PS -- President of Shell Oil on CNN the other day saying we are still running out of oil and shale is essential because energy self-sufficiency will allow the US to continue to burn oil while everyone else simply burns.

This is very expensive oil to pull out of the ground. The companies may decide to suspend operations until prices improve.

Rah rah America, I guess? We're running out of oil and we no longer need to worry about Arab oil or global warming if we build our own stockpile!

I've been predicting this for years. Just Google my name and shale oil.

It's easing Bakken production which the Saudi's are afraid will open up even more shale resources, thus rendering US dependence on the middle east moot. They're just delaying the inevitable.

Bakken producers will definitely be feathering operations and laying people off.

But we all knew that, it's just that most Americans are ignorant and don't know what the area looks like, they haven't been there.

It won't even be a moon-scape, because...

Plans to strip mine the moon may soon be more than just science-fiction

http://www.theecologist.org/News/news_analysis/962678/plans_to_strip_mine_the_moon_may_soon_be_more_than_just_sciencefiction.html

Texas-based Shackleton Energy Company has already begun operations aimed at mining the Moon within the next few years. 

The company’s plans for mining and refining operations would involve melting the ice and purifying the water, converting the water into gaseous hydrogen and oxygen, and then condensing the gases into liquid hydrogen, liquid oxygen and hydrogen peroxide, all potential rocket fuels.

Shackleton CEO Dale Tietz says the water extracted would be used almost exclusively as rocket fuel to power operations both within Low Earth Orbit (LEO) – such as space tourism and the removal of space-debris – on the Moon, and further out into space.

‘We are a for-profit business enterprise moving forward, and so we are only going there really for one reason and that is to mine, prospect mine and harvest water for rocket propellant production,’ says Tietz.

Whatever you do, don't read the short story in my previous post. It's sort of like Blade Runner dystopia stuff, but worse.

We seem to be headed in that direction minus the bizarre cyber-fetishism. (I think someone pointed out that both Paul Verhoeven's stuff and the book Brave New World aren't as cynical anymore because they mostly came true.) But what do you think about the Prez of Shell Oil admitting on TV that we'll run out of oil and the US wants this outcome anyway because we'll once again have a monopoly on oil and be the new Saudi Arabia, continuing to survive on oil while the Second World sinks back into economic rivalry or dependence? The goal seems to be to counteract China's lock on all the (US corporate) jobs by having the US market be powered by financial instruments backed on oil -- the petroleum dollar.

And it will exploit the rest of the world to get to that point, because the oil will dry up. Don't get me started on the ramp up of coal exports.

This is more a mistake on OPEC's part because they need to realize that as an organization, they are doomed. They need to essentially diversify, who cares what the US is doing. The US is very quick to adapt to various price mechanisms.

Oil goes back up by, say, 2016, the US will be ramping out just as it did from 2009-2014.



OPEC's move is simply to delay, not to actually do any long term strategy.

there's no such thing as "Energy independence" in a world of multinational oil companies, btw.

Coal consumption is on a decline, once electric cars take off (5-10 years) then oil will be not used nearly as much.

It, however, doesn't result in decreased production. The US will export coal and oil by 2015, and will likely be at the same level as the Saudi's since the US doesn't want to export intellectual property. In fact, the TPP is designed to make Asian states respect US intellectual property, boxing China and Russia in more in that they won't have access to it.

Look at this utterly terrifying image:



Now imagine a world that isn't allowed the technology to make their own renewables or buy renewables but are forced to instead build cheap coal plants.

EIA predicts a shale peak by 2020 and most likely 2017.

The question is whether Green River shale gets exploited in the intrim.

OPEC is making this move to keep Green River shale from being produced.

And another shale play coming online wouldn't be enough to offset the decline in the other two, in any case.

Many Bakken and Eagle Ford projects are profitable at around $50 a barrel. $100 a barrel allows R&D, $50 pays workers and CEOs.

If you can do Green River profitably, then you can take that technology and use it in Bakken and Eagle Ford as well. The big oil companies are sitting on hundreds of square miles of leases just waiting for the opportunity.

This is the same rationale that has told us that fracking gains would be short-lived for years now... and each prediction has been wrong (and not just by a little bit).

EIA predicts a shale peak by 2020 and most likely 2017.

True enough... but their predictions from prior years (as it relates to shale gas and oil production) have also been way off. It's also worth noting that they make multiple predictions; The high end of their production estimates goes well out beyond that point.


The decline rate that's most relevant to the discussion is not a geological debate... it's the one caused by price action. That will tell us a great deal more about the future for US oil production.

...then we're only fighting with ourselves.

- It's not called a ''PetroDollar'' for nothing. The U.S. is pissed-off that Russia, China and the BRICs don't love dollar-green like they're supposed to! Doing business in one's own currency isn't allowed in the ''FREE TRADE'' world of planet Earth. This kind of behavior screws with the transition over to New World Order international currency. After the central banks crash, of course.

So we'll show 'em! Even if it KILLS US!!!


K&R

The Price Of Oil Exposes The True State Of The Economy

SaudiArabia has already cut production.
apparently, that is it.

That will make interesting politics, IMO

Believe it or not the tar sands are getting shipped one way or another, Keystone XL is meant to tap into Bakken.

The reason I wonder is because of all the independence talk from foreign oil. I am under the assumption that most shale oil goes off shore after refinement. If this is true, it really pisses me off that our country is torn up to make the oil producers rich with really no effect on becoming independent.

The US exports refined petroleum products, most of which are refined from oil that was imported in the first place. NB that US imports are around ten million barrels a day.)

this way: Does the U.S. export all refined petro products from U.S. shale oil?

and the volume of refined product exported is still significantly less than net total crude imports. It wouldn't matter if the USA were exporting five million barrels a day of refined product if it's still IMPORTING eight million barrels a day.

of keeping all refined petro products from U.S. shale in the U.S.

As it stands now we import about 2.8 billion barrels. At that rate we'd be off of oil imports in 14-28 years. Well within the 2030-2050 energy independent road-map. Doesn't consider electric cars or any other renewables energy technologies (wind, solar; solar which is about to be cheaper than any other power source).

and your ignorance of the decline rate of shale doesn't really help your assertions.

No doubt OPEC's attempts have stuttered it.

Either way you want to spin it, the US, as a capitalist economy, will adapt rather quickly. Let oil become $300 a barrel and tell me then that shale won't be exploited.* A joke.

*assuming electric cars aren't dominant by then, of course.

You're making it pretty clear that you haven't been paying attention as the last 3-4 years proved that wrong.

I'm not sure why you don't understand the difference between the decline rate of individual wells and overall total production. The decline rate of 50-90% in the first year of production is pretty consistent across all shale plays; maintaining overall production rates requires bringing more new wells into production (and indeed that's what's been happening, to an extent that new production coming onstream has more than offset the decline rate in already-producing wells). The fact that more wells are coming onstream doesn't change the underlying observed decline rates per well (and total production is likely to see a decline if oil prices stay lower, as bringing new shale into production ceases to be economical with a sub-$80 per barrel price).

You do realise that fossil fuels are a limited, non-renewable resource whose production will inevitably peak, and decline, no? The question is not whether shale production is going to decline, the question is when. (And most reasonable assessments agree that "before 2020" is the most likely answer to that question.)

The peak in conventional crude oil production has already occurred. Current production levels are the result of exploitation of unconventional sources including shale and tar sands. The size of those resources is reasonably well-known; the most likely rate of production can be extrapolated from the data we have on current production trends, the size of the resource, and estimates on ultimate recovery. (And given what we know of the decline rates for conventional oilfields, the expectation that shale and tar sands will fill the gap to such a degree as to maintain current levels of production seems like wishful thinking.)

Just wondering.

We removed the ban on oil exports this year.

They slightly lifted the ban for a couple companies' exports of condensate... not crude in general.

That doesn't really impact SJ's answer re: whether the US exports oil from shale.

a price war might facilitate the transition away from fossil fuels to some degree, if it manages to do enough "damage" to the petrodollar.

I realize there will be some pain for all involved... but if we don't go through detox soon, we deserve the miserable demise we are facing.

Just sayin'

There's much more to it than that. This is a battle within OPEC more than anything else.

We've seen the game played out more than once in the past... but the in-fighting within the cartel largely disappeared over the last decade or so as world supply had trouble keeping up with demand (so members could produce all that they wanted to without hurting profits for other members)

It's also a "war" with other non-OPEC exporting states (e.g., Russia) that are hurting far more than the US. Not more than US oil companies perhaps... but far more than the US itself (for whom low oil prices aren't a bad thing).

I think OPEC's actions are akin to Horse and Buggy people deciding to increase Horse Production to lower the price of Horse and Carriage rides, in response to the car.* It might work in the intrim, for a few years, but it's not a long term strategy.

That's why I argued in my OP that OPEC is going about it the wrong way. Reduce production, let the profits from reduced production be funneled into energy independent / renewable / sustainable technologies. OPEC can't last forever. We may not be "peakists" but we know a finite resource when we see it. We just recognize market mechanisms.

*for this analogy fracking would be the new oil production technology that would be like the car, replacing easy to get oil with harder to get oil; or easy to breed horses with harder to manufacture cars.

pollutes our water supply. Let's hope the fracking companies go belly up. The oil gotten from fracking is exported and we also export refined gasoline so the energy self sufficient to argument os bogus on it's face.

"Buy, buy, buy!!!"