The Dark Side of America’s Rise to Oil Superpower

[IsailedawayfromFR]

By Javier Blas   January 25, 2018

The last time U.S. drillers pumped 10 million barrels of crude a day, Richard Nixon was in the White House. The first oil crisis hadn’t yet scared Americans into buying Toyotas, and fracking was an experimental technique a handful of engineers were trying, with meager success, to popularize. It was 1970, and oil sold for $1.80 a barrel.

It sounds good, but be careful what you wish for. The last three years have been the hottest since recordkeeping began in the 19th century, and there’s little room in Trump’s plan for energy sources that treat the planet kindly. Governors of coastal states have already pointed out that an offshore spill could devastate tourism—another trillion-dollar industry—not to mention wreck fragile littoral environments. Florida has already applied for a waiver from such drilling. More supply could lower prices, in turn discouraging investments in renewables such as solar and wind. Those tend to spike when oil prices rise, so enthusiasm for nonpolluting, nonwarming energies of the future could wane.

Any celebration over this accomplishment ignores the evidence that such dependence on fossil fuels is no independence at all.
https://www.bloomberg.com/news/articles/2018-01-25/the-dark-side-of-america-s-rise-to-oil-superpower

All of this frightening gloom and doom from this author.  His track record of prediction is none-too-good with his news in 2007 containing these excerpts:

World will face oil crunch ‘in five years’  Javier Blas  JULY 9, 2007
The world is facing an oil supply “crunch” within five years that will force up prices to record levels and increase the west’s dependence on oil cartel Opec, the industrialised countries’ energy watchdog has warned.

In its starkest warning yet on the world’s fuel outlook, the International Energy Agency said “oil looks extremely tight in five years time” and there are “prospects of even tighter natural gas markets at the turn of the decade”.

The IEA said that supply was falling faster than expected in mature areas, such as the North Sea or Mexico, while projects in new provinces such as the Russian Far East, faced long delays. Meanwhile consumption is accelerating on strong economic growth in emerging countries.
https://www.ft.com/content/2d97d75a-2e0c-11dc-821c-0000779fd2ac

[thackney]

World will face oil crunch ‘in five years’  Javier Blas  JULY 9, 2007

I don't think he was wrong.



Looks like prices stayed around $90~110 per barrel from 4 to 7 years from his prediction.

[IsailedawayfromFR]

I don't think he was wrong.



Looks like prices stayed around $90~110 per barrel from 4 to 7 years from his prediction.

Except his implication was that would be the standard +5 years and on by the litany of undersupply, OPEC's throttle and higher prices coming.

It most certainly was not any of these for any length of time much past 7 years.

Technological ingenuity has always been a problem for any type of prognosticators, whether prior to the advent of seismic, or of deep water drilling. This case was no exception, so why would his current 'prediction' of doom and gloom hold any more weight?

[thackney]

Except his implication was that would be the standard +5 years and on by the litany of undersupply, OPEC's throttle and higher prices coming.

I don't see that in this article of prediction it would become a new and lasting standard.

[IsailedawayfromFR]

I don't see that in this article of prediction it would become a new and lasting standard.

Hmm.  So you believe this was an accurate prediction?

“If we get to the point were there is insufficient supply, the only way to balance the market will be through higher prices and a drop in demand.”

[thackney]

Hmm.  So you believe this was an accurate prediction?

“If we get to the point were there is insufficient supply, the only way to balance the market will be through higher prices and a drop in demand.”

At five years past his prediction, we had both higher prices and a drop in demand. 

[XenaLee]

The only dark side I see is if or when another "Obama/Democrat" gets into the White House.  Until then things will be fine.  More BS doom&gloom from the left... as is always the case when there's a Republican CIC.  We have enough oil & gas right here in the USA to ensure our independence from foreign entities.... as long as we don't have another leftist, anti-American interests putz in control.

[IsailedawayfromFR]

At five years past his prediction, we had both higher prices and a drop in demand. 

That may be true, but was this part of that quote accurate?

“If we get to the point were there is insufficient supply, the only way to balance the market will be through higher prices and a drop in demand.”

Gee, I believe we had some growth in oil production which actually did that, not what they said.

[Oceander]

I don't see that in this article of prediction it would become a new and lasting standard.

It’s a necessary implication of his statements. 

[thackney]

It’s a necessary implication of his statements.

Funny, I always thought 5 years meant 5 years, not 5 years to infinity.

[IsailedawayfromFR]

I don't see that in this article of prediction it would become a new and lasting standard.

Or this prediction?

there are “prospects of even tighter natural gas markets at the turn of the decade”.

[thackney]

Or this prediction?

there are “prospects of even tighter natural gas markets at the turn of the decade”.

Yeah he missed that.  It happened a year later instead of 2 1/2 year later.

[Oceander]

Funny, I always thought 5 years meant 5 years, not 5 years to infinity.

You didn’t read the entire statement for comprehension then. Who cares about oil spiking to, say $200 in 5 years if it will most likely be back down to $50 a few weeks later?  The necessary implication of his statement was that we have to do something now because in a few years oil will be up so high it’ll be unaffordable.  If it was just going to come right back down again, then there would be no need to do anything about it. 

[thackney]

You didn’t read the entire statement for comprehension then. Who cares about oil spiking to, say $200 in 5 years if it will most likely be back down to $50 a few weeks later?  The necessary implication of his statement was that we have to do something now because in a few years oil will be up so high it’ll be unaffordable.  If it was just going to come right back down again, then there would be no need to do anything about it.

You are reading words and meaning into that are not there.

The spike wasn't weeks, it was years.  It was long enough to impact investment, increase production and reach a new "normal".

That has always been the case in the oil market.  It is elastic both in supply and demand but not immediately elastic.

Pipe fabrication facilities, hydrofrac pump capacitities, etc.  All these along with more directly related and others invest on what they believe is coming in a few years.

[dfwgator]

Energy independence is a National Security Issue.

[thackney]

Energy independence Freedom is a National Security Issue.

Keeping the government interference small as possible is the best result.  Price controls and other regulations cause more problems than believed to solve.

[dfwgator]

Keeping the government interference small as possible is the best result.  Price controls and other regulations cause more problems than believed to solve.

I'd rather not rely on Arabs for our energy.

[thackney]

I'd rather not rely on Arabs for our energy.

I would rather be able to import and export in a relatively free market. 

The ability to produce and profit at the individual level is the reason we are such a large producer.

[Oceander]

You are reading words and meaning into that are not there.

The spike wasn't weeks, it was years.  It was long enough to impact investment, increase production and reach a new "normal".

That has always been the case in the oil market.  It is elastic both in supply and demand but not immediately elastic.

Pipe fabrication facilities, hydrofrac pump capacitities, etc.  All these along with more directly related and others invest on what they believe is coming in a few years.

And you’re not reading the statement that was put in front of you in its proper context, so you read nothing.

[Fishrrman]

"It sounds good, but be careful what you wish for. The last three years have been the hottest since recordkeeping began in the 19th century..."

No reason to continue reading beyond this point...

[Joe Wooten]

"It sounds good, but be careful what you wish for. The last three years have been the hottest since recordkeeping began in the 19th century..."

No reason to continue reading beyond this point...

And he neglected to say that NASA/NOAA got caught fudging the raw data. The mid 1930's are still the hottest years on record here.

[Smokin Joe]

You are reading words and meaning into that are not there.

The spike wasn't weeks, it was years.  It was long enough to impact investment, increase production and reach a new "normal".

That has always been the case in the oil market.  It is elastic both in supply and demand but not immediately elastic.

Pipe fabrication facilities, hydrofrac pump capacitities, etc.  All these along with more directly related and others invest on what they believe is coming in a few years.

The hardest thing to maintain is a group of competent personnel to deal with the expansion. This is one industry which uses people like rented mules during the booms and leaves them to find other means during the busts. It has ever been so, but could you imagine the effect of having a boom with the people to man the rigs who knew what they are doing instead of having to train a replacement workforce every time?

[Joe Wooten]

The hardest thing to maintain is a group of competent personnel to deal with the expansion. This is one industry which uses people like rented mules during the booms and leaves them to find other means during the busts. It has ever been so, but could you imagine the effect of having a boom with the people to man the rigs who knew what they are doing instead of having to train a replacement workforce every time?

But that would violate a long standing oil patch tradition......

[MajorClay]

The hardest thing to maintain is a group of competent personnel to deal with the expansion. This is one industry which uses people like rented mules during the booms and leaves them to find other means during the busts. It has ever been so, but could you imagine the effect of having a boom with the people to man the rigs who knew what they are doing instead of having to train a replacement workforce every time?

Yep, in a perfect world...

[Smokin Joe]

But that would violate a long standing oil patch tradition......

Worm farming?