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Guest Post: US #1 in Oil: So Why Isn’t Gasoline $0.80 Per Gallon?

Tyler Durden's picture





 

Submitted by Marin Katusa via Casey Research,

While the White House spied on Frau Merkel and Obamacare developed into a slow-moving train wreck, while Syria was saved from all-out war by the Russian bell and the Republicrats fought bitterly about the debt ceiling… something monumental happened that went unnoticed by most of the globe.

The US quietly surpassed Saudi Arabia as the biggest oil producer in the world.

You read that correctly: "The jump in output from shale plays has led to the second biggest oil boom in history," stated Reuters on October 15. "U.S. output, which includes natural gas liquids and biofuels, has swelled 3.2 million barrels per day (bpd) since 2009, the fastest expansion in production over a four-year period since a surge in Saudi Arabia's output from 1970-1974."

After the initial moment of awe, pragmatic readers will surely wonder: Then why isn't gasoline dirt-cheap in the US?

There's indeed a good explanation why most Americans don't drive up to the gas pump whistling a happy tune (and it has nothing to do with evil speculators). Let's start with the demand side of this equation.

Crude oil consists of very long chains of carbon atoms. The refineries take the crude and essentially "crack" those long chains of carbon atoms into shorter chains of carbon atoms to make various petroleum products. Some of the products that are made from petroleum may surprise you.

Top 10 Things You Didn't Know
Use Compounds Made from Crude Oil
  1. Golf balls
  2. Toothpaste
  3. Soap
  4. Aspirin
  5. Life jackets
  6. Louis Vuitton knock-offs
  7. Guitar strings
  8. Shoes
  9. Soccer balls
  10. Pantyhose

The United States has the largest refining capacity in the world and is still by far the largest consumer of oil in the world (though China is beginning to catch up), and its refineries require 15 million barrels of oil a day. That means even though, due to the shale revolution, domestic production has dramatically increased to about 8 million barrels, the US still has to import between 7 and 8 million barrels of expensive foreign oil a day.

Let's take a look at who the US buys the imported oil from. (Now that I finally figured out my way around the new Windows 8—which, by the way, really sucks—I can even add some color to my tables.)

Country
Millions of barrels
exported to US per day
Canada
2.5–3
Saudi Arabia
1.2–1.5
Mexico
0.8–1.0
Venezuela
0.8
Kuwait
0.3–0.5

Canada is blue because it is not only friendly with the US, but also has the ability to increase oil production. The other countries are red because they either have decreasing oil production, or the country is not on good terms with the US government, or the production may be at risk for various reasons. The "red countries" all sell oil to the US at higher prices than does Canada.

As I said, the US imports about 7 million barrels of oil a day, and our top 5 exporters make up between 5.6 and 6.8 million barrels while the rest is split among other countries.

This means that even though the US has significantly increased its oil production in the past five years, a good chunk of oil has to be imported at much higher prices. And higher crude oil prices for refineries means higher prices at the gas pump.

But that's not the only issue: The "new oil" produced from the shale oil fields in the Bakken and Eagle Ford formations isn't cheap. Both the Bakken and Eagle Ford have been hugely successful, and an average well in either region can produce over 400 barrels of oil per day.

That may sound like a lot, but drilling thousands of meters into the ground (both vertically and horizontally), then casing and fracking the well, costs millions of dollars. And the trouble doesn't end once the well has been drilled: oil and gas production can drop as much as 50% in the first year.

Think of it as running on a treadmill—but the incline gets steeper and steeper the longer you run. That's the current reality of America's oil production.

Now, these areas also have to deal with declining legacy oil production ("legacy" meaning older oil wells that produced before fracking became popular) due to depletion rates. Freeze-offs, and even hurricane season can affect the legacy oil wells' production decline.

As the old wells begin to deplete, they need to be replaced by unconventional wells with horizontal drilling and hydraulic fracturing. Even though these new wells provide an initial burst of production, they decline very quickly. That means you need to drill even more wells just to keep up—and the vicious cycle continues.

The costs, as you can imagine, are forbiddingly high. Even in known oil-rich regions like the Bakken and Eagle Ford, the all-in cost of extracting a barrel of oil from the ground can cost as much as US$75 per barrel (for comparison, Saudi Arabia can produce oil for as low as US$1 per barrel). To put it in simple terms: cheap oil in North America is a thing of the past.

So, the US produces expensive oil and relies on imports of even more expensive oil. And since the refiners need to make money as well, this means higher prices at the pumps. Who loses? The US consumer, of course.

What would help lower gas prices? Building more pipelines to deliver cheaper Canadian oil to refineries in the US and decreasing the refineries' dependence on expensive foreign oil. Until these new and much safer pipelines are built, rail has to pick up the slack. Almost 400,000 railcars full of oil are expected to be shipped in 2013, compared with just 9,500 railcars in 2008, a whopping 41-fold increase.

But rail is not the answer. In fact, transporting oil by rail is much more dangerous than transporting it by pipeline. Just last week, we wrote about two recent accidents, one of which claimed 47 lives.

Federal and state taxes at every step of the gasoline-making progress make the pain at the pump even worse. The US government already takes more than 60% of the divisible income from every barrel of oil produced… and another 50 cents per gallon at the pump.

Then there's the matter of Obama's supposed "Green Revolution" and how America would be saved through the use of alternative energies. Obama wrote massive checks to different renewable energy firms that went belly-up, the most famous of them all being solar panel manufacturer Solyndra, whose bankruptcy cost American taxpayers more than $500 million. Obama is also a heavy supporter of ethanol (his home state of Illinois, after all, is the third-largest ethanol-producing state) and has increased the targets for the use of ethanol in transportation.

Someone has to pay for all of these subsidies, so why not get the dirty, evil oil companies to pay for them? Keep in mind, though, that the oil companies have enough lobbyists and lawyers to keep the government at bay—so the higher prices will be passed on to the consumers.

To sum up why the price of gasoline is so high even though the US is producing so much more oil than before:

  1. The high cost of American oil production
  2. Even higher costs due to imported (non-Canadian) oil
  3. Obama not allowing cheaper Canadian oil to flow to the refineries via pipelines such as the Keystone XL
  4. The taxes on crude are used to fund Obama's green dream—his green-energy "legacy"—and his love for ethanol and the taxes at the pump will not decrease

 

Doug Casey and I are convinced that new technologies applied in the Old World will bring huge New World profits. But don't take my word for it—I challenge you to try out my research. Click here to take me up on my 100% money-back guarantee.

 


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Wed, 10/30/2013 - 19:17 | Link to Comment goose3
goose3's picture

Oil (and gasoline) aren't cheaper because Oil is a global commodity, not a US commodity.  The easy oil has mostly been developed, and harder and harder oil is more expensive to develop.

Wed, 10/30/2013 - 19:29 | Link to Comment knukles
knukles's picture

Because the government's involved, FFS
Any further questions?

 

look mommy a pony!
oh thats no pony honey, that's a government promise
but the sign says its free, all we have to do is take it away
thats because its a dead promise, dear

Wed, 10/30/2013 - 19:32 | Link to Comment mofreedom
mofreedom's picture

Funny money raises the price of all commodities, duh.

Wed, 10/30/2013 - 19:35 | Link to Comment Popo
Popo's picture

This whole article is hopelessly ignorant. The premise is that because we make it, it should be cheap. But that premise totally ignores the extraction costs of shale oil.

Wed, 10/30/2013 - 19:39 | Link to Comment Ahmeexnal
Ahmeexnal's picture

Oil's well that ends well.

"You didn't build that!" Mabus Yomomma

Thu, 10/31/2013 - 06:22 | Link to Comment falak pema
falak pema's picture

well said and referenced both of you. Food for thought.

Thu, 10/31/2013 - 16:52 | Link to Comment Sparkey
Sparkey's picture

Scarlet is on to something, I thought Doug Casey was an alright guy, for a while, until he became a shill for the Frackers, as I see it; Fracking serves two purposes, It ropes in the suckers, with articles like this, and it destroys the land for human habitation, population reduction isn't going to be pretty! Is Venezuela slated for Fracking? If not, perhaps we could move down there and get a little place next to Doug!

Wed, 10/30/2013 - 19:40 | Link to Comment DaveyJones
DaveyJones's picture

actually...it's hopefully ignorant

Wed, 10/30/2013 - 19:47 | Link to Comment knukles
knukles's picture

then they can change it for the better...  :)

 

You all realize do you not that they were originally talking about free health care about 6 years ago?  And bringing the price of gas way way down.  And extricating our asses from wars.  And having an open transparent administration and oh never the fuck mind

Wed, 10/30/2013 - 19:53 | Link to Comment DaveyJones
DaveyJones's picture

don't remind me

I'll have to take another anger management class

Wed, 10/30/2013 - 20:15 | Link to Comment smlbizman
smlbizman's picture

gas is cheap in the us...relatively speaking...

http://www.statista.com/statistics/221368/gas-prices-around-the-world/

Wed, 10/30/2013 - 20:21 | Link to Comment Stackers
Stackers's picture

and adjusted for inflation gasoline is cheap. Gas is only up about 100% over the last 20 years - vs. everything else up about 200% and things like college up 1000%

Wed, 10/30/2013 - 20:24 | Link to Comment DaveyJones
DaveyJones's picture

remember the trick. You have to average the cost of a worldwide military machine that "assists" our friendly petro-dollar. I wonder what the brings the average gallon to. 

Wed, 10/30/2013 - 20:30 | Link to Comment venturen
venturen's picture

How else can a Giant Squid eat and get fat? J ARON

Wed, 10/30/2013 - 21:11 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

Wow! Look at the end of the article.

That guy is offering a money back guarantee!

Imagine that!

 

 

Thu, 10/31/2013 - 00:48 | Link to Comment g'kar
g'kar's picture

One of O'Dicktator's executive orders and it is 20 cents a gallon until there is no more gasoline on the market. Similar to when there will be no more doctors on the market when O'DicktatorCare goes full tilt.

Wed, 10/30/2013 - 20:59 | Link to Comment Hooter Shaker
Hooter Shaker's picture

In 1964, a silver dollar would buy about 4 gallons of gas.  Today, that same silver dollar will buy about 4 gallons of gas after you convert it to bennybux.  Looks to me like the fiat has lost value, not the price of gas has risen.

Wed, 10/30/2013 - 21:07 | Link to Comment Jumbotron
Jumbotron's picture

Ok....think about this.  Let's say Bennybux goes bye bye.  Then the price of EVERYTHING would collapse.  It's all about ratios.  The percentage one would pay for gas would be about the same or more if EVERYTHING collapsed in price.....including the price of your labor (ie. income.....that is....if you still have a job in this deflationary dystopia I'm painting here)

The cost of extraction for everything has gone up.......oil, minerals, lumber, rare earths, fish, meat, etc. etc......because we have extracted all of the cheap and easy to extract stuff.  In terms of fish.....the good stuff is rare....now we're eating hagfish in our McFish sandwiches.  Pork, chicken and cow meat are plentiful....but not cheap.....because it takes shitloads of water and fuel to raise and transport that meat. 

Peak cheap anything.....except for Benny Bux is the rule of the day.

Oh yeah......life is still cheap......and brutish and short.

Wed, 10/30/2013 - 21:46 | Link to Comment Harry Dong
Harry Dong's picture

Lamprey pie. Umm umm good. I think the mc filets are better now.

Edit. Srsly, the overfishing is truly heartbreaking. And the acidification of the ocean makes Fukushima look trite. Hope there is some self regulating mechanism science doesn't know about yet to stop this extinction event.

Wed, 10/30/2013 - 23:03 | Link to Comment Jumbotron
Jumbotron's picture

A few years back, Harry, I worked for a video editing and duplication shop.  And this guy came in with some old black and white and silent 16mm film from the sixties he wanted transfered to DVD.  It was him as a young man with a bunch of his buddies on a fairly large boat.  If memory serves me it had about 6 guys on either side with enough room to swing these LARGE rods.  And they were hauling in tuna as fast as they could throw the line back out into the water after shaking the fish off the line.

Here's the kicker.......there was NO BAIT on the hooks.  I asked the guy when he came back did I see some bad edits in the film or was I just missing something.  And he told me no....they would initially bait the hooks in the beginning...but after a while just the hook hitting the water would initiate the strike.  They would make several trips back and forth to shore to offload the fish and go back for more.....all day long.

He told me now.....the only thing the commercial fisherman are catching a lot of off the coast of Georgia is Cannonball Jellyfish because of the acidification you spoke of.  They are a delicacy in China.  Go figure.

I'll never forget that film.

Wed, 10/30/2013 - 23:22 | Link to Comment DaveyJones
DaveyJones's picture

sounds like soon, they'll be a delicacy everywhere

Wed, 10/30/2013 - 23:31 | Link to Comment Jumbotron
Jumbotron's picture

I don't think so.  I think they're the new McFish sandwich.  LOL.

Wed, 10/30/2013 - 21:08 | Link to Comment quasimodo
quasimodo's picture

Winner !

Now go and tell that fact to 6 people you know, the odds are they will look at you like you have a third head. Then go and tell them to put some fiat into metals, that gives them an instant migraine and causes knashing of teeth.

Thu, 10/31/2013 - 07:33 | Link to Comment earnulf
earnulf's picture

We all know that metals have maintained thier value in regards to the US dollar and all other fiat currencies.   Anyone who doesn't have a stash by this point is just playing a version of roulette from that cold place across the artic circle.

Wed, 10/30/2013 - 21:39 | Link to Comment Harry Dong
Harry Dong's picture

down arrows for jumping to conclusions. Now go back and read it. (and yeah, the article has plenty other shortcomings to pick at).

Edit. Changed to green. I get your point now.

Wed, 10/30/2013 - 20:00 | Link to Comment Zero Point
Zero Point's picture

Few people understand what oil shale really is. That's because the media consistently call it "shale oil", so people can picture some kind of liquid.

See how easy this is?

Oil shale, a kind of rock, which needs to be super heated so usable oil can be harvested from the resulting gases, becomes Shale oil... A mental image of liquid bubbling around in aquifers.

How interesting language is, when such simple lies can be told so easily.

Wed, 10/30/2013 - 20:07 | Link to Comment DaveyJones
DaveyJones's picture

and don't forget all that pretty water

Wed, 10/30/2013 - 21:05 | Link to Comment Incubus
Incubus's picture

Awesome isn't it?

 

We have plenty of oil for everyone else to use but us: and we destroy our water reserves in the process.

 

It's ok... We can just go into space and harvest ice planets when the EROI for water renders civilization moot.

 

Remember, the upper crust never has to worry about resource scarcity.  They will have enough to use even after the world ends.  It's about whether or not you and I do.

Wed, 10/30/2013 - 21:21 | Link to Comment GMadScientist
GMadScientist's picture

Guess again...after "the world ends", production stops, trade stops, sales stop, and that upper crust is just a bunch of corpses waiting to happen; there'll be no toddling down to the mall to buy iPads for the grandchildren or Mtv Cribs. At some point, it's not worth running the trains, even if they do happen to occasionally catch on fire and improve resource scarcity.

Wed, 10/30/2013 - 21:25 | Link to Comment Incubus
Incubus's picture

they'll still get resources, just on a smaller scale, because there's never a shortage of sycophants willing to do whatever it takes for the table scraps.

 

side note: (why did I use EROI for water?)  I guess if we had hydrogen fuel infrastructure, it would matter.

Wed, 10/30/2013 - 21:12 | Link to Comment duo
duo's picture

It's like punching 50 holes in your tube of toothpaste and wondering why nothing comes out where it's supposed to when you squeeze it.

Wed, 10/30/2013 - 22:03 | Link to Comment TheFourthStooge-ing
TheFourthStooge-ing's picture

.

Few people understand what oil shale really is.

So very true.

That's because the media consistently call it "shale oil", so people can picture some kind of liquid.

There's a bit of confusion between shale oil extracted from oil shale, and "shale oil", more accurately called tight oil, produced from drilling and fracking in shale formations such as the Bakken Shale.

Oil shale, a kind of rock, which needs to be super heated so usable oil can be harvested from the resulting gases, becomes Shale oil...

That's the process of using pyrolysis to extract the kerogen from the oil shale. It can be referred to as shale oil, although calling it kerogen or kerogen oil is probably more useful so as to distinguish it from the tight oil ("shale oil") obtained from fracking in shale formations.

Just to be clear, what is being obtained via fracking is oil, not kerogen, does not involve pyrolysis, and, despite the high costs and horrendous depletion rates of wells, is being produced on a commercial scale. As for kerogen from oil shale, there is currently no economically viable way to extract and process it at a commercial level.

Thu, 10/31/2013 - 00:41 | Link to Comment AGuy
AGuy's picture

"This whole article is hopelessly ignorant. "

No Popo, you just failed to read it:

"Even in known oil-rich regions like the Bakken and Eagle Ford, the all-in cost of extracting a barrel of oil from the ground can cost as much as US$75 per barrel"

 

Wed, 10/30/2013 - 23:50 | Link to Comment Dingleberry
Dingleberry's picture

maybe printing 85 large every month has something to do with it.

Thu, 10/31/2013 - 00:36 | Link to Comment Freddie
Freddie's picture

How many children must die from libturd Warner Buffert oil railroads?  F him!

Wed, 10/30/2013 - 19:20 | Link to Comment Hohum
Hohum's picture

Because US oil is much more expensive to produce, that's why, silly.  US has more than half the rigs in the world.  And, oh yeah, we consume about 19 million barrels per day.  Plus what goose3 said.

Wed, 10/30/2013 - 19:50 | Link to Comment Hedgetard55
Hedgetard55's picture

Bullshit.

 

It is because Ben's QE is going not just into stocks and bonds but oil futures.

Wed, 10/30/2013 - 19:55 | Link to Comment mofreedom
mofreedom's picture

every commodity-centric company would only pre-tax $100.09 in total if the Fed tapers ever...but I do believe gas would be well under $2.00 per gallon.

Thu, 10/31/2013 - 01:03 | Link to Comment AGuy
AGuy's picture

"And, oh yeah, we consume about 19 million barrels per day."

Unfortunately its no where near 19 mbbd because the US now exports a lot of finished oil products. I don't think the EIA figures subtract finished oil product exports. You need to dig up a chart on consumption of finished oil products to get a real estimate. US consumption is now probably down in the 15 to 14 mbbd range, and heading lower as americans drive less, drive smaller fuel efficient vehicles, and demand for shipping goods is also declining.

US Net Exports of refined Oil products:

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja...

 

 

Wed, 10/30/2013 - 19:23 | Link to Comment Gumbum
Gumbum's picture

Was about to say the same that goose3 and Hohum said. Look up ERoEI. Despite what the propagande media is telling you, shale and fracking is crap...

Wed, 10/30/2013 - 20:06 | Link to Comment Running On Bing...
Running On Bingo Fuel's picture

Let's talk about trade deficits with all this USA oil.

What's up?

Over.

Wed, 10/30/2013 - 19:24 | Link to Comment Quinvarius
Quinvarius's picture

Why does everyone have to shit on ethanol?  For fks sake, it is an additive that replaced a massively dangerous chemical called MTBE to make gasoline burner cleaner.  No one is billing it as a complete gasoline replacement in America.  The refiners own ethanol plants.  The corn they use for starch is still used as cattlefeed after the process of making ethanol.

I blame CNBC for this travesty.  Ethanol is fine.  Move on with your lives. 

Wed, 10/30/2013 - 19:33 | Link to Comment OwnSilverPlayMusic
OwnSilverPlayMusic's picture

Yeah it's perfectly rational for people to starve to death so soccer mommy's can drive their suv's.

Wed, 10/30/2013 - 19:43 | Link to Comment Quinvarius
Quinvarius's picture

Dude, the corn used in ethanol making is still used as cattlefeed:

http://www.youtube.com/watch?v=LxbsLioiXKs

It is like ethanol hating trolls don't have the ability to learn.  I don't get it.  Let the farmers make their value added extra money providng another useful product in peace.  It makes money so it will always be around.

 

Wed, 10/30/2013 - 19:49 | Link to Comment Totentänzerlied
Totentänzerlied's picture

1. Stop feeding corn to beef cattle
2. Stop eating beef

Wed, 10/30/2013 - 19:51 | Link to Comment DaveyJones
DaveyJones's picture

we are feeding gmo soy and gmo corn to animals whose very health (read ours) depends on eating grass

 

Wed, 10/30/2013 - 20:15 | Link to Comment Running On Bing...
Running On Bingo Fuel's picture

Ever been to Coors Brewing in Golden CO.? After the brew is finished a Purina truck pulls up and collects all of the grains used in creating the beer.

The problem with this for your pet; all the grains used don't have ANY nutritional value left in them.

Beer is food. Ever hear that statement?

Over.

Wed, 10/30/2013 - 21:27 | Link to Comment Harry Dong
Harry Dong's picture

Bread in a bottle. Cheers!

Wed, 10/30/2013 - 23:03 | Link to Comment brettd
brettd's picture

Pork chop in a can.

Down the hatch!

Wed, 10/30/2013 - 20:02 | Link to Comment mofreedom
mofreedom's picture

I'm sorry so you're afraid to die...you are of no use to use in the revolution....good bye.

Wed, 10/30/2013 - 20:05 | Link to Comment validate
validate's picture

Eat buffalo, Eat grass fed beef, and thrive.

Wed, 10/30/2013 - 20:26 | Link to Comment mofreedom
mofreedom's picture

I love grass fed beef but I love mega-stuffed oreos.  Dammit live, and love life chemicals and all...though I don't endorse psychotropics.

Wed, 10/30/2013 - 19:49 | Link to Comment DaveyJones
DaveyJones's picture

the eroei of ethanol (from corn) is nearly flat

 

 

Wed, 10/30/2013 - 21:09 | Link to Comment chemystical
chemystical's picture

 

Save me the research:  do the specific forms of EI in that acronym have a better use?  What's their cost basis and how is it normalized?

My wife probably has a negative EROEI and has certainly had a nearly zero ROI from some perspectives.

Wed, 10/30/2013 - 19:51 | Link to Comment NidStyles
NidStyles's picture

I hate seeing exhausts rust from the inside out, that is my major issue, not to mention the shortened lifespan of O2 sensors as a result.

Wed, 10/30/2013 - 20:08 | Link to Comment mofreedom
mofreedom's picture

and lawn mowers...thank you for your concern.

Thu, 10/31/2013 - 04:29 | Link to Comment NidStyles
NidStyles's picture

Most people don't think it's an issue, that is until they start realizing what exactly their exhausts have in them.

Wed, 10/30/2013 - 19:52 | Link to Comment knukles
knukles's picture

Soccer moms in SUV's are not allowed to starve to death.
Slim down, get a boob job (SoCal), wear 6" heels.... you get the picture...

but not starve to death...

Talking about SoCal, last time we were down in the San Diego area, I was shocked (yes, and that's going a long way for me) to see all the 16y/os with boob jobs and Botoxed lips.
Look at the new titties daddy got me for my 16th birthday!

 

There are many more things ever so very wrong with this place than the price of gas...

Wed, 10/30/2013 - 19:56 | Link to Comment DaveyJones
DaveyJones's picture

you can never be too stiched or too thin

Wed, 10/30/2013 - 21:14 | Link to Comment chemystical
chemystical's picture

 

 

at the risk of being termed an even bigger perv, that's one costal trend that I hope to see move to the heartland sooner rather than later.  

It's a garnishment by design and intent; don't blame me for looking at it

famous last words before the metaphorical frying pan flies towards me head.

Wed, 10/30/2013 - 19:53 | Link to Comment lasvegaspersona
lasvegaspersona's picture

All the sugar in corn is depleted from whatever is left. Cows may still eat it but is has lost every bit of benfit to the cows as were captured in the alcohol. PLUS there is energy lost.

That is why corn alcohol is a bad idea.

Take a chemestry class (you could even learn to cook meth...)

Wed, 10/30/2013 - 20:13 | Link to Comment Quinvarius
Quinvarius's picture

No, dude. No.  It takes the shit starch out of the corn and leaves the protien, nutrients and fat.  Watch the video.  And no energy is not lost.  For the love of gawd.  That argument has been debunked as pure nonsense already.  I mean really. You are going to count sunlight per square foot of earth as energy imput?  Give me a break.  How about counting all the eons worth of pressure and heat that went into compressing dino juice?  You want to talk about negative energy? 

Wed, 10/30/2013 - 21:21 | Link to Comment chemystical
chemystical's picture

 

 

"You are going to count sunlight per square foot of earth as energy imput?"

Hence my inquiry as to the specifics of the EI in another poster's EROEI assertion.  Not saying s/he's right or wrong.  Not in my element there, but i'd like to hear more.  I'm not too bad at that science stuff.

Wed, 10/30/2013 - 21:14 | Link to Comment GMadScientist
GMadScientist's picture

I tell you what; how about we end gov subsidies for ethanol production and see how many of those farmers are still reaching for that "value add" of yours?

 

Thu, 10/31/2013 - 00:44 | Link to Comment Freddie
Freddie's picture

Go buy a Tesla.  They are the best. I wish Apple would buy Tesla.  Elon Musk could be the Next Steve Jobs. He knows eveyrthing in the world.

Wed, 10/30/2013 - 19:55 | Link to Comment Quinvarius
Quinvarius's picture

Look at the downvotes rolling in.  LOL.  You fkrs are brainwashed.  I honestly feel bad for you.  I guess cold analysis of facts, economic realities, and math are never popular.

Wed, 10/30/2013 - 20:06 | Link to Comment Almost Solvent
Almost Solvent's picture


Edmunds.com: How do you like running on E85?

Avalanche Owner: The mileage sucks. On gas I can get 18 (miles per gallon). On E85 I get like 12.

Did you buy this truck so you could run on E85?

Yup.

But you get worse gas mileage. So why do you do it?

To help the environment.

Footnote: This man didn't seem to fit the profile of an environmentalist, tree-hugger or greenie. He was just a regular guy trying to do something good for the planet. We experienced a small burst of patriotic pride.

 

http://www.edmunds.com/fuel-economy/e85-vs-gasoline-comparison-test.html

Wed, 10/30/2013 - 20:11 | Link to Comment Quinvarius
Quinvarius's picture

Then he would really hate MTBE, what they used before ethanol to make gasoline burn cleaner and to add octane,  because he would have bad gas mileage and cancer.

Wed, 10/30/2013 - 21:20 | Link to Comment Cloud9.5
Cloud9.5's picture

My Grandpa used to make shine and then feed the mash to his pigs.  They loved it.

Wed, 10/30/2013 - 21:22 | Link to Comment GMadScientist
GMadScientist's picture

You may need your Obamacare policy after you get done pattin' yourself on the back there, sport.

Wed, 10/30/2013 - 21:58 | Link to Comment Angus McHugepenis
Angus McHugepenis's picture

I can tell you why I don't run ethanol gasoline in my older vehicles. It will clog the fuel line among other things, eventually, especially in colder climates. A perfectly good engine will stop running once the corn syrup has its chance to work. I actually buy fuel line cleaner, gas cleaner, etc and dump it in every tank of gas I buy if I can't avoid the Ethanol blended shit. I avoid the Corn Syrup gas stations like the plague!

I use two mechanics (one has a chain of stores) to do work that I cannot do myself. Both have seen many cars with virtually nothing wrong with them that won't start because of no fuel. Corn Syrup Ethanol is always the cause once they replace the fuel lines. This is usually always the case for older vehicles. Since I'll never buy another new car equipped with the latest NSA spyware I couldn't give a shit about the newer ones being able to handle the Corn Syrup addiditive.

Thu, 10/31/2013 - 06:21 | Link to Comment safe as milk
safe as milk's picture

actually, the crap that's clogging the fuel line isn't from the ethanol. the ethanol is dislodging the crap from the years of gas in you engine. after you switch the vehicle over to e85, the clogging will occur in the beginning but will not continue if you stay on e85. it's the going back and forth that's the problem.

Sat, 11/02/2013 - 19:20 | Link to Comment Angus McHugepenis
Angus McHugepenis's picture

Yeah, I'll get right on your recommendation as soon as you slip a cunt over your head and fuck some sense into yourself. You are obviously a shill for the ethanol assholes and certainly not a mechanic, which is pretty much verified by your 15 week, 4 day status.

Wed, 10/30/2013 - 20:14 | Link to Comment delacroix
delacroix's picture

the mtbe story is distorted. the purpose of the additive was to get more gallons of motor fuel per barrel, by homogenizing the molecules of lower grade solvents to petrol. most of the emission reduction was due to less solids, in the lower grade solvents.  did you notice the lowering of octane ratings, and the shorter shelf life of modern fuel?

Wed, 10/30/2013 - 23:40 | Link to Comment Wahooo
Wahooo's picture

They are clueless, that's why. And our gasoline isn't expensive either so what the hell is this article about anyway?

Wed, 10/30/2013 - 19:25 | Link to Comment kaiserhoff
kaiserhoff's picture

Gas is down to 2.89 along the Blue Ridge.  The price drops are continuing with each new delivery.  Don't really know why.

Wed, 10/30/2013 - 19:32 | Link to Comment stock trout
stock trout's picture

I'm told pipelines run from the refineries to a major distribution point in Roanoke, VA which explains a lower cost in the Blue Ridge region. Don't know if that's true. 

Wed, 10/30/2013 - 19:46 | Link to Comment kaiserhoff
kaiserhoff's picture

It is true, and some of this may be delayed reaction to the kleptocrats' holiday.

After all the low rates and easy credit, I see an incredible number of new trucks on the road.  They probably get better mileage than the old boats they replaced.  People are more mindful of fuel costs here than they were even a few years ago.

Wed, 10/30/2013 - 19:26 | Link to Comment benb
benb's picture

"Then why isn't gasoline dirt-cheap in the US?"

Because the global gangsters have rigged the market. Because they control the puppet government. Because they control the natural resources. Because they control the patent office and like J.D. Rockefeller (Goodfella) said - "Competition is a sin."

Wed, 10/30/2013 - 20:59 | Link to Comment Incubus
Incubus's picture

https://www.youtube.com/watch?v=5jmuhZY2mgs

 

 

Arthur Jensen: You have meddled with the primal forces of nature, Mr. Beale, and I won't have it! Is that clear?! Do you think you've merely stopped a business deal? That is not the case. The Arabs have taken billions of dollars out of this country, and now they must put it back! It is ebb and flow, tidal gravity! It is ecological balance! You are an old man who thinks in terms of nations and peoples. There are no nations. There are no peoples. There are no Russians. There are no Arabs. There are no third worlds. There is no West. There is only one holistic system of systems, one vast and immane, interwoven, interacting, multi-variate, multi-national dominion of dollars. Petro-dollars, electro-dollars, multi-dollars, reichmarks, rins, rubles, pounds, and shekels. It is the international system of currency which determines the totality of life on this planet. That is the natural order of things today. That is the atomic and sub-atomic and galactic structure of things today! And you have meddled with the primal forces of nature, and You Will Atone!

Am I getting through to you, Mr. Beale? You get up on your little twenty-one inch screen and howl about America and democracy. There is no America. There is no democracy. There is only IBM and ITT and AT&T and DuPont, Dow, Union Carbide, and Exxon. Those are the nations of the world today. What do you think the Russians talk about in their councils of state - Karl Marx? They get out their linear programming charts, statistical decision theories, minimax solutions, and compute the price-cost probabilities of their transactions and investments, just like we do. We no longer live in a world of nations and ideologies, Mr. Beale. The world is a college of corporations, inexorably determined by the immutable by-laws of business. The world is a business, Mr. Beale; it has been since man crawled out of the slime. Our children will live, Mr. Beale, to see that perfect world in which there's no war or famine, oppression or brutality - one vast and ecumenical holding company, for whom all men will work to serve a common profit, in which all men will hold a share of stock - all necessities provided, all anxieties tranquilized, all boredom amused. And I have chosen you, Mr. Beale, to preach this evangel.

Wed, 10/30/2013 - 19:26 | Link to Comment GrinandBearit
GrinandBearit's picture

Because the sheeple like to be screwed with cactus dildos.

Wed, 10/30/2013 - 19:28 | Link to Comment Sean7k
Sean7k's picture

Because you use market prices to sell goods. Have they gone full retard at Casey Research? 

Wed, 10/30/2013 - 19:31 | Link to Comment Cloud9.5
Cloud9.5's picture

We are transitioning from the cheap to the expensive stuff at a rate of 5.5% a year.  That transition should be complete in twelve years or so.  At what point along the time line do we reach the economic tipping point that induces systemic collapse?

Wed, 10/30/2013 - 19:37 | Link to Comment DaveyJones
DaveyJones's picture

because it's an exponential play on the energy fundamentals, peak debt will hit us hard before peak energy does

but you're right, the bottom line is the easy ride is over 

of course, ignoring, warring, and lying about it only makes it worse

 

Wed, 10/30/2013 - 19:51 | Link to Comment Black Forest
Black Forest's picture

At what point along the time line do we reach the economic tipping point that induces systemic collapse?

That might take some time. Cheers.

 

Wed, 10/30/2013 - 20:58 | Link to Comment Cloud9.5
Cloud9.5's picture

When lite sweet crude peaked in 2005, the crash came two years later.  All liquids are supposed to peak somewhere between 2015 and 2020.  So, it might be closer than you think.

Wed, 10/30/2013 - 20:06 | Link to Comment joego1
joego1's picture

$115/barrel heading their by the end of 2014

Wed, 10/30/2013 - 19:31 | Link to Comment Obese-Redneck
Obese-Redneck's picture

Yeah, Sarah Palin and Bachmann promised me 2$ gasoline, so I can waste it in my monster truck on the way to the homo Nascar race where they push each other around in the butt, kind of like Ted Nugent and former chief Kessler.

Wed, 10/30/2013 - 21:23 | Link to Comment GMadScientist
GMadScientist's picture

Dr C Everett Koop says I shouldn't.

Wed, 10/30/2013 - 21:57 | Link to Comment Emergency Ward
Emergency Ward's picture

General Joycelyn Elders says you are among the best and brightest even with Clinton-era gas prices.

Wed, 10/30/2013 - 19:32 | Link to Comment Richard Whitney
Richard Whitney's picture

'Taxes' is the correct answer to why gas isn't 80 cents per gallon at the pump. What do I win?

Wed, 10/30/2013 - 19:45 | Link to Comment DaveyJones
DaveyJones's picture

more taxes

Wed, 10/30/2013 - 19:58 | Link to Comment TalkToLind
TalkToLind's picture

Don't forget about the Corn Juice.  That's right, not only is Ethanol more expensive to produce than gasoline, it's less potent and it mucks up your engine.

Wed, 10/30/2013 - 19:34 | Link to Comment DaveyJones
DaveyJones's picture

"What would help lower gas prices?"

that question answers alot about your knowlege of the subject

Wed, 10/30/2013 - 19:44 | Link to Comment One And Only
One And Only's picture

Let's also look at state taxes.

If you live in CA or CT for example you are paying almost $1.00 per gallon in gas tax. If you live in the tri-state area (which I assume many zerohedge readers are) you will notice that gas is about a dollar a gallon cheaper in New Jersey than it is in CT or NY. So poor consumers living in CT and New York can thank their liberal politicians for that (state provided welfare isn't free)

How does your state stack up? Check out the link and hover over your state to get more info.

http://www.api.org/oil-and-natural-gas-overview/industry-economics/fuel-...

Don't forget you pay this tax AFTER the drillers have been taxed, the transporters have been taxed, the refiners have been taxed, and the gas stations have been taxed. Those who LOOOOVVVE higher taxes to punish the rich...they are passing all of that tax onto you and then the government fucks you directly on top of it at the point of sale at the pump. TAX TAX TAX

To boot - A MAJOR oil refinery hasn't been built since the 1970's because of gubmint regulation so we are lacking in our capacity to efficiently refine oil into gas. 

Make sure to vote em all back in.

Wed, 10/30/2013 - 19:46 | Link to Comment Democratic koolaid
Democratic koolaid's picture

You have to do some accouning, that would figure about,  and over 60% of taxpayers money is being Embezzlement off by coruption, illigitimacys and mis-managments that private buisnesses would never allow.

Wed, 10/30/2013 - 20:09 | Link to Comment Harry Dong
Harry Dong's picture

ha, I'd say 75%. DO YOU KNOW HOW MUCH THE US GOV'T PAYS TO BUILD AN OUTHOUSE - $288,000!!!  It's for shizzle if you're ever at the Great Smokey Mts check it out.

 

Wed, 10/30/2013 - 19:39 | Link to Comment knukles
knukles's picture

Fuck it...
Time to give into the Urge

It's Obama's Fault

Wed, 10/30/2013 - 19:41 | Link to Comment Democratic koolaid
Democratic koolaid's picture

The fact that we live in a Capitalist economy, and all enjoy our Kool-aid, that is not some Soviet gulag has something to do with it.   Plus the fact that some people have to be able to afford to buy a Ferrari.

Wed, 10/30/2013 - 20:02 | Link to Comment DaveyJones
DaveyJones's picture

"The US quietly surpassed Saudi Arabia"

actually, there was nothing quiet about it

which is another sign of propaganda

Wed, 10/30/2013 - 19:45 | Link to Comment Seasmoke
Seasmoke's picture

Natural Gas Bitchez !!!!!!!!

Wed, 10/30/2013 - 20:03 | Link to Comment Harry Dong
Harry Dong's picture

Uranium!

Thorium!!!

http://en.wikipedia.org/wiki/Thorium#Reserve_estimates

 

OK, better yet...

Quit driving 2 ton whales to pick up a gallon of milk!

*go ahead and give me a red for mentioning uranium, i don't care*

Wed, 10/30/2013 - 20:28 | Link to Comment espirit
espirit's picture

Two tons is for amateurs, my Expedition weighs in at three tons.

BTW: Mass Rules the road.

Wed, 10/30/2013 - 20:53 | Link to Comment Incubus
Incubus's picture

if you're a shitty driver.

 

I don't need mass.  I've got a nimble little car. 

 

I had some 'billy in a jacked up pick up truck try to block me from passing him a long time ago.  I just maneuvered past him and I was like:

 

"lol. u mad bro?"

Wed, 10/30/2013 - 20:54 | Link to Comment RaceToTheBottom
RaceToTheBottom's picture

I am converting a 95 VW 4X4 Vanagon to run its new Subaru engine on Natural gas.  Then I am going to drive up into the hills and get away from all the nuclear irradiated zombies.....

So there.

Wed, 10/30/2013 - 19:45 | Link to Comment Son of Captain Nemo
Son of Captain Nemo's picture

Does anybody here on this thread have anything to say about the issue of "refining capacity" in the U.S. since the early 70's?

This article doesn't delve into the fact that oil companies made the deliberate move to curtail refineries which greatly impacts the delivered price of oil and hands the oil makers a substantial premium on profit?

 

 

Wed, 10/30/2013 - 19:45 | Link to Comment starfcker
starfcker's picture

nice work marin. now here's a gold star and a lollipop, head back to your cubicle before your meds wear off. how about our government loving high oil prices because it intensifies other countries needs for petrodollars? how about our government loving high oil prices because it allows massive amounts of dollars to be funnelled to third world countries that we are trying to build economies in? how about the fact our government loves high energy prices because it helps keep the cost of producing anything domestically high, incentivising offshoring? how about the I.C.E., son of enron, an offshore (atlanta) trading platform that ads at least a buck to a gallon of gas without delivering anything except JPM profits? you get an F- from me.

Wed, 10/30/2013 - 19:46 | Link to Comment toady
toady's picture

Speculators

Wed, 10/30/2013 - 19:55 | Link to Comment TalkToLind
TalkToLind's picture

Only 10% Ethanol?  Fuck that, give us MOAR CORN JUICE!

Wed, 10/30/2013 - 19:55 | Link to Comment SmittyinLA
SmittyinLA's picture

We obliterated any increase in fuel production with mass immigration, its not how much energy you produce but the ratio of energy to population.

Saudi Arabia has a population of 28.29 million, we have about 325-400 million (nobody really knows with our borders) or more than 10x much as the Saudis.

Including gas we now produce slightly more than the Saudis, and that's only because we're drilling like crazy, production will fall as soon as we stop drilling new productive holes, but we're not producing anywhere near as much as 10x as much as the Saudis.

The average person in America consumes 12 barrels per year, 20 million illegal aliens consume 240 million barrels a year, just to keep up with legal immigration of 2 million a year we need 24 new million barrels of new production every year plus these are diminishing stocks, oil wells play out and run dry.

Gasoline prices would crater if we deported 20 million illegal aliens-aling with health expenses, taxes and wages would skyrocket.

Wed, 10/30/2013 - 19:57 | Link to Comment lasvegaspersona
lasvegaspersona's picture

and....the dollar is losing value every day....picture King Abdulla looking at that stack of paper money (kind of like Walter White and his wife) and asking....what good is all this paper, I'll never be able to spend it and my kingdom loses oil from the ground daily.

I'd like to have some gold...at least for what I can't spend.

Wed, 10/30/2013 - 20:10 | Link to Comment hardcleareye
hardcleareye's picture

Further in the Reuters article you will read.....

"The United States still lagged both Saudi Arabia and Russia in production of just crude oil by abut 3 million bpd, PIRA noted."

This reminds me of Clinton's "it all depends on what the definition of is, is..."  

While natural gas is good, it isn't crude.....

 

How do you spell PROPAGANDA.......

http://www.reuters.com/article/2013/10/15/us-oil-pira-idUSL1N0I51IX20131...

<sadly shaking head at people who don't understand the difference...>

Wed, 10/30/2013 - 20:15 | Link to Comment More_sellers_th...
More_sellers_than_buyers's picture

look at the numbers.... ugh there is no hope... how long do we have?

Wed, 10/30/2013 - 21:23 | Link to Comment Cloud9.5
Cloud9.5's picture

2017 would be my guess.

Wed, 10/30/2013 - 20:18 | Link to Comment Constitutional ...
Constitutional Republic's picture

Ain't globalization great. Every country gets to go bust at around the same time, and see their resources siphoned off to the highest global bidder ... usually the central bank backed 'special' corporations who do enjoy wining and dining (bribing and blackmailing) the national politicians to hand over their people, and resources.

Wed, 10/30/2013 - 22:00 | Link to Comment Seize Mars
Seize Mars's picture

Oil is expensive because if it weren't, the LGPP's wouldn't have as much value (Little Green Pieces of Paper). Oil is money. The higher it goes, the more LGPP'S they get to print!! Whee!

Wed, 10/30/2013 - 20:45 | Link to Comment robertocarlos
robertocarlos's picture

If Saudi Arabia was the only producer and they accepted a 1000% markup then oil would only be 10 dollars a barrel. We just need to use less oil. This public service announcement has been brought to you by the Obamanomics Centre for Good Things. 

Wed, 10/30/2013 - 20:49 | Link to Comment Incubus
Incubus's picture

This country needs another revolution to kick the vampire squid deathgrasp on it.

Innovation is bogged down by mountains of legal bullshit; politicians are bought off by big money.  Revolutionary ideas are bought out and shelved.

It comes down to $$$$.

 

What's profitable to big money isn't in the best interests of "main street."

Decentralize.

Wed, 10/30/2013 - 20:56 | Link to Comment ZH Snob
ZH Snob's picture

it's a fracking miracle!

Wed, 10/30/2013 - 21:38 | Link to Comment adr
adr's picture

I have a hard time believing the rise from $18 a barrel to $100+ is completely due to ROEI and lower supplies of easily recoverable oil.

Not when the exponential increase coincides exactly with the CFMA and dissolving the separation between commercial and investment banks. That and the second major rise corresponds with the exponential increase in Benny Bux.

When 97% of the contracts are traded by speculators, you don't have price discovery.

ROEI is a terrible metric because it includes the cost of oil to produce oil. If the price of a barrel goes down, everything made with oil costs less, and it costs less to explore and drill.

If you are a consumer of a commodity, would you want a contract to cost more or less? A true consumer of a commodity will always want a contract to be as cheap as possible, so his margins will be as large as possible. A seller of a contract wants the contract to be more expensive, so his margins are greater. This balance is what keeps a lid on the cost of a commodity. 

Today the contracts are bought by very few actual consumers, the vast majority are bought by speculators hoping the contracts will increase in value. This imbalance favors higher prices, and that is what we see.

The majority of the rise of an oil contract since 2009 is due to massive speculation with nearly free money from the Fed. Just like the rise from 2002-2008 was because banks used billions in consumer accounts to speculate in the market. It it was really supply based, the price of a contract wouldn't have dropped from $140 to $30 in a few months.

The people I talk to in Ohio involved in fracking tell me the break even is around $35, and that is because raw components like steel are so expensive. I've also been told repeatedly that the dropoff in well production is due to drillers capping wells and saving the oil for later extraction, not because they are running dry. Many are finding that injecting a well amd letting it sit produces more oil than trying to immediately extract from it.

If 

Wed, 10/30/2013 - 22:26 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

Re-perform all your analysis in joules rather than dollars. 

You don't seem to understand shale processes.  There is no injection after fracking is complete.  It's not Ghawar in Saudi Arabia where they inject water and CO2 to add pressure driving the oil up.  Completely different geology.  Completely different physics.

You seem to be in Ohio.  It has legacy wells back to the 1800s.  Squeezing out the last drops from those does require pressure injection, but those are not the Utica shale sources, so your error is legit.  Those are stripper wells that produce a barrel or 5 per day.  Been doing so a long time and they will do so (in decreasing amounts/day) for another long time.  THOSE might be capped, but not plugged, awaiting price, but it's a very low amount.

But again, that's not the shale game.  Shale leases have to be drilled and produced by a deadline or the lease is forfeited, per the contract.

 

 

Wed, 10/30/2013 - 23:13 | Link to Comment DaveyJones
DaveyJones's picture

 "If the price of a barrel goes down, everything made with oil costs less, and it costs less to explore and drill."

run that concept backwards and you might be onto something

and by price, see Crash's comment

 

Wed, 10/30/2013 - 21:45 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

Not gonna bother too very much here.

Net joules.  Stop pricing in dollars.  Price in joules.  It clarifies.

Bookmark this:  http://mazamascience.com/OilExport/  Have a look at China, India and Saudi Arabia's domestic consumption of oil.

Compare and contrast with the US of A.

Sunshine is about 1000 watts/square meter.  The typical solar panel is 14% efficient.  So you get 140 watts / square meter.

There are 750 watts in 1 horsepower.  Go ahead and compute surface area of the top of your car required to equal a 110 horsepower Camry.

Chlorophyl is about 3% efficient turning that 1000 watts into calories.

Save all those numbers.  They define your approaching death.

 

 

Wed, 10/30/2013 - 21:54 | Link to Comment chemystical
chemystical's picture

 

Bear in mind please that the US's biggest export in terms of $ value is fuel. 

Additionally, as of last year the US is now a net EXPORTER of gasoline, diesel, and heating oil.  The last time that occurred was over 60 yrs ago when the Korean War was in full swing.

I understand cost efficiencies in transportation, but tell me again how globalism in general has help the US worker (and more to the point...the unemployed would-be worker).  The US has the single biggest expanse of diverse resources in the world.  It needs little from the rest of the world - aside from, of course, a market for its goods.  Those goods have dwindled considerably, however, as it factories and jobs were exported.  That skid was greased by big business boards and codified by the economic Quislings in DC).

Should oil be nationalized like Mexico and some countries in the ME and have tried to do at various times during the last 80 years, and has been done by some SA countries?  Maybe.  After all, the repercussions of those acts have historically been military and economic assault by the US.  What are we gonna do....attack ourselves? 

(and please don't say that the phony ME 'countries' like Saudi Arabia or Kuwait have nationalized their oil.  their "royals" were created out of thin air, they are puppets, and their "borders" are fictional.  There was no Kuwait until the western powers drew a line on the map and stole it from Iraq while they were in the midst of a civil war.  The Brits parked their navy offshore and said, "keep your mitts off of everything on this side of that line.  Yeah, it used to be part of your country, and yeah, it's the only coastline you have, and your other access to the Gulf is via that river that Iran claims to won, but tough shit.")

Wed, 10/30/2013 - 23:28 | Link to Comment DaveyJones
DaveyJones's picture

"What are we gonna do....attack ourselves?"

no, we already did that

and it didn't work

in many ways, US oil is already "nationalized" - the petro dollar, the military machine, 911, ME policy......

Wed, 10/30/2013 - 21:57 | Link to Comment Tulpa
Tulpa's picture

"You are going to count sunlight per square foot of earth as energy imput?...How about counting all the eons worth of pressure and heat that went into compressing dino juice?"

We don't have a choice about how the heat and pressure of millions of years ago was used.  The oil is already there, we can use it or not, that's the only choice.  However, we do have a choice about what will be planted on precious arable land to soak up that solar irradiance, and wasting that area on substandard fuel rather than edible plants is ridiculous.

Wed, 10/30/2013 - 23:07 | Link to Comment DaveyJones
DaveyJones's picture

bravo

Thu, 10/31/2013 - 05:48 | Link to Comment Incubus
Incubus's picture

in 100 million years, think of the "karmic balance"

Some other devloping species will be using fossilized human oils to power their civilization.

 

Hopefully they're smart enough to get off of this rock and move into space.

Wed, 10/30/2013 - 22:39 | Link to Comment Yenbot
Yenbot's picture

Here, WATCH ME: (last tank moving WINS)...

Wed, 10/30/2013 - 22:42 | Link to Comment tvdog
tvdog's picture

The U.S. has coal to last for 400 years at current rates. You can make methane out of coal and water and run vehicles on that. Just as soon as this "global warming" bullshit dissipates in the little ice age that is unfolding.

Wed, 10/30/2013 - 23:37 | Link to Comment DaveyJones
DaveyJones's picture

the energy value of the coal is depleting as well

it is also taking more energy to get the lesser quality stuff

http://www.theoildrum.com/node/4061

Wed, 10/30/2013 - 22:53 | Link to Comment GeorgeHayduke
GeorgeHayduke's picture

From what I understand, shale hydrocarbons aren't profitable under $100 barrel. Maybe that's why we don't have the glory days of $20 a barrel oil and likely never will again.

Wed, 10/30/2013 - 23:01 | Link to Comment bugs_
bugs_'s picture

$2.95 in DFW - will see $2.50 by Thanksgiving travel season.  Its coming - maybe not $0.80 but sub $2.00 is certainly possible - with all of its supply side effects on the economy.

Wed, 10/30/2013 - 23:43 | Link to Comment shutdown
shutdown's picture

If everyone on Earth burned oil like the North Koreans do it would last humanity tens of centuries, long enough to figure out something else to burn without causing a mass extinction.

But no, humans will rip through what's left of the oil as fast as possible much like algae in a nutrient-coated petri dish. Then it'll be game over. Figure five more years until it's too valuable to waste in cars. Silly humans.  

Thu, 10/31/2013 - 02:22 | Link to Comment Socialized Losses
Socialized Losses's picture

five more years is all we got & I agree 100% because you've been saying it for decades

Thu, 10/31/2013 - 00:23 | Link to Comment earleflorida
earleflorida's picture

In a decade, gasoline will be considered a 'Secondary Fuel Source', with the ubiquitous advent of Darwinian-Hybrid's (battery technology leapfrogging all competition-- swap-out station infrastructure should be on-line 2025 at the latest) running on Nat-Gas and LNG's flexfuel-retrofitted in 'ALL Auto Manufacturing Production Facilities!

It's happening now (EV's are the end game and Tesla will be the Henry Ford and perhaps the Rockefeller if he can corner the 'Battery Pack Market') in all parts of the globe! jmo

Ref:  "Natuaral-gas vehicles run best without subsidies"         http://www.bloomberg.com/news/2012-03-29/natural-gas-vehicles-will-run-best-without-subsidies.html

 "3 Foreign Companies Invest in U.S. Project to Export Liquid Gas"           http://dealbook.nytimes.com/2013/05/17/3-foreign-companies-invest-in-u-s-project-to-export-liquid-gas/?_r=0             

thankyou Tyler 

 

Thu, 10/31/2013 - 00:16 | Link to Comment Notarocketscientist
Notarocketscientist's picture

THE FRACKING PONZI SCHEME

Robert Ayres, a scientist and professor at the Paris-based INSEAD business school, wrote recently that a "mini-bubble" is being inflated by shale gas enthusiasts. “Drilling for oil in the U.S. in 2012 was at the rate of 25,000 new wells per year, just to keep output at the same level as it was in the year 2000, when only 5,000 wells were drilled."  http://www.forbes.com/sites/insead/2013/05/08/shale-oil-and-gas-the-contrarian-view/

 

Why America's Shale Oil Boom Could End Sooner Than You Think

http://www.forbes.com/sites/christopherhelman/2013/06/13/why-americas-shale-oil-boom-could-end-sooner-than-you-think/

 

FRACKING WILL CREATE AN ECONOMIC CRISIS

Overinflated industry claims could pull the rug out from optimistic growth forecasts within just five years.  A report released in March by the Berlin-based Energy Watch Group (EWG), a group of European scientists, undertook a comprehensive assessment of the availability and production rates for global oil and gas production, concluding that: "... world oil production has not increased anymore but has entered a plateau since about 2005."  Crude oil production was "already in slight decline since about 2008."

 http://www.guardian.co.uk/environment/earth-insight/2013/jun/21/shale-gas-peak-oil-economic-crisis 

Thu, 10/31/2013 - 02:37 | Link to Comment earleflorida
earleflorida's picture

Germany and France?

Let's start with Germany's energy need (electricty generation). In 2011 the German's put a three (3) month long moratorium on Nuclear energy that generated ~ 25% of their needs--- today the moratorium has been lifted, but... Nuclear power only generates 17%, with green energy's being solar, wind,etel.taking up the slack.

France is a different fish-to-fry all together. Nuclear Power generates 75% of all their electricty needs. Note: GDF Suez of France is signatory (ref: '3 Foreign Companies Invest [...], previous comment) to U.S. Shale Gas Export. Note2: The 4th largest (globally) publicly-traded energy company is Frances', Total SA! Do you see any conflicts of interest,... but in all honesty, water is a problem, and always has been in France, Italy, and Germany?!? If only they could frack with wine?

 America has been fracking for 40 years plus-- lots of expertise and knowledge gained that other countries would pay dearly for... such as Australia, China, India, etel..

China's has to stop with the coal, period!  ref:   "The Map that Shows China's coming Shale Gas Boom" 10/23/13 by Todd Woody   http://qz.com/138837/the-map-that-shows-chinas-coming-shale-gas-boom/

"Six Reasons Fracking has Flopped Overseas"  4/7/13    http://www.forbes.com/sites/jeffmcmahon/2013/04/07/six-reasons-fracking-has-flopped-overseas/

 "Nuclear Power in France"    Sept/2013       http://www.world-nuclear.org/info/Country-Profiles/Countries-A-F/France/#.UnHn1yfD9y0

Ps. I read somewhere that the United States has lost the equivalent of TWO (2) Lake Eries (Great Lakes) water volume since 1900, WOW!!! Why are we losing our most precious resource and yet nothing is being mentioned in the MSM?              PLug in Search window :((   

 "US Depleted Two Lake Eries Worth Groundwater 1900 Study Finds"

http://www.popsci.com/enviroment/article/2013-05/us-depleted-two-lake-eries-worth-underground-water-1900-study-finds            I just realized, that I had read it in my beloved subscription of Popular Science

Ps2. The U.S. Land and Management does what it wants on its own land because it's owned by our Federal Government,... and they own ~30%!        Ref:     http://en.wikipedia.org/wiki/Federal_lands 

thanks, JMO

Thu, 10/31/2013 - 03:05 | Link to Comment gregga777
gregga777's picture

I AM a rocket scientist.

I strongly suggest that you study the science of thermodynamics if you think an alternative to coal, oil & gas fossil fuels exists. Ancient sunlight was captured by plants and animals hundreds of millions of years ago and transformed by temperature and pressure over vast periods of time into readily usable energy. We don't have to do anything to create the energy. It's sitting there deep beneath the earth waiting for us to find it.

And finding it is something we aren't doing very much of over the last fifty years. Everyday we burn "14,000 years of fossilized sunlight" (I'm using a Canadian scientist's numbers-I haven't determined how he came up with that figure).

Then you might begin to appreciate the disaster humanity faces in the coming decades as you discover that all of the "green" energy programs are quite literally dead-ends.

For instance, just to mention a single dilemma of our dependence on fossil fuels, without natural gas-based ammonia fertilizers crop yields will drop to less than 20% of current yields.

Thu, 10/31/2013 - 19:26 | Link to Comment earleflorida
earleflorida's picture

"What's in a Barrel of Oil?"     *(petroleum products yielded from one barrel of crude oil in California)

http://energyalmanac.ca.gov/gasoline/whats_in_barrel_oil.html

Sat, 11/02/2013 - 11:01 | Link to Comment Seize Mars
Seize Mars's picture

Ha ha ha!

Yes, dead plant material rotted, then was magically covered by thousands of feet of earth, then magically transformed to long chain alkanes and other hydrocarbons.

If that seems totally unbelievable, then just add millions of years. Now it seems plausible!

Ha ha ha!

Whee!

P.S. Whew. That must have been one hell of a lot of dead plant material. Huh...uh...I wonder if we can reproduce this in a laboratory. No? Oh it must be the "missing millions of years..." uh uh uh uh uh uh uh.......

UHHHH

Thu, 10/31/2013 - 04:17 | Link to Comment FunkyOldGeezer
FunkyOldGeezer's picture

Methinks the average 'merikan doth complain too much about 'gas' prices.

If you can't get the economy moving with such (relatively) low fuel prices, you ain't got a hope in hell. Rather like the business that can only be profitable on the backs of part-time, low paid workers, isn't really a viable business, the US economy is in some sort of surrealistic reality check needed land.

Thu, 10/31/2013 - 08:14 | Link to Comment Its_the_economy...
Its_the_economy_stupid's picture

OK, now I've heard it all.

 

How come no one is printing money and sellling down contracts of oil like they are doing gold? If gold can be suppressed in a world wide market, let's do the same for oil.

Thu, 10/31/2013 - 19:30 | Link to Comment Mad Muppet
Mad Muppet's picture

Well for the  love of God, why don't we send our FSA terrorists to begin destablizing Saudi Arabia, and then when the House of Saud is sufficiently terrorized to offer us oil at $40bbl (if only we keep them safe), we recall the bad guys, and send in bunches of Marines. Sounds like a win/win/win. I can't be the only one who thought of this.

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