This page has been archived and commenting is disabled.
Why The US Will Never Become A Net Oil Exporter
The big domestic news from yesterday was the hint, first reported in the WSJ, that the US is looking at loosening a four-decade ban on oil exports.
The US government was quick to refute this suggestion which nonetheless promptly managed to eat into the spread between WTI and Brent, a structural gap resulting from the inability of WTI to reach global markets. Moments ago, Bank of America's Francisco Blanch confirmed as much when he said, at a press conference in New York, that "from a legislative standpoint there is close to zero chance of the crude oil export ban of 1975 being repealed" in Washington, Francisco Blanch, head of commodities research at Bank of America, said at a press conference in New York. He added that the Obama Administration has a "fair amount of leeway" on the administrative front and more condensate exports may be approved. He concluded that "lifting the export ban is too hot a political button" for Obama Administration.
He is right.
But aside from the political rhetoric, there are fundamental considerations that also have to be taken into account. One of the better post-mortems on America's crude supply and demand picture comes from Leonid Bershidsky who, in Bloomberg, writes the following:
The Commerce Department has issued separate private rulings allowing two companies, Pioneer Natural Resources Co. and Enterprise Products Partners L.P., to export condensate -- a light hydrocarbon that remains liquid at normal temperature and pressure -- under the condition that the condensate will be stabilized and distilled. These are two early phases of the refining process that don't turn the light oil -- which is what condensate ultimately is -- into a finished fuel like gasoline, which U.S. companies are allowed to export.
U.S. oil production has increased by 66 percent, or 3.3 million barrels a day, since 2008, Daniel Yergin, author of the influential book about the oil industry, ``The Quest,'' said in recent congressional testimony. That has been lucky for the U.S. According to Yergin, the increase "has almost exactly balanced the amount of oil currently missing from the world market owing to disruptions in countries like Libya and Iraq and sanctions on Iran. In other words, the increase in U.S. oil production has compensated for loss of oil elsewhere. Without that increase, we would be looking at much higher oil prices than today."
In other words, the enormous growth in U.S. oil production has helped to displace imports, but only at marginally lower prices than imported oil would have commanded. Unlike the shale-gas revolution, the growth in shale-oil extraction hasn't led to a big price drop.
Allowing exports on a large scale under these conditions wouldn't be a good idea. Pioneer, a small producer, and pipeline operator Enterprise Product Partners, which doesn't have its own extraction operations, aren't going to make much difference to the U.S. energy balance if they are allowed to sell some lightly processed condensate abroad. What is valuable to President Barack Obama's administration is the public-relations effect of the rulings: The world will now know that the U.S. is an oil exporter for the first time since the 1970s. Europeans may take U.S. promises to help wean them off Russian hydrocarbons a bit more seriously. The Organization of Petroleum Exporting Countries and Russia will keep in mind the threat of U.S. pressure on global oil prices.
The U.S. government isn't about to open the floodgates, however. According to the U.S. Energy Information Administration's reference scenario, domestic oil production is going to peak at 14.6 million barrels a day in 2019 and then drop to 12.7 million barrels a day in 2040. Given the 2013 consumption level of 18.9 million barrels of crude a day, the U.S. will never be a net oil exporter under this scenario, or even under the EIA's most optimistic one, which puts 2036 output at 13.3 million barrels per day. Closing that gap would require a drastic reduction in the country's appetite for hydrocarbons.
The U.S. crude producers need the flexibility of exporting oil or selling it domestically. As for the political dreams of making the U.S. a major oil exporting power, or even of energy independence backed by the shale boom, they are just that -- dreams. Although the administration recognizes the importance of the political agenda, it is only going to make tiny steps toward liberalizing exports, akin to verbal interventions on the global oil market.
- 15912 reads
- Printer-friendly version
- Send to friend
- advertisements -


Will we still be considered an exporter when we don't get paid either....?
Q2 2019 GDP is being revised up to -4.5% from -6.1% after an "Accounts Receivables" entry is being made on the G/L for money owed by Ukraine....
The USA will never be a net exporter of oil because it is priced in our current number 1 export.
pods
Just think of the near endless financialization opportunities, though. Almost like a self-wagging tail.
why should we be, other than the desire to pay evermore at the pump, and to enrich exxon? i dont get the whole concept, same with nat gas.
Just think about exporting oil and importing all those USD from holders drowning in that paper from around the world - price inflation yee haa.
The model was to import oil and export paper, not the other way around.
And yet there is unmet demand for USD in many parts of the world.
Also, America could become a net exporter if demand falls below supply, as the economy adapts to the higher oil prices and cost of living.
still, they were right when they said we'd become "the new Saudi Arabia"
but they meant exporting terrorism and a youth who hates its government.
Why not just annex the old SA and or Iraq and or Iran and then by any definition we will be a net exporter?
Right. The author kinda missed the target. Those added US oilfield workers are 'contract workers' for the Federal Reserve. Take away QE and many of those jobs will disappear. On the other hand, print to infinity and all US consumers will be priced out. Then, we can export, just like Nigeria. US becoming 3rd world is what DC wants.
Does any one actually believe any public numbers from the gov. or WSJ? Please!
In 1973 during the Arab oil Embargo, while in the High School library I read a Time Mazagine article saying by the 1990's the world would run out of oil. Bottom line, they don't have a clue and neither do these "estimates".
Only people wanting to sell magazines were saying that....
The experts knew otherwise...
Hubbert predicted a peak in ~1990 assuming pre-1970 growth rates...
Correcting his estimate for observed post embargo rate gave a peak in 2000...
Pretty fucking good for 1965....
This BULLSHIT about being an exporter is simply that....absolute BULLSHIT !!
If even the ROSIEST scenario of U.S. domestic oil production which includes tight oil cannot get us back to the historical peak of 1970.....after which we had recession and the start in earnest of Ponzi Economics to keep America afloat.....how is the HELL could anyone ever expect to be in better shape with LESS output than then ?
http://crudeoilpeak.info/wp-content/uploads/2012/03/US_crude_oil_product...
Like OMG, thank for this post. Not sure I could listen to Blue King Bill or Blue Queen Hillary.
Thought you loved the Elysium class.
Hard to keep the makeup on those scales.
"Elysium class," said the marxist rabble from the Envious Class; i.e., losers in economic competition (capitalism.)
I am sure that the .1% pay their TROLLS very handsomely and that this comment rings true for you in the emporor's box. / Sarc
I think Poland would beg to differ.
pods
"the .1% pay their TROLLS very handsomely"
Handsomely, indeed. Who do you think paid the bills for Hayek, Mises, Friedman, etal?
One man's Economist is another man's Troll.
Now why don't you make yourself valuable to the market, before the Protectors of Property Values, i.e., the cops, occupy your pie hole with Nutraloaf?
So, in your view, fraud, corruption and violence are valid parts of the market?
Being smart-n-savvy is also a sign of being "more fit" in a survival-of-the-fittest society. Survival-of-the-fittest doesn't mean the nice people win.
In your World (progressive), the con artist is a smart and savvy survivor, the proof is in his ability to con people and be smart enough to get away with it. In my World he ends up hanging himself before his victims deliver justice.
You never did get that reality thing down, did you?
And they thought the Marxists were a bunch of idealists..
A global warming troll lecturing me about not being a realist. That takes the cake.
A bible thumping creationist lecturing us on science...
Yeah, the cake, the platter and the oven it was baked in...
I'm not lecturing you on anything except the obvious. I'm not a creationist and was a scientist before I ever read the Bible.
So in your view, you can succeed only in a perfect society?
You inferred that the Clintons are capitalists, and that people who do not like the political class are marxists. Tell me, what capital does a politician own? What product does a politician produce?
Top Gear is a low budget marxist. Not very good at bullshitting.
Re: losers in economic competition (capitalism.)
I thought we didn't have capitalism because of The Fed and the Elysium Class were winning because we had Obama socialism.
Take off your tin foil hat, roll up your sleeves, and you too can become part of the Owner Class who control the productive property in America, if you work hard—and smart—enough.
Until then, you're just parasitical trash for the Protectors of Property Values, i.e., cops, to pick up and discard.
"Cops must be unleashed, and allowed to administer instant punishment...unleash the cops to clear the streets of bums and vagrants. Where will they go? Who cares?" ~Murray Rothbard
HA! +10.
It has decreased the need for $ in the world and it has increased the alliances the Chinese make based on their international business plan.
Zerohedge need to factor in that the major depression we're heading into will make oil consumption drop MASSIVELY... So I say US next exporter of oil by 2016.
We're headed into an era where Americans will not be able to afford what they produce themselves. Welcome to to the Third World.
Zimbabwe times. (Curse for the modern age)
Workers produce? That's Marxist bullshit. The true productive people are those who own productive capital.
And once robots replace all the workers, the productive capital will all sit idle with no customers to purchase the products.
yeah, that's what the shareholders of my company thought when the union went on strike. Sent us office workers onto the floor to run the presses. After we fucked up a few hundred grand worth of material, they decided to sit back down at the bargaining table....
"...we fucked up a few hundred grand worth of material..."
Ah, the spokesman for the Criminal Parasites, the children of Ned Ludd, wantonly destroying capital.
Go back to reading your International Workers Socialist Review rag, primitivist and destroyer of civilization.
i'm just sayin dude. No way those machinists could do my job. But dont assume you could do theirs. Have a little respect..
Why this dirty hype of shale business will become far too expensive.
The complexity of oil has become extreme, and somewhat in self defense.
US imports of oil have fallen. About half of the fall has been consumption decline. So the celebration of oil production cutting imports is 2X what it should be.
But worst of all -- people don't understand the complexity. Oil is supposed to have a definition, based on API degrees, but it doesn't. It's dodged, and it is dodged nowhere more aggressively than in shale fields.
Meaning, condensate IS NOT OIL, but it is often called oil. Oil should be thought of as a combination of diesel, gasoline, kerosene, even asphalt and smaller quantities of other stuff. All those substances are in a barrel of crude. You don't CREATE them from the barrel. You remove them from the barrel. It's merely distilled. There is no magical creation going on.
Condensate doesn't have diesel. It doesn't have kerosene. It may have some gasoline, but mostly it is propane or other liquids. Which opens another can of worms -- NGLs, natural gas liquids. Those are overtly propane and ethane etc, but some hand waving of "all liquids" can get that to look like "oil".
Don't stop and say "well if it has gasoline that is what matters." Turns out not so. About 60% of all consumption gain in the world right now (read china) is diesel.
Oil output from the US frankly is unknown right now because of all this bullshit redefinition taking place. Rest assured of one thing -- the uncertainty is not to the upside, it is to the downside. There has been production gain, but far less than quoted.
"Oil output from the US frankly is unknown right now because of all this bullshit"
Weird. These days, any "output" from the US seems to share this magical quality
Tell me, what is "oil's" pipeline quality API gravity then? You seem to have a very low-level understanding of this, at best. Rather than say "oil should have have a definition" you should say different types of oil have different API gravities. And it does...light crude is greater than 31.1 API and heavy crude is below 22.3 API. In the industry those stream distinctions you talk about (which aren't even where most people get confused anyway) are quite clear and the different streams are all measured separeatly once produced. Condensate does not contain propane at all. Condensate is C5-C7 (aka light crude aka natural gasoline aka diluent) while NGLs are C2-C6, so there is some overlap. It's all taken out of the "oil stream" and broken out into its contingent parts. This is why oil and gas separators and natural gas fractionators exist. It may get a little blurry when it comes to comparing some of the liquid streams, but by no means is the definition of what you call oil changing.
Some people peg condensate at anything over 45 API, some put it at 50 API, who is right? Who knows. It's a matter of definitions. You're mixing API with the actual distillation cuts. Those things don't always have a linear relationship.
You missed the forest for the trees anyway. What he's saying is that a lot of this shale stuff, e.g. Eagle Ford, isn't really what we traditionally think of as crude oil on a BTUs per barrels basis, but it gets counted as "oil" anyway.
zackly...
Your point is well made, but as a side car, 3 questions:
1) will demand across the world plummet making it perhaps economically dis incentivized ( what the fuck word what that? ) to produce oil here, or relieve the need to import oil TO the US?
2) will the NATO war machine bomb any current oilfields into the stone age ( i.e. libya-ize iran or iraq ? ) making world supply perhaps, tenuous.
3) I noticed by your avatar you found some beer and I was wondering if you wanted to share and I could regale you with stories of intrigue and hilarity as partial payment.
Maybe, maybe not. Gasoline consumption is already down by 75% since peaking in 1998. (http://www.zerohedge.com/news/2014-05-30/us-gasoline-consumption-plummet...) Yes, a lot of this is due to improved fuel efficiency, but it's also because when people don't have jobs, they don't have to commute.
Allowing US crude exports isn't about the US supplying oil to the rest of the world. It's about enriching the oil majors by allowing them to capture the arbitrage between WTI and Brent.
The article you quote has been debunked.
Read the comment thread. Always. 70% of value of ZH articles are not the articles themselves.
best read those comment threads quickly.
before they disappear down the memory hole.
seem to have a shelf-life reminiscent of how
the financialists divide yearly-time into
quarters.
Please, will someone remove that grossly misleading and just plain false article from the ZH archives? U.S. gasoline consumption is down 6 prcent from its peak in 2007.
http://www.eia.gov/tools/faqs/faq.cfm?id=23&t=10
Let's start by breaking down a barrel of crude oil. Approximately 47% is gasoline which we mostly use [but, export also?], and 20% is a combo of Heating Oil/ Diesel Fuel, which accounts for 2/3rds! http://www.californiagasprices.com/Crude_Products.aspx
'Editorial Commentary from 'GasandOil' : Home Page & Events', on a current global calender... http://www.gasandoil.com/editorials/a-future http://www.gasandoil.com/events
and, where we were and where we're going: http://www.gasandoil.com/news/2001/11/ntn14784
lastly, your favorite site: http://www.eia.gov/dnav/pet/pet_pnp_cap1_dcu_nus_a.htm
and this from EIA (quote?),... "In 2012 the US imported ~ 10.6 Mbpd from about 80 countries (mostly colonies?). We (that is to say the US exported ~ 3.2 Mbpd of crude and petroleum products. This resulting in a net import of ~ 7.4Mbpd which accounts for approx. 40% of the petrolem consumed in the US. (Note: the lowest annual avg. since 1991. Petroleum is defined as crude oil? and refined petroleum products like gasoline, and biofuels like ethanol and biodiesel.) In 2012, about 80% of gross petroleum imports were Canada, Mexico (pure sulfur shit mud), SA, Venezuela (fallen off our Monroe Doctrine Map of obediant Colonies?), and Russia ( yes the good ole USSR?). Net imports from OPEC countries accounted for 55% of US net imports.
In 2008 approx. 4Mbpd the US produced in petroleum (see above def.) and ~ 9Mbpd we imported, avgeraging out to ~ 13Mbpd +/+. With all our Refineries maxed-out at full capacity, we (US) cannot process enough crude oil... which is ~13Mbpd+/+ {(~14.5Mbpd /2014?)} to meet our current needs. So, what do we do? We import ~3Mbpd (mostly gasoline!) refined product from our closest northern friend (think geography and logistics/cost of transport of 1500 miles v. 200 miles) Canada (how convenient?), every single day of the year.
Lastly, as if most don't already know,... the US consumes as much oil as China, India, Russia, Germany, and Japan combined-- along with consuming ~9.2 Mbpd of gasoline, and yet we still export our excess gasoline!?!" end fucked up quote! Ref: http://www.eia.gov/tools/faqs/faq.cfm?id=727&t=6
jmo
hey,... ya gotta believe someone
US oil consumption has been falling since before 2007 (and likewise GDP).
But you have made the generalized error of presuming consumption falls beause of a US recession.
China and India have consumption growth far higher than anything the US ever had. They will overwhelm any fall in US consumption.
The US has about 4% of the world's population and burns 23% of the daily oil. China and India want to catch up.
For them to do so will require global oil production of about 190 million bpd and the faster they get there, the fewer of their people die of poverty, so they want to ramp up FAST. That's significantly more than 2X what comes out of the ground now, and almost all of that is from post Peak (declining) fields like the North Sea and Mexico's Canterell and Indonesia and wherever.
Clearly, they have to take some from someone else.
in a nutshell.
How does consuming more oil prevent people from dying of poverty? I suppose to some extent more overall wealth means better health care and wider range of foods for the poor.
Other than that, driving more cars and running more factories and building more roads may not be the best way to improve people's quality of life.
I guess one way to look at it, is the more they can produce in goods, the more they can trade for food imports.
"I suppose to some extent more overall wealth means better health care and wider range of foods for the poor."
Pretty much that.
You want GDP? Burn oil.
Have a look at Greek oil consumption. 1:1 with GDP up or down.
As a trade-off, more cars means less walking. More eating in restaurants means more salt and sugar in your diet. More manufacturing means more pollution. It's hard to see how it nets out to a healthier society, or even a better fed one.
If you want more material wealth (that includes food), you have to consume more energy to produce the wealth. That means consuming more oil.
Or you have to more efficiently allocate resources - but that is harder than simply adding more energy into the system. Most of the "wealth" is illusionary - cars, cruise ships, just-in-time delivery, more products that are of lower quality and wear out faster and faster. More cellphones that are out of style and need to be replaced yearly when they could last several years.
That comes in handy lolmao. They'll need less barrels to produce one when oil gets cheaper.
Probably something more like this (4 gallons per week):
http://aoghs.org/wp-content/uploads/2011/02/August-15-Gas-Rationing-AOG.jpg
WTI price will rise to Brent if/when Oil exports begin. Maybe we can sell some to Canada and Mexico by pipeline to reduce the costs. Get Gazprom to build the new reversable pipelines.
Never say never. There'd be plenty of oil to export if it was so expensive that only governments and the 1% could afford it. Make the price so high nobody can afford it, but make discount coupons available for your friends/people who vote for you. Works just like the healtcare cartel does.
I will make this so simple a caveman can understand, NO ONE makes oil expensive. The expense comes from having to drill 2 miles deep in the ocean, dig half of Canada and cook it with a valuable fresh water source. Gone are the days of Jed Clampett firing his shotgun in the ground and finding oil. The cost to find, drill, transport and refine continues to climb year after year. When I was winning my first science fair in grade school 21 gallons of gasoline were refined from the very high quality crude produced. Today they are lucky to refine 17.5 gallons per barrel. The quality of crude has been declining at the same rate as the none syn-crude production. The Saudi's could drill at a cost of 5.50$ per barrel 30 yrs ago now the cost is 21.50 per barrel just to pump. The Saudi's are now pumping 100 barrels of salt water into Ghawar just to create the head pressure to pump. Expensive energy begets expensive energy it really is as simple as that.
I don't disagree with you. The point being is we don't let free-markets work now. What makes you think the free market will work when things get really scarce? Any oil will be pumped at any cost, and the bill will be past on to those who can't create money out of nothing. Its going to get worse, because the governments don't think the laws of economics apply to them.
The reason you will never see "free market" oil pricing is that tight market conditions lead to alternating price spikes and crashes in a series of divergent oscillations that would cripple the greater economy and threaten the extraction/refinement/distribution system.
What they are trying to do is insert some kind of "shock absorber" into the system to dampen the oscillations in price and keep both flow rates and consumption relatively steady.
If we opened up the USA to drilling and exploration we could be an exporter I think.....but we never will allow it....to many greenies out there
Why would you want to export US oil?
This is blind faith.
What is magical about US dirt? Why, after draining it for 100+ years, are you confident there is infinitely more to drain? And again, what is magical about US dirt? Other countries don't have Green obstacles to overcome, but they can't find oil, either.
Why is it not possible that EMPTY can be true?
I know it's a weird concept, but the earth has physical limits
Scientists predicted world peak decades ago and the US peaked forty years ago, Militaries, Governments, and Oil Companies all over the world have written about this. World peak was around 2004/5 and as Crash points out, it is all bullshit from here: redefinitions, wars, lies - anything but what needs to be done. What else do you think motivates 911, the longest (most unproductive) wars in US history, and a complete scrapping of the constitution all for a new boogeyman.
That said, peak debt will hit (has hit) us first. We have never seen math like this before and that's because even our "modern" economic systems and philosophies are built on this fantasy of infinte growth and little work.
oil replaced reality for the human race. It took the place of everything including our food. Along the way, it poisoned everything as well including the way we think.
US peak oil coincided with Nixon closing the gold window and his puppeteer, Kissinger, cutting a Petro Dollar contract with Saudi Arabia. Then, throw in the false environmental movement funded by Rockefeller, and others. We are as enslaved as ever, thanks partly to that crook Nixon.
OK, I will call you. So where is this vast source of oil no one seems to know about but you? If there is oil at a less expensive price oil companies DRILL IT! They even drill off the coast of Ca. with the billionaire homeowners trying to stop them. When oil companies can find a way they will drill off the coast of Brazil in 3 mile deep waters at a cost of 95-110$ a barrel. So the B.S. about hidden pools of oil even cavemen won't believe.
There's oil off of the coast of Brasil? So they say. From here it appears that there are a lot of dry holes.
There's oil off of the coast of Brasil? So they say. From here it appears that there are a lot of dry holes.
Just print more oil, easy enough solution.
The oil market is completely rigged. The World is awash in oil. The US has massive deposits in Alaska for one which are off limits. Oil is a scam by the Ruling Oligarchy to control our economy. Cheap energy technology is totally suppressed by the gangster run federal government.
As I recall there was a Star Trek episode (the original TV series) where Chicago type gangsters ran an entire planet. What I didn’t understand years ago was that Gene Roddenberry’s story was based in reality.
Yes, the world is so full of cheap oil. That's why oil companies build gigantic drilling ships to drill in 5000 feet of water through 2 miles of bedrock, because it's so easy to get at and there's plenty of it, right?
Stated another way...yes the world is awash in oil...but it can only be awash in oil if we're willing to pay $100+/bbl for it.
Petro Dollar. Dollars are a debt instrument. US debt is at an all time high. Bankers and Oil Co's are two sides of the same coin. Oil prices could be 66%(2008 bottom) cheaper, but it'd take a lot of bankers(and politicians) falling out of a lot windows.
You should look up EROEI some time. The curve is approaching a 4:1 or even 2:1 ratio these days. It used to be >50:1. That's why oil is $100+.
The 2008 lows were the result of a massive selloff in every type of asset class. When oil went below $65 the tar sands, shale, etc. became unprofitable.
Sorry that you can't get out of the matrix. The energy market is entirely rigged. Scientific discoveries are suppressed to keep the ruse going. As for the little Cass Sunteins down voting my comment... well... zerohedge commenters ain't what they used to be. Keep believing the CIA propaganda in Time magazine and the bullshit on Bloomberg. It's all a hoax. A lot of people couldn't admit to themselves that they have been conned. There are a lot of Globalists laughing their asses off about how gullible you guys are.
“We’ll know our disinformation program is complete when everything the American public believes is false.”
– William Casey, CIA Director (from first staff meeting, 1981)
“Deception is a state of mind and the mind of the State.”
– James Angleton, head of CIA counter intelligence from 1954-1974
Casey was a pawn for big oil's CONOCO, and was murdered for his involvement in Iran-Contra. Casey got Bush #41 his job with a quaint reference introduction to Nixon. Under Nixon, Bush Sr. was USA represenative to the UN, plus Chairman of the Nat'l Republic Cmte. In 1974 Ford, appoints him Amb. to China after Nixon Resigns?!?
Conoco (merged with Phillips 2002) in the 70's/80's was huge and Casey was their point man. He also orchestrated the Iran-Iraqi war from 1980-89 in which more than 1million +/+ people were murdered. Kissinger was said to have had a hand in the war hoping that playing both sides against each other, Sunni v. Shiite... they'd kill each other off, without the US ever getting involved! But, Casey was under investigation when impeachment talked started to reach a pitch scream amongst DC Democratic/ Gop insiders!
As far as Angleton is concerned... another pupprt-- in 1954 he was recommended strongly to Eisenhower by Nixon, who was politically savvy, and Eisenhower really lost in realpolitics.
Remember that the CIA was the Truman administration brain child paired up with a new security blanket called the NSA! Nixon was a communist IMHO...! Just had to say it!!!
Oh, btw... their isn't that much oil to discover, when all the low-lying fruit was picked a century ago. If you consider ocean exploration where the actual cost to get the oil out of the deep-water will cost 4X moar than terrestrial.
Think Thorium!!!
Ref: http://www.nytimes.com/1987/05/07/obituaries/william-casey-ex-cia-head-is-dead-at-74.html
http://consortiumnews.com/2014/04/09/reagan-bush-ties-to-iran-hostage-crisis/
http://www.historycentral.com/Bio/presidents/bush.html
Where is the <sarc> marker? Ooooohhh, you really believe that stuff about being 'awash' in oil. Yes, I guess that is why the big companies are spending wads of cash to drill 5000 ft under the GOM and spending mega more to explore under the polar ice caps. Also, the fact that they are using $4 dollars worth of investment in their fracking operations to get $1 worth of oil. Yeah! I get it, they just like burning through cash.
Why not burn cash? It was given to them, free of charge, by the FED. Those projects would not be running at a normal 5% interest rate. Mises' definition of malinvestment.
Thorium. Hydrogen. Solar. Geo thermal.
I have yet to find anyone who can tell me why these resources combined with the trillions we spent on War, Bank Bailouts, etc could not solve our energy challenges. I kinda think it's because oil production is tied to Real Estate and control of land is the basis for most rent seeking.
The parasite class is restraining humanity from progress so they can continue to live life on our backs.
Here, allow me to shatter your paradigm for you:
the main reason, among others, is because none of those things is any good for fueling transportation. As of right now, nothing beats the energy density and portability of hydrocarbons. Without a cheap and easy way to make things move around, you can't have complex civilization.
OK. Place GenIII or GenIII+ (or GenIV molten salt Thorium) nuclear power electric plants near Oil refineries to (use electric methods) to convert/crack to natgas/methane. Then like Colorado fuel the CNG clean burning cars. There are modern efficiencies that have not been captured so far.
Electric conversions and Oil refinery systems have not (yet) been fully explored.
If commercially viable thorium reactors actually existed, sure, you could supply refineries with that electricity rather than whatever it is that's supplying refineries their electricity right now.
CNG is OK but it's nowhere near as energy dense as gasoline or diesel. BTW oil refineries are not where natgas comes from.
None of that changes the fact that gasoline/diesel are king when it comes to moving things around.
I suspect the poster was talking about using Mobil process or something similar to synthesize gasoline from natural gas, with a Thorium reactor as the additional energy input.
I was speaking of a thorium powered car.
I was refering to HardlyZero's: "Place GenIII or GenIII+ (or GenIV molten salt Thorium) nuclear power electric plants near Oil refineries to (use electric methods) to convert/crack to natgas/methane."
Aye! WTF would the EROEI on that per gallon?
Since Thorium reactors that commercially produce electricty do not currently exist, the total EROEI is unknown.
Likely, the natural gas would lose 50% of its energy being turned into gasoline, or >20% to compress into CNG.
Since you have to amortize billions in reactor developement (each) into the fuel they'd sell, my guess is that the break-even point would be decades down the road. Early on, any fuel would have to be sold at a huge loss. IDK, I'm just not seeing this happening.
You don't need natural gas, with electricy and a catalyst you can turn air plus sea water into gasoline.
The problem is that these reactors you are talking about do not exist yet. If they are developed prudently, it will take a few decades for the prototypes to be developed and thoroughly tested and decommissioned, then once we know how to safely operate and dispose of them, decades more to roll out large numbers of them.
China and India are working hard on Thorium. America and Europe are working on Fusion. Maybe one or both of these will be a solution 50 years from now, maybe not.
What? Do you realize that gasoline is a complex mix of chains of hydrocarbons of varying lengths? No amount of water and air is going to produce that. WTF??
You know that air contains carbon dioxide, and water contains hydrogen, right? Hydrogen + carbon + energy + catalyst to produce synthetic hydrocarbons. Sure, maybe 80% of the energy is lost in the process. I cannot find the better article, so here is one that at least covers it:
http://gearheads.org/synthetic-gasoline-from-air-but-is-it-green/
Nat Gas conversion was said to be feasible at $80-90/barrel. Shell was bragging about it a few years ago. Then silence. They know this price level is no way near sustainable, being built on free money from the FED.
The problem is, when people say "will be profitable at price X", they are saying if the price of X goes up, but the price of all the inputs remains the same.
Profitable at $90 oil with what price natural gas? Selling the gasoline at what price? That is likely the problem, no way to lock in a lonmg term natural gas supply at $4.
I thank you for the sanity. People still think there is magic that is going to save us, the 100 mile a gallon carburetor Ford developed in the 1940's and won't release ha! If there is magic, people profit from it, very simple. The more expensive energy is the more expensive energy will be, DONE. Sadly we don't even have the remaining energy to get to the time of Star Trek people think will save us. Our physics budget was cut for 2015, I think that sums it up.
If you had a 500 pound car with a 20 horsepower engine, you could probably get 100 miles per gallon on gasoline no problem. Heck, Skoda used to make a little 1.2 litre diesel engine car that got 90 miles per gallon. The problem is not that such things are impossible, the problem is that people have a strong preference for SUVs and 4X4s.
Also, factor in the oil industry backed gov. agencies. The EPA mandated emission controls. Then, another mandated air bags, etc. The Geo Metro was getting over 50 mpg, 25 years ago. People are still driving a few, but they were intentionally pushed out of the market. There are no where near as many FUV's around here. They've been replaced by Honda's, Kia and such. It ain't conspiracy theory if it's true.
The emissions controls are amazing; perhaps you do not remember or did not live through the smog of the 70s and 80s. Maybe you miss (or missed out) on the joys of leaded gasoline fumes.
If the market demanded smaller, more efficient vehicles, manufacturers would make them. Jevon's Paradox would kick in, so the oil companies could sell more oil at higher prices if people were able to use gasoline more efficiently.
As for the switch to Japanese companies, that is more due to lower prices and better quality than the American brands.
So, if I'm reading this right, emissions controls and safety systems like airbags are Big Oil conspiracies to make vehicles heavier and more complex so that they consume more gasoline. Gotcha. That makes total sense. </sarc>
The Geo Metro was a product of the 70s oil shocks. It got 50mpg because it was a tiny plastic piece of shit and oil was expensive. A moped also gets fantastic gas mileage.
Before that, when oil was much cheaper, you had muscle cars that were getting 8mpg on a good day.
Oil consumption rises when it's cheap and falls when it's expensive. What's your point?
And where exactly did you find your Crystal Ball???
There's enough verifiable and foreseeable challenges to mankind to be pessimistic. To assume that you know where science will be 50-100 years from now paints you as a narcissist AND an idiot. A person from 1890 would have feinted in awe at the world of the 1990s. Hell a person from the 90's would be pretty impressed at the tech of today. Go be a doomsday prepper if it suits you, I prefer to be cautiously optimistic about our species chances.
Pessimism or optimism as survival strategies are only as successful as the eventual outcome - which is not determined by your outlook.
If you want to play your fiddle while the sun shines and bet your family's future on our just-in-time delivery networks powered by oil. Be my guest.
In the meantime the more conservative amongst us (who understand the implications of "Pascal's Wager" when applied to Malthus) will be enjoying the last remaining days of summer filling our stores for the long winter that will eventually come.
Best of luck.
Well, you found him.
Because they are all bullshit and do not either work, or more importantly, scale.
There are 250 million fucking cars on the road in the US alone. How many fucking geothermal power sources are there in the US? You going to push 250 million cars with the wisps of steam out of Mt St Helen's?
They are bullshit and don't work or scale.
Oil is everything because of physics, not conspiracy.
The answer is to eliminate 200 million of those cars, the need for which is wholly artificial...
http://www.newurbanism.org/
thank you jesus finally someone with some sense
>> someone with some sense
I've long ago given up on trying to make that argument. I'm just sitting back and waiting for economic reality to force the solution that was obvious from the beginning. Speaking of conservation or a less consumption based society is politically unacceptable.
Bankers won't allow market forces to prevail.
Great - So "The World of Next Tuesday" is a centrally planned ghetto with no independant means of escape.
Can't wait to sign up for that.
yea well bankers don't make profits unless every year we drive more cars than the previous year. so we will drive more and more and more, until we won't. but we can still live comfortable lives with vastly reduced consumption
Good news, good news! Homes in downtown Detoilet can be had for a song! Praise Jesus.
No crash I didn't find him because you offered not a link or an empirical fact. Change the dynamic not the physics. Your arguments of bullshit and scale apply to the paradigm as is. There is no reason that paradigm must remain.
As for cars show me one empirically researched article that shows that we could not have a scaled hydrogen auto economy given the investment dollars. I'd gladly read it.
You're the one making extraordinary claims that thorium/hyrdrogen/solar/whatever could replace what we have now. It stands to reason that if this were true, some companies somewhere would be doing a brisk business building thorium/hydrogen/solar/whatever-powered cars. Hydrogen and solar are not new technologies.
The onus isn't on him to prove that we can't have a hydrogen economy, it's on you to prove that we can.
I never siad they'd replace what we have now. We have to change our habits and how we use this planet SIGNIFICANTLY. That said, all the doomers saying humanity will cease when the oil runs out later this century have as much a monopoly on future telling as the local gypsy.
Oil costs are, just now, eating up the same amount of household income as it was in 1980. The slave masters don't want it taking up any less, if they don't have to.
Another Cargo Cultist.
"The cults that won Cargoist adherents among the citizens of advanced nations were not always obviously religious. The Type II belief held that great technological breakthroughs would? inevitably occur in the near future, and would enable man to continue indefinitely expanding the world's human carrying capacity. This was a mere faith in a faith...Technological optimism manifested itself in several pious hopes, enumerated below..."
~Catton, William (1980) Overshoot. University of Illinois Press. p. 187
http://www.ecoglobe.ch/overshoot/e/overcarg.htm
Turns out, once people get to a decent standard of living with low infant mortality, population levels off and then will decline slowly. No need to try to create greater carrying capacity.
Education of women has the most powerful observed effect...
Now I could be tottally off my rocker, but the way I understand it is this stuff is used to dilute tarsands oil. And sells at quite a discount to WTI, The exports will probably go to heavy oil producers so that they can ship it back to us in pipelines mixed with bitumen so the heavy oil will meet specs to enter the pipeline system. First stage towards opening up the long awaited and super scary northern leg of the Keystone pipeline?
We do blend condensate into heavier oils, sometimes, but the blending happens here in the U.S. after the heavier oils have already been imported. Also, much of the U.S. refining complex can run heavy Canadian/Venezuelan/Mexican stuff without any need to blend in condensate at all.
Exactly right, refineries were retrofit 10-15 years ago to do just that.
I just love predictions that try to predict the state of the world and the US oil infrastructure in 26 years. They are especially moronic.
https://www.aclu.org/sites/default/files/assets/jus14-warcomeshome-repor...
America will never be a net oil exporter because we have mass unlimited immigration, it doesn't matter how much oil we have or how much you drill if you obliterate production with mass immigration.
1-person consumes 12 barrels per year -every year
1+million immigrants = 12 million new barrels of continuous production per year -just to keep up with just the immigrants for that one year, but we add millions of additional new immigrants every year, on top of that we're depleting our oil reserves.
"The U.S. crude producers need the flexibility of exporting oil or selling it domestically."
Well, surprise, surprise! That whole "global market" thing just keeps showing up everywhere, doesn't it? Everybody needs access to the global market, whether it's for finding the cheapest workers, or the best prices for their stuff.
They want higher prices for their oil, and don't want any obligations to have to sell it domestically. They DO want the ability to benefit from government (taxpayer)subsidies though. So, the US taxpayer will support those businesses, and in return the oil will be sent overseas. Unless those taxpayers are willing to cough up enough to keep it here. So, we get to compete on that global market yet again...for jobs we get the right to undercut a 2-dollar an hour textile worker. For gas, we'll get to compete with Europe, where they pay like 10 bucks a gallon for gas.
See how it works? We open up the global market, and you get to compete for your wages with folks from Vietnam. Then you get to compete with Europeans for the prices you PAY for the stuff you need. Because YOU don't really have access to those global markets, you can't make big business compete for YOU, so they get to dictate both the prices they pay, and the prices YOU pay.
Dontcha love the free market? Every time I think about shit like this I want kick Bill Clinton right in the teeth. Fucking fraud, running as a Democrat. Fucking idiot voters, falling for it. We haven't had a Democrat in office since Carter, that poor slob. It's been nothing but varieties of Republicans ever since.
Go ahead Dems...run Hillary in 2016. As a long time Democrat voter, I will NOT be pulling the lever for that bitch. If I wanted to vote Republican, I'd have registered as one.
Bemused...as a Republican I feel the same way about some (most) of our candidates...if I wanted my taxes raised I'd vote for a Democrat...they do it much better.
And folks like you and me should be working together. Despite the differences we have on many issues, there ARE issues we can both agree on. I know that a lot of Republicans feel the same way about their party, and the truth is that once these jokers get elected, there is but ONE party. Two sides of the same counterfeit coin...
I would gladly agree to a plan where ALL incumbents are voted out after a single term and replaced with someone from the other party at each election. Democrat incumbent? When your terms over, you're out, and the Republican gets the next term. Republicans get tossed and replaced with Democrats. Each and every election. Every few years, Washington lobbyists should face an entirely new sea of faces, and have to re-negotiate all their little 'deals' with a new guy from the other party, who will also be gone in a few years. It is the continuity that enables them to bribe these guys, the rug must be pulled out from under them on a regular basis. THAT will dry up much of the lobby money, no one will invest too much in a guy who will only be there for one term.
I'd do it...I'd even pull the lever for a Tea Party candidate if that was the plan. And if we DID do that, the balance of power wouldn't change all that much. Of course, nothing would get done, but really, wouldn't that be the point?
It would take 2-3 election cycles to dry up the bulk of the money and focus the minds in Washington. Then we could go back to calling each other communists and fascists, but we will have accomplished a very great thing. It would also put the notion in Washington heads that we CAN work together despite all of our differences. And THAT would scare the crap out of them, enough for them to behave for awhile anyway.
These differences between us are to a big extent exacerbated and exploited by both sides to prevent us from uniting for anything. If people COULD reclaim their government, much of the tension between the sides would ease, and we might actually be able to sit down and have a rational discussion about how to proceed.
I would be willing to put all else aside and work with the 'opposition' for something like that.
Carter was owned by Rockefeller. Carter, a former Navy 'nuke', shut down the US nuclear expansion.
But, the Bakken? And the Niobrara and Eagle Ford? And the Marecllus? I thought the US was swimming in safe, easily accessible oil and gas? That's what the PSAs say. You know, the ones being run round the clock on 90% of TV and radio stations here in CO and elsewhere? The ones that seem absolutely fucking desperate to convince us that there is ZERO possible downside to injecting known (and unknown?) carcinogens into our soil? Yeah, those. They say everyone should have a fracking pad in their back yard and it will "keep us safe from terrists".
A net exporter? That is obviously a joke. Sure, we frack oil now, but never enough for domestic consumption. Or if we did frack enough to fill all domestic demand, the price for that extraction level would be $500 dollars a barrel. I always say, it is not how much oil you got in the ground, it is ALL about how much it costs to get it out of the ground. A very simple econoimc concept, it amazes me how many people just can't grasp it.
The money part confuses people. Try explaining it as an energy in vs. energy out problem.
My work here is almost done....
Flakmeister....
We all have been waiting for over 4 hours. Tight all the loose ends… before we run out of oil. And eyesight facing this screen!
Surely u jest. 2040? Really? Today, the country is near meltdown and this dude is talking 2040? Com'on. GDP will plummnet when the great reset occurs and demand for oil will drop significantly.
As will production capability when develpment capital evaporates.
During the tragic famines that occurred in Ireland in the mid 1800's, and in India in the late 1800's up to 1943, exports of grain and other food items continued. Millions of people died of starvation, but the exporters continued to make money. Ireland resolved its problem through emigration. When India gained its independence, government programs prevented serious famines from that day forward.
In those earlier events, the prophets of the "free market" railed against programs assisting the starving. The current discusion on oil exports by the US has brought forth similar "thinking." The fracking boom is a kind of scraping the bottom of the barrel, at high cost, that will deplete all petroleum resources in the US ever more rapidly. This while conventional oil is still available in other places. Is this any kind of rational planning, or simply short-term greed?
RMolineaux…
Good luck overcoming false opinions and free-market delusions with logic and facts around here, lately.
Example of self-deception: US private debt [not including financials]: $42 trillion dollars. About 3 times the size of the US government.
Anyway, insightful comment.
I am sorry but I don't buy into the shale scam. Yes, there is a great deal of production but it isn't economic once you use the depreciation cost schedules that are suggested by the well production data. The only reason why the scam has been able to last as long as it has is because the Fed has made cheap financing avaialbe to lenders looking for yield arbitrage and SEC rules that allow the accountants and geologists to overstate reserves and understate costs. But that story can't continue much longer becase the shale producers are still having funding gaps at a time when produciton in areas such as the Bakken is turning over.