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Houston, We Have A "Fracking" Problem

Tyler Durden's picture




 

Submitted by Lance Roberts of STA Wealth Management,

 

 

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Mon, 10/20/2014 - 15:14 | 5356114 Pairadimes
Pairadimes's picture

I'd say we're fracked.

Mon, 10/20/2014 - 15:20 | 5356134 12ToothAssassin
12ToothAssassin's picture

I wouldnt trust any analyst that misspells "Idle" on their chart

Mon, 10/20/2014 - 15:24 | 5356160 I am more equal...
I am more equal than others's picture

 

 

In Louisiana there are more than $160 billion in industrial plant expansions and new plants (LNG, CNG).  Looks like Texas and Louisiana are about to get royally fucked.

Mon, 10/20/2014 - 16:43 | 5356527 emersonreturn
emersonreturn's picture

i'd say calgary as well

Mon, 10/20/2014 - 17:14 | 5356627 localizer
localizer's picture

I'd think Venezuela is the first to get royally fucked... if this trend continues for a longer period.

Mon, 10/20/2014 - 15:42 | 5356164 hedgeless_horseman
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I wouldnt trust any analyst that misspells "Idle" on their chart

I wouldn't trust any analyst that isn't on my payroll, because they are only trying to improve the P&L of the company for which they work. 

The problem with dropping demand, of course, is the potential for the creation of a "supply glut" that leads to rapidly falling prices.

I don't think that the chart he is referring to actually shows dropping demand, although it is a bit difficult to detemine what, exactly, it does show.  I think it shows that Population Adjusted Growth of Estimated Vehicle Miles is slowing...to 50%? 

 What the fuck kind of metric is that?

Here is petroleum supplied, which I believe closely approximates demand in the USA.  You can decide if you think it is dropping.

http://www.eia.gov/dnav/pet/pet_cons_psup_dc_nus_mbbl_m.htm

 



Mon, 10/20/2014 - 15:44 | 5356256 SelfGov
SelfGov's picture

Doug Short's metric only shows the change in crude oil supply going towards gasoline fueled transportation.

Mon, 10/20/2014 - 15:50 | 5356282 hedgeless_horseman
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Follow the link, check the boxes, and click the "Graph" button at the top of the column.

Mon, 10/20/2014 - 17:31 | 5356692 Stoploss
Stoploss's picture

Let's be clear..

Tyranny causes low oil prices more than anything else combined...

You don't need a fucking chart to see that.

Mon, 10/20/2014 - 17:40 | 5356718 AGuy
AGuy's picture

US Exports alot of refined products. Mexico relies heavily of US refining.

Consider:

1. there are fewer Americans and Europeans in the labor force (http://data.bls.gov/timeseries/LNS11300000). The Unemployeed are certainly consuming less oil then when they were employeed

2. Global air travel is down. There are fewer airlines and fewer flights. Avation is a big consumer of Oil.

3. Asia has been the only region that has seen significant demand increases. Although sooner or later it going to crash.

 

Mon, 10/20/2014 - 18:47 | 5356950 MeelionDollerBogus
Tue, 10/21/2014 - 02:43 | 5358314 CASTBOUND
CASTBOUND's picture

my neighbor's half-sister makes $63 /hour on the internet . She has been out of work for 10 months but last month her pay was $16551 just working on the internet for a few hours. More Info... www.job-reports.com

Mon, 10/20/2014 - 15:15 | 5356120 You Lie
You Lie's picture

Seriously?  This article seems to be trying to bring sympathy to oil companies.  There is nothing anyone could ever say or do that would make me feel sorry for a any oil company.

Mon, 10/20/2014 - 15:20 | 5356135 reTARD
reTARD's picture

Wouldn't Ebola'ed people drive the least?

Mon, 10/20/2014 - 15:40 | 5356231 Trucker Glock
Trucker Glock's picture

Correct.  They fly, from Monrovia to Europe and US.

Mon, 10/20/2014 - 15:21 | 5356155 Bunga Bunga
Bunga Bunga's picture

It's more that commodity prices detach from underlaying energy prices.

Mon, 10/20/2014 - 15:23 | 5356165 astoriajoe
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We're already exporting a million barrels per day of products. Without that, utilization and margins would be in the shitter for refiners.

Mon, 10/20/2014 - 18:32 | 5356877 baldski
baldski's picture

astoriajoe: You are right on! We export over 3 million bbl/day of refined products. The largest export product from California last year was diesel and jet fuel.

Mon, 10/20/2014 - 16:17 | 5356235 falak pema
falak pema's picture

don't let the temporary glut due to speculative hoarding and inevitable fiat induced recession, in a constant flux fossil fuel world, distract your from the fundamental energy constraint : we are limited by peak cheap energy and by peak fiat pump n dump to requiring that energy price DECREaSE for fiat debt to disappear. 

It won't happen and the combined effect of increasing fiat "non real economy" dissemination; aka all funneled to bubble-o-nomics; and resultant distortion of real economy's recessionary throttling due to lack of cheap, abundant energy AND monetary liquidity, will lead us to the dystopian asymptote.

Fracking is the last resort of fossil dinosaurs trying to get at the "cheap" resources that Mother Nature has bestowed to the homo sapien world. Having destroyed that largesse, we are now faced with the inevitable perspective of ending up like the dinosaurs into a decaying species. 

Fortunately, there is still some wine left to drink and some cheese left to be nibbled. 

Thank God or Nature for small mercies. Sisyphus we stay.

Mon, 10/20/2014 - 15:41 | 5356240 debtor of last ...
debtor of last resort's picture

More QE to 'kill the dollar' and make oil affordable for the rest of the world. But the dollar is dead already. Like stocks: who's buying? A sea of water, but not a drop to drink.

Mon, 10/20/2014 - 15:42 | 5356242 One And Only
One And Only's picture

Buy solar panels, eat your peas, inflate your tires.

Mon, 10/20/2014 - 15:45 | 5356261 CHX
CHX's picture

<<< Frack off

<<< Frack on

Mon, 10/20/2014 - 18:44 | 5356938 MeelionDollerBogus
MeelionDollerBogus's picture

oh, the Fracker. What a wonderful invention.

* for Farscapers that's Frellers

Mon, 10/20/2014 - 15:51 | 5356281 Tsar Pointless
Tsar Pointless's picture

Boom over. Bust just beginning.

Here in Weatern PA, we're going to reap what we've sown, and it isn't gonna be pretty. Or, in the case of the water we've polluted, tasty.

Mon, 10/20/2014 - 16:16 | 5356394 thatthingcanfly
thatthingcanfly's picture

Bullshit. Your water will continue to taste the same as it always has. Turn off the Matt Damon movies.

Mon, 10/20/2014 - 17:18 | 5356633 ndoilguy
ndoilguy's picture

In the name of anything on this planet anyone has ever considered to be holy, stop with the hollywood anti-frac crap.

Mon, 10/20/2014 - 15:56 | 5356309 PrDtR
PrDtR's picture

Time to "DRILL-BABY-D R I L L" off the coast ..we have plenty of oil if the libs stop exporting oil drilling to "NOT IN MY BACKYARD" locations.. 

Mon, 10/20/2014 - 19:33 | 5357139 Augustus
Augustus's picture

I would like to see a mash up of the videos of all the libtards who have said for years that drilling more wells will not affect the oil prices.  Of course, if they were allowed to stop drilling and fracking, they could make it seem that they were correct.  However, we can see prices are now down by about 40% from the $140 bbl highs of several years ago.

 

Drill Baby, Drill.

Mon, 10/20/2014 - 15:57 | 5356312 PKF
PKF's picture

Most of the young people around here can't afford a car, never mind insure and maintain it.  They have crap jobs or are in debt from college....and no jobs of any worth are around.  

Fracking can certainly frack up one's water supply.

Mon, 10/20/2014 - 16:01 | 5356318 Super Hans
Super Hans's picture

Who is making the profit? Oil prices have come way down but gas prices have not! 

This whole oil thing is just so depressing because it lays bare one of the base instincts and that is greed! No one ever does the right thing!

I watched a Top Gear episode from like 10 years ago and they drove a GM car powered by water! It was a hydrogen fuel cell! 

Humans NEVER make any changes until it is almost too late.  

I'm fucking tired of paying over $3.00 per gallon! 

I really wish someone would just should me in the head to end it!

Excuse the typos, as I can't fucking read what I type because the poor design of this site.  Fuck it!

Mon, 10/20/2014 - 17:43 | 5356724 Billy Sol Estes
Billy Sol Estes's picture

$2.68 in Houston last week

Mon, 10/20/2014 - 16:10 | 5356365 konputa
konputa's picture

Operating vs Idel Refineries?

God damn, we don't proof our charts now do we? Do I have a reason to question the numbers if they can't spell Idle?

Mon, 10/20/2014 - 16:17 | 5356384 Againstthelie
Againstthelie's picture

To double that output from the Bakken, for instance, would require 5,200 new wells a year, and tripling it would require 7,800 and so on. Then, to the horror of all, less than a decade after all that was done, that additional million barrels of oil a day in production would be reduced to just 100,000, no matter what the oil companies do, because of the nature of the formation where the well was drilled.

Imagine the amount of poison pumped into the ground for future generations to bear. What an incredibly criminal regime of unparalleled proportions.

Probably less than 300 years after establishment of the plutocrats' and freemason's dream-regime it will have ruined a whole and incredibly resource rich continent.

Either mankind will get rid of the satanic western regime, or this regime will destroy the whole planet.

Mon, 10/20/2014 - 19:35 | 5357155 Augustus
Augustus's picture

The stuff pumped into the ground is water and sand.  Less toxic than what children are exposed to at the beach when playing in the surf.

Mon, 10/20/2014 - 16:34 | 5356480 Imminent Collapse
Imminent Collapse's picture

Not to worry, fracking has been exempted from the Clean Water Act and frackers aren't required to tell anyone what they are putting into the ground.  Crony capitalism at its best (bested only by the pharmacutical industry).  Morals?  Not over money.  Sorry. 

Mon, 10/20/2014 - 17:25 | 5356672 ndoilguy
ndoilguy's picture

LOL, we have all kinds of local, state, and federal oversight.

Mon, 10/20/2014 - 19:17 | 5357064 oudinot
oudinot's picture

Really?

There is no regulatopry oversigh over hazardous chemicals employed in frackingt, you are either  a moron or a troll; kindly fuck off.

Mon, 10/20/2014 - 21:40 | 5357675 ndoilguy
ndoilguy's picture

Oh I know what you mean, that dihyodrogen monoxide is some real dangerous stuff.

Mon, 10/20/2014 - 17:40 | 5356717 Billy Sol Estes
Billy Sol Estes's picture

Right....

Mon, 10/20/2014 - 19:15 | 5357051 oudinot
oudinot's picture

You are absolutely right, Imminent.

Mon, 10/20/2014 - 16:35 | 5356486 dbTX
dbTX's picture

Oil goes up, oil goes down. Always has, always will.

Mon, 10/20/2014 - 16:59 | 5356575 Son of Captain Nemo
Son of Captain Nemo's picture

Come on now Zerohedge!...

You got it all wrong!!!

Just to prove it, here is the next 49er Gold Rush by the same folks that brought you Michael Lewis and Brad Katsuyama!!!

No worries on the shale oil -got lots of it and that yellow stuff too! Remember this is America you're talkin about!!!

Oh by the way "Trick or Treat" replacing /sarc

Tis the Season!!!

Mon, 10/20/2014 - 17:13 | 5356622 localizer
localizer's picture

So the Saudis are succeeding? 

Mon, 10/20/2014 - 17:18 | 5356642 WOD
WOD's picture

You can't buy gasoline with an EBT card...

Mon, 10/20/2014 - 17:23 | 5356662 ndoilguy
ndoilguy's picture

The decline is partially due to wells that need maintence from workover rigs and swab rigs that are in high demand. Lets look at it this way, if we drill a frac well at 12 million to use a round number and we get 20 million out of it before the decline and then contiunes for the next 5-10 years at 100 barrels a day, where is the loss? I am not in the gas frac business that is a whole other deal. Oh, 4 billion for a new plastics plant that will use the gas most wells simply flare off.

Mon, 10/20/2014 - 17:35 | 5356702 Billy Sol Estes
Billy Sol Estes's picture

Oh no panic end of the world fracking is the problem blah blah blah

Mon, 10/20/2014 - 18:36 | 5356895 MeelionDollerBogus
MeelionDollerBogus's picture

1) this "detachment" would easily fit a scatterplot so it's not detached at all, just got a different constant in the equation, or a different power more likely

2) the joke part of the commentary

BUY BUY BUY SELL SELL SELL BYE BYE BYE!!

Mon, 10/20/2014 - 18:38 | 5356902 Hohum
Hohum's picture

The wheels ARE about to come off the cart if oil stays in its current price range.  Looking at tables from the Bakken leads to no other conclusion.

 

https://www.dmr.nd.gov/oilgas/stats/historicalbakkenoilstats.pdf (Reasonable assumption of $6M per well)

Mon, 10/20/2014 - 20:45 | 5357460 wrs1
wrs1's picture

Im not sure how those tables lead to no other conclusion but that the wheels come off, can you elaborate?  What I see is that output in the bakken is up over 10x daily on a per well basis since 10 years ago.  

What I have to wonder about is why the US would start yip yapping about selling oil from the SPR right now?  Seems mighty suspicious in the timing, kind of like selling your gold at $250/oz.

Mon, 10/20/2014 - 19:54 | 5357209 RaceToTheBottom
RaceToTheBottom's picture

One drill for every citizen.  Still lots of room for more.....

Will also reduce when population reduction occurs

 

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