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12 November 2012

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jerseycityjoan

What about the effect on the drinking water and environment where fracking is carried out?

Then there's the recent earthquakes that have been linked to fracking.

It seems to me there's lots more to learn about the effects of fracking.

The energy situation has changed for now. I have my doubts about whether fracking will be or should be carried out long term.

turcopolier

jerseycityjoan

Would $10/gallon change your mind? pl

Norbert M. Salamon

The price of gas is going to go up to a level that the major producers can make money. At present for the last year or so, the gas rig count went down by 51% according to Baker Hughes, indicative of some economic problem.

Whether these gas and shale oil companies can work with the high depletion rates by drill baby drill modus operandi will be known soon as the sweetpots are all in production, and they have to go the thinner pickings.

It is possible that the USA might surppass Saudi Arabia, when the USA Goes up to maybe 7-8 millioon barrels per day [counting only oil, not biofuel, Natural gas Liquids etc], while the Saudi's production falls below this line due to depletion.

The only remaining problem is the need for capital, where Bakken holes are costing around 11 million apiece, with the best hope of Mobil oil to lower it to 10 million in the near future. As the average production at Bakken is approx 200 barrels per day, it takes along time to pay for a well -and depletion rates are very high within 2 years.

mbrenner

The idea that the foreseen end of the United States' need to import oil will lead to a drastic restructuring of our position relative to the Middle East is a nice theme for a magazine cover story. However, it is a gross over-simplification of reality. Here in notational form is a list of some considerations to keep in mind before jumping to radical conclusions.

1. Energy experts are not of one mind as to the odds on achieving complete energy independence. There are several variables that must be factored in and predictions about most have wide confidence margins. So, too, does the conclusion - obviously.

2. There is no readily definable magic threshold beyond which the balance of dependency between suppliers states and consumer states, and therefore reciprocal influence, shifts drastically.

3. The United States' relations with major suppliers in the Middle East and elsewhere are multi-dimensional. Have we forgotten the "war on terror," "the war on proliferation," the democracy promotion project and our national dedication to shaping the world's affairs according to our own lights?

4. In a world of economic interdependence, it makes no sense to speak of the United States economy as if it were autarkic. Sio long as other major economies remain energy dependent, their vulnerability to supply disruption is our problem as well.

The last thing we need is another sudden 180 degree turne in the cyclical pattern of euphoria and dread that has marked American thinking about its place in the world.

turcopolier

mbrenner

Even I am not as professionally pessimistic as you. pl

Allen Thomson


We commute from San Antonio down I-37 to US 77 a few times a year, and it's been amazing to see the rapid growth of activity as the Eagle Ford shale formation has been exploited. Generally everybody loves the $$$, even though it's meant that ranch roads originally designed for a few pickup trucks a day are rapidly disintegrating under dozens of 18-wheelers.

Anyway, I wanted to invite speculation from all you geopolitically astute types about the possible consequences of the geography of the Eagle Ford Play. To wit, it runs NE-SW, growing in width as it goes. And where it goes is the Mexican border, with no sign of stopping. So I expect that, at some point, somebody's going to want to set up fracking operations in Mexico. But that part of Mexico is Zeta territory and much drug traffic goes through it. Does oil mix with coke?

http://static6.businessinsider.com/image/4d0f3b9549e2aed74e010000/map-eagle-ford.jpg

zanzibar

While I agree there are many downsides to having a reserve currency, I don't get the relationship between petro-dollar recycling and why we are best buddies with the Saudis.

The idea that if crude were to be priced in Euro or Yen would be problematic for the US does not make sense since dollars can be exchanged for another currency. The exchange rate is another matter. That of course has nothing to do with the fact if a creditor is willing to provide credit or requires cash on the barrel.

We run large trade deficits with many countries and regions including significant deficits with Japan and China. All these dollars by definition get recycled back into dollar assets like Treasury bonds or get exchanged for non-dollar assets through forex markets.

While we have an explicit security guarantee with the Japanese under treaty (which of course has nothing to do with dollar recycling), we have none with the Chinese who are consideed our adversary by our leading politicians.

Former 11B

I work directly at the pointy end of the spear of oil and gas exploraton in Texas. Anybody who tells you that it is new technology that is making the shale plays possible is a damn liar and that includes the paid actors on TV commercials. We had the directional and fracking technologies 20 years ago. The downhole tools themselves improved for a while, but now with the boom in full swing they are just as reliable and in some cases even less then 15-10 years ago.
100 dollar a barrel oil is what drives this bubble. There is really a lot of money floating about that begs to be invested, but investors are concerned (rightly) about complex instruments dreamed up by masters of the universe between coke and hooker binges. Shale properties and projects represent at least tangible things that will pay back at least some of the investment. If you frack the eagle ford you will get back quanities of gas and condinsate. Condinsate can be refiened into oil. The gas they mostly burn because it it cant be sold for enough profit to justify building new pipelines. Some leases are close enought to tie into, and new pipelines are being built. But oil is really the prize.
This has all turned into one big engineering excercise. You buy up as many leases as you can then drill the wells in a desirable distance from each other, frack and then start selling the aggregate returns. Turns out though the predictions have some problems.
1. Some areas are 'sweeter' than others with no way to predict before hand which will be which. I work directly with the geologists who do this work and they understand this as well.
2.Condinsate is a really poor medium for distilling into oil.
3. We used to get 100 barrels for every 1 we put in. We are down to about 10 barrels for every one. And its not going to get better.
4. Conventional plays are pretty much done and the people who know how to drill for them are retiring/dying/getting the hell out. Since you dont have wells come in from pressure anymore(you have to apply pressure to get anything out), the powers that be have decided to install the coperate drone model(think Wallmart) to the field. No one with vast expeience will put up with this. Think peace time army vs war time army. Vest industrial knowledge and experience is being lost(driven out) forever.
5. Once you do the frack job and then the play runs out it is done. In the older conventional plays once depletion started you could then frack and do other things to extend the life of the field. Not with shale plays. When its done, it done.

I will not offer up any obsevations on anything other than the expertise I have directly from working hundreds of jobs directly at the wellsites for the last twenty years. I am what is called a Mudlogger and wellsite Geologist and anyone who works in the energy exploration field knows what that is.

Our energy independence will come because no one will be able to afford to do any non essential driving. I see that already when I drive down I59 in Houston on any Sunday or at non peak hours on weekdays. If there are no accidents or road construction than it is a dream to drive the newly built 6 lanes with just you and the revenue seeking cops hiding on the other side of the overpasses.

Anybody telling you new technology is making the shale plays possible is lying and has an agenda. You have been warned.

Charles I

for potable water it sure would!

Babak Makkinejad

UAE and Kuwait is not any different; with their 300-pound men.

And they are very racist; to Muslims and non-Muslims alike.

Babak Makkinejad

All:

What do you think the probability of US joining OPEC after 2017?

EchoTed

A major point of the analysis in this post is based on the assumption that heavy US involvement in the Middle East is due to oil. This is false!

Only a minor portion of US crude imports come from the Middle East:

http://www.consumerenergyreport.com/research/crude-oil/where-the-us-gets-its-oil-from/
And as a percentage, that portion has been decreasing over the last 20 years, while US military involvement in the region has increased. There is actually an inverse relationship between US dependence on ME oil, vs. her willingness to engage in military intervention in the region.

As others have shown, (http://www.amazon.com/Israel-Lobby-U-S-Foreign-Policy/dp/0374531501) there is strong evidence that the oil lobby in the US has been ineffective at countering the more hawkish elements within the US foreign policy community who have advocated for military involvement in the region.

The short answer is that the United States will have to stay and manage the entire Middle East for the next 100 years for reasons other than oil.

confusedponderer

But why choose when you can have it all? Apparently fracking allows you to enjoy your tab water, enriched with all the benefits of natural gas:

http://www.youtube.com/watch?v=4LBjSXWQRV8

With that I want to say that the US are seriously lacking in the enforcement of environmental regulation (read: law enforcement). Reportedly Canada, using the same basic technologies, doesn't have these problems, because they do enforce their environmental rules.

American's can thank Republicans for that, since they have been gutting enforcement agencies as a matter of course for decades. Only that can explain why something like Upper Big Branch mine disaster could have happened. The inspectors couldn't close the mine for safety violations because the rules had been rewritten, rendering them impotent to do anything effective about it. It takes years to restore such damage done to an institution.

Under Bush 43 Richard Stickler had been appointed to head the MSHA. During confirmation hearings this was said about the man: Stickler had overseen "some of the most dangerous, most frequently cited for safety violations in the entire industry. In fact, his mines had a rate of preventable accidents that were 3 times the national average". Clearly, stellar credentials.

By that logic I suggest that a pyromaniac heads the fire department, because more than anybody else he knows a lot about fire and will strike the right balance between titillation and damage containment. Also, Pablo Escobar, if someone could resurrect him, could provide some true insights into the operations of a drug cartel - why not have an expert like him head the DEA?

Generalised, Republican politicos are the folks who can't get enough law enforcement and want to be ever tougher on crime - but when some extracting industry operates dangerously, maybe even harms the environment or turns national treasures into wastelands (mountain top removal mining), then law enforcement becomes something of a dirty word, red tape arbitrarily imposed by bureaucrats and put on America's intrepid entrepreneurial spirit! That's campaign donations at work.

What's wrong about wanting to make sure that one can eat the fish caught, or show the children the beauty of the land they and their ancestors lived in? IMO that's an eminently conservative thing to want. Nixon apparently saw that when he founded the EPA. The commie bastard ...

Neil Richardson

zanzibar:


"While I agree there are many downsides to having a reserve currency, I don't get the relationship between petro-dollar recycling and why we are best buddies with the Saudis."


Policies and institutions sometimes linger on long after their expiration dates.


"The idea that if crude were to be priced in Euro or Yen would be problematic for the US does not make sense since dollars can be exchanged for another currency. The exchange rate is another matter. That of course has nothing to do with the fact if a creditor is willing to provide credit or requires cash on the barrel."

I do not believe Walrus was arguing this. He was merely pointing out what has been the rationale since William Simon and Bill Casey had negotiated the Saudi agreement to denominate the sales in USD. Remember that this was a period when the dirty float regime was starting to emerge which continued well into the late 1980s (e.g., The Plaza Accord)


"We run large trade deficits with many countries and regions including significant deficits with Japan and China. All these dollars by definition get recycled back into dollar assets like Treasury bonds or get exchanged for non-dollar assets through forex markets."


That is true, but at the time there were serious concerns among OECD central bankers that private markets (Eurodollar) could not cope with the recycling which was the reason why Kissinger had sent Simon and Casey. Remember that many had been traumatized by the Great Depression. And the lessons of 1929 were often invoked privately and publicly. As for Japan and China, states with export-led growth policies generally do not seek to either appreciate their own currencies or devalue the currency of their major market as you know.


"While we have an explicit security guarantee with the Japanese under treaty (which of course has nothing to do with dollar recycling), we have none with the Chinese who are considered our adversary by our leading politicians."


Economic statecraft might not be that useful when it comes to high politics. However, examples like Eisenhower's threat to devalue sterling during the Suez Crisis is a lesson that some in Asia have dreamed of even in the 1980s (e.g., Ishihara Shintaro)

RetiredPatriot

Thanks Former 11B!

Great gouge.

RP

Alba Etie

Col Lang
I do not believe its an either or proposition. Brazil for example is using biofuel based on sugar cane. I believe we could do the same - with in fact very promising work being done in blue green algae biofuel. Additionally our biggest source of new energy could be conservation . Mayor Bloomberg and others assert that retrofitting standing structures ie the Empire State Bldg. for energy conservation / renewables can & will generate as many jobs as highly exploitive fracking technologies that destroy aquifers.
And in a total flight of fancy -what if we could take the savings of one carrier battle group deployment in MENA and apply those dollars directly to a Manhattan Project for safe affordable electric cars that could be powered by renewable and diverse sources such as micro wind turbines & solar roofs on parking garages .
Respectfully its IMO not an either or question .

Charles I

Something missed in the 2030 discussion is that it is predicated not only on increased production, bur a 5 million bpd reduction in use.

I seem to need a new outlet for a new device charger every week, my consumption is not going down.

Charles I

Today's conservatives are of a Dominionist slant, and while they view the bounty as created for extraction, environmentalism is interference in Creation, you know, like birth control. Not to mention all that pesky temporal regulation of divine human free will has got to be problematic.

Charles I

hardee har har

r whitman

No but Texas and North Dakota might.

confusedponderer

The best one on the environment from Dominionist circles I have heard so far was from some rather nutty preacher's pod cast from a few years back. It went like this:

Pollution is a sign of prophecy indicating the end times. Since prophecy is the result of divine will, it would be impudent, sinful even, to tackle pollution in violation of the divine will. Protecting the environment is sinful because it is an attempt to thwart or delay fulfilment of prophecy. Since the rapture is imminent believers would soon be granted a brand new earth soon anyway - that being uttered cheerfully, with utmost conviction.

Sooooo ... mountain tops begone! Didn't Ezekiel say in 38:20 "... and the mountains shall be thrown down, and the steep places shall fall ..." God wills it - or does he?

MS2

Thanks for this. It seems strange to project to 2030 when the life of each well is so short and the nature of the formations poorly understood. Can you provide anything resembling a confidence band on projections out then?

shepherd

Profit is the main driver. Others below have gone into much more detail about the technology involved and how it's caused such an about face in our energy picture. I can't add much to what they've said, but would invite you to read their comments.

Thomas

It deppends on when the new fields on the Eastern Continental Shelf are discovered and placed into production.

I will go with the December 2018 meeting.

Lee

OPExportingC, zero probability

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