Bad news for the Gulfies and their Israeli friends.

 

If new incremental costs per barrel for US shale oil are as low as described in this article the political power of the Arab States of the Gulf is markedly reduced.  It should be remembered that shale is only one portion of the ever growing wealth of petroleum reserves being discovered on US territory.  The new Permian Basin reserves in Texas as well as those on the north slope of Alaska come to mind.  pl  

http://www.zerohedge.com/news/2017-03-21/how-opec-lost-war-against-shale-one-chart

Comments

[Imagine]

Energy independence in America will mean that we no longer have to kowtow to Middle East interests to ensure survival. This should be a strategic imperative for America.

[Jack]

Sir

There's also the Vaca Muerta shale field in Argentina, which the EIA estimates has 16 billion barrels of recoverable oil. Chevron and Exxon are ramping up their investments there.

With the continued lower breakevens for US shale, it will no doubt exacerbate the fiscal deficit in Saudi Arabia who have been borrowing in financial markets to close the funding gap.

[Valissa]

OT... important news...

Nunes Confirms There Was "Incidental Surveillance" Of Trump During Obama Administration http://www.zerohedge.com/news/2017-03-22/nunes-trump-transition-members-and-possibly-trump-himself-were-under-surveillance-du

[r whitman]

I have been around oil people most of my life. Oil and gas production figures, reserve estimates and production costs are as accurate as DT's White House tweets.

[turcopolier]

r whimean

Which oil data would you prefer? pl

[Norbert M Salamon]

Colonel:
Information left out from the article to justify their conclusion:

One must wonder what his amazing BREAKEVEN WELL HEAD PRICE consist of. Capex? royalty to land owner? Maintenance budget? Disposal of contaminated fracking fluid? Interest payments?

We know what it excludes: treatment for degasification per transport regulation, transport to refinery, need of heavy oil for mixing the pentanes and other light distillates to reach requirement of gasoline standards, etc.

Living in an area of Alberta which is busy with fracking drilling, pipelines, trucking of well product, etc. I observe that there is lot of expense after the hole is producing.

Based on the above I am skeptical regarding Goldman conclusions. [as an aside we know that this firm has misled investors and public before so the firm could make extra income -- all those lovely CD-s and worthless mortgage documents etc.]

[turcopolier]

NMS

Let's get past the self protective and defensive BS. You have a long record here as a proponent of the idea of "peak oil." You have maintained that whatever increases in reserves an production there are should be understood to be passing phenomena preceding the further and inevitable decline of world oil supplies. So, do you assert that costs of production as represented in the report are incorrect? pl

[Fool]

Colonel Lang, why is this bad news for the Israelis?

[turcopolier]

fool

1- They are now prospective oil exporters and thei products inevitable will earn less. 2. Their new chums in the Gulf will be less influential in the world. pl

[r whitman]

Real data is hidden in the vaults of oil companies and not available to the regulators and the public. If they are public companies, their estimates have so many qualifications and assumptions as to be useless.

That's why I would rather own investments in pipelines, refineries, drillers or service companies not production outfits.

[Norbert M Salamon]

Colonel,
I did not assert what the costs are, I questioned as to the modus operandi of establishing the costs as depicted by the graph.

Aside from the above, I am aware that the US production fell by close to 1 million barrels per day from shale oil zenith, and since then has increased substantially, not yet at the zenith of fracked oil production of recent past.

As to the recent "find" in Alaska, if developed soon, it might extend the viability of the Alaska Pipeline; for without new oil, the pipeline will have to close down due to depletion in Purdue Bay.

[Fool]

Colonel, I was under the impression that Israel's energy prospects were also in shale. I'm not an oil trader but I imagine this means that their netback would thus trend with American shale producers as well?

FWIW...my Likudnik acquaintance has been touting Israel's prospective energy independence (as a geostrategic plus) since back when oil was trading above $100. But I was skeptical...(1) this type of bluster is common from American zionists, who are often the mark of their own propaganda; and (2) domestic production is abhorred among the Israeli Left, the religious zealots (to the extent these deposits are on-land), and some of their limousine liberal patrons here (e.g. JNF).

[turcopolier]

fool

So far as I know Israel's oil and gas is all off shore except for the semi-mythical Golan Heights deposits. pl

[robt willmann]

Valissa,

Yes, U.S. Rep. Devin Nunes (Repub. Calif.) spoke today of the alleged "incidental" collection of communications of the Trump team, that did not refer to Russia or Russians. This afternoon, Rep. Nunes held an interesting press conference about it.

Back on 8 March, Col. Lang had a post on the subject of the interception of communications. I have been preoccupied for a while, but the main culprits (that we are aware of) appear to be--

1. "Executive Order" 12333.

2. Opinion memos "interpreting" executive order 12333 and other federal laws about wiretapping, electronic surveillance, and other forms of acquiring and collecting the communications of people. These memos are claimed to be "classified" and secret, so the public and legal profession cannot look at them and judge for themselves.

3. The location(s) where the original raw, uncensored information, data, and communications are stored.

4. Who has access to the raw, uncensored information, data and communications.

5. Of the people who have access to the original, uncensored information, data, and communications, who can distribute it to other people -- domestic and foreign -- and who are the other people who can get it.

6. Of the people who have access to the original info and can distribute it, under what circumstances do they block out, or "mask", the identity of the persons whose communications and data were obtained? And who has the authority to "unmask" the identity of the people before the information is distributed? (At the Congressional hearing on Monday (20 March) with FBI Dir. Comey and NSA Dir. Admiral Rogers, the "masking" issue started to appear a little).

7. "Incidental" collection of communications and data of U.S. persons who are not the original target of surveillance, usually of a foreign person.

8. Getting a foreign intelligence service to do the surveillance and collection (otherwise illegal), and give it to the U.S. agency.

Executive order 12333 was originated by Ronald Reagan, I believe, and has been amended. From what I can see from a quick check, the last amendment was on 30 July 2008 by president Bush jr., in executive order 13470, which amended executive order 12333--

https://www.gpo.gov/fdsys/pkg/FR-2008-08-04/pdf/E8-17940.pdf

https://www.federalregister.gov/documents/2008/08/04/E8-17940/further-amendments-to-executive-order-12333-united-states-intelligence-activities

The 2008 version of exec. order 12333 after the amendments is probably here, although I have not tried to check it with the amendments--

http://www.americanbar.org/content/dam/aba/administrative/law_national_security/eo_12333_amended.authcheckdam.pdf

The press conference of Rep. Nunes of this afternoon is here--

https://www.c-span.org/video/?425829-1/devin-nunes-confirms-surveillance-trump-transition-team

The meticulous Marcy Wheeler, who when following the twists and turns over the last several years about surveillance has shown that a PhD in comparative literature can be useful, had some comments about the Congressional hearing the day before yesterday with Comey and Admiral Rogers--

https://www.emptywheel.net/2017/03/20/when-a-white-republican-gets-spied-on-privacy-suddenly-matters/

[Thirdeye]

This makes me wonder if there might be a political incentive on our side of the pond to keep prices artificially high in the the interests of bolstering our Wahhabi buddies against more diversified economies. Anybody care to comment on the relevance of the Petrodollar trade in supporting US debt?

[eakens]

Oil deposits are finite in the short term. Long term, we keep discovering more. Secondly, the only thing Bankruptcies do is bring down the basis, because the vultures (e.g. Goldman) come in and buy things up on the cheap and take out those who originally put up the cash to build up the infrastructure. Same thing happened in the housing market. The sovereign wealth funds in Iceland, Norway, and many, many other investors basically were left holding the bag. In fact, were it not for CMBS, many heritage properties that a family or high net worth individual would not normally sell, were sold due to the sky high prices. Those assets then ended up in special servicing, allowing entities like Blackrock and GS to come in and pick them off on the cheap. It was a massive transfer of wealth on the backs of individuals and foreign SWF, not to mention the repeal of Glass Steagall. Cruel trick, but ingenious.

[Fred]

Marcy also made comments on her blag that the FBI information is readily available to any FBI agent for the asking based essentially on the same IT access levels Bradley Manning used when he surfed through the IT systems soaking up everything he could get his hands on. I find it hard to believe that such open access to IT systems for those with no actual need to know wouldn't have been corrected by the Obama Administration once it came to light.

A separate issue left out of all the discussions are the three House IT staffers who were recently fired:
http://www.politico.com/story/2017/03/house-democrats-it-staffers-hina-alvi-imran-awan-235569

[Degringolade]

Colonel:

I am being completely earnest when I tell you I hope that you are right.

I would like to not have my kids deal with the shitstorm that will happen if Norbert M Salamon et al are correct in their analysis.

I am trying to figure out how to hedge my bets so that I can muddle through regardless who is right.

If you are right it will be a damn sight easier.

[LeaNder]

Marcy is absolutely hilarious, and yes a little mean. ;)

In any case, after today’s hearing I am beginning to suspect the IC doesn’t like to have public hearings not because someone like me will learn something, but because we’ll see how painfully little most of the so-called overseers have learned in all the private briefings the IC has given them. If these men don’t understand the full implications of incidental collection, two months after details of Flynn’s conversations have been leaked, then it seems likely they’ve been intentionally mis or underinformed.

Or perhaps they’re just not so bright.

[MRW]

James,

Watch this: https://www.youtube.com/watch?v=oxFm1TXshZY

The planet is not in deep trouble. The planet is going to be just fine. It’s existed for 4+ billion years and will continue long after you and I are gone. We have a dearth of CO2 on this earth, not a surplus. And as the world population grows, we will need more of it to feed the population without stressing water supply. Thankfully, crops have increased 33% since 1990. A good thing.

Burt Rutan (the speaker in this youtube) is a remarkable man, a pioneer, and renaissance airplane designer. He has designed a new type of airplane every year for 46 years. He was building solar farms in the 1970s and designed his house in the Mojave Desert (most of his work was for the military nearby), which Popular Science in 1989 called “the ultimate energy-efficient house.” He designed Voyager, the plane that flew around the world (27,000 miles) without refueling. He designed one of the first rockets (can’t remember). He is considered a titan in the biz.

Rutan says he always has to have a hobby. So he started investigating the climate change/global warming data in the late 90s and spent 10 years examining what the data said before he created this presentation. This is not his full presentation, but anyone who has seen it say it is the best they’ve ever seen on the subject. On top of it all, it’s not boring.

[Vic]

The low price of oil has done more to turn the tide in GWOT than any single military effort.

Why? Low oil prices strike at the center of gravity of radical islamic terrorism. Saudi Arabia developed wahhabism, promulgated it, and funded international terrorism. With the Saudi economy in the crapper because of low oil prices, they are incapable/less capable of funding terrorist operations like they have in the past.

In the past we would not have touched the Saudi's. We had a "special relationship with them. We over looked their really bad behavior and they continued to sell us cheap oil. We've now cut their throats economically, but can turn to them and claim that it is due to the invisible hand of the markets.

Now is no time to slack off. We need to look at taking legal action against US energy firms and investment firms that collaborate with the Gulf States/. OPEC. OPEC is engaged in price fixing and racketeering. We need to now destroy OPEC and insure a "free markets" for oil.

Energy independence will result in making America independent from having any vital national interests in the middle east. No more "special relationship". We can then ignore wars, insurgencies, coups, terrorism and other disasters that plague the region. That will free up a huge chunk of American resources that were wasted on other peoples.

Mr. Victor Camp

[Babak Makkinejad]

Exactly so -

Please see below also:

A simple rule to determine which insolation cycles lead to interglacials:

http://www.nature.com/nature/journal/v542/n7642/full/nature21364.html

Theory of chaotic orbital variations confirmed by
Cretaceous geological evidence (solar system suffers chaotic changes)

http://www.nature.com/nature/journal/v542/n7642/full/nature21402.html

And here is the ultimate human and non-human catastrophe to avoid (happened 3 times before in geological time):

http://www.pik-potsdam.de/~stefan/Lectures/paleoklima/hoffman%26schrag_2002.pdf

[Babak Makkinejad]

All:

Cheap fossil fuel prices will increase life expectancy everywhere in Africa and in South America - without a doubt. It will make the internal combustion usage widely available.

I must say, only rich self-indulgent Euro-Americans seem to have a real obsession and enmity - almost like a religious sentiment - with fossil fuels.

Every single internal combustion engine that is replaced with another battery-operated rich-man's toy, is another nail in the coffin of a pre-adolescent kid in Congo.

[Fred]

Babak,

"Every single internal combustion engine that is replaced with another battery-operated rich-man's toy, is another nail in the coffin of a pre-adolescent kid in Congo."

Really? I know we export a number of used cars to the Caribbean from the US but I was unaware that used vehicles were being exported to the Congo in any appreciable number or that battery operated vehicles were the driver of such changes. The population growth projection charts for Africa sure don't seem to have many coffins projected.
http://www.businessinsider.com/africas-population-explosion-will-change-humanity-2015-8

On a bright note the virtue signalers will have no shortage of refugees to let into Europe or the US. Surprisingly what Africa seems to be running out of is, to use the German word, Lebensraum. Which is why all those other places with first world technology are so appealing.

[The Beaver]

Colonel,

The power-hungry Jared Kushner won't be a happy camper :-)
For last week’s visit, the Saudis did their homework. Understanding that Trump favors visuals, they came prepared with a series of snazzy PowerPoint slides detailing the Iran threat and opportunities for economic investment. The visit was planned and managed by Jared Kushner with an assist by new deputy national security advisor, Dina Powell. In addition to an Oval Office meeting and lunch with Trump and his high command, the prince met with Defense Secretary Jim Mattis at the Pentagon in an unusual session that included five senior White House officials, including Kushner, Powell, and Steve Bannon. During my nearly three years in the Pentagon during the Obama administration, I attended every meeting the secretary of defense had with Saudi leaders, and I can’t recall a White House official ever attending.

http://www.defenseone.com/ideas/2017/03/when-house-trump-met-house-saud/136367/