azblackbird
Pattern Altitude
Just wondering… since Brandon is pulling oil from the SPR, how come he’s not pulling anything from the strategic wind or solar reserves? 
Avgas Prices
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Daleandee
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Dale Andee
Seems all of us will lose if TC Energy is awarded the $15 billion in damages they are trying to get from the U.S. for cancelling the project in accordance with the terms of the North American Free Trade Agreement.
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Bob Noel
I think I was too subtle (not jabbing at you EdFred)... it's disingenuous to complain about job creation not being permanent jobs.
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Warlock
Heavy sour crude is the bread and butter where I live and gives a bigger cut of diesel…while energy policy makes the poor poorer and drives this economy to recession people still want to say the safest way to transport product is bad and would not make a difference. Laughable…
Mikey B
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That's all right, pleading the 5th seems to be very common lately.
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Bob Noel
I still remember a Wings briefing that had a person from the NTSB... telling us the safest way to travel is pipeline. (he told it waaaaay better than I can).
tspear
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Timothy
Correct. I am just pointing out the fallacy of blaming the cancellation of Keystone pipeline in Jan 2021 having an impact on current O&G prices and that Keystone will provide for thousands of jobs.
From what I recall, the number provided by TransCanada was over 100K jobs, while the US State Department analysis was a few thousand for a couple years with less than 100 after the pipeline goes live.
Nothing fundamental changed in O&G production in the USA in the past year. So why did the price change....
Tim
LesGawlik
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Good Guy
All of the ones with big.gov.
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Warlock
Let me help some Texas numbers on Rig counts the day this Admin took office there 400 rigs drilling in Texas and within six months it dropped to 107 as investors were scared as well as banks being told to not lend to Oil and Gas…we have started the slow climb back but…Biden was taken seriously when he said he wanted to eliminate fossil fuels…the domino effect…and it’s easy to turn off but hard to restart. Why would anyone want to invest in this hostile environment…it’s not hard to understand.
tspear
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Timothy
Texas is just part of the puzzle. Here is the numbers for across the USA.
https://www.aogr.com/web-exclusives/us-rig-count/2022
You can go back in 2021 or 2020 and find the low point was actually in August 2020. Since then, it has pretty much increased every month.
Tim
Mainly because prices are set at the global level and are greatly influenced by various oil inventories which are at historical lows. Had the XL phase 4 been completed on its original time schedule (2016) that would have added another 830Kbpd to the domestic inventory. Would that have made a difference in the big picture probably a little bit. The main issue are the global inventories. And when the world's largest oil producer has an agenda not to aggressively refill their domestic inventories over time and publicly pursue alternate energy sources, there is no incentive for other global producers to make up the difference and the oil futures remain high as demand remains high. Keep in mind only 2 years ago the oil industry tanked and some oil futures were selling at a negative $25 per barrel. There is no switch to turn this industry on and off at a whim as some in the media claim. So with domestic refining capacity at 94% or so, major inventories at low levels, and the EU transitioning away from Russian oil, unless demand goes down the prices will remain high. Throw in an active GOM hurricane season or another global issue and these prices will seem cheap. There are a number of weekly reports that track all this for those interested at eia.gov.
tspear
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Timothy
Ding ding ding! We have a winner! Note: You are making an assumption that the tar sands would be profitable and the company would have stayed in business. From what I have read, the tar sands needed over $100 per bbl to become profitable. Unfortunately, I have not seen a breakdown if this was the profit price point at the pit, or delivered via rail or what. So, the company may or may not have made it with prices much lower than $100 which have been in place most of the last six years.
Absolutely nothing stated did the current administration have a material impact. Will changes enacted by the administration impact O&G price in the future? Yes, but that will be a decade away. There is a few ways the administration could make a material impact today on prices; I just have not seen them do it.
In fact, you can go back fifty or more years to find the seeds for the current crisis.
Tim
Absolutely nothing stated did the current administration have a material impact. Will changes enacted by the administration impact O&G price in the future? Yes, but that will be a decade away. There is a few ways the administration could make a material impact today on prices; I just have not seen them do it.
In fact, you can go back fifty or more years to find the seeds for the current crisis.
Tim
The numbers I saw had the break even price at $65 USD with $75 USD regardless if the XL was built or not. Which are in the general range of deep water price points but still above those for tight oil. There were other circumstances at play but the oil cost/profit side was solid.
Those changes have affected things already. Since it takes 5 to 15 years to permit a hole now those changes have moved $1B+ in domestic exploration budgets overseas which will add another 4 years to the permitting schedule if they choose to come back in a better political climate. This isn't the first time we went from feast to famine but nobody seems to learn. The fact they demand more gasoline and diesel to be refined right now from thin air and demand production from undeveloped existing lease holdings shows how clueless the people making those changes are on how the industry and system works.
tspear
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Timothy
You are making my point. The changes affect price in five years minimum using your timeline.
On the flip side; I can also say. The administration and/or Congress is doing sh** to mitigate the eventual O&G shortages they are likely encouraging. Pushing solar and wind; which is the most common answer provided does nothing; and in fact makes the situation worse by not telling people what actually has to be done.
When you look at academic papers (yes I am talking ivory tower people who study this stuff) a number of them have provide a tipping point where the amount of power produced from solar/wind rapidly decline on return. e.g. above point X, for each kwh produced only 90% would be used, additional kwh rapidly decline to 80%... all they down to effectively 0%. The curve is usually presented as asymptotic in a negative direction. The more power you produce, the less gets used once past the tipping point. The tipping point varies by region, and largely depends on weather patterns and local demand curve. However, the numbers are fairly consistent from what I have read. The maximum utility of solar/wind is roughly between 25% and 50% of total electrical generation capacity. Above that number, the returns rapidly diminish as the "renewable" power is provided out of band with the demand.
The solutions to this kind of problem are not popular, or cheap.
Note: This is based on my reading of papers. I am by no means an expert in this area!
Tim
On the flip side; I can also say. The administration and/or Congress is doing sh** to mitigate the eventual O&G shortages they are likely encouraging. Pushing solar and wind; which is the most common answer provided does nothing; and in fact makes the situation worse by not telling people what actually has to be done.
When you look at academic papers (yes I am talking ivory tower people who study this stuff) a number of them have provide a tipping point where the amount of power produced from solar/wind rapidly decline on return. e.g. above point X, for each kwh produced only 90% would be used, additional kwh rapidly decline to 80%... all they down to effectively 0%. The curve is usually presented as asymptotic in a negative direction. The more power you produce, the less gets used once past the tipping point. The tipping point varies by region, and largely depends on weather patterns and local demand curve. However, the numbers are fairly consistent from what I have read. The maximum utility of solar/wind is roughly between 25% and 50% of total electrical generation capacity. Above that number, the returns rapidly diminish as the "renewable" power is provided out of band with the demand.
The solutions to this kind of problem are not popular, or cheap.
Note: This is based on my reading of papers. I am by no means an expert in this area!
Tim
UngaWunga
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UngaWunga
Yeah, nuke plants aren't very popular and take forever and a day to build.
And cutting consumption isn't popular, either.
Not really. Those permits were filed 2 years ago and cancelled. Using your timeline its not 5 years but 10 years on tight oil but takes any new deep water stuff out to 20 years. As I stated oil exploration/production is not a switch you turn off and on. Delaying one year can equate to 10 years delay in some scenarios. But thats just exploration. There are other industry initiatives that have been cancelled as well that just keep kicking the can down the road. However, this is the 1st admin that publicly stated on different levels this is a good day and reason to go green. The ramifications of that mindset and agenda has never been publicly stated before with such candor. And the people I personally know in the industry have given note to this change in "official" policy. Interesting times ahead.
azblackbird
Pattern Altitude
Kinda hard to reason with people that think electricity comes from the wall socket, meat comes from the grocery store, and gas comes from a gas pump.
Don’t even get me started on how they think the energy fairies magically manufacture their green vehicles, wind turbines, and solar panels.
tspear
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Timothy
And a few more which are not popular but could make serious impacts fairly quickly:
1. Build more hydro
2. Build energy storage on large scale like this one: https://www.tva.com/energy/our-power-system/hydroelectric/raccoon-mountain
3. Build transmission lines to bring power from where produced to where needed. By building large lines going east/west you can dramatically increase the times for which solar/wind can make a difference (effectively expanding the time of use).
4. We have many dams in the country which are used for recreation and water control. Start retro fitting every one to produce power, even if only on a small scale.
5. Start a massive retro-fit of every government owned building to be a net zero building with local energy storage.
6. GSA has massive numbers of leases. Make all leases be net zero only for at least HVAC/lighting and operation; or some much better level of insulation than current.
7. The federal government currently buys finished O&G product on the market. The feds "own" the natural resources. Have the feds issue contracts to mine/drill the resources. Just to meet DoD requirements, this effort would represent millions bbl a day. (twenty plus years ago, I had a contract to DoD for a software system to track utility/fuel costs among other things, and the Navy alone consumed over 6% of the US total energy budget). This gets around the belief that not enough investment is being done for O&G. The feds effectively become the investor instead of Wall Street.
8. The Navy has many nuclear ships which spend significant time in port. Currently due to how budgets work, the Navy pulls domestic power to operate the ships while in port. Change the budget incentive, and have the ships provide power to the base while in port.
9. Take the US O&G markets off the global stage. Ban exporting the raw oil, and the finished products. Only allow imports. (This would really **** off our allies)
I am sure there is more. None of these are "sexy", most are not easy, and generally require extensive grunt work for execution, let alone the political will to execute.
I cannot think of one off hand; but there is likely a very trite quote about the situation we are in.
Tim
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Bob Noel
mmmmm, putting aside the decades of environmental impact studies that would be required (and therefore wouldn't qualify as "fairly quickly"), it was my understanding that we've pretty much done the "easy" large ones.
are you claiming there are lots of sites for hydro? where are they?
tspear
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Timothy
Bob,
Agree on permits. However, if Congress and the administration wanted to act, and treat our energy situation like a real crisis. This could be changed.
I have read multiple pundits state we are effectively executing economic war against Russia because of the invasion in Ukraine. If that is the case, we should "go to war" and follow what was done in WW2. In the space of a few years, the TVA tripped energy capacity. This is just a small sample of what we can do if we put our minds to it. It is a question of political will.
No idea on the veracity, or the original source of the data, but the second paragraph covers it:
https://www.hydropower.org/country-profiles/usa
Tim
Agree on permits. However, if Congress and the administration wanted to act, and treat our energy situation like a real crisis. This could be changed.
I have read multiple pundits state we are effectively executing economic war against Russia because of the invasion in Ukraine. If that is the case, we should "go to war" and follow what was done in WW2. In the space of a few years, the TVA tripped energy capacity. This is just a small sample of what we can do if we put our minds to it. It is a question of political will.
No idea on the veracity, or the original source of the data, but the second paragraph covers it:
https://www.hydropower.org/country-profiles/usa
Tim