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Page added on May 20, 2017
No, US Shale Drillers Have Not Won A War With OPEC
- More than 200 U.S. energy companies filing for bankruptcy in less than 2 years;
- A commodity price about half of what it was 3 years ago;
- Rig count half of the 2014 level;
- An industry just now beginning recover from large layoffs during 2015 and 2016.
If the current state of the U.S. upstream oil and gas industry is what an industry looks like when it has “won” a war, then let’s not have any more wars, OK?
But that’s exactly what some in the energy-related news media would have you believe: that the U.S. shale industry has succeeded in staring down the OPEC cartel’s effort to put it out of business and emerged victorious. Several readers contacted me and ask me if that was not in fact the bottom line of the piece I posted last Friday, titled “OPEC Still Fundamentally Misunderstands U.S. Oil Industry.”
Well, no, that was not the point, but since some took it that way, I guess a fuller explanation is in order.
The point of that previous piece – one of the main points, anyway – was that the U.S. shale industry had survived fairly intact from an effort to kill it off. Still standing three years after the assault began, the industry is now leaner , more efficient, able to extract much higher volumes of oil from the same formations than it had been, and better equipped to withstand any future shocks, whether naturally occurring or artificially derived.
But, as pointed out at the top of this story, this new status quo has come at a tremendous cost. Add to that cost the fact that companies that were hugely profitable during the decade leading up to 2014, as the shale boom came into full fruition, now struggle to show a profit after having suffered through two-plus years of heavy losses, and you begin to see the price that has been paid. The industry is currently back up and running on sort of a normal basis, but this “new normal” is not remotely the same as the old normal.
Then there is the fact that one side “wins” any war when the other side has been vanquished from the field of battle. If OPEC was the “enemy” in this war, well, OPEC still stands, doesn’t it? Yes, it is diminished in terms of its ability to exert its will over the global oil markets. Yes, some of its member countries are suffering heightened social unrest as a result of having lost so much GDP due to the collapse in crude oil prices. And yes, Saudi Arabia has already surrendered much of the market share it initially gained during 2015 and 2016 in its current efforts to re-balance supply and demand, and will most likely have to surrender even more of that market share in order to fully balance the market.
All of that is true, and more. But OPEC still stands, just as the U.S. shale industry still stands.
I have personally interviewed and spoken with senior executives at more than a dozen U.S. upstream and service companies over the past six months, and get the sense that, given the choice, each and every one of them would be more than happy to be able to go back to early 2014 and take a do-over in this “war” with OPEC. I suspect that the oil ministers in Saudi Arabia and most other OPEC member nations – not to mention Russia, Mexico and other major non-OPEC producing countries – would be very happy to take a do-over as well.
If you want a movie analogy for this epic battle between OPEC and U.S. shale, think of the final scene of the first “Rocky” film: both fighters beaten and battered, blood spilled all over the ring, Apollo Creed barely able to raise his hands over his head after being declared the “winner” by the judges. As the two opponents embrace each other in respect, Apollo Creed tells Rocky, “Ain’t gonna be no rematch.”
Where the oil war is concerned, there ain’t gonna be no do-overs, either. The market is where it is, and hopefully more sensible decision-making will prevail going forward.
There are no winners here. Don’t let anyone kid you otherwise.
31 Comments on "No, US Shale Drillers Have Not Won A War With OPEC"
brent on Sat, 20th May 2017 8:04 pm
uh oh facts what happened to all the good feels?
Anonymouse on Sat, 20th May 2017 8:14 pm
RolFL, more opec-tired-to-ruin-the-uS-frakers bullstein from wall street. Had ‘opec’ (read saudi arabia) actually tried this, the uS would have militarily invaded and occupied ‘Saudi’ Arabia long ago.
Instead, president hair-piece, speaking on behalf of the uS oil cartel and arms manufacturers, just agreed to sell the sauds 100 billion+ worth of over-priced amerikan weapons. Not something the uS would do for a ‘hostile’ regime that supposedly was trying to intentionally undermine one of amerikas most favored and powerful corporate entities.
I guess you look at this another way too, amerika finally found a war it could actually ‘win’.
DMyers on Sat, 20th May 2017 10:26 pm
Forbes Meets Doomstead Diner?
Surprisingly dark, considering the source.
Sad thing, the finale leaves one groping for a handle on the message. “…hopefully more sensible decision-making will prevail going forward.” [quoting from the article]
More sensible than what? A market gone haywire isn’t really a decision making issue. It is what it is, as the author admits in the midst of this.
Everyone is yearning for the past, as in 2014. Bullshit with that. 1969 would be even better, if you’re going to wish for the impossible, but let’s make it 1964 and hope to touch down at the Electric Kool-aid Acid Test.
No, shale ain’t all that. Stop the shale hype, and let’s get back to real oil, if you know what I mean. Playing liquification agent to the tar sands is a noble destiny for shale oil, but OPEC has the stuff that really fuels modern civilization. Please, stop confusing the two.
rockman on Sat, 20th May 2017 10:44 pm
D – “Playing liquification agent to the tar sands is a noble destiny for shale oil, but OPEC has the stuff that really fuels modern civilization. Please, stop confusing the two.”
In reality the condensate production from our shales is just as critical for our refining industry. Without the light oils we would be refining our domestic heavy oils and imports…including those from OPEC. US refineries don’t crack heavy or light oils: they refine BLENDED OIL with a very narrow range of 31° to 33° API. Before the shale boom we had to import large volumes of light oils to make those blends. And the Canadian oil sands? Even though they use light oil to make a blend so it can be pumped dilbit is still only around 23° API. IOW before it’s run thru a refinery even more condensate has to be added to it to get to the necessary 32° API gravity.
Either produced from our shales or imported our refineries are dependent on the very light oils.
DMyers on Sun, 21st May 2017 12:08 am
Rockman,
If we had to pay you for the education, you’d be a rich man. But you don’t dispute that shale oil is a light condensate. This is in contrast to what I choose to call, “real oil”.
I’m not going to debate you on anything, Rockman, as you’d kick my ass in minute, so I’ll focus on our agreement. Shale is a light condensate, used for the purpose of processing heavier, otherwise worthless, forms of oil. So, shale oil is not the oil that Jed Clampett saw bubbling out of the ground when he fired that fateful shot into a hillside in Arkansas. It isn’t black gold. Rather, it’s champagne.
The last time someone asked me, “you want some black gold or a glass of champagne?” I opted for black gold. It happened, however, that this black gold had been alchemically produced from champagne. So, the whole thing can get complicated.
All I’m advocating, Rockmahni
is fair labeling. If it’s oil, it’s oil. But if it’s an oil processing agent, then it’s that instead. Forgive the anal-ity.
Go Speed Racer on Sun, 21st May 2017 1:09 am
I keep hearing the shale oil is like paint thinner. Or maybe kerosene.
Strummer on Sun, 21st May 2017 5:44 am
“Add to that cost the fact that companies that were hugely profitable during the decade leading up to 2014, as the shale boom came into full fruition, now struggle to show a profit”
Really? Hugely profitable?
https://fractionalflow.files.wordpress.com/2016/08/fig-3-bakken-monthly-ncf-vs-cumulative.png
rockman on Sun, 21st May 2017 8:50 am
D – “But you don’t dispute that shale oil is a light condensate. This is in contrast to what I choose to call, “real oil”.” No problamo. LOL. You’re certainly free to call it what you like. Let’s call condensate (BTW “light condensate” is a tad redundant: condensate is light oil) “banana pudding”. At the same time let’s call heavy oil “chocolate pudding” since, like condensate, isn’t “real oil”. I assume you agree that the hydrocarbon formerly known as “heavy oil” isn’t “real oil” given you pointed out its limited value in its original state.
Serious I’m OK with the terminology change. So from now on we’ll only call liquid hydrocarbons in the 31° to 33° API range, which constitutes all we refine, “real oil”. So from a production standpoint there is very little “real oil” being produced in the world today. Just a guess but maybe only a few million bbls/day. The rest of the 90+ million bbls per day being produced is composed of banana and chocolate pudding.
Again, seriously, I have no problem with that nomenclature. It doesn’t change any aspect of the entire dynamic, does it? In truth I’ve been trying to inject that same reality into our conversations. I’ve done so by repeatedly pointing out that very little of the liquid hydrocarbons produced in the US or imported is “real oil”. The Canadian dilbit certainly isn’t “real oil”. But the entire dynamic of the refining industry, and thus of our entire consumption of its products, hinges on processing only “real oil”, or what I had been calling “blended oil”
So you see the terminology isn’t important at all. What’s important is for everyone to understand that is that our economy is dependent upon refining only “real oil”. And that the world produces very little “real oil”. But we do produce huge amounts of banana and chocolate pudding that can be mixed together to make “real oil”. And most important: the world would suffer a severe shortage of “real oil” if we didn’t have enough banana pudding to mix with our chocolate pudding. Chocolate pudding which had for years been becoming a larger portion of the mix. Had increasing amounts of banana pudding not been produced to mix with our huge reserves of chocolate pudding the economies would have been badly damaged.
And it’s that appreciation IMHO which is critical and not the terminology we use. Of course, it might be easier to just stop calling it “condensate” (the definition of which is based upon the phase it exists in the reservoir and not its gravity) and just call it what it is: light oil.
Then the conversations get easy: the world is dependent upon mixing light and heavy oils to make the blended oils the refineries require to make the products the consumers demand.
rockman on Sun, 21st May 2017 8:54 am
Racer – “I keep hearing the shale oil is like paint thinner. Or maybe kerosene.” One might presume that since “oil” is a portion of the term “shale oil” it might actually be oil. Otherwise wouldn’t we be calling it “shale kerosene” or “shale paint thinner”? LOL.
rockman on Sun, 21st May 2017 9:14 am
D – Which brings up something I’ve wonder about for a while so I try a poll right here:
How many before they started out hanging around here thought that all the produced oil in the world was refined just as it comes out the well head? IOW didn’t appreciate that the light and heavy oils had to be mixed to make suitable refinery feedstocks?
Second question: that essentially none of the oil that is processed in refineries IS CONSUMED in the process? IOW every oil Btu going in comes out as a Btu of product. And yes: a significant amount of Btu’s are used to SEPARATE the different hydrocarbon chains. But nearly all the Btu’s consumed come from NG and electricity (which is generated with NG or coal in Texas, the largest refiner in the country).
Certainly not a criticism. Unless the public hangs out with some petroleum geeks all it understands is the headlines from the MSM. Which, for the most part, is just sh*t. LOL.
Sissyfuss on Sun, 21st May 2017 9:47 am
But Rock, what’s the API of that shit and can it be be blended into any useful purpose other than feeding the sheeple?
Apneaman on Sun, 21st May 2017 9:48 am
rockman, I knew. I should since I built and repaired refineries for a living.
Now here’s a little hopey something for you and the other Cancer industry cheerleaders to get a Sunday stiffy over.
How fluids flow through shale
New shale modeling may lead to more efficient extraction of oil and natural gas
https://www.sciencedaily.com/releases/2017/05/170502112553.htm
Cloggie on Sun, 21st May 2017 10:19 am
rockman, I knew. I should since I built and repaired refineries for a living.
But you are not afraid that folks here will call you a hypocrite and a major league cancer monkey yourself?
Of course not. Name calling and demonizing, that’s your trade. Until it is train time again.
Apneaman on Sun, 21st May 2017 10:37 am
hair clog, it’s none of my business what anyone thinks about me.
Cloggie on Sun, 21st May 2017 10:46 am
ApneaTurd, I’m sorry if I have hurt your feelings.
joe on Sun, 21st May 2017 10:59 am
With the banksters looking to force the issue of terminally low interest rates to keep our aging zombie economies alive its likely that the banana pudding will get more expensive to make since the main ingredient of modern cake making is fiat currency. When that happens people will begin to see that we havent really moved on from the disaster that was 2008, only deferring the true impact.
onlooker on Sun, 21st May 2017 11:13 am
Well said Joe
rockman on Sun, 21st May 2017 11:40 am
Sissy – “…what’s the API of that shit…”. You have to be more specific: there’s lot of different “shit” out there. LOL.
If you mean the Canadian oil sands they come out of the ground around 12° API if memory serves. By mixing about 25% with light oil/condensate so it can be pumped down a pipeline or flower out of a rail tank car the result is around 23° API. Still not suitable for refinery feed stock. Which is why about all the dilbit reach terminals like Cushing is bought by blending companies. Actually true for nearly all the oil produced in the US.
Only recently have US refineries begun buying a little bit of oil directly from us producers…they’re not satisfied with the blends offered for sale. Yes: very little oil has ever been bought directly from us producers. They buy it from companies, like Plains Resources, the names of which few here are familiar. So they 3 mm bbls of dilbit that are imported is blended with more light oil to bring it up to around 32° API.
So if that’s what you’re referring to as the sh*t that doesn’t appear to have “any useful purpose other than feeding the sheeple”: that sh*t is part of the source for much of the motor fuels consumed in the US.
Or were you talking about some other sh*t?
rockman on Sun, 21st May 2017 12:51 pm
D – And in case I confused you or anyone else by stating that the definition of “condensate” has nothing to do with its composition or utility. And, probably most shocking of all, its API gravity…at least in the largest oil producing state, Texas. By Texas LAW oil that exists in a reservoir in a gaseous phase is defined as “condensate”. Another hydrocarbon with the identical composition AND gravity that exists as a liquid phase in the reservoir is classified as “oil”. So when the condensate comes out of the separator at the well head and CONDENSES into a liquid it is still recorded as “condensate” just as an identical liquid hydrocarbon in another tank down the road can be classified by Texas as “oil”.
And why does that gaseous phase transform to a liquid phase: the lower pressure and temperature at the surface. Search the laws of physics if you want those details. And if that doesn’t mess your head up: guess what happens in NG/condensate reservoirs (and the wells completed in it the state classifies as “gas wells”) when the pressure decreases enough to condense that gaseous phase to a liquid phase: state law requires the formerly “condensate” production to now be counted as “oil” production. AND the well is reclassified from a “gas well” to an “oil well”.
Yes: a “gas well” producing 100 bbls per day of CONDENSATE on 1 Jan, 2013, and recovers a total of 50,000 bbls of “condensate” thru 31 Dec, 2014, might be reclassified as an “oil well” on 1 Jan 2015, producing 60 bbls per day of OIL and might recover 30,000 bbls of “oil” by the time it’s depleted.
Do you see now why Texas reports oil production as “C+C”…crude plus condensate? Because all of those bbls are OIL. And the distinction between a gas/condensate well and an oil well with associated NG production is not some trivial matter. It effects $BILLIONS of specific aspects of hydrocarbon development and production: there are very different regulations for oil wells and gas/condensate wells. Today the most important is well spacing. A reservoir classified as gas/condensate might only be allowed a well every 640 acres. Which means a company could hold 6,400 acres with just 10 wells as long as they keep producing. But produce it until the reservoir drops and it can be reclassified as an oil reservoir that can be drilled on an 80 acre spacing then it could take 80 wells (6,400 acres/80 acres) to hold the entire lease.
Also, at one time the state significantly reduced how much liquid hydrocarbon could be produced from an “oil well” (the proration law) but couldn’t for an identical “gas well” producing the same volume of identical liquid hydrocarbon. This lead to a lot of Attlee over classification. And that classifications isn’t some arbitrary opinion: done with a somewhat complex reservoir engineering calculation.
But that reclassification isn’t always a bad thing: often wells drilled on large spacings, like a 640, do not effective drain the entire 640 acres. So reclassification allows more “infield” drilling on smaller spacing. Something that has been going on for a while in the Eagle Ford.
This is the reality of the oil vs. condensate dynamic…at least in the largest oil producing state. And don’t even think about arguing the point with the Rockman: these are the LAWS of the Texas Rail Road Commission and how our liquid hydrocarbon production is tabulated. Don’t agree? Bitch at them. LOL.
Alice Friedemann on Sun, 21st May 2017 3:39 pm
Rockman: Does the balance of light & heavy oil affect the peaking of oil production and/or the products produced? So if there’s far more light than heavy oil could that lead to too much oil for plastics and not enough for diesel fuel? Or conversely, more heavy oil than light oil can remedy, and we have way too much asphalt for roads? Or does it just mean a lower EROI due to higher energy costs to process the heavy oil into valuable products?
rockman on Sun, 21st May 2017 6:36 pm
Alice – “Does the balance of light & heavy oil affect the peaking of oil production and/or the products produced?” An excellent question. And one I haven’t thought to quantify. But I can give you a gut instinct answer I’m 100% confident: we’ll run out of light oil for blending long, long, long before we run out of the heavy crap. LOL. And if you think regional it has in many countries. It even happened in the US at one time. As I’ve said numerous times: before the shale boom US refineries had to import light oil for blending. The folks in Alberta are thankful for our light oil production: they need about 750,000 bbls per day of light oil to blend with their oil sands but need to import about 300,000 bbls/day from the US. And when the Eagle Ford boomed in S Texas a dozen tankers would be lined up at the port in Corpus Christi to haul light oil half way around the continent to eastern Canadian refineries to blend with their heavy African imports. How times change: two pipelines that used to haul imported light oil from Corpus to a big refinery in San Antonio were reversed and EFS light oil was pumped to the port at Corpus. And from there on to Canada.
And not just a US phenomenon: a year or two ago Venezuela, a major oil exported, began importing light oil from Libya to blend for their refineries. And for whatever reason it has now begun importing finished gasoline.
So could we produce all the products we consume today if we didn’t have enough light oil to blend? Maybe…maybe not. I’m not a definer. But I’m sure it wouldn’t be nearly as efficient. But we would have to crack a lot more bbls and would be much more expensive. Also, remember refineries BUY a lot of NG and a good bit of electricity to crack oil. And today NG is relatively cheap. Imagine how much gasoline would cost if we see NG triple (as it did some years ago) as we start running short of light oils.
Now think about all the optimism expressed over the many decades of PROVEN Canadian oil sands and Venezuelan Orinoco heavy oil that exists. How useful will those BILLIONS of bbls be it we don’t have BILLIONS of bbls of light oil to blend with them?
With that in mind: did you see posts starting years ago about how “worthless” condensate production (like from the Eagle Ford) was and shouldn’t counted as “real oil”. Makes you wonder what they were smokin’, eh? LOL. In fact, the term “real oil” still pops us from time to time.
rockman on Sun, 21st May 2017 7:23 pm
Alice – And in case you wanted to see the evidence of just how fanatic our refineries are about the narrow range of oil gravity they demand here’s the data of the “U.S. API Gravity (Weighted Average) of Crude Oil Input to Refineries” from the EIA. From 1985 to 2016 it ranged only from 30.2° to 32.5° API.
https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=mcrapus2&f=a
So that’s the “real oil” we’ve refined to make all the products we’ve consumed for at least the last 30 years. Very little of which naturally occurred in nature.
BTW you may already know that the tank farms in Cushing, OK, is the largest oil storage facility in the world. But do you know why? It’s the largest oil BLENDING facility in the world. And you may know they eliminated the choke point there holding back Canadian dilbit getting to Texas refineries. So they reversed a pipeline that once flowed oil from the Texas ports to Cushing. And I’ll give you three quesses what that imported oil was. And the first two don’t count. LOL. A hint: remember those two reversed pipelines at the port of Corpus Christi.
Reminds of very old story: 4 decades ago I was on lunch break in an old neighborhood bar across the street from my office at Mobil Oil. Yes: a bar for lunch…worked in New Orleans. During the time of the great Arab oil embargo. An old bar fly was going on about all the talk about needing more drilling. His comment: “They’re stupid, we don’t need more damn oil wells! We need more gasoline wells!”
True story. Unlike many of my stories. Hey, the Rockman often eats lunch in a bar…whatcha expect? LOL.
Sissyfuss on Sun, 21st May 2017 8:08 pm
Rock, I was asking if you could give me the API of MSM headline horseshit that you had mentioned. But your response was erudite and informative that it blew my insouciant drivel clean out of the wellhead.
Sissyfuss on Sun, 21st May 2017 8:12 pm
And to paraphrase President Mongo, “Gee, who knew oil could be so com!plicated?”
rockman on Sun, 21st May 2017 9:39 pm
Sissy – About the only specific concept of US oil our MSM writes about is “WTI” oil. Which, in the context they use (oil future contracts) isn’t really physical oil. It’s just a “benchmark price”: very little to no US oil is sold at that exact price they toss out. I suspect that almost none of them understand that there is very little WTI produced in the US:
WTI = a light crude oil, with an API gravity of 39.6° and specific gravity of about 0.827. It contains about 0.24% sulfur thus is rated as a sweet crude oil (having less than 0.5% sulfur), sweeter than Brent which has 0.37% sulfur.
But the MSM probably thinks WTI is what our refineries process. In reality no refineries crack 100% WTI gravity oil…they crack blended oil. Any oil with a gravity around that of WTI (about 40° API) is blended with equal amounts of heavy oil (like 22° API) to produce a blend around 31° API. That’s about the gravity our refineries have been processing for at least 35 years. That’s what the EIA has recorded as the “API Gravity (Weighted Average) of Crude Oil Input to Refineries”:
https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=mcrapus2&f=a
Yes: despite the MSM incessantly talking about WTI very little WTI oil is produced in the US and not one load of 100% WTI has been refined in the country for many decades…probably never. Essentially WTI is, for the most part, just a theoretical construct…it doesn’t really exist.
DMyers on Sun, 21st May 2017 9:55 pm
Rockman,
You’ve explained this all very well. With respect to your poll, yes, I was an idiot with no exposure to the real operation of oil-in tanker > gas in my car. Only with the assistance of the Rockmahni Institute of Higher Education in Oil Production have I come to grasp a small piece of all this.
With respect to the designation of “real oil”, I understand your denigration of the whole notion. However, the matter is one of politics and propaganda.
Let’s say, for example, that we have two camps debating peak oil. The antagonists to peak oil want to heighten and maximize the barrels of oil produced to show advancement beyond the prior peak, thus disproving the thesis. So, the inclusion of substances that are not oil but are added to heavy oil to make “real oil” adds weight to their argument.
When the normal individual in society hears about so many millions of barrels of shale oil, that person imagines that this is the same stuff he’s always recognized as oil, the stuff that gushed out in a great spout of glory in the movie, “Giant”. So, there is a bit of deception in using the term to describe two different chemical entities.
An interesting side effect of this blending process is a skew of barrels produced and “barrels of oil”. In other words, we might have a 50/50 blend. Let’s say a million barrels of heavy to a million of light. The result is that a million barrels of each have been added to the total barrels of oil produced, but in the end blending causes the actual barrels of “real oil” produced to be half of the barrels previously added.
Substantively, you’re on top of the whole thing here, Rockman. I’m a humble student taking notes. Politics and propaganda are part and parcel to the barrels of oil count.
rockman on Sun, 21st May 2017 10:38 pm
D – Excellent point about the “spinning” on all sides of the issue. But: “…but in the end blending causes the actual barrels of “real oil” produced to be half of the barrels previously added.” Not sure I follow that: you end up with 2 million bbls of blended “real oil” after mixing 1 million bbls of “real oil” (light) and one million bbls of “real oil” (heavy).
Or did I confuse you with the silly pudding talk? LOL.
And I doubt you are an idiot. You’re just uneducated in certain areas…like everyone else. Even the Rockman: AFTER 66 years stumbling thru life he still hasn’t figured out what the f*ck women really want. LOL.
deadlykillerbeaz on Mon, 22nd May 2017 7:49 am
Bakken oil is shipped to Canada.
A lot of the Bakken formation exists in Canada too, ya know. The depocenter is in North Dakota, though.
https://www.eia.gov/todayinenergy/detail.php?id=16151
TORONTO (ICIS)–NOVA Chemicals has begun using the first barrels of ethane from North Dakota’s Bakken shale region at its cracking complex in Joffre, north of Calgary in Alberta province, the Canada-based petrochemicals firm said on Friday.
The ethane was produced at a processing plant in Tioga, North Dakota, and shipped across the border into Alberta via the Vantage Pipeline, which connects to the Alberta Ethane Gathering System (AEGS). NOVA is the contract operator of both AEGS and Vantage.
Vantage has an initial design capacity of 40,000 bbl/day but is expandable to more than 60,000 bbl/day, “a volume that reflects more than 20% of Alberta’s existing installed ethylene production capacity,” NOVA said.
Ethane extracted from associated gas produced from the Bakken shale region is expected to be a growing and stable feedstock supply source for Alberta’s petrochemical industry, the company added.
“The introduction of Bakken shale-based ethane into the feedstock diet at Joffre marks an important milestone in the diversification of our ethane sources for the region and our NOVA 2020 strategy to capitalize on North American demand,” said NOVA’s acting CEO Todd Karran.
“The new supply sources we recently began to use, together with those currently in development, should enable us to run our existing polyethylene (PE) plants at full capacity, as well as support our PE1 Expansion project in Joffre and position us well for potential further growth,” Karran added.
https://www.icis.com/resources/news/2014/06/13/9791419/canada-s-nova-uses-first-bakken-ethane-at-alberta-cracking-complex/
rockman on Mon, 22nd May 2017 8:24 am
“Ethane extracted from associated gas produced from the Bakken shale region is expected to be a growing and stable feedstock supply source for Alberta’s petrochemical industry”. And not just Alberta: $billions worth of new ethane crackers being built in the Marcellus Shale region. The US also lacks enough capacity: much of the LNG being exported isn’t methane for heating/electricity generation but is ethane shipped for industrial consumption…a more valuable commodity then methane.
Alice Friedemann on Tue, 23rd May 2017 4:15 pm
Rockman,thanks for your long thoughtful answer. The end of fracking bonanzas of natural gas while conventional natural gas declines I suppose can be gotten around for a while by importing LNG to refine heavy oils (I believe the natural gas near the tar sands has only 25-30 years to go).
And let’s hope the electric grid stays up, a refinery in the SF Bay area had to release toxic gases after a power outage — so it sounds like the electric grid must be up 24 x 7 to run a refinery??? The grid hadn’t come down for 30 years…
Kenz300 on Wed, 24th May 2017 1:00 pm
How soon before OPEC increases oil production AGAIN and puts the remaining frackers into bankruptcy?