[evilgenius]

I wonder if the Saudis think they can get as much, or more, oil from the surrounding rock as they can from their elephants? They may believe they have learned a lesson, a different lesson than many think, from the American fracking boom. It may or may not be true. I hope they aren't basing everything upon it. To do so is a dance with money, and money always wins!

[ROCKMAN]

evil - I haven't seen one documented report that the KSA has proven that any of their shales have commercial potential. They may have shales but so does the rest of the world. And those are also almost universally non-commercial...just like the vast majority of the US shale formations. The geologic conditions for commercial production of oil from a shale very rare. Consider the US: we have a cumulative shale thickness (that can be reached with a drill bit) of hundreds of thousands of feet while the cumulative thickness of our commercial oil shales is less than 2,000'.

And set that factor aside and consider who almost all the big shale players in the US were: public oil companies that were focused on doing anything possible to boost stock value including drilling thousands of not very profitable wells. Stock values that have dropped 60% to 98%. And then consider the lack of shale drilling/frac'ng infrastructure in the KSA compared to the US. And lastly: the big KSA conventional wells produced at a nearly constant oil rate for decades. Shale wells decline sharply the first 12 months. IMHO speculating about KSA shale development today is completely pointless.

[evilgenius]

Rockman,

Yeah, that's kinda my point. I wondered out loud if they believe they may have something, even if they haven't proved anything out. It would be a dangerous position for them, for all of the reasons given. The trouble with that kind of thinking, brought on by their ability to extend the flow of oil from their fields for so long in the face of a lot of doubt, is that it can become a part of an informal mindset. I once worked for a telecom company that made bad decision after bad decision. Everybody who worked there chalked it up to a plan to make themselves look more attractive to potential suitors. Everyone agreed that the company would be bought. Nobody ever bought them. They went under, instead. When you look at what the Saudis are doing now you have to scratch your head. Is it worth the potential economic trouble they are bringing upon themselves merely to stifle quickly depleting competitor production from America? Even if you consider that they might want to kick Iran in the goads, and push back at the US for sort of normalizing with them, it may still not be a wise thing they are doing.

[Byron Walter]

$this->bbcode_second_pass_quote('evilgenius', ' ')...When you look at what the Saudis are doing now you have to scratch your head. Is it worth the potential economic trouble they are bringing upon themselves merely to stifle quickly depleting competitor production from America? Even if you consider that they might want to kick Iran in the goads, and push back at the US for sort of normalizing with them, it may still not be a wise thing they are doing.

[TheDude]

"Rocky Mountain High..." Hey JD. Glad to see you haven't flown a plane into a hillside like your namesake.



Wow, these guys are screwed. If this keeps up no one will go near a driller with a ten stage hydrofrack. Funny how OPEC are treating the shale boys like the USSR back in the 80s, attempting to pummel them into submission. At least, the USSR if you follow the conspiracy about Ronnie Raygun leaning on the Saudis to flood the market with oil to destroy the Commanistz.

Chart from Oil Production Vital Statistics August 2015 | Energy Matters.

[Outcast_Searcher]

$this->bbcode_second_pass_quote('pstarr', '
')$this->bbcode_second_pass_quote('Outcast_Searcher', 'I') keep seeing this claim on this site (with no credible citations), and yet the simple laws of economics like supply and demand are ignored even as the claim is being made.

[ralfy]

$this->bbcode_second_pass_quote('Outcast_Searcher', '')$this->bbcode_second_pass_quote('pstarr', '
')$this->bbcode_second_pass_quote('Outcast_Searcher', 'I') keep seeing this claim on this site (with no credible citations), and yet the simple laws of economics like supply and demand are ignored even as the claim is being made.

[El_Producto]

$this->bbcode_second_pass_quote('Outcast_Searcher', '
')
This claim is absurd on its face.

Addressing just the US, which uses a LOT of oil, is the world's largest economy, and despite all its debt, is still a relatively "rich" nation overall:

1). People take on debt because they always want a higher standard of living, no matter how high it already is.

2). People elect the clowns in Washington that keep spending on programs of all types that accumulate the debt. People WANT the programs, overall, or they'd vote against the clowns who fund them. Left wing or right wing clowns -- they ALL compete on the goodies they promise the electorate. The VAST majority of those programs aren't about energy.

3). First world countries are getting LESS energy intensive, not more. Thus in real terms, oil consumption is trending toward costing less per capita. The current energy intensity of the US is about 40% of what it was in 1950. And yet the 50's were a very powerful growth time for the US. The US energy intensity is projected to shrink by almost another 50% of its current value by 2040. Somehow, I don't think using WAY less of the GDP on energy is exactly a bankrupting force (at least to people willing to acknowledge the GDP is a reasonable indicator of overall economic activity).

http://www.eia.gov/todayinenergy/detail.cfm?id=10191

Just because you insist stridently that everything is about oil, and that makes us economically doomed doesn't make it so when looking at the objective data and trends. Now, overall endless planetary BAU growth and its cumulative toll on the planet -- longer term that's an entirely different kettle of fish, to anyone who can do arithmetic, IMO.

[StarvingLion]

Phd Thesis - The universe is full of stupid people

Earthlings: "Where are the extraterrestrials?"

Extraterrestrials: "Where are the earthlings?"

1. They both discovered that FF was the best energy source
2. They both discovered fractional reserve banking
3. They both blocked herd thinning world wars due to nuclear weapons.
4. They both discovered that every fusion scheme is ruined by instabilities.

And so they all fried their respective planets with GHG and ecological damage from overpopulation because there was no way out of the dilemma of burning stuff to fuel growth.

[SeaGypsy]

I think it will be argued that early agricultural/ nomadic tribal life was the pinnacle point of wisdom for our species.

Technological enough-

Thorough knowledge of the bioregion

Thorough ability to restrict & control population to not exceed carrying capacity

Adequate technological development to provide adequate lifespans to ensure biological & cultural procreation

Before telling me this is idiocy, read up on:

The moiety system (common to many disparate tribal people on every inhabited continent- implies deep understanding of genetic risks & inbreeding)

Navigation systems of Polynesian people. (How did they find & populate every inhabitable island in the Pacific?)

Survival systems of central Australian & African desert Aboriginals. (50-75,000 people lived with stone age implements only just in the MacDonnell ranges & created the oldest living languages, older than the Pyramids, but they 'built' nothing.)

Medicine systems implying deep knowledge of plants & their effects on physiology & psychology (humans have gotten, one way or another, wasted, for as long as we have existed)

The hubris of modernity is infinite, of course we are better, look at all the 'stuff', right? But taking a millennial view, our era in retrospect is going to be seen in a very different light. I have wondered at times if that is why certain doomers have to project total annihilation of our species, as unlikely as that actually is.

[StarvingLion]

Phd Thesis 2 - The Super Smart People are really pretty damn stupid.

California (Silicon Valley) is so "brilliant" that its agriculture industry will kick the bucket and then it can't feed itself.

Texas (Lockheed Martin) is so "brilliant" that all it does now is invest in Silicon Valley startups.

Munich (Siemens) is so "brilliant" that it believes in 19th century technology (windmill).

[JohnDenver]

$37 today. Getting closer...

[ralfy]

Unfortunately, costs aren't going in the same direction.

Related:

"Guess What Happened The Last Time The Price Of Oil Plunged Below 38 Dollars A Barrel?"

http://theeconomiccollapseblog.com/arch ... s-a-barrel

"Oil Industry Needs Half a Trillion Dollars to Endure Price Slump"

http://www.bloomberg.com/news/articles/ ... to-survive

[ROCKMAN]

For what it's worth just met with my very wealthy owner yesterday. He's connected to some of the top analysts in the world. The consensus at the moment is that $30/bbl is a real possibility but from there a gradual increase over years. Bad for our revenue stream. OTOH he's almost giddy at the prospect of cannibalizing crippled companies in the coming months. Recessions can be tough...unless you sitting on the sideline flush with cash. LOL.

[EdwinSm]

I did not find a time line in the article for when crude was to hit the $10-20 range, but noted that the first proposal was made in February. The February article [http://business.financialpost.com/news/energy/get-ready-for-10-oil-says-a-gary-schilling?__lsa=bdf5-fd18] also does not give a time frame.

It has been now 10 months, although I admit that the price is edging down, but it still has a long way to fall to get into the range. Can we dismiss that scenario yet?


Ps. Even moderate doomers have had difficulty with time frames so maybe we should learn from the article and just say "sometime this or that will happen".

ps. any

[Tanada]

At this point I believe it could go either way for a while. The recession and over production are suppressing prices, but with actual bombing going hot and heavy in Syria and a little more in Iraq things could heat up overnight. Traders are always trying to be at the leading edge of any trend because that is where the highest profits are. If the Traders think the price will be going up because of cause X or effect Y then the price will go up until real world fundamentals prove them wrong. The same thing happens going down.

[ROCKMAN]

T - With gasoline prices heading even lower you might think this would be a great opportunity to raise fed motor fuel taxes. Whicj explains why you would never have a chance to be elected as one of our congress critters. The author is a Reuters Breakingviews columnist.

"Congress is punting a needed gas tax hike in favor of a raid on America’s banks. A $305 billion, five-year transport spending plan was approved by the House of Representatives on Thursday and is heading for the Senate. Rather than raise the U.S. fuel levy, though, lawmakers are plugging the $70 billion shortfall in funding for the infrastructure deal in part by swiping the Federal Reserve’s rainy day fund and dividends it pays lenders. It’s creative, at least. Today’s politicians are mostly loath to raise taxes, and that’s especially the case for congressional Republicans on the cusp of a presidential election year. But there has been no increase in the tax on gasoline, which funds much federal transport infrastructure, since 1993 – even though U.S. drivers pay far less than most developed-world counterparts for fuel. Better vehicle fuel efficiency has reduced takings, too. As a result, the Highway Trust Fund has suffered a rising deficit since 2008. Topping up the tank might only take an extra 10 cents of tax per gallon of gas, about a 5 percent increase on current depressed prices. Instead, Congress is picking other pockets. Lawmakers are lifting $19 billion directly from the Fed’s surplus account, which will henceforth also have to hand over to the U.S. Treasury anything above a $10 billion ceiling.

They’re also scrapping the tradition of the central bank system paying its members a 6 percent annual dividend. That will now be replaced by the lower of a 6 percent return and the prevailing 10-year Treasury yield, currently just over 2 percent. Institutions with less than $10 billion in assets will be spared, reflecting Congress’ chosen line between often demonized big banks and generally praised community lenders.
Banks are not the only victims. Lawmakers also intend to raid the government’s strategic petroleum reserve for 66 million barrels of oil. They do not plan to reduce the stash below the generally accepted floor of 530 million barrels. But they are reckoning on proceeds of $6.2 billion, which would require the crude oil price to more than double from its current level.

The trouble with clever one-off fixes is that they don’t offer a long-term solution to U.S. infrastructure funding needs, while a modestly higher gas tax could. In Washington, though, any doable deal is a rarity that users of roads, bridges and mass transit can be thankful for."

You're just too dumb to understand that the perfect time to sell SPR oil is when we've had the lowest oil price we've seen in many years. You're just hopeless, buddy. LOL.

[Outcast_Searcher]

$this->bbcode_second_pass_quote('Tanada', 'A')t this point I believe it could go either way for a while. The recession and over production are suppressing prices, but with actual bombing going hot and heavy in Syria and a little more in Iraq things could heat up overnight. Traders are always trying to be at the leading edge of any trend because that is where the highest profits are. If the Traders think the price will be going up because of cause X or effect Y then the price will go up until real world fundamentals prove them wrong. The same thing happens going down.

[Cog]

What is it about low gasoline prices that makes liberals frantic to raise gas taxes? Is it some sort of mental illness? How about leaving the American people alone for a bit to enjoy a bit of break in their life?