[ROCKMAN]

Big news about Apache's new "3 billion barrels of oil". From the sponsors of the conference:

Christmann is set to discuss Apache's plans for the discovery during a keynote address entitled ‘Alpine High & Permian-Wide' at 1:15 p.m. Tuesday, November 8, during Hart Energy's 2016 Executive Oil Conference. The conference and exhibition, scheduled November 7-8 in Midland, TX at the Midland County Horseshoe Pavilion, attracts top executives and decision makers from the region's most-active exploration and production companies for world-class conference sessions about effective strategies, trends and technologies that will increase operational efficiency.

It will be very interesting to see what actual data he shares. BTW Apache, like every other company, doesn't give a sh*t what the rest of the oil patch thinks about what any company says. His presentation will specifically target Wall Street analysts.

And no: the Rockman won't be attending.

[ennui2]

The confusion here is that nobody really knows what they're advocating anymore.

On the one hand, we're still currently in a supply glut. So there can be a simple argument pro/con whether we're in a glut or how long that's going to last.

The second part of it is how price will respond to supply going forward.

ETP suggests only a downward spiral in prices. To those who reject the idea that low oil prices are a problem, this instills no fear whatsoever, in fact the reverse. This is why when I point to the current price of gas, I am saying just that. Or talking about summer road-trips.

ETP's ability to get people quaking in their boots rests on the idea that as prices stay low or go lower, that this reflects demand destruction and the lock-step unwinding of global GDP. This has been seriously overstated, as many rebuttals have proven. Also, it's very easy to confuse normal economic boom and bust cycles with the impact of oil supply/prices (high or low).

On the flipside you have classic peak oil doom, which is oil shortages, burning the furniture, Mad Max and Toecutter and what not.

Some of the flippant attempts to portray a post-peak dystopia continue to rely on classic peak oil dystopian imagery, which seems incompatible with ETP's "oil is worthless, hence cheap and abundand" narrative.

With this logical inversion of oil being cheap being equated with an ominous sign or portend of doom, it's no longer possible for rational moderate peakers to communicate with ETP nuts because we're simply not speaking the same language anymore.

The longer oil stays cheap, the LESS a rational peaker will feel that the sky is about to fall.

And yet ETP advocates keep saying "Look how cheap oil is! Isn't this scary???"

No, it's not scary. It's a glut and this is actually a GOOD THING for the economy other than those who work in the oil patch or those who would have liked oil scarcity to encourage the move to renewables.

This is pretty much the long and short of it all. As long as ETP insists that cheap oil is a bad thing and classic peakists insist that cheap oil is good, we're just going to keep talking past each other.

[ROCKMAN]

"ETP's ability to get people quaking in their boots...". Sorry, did I miss something? I haven't seen much " quacking" in these here parts. And in the oil patch (where drilling decisions are made) the Rockman has not talked to one person in his world that has ever heard of "ETP". I'm sure some in the oil patch must have but not any of the hundreds the Rockman knows.

[ennui2]

$this->bbcode_second_pass_quote('ROCKMAN', '&')quot;ETP's ability to get people quaking in their boots...". Sorry, did I miss something? I haven't seen much " quacking" in these here parts. And in the oil patch (where drilling decisions are made) the Rockman has not talked to one person in his world that has ever heard of "ETP". I'm sure some in the oil patch must have but not any of the hundreds the Rockman knows.

[SumYunGai]

$this->bbcode_second_pass_quote('ennui2', 'E')TP suggests only a downward spiral in prices. To those who reject the idea that low oil prices are a problem, this instills no fear whatsoever, in fact the reverse.

[ennui2]

Oil companies will not, I repeat will not, intentionally bankrupt themselves the way you think they will. What happened was the Saudis intentionally sabotaged the fracking scene because their costs are lower than frackers. They exploited this differential, although in the process, they also cut into their own profit margins and can't hold frackers down indefinitely. That's all that's going on here. A turf battle between the middle-east and the US.

It will pass and at some point the middle-east will learn to coexist with frackers with oil at a higher (profitable) price-point. If Saudis go into terminal decline then price will only go up anyway, spurring on more fracking as the activity will be that much more profitable, hence putting a cap on how high oil can go.

The crazy thing is that half the rhetoric here is still flogging geological depletion. You can't fearmonger about the wells going dry while simultaneously saying prices will crater. It doesn't work out that way. As costs to produce go up, the cost to the consumer will also go up to compensate for the overhead. As total supply goes down, prices will go up. People some here still admire in posterity (like Matt Simmons) were all pushing this narrative. Some people want to have their cake and eat it too. You can't.

[SumYunGai]

$this->bbcode_second_pass_quote('ennui2', 'O')il companies will not, I repeat will not, intentionally bankrupt themselves the way you think they will.

[ROCKMAN]

Y'all get so focused on generalities you can't see the the forest for the f*cking trees. LOL. Oil companies aren't "going to go bankrupt" and they are not not "going to go bankrupt". I appreciate that not understanding the business leaves many with no choice but to make rather meaningless generalities. For instance that companies can't increase reserves profitably at today's prices. Here's company that just added $2 BILLION worth of profitable oil reserves to their books. And if oil prices bump up in a year or two even more profitable.

Yes: a number of companies have become financially crippled. But many others are adding oil reserves at a lowest cost then they've been able to for more then 10 years. I can't estimate what Anadarko paid but it's obviously much less the $45/bbl otherwise they would't have bought the reserves. And now the sellers has gotten a $2 BILLION infusion to help them survive:

.Anadarko Petroleum Corp., Houston, has agreed to acquire the deepwater Gulf of Mexico assets belonging to Freeport McMoRan Oil & Gas (FMOG), a subsidiary of Phoenix-based mining firm Freeport-McMoRan Inc., for $2 billion.

[ROCKMAN]

"Sure I can. As oil prices go down, production is lost. It is happening already." Do I assume correctly that you're misusing the word "production" to mean drilling new wells. Given that on average wells cost less to CONTINUE producing then the current price we aren't "losing production". The fact that the world is producing so much oil today proves that.

[rockdoc123]

$this->bbcode_second_pass_quote('', 'B')ut many others are adding oil reserves at a lowest cost then they've been able to for more then 10 years. I can't estimate what Anadarko paid but it's obviously much less the $45/bbl otherwise they would't have bought the reserves. And now the sellers has gotten a $2 BILLION infusion to help them survive:

[SumYunGai]

Here come the experts.

$this->bbcode_second_pass_quote('ROCKMAN', 'O')il companies aren't "going to go bankrupt" and they are not not "going to go bankrupt".

[Observerbrb]

You need high Oil prices to expand your Oil resource base, because this same resource is increasingly expensive to get. W/ low oil prices, your resource base shrinks. Prices would need to rise again to reverse this trend.

This is not rocket science, and that explains our main reasoning: Peak Oil could only occur if Oil prices are low/Oil is expensive to get.

Another option would be: Prices are high (~100 $), but oil is even more expensive to get. From my understanding, this reasoning is not feasible, since "Oil -mostly- drives its own demand". If oil becomes more and more expensive to get, it would drain more and more resources from the rest of the economy - thus the ability of the economy to pay for this oil will go down, as it is currently doing.

[Plantagenet]

$this->bbcode_second_pass_quote('Observerbrb', ' ')Peak Oil could only occur if Oil prices are low/Oil is expensive to get.

Another option would be: Prices are high (~100 $), but oil is even more expensive to get. From my understanding, this reasoning is not feasible, since "Oil -mostly- drives its own demand". If oil becomes more and more expensive to get, it would drain more and more resources from the rest of the economy - thus the ability of the economy to pay for this oil will go down, as it is currently doing.

[ROCKMAN]

"Why list those companies in detail such? What does it prove?" It proves you don't understand the entire dynamics of the energy business. By focusing on only the finacially crippled companies you're completly missing the huge finacial GAINS other companies are making. Companies, thanks to acquiring huge PROVEN oil reserves far cheaper then they could have developed in the last 20+ years by drilling , that are looking at a great future that will require just a modest rise in oil prices. IOW the huge reserves developed in the recent past (regardless of how many companies those effort created) have not DISAPPERED. They still there and much of it is being acquired by companies at truly bargain basement prices. Fewer companies control those reserves then there several years. IOW one of the biggest fossil fuel wealth transfers in decades is happening now and so many Monday morning quarterbacks aren't even aware.

That's why it's so f*cking important even if you don't understand it. LOL.

[AdamB]

$this->bbcode_second_pass_quote('pstarr', '
')Don't you have anything long, smart-sounding (and really dumb) to say about reserves?

[AdamB]

$this->bbcode_second_pass_quote('ROCKMAN', 'A')nd in the oil patch (where drilling decisions are made) the Rockman has not talked to one person in his world that has ever heard of "ETP". I'm sure some in the oil patch must have but not any of the hundreds the Rockman knows.

[AdamB]

$this->bbcode_second_pass_quote('Observerbrb', 'Y')ou need high Oil prices to expand your Oil resource base, because this same resource is increasingly expensive to get.

[Observerbrb]

$this->bbcode_second_pass_quote('AdamB', '')$this->bbcode_second_pass_quote('Observerbrb', 'Y')ou need high Oil prices to expand your Oil resource base, because this same resource is increasingly expensive to get.