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Page added on December 11, 2015
OPEC cannot kill shale oil
Gulf Cooperation Council (GCC) members including Saudi Arabia are no longer able to afford their abundant welfare and near-zero taxes because of the collapse in oil prices and expensive military campaigns. The six Gulf States have agreed to introduce VAT, to plug the gap. It’s not yet clear how high the tax is going to be, but it will be introduced over the next three years.
Saudi Arabia recently decided not to cut oil production, which would’ve helped drive up prices. RT asked Dr. Mamdouh Salameh whether it is now reaping what it has sowed.
In his words, Riyadh’s policy on the matter is “fluid”.
“They are insisting on not cutting production and also putting pressure on OPEC not to cut production…. They claim they want to defend their market share,” he said. According to Salameh, “that policy was tested and found wanting by Sheikh Ahmed Yamani, the former Saudi Oil Minister, who tried it in the early 80’s when he flooded the oil market with 10 million barrels a day leading to a collapse in the oil price to $10 a barrel.”
“He was forced to withdraw it, and he lost his job afterwards,” he added.
The expert argues that this policy will not work and “Saudi Arabia and the other Arab Gulf producers within OPEC will have to cut production.”
“Their talk about gaining or defending market share is nonsense, because even if Saudi Arabia gets five percent more market share, the value of that five per cent amounts between $6-8 billions,” he told RT. He suggests that Saudi Arabia alone is losing $140 billion.
Salameh cited the International Energy Agency in Paris that said that “the global demand for oil this year, 2015 has been increasing by 1.4 per cent translating into 1.3 million barrels a day or 1.4 million barrels a day. That is a good and positive development.”
“But what is preventing the price from increasing – is that every time the price shows signs of moving up, OPEC and particularly Saudi Arabia introduces more oil thus exacerbating an already existing glut,” he continued.
Salameh argues the Saudis claim that they “will stick to 30 million barrels a day.” However, they are producing 32.2 million. “If you take that 2.2 out of the market, you stop the glut and a price could rise immediately or within a week to 70 or 80 dollars,” he added.
He does not think that Saudi Arabia is driving down oil prices to squeeze out the American shale producers, “because the minute the oil price starts to go up, shale oil will be back.“
He said that it is “true that some shale oil producers have gone out of the market, and the production of US shale oil has declined this year by 600,000 barrels a day.” He went on to say that “it is projected to decline by almost 900,000 barrels next year” if the prices continue to be that low.
“Efficient producers of shale oil will remain in the market, and they are using technology to reduce the breakeven prices from $70 to $85 – now it is $60,” Salameh told RT. “Maybe in few months it could go to $50.”
According to Salameh, we have to accept that shale oil is “a fact of life and we have to deal with it.” But, he added,” the shortcoming of shale oil is their depletion rate.”
“In the first year of production a well of shale oil loses 70 – 90 per cent of its reserves. That means that shale oil producers will have to produce and drill so many thousand, estimated, I think by Bloomberg, to be 9,000 wells every year at a cost of $45 billion that are just to remain where they are to prevent production from declining further. So OPEC cannot kill or slowdown – it can slowdown shale oil, but … the geology will eventually kill shale oil,” the expert said.
OPEC, he noted, cannot kill shale oil production, but can slow it down. However, it is “geology that “will eventually kill shale oil.”
122 Comments on "OPEC cannot kill shale oil"
shortonoil on Sat, 12th Dec 2015 7:08 pm
The reason that particular number is important is that the increase of 1 BTU in extraction energy cost, reduces, the energy delivered to the end user by 4.9 BTU. So, even small changes in production energy has a wide impact on the overall economy. Our economy is literally married to oil.
makati1 on Sat, 12th Dec 2015 7:39 pm
short, the marriage is about to be dissolved, I think. There will be no assets to divide or alimony to be paid. Just ‘game over’ for the lifestyle we have grown up in. And, the sooner the better, if we want anything left for our kids and theirs.
twocats on Sat, 12th Dec 2015 8:13 pm
hey short, that’s why we have these things called sentences because they have a start and a finish and have more complete thoughts. Are you saying that its simply not possible, using an energy source other than oil, to spend more energy getting out the oil than is in the oil? I mean, sure its a bit far fetched, but not inconceivable by the laws of physics. So go ahead, pick away, I stand by my statement. And then your broad, “this is what’s wrong with our leaders thing” it’s just drama queen material.
twocats on Sat, 12th Dec 2015 8:20 pm
2/1 vs 1/2. Wow, you can just switch the numbers around, that crazy math. I mean if we are talking about pure physics then all EROEIs are precisely 1.
twocats on Sat, 12th Dec 2015 8:28 pm
Ohhhh! you mean my use of the word negative. God, short, are you fucking serious?! All the bullshit that gets thrown on these threads?!! and that’s what you cling to. Ok, fuck you then. Clearly I’m talking about negative in this sense of more energy being put in than you are getting out, which is a value somewhere between 0 and 1. Ok, there, you fucking happy?!
twocats on Sat, 12th Dec 2015 8:28 pm
and i said, “in a sense” right after the word negative. again, fuck you right in the eye.
twocats on Sat, 12th Dec 2015 8:29 pm
but, other than that, I like your posts.
GregT on Sat, 12th Dec 2015 9:01 pm
You OK twocats?
twocats on Sat, 12th Dec 2015 9:43 pm
Hah hah! you bet Greg. I just didn’t like how Short took something I said and interpreted it INCORRECTLY and then used that to point out why the world is going to hell in a hand basket or whatever he said. I mean, god, get a hobby or something. Negative has several meanings including “not good” so its a nice broad word.
twocats on Sat, 12th Dec 2015 9:47 pm
the big question is whether i’m going to micro troll everything that short says from now until the end of time, but I think I’ve vented enough. my full nickname is two-cats-and-a-weasel-in-a-bag so every now and again I like to turn the jets out and clear the lines.
Apneaman on Sat, 12th Dec 2015 10:00 pm
twocats, your definition of negative is a modern one (Oprah made a career on it). It’s been a big part of the PC movement (control) and has been used to great effect in shutting down necessary debate in the last 30 years. You know, like you are trying to do with short – it doesn’t matter what is right or wrong only that we remain positive at all times? How convenient. Ok the debate, any debate is actually no longer necessary as apes are not going to be around much longer, but it’s still irritating hearing that word and any PC bullshit in general. I am I being too negative?
Bright-sided
A sharp-witted knockdown of America’s love affair with positive thinking and an urgent call for a new commitment to realism.
http://barbaraehrenreich.com/brightsided-by-barbara-ehrenreich/
twocats on Sat, 12th Dec 2015 10:35 pm
I’m trying to digest what your saying ap, and I think its that the word was a poor choice. I’m willing to grant that. Just for the record here are the 32 definitions of negative:
http://dictionary.reference.com/browse/negative?s=t
I’m agreeing also on the PC bullshit. But if an EROEI is less than 1, which is what I was referring to, I dare you to find someone other than Marmico that would call that “positive” versus “negative”. Am I taking crazy pills?
twocats on Sat, 12th Dec 2015 10:37 pm
and I wrote that awesome three paragraph entry in less than two minutes!!
GregT on Sat, 12th Dec 2015 10:43 pm
twocats,
.00000001 is still positive. -.00000001 is negative. Not trying to be a nitpick here, but facts are facts.
twocats on Sat, 12th Dec 2015 10:47 pm
I was using #7, you guys are being #6 🙂
6.
lacking in constructiveness, helpfulness, optimism, cooperativeness, or the like:
a man of negative viewpoint.
7.
being without rewards, results, or effectiveness:
a search of the premises proved negative.
GregT on Sat, 12th Dec 2015 10:53 pm
Fair enough. If you are going to use that definition, then less than an EROEI of about 6 to 1 could be considered to be negative, as modern industrial society as we know it requires more.
twocats on Sat, 12th Dec 2015 10:54 pm
trust me, my math skills are plenty good to understand a ratio. I mean its just he took the time to write this:
“It is this very lack of understanding of the most fundamental principals, by people in management and control positions, that makes our present situation most dire. The world is not likely to address our coming energy crisis very effectively if it does not even understand what is happening? The world has morphed into a society of techno geeks that fix the third clog on the fourth wheel. When the wheel falls off they are left with no solution to the problem.”
I mean, if every time someone made a mistake on these threads we blamed the entire collapse of civilization on them we would never do anything else but that. And it wasn’t a mistake, he misunderstood what I was saying. I mean, there’s a lot of people on this blog that think if you have an EROEI of less than 10 its game over. I saw a post from shortonoil not more than a week ago that claimed EROEI was like 1.03 or some bullshit. Someone called bullshit on it, and that was it. They didn’t say that shortonoil is the very apotheosis of what’s wrong with the world. I guess that’s what continues to irk me, who the fuck does he think is? He would have done better to just say, hey dickwad, you can’t have a negative ration and be done with it.
twocats on Sat, 12th Dec 2015 10:55 pm
I mean, when apneaman said I had my head up my ass, that was fine. but don’t blame the world on me, that’s not right.
twocats on Sat, 12th Dec 2015 10:58 pm
my goal now is to make this thread as a post on Ron Patterson’s blog since apparently its a low news week. Everyone, it’s been real, have a good… Christmas! see ap i didn’t chicken out, I’m calling it Christmas daggumit.
twocats on Sat, 12th Dec 2015 10:58 pm
as long as a post* oh no, another mistake, two cats destroyed the world again, sorry yall!
twocats on Sat, 12th Dec 2015 11:00 pm
“Fair enough. If you are going to use that definition, then less than an EROEI of about 6 to 1 could be considered to be negative, as modern industrial society as we know it requires more.”
exactly greg, but I was even talking about LESS THAN 1. I.e. it would cost more energy to get out than was contained in the oil by using humans manually working gears of drill rigs!! ARmies and armies of people turning gears so that a few wealthy people could drive. MAd max fury road and all that.
twocats on Sat, 12th Dec 2015 11:02 pm
I imagine a high tech dark ages where most people live in a, I don’t know, pre-19th century technology world, and a small percentage stay in a 21st century one. Not unlike much of the world already today.
GregT on Sat, 12th Dec 2015 11:07 pm
I think you may have overlooked this part of Short’s post twocats:
“Not to pick on twocats, but ERoEI is a ratio.”
And also;
“It is this very lack of understanding of the most fundamental principals, by people in management and control positions, that makes our present situation most dire. The world is not likely to address our coming energy crisis very effectively if it does not even understand what is happening? The world has morphed into a society of techno geeks that fix the third clog on the fourth wheel. When the wheel falls off they are left with no solution to the problem.”
I don’t see anything wrong with this statement at all. Short has hit the nail on the head here yet again, IMHO, and I don’t believe that he was targeting you. As an engineer who is talking about a ratio, it shouldn’t be too difficult to understand where he is coming from. Don’t take things so personally twocats. A misunderstanding, nothing more.
GregT on Sat, 12th Dec 2015 11:10 pm
“ARmies and armies of people turning gears so that a few wealthy people could drive.”
In other words, slave labour? I’m more than willing to bet that that’s exactly where we are heading back to. Human nature hasn’t changed.
twocats on Sat, 12th Dec 2015 11:26 pm
Greg, I agree with your points and I even agree with short’s statement, I just protest the juxtaposition of that nitpick with that statement. If he had stopped after the EROEI is ratio… and I even would have suffered the smarmy negative energy line, like god, suck your own dick why don’t you, I would have had no problem.
I know, I get bent out of shape over the craziest things. It’s really rather not a big deal and I appreciate you setting me straight on the whole thing.
twocats on Sat, 12th Dec 2015 11:33 pm
And I will still support Shortonoil on this website as he actually contributes quite a lot of information and understanding.
GregT on Sat, 12th Dec 2015 11:37 pm
twocats,
You sound like you have a good head on your shoulders, and that you are interested in the truth. Stick around, and try not to get bent out of shape. 🙂
MSN Fanboy on Sun, 13th Dec 2015 2:14 am
GregT on Sat, 12th Dec 2015 11:37 pm
twocats,
You sound like you have a good head on your shoulders, and that you are interested in the truth. Stick around, and try not to get bent out of shape. 🙂
THE GUY/GIRL SOUNDS NUTS
I suppose as long as they agree to preach to the choir we can overlook the fact their writing style suggests… insecurities.
Must have been bullied as a child to get so worked up.
Davy on Sun, 13th Dec 2015 7:31 am
I would like to point out something I have in my mind concerning EROI. I have been here on this board a long time so I have seen all the various pro’s and con’s on EROI. As a doomer and one who looks at doom systematically I find oil and its EROI interesting from the point of view of what is adequate for industrial civilization at the estimated 6 to 1. I feel because oil is existentially vital as a foundational fuel and feed stock it will be harvested at lower EROI’s than is adequate for a modern society. How long is debatable and if it will be done is debatable because at a certain point it all comes down to human confidence that allows economic liquidity.
Society may do this regardless of the ETP of oil. I am a firm believer in Short’s Hill’s group ETP equation. I am not an engineer nor very good with advanced math but I am good enough with conceptional relationships. The fact that oil’s BTU utility and EROI falls below what supports industrial civilization will not stop oil continuing being used for the attempts at industrial civilization. Industrial man will continue to try to use oil even as the use of oil will be a sink not a gain.
Industrial man can likely do this for much longer than we might theoretically imagine per the physics. There are so many ways for industrial man to subsidize the production of oil and cannibalize the greater infrastructure. I also will discount Short’s ETP concerning price by saying oil and the economy are linked as a car and gas are. They have no use without the other. Sure postmodern man will be toying with oil for many generations hence but oil driving an economy puts oil in another category. This puts oil into the human nature category found in markets just as human nature must live in the reality of the physics of oil. Somewhere in the ether between this relationship a compromise is met.
The price of oil is as much a function of the physics of oil as the human nature of its value. We can say the physics of oil trumps the human nature but this is just not fully accurate except in theory and absolutes. Humans will try to drive an economy far past what theory says is possible. Price will vary as much by oils BTU contribution to the greater economy as the human nature actions of price discovery. I want to add price discovery with all its distortions. We see those distortions today with QE and central bank repression.
Our system is built upon economic fundamentals. One of these fundamentals is continuous substitution. We cannot substitute oil in an oil based society at the “foundational level”. Greenies and other strains of technotopians talk this way but the reality is we are stuck with what we have because of scale of time, place, and productive ability. We can substitute oil’s “declining value” by using other fossil fuels or alternative energies. We can use animal and human labor. We can realize vast wealth inequality with a two tier society with the elites using oil and the serfs in a postindustrial hybrid society of preindustrial technologies and lifestyles. In other words we will see an oil based man use oil even as his civilization decays. He will use oil even as it kills himself.
Decay is random. Decay is about abandonment, dysfunction, and irrational. We are in and will increasingly enter a period of flux were our world is surreal. It will be surreal because it will be a growth based human system entering a bumpy descent. Once a full on descent is entered “meaning” will change. Of course the physics will not change but the human nature will change or not change in a random fashion.
Where the human nature changes with reality we will see functional. Where it does not change we will see dysfunctional. There will be surreal dysfunctions with modern industrial oil based man living in a unsustainable decaying industrial system. He will attempt to run a civilization on oil far past where its contributions are positive to growth. He will use oil by choice even though it is destructive to his betterment. Industrial man has no choice for he knows no other life and has no tools to transition. It is nature that will force reality. It is man that will resist.
In the period we are now in the price for oil will likely bounce all over the place because we are human and subject to human nature. That human nature is approaching a turbulence. Turbulence is one physical state without definition per physics. Please give me an equation for it. EROI and ETP are theories that represent reality. The psychology of humans is both rational and irrational. You mix these and you get a cocktail. This cocktail will be different at a growth/decay inflection point then it is now with an economy that is still growing. I say growing but that does not mean positive long term growth. Oil will likely be used long past ETP and EROI says it should be. Price will move around irrationally during the turbulent inflection point of growth and descent. Call that prattle and word salad but how else do you reconcile the rational and irrational.
onlooker on Sun, 13th Dec 2015 8:02 am
I would have to say that is a stupendous post Davy. I would add that oil as the foundational energy source is as you said irreplaceable even as some substitution can take place. Therefore, both out of desire but also out of need societies will still try and attain oil for its myriad of uses. I would like to cover a bit the pananorma of how this relates with regions of the planet and respective countries. As we are aware Northern countries are richer in may ways while Southern countries are more overpopulated relative to resources. On the other hand the reliance of Northern countries completely on a modern oil based infrastructre makes them particularly vulnerable to price fluctuations and both perceived instabilities as well as material/physical shortages and instabilities. On the other hand Asia with its vast population will find it very difficult to avoid the most drastic of effects of overshoot, meaning die-off. What is happening in the Midde East is so apparent a child can discern it. They are there first and foremost for the oil. The War on Terrror is but a smokescreen. Middle East is simply blessed with much oil and gas as well. The trajectory of powerdown is a composite of as you stated human rationality and irrationality along with physical realities that cannot be negotiated or changed. Thus, it will be both voluntary and forced. Oil will continue to play a role in human affairs for some time to come. The proof is how the Climate conferences including the latest in Paris are not really intent on substantial fossil fuel reduction and also because recent polls clearly show that people by and large are still not overly concerned with climate change. I think clearly humanity will have to endure massive die-off in a both gradual and at times abrupt manner. Industrial modern civilization cannot be maintained that much longer in so much as resource shortages of many kinds especially of course fossil fuels will not allow it. So modern civilization will wither away in fits and starts while humanity tries to adapt and mitigate. All the while climate change threatens ever more massive disruptions and discontinuities. At the other side of the bottleneck of overshoot perhaps remaining humans that probably will number less than a billion will try and maintain some level of functioning society and modernity but certainly at a much less complex level than now and beholden to the whims of Mother nature and what she has in store for us.
makati1 on Sun, 13th Dec 2015 8:30 am
onlooker, much as I too would like to see a slow stepping down to a lesser level of consumption, I don’t see it happening. As desperation sets in (We are already seeing it in the US and Europe) we are moving ever closer to world war three and that nuclear exchange some like to deny could possibly happen.
Both of the major nuclear powers are increasing and upgrading their nuclear arsenals as we type. Even China is sending their bombers on longer and wider flights into the Pacific Ocean, passing near Guam and other US outposts. Extending their reach and reminding the US that it is not safe anymore. Even little North Korea can now reach the West coast with nuclear missiles.
With people like Trump or Billery having the best chance to make Prez next year, a world war is not that far away. So, dream on about a slow decline, but I don’t see it happening. With Climate change in the background, a world war possibility, a for-sure financial/economic crash and the end of cheap and plentiful energy, it is going to get extremely difficult from here on out, I think.
rockman on Sun, 13th Dec 2015 8:52 am
looker – “So in fact peak oil will really bite when it is not so economically viable to find and produce oil for the market.” Good point and there’s a great visual to emphasize that point: look at the US oil production curve. We peaked about 35 years ago. And during those decades the inflation adjusted price of oil was less the current prices…and considerably less then during the height of the shale boom.
And the shales boomed when oil price boomed. And not due to technology: horizontal drilling for unconventional reservoirs, like the Austin Chalk in Texas, was well established 15 years earlier. And frac’ng has changed very little for decades.
IOW US oil production peaked because oil prices essentially peaked decades ago. Yes: up and down but no great movement like we saw when the shales boomed. And US oil production almost reached a new peak because oil prices reached near peak levels once again. Which means that we may not only be at global PO but the longer it takes for oil prices to significantly increase we may never again approach current production levels as depletion continues to take its toll. The recent increase in global oil production actually is the result of low oil prices…not higher. The oil price collapse has forced some producers, like the KSA, to bring their reserve capacity into play so as to increase the revenue stream. Which also means the lower oil prices are also increasing the depletion rate of existing proven reserves as well as hampering the development of new reserves.
The recent oil price collapse may eventually be viewed as the ultimate “Oh sh*t” moment in the global energy dynamics.
Davy on Sun, 13th Dec 2015 8:54 am
Onlooker great continuation on the subject. I suspect the engineers mathematicians, and physicist would find our discussion uncomfortable but we must somehow account for human nature in our physical realities.
shortonoil on Sun, 13th Dec 2015 8:57 am
“I saw a post from shortonoil not more than a week ago that claimed EROEI was like 1.03 or some bullshit.”
That comment said absolutely nothing about ERoEI. That comment was a statement concerning the energy delivered to the end user from the Petroleum Production System. It now requires 3% more energy to produce petroleum and its products than what is delivered to the end user. The economy can never again acquire all the petroleum that is produced. The world’s ever growing inventory of crude gives strong support for that assessment.
“He would have done better to just say, hey dickwad, you can’t have a negative ration and be done with it.”
hey dickwad, you can’t have a negative ratio for an energy function! That’s because there ain’t no such thing as negative energy in these parts. If there was my still would blow up, and there would be corn mash all over the place!
The point that is being made is that we are now in a serious energy crisis, and we have a bunch of economists, and politicians calling the shots who think that dilithium crystals can solve the problem.
Davy on Sun, 13th Dec 2015 9:02 am
Mak, WWIII is a decision. It is either a self-organizing one or the conscious action of one man. It can be both with the self-organizing pushing one man to a fateful decision. It does not have to happen and is a 50/50 possibility because man is not completely rational. If man were a rational being we could predict it. Something may happen before we get to that world war point to end the ability to have a WWIII. We might have a regional war that just stops short of Armageddon. Most doomers here agree we are going down a road not up. WWIII is a possibility on that road.
twocats on Sun, 13th Dec 2015 9:46 am
My apologies for lashing out short, I’m home for the holidays and I guess on edge. Davy really summed up the point I was getting at which is to say – NET Negative Energy (so I spoke in error). Which is to say, people think “oh if only this happens – then it’s all going to shit” but Davy really summed up my point better than I did.
twocats on Sun, 13th Dec 2015 9:53 am
“The economy can never again acquire all the petroleum that is produced. The world’s ever growing inventory of crude gives strong support for that assessment.”
these two concepts seem contradictory. what am I missing?
twocats on Sun, 13th Dec 2015 9:57 am
ok, I get what you are saying. But in conclusion are you saying that NEVER again will it acquire that oil, in that we will NEVER work through the surplus? That’s bold.
onlooker on Sun, 13th Dec 2015 9:58 am
I think Mak, only a fool would rule out WWIII, on the other hand, only fools would start it.
shortonoil on Sun, 13th Dec 2015 10:45 am
“But in conclusion are you saying that NEVER again will it acquire that oil, in that we will NEVER work through the surplus?”
Yes, the present global oil production system will never work through the surplus. That is why we believe that the future production system for oil will be regional producers. Small, very efficient refineries using regional sources. The fuel used in the future will come from a well fifty miles away, and processed in a refinery down the road. We are presently working with some small start-up firms that are basing their business models on that structure.
This will, of course, change the landscape of the present society. By 2030 the US will be consuming 5 to 6 mb/d; extracted locally, processed locally, and distributed to limited regions. Petroleum can no longer supply sufficient energy to support a globally distributed system. The present system must end in the near future.
http://www.thehillsgroup.org/
Davy on Sun, 13th Dec 2015 10:55 am
Well, short, that is a new one for me. I may have missed this information in your previous posts but I don’t recall you ever postting this info. It is a very interesting scenario and appears very valid considering a trend towards the local away from the global.
rockman on Sun, 13th Dec 2015 11:03 am
looker – I suppose it depends upon how one defined a “world war”. During WWI and WWII the majority of the countries did not have a roll in the military conflicts. IOW how many Mexican or Irish military were killed in WWII? Is there some defined number to qualify…X countries? Some areal extent: Y square miles? Can it include financial attacks, such as the US oil embargo on Japan in 1940, as well as military?
Maybe we should switch to “conflict” instead of “war”. There does seem to be a global (i.e. “world”) conflict going on now. The Brits vs the Argentinians over the Falklands. China vs the Philippines in the S China Sea. Landowners vs oil companies in Pennsylvania. LOL. And of course those minor skirmishes going on in the ME.
Dead is whether you use a IED, an AK, a drone or a 40 meg tactical nuke. It’s all still “war”. The only difference is the body count. After all how many Poles, Brits or Chinese died before we tagged it WWII?
onlooker on Sun, 13th Dec 2015 11:09 am
Actually Rock, I was using in the context of all out nuclear conflict. Some vouch in the conviction that any major war would lure the major power in and that after that it would be only a matter of time before all our nuclear war started. Which is the contention of Mak also. I also agree with that assessment. What about you Rock, do you believe any major conflict involving one or more major powers would ultimately and inevitably lead to an all out nuclear exchange?
shortonoil on Sun, 13th Dec 2015 12:00 pm
“Well, short, that is a new one for me. I may have missed this information in your previous posts but I don’t recall you ever postting this info.”
I may have mentioned it very briefly before, but was reluctant to go further until we actually had clients come to us and say, “are you sure about the conclusions in that report”? But, think of it in energy terms; a mega refinery today is processing oil from 50 different sources, and that takes a huge amount of effort to keep them working properly. Also a refinery operates at between 650 to 850 °F, and most of that heat comes from the petroleum itself in the form of still gas. Of the 5.88 million BTU in a barrel it takes 1.2 million just to heat up the oil to the distillation temperature. If a refinery could be set up to use the petroleum from one source, a field, it could be designed to run extremely efficiently, and if a third of the heat to boil the oil came from some other local source, you have again a money making operation. Geothermal, solar, even wind can be converted to heat fairly inexpensively. That, however, means that you have a regional production system, not a global one. At $35/ barrel that global system is just not going to be around very long.
Twocats on Sun, 13th Dec 2015 12:20 pm
An extremely commendable endeavor short. I wish you success for your sake and ours.
antaris on Sun, 13th Dec 2015 12:26 pm
Short in 2007 the EIA charts say US crude production was at about 5 million barrels per day. If you take the shale out, production would be just over 4 million today. By 2030 not much will be left, so where are you going to find your local 5 to 6 million bpd?
Boat on Sun, 13th Dec 2015 12:31 pm
short,
Yes, the present global oil production system will never work through the surplus. That is why we believe that the future production system for oil will be regional producers.
It will be interesting to see how many doomers will jump onto that bandwagon.
You have been making many comments like this for a long time. Which I totally disagree with. I don’t think most doomers really understood what you were saying. MSM predicts fracking will give up 900,000 bp and along with growth in world consumption the glut should be gone by the end of 2016. We have yet another prediction that one of us will be wrong. Tick Tock.
Boat on Sun, 13th Dec 2015 12:34 pm
I challenge you posters to back up your man short or drop his prediction like a hot rock. Man up, grow some balls. Make your stand.
GregT on Sun, 13th Dec 2015 12:44 pm
“Some vouch in the conviction that any major war would lure the major power in and that after that it would be only a matter of time before all our nuclear war started.”
The world’s two nuclear super powers already have boots on the ground in Syria, on opposite sides of the conflict. Both sides have talked about a nuclear exchange.
Apneaman on Sun, 13th Dec 2015 12:46 pm
Boat, shut the fuck up. You sound like a complete fucking retard.