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A lot of oil in the Permian is produced using CO2. Roughly 1 ton of CO2 is injected/bbl oil produced. Those producers get a tax credit of $10.92/ton CO2 injected. My memory is foggy on the CO2 pipeline costs from Colorado but I'm guessing it's a couple $/ton so many Permian producers are getting a roughly $8/bbl subsidy gratis of the US taxpayer. Since that's fairly high quality oil without transportation problems and close to refineries, those producers have a large advantage.
What about the option where the stock indices are driven by low interest rates and gov't 'stimulation' programs whereas oil and other commodity prices are a measure of real economic health. The patient is sick and it was just a matter of time before the stock indices back tracked.
There is a huge amount of waste associated with the social programs in Brazil. I know that money being redistributed brim petrobras to the universities was so rediculous that they couldn't spend it usefully which meant that creative ways of spending were found, eg nice vacations for a lot of 'consultants'
Yup, $70/bbl isn't going to happen next year. Much of the Barron's article smacked of "technical analysis" and a lot of wishful thinking regarding Putin. Putin is getting along fine in Russia by blaming bad stuff on the US and ISIS and doesn't give a rat's rear end about Russia's crippled economy.
btw, I'm in the $45-55/bbl camp for end 2016.
Agreed that 2.6 gal payload on battery drone is impractical and inefficient.
GPS guided tractors and combines have their own problems. Bambi and sinkholes happen.
Absolutely. And a humorous story.
Btw I think the idea of using drones for agricultural applications is a great idea and in principle can increase efficiency. However, I know that there will be a bunch of knuckleheads who will think they make great targets amongst other things.
I think maintenance will present another problem or an opportunity. I can see Deere getting into this kind of market with the money making business being in the servicing.
And a future bonanza for liability lawyers
Apparently, management by wishful thinking also exists in Pemex. They have next to nothing for refining capacity and I suspect most of their pipeline network is not designed to move refined petroleum. Left to their own devices and choices, other producers will likely transport the oil to the US and then it'll go to whatever market is most advantageous to the refiners.
Geez. Refining equipment? The writer doesn't have a clue what service companies do.
I think exploration is dead for a while and anybody who works in that domain, whether inside a production or service company, is in danger. The carnage is extreme and, as far as I can tell, not particularly selective beyond what part of the company people are in.
Do u mean hellfire missile? If so, the've been actively deployed on drones (predator) since 2002.
I'm surprised that it hasn't dropped more. The larger supply/consumption environment shows no sign of changing soon and with the Paris event air transport consumption will take a hit.
It isn't. Coal, grain, oil, manufactured steel products... I haven't checked auto shipments but wouldn't shock me if those are down too
1986 all over again. The Saudis crashed oil prices then to regain market share and they've done it again. Took 15 yrs for oil prices to recover.
A truly ridiculous company. I like the $800k loan at 30%. Looks like the lender didn't receive any payments.
Survey would be interesting. I thought the quoted numbers were as reasonable a guess as any. Maybe a bit high.
I'm sure that 2.5M includes people with wood burning fireplaces, stoves, and furnaces and I'd bet the majority is the former and that those fireplaces are more for ambiance than for primary heating. Since that population tends to be composed of affluent, 'educated' folks that correspond to the largest fraction of climate change worriers I find that intersection of humans to be a particularly wonderful group of hypocrites.
More fear and loathing for the masses from the AP:
Why does firewood cost so much? Blame fracking
Industries that use mat logs, including drillers, are hogging supplies in the Northeast
By Rik Stevens
The Associated Press
CONCORD, N.H. — Northeasterners who are digging deeper into their pockets to pay for firewood this season can add a new scapegoat to the roster of usual market forces: fracking.
Yep, a timber industry representative in New Hampshire said those hydraulic fracturing well sites in Pennsylvania's Marcellus Shale formation are using construction "mats" made of hardwood logs — think of the corduroy roads seen in sepia-toned photographs from the 1800s..... <another journalist lacking in knowledge of history since such roads have been used for 1000s of years>
....... Jasen Stock, executive director of the New Hampshire Timberland Owners Association, said it's not just fracking sites that are hogging logs.... <how very objective to point this out halfway thru the story>
Pipelines and transmission wires — really any large-scale construction project — have in the past three years ramped up the appetite for the perfect mat log: a hardwood trunk, 16 to 20 feet long and 8 to 10 inches in diameter.
"If you're putting in a power line or gas line over wetlands or soft soil, they use thousands and thousands of these mats, and they're made of hardwood logs," Stock said. "If you're in the firewood business, that's your sweet spot. That's the log you want."
About 2.5 million households in the U.S. burned wood to keep warm in 2013.
<I'd bet most of them also think climate change is one of the greatest threats to civilization>
No idea about $s that might be recouped. My analogy to empty Chinese cities was becuz there are a bunch of new or nearly new deep water drill ships out there looking for business so deep discounts can undoubtedly be had by anyone that wants to remotely visit the bottom of an ocean.
As for COP's supposed exit from deep water. The exit isn't complete. They specified exploration. I am sure they will continue to partner in deep water projects. In addition, there's no barrier to them going back into deep water exploration when prices improve and they might have a friendlier political environment as a bonus.
http://oilpro.com/post/16609/oil-major-dumps-3-year-drillship-contract-before-begins-abandons
It's the oil industry version of China's empty cities
Welllll.....that would depend how u want to count. The Nazi genocide was the 1st thing that came to my mind when I read that statement in the WSJ. So if worst social policy is measured in terms of immediate deaths vs precluded births, then yeah, the Chinese govt's policy wins the bad policy award. However, I suspect if I were to argue in front of a tv camera that the Chinese birth policy was worse than the Nazi govt's internment and death camps, then I suspect I would be roundly pilloried.
That is a truly crappy price even at current oil prices.
I can think of a few worse social policies in human history but then some newspaper writers apparently didn't ever take a history class.
No, enforcement is not imposed by congress nor are regulations established by congress. Congress may give regulatory agencies the power to establish regulations but both the enforcement and establishment of refs are executive dept actions
"the loose regulations and lax enforcement imposed by congress"
apparently, u r either not a US citizen or you're just clueless as to how the US gov't has been operated under the Obama administration and how it is supposed to operate.
While I agree with your general point about human behavioural response, I don't think that making more babies/family will necessarily lead to greater consumption of oil/natural gas/coal. In other developed countries birthrate and fuel consumption growth have been going in opposite directions for 50 yrs.
Food and some other commodity consumption rates might respond as you suggest if there is a meaningful increase in birth rate but I'm not convinced that there will be a birthrate response.
Not sure if you're being facetious. Birth rates in US, Japan, and China are very similar now. I think societal affluence will have more impact on commodity prices and lower birth rates tend to go along with affluence.
The official policy change probably won't make much difference. It's more of an acquiescence.
I suspect the inadequate infrastructure that Shell refers to extends beyond transportation to get the oil to market. They are looking at injecting H2S rather than flaring. Given the H2S concentrations I see, that seems incredibly inefficient.
It also appears that emulsion transportation and treatment is another problem.
I also wouldn't be surprised if they're thinking they may get hit w carbon capture and storage costs.
From what I've sen of the water reclamation and recycling operations, that's another problem they probably haven't conquered.
They were also counting on piping in condensate to use as diluent. It's conceivable that the condensate producers they were counting on have vaporized.
While I expect better from Shell, I recently encountered an engineer who had designed the surface facilities to handle the H2S stream but neglected to consider mercaptans. Tacking that sort of thing on after the fact gets expensive.
The Alberta budget boils down to: 'we're going to spend our way into oblivion; we don't know exactly how we're going to make all the money go away, but with a lot of happy, happy, joy, joy thoughts everything will be okay.'
I did like the $50/carton tax on cigarettes. The smuggling business in N. Dakota and Montana should boom.
Just in case anybody thinks I'm being hyperbolic.
From the Edmonton newsrag:
"Officials did not have details on what projects that funding would go towards....
“I’m confident in the plan we’ve built,” the Finance Minister said.
Close to 60% of the debt they plan to incur is for 'unspecified' projects. This is from. Gov't that exempts a portion of their salaries from taxes an, provides free cars and gives a fuel allowance
I don't think so. The pipeline specs would be very different.
So what they're telling us is that many Chinese effectively smoke 80 cigarettes/day
A quite reasonable perspective
The Fed official who asked about the drill ship should be fired and the inclusion of the question in the story gives the appearance that the wsj writer has a bias. At the time the investment was made there were many companies in the oil industry making big investments in deep water drilling vessels. The surge in production from hydraulicly fractured land wells hadn't happened yet and deep water was seen as the next big target. GE was making a big move into O&G so buying a drill ship wasn't unreasonable.
I don't remember if Dante had a ring for the hindsight crowd but they certainly deserve one.
"removing Rouseff would address one of the major impediments to the Brazilian economy."
From what I remember, Rouseff was a populist. The problem lies with the Brazilian populace. Until they figure out that the mommy state won't work, nothing will change.
Lol. More fun....
US Shale Firms Snap Up $50 Oil Hedges, Risking Rally Reversal
NEW YORK, Oct 12 (Reuters) – Welcome to the oil market's new vicious cycle.
http://www.rigzone.com/news/article.asp?hpf=1&a_id=141052&utm_source=DailyNewsletter&utm_medium=email&utm_term=2015-10-12&utm_content=&utm_campaign=feature_4
How about Pemex's debt at 15% of Mexico's GDP?
There's a lot of ingredients for very bad things to start happening.
Indeed. Ernie is more about climate change than economics.
I suspect a lot of the lower depletion rate is due to producers choking back on wells.
I concur w genisi. The claims are hyperbolic and extremely speculative. There may be oil there but certainly not one of the biggest reservoirs in the Middle East as the company claims.
There are several oil shale deposits in Israel and it's conceivable that there are structures containing more deeply buried equivalents that may have formed mature oils.
http://afekoil.co.il/en/
http://www.export.gov/israel/build/groups/public/@eg_il/documents/webcontent/eg_il_082079.pdf#page23
http://pubs.usgs.gov/fs/2010/3014/pdf/FS10-3014.pdf
The irony is that the danger being considered is largely economic. The good news is that the guy in the picture and his brethren will likely live longer and their children are more likely to have properly functioning parts.
Wind & solar serve a different market than oil. The former serves fixed point consumption (e.g. your family's farm appliances) vs transportation. Those folks who think they are gaining efficiency and being 'green' thru electric vehicles are people who don't understand thermodynamics and battery manufacturing. If you've ever seen a solar panel plant or start to consider what's involved in panel manufacturing, then you might also recognize that the comment applies there as well. Most folks who have a NIMBY attitude about oil refineries would be petrified by what's involved in solar panel plant.
As for Denmark, Sweden, Norway, Germany, and the US: the wind and solar farms you describe would probably not exist if it were not for the heavy taxation on carbon fuels and surcharges on the consumers' electric bills.
There are places and circumstances where wind and solar make sense, but in a market free of government interference, carbon would win. Of course, some will argue about climate change consequence. I used to work in that business so I'm very familiar with the intellectual dishonesty and hypocracy in the community. All you have to do is listen to a Nancy Pelosi speech on the topic. A former DOE exec once summed it up for me: "one can only go to so many wine and cheese gatherings on this topic..."