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1 freetoken  Sun, Sep 25, 2011 9:47:52pm

I was afraid this was going to happen. American society is wanting to believe in miracles, and that isn't just limited to the Tea Party and their fantasy of Jesus-ruling-the-WhiteHouse.

The oil deposits in ND have been long known. They were not produced before because the petroleum was not in large, easy to access reservoirs but packed into tight sedimentary deposits with the source rock spread over large distances.

Only with the advent of high oil prices has it become feasible to do the horizontal drilling, and drilling wells in large numbers, necessary to increase ND petroleum production.

Furthermore, claims about Brazil are based on fantasy. Brazil is still a net oil importer, and may always remain that way as any increased production will stimulate their own economy and as an emerging marking they don't yet consume the amount of oil/capita that most Westernized countries do. Also, the claims about offshore Brazilian oil overlook the fact that the assumed deposits will require the deepest off-shore drilling yet, and will make the Macondo project look like childs play.

Also, the NPR is misinterpreting the EIA data. The US has also been in a deep recession that has curtailed per capita oil consumption significantly, and if we get into boom times (for which all politicians are lusting to take credit) energy demands will skyrocket.

Americans are running from hard analyses and toward fantasies in large numbers, and that doesn't bode well for our ability to deal with reality in the future.

2 Gretchen G.Tiger  Sun, Sep 25, 2011 10:06:55pm

The Brave New World is difficult to cope with. Trying to reclaim past glory is so much more familiar.

I do understand why so many have trouble understanding that the past is over. Geez, I still can't accept that Mr. Spock was "in touch" with his feelings in the last movie. The idea that oil reserves here in the US isn't an answer to our problems is even harder to accept.

It seems soo perfect, it fits all the perceived problems we have. We could starve Saudi (not that we actually get much oil from them anymore -- but that is still the perception); solve the "muslim problem" (which isn't a problem); put people back to work, fix the economy; make lots of money again.

In reality, it's a soiled band-aid that will create more problems that it will fix.

3 Bob Levin  Sun, Sep 25, 2011 10:21:07pm

re: #1 freetoken

re: #2 ggt

So folks, how much do I believe the article that is posted?

4 Gretchen G.Tiger  Sun, Sep 25, 2011 10:26:30pm

re: #3 Bob Levin

re: #2 ggt

So folks, how much do I believe the article that is posted?

I don't know Bob. I trust NPR, which is the only reason I read it in the first place.

How long the "boom" will continue is anyone's guess. I kinda freaked when read the word "fracking".

5 Bob Levin  Sun, Sep 25, 2011 11:11:05pm

re: #4 ggt

Okay, let's say that the basic data is true, that the US is able to bring more oil to the world's market. And given the political stability in the US, the purchasing of our oil is more desirable than OPEC oil. Fine so far.

But as soon as we look at this from an economic viewpoint, things become quite murky. In order to develop the resource, the price must stay high enough. But the developed resource heading to market lowers the price.

Because I am not a recognized expert, I have a luxury. I can say, we have no idea what's going to happen in the next two years, let alone five. Experts always have to know. Goldman could say the US could overtake other nations--because of the stability of the US.

Will this create an economic boom? It certainly couldn't hurt, as the pool of US wealth begins to refill. We are still suffering from the shock and aftershocks of the burst housing bubble. It will still be years for this pool to refill. At most, just about every state, county, and city will be able to get out from under the revenue problems they now face. It would certainly be a good thing for the pool to fill from the creation of wealth rather than the simple printing of money.

For the consumer, we will still be in the same mode we are in today, and therefore the demand for alternative energy and new engines will not go away. Our labor force still needs to be changed, through training and immigration, and even the bringing back of trade schools as respectable alternatives to college prep. Perhaps folks can feel like they are swimming rather than just treading water, barely.

And if the economy improves, today's right wing will disperse.

The fracking issue is serious. There are always things to be fixed as a result of the latest discovery and improvement.

In the short term, this might be okay.

6 freetoken  Mon, Sep 26, 2011 2:10:49am

re: #3 Bob Levin

re: #2 ggt

So folks, how much do I believe the article that is posted?

Heh, belief is the easy part...

re: #5 Bob Levin

Okay, let's say that the basic data is true, that the US is able to bring more oil to the world's market.

That doesn't have to be put into the future... it has already happened these past couple of years, but it is important to understand why.

The hurricanes of 2005 delayed some offshore projects (like Thunderhorse), which meant the following couple of years showed a decline in US oil production. Then, when those came online the world oil price was highly volatile, but prices persisted above, significantly, the lows experienced during the simultaneous booms of the North Sea and Alaska (during the 80's and early 90's.)

With higher prices smaller firms felt they could invest in horizontal drilling in places like ND, where as I mentioned before it had long been known there are sources, albeit poor sized reservoirs.

So from the valley post-2005 to the current rate the US "increased" petroleum production by very roughly 1mmb/day. But again, be careful of that valley as it was partially induced by production delays in the GoM.

I believe you rightly intuit the issue about the price - it really is case of supply and demand. If American's are willing to pay the price they can have gasoline available on demand at the local gasoline stations, at least for several more years (assuming there is no great world tragedy on the immediate horizon.)

The EIA (and the international equivalent, the IEA) have lots of data online, but they tend to look at things like economists (which is there charter after all, as being creations of the OECD.) One characteristic of their terminology is to call "oil" anything that is a liquid that we use to burn - including alcohol made from grains, and even urea. This leads people astray who aren't aware of the game.

The US has increased liquids production because of the boom in natural gas, and what comes out of natural gas wells is not just methane but also what is termed "natural gas liquids", which are hydrocarbons heavier than methane (but not as complex as longer chains that dominate petroleum) that condense at atmospheric temperatures.

So, between the increase in GoM production, and the increase in drilling in ND, and the increase in ethanol production (due to mandate by Congress and supported by your tax money), and due to increase in natural gas liquids, the US has shown an increase in production of "liquids" these past few years.

However, this isn't as impressive as it might sound, as the amount of energy available per mass from the lighter hydrocarbons (propane, butane) is not as much as from the longer chains (found in the black gooey stuff we call petroleum.) Plus alcohol production consumes hydrocarbons (farming) and thus the net energy production is very small (and might be negative.)

All of this is much more complicated than the Average American is willing to hear... it just can't be reduced to a sound-bite.

7 Bob Levin  Mon, Sep 26, 2011 4:19:56am

re: #6 freetoken

The original post was hinting that the axis of global oil production could swing from the Middle East to the Western Hemisphere. Is this hint based on flimsy data?

And if this switch could occur if the price is high enough, how high must the price be?

I then suspect that I also intuited the key point, that the position of the US consumer will be relatively unchanged, and the demand for alternative energies will be as necessary as it presently is--which I'm thinking is pretty darned necessary. An itch we cannot scratch.

8 dragonfire1981  Mon, Sep 26, 2011 4:46:15am

Oil is a finite resource. We WILL run out sooner or later and anyone who thinks that isn't the case is delusional.

I also worry about the possible environmental impacts of fracking. I would like to see more focus on cleaner alternative fuel sources, but sadly I think that's a long way off.

9 freetoken  Mon, Sep 26, 2011 4:48:16am

re: #7 Bob Levin

The original post was hinting that the axis of global oil production could swing from the Middle East to the Western Hemisphere. Is this hint based on flimsy data?

Inevitably the people who hold this view inflate the "oil" (remember to define that word) reserves in the western hemisphere by counting the kerogen shale in the Rockies, which most definitely is not "oil" in the old fashioned sense of petroleum. They also assume all the tar in Canada can be used, and all the really heavy gunky petroleum in Venezuela will somehow be used, and that somehow the Atlantic offshore resources South America lives up to all the hype the admen down there sell.

They also tend to believe that the "Middle East" will somehow collapse under military or religious troubles.

Some also inflate the possibility of NA natural gas supplies, and some even include the possibility of turning solids like coal into liquids, in order to make this hemisphere seem like an endless supply of cheap energy.

Just because this planet formed with plenty of carbon in the crust and atmosphere, and just because life during the past 500 million years has sequestered (after photosynthesis and then deposition after death) much carbon in combustible form in the upper regions of the crust, does not, repeat not, mean that it is available for use at our whim.

Much of the so called resources are very remote, and/or very deep, and/or are in a form that will require extensive pre-processing before use. That's why "oil" costs so much and will always be a valuable resource.

10 Bob Levin  Mon, Sep 26, 2011 5:32:36am

re: #9 freetoken

So, I gather that you think the article shouldn't even have been written. Okey dokey.

Much of the so called resources are very remote, and/or very deep, and/or are in a form that will require extensive pre-processing before use. That's why "oil" costs so much and will always be a valuable resource.

Now you know that Western Civilization has changed energy a few times, from wood to coal, from coal to oil. So, I don't see oil has having any value beyond our present historical period, which will last until the next viable source of energy snuggles into our way of life.

11 Gretchen G.Tiger  Mon, Sep 26, 2011 10:01:55pm

re: #10 Bob Levin

So, I gather that you think the article shouldn't even have been written. Okey dokey.

Now you know that Western Civilization has changed energy a few times, from wood to coal, from coal to oil. So, I don't see oil has having any value beyond our present historical period, which will last until the next viable source of energy snuggles into our way of life.

You forgot Whale Oil. . . .

I read something a long time ago that went thru a lot of this. It was written from the economic point of view and basically said when the commodity became scarce, for whatever reason, the price became too high and another source was "found".

I'm really a bit frustrated by this. If cheap energy from fossil fuels continues to be available there will be no incentive to fund innovation. We need serious R&D in this field and I don't see the public demanding it or Private Enterprise & Congress funding it. As long as people can afford the price of gas and their electricity bill, I don't see that changing.

12 Bob Levin  Mon, Sep 26, 2011 10:42:08pm

re: #11 ggt

I see it changing. I mentioned this the other day. There is a tremendous demand for alternative energy, but we don't yet have the technology that people want to buy. Still, most power companies have a green programs that will come to your house and assess energy efficiency, install solar panels, do whatever has come to market. There are even subsidies to help.

This is different from previous trends because there is such a thing as the little guy. For instance, trees became scarce in England from heating the manor houses, building the navy, and--here's the kicker, beginning the industrial revolution. Wood couldn't sustain the IR, and coal took over. England is an island of coal. But then England couldn't stand the pollution, while the rest of the world industrialized. So, oil. Notice how top down this is.

The next move is not going to be some new way to run factories, they will be the last to change. However, folks certainly can decide how to power their homes. In the Southwest, solar cells are common, and folks sell their excess electricity back to the grid.

I said, eventually, within 10 years, no one in our family will own a gasoline powered car. I suspect that T Boone Pickens will get his wind turbines throughout the Midwest. Oh there is so much demand for this--companies can't invent fast enough to satisfy this demand.

Here's another factoid. I think it's fair to say we're in a bit of an electrical revolution, in terms of technology. Has power usage risen along with this? Nope. Part of design is doing more with less energy. If we plant a couple of billion trees, we're good.


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