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SKELETONS posted:For Scotland, or for the rest of the UK? A good amount of the Scotland independence excitement was based on how the big North Sea energy revenues would allow them to fully fund their government. Also for people excited about texas crashing the energy sector is a decent share of the state economy but not as overwhelming as other energy boom states like North Dakota. etalian fucked around with this message at 16:43 on Dec 23, 2014 |
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Dec 23, 2014 16:39
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Willie Tomg posted:Rick Perry could not have timed his exit from politics better with a loving stopwatch and a decade's notice. Seeing the reaction of the Abbott administration will be "cool" in the sense that I have no dependents and my work is a skilled trade that is infinitely relocatable, so I have a degree of insulation from how catastrophically hosed things will be. Getting clear of the mushroom cloud is *merely* an exercise in leaving a bunch of friends because of economic distress. Again. I disagree strongly about Perry. 2012 would have been the ideal time to exit but he wants a 2016 presidential run and a Texas downturn will completely obliterate his attempt to paint himself as some sort of economic growth wizzard.
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Dec 23, 2014 16:54
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Last time I heard Obama has a giant brass ship throttle controller thing that he uses to change gas prices. "Full Astern" yells Obama as he chuckles while hard working joe looks sadly at the $4.30 gas prices to fill his F150.
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Dec 23, 2014 17:06
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Bip Roberts posted:Last time I heard Obama has a giant brass ship throttle controller thing that he uses to change gas prices. "Full Astern" yells Obama as he chuckles while hard working joe looks sadly at the $4.30 gas prices to fill his F150. 
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Dec 23, 2014 19:13
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Have they been this direct about it before?quote:Saudi Arabia convinced its fellow OPEC members that it was not in the group's interest to cut oil output however far prices may fall, the kingdom's oil minister Ali al-Naimi said in an interview with the Middle East Economic Survey (MEES).
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Dec 24, 2014 00:47
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Won't they like, run out at some point? I mean if it's twenty or thirty years in the future it might as well be forever from their perspective. Are they just trying to halt the transition into alternative fuels and so forth?
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Dec 24, 2014 03:43
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Accretionist posted:Have they been this direct about it before? Yes, in the 80s as I keep saying in the thread. All of this has happened before!
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Dec 24, 2014 03:50
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Nessus posted:Won't they like, run out at some point? I mean if it's twenty or thirty years in the future it might as well be forever from their perspective. Are they just trying to halt the transition into alternative fuels and so forth? They're trying to do Walmart's strategy of pricing out the competition (as in, other oil manufacturers). If & when the competitors go out of business, they'll probably reduce output, and it will take longer for prices to rise again because you can service more vehicles with the same amount of gas (because they're more efficient).
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Dec 24, 2014 03:51
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rockefeller used to call it giving them "a good sweating"
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Dec 24, 2014 05:10
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How realistic is it that oil will stay below $100 for, say, a whole decade? Obviously this kind of thing is hard to predict but is he just blowing smoke?
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Dec 24, 2014 05:15
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50/50? I mean, it worked for the 90s, so it could work again. Or anything else could happen. Saudis talk their book, but they rarely move production around more than +/- 10% so the price changes have a lot more to do with the overall world economy (china) than twisting the spigots at ras tanura.
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Dec 24, 2014 05:35
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Rather than some bizarre lunacy about the Saudis trying to maintain "market share" in a market that doesn't give a gently caress about origin, I think it's way more likely that prices will be kept low until a lot of the big players with a lot of money have the opportunity to buy out small companies that are feeling the squeeze for a pittance. The Saudis aren't accepting less than they could get otherwise for their oil out of some ill-conceived market-share dick-wagging contest, they're doing it because there's something in it for them that makes it worth artificially devaluing a finite resource for a while.
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Dec 24, 2014 05:41
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The Saudis have put a large importance on "market share" for quite a while now. Though that has as much to do with OPEC internal stuff as the rest of the world. I would be surprised if there were any major production changes soon.
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Dec 24, 2014 05:44
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hobbesmaster posted:The Saudis have put a large importance on "market share" for quite a while now. Though that has as much to do with OPEC internal stuff as the rest of the world. I would be surprised if there were any major production changes soon. The Saudis are many bad things, but morons they are not. The market share thing is ridiculous, so it's obviously cover for something else. There are a lot of good candidates: 1) Allowing large players to consolidate holdings, in exchange for a kickback further down the road. 2) Put the screws to players like Russia and Venezuela, probably at the behest of the US. 3) Cut off as much of ISIL's funding as possible. All of those make more sense than trying to maintain market share in a market that's largely without any kind of branding or distinction between products.
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Dec 24, 2014 06:05
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Nessus posted:Won't they like, run out at some point? I mean if it's twenty or thirty years in the future it might as well be forever from their perspective. Are they just trying to halt the transition into alternative fuels and so forth? Saudi Arabia is still mainly working from their major oil fields to the best of my knowledge, which have permeability roughly 100-1000 times the conventional oil fields in the US.I have worked with a few people that spent time with Saudi Aramco and they say there are a great deal of ignored lower productivity fields because there is no incentive to develop them when they already have enough excess capacity for most disruptions. I would say the difference is $10/bbl development cost compared to $20/bbl cost and it is always easier to use existing wells and facilities for enhanced oil recovery than to develop new fields. They also haven't even begun to deal with tight reservoirs or shale plays because there are easier things to get to. It is also a much different culture with nationalized oil reserves compared to leased oil rights. There is a much higher concern with increasing recovery percentage than maximizing profits because of the view that the oil belongs to the country and anything left in the ground is wasted The Saudis have some amazing technology that has been developed with nano-particles and reservoir simulation because they have the money to do it, but aren't as constrained at maximizing profit.
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Dec 24, 2014 07:01
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There's been some speculation in the thread about how the drop in prices will affect North American production, and it reminds me of this article I saw in Texas Monthly arguing that Texas has some resilience to the price collapse on account of 1. a more diversified economy than it had in the 1980s 2. the existence of the Rainy Day Fund and 3. the offset in tax revenues that will likely be caused by increased consumer spending that accompanies most falls in oil prices. http://www.texasmonthly.com/burka-blog/three-reasons-not-panic-about-oil-prices Texas Monthly posted:The drop in oil prices could mean layoffs in the energy industry. And in theory, mass layoffs in one industry can have ripple effects across the state. The mitigating factor is that oil and gas production is capital-intensive rather than labor-intensive. Texas has about 12.4 million jobs. Per the Dallas Fed, about 200,000 of those jobs, or 2% of the total, are in oil and gas production, extraction, and support services. In the 1970s and 1980s, the oil industry had a much bigger footprint on Texas. A 10% increase in the price of oil translated to a 1% increase in total employment—and between 1981 and 1987, industry employment was halved; the state lost some 212,000 jobs. Today we don’t have that many oil and gas jobs to lose. I think she's right about the second point: the outlook among oil and gas professionals I've spoken to back home in Houston suggest they expect knock-on affects to take hold sometime in the middle of next year, where some are already forecasting mass layoffs in the service field. And while the article is right that oil and gas jobs are a fraction of the state's employed (and smaller in absolute and per capita numbers than the 1980s), I think she underestimates just how far these "ripple effects" could spread. Anecdotally, virtually everyone I know in inner-city higher value realty, as well as the service industry, attributes a lot of their growth to the upswing the industry has experienced the past six years. Anyone from Houston can attest to the rise in rental prices and property costs -- which has happened in part ont he rapid growth of oil and gas. Nor should it be forgotten that the industry has tentacles in virtually every other professional sector. IT companies provide servers and service, attorneys are held in counsel, realtors lease office space and accounting firms audit them and maintain their books. It might not be the 1980s anymore, but oil is still king in many respects. Conservatives have been highly optimistic, not without some reason, about Texas' strong economic growth over the past several years. I do suspect this downturn, especially if it deepens and persists, will damper this vision somewhat.
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Dec 24, 2014 13:18
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SKELETONS posted:How realistic is it that oil will stay below $100 for, say, a whole decade? Obviously this kind of thing is hard to predict but is he just blowing smoke? Below 100 is a pretty big span, but it's doubtful it will stay there for any long time from what I've read. The "glut" can last maaaaybe 1-3 years (depending on just how big cuts are made / how long the already drilled stuff lasts), which will keep alternatives/efficiency gains low in the meanwhile and demand will continue to increase, at a slightly improved pace. Once we are looking at shortages in production again the price will spring right back up. Only other thing that might keep it at hold for more years than that is a economic crash, but that's even harder to predict how it will affect things beyond lowered demand for awhile.
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Dec 24, 2014 14:01
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New drill schedule for my company: Projections for new wells in 2015 is down 77.5% from projections from 6 months ago and down 49% from the number of wells drilled in 2014. Two thirds of our rigs have been stacked since late November and all of our rigs are now stacked until January 1. All drilling now is focusing on holding down leases and we are focusing more on proving our dry gas assets.
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Dec 25, 2014 05:32
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Pimpmust posted:Below 100 is a pretty big span, but it's doubtful it will stay there for any long time from what I've read. Some of the stuff I've read suggested that shale oil might be closing on a level efficiency and outside adoption that a longer term glut was possible. Is this likely?
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Dec 26, 2014 10:40
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ReV VAdAUL posted:Some of the stuff I've read suggested that shale oil might be closing on a level efficiency and outside adoption that a longer term glut was possible. Is this likely? Since I work in exploring for these things, the best answer I can give is yes and no. In the past few years, most companies (except EOG, they have been way ahead of the curve) have started pumping larger and larger frac jobs. A good example is that in the Eagleford in Texas, frac jobs have gone from 4 million pounds of proppant to 8-10 million pounds of proppant (mostly sand, which to me is a terrible idea because the crush resistance will fail once wells are depleted). At any given price point for oil and gas, there is a balance between up front production and most efficient well spacing for total recovery. One of the ways you can do this is by having more fracturing intervals in a well. Because of the time value of money, additional frac stages or decreased well spacing can be profitable, even if in the long run it doesn't produce that much more oil/gas. The extreme example of this is the Tuscaloosa Marine Shale in Mississippi, where people started out at 8 million pounds of proppant, have moved to 13 million pounds and can't make economic wells (i.e. Halcon and Goodrich). Even as an extreme, this is very similar to fringe acreage on any other producing play. The unconventional shale plays have a much wider range of gray area compared to conventional fields (that may be delineated by water lines), so development can be somewhat tied to oil/gas prices. The biggest cost to developing a field is the large scale infrastructure, but because all of the growth is in either mature oil basins (Permian basin in West Texas), close to market (Eagleford Shale), or a combination (Bakken Shale), they can drill wells for less than the "accepted" value. I read the reports of breakeven costs that are made by the major investing banks. They are very weak on actual geology or engineering, but work really well on a statistical basis. Their main failing is that using statistics assumes that any future well is drilled with the same knowledge as the previous wells, which ignores regional knowledge and any price efficiency. With all this being said, the US producers are looking at worse times because the riskiest gambling exploration doesn't work out (things that need $12+ million, vs $6 million wells) won't be developed, but some rigs can be moved back to profitable areas that can use the efficiency that has already been built in.
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Dec 26, 2014 11:15
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ReV VAdAUL posted:Some of the stuff I've read suggested that shale oil might be closing on a level efficiency and outside adoption that a longer term glut was possible. Is this likely? well if anything the whole boom led to lots of progress in energy extraction and exploration cost reduction.
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Dec 26, 2014 15:06
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I got no actual drilling experience, but the counterpoint to "new technology"/efficiency gains/drilling experience is the so-called "sweet spots" of plays. Basically companies pick the most profitable/easy to extract spots and drill those first, with the higher decline rates of fracking plays compared to traditional wells, that presents a logical problem as you get to the 5+ year stage and heavy overinvestment and resulting bust (like now). Drilling experience can only compensate so much when faced with only lovely areas to drill, or so goes the theory. Sounds plausible enough to me, but we do have some actual drillers here that can maybe shed some more lights on that. Maybe there's enough "good spots" left for it not to be much of an issue yet. Although even with plenty of those, if everyone is pulling down on the rigs and 2015 budget as they are, it's bound to show soonish (i.e: half a year/a year).
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Dec 26, 2014 23:57
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Well the idea is that maybe technology will come around that will make those wells cost less. Hell, my company is working on stuff for that.
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Dec 27, 2014 03:30
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hobbesmaster posted:Well the idea is that maybe technology will come around that will make those wells cost less. Hell, my company is working on stuff for that. It's another reason why the Saudi rage quit will not work. Due to process improvements things like oil extraction and exploration become much cheaper over time. The US also has another edge in this area due to the technical talent and also lots of venture capital funding for energy startups.
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Dec 27, 2014 03:36
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etalian posted:It's another reason why the Saudi rage quit will not work. One of the other huge differences from the 80s dynamics is the emergence of regional infrastructure development in sub-saharan africa and the willingness of Chinese to do big-man patronage projects with exported laborers. There's a shitload of oil in the Great Lakes, just asking for extraction.
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Dec 27, 2014 03:42
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My Imaginary GF posted:There's a shitload of oil* in the Great Lakes, just asking for extraction. * unconventional Ordovician oil plays under the eastern great lakes are clay rich and not responsive to normal unconventional completion techniques and have some technological obstacles in place. As for costs and effiencies asked earlier there is a huge gap between some of your smaller-mid size companies and your majors. A certain company rhyming with bell was drilling and completing wells at +10,000,000 a pop while your basin average is ~6 with some of your discount operators getting down to 3.1-3.5.
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Dec 27, 2014 05:59
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JohnGalt posted:* unconventional Ordovician oil plays under the eastern great lakes are clay rich and not responsive to normal unconventional completion techniques and have some technological obstacles in place. There's a 60k bpd refinery scheduled to break ground 1Q15 in Uganda, with a Japanese pipeline project through Kenya, and Dubai Ports export facilities in the works. Its a drop in the bucket globally, yet signifies a significant geopolitical development: East Africa is now pursuing a comprehensive regional plan for development of energy resources, as collective bargaining with developed nations puts the region into an improved position. For instance, Chinese mineral plays in Rwanda and Uganda have been paired with solar energy development under German management with a long-term, export-orientation to Kenya planned, and cannot be separated from Ugandan developments in refinery capacity. With the way Kagame is intervening in DRC, that's a pretty strong position from which Uganda-Rwanda-Ethiopia-Somalia-South Sudan are collectively bargaining for comprehensive developmental aid from.
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Dec 27, 2014 06:33
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My Imaginary GF posted:There's a shitload of oil in the Great Lakes, just asking for extraction.
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Dec 27, 2014 08:07
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Ofaloaf posted:Suddenly, I completely understand why a NIMBY is a NIMBY. ...because they assume everything is about their great lakes, and not SSA's great lakes?
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Dec 27, 2014 08:08
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My Imaginary GF posted:...because they assume everything is about their great lakes, and not SSA's great lakes?
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Dec 27, 2014 08:10
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Ofaloaf posted:Pretty much! Turns out "Great Lakes" is my trigger word and all context disappears, whoops. Dear god, has Elon Musk developed a revolutionary idea to disrupt the oil pipeline business?! How will this so-called 'Hyper-Enbridge XL Keystone Loop' work?
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Dec 27, 2014 08:13
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My Imaginary GF posted:Dear god, has Elon Musk developed a revolutionary idea to disrupt the oil pipeline business?! How will this so-called 'Hyper-Enbridge XL Keystone Loop' work? Think crazier.
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Dec 27, 2014 17:02
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My Imaginary GF posted:...because they assume everything is about their great lakes, and not SSA's great lakes? Some clues that we were shifting gears would have been nice. Also, the things that go on in Africa as far as E&P are crazy. No qualms are given about setting the ocean on fire. As to the US great lakes being a trigger word.. I hope you know about the Cargill salt mine..
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Dec 27, 2014 17:21
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Shale plays are really hard to predict 5+ years out. We are so bad at fracing, and the technology and field cases have so far to go. Its one of the few cases where advancements in technology may be a more immediate panacea.
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Dec 27, 2014 17:33
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How about states north of Texas, i.e. Oklahoma? This NYT article cites this 2003 study that suggests that states like Oklahoma, Alaska, North Dakota could experience some large economic issues. I'm concerned because I was hoping to get out of Oklahoma in the upcoming year, meaning that I would likely be selling my house, but if the oil and natural gas companies in the area (Cheasapeak, Devon, et al) go down then the economy here is going to tank... I guess that's what you get for building the local economy around a commodity that historically has undergone large price fluctuations 
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Dec 27, 2014 17:51
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MothraAttack posted:Nor should it be forgotten that the industry has tentacles in virtually every other professional sector. IT companies provide servers and service, attorneys are held in counsel, realtors lease office space and accounting firms audit them and maintain their books. It might not be the 1980s anymore, but oil is still king in many respects. Conservatives have been highly optimistic, not without some reason, about Texas' strong economic growth over the past several years. I do suspect this downturn, especially if it deepens and persists, will damper this vision somewhat. I think your view of Texas is a bit Houston-centric. That part of the state is definitely gonna have to eat some poo poo over the next 3-5 years, but the rest of us are better protected. I mean, it's not like the drop in oil prices is going to hurt Dell in Austin or AT&T in Dallas. Sure, the budget shortfall is going to suck balls and the cuts our next legislator is going to make will really hurt, but I don't even think this will live up to the dot com crash (for the non-Houston parts of the state, that is). Fun fact: this turned out to be an very merry christmas at the e_angst household, as my grandmother kept the mineral rights to the family farm when she sold it off decades ago, and there are now three successful wells pumping there (well, the wells are pumping from an area of which the old family farm makes up 1.5%, but it's still enough for her to be getting 5-figure checks on a regular basis). She's been distributing the money very generously, but pretty much everyone in the family knows that money is going to go away soon (or at least be drastically lowered), so we're all just buying a few nice things or paying down old debts. We're not upgrading our lifestyles expecting the taps to keep flowing. And no one is worried that any upcoming oil-related crash is going to hurt us too much. We've all got pretty decent middle-class jobs and do all right for ourselves. (I'm working at Apple, my brother for a small company that makes aircraft parts, my uncle works at Southwest, my other uncle is a contractor who does COBOL work for legacy systems, etc, etc.) Granted, we're spread along I-35 and not along the coast or in the valley, but I'd say that except for this unexpected one-time cash in we're fairly representative of the Texas middle class, and things look pretty secure for now. e_angst fucked around with this message at 19:49 on Dec 27, 2014 |
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Dec 27, 2014 19:46
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e_angst posted:I think your view of Texas is a bit Houston-centric. That part of the state is definitely gonna have to eat some poo poo over the next 3-5 years, but the rest of us are better protected. I mean, it's not like the drop in oil prices is going to hurt Dell in Austin or AT&T in Dallas. Sure, the budget shortfall is going to suck balls and the cuts our next legislator is going to make will really hurt, but I don't even think this will live up to the dot com crash (for the non-Houston parts of the state, that is). So for the most part, the only people that should be scared are degree less, skill less, 20-40 somethings that drill/frac.
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Dec 30, 2014 16:50
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AllPraiseToAllah posted:So for the most part, the only people that should be scared are degree less, skill less, 20-40 somethings that drill/frac. If theres rounds of mergers or acquisitions the office and engineering staffs will definitely be affected.
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Dec 30, 2014 17:27
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AllPraiseToAllah posted:So for the most part, the only people that should be scared are degree less, skill less, 20-40 somethings that drill/frac. Well, school teachers and other professions that rely on public money throughout the state will have cause for concern (I imagine a lot of teachers who are primary doing non-core courses or who were hired recently will be getting bad news at the end of this school year). Anyone in any of the boom towns that have come up along the Eagle Ford shale will have it rough as well. Houston is probably the only major metropolitan area in the state that will see any significant negative consequences, since oil is so tied into their economy, but they are big enough that they'll be able to recover. (Interesting fact I learned the other day. It turns out the gross domestic product for the city of Houston is slightly higher than that of the whole of Taiwan.)
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Dec 30, 2014 17:58
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Anyone relying on public money in Texas is probably always feeling some level of anxiety.
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