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Economy U.S Energy Independence: From Net Oil Exporter To Begging OPEC To Increase Production Again.

Discussion in 'The War Room' started by Arkain2K, May 9, 2018.

  1. Arkain2K Si vis pacem, para bellum

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    Thanks to technological innovations in the last five years that drastically reduced the average break-even prices for shale production down to around $50/barrel, we are now pumping so much oil that all the pipelines and refineries are at max capacity.

    Not a bad problem to have, I'd say.

    With the U.S flushing with oil, $100/barrel of Middle East crude is a thing of the past. Once all the kinks are worked out, my guess is global prices will stabilize at the $60-$70 range, no matter what OPEC and Russia does, because the United States will soon be the world's top oil exporter.

    If they ever think about cutting production, American oil would simply swoop in and take their market share right under them.

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    America's Permian Basin Is Growing Into the Largest Oil Patch in the World
    By Jessica Summers and Sheela Tobben| April 24, 2018​

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    The Permian shale play is all about setting records. Now, the region may even become the world’s largest oil patch over the next decade.

    Output in the basin is forecast to reach 3.18 million barrels a day in May, according to the Energy Information Administration. That’s the highest since the agency began compiling records in 2007.

    By 2023, the basin may produce 4 million barrels a day, according to the International Energy Agency. The Ghawar field in Saudi Arabia is currently the world’s biggest oil field, with capacity of 5.8 million barrels a day, according to a 2017 EIA report.

    This is all thanks to the size of the oil deposits, coupled with increased technology and efficiencies.

    “The technology is the biggest driver,” said Rob Thummel, managing director at Tortoise, which handles $16 billion in energy-related assets. “The basin in and of itself could end up being the largest oil field in the world, even bigger than Ghawar in Saudi Arabia."

    By contrast, top-producing members of OPEC such as Iran and Iraq pump less than 5 million barrels a day. Iran produced about 3.81 million barrels day in March, according to data compiled by Bloomberg.

    “If the Permian was part of OPEC, it would be the fourth-largest OPEC member, right behind Saudi Arabia, Iran and Iraq,” Thummel said. “By the end of the year, the Permian probably overtakes Iran.”

    The rampant production growth has already strained available pipeline capacity to transport the oil to market, pressuring prices. West Texas Intermediate oil in Midland, Texas, the heart of the Permian, sank Tuesday to $8 a barrel below U.S. benchmark prices in Cushing, Oklahoma, the biggest discount in more than three years, according to data compiled by Bloomberg.

    Companies are planning more lines to ease the bottleneck. Phillips 66 Partners LP and Andeavor announced Tuesday a joint venture to build a pipeline from the Permian to Corpus Christi and the Sweeny-Freeport area that may carry as much as 700,000 barrels a day when it starts at the end of 2019.

    America's biggest oilfield is running out of pipeline
    By Matt Egan | May 8, 2018

    U.S. Shale’s Refining Crisis
    By Nick Cunningham - May 08, 2018

    [​IMG]

     
    Last edited: Nov 28, 2021 at 12:50 PM
  2. Roaming East Ficti pravique tenax

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    Thanks Obama...
     
  3. Gregolian .45 ACP Platinum Member

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    Don't we WANT oil around 80-90 bucks a barrel though?
     
  4. spin Gold Belt

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    how about some really clean oil?
     
  5. Bloodworth Banned Banned

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    Scary amounts. The world would be screwed without it. Hope there is plenty to go around...

    Prices have risen too high by me. Close to 3 a gallon
     
  6. V-2 [ [ AT/GC ] ] Banned

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    The US will become the world's largest oil producer before the end of the year and a net energy exporter within the next few for the first time since 1953. As a percentage of daily demand, imports have gone from 65% in 2005 to below 15% currently. This comes at a time when there is a massive amount of reshoring taking place that will see the US regaining the top global position from China as the most competitive manufacturing country on the globe, thanks in part to tech innovation and reinvention.
     
  7. Arkain2K Si vis pacem, para bellum

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    Crude oil prices and gasoline price at the pump are related, but not the same thing.

    If your gas price is $3 a gallon, it's because your State is taxing the hell out of it.

    Here's how much we're getting fleeced in California for every gallon:

    [​IMG]

    Also, where you live also affects how much you pay for gas, because the gas station owner pay different prices to rent the land their station is sitting on, and they pass that cost onto you. Kinda funny that you can drive a few blocks to the next city and see gas price differs to the tune of 25-50 cents each gallon compare to your city.
     
    Last edited: May 9, 2018
  8. V-2 [ [ AT/GC ] ] Banned

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    Knew this thread wouldn't generate much in response as it doesn't follow the woefully false narrative that America is in the midst of some kind of terminal decline. It's becoming entirely self-sufficient and it's only a matter of time before upholding the position as guarantor of global free trade and security (at great expense) are outright dumped altogether to a posture more closely resembling pre-1945. It's willfully going to break its own 'empire'.
     
  9. panamaican Senior Moderator Staff Member Senior Moderator

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    I don't follow.
     
  10. Curmudgeon Banned Banned

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    Paper beats rock.
     
  11. Arkain2K Si vis pacem, para bellum

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    Yeah, but it's better that the Trump/Russia crowd stay out of this Business/Economic discussion :)

    I don't know about that...If anything, having a vast oil production capability and greater control over the global oil market means a huge boost to our soft power, as we can guanrantee our allies an important economic factor that they badly needs, as welll as eliminating our energy dependence on the undemocratic shitholes that we collectively (used to) depends on for oil.

    Energy independence is a very powerful tool/weapon for whichever administration that's in office, and could very well be used to expand our global influence if we chooses to.
     
    Last edited: Jul 14, 2018
  12. Seano Hands of bone

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    A damn rock flies right through a piece of paper. Lets put that myth to rest, right now. Paper wrecks rock.
     
  13. jefferz Steel Belt

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    It has to be $75 a barrel for Bakken oil to break even.
    I can’t back up this up with a source but there’s over 800 wells in the Bakken that are drilled but still need to be fracked. I know Nabors has over 200 not fracked.
     
  14. helltoupee Red Belt

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    Kind of makes Scott Pruitt's recent granting of hardship waivers to billionaire oil tycoons a little hard to explain, doesn't it?
     
  15. Judge Banned Banned

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    Well are figuring out ways to extract the oil we have more efficiently. It is this thing called SCIENCE powered by this thing called PROFIT.

    I think Canada has more oil than Saudi Arabia and we have more oil than Canada.
     
  16. bad seed Banned Banned

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    fleeced? Those taxes pay for road maintenance and it's still not enough because the federal tax is fixed and woefully insufficient.


    California has some of the better roads in the nation thanks to the dry weather and higher gas taxes, but places in the Midwest and the Rust Belt look like Fallujah. Politicians are terrified of raising it yet everyone constantly bitches about the poor state of roads. It will get even worse with widespread EV adoption unless they institute some sort of mileage tax.
     
  17. Arkain2K Si vis pacem, para bellum

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    That's outdated data broski. Here are the current break-even points (BEP) for various types of U.S shale:

    [​IMG]

    http://www.ogfj.com/articles/print/...es/north-american-shale-breakeven-prices.html



    [​IMG]

    https://oilprice.com/Energy/Crude-Oil/The-Lowest-Shale-Breakeven-Costs-Are-Here.html

    The massive drop in break-even costs now compare to the advent of shale five years ago is the reason why our pipelines are overflowing again with Permian crude. As long as WTI remains above $55, it's pump baby pump! :cool:
     
    Last edited: May 9, 2018
  18. wufabufa Silver Belt

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    I dunno man, California consistently cracks the top 10 for worst roads in the US year after year. Just because they tax the shit out of gas for infrastructure doesn't mean they spend it on roads. That shit gets siphoned of to other state programs. When I lived in the Bay Area the roads were worse than where I grew up in PA.

    https://www.statista.com/chart/8492/the-worst-roads-in-the-usa/
     
  19. panamaican Senior Moderator Staff Member Senior Moderator

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    I still don't follow, lol.

    I don't see how upping our ability to impact global energy prices via supply is going to undermine our position as protector of international free trade or lead to a nationally driven undermining of our empire.

    As @Arkain2K noted, the economic and soft power that comes with being a net energy exporter should actually bolster our ability to protect free trade since we can counter other nations attempts to impact the market through oil supply. More importantly, it should strengthen our empire by reducing our reliance on foreign oil thus give us more autonomy to act in our best interests.

    I assume you're joking but I really did want to see how he got from A to B.
     
  20. VivaRevolution Banned Banned

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    Probably obama's greatest accomplishment. I still want the US removed from the global oil infastructure, as I view it as an issue of national security, and think we should get the benefits of the risks of fracking, but I was wrong to oppose fracking. Energy is too key to pretend it was an option not to do it.
     

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