Oil

[*michaelsean*]

(03-04-2022, 09:44 PM)NATI BENGALS Wrote: Yea it got paused again too.
https://www.cnbc.com/2022/02/24/biden-administration-pausing-new-oil-and-gas-leases-amid-legal-battle-.html

If we are not even producing what we can from where we were before the pandemic. I have a hard time being mad about reviewing risks of offshore drilling.

And I wouldn't call CNBC a liberal bias site. Maybe a investor misinformation producer.
https://adfontesmedia.com/interactive-media-bias-chart/?utm_source=HomePage_IMBC_Video_Clip&utm_medium=OnWebSite_Link_and_Button

What are you arguing? He pretty much said Biden isn’t responsible for the current gas prices which is all you want to hear. I’m sure if you read everything he wrote carefully you can even find some blame to put on Trump. Win-win.

[NATI BENGALS]

(03-05-2022, 02:09 PM)michaelsean Wrote: What are you arguing? He pretty much said Biden isn’t responsible for the current gas prices which is all you want to hear. I’m sure if you read everything he wrote carefully you can even find some blame to put on Trump. Win-win.

We are discussing a topic. It doesn’t have to be viewed as an argument.

Just trying to get into the details a little deeper on a complex subject

[GMDino]

(03-05-2022, 02:18 PM)NATI BENGALS Wrote: We are discussing a topic. It doesn’t have to be viewed as an argument.

Just trying to get into the details a little deeper on a complex subject

Exactly.

it's weird to see the people who claim the "other side" is too partisan constantly try and drag it back to Biden vs Trump.  Or not comment on those who are reading the thread and still saying it's all Biden's fault and "he won't own it".

Stewy has provided a litany of reasons that one person, Democrat or repulbican, is controlling gas/oil prices.  And a reflection on the long term trends.

[Stewy]

(03-05-2022, 01:54 PM)GMDino Wrote: I was reading yesterday that many of the permits that have been allowed are not be used.  I'm sure there is a myriad of reasons for that.

Also saw a chart saying we aren't even close to the highest prices adjusted for inflation.

Most companies want optionality.  The permitting process can take weeks to months depending on the type of well (exploration (long time) vs. Production (short time)).  

Also the longer you rent a drilling rig the bigger discount you get from the rig company.  So a company would prefer to have multiple wells to drill on the same rig contract for cost savings and synergies with the rig crew (the more of the same type of well and geology a rig crew drills, the more efficient they are and drill faster).

Also a company will permit multiple sites on the surface for several reasons.  
Safety and Environmental Concerns
#1 - Safety:  If something happens with the well or the rig and the current wellbore or surface location needs to be plugged and abandoned, then instead of having to submit a brand new drill permit and wait months and waste a rig contract, they can just skid over to one of the other approved drill sites and try again immediately.
#2 - Environmental:  Drilling in the US onshore and offshore is highly regulated to protect land owners, the rig crews and the environment.  However, even with all our preparations, permits and environmental impact documents, we still drill into the Earth and get surprises.  There can be shallow water flows from unknown aquifers or super charged (can explain this if anyone really wants to know) known aquifers, which damage the well, but more importantly needs to be cemented to protect the aquifer and then the rig moved to hopefully not encounter the same problem.

Finally, because permitting takes so long for offshore deep water wells (>800 feet water depth), companies may submit for drilling permits before the prospect is fully mature.  However, if something happens during prospect evaluation and the company no longer wants to drill it, the permits do not go away.  So a company could submit 2 - 4 - 8 permits and never drill a well.  This happens all the time in the Deep Water Gulf of Mexico.

I hope this explains the issue.  

/salute

[Stewy]

(03-05-2022, 02:32 PM)GMDino Wrote: Exactly.

it's weird to see the people who claim the "other side" is too partisan constantly try and drag it back to Biden vs Trump.  Or not comment on those who are reading the thread and still saying it's all Biden's fault and "he won't own it".

Stewy has provided a litany of reasons that one person, Democrat or repulbican, is controlling gas/oil prices.  And a reflection on the long term trends.

Agreed.  And no one has to believe me and my analysis, but I have linked many places and sites that people can visit and analyze for themselves and draw their own conclusions.  Here are some more:  Happy reading.

Offshore
 - https://www.boem.gov/

Onshore
Bureau Of Land Management (BLM) - https://www.blm.gov/

International Energy Agency (IEA) - https://www.iea.org/
Worldwide Watchdog for oil and gas.  Probably the most influential organization on oil and gas prices.  These are the folks who monitor and report on refinery stocks and production (on a daily basis) throughout the world.

US Energy Information Administration (EIA) - https://www.eia.gov/

US Energy Department - https://www.energy.gov/

While all of these (minus the IEA) are part of the Department of the Interior, what they do on a daily basis is mostly non-partisan.  They are just people doing their jobs.  Now of course the current administration can change policy and influence how well or efficiently those jobs get done, but on a day to day basis the efforts of these organization are non-partisan.
Bureau of Land Management
THE BUREAU OF LAND MANAGEMENT

[*michaelsean*]

(03-05-2022, 02:32 PM)GMDino Wrote: Exactly.

it's weird to see the people who claim the "other side" is too partisan constantly try and drag it back to Biden vs Trump.  Or not comment on those who are reading the thread and still saying it's all Biden's fault and "he won't own it".

Stewy has provided a litany of reasons that one person, Democrat or repulbican, is controlling gas/oil prices.  And a reflection on the long term trends.

You’re saying I did that? You should read the OP. All I did was comment that it’s weird to argue with someone who agrees with you.

[Stewy]

(03-05-2022, 06:03 PM)michaelsean Wrote: You’re saying I did that?   You should read the OP. All I did was comment that it’s weird to argue with someone who agrees with you.

I dont think he was pointing at you.

[masonbengals fan]

How is purchasing oil from other countries any better for the environment than producing oil in the U.S. when U.S. regulations are stricter, when the U.S. produces fewer emissions, and when shipping oil also increases the carbon footprint?

[HarleyDog]

Now that the queen bee Nancy Pelosi is against buying Russian oil, maybe some of you will now begin to get onboard with reasoning. We are helping fund their invasion of Ukraine with every drop which, in my view, makes us accomplices to their invasion. To add to that point, why are we pursuing getting oil from Iran now? They are just as bad as Russia and have no value for human life. We need to go full speed ahead on energy dominance. We can then support many in NATO and starve out the Russian war machine.

[GMDino]

(03-06-2022, 11:19 AM)masonbengals fan Wrote: How is purchasing oil from other countries any better for the environment than producing oil in the U.S. when U.S. regulations are stricter, when the U.S. produces fewer emissions, and when shipping oil also increases the carbon footprint?

To me it isn't.

But if we don't produce enough here for whatever reason it has to come from somewhere.


But the push for alternative energies and getting away from oil should have been started decades ago...like the 1980's.  So we're still in the same boat.

[GMDino]

(03-06-2022, 05:53 PM)HarleyDog Wrote: Now that the queen bee Nancy Pelosi is against buying Russian oil, maybe some of you will now begin to get onboard with reasoning. We are helping fund their invasion of Ukraine with every drop which, in my view, makes us accomplices to their invasion. To add to that point, why are we pursuing getting oil from Iran now? They are just as bad as Russia and have no value for human life. We need to go full speed ahead on energy dominance. We can then support many in NATO and starve out the Russian war machine.

Was someone against that?

And do want us to stop selling our oil overseas too?

We're decades behind getting off the oil-teat.

[HarleyDog]

(03-06-2022, 07:13 PM)GMDino Wrote: Was someone against that?

And do want us to stop selling our oil overseas too?

We're decades behind getting off the oil-teat.

One thing Mason pointed out is the U.S. makes cleaner energy due to regulations. I get solar, wind and other clean energies are important in the future. Like you say, we aren't there yet. Not even close. When the government asks other countries, which are corrupt and less clean, have zero value on human rights and life to supply some of our energy, you have to ask why? And that is what I want to know. Why? China is included in this as well. 

To me it's not a left or right thing TBH. It's common sense and I stand strong in my opinion that we are accomplices in atrocities performed by those we buy and trade with. Doesn't stop at oil either. Doesn't matter if it's beanie babies, microwaves, clothes, etc. We should not be doing business with bad people, period.

[Bengalzona]

(03-06-2022, 05:53 PM)HarleyDog Wrote: Now that the queen bee Nancy Pelosi is against buying Russian oil, maybe some of you will now begin to get onboard with reasoning. We are helping fund their invasion of Ukraine with every drop which, in my view, makes us accomplices to their invasion. To add to that point, why are we pursuing getting oil from Iran now? They are just as bad as Russia and have no value for human life. We need to go full speed ahead on energy dominance. We can then support many in NATO and starve out the Russian war machine.

As I recall, we started buying a small amount of oil from Russia several years ago to make up for the amount we we used to buy from Venezuela. But also consider that "we" ain't really "we the people". "We" in this case are the private companies involved in the oil industry. "We the People" only step in when we want to tell the industry affiliates here in the U.S. not to buy from certain countries (like Venezuela or Russia) because we feel they are assholes.

Actually, they are all asshole countries. We just like to single out the worst offenders sometimes. ;-)

[HarleyDog]

(03-06-2022, 09:24 PM)Bengalzona Wrote: As I recall, we started buying a small amount of oil from Russia several years ago to make up for the amount we we used to buy from Venezuela. But also consider that "we" ain't really "we the people". "We" in this case are the private companies involved in the oil industry. "We the People" only step in when we want to tell the industry not to buy from certain countries (like Venezuela or Russia) because we feel they are assholes.

Let's see the companies step up. Let's see how consumers step up. There was a strong support for BLM (even though most of that money was used to buy mansions and extravagant goods) so there should not be a problem for the woke companies to stop doing business with Russia and China.

Russia is a large producer of oil. China is a large producer of cheap shit we run to Walmart and buy. I want to see Walmart ban all products from both companies, along with any other business that sells or has their goods made in either of those countries. We should cut them off 100%.

This war between Russia and Ukraine and the eagerness from China to invade Taiwan should be a wake-up call to all Americans and the rest of the world. We have a chance to prevent hindsight 20/20, but it will take balls. Does America still have balls?

[Stewy]

(03-06-2022, 11:19 AM)masonbengals fan Wrote: How is purchasing oil from other countries any better for the environment than producing oil in the U.S. when U.S. regulations are stricter, when the U.S. produces fewer emissions, and when shipping oil also increases the carbon footprint?

It absolutely isn't better.  The US Industry is cleaner, safer and cheaper than any other country in the world.

[Bengalzona]

(03-06-2022, 10:02 PM)Stewy Wrote: It absolutely isn't better.  The US Industry is cleaner, safer and cheaper than any other country in the world.

That's what I understand. From what I have heard, companies in most other countries are pretty far behind our companies in the technologies to locate, drill and (especially) refine oil. Is that the case?

[Stewy]

(03-07-2022, 04:19 AM)Bengalzona Wrote: That's what I understand. From what I have heard, companies in most other countries are pretty far behind our companies in the technologies to locate, drill and (especially) refine oil. Is that the case?

Well not really.  That isn't what I meant.  The US EPA and Dpt of Interior regulations are some of the if not the most stringent in the world, yet due to  the lack of political risk and above ground risk, and the readiness of materials for driling, even with all the govt regs, it's still safer, cleaner, but not always heaper to drill here.

You see, even in "other" countries, it is still your big companies - XOM, CVX, EQR, Shell, TotalEnergies, etc. that are drilling and developing the prospects on behalf of the country.  But the remoteness, lack of available of materials, and political and above ground risks limit profitability.  Or at least make it riskier.  

My point is that the things that separate the US the most are the regulations and controls which makes for a safe, clean and stable drilling experience.  However, innovations in drilling, completions and geoscience are not limited to the US.  The big companies can take all of those things any where.  Example:  My company, TotalEnergies, just made a huge discovery in Nambia (https://www.reuters.com/business/energy/totalenergies-makes-large-hydrocarbon-discovery-off-namibia-sources-2022-02-24/).  It was only the second well ever in the basin.  Very much a rank wildcat and on the adjacent block to the North, Shell had a discovery with the first well in the basin just a few months ago.

/cheers

[Luvnit2]

I have to say this thread is very enlightening and I am trying to learn.

I have read through most of it, but did not see this addressed. The Democrats do want to eliminate oil, it is on record. My understanding is the US oil is far more clean than oil from Russia. We started importing dirtier oil from a county who has told us they want to destroy us. This dirty oil (if I am correct and if not I am sure Stewy will yell us) lines the coffers of Putin and aides his military to be stronger.

We were energy independent not long ago, in 2020 we used less oil than in previous years due to the pandemic. One would think we could have built up huge reserves for a rainy day, but somehow when ended up having to buy dirtier oil (had to get oil from somewhere and continue to let Russia drill more for that dirtier oil and sell it to us and Europe.

I am not blaming Biden 100%, but didn't some of his decisions have adverse impact like approving Nordstrom pipeline from Russia to to Germany, but shutting down Keystone on day 1 of his administration and delaying pipelines in West Virginia that are 95% complete? I understand Keystone would not change the production issues now, but we would be a year+ closer.

Can someone explain to me why it is not a huge deal by anyone concerned about the environment to purchase oil from countries lacking the cleaning techniques of the US, thus buying energy from Russia and others that hurts the environment more than if it was produced in the US?

[KillerGoose]

(03-07-2022, 11:23 AM)Luvnit2 Wrote: We were energy independent not long ago, in 2020 we used less oil than in previous years due to the pandemic. One would think we could have built up huge reserves for a rainy day, but somehow when ended up having to buy dirtier oil (had to get oil from somewhere and continue to let Russia drill more for that dirtier oil and sell it to us and Europe.

I work in the oil industry as well, though I am on the software side as an analyst. Stewy can correct me if I am wrong here. We lost our energy independence due to the pandemic causing production issues. Demand plummeted, but so did production, and we are still feeling that as demand has normalized. It is much easier to shut production down than it is to ramp production up. The U.S. has around 40 billion bbls in reserve right now, which is massive. They weren't able to add to that, though, since production also dipped. 

Commenting in general here, I 100% agree with the overall sentiment in this thread - people are going to blame Biden for the gas/oil prices but they aren't really his fault. People are also going to harp on the Keystone. My MIL was wailing on Biden, telling him to turn the Keystone on and I had to remind her that the Keystone has been on for close to a decade and transports 500k bbls per day. He killed the XL project, which was going to transport tar sands crude that would be sent to the international market, primarily. It was never operational, though. 

[Stewy]

(03-07-2022, 11:35 AM)KillerGoose Wrote: I work in the oil industry as well, though I am on the software side as an analyst. Stewy can correct me if I am wrong here. We lost our energy independence due to the pandemic causing production issues. Demand plummeted, but so did production, and we are still feeling that as demand has normalized. It is much easier to shut production down than it is to ramp production up. The U.S. has around 40 billion bbls in reserve right now, which is massive. They weren't able to add to that, though, since production also dipped. 

Commenting in general here, I 100% agree with the overall sentiment in this thread - people are going to blame Biden for the gas/oil prices but they aren't really his fault. People are also going to harp on the Keystone. My MIL was wailing on Biden, telling him to turn the Keystone on and I had to remind her that the Keystone has been on for close to a decade and transports 500k bbls per day. He killed the XL project, which was going to transport tar sands crude that would be sent to the international market, primarily. It was never operational, though. 

Yes demand plummeted during the Pandemic, but the recovery in demand (according to the IEA) has out stripped their expectations and we have been back to pre-covid levels of demand for a while now.  As for lagging production, that is because of a lack of investment following the oil crash in 2014.  New Oil projects take 2-10 years to bring on line AFTER discovery and appraisal.  However, the most expensive projects were back burnered, and are still dormant or just now moving forward.  Large companies are STILL exercising Capital Discipline, and now increasing their exploration budgets.  While I can't give specifics I can say that my companies XPLO budget hasn't changed in the last 3 years and we're told not to expect it to go up, and our company is big into investing in renewables.

*******************************************************
Rig Count - 2014 vs, now and why it hasn't recovered and can't recover quickly.  This is total country wide rig count I am talking about.

I have wanted to write a little on this for a while and I suppose this is as good a time as any.  These numbers are approximate, but rig count right now is in the high 400's....about 480 or so (it changes daily obviously).  That is dominated by onshore rigs.  Pre-2014 US rig count was ~1500, which is a 60%+ drop, and it has not recovered. 

There are two primary reason why it has not recovered:
#1 - Companies are spending less since 2014 and haven't increased their budgets as I said above, but even if they did....
#2 - Rig crews are dominated by Blue Collar laborers - as 2/3 of all rigs went dormant, these hourly laborers were without income.  Moreover, due to the tremendous recovery time for oil price recovery and more importantly stability, these blue collar individuals have LEFT THE INDUSTRY, to take other jobs.  We're talking about 10's of thousands of jobs here.  And these are skilled laborers, not floor sweepers.  Working a rig in dangerous and requires training and experience, but that experience is not sitting on the sidelines, but has left the building to play somewhere else.  So a company can't just go out and hire 20 rigs and start drilling, the skilled hourly labor just isn't there.  And this, more than anything else, will hold back rapid US Production Growth.
#2a - This also goes for all the companies which service a rig while it is in operation:  (Onshore) On site housing, Cafeterias, Mud Loggers, Mud Providers, Well Loggers, road and pad crews, tr4uck drivers, etc.  All of that skilled and unskilled labor had to make a living and couldn't wait, and is mostly gone, which leads to re-hiring and training of new individuals.  Furthermore, these companies aren't going to hire people ASSUMING oil companies are going to need more rigs, they'll hire a they go until the see a long lived spike of recovery in the industry.

*******************************************************
And XL wouldn't have helped us with energy independence.....because Canada.