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Texas Is About to Create OPEC’s Worst Nightmare

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Re: Texas Is About to Create OPEC’s Worst Nightmare

#121

Post by jillesvangurp »

shmerl wrote: post #105

Everyone is now rushing to sell oil, before demand for it will start falling rapidly.

The Texas oil bubble is fueled by massive debt and very rosy long term exploitation projections. Too rosy maybe according to some; there's been some rumors a lot of oil companies in Texas have been overstating their long term supplies. Either way, low oil prices are a good thing since it cuts off more the expensive sources as a realistically viable.

It's actually helping to kill off oil investments because why bother if the prices stay below what is actually profitable. A lot of recent investments only made sense at 70$+ a barrel. Now that 30$ is on the table, those investments are effectively under water. The price volatility alone should scare investors. Imagine it drops another 10$ because Opec throws in the towel and unleashes the floodgates?

Meanwhile, oil dependence is being addressed by ongoing electrification so lower demand is going to keep prices low even as supply declines. This ensures that by the time the shit hits the fan (cheap supplies run out), it won't be as much of an issue. In 20 years when most transport is electric, the barrel price for oil will be much less relevant for most. There will still be a need for oil of course but not at the levels needed today.

Re: Texas Is About to Create OPEC’s Worst Nightmare

#122

Post by solarkraft »

LanceH wrote: post #104
FlyMoreRockets wrote: post #54

Earlier quoted context omitted.

At this point, there are no long distance electric trains in the US. Odd, it seems like it would be mutually beneficial to have the electric grid run on rail right of way and be used to power trains.

I imagine it would bring some ability for load balancing moving more freight during specific hours.

This seemed like a good idea at first, but I have a suspicion that it would mess with schedules.

Re: Texas Is About to Create OPEC’s Worst Nightmare

#123

Post by yetihehe »

electricslpnsld wrote: post #39
rcMgD2BwE72F wrote: post #37

Earlier quoted context omitted.

>There are no electric alternatives for most long distance transportation, which is a huge chunk of our energy consumption. What about trains?

Trains don't get you and your overseas goods across oceans (yet).

Neither do cars or trucks.

Re: Texas Is About to Create OPEC’s Worst Nightmare

#124

Post by tomrod »

sk5t wrote: post #102
tomrod wrote: post #48

Earlier quoted context omitted.

Not quite. It exports everywhere there is a comparative advantage. https://en.m.wikipedia.org/wiki/Comparative_advantage

Ah, but this too, not quite. If your economy is better than other economies at producing cars, but _far_ better than anyone else at producing microprocessors, it may be rational to produce microprocessors exclusively and import cars. Cf. revealed comparative advantage.

One mind-blowing item at a time. ;-)

But seriously, thanks for sharing. TIL: https://en.m.wikipedia.org/wiki/Revealed_comparative_advanta...

Re: Texas Is About to Create OPEC’s Worst Nightmare

#125

Post by rcMgD2BwE72F »

ancientworldnow wrote: post #92
rcMgD2BwE72F wrote: post #43

Earlier quoted context omitted.

>for military strategic advantages in the middle east. Really? As a European, I feel much closer to Iran's history and culture than Saudi Arabia's. My understanding is that the US chose a side a long time ago (cf. ARAMCO foundation) and decided to go "all in", even if it goes a long way against its interest. And things are getting worse with time.

Saudi Arabia has a much larger budget to spend on arms deals (the real US interest) and allying with Iran would anger Israel who the US considers an important ally (for tech, geopolitical, military, and electoral college reasons).

All these factors link back to oil. It's crucial to sell arms there because there's oil in the region. Israel has become a big ally because it's the closest one in the world's oil well. Switch to renewables and the US won't care about the region (just like the US doesn't really care about Africa and South America).

Re: Texas Is About to Create OPEC’s Worst Nightmare

#126

Post by b_tterc_p »

toomuchtodo wrote: post #11
Kaveren wrote: post #7

I'm hopeful that America can further lessen our dependence on Saudi Arabia as much as possible through this. Alas, the alliance is based around a lot more than just oil, and the Saudi vision is to shift away from oil reliance, but I'll gladly take a chink in the armor. > "Global oil demand has so far absorbed the extra U.S. crude barrels, limiting the impact on prices" This slightly curbs my optimism.

This isn't feasible. The refineries in the US are not designed for the same oil produced by the Permian basin (the Permian is producing light crude, US refineries are configured for medium to heavy crude). More importantly, oil is fungible on the world market; you can't effectively dictate "Oil produced in America is consumed in America" without drastically regulating the energy market with public policy (not going t…

Adjusting for immaterial quality differences it is fungible, but I’d imagine the transportation costs are non negligible which sort of defeats the point, no?

Re: Texas Is About to Create OPEC’s Worst Nightmare

#127

Post by Tade0 »

Synaesthesia wrote: post #62

It’s unfortunate that we’re in a glut of oil and the price is going down when we should be trying to use less oil. We’re not running out any time soon and there’s lots of coal too, so it could be very dangerous for the planet.

Coal is currently being wiped out by economics in the west and it's past its peak globally, so there's a silver lining.

Re: Texas Is About to Create OPEC’s Worst Nightmare

#128

Post by imtringued »

mulmen wrote: post #118
FlyMoreRockets wrote: post #54

Earlier quoted context omitted.

At this point, there are no long distance electric trains in the US. Odd, it seems like it would be mutually beneficial to have the electric grid run on rail right of way and be used to power trains.

Power lines can climb much steeper hills than trains.

Exactly! Hillclimbing is a huge weakness of trains which significantly increases the cost of rail construction.

Re: Texas Is About to Create OPEC’s Worst Nightmare

#129

Post by calvinbhai »

viburnum wrote: post #98

This is a disaster for the climate.

how so? Consumption won't go up proportionally to the drop in price of fuel. I see it as an antidote to the middle east conflict where the developed countries have a hand in it. If petro nations source of income is affected, there's a hope that Middle East conflict will end.

Re: Texas Is About to Create OPEC’s Worst Nightmare

#130

Post by kamaal »

rcMgD2BwE72F wrote: post #89
Synaesthesia wrote: post #59

Earlier quoted context omitted.

The US will always seek to control Middle East oil, it’s a huge lever on the rest of the world.

For another decade or two, yes. In the meantime, China is building a global supply chain to provide with world with solar panels and batteries. And bankrupt all the US companies/banks that keep investing in fossil fuels. It's all about your investment horizon I guess.

>>For another decade or two, yes.

If the US stays focussed on mid-east for the next 2 decades, and not counter China. Or rather just let China be as they are. China will have the world domination on a platter for the next few centuries.

Oil is the old game. That game probably even ended after the 1990's. The US has been fighting wrong wars for the past 30 years.

China is quietly, and yet steadily emerging as the next super power. Albeit like the UK in the past. No intention to fight any direct wars or make aggressive moves. Instead control the world's oceans, and establish trade empires. Let the current super power bankrupt itself fighting wars.

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