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Frackers Face Harsh Reality as Wall Street Backs Away

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Re: Frackers Face Harsh Reality as Wall Street Backs Away

#41

Post by mirimir »

panarky wrote: post #37
mirimir wrote: post #33

Earlier quoted context omitted.

TFA claims that: > The once-powerful partnership between fracking companies and Wall Street is fraying as the industry struggles to attract investors after nearly a decade of losing money. Is that inaccurate? I'm guessing that fracking was profitable until oil prices crashed. So is the financial debate about if, when and how much oil prices will increase?

Oil prices aren't particularly low by historical standards. https://imgur.com/a/twnV7GZ So I'd guess that the "decade of losing money" is due to poor economics of individual wells, where production dramatically falls over time. That requires more and more capital for new wells just to maintain constant volumes. If you only look at aggregates it can appear there's a boom, when in reality it's a bit of a shell game tha…

> Oil prices aren't particularly low by historical standards.

True. But I think that fracking only became financially viable (or at least, plausibly so) when oil prices were at historic highs. Similarly for tar sands.

But there have also been subsidies, to help ensure adequate domestic production. For the oil and natural gas industries overall.

And this will be the go-to technology as traditional oil and gas reserves dwindle. At least for petrochemicals.

Re: Frackers Face Harsh Reality as Wall Street Backs Away

#42

Post by Nasrudith »

panarky wrote: post #37
mirimir wrote: post #33

Earlier quoted context omitted.

TFA claims that: > The once-powerful partnership between fracking companies and Wall Street is fraying as the industry struggles to attract investors after nearly a decade of losing money. Is that inaccurate? I'm guessing that fracking was profitable until oil prices crashed. So is the financial debate about if, when and how much oil prices will increase?

Oil prices aren't particularly low by historical standards. https://imgur.com/a/twnV7GZ So I'd guess that the "decade of losing money" is due to poor economics of individual wells, where production dramatically falls over time. That requires more and more capital for new wells just to maintain constant volumes. If you only look at aggregates it can appear there's a boom, when in reality it's a bit of a shell game tha…

Really it is a matter of diminishing returns of cheaper oil - the easier wells and methods of extraction get depleted and while it is possible to reduce the extraction costs through technological advancement it is very unlikely it will ever reach historic lows. Just like how surface deposits of copper and bronze and especially native ore were quickly depleted in areas with long term civilizations.

Re: Frackers Face Harsh Reality as Wall Street Backs Away

#43

Post by jessaustin »

aoner wrote: post #39
Spooky23 wrote: post #36

Earlier quoted context omitted.

Not everyone lives in California. Heat pumps aren’t sufficient in the northeast without a substantial ($50k+) investment in a ground loop. Many homes require significant retrofit to even use one.

Just use an air to water heat pump. We've got one installed in the netherlands, costs was about €6k (ex subsidies) and we're disconnected from the gas supply. The newest generations can go up to -25 degrees celcius (look up Mitsubishi zubadan for example)

You shouldn't assume that your climate is the same as the one GP referenced.

Re: Frackers Face Harsh Reality as Wall Street Backs Away

#44

Post by markdown »

athollywood wrote: post #15

Speaking as an employee at one of the largest independent E&P’s, we haven’t relied on debt and equity financing in the last few years because we have had enough free cash flow. The only thing slowing us down really is things like pipeline takeaway and labor shortage.

> The only thing slowing us down really is things like pipeline takeaway and labor shortage.

I am under the impression that this field has pretty well paid jobs. How is there a labor shortage in a mature industry with high pay?

Re: Frackers Face Harsh Reality as Wall Street Backs Away

#45

Post by [deleted] »

Scarblac wrote: post #35
toomuchtodo wrote: post #9

Earlier quoted context omitted.

Germany and other nations that poured subsidies into renewables early on (and are to be commended for their economic sacrifice for doing so) are outliers. The rest of the world caught up as soon as renewables were cheaper than fossil fuels. Capital markets don't have feelings. Humanity lucked out that solar and wind costs were driven down as rapidly as they were through manufacturing scale. We'd be screwed otherwise…

We didn't luck out, global CO2 output is still increasing, we have never output so much as in 2018. All the green energy we've added so far is only in addition to burning fossil fuels, it hasn't replaced any yet.

[deleted]

Re: Frackers Face Harsh Reality as Wall Street Backs Away

#46

Post by toomuchtodo »

Spooky23 wrote: post #38
roenxi wrote: post #30

Earlier quoted context omitted.

Your comment omits an important but interesting detail here - how common is "rare use" and what is it being used for?

Air source heat pumps become less effective as the temperature drops. At 17F, you lose about 25% of BTU capacity as compared to 48F. Hot water is another huge use — it’s really expensive to use electricity for that purpose.

Heat pump water heaters exist.

"Heat pump water heaters use electricity to move heat from one place to another instead of generating heat directly. Therefore, they can be two to three times more energy efficient than conventional electric resistance water heaters. To move the heat, heat pumps work like a refrigerator in reverse."

https://www.energy.gov/energysaver/water-heating/heat-pump-w...

Re: Frackers Face Harsh Reality as Wall Street Backs Away

#47

Post by danielvf »

Scarblac wrote: post #35
toomuchtodo wrote: post #9

Earlier quoted context omitted.

Germany and other nations that poured subsidies into renewables early on (and are to be commended for their economic sacrifice for doing so) are outliers. The rest of the world caught up as soon as renewables were cheaper than fossil fuels. Capital markets don't have feelings. Humanity lucked out that solar and wind costs were driven down as rapidly as they were through manufacturing scale. We'd be screwed otherwise…

We didn't luck out, global CO2 output is still increasing, we have never output so much as in 2018. All the green energy we've added so far is only in addition to burning fossil fuels, it hasn't replaced any yet.

Many individual nations have simultaneously reduced total fossil fuel generation while increasing renewable use. At least in some places in the world, replacing is probably the right word.

Re: Frackers Face Harsh Reality as Wall Street Backs Away

#48

Post by objektif »

markdown wrote: post #44
athollywood wrote: post #15

Speaking as an employee at one of the largest independent E&P’s, we haven’t relied on debt and equity financing in the last few years because we have had enough free cash flow. The only thing slowing us down really is things like pipeline takeaway and labor shortage.

> The only thing slowing us down really is things like pipeline takeaway and labor shortage. I am under the impression that this field has pretty well paid jobs. How is there a labor shortage in a mature industry with high pay?

The pay is good but working conditions?

Re: Frackers Face Harsh Reality as Wall Street Backs Away

#49

Post by zachrose »

markdown wrote: post #44
athollywood wrote: post #15

Speaking as an employee at one of the largest independent E&P’s, we haven’t relied on debt and equity financing in the last few years because we have had enough free cash flow. The only thing slowing us down really is things like pipeline takeaway and labor shortage.

> The only thing slowing us down really is things like pipeline takeaway and labor shortage. I am under the impression that this field has pretty well paid jobs. How is there a labor shortage in a mature industry with high pay?

From what I understand there are a number of reasons.

One of them is that domestic oil and gas production was on the decline until the tech for horizontal drilling and fracking started the shale boom of the last 10-12 years. Combined with demographics (big boomer generation, small generation X, big millennial generation) this means you have to find and train all these millennials who probably had other plans. And then, I'm told, the highly cyclical dynamics of the industry make any kind of long-term investment difficult, so there's high overhead for a labor market that still relies on fax machines.

If you're macro-minded and you want policies that keep that labor price high so alternative energy becomes more attractive, something like the Green New Deal is probably a good bet.

Re: Frackers Face Harsh Reality as Wall Street Backs Away

#50

Post by arcticbull »

jessaustin wrote: post #43
aoner wrote: post #39

Earlier quoted context omitted.

Just use an air to water heat pump. We've got one installed in the netherlands, costs was about €6k (ex subsidies) and we're disconnected from the gas supply. The newest generations can go up to -25 degrees celcius (look up Mitsubishi zubadan for example)

You shouldn't assume that your climate is the same as the one GP referenced.

The climate is harsher than -25C/-15F in the winter?
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