A $900B Oil Treasure Lies Beneath West Texas Desert
bloomberg.com
bloomberg.com
Cost efficiency.
But with frack companies hanging by their teeth it isn't clear that this will be done.
This is a solvable problem but market conditions and the people left in the industry my not support it very well. It's not exactly a hotbed of technological innovation.
But of course, while the oil is running there are lots of jobs created, at least until OPEC decides they've had enough and drives the price of oil back down.
Since this is Texas, I'm pretty sure the local community won't worry about this stuff much (I grew up in Texas and have relatives who live just north of this field's extent). Hopefully the benefits will outweigh the costs for them -- it's not clear that this has been the case for North Dakota.
That same desert could house miles of solar panels and miles of wind farms. But, very few people are pushing that solution to the energy problem, even though it is now price-competitive with fossil fuels to do so in places like Texas, where both wind and sun are plentiful almost year round.
Shale oil is a very different process than traditional oil wells, and much riskier to water reservoir resources in the region.
As for the extra space for fracking, most states require returning the land back to how it was before after the few month process of fracking is done.
Thing is, in many places it rains, and the waste water doesn't evaporate, it just remains until a government body cleans it up or the pool membrane ruptures and it enters the water table - many smaller operators wind up after extraction, and leave their tailings for the EPA to deal with, and reincorporate and move on to the next parcel. Again, not just fracking - applies to a lot of stuff where waste is produced.
So, while in a perfect world fracking uses little land, in reality, it uses rather a bit - and is being heavily state subsidised both directly and indirectly.
All of that said, a silver lining might be that wellhead sites end up too polluted to be used for anything but solar farms.
There is an easy way to protect from after-effects: the government must mandate that a specific percentage of revenue be set aside in a trust or other impartial entity (government itself doesn't count, because government funds are always open to be tapped for other purposes). This money is at the end either used by the government to fund restoration if the operator goes belly-up, or refunded to the operator.
Also, until we get some good energy storage solutions, we are just going to run into the same problems of too much electricity during the middle of the day and not enough in the evening.
It also can depend a lot on height (very important for wind turbines)
The process is not as efficient as batteries (or just burning oil products found in the ground), but you get similar energy densities as the normal hydrocarbons. After all, the chemistry is the same.
I just wish we had functioning carbon tax or carbon emission markets. Then the government could just set the price or volume, and the market could figure out the most cost-efficient energy mix to hit the target.
The problem with solar is that solar does not provide on-demand electricity. Solar and batteries can, but that is much more expensive than using oil.
So yes, but the point is somewhat mute since both would indubitably be used in this case.
and Oklahoma, and probably more...
http://www.forbes.com/sites/timworstall/2016/11/18/the-midla...
Plus, we're at a stage where we really need to leave a lot of oil in the ground:
https://www.theguardian.com/environment/2015/jan/07/much-wor...
In WWII the Allies deeply learned the benefits of having vast, safe oil resources in lands untouchable by the enemy. US policy after the war called for encouraging foreign development, especially by the US majors, in order to keep our reserves in tact for the next war.
Put another way, shouldn't news of any new option be good?
It's interesting then that there's such negativity, or at least ambiguity, in this thread. Is it because we've grown more pessimistic at the irresponsibility of society?
I am wondering if anyone will mention "peak oil" here too :)
Just now goverment is about to be thrown because (at least from my somewhat biased understanding) they insist that any extra income from climate taxes on fuel are distributed back to the population in the form of tax breaks or cheaper train tickets :-/
Until then, the money coming in from taxation is going to be used somewhere, and it seems a shame to use it somewhere that doesn't benefit anyone.
When someone develops cheap, plentiful, clean energy at scale, oil will be made redundant. The free market is all about innovation and achieving a competitive advantage.
Maybe you should check your cold war mindset whereby pointing out a limitation of the free market necessarily gets a response about the USSR. As though that were literally the only possible alternative.
To recap:
ori_b: How to disincentivize fossil fuel use? [a current policy goal]
briandear: The free market! All we need is magical energy tech that doesn't exist yet and makes oil obsolete overnight, haha.
me: The free market actually doesn't solve the externality problem.
you: The USSR wasn't perfect either!
This is why I was happy last year when gas taxes were raised and the money fed back to cut taxes and help reduce ticket prices.
We've seen it time and time again; the free market is prone to the same short-sightedness as the rest of the human race. It will continue advancing in exactly the same way until it is either forced to change or eats itself whole, except instead of a depression we will face extinction.
I freely admit for myself - it seems rather a cold and .. Vulcan way of looking at it, but what other choice is there?
It's humanity that is short-sighted ( because of time pressure in decision processes causing things like hyperbolic discounting )and free markets reflect that, as would any thinking other than purest central planning.
We're back to "no straight thing was ever constructed from the crooked timber of humanity." Trying to ... sawmill it straight has a pretty poor track record.
Meanwhile, the hydrocarbon industry sowed the wind by drinking the zero-coupon bond Kool-Aid and will reap the whirlwind.
I'm not sure there's anything more worthless than purely theorical econ, if you assume perfectly spherical cows in a vacuum all economic systems will end up at the same point and it doesn't really matter which one you pick.
> We're back to "no straight thing was ever constructed from the crooked timber of humanity." Trying to ... sawmill it straight has a pretty poor track record.
And yet that's the entire point of political and economic system, if you unmoor the system from the "crooked timber of humanity" it has no application.
It's important to understand the limitations of such things.
The free market cares nothing about externalities unless it's forced to.
> When someone develops cheap, plentiful, clean energy at scale, oil will be made redundant.
Case in point. And you're ignoring oil companies fighting tooth and nail to avoid that situation.
> The free market is all about innovation and achieving a competitive advantage.
The free market is about making money. An excellent to do that is to suppress innovation so that your product remains relevant.
The argument is not whether the goal is reasonable, but whether are money is play. With carbon credits, there certainly are, and a lot of it.
> As for relying on taxpayer-financed investments, that's exactly what tax money is meant to be used for.
Nope, it's exactly what tax money are not meant to be used for. Tax money should be used to protect the citizens, to provide for law enforcement, defense, common infrastructure, taking care of the poor and ill. High-risk venture investment is not what it should be used for. That's what private VCs are for. And if VCs wouldn't want to touch it with ten-foot pole, maybe there's a reason for that.
> Tesla is the golden standard of using government loans efficiently, for the betterment of society, and even paying them back in full ahead of schedule!
Exactly because they profited so much out of "green credits" mandate, effectively taxing owners of all other cars to their advantage. Getting hundreds of millions by government mandate is a pretty sweet deal, especially if their direct competitors have to pay it.
VCs are glorified gamblers. I think you need to take a good look at how advanced science and technology has been done since there is science and technology; you'll quickly realize it always has direct or indirect government backing - because market itself doesn't exactly favour anything more long-term than your next quarterly report.
> effectively taxing owners of all other cars to their advantage
If that was true, I'd actually be pretty happy about it - about time someone made polluters pay for the externalities. But this isn't true, in fact it's government who decides that certain areas of technology (like green energy, green transportation) should be developed further, and offers loans and grants as a way of incentivizing companies to work in those areas.
So instead of gambling with the money from affluent people, given voluntarily, we should gamble with tax money, taken coercively from much poorer people, competing with budgets for welfare, hospitals, schools, etc. - and gamble with that. Brilliant.
> because market itself doesn't exactly favour anything more long-term than your next quarterly report.
It's bullcrap, easily disproven by existance of multiple companies with hundred-year histories. And existance of whole divisions in those companies doing long-term projects.
> If that was true,
What you mean "if"? That's a fact. Easily verifyable. Tesla sells credits to other auto-makers. It has been reported many times and widely known.
Also, I thinking there's enough good momentum towards use of alt energy resources, that we're going the right direction.
What, you thought this community was better? That smart people are smart?
Sorry - smart people are stupid too - their mistakes are just bigger. Who do you think designed the nazi war machine, idiots? Was Speer a dullard?
No. intelligent people believe just as much stupid crap as the next man. They choose to ignore their education in favour of emotion.
Yarr, down she goes. Creatures which dwell under rocks dislike the light.
The scientific consensus is that global warming is real. Climate change is happening now. The debate is about the details: how much warming there will be, how fast, and what the effects will be. This is a normal part of science, and how it's supposed to work. Regardless of the details, at this point, it is pretty clear by now that we are screwed even if we aren't quite sure how badly.
As far as I can tell, the only spin comes from idiot politicians invested in the status quo.
The thing we need is for people to stop countering the change out of their short-term interest in lining their own pockets.
Not until we have an order-of-magnitude breakthrough in battery tech or some new form of storage
Germany raised it's electricity price almost 3 times since it started it's riddiculous renewable energy bs and they still are only ~25% renewables (And they offshored their heavy, energy intensive industry that just packed up and moved to China, to happily pollute even more than before)
There you have it. This is a viable alternative that's safe, and green.
Germany did exactly the wrong thing IMO. They should've expanded their nuclear capacity instead of shutting off perfectly good plans and starting to pollute the world (proxying through China, as you say).
In our world, the one making the choice may not be the one adversely affected. There may be disagreement about the best action. There may be unavoidable risks.
Examples: thermonuclear war, global warming, predatory lending, biological weapons...
Consider a hypothetical doomsday device that could be developed in a garage. The "all options are a net good" principle is just not a very useful one in practice.
We've always been pessimistic about human nature. Advancing technology raises the stakes.
Or some real jobs and money in these dirt poor areas.
> even more greenhouse gasses released into our atmosphere
Any working solution to that has to be global and reduce demand. Refusing to drill American oil mostly means more oil money to Saudis, Putin, Venezuela and other of the worst butchers and oppressors of the world.
The people building it come from out of town, the people who will be making money from the pipeline are its owners, and the people who will be picking up the bill if things go pear-shaped will be the people who live there.
If you have any doubts about that, check out how the Exxon Valdez spill was handled. The oil company makes the profits, and can find all sorts of ways to get out of paying for the damages.
But you fail to mention that we have an oppressive government gearing up in the US too. So perhaps it's best if they help us drain ours.
Are you saying the land owners don't get paid?
Besides, this is primarily about oil wells, not pipelines. I know having oil wells on your land can be very lucrative.
> If you have any doubts about that, check out how the Exxon Valdez spill was handled
That was a one of a kind, history changing event in the arctic ocean decades ago. It's hard to think it's typical of rural Texas in the 2020s.
"The rich bastards will always screw you" is a fine sentiment over a beer in a country bar, but not a great analysis to to base trillion dollar decisions on.
There are three that I can find, one is in east Texas, one is in Maverick County on the Rio Grande, the third and last one I could find is in El Paso. None of these are co-extensive with the find that borders San Angelo and Lubbock.
>No matter how good the profit in the near future might be
Absolutes won't further your goals. Excess capital is what funds companies like Tesla.
Yet everyone acts like it's a monstrous proposition when I state that voting power should be weighted based on age rather than location like it is today. Not that it matters, it's never going to change.
Some rise above it, but human nature is inherently selfish. These 70 year olds have grandchildren too, and they're smart enough to play the politics game so I am sure they understand the overwhelming science on this issue, yet they clearly just don't care. And this election makes clear that we can't rely on the voting base to be well informed.
It's a valid concern that one voter only has to worry about their decisions for the next five years, but the rest have to for the next sixty years. Yet we have no problem with prioritizing based on life expectancy when it comes to organ donor recipients, charging more for life insurance based on age, etc.
Further, voting is already inherently unfair and weighted based on where you live thanks to the electoral college and every state getting two EC votes automatically. Some states result in voters having four times the voting power of people in other states. That and all the people living in guaranteed blue (California) or red (Texas) states effectively have no vote in practice. The same is even more true of senate representation, with two senators for every state, regardless of population.
You look at something like marriage equality, and per Pew research, 71% of millenials approve yet only 38% of the silent generation do. Yet the issue has a serious chance of being reversed due to Trump's inevitable Supreme Court picks. And our generation will be stuck with the fallout of that (and every other social issue that's bound to come up in the future) for likely 40+ years.
Look, I'm aging too. I'll be old soon. What I'm saying will already affect me as well. But this is just a matter of basic fairness.
This administration is going to push us well over the edge on carbon emissions. Our grandchildren and beyond will pay dearly for the harm that's going to be done. Those responsible will be long gone by then. That is not fair.
That's why USA is not a democracy, it's a constitutional republic.
> but the rest have to for the next sixty years.
If you delude yourself with the idea you know what's going to happen in the next 60 years, you overestimate your abilities in such a way it's not even funny.
> You look at something like marriage equality, and per Pew research, 71% of millenials approve yet only 38% of the silent generation do.
So?
> Yet the issue has a serious chance of being reversed due to Trump's inevitable Supreme Court picks.
Based on what? Trump's position is that the issue is settled.
> And our generation will be stuck with the fallout of that (and every other social issue that's bound to come up in the future) for likely 40+ years.
There are a lot of SC decisions that the right didn't like. There are a lot of SC decisions that the left didn't like. Some of them change, some of them don't. I don't see how anything here is new or has anything to do with anything - there always will be some decisions somebody won't like. Trump pick would make SC as balanced as it has ever been - 4 lefty judges, 4 righty judges, one swing vote (Kennedy). Simplifying, of course, but that's what it is.
Moreover, SC running ahead of public consensus is not usually a good idea. The continued abortion struggle is a proof - there obviously wasn't/isn't public consensus, and the issue is still a hot topic.
With gay marriage though, the issue is much closer to public consensus and I predict it will vanish from public discussion (except of course panic propaganda on par with "Republicans are going to recreate slavery!") very soon.
> Look, I'm aging too. I'll be old soon. What I'm saying will already affect me as well. But this is just a matter of basic fairness.
No it's not. Nothing you said has anything to do with "basic fairness".
> This administration is going to push us well over the edge on carbon emissions.
I have no idea what that sentence means. I suspect neither do you.
> Our grandchildren and beyond will pay dearly for the harm that's going to be done.
That's always true - whatever we do, our grandchildren and beyond will have to deal with it. That's kind of by definition.
> Those responsible will be long gone by then. That is not fair.
I agree. I'd like to stick around for the next 1000 or so years, just to see what happens. Unfortunately, so far nobody found a way how. Very unfair!
So maybe people that will be dead in five years shouldn't be deciding social issues for the next sixty.
The silent generation had their lifetime "where men were MEN, women stayed in the kitchen, and gays didn't exist!"
Now it's our turn to have a diverse society where people can be whoever they want to be.
> Based on what? Trump's position is that the issue is settled.
Is Trump going to nominate himself for the Supreme Court, then? It's not up to Trump how his nominations will rule on the issue. But based on endless cases as evidence (5-4 party line splits), a conservative court will reverse Obergefell v Hodges the second it gets the chance.
It's not 100% certain, but the odds are very good if any of Ginsberg, Breyer, or Kennedy are replaced. The odds go up dramatically for two, and I would bet my life savings on it happening within 5-10 years if all three were replaced by Trump's administration.
> There are a lot of SC decisions that the right didn't like.
Correct, because Kennedy was less socially conservative, we managed 5-4 in Obergefell. But on fiscal issues, Citizens united was 5-4, Hobby Lobby was 5-4, gutting the voting rights act was 5-4, etc.
You're deluding yourself if you think the USSC in its current state is anything but extremely hyper-partisan. And yes, that applies to both sides.
> Trump pick would make SC as balanced as it has ever been - 4 lefty judges, 4 righty judges, one swing vote (Kennedy)
Replacing Scalia won't change the dynamic in any way, that is correct. Clinton making that pick could have pushed it to the left, but I'm betting they would've magically confirmed Merrick Garland within the week had the democrats won the white house and senate.
> Moreover, SC running ahead of public consensus is not usually a good idea. The continued abortion struggle is a proof - there obviously wasn't/isn't public consensus, and the issue is still a hot topic.
Yeah, those darn activist judges in Loving v Virginia and Brown v Board of Education. We should always wait for popular opinion to catch up on what's right. /s
> With gay marriage though, the issue is much closer to public consensus and I predict it will vanish from public discussion
I sure hope you're right. But Trump voters made the gamble with my marriage, not theirs.
> No it's not. Nothing you said has anything to do with "basic fairness".
I'll respond with an equally compelling counter to your argument here -- "yeah huh, it does so!"
Anyway, like I said, my opinion means nothing here. There's a snowball's chance in hell of us moving from proportional voting power based on physical location to proportional voting power based on age. Consider it my opinion, and we'll agree to disagree.
> I have no idea what that sentence means. I suspect neither do you.
https://en.wikipedia.org/wiki/Tipping_point_(climatology)
(And no, I'm not a climate scientist. But I trust them a lot more than I trust oil and gas companies trying to protect their profits. See: tobacco companies in the '60s.)
You say it as if you know for sure you won't be dead in five years. It's nice to be a prophet.
> The silent generation had their lifetime "where men were MEN, women stayed in the kitchen, and gays didn't exist!"
Sorry, it's a load of hateful baloney. That generation fought for real civil rights. This generation fights for right not to be served sushi because it's cultural appropriation, not to be subjected to a words of a slightly controversial speaker, because it's "unsafe", and needs coloring books and play-dough to cope with losing an election. That's the generation that seriously claims they feel physically unsafe when somebody challanges their beliefs to the point of being unable to function and needing to be sequestered in a specially designated space, or they will break down completely. Not that's not I am saying about them, that's what they say about themselves. And that's the people claiming to have superior role? Puh-lease. You wanted play-dough, you get play-dough.
> It's not 100% certain, but the odds are very good if any of Ginsberg, Breyer, or Kennedy are replaced.
Keep talking about disenfranchising your opponents, and 4 years of Trump become 8, and you get it for sure.
> Is Trump going to nominate himself for the Supreme Court, then?
Nope, but it is reasonable to think the will nominate somebody who thinks like him. Otherwise all talk about who he's going to nominate is pointless.
> You're deluding yourself if you think the USSC in its current state is anything but extremely hyper-partisan.
And by "extremely hyper-partisan" you mean "not always deciding how I like it."
> But Trump voters made the gamble with my marriage, not theirs.
Votes for Trump had literally nothing to do with gay marriage question. It wasn't an issue in the campaign, and Trump himself is on record saying it's settled. That's what his voters voted for. So really there's no gamble, there's no there there. It's done, it's ok to move on. Using this question in order to criticize Trump could lead to only one outcome - when someone other than Trump arises who thinks it's not settled, he'd look like someone discussing legitimate current issue of the day, not something that was decided and agreed on years ago. Do you really want to fight for that?
> I'll respond with an equally compelling counter to your argument here -- "yeah huh, it does so!"
Except you started with such argument. If you claim you proved Fermat theorem, it's on you to provide the proof. If you claim equal vote is unfair, it's on you to prove so. So far your proof was mostly whining about how old folks ruined everything. That's not a proof, it's just bellyaching.
> https://en.wikipedia.org/wiki/Tipping_point_(climatology)
Nice story. Except nobody knows where it is, what it means and how it works. It's basically a fairy tale. Nobody ever demonstrated any scientific proof of existence of it.
Do you see the hidden assumption here? It is that people vote purely selfishly and don't care about anything that happens after they are dead. As neither of those is remotely true, your proposal makes no sense.
http://www.pewresearch.org/fact-tank/2016/11/09/behind-trump...
I didn't vote for Clinton either, because she's not a liberal. She's a center-right candidate who is further to the right than Obama was (also a center-right candidate.) She was also far worse at giving motivational speeches, and after she and the DNC threw Bernie under the bus, it's not at all surprising she did poorly with younger voters.
[1]http://www.cnn.com/2016/11/10/us/la-nina-arrives/
[2]http://nsidc.org/arcticseaicenews/files/2016/11/Figure2a.png
[3]https://robertscribbler.com/2016/11/18/arctic-storms-sparked...
[4]http://www.businessinsider.com/russian-exploding-permafrost-...
"we might end up with a northern channel in about 4 years if it stays this warm."
A "northern channel"? Do you mean a wider "Northwest Passage" from the Atlantic to the Pacific oceans?
That period lasted millions of years. All the CO2 we are blasting into the atmosphere will be absorbed by the oceans in thousands (or at most ten thousands) of years.
(It's taking a while, because the surface layers of the oceans can only absorb so much, and mixing into the deeper layers takes time.)
I heard somewhere (rumor alert) that jellyfish and other species we don't like to eat are taking over much of the oceans, since we ate most of the fish.
"Southern Fishermen Cash In On Asia's Taste For Jellyfish":
http://www.npr.org/sections/thesalt/2014/01/28/267836803/sou...
"Jelly Balls Harvested by Boone Seafood Darien Georgia":
I wouldn't say it's a rumor. Just a possibility as reported by some researchers. Not a consensus, as far as I know, though there was a book about it summarizing the research.
The mixing I was talking about will take a few thousand years, and I am not sure there's enough air to make a dent in the whole ocean's depths' pH level.
For reference the US consumed 7 billion barrels in 2015[1] so this represents basically nearly 3 years of consumption by the US with no imports at all. And world consumption has been nearly flat for a while.
That said, there is a lot of evidence and history that supports the notion that OPEC only managed to keep oil prices high by threatening member states with retaliation if they under cut the "standard" price. And at the same time, people who were in a position to undercut that price (Venezuela, Russia, Brazil) did so in order to get more foreign currency faster.
It is always a balance of incentives. The market clearly will buy oil at lower prices if given the opportunity.
So one could imagine an act of economic warfare where the oil and gas reserves were developed as quickly as possible and shipped to Europe at a steep discount to cut into the revenues Russia makes selling oil and gas. Thus putting a huge crimp in their economy which makes their military spending cut into their social programs more deeply causing internal unrest and dissatisfaction.
That certainly would not be in the best interests of the companies pulling the oil out of the ground, but it could be in the best interests of the US policy makers.
My original point was that the $900B number was specious, you cannot take the 'estimate of reserves in barrels' x 'the spot price of oil' and call it the 'value'. The quantity is material to the commodity price on the market and so moving it through the market will change the net value.
"The Midland Basin Wolfcamp Shale Is Not Worth $900 Billion - That's Not How Resource Economics Works"
http://www.forbes.com/sites/timworstall/2016/11/18/the-midla...
Edit: I really was being sarcastic. This is the current response towards Facebook and I was trying to demonstrate how silly it is.
https://www.buzzfeed.com/craigsilverman/partisan-fb-pages-an...
https://www.buzzfeed.com/craigsilverman/how-macedonia-became...
I feel like there's something more interesting going on here. Like, more to the point that there's this unstoppable reality that people are reading the stories they find attractive.
Whether the goal of the stories was to game a compensation system, by forming a click-bait content-farming advertisement ring, and whether it was a plan hatched by two-bit amateurs doesn't matter as much as the premise that many, many people are susceptible to preferring a channel that happily conforms to the ideas that seem to please them, without questioning why it always provides them with everything they've always agreed with.
Is the problem that someone out there is creating junk food popcorn stories that people smoke crack and read avidly? Or is the problem that people are smoking crack before they read the news?
Seems like it's an easier solution to hunt down those rotten unethical publishers. But after you get rid of the publishers, you still have this sprawling kingdom of crack addicts, so did anything really get fixed?
Like, certain people prefer to hear that we have this amazing trillion dollar oil field now, whether it's worth that much or not. So that's what gets published.
Meanwhile, the valuation of the huge, bigly oil field is a digression from the more pressing conversation about whether we should ever burn all that oil to begin with.
Like, yeah, wow. Lots of oil. Great. But uh, what about all the smog and that business with the greenhouse gases? Weren't we supposed to start using less oil?
But never mind all that! What gets clicks is the price tag! Run it!
True that the 900B estimate is nothing to do with actual monetary value of the deposit - it's just a size estimate expressed in terms most understandable by common person. Maybe it is misleading - though quantifying "a real lot of oil" to make it comprehensible is not an easy task, and writing "well, there's lots of oil but we have no idea if we can get to it and how much would that cost" is a bad headline. But the correction that 900B figure is just a sort of "car analogy" to estimate the size and not the actual worth is true. It does not mean original article is "fake news" - it's true news, just using one somewhat misleading illustration.
Heck, by this metric CNN, ABC, FOX, CBS, NYT, WP all are fake news outlets. What are the real news then?
The US consumes 19 million barrels a day [2], so (75000 barrels*0.1)/(19bpd)/(365 dpy) = 1 year. All that oil would be burnt in a single year if it was the only source!
[1] Consequently, the recovery factors for shale oil are typically lower than they are for shale gas, ranging from 3 percent to 7 percent of the oil in-place with exceptional cases being as high as 10% or as low as 1 percent. http://www.eia.gov/analysis/studies/worldshalegas/pdf/overvi...
I'd guess that this would lead to instability and possibly war... though it could mean less US involvement in the area, for better or worse.