U.S. oil production to be equal to Russia plus Saudi Arabia by 2025
reuters.com
reuters.com
Fatih Birol made the comment in an interview with Turkey’s state-owned Anadolu news agency.
Shortest article ever?
In all seriousness I don’t think this is the worst thing for any of the three countries. Most new US production is higher cost (fracking), so the drop in market share is at least met with a stronger price floor for all.
It's Reuters. They are a wire service. They report news, not write articles.
I don't think you are being serious. The fact that humans are still exploiting fossil fuels in an accelerated pace is the worst thing could have happen to the earth's climate change.
At the same time, there's a lot of upside to reducing the power of authoritarian oil states that gives dictatorships power to squash democracy and human rights.
"Study after study has found that, while discovering big oil deposits doesn't turn democratic countries with a lot of oil like Norway and Canada authoritarian, authoritarian countries are more likely to stay that way if they've got a ton of oil. Of all the bad things that oil does for countries, this is probably the worst and most robustly demonstrated."
https://www.vox.com/2014/4/10/5601062/oil-curse-explained
Say what you will about the U.S. (and Canada and Norway), but I'd rather a democracy be the biggest producer than an autocracy.
[1] https://www.npr.org/2018/12/11/675343616/often-quiet-on-wars...
[2] https://foreignpolicy.com/2018/11/28/senate-advances-resolut...
That's your opinion. There are people who believe we need to curb the carbon based energy consumption and try to reverse the negative impact of greenhouse gas. Others don't.
> Please explain to me how this means the end of civilization.
Try google? There are loads of resources if you do and pay attention to the topic on HN. We're just scratching the surface of unknowns in how much worse it could get on the path of an accelerated climate change. For example: https://www.washingtonpost.com/news/wonk/wp/2014/02/11/there...
Oh, I said "coastal civilization" and hoping it doesn't get to "entire civilization".
But, it's not a game, and we don't NEED to consume as much oil. By rolling back car mileage standards, we will in fact use MORE, not less, so our reliance grows instead of shrinking. We should be moving to alternatives and funding research at a much higher level. Who cares if someone else is the largest producer of oil, if we no longer need it anyway. By not consuming it, they can't profit from it and they will become less powerful regimes.
When we raise output, OPEC immediately counters and lowers theirs to keep prices the same. It's basically a zero sum game. So we end up drilling more and wasting more, and they save theirs for later since they're not pumping as much. How does that help anything besides cause us to run out faster then they do? Are they having to resort to fracking? Nope. They have plenty still, and when theirs gets low they will start doing more fracking and still be ahead. They just aren't as low as we are so they're not having to scrape the bottom of the barrel like we are. If we don't shift off oil, we will run out before they do and prices will soar, which would really damage our economy. We're delaying the inevitable for short term gain and profit.
... only if one assigns no cost to all the CO2 produced.
Burning a barrel of oil creates about 340 kg CO2, about half of which ends up in the atmosphere (oceans absorb some, etc.) World oil reserves are over a trillion barrels.
Burning 46 billion barrels of oil adds 1 ppm to atmospheric CO2. So those trillion barrels will boost CO2 by over 20 ppm.
Of course, coal is much worse. World coal reserves are around a trillion tons. Burning 5 billion tons of coal raises CO2 by a part per million. Burning all that coal would raise atmospheric CO2 by nearly 180 ppm.
Burning fossil fuels is not the only source of carbon dioxide; there's also deforestation. But leaving as much fossil fuels in the ground as possible, would make achieving desirable CO2 goals that much easier.
The comment i was replying to, says that US producing more oil doesn't mean that more oil will be burnt in total, because others have to produce less in response, and saving oil for later would be better for those who save it.
Even though i wish the second part was true, so that oil prices could go up reducing its usage, i have to admit that unfortunately, selling as much oil as possible while there is a demand for it, is the rational strategy for people who own the oil.
Yes, it would reduce the geopolitical power of KSA and Russia to reduce oil consumption. Reducing the global demand for oil will, in isolation, lower the price and undermine these autocratic regimes.
However, reducing the global demand for oil while simultaneously increasing the supply for oil from the free world will not only lower the price even more, it will also make it easier for the free world to achieve resource independence from autocratic oil states.
Can you explain how you see that upside playing out? You're suggesting some sort of change in oil price, which alters Saudi Arabian politics, which leads to an improvement in human rights? What would that look like exactly?
It's much easier to let the new technology speak for itself than to tell people, "Hey, we know what we're offering is no good, but it's what we've got to do."
Cheap oil will make green energy a smart business choice rather than a sacrifice. The optics on that are way better.
CO2 emissions are cumulative, and there's far more CO2 still sequestered in as-yet-unburned fossil fuels than even the rosiest estimates say our atmosphere could safely absorb. That implies that we're going to have to leave some sizable fraction of our planet's remaining oil in the ground, permanently.
From a long term betterment of the species standpoint, what we really want to be seeing is the global supply of oil starting to taper off and costs per barrel drifting slowly but steadily upward.
The space where oil is competitive is transportation. We are seeing massive gains in efficiency in that space.
Even with electrical generation it's a mixed bag. The recent US fracking boom has also dramatically lowered the prices for natural gas. Natural gas burns cleaner than coal, so to the extent it's pushing us away from coal consumption it's serving to buy us some time. But it's still desequestering carbon, which means we're still going to need to stop well before we run out of available natural gas to burn.
My whole point is that I believe clean energy can stand on its own feet, and that when it does, fossil fuel use will plummet dramatically to almost nothing.
In the meantime, having a plentiful supply of fossil fuels is good for the economy and for national security. The whole point is to have a ton available but never need to use it.
The price floor problem for Russia and Saudi is societal and governmental financial, rather than raw production cost based.
Saudi Arabia now needs ~$95 oil to balance its budget for 2019. That has persistently been moving higher for them. So they're stuck in a death trap on price, where they're one of the few producers that can cut substantially to lift prices which the US producers constantly push down on. So they lose share to the US producers just to try to stay alive on price. Meanwhile it costs ever more money to placate the people of Saudi Arabia (and their population is growing rapidly, tripling since ~1982; a problem Russia of course doesn't have, with a stable population figure). Eventually that formula explodes, something will give in the coming decade.
Russia is in better shape on the price they need. They're a lot more comfortable near $60 than the Saudis. However they're still not able to realistically sustain oil prices lower than what the $40-$50 Permian producers can manage (seeing as the US producers don't have a national budget to support or a social bribe to pay for stability).
Not to be rude, but this is really off the mark. The only reason that we're not still in a cartel market regime of $100 barrels is fracking being invented/discovered and efficiently improved. It cut the price floor well in half.
Fracking is not the cheapest, but it's also not the most expensive (see Canada's oil sands). When you compare fracked WTI (basically the USA-sourced index) to offshore Brent (North Sea, off the coast of UK), the costs are apples to oranges because fracking can be readily tapped at a relative drop of the hat (if prices spike in a short term period), but offshore is a huge multi-million/billion endeavor where you have to depreciate costs over a really long time horizon (same with oil sands, but different tech).
http://www.artberman.com/wp-content/uploads/HGS-11-SEPT-2017...
http://www.artberman.com/alternative-facts-about-opec-u-s-sh...
Cost to finance $17T per year at various interest rates (today's average rate on the US debt is about 2%):
rate, cost($B), % of 2017 Fed income
2%, 340, 15%
3%, 510, 22%
5%, 850, 37%
8%, 1360, 59%
10%, 1700, 74%
As you can see by this chart (sorry about the formatting), the Fed has to keep interest rates low or the US will have little choice but to default on the debt.
I think a lot of people who ponder such things have concluded that the Fed will keep the interest rates low and the US will/are fudge/fudging the inflation numbers so that the Fed can still claim they are hitting their 2% target even though asset prices go through the roof. Who knows what the end game on such a plan will be, but some form of hyperinflation is not out of the question. All those people who are too scared of losing value on investments and just parking their savings in cash, will be very disappointed and confused if that happens.
Muni / local debt is about $1.8 trillion, with around $2 trillion in tax revenue.
The US Government's ratio of tax revenue to debt to be maintained, is about 10x worse than the states. States would have to boost their debt from $1.2t to $12t to match it.
US state and muni debt is also not particularly increasing. There hasn't been a jump in state debt since the great recession. Many of the states have to keep balanced budgets by law, or close to that. Mostly the only time they plunge into the red, is when their budgets explode for a few years during / after a recession (then they go back to trying to balance their budgets, and usually don't do a good job of paying down the recently acquired debt). States obviously don't have the luxury of doing a stealth tax on income & wealth via the currency to meet their funding needs.
Isn't there a bunch of 10 or 30 year treasuries that were issued years ago will be paid out at their historical rates?
Oil independence means the US will never again need to ally with despots to support domestic needs.
IMO this is a huge step forward.
https://www.abqjournal.com/1254493/usgs-permian-oil-gas-rese...
"The USGS said its estimates are for “continuous unconventional oil,” meaning it’s spread throughout the Wolfcamp and Bone Spring formations rather than concentrated in one place. It said the reserves are “undiscovered,” meaning they have yet to be produced, and that they’re “technically recoverable” with current technologies."
Key phrases:
* continuous unconventional
* undiscovered
If you look at the US for example for the first time in 30 years. They've been oil reserves. Oil they save for nation security to turn it into profit before it's worthless.
It makes sense for China, the US, and europe to go electric since they have very little oil. It's a national security thing is what my guess is.
Huh? We've had reserves for practically a century:
https://en.wikipedia.org/wiki/Oil_reserves_in_the_United_Sta...
Also, looks like USA decided that oil is a has-been, otherwise we'd be keeping it in reserves (Gov drilling policies ensure that.) Or maybe just wants to bankrupt OPEC and then stop?
Does the u.s. government pay oil companies to suspended operation?
Realistically, that is more than we're ever likely to need given the ongoing electrification of transportation. It doesn't make sense to "save it" for the future and US crude oil has the advantage that they do not need the profit margins that would allow them to prop up a country with it.
I don't love that we're doing this either, but I like Russia and SA not having money to fuel their escapades.
We could also invest in green energy to the point where the means of capture and storage are isolated to our borders, though I'm doubtful that we can do the same for the manufacture of the products that get us there (batteries, solar panels).
CO₂ is one issue; but pollution of aquifers seems to be overlooked until it will be too late, contaminating many fresh water supplies.
We need radical change, and we need it today, if we want our children to avoid an unprecedented catastrophe. There is currently no political will to make such a change.
[0] https://www.theguardian.com/environment/2018/nov/16/climate-...
We can agree on that, at least. Maybe if you work on the rest of your message it might become more sensible to the average voter?
The US is almost at parity in oil consumption and production. This mean lesser need for oil to be transported from around the world for US consumption. That is a good thing.
"Thing global, buy local".
It's now at 11.6 million. A gain of roughly six million barrels per day.
US crude oil exports will average around two million barrels per day for 2018.
Net difference for 2018 is at about four million barrels per day, of less oil imported versus ~2011 and prior. We're importing a lot less oil than a decade ago, while we're simultaneously at a tipping point where oil consumption is about to begin declining (previously we had already dramatically expanded our economy while using far less oil per inflation adjusted dollar of GDP output; next we'll press downward on actual oil consumption). The US isn't using much more oil than what it was in 1978 approximately (most of the growth is population growth based). The per capita use has declined considerably and is back to about where it was 50 years ago.
There are estimates that a barrel costs anywhere from $30-50 to pump in the Permian. I figure with technology it will be sub $20 in the next year or two. If you remove storage from the cost with additional pipe lines it makes it even more cost effective.