The Brave New World of Ample Oil

Guest post by Tilak Doshi

In the oil universe, the September 14th attack on Saudi Aramco’s oil facilities is comparable to the 9/11 attacks on the twin towers in New York City. Yet, the taking out of half of the Kingdom’s oil output led not to an oil shock but a whimper. Barely two weeks after the brazen attack, oil headlines were once again dominated by fears of over-supply and falling prices amidst a slowing global economy.  Following an initial 20% intra-day price surge after the attack, the benchmark Brent crude oil price quickly retraced its steps back down to pre-attack levels.

The US oil production surge benefits Asia

The shift from a perceived world of oil scarcity to abundance has been brought about in an astonishingly short period of time by the advent of the “fracking” revolution in the US. This combines horizontal drilling and hydraulically-fracturing shale rock with high-pressure liquids to extract “unconventional” oil and gas. In the past decade, US crude oil production more than doubled. By mid-2019, US production was rated at over 12 million b/d, surpassing Russian and Saudi Arabian output as the world’s largest.

Academic studies suggest that global oil prices would have been higher by $10 to $50 per barrel higher if there had not been a fracking boom in the US. Given the scales involved, even with conservative estimates on the price impact, the US upsurge in unconventional oil production has probably led to the biggest transfer of wealth in history. Largely at the cost of reduced oil revenues to OPEC and Russia, benefits have primarily flowed to the world’s largest oil markets in the US, China, India, Japan and South Korea as well as the US unconventional oil producers.

From what was previously expected to be an inevitable growing dependence on Middle Eastern supplies, Asian oil refiners are now spoilt for choice. With Europe’s long-declining oil demand trends, crude oil exports from the Russian Far East, West Africa and Latin America to Asian markets compete with the traditional large exporters of the Middle East. While the majority of Asian crude imports are still sourced in the Middle East, prices are set at the margin by competing crudes from other regions including the US.

Middle East imperatives for economic reform

While the US fracking revolution has benefited Asia’s crude oil importers, it has burdened the Middle East oil producers. The Gulf states had built up extensive welfare states utilizing massive oil revenues to support social security, health, education and government employment programs. The social upheavals since the Arab Spring in 2010 led the Gulf states to further expand the social support programs to maintain their implicit social contracts with their citizens.

In 2015, the fiscal break-even oil price for Saudi Arabia – that is the oil price at which the government budget is balanced — was estimated by the IMF to be $94.25/barrel while the reference “OPEC basket price” had plummeted to $49.50/barrel. The situation since has generally been one of increased government spending, low economic growth and recurring budget deficits

The Gulf Arab states are reaching their limits of tolerance to declining oil export revenues. Low oil prices make the imperative of economic reforms and industrial diversification a central concern for the Gulf “rentier” oil states. The risks of a collapse in the social contract between the ruling regimes and their peoples in the Gulf region may be remote for now. The spectre of growing populations, unemployed youth and persistent budget deficits, however, will increasingly concentrate the minds of its planners and palace advisers.

Oil geopolitics upended

Ever since the historic meeting of Saudi Arabia’s King Abdul Aziz (Ibn Saud) with US President Franklin D. Roosevelt on a warship cruiser in the Suez Canal in 1945, the quid pro quo of the strategic relations between the two nations has been clear: while the Saudis assured the Western world access to its oil exports, the US served as the security umbrella for the Kingdom. With its new-found unconventional oil and gas resources, the US is no more the energy supplicant in this relationship. Saudi Arabia and other Middle East oil producers still constitute the world’s major source of low-cost conventional oil reserves. However, their overwhelming dominance is no longer a defining feature of global oil markets.

In the age of US-led oil abundance, conventional notions of geopolitical risk and perceptions of energy security have been upended. By effectively making the US the “swing” producer in global oil markets, the fracking revolution has weakened the ability of OPEC and Russia to support crude oil prices by restraining output. It may be argued that US strategic interests in the Middle East might wane along with the decline in its energy imports from that region. But it would be a mistake to make too much of America’s reduced dependence on Middle Eastern oil. Containing Islamic terrorism, mitigating the threat of nuclear proliferation and supporting Israel’s defence needs in a volatile region remain strategic foreign policy imperatives.

It is also important to avoid a superficial understanding of “dependence” on oil imports from the Middle East. Oil is sold in fungible global markets, and its price for the large oil importers in Asia is linked to its price everywhere else. Ultimately it does not matter how much of the oil consumed in Asia comes from the Middle East. The price of oil depends on global demand and supply, and the disruption of oil trade flows anywhere affects consumers everywhere. The precepts of “energy security”, founded on defunct Malthusian notions of scarcity, have been debunked. Asia’s oil importers and the Middle East oil producers now face the brave new world of ample competing oil supplies, shifting geopolitics and an American energy renaissance. 

A previous similar post appeared originally at Business Standard

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93 thoughts on “The Brave New World of Ample Oil

  1. The world’s ample oil supply will continue to become ever more ample – the transition of motoring vehicles from gasoline and diesel to electric is well underway and will accelerate when VW starts building EVs that cost under $20,000 , due out in the next year or so. VW Group will completely transition to electrics over the next few years a, as will BMW, Mercedes, GM, etc. All automakers are
    making similar transitions, which means a steady decline in demand for oil that is used for vehicular fuel.

    • @ColMosby “…the transition of motoring vehicles from gasoline and diesel to electric is well underway and will accelerate….” 

      Total number of EVs in the world today (about 3 million) is less than 0.5% of the total vehicles in the world (about 1.3 billion in 2015, the latest number I could find).

      If you gave me a job to do and I had completed less than 0.5% of the work, would you say that the project was “well underway”?

      • Not only are EVs a small percentage of the whole but the total number of vehicles is increasing. In the UK at the end of 2017 we had 37,500,000 vehicles, at the end of 2018 we had 38,200,000 vehicles; an additional 700,000 vehicles but only 65,000 EVs were sold in the UK in 2018. so the percentage of EVs in use actually fell.

      • And that required huge subsidies for the EVs. Every place where those subsidies have been removed, sales collapsed.

        Even with continued subsidies, there is evidence that much of the early sales were to true believers, which results in a leveling off of sales as soon as all the true believers have their first car. (Few EV owners buy a second one.)

    • “By 2030, Volkswagen intends for electric vehicles to comprise 40% of its global sales. Volkswagen doesn’t have much of a choice in deciding whether or not it wants to invest in electric vehicles due to tightening regulations and the aftermath of its Dieselgate scandal.”
      https://www.businessinsider.com/vw-making-huge-bet-on-electric-vehicles-in-next-decade-2019-11

      So VW ISN’t transitioning completely to electrics over the next few years, and they are being forced to invest in electric vehicles.

      Further, IF EVs ever gain significant market share, the reduced demand for gasoline will push its price down, improving the economics of ICE vehicles.

      ColMosby, don’t you realize the problem with playing fast and lose with easily verifiable facts on a site populated with researchers? LOL!

        • If fossil fuels become cheaper due to less demand govts will take up the slack by increasing taxes on the pretense of “fighting climate” . This is why govts, esp. in Europe are complicity. They know taxing “carbon” by one means or another is a great revenue source.

          They don’t believe all the wailing in the streets but if people want to be taxed more heavily for their sins, well they are not going to waste the opportunity.

          • “If fossil fuels become cheaper due to less demand govts will take up the slack by increasing taxes on the pretense of “fighting climate” ”

            But haven’t they learned the risk of that annoying their Yellow Vests?

      • And now reality: consumption of cars in Europe was nicely declining for years, getting car manufacturers nicely under limit of 100g CO2/100km.
        But.
        Everybody knew that NEDC fuel consumption measurement was faulty and real consumption is somewhere else, around 20% more.
        Now newer and more real WLTP fuel consumption measurement is in place and suddenly all cars have 20% higher consumption and CO2.
        Result? There will be penalty applied to manufacturers, averaging 2400 Euros per car because not fulfilling CO2 limits. So people are driving underpowered cars 1.0l etc. which are basically consuming almost same amounts of fuel as stronger and anyway paying premium for not fulfilling some virtual CO2 limit.
        Keep on mind that those CO2 limits are coming from same people saying you that electric cars are taking over and are good to you.
        They just want your money(your time and work), nothing more.

        • I’ve always tried to tell people that buying under-powered cars is false economy as you just have to work the car harder in lower gears, mitigating the smaller engine economy, more wear and tear, less able to cope with extra loads in cold/dark weather, plus they’re bloody horrible and really boring- but then I drive a V8 for my sins….

          • Generally an IC engine is most economical when it is running at peak torque. That is the primary reason for 8 and 10 speed automatic, and now even 8spd manual transmissions. The multiple gears allow the engine to spend more time at it’s most efficient rpm.
            The CVT transmissions are slightly better, but the the conventional automatic 10 speeds is probably the best bet overall. Unlike semitrailer trucks they don’t have to slowly accelerate very heavy loads.

      • The various governments will not allow the retail price of car fuel to go down however low the production costs go. In reality they will use tax to make car fuel ever more expensive in order to make ICE vehicles uncompetitive with the running costs of EV’s.

        Separately as the demand for car fuel reduces many of the fixed costs of production and distribution will remain and will force up the retail price. As demand falls there will be ever fewer gas stations able to supply car fuel profitably on low sales volumes so eventually car fuel will become a specialist item for car vintage collectors. This is exactly what happened when photography went digital – a box of Kodak 5×4 film rapidly doubled in price before production stopped altogether

        • Luke: IMHO ColMosby is actually a UAW mole, giving folks the idea that EV enthusiasts are smiling bobblehead dolls. Nothing but a spring and a big grin between the ears.

    • According to French consultancy Inovev, the ID.3 will appear on the market next spring with prices starting at 40,000 euros ($46,000) after tax, and will be sold across Europe, but not in the U.S.

      “With this new model, Volkswagen aims to become the leading manufacturer of electric cars in terms of sales by 2025. The manufacturer plans to sell 1 million electric vehicles per year between 2025 and 2030, half of which will be sold in China and the other half in Europe and the United States,” Inovev said in a report.

      After launching the Golf-sized ID.3, VW will unveil the ID.1 a couple of years later, an electric iteration of the Up city car, the ID.2 electric Polo sized sector in 2023, and the ID.4, matching the size of the sedan above the Golf in VW’s lineup. The ID.1 will be priced starting at 20,000 euros ($22,800) and the ID.2 30,000 euros ($34,200), according to Inovev.

      LMC Automotive doesn’t think the industry in general or VW in particular can meet these big targets.

      https://www.forbes.com/sites/neilwinton/2019/07/01/volkswagens-ambitious-electric-plans-pose-big-questions/



    • You sound like an ignoramus. There is not enough cobalt and other minerals to even make the number of EV’s that are being targeted.

    • Vote Democrat and you too can enjoy the electrical nirvana.

      A $5000 tax on all internal combustion vehicles will help you go electric.

      But do realize that as people switch to electric cars, declining revenues from taxing gasoline will have to be made up by? … taxing electricity.

      • More likely, EVs will be required to undergo an annual inspection much like the current Smog Check on ICE cars where mileage driven will be collected and taxed accordingly with a 1/12 monthly bill the following year.

        • Sorry Bri.. you’re behind the ‘Progressive’ times.
          Vehicles of ALL types will be required to have a GPS transportation module installed in order to be legal on the road.
          Your vehicle will automatically report its driving data, speed, position, etc. to a government collection network. You’ll be charged a useage fee based on the roads on which you were driving, time of day you were driving them ( congestion fees), rental of roadspace when you aren’t driving ( ie parking) and anything else can be tacked on. You’ll get an electronic bill based on all these things, and a complete record of your movements in the vehicle will have been recorded to produce that bill.

          It’s called Road Pricing. It is evil.

      • Like all addicts they cannot abide a reduction in their supply. Governments have become addicted to transportation fuel taxes (gas taxes) to fund all their agendas, and when the maintenance piper calls his due the coffers are low so they hike the tax yet again.
        They then endorse wide spread replacement of ICE vehicles to electric thereby reducing the fuel tax revenues they so dearly crave.
        Yes, they will come after electric vehicles with monitoring devices which track time and location, from which velocity and distance can be assessed. First commercial vehicles will be assailed, because the public will naively acquiesce. When they mandate it for all private vehicles it will be too late for “Les Gilets Jaunes”.
        There is nothing more desperate than an irrational junkie.

    • The only reason that European car manufacturers are spending billions of Euros to develop electric vehicles is that the EU has produced laws forcing them to do so. The new regulations mean that a car producer has to have a “fleet average” of 95g /Km by 2021 which will be reduced each year until 2030 when the target will be just under 60g/Km. Failure to meet the target will be punished by huge fines – VW is expecting a fine of 1.4 billion Euros in 2021.

      So this is why car manufactures are pushing EV’s so hard – nothing to do with consumer demand. The public will be increasingly forced to buy EV’s -no matter how bad they are as that’s all that will be available. Forget consumer choice – we are rapidly heading for a Soviet style command economy in order to “save the planet”

    • “VW Group will completely transition to electrics over the next few years a, as will BMW, Mercedes, GM, etc.”

      Car companies will do no such thing, else they go out of business. They can produce whatever they want, but if people don’t buy their products they will go bankrupt. Cars aren’t like food; I can’t go long without buying what food is available, but I can defer buying a car for years; car companies can’t survive that kind of delay. When car companies say they are going electric, they mean some percentage of their cars will be EVs, i.e., all electric, and the larger percentage will be hybrids, i.e., ICE with some degree of electric assist.

    • The break through for electric vehicles will happen after the breakthrough for fusion happens.
      Until EV’s can solve the range/recharge problem, they will never be more than toys.

    • Wondering what will power the recharging of the electric vehicles ? Not sure how electric vehicles will do away with fossil fuels…would you enlighten us please ?

  2. “…with high-pressure liquids to extract “unconventional” oil and gas. ”

    Just a technical note, a vital ingredient in the fracturing fluid injection is “proppant” (usually high strength sand particles) to hold open the cracks to keep the oil, water and gas flowing.
    =====

    And more so than oil, LNG exports to Asia are likely to be the real disruptor in the coming decades. Oil derived fuels will be vital for transportation, by it is gas that will do for Asian emissions what it did for the US emissions without any government fiats.

  3. Fracking has upset many apple carts. I was researching a project on building an electric powered pickup truck when I found out about fracking. That project no longer made any sense.

    Fracking should have made many people re-evaluate their stance on renewable energy. Obviously, it didn’t.

    Renewable energy is pointless in the face of our abundant supply of fracked oil and gas. As it was, it was an unpalatable desperation strategy.

    • The GreenSlime went long on Wind and Solar in the first decade of the 21st Century. They can’t turn back now. They’ve been licking their chops at the thought of endless decades of Trillions of dollars in cash flowing in from their schemes; schemes that were sold as sure bets. The Fracking Revolution/Energy Dominance thing wasn’t supposed to happen. Neither was Trump. So the GreenSlime now is spending hundreds of millions of dollars to buy propaganda and politicians to shut it down and put in a lackey in the White House they can control.

    • Commie bob
      If you have any interest, you may want to keep apprised of the evolving CNG market for vehicles.
      Using MOF – Metal Organic Framework – technology, odds are good that CNG will emerge in the coming years.
      Cutting edge technology has pea-sized MOFs with internal surface area of 2 football fields.
      Residental-supplied houses will be able to fuel vehicles right in their driveway.
      Non OEM conversion kits from ICE to CNG are available for a few hundred bucks.
      Not quite there, yet … but closer than people realize.

    • “Fracking has upset many apple carts. I was researching a project on building an electric powered pickup truck when I found out about fracking. That project no longer made any sense.”

      Nevertheless, today (Monday) Tesla is supposedly announcing / unveiling its BEV pickup truck. (I’ve read that its bed is half-sized.)

  4. Well, oil companies are now run by Woke liberals, like Exxon’s Rex Tillerson who relentlessly pushed for policies to curb “climate change” and to liberalize the Boy Scouts to allow gay troup leaders of young boys (um, insane, no?).

    Corporations across this country are now leftists. Corporations are no longer the conservative’s friend, they are the enemy.

    The latest:

    Tillerson (et al) is the Tip of the Cabal to Take Down President Trump: https://noqreport.com/2019/11/10/tillerson-kelly-tip-cabal-nikki-haley-reveals-nefarious-plans/

    Btw, not to gloat, but when the climate change pushing Tillerson was nominated I told people here that that was a HUGE mistake, but most (not all!) here just said “no, no, he’s an oil company executive so he must be good.” NOT SO.

    • I guess that’s why Trump fired Tillerson and Kelly so quickly. They take a new job and the first thing they do is try to undermine their boss, and his boss, the American people who voted him into Office.

      One good thing: Trump doesn’t suffer fools gladly and terminates their employment as soon as he gets a measure of their failed character

  5. The opening sentence compares the recent bombing of Saudi oil production to the atrocity of 9/11.
    Absolutely bizarre.
    The attack upon the Twin Towers was by murderous authoritarians who could not tolerate freedom and prosperity as represented ny NYC and the World Trade Center.
    Previous examples include the “Spanish Fury” when troops from the Spanish Netherlands raided Antwerp, the world’s financial capital in the 1570s and slaughtered 7,000 men, women and children.
    Also around that time there was the St. Barthelomew’s Massacre that destroyed as many as 30,000 lives. Protestants who sought freedom.
    The recent raid was upon some oil production.
    Astonishing to make the comparison.

  6. We’re still using the old political axis (left-right, conservative-liberal). It’s now the deplorables (somewheres) vs the oligarchy (elites, nomenklatura, anywheres). The oligarchs include government, corporations, finance, media, and universities. And they despise the rest of us.

    • Yes, Bear, I think that’s a very good way of putting it!!

      Though .. I’m not 100% sure what you mean by “somewheres” and “anywheres” but I can kind of guess.

      • Somewheres are people who have loyalty to a place: hometown, country, so on. Anywheres are people with no loyalty to a place, that is, they can live anywhere and it is the same to them. Anywheres sneer at Somewheres as provincial hicks (deplorables) because they consider themselves to be sophisticated and enlightened.
        Somewheres have close family bonds. Anywheres find the concept of close family quaint and old fashioned.
        Somewheres believe in duty and personal responsibility . Anywheres believe they have a moral right to rule.

        • “Anywheres believe they have a moral right to rule.”

          Yup. Speaking of “rule,” in response to the total Dem takeover of the previously solid red Virginia I commented on Hotair:

          “The urban zoos are soon going to rule over and subjugate all the rural areas. Unless something is done about it.”

          • Looking at world events, the somewheres seem to be waking up. There will be three possible outcomes that I can see. The first is electing leaders like Donald Trump to get their nations back under control. The second is rural strikes which will starve the cities into submission. The third is total civil war. I don’t know what would happen in most countries but I think the somewheres have an advantage. In the US, because of the 2nd Amendment, the somewheres would win a quick war because they have most of the weapons and the military is populated by somewheres.

  7. The anti-fossil fuel maniacs have the goal of decreasing the world population by at least 6 billion, they are finally starting to talk up “population control” which means death. Take away fossil fuel and it is much easier to starve and freeze people to death in the dark

  8. Electric cars are inferior to Internal Combustion Engine cars in every respect: Heavier, I mean a lot heavier, the battery in the Tesla Model S weighs 1,700 lbs, which also is very hard on the tires and suspensions. More expensive. Shorter range. Takes half a day to refuel unless you have a charging station that costs thousands of dollars. Fires that cannot be put out with water and burn for hours. If you run out of battery, the car becomes a brick, tow it and experience damage, cannot just walk to the gas station and buy a gas can and some gas.

    Sure, none of this will change any time soon as battery technology has seen nothing new in quite a while.

    Looking for an electric pick-up, or an electric 18-wheeler, anytime soon? Good luck. There are electric city delivery trucks, all the same problems, and worse.

    Sooner or later the masses will realize that the weather seems the same to them, and nothing bad is actually happening. Lincoln said it best, “…You cannot fool all of the people all of the time!”

    • EV torque and acceleration is better, and not having to deal with over 90% of the ICE power-train is certainly a plus, but the poor energy density of batteries is a barrier to ever contending for anything other than a rolling virtue-signal of an urban grocery-getter or an exotic sports car.

      • Yes your first statement is true. I suggested this to Tesla’s Engineering Manager, told him that with 1/4 of the battery and a simple 15 Kw motor-generator set with a gas tank, he would have the greatest performance vehicle outside of Formula One or Indy-Cars, which could also be driven cross-country. He said Musk has dictated that Tesla is all-electric.

        Pity…

        • This is because Musk has his eyes set on Mars where there is no oxygen to burn. All his Earthbound ventures are just self-funding R&D efforts to produce useful infrastructure for his planned Mars colonies.

      • Still transmission wear, reduction gears, differentials etc, need OIL and cooling. Torsional wear on bodies, suspension, tyres and brakes, all the same in EV’s, probably more on brakes with elevated vehicle weight, speed and stopping distances. The 2nd law of thermodynamics never fails!

      • ICE powertrain components are very reliable and constantly getting better. They are also not as large a portion of a vehicle as EV proponents seem to believe. Nor do EV propulsion systems just consist of an electric motor and a battery. There is the entire battery system (much more complicated than a gas tank, fuel pump, etc.), the system to connect the battery system to the electric motor and the system to connect the electric motor to the wheels to actually move the vehicle. These are not parts, they are systems, just like the powertrain systems in an ICE vehicle. Plus, as Michael Moon pointed out, the weight of an EV requires a much stronger suspension or the vehicle dynamics and reliability will be a huge issue. I do remember reading somewhere that Tesla suspensions were wearing out quickly and causing maintenance issues.

      • All wires have inductance. The longer the wires and the more tightly wound the coils are, the greater the inductance.
        Inductance slows down the rate at which electrons can flow into a coil. Bigger motors have larger coils and hence larger coils and hence more inductance. Because of this there is a limit to how fast a motor can turn, and the faster a motor turns, the less efficient it is.
        This is why many electric vehicles still require a transmission.

  9. it’s good that the US is the #1 oil producer. As with everything else we lead, it should result in more stability and predictability. Also, taking $$ out of the hands of the OPEC cartel is always good. Fracking has done well.

  10. Thank God. This article is the signal that it safe to go back into oil stocks. Just like the 2003 issue of The Economist that proclaimed the end of the oil age.

  11. Electric vehicles rely on rechargeable battery technology. There is some research into ultracapacitor technology that could offer very rapid re-charging, but the cables necessary to connect every recharging station to the national grid system would be massive. However, ultracapacitors are not available for the foreseeable future. In any case, to change over to electric vehicles, the UK would require 11 new nuclear power stations to be built by 2030 & building that infrastructure has not started.

    OTOH, if there were lightweight, non-rechargeable batteries, capable of powering electric vehicles for 1,500 miles & which could be changed within 90 seconds, one would think that would be a game changer? A new battery would cost about £135 or 9 pence per mile ($173 or 11.5 cents per mile) before respective governments decided to add taxation, which they will, obviously!!!

    What would be done with the exhausted batteries? Recycle them in an aluminium smelter & manufacture new batteries. Such a technology could eliminate most of the need for the 11 nuclear power stations. Is this a pipe dream? I certainly hope not! https://www.metalectrique.com/blank-page

    • It takes more than 90 seconds to change a tire or the current battery in an ICE vehicle. Why do you think this battery pack would be so easy to swap? How large and heavy would it be (what is the energy density of this battery)? I wouldn’t want my wife wrestling the battery pack shown on their website into my vehicle. I would need to repaint the vehicle after every battery swap. Tesla “demonstrated” their quick battery swap to satisfy a government requirement for their subsidy farming, but it was a one-off with a clean new vehicle and vehicle production equipment. The real world of vehicle maintenance is not that clean and simple.

      And I don’t think that having a different form of battery would eliminate the need for energy to move vehicles so those 11 nuclear plants would still be needed by the aluminum smelters. This seems like just another BS ad from a company with no real product but a potential for some special purpose uses.

    • Super/ultra capacitors big enough to run a car are the new fusion although they have been around and working in smaller applications.

      • A super/ultra capacitor capable of powering a vehicle? Hate to be anywhere near it if the thing were to ‘discharge’ accidentally. I’m guessing there’s be very little left of the vehicle and even less of any occupant.

        Cheers

        Max

    • Aluminium-air batteries do have power densities that can come fairly close to gasoline (though they can never reach it). And I agree that it is probably the most power-dense practical battery possible.

      There are however some serious problems. The batteries very nearly double in weight as they discharge (4Al +3O2 -> 2Al2O3 equals 108 + 96 =204). This doesn’t exactly simplify swapping batteries quickly.

      Also converting the aluminium oxide back to aluminium metal takes huge amounts of electrical power, typically 13-15 kWh per kilo of aluminium, always considerably more than you can get out of the battery, since the process is far from 100% efficient in either direction.

      And having an ultracapacitor in a car? On a road? With other vehicles around?

      The problem with a capacitor is that if it is damaged it doesn’t just burn. It explodes. extremely violently, since the entire energy content converts to heat in microseconds. There are lots of capacitor explosions featured on Youtube, and remember that the very biggest of those “supercapacitors” contain about the same amount of electricity as an ordinary AA cell.

  12. For the brave new world of ample oil to continue, I would suggest WTI will need to be priced higher than $55 by 2021 for the abundance to continue. The shale revolution was built on $200B of debt funding a lot of drilling with less than investible returns. WS funded this effort believing oil would quickly return to $100 and the higher prices would solve all problems. That hasn’t happened and WS has lost patience and interest in funding growth for the sake of growth. Shale growth has slowed dramatically this year and with a falling rig count, lower numbers of completions and more laid off Frack crews, looks set to slow even more in 20. The legacy decline rate in the Permian is up to 270K barrels of decline per month. So a higher and higher number of completions are going just to replace legacy declines. None of this should create too much of a problem in 19 or 20 as ample new production comes on line from Brazil, Norway and new production from Guyana. But come 21 and beyond the world will need higher growth rates from US shale. It appears that will require WTI at a yearly average of $70+ to deliver the economic returns needed to support the needed production.

    • Fracking results in lots of oil which results in oil prices dropping. As a result of oil prices dropping oil companies slow down their search for new oil sources.
      Which proves that fracking is a failure.

      Either some people don’t know basic economics, or they are pushing an agenda.

    • This fast “legacy decline” is always touted as a sign of the failure of tight oil, and has been now for about 15 years. Which just shows that the Marcs of this world does not understand how an oil well works. All oil wells start at a high production rate which declines roughly exponentially, that is quickly at first and then slower and slower.

      So a high decline per month indicates that a field is being actively developed with many new wells being opened, while a slow decline equals an old field, with few or no new wells coming on line and a lot of stripper wells with almost constant (but low) production.

  13. If and when we ever get a deal with Iran, and with their recent reported discovery of an oil field with over 50 bbl, increasing their reserves by 1/3, the world will be awash with oil, sending prices plummeting again.

  14. Asia’s oil importers and the Middle East oil producers now face the brave new world of ample competing oil supplies, shifting geopolitics and an American energy renaissance.

    Keep dreaming. Shale growth is projected to stall by 2021:
    https://www.forbes.com/sites/rrapier/2019/11/10/shale-growth-projected-to-stall-by-2021/#4644112235b5

    There is an ongoing decline in shale oil rigs this year:
    https://www.houstonchronicle.com/business/energy/article/U-S-oil-and-gas-rig-count-continues-declines-14820478.php

    Production hasn’t been affected yet because the number of DUC (drilled uncompleted) wells is going down too, but when DUCs get sufficiently low production will slow.

    Looks like everything is going to change again. I wonder about the validity of this article a year from now.

    • The salient point is that the oil is there, ready to be tapped into, even if it means prices need to rise some first. It will have a stabilizing effect on oil prices. That $60, $70, and $80 oil is there, waiting in the wings.

    • One interesting point about the DUCs is that EM and Chevron (which are doing more and more of the drilling in the Permian) don’t generate DUCs like the independents do. They frack every well they drill in short order.

      • Well yes, there is that, but I don’t see it as having a big effect, other than perhaps a gradual upwards push in prices. So maybe $80 oil becomes the norm in 10 years. Big deal.

  15. “Ample” is not descriptive enough for the supply of hydrocarbon fuel. ” Ample” for how long… 50, 100, 800, 1200 years? Time is a big factor for Big energy, (a commodity of massive over supply that requires massive collusion and a level geographic market control that turns liberal, libertarian & corporatism’s globalist philosophy into a dystopic farce). Look for the proven reserves yourselves and do the math you might be astonished. It’s a bad time for massive over supply because superconductive, TEG, nano-material science technology is advancing rapidly…. (look for yourselves but it might cost you big money for the market reports and good info but it is possible to cobble it together with some effot). Once you have numbers you are confident in, do the 10 and 20 year forecast on hydrocarbon demand and supply I thoroughly enjoy burning fuel and am a climate change denier. But I am beginning to think that the over supply of proven hydrocarbon fuel reserves is the organizing story of our era and climate change is nothing more than a propaganda puppet.

    • It also requires humungous amounts of cheap electricity to convert the aluminium oxide back into aluminium. And power density will never equal gasoline. But it is probably the least impracticable type of battery for an EV.

  16. The fracking revolution in the USA has upended the global oil market, but there is one factor overlooked in the article. Fracked oil from both the Permian Basin and Bakken fields is relatively light and sweet (about 0.2 to 0.5% sulfur), compared to over 3% sulfur for Middle Eastern crudes. A lighter crude oil yields more straight-run naphtha (can be refined to gasoline), kerosene, and Diesel fuel, which can be hydrotreated to saleable products, while heavier crudes have lower yields of light products, and refiners must resort to expensive processes such as catalytic cracking, hydrocracking, and coking to convert heavy (high-boiling compounds with large molecules) to saleable fuels. Low-sulfur (sweet) crudes also require less hydrogen consumption to remove sulfur than high-sulfur (sour) crudes.

    This means that refiners may be willing to pay a premium for light, sweet fracked crude oil from the Permian Basin over the price of Middle East crude, because (1) fracked oil is cheaper to refine and produces higher yields of usable products, and (2) refiners in the USA do not need to pay the cost of shipping Middle Eastern crude to the USA. The higher quality and sales price of fracked crude may enable Permian Basin producers to remain profitable, and drill new wells, even as yields decline from existing wells.

    Regardless of future improvements in battery technology, all-electric vehicles have the problem of merely transferring the fuel combustion from one place (the vehicle engine) to another (the power plant used to generate electricity), without actually decreasing fossil fuel consumption or emissions.

    If car manufacturers or governments really want to reduce the emissions from vehicles, they should be promoting hybrid cars and natural-gas-burning vehicles rather than all-electric vehicles. Hybrid cars (which have a gasoline engine and an electric motor that recovers energy used in braking) have much lower fuel consumption than vehicles with conventional gasoline engines, but do not require recharging. Natural-gas passenger cars are impractical, due to safety concerns in handling high-pressure natural gas, but several major cities now use natural-gas-powered buses for public transportation, and the gas tanks are refilled by qualified personnel at a centralized filling station during hours of low bus usage (for example, midnight to 5 AM).

  17. Exxon, Hess and a few others are getting massive finds in Africa. There was a huge find off one of the small Central American countries a year or so ago (it potentially will make the country as wealthy as some of the smaller Emirates countries in the ME ) and Iran has just reported finding a massive new oil field
    https://www.newshub.co.nz/home/world/2019/11/iran-discovers-massive-oil-reserves-worth-potentially-trillions-of-dollars.html

    These are just a few, so tell me again about peak oil.

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