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Discussion: (18 comments)

  1. Benjamin Cole

    Not only that, but the rig count in Texas keeps rising. Investors believe they can make money at these prices.

    Gotta say, I don’t see how the “world is running out of oil” but “U.S. production is not sustainable” arguments mesh.

    If the “world runs out of oil” the price will go up from here–meaning profits for US producers.

    More likely is we enter a very long period of stagnant oil prices, like 1980 to 2000. But Us producers appear able to make money at $80 a barrel, so looks like domestic production will continue to rise….

  2. PeakTrader

    The oil shock of the 2000s was greater than the oil shock in the 1970s, it was a demand shock, rather than a supply shock, because of peak oil, and high oil prices have been sustainable, even in this deep depression. Chart:

    http://inflationdata.com/Inflation/images/charts/Oil/Inflation_Adj_Oil_Prices_Chart.htm

  3. Krishnan

    The fossil fuel warriors missed this when they came to power in 2008 … they did not see what was to come the next few years from fracking – If they really understood developments in technology, they would have anticipated this and passed legislation to throttle fracking (anyway they could have). Now that the genie is out of the bottle – and states like TX and ND and PA and others are enjoying an economic boom, it would be more difficult to stop this –

    I am wondering what the envirowhackos are planning

    1. Now that the genie is out of the bottle – and states like TX and ND and PA and others are enjoying an economic boom, it would be more difficult to stop this –

      I am wondering what the envirowhackos are planning.

      The envirowhackos are not just stupid but hypocritical and corrupt.

      …TIME has learned that between 2007 and 2010 the Sierra Club accepted over $25 million in donations from the gas industry, mostly from Aubrey McClendon, CEO of Chesapeake Energy—one of the biggest gas drilling companies in the U.S. and a firm heavily involved in fracking—to help fund the Club’s Beyond Coal campaign. Though the group ended its relationship with Chesapeake in 2010—and the Club says it turned its back on an additional $30 million in promised donations—the news raises concerns about influence industry may have had on the Sierra Club’s independence and its support of natural gas in the past. It’s also sure to anger ordinary members who’ve been uneasy about the Club’s relationship with corporations. “The chapter groups and volunteers depend on the Club to have their back as they fight pollution from any industry, and we need to be unrestrained in our advocacy,” Michael Brune, the Sierra Club’s executive director since 2010, told me. “The first rule of advocacy is that you shouldn’t take money from industries and companies you’re trying to change.”

      The news of the gas industry donation—which had been kept anonymous until now, as many of Club’s gifts from individuals and corporations are—is particularly worrisome for the Sierra Club because its former executive director Carl Pope had been vocal in supporting natural gas as an alternative to coal. Pope—a lifelong Sierra Club staffer who served as executive director and then chairman before stepping down late last year—accompanied Chesapeake’s McClendon in 2009 on trips promoting the benefits of natural gas over coal, even as millions of dollars of McClendon’s money was flowing to Sierra Club anonymously….

      But in the end the problem for shale gas and oil will not be the environmental movement but the cost of production.

      1. Che is dead

        “Officials of a dozen top Big Green environmental groups contributed more than $14.5 million to congressional and presidential candidates in 2008 and through the second quarter of 2010 with 96 percent of the total going to Democrats, according to an Examiner analysis of federal campaign data.

        The data was compiled from the Federal Election Commission and included only donations by individuals who listed one of the 12 groups as their employer or listed themselves as an officer or director of one or more of the groups. This analysis does not include contributions by individuals who did not list an employer.

        The groups included the Audubon Society, Clean Water Action, Defenders of Wildlife, the Environmental Defense Action Fund, Friends of the Earth, League of Conservation Voters, Natural Resources Defense Council, Nature Conservancy, Ocean Champions, Sierra Club, the Trust for Public Land and the Wilderness Society …

        Six of the dozen collectively received more than $160 million in federal grants and contracts, according to their 2008 or 2007 IRS tax returns …” — Washington Examiner

        Let’s see, they give the Democrats $14.5 million in campaign contributions and the Democrats give them more than $160 million of taxpayers money. And if anyone suggests the obvious, they’re just saving the planet.

        Yeah, environmentalism isn’t just a scam.

        1. Yeah, environmentalism isn’t just a scam.

          Yes, it is but we have to be careful. Many of us are environmentalists because we do care about conservation and the environment. The problem is not the desire to see a better environment around us but the misguided means taken to force people to do what they would not choose to because of some misguided ideas being pushed by corrupt elitists who are more interested in power and social engineering than they are about people and nature. The more money and power these idiots get the worst they become and the more stray from their original goals.

      2. Krishnan

        What the envirowhackos want is money/resources that THEY can enjoy while working to throttle development (in general) – No surprise there. Nothing will surprise me – I would guess that soon someone from the “coal” industry will fund them to fight natural gas/fracking because “coal is environmentally more friendly and fracking causes problems with water supply” (or something like that) – And we have yet to hear from the nuclear whackos – they may be busy collecting money from the nuclear industry …

      3. Delmar Jackson

        In the 1990s, the Club came across a deep-pocketed donor with an interest in the environment, one David Gelbaum, a Wall Street investor who had made hundreds of millions of dollars. He was willing to be a generous funder to the Sierra Club, but with one stipulation. As he was quoted in a Los Angeles Times article (“The Man behind the Land,” 10/27/04), “I did tell [Sierra Club Executive Director] Carl Pope in 1994 or 1995 that if they ever came out anti-immigration, they would never get a dollar from me.”

        That restriction posed a problem, since existing Sierra Club policy dating from the 1960s recommended a steady-state population for the United States and recognized immigration’s being a major cause of increasing human numbers. In 1969 the organization expressed hope that American population could be stabilized by 1980. In 1970 the Club endorsed a resolution from Zero Population Growth (later renamed “Population Connection”) that included support for actions that would “bring about the stabilization of the population first of the United States and then of the world.” In 1989 a Sierra Club policy specifically noted that “Immigration to the U.S. should be no greater than that which will permit achievement of population stabilization in the U.S.”

        But with big money beckoning in return for the disavowal of the clear connection of environmental harm with excessive immigration and population growth, Sierra leadership folded like a cheap lawn chair. In 1996, the Club rescinded its previous population policies that could be seen as related to immigration levels. The elite management team probably rationalized that enormous environmental good could be done with great riches, and therefore merited dispensing with integrity about an increasingly controversial topic.

        And the Club was very well rewarded indeed by the generous David Gelbaum; the organization received over $100 million dollars in a couple donations over the years 2000 and 2001. In any normal circumstance, such a transaction would be considered a bribe and roundly condemned. But the Club leadership kept the source of the new riches secret, until the 2004 LA Times article revealed Gelbaum as the sugar daddy. Even after the dots were connected, however, the liberal press couldn’t bring itself to recognize an Enron-sized environmentalism scandal of an iconic organization.

        Brenda walker
        http://www.thesocialcontract.com/artman2/publish/tsc_21_3/tsc-21-3-walker-sierra-club.shtml

        1. Vangel

          In 1996, the Club rescinded its previous population policies that could be seen as related to immigration levels.

          Do you mean to say that the Club should have stuck with the failed Ehrlich predictions even after they were shown to be full of crap? It seems to me that recognizing an error should never be a problem for these idiots. My problem is that they do not do enough of that because their ideology gets in the way.

  4. “Texas created 17% of US payroll jobs over the last year, even though the state represents only 8.2% of the US population.”

    “oil is an energy source of the past.”

    ~Barack Obama

    1. Krishnan

      Never, EVER underestimate the fury of those that continue to be proven wrong – and worse. You ain’t seen nothing yet – when it comes to the “war on oil”. Fossil Fuels that are enabling the world’s poorest to live a decent life is just too much for the regressives. I remember a talk by Matt Ridley where he has a slide showing how different (“green”) the Dominican Republic is compared to Haiti (because of the use of fossil fuels).

      Fossil Fuel whackos consider the use of any source of energy by anyone else as evil (they used to talk about replacing coal with gas – and when that has happened they changed the goal posts) – If we can find a cheaper way to capture the sun’s energy, they will find something wrong with that also – It is important to really appreciate their philosophy – driven by the belief that humans are evil because we exist (except they and theirs)

  5. LibDespiser

    You mean Liberals talking points regarding Red States taking more from the Federal Govt than they pay in is total BS? Tell me it aint so…

  6. Note that the chart doesn’t show Texas oil production peaked around 1970 at levels considerably higher than today’s level. Going after expensive to get, energy intensive, lower energy containing shale oil (and deep water Gulf of Mexico) shows the low hanging fruit has been taken. See http://www.shalebubble.org for a geological perspective — not as much fun as a political rant, but it does have the advantage of looking at physical reality.

    Fracked wells don’t last as long as conventional oil and gas drilling wells. Welcome to the Peak Energy plateau, imposed by physical limits.

    1. Fracked wells don’t last as long as conventional oil and gas drilling wells. Welcome to the Peak Energy plateau, imposed by physical limits.

      This is something that Mark and the cheerleaders have ignored. All they look at are the production levels because they assume that production would not take place if there were little profit to be made. If they actually looked at the numbers coming from the shale players they would find that there are no profits being made by the producers. The beneficiaries of all of the activity are workers, consumers, and taxing agencies, not the companies themselves.

  7. The output is about half what it was 40 in the sixties and the cost has increased to $90 instead of three or four.

    Also it is usual to start the Y axis of charts like this at zero, not 800,000. This is dishonest reporting.

  8. Vangel, do you really thing oil and gas companies are investing these countless billions in the Bakken, the Eagle Ford, the Barnett, and the Marcellus and NOT MAKING MONEY?? Don’t you think these companies know where to get a positive return. Where did this silly myth of “no return for the companies” come from? That’s insane.

    1. Vangel

      Vangel, do you really thing oil and gas companies are investing these countless billions in the Bakken, the Eagle Ford, the Barnett, and the Marcellus and NOT MAKING MONEY?? Don’t you think these companies know where to get a positive return. Where did this silly myth of “no return for the companies” come from? That’s insane.

      What I ‘think’ does not matter. What matters is what is being reported in the SEC filings. And they show negative cash flows and exploding debt on the balance sheets. That would not be a problem if the production data supported the depreciation cost estimates that are being used but it does not. The data shows that depreciation costs are underestimated and that the producers will have to write down their balance sheet some time in the future.

      You have to keep in mind that the large majors do not need to make a profit from shale operations because they are looking for a way to hide their reserve depletion problem. The new SEC rules and the ability to use a 6:1 BTU based conversion factor allows that to happen.

  9. Kerry Hancock

    Life around the Permian Basin and Eagle Ford is crazy. Complete shortage of rooms and restaurant space. It’s great!!!! A new boom is happening just west of Abilene on the Cline Shale. Oddly’ our local nuclear plant is suffering due to low natural gas prices. (So are my Barnett shale royalties)

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