AEIdeas

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Discussion: (29 comments)

  1. MacDaddyWatch

    Drill baby, drill!!!

  2. Citizen B.

    Texas oil and natural gas production have greatly increased tax revenue for the state.

    For Fiscal Year 2012 these stunning figures were reported as increases from 2011:

    Natural gas production tax collection up 38.3%.
    Oil production tax collection up 42.8%.

    1. Citizen B.

      More economic growth resulting in more taxes collected.

      Hmm.

  3. Not to worry, there are still people out there lobbying for wind & solar powere though…

    1. There is nothing wrong with wind and solar in Hi for example, because there the electricty is generated from burning oil. The kwh rate ranges from $.30 up depending on the island you are on. There wind and solar make sense, particularly if you put the solar on the leward sides of the islands where the sun shines a lot. Likewise for many Caribbean islands. In the lower 48, it does depend, but if you use gas as a backing fuel for them it lengthens the time till you exhaust the natural gas (I know its over a century now but it will come eventually).

      1. lyle says: “The kwh rate ranges from $.30 up depending on the island you are on“…

        Is that with or without the taxpayer funded subsidy?

  4. Bob Wright

    This is just more evidence that the U.S. economy does what it does in spite of the federal government, not because of it.

    While private industry has the U.S. in the middle of an energy revolution which could leads to an industrial revolution, many in the chattering class and the political class are actively trying to subvert this effort.

  5. As usual, there are problems with what you are saying.

    First of all, the natural gas is not cheap. If you look at all of the costs you are looking at $7.50 or more to break even in your average shale formation. Yes, there are very profitable wells in a few of the core areas but those are too few to make a difference.

    Second, the shale gas experiment has destroyed a great deal of capital and can hardly be called an economic success for the producers who sell their output for less than it costs to get it out of the ground.

      1. Surging energy production in North America is prompting billions of dollars of investment next year on pipelines and other infrastructure projects to move oil and gas around the continent….

        This is nice but it does not deal with the fact that shale gas is not economic. It also does not matter because billions of dollars were spent on land and house construction after 2005 even though there were clear signs that the bubble was popping. It is easy to fool yourself, especially when you are using other people’s money and you get rewarded for the extra responsibility that comes from new capital investment.

        What I see that the WSJ does not cover is the inability of shale gas companies to use hedges to help reduce their risks. If you look at the futures market you are looking at $5 gas contracts nearly five years in the future. How exactly will the producers be able to survive selling their production for less than $4 while their costs are over $7.50 once the depreciation costs are properly accounted for?

        And just how important is a new pipeline construction when Cushing capacity is running out because real demand has fallen off a cliff? Do you really think that you can export shale oil and get Brent prices some time in the next few years? And even if you could how would you deal with the depletion problem that makes shale oil uneconomic even at current Brent prices? And what happens when real prices collapse once the next crisis hits demand? While I could see the shale producers benefitting from a collapse in the currency they will see their production costs explode as their suppliers are wiped out and their customers can no longer afford as much of the product that they sell? The WSJ was hyping the housing bubble just as it was talking up the tech bubble. Given its track record I would not put much stock into a puff piece that does not look at the economics of production.

        1. This is nice but it does not deal with the fact that shale gas is not economic. It also does not matter because billions of dollars were spent on land and house construction after 2005 even though there were clear signs that the bubble was popping. It is easy to fool yourself, especially when you are using other people’s money and you get rewarded for the extra responsibility that comes from new capital investment“…

          Well vangel your point of view isn’t selling to these people…

          These are using their money and money ‘voluntarily‘ given for investment purposes for these projects…

          Apparently your numbers seemingly exist only for you and not folks actually making the gamble…

          1. Well vangel your point of view isn’t selling to these people…

            These are using their money and money ‘voluntarily‘ given for investment purposes for these projects…

            Are they using their own money? If you look at the 10-K filings you notice that much of the capital expenditure in any given year is being financed by borrowing. And let me note that it is easy to get equity financing if you have a bubble because we saw that in the hyped up tech and housing booms even as many of us were correctly pointing out that they were bubbles that would end in tears.

            There is no evidence that shale gas is economic or likely to be economic over the next few years. And when you look at the decline rates for liquids producing wells in the Bakken and other shale formations you find that the only way to keep production from falling is to invest massive amounts of new capital in wells that have about a seven year life and do not produce as much oil as has been estimated just as the shale gas wells did not come close to meeting the EUR projections. That means that there have to be write downs of assets coming our way and that means that most shareholders would be wiped out.

            Ironically, some production may be able to continue after bankruptcy wipes out the debt from the company balance sheets and the services companies are forced to take big losses on past due contracts. With all the new bankruptcies the cost may fall to a low enough point that some of the companies in some of the areas can make a small profit for a few years. That is the optimistic scenario.

            Apparently your numbers seemingly exist only for you and not folks actually making the gamble…

            Not at all. Look at any of the 10-K filings and show me where you see positive cash flows from operations? Show me any primary shale company that does not have a funding gap and then we have an argument. From what I see the shale promoters are citing hype and narrative. I prefer real numbers and facts and those do not show that shale is economic. Yes, natural gas production from shale has exploded but that has been caused by capital destruction. That is not a way to prosperity. It is a way to poverty.

            Haven’t you found it interesting that Mark is not bothering to look at the economics as you would expect an economics professor to do? He can hide behind cover by claiming that the production numbers he cites are coming from the EIA and accurate but there is no dispute on that front. The numbers that he cites actually show very low productivity for wells that are very expensive. Even a back-of-the-envelope calculation or two should be enough to interest a curious individual into exploring the underlying economics of shale production yet he stays away. He keeps citing, as you do, the narratives while ignoring the analysts who point to the actual production data and the reported funding gaps.

          2. Are they using their own money? If you look at the 10-K filings you notice that much of the capital expenditure in any given year is being financed by borrowing“…

            So what vangel? It isn’t extorted money such as the federal government spends its ‘green socialist venture‘ crapola…

            There is no evidence that shale gas is economic or likely to be economic over the next few years“….

            Yet there’s ‘NO‘ evidence that you have a clue on this…

            Neither do I but apparently people who’ve already made money in this game over the last several decades think there’s something to it all…

            Not at all. Look at any of the 10-K filings and show me where you see positive cash flows from operations?“…

            LOL! Your faith in the 10-K filings is truly touching…

          3. So what vangel? It isn’t extorted money such as the federal government spends its ‘green socialist venture‘ crapola…

            I never said that it was extorted money. The shale investors are going into shale with their eyes open while they refuse to look at the fundamentals just as the tech and housing bubble investors did before them. (I suspect that many are the same people who got into tech and housing hoping to make an easy gain.)

            Yet there’s ‘NO‘ evidence that you have a clue on this…

            Neither do I but apparently people who’ve already made money in this game over the last several decades think there’s something to it all…

            But there is evidence in the SEC filings. We KNOW that you can’t make money in shale gas at anywhere under $5 per Mcf and that number is only good for some of the better areas. We have heard CEOs tell us about what they need to break even and see that the prices going out for the next five years are below those numbers. That makes all of the shale gas investment worthless for investors.

            As for the people who have made money, who are they? Yes, workers in the sector have made a lot of money. The oil services companies and their suppliers have made a lot of money. (So far but face huge problems if the funding gaps cannot be closed.) The states have made a lot of money as have landowners who sold leases. Stock flippers, promoters, and company managers have made a lot of money. But there have been no real money made from operations even if you ignore the accounting tricks related to the unrealistic EURs. And that is what the retail investor will depend on; sustainable real profits made from operations. You have no evidence that those exist.

            LOL! Your faith in the 10-K filings is truly touching…

            Actually, I am fully aware that companies can use accounting tricks to make their operations look better, which is why I do not really believe much in the way of what is being stated on the income statement. But the balance sheet and cash flow accounting is tougher to play with, particularly if you are the type who actually reads the notes in the audited statements. When I look at the typical shale company filing I see Nortel yet again. Like Nortel management did, the management of the shale companies that I have looked at are underestimating the real costs by playing around with the depreciation costs. And like Nortel, the shale companies have yet to make a true profit even though the energy sector pricing has boomed in the past decade. I have found it much more useful to look at the SEC filings and think for myself than to rely on narratives from promoters. But if you want to take the ‘it’s different this time’ approach good luck to you.

          4. The shale investors are going into shale with their eyes open while they refuse to look at the fundamentals just as the tech and housing bubble investors did before them“…

            So you claim vangel but I’m guessing they’re all betting on their own previous track records…

            But there is evidence in the SEC filings“…

            LOL! How touching, still have faith in government mandated paperwork…

            We KNOW that you can’t make money in shale gas at anywhere under $5 per Mcf and that number is only good for some of the better areas“…

            We know nothing of a sort… That’s your claim (one I wouldn’t have normally quibbled with) but apparently others think differently…

            We have heard CEOs tell us about what they need to break even and see that the prices going out for the next five years are below those numbers“…

            Do you believe what you see and hear in advertising too?

            But there have been no real money made from operations even if you ignore the accounting tricks related to the unrealistic EURs. And that is what the retail investor will depend on; sustainable real profits made from operations. You have no evidence that those exist“…

            Never claimed I had any evidence and as for the retail investor, let them make their own decisions, its their money after all…

            But the balance sheet and cash flow accounting is tougher to play with, particularly if you are the type who actually reads the notes in the audited statements“…

            No it isn’t…

            Its merely paper (or electrons)…

            But if you want to take the ‘it’s different this time’ approach good luck to you“…

            I’m not taking any approach but I can’t see carrying on like you do about it…

            Instead I occassionally peruse the ECONBROWSER for a sober word or two on the subject…

          5. So you claim vangel but I’m guessing they’re all betting on their own previous track records…

            Not at all. I am pointing out that human nature does not change easily. Most retail investors like the safety of the crowd and would rather seek a manufactured ‘consensus’ rather than think for themselves. And most industry insiders will spend all the money that they can raise because that is how they get the big bonuses and keep their jobs. If shale company managers recognized the higher depreciation costs and reduced their EURs to conform with what the production data is showing we would see most companies shut down their operations and those managers would be on the streets looking for work. Given the incentives it is easy to explain the activities that are being observed in the sector.

            LOL! How touching, still have faith in government mandated paperwork…

            It is one place where the companies have to disclose the type of information that investors can use to figure out what is going on. If you had read the filings of Enron, Nortel, or Lucent you would also have figured out that there was not much of value there long before the companies collapsed and shareholders were wiped out.

            We know nothing of a sort… That’s your claim (one I wouldn’t have normally quibbled with) but apparently others think differently…

            But we do. As I pointed out, no matter which of the companies that operate large sized shale areas you look at, all you see are projects that cannot self finance. That is the same thing that we saw during the tech bubble when companies needed new loans and new equity to finance their operations before they imploded and shut down.

            Do you believe what you see and hear in advertising too?

            No. I leave that to you. During the calls CEOs have little leeway because they can be sued for misrepresenting the position of the company. That is why I pay attention and listen carefully about issues that are important. It sure beats getting information from industry purchased ‘independent reports’ and analysts who are selling the shares.

            No it isn’t…

            Its merely paper (or electrons)…

            That is not important. What is important is the fact that the statements show an explosion of debt and negative cash flows that require either new borrowing or shareholder dilution. When investing we have to deal with the facts as they are, not narratives that we wish were true.

            I’m not taking any approach but I can’t see carrying on like you do about it…

            Instead I occassionally peruse the ECONBROWSER for a sober word or two on the subject…

            LOL…Hamilton uses the Maugeri report and goes from there. But anyone who understands the sector can figure out the problems with the Maugeri assumptions.

            http://www.theoildrum.com/node/9495

            Let me point to a few of the important issues brought up in the argument against the Maugeri report.

            First, in the link below you can see the problem with the very prolific Elm Coulee field in the Bakken. After years of production increases, the field went into a steep decline and now produces little oil. That is not the problem though because all fields have a natural production life and eventually dry up. The problem is the assumption of ultimate recovery made by the operators. The amount of oil produced by the field is going to be around 30% lower than was assumed. That means that the depreciation costs were lower than they should have been and that eventually we would have to see a proper reconciliation by the accountants. The problem for current shale investors is that the production data indicates that the ultimate recovery will be half of what was assumed for Elm Coulee, which means that the depreciation costs should be significantly higher than they are. (And note that the Elm Coulee was dolomite and that much of the Bakken production is in limestone. The average shale formations are less productive.)

            http://www.theoildrum.com/files/JL_Maugeri_17_ElmCoulee.jpg

            The other problem is the very low well productivity. Even though there has been an explosion of drilling, the Bakken is showing less than 150 bpd for the average producing well. The depletion rate is too high and there is no way to get production levels to the optimistic forecasts without a new wave of capital investment even though the shale producers cannot self finance. That means a new explosion of borrowing and new pressures on the oil services companies at a time when many are nervous about the funding gaps that their customers are experiencing.

            http://www.theoildrum.com/files/JL_Maugeri_21_BakkenMonthly.jpg

            I end with a typical decline curve.

            http://www.theoildrum.com/files/7%20typical%20Bakken%20production_2.png

            And with a bit of serious analysis.

            http://seekingalpha.com/instablog/121744-mark-anthony/1361591-the-real-economy-of-bakken-shale-wells-of-continental-resources

          6. Still missing the boat, eh vangel?

            Not at all. I am pointing out that human nature does not change easily. Most retail investors like the safety of the crowd and would rather seek a manufactured ‘consensus’ rather than think for themselves”…

            So what? They (those retail investors) are NOT being forced to invest yet, are they?

            And most industry insiders will spend all the money that they can raise because that is how they get the big bonuses and keep their jobs“…

            And that’s problematic why?

            If shale company managers recognized the higher depreciation costs and reduced their EURs to conform with what the production data is showing we would see most companies shut down their operations and those managers would be on the streets looking for work“…

            Yeah, so YOU claim but even if it what you’re saying is factual, so what?

            If you had read the filings of Enron, Nortel, or Lucent you would also have figured out that there was not much of value there long before the companies collapsed and shareholders were wiped out“…

            Knew that before I ever picked up an earnings report…

            I use the ‘one sentence‘ rule…

            During the calls CEOs have little leeway because they can be sued for misrepresenting the position of the company“…

            Yes they can be but that costs money and one needs inside information to make the law suit stick…

            That is not important. What is important is the fact that the statements show an explosion of debt and negative cash flows that require either new borrowing or shareholder dilution“…

            Again, so what?

            Hamilton uses the Maugeri report and goes from there. But anyone who understands the sector can figure out the problems with the Maugeri assumptions“…

            Well look at you referencing the Oil Drum, what’s next? Wikipedia?

            First, in the link below you can see the problem with the very prolific Elm Coulee field in the Bakken“…

            No vangel, that’s YOUR problem…

            The other problem is the very low well productivity. Even though there has been an explosion of drilling, the Bakken is showing less than 150 bpd for the average producing well“…

            Again that’s YOUR problem apparently…

            vangel everyone has an opinion on this and your’s may be quite valid but it isn’t the only one…

            Try this one on for size: FRIDAY, MAY 11, 2012
            Bakken Growth

            Here is the cornucopian mystery of the Bakken shale revealed. When one looks at the production of the Bakken fields, the growth seems remarkable (plotted against data from the North Dakota Dept.of Mineral Resources)‘…

            vangel what this gent wants is more data and he’s of the opinion that no one seems to have enough data to make a good guesstimate: ‘This is my plea: What we need from the Dept. of Mineral Resources of NoDak.gov is a complete set of data from every well, not the rolled up info. Even with the rolled up info, you can do some decent analysis, but why not get everything?‘…

            The bottom line vange at least as far as I’m concerned is that if one can’t afford to lose it, then don’t bet it…

          7. So what? They (those retail investors) are NOT being forced to invest yet, are they?

            This is not the debate. The debate is about the economics of shale production. You claim that there is no problem and that shale is a good investment. I claim that what we have is an unsustainable bubble just like we had in housing. Individual investors have the choice of thinking for themselves or listening to the hype. Just as they did with tech and housing they seem to have chosen the latter. I see no problem with that as long as they are not being led into making their bets by use of fraud, which is what I think that we have when you get people in the media and the analysts ignore the financials and go along with the industry sponsored reports and questionable government claims about exploitable reserves.

            “And most industry insiders will spend all the money that they can raise because that is how they get the big bonuses and keep their jobs“…

            And that’s problematic why?

            We call them malivestments. They distort the economy and create bubbles that have to be liquidated at a huge loss to investors and savers. It is problematic the say way that the housing malinvstments were problematic.

            Yeah, so YOU claim but even if it what you’re saying is factual, so what?

            Unless you look at the actual depreciation costs it is hard to make a reasonable investment decision. The Nortel investors who did not look at depreciation and thought the write-offs were one off items found out the answer to the so what question. I suspect that if you are a shale investor who satays the course you will find the answer as well.

            Knew that before I ever picked up an earnings report…

            I use the ‘one sentence‘ rule…

            Funny how people who fall for bubbles always claim to have known about the last ones.

            Yes they can be but that costs money and one needs inside information to make the law suit stick…

            Not true. All one needs is an outright lie, which is why the conference calls are a lot more sombre, cautious, and full of qualifying statements than the claims made by the press.

            “That is not important. What is important is the fact that the statements show an explosion of debt and negative cash flows that require either new borrowing or shareholder dilution“…

            Again, so what?

            Too much debt and negative cash flows leads to insolvency.

            Well look at you referencing the Oil Drum, what’s next? Wikipedia?

            What part of the analysis did you have a problem with again?

            “First, in the link below you can see the problem with the very prolific Elm Coulee field in the Bakken“…

            No vangel, that’s YOUR problem…

            ??? We see the same production profiles in the rest of the Bakken that we saw in the Elm Coulee. The difference is that the Elm Coulee was profitable. And while some profits can be generated in the limestone part of the Bakken the shale formation seems to be a lost cause if you want to make a profit from operations. The production peak is within spitting distance and the decline from there is a steep one. That is a problem for the optimists, not those that rely on facts for their analysis.

            “The other problem is the very low well productivity. Even though there has been an explosion of drilling, the Bakken is showing less than 150 bpd for the average producing well“…

            Again that’s YOUR problem apparently…

            vangel everyone has an opinion on this and your’s may be quite valid but it isn’t the only one…

            I think that you do not seem to understand how things work. If you spend $10 million on a well and have to make royalty payments, spend on infrastructure, pay financing costs, overheads, etc., you better generate more cash from the sales than you spent on generating the oil and gas. The fact that after billions of new investment you are seeing less than 150 bpd means that the depletion rates are a much bigger problem than the EURs indicate. That means insolvency or massive asset sales that wipe away most investors.

            vangel what this gent wants is more data and he’s of the opinion that no one seems to have enough data to make a good guesstimate: ‘This is my plea: What we need from the Dept. of Mineral Resources of NoDak.gov is a complete set of data from every well, not the rolled up info. Even with the rolled up info, you can do some decent analysis, but why not get everything?‘…

            I have already provided links to studies that used actual well data to determine that the EURs are overstated by close to 100%. Since those reports came out the companies and the EIA have been careful NOT to provide the data that makes similar analysis possible for the Bakken, Eagle Ford, and other formations. The data is there but the gentleman has to find it like the other analysts did. Still, we have analysis on individual wells. Here is one I cited previously. It shows a major problem with depletion and indicates that even the ‘better’ wells cited in company presentations may not be economic or marginally economic at best.

            The bottom line vange at least as far as I’m concerned is that if one can’t afford to lose it, then don’t bet it…

            I am talking about rational investing by using the known facts and as much data as possible. You are talking about ignoring the facts and treating investments as a trip to Vegas. The two are not the same activity.

          8. This is not the debate. The debate is about the economics of shale production“…

            The debate is NOT about the economics of shale production vangel, that will take care of itself…

            The debate is you thinking you have the answers, you don’t…

            You claim that there is no problem and that shale is a good investment“…

            There is no problem vangel and I never said it was a good investment… That’s something you dreamt up…

            I see no problem with that as long as they are not being led into making their bets by use of fraud“…

            What do you care if some are using fraud, its not your money, right?

            Caveat emptor…

            We call them malivestments. They distort the economy and create bubbles that have to be liquidated at a huge loss to investors and savers“…

            You and your fellow travelers might think that but bubbles have always been around of one sort or another…

            It is problematic the say way that the housing malinvstments were problematic“…

            Wrong again vangel, what was problematic was government interference in the housing market in the first place…

            Funny how people who fall for bubbles always claim to have known about the last ones“…

            I’ve yet to fall for one that wasn’t due to government interference…

            Not true. All one needs is an outright lie, which is why the conference calls are a lot more sombre, cautious, and full of qualifying statements than the claims made by the press“…

            Oh man! That line is so full of it I don’t even no where to begin…

            What part of the analysis did you have a problem with again?“…

            The source…

            We see the same production profiles in the rest of the Bakken that we saw in the Elm Coulee“…

            Who’s we?

            I think that you do not seem to understand how things work“…

            I think you’re atttempting to make more of your paltry knowledge of the field lnto something it isn’t…

            I am talking about rational investing by using the known facts and as much data as possible“…

            No you’re not… You’re talking questionable investment using questionable vangel abilities to make the investment assessment…

          9. The debate is NOT about the economics of shale production vangel, that will take care of itself…

            The debate is you thinking you have the answers, you don’t…

            LOL…Is that what the debate is about? If it is you will be only debating yourself. The issue is economics of production and on that front the SEC filings are very clear that shale projects outside of a few small areas are not self financing.

            There is no problem vangel and I never said it was a good investment… That’s something you dreamt up…

            Since you are arguing and I am saying that it is not economic and that we have a bubble in shale oil and gas you clearly are saying that I am wrong and that shale is economic. That would make it a good investment in your view.

            What do you care if some are using fraud, its not your money, right?

            Caveat emptor…

            I do have a problem with fraud as do most people as well as the courts. Are you saying that making false statements knowingly is acceptable?

            You and your fellow travelers might think that but bubbles have always been around of one sort or another…

            Yes they have been around. And we have a few right now, particularly in shale production, green energy, and the biggest bubble of all, sovereign debt.

            Wrong again vangel, what was problematic was government interference in the housing market in the first place…

            It is interfering now. Not only is the government allowing companies to ignore the actual production data and still provide estimates of ultimate recoveries but it is funding reports that overestimate reserves significantly. Add to that the meddling with interest rates that makes cheap financing available to the promoters who are running the scams and I do not see how you can remain satisfied with the events that we see in the sector.

            I’ve yet to fall for one that wasn’t due to government interference…

            Do you mean to tell me that you do not have any exposure to bonds? Or real estate? Or shares in financial companies?

            And why fall for those that are caused by government interference when it is easy to avoid them?

            Oh man! That line is so full of it I don’t even no where to begin…

            Of course you don’t. You refuse to look at the SEC filings and to listen to the calls carefully. You have no problem with the hype and lies and see the process as little more than gambling with money you can afford to lose.

            “What part of the analysis did you have a problem with again?“…

            The source…

            There is nothing wrong with the source but even if there were a problem with it you still have to address the problem with the analysis. The fact is that there isn’t a problem with the analysis. It deals with the data that was reported by the companies and issued by the government and shows that the numbers do not add up to a nice picture.

            “We see the same production profiles in the rest of the Bakken that we saw in the Elm Coulee“…

            Who’s we?

            We is anyone who cares to look at the data. Obviously you do not choose to because it does not support what you want to see.

            “I am talking about rational investing by using the known facts and as much data as possible“…

            No you’re not… You’re talking questionable investment using questionable vangel abilities to make the investment assessment…

            Someone who argues that we should not look at the SEC filings because they are mandated by the government, who refuses to look at the analysis, and refuses to listen to the conference calls is hardly in a position to question the investment concerns of others.

          10. The issue is economics of production and on that front the SEC filings are very clear that shale projects outside of a few small areas are not self financing“…

            You’re delusional vangel

            Everyone of these players are wrong and you’re right?!?!

            Well if that’s what it takes to get you through your day then run with it dog…

          11. <b.Everyone of these players are wrong and you’re right?!?!

            Not at all. They are looking out for themselves and getting richer as the bubble continues to grow just as the tech and housing promoters did. The fact that you confuse their interests with yours could explain why you refuse to look at the actual financials and have no problem relying on narrative and herd behaviour as your guide.

        2. The title of the WSJ article is “Oil Boom Spurs New Investment,” and is mostly about shale oil and not shale gas. The article also reports that “$45 billion may be spent on new or expanded transportation infrastructure, including pipelines, rail cars, rail terminals and other projects.” So again we see energy companies investing billions of dollars of their valuable (and scarce) capital on projects involving energy infrastructure. And yet they somehow are unaware of your inside information and claims that shale oil/gas is all a bubble?

          1. You wrote the same thing about shale gas not too long ago as you are writing about shale oil now. The problem that I see is that you keep refusing to take a look at the economics, which is an area of expertise that you claim to have. Instead of falling for the hype it might help to look at the actual financials that are filed each year and see how the projects are doing. I have looked long and hard for suitable investments but have yet to find any that fit the bill. You might try checking the filings and verify for yourself what seems evident to most of the people who have bothered to look.

            Stop being a part of the herd and start thinking for yourself. While you might lose some of that optimism you should do much better with your investments.

  6. Benjamin Cole

    The numbers on Texas oil production are amazing. Production is doubling in just a couple of years.

    This is a very “mature” area of oil production.

    Egads, think about Iran, Iraq, Saudi Arabia, Nigeria, Russia, Venezuela, Mexico etc. and how much more oil they could produce if they would go to free markets and property rights type government.

    Peak Oil is probably better defined as “peak bad government.”

    Congrats to American oil drillers, and please drill for more!

    And now can we wipe out the pinkest, largest, most-subsidized, most socialistic renewable energy program in the USA?

    I am talking about ethanol.

    Pinko-beer. GOP moonshine.

    1. The numbers on Texas oil production are amazing. Production is doubling in just a couple of years.

      The completion of new offshore platforms and billions in new investment in high IP wells has a way of increasing production. The issue is cost. While the offshore wells should be profitable that production is dependent on new investment. The problem for the onshore investment is that it is not very profitable. Most shale formations have a ‘high’ IP value that quickly falls to less than 200bpd in a few months. By the time the well is no longer producing a positive cash flow the investors will realize that the actual return to them was negative. The same type of blind enthusiasm was seen about shale gas not that long ago but it took around seven years for investors to start noticing that they should be asking questions of management. And even though the problems have been brought to light they have yet to exit their positions as they continue to hope that the hype turns to reality. Having been around the block once or twice it is my experience that the retail investor gets screwed by this type of promotion and when most have jumped on board the people who have been promoting the ‘investment’ have cashed out most of their positions.

  7. GERALD OHARE

    Clearly we can use solar and wind for internal use and sell off the gas and oil to bring money to our country. Our options also include coal gasification which can make methanol and hydrogen through a clean process. This is without a game changer and a gift from God as my mother use to say. The 21st century is going to be the golden age of American production and innovation. I’m glad that I am alive to see this happen. God bless America!!!!

    1. Clearly we can use solar and wind for internal use and sell off the gas and oil to bring money to our country.

      Really? Solar and wind are not economic. Reliance on them would drive up energy costs and make American industry uncompetitive.

      Our options also include coal gasification which can make methanol and hydrogen through a clean process. This is without a game changer and a gift from God as my mother use to say. The 21st century is going to be the golden age of American production and innovation. I’m glad that I am alive to see this happen. God bless America!!!!

      It is amazing how delusional Americans can be. Haven’t you noticed that your country is the biggest debtor in human history and that most of the new debt is being purchased by the Fed? That is an indication of ruin, not a foundation for greatness.

      Green energy is a loser for the time being and looks to be a loser well into the future. The best solutions, coal and nuclear, are being ignored by the ignorant and the fearful as massive amounts of new investment are being wasted on processes that cost more to run than the value of their production.

    2. Look up the term, ‘energy density‘…

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