Good. The more oil we pump, the less we import, the more we export (generally). Obviously different industries require different flavors of oil, but tight oil usually has great characteristics - light and sweet. A lot of people don't know this, but the oil industry was founded almost entirely by Americans, its good to see the US back on top.
I've had the pleasure of working for a large driller as a software engineer. The innovation in drill tech is unbelievable. I hope all of you get the chance to read about the upstream industry - phenomenal work being done. Oil is an industry where a ton of the knowledge is only documented in books or the minds of the workforce. so better yet, visit your local rig site.
The transformation of the US for largest importer to largest exporter in only a few years is stunning.
Unfortunately, this is a geopolitical tactic to crush Saudi Arabia and other oil-producing nations like Iran so that it defunds terrorism. The tipping point for the US between electric cars and gas is about $6/gallon from what I've read. CA is getting close, I'm paying $4/gallon but most of that is taxes these days. We can't move forward until we get rid of $2/gallon gas throughout the country.
It's not so much a tactic as a technologically-enabled event. The US is not about to "crush" Saudi Arabia, it's actively fighting along side them in Yemen.
UK petrol prices have been close to equivalent of $6/USgal for a while - currently about £1.20 per liter, £4.50/USgal = $5.67, and electric cars are still pretty scarce. Hybrid taxis have been popular for a while though.
The falling cost of EV's and renewable energy is a relatively recent phenomenon too, though. Even 5 years ago vs. now, the choice to buy EV has gotten easier.
If I were in the market for a new car, I'd be looking at EV's. I drive about 5-6000 miles a year and can't really justify the money, though (and tbh 6,000 miles a year at 50+mpg means driving is a relatively small part of my carbon footprint. Really, I need to fly less)
Article below says Aramaco's bond offering indicated they were near break at $45/barrel, vs the $10 often repeated. Their production seems to include a ton of waste. Beyond that, Saudi Arabia is estimated to need $70-85/barrel to balance their budget (though they can borrow if need be).
In the past the consensus was they could outlast frackers, but I think that's changed in the past several years.
Gas isn't the only tipping point for EV's, it's just a single long-term savings factor. EVs also would do well with cheaper batteries, more EV options at lower cost, and local/national policy changes. I'd also expect EVs and autonomy to be synergistic, as autonomous driving systems require a lot of electrical power.
>The transformation of the US for largest importer to largest exporter
Largest producer, not largest exporter. It consumes about 20M barrels a day so it is still a net oil importer, although it is forecast to become a net exporter in 2022 [1]. The combination of the US and Canada OTOH is a net exporter, and has been for a few years, which means the US has been functionally independent from OPEC for a few years.
The US imports more heavy crude than it needs because it has a competitive advantage in refining it and in turn exports a lot of easier-to-refine light crude (the product of fracking). This this "swapping" of light crude for heavy could be discontinued with little disruption to the US economy. I.e., it does not mean much. I'm mentioning it only because someone who doesn't know about it might be misled by export statistics.
Also, calling the shale-oil boom a geopolitical tactic gives the impression that the boom was somehow planned or at least incentivized by the US government, which George Friedman says was not what happened. (Friedman used the shale boom in a talk to help make the point that many important developments occur in the US without significant involvement by the government.)
Most of the oil production increase in the last years in the US is due to fracking; such an amazing technology where a bunch of chemicals are injected directly into the ground. Ted-ed has a good video about it: https://www.youtube.com/watch?v=Tudal_4x4F0
Lets screw up the environment by not quitting our society's oil dependency so that a few shareholders of [INSERT_RANDOM_OIL_COMPANY_hERE] can enjoy all the $$$ while future generations (and probably us too given how fast this go) get to pay the price.
> What if we make future generations not needing to actually consume these resources ?
In all likelihood we'll need to consume the resources available to us to advance to the next level of technology where the existing resources are no longer needed.
> Also if you consume all the available non-renewable energy that you have, at one point you will mathematically end up in a dire situation.
Mathematically speaking, the resources will be consumed eventually. We just need to try to make as much progress as possible before that happens.
There is a fantastic talk with Milton Friedman about this argument that I recommend looking up.
A typical Engineering mindset conceptualizes the problem as if it were physics, where you see current output and stock and calculates the end result, but thats not how humans interact with each other: we are execute ingenuity at every step changing the basic formula again and again. If the former were true, you would have seen oil prices increase steadily over time, as oil absolutely runs out (no new one is produced), but you can see thats not what happens, it's even today way cheaper that it was decades ago. If it were starting to run out, the prices would shoot up and alternatives would become so appealing that they would be developed and used.
Hopefully the concept is clear, the TLDR is don't use physics to explain economics.
Because technology advanced and new reserves were found.
The main problem is not that we'll eventually run out of oil. It's just that by the time we finish all the reserves most people living on Earth will probably experience extreme weather conditions all year round.
> The main problem is not that we'll eventually run out of oil.
The concept of "peak oil" (discounting whether or not it's a fallacy) wasn't ever that we'd run out of oil. When peak oil occurred, there would still be oil in the ground.
The problem was (supposed to be) that the amount of energy it would take to extract that oil from the ground would be greater than the amount of energy you would get from that oil extracted. In other words, it would take as much or more than a barrel of oil's energy to extract that barrel of oil.
At that point, it would make no economic sense to try to get that oil, at least from an energy consumption point of view (it may make sense for other reasons though - for instance, to use the oil to make chemicals or plastics or other materials).
We were supposed to hit that point - and we have hit that point multiple times on a per-oil producing country level. The United States hit it a long while back. But then this new technology of fracking came into being, and it changed the equation radically. Now it seems the USA is outputting more oil than it ever has, in effect reversing it's peak oil status (which I don't think was ever thought possible).
Shale oil and oil sands were known about for a long time, but the technology made it super energy intensive; fracking opened it up, and also made old wells produce again. I'm sure the concept is being applied world wide as needed, and that's caused the "world peak oil" timeline to recede as well.
What would probably happen if "peak oil" ever did occur on a world level, would be that other energy sources would be used to extract it; nuclear generated electricity would be the best choice, much like it's been proposed for water desalination. But even those thoughts were predicated on the idea that solar costs wouldn't drop like they've did in recent years, so maybe solar might be the better choice?
Also, the oil probably wouldn't be brought up for fuel usage in such a scenario, since you'd still be upside down in that regard. But it would make sense to extract it for its other uses as a raw material.
You mean the rules that make it illegal to put your home walking distance from your job, or to build a granny unit, or to build a home without parking, or to build an apartment building, or to not have a lawn, or to repurpose parking to housing, or to opt out of subsidizing meat production?
> Do you want to depend on someone to say how many beatings is moral to be inflicted upon yourself?
Regardless of what I want, we currently live in a society where the govt holds the monopoly on violence. You're free to have your opinion that an adolescent libertarian utopia is possible though.
Ok, I've responded to a couple of the comments upthread. Not seeing a moderation reply doesn't mean we implicitly endorse a comment. The likeliest explanation is that we didn't see it.
Crossing into name-calling and personal attack is not cool and will get you banned here. Would you please review https://news.ycombinator.com/newsguidelines.html and use this site in its intended spirit?
Not only this, he doesn't seem to understand fracking is not a new technology. Horizontal drilling is along with several others. It is these which make fracking ops viable.
Most people want to improve the environment. They way to do that is not legislating in controls on production because then we just import from ME and pay to secure shipping routes in that region. Instead, legislate in incentives to reduce demand (electric car subsidies etc.).
The market capitalization of the large oil companies have also been very closely correlated with oil prices, so cheap oil could in fact hurt their margins rather than help shareholders.
> Lets screw up the environment by not quitting our society's oil dependency so that a few shareholders of [INSERT_RANDOM_OIL_COMPANY_hERE] can enjoy all the $$$ while future generations (and probably us too given how fast this go) get to pay the price.
This is sanctimonious and inaccurate. Oil allows our consumer culture to exist. We make plastic crap with oil, we import it from China using oil, we deliver it using oil to an amazon warehouse, and then deliver it again using oil to a Prime Member. That cycle, in turn, supports everyone else’s job. Indeed, the very web is built in that oil consumption cycle, since Google runs the web and 98% of Google’s business is helping sell more plastic crap to people.
I think the jobs argument for ruining the environment is something that should be seriously engaged but it's still intuitively clear to me that we won't run out of useful things to make or do that easily. Transitioning away from oil is a big project.
Please stick to the community guidelines and respond directly to the argument. Calling a response "sanctimonious drivel" does not make your reply more compelling.
The fact that OP is being sanctimonious is highly relevant to the point I’m making. It’s one thing to hold the opinion that we need to eliminate oil use because of the serious environmental repercussions. But if you’re living in america enjoying American employment options and living standards, you don’t get to engage in “holier than thou” “us versus them” rhetoric. Our entire economy and all of our jobs are predicated on cheap energy. Oil companies make a lot of money because they deliver an essential, high demand product. But given that oil and gas is less profitable than your average industry (as you’d expect a commodity to be) there is no basis for acting as if the benefits of cheap oil flow to oil company shareholders. It flows overwhelmingly to consumers.
I'm not saying OP made a stellar point, but "drivel" is an unnecessarily aggressive descriptor here. Try to assume good faith and draw out an argument that elevates the overall discussion. You're raising a worthwhile concern. Raise it in a way that invites, rather than shuts down discussion.
I drunkenly invited someone to Denver at my expense for a duel the other day (not literally, but figuratively). All this partisan, populist rhetoric is driving some of us a bit nuts, but you are usually a voice of reason. It's ok to slip up from time to time.
> "But if you’re living in america enjoying American employment options and living standards, you don’t get to engage in “holier than thou” “us versus them” rhetoric. "
This is a strange place for the love-it-or-leave-it fallacy to rear its simplistic head. Grandparent is pissed at fracking companies and the perceived greed of their shareholders. A widely-held viewpoint expressed plainly. The mere existence of your disagreement doesn't make his opinion any less valid.
We don't have to get oil domestically. Other countries are more than happy to decimate their local environments to sell oil to the US at below market rates.
I'm sure this makes me an asshole, but given the choice between making regions of Saudi Arabia or the USA unlivable, I'd take Arabia any day.
I don’t get any of this comment. Oil is the king of being sold at market rates, and if we aren’t producing any market rates skyrocket. Also doesn’t matter where oil is burned, it still becomes CO2 and other greenhouse gasses if we don’t leave it in the ground.
I will not be at all surprised when disease rates in areas near fracking skyrocket. Of course it will take probably ten years to even loosely correlate illnesses and deaths with "new" oil activity, and longer still for any change of course (if ever)
In many ways it feels like we still live in the wild west
Please source your claims. Fracking most definitely increases rates of low Richter scale seismic activity. However, fracking does not pollute groundwater. Wastewater injection, a process which happens once a fracked well is exhausted, can - if done improperly.
However, your claim is nothing but anti-science drivel unless you source it. Do you also believe vaccinations are harmful because they "inject chemicals into your body"? These processes are more nuanced then you think and are heavily regulated.
While I agree, they'll deny it all and say correlation does not equal causation, we don't care about common sense, and we have better lawyers than so fuck you we'll keep doing this and raking in the cash until your land is decimated and useless and we'll move on to the next plot of land to destroy and profit off of.
A green account, which as far as I can tell was created solely for the purpose of posting comments defending an industry well-known for hiring shills to muddy the waters on established science, should not be lecturing other people on HN norms.
You mean poor people don't, which you incorrectly assume that there is any sympathy for the lower class. If you're rich however, like the people that own these companies, you can have all the clean and filtered water you want and move and purchase any land you want so you can continue to live the good life while everyone else gets screwed and pays the price. Out of sight, out of mind. Not my water, not my problem.
People are electing to buy the fuel with their own money. So, what is the implication of your comment? We should force people to stop doing what they want?
I don't have kids, I walk to work, and I sit in the dark a whole lot (in the winter). I could deal if my state banned all motor vehicles (except the interstates, in order to stay Commerce Clause compliant) and coal mining/burning. I doubt most could.
They're not countering falling demand, so much as trying to keep prices high in the face of a wall of supply from the US. They're constraining their own supply, while the US absorbs most of the demand growth. OPEC's forecast for 2019 remains for an expectation of about a million barrels per day of global growth, mostly coming from India and China.
Wasn't there a political expectation that if we produced our own oil, the price would drop? That was false from the start because we're a part of OPEC, right?
its false because opec exists and can, sometimes, keep price relatively stable. its possible/likely that if the USA had not produced so much oil via fracking the price would be much higher right now, because opec does not have so much ability to boost production as it used to.
Oil execs and lobbyists are worried about renewables. Better extract as much profit as we can now before renewable energy tech gets better. Keep prices low so consumption stays high. Convince the American people domestic drilling is a good thing, even though it depletes oil reserves for the long term. The oil industry today is similar to the logging industry a century ago.
81 comments
[ 3.1 ms ] story [ 133 ms ] threadI've had the pleasure of working for a large driller as a software engineer. The innovation in drill tech is unbelievable. I hope all of you get the chance to read about the upstream industry - phenomenal work being done. Oil is an industry where a ton of the knowledge is only documented in books or the minds of the workforce. so better yet, visit your local rig site.
Unfortunately, this is a geopolitical tactic to crush Saudi Arabia and other oil-producing nations like Iran so that it defunds terrorism. The tipping point for the US between electric cars and gas is about $6/gallon from what I've read. CA is getting close, I'm paying $4/gallon but most of that is taxes these days. We can't move forward until we get rid of $2/gallon gas throughout the country.
I just looked this up and so far I found in CA is 69 cents per gallon. Am I missing something?
https://www.forbes.com/sites/ellenrwald/2018/09/28/californi...
UK petrol prices have been close to equivalent of $6/USgal for a while - currently about £1.20 per liter, £4.50/USgal = $5.67, and electric cars are still pretty scarce. Hybrid taxis have been popular for a while though.
If I were in the market for a new car, I'd be looking at EV's. I drive about 5-6000 miles a year and can't really justify the money, though (and tbh 6,000 miles a year at 50+mpg means driving is a relatively small part of my carbon footprint. Really, I need to fly less)
In the past the consensus was they could outlast frackers, but I think that's changed in the past several years.
https://www.forbes.com/sites/rrapier/2019/04/01/saudi-aramco...
Largest producer, not largest exporter. It consumes about 20M barrels a day so it is still a net oil importer, although it is forecast to become a net exporter in 2022 [1]. The combination of the US and Canada OTOH is a net exporter, and has been for a few years, which means the US has been functionally independent from OPEC for a few years.
The US imports more heavy crude than it needs because it has a competitive advantage in refining it and in turn exports a lot of easier-to-refine light crude (the product of fracking). This this "swapping" of light crude for heavy could be discontinued with little disruption to the US economy. I.e., it does not mean much. I'm mentioning it only because someone who doesn't know about it might be misled by export statistics.
Also, calling the shale-oil boom a geopolitical tactic gives the impression that the boom was somehow planned or at least incentivized by the US government, which George Friedman says was not what happened. (Friedman used the shale boom in a talk to help make the point that many important developments occur in the US without significant involvement by the government.)
[1]: https://en.wikipedia.org/wiki/List_of_countries_by_oil_produ...
Most of the oil production increase in the last years in the US is due to fracking; such an amazing technology where a bunch of chemicals are injected directly into the ground. Ted-ed has a good video about it: https://www.youtube.com/watch?v=Tudal_4x4F0
Lets screw up the environment by not quitting our society's oil dependency so that a few shareholders of [INSERT_RANDOM_OIL_COMPANY_hERE] can enjoy all the $$$ while future generations (and probably us too given how fast this go) get to pay the price.
We built a system that depends on borrowing from the future, and it's abundantly clear it's running out of available credit.
Also if you consume all the available non-renewable energy that you have, at one point you will mathematically end up in a dire situation.
In all likelihood we'll need to consume the resources available to us to advance to the next level of technology where the existing resources are no longer needed.
> Also if you consume all the available non-renewable energy that you have, at one point you will mathematically end up in a dire situation.
Mathematically speaking, the resources will be consumed eventually. We just need to try to make as much progress as possible before that happens.
Economically speaking, oil is infinite. Thats why its price goes down over time!
A typical Engineering mindset conceptualizes the problem as if it were physics, where you see current output and stock and calculates the end result, but thats not how humans interact with each other: we are execute ingenuity at every step changing the basic formula again and again. If the former were true, you would have seen oil prices increase steadily over time, as oil absolutely runs out (no new one is produced), but you can see thats not what happens, it's even today way cheaper that it was decades ago. If it were starting to run out, the prices would shoot up and alternatives would become so appealing that they would be developed and used.
Hopefully the concept is clear, the TLDR is don't use physics to explain economics.
The main problem is not that we'll eventually run out of oil. It's just that by the time we finish all the reserves most people living on Earth will probably experience extreme weather conditions all year round.
The concept of "peak oil" (discounting whether or not it's a fallacy) wasn't ever that we'd run out of oil. When peak oil occurred, there would still be oil in the ground.
The problem was (supposed to be) that the amount of energy it would take to extract that oil from the ground would be greater than the amount of energy you would get from that oil extracted. In other words, it would take as much or more than a barrel of oil's energy to extract that barrel of oil.
At that point, it would make no economic sense to try to get that oil, at least from an energy consumption point of view (it may make sense for other reasons though - for instance, to use the oil to make chemicals or plastics or other materials).
We were supposed to hit that point - and we have hit that point multiple times on a per-oil producing country level. The United States hit it a long while back. But then this new technology of fracking came into being, and it changed the equation radically. Now it seems the USA is outputting more oil than it ever has, in effect reversing it's peak oil status (which I don't think was ever thought possible).
Shale oil and oil sands were known about for a long time, but the technology made it super energy intensive; fracking opened it up, and also made old wells produce again. I'm sure the concept is being applied world wide as needed, and that's caused the "world peak oil" timeline to recede as well.
What would probably happen if "peak oil" ever did occur on a world level, would be that other energy sources would be used to extract it; nuclear generated electricity would be the best choice, much like it's been proposed for water desalination. But even those thoughts were predicated on the idea that solar costs wouldn't drop like they've did in recent years, so maybe solar might be the better choice?
Also, the oil probably wouldn't be brought up for fuel usage in such a scenario, since you'd still be upside down in that regard. But it would make sense to extract it for its other uses as a raw material.
Do you want to depend on someone to say how many beatings is moral to be inflicted upon yourself?
Regardless of what I want, we currently live in a society where the govt holds the monopoly on violence. You're free to have your opinion that an adolescent libertarian utopia is possible though.
Generic ideological flamewars are among the worst, because they're so repetitive.
https://news.ycombinator.com/newsguidelines.html
Re previous 'warnings': https://news.ycombinator.com/item?id=19894978, https://news.ycombinator.com/item?id=19696256, https://news.ycombinator.com/item?id=19348644 are the ones I was referring to.
https://news.ycombinator.com/newsguidelines.html
Most people want to improve the environment. They way to do that is not legislating in controls on production because then we just import from ME and pay to secure shipping routes in that region. Instead, legislate in incentives to reduce demand (electric car subsidies etc.).
It's on the state to fulfill its obligations with the citizenry
This is sanctimonious and inaccurate. Oil allows our consumer culture to exist. We make plastic crap with oil, we import it from China using oil, we deliver it using oil to an amazon warehouse, and then deliver it again using oil to a Prime Member. That cycle, in turn, supports everyone else’s job. Indeed, the very web is built in that oil consumption cycle, since Google runs the web and 98% of Google’s business is helping sell more plastic crap to people.
Oil and gas is not particularly profitable. In fact it’s less profitable than average: http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/.... Return on equity is single digits, versus 20%+ for companies like Facebook.
This is a strange place for the love-it-or-leave-it fallacy to rear its simplistic head. Grandparent is pissed at fracking companies and the perceived greed of their shareholders. A widely-held viewpoint expressed plainly. The mere existence of your disagreement doesn't make his opinion any less valid.
I'm sure this makes me an asshole, but given the choice between making regions of Saudi Arabia or the USA unlivable, I'd take Arabia any day.
In many ways it feels like we still live in the wild west
However, your claim is nothing but anti-science drivel unless you source it. Do you also believe vaccinations are harmful because they "inject chemicals into your body"? These processes are more nuanced then you think and are heavily regulated.
Sure, all your neighbors died of the same thing, but maybe you’re the only one that would have had it anyway.
(This argument has worked in court, which is why I’m repeating it.)
I don't have kids, I walk to work, and I sit in the dark a whole lot (in the winter). I could deal if my state banned all motor vehicles (except the interstates, in order to stay Commerce Clause compliant) and coal mining/burning. I doubt most could.
Edit: Falling demand for OPEC oil, I mean.
https://www.opec.org/opec_web/en/about_us/25.htm