Monday, October 05, 2015

Shale Gas Salvation? Frack Off ....

The US Shale Oil Industry Will Simply Vanish says Energy Information Administration (EIA)

by Phil T Looker, Financial Editor

A few months ago, before the June oil prices crash, the US oil industry was ebullient. "It is too late for OPEC to stop the shale revolution", industry pundits squawked, "OPEC can’t stop the shale industry" – screamed banner headlines in the usually restrained financial press.

In July, the projected the expansion of US shale oil and gas supply in 2016 had to be adjusted to take into account new conditions. Compared to the first-half of 2014, US crude oil prices had declined by 47%. Fracking, the process of getting oil and gas to the surface from oil shale deposits is expensive. And messy. And making the oil and gas useable asfter it has been got out of the ground is another expensive process. With EIA forecasts predicting the Brent crude oil (the highest quality crude oil) average price will rise in 2016 scarcely to 59$ from average 54$ in 2015, it simply is not worth the expense of getting oil and gas out of the ground.

This is not only because of poor product quality; shale oil wells only have a very short life in which to pay back investment. Production start to collapse exponentially the moment a new well is in operation. Within 3 to 5 years these wells produce less than 20% of their initial production capacity.

My research indicates the running costs for one well is about $20 dollars per barrel, at current prices hardly enough to keep the well running. To create commercial products from shale oil, costs average around $35 to $40 dollars a barrel including transport, storage etc.. US shale companies need 57 dollar a barrel to break even. Most shale producers get paid less than spot market prices because of quality related problems.

The financial mainstream-media try to reassure investors that the rig production is going up, but forget to mention that the production per well is going down. This is because producers are now drilling more than one hole per rig. Producing oil has become a little cheaper but that is not enough to compensate for the low oil prices. With West Texas Intermediate selling at $46.50 producers are still losing dollars on every barrel produced.

The main oil price factor in the markets used to be the state of the US economy. Now it is the economic condition of China and expectations of demand growth in emerging markets. The oil price seems to be linked to China’s Purchasing Managers’ Index (PMI), which declined in August to 47,3, the lowest level in last six years. Also increased uncertainty of developing Asian countries affected the price, the latest stage in a slowdown that looks set to continue as demand from western economies for manufactured goods continues to slump.

At the same time, due to US fracking mania, supply is still going up. Then there is Iran; with a looming global crude oil supply glut the agreement to ease sanctions that will let the Islamic State back into the global market next year while te outlook for car owners is good, for business it is bleak. Added supply could be almost twice as big as the production cuts by US shale frackers who are shutting up shop.


Russia and Iran strike $10bn energy deal

Iran and Russia are negotiating a power deal worth up to $10 billion. The construction of new thermal and hydroelectric plants and a transmission network are in the works. Iran’s Energy Minister Hamid Chitchian met his Russian counterpart Alexander Novak in Tehran to discuss the power deals, according to the Mehr news agency.
Energy crisis posts

Britain Faces Power Shortages - We Told You So
News that Britain faces power blackouts as obsolescence and authoritarian regulation by the EU and Euronazi's try to usurp the sovereign powers of our British Parliament should come as a surprise to nobody.
New Renewable Energy Scam Attacks Our Human Rights
We have reported the great wind turbine scam and the solar panel scam many times before but have always been supportive of hydro electric schemes. It turns out we were wrong, so corrupting is the greed on big money, so tempting is the lure of taxpayers cash that even hydro electricity has been seduced by those who can't resist the temptation to steal from the public purse.
UN Panel Says Redesign The World Economy For Sustainability

Politicians can phrase their press communiques in fine words and soaring rhetoric but in the end they cannot disguise the fact that their latest initiatives on saving civilization are just another thinly disguised move towards global government, a global economy and culture the suppression of the individual and a New World Order.
Scalar Waves: A hidden source of clean, cost free energy
A infinite supply of cost free, clean electricity that has been know to the world for over a hundred years but never exploited? Is Ian talking about a science fiction story? you might well ask. Well no, I'm not. Scalar Waves, discovered by Nikola Tesla have that potential along with the potential to put the energy companies out of business ...
The Danish Experience - Problems With Wind Power And The Truth About Turbines
The truth about wind turbines, their real efficiency as opposed to the hyperbolic claims of clean sustainable energy firms and their lobbyists, politically correct politicians and green activists and how wind farm operators have been given a licence to pick the pockets of taxpayers
The Great Wind Turbine Con Trick
A detailed and damning critique of wind turbine technology, renewable energy scams, green lobbying, the dodgy science behind the case for sustainable power and the politicisation of concerns about the environment. The whole thing looks more and more like a confidence trick by academics, politicians, big business and the New World Order ...

Biofuels - The Great Green Folly

As the promises that wind and solar power could meet all our energy needs is exposed as pseudo - scientific twaddle by the wind's refusal to blow steadily all the time and the sun's refusal to shine at night, few of the alternative energy sources hyped as a replacement for fossil fuels. Of those, biofuel looks the next most likely to say, "If you hadn't over hyped me I coulda been somebody, 'stead of a bum. I coulda been a contender.

Back To Basics by Sir Hector Gobbett - BroadsidesSir Hector Gobbett Broadsides, Conservative MP for Rawtenborough since 1832 and a great champion of old fashioned values has agreed to write for us in support of a return to traditional convervative values, self determinations and the restoration of traditional British right like Primae Noctis. In this first article he argues for the reten of ritualistic beatings in schools, the death penalty for single mothers and the 95 hour working week for poor people.

Sir Hector Gobbett - Broadsides has been the Conservative Member of Parliament for Rawtenborough since 1832. This makes him the longst serving member of the British Parliament. He is a right winger and a staunch supporter of old fashioned values, free market economics and the virtues of the class system. Like all businessmen Sir Hector has been it hard by the enegy crisis and inceases in fuel costs. He has some very creative ideas on how we may generate affordable, sustainable energy for the future.
Latest Posts

Elsewhere: [Boggart Blog]...[Little Nicky Machiavelli]...[Scribd]...[Wikinut] ... [ Boggart Abroad] ... [ Grenteeth Bites ] ... Ian Thorpe at Flickr ] ... [ Tumblr ] ... [ Ian at Minds ] ... [ The Origninal Boggart Blog]

No comments: