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Orders of magnitude doesn't mean 1000x - just 10x is enough. As to fracking - the wheels have already fallen off, low oil prices forced a production hiatus, st

Orders of magnitude doesn't mean 1000x - just 10x is enough. As to fracking - the wheels have already fallen off, low oil prices forced a production hiatus, stop/start is inefficient and costly, and you need only look at the headlong rush in the UK that kinda petered out to get an idea of where fracking is going - nowhere. The fossil sector is in big, big trouble - this chaotic oscillator will not stop until the market decouples from energy. The only question is whether they'll be allowed to collapse, or if we'll see state bailouts that keep them limping along. As to reduced demand - that's also part of the problem. Oil prices are not purely demand driven, they have costs to meet, shareholders to appease, and massive capital investment needs that will not be met with a suppressed price, which will feed the death spiral they've been in for some five years now.

pessimizer 11y ago
> Orders of magnitude doesn't mean 1000x - just 10x is enough. That's "order" of magnitude, not "orders."
- deleted 11y ago
  [deleted]
- Retric 11y ago
  It's a vague term as: Other orders of magnitude may be calculated using bases other than 10. https://en.wikipedia.org/wiki/Order_of_magnitude https://en.wikipedia.org/wiki/Order_of_magnitude In base 2, 2x = 1 order of magnitude 8x = 3 orders of magnitude. Worse both informal definitions are in common usage.
- madaxe_again 11y ago
  11x would be "orders", if we're playing semantic pedantry.
TheCowboy 11y ago
Where are you getting the information that stop/start is inefficient and costly for fracking? It's less than conventional oil wells. I've found a significant cost of fracking is establishing the wells. If the price goes up that much, fracking is viable and will happen. The only way fracking is out of the equation if when low prices keep it from being profitable. Fracking presently functions as a cap on the price. If prices vary wildly, then there are strategies to deal with that, and the variation needs to be explained. How does it come down so rapidly? Assuming healthy economics, probably because of fracking. It doesn't make sense to say that market prices aren't demand driven just because other costs and factors exist. If suppliers will lose money at a given low price because of costs, eventually supply decreases and prices rise, etc.
- madaxe_again 11y ago
  Info mostly comes from banter with energy market traders who are getting ready for a mixture of feast and bloodbath. I used to work a futures desk, mostly on intermediates. I got a decent sense of the market in those few years, and watching it is an ongoing pastime. Re: the specifics around fracking start/stop - it's staff. You either retain salaried workers who are unproductive for stretches, or you work contractors, which is expensive. Either way it drives up cost. Re the demand driven bit - I explained that poorly. Oil is a very "special" commodity, in that it has spectacular investment costs, incredible levels of state funding (and debt), and a price determined by anticipated demand more than anything else I'm aware of - you need only look at the volume curve across futures to see this - and the fact that we are still in a contango market. This adds up to the price of oil being driven by overall economic growth forecasts, which are theoretically demand, but aren't. This results in expenditure (exploration and exploitation), which has a several year time lag. Fracking has been oh-jesus expensive and may never turn a profit. Investors (states) are getting shy. I'm still explaining this poorly - I'd need to write an essay to convey what I'm trying to get at - there are a few dynamics at play and I will be amazed if we don't start seeing even more instability. Confidence in the market is very, very low. Talk to traders, not what the press says. Of course the press says it's rosy - nobody wants a premature sell-off, even if there could be some tasty dead cats in it for the vultures. We still need oil for energy for the time being.
  - Gibbon1 11y ago
    I like how you got down voted for reporting your first hand knowledge. I used to deal with a guy in the oil business. Reselling valves pumps and misc plumbing. Nothing in that business is cheap. Just remembered, Shell? did a drilling project few years ago in northern Canada. Spent $2 billion to drill deep wells into what looked like a large reservoir of oil and it was dry. And that wasn't $2 billion in paper funny money, that was $2 billion spent on stuff.
    - madaxe_again 11y ago
      Nah, everything is clearly totally fine, and I, like the energy markets, are wrong. There has always been oil and demand for oil. There will always be oil and demand for oil. Oil without end. Or not: http://www.salon.com/2016/04/29/there_will_be_pandemonium_partner/ http://www.salon.com/2016/04/29/there_will_be_pandemonium_pa...
greedo 11y ago
Wishful thinking, and backtracking as well. Magnitude change isn't 10x, and short of an increase in taxation, the idea that my current $2/gal gas will become $20 is just inane.

pessimizer 11y ago

> Orders of magnitude doesn't mean 1000x - just 10x is enough. That's "order" of magnitude, not "orders."

deleted 11y ago
[deleted]
Retric 11y ago
It's a vague term as: Other orders of magnitude may be calculated using bases other than 10. https://en.wikipedia.org/wiki/Order_of_magnitude https://en.wikipedia.org/wiki/Order_of_magnitude In base 2, 2x = 1 order of magnitude 8x = 3 orders of magnitude. Worse both informal definitions are in common usage.
madaxe_again 11y ago
11x would be "orders", if we're playing semantic pedantry.

TheCowboy 11y ago

Where are you getting the information that stop/start is inefficient and costly for fracking? It's less than conventional oil wells. I've found a significant cost of fracking is establishing the wells. If the price goes up that much, fracking is viable and will happen. The only way fracking is out of the equation if when low prices keep it from being profitable. Fracking presently functions as a cap on the price. If prices vary wildly, then there are strategies to deal with that, and the variation needs to be explained. How does it come down so rapidly? Assuming healthy economics, probably because of fracking. It doesn't make sense to say that market prices aren't demand driven just because other costs and factors exist. If suppliers will lose money at a given low price because of costs, eventually supply decreases and prices rise, etc.

madaxe_again 11y ago
Info mostly comes from banter with energy market traders who are getting ready for a mixture of feast and bloodbath. I used to work a futures desk, mostly on intermediates. I got a decent sense of the market in those few years, and watching it is an ongoing pastime. Re: the specifics around fracking start/stop - it's staff. You either retain salaried workers who are unproductive for stretches, or you work contractors, which is expensive. Either way it drives up cost. Re the demand driven bit - I explained that poorly. Oil is a very "special" commodity, in that it has spectacular investment costs, incredible levels of state funding (and debt), and a price determined by anticipated demand more than anything else I'm aware of - you need only look at the volume curve across futures to see this - and the fact that we are still in a contango market. This adds up to the price of oil being driven by overall economic growth forecasts, which are theoretically demand, but aren't. This results in expenditure (exploration and exploitation), which has a several year time lag. Fracking has been oh-jesus expensive and may never turn a profit. Investors (states) are getting shy. I'm still explaining this poorly - I'd need to write an essay to convey what I'm trying to get at - there are a few dynamics at play and I will be amazed if we don't start seeing even more instability. Confidence in the market is very, very low. Talk to traders, not what the press says. Of course the press says it's rosy - nobody wants a premature sell-off, even if there could be some tasty dead cats in it for the vultures. We still need oil for energy for the time being.
- Gibbon1 11y ago
  I like how you got down voted for reporting your first hand knowledge. I used to deal with a guy in the oil business. Reselling valves pumps and misc plumbing. Nothing in that business is cheap. Just remembered, Shell? did a drilling project few years ago in northern Canada. Spent $2 billion to drill deep wells into what looked like a large reservoir of oil and it was dry. And that wasn't $2 billion in paper funny money, that was $2 billion spent on stuff.
  - madaxe_again 11y ago
    Nah, everything is clearly totally fine, and I, like the energy markets, are wrong. There has always been oil and demand for oil. There will always be oil and demand for oil. Oil without end. Or not: http://www.salon.com/2016/04/29/there_will_be_pandemonium_partner/ http://www.salon.com/2016/04/29/there_will_be_pandemonium_pa...

greedo 11y ago

Wishful thinking, and backtracking as well. Magnitude change isn't 10x, and short of an increase in taxation, the idea that my current $2/gal gas will become $20 is just inane.