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U.S. oil production to be equal to Russia plus Saudi Arabia by 2025
- mogadsheu 8y ago>ISTANBUL (Reuters) - Total oil production in the United States will be nearly equal to that of Russia and Saudi Arabia combined by 2025, the head of the International Energy Agency (IEA) said on Friday. Fatih Birol made the comment in an interview with Turkey’s state-owned Anadolu news agency. Shortest article ever? In all seriousness I don’t think this is the worst thing for any of the three countries. Most new US production is higher cost (fracking), so the drop in market share is at least met with a stronger price floor for all.
- smnrchrds 8y ago> Shortest article ever? It's Reuters. They are a wire service. They report news, not write articles.
- AimForTheBushes 8y agoWhich is why they are, imo, the best large news corporation.
- devy 8y ago> In all seriousness I don’t think this is the worst thing for any of the three countries. I don't think you are being serious. The fact that humans are still exploiting fossil fuels in an accelerated pace is the worst thing could have happen to the earth's climate change.
- josephjrobison 8y agoI agree with you that we should be moving to renewables as fast as possible. At the same time, there's a lot of upside to reducing the power of authoritarian oil states that gives dictatorships power to squash democracy and human rights. "Study after study has found that, while discovering big oil deposits doesn't turn democratic countries with a lot of oil like Norway and Canada authoritarian, authoritarian countries are more likely to stay that way if they've got a ton of oil. Of all the bad things that oil does for countries, this is probably the worst and most robustly demonstrated." https://www.vox.com/2014/4/10/5601062/oil-curse-explained https://www.vox.com/2014/4/10/5601062/oil-curse-explained Say what you will about the U.S. (and Canada and Norway), but I'd rather a democracy be the biggest producer than an autocracy.
- vtange 8y agoNot to mention it sorta insulates us from the political shenanigans of that region. Especially true if you believe Iraq was "all about the oil."
- adventured 8y agoThe recent flexing by Congress of their War Powers Act authority [1][2] in regards to Yemen / Saudi Arabia - which was unprecedented in recent US history - may have only occurred due to the boom in US oil production. I'd expect that most of Congress would have been a lot more concerned with upsetting the relationship with Saudi Arabia otherwise. [1] https://www.npr.org/2018/12/11/675343616/often-quiet-on-wars-congress-challenges-white-house-over-yemen https://www.npr.org/2018/12/11/675343616/often-quiet-on-wars... [2] https://foreignpolicy.com/2018/11/28/senate-advances-resolution-to-end-u-s-support-for-saudi-led-war-in-yemen/ https://foreignpolicy.com/2018/11/28/senate-advances-resolut...
- devy 8y agoIn grand scheme of things, these don't matter when the sea level raises 2 meters and 2/3 of coastal population and civilization got wiped out post-2040.
- phyller 8y agoIn the grand scheme of things, if that's accurate they've got 20+ years to find 2 meters of elevation so they don't get drowned. This kind of breathless reaction is what makes people skeptical of the entire concept. Please explain to me how this means the end of civilization.
- jessaustin 8y agoIt will be a lot more clear to both of us when we're paying the taxes to "bail out" the real estate developers who are investing in Miami right now.
- devy 8y ago
- war1025 8y agoIf you believe in the merits of newer, more efficient technology, then having an abundant supply of oil doesn't really come with a downside, IMO. It's much easier to let the new technology speak for itself than to tell people, "Hey, we know what we're offering is no good, but it's what we've got to do." Cheap oil will make green energy a smart business choice rather than a sacrifice. The optics on that are way better.
- aljones 8y agoNo downside? The externalities of oil production and consumption are well known.
- vec 8y agoThat's exactly backwards. Cheaper oil will lower the operating costs of power plants that use oil as a fuel, which raises the bar that newer technologies will have to clear to be comparatively more efficient, which will in turn slows the rate of adoption for renewables. CO2 emissions are cumulative, and there's far more CO2 still sequestered in as-yet-unburned fossil fuels than even the rosiest estimates say our atmosphere could safely absorb. That implies that we're going to have to leave some sizable fraction of our planet's remaining oil in the ground, permanently. From a long term betterment of the species standpoint, what we really want to be seeing is the global supply of oil starting to taper off and costs per barrel drifting slowly but steadily upward.
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- pavpanchekha 8y agoThe cost of US fracking continues to drop; $40 oil is plausible in the near future. The issue for Russia and the KSA is that their budgets aren't solvent at a $40 or $50 oil price
- notfromhere 8y agoits what happens when your state is basically a poorly-run oil company
- protomyth 8y agoThe article discussed here https://news.ycombinator.com/item?id=18505672 https://news.ycombinator.com/item?id=18505672 mention lower that $40 happens in Texas.
- Arnt 8y agoWhat's the KSA? Saudia Arabia? Doesn't Ghawar produce at around a lowish single-digit cost? https://en.wikipedia.org/wiki/Ghawar_Field https://en.wikipedia.org/wiki/Ghawar_Field
- hokkos 8y agoHe talks about SA budget, they sure earn money, but not enough to subsidize their citizen like they used to.
- kevinstubbs 8y agoKSA = Kingdom of Saudi Arabia
- adventured 8y ago> Most new US production is higher cost (fracking), so the drop in market share is at least met with a stronger price floor for all. The price floor problem for Russia and Saudi is societal and governmental financial, rather than raw production cost based. Saudi Arabia now needs ~$95 oil to balance its budget for 2019. That has persistently been moving higher for them. So they're stuck in a death trap on price, where they're one of the few producers that can cut substantially to lift prices which the US producers constantly push down on. So they lose share to the US producers just to try to stay alive on price. Meanwhile it costs ever more money to placate the people of Saudi Arabia (and their population is growing rapidly, tripling since ~1982; a problem Russia of course doesn't have, with a stable population figure). Eventually that formula explodes, something will give in the coming decade. Russia is in better shape on the price they need. They're a lot more comfortable near $60 than the Saudis. However they're still not able to realistically sustain oil prices lower than what the $40-$50 Permian producers can manage (seeing as the US producers don't have a national budget to support or a social bribe to pay for stability).
- user2426679 8y ago> Most new US production is higher cost (fracking), so the drop in market share is at least met with a stronger price floor for all. Not to be rude, but this is really off the mark. The only reason that we're not still in a cartel market regime of $100 barrels is fracking being invented/discovered and efficiently improved. It cut the price floor well in half. Fracking is not the cheapest, but it's also not the most expensive (see Canada's oil sands). When you compare fracked WTI (basically the USA-sourced index) to offshore Brent (North Sea, off the coast of UK), the costs are apples to oranges because fracking can be readily tapped at a relative drop of the hat (if prices spike in a short term period), but offshore is a huge multi-million/billion endeavor where you have to depreciate costs over a really long time horizon (same with oil sands, but different tech).
- DeonPenny 8y agoThe U.S. knows there's an obvious oil glut coming around 2025. So they are offloading large oil stores. Smart for them to do it now since it won't be worth much in the longer term.
- tpfour 8y agoOil glut? The analyses I've read point to an oil _crunch_. Are you being sarcastic?
- hguant 8y agoNope - just a few weeks ago the largest oil reserve in the US was announced by the US Geological Survey. https://www.abqjournal.com/1254493/usgs-permian-oil-gas-reserves-largest-ever-found-in-u-s.html https://www.abqjournal.com/1254493/usgs-permian-oil-gas-rese...
- iheartpotatoes 8y agoI love this part: "The USGS said its estimates are for “continuous unconventional oil,” meaning it’s spread throughout the Wolfcamp and Bone Spring formations rather than concentrated in one place. It said the reserves are “undiscovered,” meaning they have yet to be produced, and that they’re “technically recoverable” with current technologies." Key phrases: * continuous unconventional * undiscovered
- AndrewGaspar 8y agoPeak "Peak Oil" was 2005. https://trends.google.com/trends/explore?date=all&geo=US&q=peak%20oil https://trends.google.com/trends/explore?date=all&geo=US&q=p...
- DeonPenny 8y agoNo not only is oil production at historic highes, my theory is the US, Chinese and other foreign governments will start pushing electric vehicles hard. With tech adoption being extreme high unlike the past this adoption curve may take less than 5 years to get huge shares. If you look at the US for example for the first time in 30 years. They've been oil reserves. Oil they save for nation security to turn it into profit before it's worthless. It makes sense for China, the US, and europe to go electric since they have very little oil. It's a national security thing is what my guess is.
- patagonia 8y agoThis is inline with climate goals how..?
- murph-almighty 8y agoI think it's more in line with foreign policy goals. I don't love that we're doing this either, but I like Russia and SA not having money to fuel their escapades.
- patagonia 8y agoI don’t know that it is necessarily in line with foreign policy goals on balance. Yes it is serving the US well in the short term in our dealing with said countries. However, the argument has been made that runaway climate change will have very bad economic and security implications for the US. We’re once again borrowing from the future with the hopes that 1) we can find a fix and 2) it’ll be worse for “them” than it will be for us.
- murph-almighty 8y agoThis is also true! I was thinking on a very short term scale. We could also invest in green energy to the point where the means of capture and storage are isolated to our borders, though I'm doubtful that we can do the same for the manufacture of the products that get us there (batteries, solar panels).
- athenot 8y agoOn the other hand, we're internalizing the pollution associated with that form of energy production. CO₂ is one issue; but pollution of aquifers seems to be overlooked until it will be too late, contaminating many fresh water supplies.
- zjaffee 8y agoMost of the fracking that is happening for this oil is in West Texas, nowhere near any substantial water table as is the case when looking at the fracking done in North Dakota, and also in one of the least populated parts of the country.
- elvirs 8y agohow? thru fracking? say bye to drinking water.
- elvirs 8y agothe guy is Erdogan's puppet and has to say things to undermine Saudi Arabia soooo im guessing since he is 'head of energy' he had to improvise a little using energy terms.
- drpgq 8y agoWell Turkey benefits from low oil prices since they basically have none.
- 2sk21 8y agoThis will only happen as long as investors are willing to throw money at fracking without expecting returns. The economics of the fracking industry are dubious at best. See for example: http://knowledge.wharton.upenn.edu/article/will-fracking-industry-debts-set-off-financial-tremors/ http://knowledge.wharton.upenn.edu/article/will-fracking-ind...
- shookness 8y agoFracking companies are facing a ticking time-bomb of debt: http://www.artberman.com/wp-content/uploads/HGS-11-SEPT-2017-Presentation.pdf http://www.artberman.com/wp-content/uploads/HGS-11-SEPT-2017... http://www.artberman.com/alternative-facts-about-opec-u-s-shale-from-the-wall-street-journal/ http://www.artberman.com/alternative-facts-about-opec-u-s-sh...
- njarboe 8y agoAlong with the US national government. About $17 trillion not owed to itself. Added 0.7 trillion in 2017. Cost to finance $17T per year at various interest rates (today's average rate on the US debt is about 2%): rate, cost($B), % of 2017 Fed income 2%, 340, 15% 3%, 510, 22% 5%, 850, 37% 8%, 1360, 59% 10%, 1700, 74% As you can see by this chart (sorry about the formatting), the Fed has to keep interest rates low or the US will have little choice but to default on the debt. I think a lot of people who ponder such things have concluded that the Fed will keep the interest rates low and the US will/are fudge/fudging the inflation numbers so that the Fed can still claim they are hitting their 2% target even though asset prices go through the roof. Who knows what the end game on such a plan will be, but some form of hyperinflation is not out of the question. All those people who are too scared of losing value on investments and just parking their savings in cash, will be very disappointed and confused if that happens.
- rrggrr 8y agoDoes this include state and muni debt? I imagine not.
- onetimemanytime 8y agoFor how long? Surely we can't go toe to toe with them, especially SA. IIRC, oil is very cheap there to get out too. Also, looks like USA decided that oil is a has-been, otherwise we'd be keeping it in reserves (Gov drilling policies ensure that.) Or maybe just wants to bankrupt OPEC and then stop?
- hangonhn 8y agoIt mainly puts a price ceiling on oil. Fracking can be turned off or on on relatively short notice. Anytime the price dips too low, those rigs can be idled. If OPEC raises prices above breakeven for fracking, the rigs turn back on and pushes the price back down.
- hnnh44 8y agoCan you provide a source for how this works? AFAIK the u.s. doesn't operate the oil rigs, and oil companies will operate in their own self interest. Does the u.s. government pay oil companies to suspended operation?
- jandrewrogers 8y agoThe US has enormous hydrocarbon reserves, and they have been adding technically recoverable reserves at an astonishing rate. Given current crude oil production rates and reserve estimates, the US could likely keep up the current pace into the 22nd century -- so very sustainable. And that ignores the mindbogglingly large natural gas and coal reserves in the US (effectively unlimited), which can also be used for the same purposes as crude oil albeit at higher cost. Realistically, that is more than we're ever likely to need given the ongoing electrification of transportation. It doesn't make sense to "save it" for the future and US crude oil has the advantage that they do not need the profit margins that would allow them to prop up a country with it.
- hourislate 8y agoI think Big Oil sees the writing on the wall. Pump it now or risk leaving it in the ground as alternative energy continues to expand in all areas from EV's to Solar/Wind Generation. It would be great if we only used oil for other products instead of Gasoline/Diesel/Kerosene. There are estimates that a barrel costs anywhere from $30-50 to pump in the Permian. I figure with technology it will be sub $20 in the next year or two. If you remove storage from the cost with additional pipe lines it makes it even more cost effective.
- cronix 8y agoWhat we should be doing is pushing towards green power by 2025. Put more money into battery, generation and related research. It seems a good deal of our problems are due to our dependence on oil (major world pollution, wars), and we need to become independent and shift energy usage. That would be a win-win for everybody, except the massive oil companies who are running the show, which is why it won't happen, especially under current leadership who is actually rolling back regulations and standards for efficiency. We're going backwards here, and the result won't be good except for a relatively few people.
- travisoneill1 8y agoWe are moving that way and fast: https://www.bloomberg.com/features/2016-ev-oil-crisis/ https://www.bloomberg.com/features/2016-ev-oil-crisis/
- cjhanks 8y agoI think the market has decided, America is going green independent of federal regulations. Oil independence means the US will never again need to ally with despots to support domestic needs. IMO this is a huge step forward.
- zackmorris 8y agoU.S. global climate change contribution to be equal to Russia plus Saudi Arabia by 2025 (reuters.com)
- gruez 8y agoit hasn't already?
- zachguo 8y agoHow would this change geopolitics?
- DeonPenny 8y agoAllows the US to flush the world with cheap oil making people like venezula dictator look foolish.
- Findeton 8y agoAnd how much of that production is going to actually produce it?
- newnewpdro 8y agoGreat news, climate!