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An important aside here is that the US shale oil revolution now means that the US can produce oil domestically at similarly cheap prices. KSA is actively losin

An important aside here is that the US shale oil revolution now means that the US can produce oil domestically at similarly cheap prices. KSA is actively losing its leverage. MbS might not have those ten more years for his project.

beerandt 7y ago
This concept has always been a bit misleading- we're still importing light / sweet crude from places like Saudi Arabia since it is cheaper to refine (to EPA requirements). We're just exporting more heavy/sour oil and natural gas to offset it. The only way we'd realistically be self sufficient would be a WWII type scenario in which EPA regs and emissions control were suspended due to some national security requirement.
- mrkstu 7y ago
  Except shale oil is light/sweet. Where we have excess refining capacity it heavy/sour, because of cutbacks with Venezuelan oil. Right now we're running out of capacity on light/sweet processing and may need to start exporting it.
  - beerandt 7y ago
    I didn't mean to imply that it wasn't. Just that "net exporter" doesn't necessarily mean that we've stopped importing from frenemies.
- njarboe 7y ago
  The large increases in US oil production is in the Permian Basin and the Bakken Shale, which both produce light crude. Some of this is exported, as most refineries in the US are designed to process heavy crude. California refineries generally are set up for lighter crude (historically a lot of Alaskan crude) and has been hit with higher oil prices due to the recent loss of Saudi production.
  - beerandt 7y ago
    >designed to process heavy crude Yes, because historically, that's what the US produced. The refining and transport infrastructure takes time to modify and catch up to the new markets, (especially after Warren Buffet and Obama's back room deals to the benefit Union Pacific RR). California is set up for lighter crude because it has even higher costs and stricter environmental regs than the US standard, but the same premise applies. It's still cheaper for them to import the more expensive light/sweet than to refine heavy/sour from LA or Mexico or Colorado.
- hollerith 7y ago
  You have it backwards: Saudi produces heavy / sour crude whereas fracking produces light / sweet crude. And fracking has (so far) been completely or almost completely limited to the US and Canada.
  - beerandt 7y ago
    Well, I oversimplified, but I see how it looks on hindsight. But my point is that the market is complicated, and net-exporter doesn't necessarily mean self-reliant. 1) Saudi produces a range, including primarily heavy / sour, but because they and their Asia customers have lax environmental standards, whatever light / sweet product coming from or through Saudi Arabia tends to be traded to a western country with strict environmental standards. Because of the US (historically) having an excess of heavy, the US could export that heavy in exchange for a lesser amount of light, and still come out ahead after taking into account cost of refining. 2) Fracking produces mostly gas and light crude, yes, but North American production until the most recent boom was mostly the moderate to heavy sour product, (North Alaska, Alberta sands, Gulf of Mexico, pre-shale Texas). The shift is causing the existing infrastructure to be repurposed in sometimes unexpected ways, from pipeline reversals (ho-ho) to underused heavy refining / cracking capacity, to changes in trading partners. 3) Re: fracking limited to US and Canada- That's (mainly) due to cost of extraction taking into account permitting and compliance. It's a result of political policy more than technical ability or what proven reserves are available. Other countries either: 1) don't need to use new fracking methods, as it's cheaper to use traditional extraction methods, or 2) don't use new fracking methods because they're regulated to the same extent (or more) as traditional extraction methods, which still makes it relatively cost prohibitive. The US and Canada just happen to be in a regulatory "sweet spot" where new-style fracking makes economic sense.
fennecfoxen 7y ago
> An important aside here is that the US shale oil revolution now means that the US can produce oil domestically at similarly cheap prices. Perhaps, but certain politicians like Elizabeth Warren would like to end that soon. "On my first day as president, I will sign an executive order that puts a total moratorium on all new fossil fuel leases for drilling offshore and on public lands. And I will ban fracking—everywhere." https://twitter.com/ewarren/status/1170070887887986690 https://twitter.com/ewarren/status/1170070887887986690 Some analysis: https://www.wsj.com/articles/prospect-of-president-warren-spooks-energy-investors-11571650201 https://www.wsj.com/articles/prospect-of-president-warren-sp... (paywall) https://www.cnn.com/2019/10/17/business/elizabeth-warren-oil-fracking-ban/index.html https://www.cnn.com/2019/10/17/business/elizabeth-warren-oil... (not paywall)
- pstuart 7y ago
  Good. We need to stop subsidizing fossil fuels.
  - hollerith 7y ago
    Banning something strikes me as a very heavy-handed way to stop subsidizing it. Why not stop the subsidies without banning it?
    - fennecfoxen 7y ago
      Calls such as this one to "stop subsidizing" fossil fuels are not an honest exhortation to accomplish the limited objective stated. They are rhetorical, placed here to distract from the inconvenient geopolitical impacts of the proposed policy, and muddy the water with some sort of quasi-excuse that doesn't really do a great job of excusing. (But if you're talking about it, you've at least distracted people from the fact that the Warren plan sending more money to the Saudis).
  - mensetmanusman 7y ago
    There is a balance. If we stop the economy to stop all fossil fuels, that would be one solution, but then we would lose R&D support for the next step in our economic revolution.

beerandt 7y ago

This concept has always been a bit misleading- we're still importing light / sweet crude from places like Saudi Arabia since it is cheaper to refine (to EPA requirements). We're just exporting more heavy/sour oil and natural gas to offset it. The only way we'd realistically be self sufficient would be a WWII type scenario in which EPA regs and emissions control were suspended due to some national security requirement.

mrkstu 7y ago
Except shale oil is light/sweet. Where we have excess refining capacity it heavy/sour, because of cutbacks with Venezuelan oil. Right now we're running out of capacity on light/sweet processing and may need to start exporting it.
- beerandt 7y ago
  I didn't mean to imply that it wasn't. Just that "net exporter" doesn't necessarily mean that we've stopped importing from frenemies.
njarboe 7y ago
The large increases in US oil production is in the Permian Basin and the Bakken Shale, which both produce light crude. Some of this is exported, as most refineries in the US are designed to process heavy crude. California refineries generally are set up for lighter crude (historically a lot of Alaskan crude) and has been hit with higher oil prices due to the recent loss of Saudi production.
- beerandt 7y ago
  >designed to process heavy crude Yes, because historically, that's what the US produced. The refining and transport infrastructure takes time to modify and catch up to the new markets, (especially after Warren Buffet and Obama's back room deals to the benefit Union Pacific RR). California is set up for lighter crude because it has even higher costs and stricter environmental regs than the US standard, but the same premise applies. It's still cheaper for them to import the more expensive light/sweet than to refine heavy/sour from LA or Mexico or Colorado.
hollerith 7y ago
You have it backwards: Saudi produces heavy / sour crude whereas fracking produces light / sweet crude. And fracking has (so far) been completely or almost completely limited to the US and Canada.
- beerandt 7y ago
  Well, I oversimplified, but I see how it looks on hindsight. But my point is that the market is complicated, and net-exporter doesn't necessarily mean self-reliant. 1) Saudi produces a range, including primarily heavy / sour, but because they and their Asia customers have lax environmental standards, whatever light / sweet product coming from or through Saudi Arabia tends to be traded to a western country with strict environmental standards. Because of the US (historically) having an excess of heavy, the US could export that heavy in exchange for a lesser amount of light, and still come out ahead after taking into account cost of refining. 2) Fracking produces mostly gas and light crude, yes, but North American production until the most recent boom was mostly the moderate to heavy sour product, (North Alaska, Alberta sands, Gulf of Mexico, pre-shale Texas). The shift is causing the existing infrastructure to be repurposed in sometimes unexpected ways, from pipeline reversals (ho-ho) to underused heavy refining / cracking capacity, to changes in trading partners. 3) Re: fracking limited to US and Canada- That's (mainly) due to cost of extraction taking into account permitting and compliance. It's a result of political policy more than technical ability or what proven reserves are available. Other countries either: 1) don't need to use new fracking methods, as it's cheaper to use traditional extraction methods, or 2) don't use new fracking methods because they're regulated to the same extent (or more) as traditional extraction methods, which still makes it relatively cost prohibitive. The US and Canada just happen to be in a regulatory "sweet spot" where new-style fracking makes economic sense.

fennecfoxen 7y ago

> An important aside here is that the US shale oil revolution now means that the US can produce oil domestically at similarly cheap prices. Perhaps, but certain politicians like Elizabeth Warren would like to end that soon. "On my first day as president, I will sign an executive order that puts a total moratorium on all new fossil fuel leases for drilling offshore and on public lands. And I will ban fracking—everywhere." https://twitter.com/ewarren/status/1170070887887986690 https://twitter.com/ewarren/status/1170070887887986690 Some analysis: https://www.wsj.com/articles/prospect-of-president-warren-spooks-energy-investors-11571650201 https://www.wsj.com/articles/prospect-of-president-warren-sp... (paywall) https://www.cnn.com/2019/10/17/business/elizabeth-warren-oil-fracking-ban/index.html https://www.cnn.com/2019/10/17/business/elizabeth-warren-oil... (not paywall)

pstuart 7y ago
Good. We need to stop subsidizing fossil fuels.
- hollerith 7y ago
  Banning something strikes me as a very heavy-handed way to stop subsidizing it. Why not stop the subsidies without banning it?
  - fennecfoxen 7y ago
    Calls such as this one to "stop subsidizing" fossil fuels are not an honest exhortation to accomplish the limited objective stated. They are rhetorical, placed here to distract from the inconvenient geopolitical impacts of the proposed policy, and muddy the water with some sort of quasi-excuse that doesn't really do a great job of excusing. (But if you're talking about it, you've at least distracted people from the fact that the Warren plan sending more money to the Saudis).
- mensetmanusman 7y ago
  There is a balance. If we stop the economy to stop all fossil fuels, that would be one solution, but then we would lose R&D support for the next step in our economic revolution.