Skip to comments.An incomparable strategic weapon for the USA(Hint:technology that Obama is trying to destroy)
Posted on 01/09/2014 5:19:51 AM PST by bestintxas
As Russia prepares to strut its stuff before the world at the 2014 Sochi Olympics, the economic foundation of Russian power and prosperity is crumbling, thanks to a strategic weapon developed by the United States. That weapon is fracking, and it is paying havoc with Russia's ability to exercise power on the world stage. Three articles lay out the devastating consequences of this technological revolution developed mostly not by a national laboratory, huge government initiative, or top scientists, but by guys out in the Texas and Oklahoma oil patches.
The American Interest sums it up most pithily:
North America's shale gas boom is chipping away at the market for gas producers like Russia. What's more, if the United States becomes a gas exporter, Russia's customers (especially in Europe) could decide to cancel expensive contracts with Gazprom in favor of cheaper American natural gas. Gazprom supplied 27 percent of Europe's natural gas in 2011. While American gas is trading below $2 per MMBTU (million British thermal units), Gazprom's prices are tied to crude oil markets, and its long-term contracts charge customers roughly $13 per MMBTU, says the FT. European customers would love to reduce their dependence on Gazprom and start to import American gas.
Stefan Schultz and Benjamin Bidder of Der Spiegel expand on the geopolitical impact of adding potential new American gas supplies to Europe:
Early this week, an invoice was delivered to the Ukrainian government and Naftogaz, the country's national oil and natural gas company. It was sent by Russian energy giant Gazprom, and it read almost like a declaration of war: the Russians were demanding $7 billion for 16 billion cubic meters of natural gas -- which Ukraine hadn't even used.
(Excerpt) Read more at americanthinker.com ...
Whos is it that the US should be helping, Americans or the Russians and Sheiks?
Oddly enough, most of the discussion of this issue implies that fracking and gas/oil shale are limited to North America.
Fact is that there are huge such resources all over the world, including in Europe, Russia’s main energy buyer. But the biggest of all are probably in Russia itself.
Once US gas prices drop far enough that continued drilling here isn’t profitable, the rigs and crews and expertise will fan out across the world and start making much of the rest of the world energy-independent.
This is a very good thing for most of the world. Very bad for Russia, Saudi, and Venezuela.
I’m trying to find a downside here.
I don’t see the equipment including fleets of trucks being shipped overseas that easily. I do see the drillers concentrating in areas with wet gas. Permitting Cove Point and the Gulf of Mexico site for LNG export would be a major step in resolving a lot of issues world wide.
If the Saudis don’t like it, ramp up exports. We should do it.
I have no expertise in the area. And I’m sure shipping rigs would be expensive.
But it seems like shipping would be a LOT less expensive than having rigs sit not being used.
The Russians and the Sheiks, of course.
How did we end up with a commie president?
A one-two punch of dumbed-down low-info voters who vote for lying commies that promise free s**t, and massive election fraud.
“Im trying to find a downside here.”
Of course it exists there but what you have to ask is does it Commercially exist here instead.
Many attempts to try fraccing similar zones in other countries - all the major oil companies have tried it. But they give up by and large. Why?
Because the host countries demand a much greater share of revenue than an oil company can afford to give for such capital-intensive drilling projects.
Oil-producing countries are just too used to having most of the cake in the Conventional Oil world. that percentage take cannot be extrapolated into the UnConventional Oil world.
BTW - the only genuine places where large-scale fraccing is undertaken for Unconventionals are in the USA, Canada and Australia - three places where the margins remain robust and a buck can be made.
Until other countries lessen expectations of profit, they will not get any takers to do the large-scale frac projects. They could choose to do it themselves but guess what, they do not possess the expertise nor the equipment to do so.
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