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Analyst Makes Bombshell Prediction Of $50 Oil, More Production Than Possibly Know What To Do With
Business Insider ^ | December 1, 2012 | Joe Weisenthal

Posted on 12/04/2012 12:02:23 AM PST by 2ndDivisionVet

For the US economy, this would be a 'Black Swan' of a totally different variety.

In Bank of America/Merrill Lynch's 2013 Energy Outlook, analyst Sabine Schels and colleagues make a shocking prediction about the possible path of West Texas Intermediate oil.

Surging US shale oil output creates risk of $50 WTI North America’s energy supplies are surging while the rest of the world continues to fight for scarce molecules of oil and gas. On our estimates, onshore US crude oil output now vastly exceeds previous growth rates in liquids and nat gas, particularly in Lower 48 states. With profitability for US domestic oil producers very high and no change in sight to US rules preventing crude oil exports, we expect WTI prices to continue to lag international prices. Indeed, we see a risk of WTI temporarily falling to $50/bbl over the next 24 months to force a slowdown in supply growth or a change in crude oil export rules.

A key point that Schels & Co. make is that the crude oil market could come to resemble the Natural Gas market. In the natural gas market, the US has natural gas coming out of its ears, as it just has way more supply coming out of the ground than it could possibly use or export. So while prices remain decent throughout much of the world, domestic natural gas prices have collapsed...

(Excerpt) Read more at businessinsider.com ...


TOPICS: Business/Economy; Culture/Society; Front Page News; News/Current Events
KEYWORDS: economy; gas; oil; shale
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To: calex59

It may be geography-dependent, but here in NE ohio, there are plenty of fleet vehicles and busses running on LNG (Liquified Natural Gas). For obvious reasons, the local NG utility has a bunch.

The big problem, as I understand it is the L in LNG. NG is methane, and holding enough to provide any reasonable range requires that it be liquified, which requires high pressures to do so and a suitable pressure vessel to carry it around. Once that’s in place, the conversion is pretty trivial, except for the cost of satisfying the EPA trolls.

Liquifying NG also requires a fair amount of energy to run the compressors.

It’s definitely do-able if there was some external factor driving a large scale conversion, but there’s a good reason liquid transportation fuels dominate the market.


51 posted on 12/04/2012 5:59:08 AM PST by chrisser (Starve the Monkeys!)
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To: chrisser
The big problem, as I understand it is the L in LNG. NG is methane, and holding enough to provide any reasonable range requires that it be liquified, which requires high pressures to do so and a suitable pressure vessel to carry it around.

LNG is not pressurized, it is cooled down to -260°F.

The pressurized systems, often 3,000~3,600 psi are CNG, compressed natural gas. It has more volume requirement but does not require cryogenics.

52 posted on 12/04/2012 6:04:03 AM PST by thackney (life is fragile, handle with prayer)
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To: 2ndDivisionVet

If oil went down to $50/barrel, the msm would shout that it’s all due to Obama’s wonderful leadership.


53 posted on 12/04/2012 6:04:17 AM PST by nuconvert ( Khomeini promised change too // Hail, Chairman O)
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To: Average Al
I checked out the cost of conversion kits and I found prices around 4-5K a car which seemed rather high.

I did a little research into conversions for NG and LPG.

The parts themselves cost far less. There's no technical reason why a universal conversion setupt couldn't be made economically.

Except that the EPA requires that it put it's imprimatur on every system - they require the systems to be installed, tested, and approved for a single vehicle with a single engine. Once that approval is obtained, it is not transferrable to the same vehicle with a different engine or a different vehicle with the same engine, and forget a completely different vehicle.

The costs of getting EPA approval are pretty large, and they have to be spread across the currently small markets for conversions. Since the only conversions with a prayer of being profitable are those for vehicles with huge customer bases, the EPA approved conversions are scarce and expensive.

Our government at work.
54 posted on 12/04/2012 6:09:47 AM PST by chrisser (Starve the Monkeys!)
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To: dalereed

I remember $.13/9 gasoline.
My ‘66 Chevy 396/425 motor got eight miles to the gallon.
No worries...


55 posted on 12/04/2012 6:17:24 AM PST by Eric in the Ozarks (In the game of life, there are no betting limits)
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To: redgolum
This is all speculation, but it is informed speculation. The thing to remember is that it all depends on the EPA giving the green light.

Well, that's the end of that. Especially if a darter snail is at risk of extinction, because of it.
56 posted on 12/04/2012 6:25:56 AM PST by crosshairs (Hurricane Barry is 1000 times more destructive than Hurricane Sandy.)
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To: 2ndDivisionVet
Those are REALLY REALLY bad examples of the fine automobile that was the 442. They come from about the time I started hating GM and everything it stood for. It's like they were testing us to see how stupid we consumers really are.

Blech

57 posted on 12/04/2012 6:32:56 AM PST by BlueMondaySkipper (Involuntarily subsidizing the parasite class since 1981)
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To: Eric in the Ozarks

In 66 in So. California gas was 26.9.

When I was paying 13.9 was in 1954!


58 posted on 12/04/2012 6:36:35 AM PST by dalereed
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To: 2ndDivisionVet

Might get to $50/bbl, but there will be $50/bbl taxes on it.


59 posted on 12/04/2012 6:45:15 AM PST by Rebelbase
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To: Jack Hammer
Abundant gasoline at economical prices? Sorry, not in keeping with the Obama Plan to destroy the nation and bring on the Great People’s Cultural Revolution.

The ironic thing is that cheap energy may be the only way to salvage the situation -- assuming Obama wants it salvaged in the first place (which, as you point out, there is ample evidence that he doesn't want to).

60 posted on 12/04/2012 6:46:09 AM PST by kevkrom (If a wise man has an argument with a foolish man, the fool only rages or laughs...)
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To: 2ndDivisionVet

That’s funny.

How the mighty have fallen. Aeroback with a 305. And a 4 cylinder 442! Sigh.


61 posted on 12/04/2012 6:46:19 AM PST by ecomcon
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To: dalereed

My folks and I sailed into Oakland after overseas duty back in 1961. California looked damned good to me.


62 posted on 12/04/2012 6:48:49 AM PST by Eric in the Ozarks (In the game of life, there are no betting limits)
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To: 2ndDivisionVet

Even if it happens gas prices will remain high. Too many oxes would be gored by lower prices, not the least of which being Dear Leader. Market manipulation is the name of the game. $3+ per gallon is the New Normal.


63 posted on 12/04/2012 6:49:21 AM PST by jboot (This isn't your father's America. Stay safe and keep your powder dry.)
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To: 2ndDivisionVet; ecomcon
Please, if you are going to picture the 442, use a decent year.

Mine was black with gold pin-striping. Sadly, not the 442 option, but I totaled it anyways using only a rocket 350 engine.

64 posted on 12/04/2012 6:51:23 AM PST by thackney (life is fragile, handle with prayer)
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To: calex59

Because natural gas is a “fluffy” fuel unless you liquify it. Compressed natural gas tanks in a car won’t get you more than, oh, 150 miles of range - if that.

LNG infrastructure would be expensive and “lossy” (you lose gas as the liquid heats up and converts to a gas) and the tanks have to be built to keep the gas in a super-cooled state. Compressed natural gas tanks need to be built to withstand impacts in crashes, because the compressed gas (even if not flammable) would cause quite an enhancement to a crash if the tank vented explosively - not from the gas burning, but from the sheer force of becoming explosively de-compressed.

Here’s a rule of thumb: Ever been in a shop with a 80 to 120 gallon air compressor? Ever wonder how big a bang that tank would make if it exploded at 175PSI?

It would be about the force of .75 to 1.0 sticks of dynamite.

Now think about the force of a CNG tank rupturing at thousands of PSI...


65 posted on 12/04/2012 6:58:22 AM PST by NVDave
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To: Jack Hammer; Fred Nerks; Beckwith

Obama will find a way to f*ck it up somehow, never fear.>>>>>>>>>>>>>>>>>>

Few people know how true your words are and how it will be done.

The EPA now operates on executive orders from POSHITUS
and Obama is quite ready to destroy andy initiative inside the USA that will reduce the price of oil, and he has likely guaranteed this activity to the Saudis.

The only way West Texas oil will ever impact the market is to go to war and shoot at EPA enforcers.Will that happen?
Who knows?


66 posted on 12/04/2012 7:28:36 AM PST by Candor7 (Obama fascism article:(http://www.americanthinker.com/2009/05/barack_obama_the_quintessentia_1.html))
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To: Candor7

To cadge a phrase from the ancient Left, “You don’t need a weatherman to know which way the wind blows.”

Obama is set on destruction of the United States; his method will reveal itself in time, but the result is a foregone conclusion.


67 posted on 12/04/2012 7:39:06 AM PST by Jack Hammer
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To: Jack Hammer; stephenjohnbanker; Fred Nerks; Beckwith

Remember what a real president is like and remember conservatism. We need rid of the RINOs, they have failed yet dop not want to accept the failure to win the presidency. They own it, now we get rid of them all.

Just listen to this:

http://www.youtube.com/watchv=Ryv7PzyCmVA&feature=player_embedded


68 posted on 12/04/2012 7:55:51 AM PST by Candor7 (Obama fascism article:(http://www.americanthinker.com/2009/05/barack_obama_the_quintessentia_1.html))
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To: Candor7

“Remember what a real president is like and remember conservatism.”

Yes, by all means, hang in there and fight the good fight.

I’m afraid i’m getting a little too old for that sort of thing, and this election may have been my last.

Possibly, and with a little luck, I’ll live to see the next president - a conservative - inaugurated, but I’m not making any plans.

You kids do what needs to be done - it’s your world now.


69 posted on 12/04/2012 8:39:39 AM PST by Jack Hammer
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To: thackney

Maybe the technology would allow for wildcatters again and the John Q Public could drill his own well and sell it.


70 posted on 12/04/2012 8:43:32 AM PST by Resolute Conservative
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To: Jack Hammer

Don’t worry Jack. It will be turned around.


71 posted on 12/04/2012 8:57:22 AM PST by Candor7 (Obama fascism article:(http://www.americanthinker.com/2009/05/barack_obama_the_quintessentia_1.html))
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To: chrisser

Interesting info. I imagine fuel injection versus carburetors may make it more difficult as well.


72 posted on 12/04/2012 9:20:40 AM PST by Average Al
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To: Average Al
Actually fuel injection is not a problem for a gas conversion. The gas conversion can be easily done with a fuel injector into the throttle body controlled by a "mega squirt" programmable fuel injector system. With a fuel injector system, some of the parts you need to use are already there like the mass flow sensor. Mega Squirt
73 posted on 12/04/2012 9:54:42 AM PST by American in Israel (A wise man's heart directs him to the right, but the foolish mans heart directs him toward the left.)
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To: 2ndDivisionVet

The EPA will “Kill Colorado” long before oil ever approaches $50/barrel. The Agenda will not be sidetracked.


74 posted on 12/04/2012 10:01:51 AM PST by Mr. Jeeves (CTRL-GALT-DELETE)
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To: 2ndDivisionVet; Jack Hammer
Here's how they're going to screw up our first genuine shot at energy independence:

Once the greens demagogue the issue of fracking, the EPA will shut it down.

75 posted on 12/04/2012 10:12:46 AM PST by Lakeshark (!)
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To: American in Israel
I would love to convert my cars over to use natural gas. Particulary since it is much cleaner and I wouldn’t have
the concerns about using corrosive ethanol in my engines.
76 posted on 12/04/2012 10:53:18 AM PST by Average Al
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To: Spktyr
However - after a number of ‘genius’ individuals blew up entire city blocks trying to rig up home filling stations and a number of cars were involved in incidents that killed everyone in a 100’ radius because of tank ruptures and improper maintenance, it was filed away as a bad idea for the vehicle population as a whole.

Do you remember where you read these articles? My impression is that most natural gas related accidents come from crashing into natural gas pipelines. To my knowledge, Mexico's CNG conversions are completely unregulated, and I've never heard of spectacular accidents.

77 posted on 12/04/2012 10:55:14 AM PST by Zhang Fei (Let us pray that peace be now restored to the world and that God will preserve it always.)
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To: BRK
Always thought the first 4 in 442 stood for 400ci.
I stand corrected.
Do know at the end of production they were up to the 455ci.
They were pretty hot, but GTO looks and sales kind of did them in.
78 posted on 12/04/2012 11:42:32 AM PST by The Cajun (Sarah Palin, Mark Levin......Nuff said.)
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To: Candor7

Yes, it’ll be turned around eventually, and thank you for striking a positive note.

For everything there is a season; however, I doubt very much I’ll be here to see it.

In the interim, I’m a little tired of - and sore from - being ‘turned around’ by the president.


79 posted on 12/04/2012 3:59:22 PM PST by Jack Hammer
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To: 2ndDivisionVet

If oil drops that low it won’t be profitable to extract it from shale.


80 posted on 12/04/2012 8:50:09 PM PST by Terry Mross (I haven't watched the news since the election. Someone ping me if anything big happens.)
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To: Lakeshark

Matt Damon won’t care, of course, he’s a major star and he’ll still have enough gelt to buy the limo, fuel it (whatever the price of gas), and have a chauffeur drive him around.

Life becomes a little more problematic for us peons.


81 posted on 12/05/2012 1:11:26 AM PST by Jack Hammer
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To: Jack Hammer
You're right, he won't care a bit.

Neither does he care that his so called documentary about the evils of fracking is supported financially by the Saudis and will benefit them greatly if he can convince enough suckers to put pressure on to stop fracking from being used.

Like most actors, he wants to make up for his overwhelming fortune gotten by pretending to be someone else, so he picks a "cause" that makes him feel good.

This documentary of his is demonstrably false, much like Michael Moore's agitprop, and it will be used to try to destroy the industry that could, if left alone, bring the US to energy independence.

82 posted on 12/05/2012 6:37:36 AM PST by Lakeshark (!)
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To: 2ndDivisionVet
Please tell us that this is our early Christmas present and that our country could possiblely pay off our national debt if we gouge the rest of the world with the price of our oil.
America's version of O.P.E.C.
I would rename of America's telling the rest of the world G.O.T.O.H.E.L.L.
83 posted on 12/05/2012 11:10:39 PM PST by American Constitutionalist
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To: The Cajun
A big block Chevy engine is fine, but, it's no good with all the speed light cams all around the country to send you a nice fine in the mail.
A V6 chevy engine is good enough for me...
84 posted on 12/05/2012 11:12:39 PM PST by American Constitutionalist
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To: The Cajun
Also ? another thing ? those liberals who want to " TAX THE RICH " or " THE RICH NEED TO PAY THEIR FARE SHARE " ?

If the environmentalist want to drive those VOLTS ? they need to pay a heavy premium for those cars on top of the already high cost of those Chevy VOLTS.
I say ? TAX the crap out of the liberals and environmentalist since they want us to go to green way.
85 posted on 12/05/2012 11:16:03 PM PST by American Constitutionalist
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To: BRK

86 posted on 12/05/2012 11:19:43 PM PST by American Constitutionalist
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To: 2ndDivisionVet
1969 OLDS 442 Convertible.


87 posted on 12/05/2012 11:23:08 PM PST by American Constitutionalist
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To: The Cajun

http://cgi.ebay.ca/ws/eBayISAPI.dll?VISuperSize&item=160765464456

Looks like you might be riight about he first 4 standing for 400 cid. Take a look at this ad back from 1965. Looks like I stand corrected.


88 posted on 12/06/2012 7:28:05 AM PST by BRK
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To: 2ndDivisionVet

89 posted on 04/06/2013 8:14:19 PM PDT by Jack Hydrazine (I’m not a Republican, I’m a conservative! Pubbies haven't been conservative since before T.R.)
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