Posted on 12/03/2014 2:18:51 PM PST by Kaslin
And they say there's no good news in the paper. But when it comes to oil, oil prices, oil diplomacy and just about everything else connected to this country's shale-oil boom, there's little but good news to report either at home or abroad. From the gas pump to international conferences, it's all good. Unless you're a gigantic corporation that's exploited this country's addiction to petroleum for years at immense profits. Or a rapacious oil sheik or dictator who's exploited not only his own people but the rest of the world. In that case, it couldn't happen to a more deserving bunch.
The drop in oil prices as American producers move into high gear isn't just good news for this country's consumers but the whole economy, for so much of it runs on oil and gas. And a variety of other petroleum products. No wonder the stock market keeps edging up despite the drop in oil shares. Investors can look at the big picture, and it's definitely acquired a rosy glow.
Granted, it's bad news for the old oil cartel, formally known as OPEC, the Organization of Petroleum Exporting Countries, which for as long as memory runneth not to the contrary has had the rest of the world by the throat, or rather the pipeline.
But now this country is about to get still another pipeline of its own. The Keystone XL is to carry not only American oil but that produced by Canada's tar sands down to the Gulf of Mexico, where it'll be refined and begin to flow out not just to American markets but the rest of the world. Which means it'll reduce the price of oil for all, and bolster our friends and allies worldwide. For they could no longer be held hostage by oil-rich autocrats who have controlled the oil tap for so long -- and used it to bully others. Case in point: Moscow's threats to leave countries like Ukraine, Poland and Germany shivering in the cold unless they bow to the Kremlin's will.
But what's the new Autocrat of All the Russias, aka Vladimir Putin, to do now? Some 45 percent of his country's now shaky budget depends on oil revenues, and they're dropping as fast as the ruble.
What a reversal of fortunes as dictatorships around the world face new competition from a free market now starting to overflow with oil and gas to export. Even this American president, who's dragged his feet every step of the way as American producers sought to take advantage of this hopeful new development in the country's petroleum industry, is not above taking credit for the dramatic improvement in American oil production. He may have been short of vision, but nerve he's always got.
Let's hear it for those who've led the way -- from the new shale-oil fields in the Dakotas to the old, suddenly rejuvenated oil industry in Texas. Congratulations all around and Drill, Baby, Drill. 'Cause we ain't seen nothin' yet despite all the naysayers hiding behind imaginary fears and scare stories about environmental dangers. Earthquakes! Poisonous gases! Dry-as-dust aquifers! You name the menace, and shale-oil is to blame for it.
But the American people no longer scare as easily. They begin to realize that shale-oil drilling goes on deep under the water table, where no harm can be done if proper precautions are taken. Like double-casing the pipes that bring the petroleum to the surface. Reason returns.
What a surprising turn of events. Though it's doubtful it would have surprised George P. Mitchell, the old Texas wildcatter who had this strange idea of using fluids under high pressure to break up rocks far below the surface of the Earth -- and pumping up the natural gas that the process released. He spent his last years and the last fortune he'd made in the old fields pioneering a technique called hydraulic fracturing (now known as fracking for short) in Texas' Barnett Shale, and finally got everybody else's attention. He kept faith with his own vision despite disappointment after disappointment, and now it's produced this gusher that's changing the world. For much the better.
Oil companies average 4% profit while the government takes 15% profit (whoops, I mean tax). Who is profiting from our country’s “addiction to oil”?
Oh, so I guess they're supposed to just give it away for free - it's your right doncha' know. White privilege and all that...
That was the first thing I thought about too! Unless he is referring to the State and Federal governments, who add on way, WAY more in taxes than the "gigantic corporations" have obtained in profits.
At least those "gigantic corporations" do something like OBTAIN THE OIL FROM THE GROUND!
LOL...funny, we all stopped on the same passage!
I generally like the article except for that one passage, and it is possible I misunderstood it...it seems out of character with the rest of the article.
Strange idea? The industry had been doing the same for decades before. It took George a decade to come up with the right combination to be economic in the shale. But it wasn't a new idea, he just figured out the specific "recipe" to make it work in shale. No big break through, just years and millions of dollars of incremental improvements.
In his own words:
http://www.economist.com/blogs/schumpeter/2013/08/interview-george-mitchell
Great linked article, thackney, thanks for posting it!
It takes two. I figured the folks who kept paying willingly rather than change their behavior to stop the exploitation have a part in this, too.
Who’s your mama for oil?
Those petroleum, electrical, and mechanical engineers who mastered long and difficult college courses, and followed that by real work on real projects?
Or, the Dorkbama and his clueless marshmallow major idiots who have never run anything primarily because no real company would ever hire them?
One laughs to think of the Gruberdork doing anything but cleaning the batrooms on an oil rig. Economist, my as...er...Obamahole. Sounds like economics is rapidly joining the marshmallow major crowd.
One has to love this!
If you want more of that:
http://www.forbes.com/2009/07/16/george-mitchell-gas-business-energy-shale.html
EOG, Devon and some others took his work added horizontal steerable drilling and then is when it really took off.
It’ll be nice to see the US tell the OPECers to go pound sand along with the green weenie enviroMENTALists—they’d better get pounding, there’s a lot of sand over there and both groups have a lot of catching up to do...! And diesel fuel for transport industries better drop too, and with that, prices on products as well.
Remember that the elite do not want the peasants using THEIR energy.
That will be the underlying motive behind any energy policy implemented by democrats.
Here’s the flaw. Greenberg thinks about “big oil”. The fracking boom has been a God send for thousands and thousands of individual property owners who get a monthly royalty check - especially land owners in rural areas. The secondary positive effects of the oil boom have led to employment; oil field service expansion; rising property values; increased tax revenues for cities and counties.
Re: stopping on that passage.
Yes, and people with the slightest knowledge
of economics know that even corporations
don’t have control over prices. Even
a monopolist’s prices are governed by
economic forces. If the rapist corporations
are being evil in fat times, are they being
generous in lean times for them like today?
The only downside is that Obama may get the credit for the economic benefits, even though he opposed everything that enabled this.
Right. It is what the market will bear.
“But what’s the new Autocrat of All the Russias, aka Vladimir Putin, to do now? Some 45 percent of his country’s now shaky budget depends on oil revenues, and they’re dropping as fast as the ruble”: I wonder if this is the very “hook” that God will put into Russia’s jaw and drag it down to attack Israel?
Yes, they will not maximize profits
if their prices are too high, and they
will also not maximize profits if
their prices are too low. Regardless
of whether they are run by angels
or scoundrels, they cannot defy
the laws of economics.
Even monopolies.
If the ramifications of not understanding that by the very people who have power in this country over law and commerce, it would be funny if it were not so damned serious.
It ismisunderstood by the same people who think socialism is a great idea, price controls are a great idea, a minimum “living wage” is a great idea, and communism is a great idea, especially the Chinese Communist model.
Heck, we are all preaching to the choir here, aren’t we?
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