Gas Prices....Good, or Bad?

Don M.

Don M.

SF VIP
Location
central Missouri
We've been given a nice respite from high pump prices in recent weeks, and some are saying we may drop below $2 a gallon in some parts of the nation. This seems to be due to people driving less, driving more fuel efficient vehicles, and new/unconventional sources of oil coming on line...thus creating a surplus.

However, there are also some concerns about the long term effects. OPEC recently decided Not to reduce their output, and seems willing to allow the price of crude to continue to drop. This could put many of the new producers/sources, such as the Canadian Sands, and Fracking, etc., at risk. These newer sources of oil are quite expensive to produce, and if crude prices stay low for any extended period of time, it may put many of these suppliers out of business. The US is very near reaching energy independence, and the Saudis/OPEC seem to be getting concerned that they may not be able to hold us hostage for much longer. The OPEC nations have a huge surplus of Dollars, so they can ride out low prices for quite some time, whereas these new producers may not be able to hold out for months/years if crude stays below $70 a barrel.

In addition, the November car sales showed a real spike in purchases, with the biggest gains being large pickups and SUV's. We could be looking at a short lived "dip" in energy costs, followed by a major rise that could drive pump prices up to $5 a gallon in a year or two. Between OPEC playing "Chicken" with the newer and smaller producers, and peoples short memories causing them to revert to buying gas guzzlers again, we might be very wise to "Be Careful of What You Wish For".
 

Will there be complaints when citizens who work in the gas and oil industries in the US begin losing their jobs and the unemployment rates rise along with applications for unemployment insurance?
 
Here in the Uk unleaded is around £1.20 a litre (£5.80 a gallon)...the equivalent of over 9 US dollars a gallon..

It's Down in the last few weeks by about 8pence a litre, but still scandalously high and not likely to come down any further...
 
hollydolly said:
Here in the Uk unleaded is around £1.20 a litre (£5.80 a gallon)...the equivalent of over 9 US dollars a gallon..

It's Down in the last few weeks by about 8pence a litre, but still scandalously high and not likely to come down any further...
Click to expand...

The huge difference in gas prices, between the US and Europe, is all Taxes. The Europeans tax gas heavily so as to support an excellent mass transit system...whereas here, we are locked into our cars, for the most part. But, then, in order to create a mass transit system here that would rival the European systems, we would have to spend Trillions. The geographic differences and population densities would make such systems very impractical here, except for the big city corridors.
 
YET... on the otherhand.. with gas costing less, people have more money in their pockets.. Not a huge amount, but perhaps a dinner out once a week. Or an upgrade on some service.. or perhaps a few additional Christmas presents.. That multiplied by millions if consumers, amounts to a huge bump in the economy and creation of jobs, not a loss. What would be lost in the oil industry jobs would likely be more than made up for in other industries.
 
I believe one of the reasons why oil is low is because China, which is the world's second largest user of oil, (U.S. is first), is suffering somewhat of an economic downturn. Their factories are no longer being utilized at 100%, which equates into less people working. I don't believe they are just yet ready to cash in their U.S Treasury bonds, but China, like always from an economic standpoint, needs to be kept an eye on. If their output (factory) goes up, then this may signal growth and shore up oil prices.

Also, Russia produces a lot of oil and may be the largest exporter of natural gas. They are not a member of OPEC, so they do not have to abide by the set price on the exchange. Yesterday, WTI futures for January oil closed at $66.00. while Brent closed at $69.00. $3.00 a barrel doesn't sound like much, until you start taking that number times millions of barrels of oil produced and sold daily.

As for these prices helping the U.S. job market, I would say that it is not helping as much as one may think. We have to keep in mind that a lot, maybe even most of our consumer goods are made off-shore with the exception being automobiles.

U.S. cars are still popular overseas and the Russians have a love affair with U.S. goods, especially autos, for the moment., which makes little sense, seeing that the Ruble is at a very low price versus the dollar, which then leads to another discussion that oil and dollars do tend to send mixed signals. Oil prices are down, so the Ruble is also down and now Russia finds themselves in a recession. (I think the Ruble is down like 40% against the dollar since last year.) Globally, however, the with the U.S. dollar being strong against the other currencies, including the Euro, it has helped other nations with manufacturing as lower gas prices here in the U.S. has given the American consumer more buying power.

Looking ahead, Iran and Libya are expected to come back on line with even more oil in the coming months, but this does not mean that we will see even lower gas prices. We may, but it is dependent upon other factors, not just how much oil is on the market. The Saudis have resisted OPEC's demand to cut oil production and the Saudis being the largest OPEC producer pretty much is the benchmark when it comes to production numbers. Right now with the petroleum war in full bloom and Russia fighting to keep their market share, prices cannot be stabilized. As inventories continue to grow, oil traders in the pits just do not have much to bid against other than try to keep the prices from falling too far.

I have always found that oil prices and dollars go hand in hand along with bond prices. If the little guy wants a piece of the action, he is best to join a consortium and only invest as much as he can afford to lose. If I were to be back trading oil, I would buy my contracts out as far as possible, thinking that oil has to rebound sooner or later. I think mid to late 2015 will see oil prices start to rise. Sooner or later, either OPEC or Russia is going to have to blink and cut production to lower oil prices. It is really a good thing, bad thing. Thirty years ago, I wouldn't have been saying that. Heck, I can remember back in 1963, I was paying around 29 cents a gallon for gas.
 
Personally, I am estatic about the lower gas prices. I drive 30,000 + miles/year and it makes a significant difference.

There are so many things that influence crude prices, mostly political. I still believe a significant bullet point in the OPEC strategy is driven by "back room" negotiations with the U.S. Russia is dependant upon their oil production to keep their economy stabilized. When we saw the USSR's economy tank, that took them from being an agressor nation to becoming a better neighbor. As Putin has transitioned back to an aggressive state, the global nations have taken notice. If the price of crude can be held down by OPEC and the US, Russia's economy will suffer dramatically.

This drop in crude prices also will curtail the fracking operations here in the US. Fracking has dramatically contributed to instability beneath the Earth's crust and we have seen a significant uptick in earthquakes. Buildings and homes are being damaged or ruined. Infrastructure... water and sewer lines... are at risk. A pull back in the fracking operations is needed and the lower crude prices should make fracking less profitable.

Yes, much of what we consume is manufactured overseas. Still, once those containers are off-loaded at our ports they are transported up and down our highways... using fuel. The cost of those goods at retail will come down as the costs of transportation become lower. People will have more money for food, clothing, necessities... and, perhaps, a little disposable income. (We haven't heard that term "disposable income" since the 'dot com' era of the 90's.)

Nationally, we have become accustomed to looking for the negative rather than accentuating the positive. We blamed the high gas prices on this Administration. Now, a partisan political culture is looking at how we can blame that same Administration for the gas prices being too low. You and I cannot control gas prices. You and I have zero ability to raise crude prices or lower crude prices. I'm entirely too old to allow political pundits to get me worked up over which way the pendelum of gas prices swings. The Good Lord has given me one more day to enjoy the blessings of the Earth. I will look forward to what tomorrow brings, no matter what the global economy related to the price of crude brings.
 
Grumpy Ol' Man said:
.......

There are so many things that influence crude prices, mostly political. I still believe a significant bullet point in the OPEC strategy is driven by "back room" negotiations with the U.S. Russia is dependant upon their oil production to keep their economy stabilized. When we saw the USSR's economy tank, that took them from being an agressor nation to becoming a better neighbor. As Putin has transitioned back to an aggressive state, the global nations have taken notice. If the price of crude can be held down by OPEC and the US, Russia's economy will suffer dramatically.

.........
Click to expand...


Have you actually done any kind of research on Russia and Putin in particular lately? Anything? So far I've read two of his recent, lengthy speeches and am currently working on reading one from 2013. Conciliatory as have been a couple interviews that he's given!!! That's what he's about these days. From the latest that I'm reading, this phrase stands out:

... We have left behind Soviet ideology, and there will be no return. Proponents of fundamental conservatism who idealise pre-1917 Russia seem to be similarly far from reality,..... http://eng.kremlin.ru/transcripts/6007

...I will add that international relations must be based on international law, which itself should rest on moral principles such as justice, equality and truth. Perhaps most important is respect for one’s partners and their interests. This is an obvious formula, but simply following it could radically change the global situation...Does Russia aim for any leading role? We don’t need to be a superpower; this would only be an extra load for us.. http://eng.kremlin.ru/transcripts/23137

Does any of that sound like the old Soviet Union?

America is the 'aggressive state' in this case. Funding neo-Nazi's to the tune of $5 billion to overthrow a government, installing Joe Biden's son in the legal department (may be the head of it) of Ukraines energy corporation, and just recently American, former US diplomat, Natalie Jaresko has given up her American citizenship to take on the role of Ukraines latest Finance Minister! Could it be any more obvious? http://www.informationclearinghouse.info/article40379.htm


You know why I get so frustrated whenever Putin is mentioned? Because the misinformation that people are operating with is coming straight from governments that have an agenda that apparently doesn't include learning to get along with anybody that doesn't toe THEIR line and that can only be bad news for the world, my children, my grandchildren and all of yours.


I will agree with you on one thing. The gas prices are purely political and while the Saudi's are obviously trying to skewer Iran, Syria and Russia with low, low gas prices, they are also entirely cognizant of the fact that it will have an entirely negative effect on American and Canadian oil and gas and they don't care. They are out to corner the market once again.
 
Fracking is not the problem as some think. Best we all double check these comments and then find that there are ways these comments actually are not true and do get exagerated when passing from one source to another.

Read this then go to the link and read the entire article.

One prominent columnist claimed “fracking may be inducing earthquakes.” The online journal Salon simply declared that the “earthquake epidemic is linked to fracking.” And NBC News published a story with the bold title of “Confirmed: Fracking practices to blame for Ohio earthquakes.”


http://www.utsandiego.com/news/2014/dec/04/earthquakes-shouldnt-dislodge-the-facts-about/

Earthquakes shouldn’t dislodge the facts about fracking

By Chris Faulkner5 p.m.Dec. 4, 2014

The American Southwest is undergoing a spike in seismic activity. A new U.S. Geological Survey shows that a small basin on the New Mexico-Colorado border experienced 20 times more serious earthquakes from 2001 to 2011 than it had over the previous 30 years. There have been similar tremor spikes throughout the country.


Some media accounts have been quick to blame this on hydraulic fracturing. Also known as “fracking,” this technique involves injecting a high-pressure mixture of water, sand and other fluids to break up underground rock structures and free up embedded oil and gas.


One prominent columnist claimed “fracking may be inducing earthquakes.” The online journal Salon simply declared that the “earthquake epidemic is linked to fracking.” And NBC News published a story with the bold title of “Confirmed: Fracking practices to blame for Ohio earthquakes.”


This thinking is completely off-base. There’s ample evidence indicating that fracking doesn’t cause earthquakes. And spreading the lie that it does could lead to policies that undermine job creation and economic growth in the energy industry.


Some fracking operations do create very small seismic events. But, as Stanford geophysicist and former Obama administration energy advisor Mark Zoback has noted, these events “pose no danger to the public.” In fact, research has shown that these very slight tremors release about the same amount of energy as a gallon of milk falling off a kitchen counter.


What’s more, scientists have specifically looked into the idea of these micro-seismic events somehow leading to the earthquakes. They found zero connection. As a 2012 U.S. Geographical Survey explicitly stated, “studies do not suggest that hydraulic fracturing … causes the increased rate of earthquakes.”

The more likely culprit? A process called “high-volume wastewater injection.” For about 20 years, companies have been using this technique to dispose of water polluted during the production of coal-based methane, drilling of energy extraction wells and other water-intense activities. A separate U.S. Geographical Survey study has determined that injected wastewater has been lubricating fault lines and triggering serious tremors.


But even this finding is no reason for panic. Only a very small slice of wastewater injection programs are causing any serious tremors. In Oklahoma, Cornell researchers linked just four out of the state’s 4,500 injection wells — less than 0.1 percent — to seismic activity. And these were exceptionally high-volume operations where at least 4 million barrels of water were being disposed of each month.


Nonetheless, energy companies should work with regulators to reduce the risks of seismic activity related to wastewater injection.

Firms should be prohibited from disposing wastewater in wells near fault lines. They should be required to take a substantial amount of their wastewater to treatment plants instead of injecting it. And regulators should be given the authority to regularly monitor injection sites to check for unusual tremor activity.
These are the common-sense steps activists should be urging government to take.


What won’t go any good, however, is mindlessly demonizing fracking. Indeed, if activist hysteria fuels the creation of anti-fracking public policies, the economic effects would be devastating. This technique already supports over 2 million American jobs. And the continued expansion of the oil and gas industry could create millions of new employment opportunities and billions in new growth over the next decade. Bad laws would kill off this bounty.


Fracking is an economic godsend. Let’s not let baseless hysteria crush it.


Faulkner is CEO of Breitling Energy Corp., author of “The Fracking Truth.”
 
Our problem is...lack of space!
i agree; demonising fracking is not right, the evidence is not present.
however; fracking in areas of population does, in my view, needs more evidence for it's safety, and that is where UK runs into problems. There is also NIMBY principles in areas of medium to high population....
 
BobF said:
Fracking is not the problem as some think. Best we all double check these comments and then find that there are ways these comments actually are not true and do get exagerated when passing from one source to another.

Read this then go to the link and read the entire article.

One prominent columnist claimed “fracking may be inducing earthquakes.” The online journal Salon simply declared that the “earthquake epidemic is linked to fracking.” And NBC News published a story with the bold title of “Confirmed: Fracking practices to blame for Ohio earthquakes.”


http://www.utsandiego.com/news/2014/dec/04/earthquakes-shouldnt-dislodge-the-facts-about/

Earthquakes shouldn’t dislodge the facts about fracking

By Chris Faulkner5 p.m.Dec. 4, 2014

The American Southwest is undergoing a spike in seismic activity. A new U.S. Geological Survey shows that a small basin on the New Mexico-Colorado border experienced 20 times more serious earthquakes from 2001 to 2011 than it had over the previous 30 years. There have been similar tremor spikes throughout the country.


Some media accounts have been quick to blame this on hydraulic fracturing. Also known as “fracking,” this technique involves injecting a high-pressure mixture of water, sand and other fluids to break up underground rock structures and free up embedded oil and gas.


One prominent columnist claimed “fracking may be inducing earthquakes.” The online journal Salon simply declared that the “earthquake epidemic is linked to fracking.” And NBC News published a story with the bold title of “Confirmed: Fracking practices to blame for Ohio earthquakes.”


This thinking is completely off-base. There’s ample evidence indicating that fracking doesn’t cause earthquakes. And spreading the lie that it does could lead to policies that undermine job creation and economic growth in the energy industry.


Some fracking operations do create very small seismic events. But, as Stanford geophysicist and former Obama administration energy advisor Mark Zoback has noted, these events “pose no danger to the public.” In fact, research has shown that these very slight tremors release about the same amount of energy as a gallon of milk falling off a kitchen counter.


What’s more, scientists have specifically looked into the idea of these micro-seismic events somehow leading to the earthquakes. They found zero connection. As a 2012 U.S. Geographical Survey explicitly stated, “studies do not suggest that hydraulic fracturing … causes the increased rate of earthquakes.”

The more likely culprit? A process called “high-volume wastewater injection.” For about 20 years, companies have been using this technique to dispose of water polluted during the production of coal-based methane, drilling of energy extraction wells and other water-intense activities. A separate U.S. Geographical Survey study has determined that injected wastewater has been lubricating fault lines and triggering serious tremors.


But even this finding is no reason for panic. Only a very small slice of wastewater injection programs are causing any serious tremors. In Oklahoma, Cornell researchers linked just four out of the state’s 4,500 injection wells — less than 0.1 percent — to seismic activity. And these were exceptionally high-volume operations where at least 4 million barrels of water were being disposed of each month.


Nonetheless, energy companies should work with regulators to reduce the risks of seismic activity related to wastewater injection.

Firms should be prohibited from disposing wastewater in wells near fault lines. They should be required to take a substantial amount of their wastewater to treatment plants instead of injecting it. And regulators should be given the authority to regularly monitor injection sites to check for unusual tremor activity.
These are the common-sense steps activists should be urging government to take.


What won’t go any good, however, is mindlessly demonizing fracking. Indeed, if activist hysteria fuels the creation of anti-fracking public policies, the economic effects would be devastating. This technique already supports over 2 million American jobs. And the continued expansion of the oil and gas industry could create millions of new employment opportunities and billions in new growth over the next decade. Bad laws would kill off this bounty.


Fracking is an economic godsend. Let’s not let baseless hysteria crush it.


Faulkner is CEO of Breitling Energy Corp., author of “The Fracking Truth.”
Click to expand...

I'm shocked... SHOCKED that the CEO of an oil/gas exploration/extraction company based in Texas would publish and article downplaying the effect of fracking on seismic activity. I'm shocked... SHOCKED that someone would take the paper of such a biased author as gospel.
 
If you are saying this article I posted is just as biased as those that were claiming evil happenings and earthquakes, fine. Then we are certainly at a draw and that means nothing gained or lost. A draw. Now someone needs to find some evidence stronger than what was in my article to prove it was wrong if they want to be the rightful winner of this discussion. Maybe some facts, not just opinions. Fracking has been done on wells for many years. It is not something new recently.

I have no problem with the fracking based on any evidence shown otherwise. Nice closing statements on my post.
 
http://www.weather.com/science/news/fracking-triggered-hundreds-earthquakes-ohio-20141013

http://www.usgs.gov/blogs/features/usgs_top_story/man-made-earthquakes/

There are many articles/studies which draw conclusions that deep well injection/hydraulic fracking is tied to man-made seismic activity. The entire topic has become extremely politically corrupted. Northern Oklahoma and Southern Kansas have seen earthquakes, this year, at a record making pace. Our Governor is financiially tied to the Koch brothers who reside in Southern Kansas. As the residents became upset due to the increase in earthquakes, the Governor commissioned a committee... participants hand picked by him... to determine if the quakes were being caused by the increased fracking technology in Oklahoma. The hand-picked committee came back with the judgement that is was "inconclusive" and could not confirm the tie. A group commissioned by a Governor who supports... and is supported by... some of the wealthiest oil/gas producers in tne Nation comes back with "inconclusive". That speaks volumes. One would have thought the determination would have been that there was no tie between fracking and seismic activity. To have this committee, instead, simply say "inconclusive" tells me that was the only way they could save face while not stepping on the toes of political powerhouses.
 
Does anyone know that fracking also happens on water wells? Does anyone happen to know that fracking actually happened well back in the 1900's? Does any one really have any provable, repeatedly provable, instances of fracking being a general nuisance anywhere in this world? Fracking is being attacked with only unproven arguments. Earthquakes? Yes, tremors have been detected where fracking has taken place. But, mostly very lite tremors. Much of what they have been discussing about is the very low end and low level of shaking from the grounds. Activity is not often and seldom of harmful strength.

Political forces are what I consider the problems for the US situation, not facts. Some day we will have oil and such well used, By then I hope we will have some other, and just a well to use, source of energy for our transportation and homes as what has been used for the recent years.

Yes, today's gas prices are good. They should stay low much longer than they will be allowed.
 
Just a question here: doesn't fracking entail the use of 'drinkable water' being injected under pressure to force gas up or something like that? If so, is that not a serious concern that our drinking water is being used for a purpose that turns it into a waste product?

********

Answered my own question. Here is a link to a page that has an interesting visual explanation of why people are afraid of the results of fracking. http://www.dangersoffracking.com

It's a combination of issues they raise: use of millions of gallons of water per fracking site, plus injection of carcinogenic chemicals, including mercury, lead, methanol, etc. and contamination of groundwater of which that site says there are 1000 documented cases of drinking water contamination. It ends by saying that only 50% of the fracking liquid is recovered and that is left to evaporate in ponds where it releases toxins into the air causing contaminated air, acid rain and ground level ozone.

I guess all of the above is why Nova Scotia recently voted to ban fracking in our little province. Not only are many citizens using private wells for water (we are) but even the small towns are often supplied by wells that fill water towers.
 
Interesting and dangerous thinking in that article posted. The numbers are exaggerated and not at all typical of facts. For any agency to determine it is absolutely dangerous it has to be political in nature and not at all based on facts that are known. Just like this article has done. We in the US also have some lands forbidden. New York State for example and next door in Pennsylvania there is no restriction.

Example of 'up to 6oo chemicals' is not true of actual usage. That would be the total that they 'may' use but actual is only 0 to maybe 3 chemicals per well and each for a specific reason. The percentage of the mix being chemicals is but a small amount like 2 or 3 percent of the total mix used.

According to http://en.wikipedia.org/wiki/Hydraulic_fracturing the idea of fracking is much larger in usage than some seem to think, oil or gas, and longer in use than some report.

[h=2]Uses[/h] Hydraulic fracturing is used to increase the rate at which fluids, such as petroleum, water, or natural gas can be recovered from subterranean natural reservoirs. Reservoirs are typically porous sandstones, limestones or dolomite rocks, but also include "unconventional reservoirs" such as shale rock or coal beds. Hydraulic fracturing enables the extraction of natural gas and oil from rock formations deep below the earth's surface (generally 2,000–6,000 m (5,000–20,000 ft)), which is greatly below typical groundwater reservoir levels. At such depth, there may be insufficient permeability or reservoir pressure to allow natural gas and oil to flow from the rock into the wellbore at high economic return. Thus, creating conductive fractures in the rock is instrumental in extraction from naturally impermeable shale reservoirs. Permeability is measured in the microdarcy to nanodarcy range.[SUP][68][/SUP] Fractures are a conductive path connecting a larger volume of reservoir to the well. So-called "super fracking," creates cracks deeper in the rock formation to release more oil and gas, and increases efficiency.[SUP][69][/SUP] The yield for typical shale bores generally falls off after the first year or two, but the peak producing life of a well can be extended to several decades.[SUP][70][/SUP]


While the main industrial use of hydraulic fracturing is in stimulating production from oil and gas wells,[SUP][71][/SUP][SUP][72][/SUP][SUP][73][/SUP] hydraulic fracturing is also applied:



Since the late 1970s, hydraulic fracturing has been used, in some cases, to increase the yield of drinking water from wells in a number of countries, including the US, Australia, and South Africa.[SUP][81][/SUP][SUP][82][/SUP]

.......................

Water improved by fracking. These folks are just not at all dealing with facts.
 
Sounds like the same warmed over 'not to worry' statements that the government was using back in the 50's 60's and 70's about nuclear and nerve gas testing in the Nevada deserts during that time. Tell that to the residents (downwinders) of southern Utah, oh yea no one around they mostly died of cancer, and the sheep can't talk but they were bllindly staring at the stars on the western border of NV/Utah. John Wayne may have something to say about the safe tailings that he was riding through when filming John Ford's westerns. Any government or corporate guarantees should be taken with a grain of salt. They are admitting that their advice about healthy eating is somewhat askew now.
 

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