
USGS Announces Largest Continuous Oil Assessment in Texas and New Mexico - LopRabbit
https://www.usgs.gov/news/usgs-announces-largest-continuous-oil-assessment-texas-and-new-mexico
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pfarnsworth
Incredible how the US has transformed into the largest producer of crude oil
in the world in the matter of a few short years. It's definitely a
geopolitical weapon to attack those in the Middle East with, especially the
Saudis, although it's not clear to me whether they are complicit or not with
this current US policy of pumping and dumping oil. Now that ISIS is all but
dismantled, maybe the other target is Syria and Iran or even Russia. In a
similar way Reagan outspent the Soviet Union in nuclear arms race, this
definitely feels like pumping so much oil and keeping oil prices low is in
order to destabilize at least one or two of our political enemies that rely on
oil revenues.

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adventured
Reagan didn't spend the USSR into disintegration.

The USSR collapsed as it did due to the dramatic oil price drop caused by Paul
Vocker's strengthening of the dollar in the 1980s. Oil is priced in dollars,
so if you considerably increase the value of the dollar, you'll sink the price
of oil, which will hammer most foreign oil producers. The dollar index went
from ~80 to ~160, from roughly 1980 to 1986, by far the greatest dollar move
in modern history. Oil moved inversely to the dollar gains. The USSR economy
was heavily dependent on the price of oil staying as high as it was in the
1970s (oil went from ~$20 to $100+, levels it had never remotely seen before).
Having gotten used to the price of oil being so high throughout the 1970s,
their already weak system was unable to absorb the outsized shock of oil
plunging from $100+ to $30 during ~1980-1988.

In the 1950s the USSR barely had an oil economy at all. From 1960 to 1980
(they passed the US in oil production around 1975-76), their oil output had
climbed by about seven fold, making them very dependent on that resource.

Had oil remained high, the USSR could have continued to spend as necessary to
try to keep their system together. For an economy as dependent on oil as
theirs was by 1980, removing that much revenue by tanking oil from $100 to
$30, is a deadly wound on top of an already shaky foundation. While very
plausibly their system would have failed regardless eventually, a high oil
price would have likely bought them more time.

The dollar is what broke the USSR. It's also what threw Russia into a sudden
and dramatic recession after Crimea and curtailed their pursuit of further
territorial annexation (at least for a while). The US stopped QE and signaled
the beginning of rate hikes, which sent the dollar soaring and took took oil
from $105+ in June 2014 to under $28 in about 18 months (the global economy
was growing fine and oil had been in oversupply for years; it was the dollar
move that popped the market). Oil tanked immediately after the Russian Crimea
events in July-August 2014.... The dollar is by far the greatest weapon in the
US arsenal. If you want to restrain Russia, push the dollar high.

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igravious
Utter rubbish.

I recently saw a Werner Herzog feature-length interview documentary called
"Meeting Gorbachev". In it Gorbachev describes in his own words how and why
the USSR dissolves. The USSR was always an unequal political union with Russia
as its command centre. The other republics were always jostling either for a
more equal union and frequently nationalist sentiment overrode pan-Slavic
sentiment. If the USSR had managed its internal economy better and if they
weren't cut off from the outside world it could have survived indefinitely. In
the end Gorbachev made a series of moves (perestroika and glasnost: anybody
who lived through this period knows these terms and what they mean in
practice) that brought about the impending dissolution. Garbachev would have
been the leader of an independent leader of a now independent Russia but he
was politically outflanked.

It is typical US arrogance to think that they have their hands always and
every time directly on the levers that make and break nations and political
entities. It is a prime example of the mentality of US exceptionalism. Many
many factors interweave and interplay in every geopolitical landscape:
internal politics, internal economics, internal resource allocation, external
pressure, military strength, alliances, the list goes on.

Yes, oil/dollar moves may have had some impact. How much of an impact, that
would be difficult to say. But it was in no way as impactful as you make it
out to be and in now way as directly instrumental. And besides, when you look
at the history of Federal Reserve policy you can see that US economic reasons
(recession, interest rates) prompted Volcker's actions.

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mogadsheu
These guys at the USGS are a bit late to the party but they’re doing a good
thing (for the economy, maybe not the environment) by publishing research like
this.

Many companies have formed their opinions on these plays already, often with
superior data, but foreign companies, smaller companies, and firms not as
focused on the region will benefit. The hope from the USGS side is that it
will spur investment into the region.

The biggest issue? Cost of extraction/breakeven pricing, bar none.

Fwiw: I worked in the energy industry as a geologist for some years.

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ejanus
Why are they not mining these plays already when they have convincing data ?

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mogadsheu
The areas are either considered higher risk or more costly to extract.

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glup
While I understand the perceived geopolitical need for energy independence, I
sure hope we don't develop this. With recent reports like the NCA4
(nca2018.globalchange.gov), it's pretty clear things are going to get a whole
lot worse with climate change, that will take a very long time to retool our
infrastructure even with a strong economic incentive. Cheap and plentiful oil
certainly doesn't help.

I also think that flying over this region (Permian basin / western Texas) on a
clear day is --- as it is currently, without further extraction --- one of the
best ways to understand the sheer scale of energy extraction required to
support the American economy and lifestyle. If you haven't seen it, check out
the satellite imagery of Pyote, TX on Google Maps or similar.

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ThomPete
Cheap and plentiful oil helps poor countries dealing with climate change way
better than expensive and inflexible renewables. This is the actual dilemma
that is worth discussing, not whether rich nations who can afford the way more
expensive and much less scaleable renewables. But most of the political elite
dont care cause they have found a new political course to use as a way to
control many voters.

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eigenvector
At least from the electricity perspective, renewables are both cheaper and
more flexible than oil for developing countries. They do not require
dependence on a constant stream of imports, because the resource - wind,
water, sun - is already there.

They can be built at any scale, from rooftop solar to utility-scale wind
power, so they don't require the access to capital involved in building large
thermal power plants.

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ThomPete
Renewables are not reliable nor are they cheaper or more flexible, not sure
why you think that. Poor countries dont drive around teslas or have fance
electrical grids. Oil is by far the best choice for them by several factors.

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gpm
I don't pretend to be an expert. It seems like rooftop solar + a battery would
be a far more reliable power supply in reasonably sunny regions, than oil in a
place that doesn't have a stable electrical grid.

The alternative to solar is what, generators in every building and delivering
fuel? The efficiency of that sort of scheme must be terrible, and you're still
relying on regular delivery of fuel.

Am I missing something?

Personal experience tells me that this sort of thing is possible. I stayed a
few days a few years ago in a friend of a friend's house that relied solely on
solar + batteries for power (apparently the cost of getting it hooked up to
the grid made this setup far cheaper). Completely reliable. Power had to be
rationed slightly more carefully than in grid connected places, but it wasn't
a real impediment in any way. This was in Ontario, Canada. Which isn't one of
the sunniest places in the world.

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roenxi
I'm going to put it out there that when two (now three) non-experts discuss
the relative costs everyone gets to be wrong about everything, so why bother?
Nevertheless...

Firstly, relative costs will be region specific. Secondly, prices are always
in a state of flux over the medium term. Thirdly, there are probably tax and
subsidy implications. Fourthly, I suspect the rooftop solar is going to be a
poor choice compared to utility-scale centralised solar and a grid so your
specific arguments may be academic (I certainly hope so, those industrial
solar towers look amazing vs. rooftop panels). Fifthly, the failure modes of
the two systems are different making a comparison challenging.

For example, how reliable is a solar system in the face of three days of cloud
cover? Vandalism? Do these panels actually last 20 years, given that
manufacturing techniques are presumably changing and we haven't had 20 years
to test them out? What are the actual fire risks posed by house-powering
batteries?

Putting together a similar list for generators is easy but I know the answers
to a lot of those questions because I'm quite familiar with fossil fuels, as
we all are.

Anyone who says either is going to be more suitable for purpose without an
opinion sourced from an engineer or a couple of case studies is just making
stuff up. You can't first-principles this sort of thing, it is very context
sensitive. Even case studies I mistrust, because solar can look very good if
the grid is mismanaged by environmentalists to the point people opt-out.

~~~
eigenvector
First of all, I am a power systems engineer.

Oil and refined petroleum products are not an economical source of power
generation, which is why it isn't used anywhere in the developed world except
at small scale where lots of fuel storage is required, like the Canadian
Arctic. Coal and natural gas are much more appropriate, if they are available.

The biggest advantage to renewables, as I stated in my initial comment, is
that they don't have to be transported. Arguments about resource adequacy (not
enough sun, not enough water) are largely irrelevant because fossil fuel power
is _already_ rationed in developing off grid locations due to the massive cost
of transport. Recall that developing countries do not have advanced
transportation infrastructure nor a highly developed power grid to transit
energy.

Finally, energy security is a major concern for all countries, especially
those with limited ability to purchase US$ priced global commodities, and oil
is an import in most of the world.

To suggest that, for instance, countries in sub Saharan Africa are better off
spending their minimal foreign currency reserves importing diesel and trucking
it across the desert on non existent roads rather than using abundant solar
energy flies in the face of the facts.

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dreamcompiler
Microgrid engineer here, and I completely agree. Developing nations bypassed
expensive comms grids in the 90s and went straight to cell phones. The same
thing is happening now with energy. Rather than building out an (even more)
expensive electrical grid, they're putting in distributed renewables. Result:
Everybody has electricity but there's no grid. It's happening because of
economics; not ideology.

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ThomPete
not the same at all. The investments into getting phones into peoples hands
were market driven, energy infrastructure is not.

~~~
eigenvector
A person living 3 days from the road in Nepal deciding to put in a small solar
system to charge their phone and provide a bit of light absolutely is market-
driven.

~~~
ThomPete
Sure but that's not enough to keep them safe from mother nature, provide for
heating, cook their food, transport them etc. You are talking about a fraction
of what it is to live as a person in a relatively safe environment.

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code_duck
Not surprising. The boom in the Permian Basin has already been massive.
Driving through southeastern New Mexico, you see a hellscape of hastily
strung, sloppy power lines across vast fields of drill rigs, with signs
warning you of the possibility of poison gas.

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flerchin
I drove through this region on my way to Carlsbad Caverns and the extraction
already happening is surreal. You can see flares for miles. Not so far away,
herds graze in the shadow of windmills.

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ryanmarsh
Flares? I thought it was illegal to flare off NG and Y grade?

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FlyMoreRockets
I don't know about the legality, but last time I drove through, there were
some pretty massive flares. They lit up the surroundings for tens of miles.
Like hell on Earth.

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doggydogs94
No need to develop these fields when we can import oil instead.

