You seem to be against any environmental protections that help the planet? Why? Because it might cost is all a little bit more for our consumer goods? The producers hue and cry of it costing them too much to comply with environmental regulations is nothing more than a smokescreen. Complying with regulations may cost them a small portion of profits but if it makes the world a better place for you and your children and their children is it not worth it? When do we stop acting like we are the ONLY species on the planet?
that clown that owns Papa Johns claimed he would have to raise pizza prices by two bucks a pie AND lay off some of his work force. Some economists took his numbers, ran them and discovered that IF he provided good health insurance to all his current employees he could so by adding FORTY cents to to the price of s pizza
so you’ll understand if I’m skeptical of corporate America’s claims about much more regulations “cost them”.
Nothing but greed on the part of corporations and their stockholders. Fortunately I will be ashes by the time corrupt corporate greed makes this planet undesirable to live on. Your children progeny will pay the price for your greed. Native Americans are right. We do not own the land we are stewards for the future generations. People like trump are p**s poor stewards
You read a lot into what I say and make erroneous conclusions.
My position is simple. I am all for clean environment. I believe we have made significant strides in that direction. However, eventually you reach a point of diminishing returns. That is the incremental costs vastly exceed the results we can achieve. I believe that we are at that point. Even if you take Climate Change as fact, the forecasted results from what was agreed at Paris will have little effect. The reason is that CO2 is such a very small component of the Climate equation as I have regularly pointed out here. The effects of C02 are dwarfed by much larger natural forces for which we have no control over.
Regulations have already forced coal generated power to be non-competitive with wind power. Wind power has it’s own issues starting with the fact that it’s not base load power and never will be. You will always need a baseload power source and right now that is natural gas generated power, or nuclear.
California has already implemented the highest renewable mandates in the country. The goal is 50% renewables. Guess what, we now have some of the highest electric costs in the country and business and industry are leaving because of that. New Jersey had a high renewable goal. Then they rolled it back when their energy costs soared to 50% higher that surrounding states like Pennsylvania, resulting in business and industry leaving the state. Outcomes like that like that are not good, especially when you can’t show significant results in reducing so-called global warming.
Corporates exist to provide a return to their owners. They don’t exist to enrich employees. They will only pay a competitive wage to get the labor they need, nothing more. It’s your job to figure out what’s the area of highest need and highest wages and direct your own employment there. Don’t hate the corporates, they are the locomotives at the front of this entire economic train. Without them, there is no tax revenue for workers employed in jobs at the back end of the train.
I didn’t say anything about global warming. I was asking why you appeared to be opposed to enivoronmental regulations I don’t know how much impact man has on global warming. I think the truth of our impact is more than climate change deniers acknowledge and not as great as alarmists claim. I suspect most of climate change in terms of global warming are well beyond our control. We should still do what we can to minimize our impact.
My post was more about pollution in general, i.e. Rolling back stream protection rules for coal mines. So you think coal lost its place due to regulations and not because natural gas is cheaper, cleaner and more efficient?
LYou come across as one of those people that is stuck in old technology in terms of coal
I don’t hate corporations, I hate the greedy me first mentality that took over them sometime in the 80’s. My grandfather worked for Standard Oil his entire career. He was loyal to them and they held up their end of arrangement. Corporations expect employee loyalty but they sure as hell don’t return it.
I can see why Newbomb bailed on the discussion with you. I do appreciate you responding to my query in a civil manner
Coal lost its place because frackking opened up vast reserves of natural gas, forcing its price down. Coal could be made into a cleaner energy source, but it comes at a cost and it’s already not competitive with natural gas. So it was part cheap natural gas prices from frackking and part regulations (on pollution/emissions) that resulted in the death of coal.
Newbomb bailed because I was overwhelming him with fact.
I finished the install on the steering box on my son’s truck. Found that the rag joint was sloppy and came in to order that and respond here. Now back to work bleeding the steering box and bleeding the brakes.
Coal is not competitive for many more reasons than the cost of fuel. Coal fuel costs are rising because the good, cheap stuff was mined first and long ago. The rising cost of coal generation on the fuel side began more than a decade ago. The reason why the coal industry wants to relax regs (like polluting rivers) is to ‘hope’ to stay competitive for one more year, or two. Meanwhile they despoil the land, as they have done for generations.
But also the economy of scale for gas-fired combined cycle power generation absolutely kicks butt on central Rankine cycle coal power plants. Like 60 MW installed to 600 MW for coal.
The unit capital costs for gas turbines kicks coal to the curb. And gas-fired power has thermal efficiency of 58 percent or better compared to 30 to 33 percent for coal.
Coal has seen its best days. Its a buggy whip business now.
But as long as you want to complain that renewables are too expensive, do some homework on the cost of nuclear power. And I actually think new nukes using a much better designs (and getting rate base engineers out of it) has a future. We also cannot become too dependent on natural gas.
After the initial capital cost, nukes are by far the cheapest source of energy at $0.02 per kwh. I cried when they shut San Onofre. I was paid for and we were enjoying cheap energy. Then the Japanese (Marubeni) F’d us on the plumbing.
No one has come up with a permanent storage solution for spent nuke fuel. They were pushing for Yucca Mountain, then the enviros killed it claiming there’s an aquafier below it that could become contaminated. So that leaves us permanently storing spent fuel in what were supposed to be temporary above ground storage tanks. Beautiful. Oh and nukes are CO2 neutrual. Can’t win.
I just finished a review on one of the largest Oil & Gas lending portfolios in the U.S. There’s tons of reserves. The reason why there was only 10% reserve replacement last year, no one was drilling at $27 a barrel. Which BTW was a great time to be buying selective E&P companies, thank you. Bet you more reserves go back on the books at $53 oil. It’s an SEC/accounting thing that you lose reserves when it is no longer economic to produce. Permean basin has the cheapest costs at $26 barrel. Eagle Ford is slightly higher, and the Bakken is the highest at $36 barrel. It ain’t going anywhere. It will be extracted once the price of oil justifies it and that will happen.
Except for the niggley issue of proper waste disposal. A social cost not yet calculated.
But since you mention it, what are the nominal costs of solar or wind once installed and capital costs can be ignored?
Like really low. Let’s not be selective in use of ‘facts’ to make our points.
I worked in the industry for 35 years and still do a lot of research on price formation. I know SEC rules for reserves restatement on end of year price. And this is a commodity business were all sellers are price takers. But the large companies are buying reserves by purchasing companies because they can’t replace them themselves and that is troubling.
Edit: if you shoot me your email, I’ll send you a few of the weekly reports I do on the NG and oil business as it pertains to evolving supply-demand and price fundamentals.
My point there on nuke cost was that San Onofre represented a sunk cost. We were on the cheap marginal cost side of that installation and they killed it.
Solar panels erode and have a 25 year life.
Wind turbines also have an estimated 24 year life.
Green field solar messes up pristine landscape. I’m all for distributed roof top solar as that goes on existing infrastructure. I will probably self install solar when I build that second 4 bay RV garage and workshop outback.
As you know most power projects have a 30 year useful life. So that is not a revelation.
Obviously you have not visited a coal mine or been to the site of a coal fired power plant or to the oil/gas fields near Pinedale or anywhere else. None to attractive.
Send it to him here via private boardmail
Big attached files. Can that be done?
You wrote: “The reason why there was only 10% reserve replacement last year, no one was drilling at $27 a barrel”
A point here: WTI never had a monthly price below $30 in 2016 and the annual price was $48.66. Only 10 days last year saw WTI prices below $30 per barrel. I know Bakken crude is sold at a huge discount to WTI. Almost all oil companies sell in the end of the month cash market. And a lot of the medium to small firms hedge forward at more favorable prices. So few sold their oil for $27 per barrel.
E&P companies have a price deck, their assumption on the long-term price from which they make strategic investment decisions. That is the kind of work I did in the industry during my last 10 years there and as a consultant (CERA, Wall Street). A company has an assumption of their cost structure, a crushing need to maintain or increase production and/or reserves, and set annual budgets accordingly.
The time lag between investing and the subsequent supply change, oil prices oscillate. That oscillation is caused by changes in what I call “extant” or available supply. That must include storage which explicitly is not incorporated in classic supply-demand fundamentals.
Some adjustments are made within a bad commodity year, such as 2016. But producers have only themselves to blame. They ballooned productive capacity, and that glut, as articulated via storage volumes crushed the commodity price. So yes, year-end SEC rules means that producers need to restate reserves to contemporary prices. That price level was about double $27.
On the other hand, ceiling test write-downs and impairments wipe capital off of the books, and allows otherwise underwater resources to be profitable on a fix-variable cost basis.
I’ve been surprised that there are not more acquisitions, because when commodity prices dip, over extended companies get sold. But I don’t believe the quality of reserves is there otherwise more would be purchased. I know Exxon-Mobil has made a big play in the Permian and they believe the basin’s production can be doubled for years to come. We’ll see.
But to state $27 as the driver, assuming you were thinking the Permian as mentioned, about where WTI is priced, is again the selective use of ‘facts.’
Talk about selective fact picking:
http://money.cnn.com/2016/02/11/investing/oil-price-crash/
February 11, 2016: U.S. crude futures dropped as much as 5% on Thursday, driving prices below $27 for the second time in recent weeks. It settled at $26.21, the lowest point since 2003.
For calculating reserves, they use the NYMEX strip (futures pricing) at the start of the month. RBL borrowing base determinations are typically done twice a year, sometimes more, using a price deck driven by the NYMEX strip. Lot of cash starved companies had hedges, but they monetized them for the cash they needed to survive.
Yes, drilling activity has increased as oil prices have doubled off their low. Rig count is up 252 (about 50%) year-over-year. So $54 oil does matter. However, there will be a ceiling on that oil price. All those proven, but not producing, reserves come into play when the economics justify it. All those drilled but unfinished wells come into play when the economics justify it.
I only look at cash prices, one day in February 2016 was $26.26. One day. The metal meets the road in cash. EIA has the daily cash data at WTI available for your viewing. My point remains. One day does not make a year or a trend and has no value in making strategic decisions. Don’t be an ass as well as dishonest. Do your homework. Otherwise, you lose credibility with me because you don’t know what you are talking about.
“For calculating reserves, they use the NYMEX strip (futures pricing) at the start of the month. RBL borrowing base determinations are typically done twice a year, sometimes more, using a price deck driven by the NYMEX strip. Lot of cash starved companies had hedges, but they monetized them for the cash they needed to survive.”
The NYMEX strip is futures spot pricing. The market is saying, we believe the spot or cash price at a date in the future will be this value. And if you plot it up, you will see that the market changes its mind everyday.
Are you using NYMEX CL futures for your DCF analysis on reserves valuation? An interesting exercise is to plot the entire strip (presently monthly to Dec. 22, continues in six month chunks to Dec. 2025). If you have the data (I do), plot on the same time scale the same monthly futures (use closed prompts for past months) every month or six weeks for say a year or two. You can do this easily with historic data. Then look at how the strip evolves over time. As you likely know, the strip is the action of limited traders (market becomes illiquid out six to 12 months). The market has a take, based on fundamentals, and this is also influenced modestly by change in international production and any perceived threat to supply security.
The pattern is actually established by spot price, IMO, which producers sell into each month for cash, using futures hedges to minimize medium-term price risk, so that they can fund on-going operations.
Therefore, using the strip for valuation, while convenient, is flawed in important ways. But I get why folks do it, it’s acceptable. My work, which I will touch on later, was used by the Office of the CEO to help value Unocal when it was sold to Chevron in 2005.
Historical EIA Database for WTI
Spot prices (i.e., WTI) oscillate over time, seeing infrequently dramatic but temporary peaks (e.g., $145 per barrel in early July 2008). The oscillation in spot is correlated to a concept I developed at Unocal that I call comparative inventory. In this algorithm, I cross-plot weekly average WTI spot price against whether or not the market is net long or short in volume of crude oil and a mix of products to the volume the market expects for each week of the year.
The curve shape of this function I call a yield curve, since high prices cause demand to yield when the system is seriously net short of total volume. Those same high prices get producers to field new rigs. But all peaks in price occur when the market is net short in the fundamental I discovered over 15 years ago. The analysis I’ve done was presented to DOE, FERC and the National Petroleum Council, although in full disclosure I did not share with them my methodology. Nine years ago I wrote a position paper on this economic behavior for natural gas (works for coal, oil and NG) for CERA’s clients. CERA is now part of IHS. Also, I presented the core concepts to the Society of Independent Professional Earth Scientists in October 2012 in an extensive presentation on price formation. I wrote about these dynamics extensively for a Wall Street firm from 2007 to 2013 when I retired.
The complexity of the subject is why I reached out to you since I don’t want to share this on this forum. It is not appropriate.
My strong reaction was to your claim that $27 oil price is why reserve adds were so low in 2016. That is simply not true. I’ve explained my views that the price on one day is not how the industry works, they have a medium term price deck called by some a mid-cycle price. I also detailed that for 2016, no monthly average price was below $30 and the annual average was close to $50. That is fact. Also, daily spot price was below $30 for only 10 days in 2016. That is a fact. The fundamental reason why prices drove below $30, was because the market was net long, long AND storage capacity was about to exceed 90% full. The market crushes spot price in this event. While producers have to adjust budgets to the reality of short term low prices, they are on an investment treadmill where production is absolute king to investors. You can’t always get a rig when you want one, so they keep turning to the right, rationalize their portfolios, and find ways to lower cost structure for the extra-marginal fields. Brutal business.
If you want to learn more, let me know.
Newbomb bailed because he recognized that your mind is made up about things and you are parroting the conservative/trump line. The sad part is that IF people were just a little less greedy we would all benefit
Other posters have shown you some links from reputable sources I suspect you won’t read them or if you do you’ll discount them as being from the leftist liberal media
I read them all. I’ll challenge the science, not the sources. I did so in response to Newbomb and he walked. I was posting extracts direct from scientific papers. I do read this stuff.
And both you and Newbomb parrot the liberal green message on this stuff, so there.
Well sh!t I guess newbomb and me have been told.
Lol. Well, you did overwhelm me with opinion.
Cost of Pollution Imposed on Others by Businesses
You might benefit from reading this piece in Wikipedia on economic externalities. We all know the symptoms. Any pollution that impacts the quality of our life where the cost of that externality (e.g., poorer health, degraded living environment) is not covered by the entity (read business) that introduced it on the population. That is not right. The latest tactic of businesses is to force you to sign away your rights to enter into a class action suit. And the GOP wants to eliminate your consumer right to demand safe products and services.
Here is contemporary data on the cost of solar energy: Home Installation.
Here Duke Energy complains about the costs of solar: Too Expensive.
Here comparative costs of all power sources: All Power Source Costs on Average.
Article that argues renewables are the cheapest sources: Renewables Now Cheapest.
Recent Bloomberg Article with the same theme: Wind Solar Crushing Fossile Fuels.
I could go on. Do some homework. I think we need to plan for a different future. I have no issues with renewables and I believe they are on the cusp of major change in a good way. In my drive from Central Oregon to Wyoming this week, I was blown away at the number of solar farms going in. We must also be aware that established energy industry is fighting tooth and nail for the status quo. That is what they do. It is incumbent on all of us to know and question their tactics and propaganda, on both sides actually. The US nuclear energy fleet is aging and we will read more and more about their needed retirement. The same is true of coal. Both fleets are at or near useful life and must be refitted to survive and not be major polluters or unsafe to operate. The problems is that natural gas prices are so low at the moment that traditional coal cannot compete. Nukes were never competitive.
Trump lost credibility with me when he said he would “save” coal. Coal generation is not competitive in most places in the US. Eastern coal mines are played out. The stripping ratios have reached economic limits and simply cannot complete with natural gas on numerous fronts. Natural gas fuel is cheaper, is more thermally efficient by a wide, wide margin and the MW unit installed capital costs are significantly lower. That is why coal is going out, not because of appropriate environmental regulations, while that is just another reason.
If you dig deep enough you will learn that it has become harder and harder for fossil fuel exploration and production companies to replace reserves of oil and gas. Last year was a disaster, with only 10 percent replacement, compared to 30 percent historically. Ten percent replacement in the face of an underlying decline rate of 8 percent! So politicians who advocate alternative sources of energy are just being smart and yes, it might cost a bit more now, but technology is improving that cost structure and likely to save us from astronomical costs when liquid and gas fossil fuel energy reaches price points that had us all in deep hurt a decade ago. You do remember $147 per barrel West Texas Intermediate right, and gas price about $10 per mmBtu?
Your tactic is right in the wheelhouse of the industries who are trying to maintain the status quo. We must instead plan for the future.
Oil and gas woes are driven less by renewables than by a mismatch of too much supply and too little demand.
But with renewable energy expanding at record rates and with more efficient cars—including all-electric vehicles—siphoning off oil profits at the margins, the fossil-fuel insolvency zone is only going to get more crowded, according to BNEF. Natural gas will still be needed for when the sun isn’t shining and the wind isn’t blowing, but even that will change as utility-scale batteries grow cheaper.
Oil doesn’t compete with renewables. Certainly not for transportation. And oil is generally not used for power generation. It comes down to natural gas vs nukes, renewables and hydro. Until they can come up with economic grid scale battery storage, natural gas is not going away.
“Oil doesn’t compete with renewables. Certainly not for transportation.”
Sort of correct, for now. Renewable power generation will recharge batteries that run electric vehicles. So the competition is almost nil, but growing.
And oil is generally not used for power generation.
In the mid-1980s in California if memory serves me, bunker fuel used in some power plants was no longer allowed or discouraged. Most backup power, generators, is still liquid fuel. In Saudi Arabia I believe so 30% of power comes from liquid fuel. In the Kingdom they are building what is likely to be the worlds largest solar power complex.
You are correct, power is very difficult to store. That is why wind power is sketchy at best except in a select few areas.
I have a hard time listening when New Jersey is brought up as a shining example; a state that, at one time, banned Tesla direct sales due to its “uncompetitive nature.” The fact that our environment has become so politicized saddens me.
I’m fiscally conservative, but I have not seen any evidence that pushes me to believe coal is our future, and certainly none that demonstrates that THE RATE of climate change isn’t greatly affected by us. I suppose I’m just a blind sheep though.
And to act like California’s struggles have nothing to do with the deregulation of their energy industry over the past two decades is both foolhardy and insulting.
Cow Farts.
The great Bison slaughter in the 1800’s (pre-industrial age) killed off 60 million head in America which pretty much shut off bovine fart pollution (methane gas) for several decades.
The USDA estimates there are 98 million head of cattle in America as of 2015.
30 million more bovine farts today each and every day (post-industrialization) than the 60 million bovine farts of yesteryear PLUS all the other nasty human created industrial greenhouse gases emitted over the last 100 years….
The temperature didn’t significantly drop after the Bison farting ceased.
The temperature hasn’t significantly increased 130+ years later even though there’s more bovine farting and more industrialization today than the “good old days” when it took 4-5 months to travel coast to coast if you didn’t die from simple infection or starvation before you got to the coast.
A survey of 10,129 cows (with a whopping 79 responses) proves that 97% of
peer reviewed cows claim their farts don’t stink.
At least I used known sourced peer reviewed facts….well….except for the 97% part. 😀
Cow carts aren’t a big producer of methane.
Cow belches, on the other hand, are a huge source of methane.
This article has good slides showing how the cost of electricity in California skyrocketed after San Onofre shut down. Electricity costs rise with less nuclear and more renewables, plain and simple.
Less nuclear energy has meant higher costs, less clean energy overall and more deaths
One problem with renewables is they have a very large footprint to output ratio. It takes a large area to place a windmill turbine with their huge blades and output is limited. It takes more than 100 of them to replace a standard 400MW conventional plant. I don’t the area a solar farm would need to do the same, but it would truly be huge.
Most people wouldn’t want that anywhere near their homes. Consequently , they are built in the wide open spaces. I live in those spaces and I don’t want them near my home either.
Wind turbines have to be shut down and placed on jacks (brakes) if the wind gusts go above about 25mph rendering them useless on days you would think they would be at max production.
Solar is useless at night of course. It also is very limited in low light situations such as cloudy or stormy days. The dust storms we get regularly in the desert will also degrade solar output.
Keep saying, the day Ivanpah cooks a condor, it’s over…
The forum ‘Politics’ is closed to new topics and replies.
Welcome to Ute Hub › Forums › Politics › So in reading west slopes thread below I have a question for you
Anonymous.Rate your excitement level for Utah Men's Basketball playing in the NIT
Total Voters: 126
Loading ...
© Copyright 2015-2024
Website and Mobile App by Tony Korologos
