No doubt, this is a storm alright, a full-blown war, with no bullets. We’re wading into a subject we don’t know much about……… but we need to learn about, ASAP!
Petroleum is one of the top three imports/exports of every nation on earth. Remember, Saudi Arabia only has one product = oil. Russia has two products, Oil + weapons manufacture. As President Trump and the US Military annihilated ISIS, and Afghanistan begins to settle, the world is returning to peace. Well, peace is bad for an arms dealer. Add to the mix a virus, global pandemic, caused by China’s negligence ……
We’re in uncharted territory. Many of us have traded stocks, bought futures, and a few of us in this group sold stocks, gold, REIT’s, FOREX,…… The commodity guys, no problem,…… I knew a guy who blew $250K on silver futures in a single morning back in ’81……… He was never the same…….And we all knew a bond daddy (because those are the boys who pick up the bar tabs), but the oil contract guys…… hmmm…….. we stayed away from them. They were always a little squirrely.
Nonetheless, it is time to talk about what happened on Sunday night between Saudi Arabia and Russia, the agreed upon oil production of OPEC countries, price per barrel in the open markets, OPEC’s friends (Russia), how it tanked the USA market, and how the oil dominance of the USA affects geopolitics and creates ripples across the globe. Along the way, hopefully, we will all get up to speed on this subject.
Here’s the back story as I understand it: First and foremost, remember, crisis breeds opportunity. We’re all in a crisis right now, because of China, so…… look for the opportunity.
Remember the oil embargo of the 70’s and the birth of OPEC?
Well, in 2018, the USA became the #1Producer of Oil and LNG, in part, because of the Shale Revolution: https://www.timesrecordnews.com/story/opinion/2018/01/19/u-s-becomes-leader-oil-production/1048266001/ We were thrilled with President Trump and Sec, Rick Perry and their efforts to unleash American Energy.
American dominance in the energy sector was a stabilizing geopolitical force. It meant we didn’t have to fight wars in the Middle East…… because we had our own oil. OPEC fights didn’t matter to us anymore, because we could boost production and supply our allies. As the USA gained in strength, the other primary head oil producers, Saudi and Russia, fought for customers in the long shadow of American power.
So, about 3 years ago, Saudi Arabia invited Russia to join OPEC, not as a member but as a “friend”. https://www.forbes.com/sites/ellenrwald/2020/03/09/russia-will-beat-saudi-arabia-in-this-oil-price-war/#61ebf8c914a6 In the beginning, everyone got along just fine. Saudi lined up sales to China and Russia was making deals with Merkel in Germany.
Back in December ’19, the House of Saud released for public offering shares in Saudi Royal Aramco and it was widely hailed as the world’s most valuable company.
Over 20% of the Saudi public bought shares, and MANY in the Kingdom borrowed money to buy into the stock. https://www.forbes.com/sites/ellenrwald/2020/03/09/russia-will-beat-saudi-arabia-in-this-oil-price-war/#61ebf8c914a6 This guy, below, Salman Al Saud, the Energy Minister for Saudi Arabia, did a great job. His future looked bright.
Well……. from $36USD/share, the stock went up to about 38USD/share but began to drift downward……… reaching $29USD/share on Monday. Why? Because Aramco had huge contracts with China and China’s economy tanked because of the Wuhan virus……… or the WinnieThePooh Flu….. again, negligence of the CCP caused the problem. Secrecy of the CCP did not contain the contagion.
Back to the oil producers. When your customers don’t need to buy your little barrels of oil, life is not good. Saudi was in trouble, falling stock price of Aramco had 20% of the public a little worried. Economies all over the globe were retracting, decreasing demand for oil all over the globe because of China. By Mid-February the meetings of OPEC began. Saudi proposed a one million barrel a day price cut to stabilize production with demand……. otherwise, too much demand was pushing down prices. Russia saw this as a “personal problem” for Saudi and their customer, China. Vladimir, sensing opportunity, went all……… suspicious cat on Saudi.
“Russia clearly knew that Saudi sales to China had been hurt by Coronavirus and it figured that it should not have to cut its healthy production and sales to stabilize the market for everyone else.” https://www.forbes.com/sites/ellenrwald/2020/03/09/russia-will-beat-saudi-arabia-in-this-oil-price-war/#61ebf8c914a6
Because Russia was a friend of OPEC, Russia had a veto vote. If one member vetoed, then no one would lower production. Over last weekend, Russian Energy Minister, Alexander Novak, lowered the boom. No deal.
Mohammad was not a happy guy and swished his pretty robes.
Saudi Arabia then decided to cut the price at which it will sell oil to Asia and other markets, in a bid to increase its own sales and likely to punish Russia as well. News also came that Saudi Arabia would increase its own oil production in April to at least 10 million barrels per day, which is high, but still within its OPEC quota. The price of oil plummeted around 30% when trading opened Sunday evening, US time.
https://www.forbes.com/sites/ellenrwald/2020/03/09/russia-will-beat-saudi-arabia-in-this-oil-price-war/#61ebf8c914a6
Of all the OPEC countries, Saudi has the lowest cost of production and the greatest ability to ramp up production with excess capacity. Therefore, the decision was easy for Saudi. They were trying to grab new customers away from Russia. The antagonism, however, rattled the markets.
While the boys fight (Mohammad and Vlad), we will have excess capacity and more oil than we need. Inventories came in this morning at + 7 million. With the economies of the world making plans for “containment” of coronavirus (caused by China’s negligence), brokers anticipate lowered global need as the virus reverberates around the world. That means lower prices in the oil markets for the next several months.
And all of a sudden, our friends in Texas, Pennsylvania and Ohio (necessary for the election of 2020), and North Dakota, are in trouble. If oil remains below $50/barrel for an extended period of time, they’re out of business. Just a few minutes ago, report from the market floor on FOX Biz, we’re seeing hundreds of layoffs in the oil sector and an expected decrease of 300K barrels a day in production.
…………. Which fits in nicely to Russia’s grand overall scheme of destroying fracking in the USA. I remind you all of our report, almost exactly a year ago, March 6, 2019: OMG, Tom Steyer+Green Movement+ Hillary+ a whole bunch of Russians. The Mask Comes Off. https://wqth.wordpress.com/2019/03/06/omg-tom-steyergreen-movement-hillary-a-whole-bunch-of-russians-the-mask-comes-off/
We know real Russians have secretly funded the green movement and the anti-fracking movement in the USA because we tracked the money. Although we attribute the energy boom to President Trump, the signs of success in fracking were clearly apparent during the Obama Administration. The trajectory for American leadership in oil was bound to happen. Take a look at this article from back in 2012: https://www.independent.co.uk/news/business/news/us-to-become-world-leader-in-oil-and-gas-thanks-to-fracking-8307372.html
A fight for customers and dominance in the oil sector will be an all-out war and one which the USA must win. Countries such as Russia and OPEC nations tend to squander their natural wealth, fund terrorists and wars, cause disruption, and these leaders have not been kind to their citizens. It would be a good thing for a country like the USA to hold sway in this arena. Difficult to imagine President Trump standing on the sidelines and watching our position as leader of the energy sector cede to Russia and/or Saudi Arabia.
Can’t see it happening……..
Might be time to discipline the toddlers, Russia and Saudi, and get the kids out of the mud.
Please, t
Russia got WAY too much power on OPEC to have a VETO.
Why didn’t the U.S. get a place as a “friend” with VETO authority, HMMM?
Now EVERY move OPEC tries to make they have to go hat in hand to Russia and ask “Mother may I?”
DUMB DUMB DUMB!!!
OPEC is not the U.S. friend but Russia has effectively made OPEC their puppet!
AND ALL THE FAKE NEWS COULD SAY WAS “RUSSIA COLLUSION” WHILE THEY LET PUTIN GET AWAY WITH MURDER.
Not sure I like you drawing a nice picture and then leaving us hanging at the end. What do YOU think the US could do? Or should do? I don’t see much except to keep the frackers working and stashing the oil in a preserve (after the US buys it), thus keeping it off the market.
Here’s what I would do if I was President.
It’s kind of “out of the box’ so stay with me.
Every one of our allies also holds USA Treasury Bonds = part of our national debt, SOME of which was issued at a higher interest rate.
Publicly listed price would be $10/barrel- but they have to pay from their “savings account” of US Treasuries.
I would “temporarily subsidize” the oil sector until the end of the year to our allies up to a sale of $50/barrel but allies split cost between market rate (about $32 today) and the $50.
But with a slight benefit of, I don’t know, always being about $2/barrel less than market rate.
Makes USA sales easy option.
But can only pay with US treasuries.
Thus, we’re giving oil sector $18/barrel and allies are picking up the $22 difference between $10-32.
Because we refinance at a lower interest rate, it may only end up costing us about $10-15/barrel.
PLUS, it helps our allies, like Japan, who are highly dependent on imported oil by using savings instead of current funds for energy purchases.
No deal for China.
It would annihilate the Russian economy.
It MAY disrupt the Kingdom of Saudi Arabia………. because the advertised price for new customers is $10.barrel and actual price is always less than market rate from Russia or Saudi.
Meh, maybe not.
Daughn, this is the kind of thinking that plows the way. The Munchkin wolverine could do something with it. And, yer splaining of the oil crisis is primo! Much better than in the news columns.
And what a crisis it is, too! Bajillions of stock market dollars lost because somebody said they’d did something in the coming months!
So, which countries can the US romance to create new customers?
Cuba?
[ducks & runs]
Ha!
The fundamental problem is that the entire GLOBALIST world economy has been oriented toward STEALING and EXFILTRATING wealth from the United States for too long – decades.
The global economic realignment is going through a VERY painful phase around the world, even as the U.S. is sittin’ pretty.
Every other nation’s bill for stealing the U.S. wealth has come due all at once.
So a Total global economic slowdown = total energy slowdown. Lower oil prices.
While at the same time the U.S. is being energy independent and energy dominant.
There are no other markets left to sell to . . .
Except India.
Oh, wait, did I hear a boom out there?
Hmm, must have imagined it.
HAHAHAHAHA!!! India….BOOM!!!
PS Very Stable Genius!
President Trump just had dinner with the Brazilian President less than a week ago…
And he’s meeting with the head of Ireland today.
Yes – this is a big deal. Chinese communism black-swanned the whole world into some DEEP DOO-DOO. This may only be the FIRST giant spin-off. THERE WILL BE MORE.
My thinking is that Trump rightly saw China was faking it – hoaxing it – as you called it, the CHINA HUSTLE.
China, Inc. ~ The Largest Financial Crime of the Last 25 Years, and It’s Not Over.
https://wqth.wordpress.com/2019/09/13/china-inc-the-largest-financial-crime-of-the-last-25-years-and-its-not-over/
Total Ponzi scheme. The Chinese socialists could only survive on donated and stolen money from America.
So when the scam starts falling apart, and ally Iran starts running into trouble, too, and North Korean [Chinese] nukes in North Korea are no longer any good (what a smooth move to remove CHINESE nukes under the cover of their own bullshit story that they were Nork nukes), then what does Soleimani do?
TERRORISM USING BIOWARFARE.
So I think that Iran is all tied up with Wuhan, their CRAPPY, POORLY BUILT LAB, and Iran’s own CRAP LAB, very likely, and all these toads were trying to ramp up tech they were NOT ready to ramp up. China needed the money – Soleimani needed the weapon to keep power.
Once we knew Soleimani was involved with bioterror, there is no arguing that he has to be taken out.
When did all this happen? 2019 is my guess. Before things broke open in Wuhan AND Iran.
It is my belief now, based on discussions with people who experienced what may have been an EARLIER form of the corona virus, that multiple strains were transferred from China to Iran, and that the crappy labs in both places were breached by a variety of bioagents. Something got out in Iran BEFORE these more deadly varieties.
I am placing money on release of MULTIPLE STRAINS of Coronavirus – not just S and L – with at least one less lethal (but not completely normal) variety escaping or being deliberately released as a test in SPRING or SUMMER of 2019.
My advice to forensics people who want to bust China is GO BACK FURTHER. Just like pushing the COUP back further exposed them, I think pushing back to an earlier corona release or breach is key to finding China’s REAL GUILT.
And of course, THIS EXPLAINS why China was reluctant to tell the world. It was making a SALE TO IRAN. Nothing can get between CHINESE and MONEY.
“Once we knew Soleimani was involved with bioterror, there is no arguing that he has to be taken out.”
________________
We must have known that for a long time, considering Hussein & the Traitors were bankrolling Iran and Soleimani with planeloads of billions in cash.
This stuff is really starting to make sense.
“This stuff is really starting to make sense.”
______________
That’s just an illusion 😁
Once it starts making sense, the Satanic Soros Socialists will add more confusion a.s.a.p.!!!
Now we need to connect the plane crash in Iran and who was on it? Who knew what?
I suspected that the Wuhan virus was deliberate and used as a bio weapon.
I think agents are still among us trying to infect maybe POTUS?
No prove just letting my imagination run wild.
I had the flu about 3 weeks before Christmas and it was something I have never experienced before.
Took 5 weeks for cough to leave and pain in my legs were incredible. I also had the high temperature.
Looking back I wonder if the Wuhan virus has been around before that?
I am also wondering if I had it. My son in law had it also but his daughter nothing but a one day affair.
I do not have health problems just fall into the age category.
“Now we need to connect the plane crash in Iran and who was on it?”
There were a number of “Canadians”, as in perhaps naturalized former Iranians…& most/all of them were connected to a university…at least that was the part being told on the Metro Detroit news at the time…
Note that China just announced a 14-day QUARANTINE for anyone VISITING CHINA?
Shuts down “Inquiring Eyes”.
Thank God for spy satellites!!!
OMG the squirrel 🙂
Good luck getting THAT out of your memory banks.
Sorry about that one.
Grandkids will love it.
DNC Blame-Planning Session!
It should be noted that Aramco is the second company of the same name.
The first Aramco — the Arab-American Oil Company — was founded in 1936 when Standard Oil of California (SOCAL) formed a subsidiary in Arabia named the California Arabia Standard Oil Company (CASOC). They also formed a joint venture with Standard Oil of Texas (CALTEX) to market the oil throughout Europe and Africa.
In 1943, CASOC was renamed as Aramco. From 1950 to 1988, the company’s position was repeatedly strongarmed into paying increasing royalties to the kingdom and having less freedom of action. In 1988, the remaining part of Aramco was “purchased” by the kingdom and became “Saudi Aramco”.
Americans built Saudi oil from nothing — and have been robbed of any parts of it that became successful.
Sorry…..tonight’s my night for dropping links — https://en.wikipedia.org/wiki/History_of_the_oil_industry_in_Saudi_Arabia
cthulhu,
I think you are MISSING a whole big chunk of that story.
(Unfortunately I lost a very good link explaining the real history of Standard Oil)
Anyway WHO OWNED Standard Oil?
WIKI
“…Established in 1870 by John D. Rockefeller and Henry Flagler as a corporation in Ohio, it was the largest oil refiner in the world….”
Encyclopaedia Britannica
*https://www.britannica.com/topic/Standard-Oil
“Standard Oil, in full Standard Oil Company and Trust, American company and corporate trust that from 1870 to 1911 was the industrial empire of John D. Rockefeller and associates, controlling almost all oil production, processing, marketing, and transportation in the United States….
In 1906 the U.S. government brought suit against Standard Oil Company… In 1911, after dissolution of the Standard Oil empire, eight companies retained “Standard Oil” in their names….”
But look at this section of the article:
So what you are looking at is a CARTEL. Do you think after the Standard Oil TRUST was broken up they actually gave up? ““You could argue its existence from its effects, but you could not prove it.”
They started working through puppets such as PRESCOTT BUSH and MAURICE STRONG.
The problem was they could no longer set the price of oil…. FROM INSIDE THE USA. So while the Rockefellers worked (funded) the killing off of their rival, NUCLEAR POWER, through NGOs, Saudi Arabia ‘suddenly’ kicks out their long time partner the Rockefellers and forms OPEC… WHO – 🎉tada🙌🏾 – sets the price of oil. IMAGINE THAT?
OH, and who is a really great friend of the Saudis, why the Rockefeller puppet BUSH!
In an ‘oil war’ it all boils down to the break-even point for the producer.
I heard Prince MBS say once, that their break-even point was around $10/barrel.
Yes, that’s low…
But their country depends on oil profits…big profits.
It is their country’s main source of revenue.
I’ve read that Russia needs the price of oil to be at around $70/barrel, or they are hurting.
Don’t know what their break-even point is…but that $70/barrel requirement is probably because of all their programs that their oil profits pay for.
Our US oil producers have various break-even points, depending on their individual costs of production.
It ranges from $20 to $35/barrel.
Traditional wells on land, once the well is brought in, usually have the lower break-even point…with Fracking at the top end of that range.
Russia and KSA are hurting themselves in this ‘oil war’ they are creating.
They are doing it to hurt the US oil industry, which has been providing a new alternative source of oil for some of their usual customers.
It’s a futile effort, though.
Yes…it will hurt us for awhile, but our oil producers can simply cut back on production until the prices go back up.
It’s the layoffs and loss of cash flow in our economy that will hurt the most.
The rabid Left, however, can no longer claim that our President is a “puppet for Russia” now…not with this going on.
It’s slightly more complex than that — there’s the break-even point for the producer, which would determine whether the producer produces or not in a vacuum. But there’s the political point for the regime, which determines how much profit is needed in oil sales to live the lifestyle they want.
In January of this year, their production was 9,733,000 barrels per day. Their cost to produce was $10/barrel (if we believe them). The world oil price was $61.63 for the same month. So their daily revenues were roughly $51.63 x 9,733,000, or $502,514,790 — roughly half a billion dollars a day. That’s the crack they’re addicted to.
If their price war takes them down to $40/barrel by pumping 12M barrels per day, their daily revenues would be $360,000,000 — leaving them short $140,000,000 each and every day. If they seriously attempt to bankrupt shale oil by going to $20/barrel oil by pumping 14M barrels per day (which may be physically impossible), their finances would look like revenues of $140,000,000 and a shortfall of $360,000,000 per day. EVERY DAY.
Now, let’s look at it from a shale producer’s viewpoint. Let’s say his breakeven is $40. He’s been loving life since oil prices were in the $60 dollar neighborhood. But what is that breakeven comprised of? There’s operating costs (e.g. electricity for pumping), lease costs (e.g. state royalties), financing costs (interest on the money to build everything), and depreciation (all the equipment you had to put in divided by its useful life).
If an oil price war pushes prices below the $40 breakeven for a while, you can file bankruptcy. The investors that bought you all that equipment get screwed, but the equipment doesn’t disappear in a puff of smoke. Your financing costs can take a massive haircut. You might even get to put the squeeze on your state to lower your royalty rate for a limited period. Now, what does your breakeven look like? Mind you, the managers that built it might be gone, but the global oil market doesn’t care.
Disagree about the results of bankruptcy if I understand you correctly.
Most likely it would be a reorganization, not a liquidation. The creditors would get screwed on the interest rate (the court would drop it to a level that could be handled) but no way would they get screwed on the principal. IOW, the loans would be restructured rather than written off.
And nobody talks about the derivatives or the shorts.
The shorts need to take a bite.
I’m ready to intervene.
Be damned if we let them win.
We know President Trump will NOT let them win. He has a way of leveling the playing field to the point of winning. Dunno the results of his call with Saudi a few days ago. Dunno his plan. But, 100% he has a plan and his guys are working it in the background.
Would like to know our oil reserves ability to hold additional oil.
Once Saudi lands replacement contracts for lost China sales, they can increase prices on the global market. There was a headline of sorts a few days ago after Saudi lowered its prices. China was increases buys at the lower costs. Dunno the details.
“The investors….get screwed” translates to equity -> 0.
I said, “[y]our financing costs can take a massive haircut.” You say, “[t]he creditors would get screwed on the interest rate.” To-may-to; to-mah-to.
You continue with, “…..but no way would they get screwed on the principal” — but this is a dangerous illusion. Consider two once-unthinkable cases — negative interest rates, or interest rates well-below monetary inflation (both of which have been seen in the last thirty years). In both cases, nominal principal is sacrosanct — but is heavily eroded anyway.
Derivatives and shorts are side bets that have little to do with the underlying business……EXCEPT in peculiar cases such as the following. Derivatives contracts (speculative bets) are made that a particular company’s stock will not go down $1 per share, and great sums are wagered on this; the night before the derivative executes, the stock is down $1.01; and the party that stands to lose large sums if the stock is down $1.01 buys sufficient stock on the market to drive the price upward. (The same can be done the other way, of course). The fundamental disconnect here is that $100B can be wagered on the stock price of a $1B company. Indeed, there are estimates that derivatives contracts total in the quadrillions, while the price of the entire NYSE is merely in the trillions.
The concept of ‘derivatives’ need to be shot in the head and buried!
The Food Crisis was driven by derivatives.
The Mortgage Crisis was driven by derivatives.
I see NO up side to derivative gambling except for those who make $$$$ from it while the serfs get screwed.
…
How Goldman Sachs Created the Food Crisis
https://web.archive.org/web/20110502012932/http://www.foreignpolicy.com/articles/2011/04/27/how_goldman_sachs_created_the_food_crisis?page=0,1
How the AIG Bailout Could be Driving More Foreclosures
https://web.archive.org/web/20110109013409/http://www.realtytrac.com/content/news-and-opinion/how-the-aig-bailout-could-be-driving-more-foreclosures-4861
“It’s the layoffs and loss of cash flow in our economy that will hurt the most.”
_______________
Then let DJT put tariffs on the adversarial parties, and use the tariff money collected to compensate those who are laid off as the result of their industry being targeted by foreign manipulation, in the same way he used Chinese tariffs to compensate the farmers.
The recurring problem is that Sovereign States are using their power to target private industries, and (at least until recently) our government stood by and watched as our industries were destroyed.
I’m all in favor of free markets — and if I ever see one, I’ll be sure to say so.
Until then, somebody better level the playing field.
Somebody named DJT.
EXACTLY!
That is what tariffs are for.
And yes I have seen a free market. But they called it a flea market. 🤣
We have a new variable into the mix…….
The fact that 20% of Saudi Arabia owns stock in Aramco.
Salman won’t stay in power when the profits dry up.
20% of Aramco is owned by individuals in the kingdom; some amount is owned outside…..but the great majority is owned by the kingdom — and, judging by the history of Saudi oil, this can always become 100% again.
Why not?
Did Salman guarantee a return?
That would be crazy, but if he did, then presumably the kindgdom can make good on it.
And if he didn’t, then presumably the stockholders understood the rewards AND the risks involved with investing.
And if they didn’t understand the risks, now they do.
And if they got burned… (grabs hand and shakes vigorously) welcome to the world, glad you could make it! 😁👍😁
Daughn and Wolfs, how about this?
2020 would be a good year to make a policy of complete energy independence for the USA.We need no type of oil that arrives in USA on a boat. Oil from Canada and Mexico will be allowed because the USA is generous to our neighbors. It isn’t true that we must have heavy foreign oils for specialty refined products. Refining works both ways.
This Island America approach to fuels will be an advantage to USA. The North American oil price will separate from the global price; and it could be higher or lower in different circumstances. Regardless of the break-even point for fracking, oil will be plentiful and cheap enough to reindustrialize the USA. The counter-balance is natural gas, which will be cheap-as-all-get-out on our continent, and earn marvelous profits as LNG across the oceans.
Let’s go for even more Liberty. Consider the empowerment of gas and oil versus the electricity. Large-scale, the electric grid is easily disrupted by weather and terrified by EMP. Pipelines, not nearly so much. Pipelines can be hardened more completely and can be operated mechanically, without electricity or internet.
Houses and buildings can be heated, cooled and illuminated by natural gas alone, even freezers and refrigerators. Generators can make electricity at the end-point home or building. Cars and trucks can run on CNG and LNG, and fill stations could be installed in every garage, This distributes liberty and independence all over the lower 48 states. Natural gas can be “stored” in the underground formations where we find it, as well in the offshore salt domes like the Federal Petroleum Reserve.
Pretty soon we’l prove that burning natural gas has little harm. CO2 + H2O may cause an increase in trees, but little else. We should let coal compete for the right to make electricity. Just keep it clean. And it’s not “fossil fuel” either. Oil and gas are minerals made in the crust of the earth, with maybe some dinosaurs tossed in to make it cool.
America can regain its productive free markets in fuel, food, health, education, industry, merchandise, services, finance, science, technology; and even a free market in politics -local, state and federal. Of course the rest of the world can not keep up. To do that they’d have to cede control to the middle class and the invisible hand.
Hey, leave it to President Trump . . .
Who else could sell GAS to Saudi Arabia?
True story. We are set to ship West Texas LNG to Saudi Arabia.
And Saudi Aramaco is investing in West Texas and other U.S. production for the first time. Incredible.
Now as far as running car and trucks on CNG or LNG, IIRC the problem is that it isn’t as easy or practical to run vehicles on CNG/LNG from an operator’s perspective. It’s harder to fuel a CNG/LNG vehicle because the pumping does not work the same way the average consumer is used to for Unleaded. There’s an uphill ramp to climb.
There’s also the chicken or the egg problem with refueling stations. There aren’t CNG/LNG refueling stations b/c there aren’t enough cars and trucks running it to demand it. There aren’t enough cars and trucks running it b/c there aren’t enough refueling stations.
In the case of Tesla, they invested money to establish electric charging stations at strategic locations. While I doubt that they will be successful, the reality is that Detroit doesn’t have the interest in selling CNG/LNG vehicles when they feel the need to compete with Tesla (eliminate EV subsidies and this problem goes away), even less do they want to invest in CNG/LNG stations.
Fueling stations simply won’t supply CNG/LNG without demand. Even in a major metro area like DFW, the only CNG/LNG fueling stations are clustered around DFW airport where many of the corporate fleets and trucks demand them to reduce the airport’s carbon footprint. Of course it’s been years since I’ve checked and there may be a few other scattered stations, but that’s just it – a few scattered stations. And without some major capital investment, you can’t take the relatively expensive household natural gas and compress it to fuel a truck – just not cost effective.
My information could be dated but my read is that the situation hasn’t changed. T. Boone Pickens hoped to make a killing driving up the demand and prices for LNG back ten years ago but his plans to become a mega-billionaire kind of fizzled out when oil prices finally dropped 😉
Oddly enough, I have a little Silicon Valley exposure to this…..it’s not the fueling that’s the big issue, it’s the carburetion / fuel injection. To get the right number of H’s and C’s into the combustion chamber, the fuel/air mixture has to be — [I was going to spitball here, but instead will do a rough calculate. Propane is C3H8. Complete combustion will result in three CO2’s (requiring 6 O’s), and four H2O’s (requiring 4 O’s) — so 10 O’s per propane. Atmospheric O’s are O2, so five oxygens per propane. Oxygen is only 30% of air, so about sixteen airs per propane. But an “air” is only going to weigh about 15 and a “propane” will weigh about 44, so by volume you should see…] about a 1:48 fuel/air mix. [Gasoline carbs like a 14.7/1 air/fuel mix BY WEIGHT when gasoline is liquid.]
Use the correct energy product for the correct end use.
This is just rough guesses as an illustration:
Nuclear Energy is a SUPERB base load producer for electricity.
Coal for some of the tuning day/night cycle
and
LNG for the fine tuning minute by minute.
LNG is also good for heating and STOVES.
Oil –> Diesel & gas is great for transportation and as a chemical precursor.
Solar is fine for niche markets like my solar powered electric fence charger that I can set-up anywhere.
It is true, Saudi Arabia bought 20yrs worth of LNG from the Cameron Parish plant in Louisiana.
They need to stop trying to fix what ain’t broke.
Gasoline works great.
And it’s less filling 😁
Not to mention that, given sufficient other energy — *cough* nuclear *cough* — virtually any other source of energy can be reformulated into gasoline — coal, natural gas, cellulose, biomass, vegetable oil…. — and then distributed through a network that is already constructed and reasonably efficient.
BINGO!!!
My Favorite Socialist, Richard Courtney, who is found on WUWT, worked on conversion of coal to petrol. It is a state secret in the UK. He mentioned it in a comment at WUWT.
From Larry:
Everyone’s comments are thoughtful and very appreciated! You guys are the best! As a oilpatch man I understand how gasoline is just about the most powerful carry-along fuel there is. Still, we had pickups back in the day that could be switched back and forth, and CNG conversion kits.
They put the LNG on giant boats to deliver to Japan and Europe. Farmers have big CNG tanks out by the side fence. I’m just imagining a future where people’s homes have gaspipe delivery, kinda like OK and TX. At the house there’s the Cthulhu brand pump-thingie to fill your car overnight.
And Natural Gas could turn out to be omnipresent and cheap! in the USA. Export the oil, burn the gas.
1) “So, about 3 years ago, Saudi Arabia invited Russia to join OPEC, not as a member but as a “friend”.
Why would Saudi Arabia do that? Why would SA give Russia a ‘veto’ over OPEC actions, giving a Russian Bear (notorious throughout history for living life as a game of subversion and double-cross) dictatorial control over their little club?
What was in it for SA?
What did SA get in exchange for taking the Snake into their den?
Or were they just feeling particularly magnanimous that day?
.
2) “Because Russia was a friend of OPEC…
With friends like Russia… I mean, what could go wrong, right?
“…Russia had a veto vote. If one member vetoed, then no one would lower production. Over last weekend, Russian Energy Minister, Alexander Novak, lowered the boom. No deal.”
Okay, I can’t be the only one wondering at the abject stupidity of this entire scenario that we’re being expected to swallow whole.
It’s like inviting Keyser Söze to be a ‘friend’ of your little drug cartel, and then acting surprised when he wipes out your entire organization from the inside (who could have predicted?)
Why would SA and OPEC invite Russia to be a ‘friend with a veto’ (doesn’t sound like any kind of ‘friend’ I’ve ever heard of…) which Russia can hold over all of their heads, all the time, forever?
And why would SA (and OPEC) not break up with their new “friend with veto” in the 100% predictable event that their new “friend” begins immediately acting against everyone else’s interests?
The cartoonishly incurious article author, Ellen Wald, never even hints at any of these obvious questions, much less the answers.
.
3) (from linked article): “Saudi Arabia, which welcomed Russia into OPEC+ decision-making three years ago, used the only strategy available to it to react to Russia’s decision. Saudi Arabia decided to increase production and drop its prices to ensure that it would have buyers.”
What kind of doofus invites a predator into their midst, provides the predator a weapon (veto), and then leaves himself exactly ONE strategy in the absolutely positive event that the predator does what predators always do?
A sole strategy which the predator undoubtedly understood before SA did?
It’s so stupid (at least the way Forbes Senior Contributor Ellen Wald tells it) it hurts just reading it.
.
4) (from linked article): “The other problem with Saudi Arabia presenting its tactic as a reaction to Russia is that it sets them up as opponents, and Russia will almost definitely come out looking like the winner.”
What else could you
potentiallypossibly create, besides an opponent, by giving someone “veto” power over your own interests?Does Ms. Wald not see the obvious questions prompted by her report, or is she just a participating narrative engineer doing a Tokyo Rose routine?
.
5) (from linked article): “Saudi Arabia values the legitimacy of OPEC, because it gains much power from being the most influential OPEC member. Thus, Saudi Arabia will feel pressure to bring OPEC to a new production cut decision and to try to balance the market.”
Here’s an idea to bring ‘balance’ to the market. Create something to act as a COUNTERBALANCE to those interests (OPEC) which are openly hostile toward the free world (ta-daa!).
Like a group of oil-producing nations, led by America, to counter OPEC. Why didn’t this happen in 1960, roughly 10 seconds after OPEC was formed — if not before?
Shale oil production – aka fracking – was not invented until recently. That has made the difference after the ‘gusher’ wells dried up in TX.
Because it wasn’t just about oil prices.
Saudi allied with Russia to squeeze Iran.
Remember when Saudi lowered oil prices to about $45/barrel and Iran was on the BRINK of destruction…….. and so was Venezuela/Cuba………. when, at the last minute, Obama stepped in, sent them 1.8 billion in cash to Iran, released Iran frozen assets from ’79 WITH INTEREST = 150 billion AND saved Cuba ——– all in 2015?
Saudi almost had the Iranians defeated.
Wow.
Good observation, daughn. Truth. But the plan is still the plan and got back on track in 2017.
Any doubts about Soetoro, Jarrett, Kerry and their band of slugs being traitors? Nah.
Just another thing to chew on — five of the top 12 oil/gas fields in the US are in California…..idle.
The Trump Administration should seize under eminent domain. The fair price for the seizure should make California very happy since it’s VERY much in the red.
No matter how much you give them, they’ll just spend more.
Or seize them as restitution for all the billions of federal tax dollars used for fraudulent means by the Kalifournya Crime Cartel.
Much better.
mo bettah
Idle because of CA government ignorance (green BS)? I assume, yes.
Thank you for the explanation, Daughn.
Wasn’t Xi just made president for life about a year ago?
My, how time flies… 😁
If he is president for life, and it’s time for him to no longer be president, there appears to be only one natural way to reconcile those two things.
POTUS will NOT allow Russians and Saudis to use “dumping” to destroy our Energy Sector.
• Anti-Dumping actions already underway.
• Saudis have not contemplated the possibility that they trigger the closing of the Gulf of Hormuz to protect NON-Mideast nations’ energy industries from collapse.
thanks for this thread Daughn…the more i think i start to understand, the less sense it makes…giving Russia veto power was huge and I agree with all who question the “why” of that decision. the most interesting part of that story has yet to be uncovered I think.
It was all about isolating Iran. Saudi needed Russia on their side.
well that makes sense…THANKS for explaining it.
you should teach on line classes…I’d take them!
Thank you, Daughn. I was confused about what was happening with Russia and Saudi Arabia. You cleared it up.
🤔 Would POTUS set up a National-Emergency Action that requires ALL UTILITIES to discontinue purchases of Wind & Solar and replace them with USA Oil & Gas until the market has stabilized?
🤔 Could POTUS be setting the table for a massive Geopolitical Reset? …
The EU is SCREWED.
• Europe screwed themselves by leaving borders open, getting infected by China and then infecting the USA.
• If you’re a non-EU country, would you leave travel open with Europe, get yourself infected and then get a travel-trade-cargo ban with the USA?
• Imagine what European NATIONS will have to do to get the Travel Ban REVERSED!
• This sets up for a Trade Deal with the UK, as conduit from the EU.
• Countries will be faced … SOON … with becoming Chinese Colonies
… or USA Allies with Trade-Defense-Energy and now-Healthcare (Pharma, Vaccines, Technology) and -Infrastructure (5g Telecom, Ports, Transport Networks, Utilities) Deals.
• POTUS has been launching the -Infrastructure with USA-backed Financing throughout the Americas as a counter to Chinese Belt and Road infiltration.
Watch Pompeo! – for both the response to the attack on US base in Iraq – and for clues to how President Trump is dealing with Russia/China/Iran oil and biological warfare. – *
Tweets by SecPompeo
Yesterday, Pompeo met with Australia’s foreign minister.
Is Australia a oil/gas producer or customer?
Could India also be a US oil/gas customer or are they producers?
Eastern Europe is already a buyer of US oil and natural gas – which angered Russia.
Could Trump forge a new alliance with oil producers that excludes Russia and even OPEC members?
Or even more radical – will the Arabs end OPEC, drop Russia and China and join with the US?
Trump has been 6 jumps ahead on this chess board so far.
As Larry Kudlow said – This is a bold President with bold solutions!
I do not worry with President Trump and his people at the helm.
Australia: Ripe for a massive Trade Deal to save themselves from Chinese Colonization
• YUGE natural resources … exports to China
• Australia facing massive economic disruption with export cuts as others “Decouple from China”
• Australia wounded by natural disasters]
• Xi sees Australia as a piglet with the apple in its mouth … awaiting consumption.
Be patient with this TL;dr post. Take daughn’s point on the squeezing of Iran by SA a bit farther. Who immediately after assuming office struck a deal with SA? Yeah, our guy. Who headed up DOE for our guy, Rick Perry, one of his inner circle of trusted friends. Who was one, if not the most effective DOE leaders ever? Rick Perry. Where does VSGPOTUS gain information and knowledge about world conditions that fit into the overall plan of MAGA and KAG? Patriot MI.
All of this is following the script, the game plan. What happens when you think you may be about to lose a battle on the front lines, only to realize as a foot soldier, that the CiC had his generals working a plan of rope-a-dope (in honor of PDT’s friend Ali) to draw the opponent in only to be outflanked by forces they did not know existed? SA is the point of the spear. What is happening is America has SA’s back with the Prince and dad. SA and Russia have declining reserves, which is well known to both and the world. Both are producing primarily the heavy grade stuff that needs intensive refining to pump into the family wagon. A lot of the older Texas oil fields are doing the same thing FWIW. Which is why fracking and Alaska opening up are such big deals. Right, Pennsylvannia?
Contrary to what most “experts” such as Forbes say, who actually may be providing disinformation for world consumption for whatever part they are playing, Russia is actually weakening its hold on their lackeys by getting into this battle with SA. The 800 lb gorilla is protecting the spear nation as they diversify away from oil industry dominance in their economy and modernize their culture slowly as the old guard dies off and loses influence. Rick Perry has previously counseled our oil/gas producers on the moves and countermoves (Q anyone?). We have the best, most ruthless MAGA/KAG business people on the planet. What happened with the tariffs and our honey badgers with trade pacts? Yeah, that happened and continues to happen. That our fracking industry is in danger is ludicrous. Some foot soldiers being wounded for a relatively short period before returning to the front lines – yep. Momentarily afflictions that are in the plan.
This will move Russia back toward China over the coming months in a more weakened state and scare the bejeezus out the Euros. The world knows Russia has been buying and stealing gold reserves from 3rd world shizholes for years now along with China. They are having to hedge for when our VSGPOTUS and admin make mincemeat out of the Fed and all central banks in his second act. Oil sales = currency to stay liquid while they recover. Their next act will be back to military hardware sales as daughn stated. Who will buy much of it since they are in a mutual defense pact? China. Who will keep China off balance? America and the real, newly developed world allies of our VSGPOTUS. China still needs us badly as much as they hate it. ChiComms will rattle sabers and lick their wounds until they collapse economically and socially as all communists do. The world old guard’s post WW II NWO vision is dead and buried except in the minds of the Dims, RINO’s, establishment, ignorant citizens, sleepy heads, and Creepy Joe’s cranium. They have become lazy and disease filled from the blood they sucked from the victims of the communists and totalitarian dictators that support them.
Need confirmation? How have the other world leaders lining up for personal visits in the WH, Mar-a-Lago, and in their native lands reacted when our VSGPOTUS meets with them here and abroad? Win-win trade deals, military alliances with equitable cost sharing, big smiles, back slaps, happy talk, continued exposure of fake media in front of the leaders, and so on.
Pass the popcorn, please.
So if the stage for Armageddon is truly being set for the final act as many suggest, which only God knows, the coming years will reveal it with the Russia/China alliance rearing its ugly, Satanic head. I believe out VSGPOTUS knows that as well since he is surrounded by evangelical leaders who know the score. I’m not concerned about this as long as PDT is in office and hopefully, his successors in the coming decades. But I guess that is OUR jobs to make sure it happens.
I tend to agree TradeBait,
Potus early visit to SA is now bearing fruit.
Time was needed to allow POTUS and the US to become Energy independent and diversify energy resources.
To stay in the game, whatever happens, as leadership of every country should do
AND time to court Pootie with seat at OPEC.
My money says VSG fitted MbS with a custom fitted ” Trademark Win-Win ‘Art-of-the -deal” made For just this occasion, to offer Pootie. ..Free of charge of course . Everybody wins Fairly.
Surprised no one mentioned this tweet the other day by DawsonS field
-OR- it’s infinite far ranging implications and possibilities.. may already be mentioned, apologies if I missed it
WUT!? 10$? a barrel of oil??
Complicated business Folks !!
The best is yet to come!
Trumps an Animal
But he’s OUR Animal
The world is NOT a nice place. Does anyone here really think the countries of Brazil, Russia, China, have anti-bullying campaigns for their schoolchildren?
I scoff at you!
Yeah, I grew up in the burbs of Chicago. We went to church, honor, respect, and Golden Rule. Yes, Dad did biz with the unions in Chicago, and while I don’t remember the Dem Convention of 68, he sure did talk about it.
When I went into the biz world, I sought to emulate him. Gosh, everyone liked Dad. If I was like Dad, it should be easy, right?
But things were different in NYC, and the ethics were completely different in Miami. Things which would never cross my innocent mind, happened daily.
I met crooks, thieves, and cheaters….., the boys from every alphabet agency, and I learned how to shoot. I’ve been in the room with Noriega in Panama, met with many dictators and questionable diplomats on boats and tarmacs all over Latin America. Even handled the deferred comp plan for “Southern Air”. Never forget the time I breezed back to my office after a big dinner, about midnight, top down on the Alpha, wind in my hair….. only to be stopped by the Florida Marine Patrol. ‘sxuse me??? Apparently, our office building was used by Bush’s strike force during the evening hours and Carlos Lehder had just been arrested, being moved to a Navy ship off of Jacksonville. By morning it was all over the news, but they wouldn’t let me in the building without an escort.
I came home to sunny lil’ Mississippi, but I was not the same lil’ girl. When I started doing biz overseas and had a problem, I had no qualms rousting a factory or walking right up to the line when it came to collecting money.
We do biz all over the world.
Gotta have muscle which is easily deployable.
They’re not nice in India, Bulgaria, Nigeria, Doha….. or Hubei.
Hillary knows………. that woman, you can tell, …… see it in her eyes. She would have no problem killing people if they were in her way. She’s evil.
Same thing with Valerie Jarrett. She’s been to the other side of the law.
Thank GOD for someone like President Trump. THAT’s the guy we need.
He KNOWS exactly what to do.
I shutter to think what would happen with an Elizabeth Warren in charge.
Deer in the headlights.
No more babies in the White House. No more ideological Marxists-tin-pot-dictators who sell their version of a unicorn and rainbow utopia to the brain-washed masses, when they have all the power and sell out our country.
And definitely no idiotic women who think women in the USA are persecuted. They’re dumb, clueless, ignorant, and don’t know how lucky they are to live here. Treasure that Constitution, and kiss the ground called USA.
T.H.I.S.
If you missed the theme, GO BACK AND READ IT AGAIN. This is the truth. Could tell ya the tale of being visited in my hotel room in Santiago by some, cough, gentlemen, “from the embassy,” profuffering a biz card that read, “Central Intelligence Agency” asking what I was doing in the country, but that’s another story …. 😉
Nodding.
LOTS we can’t talk about.
These little pixies who want to pass out OUR money and have others pay their debts make me sick.
And journalists with ZERO real world experience. Academics only, who have never signed the front of a paycheck. And those who take VOTING or a peaceful transition of power for granted.
SNAP OUT OF IT.
Pfffttttt, enjoy the bounty of the USA. We have no idea how lucky we are.
Set ONE FOOT outside the USA and it’s the law of the jungle, baby.
One thing that gets me, Daughn, Is Russia with China. The only time in world history when Russia wasn’t very insecure about invasion was 1952. China worried about invasion when Ghengis and Japan did it. China is better favored economically and far more secure from enemies than Russia.
Putin knows it is law of the jungle, all of the time. Putin wants a future with his nation disconnected from Lenin and Stalin. And from Mao. You know Putin doesn’t want to go real-politikin’ with Mao.
You know, maybe everybody IS out to get Russia, for real. Hard to be sympathetic, isn’t it?
I am late to the conversation but the most obvious anomaly is the price of GOLD has dropped by $100 in a week to $1574 per ounce. History probably shows money flowing into gold in times of volatility driving the price up with money moving out of the market to a safe haven in precious metals. Nadda. Usually when oil drops gold rises.
Margin loans have been called.
The working class 401k’s are holding pat on their paper losses with faith in our President to navigate a recovery.
Playing leveraged margins are so dangerous. Might as well play in a casino, at least you can see a show.
The question is EXACTLY WHEN did Russia join OPEC?
Bloomberg: Russia and Saudi Arabia Pursue OPEC Deal at World Cup Summit
June 13, 2018,
*https://www.bloomberg.com/news/articles/2018-06-13/russia-and-saudi-arabia-pursue-opec-deal-at-world-cup-meeting
Russia to become member of OPEC. Possible?
June 27, 2018
https://community.oilprice.com/topic/2684-russia-to-become-member-of-opec-possible/
And that group points out:
SPUTNIK NEWS: Russia, Saudi Arabia Seek New Super-OPEC Oil Alliance – Reports
June 23, 2018
*https://sputniknews.com/business/201806231065698426-russia-saudi-arabia-new-petro-alliance/
NPR: Russia Joins OPEC In Agreement To Cut Oil Production By 1.2 Million Barrels A Day
December 7, 2018
*https://www.npr.org/2018/12/07/674730837/russia-joins-opec-in-agreement-to-cut-oil-production-by-1-2-million-barrels-a-da
DO I SMELL A DONALD TRUMP MOVE??
#freespeech #antitrust #internetcensorship
Harmeet Dhillon: On Fighting for Free Speech & Reining in Big Tech “Runaway Monopolies” [CPAC 2020]
SUPPLY CHAIN CRISIS
https://www.youtube.com/watch?v=G0MCiRggtyA&feature=em-uploademail