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My thoughts on the re-election of Obama

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Whitewing

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The more it goes, the more I think that, in the end, this may be the best route for the country as a whole.

Let me explain myself.

I think 2013 going forward is going to be really, really ugly for the US economy regardless of who is in office. Might as well be Obama as I believe no one can fix the mess at this point and, in the long run, it'll be better if a liberal donk is at the helm when the roof caves in. If the damage is as bad as I believe it'll be, perhaps true fiscal conservatives will find their feet and finally take control of government.

What the country needs is what the stock market gets before it re-sets itself.....total capitulation.

Who better to ruin the value of the US dollar (making our debt to China and others worthless), destroy the value of American homes and farms, and totally wreck the US economy than a big-government, money-printing, deficit-spending liberal donk? Who better to bring on total capitulation than Obama?

I just don't see limping along from one liberal administration to a semi-liberal one, and back to a liberal one as the answer. Look where that strategy has gotten the US so far.

The wild card in the whole thing is whether the cultural makeup of the country will have changed so much by the time total capitulation arrives that the majority of voters really do believe there's such a thing as a free lunch.

If that's the case, just add the United States to the list of once-great countries that authored their own demise.
 

Steve

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the US doesn't need to fall with the world economy, if the right decisions are made now..

several key moves could be made to make our country solvent... and the dollar stronger then ever...

1. is energy independence from the middle east..
an administration friendly to small oil/gas would make this a priority..

they would have to open up vast US areas to drilling, .. get behind sound environmental science and set a good strict policy to allow drilling in sensitive areas..

set oil reserve policy on price triggers instead of just buying,.. when prices climb above $100 a barrel.. allow the strategic reserve to suspend buying.. and when it drops below $65 require them to buy the excess production..

the low buy price would allow small producers price stability that long term drilling on small plays requires..

additionally set up several pipeline routes to expedite Canadian oil getting to several refinery areas.. and to export markets.. (when our refineries run at capacity they run at a profit).. and our fuel is less costly

2. revitalize our manufacturing with low corporate taxes on manufacturing and no corporate taxes on exports..

3,.. get the budget and fed printing under control..

a strong dollar is like free cash for our fed and government.. as a world currency we benefit from a strong dollar.

while there is more to it.. smart moves in a rough economy can make a nation..

and no one would expect Obama to do anything helpful or smart at this point.. so that leaves him with the only other option.. war
 

Whitewing

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Steve, your thoughtfulness and logic on many political issues is usually solid and I respect you. But you're going to have to come to terms with three very important truths.

1) The entire US economy is built on CHEAP OIL

2) At its current and recent economic levels, the US will never be energy independent from the middle east. Let me repeat that: The US will NEVER mantain its current economic levels AND attain energy independence from the middle east. Our imports are too great and non-OPEC reserves/production will never be able to replace OPEC sources.

3) The days of cheap oil are rapidly coming to an end.

In the late 50's, my old boss's boss, a Shell engineer by the name of Hubbert predicted that US oil production levels would climb until the early 1970's, peak, and then go into terminal decline. If memory serves me correctly, that peak was confirmed in 1971. Prior to that, the US was a net oil EXPORTER. I believe we've been importing oil ever since.

Hubbert further predicted that worldwide production too would peak in the 1990's and then go into terminal decline. I believe he was off on that prediction, but the basis of his theories are still sound. There's only so much oil out there.....whether it's a single reservoir, an entire field's production, a state's production, a country's production, or the world's production.....the production numbers all look the same.....basically a classic bell-shaped curve.

Once oil production peaks out and begins terminal decline, "cheap oil" will never be seen again. Indeed, as we humans struggle to produce more, prices continue to climb, economic damage is inflicted, prices pull back "momentarily" but then continue their march higher. It's unstoppable and there is NOTHING on the horizon to replace oil. NOTHING that will replace oil AND keep the US economy humming along at current levels.

And the US economy, its politicians, or its populace simply are not prepared for this eventuality.
 

Steve

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while it is another debate...

and while I would consider the saudis $4-$8 crude cheap... we have alot of alternates between $65 and $100 crude..


your putting energy into one oil bucket.. and that is not a true reality..

if our energy needs were exclusively met by oil,.. then I would agree...

but we have several vast options.. coal, natural gas and nuclear,...

Oil is just a tip of a "perception" on the whole energy

by coming out with a strong oil policy it would show industry and people you have the ability to lead and promote stability..


but let me go a bit further..

just replacing heating oil with other sources..such as natural gas or biodiesel would cut a percentage of our oil needs...

Heating oil accounts for about 25% of the yield of a barrel of crude oil,

replacing the paltry % used in producing electricity would not make a huge difference but every percent adds up.. so additional natural gas drilling could easily replace that..

only 2.45% of the electricity produced in the US was produced by using oil

a sound energy policy would look at the "easiest and most cost effective" to replace and use our resources to do so..

Transportation 67.5%
Industrial 24.1%
Residential 3.9%
Electric Generation 2.5%
Commercial 1.9%

While I only looked at two areas.. electricity and home heating... those two areas could be cut in a presidents term if anyone was to put a little effort into it..

we should be building nuclear power plants.. drilling for gas in Ohio.. building infrastructure.. instead we are chasing a car that can't sell itself.. let alone drive to work and back..

BTW... did Hubbert factor in natural gas, or fracking?
 

Whitewing

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Sorry to keep beating the drum, but I stand by my earlier comments.

Coal, natural gas, wind, nuclear, biodiesel will NEVER keep the US economy humming along at today's levels.

Again, our economy is built on cheap oil. It's built on jumping in the family car (one of two or three the family owns) driving down to McD's, stopping at WallyWord, passing by The Bed & Bathroom Shop over at 4th and Main, taking the kids to soccer practice across town in the PM, and then doing it all over again the next day.

Those days are numbered and those sales and road trips....McD's, WallyWorld, the Bed & Bathroom Shop, the soccer practice are a significant part of an average urban family's life.

That's all changing now, will continue to change, and with it, so go the jobs associated with it all.

The US economy, for over 50 years now, has been structured on CHEAP OIL. We cannot and will not change it in 5, 10, or even 15 years.
 

Whitewing

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Fraccing is only a production method. Advances in secondary and tertiary production methods only smooth the top of the bell curve. That's to say, they stablize output for a while, but once those efforts are exhausted, the fall off in production is even steeper.

I think back to the reading I did over the last couple of years re Mexico's huge field in the Gulf of Mexico....Canterell. Last I recall, with all the secondary and tertiary production methods being utilized, production was still plummeting. Mexico is a significant exporter to the US who will soon become a net importer.

The days of CHEAP OIL are soon coming to an end and it will rock the US economy. There's only so much oil in the ground to begin with and the best of it (the light ends) and the most easily produced (the light ends) are produced on the front side of the curve. Cross the top, and you're now producing heavier, harder to produce, harder to refine, less valuable oil.

We're either there now, or soon to be. Of this, no one will change my mind.
 

Faster horses

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WW and Steve, I value both your comments and I'm really not
educated on the subject enough to be in a conversation with you,
but I do have a question. WW, what about all the oil in Bakken
that they can't get out fast enough and they are having to take a
$35/barrel discount on? They are seeking ways to move the oil
out faster.

There is a lot of oil there and they keep raising the estimated
amount, but it's a lot over what they had estimated say, back in 2003.

We live right by the oil patch and from history I do know that when
oil gets below (I think it is $75/barrel) the oil companies slow down
and when it gets above that $75 mark they can afford to produce oil
again. Anyway, that's in this area. So there is a point at which it costs
them more to get than what it is worth.

We are thankful for the oil and gas companies. They do a lot for
the town and the county.
 

Steve

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I think back to the reading I did over the last couple of years re Mexico's huge field in the Gulf of Mexico....Canterell. Last I recall, with all the secondary and tertiary production methods being utilized, production was still plummeting. Mexico is a significant exporter to the US who will soon become a net importer.



By 1981 the Cantarell complex was producing 1.16 million barrels per day (180,000 m3/d). However, the production rate dropped to 1 million barrels per day (160,000 m3/d) in 1995. The nitrogen injection project started operating in 2000, and it increased the production rate to 1.6 million barrels per day (250,000 m3/d), to 1.9 million barrels per day (300,000 m3/d) in 2002 and to 2.1 million barrels per day (330,000 m3/d) of output in 2003, which ranked Cantarell the second fastest producing oil field in the world behind Ghawar Field in Saudi Arabia

In 2008, Pemex expected Cantarell's decline to continue to 2012 and eventually stabilizing at an output level of around 500,000 barrels per day (80,000 m3/d).[5] By September 2009 this figure was already achieved, marking one of the most dramatic declines ever seen in the oil industry.[6] Production is now expected to stabilize at 400,000 barrels per day (60,000 m3/d). The shortfall is having a negative effect on Mexico's annual government budget and sovereign-credit rating.[6]

In order to try to maintain heavy crude production in the Bay of Campeche, PEMEX is focusing its efforts on the development of the Ku-Maloob-Zaap complex in an adjacent area, which can be connected to the existing facilities of Cantarell. Ku-Maloob-Zaap complex is expected to produce 0.8 million barrels per day (130,000 m3/d) by the end of decade. In 2009, Ku-Maloob-Zaap replaced Cantarell as Mexico's most productive oil field

if it was their only possible field then they should be worried.. Mexico's problems lie more in how they invest, as with any country that has nationalized its oil.,, they risk the lack of investors to carry the burden and .. instead of re-investing, they spend the profit until it is often to late..
 

Steve

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Faster horses said:
WW and Steve, I value both your comments and I'm really not
educated on the subject enough to be in a conversation with you,
but I do have a question. WW, what about all the oil in Bakken
that they can't get out fast enough and they are having to take a
$35/barrel discount on? They are seeking ways to move the oil
out faster.

There is a lot of oil there and they keep raising the estimated
amount, but it's a lot over what they had estimated say, back in 2003.

We live right by the oil patch and from history I do know that when
oil gets below (I think it is $75/barrel) the oil companies slow down
and when it gets above that $75 mark they can afford to produce oil
again. Anyway, that's in this area. So there is a point at which it costs
them more to get than what it is worth.

We are thankful for the oil and gas companies. They do a lot for
the town and the county.

there are alot of good small companies that would invest in and drill for oil if they knew the policy was set in a way they could survive... right now we are tilted towards large corporations.. (big oil),..


with using the strategic reserve to buy excess US below $65,.. most small companies would invest more, bringing on line more production..


the same goes for stop buying above $100 would take a large buyer out of the market and slow any price climb..

while I am not in support of price "supports" this strategically makes sense.. a hell of alot more then re-electing Obama
 

Whitewing

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The world is not about to run out of oil, that's a long way off and that's not the point I'm trying to make.

The world though will soon be out of cheap oil. That's not a long way off in my humble opinion and once the markets realize and accept that fact, the game changes dramatically.

As oil prices climb, the effect is to choke off economic growth. Why? Well, because the industrialized nations, for the most part, have built their economies on cheap oil lasting forever. China and India, two of the fastest growing industrialized nations, and frantically seeking oil reserves all over the world...to fuel their own growing economies.

And it's not just the oil that's burned in our automobiles, it's the oil that's used to build the machines, that build the other machines that build those machines that eventually produce the oil. In other words, the entire US economy....roads, housing, shopping malls, down to bank credit, in the end, needs cheap oil to continue humming along at current levels.

I suspect we'll still be extracting oil when it's $500/barrel as long as those extraction costs don't exceed the value of the product being extracted. Once the extraction cost does exceed the value, oil no longer becomes a viable energy-medicinal-plastics-whatever option.

Maybe by then we'll have discovered some other gallon of liquid that can push a 10,000 lb vehicle at 60 miles per hour for 15 miles.

I'm betting that won't be the case.
 

Steve

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Whitewing said:
Cross the top, and you're now producing heavier, harder to produce, harder to refine, less valuable oil.

We're either there now, or soon to be. Of this, no one will change my mind.

every year of my life I have heard we are out of oil... standing in line in the 70's ... I believed it.. but then after researching it and not listening to one source.. I found we have alot of oil... even now we do not have a shortage.. in fact we are idling refineries.. the current prices are not reflective of a free market but of a price set by opec..

besides I have listed page after page on here in the past of discoveries.. some of them will be difficult to exploit.. but the fact is with consistent government policy.. companies will invest.. and Americans will thrive and succeed..

since you will not listen on oil.. I'll just leave it as your wrong on that one.. and let others make up their own mind..

I won't try to change your mind on it.. but the facts show we have abundant resources..



as for the rest.. as an American I am not about to just give up and let our country go down the tubes of dictatorship.. or to even give up one election..

it is not only our right to vote for the best candidate, it is our responsibility.. and if he isn't up to the job.. well tough..

Obama certainly wasn't.. so why let him sink the ship..

We used to have a fire fighting saying in the military to explain to new firefighters the importance of not giving up in face of even the worse of situations.. .. "it will only burn to the waterline" your method of fighting Obama would leave us in a hell of a position.. (swimming with the sharks)
 

Whitewing

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The statement of mine you quoted above, the one about crossing the top of the bell curve and then producing heavier material, is absolutely correct. I ran a successful reservoir fluids lab for 20 years. I know a bit about phase behavior and how fluids are produced and change over the life of a reservoir.

I never said the world was running out of oil. I've said repeatedly that the world is soon to run out of CHEAP OIL. Big difference, and again, I'm right on this one.

Page after page of past discoveries are MEANINGLESS. Oil discoveries in 10,000 feet of water in the GOM and at depths of 15,000 feet further underground are great on paper, great on news releases, and GREAT for reasurring worried Americans that all is well, hop in the car and drive to McD's.....we've got all the oil we'll ever need.

But when the family that had two cars decides it's time to cut back to one, and those with one decide it's time to make fewer trips to WallyWorld, or skip that vacation this summer.....the ripple effects are there.

Deny it if it makes you feel better......but as they say about that river in Egypt.
 

Steve

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Maybe by then we'll have discovered some other gallon of liquid that can push a 10,000 lb vehicle at 60 miles per hour for 15 miles.

coal used to fuel alot of trains... electricity still does in a few cities..

CNG can as well,.. just not quite as "user friendly"

the idea I proposed was one idea.. of how the government can have change and still keep the economy running.. what we needed thirty years ago was a policy that worked.. we have the resources if the federal government would stop pandering to environmentalists.. and get out of the states way...

on oil.. We only count reserves.. proven reserves that can be extracted with existing technology.. today.. this excludes oil that is in areas not allowed to be extracted.. and then we only count 10% the bakkens alone puts your theory in jeopardy.. and it is just one field.. and doesn't account for natural gas..

by the amount of our current oil that is still not even allowed to be drilled,.. even $200 crude is not in sight.. if it was,.. I would bet drill now drill anywhere would be the new American slogan..


and just think of all the US jobs that would create.. again fueling our economy..

North Dakota is proof of one area that is fueling a economic recovery..
Ohio Pennsylvania and Alaska could be in the mix as well.. if it wasn't for the Obama's regimes foot on the brake..

our economy is slowly forcing a recovery despite Obama's actions..

and the world is ready to fail.. but we do not have to jump off the bridge with it...

in fact.. with the right moves... we can again enjoy a strong dollar and a world that depends on it as a world accepted currency...

if steps were taken to strengthen the dollar and get our manufacturing base in place with low to no corporate taxes.. we could weather a world depression,.. and come out stronger

while some feel our economy is built on cheap oil.. I would say we have profited more from the dollar being the world currency then the cheap oil..

I would even go as far as saying Iraq wasn't about oil.. but about maintaining the dollar as the currency oil is traded in...

and now Obama is selling our leading export out cheap..
 

Whitewing

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Steve, with your comment about energy policy thirty years ago, you finally stumbled across the obvious that I've perhaps failed to point out in my postings on the subject.

Again, we're running out of CHEAP OIL and, I believe, there isn't now time to address the issue before the US economy experiences serious setbacks.

Forget coal, electricity, etc.

Is the US economy, or is it not, built around the automobile? If it's built around the automobile, as I most surely believe, then when it gets to the point that one has to decide if he's going to eat or fill up his car, then something bad is going to happen to the economy built on the car.

And that's my point. If your argument is that the US economy is not built around the automobile, then we'll just have to agree to disagree.
 

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I'll try to bring both of your arguments together....if I can.


At one time, the economy was built, and depended, on "horsepower", but at a certain point a "cleaner" energy was found (oil), and the car dropped less road apples in the street.

There was a transition period, when industry switched from horses to vehicles, but it was not done overnight and horses were not outlawed. If they had have been, the economy would have been devastated.

While oil usage and abundance will come to an end, it is a ways off and there is plenty of time for the free market to evolve towards an economy, where oil is still prevalent, but alternative energy slowly takes over as technology allows.


Unfortunately the obama administration would like to outlaw the growing of hay, so alternative energy can take place of the horse.
 

Whitewing

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hypocritexposer said:
While oil usage and abundance will come to an end, it is a ways off and there is plenty of time for the free market to evolve towards an economy, where oil is still prevalent, but alternative energy slowly takes over as technology allows.

My argument is that in 1985 oil prices were below $10/barrel. Don't know exactly where they are today because I've not looked, but I'm betting they're significantly higher than that and what have we accomplished to transition or evolve to an economy of alternative energy sources? Not much from where I sit.

Again, my point is once the world's oil production crosses the top of the bell curve, the production numbers will fall much more rapidly than most believe. There will be a lot of folks standing around scratching their asses and asking what happened.

I won't be one of them.
 

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And that's my point. If your argument is that the US economy is not built around the automobile, then we'll just have to agree to disagree.

ALL transportation about 68% of our crude usage..

nd by exploiting "existing" finds such as bakkens,. eagle ford,.. wattenberg and a host of other plays.. in Ohio, Pennsylvania, Alaska,. Utah, Colorado, Florida, heck even NJ has gas and oil...

we can replace small percentages with natural gas, coal, nuclear.. and a host of other energy source.. until the magic fuel is discovered..

but to cede now would be like quitting after you won the race.. we have plenty of fuel NOW...

we will have more fuel in four years.. and more in eight years..

in fact unless someone pushes the button we have about thirty years to switch over about half our fuel needs...

take nuclear for instance... the technological steps not taken for thirty years have left Us with aging plants.. even if we just replaced every one.. the jobs alone could last US another ten years at least..

a good energy policy isn't a one choice.. it is a flexible plan that looks at all viable options.. and uses all viable resources..

not one that looks at two old technologies and thinks we can make them work ...

but even if you were right..

I would rather walk then vote for Obama...
 

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Whitewing said:
hypocritexposer said:
While oil usage and abundance will come to an end, it is a ways off and there is plenty of time for the free market to evolve towards an economy, where oil is still prevalent, but alternative energy slowly takes over as technology allows.

My argument is that in 1985 oil prices were below $10/barrel. Don't know exactly where they are today because I've not looked, but I'm betting they're significantly higher than that and what have we accomplished to transition or evolve to an economy of alternative energy sources? Not much from where I sit.

Again, my point is once the world's oil production crosses the top of the bell curve, the production numbers will fall much more rapidly than most believe. There will be a lot of folks standing around scratching their asses and asking what happened.

I won't be one of them.

and how will voting for Obama help?

we will have an overtaxed grid that works on sunny and windy days..

and a car that is on fire...

my electric bill has already gone up significantly.. his job is done...
 

Whitewing

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Well, as the saying goes, fill one hand with crap and one with wishes (magic fuel) and see which one fills first.

You and Hypo see the energy/US economy issue through rose-colored glasses. I understand that, but don't agree with it.

IMHO no one today in Washington has the nads to tackle what lies ahead which is why I think it's time for total capitulation and a reset. I see no easy way forward.
 

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New report reveals vast stores of Alaska shale oil and gas

Using new technology, up to 80 trillion cubic feet of natural gas could be produced from North Slope shale, according to a fact sheet of the U.S. Geological Survey report, which has not yet been released. It's also more than double the conventional natural gas reserves said to exist on the North Slope, the largest such resource in the U.S.

Also, the USGS now estimates the slope holds up to 2 billion barrels of shale oil. That would fill the trans-Alaska-pipeline for about a decade at current flow-rates of about 600,000 barrels a day.

High development costs and limited infrastructure have prevented companies from producing shale resources in Alaska, the report notes. But Great Bear Petroleum and Halliburton are exploring for shale oil this winter, and Royale Energy Inc. plans to begin exploring next winter, thanks in part to the state's generous exploration tax credits.

Sean Parnell is the latest Alaska governor to push for a massive pipeline to move that gas. With shale-gas production up sharply in the Lower 48, he supports a gas-line that would run from the North Slope south to somewhere in Southcentral Alaska, where the natural gas would be liquefied and shipped on tankers, perhaps to Asian markets where gas prices are currently high. Even that project, however, would require billions of dollars and the support of Alaska's three largest oil companies -- Exxon Mobil Corp, BP and ConocoPhillips -- all of which hold leases to develop Alaska's conventional gas reserves.
 

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