Biden spoke today

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Markk
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Biden spoke today

Post by Markk »

Our President just spoke and while my thoughts are fresh, a few thoughts, I might get a few things wrong here I can correct/clarify when the transcript come out.

1.He is releasing 100 million gallons of oil a day for 6 months/ predicts/hopes gas could come down as much as 35 cents a gallon. Use it or loose it.
2. He is going to charge oil companies penalties on leases they are pumping on.
3. He is going to expand development for natural resources for batteries. E.g. nickle and graphite
4. He said something along the line that moneys generated from “this” (point 1) will help pay to replace the strategic oil he is borrowing for the next 6 months. maybe I miss heard this, so again I want to read the transcript. I am just not sure what this would accomplish at the pump?


My first thoughts were when he was speaking is that he has stated that over and over, and ran on the principle that he would end all fossils fuel production in the US.

Another thought is why would a oil company as a business decision, take the chance to put millions or billions into wells that may or may not produce, when the president might pull the plug at any moment.

Another is, what will it take for a oil company to mobilize a leased site and assuming if is a producer, get the oil to a refinery?
1. Secure permits
2. pipe line production and or access
3. Access to these sites…i.e basic infrastructures.
4. Material,equipment, and basic mobilization…housing, food, transportation etc.
5. Manpower required, and what is the available manpower pool of skilled rigger, truck drivers, pipe fitters, electricians…etc?
6. Project management for each lease sight, Is there a qualified pool available to draw from?
7. Environmental reviews and studies, this is a huge deal and complex. A current permit might have gone through this process, but not for th e infrastructure to get the oil out.

I have a couple of questions here…While this is all possible, we can certainly pull this off, but how much time will it take and does the current administration have the will to fast track permits and things like potential environmental blocks.

Will the current administration allow the producing wells to keep producing enough long term in order to make all these efforts first cover costs, and then create enough profit to make it worth while? Will there be any guarantee offered to the oil companies in regards to long term based investments.
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Doctor Steuss
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Re: Biden spoke today

Post by Doctor Steuss »

From the comments from domestic oil CEOs made in previous weeks, it seems that their biggest (and almost exclusive) constraint right now is labor. There are other supply chain issues, but those are also largely tied to labor (according to them).

Unless the Biden admin were to erase/ease safety training requirements for a lot of these jobs, and somehow shift liability away from the private entities, and to the government for death/dismemberment/environmental impact, I’m not sure we’re going to see much happen with increased domestic production.

Even if he were to be able to do the above though, would United Steelworkers and others roll with it without prolonged lobbying and negotiations?
Res Ipsa
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Re: Biden spoke today

Post by Res Ipsa »

I found this article from last month to be helpful: https://oilprice.com/Energy/Energy-Gene ... aring.html It's a combination of factors, including shareholders who want returns after seeing companies spend to expand capacity over the last few years, exhausting of the "sweet spots" in shale deposits, and rising costs.

The U.S. cannot "produce" it's way to lower oil prices. To expand production requires drilling shale oil locations that are ever more costly to get to. If OPEC were to raise production enough to bring $2.00 gasoline back, all of the US shale oil drillers would shut down because their wells would no longer be profitable. Oil is a finite resource with increasing costs to recover as we use more and more. The price has to go up. That's Economics 101.

Biden may be able to soften the price shock on a temporary basis by releasing oil from the strategic reserve, but there is no way to avoid the increasing costs of recovering oil and the resulting retail price increases.
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Markk
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Re: Biden spoke today

Post by Markk »

Then there is the question as to whether of not they pull the plug before they make a profit. If I were the head of a oil company I would need assurance or a binding contract of sorts guaranteeing enough time to get enough oil out to make a fair profit. I don’t know how much oil needs to be produced before all costs are covered, but I bet it is a lot.

I field manage and construct government projects more often than private, and it is like pulling teeth to get anything done, especially if they don’t really want the project in the first place. Environmental constraints are maybe the worse to get around. We are small potato’s , a 20 or 30 million job is huge for us, when these guys are talking billions.

Right now I am managing a project on the coast, literally a few feet away from the high tide line. It is a dream job in regards to the location, but a night mare dealing with the government (State). But the bigger problem is finding skilled tradesman, and even more challenging materials. It is a crap shoot on receiving complete orders..”back ordered” is a very common word nowadays. And something’s you just can find.
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Re: Biden spoke today

Post by K Graham »

Markk wrote:
Thu Mar 31, 2022 7:02 pm

My first thoughts were when he was speaking is that he has stated that over and over, and ran on the principle that he would end all fossils fuel production in the US.
He said he would work to transition away from fossil fuels. You're misrepresenting what he said. His move towards EV is nothing to sneeze at. Making sure all Federally owned vehicles are electric is no small thing.
Last edited by K Graham on Fri Apr 01, 2022 1:16 am, edited 1 time in total.
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Re: Biden spoke today

Post by K Graham »

Markk wrote:
Thu Mar 31, 2022 9:02 pm
Then there is the question as to whether of not they pull the plug before they make a profit. If I were the head of a oil company I would need assurance or a binding contract of sorts guaranteeing enough time to get enough oil out to make a fair profit. I don’t know how much oil needs to be produced before all costs are covered, but I bet it is a lot.

I field manage and construct government projects more often than private, and it is like pulling teeth to get anything done, especially if they don’t really want the project in the first place. Environmental constraints are maybe the worse to get around. We are small potato’s , a 20 or 30 million job is huge for us, when these guys are talking billions.

Right now I am managing a project on the coast, literally a few feet away from the high tide line. It is a dream job in regards to the location, but a night mare dealing with the government (State). But the bigger problem is finding skilled tradesman, and even more challenging materials. It is a crap shoot on receiving complete orders..”back ordered” is a very common word nowadays. And something’s you just can find.
Oil companies are enjoying record profits which have soared $174 billion this year. But you're worried about them not being able to make a profit.

https://www.theguardian.com/business/20 ... -exclusive
"I am not an American ... In my view premarital sex should be illegal" - Ajax18
Res Ipsa
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Re: Biden spoke today

Post by Res Ipsa »

K Graham wrote:
Fri Apr 01, 2022 1:15 am
Markk wrote:
Thu Mar 31, 2022 9:02 pm
Then there is the question as to whether of not they pull the plug before they make a profit. If I were the head of a oil company I would need assurance or a binding contract of sorts guaranteeing enough time to get enough oil out to make a fair profit. I don’t know how much oil needs to be produced before all costs are covered, but I bet it is a lot.

I field manage and construct government projects more often than private, and it is like pulling teeth to get anything done, especially if they don’t really want the project in the first place. Environmental constraints are maybe the worse to get around. We are small potato’s , a 20 or 30 million job is huge for us, when these guys are talking billions.

Right now I am managing a project on the coast, literally a few feet away from the high tide line. It is a dream job in regards to the location, but a night mare dealing with the government (State). But the bigger problem is finding skilled tradesman, and even more challenging materials. It is a crap shoot on receiving complete orders..”back ordered” is a very common word nowadays. And something’s you just can find.
Oil companies are enjoying record profits which have soared $174 billion this year. But you're worried about them not being able to make a profit.

https://www.theguardian.com/business/20 ... -exclusive
It’s not a question of total profits. It’s a question of whether the next well drilled can be profitable. The companies that drill aren’t all mega corporations. Some are much smaller outfits. Some of those guys got hammered in 2020 when the bottom fell out. If the war ends tomorrow and boycotts against Russia ends, where does the price go? If US drillers stick their necks out and drill to open a bunch of new shale oil wells and the price per barrel drops back down to $40 or $50, that would be a big loss. It’s pretty clear that US drillers aren’t going to drill a ton of new shale wells unless they are confident that process will stay high.
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Markk
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Re: Biden spoke today

Post by Markk »

K Graham wrote:
Fri Apr 01, 2022 1:15 am
Markk wrote:
Thu Mar 31, 2022 9:02 pm
Then there is the question as to whether of not they pull the plug before they make a profit. If I were the head of a oil company I would need assurance or a binding contract of sorts guaranteeing enough time to get enough oil out to make a fair profit. I don’t know how much oil needs to be produced before all costs are covered, but I bet it is a lot.

I field manage and construct government projects more often than private, and it is like pulling teeth to get anything done, especially if they don’t really want the project in the first place. Environmental constraints are maybe the worse to get around. We are small potato’s , a 20 or 30 million job is huge for us, when these guys are talking billions.

Right now I am managing a project on the coast, literally a few feet away from the high tide line. It is a dream job in regards to the location, but a night mare dealing with the government (State). But the bigger problem is finding skilled tradesman, and even more challenging materials. It is a crap shoot on receiving complete orders..”back ordered” is a very common word nowadays. And something’s you just can find.
Oil companies are enjoying record profits which have soared $174 billion this year. But you're worried about them not being able to make a profit.

https://www.theguardian.com/business/20 ... -exclusive

Kevin I am just laying some of the realities of what it may take to open up drilling operations. It is not as easy as a sentence in a speech. There are real hurdles to jump over.

I don’t recall what you did/do for a living, but dealing with government agencies is a long, painful, and expensive process. And I guess you are suggesting that Oil companies should just blindly throw out monies with no guarantee for a prophet in return, or even covering costs, and a very good chance for majors loses. Keep in mind loses are usually returned to us at the pump. In order for lower prices at the pump, we need the oil companies to make a profit, right of wrong that is just the way business works.

You don’t see electrical companies, like Edison, cutting their prices. You don’t see farmers and grocery stores lowering their prices, and you don’t see the Government cutting taxes. In fact they are raising taxes and prices along the board are all getting higher. How about Amazon cutting their profits in half or just operate for cost, or CNN, Fox and other networks? Maybe you should just live you life at bare minimum…did you sail to Tahiti by only wind power, or did you fly or cruise there via oil based fuels?

You are not addressing the bigger problem like manpower, materials required and cutting through red tape for them to be efficient, which means lower costs and lower prices running down to the pump.

I’m sorry but the life blood of the world is oil, and we need to ween off of it but we need to help them do so and do it wisely and in good order.
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Re: Biden spoke today

Post by Res Ipsa »

Too late for the slow wean, which would have been perfectly feasible 30 years ago. Now we’re going to have a rough transition that we could have avoided plus significant additional costs from climate change.
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Markk
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Re: Biden spoke today

Post by Markk »

Res Ipsa wrote:
Fri Apr 01, 2022 2:05 am
K Graham wrote:
Fri Apr 01, 2022 1:15 am


Oil companies are enjoying record profits which have soared $174 billion this year. But you're worried about them not being able to make a profit.

https://www.theguardian.com/business/20 ... -exclusive
It’s not a question of total profits. It’s a question of whether the next well drilled can be profitable. The companies that drill aren’t all mega corporations. Some are much smaller outfits. Some of those guys got hammered in 2020 when the bottom fell out. If the war ends tomorrow and boycotts against Russia ends, where does the price go? If US drillers stick their necks out and drill to open a bunch of new shale oil wells and the price per barrel drops back down to $40 or $50, that would be a big loss. It’s pretty clear that US drillers aren’t going to drill a ton of new shale wells unless they are confident that process will stay high.
I agree. Also most of these small outfits probably sold out and their workers are doing other things. If a company, big or small is going to start drilling, they first need the management and workers to make it happen, then they need equipment and material…and that takes time.
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