I'm still way behind in my blogging, but I will eventually get caught up. I'm expecting the February Director's Cut to be released today so it will be even busier than I had hoped. Just not enough hours in the day.
Active rigs:
| 2/17/2016 | 02/17/2015 | 02/17/2014 | 02/17/2013 | 02/17/2012 |
|---|
| Active Rigs | 41 | 135 | 185 | 181 | 197 |
RBN Energy:
the future of oil production in the Gulf of Mexico (archived).
Crude oil production in the Gulf of Mexico (GOM) has been riding high
in recent months, still surfing the wave of deepwater and
ultra-deepwater projects whose development started in the “good ole
days” of $100/Bbl oil. Some incremental output is still being added,
keeping GOM production levels high even as onshore oil output is
declining in response to low crude prices and drilling cutbacks. But
exploration and production companies (E&Ps) are cutting their
spending on offshore projects, and unless oil prices start to rebound
soon the Gulf too will see a leveling off—and after that, a gradual
fall--in production. Today, we conclude our series on resilient
production levels in the GOM with a look at recent cutbacks and what
they may mean for Gulf oil output in 2016 and beyond.
U.S. oil production as a whole has been declining the past few months
in response to plummeting prices, but that overall decline in output
has come despite gradually rising production in the GOM. As we said in Episode 1,
that’s because the incremental gains in output the Gulf has seen over
the past few months are the result of investment decisions that E&Ps
active in the GOM made a few years ago, when a barrel of crude was
selling at a price equivalent to a very nice dinner out instead of the
price of a hearty breakfast for two at Denny’s.
We also pointed out that
while it may take much longer (and cost much more) to develop new
production areas in the deepwater and ultra-deepwater Gulf than in tight
oil plays on land, the output of the best GOM wells typically remains
relatively high for several years, not just for a couple of years as is
the case with shale wells on terra firma. In other words, if all
drilling in the Gulf were to stop today, the GOM would still be
producing a lot of oil five or even ten years from now; the same
couldn’t be said, of course, if all shale drilling were to stop on a
dime in the Permian Basin or the Bakken, with their wells’ high initial
production rates and rapid production fall-offs. In Episode 2,
we discussed the major GOM projects that two of the most active
E&Ps in the Gulf—Shell and Noble Energy—either brought online in
2015 or plan to start up this year (2016). And last time, in Episode 3,
we looked at the rest of the big GOM projects with production starting
in 2016, including those operated by LLOG Exploration, Chevron, and
Anadarko Petroleum.
*****************************************
Ramblings
In the lead essay in this week’s “The Talk of the Town” in
The New
Yorker, George Pucker talks about the presidential primaries in a
“cutesy” sort of way. The first sentence in the second paragraph:
Direct
primaries — the selection of candidates by voters instead of by party
leaders — came into existence a hundred years ago. They were the
inspiration of reformers who wanted to take power away from political
machines and corporate interests, and return it to the people, who were
believed to be wiser and more capable than the bosses, because they were
less self-interested.
LOL.Tell that to Bernie Sanders. In the
popular vote he swamped Hillary in the New Hampshire primary and tied
her in Iowa (it was not entirely clear whether he might have won; though
we will see later, whether he won or not, did not matter). Despite his
impressive showing in both states, where does Bernie stand? He stands
well behind Hillary because, as those “less self-interested voters” have
found out, she “won” the majority of “superdelegates” by a wide margin.
The “superdelegates” represent the party, the political machines, and
the corporate interests.
Bernie Sanders noted this early on when he said the system was rigged.
The
New Yorker, a staunch supporter of Hillary, conveniently edited
Pucker’s article printing the myth that “less self-interested voters”
were choosing among the two or three Democratic presidential wannabes.
The hypocrisy.
[February 18, 2016: if you need more proof that the DNC leadership / the party machine will elect Hillary, don't take it from me.
From The Hill: AP: Clinton raking in superdelegate votes.
Hillary Clinton has increased her lead in the Democratic primary since her resounding loss to Bernie Sanders in New Hampshire by wooing 87 new party superdelegates to support her campaign over the past week.
The Associated Press reports that Sanders won the support of 11 superdelegates over that same time period.While Sanders holds a small lead among pledged delegates awarded to him for his showings in Iowa and New Hampshire, Clinton's massive superdelegate lead puts her ahead 481-55 in delegates to the Democratic National Convention, according to the AP's count.
Superdelegates are party leaders — mainly members of Congress and the Democratic National Committee — who are allowed to support the candidate of their choosing at the summer nominating convention.]
In the same issue, James Surowieckie
has a one-page essay on the slump in the price of oil as it relates to
the stock market. There is nothing new there. He maintains global demand
is not the issue; it continues to slowly and gradually increase,
year-over-year. Supply is the problem. He does not that the US is a net
importer, still importing 5 million bopd more than it exports.
But
this is where he gets it wrong. He says that the US consumer has saved
190 billion dollars over the last six quarters which should be a godsend
to the US economy. Again, writers are missing the 800-pound gorilla in
the room: healthcare. Whether ObamaCare has made it worse or not is for
others to decide. I don’t think it takes a rocket scientist to sort that
one out. At $500/family member each month, the cost to the US citizen
is substantial (not so much for non-citizens).
360 million x $250 / month = 90,000
million/month in healthcare premiums. $90 billion dollars each month and
most of that money not likely “used” by the payee. In the last six
quarters, that translates to $540 billion — substantially more than the
$190 billion saved in gasoline costs.
This from the
James Suvowiecki article: an October study by the JP Morgan Chase
Institute found that consumers spent around seventy to ninety cents of
every dollar they saved from lower gas prices.
We’ve done the math before. The savings translates into a McDonald’s dinner for four once every week or so for all Americans.
Let’s
do the math another way. James says the country has $190 billion
dollars in savings over the past 72 weeks. $190 billion / 360 million =
$500/72 weeks = $7/week/American.
A #1 value meal at McDonalds: Big Mac, medium fries, and a soft drink — $7.00.
The
law of big numbers always seems to work out. So, Americans are saving
$7/week on their gasoline costs and paying $250/month on ObamaCare.
