KSA - Iran tensions boiling over?

[ricgem2002]

It's also worrying that this pressure may lead to the fracking industry cutting safety corners in an effort to cut costs and maintain a profit much like the nuclear industry did in the USA.

whats worrying about it, this country does deals with other countries that flout all kinds of laws to make profit and we still deal with them. it don't seem to bother the government does it

[JFKvsNixon]

whats worrying about it, this country does deals with other countries that flout all kinds of laws to make profit and we still deal with them. it don't seem to bother the government does it

 

What choice is there? As I said with oil being vital to our society, the oil producing countries have the oil using countries over a barrel.

[ricgem2002]

What choice is there? As I said with oil being vital to our society, the oil producing countries have the oil using countries over a barrel.

I wish I knew the answer

[unbeliever]

I've seen figures that quote prices of $60/$100 per barrel to for shale oil to break even, so the current $50 a barrel for shale oil may be being sold at a loss, which will put pressure on any future investment into the sector.

 

It's also worrying that this pressure may lead to the fracking industry cutting safety corners in an effort to cut costs and maintain a profit much like the nuclear industry did in the USA.

 

The current oil price is below $40/barrel, so most shale oil extraction projects will be making a loss this month.

 

I've also seen figures as low as $25/barrel for shale oil extraction cost. $50 is typical.

Even if OPEC manage to temporarily reduce shale oil investment with this price war, not long after they try to put the price back up, shale extraction will resume.

The facility to extract oil by other means when OPEC get greedy effectively limits the world oil price to a little over the shale oil extraction cost.

The abundance of shale oil also destroys the peak oil myth. Known shale oil reserves are at least 4 times conventional oil and rising rapidly.

 

Your concerns about safety standards are reasonable, but they exist throughout industry and I don't see why shale oil would be a special case. It's not really comparable to nuclear as it's nowhere near as dangerous.

Edited January 3, 2016 by unbeliever

[JFKvsNixon]

I've also seen figures as low as $25/barrel. $50 is typical.

Even if OPEC manage to temporarily reduce shale oil investment with this price war, as soon as they try to put the price back up, shale extraction will resume.

The facility to extract oil by other means when OPEC get greedy effectively limits the world oil price to a little over the shale oil extraction cost.

The abundance of shale oil also destroys the peak oil myth.

 

Your concerns about safety standards are reasonable, but they exist throughout industry and I don't see why shale oil would be a special case. It's not really comparable to nuclear as it's nowhere near as dangerous.

 

I'd imagine the the $25/barrel to be for the often quoted profitable 10% of the fracking sites.

 

When I was expressing my concern about safety, I wasn't comparing the relative dangers between nuclear and fracking. I was just worrying that the shale industry will start to cut corners in an effort to make ends meet, much like the nuclear industry did when they were put under pressure by cheaper fuel costs.

[unbeliever]

I'd imagine the the $25/barrel to be for the often quoted profitable 10% of the fracking sites.

 

When I was expressing my concern about safety, I wasn't comparing the relative dangers between nuclear and fracking. I was just worrying that the shale industry will start to cut corners in an effort to make ends meet, much like the nuclear industry did when they were put under pressure by cheaper fuel costs.

 

Competition drives down costs. This is almost universally a good thing. It is the responsibility of the regulator (ultimately the US government) to see that cost saving measures are consistent with good safety.

The operators need to know that if they cause an accident by not operating reasonable safety standards, they'll be in a world of trouble.

 

I'm not convinced that OPEC can keep the price this low indefinitely. Their extraction costs are lower, but they're making a hell of a lot less money than they were a couple of years ago and that's really got to hurt.

Let's not forget that even if some shale oil operations shut down because of the low price, they won't all shut down. And they'll start up again pretty quickly if OPEC start taking the **** again.

Edited January 3, 2016 by unbeliever

[JFKvsNixon]

Competition drives down costs. This is almost universally a good thing. It is the responsibility of the regulator (ultimately the US government) to see that cost saving measures are consistent with good safety.

The operators need to know that if they cause an accident by not operating reasonable safety standards, they'll be in a world of trouble.

 

I'm not convinced that OPEC can keep the price this low indefinitely. Their extraction costs are lower, but they're making a hell of a lot less money than they were a couple of years ago and that's really got to hurt.

Let's not forget that even if some shale oil operations shut down because of the low price, they won't all shut down. And they'll start up again pretty quickly if OPEC start taking the **** again.

 

I was using the nuclear industry as an example, because the American Nuclear Regulatory Commission is a classic case of where the regulator acts in the interests of the industry itself rather than public.

 

There are countless examples of this in the mainstream media.

 

The documentary The Atomic States of America gives the example of the only instance in which the NRC did not reissue a 30 year licence for an ageing nuclear reactor plant because of safety concern. In retaliation, the Congressman from the district in which the plant was located was instrumental in cutting the organization’s budget for the following year. The NRC soon learned it's lesson.

 

My point being, when you relate this example to fracking, you have to question whether the US regulators are up to ensuring that that safety standards are met especially when you're looking at an industry that is having it's margins squeezed.

Edited January 3, 2016 by JFKvsNixon

[unbeliever]

I was using the nuclear industry as an example, because the American Nuclear Regulatory Commission is a classic case of where the regulator acts in the interests of the industry itself rather than public.

 

There are countless examples of this in the mainstream media.

 

The documentary The Atomic States of America gives the example of the only instance in which the NRC did not reissue a 30 year licence for an ageing nuclear reactor plant because of safety concern. In retaliation, the Congressman from the district in which the plant was located was instrumental in cutting the organization’s budget for the following year. The NRC soon learned it's lesson.

 

My point being, when you relate this example to fracking, you have to question whether the US regulators are up to ensuring that that safety standards are met especially when you're looking at an industry that is having it's margins squeezed.

 

The fine detail of how the US government conducts itself is not really my problem.

Well regulated or not, they're keeping the price of oil down and breaking the OPEC monopoly on oil supply. The first is a very good thing, the second is an extraordinarily good thing.

[foxy lady]

So what's the average person going to do about it?

 

Last year they voted in a Tory Govt who just sucks at the teet of Saudi Arabia...as did "New Labour" before, because they have no principles. As long as these despotic stone age throwbacks have oil we will still deal with them. Madness.

 

They voted in a Tory Government because they didn't want a Labour one, now Blair has gone his merry way. It seems Scotland didn't want one either. Looking at the opinion polls it seems that since May folk have moved even further away from Labour policies. So in answer to your question the average person is probably content to let the government get on with it whilst the usual bunch of banner wavers will get on with that and make no difference at all.

[Harrystottle]

The Saudis have executed 47 Shia today and Iran have 27 sunnis slated for execution shortly. Both sides seem to be ramping up the rhetoric and are fighting proxy wars in syria and yemen. Could this escalate into a hot war between the two and what would it mean for us?

 

It would mean the USA backing the Saudis in a war against Iran, which has been their intention for years. Which means we'll be in as well, on the side of the Saudis. Nice company, eh?