You are exactly right on this post and the last!
Originally Posted by Lee DeRaud
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You are exactly right on this post and the last!
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Brian, the cost of our virtual friendships with everyone here is free, and priceless.
A bargain at any price
Regards, Rod
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Well, I've always said, "I'm not easy, but I can be had." Brian
Brian
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It's only going to get worse too. A friend told me today he sold 700 steers for slaughter Friday for the highest price he's ever gotten. $1.91 per pound. Wait a few months for that to make it's way to the grocery store. It's a good time to be in the cattle business with corn prices tanking. Prices have increased on and many things and many things they reduces the package quantity to make it look like there was no change. In the end the consumer is almost always the loser.
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The Ag. economy is followed closely in our area. This article appeared today.
https://www.ksdk.com/article/tech/sc...d-b9d7f66e2c83
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I know they struggle, past seen the dirt farmers with 50 Ferraris.
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Here's my take on it, not claiming to be an expert. What most of us are affected by, or at least notice the most, is cost of gasoline or diesel to fuel our vehicles or the vehicles that deliver goods to us. Gasoline prices are affected by the price of oil and also by supply & demand forces. There is a bit of a delima right now, as the O&G industries are, or are approaching, the status of a sunset industry. Demand for gasoline is still increasing but not forever and a lot of production facilities were cut back during the pandemic and I believe companies are hesitant to make large investments to increase production knowing they may not get a return on their investment as demand falls off in the not to distant future. This doesn't make them villains, they have a responsibility to their investors to maximize profits not responsibility to the public to keep prices down.
How we solve this is, as they say, beyond my pay grade.
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They are villains in some ways. During recent lockdowns, demand for petroleum plummeted and so did petroleum prices. Of course, oil companies halted production big time and laid off many thousands. When demand started to increase, oil companies didn't increase production. They simply let high demand and low supply create a spike in prices. Then they sat back and reaped record profits while people tended to blame a certain politician for high gas prices.
As oil prices go higher, the incentive for alternate energy sources increases as well. So, US oil companies let the high prices ride for a while, THEN they slowly started to increase production until the US became the world's largest producer of petroleum.
US oil companies know the end of petroleum energy for most everything is coming. In fact, they are paradoxically investing in renewable energy while simultaneously spending tens of millions of dollars on misinformation campaigns. If you see people on TV telling us climate change is a hoax, those people invariably work for some "non-profit" funded by oil companies. If you see articles online or in print ridiculing the green energy industry, those articles were paid for by oil companies. If you see memes about how electric vehicles die in the cold and burst into flames, those were created and perpetuated by oil companies. (Sure, there is some truth to this, but oil companies exaggerate and perpetuate it while conveniently not mentioning that ICE vehicles also die in the cold and burst into flames.) Everyday people embrace all this misinformation and propaganda because they believe they are being deceived by an evil movement to destroy America. (At least that's what they tell me. And this is all very similar to tobacco companies creating and perpetuating information in the 70s and 80s about how there's no proof smoking causes cancer.)
Sure, OPEC is also a very big factor in global petroleum prices, but US oil companies can also push prices either way if they want; and they do.
Last edited by Pat Germain; 03-26-2024 at 4:14 PM.
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Is Big Oil evil? Run by the Devil himself? All 1.5M-ish US O&G workers are mindless automatons, not to mention the shareholders? Deluded by the clearly sustainable business model of destroying the planet and killing all of their customers? Or maybe they all just bought in?
Perhaps that propaganda boulevard is a 2-way street.
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ETA - Almost forgot this:
My company punched as many new holes in the ground as the BLM in NM would permit.They simply let high demand and low supply create a spike in prices.
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ETA2 - Since you edited as well:
I'm on the pointy end of this particular stick, and I'm afraid you would be wrong on this point. There has been nothing slow about the last 4 years. An oil well cannot be simply stopped and re-started at will. Once shut-in, many will never recover; they are plugged and abandoned. Others are P&A'd due to contractual issues (produce-it-or-lose-it, basically, and Uncle Sugar is the landowner). Some will require artificial lift - and all of the supporting infrastructure - to restore flow. And then consider that a given well's yield is ever-diminishing; you have to drill another one in another spot - and provide the infrastructure to collect its production ....if policy makers will issue the permit. BLM's back log of permit applications in Delaware Basin was 55,000 last time I heard. Policy, I guess....So, US oil companies let the high prices ride for a while, THEN they slowly started to increase production until the US became the world's largest producer of petroleum.
Come spend a day in the desert with me; happy to shed some light.
Last edited by Malcolm McLeod; 03-26-2024 at 7:00 PM.
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I'm really not sure what you're getting at. I used to live in Oklahoma and I knew a lot of oil field workers. No, I don't think they are evil. And I don't think oil company executives are evil, but as I said, they do tend to be villains. I don't pretend to have an intimate knowledge of oil well operations on teh ground, but I stand by everything I wrote. OPEC and US oil companies can and do decide how much oil they are going to produce. When I say "US Oil Companies", I'm talking about the big dogs and not the small companies.
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I work for a big dog. I know your 'villains' personally. Good people. Smart people. Damn smart. We are all proud to meet the world's energy needs. All 7B of 'em. Or is it 8B now? ...Is that 9B I see on the horizon?
Getting at: There was no 'slow walk'. Ever. We shut-in when there was no place left to stack the oil. It was crystal clear to management that the recovery was going to be a proverbial house-fire, so we spent >$1B in TX/NM in 1 year to recover; only the BLM, the time required to drill and move a rig, and exhaustion slowed us down.
Happy even to point out the small dogs who will do nearly anything to be big dogs. Including refusal to collude on production cuts.
Trust me, there are enough US small dogs to ensure the big dogs don't monopolize the market. OPEC has tried several times to drive these pups out of business: OPEC ups production which puts independents in a cash bind (high production costs>>low revenue>>no reserves>>bankrupt). Their only success in recent memory is BOPCO (~12-13yrs ago?). Most independents have gotten wise to the strategy.
Offer stands. Come see me. I'll drive you around and point at the facts; no need for internet links to biased interpretations and someone's propaganda. I'll even show you the drill rigs that 'policy' says aren't there. I'd really like for you to get it.
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Agreed, anyone who downplays the severity of global climate change to protect their own future profits is a villain. Look no further than the province of Alberta, probably the most right wing province in Canada and our biggest O&G producer, declared the wild fire season started on March 1st this year, historically it was April 1st.
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Pat not to sidetrack have some of the same L46 11:1 and two things with 410 and 411 gears. have you looked at the endless you tubes of converting old to Electric. Its growing constantly. My car friends are dissapointed I even look at that stuff but from first time seeing the white zombie or the 1000 HP mustang i wanted to at least drop in and watch the progression from time to time. now it doesnt matter what old car you have it can be electric. Unaffordable at first it continues to come down more and more. you can order a kit for some cars now direct bolt in now modify no damage turn your 911 back to how it was at anytime.
Id miss the sound and old school feel.
Okay back to whatever we were arguing about
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