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There Would Be No Iranian Nuclear Talks If Not For Fracking
Hugh Pickens DOT Com writes "Matthew Philips writes at Bloomberg that US Secretary of State John Kerry landed in Geneva on Friday to begin negotiations with Iran over its nuclear weapons program and there is sudden optimism that a deal is in the offing. But the simple fact is that Iran would not be coming to the negotiating table without the US oil boom. Over the last two years, the US has increased its crude production by about 2 million barrels a day. According to a recent report from the Congressional Research Service (pdf), Iran's oil exports have been cut in half since 2011 (PDF), from 2.5 million barrels per day to a bit more than 1 million today. As a result, Iran has had to halt an equal amount of production. 'I think it's pretty clear that without the U.S. shale revolution, it never would have been possible to put this kind of embargo on Iran,' says Julius Walker. 'Without US production gains, I think we'd be looking at $150 a barrel.' Instead, international prices have hovered around $110, and are less than $100 in the US. According to data from Bloomberg, the combined carrying capacity of oil tankers leaving Iranian ports last month dropped 22 percent from September. 'They're having a very hard time finding buyers,' says Walker. If a deal gets done, the trick will be to ease Iranian oil back onto the broader market without disrupting prices. If not managed properly, flooding the market with Iranian crude could carry its own negative consequences by suddenly making fracked oil in the US unprofitable."
CAFE Standards are more important. They are capping demand.
It's not fracking, that caused Iranians not to export crude, it's that little thing called sanctions.
Or would be, if we were buying ANY Iranian oil, which we aren't and haven't been.
Is this a way for the oil companies to say "We told you fracking was good"
Like a broken clock that is accurate twice a day, unintended consequences are most often negative.
Happiness in intelligent people is the rarest thing I know.
Ernest Hemingway
My impression is that revolutionaries are not necessarily very good at maintaining infrastructure. Same deal with Venezuela, decades of eating the seed corn and nobody who knows how to keep the black stuff flowing in charge.
Poison the wells of the non-believers!
'I think it's pretty clear that without the U.S. shale revolution, it never would have been possible to put this kind of embargo on Iran,'
Who says making fracked oil in the U.S. unprofitable is a negative consequence? Fracking has had a negative impact on the environment, and I'd just rather say good riddance.
On vit, on code et puis on meurt.
"If not managed properly, flooding the market with Iranian crude could carry its own negative consequences by suddenly making fracked oil in the US unprofitable."
You know all those people comaining about the money the government 'wastes' on subsidising green energy?
The government spends a lot more on oil, just less directly. Whole wars have been fought to keep that fuel affordable, and now they are even important enough to engage in market price manipulation to protect their profits.
This makes you wonder what the original purpose of the Iranian embargo was? I know the "official" stated reason is punishment for their nuclear program. I don't remember an economic embargo on Israel, Pakistan, or India when they developed nuclear programs though.
Perhaps the real reason for the embargo was to artificially raise the price of oil so the major oil companies could profitably develop the fracking infrastructure in the U.S.
>"Iran would not be coming to the negotiating table without the US oil boom."
This is a perfect example of how oil has created such a horrible political mess over the years. It has been very dangerous for us to be so dependent on the middle east.
While I am glad our increased independence is forcing Iran and such to the table, I really wish it were because we accomplished that independence through renewable energy sources. Still, I guess we should take what we can get for now.
China could easily pick up the slack.
"If any question why we died, Tell them because our fathers lied."
Obama can try to claim credit for increase oil production, but don't think for a second that anything is going to deter Iran from developing a nuclear weapon. Obama/Kerry have already eased many of the Iranian sanctions.
The moral of the story is Money Talks. An embargo is toothless if we have to keep buying Iran's oil. Once we can get our oil without them, the embargo starts to bite hard. The mullahs are looking at what happened in Egypt and Tunisia and Syria, and they can do the math. About 60% of their population is under 30. They are young, educated and unemployed, which is the recipe for social unrest and political instability. The sanctions are making an already bad problem much worse. If they have to choose between obtaining nuclear weapons, or regime survival, they will make the obvious choice.
Fracking for Peace.
Er? Citation please. None of the sanctions have been lifted to this point.
There is really very little reason to take Julius Walker's ideas seriously. He is a flack for the energy industry who came up with a novel spin in support of frakcing and got some coverage for it from credulous media. Good for him. That's his job.
"the trick will be to ease Iranian oil back onto the broader market without disrupting prices"
Go ahead, disrupt prices! Consumers will not mind.
Thank you oil companies!
Misleading article...the whole context is wrong...
First off, the collusion in the oil industry is not fully known, so we are just guessing when we talk about 'global supply'
2nd, the US does not get its oil from Iran...our demand/supply is tagentially not directly related
3rd and most importantly for this PR propaganda of a TFA: It was a **decrease in demand** not fracking!
If the US automakers hadn't **killed the electric car** there would have been at least an **equal drop in demand**
Fracking has *nothing* to do with our diplomatic success in Iran.
Thank you Dave Raggett
I agree with your general sentiment certainly, however we can look at history and see that our diplomatic success with Iran has *nothing* to do with fracking.
This is a PR propaganda article.
Iran has been a Banana Republic for global oligarch companies like Royal Dutch Shell, British Petroleum, Gasprom, etc...
anti-democratic dictators were installed by special operations work who would give favorable oil trading to the colonial oligarches...
it has happened **OVER and OVER** through history....
this is about the Arab Spring, the rise of democracy, and the triumph of US diplomacy in the region
fracking has **nothing** to do with it
Thank you Dave Raggett
Increased supply is only part of the equation.
US oil consumption has dropped down to mid 1990's level: http://www.eia.gov/countries/country-data.cfm?fips=US#pet
The trend of declining oil consumption should continue due to factors such as:
- continued underemployment
- aging population
- urbanization
- improved vehicle fuel efficiency
Also, Iran knows that if Republicans come back to power, Israel will be able to dupe the US into attacking Iran. It is prudent for Iran to negotiate a deal with an administration that is capable of negotiating (and isn't Israel's puppet).
I recall reading a few years ago that Iran needed more and more of its oil production for its own transportation and power generation needs.
And that that was, in part, the reason for Iran reducing its oil exports.
flooding the market with Iranian crude could carry its own negative consequences by suddenly making fracked oil in the US unprofitable."
And this is a problem how, exactly? Fuck the frackers. Gimme my cheap gas. I'm sick of you bastards charging so much... you're squeezing the poor and putting our economy in the crapper. Cheap gas = fast economic recovery, not this stagnant crap.
#fuckbeta #iamslashdot #dicemustdie
"Over the last two years, the US has increased its crude production by about 2 million barrels a day."
And how has US consumption increased, in those two years?
If not for fracking, we wouldn't have:
- Man made earthquakes
- Poisoned ground water
- Natural gas in ground water
- Fracking byproducts dumped onto rural roads, onto beaches, and dumped into rivers
- People having to sell their land because the water is unusable
- People having to get water delivered to them because they can't drink their well water
- People getting paid by fracking companies for their silence
- Dick Cheney pushing the EPA to make fracking chemicals untested and undocumented
- A surplus of oil which has not reduced gasoline prices IN ANY WAY AT ALL
So essentially we've gotten nothing from fracking, and the oil companies have gotten very, very rich.
Sounds like a win-win situation!
http://www.slate.com/blogs/the_world_/2013/10/11/china_now_world_s_largest_net_oil_importer_surpassing_united_states.html
This would be true if the US bought oil from Iran.
The truth is that Iran is in a hard place - the US has put it under such stringent sanctions that not only is it limited in trade to US afiliated companies, but also to any other country or company, friend or foe of the US.
It cannot trade using the petrodollar and any other company that decides to trade with Iran is also likely to get hit by sanctions.
It is an almost warlike state where Iran is being almost forced to lash out - and if that happens it will be decimated while the agressors will talk their righteous talk, mention self defence while ignoring how Iran was starved and forced into reacting.
2nd, the US does not get its oil from Iran...our demand/supply is tagentially not directly related
Oil is a commodity. Every barrel the United States doesn't buy from country A is a barrel that country A gets to sell instead of Iran.
3rd and most importantly for this PR propaganda of a TFA: It was a **decrease in demand** not fracking!
Perhaps the truth is both an increase in supply due to substitution with fracked gas and a decrease in demand due to CAFE and foreign counterparts.
Quote: 'Without US production gains, I think we'd be looking at $150 a barrel.'
This is the bubble where ideology and proof are one and the same.
Well, the USA is falling apart. Therefore the need for nukes isn't quite as extreme as it once was. Also, Germany and Denmark are pointing towards how an advanced society can operate without nukes or carbon, and in a place as sunny as Iran, this becomes a kind of no-brainer.
Iran's biggest worry is their biggest asset: The South Pars gas field. The Europeans want it BAD as an alternative to Russian natgas, and the Americans would love to take it away from Iran, just cuz the Americans are a bunch of greedy dicks who'd love to stick it to the Russians, and screw the Iranians in the process. As long as South Pars stays underground, the Russians have their captured market (Europe) and Iran has money in the bank. As long as Iran was banging the nuke drum, the Americans were able to keep their psychotic fear machine rolling. Now that the USA Empire is entering late afternoon, they can afford to play nice with them and their pointy little all american bullet headed saxon mother's sons. Franking is crushing the natgas market, but everyone knows franking is a temporary solution, so Iran will hold that Ace of South Pars and cash big time when they will need the money to transition to solar. At that point the USA will be in some kind of tizzy tea party dipshit media freak show - probably with Britney Spears running as a Republican and (fill in name of faceless bureaucrat) on the Democratic ticket and some frothing tool of the Koch guard as a third party spoiler.
Ya gotta look at this stuff with a longer term view...
Shoes for Industry. Shoes for the Dead.
it's possible, I can acknowledge that for sure...somewhere far down the chain, I'm sure that public perception that fracking in the US has reduced demand significantly has affected commodities trading...
you're coming from the right place, so I don't mind talking a bit of semantics, but this topic is easily trolled...
Thank you Dave Raggett
While the drop in Iranian exports is certainly a sum of many things, the article completely fails to mention the EU sanctions. Notice the very sharp drop in the export volume graph mid-2012? That's the sanctions coming fully to force in July 2012: http://en.wikipedia.org/wiki/European_Union_sanctions_against_Iran#Sanctions
Oil is a commodity. The sky is blue.
that doesn't mean you have a point...you have *half* a point...your argument has only one leg to stand on...
wrong...you are ignoring important distinctions leading to a reductive argument
the global energy industry is not like AP Economics...the concept of supply/demand you illustrate above is about on the level of trying to talk quantum entanglement by commenting that "force equals mass * acceleration fool, therefore quantum computing is truely quantum"
First off, oil producing countries collude with each other to control global demand. Iran is part of more than one quasi-political union of oil producing non-Nato countries.
The US can import oil from certain suppliers for very cheap compared to others...
Fracking does not produce the oil that becomes gasoline. Almost all discussion of "oil prices" is statistically referring to oil that leads to gasoline...the "price at the pump"
I can acknowledge that **the perception** that US fracking has reduced global demand has affected commodities traders far down the chain...how much of an effect? is it salient? TFA sure didn't tell us
We need to just call out this garbage instead of making (correct) counterpoints...I'm not directing this at you, teeples, but all /. peoples...
it's really ok to say, "fracking didn't cause this...TFA is bullshit"...even though...**technically** one might be able to demonstrate some tangential effect...
the article is misleading 100%...its a 'lie'...or it is an attempt to craft a greater lie
Thank you Dave Raggett
The argument in the summary is absolutely awful. Here's why:
First, let's start with two facts, and let's assume they are true: "the US has increased its crude production by about 2 million barrels a day" and "Iran's oil exports have been cut in half since 2011 (PDF), from 2.5 million barrels per day to a bit more than 1 million today". The implication in the summary is that Iran's oil production was reduced because the US increased oil production. Let's think about this for a second. This argument would make sense if all three of these claims were true: (1) Iran and the US were the only oil producers in the world, (2) The US was the only oil consumer in the world, (3) US oil consumption remained stable over the past two years. None of these claims are true. First, oil is a global commodity - there are plenty of producers and plenty of consumers. To put this in context, the global oil production is about 80-90 million barrels per day ( http://en.wikipedia.org/wiki/List_of_countries_by_oil_production ). So, why would it be true that an increase in 2 million barrels per day in the US would lead directly to a 1.5 million barrel reduction in Iran? Even worse, the US does not purchase any oil from Iran.(though there could be indirect effects, for example, a reduction in US oil purchasing could result in other nations purchasing more oil from Saudi Arabia or Canada, thus reducing their need to buy from Iran). If this is an indirect effect, then we would expect all oil-producing nations (*not* just Iran) to have a small reduction in oil sales (i.e. Saudi Arabia and Canada and Venezuela and other net-oil-export nations would all share in the decline).
In short, it's absolutely absurd to tie an increase of 2 million barrels/oil per day in the US to a 1.5 million barrel/oil per day sales reduction in Iran. These two things don't have any cause-and-effect relationship. They are merely correlated in time. (And I'd bet $100 that if the US never did any fracking, Iran would see the exact same decline in oil production.)
I can see the political implications of making this claim though: it allows (pro-oil) Republicans to pretend that fracking (which they support) resulted in forcing Iran (the country they hate) into a weaker position which pressures them to negotiate with the US. This allows them to take credit for Iran coming to the negotiating table while also undermining any anti-fracking talk. In short: if you damn liberals try to stop fracking, you're helping "Death to America" Iran. Why do you hate freedom?
the sanctions on iran have artificially raised the price of crude, transferring trillions of dollars from consumers to producers
My blog
This is total bullshit. Please tell me the /. public knows the difference between natural gas and oil that is refined into gasoline. They are not the same and this is probably the biggest piece of government propaganda I've seen on this website in awhile.
How is making fracking unprofitable a negative thing?
Free Manning, jail Obama.
You're wrong. I believe everything that I read, particularly if it is backed by big oil money. This is good enough for me, and I'm glad to give up clean drinking water, have flames shoot out of my faucets, and let the fracking industry pump any industrial toxins that they want into the ground, as long as they tell me that it is keeping the Iranians in check.
I'm an American. I love this country and the freedoms that we used to have.
The Ayatollahs and the House of Saud should increase their funding of the various North American Green groups. Without green group obstruction, we'd have another huge new source of oil in ANWR, we'd be almost done with the Keystone Pipeline, and we would have vast new production offshore.
Also useful to Ayatollahs and the Saudi royals:
- Boko Harem terrorist attacks threatening to destabilize oil production in Nigeria
- Socialist nationalization of oil production facilities in Venezuela under Chavez and Maduro
Iran WANTS electricity from nuclear power plants, because it is CHEAPER than selling valuable oil and natural gas. (this was before fracking took off) Their motivation is economic. Iran wants to build tens of nuclear power plants, and save the expensive oil for export.
They seem to have forgotten the link in their little plan there. We don't buy oil from Iran! So us producing more has a very diffused effect on how much Iran sells. Almost nobody buys from them actually. In fact, if the US buys less, other countries can afford to buy more oil for a lower price and there's more to go around so that drops Iran's oil outputs to the people that do buy them but it's so delayed and diffused that the correlation isn't as solid as this article makes it out to be.
Making oil cheaper will increase human misery as well as ulimately cost us all a fortune. It is the same issue as making coal more vailable. Cancer and other miiseries plague nations that use fossil fuels.
Who on Earth could have more solar opportunity than Iran? If they invest in solar and wind their energy needs will be easily met. So what we are really looking at is a desire to bring in money. One can ship oil or coal but shipping sunshine is a problem.
Fracking is a curse upon us. If it makes oil cheaper we will suffer greater losses to our environment, our health and our way of life. The US could have gone to natural power decades ago. There simply is nothing stopping us other than rich people and politics.
The main reason Iran is negotiating on weapons is that the Iranian people elected president Rouhani. They were sick of Ahmadinejad clownish posturing and hostility to just about every other nation. Sanctions are having wearing effect on Iranian families and they didn't see an improvement in future as long as a leader like Ahmadinejad ( although he was not standing again ) was in power. The Iranian people elected a moderate with a mandate to improve Iran's foreign relations and that is what is happening. We will see a lot more of this in the months to come and more of Israel's attempts to derail any agreements.
Fracking is used for Natural Gas production not Oil last I looked. Iran's output has been stifled by sanctions, not market oil glut. The cost of domestic oil is what keeps the US at odds with Middle Eastern countries. If they drop prices they render domestic oil production too expensive. The truth is America is still at the mercy of the Middle eastern oil. All they need to do is produce more oil at lower prices and they will destroy the domestic market. Oil companies are going to buy from the cheapest source, that's how Exxon/Mobile makes record profits every quarter.
Polluted ground water or a nuclear Iran?
Hummmm...I remember a bunch of people saying that "drill here, drill now, pay less" wouldn't work? Could they have been wrong????
In fact, I think it would be great if fracking and oil sands projects were unprofitable.
I do not fail; I succeed at finding out what does not work.
check out Aamaco...wholly owned subsidiary of Saudi Aramco ;)
then check out who Bush Sr. was partying with on 9/11 :P
Thank you Dave Raggett
check out Aamaco...wholly owned subsidiary of Saudi Aramco ;)
Never heard of "Aamaco". There's "AAMCO", an automotive transmission repair company. There's "Amoco", which used to be Standard Oil of Indiana and became part of BP a decade and a half ago. But Wikipedia's article about Amoco mentions nothing about Saudi Aramco. Its article about Saudi Aramco does, however mention Saudi Aramco's origin in a joint venture between the companies that became Chevron and Texaco, which later drew investment from what is now ExxonMobil. Between 1973 and 1980, however, the Saudis acquired Aramco.
yes. exactly.
Thank you Dave Raggett
no.
**you** said "below market"
here's what I said, copied from my comment above:
your argument is pure trolling...you are using rhetorical trickery and this conversation is no longer value-added for anyone
my statements were sloppy, but they held up to scrutiny...the US has favorable trading status with Saudi Arabia and you've only helped show that
I'm not going to comment further on this thread
Thank you Dave Raggett
Seriously, we should allow keystone pipeline, BUT, require a tax on it (say $1-2/BL) that is applied to move our vehicles to electric, CNG, and LNG. With this approach, we can drop America's oil addiction, while moving the west to clean energy.
And the nice thing about having CNG/LNG is that coal can be converted to methane relatively cleanly.
I prefer the "u" in honour as it seems to be missing these days.
The question here is whether this is because of CAFE standards or the price of gasoline? When when oil(and therefore gasoline) was cheap 'everybody' was buying SUVs and Trucks because of the greater feature sets at lower upfront cost. As the prices headed up people started switching back to cars and a lot of work even went into trucks and such to improve their performance. F-250 class trucks are now getting F-150 mileage.
I'd argue that price of gasoline had more to do with realworld increases in efficincy and reduced consumption rates than CAFE ever did.
I don't read AC A human right
Iran has no nuclear weapons program.
Iran has no nuclear weapons program.
Iran has no nuclear weapons program.
Ask the Pentagon or even the IDF and they'll tell you the same. U.S. threats against Iran - and committing acts of war with Stuxnet or looking the other way as Mossad murders Iran's nuclear scientists - has nothing to do with stopping Iran from getting a nuclear weapon, as Iran has no nuclear weapon's program.
And as for good-faith negotiations, Iran has been trying to do just that for over ten years. The U.S. has either ignored those attempts, or to move the goalposts as soon as Iran has done what the U.S. has asked it to do.
The tobacco-frackers are being swamped by data against them pouring in on every side. faster than they can breed their own fraud. Desperation breeds bullsh*.
Sure, everything is interconnected, so it would be false to say there's no effect, but "Yay for world peace! All credit to fracking!" is a wild reach.
Motivated reasoning. It's a thing.
...is a marketing term. Thank you for sharing.
... if we had seriously tried to limit petroleum consumption and develop alternatives since 1979, we might not have to embrace either risky proposition.
How the hell is this a problem?
"Consensus" in science is _always_ a political construct.
This is a perfect example of how oil has created such a horrible political mess over the years. It has been very dangerous for us to be so dependent on the middle east.
The only direct dependence the US has on the middle east is due to oil being priced globally. The US isn't particularly dependant on the middle east and OPEC for oil supply. The problem is that other parts of the world are. Oil has created big political messes like Iran due to countries like the US being unable to resist being a bunch of evil a-holes and doing things like overthrowing governments in the region on behalf of oil companies without regard to future consequences. What's astonishing is that our leaders have the nerve to act surprised when it turns out that people in other countries don't like us meddling in their internal affairs.
Relatively little of the oil used in the US comes from the middle east. About 40% of the oil used in the US is produced domestically and this number has been climbing. Of the 316 million barrels imported by the US in August 2013, only 67 million came from the Persian Gulf region or about 21%. This 21% is about 13% of total US oil demand and about 2/3 of that 13% is from Saudi Arabia. In fact Saudi Arabia is the only middle eastern country to crack the top 5 exporters to the US - the others being Canada, Mexico, Venezuela and Nigeria.
Wait, whoa, hold on. Let's look at that downside again:
If not managed properly, flooding the market with Iranian crude could carry its own negative consequences by suddenly making fracked oil in the US unprofitable.
So... coming at this as someone who drives a car, consumes oil, and general does business with other people who depend on oil production, the idea of the market being flooded with cheap oil sounds like a fantastic thing. It's a good thing for me and virtually everyone I do business with, even tangentially. It's good for consumers.
Ah! But I understand that markets and industries can be disrupted by volatility. This sort of thing takes out the small players, leaving only those with big pockets that can weather the storm, or conglomerates with diverse portfolios. But.... when you think of "small players" does the US oil industry come to mind? Are we worried about those poor starving orphans over at Chevron and Exxon? Are they mom&pop shops that are worried about their slim profit market being washed away as big players muck up their market?
I mean, competition is a good thing, and losing any players reduces competition... But we're the big players here. To be an ass about it, volatility kills competition to US dominance. If ever there was an industry that could weather a downturn, it's the oil and gas megacorps.
So Kerry is going to Iran to keep them from dropping the price of oil? Seriously?
US imports may have lessened due to fracking. But if investment in developing and implementing renewables in the last 30 years had been as intense as efforts to develop new drilling techniques, the US would be more energy independent AND there'd be less fracking. So "...there would be no..." is a patently false statement.
Iran has developed nuclear capabilities that are somewhat inconsistent with a purely energy production system but are consistent with a weapons development program. They have refused certain levels of monitoring and more importantly removal. They are being deliberately provocative. So yes they have a nuclear weapons program.
As for the United States ignoring attempts. The Islamic Republic of Iran has until recently consistently refused direct talks and consistently refused to establish diplomatic relations. In what possible sense can there actions be seen as good faith negotiations. Now I agree the United States isn't all roses either but both sides have genuinely a level of hostility just short of war.
Does anyone in the West actually believe anything coming out of the Iranian gov't? They'll say whatever needs to be said to avoid sanctions and then do whatever the hell they want in secret anyway.
The talks will derail because leaders only care about power, the illusion of power, or both.
First off, the collusion in the oil industry is not fully known, so we are just guessing when we talk about 'global supply'
Sorry but no conspiracy theories are needed here. Oil is a fungible commodity sold worldwide. Simple supply and demand analysis (with a bit of speculation thrown in) can explain oil pricing rather well. If you want to invoke collusion outside of known cartels like OPEC you need to provide even a hint of evidence that nothing else can explain oil price movements.
If the US automakers hadn't **killed the electric car** there would have been at least an **equal drop in demand**
I think you are going to have a hard time proving that assertion. Your argument basically is falling into the fallacy post hoc ergo propter hoc. I will happily concede that battery technology has not received adequate investment and that car companies (including GM) really dropped the ball here. However it does not automatically follow that electric cars would have had the effect on the market you seem to believe the would have. There were and are significant technology hurdles for electric vehicles to overcome to significantly impact the car market. We very likely might be further along than we are but that isn't the same thing as proving that electric vehicles would have been adopted at a rate sufficient to offset that much oil use.
Fracking doesn't have major effects on oil prices, and won't until cars run on natgas.
Curious since US oil production has increased dramatically recently largely due to close to a million barrels of oil per day coming out of the Bakken and Eagle Ford shale formations thanks to fracking. You want to explain to me how an extra million barrels of supply a day has no effect on oil prices?
to sell us when fracking has fucked all ours up?
Conversely, could it not be said that the nuclear crisis in Iran was manufactured to, in fact, raise the price of oil thereby making fracking economically feasible?