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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."
Except no, because of the Jevon's Paradox. Making the use of a resource more efficient actually increases total demand.
"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.
The sad part is that we're not using some great portion of the profits from oil to work on alternatives. When we run out of oil or its environmental effects become so deleterious that we can no longer justify its use, we will have squandered vast amounts of money and resources.
The world's burning. Moped Jesus spotted on I50. Details at 11.
True. But the sanctions were never all that impervious.
On the other hand, with reduced demand for their Oil, (due to the US being a net exporter of oil), there is more oil available on the market. Other oil importers don't need to go to Iran.
Theoretically, with less of a market for oil Iran should not need Nuclear power and could be meeting their energy demands with modern oil and gas generation facilities, Far less costly and easier to build.
Therefore, they don't NEED nuclear. And they can't make the claim that the do. If Iran was really after power production all along, they should be willing to delay nuclear. If that was never their real goal, then these talks may lead nowhere.
News reports suggest that a deal is no where near as close as this cheerleading article suggests.
So the article is a bit pre-mature. I think there are talks mostly because there was an election, and there was a change in tactics on the part of Iran, who probably realize they are inching closer to being on the receiving a preemptive strike and they see their last friend in the region, Syria, being ground into dust by civil war in spite of Iran's help).
Sig Battery depleted. Reverting to safe mode.
Therefore, they don't NEED nuclear.
That's right. And since they have lots of trees, they don't NEED oil and gas either. Let them burn wood! They're nothing but a bunch of sand niggers anyway. What would they know about the health hazards of smog, right? You're a bigoted asshole.
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.
This is only sort of right. It is true that the US doesn't use Iranian oil, however, the oil it does or did import displaced oil other countries could use so it in effect would have had the same impacts as if the US was doing so. Let's look at this from a simple point of view. Suppose the world in it's entirety produced 10 units of oil per day. From that 10 units of oil, every single country and business that wanted to, could purchase and use oil at about $100 a subunit if it didn't already create their needs themselves. Now suppose the US of some other random country all the sudden decides that a producer cannot produce and sell 1 unit of oil. Now, whether the US or other random country ever purchased oil from them or not, the entire world has to get buy with 9 units total or ignore the sanctions to maintain the 10 units. That is unless the one unit was made up somewhere else allowing the sanctions to hold and creating 10 units.
The oil markets are not per country but rather world wide and drops in production in one area will globally impact prices if it isn't made up somewhere else. The US us making it up somewhere else.
This is probably more true then anything. Mahmoud Ahmadinejad was a bit crazy, he was a twelver to start with but also held a grudge against the US for how they handled Iran's attempt to help with Afghanistan. So it was like telling a bi-polar girlfriend that her sister is cuter than she is or the dress she is wearing doesn't make her look as fat as the other ones. Most of the "freakish" anti western sentiment can be traced to the coalition forces booting his troops from Afghanistan making him look bad and his believe in the twelfth Imam coming back and delivering paradise.
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?
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.