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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."
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
'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,'
Except no, because of the Jevon's Paradox. Making the use of a resource more efficient actually increases total demand.
It's a global market - oil gets shipped all around the world via tanker. If the US buys less oil, that means the sellers have more oil to sell, which they in turn sell to someone else (Probably China, they have huge demand), who in turn then doesn't buy from Iran. It's all interconnected.
Which doesn't matter for a global fungible commodity. Think of the oil and gas markets as giant buckets with streams of inputs from various sources and streams of outputs to other places. Direct inputs and outputs don't matter, just the net inputs and outputs.
putting the 'B' in LGBTQ+
Global Supply and Demand doesn't care who buys from where. I'm not saying that it is true that we owe a debt of gratitude to frackers for bringing about world peace. I'm simply pointing out that your implication that there is no correlation because we don't specifically purchase our oil from Iran is a similarly flawed claim.
Guns don't kill people; Physics kills people! - John Lithgow as Dick Solomon on Third Rock From The Sun
"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.
Interestingly enough the US imported more in 2012 from the Persian Gulf. We've mostly trimmed the amount of business we do with nations like Mexico, Nigeria, and Brazil, in response to our new gains in supply. This is just crude oil, a substantial part of US demand is met by imported petroleum products too, of course. U.S. Crude Oil Imports Mexico is due to begin declining in production in the next few years, and the Trans Alaska Pipeline may have to be shut down soon as well - this is more of a wildcard, estimates of how low the flow through can go before it becomes unprofitable to operate vary a great deal - so new sources of supply are going to be needed, even with US demand having peaked and declining slowly owing to less driving/more efficient new vehicles/the slow inroads made by EVs removing demand for gasoline entirely.
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.
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
(due to the US being a net exporter of oil)
You have a strange notion of "net exporter".
And if you think it's too old data because of the shale oil "booming" the EIA also provides data for 2013.
I have discovered a truly marvelous proof of killer sig, which this margin is too narrow to contain.
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.
http://www.slate.com/blogs/the_world_/2013/10/11/china_now_world_s_largest_net_oil_importer_surpassing_united_states.html
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.
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
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.
Wat?
I can't believe I just read that. If you don't remember these things, all it means is you need to revise your 20th century history again.
Let's review. Israel, in its extremely short life so far, has managed to obtain a global reputation for being insanely aggressive and warlike. The very creation of it led immediately to war with its new neighbours. Israel not only has nukes, but also created the Mossad, which openly assassinates people it doesn't like. Its leaders routinely threaten to attack or invade Iran if Israel's "friends" even think about being the slightest bit reasonable or diplomatic. Fear of what the completely crazy Israeli leadership might do if diplomacy fails is one of the reasons the rest of the world has implemented sanctions - it's seen as marginally preferable to Israel starting all out war in the middle east, which we know they wouldn't hesitate to do.
Pakistan and India have been at each others throats since the moment India became independent from the British Empire. The Partition was the rest of one of the most bloody civil wars in recent history. Since then both India and Pakistan have managed to obtain nukes, and their constant fighting over Kashmir is rated one of the most likely triggers for nuclear war. Each side routinely accuses the other of sponsoring terrorist attacks.
Of all the countries in the world you could have picked to try and make Iran look bad, you could not have chosen worse. Iran, despite the incredible amounts of shit they have had dumped on them in recent times, is not at all likely to invade a neighbour or randomly start a war in the middle east. I know this runs counter to US and Israeli propaganda, but there's no evidence at all that this is even slightly likely to happen - the Iranian leader has even said that war is un-Islamic, and he's really big on not doing things that are un-Islamic. Contrast this to the Israeli leaders who talk about war all the time.
BTW the story is crap. It's been obvious for ages that the sanctions have been put in place because America is Israeli's bitch and Europe is America's bitch. They aren't going to be removed, ever, because the people who control the sanctions regime are motivated by power, and only power. See how the moment it looked like there might be progress in Geneva the American's were running to Israel to re-assure them that the sanctions weren't going to be lifted no matter what happens (and that's despite them being struck down as illegal in European courts).
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.