Originally published at: https://boingboing.net/2018/12/20/long-con.html
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Invisible hand, market solutions, detegulation, et bullshit cetera.
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Seems like if it is truly unprofitable over the long term than this problem will solve itself. The industry is betting that the price of oil will go up again in the future, which seems like a reasonable assumption.
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Bankers propping up big oil with tons of cash.
GOP propping up big oil with drilling on protected lands, stealing land from Native Americans, fear-mongering around our beloved oil jobs, overriding the US voter when it comes to drilling sites, etc…
When the whole thing crashes be prepared for US taxpayer bail outs (why the bankers are propping) under the rationale that it’s the only way to save our economy. Oh and the national security implications (GOP has been playing up that line for a few years now, wonder why?).
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Government incentives are unreliable on the long term however. Your bought out senator eventually retires, and new administrations may or may not be sympathetic. In the short term they can be pretty sure the government will cover any losses using public funds, but in the long run you can’t count on it.
It may be unprofitable in simple monetary terms, but who can put a price on the groundwater contamination? That’s gold.
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These sleazebags make entertainment industry accountants look like choirboys.
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“The long run”. What is that? As long as the managers get their fat bonuses a couple of years they don’t care if the business go down in flames in the long run. Your pensions may suffer if pension funds invested in the scam, but that’s your problem, not theirs.
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Very much short term thinking, but current capitalism is pretty much founded on that. On the medium and certainly the long term this is not a bet I would take, renewable energy is growing fast and will continue to do so in the next few decades, making a structural fall in oil prices very likely indeed. Fracking, due to high costs, will be the first part of the oil industry going down the drain.
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I guess it depends on your timescale. If short term is within a year, medium term is within 5-10 years, and long term is 10+ years then I’m skeptical that we’ll make the transition to renewables enough to tank commodity oil prices before the long term.
All it takes is some geopolitical instability in the next 5 years for those bets to pay off. OPEC countries going to war or severely cutting production or an explosion in the Chinese/Indian middle class and a rush to buy automobiles. Currently renewables aren’t in the right order of magnitude to apply noticeable pressure on oil prices.
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That’s all true, but on this topic I’m an optimist (which I’m usually not) because the alternative is runaway climate change and the end of the world as we know it.
Strangely that’s the part I’m most skeptical about. Something like half of the country still doesn’t believe it exists, and the majority of people who could really make a difference today are solidly in the “Got Mine, Fuck You” mindset.
…and I feel fine.
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Q: I’m a human who wants to harvest sun-energy to make electricity. What is the most cost-effective way to do that?
A:
Option 1: Use the sun to grow massive amounts of vegetation, then bury that vegetation. Wait a few million years for it to turn into hydrocarbons, then drill holes in the earth’s crust. Inject a mystery fluid to break up underground rock formations and try to capture whatever hydrocarbon gas is released. Do this all over the country so you don’t miss any spots. Not bad, you’re almost there. Now light those hydrocarbons on fire to create steam to spin a turbine, which will spin an electric coil inside an electric field, which will create electricity. Viola! Job well done.
Option 2: Use photovoltaics to do all of the above in one step.
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I thought all mining, all of it, is fundamentally a money-losing operation. Because they never include the cost of cleaning up the mining site in the business plan. The mining companies plan to go bankrupt once all the ore is gone, and leave cleanup to the taxpayer.
Source: “Collapse” by Jared Diamond.
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No wonder the work fracking always sounded so subtly obscene.
From what I read in Bloomberg frackers have new tech that allows them to be profitable at $30/barrel. And that’s a barrel of crude not gas. Hence the low gasoline prices. The same article I read a few weeks ago says they are back to fracking full bore in the West Texas Permian basin. Three new pipelines from there to Houston refineries are scheduled to come online next year but in the meantime they shipping it by train and truck.
A friend of mine who is in the Eagle(?) basin near Ft Worth says she sold the fracking rights to her land for $20,000. She said everyone around there did cuz they’d just take it anyway going sideways underground. So they don’t need to own the land, just the rights.
So basically reversed Hollywood accounting?
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More or less, yes.
Somehow it qualifies as GAAP. See the new Lessig book and it’s discussion of institutional corruption.
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When the loans come due the banks will be weakened. In the meanwhile we are burning some of the dirtiest fuel around. We are causing earthquakes. We are poidoning groundwater forever. People are getting sick and dying. We are pouring the waste into the Gulf of Mexico. And The Sacred Market will do the thin end of fuck-all to fix that. It just privatizes the revenue and pushes the massive costs onto the rest of us.
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