Rand alPaul posted:

As someone who lives in Oklahoma and suffers through daily earthquakes I would like to thank Saudi Arabia for loving with frackers.

Although I feel like if Saudi Arabia doesn't drive them into bankruptcy, the class action lawsuits certainly will. They're causing billions of dollars worth of damage to buildings.

Mozi posted:

Would there be waste water disposal without fracking? Are the waste water disposal companies entirely separate from fracking companies, sharing no legal responsibilities? Are you just being pedantic?

Mozi posted:

Would there be waste water disposal without fracking? Are the waste water disposal companies entirely separate from fracking companies, sharing no legal responsibilities? Are you just being pedantic?

JohnGalt posted:

There could definitely be fracing with very little fluid disposal. In the Appalachian basin, it is pretty common practice to mix off production water into the next frac. It doesn't totally eliminate the need (due to TNORM or components that may interfere with completions), but it is significantly reduced. Why this isn't done in OK, I have no idea. I don't have experience there.

Trabisnikof posted:

Pretty sure a big issue in OK is that the basin is very wet, so they may already be mixing production water back into the next frac, but there just is too much water to use up. But I may be mixing up drunken conversations in my memory.

JohnGalt posted:

There would still be waste water disposal without fracing (please stop using a "k", you're triggering me), but it wouldn't be anywhere near the volume currently experienced. There is still legal responsibility for the waste, because waste generators are responsible from cradle to grave. I really don't know if the earthquakes are the legal responsibility of waste generators, that seems like quite the stretch.

Zeroisanumber posted:

Chevron (CVX) is down 1% today and oil dropped below $30/bbl again before settling at $30.22. Gonna wait until it falls below $30 and stays there at close and then buy, buy, buy!

Also, the Russians have to revise their budget because they forecast at $50/bbl so lol.

JohnGalt posted:

A Buttery Pastry posted:

Well, there's a difference between is and ought. If it can be shown that the waste water disposal is shown to be the likely cause of some earthquakes then clearly they should be held legally responsible.

Mozi posted:

Thanks, that was informative. This is actually the first time I've seen it referred to as 'fracing,' so the industry has a ways to go in pushing that nomenclature...

VVV I've found that line is drawn in whether you use 'fracking' as a synonym for the other f word.

JohnGalt posted:

I guess you're free to believe that. The cumulative formation impact that is causing this is not really a problem the waste generator can control though, especially when there are many entities dealing with each other. The only way to solve it by blaming fracing would be to have some sort of organized distribution of waste with allocations per facility. It sounds really convulted and it would be much easier to regulate disposal wells better.

A Buttery Pastry posted:

The fact that responsibility is divided does not really seem particularly relevant to me. Dumping industrial waste in an unsafe manner doesn't become fine just because "everyone else is doing it".

Trabisnikof posted:

But they're not doing it in an unsafe manner. That's the whole deal. No single well is causing this. No one operator can shut off and have the earthquakes stop. Likewise, one injection well wouldn't have the same impact that this many does. It needs better regulation as a group.

JohnGalt posted:

It's not dumping waste. It's literally the safest way to dispose of fluid waste.

Let's look at the current issue in OK. Each disposal facility has limits on how much they can pump (I'm not sure if this is a volume restriction or a pressure restriction in OK). The idea is that the fluid pumped downhole has to difuse throughout the formation so that the pore pressure (the pressure the fluid exerts) does not overcome the confining pressure enough to allow movement.

This is okay when there isn't a huge volume being disposed because it never reached the point where it caused a lot of earthquakes. The problem is in the interwell formation. When multiple wells in proximity pump at there maximum allowed rate and the fluid diffuses throughout the formation, it creates higher than expected pressures in the space between the wells.

In your scenario, where the generators are the responsible party, each generator has to know all the fluid going to the facilities they use, as well as all of the other facilities fluid volumes. Short of some sort of collusion to shut out some wells (which is illegal) waste generators don't have the tools to even deal with this issue.

It's going to be much more effective to have regulation on injection wells.

A Buttery Pastry posted:

Still not sure how this changes the fact that their collective actions cause earthquakes. Like, I get that the whole regulatory structure around the thing isn't great, but lack of proper regulations shouldn't be the same as lack of responsibility.

Trabisnikof posted:

Have you literally never heard of the concept of "the tragedy of the commons" because that seems to be the stumbling block you can't get over.

Trabisnikof posted:

Have you literally never heard of the concept of "the tragedy of the commons" because that seems to be the stumbling block you can't get over.

Squalid posted:

The proper response to the tragedy of the commons isn't just to let the pasture be grazed to oblivion. Recognizing that all the shepherds bear responsibility for the crisis is a prerequisite for action.

A Buttery Pastry posted:

Is that really applicable here? You have companies acting in their own rational self-interest sure, but it's against the interests of not their own group as a whole, but of another group entirely. (That being residents in whatever area they're operating.) And even if it was applicable I'm not sure why it would matter? The tragedy of the commons isn't some perfect defense against acting in an irresponsible manner.

A Buttery Pastry posted:

The fact that responsibility is divided does not really seem particularly relevant to me. Dumping industrial waste in an unsafe manner doesn't become fine just because "everyone else is doing it".

A Buttery Pastry posted:

Still not sure how this changes the fact that their collective actions cause earthquakes. Like, I get that the whole regulatory structure around the thing isn't great, but lack of proper regulations shouldn't be the same as lack of responsibility.

JohnGalt posted:

This is okay when there isn't a huge volume being disposed because it never reached the point where it caused a lot of earthquakes. The problem is in the interwell formation. When multiple wells in proximity pump at there maximum allowed rate and the fluid diffuses throughout the formation, it creates higher than expected pressures in the space between the wells.

In your scenario, where the generators are the responsible party, each generator has to know all the fluid going to the facilities they use, as well as all of the other facilities fluid volumes. Short of some sort of collusion to shut out some wells (which is illegal) waste generators don't have the tools to even deal with this issue.

It's going to be much more effective to have regulation on injection wells.

Trabisnikof posted:

Yes, which is why they need to be further regulated.


Most of those people are residents too. But if quakes shut down production, that's bad for everyone.

JohnGalt posted:

It's going to be much more effective to have regulation on injection wells.

Rand alPaul posted:

How do you know Company A's cigarette caused your lung cancer? Case dismissed.

quote:

The first signs of a thaw are emerging for the battered oil market after Russia signalled a sharp fall in exports this year, a move that may offset the long-feared surge of supply from Iran.
The oil-pipeline monopoly Transneft said Russian companies are likely to cut crude shipments by 6.4pc over the course of 2016, based on applications submitted so far by Lukoil, Rosneft, Gazprom and other producers.
This amounts to a drop of 460,000 barrels a day (b/d), enough to eliminate a third of the excess supply flooding the world and potentially mark the bottom of the market. Russia is the world’s biggest producer of oil, and has been exporting 7.3m b/d over recent months.
Transneft told journalists in Moscow that tax changes account for some of the fall but economic sanctions are also beginning to inflict serious damage. External credit is frozen and drillers cannot easily import equipment and supplies.
New projects have been frozen and output from the Soviet-era fields in western Siberia is depleting at an average rate of 8pc to 11pc each year. Russia's deputy finance minister, Maxim Oreshkin, told news agency TASS that the oil price crash could lead to “hard and fast closures in coming months”.
What is unclear is whether the production cuts are purely driven by markets or whether it is in part a political move to pave the way for a deal with Saudi Arabia. Opec stated in December that it is too small to act alone and will not cut production unless non-Opec states join the effort to stabilize the market, a plea clearly directed at Russia.

Kremlin officials insist publicly that they cannot tell listed Russian companies what to do, and claim that Siberian weather makes it harder to switch supply on and off. Oil veterans say there are ways to cut quietly if president Vladimir Putin gives the order.
Helima Croft, from RBC Capital Markets, said the expected cuts could be the first steps towards an accord. “As the economic reality of lower oil prices begins to bite, perhaps Putin will push for a course correction and reach a deal with the Saudis. It would certainly upend the current conventional wisdom that Opec is down for the count," she said.
Russia has a strong incentive to strike a deal. Anton Siluanov, the finance minister, said the Kremlin is drawing up drastic plans to slash spending by 10pc, warning that the country’s reserve fund may run dry by the end of the year. “We have decided not to touch defence spending for now,” he said.
The budget deficit is running near 5pc of GDP at current oil prices, yet the country lacks an internal bond market and cannot borrow abroad.

The oil markets have so far shrugged off the news from Moscow, focusing on the more immediate glut. Short positions on the derivatives markets remain extremely stretched, but this creates the conditions for a vicious "short squeeze" if sentiment turns.
Brent crude is hovering near 11-year lows at $30.50, while Saudi Arab light is trading in Asia at $24.57, and Basra heavy is down to $17.77. The cheapest West Canadian is selling at $16.30.
Markets are bracing for the certain decision to lift sanctions against Iran next week, a move that will open the way for a burst of Iranian supply by March.
David Fyfe, from the Swiss-based oil traders Gunvor, said Tehran is likely to tread carefully at first. “They don’t want to crater the market. We think they will work up to 500,000 b/d by the end of the year,” he said.
While Iran has 30m to 40m barrels sitting in tankers offshore, this is mostly ultra-light or condensate. It is hard to sell quickly and will not have much effect on the crude price.
Mr Fyfe said the futures markets are pricing crude at $35 or lower through 2016, below the crucial cash cost in large parts of the world. “At this sort of level people are going to be scratching their heads asking whether they can really afford to keep producing,” he said.

The paradox of the market is that although inventories are at record highs there is little spare production capacity by historical standards, creating the risk of a violent spike later once the glut has been digested and the Saudis have knocked out enough rivals.
“We’re heading toward a short supply situation unfortunately, “ said Harold Hamm, head of the US shale driller Continental Resources.
“That’s going to get very concerning in the latter part of the year,” he told the Wall Street Journal. Mr Hamm said prices will this jump later this year to $60.
Oil demand rose 1.7m b/d last year – the second highest pace in a decade - and is still rising more briskly than widely supposed. Chi Zhang from Barclays said China’s imports of crude surged to a record 7.8m b/d in December as the country continued to fill its strategic reserve.
Ms Croft said the market is likely to tighten in the second half of the year despite the return of Iran, arguing that there are very few spots in the world other than Libya able to crank up output quickly
“We remain of the view that many of the bearish macro factors appear overblown. Current market conditions are setting the market up for a supply shortfall for the coming years, which is not accurately priced into the forward curve,” she said.

TROIKA CURES GREEK posted:

The types of earthquakes caused by fracking are virtually imperceptible to people- who gives a gently caress if the number of 2-3.0 earthquakes is vastly higher it's utterly irrelevant. Fracking just seems like one of those issues where the strongest arguments against is are "the other party likes it", because there's no legitimate argument against fracking where the wastewater is properly handled.

LemonDrizzle posted:

This is interesting: http://www.telegraph.co.uk/finance/economics/12100609/Glimmers-of-hope-for-oil-as-Russia-poised-to-slash-output.html

TROIKA CURES GREEK posted:

The types of earthquakes caused by fracking are virtually imperceptible to people- who gives a gently caress if the number of 2-3.0 earthquakes is vastly higher it's utterly irrelevant. Fracking just seems like one of those issues where the strongest arguments against is are "the other party likes it", because there's no legitimate argument against fracking where the wastewater is properly handled.

Trabisnikof posted:

But it is a real question if all states are ready to regulate such a complex process, especially in states without a history of O&G development. Small, fly-by-night operators can do real damage when local regulators can't or won't regulate effectively.

JohnGalt posted:

I think it might be a little backwards here. Regulations in relatively new boom states like PA and OH are have MUCH stricter regulations than OK and TX. There is a reason TAFT (This aint loving texas) is a phrase.

Also, unconventional operations really can't be fly by night. A single well is going to require over 5.5 million in initial investment. Any company willing to put that kind of investment isn't fly by night. The mom and pop operators of conventional assest have much lower oversight because it isn't the focus of public afternoon and therefore get away with murder.

The PA threshold for reporting of fluid release to ground is 3 gallons in a 24 hour period. Most fluids in that quantity do not even have a real environmental impact.

Trabisnikof posted:

Those regulations were passed after the industry hosed up already in many instances. There weren't prexisiting regulations in place when the basins we're opening up.

Trabisnikof posted:

You're forgetting it's a complex supply chain. Sure, the whole operation is more complex than just sticking a pumpjack somewhere so maybe fly by night wasn't correct. But even small and medium sized operators have huge incentives to cut corners in this price environment. Then we get the contractors who can be even more incentivized to cut costs. The water trucking company, the injection well owners, the man camp with an illegal septic system, etc. All related to develop and in need of regulation.

Volkerball posted:

What research has been done that connects fracking to earthquakes, and if there is a connection, is it inherent to fracking or is the problem also present in non-fracked wells?