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The Global Effects of Falling [Oil Prices] - OPEC tentatively agreed to cut production

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    spool32spool32 Contrary Library Registered User regular
    edited January 2015
    Mvrck wrote: »
    Wyoming and California have been confirmed to have been poisoned by fracking. But who cares about the California water supply, they have plenty, right?

    That CA link sure is a thing. Don't people see a catchphrase like "Real Liberal Politics" and think that the source is maybe a bit... tilted?

    Anyhow I chased the actual info to the Center for Biological Diversity, which says it "obtained" some reports from the Central Valley Regional Water Board but doesn't publish the letters - only its summary of the data. So take that as questionably reliable at best. I wish I didn't have to do this work for people willing to fling bad sources!

    The propublica source for Wyoming is legit though.

    The takeaway is that shitty companies pumping poison into groundwater might poison some wells in an aquifer, probably. This is so obvious it's almost not worth mentioning!

    I think the leap from this to Fracking Destroys Aquifers is even larger than the one from "some wells in an area of Wyoming have likely been contaminated by oil drilling" to "Wyoming is Poisoned".

    spool32 on
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    Dis'Dis' Registered User regular
    Yeah spool I agree fracking be done without damage (as an oil industry person I always worry if Upton Sinclair's quote is applying though)...if you regulate where they can drill so they don't break aquifers and regulate and inspect their downhole fluids so its not insanely dangerous.

    Pity the US regulatory landscape or capabilities aren't anywhere near that and those sorts of things will cost money.

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    JohnnyCacheJohnnyCache Starting Defense Place at the tableRegistered User regular
    If you're not using harmful shit, then you shouldn't be afraid of disclosing what it is you're using. If you are using harmful shit...

    Just to advocate infernally, lots of industries are allowed secrecy under the guise of trade secrets or proprietary blends

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    MvrckMvrck Dwarven MountainhomeRegistered User regular
    spool32 wrote: »
    Mvrck wrote: »
    Wyoming and California have been confirmed to have been poisoned by fracking. But who cares about the California water supply, they have plenty, right?

    That CA link sure is a thing. Don't people see a catchphrase like "Real Liberal Politics" and think that the source is maybe a bit... tilted?

    Anyhow I chased the actual info to the Center for Biological Diversity, which says it "obtained" some reports from the Central Valley Regional Water Board but doesn't publish the letters - only its summary of the data. So take that as questionably reliable at best. I wish I didn't have to do this work for people willing to fling bad sources!

    The propublica source for Wyoming is legit though.

    The takeaway is that shitty companies pumping poison into groundwater might poison some wells in an aquifer, probably. This is so obvious it's almost not worth mentioning!

    I think the leap from this to Fracking Destroys Aquifers is even larger than the one from "some wells in an area of Wyoming have likely been contaminated by oil drilling" to "Wyoming is Poisoned".

    http://www.biologicaldiversity.org/campaigns/california_fracking/pdfs/20140915_Bishop_letter_to_Blumenfeld_Responding_to_July_17_2014_UIC_Letter.pdf

    Or is that too liberal for you?

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    PhyphorPhyphor Building Planet Busters Tasting FruitRegistered User regular
    This letter? http://www.biologicaldiversity.org/campaigns/california_fracking/pdfs/20140915_Bishop_letter_to_Blumenfeld_Responding_to_July_17_2014_UIC_Letter.pdf
    The Central Valley Water Board also conducted sampling of eight water supply wells in
    the vicinity of some of these Category 1 injection wells. Nitrate, arsenic, and thallium exceeded the
    Maximum Contaminant Level (MCL) in four of the water samples. The Central Valley Water Board
    provided the results of these samples to the owners of the supply wells and notified the Kern County
    Environmental Health Department. TDS exceeded the secondary MCL (SMCL) in 3 samples collected,
    with maximum concentrations detected at 1,800 ppm.

    Of course, they're not even considering any dumping into "exempt" aquifiers, which most of the wells do... which is pretty dumb by itself!

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    DiorinixDiorinix Registered User regular
    Speaking as an employee working on the fracking side of the oil industry in Alberta, a lot of the problems with the process comes with the regional regulations that govern well construction as well as fracking itself.

    Here, the majority of fracking jobs occur on horizontally-drilled wells, at a depth of 2000-3000 below surface. Casing and cementing procedures here during drilling are tightly regulated, and the board does not approve fracking permits for wells where the casing or cementing has been installed poorly (as determined by pressure tests).

    Keep in mind that water tables are typically less than 100 metres below surface.

    To frac a specific "zone" (the targeted area in the well bore, usually less than 20 metres long), isolating packers are placed in the casing above and below the zone. The frac job is engineered to only apply the hydraulic pressure to the rock formation between the packers - if the cement job was performed correctly during drilling .

    A specific frac is performed in 3 stages. First, the fluid only is pumped to start the fracturing process. At a precise point where the formation begins to fail, a "pill" is added to the frac fluid, which typically is a sand or other silicate material that is engineered to flow into the fractured formation. Then, when maximum penatration is determined, the pumps are shut off and the fluid is allowed to travel back up the frac string and the sand stays behind to hold the fractures more open - the end goal leaving the zone with more porosity and permeability.

    Now for the problems and differences between a good frac and a bad frac, as determined by an insider.

    1 - A good frac will have a closed-loop water system, where the returned waste water is contained in tanks and then transported safely to a treatment facility to remove the chemicals. A poor frac will unload the waste water into open pits before transport. Worse, this water will be dumped back into natural water sources. Good regulation requires operators to use the good process.

    2 - A good frac will only hit the zone targeted, and recovery of frac fluid will be +80%. A bad frac will travel up shoddy casing cement and disperse into the wrong zones. Fluid will hardly be recovered and now the well has a risk of migrating hydrocarbons from zone to zone via failed cement. Good regulation requires drilling to confirm a good cement job before the operator can obtain a license to stimulate.

    Fracking is definitely an expensive procedure, and has technologies have been improved the cost-benefit has gone up as operators have been able to access previously unobtainable reserves. Keep in mind ALL oil and natural gas is locked in rock formations. There's no pool or cavern of it that we tap with a straw and suck up. Easier to access formations are porous (large holes in the rock molecules to hold hydrocarbons) and highly permeable (pores connected allowing hydrocarbon to flow). As oil prices drop (and typically natural gas has been linked but less so in the last 5 years), non-conventional methods to extra oil and gas become way less attractive.

    The effect on Alberta is going to suck, and it's our own damn fault. The economy is not as diversified as it should be, there's no back up savings à la Norway, and nearly everyone has extended their credit to the max. We're already hearing of drilling rigs getting laid off in January (usually seasonal layoffs occur in March-April as the spring thaw makes moving heavy machinery impossible). I fully expect the industry to be essentially be in full shut down 6 weeks earlier than normal, and not back to work until 2-3 months after the WTI climbs back to 70+ pbbd.

    TL;DR - fracking CAN be done safely, needs more regulation, dropping oil prices will put 10s if not 100s of thousands out of work until recovery starting in the spring.



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    spool32spool32 Contrary Library Registered User regular
    Mvrck wrote: »
    spool32 wrote: »
    Mvrck wrote: »
    Wyoming and California have been confirmed to have been poisoned by fracking. But who cares about the California water supply, they have plenty, right?

    That CA link sure is a thing. Don't people see a catchphrase like "Real Liberal Politics" and think that the source is maybe a bit... tilted?

    Anyhow I chased the actual info to the Center for Biological Diversity, which says it "obtained" some reports from the Central Valley Regional Water Board but doesn't publish the letters - only its summary of the data. So take that as questionably reliable at best. I wish I didn't have to do this work for people willing to fling bad sources!

    The propublica source for Wyoming is legit though.

    The takeaway is that shitty companies pumping poison into groundwater might poison some wells in an aquifer, probably. This is so obvious it's almost not worth mentioning!

    I think the leap from this to Fracking Destroys Aquifers is even larger than the one from "some wells in an area of Wyoming have likely been contaminated by oil drilling" to "Wyoming is Poisoned".

    http://www.biologicaldiversity.org/campaigns/california_fracking/pdfs/20140915_Bishop_letter_to_Blumenfeld_Responding_to_July_17_2014_UIC_Letter.pdf

    Or is that too liberal for you?

    Well, the Center for Biological Diversity is probably the sort of org I'd support if I was inclined to pick one in this realm. Thank you for finding the pdf!

    It should have been the starting point for sourcing, not the 3rd or 4th step back.


    Also Pyphor, it looks from a quick read through that letter that an exempt aquifer has too much suspended sediment to be drinkable.

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    MvrckMvrck Dwarven MountainhomeRegistered User regular
    The press release with the PDF was linked right in the article. The fact that you dismissed it because you didn't like the website name isn't my fault.

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    PhyphorPhyphor Building Planet Busters Tasting FruitRegistered User regular
    spool32 wrote: »
    Mvrck wrote: »
    spool32 wrote: »
    Mvrck wrote: »
    Wyoming and California have been confirmed to have been poisoned by fracking. But who cares about the California water supply, they have plenty, right?

    That CA link sure is a thing. Don't people see a catchphrase like "Real Liberal Politics" and think that the source is maybe a bit... tilted?

    Anyhow I chased the actual info to the Center for Biological Diversity, which says it "obtained" some reports from the Central Valley Regional Water Board but doesn't publish the letters - only its summary of the data. So take that as questionably reliable at best. I wish I didn't have to do this work for people willing to fling bad sources!

    The propublica source for Wyoming is legit though.

    The takeaway is that shitty companies pumping poison into groundwater might poison some wells in an aquifer, probably. This is so obvious it's almost not worth mentioning!

    I think the leap from this to Fracking Destroys Aquifers is even larger than the one from "some wells in an area of Wyoming have likely been contaminated by oil drilling" to "Wyoming is Poisoned".

    http://www.biologicaldiversity.org/campaigns/california_fracking/pdfs/20140915_Bishop_letter_to_Blumenfeld_Responding_to_July_17_2014_UIC_Letter.pdf

    Or is that too liberal for you?

    Well, the Center for Biological Diversity is probably the sort of org I'd support if I was inclined to pick one in this realm. Thank you for finding the pdf!

    It should have been the starting point for sourcing, not the 3rd or 4th step back.


    Also Pyphor, it looks from a quick read through that letter that an exempt aquifer has too much suspended sediment to be drinkable.

    Yes, but water can be used for non-drinking purposes that might also be ruined by contamination by whatever's in fracking fluids. Crop irrigration perhaps

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    spool32spool32 Contrary Library Registered User regular
    Mvrck wrote: »
    The press release with the PDF was linked right in the article. The fact that you dismissed it because you didn't like the website name isn't my fault.

    Yes it is. If you want to have a conversation about information, don't link to a silly over-dramatized inflammatory interpretation of the information and then expect those of us who don't jerk off to a jpg of blue states to dig through your shit looking for corn kernels.

    Do better - just like everyone asks me to do.

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    spool32spool32 Contrary Library Registered User regular
    Phyphor wrote: »
    spool32 wrote: »
    Mvrck wrote: »
    spool32 wrote: »
    Mvrck wrote: »
    Wyoming and California have been confirmed to have been poisoned by fracking. But who cares about the California water supply, they have plenty, right?

    That CA link sure is a thing. Don't people see a catchphrase like "Real Liberal Politics" and think that the source is maybe a bit... tilted?

    Anyhow I chased the actual info to the Center for Biological Diversity, which says it "obtained" some reports from the Central Valley Regional Water Board but doesn't publish the letters - only its summary of the data. So take that as questionably reliable at best. I wish I didn't have to do this work for people willing to fling bad sources!

    The propublica source for Wyoming is legit though.

    The takeaway is that shitty companies pumping poison into groundwater might poison some wells in an aquifer, probably. This is so obvious it's almost not worth mentioning!

    I think the leap from this to Fracking Destroys Aquifers is even larger than the one from "some wells in an area of Wyoming have likely been contaminated by oil drilling" to "Wyoming is Poisoned".

    http://www.biologicaldiversity.org/campaigns/california_fracking/pdfs/20140915_Bishop_letter_to_Blumenfeld_Responding_to_July_17_2014_UIC_Letter.pdf

    Or is that too liberal for you?

    Well, the Center for Biological Diversity is probably the sort of org I'd support if I was inclined to pick one in this realm. Thank you for finding the pdf!

    It should have been the starting point for sourcing, not the 3rd or 4th step back.


    Also Pyphor, it looks from a quick read through that letter that an exempt aquifer has too much suspended sediment to be drinkable.

    Yes, but water can be used for non-drinking purposes that might also be ruined by contamination by whatever's in fracking fluids. Crop irrigration perhaps

    Possibly. idk enough about it to speak intelligently... maybe it's so full of silt that it can't effectively be pumped through plumbing? I guess what's needed is some understanding of why the water board exempts some aquifers in the first place. You'd hope it would be for a sensible reason...

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    GooeyGooey (\/)┌¶─¶┐(\/) pinch pinchRegistered User regular
    edited January 2015
    spool32 wrote: »
    Cantelope wrote: »
    If fracking dies it may not start up again, and probably won't on the same scale. Fracking has largely been an unprofitable venture. Original estimates of profitability were all contingent on getting a certain amount of oil per well drilled. There were few sites where they actually got that. What ends up happening is that for the oil they know is there, they end up drilling three or four wells for that, which is significantly more expensive. Oil profitability varies quite a bit depending on the driller's costs, and what were seeing is that most of these frackers can't compete except when the oil price is much higher than it's been.


    As more cities move to ban fracking as more evidence comes out about the negative health consequences, the cost for borrowers to frack will increase, as that will present a greater risk. What we were already seeing before any of these low oil prices hit the scene was an industry that was largely struggling to produce any profit, and where many market participants were operating on a slight loss. I believe the fracking industry always was, and always will be a temporary phenomenon. If there is any risk that water sources or arable land was being put at risk by these activities, or that there were other non-negligible environmental concerns then effectively we've been robbing the future so that we could lose money today.


    That is not to say that there are no profitable frackers, but a large portion of the industry has just been scraping by on their ability to borrow in the hopes of performing better in the future. With the price of oil going down we are going to see bankruptcies, and the first was announced recently,


    http://www.economicpolicyjournal.com/2015/01/the-first-shale-oil-casualty-wbh-energy.html


    Edit: To backup my claim about unprofitability, note this article about Shell losing money fracking in 2013. Oil is the industry of major players, people who have lots of resources backing them. If they can't figure it out while employing the world's best and brightest geologists, you probably can't either.


    http://www.ft.com/cms/s/0/3e56228a-2ce4-11e3-8281-00144feab7de.html#axzz3OB6ldJKU

    @gooey can you speak to this?

    This thread was made for oils like you

    sure

    I'm not going to get into a debate about the morals or environmental concerns of hydraulic fracturing (fracking) because it's a no-win scenario here and minds are not going to be changed.

    But a few things:

    There is a conflation of terminology here. Fracked wells don't show steep initial production declines, shale wells do. Fracking is a well stimulation technique to open up fissures in rock. It has nothing to do with the decline profile of a well itself, the substrate in which the well is drilled does.

    The idea for fracturing rock with hydraulics is actually pretty old, and has been around conceptually since the 50s and commercially as we know it today since the 60s (fracturing wells through other means such as explosives has been around since the mid 1800s and is still in use today).

    Most shale formations show steep initial production ("IP") declines and then level off and produce at a stable decline for many (8+) years before hitting halflife (the point at which the well is estimated to have produced half of it's estimated hydrocarbons). Theoretically from then the marginal barrel of oil (read: hyrdocarbons, so oil and natural gas and natural gas liquids) becomes more and more expensive to produce.

    As far as "fracking has been an unprofitable venture". That is simply not true? Many, many companies have been raking in profits and seen fantastic growth over the last few years. The articles quoted scratch the surface but don't get into the fact that Shell's problems in the Marcellus are so much more complex than a headline.

    Shale wells ("unconventional" wells) are more expensive to drill than a conventional well due to a few factors, they are deeper than many conventional wells, they do directional drilling ("laterals", where the drillpipe in the ground is literally, gradually turned horizontally and the well extends out sideways half a mile or more) as shales are typically thinner layers of rock, and they hydraulic fracture (after a conventional explosive fracturing) the well in repeated stages along the lateral to maximize resource recovery. "Drilling three or four wells" is actually something called pad drilling, and it's a cost cutting measure. Companies decided that with good horizontal drilling techniques they could drill 4-8+ wells from the same drillpad (site where the rig sits) instead of drilling a single well, moving the rig a few hundred yards over, repeat. Imagine it like the tines of two forks, running in opposite directions, viewed from above. This way the various stages of drilling to bringing a well online can be lumped together at once and efficiencies gained, much like IT project management.

    The fact that shale wells are more expensive to drill due to all of the above is what makes the economic price of a typical shale well (~$65 on average from most credible analysts) higher than a well elsewhere where the formations are more conventional and the oil is easier to get at.

    Except that's an economic price for a new well. Producing the marginal barrel of oil from an existing well is much cheaper. Most (wise) companies will (and already have) cut back their drilling plans for 2015 and beyond to reign in spending and allow them to produce off existing wells until prices come back into a range where they can feel comfortable drilling again.

    Additionally, after the previous collapse in 2007/8 most smaller producers got wise to hedging, that is, locking in their realized price through financial instruments. Most producers have hedged production through the next ~12-18 months. From then they'll start seeing market prices, and the companies that are the most leveraged (have the highest amount of debt relative to their cashflow) will have to start selling assets to pay their bills. By then, healthier companies with healthier balance sheets will be snapping up assets like crazy at an incredible discount.

    I don't know WBH Energy, I've never heard of them and I've heard of most everyone. From what it sounds like they were drilling in the Barnett Shale, which was already one of the worst places to be drilling in as far as returns are concerned before all this mess happened. Not to mention the fact that if a few months of low prices push you into bankruptcy you were already running on the ragged edge to begin with.

    That's a start. I'll write more if you want me to.


    Gooey on
    919UOwT.png
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    MvrckMvrck Dwarven MountainhomeRegistered User regular
    spool32 wrote: »
    Phyphor wrote: »
    spool32 wrote: »
    Mvrck wrote: »
    spool32 wrote: »
    Mvrck wrote: »
    Wyoming and California have been confirmed to have been poisoned by fracking. But who cares about the California water supply, they have plenty, right?

    That CA link sure is a thing. Don't people see a catchphrase like "Real Liberal Politics" and think that the source is maybe a bit... tilted?

    Anyhow I chased the actual info to the Center for Biological Diversity, which says it "obtained" some reports from the Central Valley Regional Water Board but doesn't publish the letters - only its summary of the data. So take that as questionably reliable at best. I wish I didn't have to do this work for people willing to fling bad sources!

    The propublica source for Wyoming is legit though.

    The takeaway is that shitty companies pumping poison into groundwater might poison some wells in an aquifer, probably. This is so obvious it's almost not worth mentioning!

    I think the leap from this to Fracking Destroys Aquifers is even larger than the one from "some wells in an area of Wyoming have likely been contaminated by oil drilling" to "Wyoming is Poisoned".

    http://www.biologicaldiversity.org/campaigns/california_fracking/pdfs/20140915_Bishop_letter_to_Blumenfeld_Responding_to_July_17_2014_UIC_Letter.pdf

    Or is that too liberal for you?

    Well, the Center for Biological Diversity is probably the sort of org I'd support if I was inclined to pick one in this realm. Thank you for finding the pdf!

    It should have been the starting point for sourcing, not the 3rd or 4th step back.


    Also Pyphor, it looks from a quick read through that letter that an exempt aquifer has too much suspended sediment to be drinkable.

    Yes, but water can be used for non-drinking purposes that might also be ruined by contamination by whatever's in fracking fluids. Crop irrigration perhaps

    Possibly. idk enough about it to speak intelligently... maybe it's so full of silt that it can't effectively be pumped through plumbing? I guess what's needed is some understanding of why the water board exempts some aquifers in the first place. You'd hope it would be for a sensible reason...

    $$$$$$

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    PolaritiePolaritie Sleepy Registered User regular
    Is hydraulic just easier/cheaper than explosives, or does it have other benefits for production?

    Is there a particular reason to use something besides water for the process? (The idea that toxins are being pumped deep under the water table for minimal benefit is concerning, since a leak is a question of when, not if)

    ND will continue to have crazy low unemployment, but boom town hiring will stop as companies slow down then? (So, people with jobs are probably okay, people looking are going to find.prospects drying up?)

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    Dis'Dis' Registered User regular
    Polaritie wrote: »
    Is hydraulic just easier/cheaper than explosives, or does it have other benefits for production?

    Is there a particular reason to use something besides water for the process? (The idea that toxins are being pumped deep under the water table for minimal benefit is concerning, since a leak is a question of when, not if)

    ND will continue to have crazy low unemployment, but boom town hiring will stop as companies slow down then? (So, people with jobs are probably okay, people looking are going to find.prospects drying up?)

    It's difficult to thread a explosive down a bore like you can send pressurised liquids and I think the fracturing profile will be different due to the more granular nature of explosive ignition.

    You need to use something other than water to hold/develop the fractures you induced in the rock formation open for a start, and the chemicals sent down the well have a vast range of intended usage: killing off bacteria, changing the viscosity profile of the fluid, preventing scale in your pipe, adjusting the thermal profile, acids to further break down the fracture rocks, etc.

    Seems likely, though the magnitude of the effect is hard to predict. We're already seeing a start of that sort of thing in the UK oil industry.

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    DiorinixDiorinix Registered User regular
    Polaritie wrote: »
    Is hydraulic just easier/cheaper than explosives, or does it have other benefits for production?

    Is there a particular reason to use something besides water for the process? (The idea that toxins are being pumped deep under the water table for minimal benefit is concerning, since a leak is a question of when, not if)

    ND will continue to have crazy low unemployment, but boom town hiring will stop as companies slow down then? (So, people with jobs are probably okay, people looking are going to find.prospects drying up?)

    Explosives are used to create the initial perforations to guide the frac. However, what I imagine you're asking is like trying to set off a subterranean explosion. The immense formation pressure will just close back in on itself - this is why fracks have sand pills pumped down. To hold the fractures open after the pressure drops.

    Water is used primarily because it's cheap. Other methods are being explored (just for example, my company was involved in a project where the oil company substituted liquid propane as the fluid), but the costs and risks aren't typically worth it. But the upsides to fracking a well is not insignificant. As Gooey pointed out, fracked wells significantly out-produce non fracked shale. Guess where the majority of exploration has been down in the US over the last half-decade? Yup, shale.

    Jobs that are in the drilling, completion, or servicing side of the oil and gas industry are going to get cut. Plant and refinery jobs are safe for a while.

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    GooeyGooey (\/)┌¶─¶┐(\/) pinch pinchRegistered User regular
    edited January 2015
    Sorry to cut up your post, I hate when people do that to me but I think it's easier to answer questions directly this way.
    Polaritie wrote: »
    Is hydraulic just easier/cheaper than explosives, or does it have other benefits for production?

    They just accomplish different goals. Initially an explosive charge is lowered into the well (a "gun") which perforates the casing (pipe that has been put in place after the well has been drilled), and allows hydrocarbons to flow freely into the wellbore. In a conventional oil formation this would be enough to allow the well to produce freely at an acceptable rate.

    Hydraulic fracturing takes it to the next step. Oil doesnt sit in the ground like an underground lake, it sits inside permeable rock. If you have some of those stone coasters it's kind of like that after a drink has been sweaty on it for a while - the stone is wet but it's not got a cavern inside where the water has accumulated. By hitting the rock with hydraulic pressure you can create and open up existing fractures in the rock, which further allow hydrocarbons to flow into the well. That way you access all of that wet coaster instead of one spot.
    Is there a particular reason to use something besides water for the process? (The idea that toxins are being pumped deep under the water table for minimal benefit is concerning, since a leak is a question of when, not if)

    Fracking chemicals both improve the performance of the fracking itself (make fissures longer and wider) and allow the suspension of proppants (sand or other particulate) that hold the fractures open. Since wells are under immense pressure from the ~10,000 feet of rock sitting ontop of them, some of the fissures created through hydrofracking may not stay open once pressure is released unless you wedge a proppant into the fracture to hold it open.
    ND will continue to have crazy low unemployment, but boom town hiring will stop as companies slow down then? (So, people with jobs are probably okay, people looking are going to find.prospects drying up?)

    This is a tough one. Drillers and other oilfield service companies are the tail end of the whip as far as swings in the industry are concerned. They will be hit hardest as upstream companies (producers that actually own the wells) will simply stop hiring them to drill wells. Certain counties in the Bakken (North Dakota formation) are very economic, all the way down to ~$30 reportedly, so they may not take it on the chin quite as hard depending on where they are located. I think it's wise to expect some amount of contraction, especially as noted above in oilfield service companies and also tangential industries (wellsite housing, trucking, etc.)

    Gooey on
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    [Expletive deleted][Expletive deleted] The mediocre doctor NorwayRegistered User regular
    On the topic of the economic impact of the falling oil prices: This has been major news in the national press in my country (Norway) lately. Norway is a major oil and natural gas exporter, and there is heavy speculation as to how this will affect us.

    The short answer: badly, but not super badly. We can expect a slight rise in unemployment from just under 4% to just over 4%. We can expect decreased investments by the oil sector (who finance a lot of research too, including my current position as an assoc. prof). We can expect lower interest rates. We should shortly expect the price of imported goods (food, clothes, electronics, assorted mfg goods) to increase. On the plus side, our fish farms should do very well due to decreased costs.

    Overall, though, we should be able to weather this fine unless the price drop is permanent.

    Sic transit gloria mundi.
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    DehumanizedDehumanized Registered User regular
    I strongly doubt it will be. Eventually OPEC will decide they've done enough damage to their economic rivals and get back to maximizing their own profits.

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    Casually HardcoreCasually Hardcore Once an Asshole. Trying to be better. Registered User regular
    Okay, can we please check the sources of any claims of 'destroying ground water sources'. Cause that California source is just as bad as anything from conservapedia.


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    Alistair HuttonAlistair Hutton Dr EdinburghRegistered User regular
    I strongly doubt it will be. Eventually OPEC will decide they've done enough damage to their economic rivals and get back to maximizing their own profits.

    Every time the price of oil drops the whole world suddenly forgets that it has gone up and down in price in the past.

    I have a thoughtful and infrequently updated blog about games http://whatithinkaboutwhenithinkaboutgames.wordpress.com/

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    GooeyGooey (\/)┌¶─¶┐(\/) pinch pinchRegistered User regular
    I wrote something to this effect in the chat thread a while back, but I think it's useful here.

    OPEC nations are economically reliant entirely on oil and gas, and several (Iran, Venezuela, Libya, Nigeria, Iraq) are in varying states of unrest. As there is virtually none to very little activity driving GDP outside of the national oil company in these nations, low oil prices do not help their situations at all. Generally people that are in a position of power want to stay that way.

    Saudi Arabia is the big dog at the bowl in OPEC (about 1/3 of OPEC production, which is about 1/3 of global production, which is about 90 million barrels a day). Saudia Arabia has deep pockets and can weather a sustained drop in oil prices. The rest of the member nations not so much.

    I would be surprised if relations within OPEC aren't strained if this lasts.

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    joshofalltradesjoshofalltrades Class Traitor Smoke-filled roomRegistered User regular
    Gooey wrote: »
    I wrote something to this effect in the chat thread a while back, but I think it's useful here.

    OPEC nations are economically reliant entirely on oil and gas, and several (Iran, Venezuela, Libya, Nigeria, Iraq) are in varying states of unrest. As there is virtually none to very little activity driving GDP outside of the national oil company in these nations, low oil prices do not help their situations at all. Generally people that are in a position of power want to stay that way.

    Saudi Arabia is the big dog at the bowl in OPEC (about 1/3 of OPEC production, which is about 1/3 of global production, which is about 90 million barrels a day). Saudia Arabia has deep pockets and can weather a sustained drop in oil prices. The rest of the member nations not so much.

    I would be surprised if relations within OPEC aren't strained if this lasts.

    What would be the practical effects of a strained relationship among OPEC nations, in your opinion? Or would it get far enough to have any?

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    KruiteKruite Registered User regular
    It should be noted that the fraking fluid being pumped into rock formations at such high pressure that you would not leak into water tables near the surface. If that fluid finds its way into the water table it's from a shoddy cement job while sealing the well bore casing or from leaks in the temporary ponds/containment at the surface.

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    Phoenix-DPhoenix-D Registered User regular
    Kruite wrote: »
    It should be noted that the fraking fluid being pumped into rock formations at such high pressure that you would not leak into water tables near the surface. If that fluid finds its way into the water table it's from a shoddy cement job while sealing the well bore casing or from leaks in the temporary ponds/containment at the surface.

    Or from waste discharge.

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    Casually HardcoreCasually Hardcore Once an Asshole. Trying to be better. Registered User regular
    What do you mean by waste discharge?

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    KruiteKruite Registered User regular
    What do you mean by waste discharge?

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    CantelopeCantelope Registered User regular
    edited January 2015
    There may be profitable frackers, but in many cases the people who will be going out of business are large numbers of relatively small names you've never heard of. This is partially for liability reasons. That is, a lot of people with big money in the energy extraction industry don't want in on these risky ventures, or if they are offering money for someone else to do it they don't want any legal liability, and a lot of the fracking industry is small risky ventures. There was a lot of credit extended to small time players without proper due diligence by finance types.


    A lot of these busts would happen even without any changes in the oil price, it's just a matter of time. It's a young industry, and whenever any industry is young finance types have no idea what valuable metrics are. They don't understand either the metrics themselves or the reliability of them. A ton of money gets thrown at people that do not deserve it, because financiers are often prone to fads and worry about not getting in on the next big thing. A lot of money has been thrown at people in the industry who have been losing money, and this is just a catalyst that would send them out anyways.



    Environmental concerns do not seem to be negligible. Meaning there is an economic cost/risk that is not being addressed. When it is addressed we won't know how until it happens, and so we've no clue what that will mean for industry profitability. Additionally, the fact that it can be done safely and without contaminating water is different from the reality of whether or not it will be done safely in the majority of cases and what the potential risk is in cases where it fails (note, I'm skeptical of this being a fact, I'm just stating it for the argument). American businessmen are not exactly known for their honor, to expect that the public will not at some point want some heavy handed regulation due to bad actors who do shoddy work to save a buck is in my opinion wishful thinking.


    I'm not saying there will not be fracking. But when regulation and market forces catch up to the reality of what is going on out there in the industry, it will shrink. Right now it's primarily market forces at work, and we shouldn't be surprised if a lot of the bankruptcies are people fracking in particularly difficult to frack places. A lot of those cases it will be obvious in hindsight that no one ever should have lent them the money to do it in the first place.

    Cantelope on
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    durandal4532durandal4532 Registered User regular
    Oh, what I meant by "Fracking destroys aquifers" is that fracking is provided with extensive state-based exemptions to laws protecting aquifers which are not currently in use to provide drinking water. I am reasonably certain that once fresh water has been injected with waste material, it is effectively no longer considered "fresh".

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    Casually HardcoreCasually Hardcore Once an Asshole. Trying to be better. Registered User regular
    I'm not sure what's going on in California, but there's no aquafiers being frac into in ND. Unless you're including the lodgepole formation that has a high water content. Though, I wouldn't drink anything from the lodgepole because it also has a high petroleum content and was drilled into back in the eighties for oil.

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    PolaritiePolaritie Sleepy Registered User regular
    Kruite wrote: »
    It should be noted that the fraking fluid being pumped into rock formations at such high pressure that you would not leak into water tables near the surface. If that fluid finds its way into the water table it's from a shoddy cement job while sealing the well bore casing or from leaks in the temporary ponds/containment at the surface.

    Law of large numbers. Failure is a certainty, the question is when (and I guess whether the well shuts down first... and has no crazy toxic residues left in it, etc. because companies won't pay to clean stuff up if they don't have to really).

    I don't get why so much toxic stuff needs to be in the fluid. Or why companies aren't required to say exactly what they're pumping.

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    Casually HardcoreCasually Hardcore Once an Asshole. Trying to be better. Registered User regular
    edited January 2015
    Okay, how are we defining so much? Cause a good time 99% of it is water and guar.

    Seriously, for every liter of Frac fluid I've seen there's like 5 drops of biocide in it.


    Check it out for yourself

    https://fracfocus.org

    Casually Hardcore on
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    CantidoCantido Registered User regular
    Rchanen wrote: »

    Fuck you Texas, this is a good thing*

    *And not a substitute for continued investment in green technology.

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    Dis'Dis' Registered User regular
    Rchanen wrote: »

    Positing that it'll vary between $20 (est. break even point for many conventional fields) and $50 (est. break even point for many unconventional) doesn't take into account exploration and development costs, and assumes unlimited unconventional capacity at $50 in the event of rising consumption. Seems off to me.

    The idea that unconventional plays will naturally be very boom/bust is being bandied else and seems more likely. Regions and States with high production costs should be putting their oil tax money into long term funds/capital expenditures rather than using it on short term expenses or dropping taxes.

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    Regina FongRegina Fong Allons-y, Alonso Registered User regular
    Surfpossum wrote: »
    My understanding of fracking (which is incredibly limited and based primarily off of opinions my geophysics friend has) is that the effects are primarily good, since they relieve buildup that would potentially result in larger quakes or something like that.

    The bad stuff comes from all the top-secret junk that gets used in fracking fluid, which tends to be literally poison or somesuch.

    Is this incorrect?

    When fracking is done properly there is almost no chance of the fluid entering groundwater (fracking wells are much deeper than any aquifer). Things get dicier when you're doing it underwater or when regulations start getting lax (or both).

    The real danger is that oil companies are always pushing back against regulation and oversight, and the current boom has no doubt hilariously overtaxed whatever government oversight exists.

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    a5ehrena5ehren AtlantaRegistered User regular
    Surfpossum wrote: »
    My understanding of fracking (which is incredibly limited and based primarily off of opinions my geophysics friend has) is that the effects are primarily good, since they relieve buildup that would potentially result in larger quakes or something like that.

    The bad stuff comes from all the top-secret junk that gets used in fracking fluid, which tends to be literally poison or somesuch.

    Is this incorrect?

    When fracking is done properly there is almost no chance of the fluid entering groundwater (fracking wells are much deeper than any aquifer). Things get dicier when you're doing it underwater or when regulations start getting lax (or both).

    The real danger is that oil companies are always pushing back against regulation and oversight, and the current boom has no doubt hilariously overtaxed whatever government oversight exists.

    My understanding (from a layman's perspective) is that most groundwater contamination at this point is from improper disposal of the fluid that comes back to the surface. But I might be wrong on that.

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    HappylilElfHappylilElf Registered User regular
    a5ehren wrote: »
    Surfpossum wrote: »
    My understanding of fracking (which is incredibly limited and based primarily off of opinions my geophysics friend has) is that the effects are primarily good, since they relieve buildup that would potentially result in larger quakes or something like that.

    The bad stuff comes from all the top-secret junk that gets used in fracking fluid, which tends to be literally poison or somesuch.

    Is this incorrect?

    When fracking is done properly there is almost no chance of the fluid entering groundwater (fracking wells are much deeper than any aquifer). Things get dicier when you're doing it underwater or when regulations start getting lax (or both).

    The real danger is that oil companies are always pushing back against regulation and oversight, and the current boom has no doubt hilariously overtaxed whatever government oversight exists.

    My understanding (from a layman's perspective) is that most groundwater contamination at this point is from improper disposal of the fluid that comes back to the surface. But I might be wrong on that.

    that or shoddy well construction are the two biggies iirc

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    DiorinixDiorinix Registered User regular
    Of the two pathways, improper disposal/storage is more heavily weighted to the likelihood of contamination. 75/25 I'll say.

    Reason being that if a well has poor construction, the fluid loss isn't going to be isolated to JUST where the fresh water table is - it'll be gone into other poorly cemented zones as it works it's way back up the casing from the end of the frac string.

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    joshofalltradesjoshofalltrades Class Traitor Smoke-filled roomRegistered User regular
    There's a bill getting sponsored by Lisa Murkowski (R-AK) to allow the US to export its oil. I'm no export on oil macroeconomics, but after looking up her voting record she's actually not bad, as Republicans go. The expected effects of such a deal would lower global oil prices and raise the US' somewhat. I can't say that would be a bad thing; higher prices at the pump means smarter driving habits and more research into renewable energy sources. Like I said though, it may have unexpected results that I'm not seeing.

    All that said, I wouldn't expect the bill to pass right now anyway. WTI is down below $50 again, which is having the expected bust effects.

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