Got Gas? U.S. Economy to Worsen as Gas Prices Skyrocket

[Londo_Jowo]

Why is Mcowed addressing a person he claims to have on ignore? His discussion skills are so weak that he is ok getting in trollish jabs but cannot tolerate a response?

Guaranteed McOwned reads all the posts which causes him to go into a hissy fit and post many off the wall articles that very rarely back up his claims.

 

[Doppel]

Just got word from a friend that the domestic Oil Company Thugs have sprung a plan to pull out of the retail business in the U.S. to replace with Foreign owned operations. They expect to at least quadruple gas prices and profits.

I'll post more when I get more info.

This will be huge.

Mcowned, any update on this "friend" and the quadrupling of oil prices? I really think you should not be putting such absolutely idiotic drivel into this thread without backing it up in some manner. It really pulls the thread down to a level of complete stupidity and you must be held accountable for it.

I would not claim that a friend had said gas will go to $.01 gallon without either corroborating it or expecting to be laughed at for a fool.

So, step up.

 

[dmcowen674]

Their plans on getting maximum profit for incompetence paying off big time.

Remember they have purposely permanently closed 8 Refineries this year so far.

3-13-2013

http://www.fool.com/investing/general/2013/03/13/eia-petroleum-status-report.aspx

U.S. Crude Oil Refineries Hit 2-Year Capacity Low



Refinery output dropped to 81% capacity for a new two-year low.


U.S. crude oil inventories rose 1.2% to 384 million for the week ending March 8, according to an Energy Information Administration report (link opens a PDF) released today. The EIA notes that this level is "well above the upper limit of the average range for this time of year."




According to The Wall Street Journal, a production pullback by refineries in 2013 has caused gasoline inventories to drop dramatically compared with crude oil trends.

 

[Doppel]

Their plans on getting maximum profit for incompetence paying off big time.

Remember they have purposely permanently closed 8 Refineries this year so far.

3-13-2013

http://www.fool.com/investing/general/2013/03/13/eia-petroleum-status-report.aspx

U.S. Crude Oil Refineries Hit 2-Year Capacity Low



Refinery output dropped to 81% capacity for a new two-year low.


U.S. crude oil inventories rose 1.2% to 384 million for the week ending March 8, according to an Energy Information Administration report (link opens a PDF) released today. The EIA notes that this level is "well above the upper limit of the average range for this time of year."




According to The Wall Street Journal, a production pullback by refineries in 2013 has caused gasoline inventories to drop dramatically compared with crude oil trends.

That's a rehash of yesterday's spam link you posted, mcowned. Stop posting.

 

[dmcowen674]

3-14-2013

http://finance.yahoo.com/news/oil-rises-despite-ample-crude-supplies-095957829--finance.html

Oil rises despite ample crude supplies



Oil prices rose Thursday ahead of the release of employment data in the U.S. although the increase was kept in check by ample crude supplies and worries about the eurozone economy.


The Labor Department will release weekly jobless claims later in the day. A brightening employment picture in the U.S. helped propel the Dow Jones industrial average to a record high earlier this month.


On Wednesday, the Energy Department's Energy Information Administration said crude supplies rose by 2.6 million barrels to 384 million barrels for the week ended March 8. Analysts had expected an increase of 2.3 million barrels.



The increase puts oil in storage 10.5 percent higher than levels one year earlier.


Sickly European economies are also keeping oil prices down.

Brent crude, used to price many kinds of oil imported by U.S. refineries, rose 8 cents to $108.60 a barrel on the ICE Futures exchange in London.

 

[Londo_Jowo]

3-14-2013

http://finance.yahoo.com/news/oil-rises-despite-ample-crude-supplies-095957829--finance.html

Oil rises despite ample crude supplies



Oil prices rose Thursday ahead of the release of employment data in the U.S. although the increase was kept in check by ample crude supplies and worries about the eurozone economy.


The Labor Department will release weekly jobless claims later in the day. A brightening employment picture in the U.S. helped propel the Dow Jones industrial average to a record high earlier this month.


On Wednesday, the Energy Department's Energy Information Administration said crude supplies rose by 2.6 million barrels to 384 million barrels for the week ended March 8. Analysts had expected an increase of 2.3 million barrels.



The increase puts oil in storage 10.5 percent higher than levels one year earlier.


Sickly European economies are also keeping oil prices down.

Brent crude, used to price many kinds of oil imported by U.S. refineries, rose 8 cents to $108.60 a barrel on the ICE Futures exchange in London.

Wow, oil rose a whole 12 cents

Benchmark oil for April delivery was up 12 cents to $92.64 per barrel at late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract fell 2 cents to close $92.52 on the Nymex on Wednesday.

Yet, it's lower than $93.03 that you posted two days ago.

Oil rising fast

Crude Oil Apr 13 (CLJ13.NYM)

-NY Mercantile

93.03

0.97(1.05%) 12:06PM EDT


3-12-2013

 

[dmcowen674]

Bolded the Stock Market Scamming and Trickery by the Oil Thugs:

3-15-2013

http://www.marketwatch.com/story/oil-adds-to-advance-ahead-of-us-data-2013-03-15?siteid=yhoof2

Oil adds to advance ahead of U.S. data



Oil futures climbed further uphill in electronic trading Friday, with U.S. economic data among the possible market drivers later in the day.
Crude oil for April delivery CLJ3 +0.13% gained 25 cents, or 0.3%, to trade at $93.28 a barrel during East Asia hours.

The move extended April crude’s 51-cent rise in Thursday’s New York Mercantile Exchange session, buoyed by a surprise drop in weekly jobless claims.

For the near term, GFT Markets technical analyst Fawad Razaqzada said late Thursday that Nymex crude “remains in ‘sell the rallies’ mode” until it can break above the $93.50 resistance level.

As for the possible downside, Razaqzada said it “has so far been limited to the 200-day moving average around $90. Once [the] price breaks out of this range, then we could see a sharp move in that direction.”

Such a breakout from Nymex crude’s recent range could happen based on U.S. data, he said. Among other indicators, the U.S. is due to announce February retail inflation and industrial production numbers, along with consumer-sentiment data.

However, Razaqzada added that “it is difficult to see [Nymex crude] rally past the $95 resistance without the bulls having to chop some wood. But with the weekend fast approaching, expect some sideways price action.”

 

[dmcowen674]

How the fuck can there by supply worries with the U.S. swimming in oil going back by decades.

Lying Mother Fuckers

Bolded all the Stock market bullshit too

3-15-2013

http://news.yahoo.com/3-oil-above-109-u-094113349.html

Oil above $109 on U.S. recovery hopes, supply worries



* Jobless claims data show labour market recovery gaining traction


* U.S. senators introduce bill to approve Keystone XL pipeline


* Obama says Iran more than a year away from nuclear weapon



Brent crude oil rose above $109 a barrel on Friday as strong U.S. jobs data fuelled hopes of a better outlook for demand in the world's top oil consumer, while concerns over supply from the Middle East added support.


Investors took on more risk as the jobs data added to other positive economic news, suggesting a steady recovery in the world's largest economy.


Oil got a further boost after President Barack Obama said military force remained an option if sanctions and diplomacy failed to thwart Iran's nuclear ambitions.


Brent crude was up 30 cents at $109.26 per barrel by 0935 GMT, gaining for a second day after snapping four straight days of losses. The April contract, which expired on Thursday, settled 90 cents higher, but the benchmark was poised for its fourth weekly decline in five weeks.


U.S. oil gained 15 cents to $93.18 per barrel, and was set to post its second straight week of gains.




Beyond fundamental factors of demand growth and supply concerns, U.S. oil is gaining faster than Brent because investors are unwinding positions on the spread of the two contracts .


The difference has narrowed nearly $8 a barrel after touching $23.45 on Feb. 8, the widest since end-November.

The U.S. benchmark benefiting from work on a key oil pipeline that will help ease an oil glut in the Midwest of the United States from a drilling boom.

 

[Doppel]

How the fuck can there by supply worries with the U.S. swimming in oil going back by decades.

Lying Mother Fuckers

Bolded all the Stock market bullshit too

Mcowen, how can you criticize others for perceived lies when you fill this thread with your bull? Speaking of lying, where is this friend of yours who claimed a quadrupling of oil prices?

 

[dmcowen674]

Don't listen to the Oil Thug bullshit and their supporters on here that there isn't enough Oil leases.

If there wasn't enough how can the rig count be going up?

Oh and of course Republicans say Obama is holding back the leases.

Notice the number is 1776

3-15-2013

http://news.yahoo.com/us-rig-count-jumps-24-174429760.html

US rig count jumps 24 this week to 1,776


US rig count up 24 this week to total 1,776, but down more than 200 from a year ago



Oilfield services company Baker Hughes Inc. says the number of rigs actively exploring for oil and natural gas in the U.S. has increased by 24 this week to 1,776.


The Houston-based company said in its weekly report Friday that 1,341 rigs were actively exploring for oil and 431 for gas. Four were listed as miscellaneous. A year ago, Baker Hughes counted 1,984 working rigs.


Of the major oil- and gas-producing states, Louisiana gained eight rigs, Oklahoma seven, Texas three, New Mexico and Pennsylvania two each, and North Dakota and Wyoming one apiece. West Virginia was down one. Alaska, Arkansas, California and Colorado were unchanged.


The rig count peaked at 4,530 in 1981 and bottomed at 488 in 1999.

 

[Doppel]

Don't listen to the Oil Thug bullshit and their supporters on here that there isn't enough Oil leases.

If there wasn't enough how can the rig count be going up?

Oh and of course Republicans say Obama is holding back the leases.

Notice the number is 1776

Mcowned, where is this friend you lied about with the quadrupling of gas prices?

 

[Londo_Jowo]

I heard through the grapevine McOwned will be happy and Chicago will pay higher prices during the month of May and part of June due to a refinery in the Chicago area shutting down for maintenance and shifting to summer/specialized blends required in Chicago.

 

[Londo_Jowo]

Oilfield services company Baker Hughes Inc. says the number of rigs actively exploring for oil and natural gas in the U.S. has increased by 24 this week to 1,776.

Only McOwned would take this as rigs that are already producing oil and natural gas.

 

[Doppel]

I heard through the grapevine McOwned will be happy and Chicago will pay higher prices during the month of May and part of June due to a refinery in the Chicago area shutting down for maintenance and shifting to summer/specialized blends required in Chicago.

Maybe if prices are higher he can be happy again. After all, with Chicago now dropping the price of gas over the past three weeks, it can't be pleasing to him.

http://chicagogasprices.com/retail_price_chart.aspx

 

[dmcowen674]

3-17-2013

http://news.yahoo.com/keystone-fears-resonate-along-england-175152111.html

Keystone fears resonate along New England pipeline



The Canadian energy industry insists it has no plans to reverse the flow of a pipeline that carries crude oil from Maine to Montreal, but that has done little to reassure New England towns that oppose the idea and the 18 members of Congress asking for a full environmental review.


Environmentalists in the U.S. and Canada started raising the alarm about oil they call "tar sands" or "oil sands" being moved through northern New England several months ago.


"It's a climate-destructive fuel, and Vermont is committed to clean energy," said Jim Murphy, of the National Wildlife Federation. "We don't want to be the pass-through for climate-destructive fuel."

The Portland Montreal Pipe Line carries foreign crude oil from tankers docked in Portland, Maine, inland to eastern Canada, which imports most of its oil and has refineries there. But as the Canadian energy industry tries to figure out how to profit from new technology allowing them to exploit vast oil reserves in Alberta, it's already looking at ways to ship it east — and, opponents fear, abroad through the Portland conduit.


Opponents claim moving the Alberta oil through the aging Portland-Montreal pipeline would a threat because it is thicker and more corrosive than the regular crude it now carries, making it more likely to spill and cause an environmental disaster. The oil in question is the same kind that would flow through a controversial extension of the major Keystone pipeline in the central and western U.S.

"If they find any way at all to get oil sands oil to the eastern Canadian refineries, then I think somebody will argue, 'Let's reverse the Portland-Montreal pipeline because we don't need (that) crude anymore," said David Runnalls, an energy expert with the Centre for International Governance Innovation, a Canadian think tank.

The CEO of the Maine company that owns the pipeline would welcome the opportunity to find new business uses for the 24-inch pipeline, built in the 1950s, which runs through towns in Maine, New Hampshire and Vermont.

He has made that pitch in media interviews in the United States and Canada, as well as last month to the Vermont Legislature, but hasn't specifically proposed reversing the flow.

Raising suspicions of the plans — or lack thereof — is that Calgary-based Enbridge Pipelines Inc. is seeking regulatory working to reverse the flow of another pipeline from Ontario and Montreal, known as Line 9, to carry oil from western Canada to Quebec refineries.

There was a brief effort to reverse the Portland-Montreal pipeline in 2008, but it was abandoned during the economic downturn.


The Canadian oil industry has invested at least $50 billion in Alberta oil.


"If you connect the dots, there's huge interest in moving oil out of Alberta, and where is it going to go?" said Sandra Levine, an attorney with the Vermont office of the Conservation Law Foundation, one of the groups fighting the possible reversal of the pipeline.


The issue has gotten the attention of the members of the U.S. House and Senate, all Democrats save one independent, from as far away as Arizona, who have asked Secretary of State John Kerry to require a comprehensive environmental impact statement should the Portland Pipeline Corp. seek to reverse the flow.

 

[dmcowen674]

Here come the excuses as promised a month ago for the extreme price increase we will see this summer.

My friend works at one of the remaining refineries on the East Coast and they saw this coming a month ago when they couldn't get any Ethanol.

Well they could get it but they aren't going to pay the nearly 1000 percent higher price being asked.

Look for at least $6 gas, possibly $8 in high blend Markets like Chicago and LA he said.

3-18-2013

http://www.bloomberg.com/news/2013-...w-average-output-buoys-prices.html?cmpid=yhoo

Ethanol Outpaces Gasoline as Below-Average Output Buoys Prices

Ethanol outpaced gasoline on speculation that low production rates will stem price declines.


The price difference, or spread, narrowed 0.43 cent to 53.05 cents a gallon at 10:23 a.m. New York time. Production averaged 797,000 barrels a day in the week ended March 8, according to the Energy Information Administration, down 11 percent from a year earlier and the lowest level for this time of year in records begun in June 2010.


“Production in the biofuel markets isn’t rebounding as much as we thought,” said Terry Reilly, senior commodity analyst at Futures International LLC in Chicago.


Denatured ethanol for April delivery fell 1.6 cent, or 0.6 percent, to $2.613 a gallon on the Chicago Board of Trade.



Prices have gained 19 percent this year.


http://www.bloomberg.com/news/2013-...d-ethanol-credits-valero-says.html?cmpid=yhoo

Refiners Pay Price as Traders Hoard Ethanol Credits, Valero Says



Gasoline prices will remain higher for consumers as energy traders “hoard” biofuel credits that refiners are using to meet U.S. ethanol requirements, said Bill Klesse, chairman and chief executive officer of Valero Energy Corp


Refiners including Valero, the world’s largest independent refiner, Exxon Mobil Corp. and CVR Energy Inc. (CVI) are pushing the Environmental Protection Agency to reduce the amount of ethanol they’re required to add to gasoline to avoid what they say will be a sharp spike in prices at the pump just as the summer driving season begins.

Fuel processors buy biofuel credits that are available as an alternative to actually blending ethanol into gasoline.

The cost of those credits has ballooned tenfold as the 2013 federal mandate for biofuel exceeds what the market can absorb, refiners say.

Energy traders and companies that blend gasoline and ethanol are buying and holding on to the credits, expecting prices to go higher and making the credits harder to get, Klesse said in an interview at a refining conference in San Antonio today.

“You have traders hoarding,” Klesse said at the annual gathering of the American Fuel and Petrochemical Manufacturers, or AFPM, a refining trade group. “We’re going to pass it on, one way or another.

Rising Price

The price for RINS rose 963 percent to 75.5 cents March 15 from 7.1 cents on January 8, according to data compiled by Bloomberg.



A RIN price of $1 translates into an additional cost of 10 cents per gallon of gasoline, Valero’s Klesse said.


Without prompt action by the EPA to curb the biofuels requirement, consumers face higher pump prices as refiners pass along the extra cost of RINs, or avoid the problem by increasing exports, which also will raise prices by reducing U.S. gasoline supplies, Klesse said.

 

[Londo_Jowo]

Here come the excuses as promised a month ago for the extreme price increase we will see this summer.

My friend works at one of the remaining refineries on the East Coast and they saw this coming a month ago when they couldn't get any Ethanol.

Well they could get it but they aren't going to pay the nearly 1000 percent higher price being asked.

Look for at least $6 gas, possibly $8 in high blend Markets like Chicago and LA he said.

3-18-2013

http://www.bloomberg.com/news/2013-...w-average-output-buoys-prices.html?cmpid=yhoo

Ethanol Outpaces Gasoline as Below-Average Output Buoys Prices

Ethanol outpaced gasoline on speculation that low production rates will stem price declines.


The price difference, or spread, narrowed 0.43 cent to 53.05 cents a gallon at 10:23 a.m. New York time. Production averaged 797,000 barrels a day in the week ended March 8, according to the Energy Information Administration, down 11 percent from a year earlier and the lowest level for this time of year in records begun in June 2010.


“Production in the biofuel markets isn’t rebounding as much as we thought,” said Terry Reilly, senior commodity analyst at Futures International LLC in Chicago.


Denatured ethanol for April delivery fell 1.6 cent, or 0.6 percent, to $2.613 a gallon on the Chicago Board of Trade.



Prices have gained 19 percent this year.


http://www.bloomberg.com/news/2013-...d-ethanol-credits-valero-says.html?cmpid=yhoo

Refiners Pay Price as Traders Hoard Ethanol Credits, Valero Says



Gasoline prices will remain higher for consumers as energy traders “hoard” biofuel credits that refiners are using to meet U.S. ethanol requirements, said Bill Klesse, chairman and chief executive officer of Valero Energy Corp


Refiners including Valero, the world’s largest independent refiner, Exxon Mobil Corp. and CVR Energy Inc. (CVI) are pushing the Environmental Protection Agency to reduce the amount of ethanol they’re required to add to gasoline to avoid what they say will be a sharp spike in prices at the pump just as the summer driving season begins.

Fuel processors buy biofuel credits that are available as an alternative to actually blending ethanol into gasoline.

The cost of those credits has ballooned tenfold as the 2013 federal mandate for biofuel exceeds what the market can absorb, refiners say.

Energy traders and companies that blend gasoline and ethanol are buying and holding on to the credits, expecting prices to go higher and making the credits harder to get, Klesse said in an interview at a refining conference in San Antonio today.

“You have traders hoarding,” Klesse said at the annual gathering of the American Fuel and Petrochemical Manufacturers, or AFPM, a refining trade group. “We’re going to pass it on, one way or another.

Rising Price

The price for RINS rose 963 percent to 75.5 cents March 15 from 7.1 cents on January 8, according to data compiled by Bloomberg.



A RIN price of $1 translates into an additional cost of 10 cents per gallon of gasoline, Valero’s Klesse said.


Without prompt action by the EPA to curb the biofuels requirement, consumers face higher pump prices as refiners pass along the extra cost of RINs, or avoid the problem by increasing exports, which also will raise prices by reducing U.S. gasoline supplies, Klesse said.

So in other words your hate and anger directed towards refiners is misdirected. You instead should direct your hate and anger where it belongs.......the government and biofuel hoarders.

 

[dmcowen674]

3-18-2013

http://blogs.marketwatch.com/energy-ticker/2013/03/18/north-dakotas-oil-production-reaches-record/

North Dakota’s oil production reaches record



North Dakota’s crude-oil production reached a record 770,000 barrels a day on average in December, the Energy Information Administration said Monday.


Annual production in the home of the Bakken formation more than doubled between 2010 and 2012 through the use of hydraulic fracturing, or fracking, and horizontal drilling. Almost 95%


North Dakota is the No. 2 crude producing state after Texas. It accounted for 10% of the U.S. production.

Much of the oil leaves the state by trucks to rail. Bakken oil trades at a discount in relation to “Texas tea” West Texas Intermediate, the benchmark oil traded in the New York Mercantile Exchange, due at least in part to transportation hiccups.


Some 75% of production in the four counties where oil production concentrates is transported by truck — which can become dicey very quickly. A blizzard warning is in effect for southeast North Dakota on Monday, the National Weather Service said.


Inclement weather caused the November production to fall slightly from October because of weather-related transportation problems. Harsh weather has also interfered with production in January.

 

[dmcowen674]

But wait, there's more

There always is with this Thug Oil Industry

To make sure gas prices will be as high as possible and even though there is plenty of oil, still have to have the excuse to throw out there to the gullible Americans

3-18-2013

http://www.nytimes.com/2004/12/07/business/07opec.html?partner=yahoofinance&_r=0

OPEC May Weigh Cutting Some Production



Oil prices have been at record highs this year, with money flowing into the coffers of oil producers thanks to the world's growing thirst for oil.



Now, because of OPEC's efforts, there is more oil on the market than is needed to meet demand. With the group's production at its highest in 25 years, some producers fear oil prices will tumble as demand slows next year in the wake of high prices and a usual seasonal brake in the second quarter. This means OPEC may be tempted to act pre-emptively and reduce output.


"As an oil producer, OPEC wants to make sure that all the risk is on the upside," said Manouchehr Takin, an oil analyst at the Center for Global Energy Studies in London. "They'll want to cut output in anticipation."

Saudi Arabia increased its daily production to 9.5 million barrels in recent months, producing way above its quota of 8.5 million barrels. It is also drawing up plans to increase its sustainable capacity to 12.5 million barrels a day in the next few years, from 11 million barrels now.


"We are doing what we can, we are doing our best, but we are going to do some more," Ali al-Naimi, the Saudi oil minister, told a conference at the Royal Institute of International Affairs in London on Nov. 29, according to Reuters. For now, he said, "There is no shortage of supply in the market."

One factor that weighs on OPEC's debate is that oil inventories, or commercial oil stocks in consuming nations, are rising.

That could mean an oversupply of 400,000 barrels a day this quarter, said Cambridge Energy Research Associates, an energy consultant.

 

[cybrsage]

dmcowen, are you angry that the oil industry employs tens of thousands of people? Just trying to find out what about them makes you hate them so much. People earning money seems to be something you despise, so I am starting there.

 

[dmcowen674]

dmcowen, are you angry that the oil industry employs tens of thousands of people? Just trying to find out what about them makes you hate them so much. People earning money seems to be something you despise, so I am starting there.

Tens of thousands of incompetent people.

They should all be fired and hire people that are capable of doing the job properly.

 

[Londo_Jowo]

Tens of thousands of incompetent people.

They should all be fired and hire people that are capable of doing the job properly.

So says the person that has no clue how to perform the said workers job.

 

[cybrsage]

Tens of thousands of incompetent people.

They should all be fired and hire people that are capable of doing the job properly.

So it IS because people have jobs and are earning money. Wow.

 

[Doppel]

When I caught Mcowen red handed lying about his claims of a Chicago gas price rise a few months back I made an offer. I said: tell me which station this happened at. If it is real I will leave this thread forever, if not you have to. He never took me up on it.

I offer again, Mcowned. Your skills in prediction are the worst I have ever seen and with your ghastly behavior in this thread my challenge: if the average cost of gas in the USA does not, even for a single day, hit $6 according to gasbuddy in 2013 you promise to leave this thread and never return.

I know you won't accept this challenge despite several times now claiming we will hit $6 this year. You won't accept because you are a troll and you know it.

 

[OverVolt]

I heard a joke the other day. When it comes to alternative sources of oil (shale, etc.). When you read a news article you can just replace the word "technology" with "price"

http://www.nytimes.com/2013/02/04/u...-and-battle-heats-up.html?pagewanted=all&_r=0

ELLOWS, Calif. — Secure in this state’s history and mythology, the venerable Midway-Sunset oil field near here keeps producing crude more than a century after Southern California’s oil boom. Many of its bobbing pump jacks are relatively short, a telltale sign of the shallowness of the wells and the ease of extracting their prize.

But away from this forest of pump jacks on a flat, brown landscape, a road snakes up into nearby hills that are largely untouched — save for a handful of exploratory wells pumping oil from depths many times those of Midway-Sunset’s. These wells are tapping crude directly from what is called the Monterey Shale, which could represent the future of California’s oil industry — and a potential arena for conflict between drillers and the state’s powerful environmental interests.

At one such exploratory site, tall pump jacks stood above two active wells on a small patch of federal land. For now, the operator, Venoco, has been storing the oil in two large tanks. But construction is scheduled to start soon on pipelines, and more wells are planned.

Comprising two-thirds of the United States’s total estimated shale oil reserves and covering 1,750 square miles from Southern to Central California, the Monterey Shale could turn California into the nation’s top oil-producing state and yield the kind of riches that far smaller shale oil deposits have showered on North Dakota and Texas.

For decades, oilmen have been unable to extricate the Monterey Shale’s crude because of its complex geological formation, which makes extraction quite expensive. But as the oil industry’s technological PRICE advances succeed in unlocking oil from increasingly difficult locations, there is heady talk that California could be in store for a new oil boom.

Established companies are expanding into the Monterey Shale, while newcomers are opening offices in Bakersfield, the capital of California’s oil industry, about 40 miles east of here. With oil prices remaining high, landmen are buying up leases on federal land, sometimes bidding more than a thousand dollars an acre in auctions that used to fetch the minimum of $2.

“We’ve seen a significant increase in the last three to five years in the price paid from our sales,” said Gabriel Garcia, assistant field manager at the federal Bureau of Land Management’s office in Bakersfield. “Some of that has to do with speculation on new technologies HIGH PRICES, and some ALL of that has to do with the high price of oil.”

The Monterey Shale has also galvanized California’s powerful environmental groups. They are pressing the state to strictly regulate hydraulic fracturing, or fracking, the drilling technique that has fueled the shale oil and gas boom elsewhere but has drawn opposition from many environmentalists. In December, the State Department of Conservation released a draft of fracking rules, the first step in a yearlong process to establish regulations.

Severin Borenstein, a co-director of the Energy Institute at the Haas School of Business at the University of California, Berkeley, said technological PRICE advances and the high price of oil were driving interest in the Monterey Shale, just as elsewhere.

“Everyone has known that there is shale oil not just in the Monterey Shale but also in North Dakota and Wyoming and all over the country,” he said. “Back in the ‘70s, there were discussions that there’s all this oil and all we’ve got to do is get it. Now 40 years later, the technologies HIGH PRICES have become available to actually get it in a cost-effective way.”

While oil is found less than 2,000 feet below the surface in fields like Midway-Sunset, companies must pump down to between 6,000 and 15,000 to tap shale oil in the Monterey.

Though production has been declining for years, California remains the country’s fourth-largest oil-producing state, after Texas, North Dakota and Alaska. So far, little of the crude is derived from the Monterey Shale, whose untapped deposits are estimated at 15.4 billion barrels, or more than four times the reserves of the Bakken Shale in North Dakota, according to the United States Energy Information Administration.

“There are billions of barrels of oil buried in the Monterey Shale, and as far as I know, nobody’s been able to find it yet,” said Neil Ormond, the president of Petroleum Land Management, a company based in Clovis, Calif. “But I think there’s going to be more people looking for it. You can’t let a few dry holes discourage the whole thing, because if you find oil, you make money.”

A landman, Mr. Ormond bought leases on more than 10,000 acres of federal land in an auction organized by the Bureau of Land Management. Landmen usually work for oil companies, acquiring leases that allow them to explore and drill for oil.

Landmen have also been increasingly approaching individual landowners and buying mineral rights, though these private transactions are hard to track, said Tim Kustic, California’s state oil and gas supervisor.

“That’s an early precursor to an increase in exploration and drilling activity,” Mr. Kustic said.

The two companies with the biggest stakes in the Monterey Shale, Occidental Petroleum and Venoco, are increasing their exploration efforts, including a joint three-dimensional seismic survey of one area.

Companies with experience exploiting the Bakken Shale, including the New York-based Hess, have recently set up operations in Bakersfield, too. Jon Pepper, a spokesman for Hess, said it was “too early to talk in any definitive way” about the company’s plans in the Monterey Shale.

But the oil companies’ plans for the Monterey Shale are already drawing increasing scrutiny from environmental groups. Though oil companies have engaged in fracking in California for decades, the process was only loosely monitored by state regulators.

The Monterey Shale’s geological formation will require companies to engage in more intensive fracking and deeper, horizontal drilling, a dangerous prospect in a seismically active region like California, environmental groups say.

Environmental groups, including the Sierra Club and the Center for Biological Diversity, are suing the Bureau of Land Management and the Department of Conservation to prevent the opening up of further land to oil exploration and to enforce stricter environmental practices.

“If and when the oil companies figure out how to exploit that shale oil, California could be transformed almost overnight,” said Kassie Siegel, a lawyer at the Center for Biological Diversity. “Fracking poisons the air we breathe and the water we drink. It is one of the most, if not the most, important environmental issue in California.”

Tupper Hull, a spokesman for the Western States Petroleum Association, an industry lobbying group, said oil companies had safely used fracking for decades in California, mostly combined with traditional vertical drilling.

“Nobody can point to any incident or impact that has taken place,” Mr. Hull said.

After the California Department of Conservation released its draft of fracking regulations, environmental groups criticized a clause that would allow companies not to disclose the chemicals used in fracking to protect trade secrets.

Jason Marshall, chief deputy director of the Department of Conservation, said companies seeking to withhold such information would have to adhere to the state’s trade secret protection laws.

“The baseline assumption of these regulations is the disclosure of what’s in the fluids,” he said. “It should be the exception when someone is trying to exercise a trade secret protection.”

Fracking is actually old technology it just was never worth it at lower prices.


http://en.wikipedia.org/wiki/Hydraulic_fracturing

The first use of hydraulic fracturing was in 1947. However, it was only in 1998 that modern fracturing technology, referred to as horizontal slickwater fracturing, made possible the economical extraction of shale gas; this new technology was first used in the Barnett Shale in Texas.[1][2][3] The energy from the injection of a highly pressurized hydraulic fracturing fluid creates new channels in the rock, which can increase the extraction rates and ultimate recovery of hydrocarbons.