US Fracking Boom Sends Peak Oil Believers into the Denial Zone
True believers in peak oil doom have descended into full fledged denial mode.
US states such as Texas, North Dakota, Ohio, Pennsylvania, Louisiana, and more are taking advantage of a huge economic boost coming from the US fracking boom.
One of the biggest secondary economic effects of this fracking boom is the growth in US manufacturing directly related to the relatively low US gas & oil costs.
“Low natural gas prices provide an additional competitive advantage to US producers in many industries, including chemicals, steel, copper, aluminum, cement, and other energy-intensive industries,” FitchRatings states. _Platts
For their part, true believers in peak oil doom have descended into full fledged denial mode. Many of the doomers are bravely declaring that US tight oil & gas are mere “flashes in the pan,” and will play out entirely “any day now.”
The reality is saying something much different, with US natural gas prices falling roughly 30% between 2011 and 2012. Prices of crucial commodities do not fall that drastically in the face of an obvious and impending supply shortfall.
But resource scarcity doomers have never been known for their skill at reading price signals, or other important indicators. In their world, it is all about the circular jerkular belief reinforcement, boosted by the echo acoustics of the choral chambres.
…natural gas spot price fell 31% last year. This drop in natural gas price may be a major reason why our economy has been performing better than many expected. The EIA reported that average wholesale prices for natural gas fell significantly throughout the United States in 2012 compared to 2011. The average wholesale price for natural gas at Henry Hub in Erath, Louisiana, a key benchmark location for pricing throughout the United States, fell from an average $4.02 per million British thermal units (MMBtu) in 2011, to $2.77 per MMBtu in 2012. This was the lowest average annual price at Henry Hub since 1999. Of course today the markets focus will be on the reports. Buckle up!
The American Petroleum Institute reported whopping builds in products and not as much as I expected on crude. The API reported crude stocks up by 2.4 MLN BBLS The surge came in gasoline were we saw a 7.9 Million barrels and distillate stocks 5.9 Million barrels. In Cushing Oklahoma the oil delivery point stocks rose by 332,000 barrels. Refinery runs dropped weekly crude imports up 1.2 million barrels. Heating oil stocks UP 537,000 Barrels to27.16 million barrels per day. _Phil Flynn
Remember: Everything you think you know, just ain’t so. While that aphorism may contain a bit of hyperbole, if you keep it in mind you are not as likely to fall into the deep black holes of denial where doomers tend to dwell.