America 3.0

When Texas DUCs Go Quack, Quack, Frack

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The “DUC” in this case being _D_rilled but _U_n_C_ompleted shale oil & gas wells

I ran into this article by Seeking Alpha energy analyst Gary Bourgeault over on Real Clear Energy which gave a figure for how many drilled but ‘unfracked’ wells are available for the new extended oil flow fracking technique I mentioned in May 15th 2016 post Texas Fracking and the Death of Big Oil.

The key passage from “U.S. Shale Oil Boom Over Says CSMonitor – Hahahahaha” below —

DUC wells waiting in the wings
 
Another major reason the shale boom isn’t over is the large number of drilled but uncompleted wells waiting to be brought into production. There is an estimated 5,000 in the U.S. which can be quickly brought to market when the price of oil is high enough to reward it. Some companies have been completing them for some time, and more are being completed in 2016.

There are a lot of implications in that number. Starting with the fact that new oil & gas rig counts are going to be minimal for some time. And the hard economic fact that major politically event driven oil price spikes are going to be extremely short and will drop below 50 dollars a barrel within weeks to three months, given how fast these North American “DUC” wells can be fracked to bring product to market.

This new age of “banked” cheap oil plays, and the resultant oil price stability, will see off both the “Big Oil” economic model and the political/corporate elites that live by it.

Update May 27 2016:

It looks like Zerohedge has come to the same set of conclusions about the “Big Oil” economic model with his post “Peak Petro-State – The Oil World In Chaos”

Texas Fracking and the Death of Big Oil

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It isn’t often you see the death of a major worldwide industry. Last week I saw the death of the “Big Oil” economic model. It just died at the hands of Texas oil frackers who have developed a new “disruptive technology” that has made obsolete all the pillars of technology underpinning large, vertically integrated oil companies. More importantly, the same is true of all the petro-states that nationalized Big Oil’s assets in the 1960s to make all the state oil companies around the world today.

I found this out doing my day job last week as a Defense Department quality auditor visiting a mid-sized oil service company diversifying into federal contracts. The meeting was about issues with the contract they won and touched on others they have bid on. As a side bar at lunch the following points about their main business came up:

1. Oil field spending has died. Rig count in the USA is the lowest it has been since 1940.
 
2. One oil rig controller company these folks worked with saw a year over year drop of 72% in its business.
 
3. Another company they supplied had their “Cap-X” budget drop from ~$400 million for 2015-2016 to little over $30 million for 2016-2017.
 
4. One drilling company they supplied went from 120(+) new wells last year to _12_ this year.
 
5. This supplier sold a lot of copper tubing for “frack-log” drilling. That is the drilling of holes in good oil-bearing rock without fracking rock for oil immediately — and here is the new part — to take advantage of a new long-flow fracking technique.

While most of the points above are due to the Saudis’ oil price war on Texas frackers. An ex-Big Oil geologist I know put it this way —

The entire reason for the price drop was because the Saudis wanted to destroy fracking in the United States in order to keep us dependent upon them in order to keep them getting a free defense. The Saudis will have to diversify and start spending money on defense before the price goes back up, or they will be in serious trouble.

The technique in Point #5 above marks another “fracking revolution” that is of growing importance to the USA. This new fracking energy revolution will upend the world order as we know it. Political winds willing, America may well be a net hydrocarbon exporter in five to eight years.

Explaining why that is requires some background in Texas oil fracking.

Read more

When Will Pres. Obama Pardon Hillary Clinton? And for What Crimes?

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Back in January 2016 there was a lot of speculation over whether Pres. Obama would pardon Former Sec of State Hillary Clinton for E-Mail/Server-gate, (See Google Link ).

Now that Trump has the GOP nomination well in hand with a preference cascade in the North East (See MSNBC video link), Trump has said Hillary should be prosecuted for E-Mail/Server-gate, and that Democratic strategist Dave “Mudcat” Saunders is telling the Daily Caller Trump Will Beat Hillary Like ‘A Baby Seal’. It is time to again ask the questions:
1. When Will Obama Pardon Hillary? and
2. For What Crimes?

I suspect, whatever the answers to those two questions are, after January 2017 GOP Congressional committee chairmen will call her in to testify under oath, in hopes of catching her in a perjury trap.

Discuss.

ISIS Practices “Auftragstaktik”‏ — A Case of Evolutionary Selection in Action

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America’s incompetently planned and led wars in the Middle East have acted as a biological process of evolutionary selection that has been creating nastier and more lethal terrorist organizations. This has happened because of the fecklessness of America’s political leaders. (Bing West covers that political fecklessness and the selective pressures on our Islamist enemies in his article America the Weak.)

Nowhere is this selective pressure seen better than with the evolution of ISIS and its adoption of “Auftragstaktik”” in order to execute terrorist operations.

“Auftragstaktik”” is a German military term that is loosely translated in English as “Mission Tactics”. According to the UK Daily Mail, the terrorist organization ISIS has adopted “Auftragstaktik”” as a central organizing theme because Western signals intelligence destroyed other Islamic terrorist organizations like Al-Qaeda that tried to be more centrally directed.

ISIS figured out that if you give a leader resources, a target, and a time to get it done, then tell him to get it done however he can, you will get big, nasty and above all successful terrorist attacks in western nations, because such methods do not require detectable electronic communications.

See this UK Daily Mail clip:

The bloodthirsty militant group admitted to following the technique in a recent issue of Dar al-Islam, its French-language propaganda magazine.
 
It was this strategy of warfare that led to the November 13 Paris attacks, in which 130 people died, and the Brussels bombings two weeks ago that killed another 32.
 
The doctrine was first developed in the early 19th century in Prussia in response to the state’s crushing defeat against Napoleon.
 
This new theory of war – which gave troops the skills to respond to rapidly changing circumstances in the heat of battle – was then refined by general Carl von Clausewitz.
 
Later fellow Prussian general Moltke the Elder further tweaked his theory, ushering in a new way of commanding modern-day armies.
 
Today, similar tactics form a crucial component of the U.S. and UK armies military training.
 
The February ISIS article, which was devoted almost entirely to the Paris bombings, explained that its jihad in Europe encompasses three types of attacks.
 
This includes ambitious mass slaughter plots carried out by operatives sent from ISIS headquarters in the Middle East, to lone-wolf attacks by people with no connection whatsoever to the group.
 
It even cited a historical German infantry manual from 1908 as its inspiration.
 
The soldiers’ manual stated: ‘There is nothing more important than educating the soldier to think and act for himself.
 
‘Autonomy and his sense of honor push him to do his duty even when it is not in front of his superior.’
 
According to SOFREP.com, this style of warfare – known in the U.S. as mission-type tactics – translates to: ‘Here is your target, here are your assets, go get it done.’
 
This, ISIS claimed, allowed its cells to inflict terror in Europe with ‘complete tactical autonomy’ and leaves little evidence that can link back to their commanders.

This ISIS “Auftragstaktik”” model will be replicated and improved upon. This will not end well.

We have sowed the wind, now we reap the whirlwind.

Discuss.

Foreign Gov’ts Asking Washington DC Lobbyists about Donald Trump…

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…what could go wrong?

That sounds like the plot line from a Broadway musical comedy, yet it’s happening. See this this text clipped from THE HILL column “Trump angst pours in from overseas” about the details.

Lobbyists in Washington say they are being flooded with questions and concerns from foreign governments about the rise of Donald Trump
 
Officials around the globe are closely following the U.S. presidential race, to the point where some have asked their American lobbyists to explain, in great detail, what a contested GOP convention would look like.
 
The questions about Trump are “almost all-consuming,” said Richard Mintz, the managing director of Washington-based firm The Harbour Group, whose client list includes the governments of Georgia and the United Arab Emirates.
 
After a recent trip to London, Abu Dhabi and Beijing, “it’s fair to say that all anyone wants to talk about is the U.S. presidential election,” Mintz added. “People are confused and perplexed.”
 
The Hill conducted interviews with more than a half-dozen lobbyists, many of whom said they are grappling with how to explain Trump and his unusual foreign policy views to clients who have a lot riding on their relationship with the United States.

The comic possibilities in those sorts of miscommunications are better than THE PRODUCERS improbably successful money scam play “Springtime for Hitler.”