There Would Be No Iranian Nuclear Talks If Not For Fracking 236
Hugh Pickens DOT Com writes "Matthew Philips writes at Bloomberg that US Secretary of State John Kerry landed in Geneva on Friday to begin negotiations with Iran over its nuclear weapons program and there is sudden optimism that a deal is in the offing. But the simple fact is that Iran would not be coming to the negotiating table without the US oil boom. Over the last two years, the US has increased its crude production by about 2 million barrels a day. According to a recent report from the Congressional Research Service (pdf), Iran's oil exports have been cut in half since 2011 (PDF), from 2.5 million barrels per day to a bit more than 1 million today. As a result, Iran has had to halt an equal amount of production. 'I think it's pretty clear that without the U.S. shale revolution, it never would have been possible to put this kind of embargo on Iran,' says Julius Walker. 'Without US production gains, I think we'd be looking at $150 a barrel.' Instead, international prices have hovered around $110, and are less than $100 in the US. According to data from Bloomberg, the combined carrying capacity of oil tankers leaving Iranian ports last month dropped 22 percent from September. 'They're having a very hard time finding buyers,' says Walker. If a deal gets done, the trick will be to ease Iranian oil back onto the broader market without disrupting prices. If not managed properly, flooding the market with Iranian crude could carry its own negative consequences by suddenly making fracked oil in the US unprofitable."
The Law of Unintended Consequence (Score:4, Interesting)
Re:Interesting argument (Score:4, Interesting)
Interestingly enough the US imported more in 2012 from the Persian Gulf. We've mostly trimmed the amount of business we do with nations like Mexico, Nigeria, and Brazil, in response to our new gains in supply. This is just crude oil, a substantial part of US demand is met by imported petroleum products too, of course. U.S. Crude Oil Imports [eia.gov] Mexico is due to begin declining in production in the next few years, and the Trans Alaska Pipeline may have to be shut down soon as well - this is more of a wildcard, estimates of how low the flow through can go before it becomes unprofitable to operate vary a great deal - so new sources of supply are going to be needed, even with US demand having peaked and declining slowly owing to less driving/more efficient new vehicles/the slow inroads made by EVs removing demand for gasoline entirely.
Re:Interesting argument (Score:2, Interesting)
Problem? (Score:4, Interesting)
flooding the market with Iranian crude could carry its own negative consequences by suddenly making fracked oil in the US unprofitable."
And this is a problem how, exactly? Fuck the frackers. Gimme my cheap gas. I'm sick of you bastards charging so much... you're squeezing the poor and putting our economy in the crapper. Cheap gas = fast economic recovery, not this stagnant crap.
Bad Headline, and there's more going on. (Score:5, Interesting)
Well, the USA is falling apart. Therefore the need for nukes isn't quite as extreme as it once was. Also, Germany and Denmark are pointing towards how an advanced society can operate without nukes or carbon, and in a place as sunny as Iran, this becomes a kind of no-brainer.
Iran's biggest worry is their biggest asset: The South Pars gas field. The Europeans want it BAD as an alternative to Russian natgas, and the Americans would love to take it away from Iran, just cuz the Americans are a bunch of greedy dicks who'd love to stick it to the Russians, and screw the Iranians in the process. As long as South Pars stays underground, the Russians have their captured market (Europe) and Iran has money in the bank. As long as Iran was banging the nuke drum, the Americans were able to keep their psychotic fear machine rolling. Now that the USA Empire is entering late afternoon, they can afford to play nice with them and their pointy little all american bullet headed saxon mother's sons. Franking is crushing the natgas market, but everyone knows franking is a temporary solution, so Iran will hold that Ace of South Pars and cash big time when they will need the money to transition to solar. At that point the USA will be in some kind of tizzy tea party dipshit media freak show - probably with Britney Spears running as a Republican and (fill in name of faceless bureaucrat) on the Democratic ticket and some frothing tool of the Koch guard as a third party spoiler.
Ya gotta look at this stuff with a longer term view...
Rouhani is why (Score:5, Interesting)