ANWR Article

[3855WIN]

That wllm is either a smart fellar or a fart smeller.

 

[Aperventure]

@wllm I’ve thought this ever since I visited dead horse 10 years ago, I drove up the haul road.

We may very well be thanking those who put drilling and extraction restrictions on a known oil asset (that is if those restrictions are revoked) once other large productive fields have reached a point of decline where they are not financially viable. E.g. read Hubert’s peak to understand why there will not be any new large oil assets discovered.

Additionally there is already infrastructure (pipeline to gulf of AK) to transport the oil out which often costs the producer 10-30% of the price they can sell oil for.

This is if you believe peak oil is a real thing of course.

The only real possibility in my mind is like in say ~10-15 years, if at that point we (the US) are still using fossil fuels at the same levels we are today, it's possible when will exhaust the Permian and head north again.

 

[AvidIndoorsman]

@wllm I’ve thought this ever since I visited dead horse 10 years ago, I drove up the haul road.

We may very well be thanking those who put drilling and extraction restrictions on a known oil asset (that is if those restrictions are revoked) once other large productive fields have reached a point of decline where they are not financially viable. E.g. read Hubert’s peak to understand why there will not be any new large oil assets discovered.

Additionally there is already infrastructure (pipeline to gulf of AK) to transport the oil out which often costs the producer 10-30% of the price they can sell oil for.

This is if you believe peak oil is a real thing of course.

Peak production is a hard one... in 2019 I would have said no way, but the pandemic + war in Russia has lead to a lot of renewable development/alternatives in the US and Europe. Probably a solid argument to be made the US domestic consumption is starting to peak... I would definitely say German/UK/French consumption.

China/India... no way, not even close IMHO.

Hard to say what happens with a global economy, lots of the super majors are diversifying and heavily investing in other parts of the energy space, look at Shell, BP, Total, ENI , etc.

Running room in domestic shale is absolutely dependent on use, currently we are still below historic CAPEX/Rig numbers, and Q2 public presentations seem to suggest there isn't appetite to exceed those levels.

Oil prices were up all summer, but they have been pretty soft this week.

Basically I think there is 10-20 years of good production left in shale, and it all depends on how much and how fast we shift our energy.




Biggest issue though with ANWR, is that it's at least 10 year cycle. There is a non-zero chance we have dramatically changed our domestic consumption in 10 years... or not

Here's the thing though, if you SPUD a Permian well in Jan 2022 you probably drilled/fracked/produced the well and have already paid it back, and are now just printing money. If you saw prices spike in Feb and added a rig some of those new planned wells will be paying out in Q1 2023.

AK projects don't work like that, you need to have long term confidence and can't play short term commodity cycles.

... and also all the big banks have said they won't finance anything, so even if we do drill out the Permian conditions have to be such to get investors back into considering big AK projects.

In 10-20 years the boards of banks will be entirely made up of Millennials and Gen Z, what's your over under on zoomers firing up the Rigs in ANWR lol