Quite astonishing

Yes, OK, blah, blah, but if you’re going to do an economic analysis you do actually have to be able to do an economic analysis.

Actually, as an accountant, Snippa should at least be able to do sums:

It also destroys the economics of fracking, which have always been almost incomprehensible given the massive up front costs and the remarkable fall off of yield after only a couple of years of production.

Massive costs? A fracking well costs perhaps $10 million to get up and running. A conventional oil field $10 billion perhaps these days. Which one is massive?

And as to the up front. Near all of the costs of renewables are in CapX, some of the costs of fracking are in OpeX. Which, therefore, is more upfront?

That is, in an accounting or even economic sense the joy of fracking is that it has lower upfront costs than the two major alternatives…..

15 thoughts on “Quite astonishing”

  1. I hope that, if the Saudis and Russians manage to lower oil prices and make US fracking uneconomic, Trump will spend some of the trillions he’s printing to support it.

    This is because I loathe the wars in the Middle East, and would love ourselves and our allies to abandon them and leave the locals alone to kill each other in peace. It would be impractical for the US to abandon the Middle East if they once again became dependent on Middle Eastern oil.

  2. I wonder how much time he has spent looking at the costs of fracking. Actually, no need to wonder because it is obvious that he has spent no time at all. He is just guessing. Sitting alone in his house, convinced that he is suffering from a debilitating virus and making up hundreds of ridiculous blog posts that have the intellectual coherence of donkey shit. Who is he kidding?

  3. For once he’s inadvertantly honest enough to use the word incomprehensible about his failure to understand this particular subject. He should use it much more frequently.

  4. The CapEx isn’t lost. Once one field has dried up, you can pick up your toys and move onto another field.

  5. Dennis, Bringer of Joy

    For once he’s inadvertantly honest enough to use the word incomprehensible about his failure to understand this particular subject. He should use it much more frequently.

    To no one’s surprise, the fact that it was incomprehensible didn’t keep him from offering an opinion.

  6. Boganboy, I agree, with the proviso that we turn the ME into a trillion tiny glass beads.

    Of course, you’d have to convert your purple Torana to solar!

  7. I suppose that the cost of a fracking well vs the cost of a conventional well mean nothing without an assessment of the benefits. If a $10m fracking well produces 0.1% of the oil produced by the conventional well it’s okay, if it produces 0.2% it’s a no brainer.

    As someone who has spent a lot of time in the Middle East there is nothing IMO much we can do for it. We probably can’t turn it into glass (fallout, for one thing) but I would certainly favour heavily manned drawbridges until certain people show they can agree to put the law of the land above that of their religion.

  8. In the UK a lot of fracking capability is re-using existing non-fracking gas wells, so the capital investment is even smaller. The Kirby Misperton protesters don’t realise (or chose to conceal) that there are already close to a dozen gas wells in the Rydale plain, including at the Kirby Misperton site itself.

  9. Economics of fracking “destroyed” by low energy prices.

    Economics of bat-chomping eco-crucifixes that provide a fraction of the energy at multiples of the cost just fine.

  10. Yes obviously all these companies into fracking are run buy masochists who want to lose money or Govts who don’t care. Whoever thought “lets invest in fracking – we’ll make a loss.”
    One would have thought that if he really thought he had coronavirus he’d be writing his autobiography or writing his theory of everything (or playing with his trainset) rather than write these inane rantings.

  11. As someone who has spent a lot of time in the Middle East there is nothing IMO much we can do for it. We probably can’t turn it into glass (fallout, for one thing)

    Fallout is an exaggerated problem, unless your nuclear devices are being used deliberately to create it by low-altitude detonation. A few dozen high-altitude nukes to remove population centres would create detectable amounts of fallout in Afghanistan and Pakistan (under prevailing westerlies), but nothing to compare with Chernobyl or probably even Fukushima. Avoiding collateral damage to Israel might be tricky, though.

  12. comparing 10 million per well to 10 billion for a oil or gas field is like comparing the cost to build one business to building a city. Not quite apples and oranges, but perhaps apple trees and orchards.

  13. That is, in an accounting or even economic sense the joy of fracking is that it has lower upfront costs than the two major alternatives…..

    Even better is open cast coal mining as ‘Green’ Germany does with dirty lignite

  14. ‘Even better is open cast coal mining as ‘Green’ Germany does with dirty lignite.’

    One could also use that 90 year old German tech to make the coal into oil. I agree this probably wouldn’t be economic, unless you added avoiding the cost of the wars to the profits. But I’d really really love to abandon the Middle East.

  15. @Boganboy

    When I was young there was a Gas Works in town centre making coal gas, walked past it frequently on way home park. Sometimes a nasty smell which, like ammonia, made breathing difficult; sometimes an eerie noise bit like Doctor Who theme

    bangor ireland Gas Works

Leave a Reply

Your email address will not be published. Required fields are marked *