Is $60/Bbl WTI still considered a break even for Shale Oil

7 minutes ago, Mike Shellman said:

Horse dookey. Even the term "breakeven" is stupid. In the oil business we're not in it to break even, we're in to make money. Time to payout, ROI and NPV have historically been the metrics the real oil business has always focused on. 

And dung heap on the stripper well comment by the other man with no name. In legal terms production in paying quantities means just that and has absolutely nothing to do with breakeven prices. There is no legal precedence for the use of breakeven prices in any legal argument or case precedence. It's too qualitative and too vague. Any lawyer with an IQ equal to the price of oil would eat that term up. 

You two guys should start a Shale R US/ Abolish All Stripper Wells forum.  Its perfect; you can pat each other on the back all the time, delete opinions you don't like, and copy and paste links without acknowledging its author, ALLLLLLLL day long. 

 

Breakeven- The point at which cost and income are equal and there is neither profit nor loss. 

So where does “margin” come in?

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8 minutes ago, Mike Shellman said:

Horse dookey. Even the term "breakeven" is stupid. In the oil business we're not in it to break even, we're in to make money. Time to payout, ROI and NPV have historically been the metrics the real oil business has always focused on. 

And dung heap on the stripper well comment by the other man with no name. In legal terms production in paying quantities means just that and has absolutely nothing to do with breakeven prices. There is no legal precedence for the use of breakeven prices in any legal argument or case precedence. It's too qualitative and too vague. Any lawyer with an IQ equal to the price of oil would eat that term up. 

You two guys should start a Shale R US/ Abolish All Stripper Wells forum.  Its perfect; you can pat each other on the back all the time, delete opinions you don't like, and copy and paste links without acknowledging its author, ALLLLLLLL day long. You can even give out award points for name calling and insults. An 'LOL' gets you a big bonus! 

 

Oh Mike the great oil expert, please do enlighten us with your great wisdom? will ya now?

Everything to you is stupid, people that do not agree with you are idiots.

You are the only person alive on this forum that has been in the "real oil business" .

To me it is not about shale vs. conventional. All I see in your comments and responses are constant shale bashing, and seems you would be just happy if shale ceased to exist. Yet you offer no solutions to improve the shale sector.

I know and agree that not all shale companies will make it, shale companies have come and gone, as have other conventional oil and gas companies, companies who have no fiscal discipline and or good operations, management plans will go under and if the assets are good will be bought out by others, as happens even with conventional oil companies. I am not talking about breakevens for legal purposes, yet the point was break even is used by every industry and it wasnt created by the shale industry to pull wool over peoples eyes. I dont see "breakevens" mentioned in any leases, which is a legal contract, so you keep throwing the term around.

You put too much faith into SEC filings.... havent there been companies across different industries found guilty and fined billions of $$$ and their execs went to prison for fraudulent SEC filings?

So do tell us Mike the Great OILMAN? how many thousands and thousands of mineral acres do you own? how many millions of acres of leases do you own and operate? how many millions of stripper wells you own and operate? how many non stripper conventional wells do you own and operate? and how many millions of barrels of oil and and bcf's of gas do you produce from these? (I wouldnt use the term BOE because that is something the shale shell game created ), how many billions of $$$ do you pay out in royalties? If I recall correctly , you also have a disdain for royalty owners, just as you have a disdain for corporate executives, Federal Reserve Banks and their reports and anyone else who disagrees with you. And how many hundreds of thousands or millions of acres of 'shale' leases do you own and operate and how many hundreds of thousands of shale wells have you drilled and are producing from? and how many millions of barrels of shale barrels and bcf of shale gas do you produce? how many millions  of barrels of shale oil and bcf of shale oil do you export? I guess exporting it is not good, we should put a ban on it again. BTW , FYI in case you forgot, it wasnt this admin that allowed the export of US crude, it was the previous one. Just in case it is proven exports are bad and should be banned, we should just ban the exports of everything? corn, soybeans, ethanol, farm goods, agri commodities, soybean oil, sunflower oil, canola oil, farm equipment, beef, poultry , eggs, pork, heavy equipment and machinery, pharma, biomed equipment and everything that is exported!!!

 

Yes , we are all in the oil business to make make money and not just a small amount of money!!! So keep on drilling and keep on producing. Let there be OIL!!!!

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What will happen if this comes true and drops further?

It will be a blood bath in the shale patch and it will be a clean up operation after that, the weak and sick will be gone and bigger , better operators with better quality rocks, better fiscal discipline and better economics will survive and thrive!

https://www.cnbc.com/2019/05/28/crude-could-drop-to-52-as-global-pressures-persist-top-technician.html

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(edited)

6 hours ago, Wastral said:

NGL/NG resources in the permafrost or Methane Hydrates. 

Your faith in Methane Hydrates and permafrost as a future resource seems entirely misplaced. These are quite fragile structures and they are actually at risk as the world warms since the formation and stability is dependent on temperature as well as pressure in the case of ocean reserves. Assuming there's a need to tap them, we can also expect that shale has more or less been exhausted and that indicates a BaU scenario which in turn likely means serious annual loss of methane hydrates through warming starting in a few decades and continuing to rise over the next few centuries as well as a resultant strong feedback loop (permafrost is also associated with a feedback loop in case you weren't aware). Add to this the fact that disturbing these structures has the potential to even result in tsunamis and you end up with a more or less non usable resource that will almost certainly experience worse returns than shale if widespread extraction is attempted. Never mind that it increase the already critical external costs of fossil fuels.

Edited by David Jones

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(edited)

2 hours ago, ceo_energemsier said:

Yes , we are all in the oil business to make make money and not just a small amount of money!!! So keep on drilling and keep on producing. Let there be OIL!!!!

That's nice but maybe don't get so emotionally attached to some product especially one that has serious global issues associated with it. On the whole it has been of great benefit last century, now it's associated with a serious long term threat to global society. Move with the times and make money by all means but if you find yourself with a product that is associated with so much risk, maybe find a different solution (assuming projections are even remotely accurate which they probably are and these are properly priced in you would likely have to pay money to produce oil). I hear Texas has really good wind resources, could be that there's something there

Edited by David Jones

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On 5/29/2019 at 10:16 AM, James Regan said:

93E9A96E-03FF-4084-B368-71EED0943E0A.jpeg

To keep this in perspective, why not compare shale oil companies with all other companies? Off the top of my head, I can name dozens of Wall Street Darlings who have NEVER been cash flow positive! Amazon for the past Decade only had a FCF of around $10 billion, and this for a company bigger in market cap than any other. Microsoft and Apple hoard their cash, but Amazon can't, because they don't have it to hoard. 

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(edited)

16 minutes ago, Ward Smith said:

To keep this in perspective, why not compare shale oil companies with all other companies? Off the top of my head, I can name dozens of Wall Street Darlings who have NEVER been cash flow positive! Amazon for the past Decade only had a FCF of around $10 billion, and this for a company bigger in market cap than any other. Microsoft and Apple hoard their cash, but Amazon can't, because they don't have it to hoard. 

How many Shale “plays” does Apple or Amazon or Microsoft own, read the title of the Post. If I wanted to discuss Tech I would be in another forum!

To keep this in perspective...

Edited by James Regan
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37 minutes ago, David Jones said:

That's nice but maybe don't get so emotionally attached to some product especially one that has serious global issues associated with it. On the whole it has been of great benefit last century, now it's associated with a serious long term threat to global society. Move with the times and make money by all means but if you find yourself with a product that is associated with so much risk, maybe find a different solution (assuming projections are even remotely accurate which they probably are and these are properly priced in you would likely have to pay money to produce oil). I hear Texas has really good wind resources, could be that there's something there

David Jones, why in blazes are you even on an oil website? You obviously hate the industry and everyone associated with it. You're like a preacher who goes to a bar to shout at all the sinners, the difference being those preachers generally get their assess handed to them eventually by the patrons, and here you're safe in anonymity. I get that your religion is AGW and your faith in it is duly noted. But you come here, day after day and thousands of posts later, who do you think you've proselytized to your AGW religion and evil fossil fuels?

I've got large investments in the fossil fuel industry and small investments in "green" and that's about the right ratio. One is real, and has legitimate economic benefit and the other requires massive government handouts to pretend economic benefit. And don't trot out your sorry and pathetic arguments that the fossil fuel industry is "subsidized". Unless and until carbon credits are legislated into existence that's a fallacy. You, as a "useful idiot" to quote Stalin, are carrying water for the very executives you despise. How's that feel? 

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7 minutes ago, James Regan said:

How many Shale “plays” does Apple or Amazon or Microsoft own, read the title of the Post. If I wanted to discuss Tech I would be in another forum!

To keep this in perspective...

The point wasn't "tech" but market analysis. As I've posted elsewhere, free cash flow FCF, has become something of a relic of a bygone era. A company can be profitable but have lousy FCF and vice versa. The oil industry still has much to learn from other industries so staying in the same box isn't doing any good, time to look outside the box in thinking and execution. 

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15 minutes ago, Ward Smith said:

David Jones, why in blazes are you even on an oil website? You obviously hate the industry and everyone associated with it. You're like a preacher who goes to a bar to shout at all the sinners, the difference being those preachers generally get their assess handed to them eventually by the patrons, and here you're safe in anonymity. I get that your religion is AGW and your faith in it is duly noted. But you come here, day after day and thousands of posts later, who do you think you've proselytized to your AGW religion and evil fossil fuels?

I've got large investments in the fossil fuel industry and small investments in "green" and that's about the right ratio. One is real, and has legitimate economic benefit and the other requires massive government handouts to pretend economic benefit. And don't trot out your sorry and pathetic arguments that the fossil fuel industry is "subsidized". Unless and until carbon credits are legislated into existence that's a fallacy. You, as a "useful idiot" to quote Stalin, are carrying water for the very executives you despise. How's that feel? 

I don't know what kind of investments you have made but I hope you are not making these with the same mathematical and "logical" principles you seem to have applied when you assessed AGW, assuming you even took the time and didn't just read the presidential twitter feed for your info on the matter. I consider this to be an energy website and yes, I am going to address the rampant misinformation and bad logic that is prevalent when it comes to this issue because it is very relevant to the oil industry as a whole and also because I follow the industry due to their industrial capacity and experience which would actually be of benefit to the transition if they decided to apply themselves. I'm not carrying anything for anyone other then everyone in general and If I didn't constantly find daft and illogical as well as inaccurate arguments which are often based on misunderstanding of basic concepts when it comes to arguments against the validity of the issue, I'd be on your side screaming bloody murder for all the pressure we're under right now (which btw would not be the case if action had been taken earlier). However, I've not seen a single piece of information to convince me that AGW is a non-issue, in fact it's the opposite and since it is directly related to fossil fuels this issue has a place on this forum unless we've come to the point that you feel people should be banned from the discussion because the majority can't stomach a logical and factual argument?

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5 minutes ago, David Jones said:

assuming you even took the time and didn't just read the presidential twitter feed for your info on the matter

Oh, come now, David, that is a bit harsh.  Nobody here is paying attention to the Trump twitter feed, that is done for his ideas of politics. The people here are businessmen and oil technical experts. so let's keep it in perspective. 

6 minutes ago, David Jones said:

unless we've come to the point that you feel people should be banned from the discussion because the majority can't stomach a logical and factual argument?

Nobody does that here, unless you are deliberately taking the posture of a troll.  If you have a logical and/or factual "argument" or position to take that is contrary to mine, I invite you to post it.  There, consider that a (friendly) invitation.  Note, though, that I ONLY and EXCLUSIVELY engage with serious writers, trolls and baiters are pests and I loathe that crowd.  You tend to come across as strident.  that is not a good approach for intellectual discussion, now is it? 

Anyway, getting back to your comment about Texas and wind:   yes, Texas certainly has a nice niche for wind energy production.  One big problem is the way the wind industry has developed.  Those guys insist in using gigantic airplane propellers as their design, and there are serious negatives to that, including dead birds and bats, aircraft hazard, infrasound, and final costs shovelled off onto the public purse.  Why not do wind with a different design?  The Dutch developed a sailcloth format that worked just great and you had none of the current-design issues with that.  Just for example. Over to you.

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25 minutes ago, Jan van Eck said:

Oh, come now, David, that is a bit harsh.  Nobody here is paying attention to the Trump twitter feed, that is done for his ideas of politics. The people here are businessmen and oil technical experts. so let's keep it in perspective.

Maybe not all but there are definitely some here that post arguments which suggest otherwise and I have not yet encountered any post that has any sort of real discussion quality on AGW other than to dis the issue as irrelevant. Will I find a single valid argument, should such an argument exist if I were to comb through the entire forum (and no arguments such as "we don't know everything so we don't need to act" are not valid if you know a single thing about how science is actually done when it comes to uncertainty)?

25 minutes ago, Jan van Eck said:

You tend to come across as strident.  that is not a good approach for intellectual discussion, now is it?

That may be but how much did "nice" and "measured" intellectual discussions bring to addressing the issue over 30 years. I'm not sure sugar-coating the issue at this point is going to bring much attention or acknowledgement of the situation.

25 minutes ago, Jan van Eck said:

Anyway, getting back to your comment about Texas and wind:   yes, Texas certainly has a nice niche for wind energy production.  One big problem is the way the wind industry has developed.  Those guys insist in using gigantic airplane propellers as their design, and there are serious negatives to that, including dead birds and bats, aircraft hazard, infrasound, and final costs shovelled off onto the public purse.  Why not do wind with a different design?  The Dutch developed a sailcloth format that worked just great and you had none of the current-design issues with that.  Just for example. Over to you.

This design has had issues as far as I'm aware but regardless I am not sure that anyone is preventing people from building such designs should they be effective, or are they in Texas? Also, while environmental issues of these technologies should be taken into account and addressed where possible, the damage of fossil fuels to the environment is magnitudes greater. The fact that you bring this up makes me wonder how much you have actually read on the issue of AGW and it's multitude of consequences including exacerbating the extinction of many species. It's doubtful that wind turbines will lead to the extinction of bird species, especially off shore variants which are also unlikely to be affected by many of the other problems you mentioned but you are welcome to point me to research that says otherwise.

Off shore is likely the future for wind assuming sufficient grid connection can be ensured. As for costs, total costs of renewable energy and even a grand transition away from fossil fuels is lower than the cost of consequences. Multiple assessments have come to this conclusion as far as I'm aware, if they hadn't we wouldn't be discussing this at all.

Edited by David Jones

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Exxon Mobil, Chevron Resist Shareholder Pressure On Climate Change

 

Exxon Mobil Corp. and Chevron Corp. both held annual shareholder meetings on May 29, with climate change issues high on both agendas. Despite pressure from some of their own investors, both companies’ shareholders ultimately voted to reject proposals focused on greater accountability and transparency in the area of climate change.

The fact that climate change is increasingly dominating the discussion is a sign of the changing times, despite Exxon Mobil and Chevron showing resistance to shifting their focus away from fossil fuels. The two U.S.-based companies have come under fire from activist investors, among others, for not being as proactive on environmental issues as their European counterparts, Royal Dutch Shell plc and BP plc.

While executives from both Exxon Mobil and Chevron continue to emphasize the importance of meeting future oil demand, they have to take at least some steps to appease their shareholders on climate change concerns. This trend seems set to become more pronounced over time.

Exxon Mobil’s chairman and CEO, Darren Woods, kicked off the company’s annual meeting in Dallas, Texas, with a presentation looking at what the company is doing to address climate change.

“Exxon Mobil joined the oil and gas climate initiative and continued our work in support of a carbon tax. In an important step for industry we also supported strong regulations for methane emissions,” Woods said. However, earlier this year, the U.S. Securities and Exchange Commission (SEC) allowed Exxon Mobil to block a shareholder resolution calling on the company to set greenhouse gas (GHG) emissions reduction targets in line with Paris Agreement goals on climate change.

The supermajor described the resolution as being misleading over its stance. But the SEC’s move resulted in a backlash from certain shareholders. These included the Church Commissioners for England—the Church of England’s endowment fund—and New York State Comptroller Thomas DiNapoli, who manages the state’s pension fund.

The two shareholders said in early May they would withhold support for the re-election of all of Exxon Mobil’s directors at the supermajor’s annual meeting, citing its “inadequate” response to climate change concerns. They attributed this to Exxon Mobil’s board not functioning effectively owing to the absence of an independent chairman, and urged other shareholders to back a measure that would have split the roles of CEO and board chairman. But the proposal was defeated, winning only 41% of the vote at the supermajor’s annual meeting.

Measures that called on the board to set up a special committee on climate change, publicize climate change risks at Exxon Mobil’s U.S. Gulf Coast chemical plants and report its lobbying and political contributions were also rejected. And Woods, while acknowledging the importance of tackling climate change, maintained that oil would have an increasingly significant role to play in meeting future demand.
“Engagement on climate is important, but working on solutions through fundamental research and development for new technologies is also important,” said Woods. He added that ExxonMobil would continue to engage with shareholders as part of a “years-long process.”

Chevron shareholders, at its annual meeting in San Ramon, Calif., rejected a similar proposal to create an independent chairman role. The resolution garnered just 26% of votes, while only 8% voted in favor of setting up a board committee on climate change.

A Chevron stockholder proposal that would see the company reporting efforts to reduce its carbon footprint was also defeated, winning only 33% of votes.

“Chevron believes in taking prudent, practical and cost-effective actions to address climate change risks. This proposal is based upon the flawed premise that a global agreement to limit warming to 2 degrees Celsius requires each individual fossil fuel producer to reallocate investment to different energy resources,” Chevron said in a statement reporting its voting results. “A decrease in overall GHG emissions, however, is not inconsistent with continued or increased fossil fuel production by the most efficient producers,” it added.

But the fight is far from over, and in fact the shareholder push on climate change issues appears to be gathering momentum. The 41% share of the vote for the independent board chair proposal at Exxon Mobil was the largest out of the last seven times such a move has been considered. “Exxon would ignore this level of support for an independent board chair at its own risk”, DiNapoli warned in a statement.

Steps taken by European super-majors are also expected to ramp up the pressure on their U.S. counterparts. Investors in BP recently passed a resolution requiring it to set out a business strategy consistent with the goals of the Paris Agreement, with support from the company. Meanwhile, Shell has linked executive pay to emission reduction goals.

Indeed, Woods also noted his company’s progress in lowering emissions, which includes its work on algae-based biofuels and its efforts to develop more carbon-capture technologies.

“Last year, we set goals to reduce methane emissions by 15% and flaring by 25%. We’re on track to meet both,” he said. Woods added, however, that his company would continue to meet the growing demand for fossil fuels, echoing Chevron’s comments. But this pursuit of increased oil production looks like it will increasingly have to be balanced with efforts to mitigate climate change risks. Pressure from activist investors does not appear likely to ease, and indeed should be expected to intensify.

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Oil Demand is not going to go anywhere, except up even with all the EV's. EVs need more oil in the form of petchems in massive amounts to be able to be competitive and efficient. Simple and pure, unless you want to cut down trees and make wooden cars but still plastics , plastics, composites and derivatives, at fairly lower costs and in large volumes.

_________________________________________________---

 

Exxon’s 2018 profit rose 6% to $20.8 billion as higher prices offset a 4% decline in production, but the shares fell 18% last year. They closed Wednesday up about 6% for 2019.

Woods said Exxon’s businesses performed well last year, and production in the Permian Basin of west Texas and New Mexico is growing faster than expected.

Exxon, which is based in Irving, Texas, continues to project that demand for oil will grow nearly 1% a year, propelled by its use in transportation and chemicals, and Woods repeated a goal of doubling 2017 earnings by 2025.

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18 minutes ago, ceo_energemsier said:

Oil Demand is not going to go anywhere, except up even with all the EV's. EVs need more oil in the form of petchems in massive amounts to be able to be competitive and efficient. Simple and pure, unless you want to cut down trees and make wooden cars but still plastics , plastics, composites and derivatives, at fairly lower costs and in large volumes.

_________________________________________________---

 

Exxon’s 2018 profit rose 6% to $20.8 billion as higher prices offset a 4% decline in production, but the shares fell 18% last year. They closed Wednesday up about 6% for 2019.

Woods said Exxon’s businesses performed well last year, and production in the Permian Basin of west Texas and New Mexico is growing faster than expected.

Exxon, which is based in Irving, Texas, continues to project that demand for oil will grow nearly 1% a year, propelled by its use in transportation and chemicals, and Woods repeated a goal of doubling 2017 earnings by 2025.

That's unlikely to be true, the amount of fossil fuels necessary to build a car are in no way equivalent to the amount of fossil fuels it displaces, especially if the construction was done without the use of coal energy and with more efficient and modern means. Something like the well known Model 3 which has a large battery in it weighs about 1600kg. An average fossil fuel car in the US for instance would drive maybe 14000 miles and consume 560 gallons of oil which weighs about 2100kg. That's in a single year, never mind over the lifetime of a car so suggesting that a car that weighs 1600kg but displaces potentially up to 2100kg of oil annual is going to increase oil demand because of it's using some oil products in it's body work (not even where most of the weight is likely to be) is simply ludicrous. There very little chance EVs won't at the very least damage demand growth by 2030.

Edited by David Jones

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3 minutes ago, David Jones said:

That's unlikely to be true, the amount of fossil fuels necessary to build a car are in no way equivalent to the amount of fossil fuels it displaces, especially if the construction was done without the use of coal energy and with more efficient and modern means. Something like the well known Model 3 which has a large battery in it weighs about 1600kg. An average fossil fuel car in the US for instance would drive maybe 14000 miles and consume 560 gallons of oil which weighs about 5100kg. That's in a single year, never mind over the lifetime of a car so suggesting that a car that weighs 1600kg but displaces potentially up to 5100kg of oil annual is going to increase oil demand because of it's using some oil products in it's body work (not even where most of the weight is likely to be) is simply ludicrous. There very little chance EVs won't at the very least damage demand growth by 2030.

Why EVs Can’t Do Without Oil

Like most debates these days, the debate on the carbon footprint of electric vehicles is a heated one with the most vocal opinions coming from extreme camps. Again, like most other debates, the truth is at neither extreme. It is in the middle and says that electric vehicles would never have a chance against internal combustion engines if it weren’t for the oil industry or, more specifically, the petrochemicals industry.

It’s a truth often overlooked that there are thousands of products we use in everyday life that contain oil derivatives. The list is impressively long even without including plastics, but plastics are the biggest reason why EVs cannot do without oil, and this includes carbon fiber, which is also an oil derivative.

 

Here’s a detailed infographic from the American Fuel & Petrochemical Manufacturers that details exactly how dependent EVs are on their production. While a dedicated EV supporter could argue the data will undoubtedly be skewed in favour of petrochemicals, things actually boil down to something quite simple: weight.

Electric vehicles need to be as lightweight as possible to have a longer range. At the same time, they need to be relatively affordable, so there is a meaningful market for them. The only materials that can to date cover both these requirements are oil and gas-derived polymers. You could make polymers from renewable sources, but these have been slow to take off, most likely due to the higher cost of production.

Back in 2012, Frost & Sullivan research forecast that global demand for plastics will soar in the years to 2017 thanks precisely to the growing adoption of electric vehicles. They projected a compound annual growth rate of as much as 80 percent between 2012 an 2017 on the back of EV market growth. While this has not exactly been the case, demand for plastics has risen significantly: according to IHS Markit, it doubled between 1999 and 2018 to exceed 100 million tons.

 

https://www.businesswire.com/news/home/20180518005048/en/Global-Plastics-Demand-Expands-Rapidly-Sustainability-Key

 

https://www.visualcapitalist.com/how-much-oil-electric-vehicle/

 

 

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(edited)

29 minutes ago, ceo_energemsier said:

Why EVs Can’t Do Without Oil

Like most debates these days, the debate on the carbon footprint of electric vehicles is a heated one with the most vocal opinions coming from extreme camps. Again, like most other debates, the truth is at neither extreme. It is in the middle and says that electric vehicles would never have a chance against internal combustion engines if it weren’t for the oil industry or, more specifically, the petrochemicals industry.

It’s a truth often overlooked that there are thousands of products we use in everyday life that contain oil derivatives. The list is impressively long even without including plastics, but plastics are the biggest reason why EVs cannot do without oil, and this includes carbon fiber, which is also an oil derivative.

 

Here’s a detailed infographic from the American Fuel & Petrochemical Manufacturers that details exactly how dependent EVs are on their production. While a dedicated EV supporter could argue the data will undoubtedly be skewed in favour of petrochemicals, things actually boil down to something quite simple: weight.

Electric vehicles need to be as lightweight as possible to have a longer range. At the same time, they need to be relatively affordable, so there is a meaningful market for them. The only materials that can to date cover both these requirements are oil and gas-derived polymers. You could make polymers from renewable sources, but these have been slow to take off, most likely due to the higher cost of production.

Back in 2012, Frost & Sullivan research forecast that global demand for plastics will soar in the years to 2017 thanks precisely to the growing adoption of electric vehicles. They projected a compound annual growth rate of as much as 80 percent between 2012 an 2017 on the back of EV market growth. While this has not exactly been the case, demand for plastics has risen significantly: according to IHS Markit, it doubled between 1999 and 2018 to exceed 100 million tons.

 

https://www.businesswire.com/news/home/20180518005048/en/Global-Plastics-Demand-Expands-Rapidly-Sustainability-Key

 

https://www.visualcapitalist.com/how-much-oil-electric-vehicle/

 

 

Again, completely irrelevant to total oil demand since as the visualcapitalist article points out. An EV uses 772 pounds of plastics. Now I'm no plastics expert but my guess is that unless you're making 772lbs of plastic with 5000 gallons of fuel (10 year use for vehicle) your "extra demand" from plastics is negligible compared to your loss of demand from gasoline. Plastic production is most definitely not that inefficient. 772lbs is the weight of less than 100 gallons, that's more or less what your "extra demand" is likely to be while at the same time losing up to 5000 gallons of fuel demand. So.. 50 gallons lost and 1 gallon gained (assuming other cars don't use plastic which is obviously not the case) and apparently demand will go up with more EVs. Hhmmm, how do people in the fossil fuel business make money if this is the logic that is prevalent? Obviously, when you have the potential to displace 4900 gallons of oil you're displacing a heck of a lot of CO2. Plenty of assessments have shown this to be true. As I've said before, it's a case of lowering emissions permanently, burning the stuff is always going to be more emissions intensive than using it in materials. Especially just burning fossil fuels because you can't be bothered to collect and sell them.

Edited by David Jones

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16 minutes ago, David Jones said:

Again, completely irrelevant to total oil demand since as the visualcapitalist article points out. An EV uses 772 pounds of plastics. Now I'm no plastics expert but my guess is that unless you're making 772lbs of plastic with 5000 gallons of fuel (10 year use for vehicle) your "extra demand" from plastics is negligible compared to your loss of demand from gasoline. Plastic production is most definitely not that inefficient. 772lbs is the weight of less than 100 gallons, that's more or less what your "extra demand" is likely to be while at the same time losing up to 5000 gallons of fuel demand. So.. 50 gallons lost and 1 gallon gained (assuming other cars don't use plastic which is obviously not the case) and apparently demand will go up with more EVs. Hhmmm, how do people in the fossil fuel business make money if this is the logic that is prevalent? Obviously, when you have the potential to displace 4900 gallons of oil you're displacing a heck of a lot of CO2. Plenty of assessments have shown this to be true. As I've said before, it's a case of lowering emissions permanently, burning the stuff is always going to be more emissions intensive than using it in materials. Especially just burning fossil fuels because you can't be bothered to collect and sell them.

Everything is irrelevant except for the agenda you are trying to push here!

____________________________________________________________________

 

 

Introduction
While the passenger vehicle sector represents only about one-quarter of the oil demand
barrel, the sector receives a significant amount of attention from some governments and the
media. This is due largely to the belief that a rapid transition from conventional oil-powered
cars to electric vehicles (EVs) is both possible and necessary to reduce greenhouse gas
emissions and improve urban air quality. Numerous studies analyzing the impact of EVs on
oil demand have been published. To determine whether the enthusiasm around the potential
for EVs to reduce fossil fuel consumption is warranted, the author reviewed several of these
studies and found that it was di
ffi
cult to derive insight from comparing these published
forecasts, because they were not calculated on the same basis and they failed to provide
some key underlying assumptions. To bridge that gap, the author conducted a survey of 15 of
these forecasters representing governments, think tanks, consultants, investment banks, and
oil companies to obtain comparable data along with their underlying assumptions, with the
agreement that the sources of the data would not be disclosed.
Summary
The review showed that none of the passenger vehicle forecasts projected much oil demand
growth over the next 25 years. This was an area where there was clear agreement among
forecasts. In many cases, demand remained flat after peaking. A few forecasts, particularly
two-degree carbon scenarios, showed a considerable decline in demand in this sector by
2040. However, even in these cases, no decline in demand is projected before 2020, and
there isn’t much decline before 2030. It should also be noted that any decline in oil demand
from the passenger vehicle sector could be o
ff
set by demand growth in the petrochemical,
aviation, or freight transport sectors, which have fewer and more costly substitutes for oil.
The pace of demand growth matters. If the world doesn’t move o
ff
oil at a rapid clip, it is
important that policy makers recognize the need for investment in new oil supplies to prevent
supply shortages and accompanying oil price spikes
 
 

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Oil market glut will lead to declining prices through 2020 by Dr. Daniel Fine

 

With the OPEC-Russia meeting ahead, the price of oil is at a crossroad. 

President Trump wants lower prices for gasoline at the pump and the Democratic Party wants a shortage to lift prices higher. This is the 2020 presidential election, to re-elect Trump or a create a Democratic left-center White House.  

Is OPEC-Russia ready to sustain output cutbacks for $70 Brent Oil or continue revenue maximum against market share? Curiously, in the conversation at Vienna the Oxy purchase of Anadarko will resonate. Why? Oxy must now increase its export of oil to lower its debt (Warren Buffet and more) and prevent a serious management miscalculation of paying too much for Anadarko. 

Permian Delaware shale, with new high volume pipelines completed soon, must find expanding import markets of l.5 million barrels of oil per day or the equivalent of OPEC-Russia resuming late 2016 output for export.

As this writer concludes this column for the The Farmington Daily Times' Energy Magazine, which Is going on hiatus in San Juan County after this edition, there is no change in an outlook that dates back to the oil price crash of 2014-2016.  

There is too much oil (over-supply) against world demand for it.

Exxon-XTO in the Permian is prepared for $40 per barrel, and to still add  $82 billion value in the New Mexican Permian or the Delaware in the next 40 years.

However, along with Chevron, Oxy,  EOG and Pioneer, it must have a market for the economic recovery of reserves estimated at nearly 47 billion barrels in the Permian Delaware Basin. They must export against OPEC-Russia production.

The lifting cost of Saudi Aramco oil remains lower than Permian Shale. Saudi Aramco has sold debt (bonds) and 63% of its cash flow goes to its government? With oil demand slack and sluggish, and electric vehicles preparing for a 2024 market challenge both technically and politically (zero emissions). 

While associated natural gas has partially become a free commodity from Permian Delaware producers, natural gas is up next, after coal, as a target for Green Energy. It should resemble oil on a smaller scale as price dependent entirely on exports in the form of LNG.  

Will Persian Gulf, Australian, and Russian natural gas production roll backward in favor of American LNG? American exporters today cannot compete in a $5 per ton Asian LNG market.

Some San Juan Basin producers at the recent San Juan Basin Energy Conference openly discussed shifting capital spending

from natural gas to oil development.

This writer reaffirms his $50 average price for WTI oil in 2019 presented for the smaller independent producers at a briefing at Merrion Oil last December, but beginning early in 2020 forecasts a second half average of $38 per barrel .

In New Mexico, the Governor can adjust the Energy Transition Act basic law next February, but it should be a petroleum-revenue 30 day session without serious oil and gas organized opposition. 

New Mexico is now a hybrid Green State with more exportable oil and gas than every OPEC country except Iraq and Saudi Arabia, and yet it will impose the most effective rules for methane capture.  

No amount of ad hominem distraction against its policy and leadership will change this direction, and the nation could follow with the outcome of the national election next year.

Daniel Fine is the associate director of New Mexico Tech's Center for Energy Policy. The opinions expressed are his own.

https://www.daily-times.com/story/money/industries/oil-gas/2019/05/24/analysis-oil-market-glut-lead-declining-prices-through-2020/3760213002/

 

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3 minutes ago, ceo_energemsier said:

Everything is irrelevant except for the agenda you are trying to push here!

____________________________________________________________________

 

 

Introduction
While the passenger vehicle sector represents only about one-quarter of the oil demand
barrel, the sector receives a significant amount of attention from some governments and the
media. This is due largely to the belief that a rapid transition from conventional oil-powered
cars to electric vehicles (EVs) is both possible and necessary to reduce greenhouse gas
emissions and improve urban air quality. Numerous studies analyzing the impact of EVs on
oil demand have been published. To determine whether the enthusiasm around the potential
for EVs to reduce fossil fuel consumption is warranted, the author reviewed several of these
studies and found that it was di
ffi
cult to derive insight from comparing these published
forecasts, because they were not calculated on the same basis and they failed to provide
some key underlying assumptions. To bridge that gap, the author conducted a survey of 15 of
these forecasters representing governments, think tanks, consultants, investment banks, and
oil companies to obtain comparable data along with their underlying assumptions, with the
agreement that the sources of the data would not be disclosed.
Summary
The review showed that none of the passenger vehicle forecasts projected much oil demand
growth over the next 25 years. This was an area where there was clear agreement among
forecasts. In many cases, demand remained flat after peaking. A few forecasts, particularly
two-degree carbon scenarios, showed a considerable decline in demand in this sector by
2040. However, even in these cases, no decline in demand is projected before 2020, and
there isn’t much decline before 2030. It should also be noted that any decline in oil demand
from the passenger vehicle sector could be o
ff
set by demand growth in the petrochemical,
aviation, or freight transport sectors, which have fewer and more costly substitutes for oil.
The pace of demand growth matters. If the world doesn’t move o
ff
oil at a rapid clip, it is
important that policy makers recognize the need for investment in new oil supplies to prevent
supply shortages and accompanying oil price spikes
 
 

Again conflating information. I was referring to a car as an example in relation to your link above about the materials and whether EVs offset oil demand and as you can clearly see, petrochemical demand for their construction will never, let me repeat this, never equal the amount they displace in terms of gasoline. The assumption above is of course that other sectors will increase in demand but this is not relevant to the actual EV technology and now much oil it requires compared to how much it displaces. So really, you can hold on to those straws if you like but there's little excuse to feign ignorance of the obvious either now or in future. Btw, we're not on a 2c trajectory. We're currently >3c so unless these assessments also incorporated 3-4c trajectories they are unlikely to be correct. I would say that a 2c scenario is better for the oil industry. A >3c trajectory like the one we are on has much greater overcompensation potential over the next 2 decades.

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1 minute ago, David Jones said:

Again conflating information. I was referring to a car as an example in relation to your link above about the materials and whether EVs offset oil demand and as you can clearly see, petrochemical demand for their construction will never, let me repeat this, never equal the amount they displace in terms of gasoline. The assumption above is of course that other sectors will increase in demand but this is not relevant to the actual EV technology and now much oil it requires compared to how much it displaces. So really, you can hold on to those straws if you like but there's little excuse to feign ignorance of the obvious either now or in future. Btw, we're not on a 2c trajectory. We're currently >3c so unless these assessments also incorporated 3-4c trajectories they are unlikely to be correct. I would say that a 2c scenario is better for the oil industry. A >3c trajectory like the one we are on has much greater overcompensation potential over the next 2 decades.

Who are what caused the ice age to vanish? how many Hummers were running around then? or coal fired and oil fired power plants?

What happened to most of the oceans and seas? did they just evaporate into thin air? You would think what happened to all that ice that melted? The world should still be flooded from then?

Oil is not going to go away, demand will be simply replaced from one sector to another. Not all countries will be able to afford and maintain and support mass use of EVs. We are looking at a small group of countries in the EU that may, other than that not much of an exponential burst of EV use for replacing liquid fuels. In countries where people cant afford a decent daily meal and their average monthly wage maybe 5$ , only the ultra rich maybe able to do so and this wont be in a large enough number to make a dent in liquid fuels demands.

And the world is also going to end in 12 years is it? so whether is is 2,3 or 5 or 10 degrees? does it make a difference for 12 years?

We should all live it up before it all goes to hell literally!

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3 hours ago, David Jones said:

I don't know what kind of investments you have made but I hope you are not making these with the same mathematical and "logical" principles you seem to have applied when you assessed AGW, assuming you even took the time and didn't just read the presidential twitter feed for your info on the matter. I consider this to be an energy website and yes, I am going to address the rampant misinformation and bad logic that is prevalent when it comes to this issue because it is very relevant to the oil industry as a whole and also because I follow the industry due to their industrial capacity and experience which would actually be of benefit to the transition if they decided to apply themselves. I'm not carrying anything for anyone other then everyone in general and If I didn't constantly find daft and illogical as well as inaccurate arguments which are often based on misunderstanding of basic concepts when it comes to arguments against the validity of the issue, I'd be on your side screaming bloody murder for all the pressure we're under right now (which btw would not be the case if action had been taken earlier). However, I've not seen a single piece of information to convince me that AGW is a non-issue, in fact it's the opposite and since it is directly related to fossil fuels this issue has a place on this forum unless we've come to the point that you feel people should be banned from the discussion because the majority can't stomach a logical and factual argument?

Perhaps if you learned how to use the enter key, to break up your verbal diarrhea…

See, this is a new paragraph, intended to separate ideas from the prior paragraph, not so hard eh? Make your point, hit enter, then move on to your next thought, assuming you have one. 

Here's a way you can make as much as me: Bar bets. Go to a bar, and instead of calling them all sinners for the copious amounts of carbon dioxide they're consuming, then re-emitting, have yourself a nasty pint of foamy carbs and using the bar napkin, draw a line across it. Tell the person next to you that you'll bet them 10 quid they can't show you on that line where 1000 is, assuming the line is one million long. Everyone gets it wrong, including you. Invariably they will put a mark at the one third or at best one tenth location. But as any grade schooler knows, there are 1000 thousands in a million, and dividing your arbitrary line into a thousand leaves no room at all. You can even make it easier by marking said line 0 on one side and million on the other. People get fooled by that zero, which is almost exactly where the thousand point belongs. 

Why do I tell you all this? Because you're making the same scale and category error concerning AGW. I've read each and every one of the IPCC reports. In fact I used to link directly to chapter and verse within them, but I was causing the religion too much heterodoxy so they changed their method and force you to only search rather than allowing direct access. Needless to say, individual search terms are needle in haystack when every other word is the same. So they've stopped me there, but there are other sources…

Here's your homework assignment. First, determine the HUMAN component of global CO2 emissions annually. Don't go to Uncle Google and Aunt Wikipedia, they'll lead you astray. They'll tell you (a SWAG estimate) of mankind's total, while CAREFULLY neglecting to let you know what the denominator is. It's in the IPCC reports, deeply hidden for good reason. Because it is VERY MUCH like finding that thousand point on the million line. Not only is Total CO2 in the atmosphere a vanishingly small 400 parts per million, but mankind's percentage of THAT number is only 1/2 of 1% Let's take this a little further, because I'm certain you fancy yourself some kind of genius. The average of the global climate models indicate that DOUBLING CO2 will increase the watts per sq meter by 2 watts at the surface. Oh my gawd, that's horrible! But how many watts are hitting the earth's surface now? 1300 and change? Yet again, on a percentage basis, 2/1300 isn't a very impressive number, but it gets even worse when you (continue to) recognize that man is only contributing 0.05% of those measly 2 watts. 

Now let's play your mental masturbation game of forcing all mankind to meet the Paris Accord. Now we're talking about 15% of 0.05%, how meaningful is that? 

Not very impressive eh? We can all live in caves and eat grass and save a micro watt of heat energy. That's before I even talk about the error bars, or the dodgy way the models work, or the lack of legitimate experimental proof of the primary premise, which is that more CO2 will FORCE more water vapor into the atmosphere, water vapor being the REAL greenhouse gas. That's why what you think was a math error above was not, there's another term and another factor that needs consideration. But I'll leave that for the student. Cheers

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31 minutes ago, Ward Smith said:

Perhaps if you learned how to use the enter key, to break up your verbal diarrhea…

See, this is a new paragraph, intended to separate ideas from the prior paragraph, not so hard eh? Make your point, hit enter, then move on to your next thought, assuming you have one. 

Here's a way you can make as much as me: Bar bets. Go to a bar, and instead of calling them all sinners for the copious amounts of carbon dioxide they're consuming, then re-emitting, have yourself a nasty pint of foamy carbs and using the bar napkin, draw a line across it. Tell the person next to you that you'll bet them 10 quid they can't show you on that line where 1000 is, assuming the line is one million long. Everyone gets it wrong, including you. Invariably they will put a mark at the one third or at best one tenth location. But as any grade schooler knows, there are 1000 thousands in a million, and dividing your arbitrary line into a thousand leaves no room at all. You can even make it easier by marking said line 0 on one side and million on the other. People get fooled by that zero, which is almost exactly where the thousand point belongs. 

Why do I tell you all this? Because you're making the same scale and category error concerning AGW. I've read each and every one of the IPCC reports. In fact I used to link directly to chapter and verse within them, but I was causing the religion too much heterodoxy so they changed their method and force you to only search rather than allowing direct access. Needless to say, individual search terms are needle in haystack when every other word is the same. So they've stopped me there, but there are other sources…

Here's your homework assignment. First, determine the HUMAN component of global CO2 emissions annually. Don't go to Uncle Google and Aunt Wikipedia, they'll lead you astray. They'll tell you (a SWAG estimate) of mankind's total, while CAREFULLY neglecting to let you know what the denominator is. It's in the IPCC reports, deeply hidden for good reason. Because it is VERY MUCH like finding that thousand point on the million line. Not only is Total CO2 in the atmosphere a vanishingly small 400 parts per million, but mankind's percentage of THAT number is only 1/2 of 1% Let's take this a little further, because I'm certain you fancy yourself some kind of genius. The average of the global climate models indicate that DOUBLING CO2 will increase the watts per sq meter by 2 watts at the surface. Oh my gawd, that's horrible! But how many watts are hitting the earth's surface now? 1300 and change? Yet again, on a percentage basis, 2/1300 isn't a very impressive number, but it gets even worse when you (continue to) recognize that man is only contributing 0.05% of those measly 2 watts. 

Now let's play your mental masturbation game of forcing all mankind to meet the Paris Accord. Now we're talking about 15% of 0.05%, how meaningful is that? 

Not very impressive eh? We can all live in caves and eat grass and save a micro watt of heat energy. That's before I even talk about the error bars, or the dodgy way the models work, or the lack of legitimate experimental proof of the primary premise, which is that more CO2 will FORCE more water vapor into the atmosphere, water vapor being the REAL greenhouse gas. That's why what you think was a math error above was not, there's another term and another factor that needs consideration. But I'll leave that for the student. Cheers

Wow hats off for a lesson in the correct use of the English language obviously from a native speaker , suitably impressed. You should write professionally 😉 

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7 hours ago, Ward Smith said:

Perhaps if you learned how to use the enter key, to break up your verbal diarrhea…

See, this is a new paragraph, intended to separate ideas from the prior paragraph, not so hard eh? Make your point, hit enter, then move on to your next thought, assuming you have one. 

Here's a way you can make as much as me: Bar bets. Go to a bar, and instead of calling them all sinners for the copious amounts of carbon dioxide they're consuming, then re-emitting, have yourself a nasty pint of foamy carbs and using the bar napkin, draw a line across it. Tell the person next to you that you'll bet them 10 quid they can't show you on that line where 1000 is, assuming the line is one million long. Everyone gets it wrong, including you. Invariably they will put a mark at the one third or at best one tenth location. But as any grade schooler knows, there are 1000 thousands in a million, and dividing your arbitrary line into a thousand leaves no room at all. You can even make it easier by marking said line 0 on one side and million on the other. People get fooled by that zero, which is almost exactly where the thousand point belongs. 

Why do I tell you all this? Because you're making the same scale and category error concerning AGW. I've read each and every one of the IPCC reports. In fact I used to link directly to chapter and verse within them, but I was causing the religion too much heterodoxy so they changed their method and force you to only search rather than allowing direct access. Needless to say, individual search terms are needle in haystack when every other word is the same. So they've stopped me there, but there are other sources…

Here's your homework assignment. First, determine the HUMAN component of global CO2 emissions annually. Don't go to Uncle Google and Aunt Wikipedia, they'll lead you astray. They'll tell you (a SWAG estimate) of mankind's total, while CAREFULLY neglecting to let you know what the denominator is. It's in the IPCC reports, deeply hidden for good reason. Because it is VERY MUCH like finding that thousand point on the million line. Not only is Total CO2 in the atmosphere a vanishingly small 400 parts per million, but mankind's percentage of THAT number is only 1/2 of 1% Let's take this a little further, because I'm certain you fancy yourself some kind of genius. The average of the global climate models indicate that DOUBLING CO2 will increase the watts per sq meter by 2 watts at the surface. Oh my gawd, that's horrible! But how many watts are hitting the earth's surface now? 1300 and change? Yet again, on a percentage basis, 2/1300 isn't a very impressive number, but it gets even worse when you (continue to) recognize that man is only contributing 0.05% of those measly 2 watts. 

Now let's play your mental masturbation game of forcing all mankind to meet the Paris Accord. Now we're talking about 15% of 0.05%, how meaningful is that? 

Not very impressive eh? We can all live in caves and eat grass and save a micro watt of heat energy. That's before I even talk about the error bars, or the dodgy way the models work, or the lack of legitimate experimental proof of the primary premise, which is that more CO2 will FORCE more water vapor into the atmosphere, water vapor being the REAL greenhouse gas. That's why what you think was a math error above was not, there's another term and another factor that needs consideration. But I'll leave that for the student. Cheers

I'll tell you what, seal a room hermetically and raise the concentration to 1% of CO2, stay there for a few days. 1% is kind of small no? Shouldn't be an issue. Heck, I'd say even 0.5% will do the job of making the effects of CO2 apparent to you. It's also as if you don't understand that applying more heat results in evaporation and that this is being done on a global scale but hey, I don't separate my posts into neat little snippets so I must be wrong. Go ahead, do what I said above since I am so wrong all the time, it must be a pleasant experience right?

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7 hours ago, ceo_energemsier said:

Who are what caused the ice age to vanish? how many Hummers were running around then? or coal fired and oil fired power plants?

What happened to most of the oceans and seas? did they just evaporate into thin air? You would think what happened to all that ice that melted? The world should still be flooded from then?

Oil is not going to go away, demand will be simply replaced from one sector to another. Not all countries will be able to afford and maintain and support mass use of EVs. We are looking at a small group of countries in the EU that may, other than that not much of an exponential burst of EV use for replacing liquid fuels. In countries where people cant afford a decent daily meal and their average monthly wage maybe 5$ , only the ultra rich maybe able to do so and this wont be in a large enough number to make a dent in liquid fuels demands.

And the world is also going to end in 12 years is it? so whether is is 2,3 or 5 or 10 degrees? does it make a difference for 12 years?

We should all live it up before it all goes to hell literally!

Nobody is questioning the existence of long term planetary climate cycles here, I certainly am not doing this and never have been. Putting aside the fact that just because these cycles exist it doesn't mean a major change in the current climate cycle can't be generated and supercharged by anthropogenic means (there is plenty of research as to why these cycles have happened in the past and how long it usually takes, go and look around and you'll find some easily but I'm reasonably sure you're aware of it already), the current changes are happening on a scale of hundreds of years. There's no evidence for a natural cycle that resulted in 3-4c of global average temperature change during 120 years that I'm aware of (the temperature has increased by about 1c since about 1980). If you know some research that shows the occurrence of something like that on a global scale during that time frame, be my guest and post a link here but please don't bother posting some fossil fuel industry think tank article. I'm not about to spend my time reading propaganda.

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