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There Would Be No Iranian Nuclear Talks If Not For Fracking

samzenpus posted about a year ago | from the frack-baby-frack dept.

The Almighty Buck 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."

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CAFE Standards (1)

mdsolar (1045926) | about a year ago | (#45385507)

CAFE Standards are more important. They are capping demand.

Re:CAFE Standards (3, Insightful)

Stormy Dragon (800799) | about a year ago | (#45385601)

Except no, because of the Jevon's Paradox [wikipedia.org] . Making the use of a resource more efficient actually increases total demand.

Re:CAFE Standards (2)

mdsolar (1045926) | about a year ago | (#45385775)

Driving is pretty saturated (note short term stiffness in gasoline demand) so it seems unlikely this is important. And, the effect has never been shown to increase demand though it may at times make the demand reduction softer.

Re:CAFE Standards (1)

yndrd1984 (730475) | about a year ago | (#45385959)

Driving is pretty saturated (note short term stiffness in gasoline demand) so it seems unlikely this is important.

While that's true in the short term, I don't think that many effects from CAFE standards would be described as 'short term'. There's no reason that demand can't be inelastic in the short term (filling up) and elastic in the long term (auto purchases).

And, the effect has never been shown to increase demand...

Never? That's quite an assertion you've got there, son. Care to let the rest of us in on your sources?

Re: CAFE Standards (0)

Anonymous Coward | about a year ago | (#45386343)

Not showing an effect would be a negative, how do you expect someone to prove a negative?

I'm not saying he's right, I'm saying that you and you need to prove the positive.

Re:CAFE Standards (1)

mdsolar (1045926) | about a year ago | (#45386361)

I see what you are thinking. More cars does not need to mean more driving really. If you already have a 3.5 hour commute, your second car is not going to get a lot of miles on it. In China, where there are many new roads being built, and many people who have no cars at all, cheaper to run cars may speed adoption, but that is not Jevon's Paradox, that is regular growth.

Re:CAFE Standards (2)

superwiz (655733) | about a year ago | (#45386197)

It's flawed. It tries to argue that the initial spike in demand (due to obvious decrease in cost) is indicative of a long-term trend. But it's not. It's an impulse response. And in impulse response the steady state is what controls the long term effect. The steady state, in this case, is the natural level of demand.

Re:CAFE Standards (1)

ShanghaiBill (739463) | about a year ago | (#45386331)

Except no, because of the Jevon's Paradox [wikipedia.org] . Making the use of a resource more efficient actually increases total demand.

Jevon's Paradox is not a general rule, but an exception to a rule. I doubt if it applies in this case. Do you really think that most people consume more fuel when they buy a more efficient car? Note: They may indeed drive more, but the question is whether they drive enough more to consume even more fuel than if they bought an SUV instead of a Prius.

Re:CAFE Standards (2)

Kardos (1348077) | about a year ago | (#45386607)

You're right, people who already have a car will not change their usage much. It's people who couldn't afford to drive (teenagers, working poor, etc), who switch to driving when it gets cheaper. This is the increase in usage that Jevon's Paradox entails.

Re:CAFE Standards (1)

rmdingler (1955220) | about a year ago | (#45385695)

The exclusion of "light trucks" from CAFE calculations has made that particular argument much less relevant.

Re:CAFE Standards (2)

mdsolar (1045926) | about a year ago | (#45385741)

Re:CAFE Standards (2)

dhanson865 (1134161) | about a year ago | (#45385831)

Except that they sort of are http://en.wikipedia.org/wiki/Corporate_Average_Fuel_Economy#SUVs_and_minivans_created_due_to_original_mandate [wikipedia.org]

SUVs and Minivans (and many "cars" that people don't realize fit in into those categories) are excluded from the more stringent car standard of 30.2 MPG and are instead allowed to guzzle just like true trucks at the less stringent 24.1 MPG rate.

The amount and type of loopholes in CAFE have changed over the years but there are still a large number of vehicles sold to average drivers that don't count as a "car" for CAFE purposes leaving the whole CAFE framework pretty weak sauce overall.

Re:CAFE Standards (1)

mdsolar (1045926) | about a year ago | (#45385851)

They seem to be working since oil consumption keeps heading down.

Re:CAFE Standards (1)

rmdingler (1955220) | about a year ago | (#45385861)

I drive corrected.

Bull (0)

nospam007 (722110) | about a year ago | (#45385509)

It's not fracking, that caused Iranians not to export crude, it's that little thing called sanctions.

read the fucking summary (3, Informative)

Anonymous Coward | about a year ago | (#45385591)

'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,'

Re:read the fucking summary (0)

Anonymous Coward | about a year ago | (#45385721)

The 'fucking summary' is wrong, though. Iranian oil makes up a very tiny fraction of US imports. There's no possible way that either the US cares about embargoing Iran (because it just doesn't matter to the US) or that Iran is negotiating due to US oil exports (because the US doesn't even buy much Iranian oil in the first place).

The only reason, bar none, that Iran is coming to the negotiating table is because their new leader is not an off-the-rails anti-westerner like his predecessor. There has been no other significant changes in either country's domestic policies.

Re:read the fucking summary (-1)

Anonymous Coward | about a year ago | (#45385839)

read the fucking book co-authoRED by Tony B-Liar and John Kerry! the two-state solution is in their job description, negotiate?!?!?!?!?!? u must BB fracking kidding me!

Syrians have not celebrated spring this year. Iran, Shamir-ran...... or wuz that Rabin.
to be or not "BiBi", u gits r (paid in Goldman) sachs, bolloxed-buggers, use a BLANKS!BLANKS!tissue dan rather than picking your Facebooger knows cuz he floated in complishitty with Bloombooger.

blow your knows, blow your whistle,

PRISM, created by SiSense, is an israeli operation, slash your dot, full-stop. tech-journal, methinks snot.

Re:read the fucking summary (0)

Anonymous Coward | about a year ago | (#45386029)

read the fucking book co-authoRED by Tony B-Liar and John Kerry! the two-state solution is in their job description, negotiate?!?!?!?!?!? u must BB fracking kidding me!

Syrians have not celebrated spring this year. Iran, Shamir-ran...... or wuz that Rabin. to be or not "BiBi", u gits r (paid in Goldman) sachs, bolloxed-buggers, use a BLANKS!BLANKS!tissue dan rather than picking your Facebooger knows cuz he floated in complishitty with Bloombooger.

blow your knows, blow your whistle,

PRISM, created by SiSense, is an israeli operation, slash your dot, full-stop. tech-journal, methinks snot.

Print this out and take it with you to your next appointment. I think you need to adjust the meds.

Re:read the fucking summary (0)

Anonymous Coward | about a year ago | (#45385937)

The only reason, bar none, that Iran is coming to the negotiating table is because their new leader is not an off-the-rails anti-westerner like his predecessor. There has been no other significant changes in either country's domestic policies.

The leader of Iran has not changed; their president has. Iran's government is not completely analogous to the US government, you know.

Their economy is in the tank with sky high inflation. It's true that sanctions have a large role to play here, but don't go all self-righteous -- it's only because they've gotten so bad that it's really hurting the people now. As with any government official with a bad economy, the people expect the new person to do something quickly. As a result, the new president is willing to do whatever is necessary to get things going again. The alternatives are much worse.

The speed is because, like any elected official, if they do not produce results, their opponents will eat them alive (figuratively speaking).

Re:read the fucking summary (4, Informative)

clarkkent09 (1104833) | about a year ago | (#45385961)

The 'fucking summary' is wrong, though. Iranian oil makes up a very tiny fraction of US imports.
 
It is not about how much US imports from Iran. It's the ability to shut down Iranian oil imports without having an effect on global oil prices, because US is now able to make up the difference. Just trying to be clear on what TFA 'claims', since, not being an oil industry expert, I have no clue whether it is true or not.

Re:read the fucking summary (3, Insightful)

sumdumass (711423) | about a year ago | (#45386083)

The 'fucking summary' is wrong, though. Iranian oil makes up a very tiny fraction of US imports. There's no possible way that either the US cares about embargoing Iran (because it just doesn't matter to the US) or that Iran is negotiating due to US oil exports (because the US doesn't even buy much Iranian oil in the first place).

This is only sort of right. It is true that the US doesn't use Iranian oil, however, the oil it does or did import displaced oil other countries could use so it in effect would have had the same impacts as if the US was doing so. Let's look at this from a simple point of view. Suppose the world in it's entirety produced 10 units of oil per day. From that 10 units of oil, every single country and business that wanted to, could purchase and use oil at about $100 a subunit if it didn't already create their needs themselves. Now suppose the US of some other random country all the sudden decides that a producer cannot produce and sell 1 unit of oil. Now, whether the US or other random country ever purchased oil from them or not, the entire world has to get buy with 9 units total or ignore the sanctions to maintain the 10 units. That is unless the one unit was made up somewhere else allowing the sanctions to hold and creating 10 units.

The oil markets are not per country but rather world wide and drops in production in one area will globally impact prices if it isn't made up somewhere else. The US us making it up somewhere else.

The only reason, bar none, that Iran is coming to the negotiating table is because their new leader is not an off-the-rails anti-westerner like his predecessor. There has been no other significant changes in either country's domestic policies.

This is probably more true then anything. Mahmoud Ahmadinejad was a bit crazy, he was a twelver to start with but also held a grudge against the US for how they handled Iran's attempt to help with Afghanistan. So it was like telling a bi-polar girlfriend that her sister is cuter than she is or the dress she is wearing doesn't make her look as fat as the other ones. Most of the "freakish" anti western sentiment can be traced to the coalition forces booting his troops from Afghanistan making him look bad and his believe in the twelfth Imam coming back and delivering paradise.

Re:read the fucking summary (4, Informative)

ShanghaiBill (739463) | about a year ago | (#45386507)

The 'fucking summary' is wrong, though. Iranian oil makes up a very tiny fraction of US imports.

You should look up the word fungible [wikipedia.org] . It makes little difference whether Iran sells direct to the USA or not. If Iran sells instead to Europe and China, and they participate in the sanctions, then they will have to buy elsewhere. Likewise, fracking in America means Americans import less, leaving more oil for others. There is only one world market for oil.

Re:read the fucking summary (2)

hawguy (1600213) | about a year ago | (#45385751)

'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,'

Just because the summary says something doesn't make it true - is the world oil production so tight that using sanctions to cut off 1.7% of the global production would be impossible without US shale oil? Neither the summary nor the linked article explain why only US shale could have made up the difference. The opinion of a single analyst is hardly "proof".

Re:read the fucking summary (1)

yndrd1984 (730475) | about a year ago | (#45385891)

It's not fracking, that caused Iranians not to export crude, it's that little thing called sanctions. - Says one person

'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 someone else, who has a political agenda.

Well, clearly the first person had to be wrong. There's no other explanation.

Re:Bull (3, Insightful)

icebike (68054) | about a year ago | (#45385793)

True. But the sanctions were never all that impervious [thomsonreuters.com] .

On the other hand, with reduced demand for their Oil, (due to the US being a net exporter of oil), there is more oil available on the market. Other oil importers don't need to go to Iran.

Theoretically, with less of a market for oil Iran should not need Nuclear power and could be meeting their energy demands with modern oil and gas generation facilities, Far less costly and easier to build.

Therefore, they don't NEED nuclear. And they can't make the claim that the do. If Iran was really after power production all along, they should be willing to delay nuclear. If that was never their real goal, then these talks may lead nowhere.

News reports suggest that a deal is no where near as close [nytimes.com] as this cheerleading article suggests.

So the article is a bit pre-mature. I think there are talks mostly because there was an election, and there was a change in tactics on the part of Iran, who probably realize they are inching closer to being on the receiving a preemptive strike and they see their last friend in the region, Syria, being ground into dust by civil war in spite of Iran's help).

Re:Bull (3, Informative)

alexhs (877055) | about a year ago | (#45385895)

(due to the US being a net exporter of oil)

You have a strange [eia.gov] notion of "net exporter".
And if you think it's too old data because of the shale oil "booming" the EIA also provides data for 2013 [eia.gov] .

Re:Bull (3, Insightful)

Anonymous Coward | about a year ago | (#45385931)

Therefore, they don't NEED nuclear.

That's right. And since they have lots of trees, they don't NEED oil and gas either. Let them burn wood! They're nothing but a bunch of sand niggers anyway. What would they know about the health hazards of smog, right? You're a bigoted asshole.

Re:Bull (1)

jovius (974690) | about a year ago | (#45386231)

Therefore, they don't NEED nuclear.

Sure, let's keep burning those fossils fuels to the bitter end.

I believe everything that I read (5, Insightful)

frovingslosh (582462) | about a year ago | (#45386593)

You're wrong. I believe everything that I read, particularly if it is backed by big oil money. This is good enough for me, and I'm glad to give up clean drinking water, have flames shoot out of my faucets, and let the fracking industry pump any industrial toxins that they want into the ground, as long as they tell me that it is keeping the Iranians in check.

Are Iranian Women Hot? (-1)

Anonymous Coward | about a year ago | (#45385527)

nt

Interesting argument (0)

NoNonAlphaCharsHere (2201864) | about a year ago | (#45385533)

Or would be, if we were buying ANY Iranian oil, which we aren't and haven't been.

Re:Interesting argument (1)

LurkerXXX (667952) | about a year ago | (#45385581)

This just in:

A politician tells a lie.

See the full report at eleven o'clock.

Re:Interesting argument (4, Informative)

SuricouRaven (1897204) | about a year ago | (#45385623)

It's a global market - oil gets shipped all around the world via tanker. If the US buys less oil, that means the sellers have more oil to sell, which they in turn sell to someone else (Probably China, they have huge demand), who in turn then doesn't buy from Iran. It's all interconnected.

Re:Interesting argument (0)

NoNonAlphaCharsHere (2201864) | about a year ago | (#45385643)

Thanks for pointing out that oil is a commodity - that never occurred to me.

Re:Interesting argument (2)

jfengel (409917) | about a year ago | (#45385729)

Yet you posted something that is contradicted by it. Nor did your reply address the contradiction.

Re:Interesting argument (1)

jkflying (2190798) | about a year ago | (#45385847)

You probably should have accounted for that in your original snarky comment then. /snark

Re:Interesting argument (3, Informative)

plopez (54068) | about a year ago | (#45385625)

Which doesn't matter for a global fungible commodity. Think of the oil and gas markets as giant buckets with streams of inputs from various sources and streams of outputs to other places. Direct inputs and outputs don't matter, just the net inputs and outputs.

Re:Interesting argument (4, Informative)

Zero__Kelvin (151819) | about a year ago | (#45385633)

Global Supply and Demand doesn't care who buys from where. I'm not saying that it is true that we owe a debt of gratitude to frackers for bringing about world peace. I'm simply pointing out that your implication that there is no correlation because we don't specifically purchase our oil from Iran is a similarly flawed claim.

Re:Interesting argument (0, Redundant)

NoNonAlphaCharsHere (2201864) | about a year ago | (#45385703)

You're right, I probably should have wriiten a long essay about how "U.S. fracking" --> "Iranian nuclear disarmament" is a wildly fanciful leap of logic, rather than simply pointing out that the two are at least two levels of indirection apart. The simple fact is that anyone making the argument is obviously astroturfing for the oil industry.

Re:Interesting argument (1, Interesting)

Zero__Kelvin (151819) | about a year ago | (#45385815)

No. You should have avoided making ridiculous posts like the one you originally made, the one you just made and this one [slashdot.org] and simply admitted that you hadn't thought about what you were posting before you posted it. All of your attempts to spin it to seem like your original post represented anything but a blatant lack of understanding and/or thought are just pathetic.

Re:Interesting argument (0)

Anonymous Coward | about a year ago | (#45385705)

Oil is generally fungible, so it doesn't matter that USA hasn't been buying the Iranian oil. What matters more is the collective boycott of Iranian oil, coupled with the depressed pricing of oil in general, putting the profitability squeeze on Iran oil production.

Re:Interesting argument (3, Interesting)

Ol Biscuitbarrel (1859702) | about a year ago | (#45385789)

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.

Propaganda for the Oil Companies (0)

Anonymous Coward | about a year ago | (#45385543)

Is this a way for the oil companies to say "We told you fracking was good"

Re:Propaganda for the Oil Companies (0)

plopez (54068) | about a year ago | (#45385637)

And for Fox News to equate environmentalists and community activists as terrorists.

Re:Propaganda for the Oil Companies (2)

AlphaWolf_HK (692722) | about a year ago | (#45385693)

Or perhaps it isn't just a way for anybody to say anything. It just is.

Not everything has to be a conspiracy theory. Coincidences do happen, quite often in fact. If you disagree, then might I refer you to Alex Jones whose very words should be music to your ears.

Re:Propaganda for the Oil Companies (1)

PopeRatzo (965947) | about a year ago | (#45386531)

Coincidences do happen, quite often in fact.

I agree that it is a coincidence that our increased oil production has brought Iran to the bargaining table, and that the negotiations have nothing to do with fracking at all.

Re:Propaganda for the Oil Companies (0)

Anonymous Coward | about a year ago | (#45385761)

Bet on Natual gas, solar, wind, oil!

The Law of Unintended Consequence (3, Interesting)

rmdingler (1955220) | about a year ago | (#45385553)

Like a broken clock that is accurate twice a day, unintended consequences are most often negative.

Law of global oligarchs (1)

globaljustin (574257) | about a year ago | (#45385835)

I agree with your general sentiment certainly, however we can look at history and see that our diplomatic success with Iran has *nothing* to do with fracking.

This is a PR propaganda article.

Iran has been a Banana Republic for global oligarch companies like Royal Dutch Shell, British Petroleum, Gasprom, etc...

anti-democratic dictators were installed by special operations work who would give favorable oil trading to the colonial oligarches...

it has happened **OVER and OVER** through history....

this is about the Arab Spring, the rise of democracy, and the triumph of US diplomacy in the region

fracking has **nothing** to do with it

Re:Law of global oligarchs (1)

fustakrakich (1673220) | about a year ago | (#45385963)

this is about the Arab Spring, the rise of democracy, and the triumph of US diplomacy in the region

+5 Funny!

Re:Law of global oligarchs (1)

rmdingler (1955220) | about a year ago | (#45386025)

"this is about the Arab Spring, the rise of democracy, and the triumph of US diplomacy in the region" .... Yes, But. Likely entirely by happenstance, it's still probable the increase in US domestic production due to fracking played some minor role.

happenstance... (1)

globaljustin (574257) | about a year ago | (#45386101)

it's possible, I can acknowledge that for sure...somewhere far down the chain, I'm sure that public perception that fracking in the US has reduced demand significantly has affected commodities trading...

you're coming from the right place, so I don't mind talking a bit of semantics, but this topic is easily trolled...

Re:Law of global oligarchs (0)

Anonymous Coward | about a year ago | (#45386483)

I think the increased US domestic production is more responsible for getting the USA to seriously negotiate though than getting Iran to the table. Not having to give a damn what the Saudis think as a result of being close to achieving energy independence surely frees their negotiating hand somewhat. I'm sure even Ahmadinejad could have been made all shiny by the likes of Bell Pottinger so don't think the change of president was necessary.

Infrastructure? (1)

glennrrr (592457) | about a year ago | (#45385561)

My impression is that revolutionaries are not necessarily very good at maintaining infrastructure. Same deal with Venezuela, decades of eating the seed corn and nobody who knows how to keep the black stuff flowing in charge.

Re:Infrastructure? (1)

Trepidity (597) | about a year ago | (#45386297)

Stalin was pretty good at it! Pretty bad at a lot of other things, but crash industrialization of Russia at all costs, that he was pretty solid at. To the extent that rural areas of Russia nowadays have a lot of USSR nostalgia, because the glorious Soviet infrastructure is slowly crumbling and not really being maintained anymore.

Fracking - The Religion of Peace! (0)

Anonymous Coward | about a year ago | (#45385565)

Poison the wells of the non-believers!

Negative Consequence? (2)

Cruxus (657818) | about a year ago | (#45385639)

Who says making fracked oil in the U.S. unprofitable is a negative consequence? Fracking has had a negative impact on the environment, and I'd just rather say good riddance.

Re:Negative Consequence? (1)

AlphaWolf_HK (692722) | about a year ago | (#45385709)

I think what they're trying to avoid is allowing politics to cause whiplash to the economy.

Re:Negative Consequence? (-1)

Anonymous Coward | about a year ago | (#45385735)

The "negative impact" you mention is a meme concocted by the environmental left movement. They hate all technology and fossil fuels, and don't want to see increased petroleum and natural gas production.

The tracking boom is causing the left to convulse and die. Good riddance.

Re:Negative Consequence? (0)

Anonymous Coward | about a year ago | (#45386317)

So do you support murdering the poor with earthquakes? That's what Fox News keeps praising.

Subsidies. (5, Insightful)

SuricouRaven (1897204) | about a year ago | (#45385645)

"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."

You know all those people comaining about the money the government 'wastes' on subsidising green energy?

The government spends a lot more on oil, just less directly. Whole wars have been fought to keep that fuel affordable, and now they are even important enough to engage in market price manipulation to protect their profits.

What was the point of the embargo again? (0)

Anonymous Coward | about a year ago | (#45385665)

This makes you wonder what the original purpose of the Iranian embargo was? I know the "official" stated reason is punishment for their nuclear program. I don't remember an economic embargo on Israel, Pakistan, or India when they developed nuclear programs though.

Perhaps the real reason for the embargo was to artificially raise the price of oil so the major oil companies could profitably develop the fracking infrastructure in the U.S.

Re: What was the point of the embargo again? (0)

Anonymous Coward | about a year ago | (#45386171)

Erm... While I don't think the US is crazy about radical states building nuclear weapons, we've been sanctioning them basically since their revolution in 1979.

http://en.m.wikipedia.org/wiki/U.S._sanctions_against_Iran

Re:What was the point of the embargo again? (2)

sumdumass (711423) | about a year ago | (#45386205)

This makes you wonder what the original purpose of the Iranian embargo was? I know the "official" stated reason is punishment for their nuclear program. I don't remember an economic embargo on Israel, Pakistan, or India when they developed nuclear programs though.

I don't remember Israel, Pakistan, or India threatening their neighbors or openly supporting terrorist groups. There is a little more reason to be concerned with Iran then there was with other countries when they got the nukes.

Perhaps the real reason for the embargo was to artificially raise the price of oil so the major oil companies could profitably develop the fracking infrastructure in the U.S.

If you think the real reason was to raise the price of oil, then you might want to explain why we haven't seen federal permits and royalties being created. You might want to consider who long the US knew they would need this in advance as it has been on the table with less support since the middle of Bush. It just seems that the US government would be cashing in on it more if that was the reason. But it appears they are not as most of the fracking is happening on private lands where no royalties are being paid to the feds who actually could use a large cash infusion about right now.

Table (1)

markdavis (642305) | about a year ago | (#45385683)

>"Iran would not be coming to the negotiating table without the US oil boom."

This is a perfect example of how oil has created such a horrible political mess over the years. It has been very dangerous for us to be so dependent on the middle east.

While I am glad our increased independence is forcing Iran and such to the table, I really wish it were because we accomplished that independence through renewable energy sources. Still, I guess we should take what we can get for now.

Re:Table (3, Insightful)

MightyMartian (840721) | about a year ago | (#45385711)

The sad part is that we're not using some great portion of the profits from oil to work on alternatives. When we run out of oil or its environmental effects become so deleterious that we can no longer justify its use, we will have squandered vast amounts of money and resources.

I call BS (2)

koan (80826) | about a year ago | (#45385685)

China could easily pick up the slack.

Re:I call BS (1)

PopeRatzo (965947) | about a year ago | (#45386547)

Where are the Chinese oil fields? How much of the world supply of oil does China produce?

I don't think for a second that China could "pick up the slack".

Bullshit. Total spin. (0)

Anonymous Coward | about a year ago | (#45385687)

Obama can try to claim credit for increase oil production, but don't think for a second that anything is going to deter Iran from developing a nuclear weapon. Obama/Kerry have already eased many of the Iranian sanctions.

Re:Bullshit. Total spin. (1)

germansausage (682057) | about a year ago | (#45385769)

Er? Citation please. None of the sanctions have been lifted to this point.

Money Talks (2)

germansausage (682057) | about a year ago | (#45385759)

The moral of the story is Money Talks. An embargo is toothless if we have to keep buying Iran's oil. Once we can get our oil without them, the embargo starts to bite hard. The mullahs are looking at what happened in Egypt and Tunisia and Syria, and they can do the math. About 60% of their population is under 30. They are young, educated and unemployed, which is the recipe for social unrest and political instability. The sanctions are making an already bad problem much worse. If they have to choose between obtaining nuclear weapons, or regime survival, they will make the obvious choice.

Re:Money Talks (2)

germansausage (682057) | about a year ago | (#45385803)

One more thought. This is probably the beginning of the end for OPEC.

I can see the propaganda title (0)

Anonymous Coward | about a year ago | (#45385763)

Fracking for Peace.

Zero Credence (0)

Anonymous Coward | about a year ago | (#45385771)

There is really very little reason to take Julius Walker's ideas seriously. He is a flack for the energy industry who came up with a novel spin in support of frakcing and got some coverage for it from credulous media. Good for him. That's his job.

prices? (0)

Anonymous Coward | about a year ago | (#45385777)

"the trick will be to ease Iranian oil back onto the broader market without disrupting prices"

Go ahead, disrupt prices! Consumers will not mind.

Re: prices? (0)

Anonymous Coward | about a year ago | (#45386207)

For a while. But, if cheap Iranian oil makes fracking unprofitable, people will stop doing it. The ensuing reduction in supply could actually drive prices back up - potentially farther than they fell.

Poison all our water for world peace! (0)

Anonymous Coward | about a year ago | (#45385801)

Thank you oil companies!

**reduction in demand** not fracking! (1)

globaljustin (574257) | about a year ago | (#45385805)

Misleading article...the whole context is wrong...

First off, the collusion in the oil industry is not fully known, so we are just guessing when we talk about 'global supply'

2nd, the US does not get its oil from Iran...our demand/supply is tagentially not directly related

3rd and most importantly for this PR propaganda of a TFA: It was a **decrease in demand** not fracking!

If the US automakers hadn't **killed the electric car** there would have been at least an **equal drop in demand**

Fracking has *nothing* to do with our diplomatic success in Iran.

Oil is a commodity (1)

tepples (727027) | about a year ago | (#45386033)

2nd, the US does not get its oil from Iran...our demand/supply is tagentially not directly related

Oil is a commodity. Every barrel the United States doesn't buy from country A is a barrel that country A gets to sell instead of Iran.

3rd and most importantly for this PR propaganda of a TFA: It was a **decrease in demand** not fracking!

Perhaps the truth is both an increase in supply due to substitution with fracked gas and a decrease in demand due to CAFE and foreign counterparts.

Argument is an oversimplification (2)

globaljustin (574257) | about a year ago | (#45386185)

Oil is a commodity. The sky is blue.

that doesn't mean you have a point...you have *half* a point...your argument has only one leg to stand on...

Every barrel the United States doesn't buy from country A is a barrel that country A gets to sell instead of Iran.

wrong...you are ignoring important distinctions leading to a reductive argument

the global energy industry is not like AP Economics...the concept of supply/demand you illustrate above is about on the level of trying to talk quantum entanglement by commenting that "force equals mass * acceleration fool, therefore quantum computing is truely quantum"

First off, oil producing countries collude with each other to control global demand. Iran is part of more than one quasi-political union of oil producing non-Nato countries.

The US can import oil from certain suppliers for very cheap compared to others...

Fracking does not produce the oil that becomes gasoline. Almost all discussion of "oil prices" is statistically referring to oil that leads to gasoline...the "price at the pump"

I can acknowledge that **the perception** that US fracking has reduced global demand has affected commodities traders far down the chain...how much of an effect? is it salient? TFA sure didn't tell us

We need to just call out this garbage instead of making (correct) counterpoints...I'm not directing this at you, teeples, but all /. peoples...

it's really ok to say, "fracking didn't cause this...TFA is bullshit"...even though...**technically** one might be able to demonstrate some tangential effect...

the article is misleading 100%...its a 'lie'...or it is an attempt to craft a greater lie

Re:Argument is an oversimplification (1)

tepples (727027) | about a year ago | (#45386699)

The US can import oil from certain suppliers for very cheap compared to others

I'm interested. Where can I read more about these suppliers that give discounts to the United States so that I don't make the same mistake?

Fracking does not produce the oil that becomes gasoline

Correct. Hydrofracturing doesn't produce anything. It does help extract natural gas, a product that can substitute for gasoline in CNG-converted cars. It's not an overnight substitution, as converting a gasoline vehicle to CNG isn't cost-free. But over time, as fleets of CNG bi-fuel vehicles are deployed, the substitution effect reduces gasoline demand.

US consumption of oil is way down (2, Informative)

ZepHead (588874) | about a year ago | (#45385841)

Increased supply is only part of the equation.

US oil consumption has dropped down to mid 1990's level: http://www.eia.gov/countries/country-data.cfm?fips=US#pet [eia.gov]

The trend of declining oil consumption should continue due to factors such as:

- continued underemployment
- aging population
- urbanization
- improved vehicle fuel efficiency

Also, Iran knows that if Republicans come back to power, Israel will be able to dupe the US into attacking Iran. It is prudent for Iran to negotiate a deal with an administration that is capable of negotiating (and isn't Israel's puppet).

Re:US consumption of oil is way down (2)

girlintraining (1395911) | about a year ago | (#45386433)

Also, Iran knows that if Republicans come back to power, Israel will be able to dupe the US into attacking Iran. It is prudent for Iran to negotiate a deal with an administration that is capable of negotiating (and isn't Israel's puppet).

Since the Carter Administration, every President has said we need to negotiate a peace between Israel and Palestine, the middle east, etc. Every. Last. One. Don't give me that "the republicans..." bull... it's been everyone for the past 20 years. And with every new Presidency, nothing happens. America loves to say it'll get everyone to the negotiating table, and then they... don't. Even Jon Stewart from the Daily Show, who happens to be Jewish, says the US is impotent when it comes to Israel.

Also, how stupid do you have to be to think that a tiny sliver of land in the Middle East... which is mostly desert and has no major world exports or imports... is puppeting the largest, most powerful, country on Earth by GDP and military expenditures?

Lay off the crack, man.

Is it that simple? (0)

Anonymous Coward | about a year ago | (#45385855)

I recall reading a few years ago that Iran needed more and more of its oil production for its own transportation and power generation needs.

And that that was, in part, the reason for Iran reducing its oil exports.

Problem? (3, Interesting)

girlintraining (1395911) | about a year ago | (#45385867)

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.

Lies, damned lies and... (0)

Anonymous Coward | about a year ago | (#45385933)

"Over the last two years, the US has increased its crude production by about 2 million barrels a day."

And how has US consumption increased, in those two years?

What else wouldn't we have without fracking? (0)

Anonymous Coward | about a year ago | (#45385947)

If not for fracking, we wouldn't have:

- Man made earthquakes
- Poisoned ground water
- Natural gas in ground water
- Fracking byproducts dumped onto rural roads, onto beaches, and dumped into rivers
- People having to sell their land because the water is unusable
- People having to get water delivered to them because they can't drink their well water
- People getting paid by fracking companies for their silence
- Dick Cheney pushing the EPA to make fracking chemicals untested and undocumented
- A surplus of oil which has not reduced gasoline prices IN ANY WAY AT ALL

So essentially we've gotten nothing from fracking, and the oil companies have gotten very, very rich.
Sounds like a win-win situation!

Re:What else wouldn't we have without fracking? (2)

DahGhostfacedFiddlah (470393) | about a year ago | (#45386115)

So essentially we've gotten nothing from fracking
Did you even RTFA^HS^HHeadline? "We" have leverage over Iran. Which is generally recognized as a good thing (feel free to argue).

Whether or not it's worth the vast environmental damage is for you to decide, but don't display your stupidity by claiming there are absolutely no upsides.

Warlike sanctions (0)

Anonymous Coward | about a year ago | (#45385977)

This would be true if the US bought oil from Iran.

The truth is that Iran is in a hard place - the US has put it under such stringent sanctions that not only is it limited in trade to US afiliated companies, but also to any other country or company, friend or foe of the US.

It cannot trade using the petrodollar and any other company that decides to trade with Iran is also likely to get hit by sanctions.

It is an almost warlike state where Iran is being almost forced to lash out - and if that happens it will be decimated while the agressors will talk their righteous talk, mention self defence while ignoring how Iran was starved and forced into reacting.

$150 a barrel (4, Insightful)

twistedcubic (577194) | about a year ago | (#45386039)

Quote: 'Without US production gains, I think we'd be looking at $150 a barrel.'

This is the bubble where ideology and proof are one and the same.

Bad Headline, and there's more going on. (4, Interesting)

Ralph Spoilsport (673134) | about a year ago | (#45386059)

Fracking doesn't have major effects on oil prices, and won't until cars run on natgas. Iran's oil production peaked years ago, and that's an open secret. They will not be increasing oil production, ever. What fracking does do is crush the market for natgas. And it just so happens that BTU for BTU, Iran has more natgas than Saudi Arabia has oil. Iran is in a suboptimal energy spot. They know that their carbon fuels will eventually run out. They need to have alternatives in place to keep the lights on before things get out of hand. The standard response has been "Nukes". Also, nukes can help make nuke weapons, which kept the USA at bay.

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...

Re:Bad Headline, and there's more going on. (2)

benjfowler (239527) | about a year ago | (#45386255)

If it's all about access to the European gas market, then how do we explain the Russia-shia axis then?

Isn't there a contradiction between Russia playing 19th-century power politics with access to Tarsus, preserving Gazprom's market power, preserving the 'oil weapon', and countering Sunni jihadism?

Very incomplete article (4, Informative)

apharov (598871) | about a year ago | (#45386109)

While the drop in Iranian exports is certainly a sum of many things, the article completely fails to mention the EU sanctions. Notice the very sharp drop in the export volume graph mid-2012? That's the sanctions coming fully to force in July 2012: http://en.wikipedia.org/wiki/European_Union_sanctions_against_Iran#Sanctions [wikipedia.org]

Awful, Awful, Awful (3, Insightful)

brit74 (831798) | about a year ago | (#45386229)

The argument in the summary is absolutely awful. Here's why:

First, let's start with two facts, and let's assume they are true: "the US has increased its crude production by about 2 million barrels a day" and "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". The implication in the summary is that Iran's oil production was reduced because the US increased oil production. Let's think about this for a second. This argument would make sense if all three of these claims were true: (1) Iran and the US were the only oil producers in the world, (2) The US was the only oil consumer in the world, (3) US oil consumption remained stable over the past two years. None of these claims are true. First, oil is a global commodity - there are plenty of producers and plenty of consumers. To put this in context, the global oil production is about 80-90 million barrels per day ( http://en.wikipedia.org/wiki/List_of_countries_by_oil_production [wikipedia.org] ). So, why would it be true that an increase in 2 million barrels per day in the US would lead directly to a 1.5 million barrel reduction in Iran? Even worse, the US does not purchase any oil from Iran.(though there could be indirect effects, for example, a reduction in US oil purchasing could result in other nations purchasing more oil from Saudi Arabia or Canada, thus reducing their need to buy from Iran). If this is an indirect effect, then we would expect all oil-producing nations (*not* just Iran) to have a small reduction in oil sales (i.e. Saudi Arabia and Canada and Venezuela and other net-oil-export nations would all share in the decline).

In short, it's absolutely absurd to tie an increase of 2 million barrels/oil per day in the US to a 1.5 million barrel/oil per day sales reduction in Iran. These two things don't have any cause-and-effect relationship. They are merely correlated in time. (And I'd bet $100 that if the US never did any fracking, Iran would see the exact same decline in oil production.)

I can see the political implications of making this claim though: it allows (pro-oil) Republicans to pretend that fracking (which they support) resulted in forcing Iran (the country they hate) into a weaker position which pressures them to negotiate with the US. This allows them to take credit for Iran coming to the negotiating table while also undermining any anti-fracking talk. In short: if you damn liberals try to stop fracking, you're helping "Death to America" Iran. Why do you hate freedom?

or put another way (1)

lytles (24756) | about a year ago | (#45386253)

the sanctions on iran have artificially raised the price of crude, transferring trillions of dollars from consumers to producers

What a bogus claim (0)

Anonymous Coward | about a year ago | (#45386299)

This is total bullshit. Please tell me the /. public knows the difference between natural gas and oil that is refined into gasoline. They are not the same and this is probably the biggest piece of government propaganda I've seen on this website in awhile.

Making fracking unprofitable (2)

he-sk (103163) | about a year ago | (#45386417)

How is making fracking unprofitable a negative thing?

Ayatollahs to step up funding to Green groups (1)

Kohath (38547) | about a year ago | (#45386691)

The Ayatollahs and the House of Saud should increase their funding of the various North American Green groups. Without green group obstruction, we'd have another huge new source of oil in ANWR, we'd be almost done with the Keystone Pipeline, and we would have vast new production offshore.

Also useful to Ayatollahs and the Saudi royals:

- Boko Harem terrorist attacks threatening to destabilize oil production in Nigeria
- Socialist nationalization of oil production facilities in Venezuela under Chavez and Maduro

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