Author Topic: Oil at $23  (Read 7280 times)

KBecks

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Re: Oil at $23
« Reply #100 on: April 22, 2020, 06:16:24 AM »
At least you used the proper verb, "gambled".  You want to "invest".  Learn the difference and pick a better industry for your life savings.

Financial.Velociraptor

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Re: Oil at $23
« Reply #101 on: April 22, 2020, 07:20:31 AM »
It's helpful to remember that not all oil went negative, just for one region in the US, the one that sells West Texas Intermediate.  Yes, this was freaky but not all oil went negative.  The same contracts that were selling for -$40 yesterday ended up selling for $10 today, the last day of the contract period.  The next months contracts are selling cheap and because there is a crap ton of oil around and not much use for it. 

This was also driven by speculation and not hedging.  Producers don't ordinarily sell their product for negative prices.  Your typical producer in the Permian has 80-90% of their production hedged in the futures market and sells the rest "spot".  Refiners likewise have the majority of their supply chain hedged as the producer's counter parties.  The rest of the contracts are held by speculators basically gambling on the price of oil.  When the contracts got down to the last two days left, it is clear a number of speculators were left with the problem of being legally obligated to take delivery of product they had no use for and couldn't unload on a third party.  It was forced selling (and not a lot of it, volume was low).  Second month futures never got close to negative. 

This will start to unwind.  New drilling will taper off (it won't go to zero because many producers have hedged production they haven't even drilled yet).  But de-novo capex for wells that have not be pre-emptively hedged will simply not happen until the price of hedges moves back above break even. 

bwall

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Re: Oil at $23
« Reply #102 on: April 22, 2020, 08:15:19 AM »
It's helpful to remember that not all oil went negative, just for one region in the US, the one that sells West Texas Intermediate.  Yes, this was freaky but not all oil went negative.  The same contracts that were selling for -$40 yesterday ended up selling for $10 today, the last day of the contract period.  The next months contracts are selling cheap and because there is a crap ton of oil around and not much use for it. 

This was also driven by speculation and not hedging.  Producers don't ordinarily sell their product for negative prices.  Your typical producer in the Permian has 80-90% of their production hedged in the futures market and sells the rest "spot".  Refiners likewise have the majority of their supply chain hedged as the producer's counter parties.  The rest of the contracts are held by speculators basically gambling on the price of oil.  When the contracts got down to the last two days left, it is clear a number of speculators were left with the problem of being legally obligated to take delivery of product they had no use for and couldn't unload on a third party.  It was forced selling (and not a lot of it, volume was low).  Second month futures never got close to negative. 

This will start to unwind.  New drilling will taper off (it won't go to zero because many producers have hedged production they haven't even drilled yet).  But de-novo capex for wells that have not be pre-emptively hedged will simply not happen until the price of hedges moves back above break even.

Great info and insight. Thanks for sharing.

ctuser1

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Re: Oil at $23
« Reply #103 on: April 22, 2020, 08:39:07 AM »
I don't specifically know what drove the oil prices negative. However, I am not sure speculation is involved. :-)..

Negative prices used to happen all the time in the electricity markets when I was last involved in them. Plain vanilla market supply and demand drives that - not speculation. It is incredibly expensive to shut down nuclear plants, very expensive to do so with coal plants, so on and so forth till you get to the gas powered peakers that can be turned up or down quickly.

In this setup, sometimes it is less expensive for a nuclear power plant to pay someone else to take electricity off their hands than to try and shut the plant down. In fact, the plants are required to submit detailed bids to ISO's ahead of time showing the price points at which they plan to operate, with negative prices very much a planned feature of many non-gas-powered plants. No speculation is involved here.

I bet that if you picked up the wholesale prices of all the 8700 electricity pricing nodes on PJM on 4 consecutive Sunday 12AM-3AM hours, you will find a few negative prices in there. i.e. it used to be very common and prevalent when I last looked.

Any commodity that requires storage can have similar mechanics play out. No place to store or very expensive storage + expensive to discontinue operations => sometimes negative prices.

No speculation is required.

Again, my work no longer involves commodity markets. So I don't "know" what is going on beyond just the headlines. But the above is just my educated guess.

maizefolk

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Re: Oil at $23
« Reply #104 on: April 22, 2020, 08:52:33 AM »
Any commodity that requires storage can have similar mechanics play out. No place to store or very expensive storage + expensive to discontinue operations => sometimes negative prices.

In addition to those criteria, you also need a commodity where it's impossible to get rid of the commodity for free.

Milk has very limited and short term storage, and it's very difficult to ramp up or down production quickly. Cows still need to be milked whether or not a farmer has anyone to sell the milk to. But when demand gets too low, prices don't go negative because farmers can and do just dump milk down the drain.

ctuser1

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Re: Oil at $23
« Reply #105 on: April 22, 2020, 09:21:56 AM »
Any commodity that requires storage can have similar mechanics play out. No place to store or very expensive storage + expensive to discontinue operations => sometimes negative prices.

In addition to those criteria, you also need a commodity where it's impossible to get rid of the commodity for free.

Milk has very limited and short term storage, and it's very difficult to ramp up or down production quickly. Cows still need to be milked whether or not a farmer has anyone to sell the milk to. But when demand gets too low, prices don't go negative because farmers can and do just dump milk down the drain.

True. Didn't think of the milk example.

MustacheAndaHalf

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Re: Oil at $23
« Reply #106 on: April 22, 2020, 09:27:01 AM »
I don't follow the Motley Fool in particular, but they echo what I've heard elsewhere... The US Oil Fund (USO) halted trading a few times recently, and may be forced to liquidate it's assets like a similar ETN already did.  This article also claims USO trailed the price of oil by a surprisingly large amount (-78% over about a decade).
https://www.fool.com/investing/2020/04/22/3-reasons-not-to-buy-oil-etfs-like-uso.aspx

So... oil ETF buyer, beware.

Financial.Velociraptor

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Re: Oil at $23
« Reply #107 on: April 22, 2020, 09:27:24 AM »
@ctuser1

Electricity markets are very different than Oil or milk markets.  I don't follow those markets outside of ERCOT (Texas) but I do know that in my state, negative (spot) electricity rates have always been driven by a perverse market incentive.  The renewable producers, especially west Texas wind producers receive generous tax credits for their production.  It makes financial sense for them to sell surplus electricity at a loss so long as the loss does not exceed the size of the tax credit.  To my knowledge, that scenario has never played out.  Neither have I ever seen futures prices turn negative.  Only spot and only during night time hours when demand is low and wind power sometimes exceeds base load needs.

magnet18

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Re: Oil at $23
« Reply #108 on: April 22, 2020, 10:41:20 AM »
At what point do people start to "buy" oil just to set it on fire?

Environmental impacts would probably limit this strat to third world nations where you could bribe your way though any obstacles.  Good business opportunity though!

"Some people just want to watch the world burn" was never so literal :D

I live in the middle of BFE, at $-40/barrel  I'm sure somebody is trying to figure out how to modify their heating oil stoves to crude oil stoves

(Eta, mostly ptf
I've seen crude in person, i don't think that *actually* feasible, plus it smells terrible)

If that was even possible why would anyone have bothered to refine it in the first place? This is a weird price inversion due to extenuating circumstances, but I would guess the normal economics of the situation would be that crude would be cheaper than the refined oil.  How could that not be true? How could the refiners make any profit if it wasn't true?

Being possible and being a good idea are very different.  I'm sure it's possible in some limited sense, and I'm equally sure it's a terrible idea.  Crude is a thick sludge that's hard to work with.  Refining essentially splits it up into it's components so they can be used most efficiently in fuels, plastics, cosmetics, etc.   (All the "crude is never coming back, yay electric cars" people forget how much stinking plastic we rely on.  Plant based alternatives are coming along though)

And, yes, of course crude is normally cheaper than refined products.  My sister is an engineer for a refinery, they *definitely* don't operate at a loss.  I don't think they have a single employee that makes less than 6 figures.

Alternatepriorities

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Re: Oil at $23
« Reply #109 on: April 22, 2020, 11:01:12 AM »
If I were to take a stab at how to design an effective crude burning heating system, I would probably start with a concept similar to the whispererlite international camping stoves that heat the fuel before burning it. The other reasonably starting point would probably be the old used motor oil shop stoves that would use corn cobs or other low quality fuel to hold the fire and then drip heated oil onto the pile to improve the heat output.

magnet18

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Re: Oil at $23
« Reply #110 on: April 22, 2020, 11:23:57 AM »
If I were to take a stab at how to design an effective crude burning heating system, I would probably start with a concept similar to the whispererlite international camping stoves that heat the fuel before burning it. The other reasonably starting point would probably be the old used motor oil shop stoves that would use corn cobs or other low quality fuel to hold the fire and then drip heated oil onto the pile to improve the heat output.

One of those used motor oil stoves might work actually, i think the biggest issues would be smoke collection and filtering the input sludge. I remember texas crude having actual chunks of junk in it but I may be remembering wrong.  Also the EPA and the angry neighbors.  Used motor oil probably burns "clean" by comparison to crude.

Alternatepriorities

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Re: Oil at $23
« Reply #111 on: April 22, 2020, 11:27:48 AM »
If I were to take a stab at how to design an effective crude burning heating system, I would probably start with a concept similar to the whispererlite international camping stoves that heat the fuel before burning it. The other reasonably starting point would probably be the old used motor oil shop stoves that would use corn cobs or other low quality fuel to hold the fire and then drip heated oil onto the pile to improve the heat output.

One of those used motor oil stoves might work actually, i think the biggest issues would be smoke collection and filtering the input sludge. I remember texas crude having actual chunks of junk in it but I may be remembering wrong. Also the EPA and the angry neighbors.  Used motor oil probably burns "clean" by comparison to crude.

No doubt! This is purely a thought experiment. Personally I prefer to heat with renewable wood and only use the natural gas when I'm not home.

magnet18

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Re: Oil at $23
« Reply #112 on: April 22, 2020, 01:07:45 PM »
If I were to take a stab at how to design an effective crude burning heating system, I would probably start with a concept similar to the whispererlite international camping stoves that heat the fuel before burning it. The other reasonably starting point would probably be the old used motor oil shop stoves that would use corn cobs or other low quality fuel to hold the fire and then drip heated oil onto the pile to improve the heat output.

One of those used motor oil stoves might work actually, i think the biggest issues would be smoke collection and filtering the input sludge. I remember texas crude having actual chunks of junk in it but I may be remembering wrong. Also the EPA and the angry neighbors.  Used motor oil probably burns "clean" by comparison to crude.

No doubt! This is purely a thought experiment. Personally I prefer to heat with renewable wood and only use the natural gas when I'm not home.

I was 100% electric this year, got by with 3 space heaters and a broken furnace I never got around to fixing, lol

if only my locale was sunny enough for a solar array to make sense ..

I have a woodstove as well, absolutely love it!

frugalnacho

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Re: Oil at $23
« Reply #113 on: April 22, 2020, 01:15:17 PM »
I don't specifically know what drove the oil prices negative. However, I am not sure speculation is involved. :-)..

Negative prices used to happen all the time in the electricity markets when I was last involved in them. Plain vanilla market supply and demand drives that - not speculation. It is incredibly expensive to shut down nuclear plants, very expensive to do so with coal plants, so on and so forth till you get to the gas powered peakers that can be turned up or down quickly.

In this setup, sometimes it is less expensive for a nuclear power plant to pay someone else to take electricity off their hands than to try and shut the plant down. In fact, the plants are required to submit detailed bids to ISO's ahead of time showing the price points at which they plan to operate, with negative prices very much a planned feature of many non-gas-powered plants. No speculation is involved here.

I bet that if you picked up the wholesale prices of all the 8700 electricity pricing nodes on PJM on 4 consecutive Sunday 12AM-3AM hours, you will find a few negative prices in there. i.e. it used to be very common and prevalent when I last looked.

Any commodity that requires storage can have similar mechanics play out. No place to store or very expensive storage + expensive to discontinue operations => sometimes negative prices.

No speculation is required.

Again, my work no longer involves commodity markets. So I don't "know" what is going on beyond just the headlines. But the above is just my educated guess.

Why could excess electricity not simply be "dumped" rather than paying someone to take it away? I understand why you can't simply "dump" crude oil and it must be physically stored somewhere, but why couldn't excess electricity be used for something useful, or failing that, just discharged into the environment?

maizefolk

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Re: Oil at $23
« Reply #114 on: April 22, 2020, 01:31:36 PM »
Why could excess electricity not simply be "dumped" rather than paying someone to take it away? I understand why you can't simply "dump" crude oil and it must be physically stored somewhere, but why couldn't excess electricity be used for something useful, or failing that, just discharged into the environment?

Dumping excess electricity requires building special infrastructure. For example use banks of resistors which could be attached to the grid to burn off the excess and make money when the price turns negative. So far the price hasn't been negative frequently enough for it to make sense to spend money building specialized equipment to burn electricity to make money when one can get paid to use up excess.

Otherwise having more power supply connected to the grid than demand will increase voltage and potentially mess up the frequency of alternating current and start to damage devices connected to the grid. The price going negative is an incentive both for producers who are able to do so to take generating capacity offline, and for large industrial consumers who CAN use electricity for productive purposes to use as much of it as possible to avoid damaging the grid itself and grid connected machines and electronics.

ctuser1

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Re: Oil at $23
« Reply #115 on: April 22, 2020, 01:34:09 PM »
I don't specifically know what drove the oil prices negative. However, I am not sure speculation is involved. :-)..

Negative prices used to happen all the time in the electricity markets when I was last involved in them. Plain vanilla market supply and demand drives that - not speculation. It is incredibly expensive to shut down nuclear plants, very expensive to do so with coal plants, so on and so forth till you get to the gas powered peakers that can be turned up or down quickly.

In this setup, sometimes it is less expensive for a nuclear power plant to pay someone else to take electricity off their hands than to try and shut the plant down. In fact, the plants are required to submit detailed bids to ISO's ahead of time showing the price points at which they plan to operate, with negative prices very much a planned feature of many non-gas-powered plants. No speculation is involved here.

I bet that if you picked up the wholesale prices of all the 8700 electricity pricing nodes on PJM on 4 consecutive Sunday 12AM-3AM hours, you will find a few negative prices in there. i.e. it used to be very common and prevalent when I last looked.

Any commodity that requires storage can have similar mechanics play out. No place to store or very expensive storage + expensive to discontinue operations => sometimes negative prices.

No speculation is required.

Again, my work no longer involves commodity markets. So I don't "know" what is going on beyond just the headlines. But the above is just my educated guess.

Why could excess electricity not simply be "dumped" rather than paying someone to take it away? I understand why you can't simply "dump" crude oil and it must be physically stored somewhere, but why couldn't excess electricity be used for something useful, or failing that, just discharged into the environment?

I don't know for sure, but can speculate.

I think there must be some physical/technological constraints. How would you "dump" the electricity? Some giant resistor load? producing heat? That does not sound very feasible/cheap/easy at the massive quantities we are talking about here. Also think of the capex spending for such a massive energy sink, all the safety issues/concerns - and it does not sound particularly feasible. Utilities are also regulated entities that need to get approval for all capex. They don't exactly operate like a private enterprise. They *can't* look to "maximize profits" - because their profit margin is capped by regulation. So I doubt they would be motivated to do this, or would be allowed by regulators if they were - "social benefit" is maximized by allowing occasional negative prices instead of spending money building unproductive energy sinks.

Besides the physical/business reasons, I think the main problem is that the clearing price is not available ahead of time. The ISO's first mandate is grid stability, they do whatever they can, turn whatever "peakers" they need to, shut down whatever generator they have to, in order to prevent blackouts/blowouts/brownouts. It is only after the fact that they communicate to the market participants at what price did the spot electricity markets cleared. So I don't see how you would plan ahead of time and "know" which hour's electricity will actually clear at a negative price, and plan for engaging the sink.

All utility companies would have a couple of math/physics PhDs running fabulously complicated "stacking models" (each utility has a different name for it) that attempts to predict how the electricity prices will clear. But, as far as I knew (years ago, when I dealt with commodities markets), none of these models are accurate enough to allow for reliable planning off them.

<Cross posted with maizeman, who, as always, posted a simple and accurate response.>
« Last Edit: April 22, 2020, 01:41:46 PM by ctuser1 »

kenmoremmm

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Re: Oil at $23
« Reply #116 on: April 22, 2020, 01:51:56 PM »
i know jack about electricity, but isn't there always "extra" capacity in the system? otherwise, we'd have brownouts all the time.

ChpBstrd

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Re: Oil at $23
« Reply #117 on: April 22, 2020, 02:01:24 PM »
Electricity can be dumped into the ground with no environmental issues. All the electricity that goes though your house passes through your devices and then goes into a metal stake in the ground.

frugalnacho

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Re: Oil at $23
« Reply #118 on: April 22, 2020, 02:04:16 PM »
Why could excess electricity not simply be "dumped" rather than paying someone to take it away? I understand why you can't simply "dump" crude oil and it must be physically stored somewhere, but why couldn't excess electricity be used for something useful, or failing that, just discharged into the environment?

Dumping excess electricity requires building special infrastructure. For example use banks of resistors which could be attached to the grid to burn off the excess and make money when the price turns negative. So far the price hasn't been negative frequently enough for it to make sense to spend money building specialized equipment to burn electricity to make money when one can get paid to use up excess.

Otherwise having more power supply connected to the grid than demand will increase voltage and potentially mess up the frequency of alternating current and start to damage devices connected to the grid. The price going negative is an incentive both for producers who are able to do so to take generating capacity offline, and for large industrial consumers who CAN use electricity for productive purposes to use as much of it as possible to avoid damaging the grid itself and grid connected machines and electronics.

Why can't it just go into the ground?

magnet18

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Re: Oil at $23
« Reply #119 on: April 22, 2020, 02:05:36 PM »

Electrical engineer here, +1 maizeman nailed it

i know jack about electricity, but isn't there always "extra" capacity in the system? otherwise, we'd have brownouts all the time.

There is a margin things can operate in.

Some systems, like a gas generator, can have surplus and run without any load on them without it causing problems.

But for other systems, if you have so little being drawn that there is no load on the turbine of a nuclear reactor or a windmill, what happens is it just starts spinning faster and faster until it fails catastrophically.  There are some good YouTube videos of windmills flying apart spectacularly.

Turbine based systems are supplemented by things like gas generators, but if you get to the point where all the gas generators are off, you need to either throttle down the reactor, dump power into specially designed power sinks, or sell it at a loss.  Selling it at a loss is most economical, because this happens infrequently, and nobody likes moving the control rods on a nuclear reactor more than necessary.

magnet18

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Re: Oil at $23
« Reply #120 on: April 22, 2020, 02:08:00 PM »
Electricity can be dumped into the ground with no environmental issues. All the electricity that goes though your house passes through your devices and then goes into a metal stake in the ground.

Sorry, i initially said you're not correct

That is not *usually* correct

As much as possible goes back on the other phase of the 220 input or on the neutral line

And by the time it gets to the ground rod it has expended it's energy in your appliances

The energy is actually expensed in your appliances

If you opened your breaker box and hooked your power to that ground stake, things would melt and the power company would knock on your door
« Last Edit: April 22, 2020, 02:15:55 PM by magnet18 »

magnet18

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Re: Oil at $23
« Reply #121 on: April 22, 2020, 02:20:37 PM »
Why could excess electricity not simply be "dumped" rather than paying someone to take it away? I understand why you can't simply "dump" crude oil and it must be physically stored somewhere, but why couldn't excess electricity be used for something useful, or failing that, just discharged into the environment?

Dumping excess electricity requires building special infrastructure. For example use banks of resistors which could be attached to the grid to burn off the excess and make money when the price turns negative. So far the price hasn't been negative frequently enough for it to make sense to spend money building specialized equipment to burn electricity to make money when one can get paid to use up excess.

Otherwise having more power supply connected to the grid than demand will increase voltage and potentially mess up the frequency of alternating current and start to damage devices connected to the grid. The price going negative is an incentive both for producers who are able to do so to take generating capacity offline, and for large industrial consumers who CAN use electricity for productive purposes to use as much of it as possible to avoid damaging the grid itself and grid connected machines and electronics.

Why can't it just go into the ground?

You would make a nice patch of ground that gets cooked to a crisp until it's no longer conductive, then you have the same problem you started with

frugalnacho

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Re: Oil at $23
« Reply #122 on: April 22, 2020, 02:52:19 PM »
Why could excess electricity not simply be "dumped" rather than paying someone to take it away? I understand why you can't simply "dump" crude oil and it must be physically stored somewhere, but why couldn't excess electricity be used for something useful, or failing that, just discharged into the environment?

Dumping excess electricity requires building special infrastructure. For example use banks of resistors which could be attached to the grid to burn off the excess and make money when the price turns negative. So far the price hasn't been negative frequently enough for it to make sense to spend money building specialized equipment to burn electricity to make money when one can get paid to use up excess.

Otherwise having more power supply connected to the grid than demand will increase voltage and potentially mess up the frequency of alternating current and start to damage devices connected to the grid. The price going negative is an incentive both for producers who are able to do so to take generating capacity offline, and for large industrial consumers who CAN use electricity for productive purposes to use as much of it as possible to avoid damaging the grid itself and grid connected machines and electronics.

Why can't it just go into the ground?

The more i think about how electricity works, this wouldn't work and you'd need to disperse electrical energy somehow, like maizeman said.

ctuser1

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Re: Oil at $23
« Reply #123 on: April 22, 2020, 03:13:08 PM »
@ctuser1

Electricity markets are very different than Oil or milk markets.  I don't follow those markets outside of ERCOT (Texas) but I do know that in my state, negative (spot) electricity rates have always been driven by a perverse market incentive.  The renewable producers, especially west Texas wind producers receive generous tax credits for their production.  It makes financial sense for them to sell surplus electricity at a loss so long as the loss does not exceed the size of the tax credit.  To my knowledge, that scenario has never played out.  Neither have I ever seen futures prices turn negative.  Only spot and only during night time hours when demand is low and wind power sometimes exceeds base load needs.

That is an interesting thing to learn.

For some reason I never worked with a big renewable energy producer. That's probably the reason I never encountered this specific driver.


Alternatepriorities

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Re: Oil at $23
« Reply #124 on: April 22, 2020, 04:50:20 PM »
Electricity can be dumped into the ground with no environmental issues. All the electricity that goes though your house passes through your devices and then goes into a metal stake in the ground.

Sorry, i initially said you're not correct

That is not *usually* correct

As much as possible goes back on the other phase of the 220 input or on the neutral line

And by the time it gets to the ground rod it has expended it's energy in your appliances

The energy is actually expensed in your appliances

If you opened your breaker box and hooked your power to that ground stake, things would melt and the power company would knock on your door

Thanks for that visual. I did actually laugh. Fortunately only my wife can hear med.

Reminds me of long chats with a former manager who worked in power distribution for a while. If one wanted to kill a couple hours, just ask about the grid rebooting process for NM. I learned a lot from him. He was also the first manager I met who was actually good with his money. He was a Mustachian before I earned my first paycheck but liked his work.

markbike528CBX

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Re: Oil at $23
« Reply #125 on: April 22, 2020, 05:00:53 PM »
Re turning nuclear reactors down or off:

Boiling Water Reactors (BWR) run best near 100% power. While you can reduce power +20%, at ~ 60% power you might get close to the instability regions (sort of chugging).

 Pressurized Water Reactors(PWR) don't have the same issues as BWRs.  As far as I know, no US PWR changes power to match the external load.  French PWRs do, probably since they represent ~75% of French electricity.  Also ?all? Naval reactors are PWRs* and change power at the Captain's demand, subject to Naval Reactors rules.

*Exceptions: 1st Seawolf core, Soviet Alukas.

Shutting a reactor down can be very quck( seconds) for emergencies, but doing it right, in a controlled manner takes days. Startup also takes days.  As I recall, the heat up max rate is 80F an hour. So from 100F to 600F over 6 hours in a hurry (hurry is a bad word in nuclear-speak).

markbike528CBX

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Re: Oil at $23
« Reply #126 on: April 22, 2020, 05:13:29 PM »
Electricity can be dumped into the ground with no environmental issues. All the electricity that goes though your house passes through your devices and then goes into a metal stake in the ground.

Sorry, i initially said you're not correct

That is not *usually* correct

As much as possible goes back on the other phase of the 220 input or on the neutral line

And by the time it gets to the ground rod it has expended it's energy in your appliances

The energy is actually expensed in your appliances

If you opened your breaker box and hooked your power to that ground stake, things would melt and the power company would knock on your door

Thanks for that visual. I did actually laugh. Fortunately only my wife can hear med.

Reminds me of long chats with a former manager who worked in power distribution for a while. If one wanted to kill a couple hours, just ask about the grid rebooting process for NM. I learned a lot from him. He was also the first manager I met who was actually good with his money. He was a Mustachian before I earned my first paycheck but liked his work.

You could use that power for good:-)
https://www.sciencedirect.com/science/article/abs/pii/0191815X88900514
In situ vitrification demonstration for the stabilization of buried wastes at the Oak Ridge National Laboratory
This assumes the ground would melt before your wires.

Alternatepriorities

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Re: Oil at $23
« Reply #127 on: April 22, 2020, 05:53:27 PM »
Electricity can be dumped into the ground with no environmental issues. All the electricity that goes though your house passes through your devices and then goes into a metal stake in the ground.

Sorry, i initially said you're not correct

That is not *usually* correct

As much as possible goes back on the other phase of the 220 input or on the neutral line

And by the time it gets to the ground rod it has expended it's energy in your appliances

The energy is actually expensed in your appliances

If you opened your breaker box and hooked your power to that ground stake, things would melt and the power company would knock on your door

Thanks for that visual. I did actually laugh. Fortunately only my wife can hear med.

Reminds me of long chats with a former manager who worked in power distribution for a while. If one wanted to kill a couple hours, just ask about the grid rebooting process for NM. I learned a lot from him. He was also the first manager I met who was actually good with his money. He was a Mustachian before I earned my first paycheck but liked his work.

You could use that power for good:-)
https://www.sciencedirect.com/science/article/abs/pii/0191815X88900514
In situ vitrification demonstration for the stabilization of buried wastes at the Oak Ridge National Laboratory
This assumes the ground would melt before your wires.

That's an awesome random piece of knowledge.

Travis

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Re: Oil at $23
« Reply #128 on: April 22, 2020, 08:04:52 PM »

Electrical engineer here, +1 maizeman nailed it

i know jack about electricity, but isn't there always "extra" capacity in the system? otherwise, we'd have brownouts all the time.

There is a margin things can operate in.

Some systems, like a gas generator, can have surplus and run without any load on them without it causing problems.

But for other systems, if you have so little being drawn that there is no load on the turbine of a nuclear reactor or a windmill, what happens is it just starts spinning faster and faster until it fails catastrophically.  There are some good YouTube videos of windmills flying apart spectacularly.

Turbine based systems are supplemented by things like gas generators, but if you get to the point where all the gas generators are off, you need to either throttle down the reactor, dump power into specially designed power sinks, or sell it at a loss.  Selling it at a loss is most economical, because this happens infrequently, and nobody likes moving the control rods on a nuclear reactor more than necessary.

Been a while since I saw a wet-stacked diesel generator.  It's almost entertaining to watch it sputter and choke after you warned the operator.  I suppose watching a billion dollar nuke do the same - not so much.

ctuser1

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Re: Oil at $23
« Reply #129 on: April 23, 2020, 06:33:13 AM »
i know jack about electricity, but isn't there always "extra" capacity in the system? otherwise, we'd have brownouts all the time.

There is a whole lot of active work going on 24/7 X 365 to make sure you don't have brownouts.

If you ever visited an ISO control room, the vibe won't likely be too different from the air traffic control rooms. They need to react fast to any mismatches to the system that can't be remedied by the automated controllers. (At least that is how it appeared to me 10+ years ago. Who knows if the technology/process has changed now).

Unlike what the Zombie movies show you - your electric grid won't survive for more than a day or two after the human grid controllers are turned into zombies. The mechanics of how to run the grid is hidden from almost everyone (thanks to the socialist provisions of the Title II regulations that just work), but is NOT automatic.

TomTX

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Re: Oil at $23
« Reply #130 on: April 24, 2020, 06:31:16 AM »
https://www.reuters.com/article/us-global-oil-opec/opec-russia-approve-biggest-ever-oil-cut-to-support-prices-amid-coronavirus-pandemic-idUSKCN21U0J6

This will put the price back up, but US shale oil still won't be profitable.

Cutting production 10M BBL/day isn't a solution when demand is down 25M BBL/day. It fill storage more slowly, doesn't solve the issue.

TomTX

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Re: Oil at $23
« Reply #131 on: April 24, 2020, 07:16:30 PM »
"virtue signal"

Where's the giant rolleyes emoticon?