American Economics Thread

[Godzilla]

US oil/Gas industry suck up all the skills/ investments and they can sell it to Europe/Asia as LNG at price multiples. so who want to work in Nuclear plants. for some reason so much investment in energy industry has yet to reduce manufacturing trade deficit.

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Nah can't really blame the oil and gas industry for that. CBI messed up with those nuclear plants and with them going broke, the likes of Bechtel picked up the pieces and really milked it. This kinda put people off building new ones, and right now, there isn't even that much gas plants being built. Most of the new stuff is wind and solar.

Also, the LNG cycle takes a while, from FID to export first gas usually take around 4 years, and another year after that to get up to name plate capacity. Right now I count only Cove Point, Cameron and freeport LNG being operation, with Calc pass coming online soon. Those are only 20mtpa...

 

[pmc]

Nah can't really blame the oil and gas industry for that. CBI messed up with those nuclear plants and with them going broke, the likes of Bechtel picked up the pieces and really milked it. This kinda put people off building new ones, and right now, there isn't even that much gas plants being built. Most of the new stuff is wind and solar.

Also, the LNG cycle takes a while, from FID to export first gas usually take around 4 years, and another year after that to get up to name plate capacity. Right now I count only Cove Point, Cameron and freeport LNG being operation, with Calc pass coming online soon. Those are only 20mtpa...

look at scale of capex. do you think this scale of money not consume skilled labor?. than add all the dividend payments.
does wind and solar pay dividends?

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In 2019, E&P companies spent $525 billion, an amount which plummeted to $341 billion in 2021, he added.

"We have to get back to $525 billion over several years until 2030 to restore market balance," McMonigle said. "I'm afraid what we're seeing with the energy crisis is on our doorstep."

 

[Godzilla]

look at scale of capex. do you think this scale of money not consume skilled labor?. than add all the dividend payments.
does wind and solar pay dividends?

No, its alot less than what you think. for a 10mtpa LNG plant, I need less than 10million man hours on site. Spread that over a 3 year period from civils to commissioning, and I'll average around 1000 men on site, peaking at around 2 or 3000 depending on how screwed job the engineer and suppliers did. Bulk of my man hours are spent overseas, be it China, other Asian yards or Mexico/Italy, maybe around 30 million man hours, and i'll be using around 3000-5000 men at those locations. This is one of the reasons why the ship yards are booming. They get these stable, high profit fabrication work along side their ship building. Easy money and great upskilling provided you have the right management. All this adds up to around $5-10 billion depending on the process. Of course if you stuff up it blows to 20 or 30 billion lol.
It may sound alot, but, it is pennies compared to what it used to be like. 10 years ago when you stick build one of these LNG, you need 7000 people on site, and you don't get that kind, nowadays, with 1 or 2000, it is manageable, even with the churn.
Also, after 1 or 2 years worth of production, and the plant is paid off.

Wind and solar are replicable projects, key is getting logistics right. Steel prices aint helping with the dividends and viability but we are talking about 1 or 200 people on these kind of jobs, (sub $50mil to build, like 50% of the cost is in the turbine/panels.) Electricity will eventually go up in price, so pay back period is much longer, but hey, its the flavor of the day....

 

[pmc]

i am referring to oil and gas role total capex size not just for exports.
there is alot of byproducts of petroleum in addition to power generations.
try paying dividends from Solar/Wind energy and see what kind of valuation you gets.

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was the largest source—about 40%—of U.S. electricity generation in 2020. Natural gas is used in steam turbines and gas turbines to generate electricity.

 

[Godzilla]

i am referring to oil and gas role total capex size not just for exports.
there is alot of byproducts of petroleum in addition to power generations.
try paying dividends from Solar/Wind energy and see what kind of valuation you gets.

yeah but it works in cycles. When the gas price is high, we build LNG. When the feedstock price is low, we build process plants. They are all megaprojects that costs in the billions. Power plants comes in here and there depending on the needs of the utility.
Its basically the same thing, you either build a fridge or a plastics factory. Capex isn't that much when you compared to the $$$ spent on exploration.

With the solar/wind, its mostly gimmicky stuff. Most of these are tacked on to other stuff for green points, or subsidies. You wouldn't be building them to expect much dividends from it, more like supporting your other activities...

 

[pmc]

40% of Exxon 72K employees worked inside US. so thats 28K employees in US. now count all the suppliers to Exxon. my point is Oil/Gas industry will always have priority to attract best people most of time at particular wage level. even the accountants working for oil/gas will have higher wage most of time.
that was before price run up.

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The highest-paying college major? Petroleum engineering.

 

[Godzilla]

40% of Exxon 72K employees worked inside US. so thats 28K employees in US. now count all the suppliers to Exxon. my point is Oil/Gas industry will always have priority to attract best people most of time at particular wage level. even the accountants working for oil/gas will have higher wage most of time.
that was before price run up.

Yeah that is expected that Exxon pays relatively high. But I think you are mistaken on how this industry work. The people working in Exxon aren't the type of people that will go build you the plants.
They use contractors, as in, companies like Bechtel / Fluor/ Worley Parson /Technip to run all their feasibility studies and then progress the things to EPC phase. Now, the talents working for these companies, aren't necessarily locked down to oil and gas jobs.
I work for them, lol, we get cycled onto all sorts of job for career development. We may spend 3 or 4 years on the same mega job, but then we will also spend 3 or 6 months building a waste water treatment plant, or bridge, or wind farm. My pay don't fluctuate when moving between these works. Of course on those little jobs, we tend to go lean because there isn't $$$ in it.
End of the day, employees for these contractors get told which projects they go on, and they tend to bring their core team with them. There is probably variation in availability of crafts, but its a non issue if these contractors are self performing. In the grand scheme of things, the wage difference of these crafts are absorbed through all the efficiency/cost blow outs that are part and parcel of this industry.

it is only ever a problem when you stack multiple projects into the same area and have them peaking at the same time. Then you will have resourcing problems and competition for labor. Usually we would talk and try to flatten the curve, but schedule blowouts aren't usually planned

 

[pmc]

You can look at Schlumberger Texas. Nothing less than $100k. and those who are dealing with chemical and project execution are way higher. the point is no industry can pay like energy industry unless it is supported by Fed bubble.

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[Godzilla]

You can look at Schlumberger Texas. Nothing less than $100k. and those who are dealing with chemical and project execution are way higher. the point is no industry can pay like energy industry unless it is supported by Fed bubble.

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Those Schlumberger guys are exploration lol, so the skills arent as transferrable to other fields unless you are talking about CO2 reinjection or other pipeline kinda stuff.
This isn't some bubble man. My home office is Houston, me and my mates have been way over 100k since 2008. This is just the industry, and the reason why everything cost so much to build, not just in oil and gas. I was spent nearly a year building a grain terminal in 2017, sandwiched between 3 years on 2 mega LNG jobs and 3 years on a petrochemical project....

 

[pmc]

This is just the industry, and the reason why everything cost so much to build, not just in oil and gas.

every thing cost so much because Oil/Gas industry is dominated and they not only have higher salaries across the board. but higher dividend payout and valuation to investors.

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