The state of Shale Gas and Oil in the U.S.A. today

By Andy May

A few news items from The Shale Gas News, by Bill desRosiers of Cabot Oil & Gas. The main paragraphs below are adapted from desRosiers, but I’ve added some detail. Things are looking very good for the U.S. oil, gas and coal industries.

  • U.S. crude oil and natural gas production increased in 2017, with fewer wells. The total number of wells producing crude oil and natural gas in the United States fell to 991,000 in 2017, down from a peak of 1,039,000 wells in 2014. This recent decline in the number of wells reflects advances in technology and drilling techniques. EIA’s updated U.S. Oil and Natural Gas Wells by Production Rate report shows how daily production rates of individual wells contributed to U.S. total crude oil and natural gas production in 2017.

     

    The well efficiency gains, in part, reflect an increase in the proportion of horizontal wells. The number of vertical wells decreased from 940,000 in 2014 to 864,000 in 2017. The number of horizontal wells increased from 99,000 in 2014 to 127,000 in 2017, an increase of 28%. This is important since only one percent of vertical wells produce 100 barrels of oil per day (BOPD) or more, but 30% of horizontal wells do. Typically, a horizontal well costs about twice as much as a vertical well to the same reservoir.

    U.S. oil production grew from 10 million BOPD to 11 million BOPD between December 2017 and July 2018. Over the same period natural gas production grew from 97 BCF (billion cubic feet) to 100 BCF. Figures 1, 2, and 3 show the total number of wells drilled and the total oil and natural gas production.

    Figure 1. Total producing wells in the U.S.A. Source EIA.

     

    Figure 2. Oil production from U.S. wells, source EIA.

     

    Figure 3. Natural gas production from U.S. wells, source EIA.

     

  • Interior credits increased fossil fuel production for jump in revenue from federal lands. Increased oil and gas production, as well as expanded access on public lands, are responsible for a surge in the Interior Department’s economic revenue this year, the administration said Wednesday.  Production activities on Interior land under the Trump administration helped generate $292 billion in economic output during fiscal year 2017, a big increase of $400 million from the previous year, according to an economic report released by the Interior Department.

     

    The increase is credited to the Interior Departments regulatory reforms and firming prices which resulted in an increase in oil and gas extraction on public lands. Public land access is much easier for surveyors, hunters and fishermen as well. The department, under Secretary Ryan Zinke and President Trump, increased its revenue from oil and gas royalties by nearly one billion dollars. The department estimates that their regulatory relief programs will save the economy $3.8B over time.

    Nationally, the number of oil and gas development wells on federal and tribal lands increased 85% between fiscal year (FY) 2016 and FY 2017. This was mostly due to higher prices, but the easing of regulations and efforts to speed up permitting undoubtedly played a role. Coal production increased 12% on federal lands, about twice as fast as for the country as a whole.

  • IHS: U.S. to be net exporter of petroleum by 2020s. A new report says the U.S. will become a net exporter of petroleum by the early 2020s, the first time since 1949. Research firm IHS Markit says continued growth in U.S. production of crude oil and natural gas liquids will push the country toward becoming a net exporter of petroleum, which the firm says includes refined products like gasoline.

     

    Crude oil production has risen from 5 million BOD in 2007 to almost 12 million BOD today. Crude oil imports have decreased from 10 million BOD in 2007 to about 7 million BOD.

  • Cheniere Bets $15 Billion on World Gas Demand Despite Tariff. On November 14, Cheniere started producing liquefied natural gas for the first time at their new Corpus Christi, Texas plant.

     

    The first U.S. LNG tanker, since a 10% tariff was imposed on U.S. natural gas, was delivered to China earlier this week and sales to China are up 50% year-over-year. If China raises the tariff to 25%, as they have threatened to do, sales may drop.

    The U.S. will have a total of six LNG export terminals operating in less than two years, making the U.S. the third largest LNG supplier after Qatar and Australia.

  • India Ready To Import More U.S. Oil And Gas. India is ready to import more crude oil and liquefied natural gas (LNG) from the United States to expand bilateral trade, India’s Foreign Secretary Vijay Gokhale said on November 14.  Speaking after a meeting between India’s Prime Minister Narendra Modi and U.S. Vice President Mike Pence on the sidelines of an ASEAN summit in Singapore, Gokhale said, commenting on the topics discussed: “There was a lot of discussion on energy, this is a new sector in the Indo-US relations. We have begun importing oil & gas from United States.”

     

    India is building 11 LNG import terminals over the next seven years and plans to triple LNG imports. It wants to more than double the share of natural gas in its energy mix. India is pushing for more compressed natural gas (CNG) powered trains, scooters and motorcycles.

  • Price of NatGas Spikes to Highest Level in 4 Years – $4.84/Mcf. The price of natural gas is above $4.72 and has been rising rapidly. The primary reason, according to news reports and interviews with traders, is low stockpiles combined with short-term weather forecasts for colder weather.
  • Figure 4. U.S. Natural Gas prices for September to November. Source: NASDAQ.

    Conclusions

    The future looks bright for the United States fossil fuel industry. Because of our innovative shale gas and oil technology and infrastructure and increasing demand in India, China and the rest of the world we will soon be energy independent and a significant exporter of fossil fuels.

    Our hard-won shale technology will eventually make its way overseas, but for now our environmentalist friends are helping us keep it to ourselves, bless their hearts.

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114 thoughts on “The state of Shale Gas and Oil in the U.S.A. today

  1. The increase in natural gas prices in a short-term event. Traders got caught offsides with the crappy CSFv2 forecast for November. We have already seen one fund blown up, I’ll bet there are others.

    The Gamma exposure is killing banks and hedge funds that are forced to cover when their delta neutral positions get out of kilter. Banks sold a lot of puts as hedges to producers and as the crude price drop creates a positive feedback loop that causes a cascade of selling as banks regain delta neutrality. The opposite happened in the natural gas market.

    The problem is that the paper markets swamps the physical market.

    The problem with shale producers is that they can’t generate their cost of capital with prices below 70-75. At todays prices, all shale players lose money. While the output has been great for supply, it has come at the cost of capital destruction. While I like Cabot as a company, desRosier doesn’t under very much

    • “all shale players lose money.”

      Clearly not true. Some do, some don’t. As for future oil and gas prices, no one knows.

      • Today’s WTI price was just under $57/bbl. Yes, they all lose money at that price (or barely break even). $66-$72 is a sweet spot for both consumers and US frackers/oil industry. The Saudis may once again try to drive the shale frackers out of business now that Iranian oil is under sanction.

        • Joel, The breakeven price in the Bakken sweet spots is much less than $40. You greatly over simplify with averages. Averages do not work well in oil and gas, the successful operators do much better than average.
          http://www.shalestats.com/

          The same is true of all of the shale plays, some areas have breakeven prices less than $30. Operators just need to adjust to prices as they always have.

    • The center of the Bakken the price needs to be below 27 dollars a barrel for it not to pay. I fairly sure the same is true for Texas, add in modern rigs can drill twice as fast at half the cost. We will never see a rig count above 3000 in this country a number less than 2000 is more than likely and 1000 even in good times may be to many. the reality a thousand rigs today can drill twice as many wells in a year that the 3000 a few years ago. Add in a modern rig crew is now three people, not eight or ten years past, the only reason it not one is safety. From someone who has lived and worked in the Bakken for the last thirty eight years.

      • Thanks for the interesting insight from someone with boots on the ground.
        Technology always improves and costs come down.

        -From retired geologist
        Alastair

      • That is the thing most people miss – the technology is not standing still. We are at Shale 2.0, and people are still talking about Shale 1.0.

        Everything is getting better in drilling – sensors, equipment, geophysics. I see fewer and fewer dry holes. Wildcatting? -please. As a geologist I’m frankly shocked at the transformation. Even 5-10 years ago seems like a lifetime. I also laugh at people not understanding why oil companies don’t bother to bid on land open to leasing – unlike the past, they know where the oil is and isn’t. They don’t bid on tracks that won’t produce.

        And down the road I see shale 3.0 coming – that is where the rest of the world figures out what Canada and America have done. Seamlessly connecting all systems and hardware platforms across the various fields of operation, integrating exploration, drilling and production facilities. Drilling becomes incredibly precise – the oil and gas is sold before the well even drills, because we know in advance exactly what it will produce. We could even see automated rigs that sinter the rock they drill through, negating the need for expensive well casing and simplifying the whole process.

        It ain’t over, it is just getting started…..

      • What rig runs a three man crew? At minimum, you’ve got: pusher, driller, derrick hand, motor hand, at least two floor hands. Most drilling contractors have an assistant driller as well. That’s just for the rig, you’ve got all kinds of service company personnel, the producers personnel etc. I’ve been on rigs for the last 15 years and there’s more people on location now than there was at the beginning of my career.

    • “All shale players lose money.”

      They sure do. But don’t tell that to people because they will not believe the data and are hoping that the optimistic narrative will turn out to be true. Fortunately, we still have a lot of coal and uranium. Unfortunately, our idiot politicians are still listening to the corrupt activists in the green movement.

    • Biggest problems: with five of the top seven gas producing fields being Russian or Iranian — the Iranian South Pars/North Field being exceptionally large and sweet.
      The Russian glut of the world market price, coupled with Irans subsidy by the Russians and hatred of America, keeps the cost low and here we are in colder sun and demand increasing. But still…

      The benefit of that to the U.S. is lost in that to the BRICS and their rise in dominance of world markets.
      The recent refusal of the Chinese to except U.S. LNG, because of the paltry excuse that we could not supply their demand, speaks to the gas that rages.

      That is precisely why the war in Syria, it is all about a pipeline from the South Pars/North field.

  2. Does the new way of extracting oil and gas mean that the old way of vertical drilling was only reaching a fraction of the oil and gas in the ground ?

    Are the older now near dry wells coming back into production ?

    MJE

    • Verical drilling only intersects the formation thickness. Horizontal drilling has exposure to the long dimension of the formation (10,000 ft or more with numerous fracking stations in a string spaced along the length of the drillhole. They set up a drill pad from which they drill a number of production wells, starting vertically and then bend the holes to enter the formation in a radiating pattern. For this drilling, the bit is turned on the end of the drill string by the pressurized drilling fluid and the drill stem itself doesn’t turn.

    • It is very rare to bring a well back on production once it has been shut in for an extended period of time.

    • “…Does the new way of extracting oil and gas mean that the old way of vertical drilling was only reaching a fraction of the oil and gas in the ground ?…”

      Yes and no…

      They use to drill more wells closer together and at each point (actually a line) where it intersects the oil (or gas) bearing strata, there is a sphere where the oil (or gas) could flow to the drill hole. This is the primary extraction, where the oil pressure forces the oil up the well hole. Its almost always less than 20% of the total oil in the ground.

      Then they started using some wells to pump materials like water, brine, air, or CO2 into the ground to force more oil out of the remaining wells – called secondary extraction. This might get 40% to 50% of the total.

      Then they started forcing hot and/or “soapy” materials into wells, called enhanced recovery, and this could sometimes force out another 10% or 15% of the total oil. So in the very best cases you might get as much as 65% of the total oil out of some areas, but often much less.

      Actually oil recovery is affected both by the viscosity of the oil, and how “tightly” it is held. Thick oils are much harder to extract then thin oils, so you will end up recovering far less of the total amount in the ground. Tightness refers to the size of the pores and cracks in the strata – the smaller the pores the less oil you can recover (until you frack it).

      Horizontal drilling increases both the radius of the sphere a single drill hole can service, and also dramatically increases the surface area of the drill hole intersecting the strata. You no longer need near as many wells to service an oil bearing area, and you can still use various above methods to increase you yield.

      Fracking is both using horizontal drilling and the forcing of grit into the cracks of strata to hold them open. The high pressure used caused much more additional cracking. These cracks again dramatically increase the amount of oil (or gas) that can easily travel into a well.

      It is unknown if we will ever need to go back into old oil fields to retrieve more of the oil…On one hand it will become easier and cheaper to do, but on the other hand the demand for oil may eventually drop so this price may not justify the cost. (it is already done in a few cases, but not widely) It depends on when the world goes over to a mostly nuclear energy base (not wind, not solar) and when battery technology is advanced enough to make electric cars practical and desirable.

      • “when battery technology is advanced enough to make electric cars practical and desirable”

        Which is never since it conflicts with basic natural laws (there are no elements with enough valence electrons, there is none better than lithium).

    • It depends on the type of geologic structure that contains the hydrocarbons, if it is a trap (a dome or some type of boundary to hold the hydrocarbons),then conventional vertical wells are the best way.

      If the hydrocarbons are distributed in a thin geologic layer and evenly across a large area (100s of Sq Mi.s), then the horizontal wells are the only way to go.

      Deep water GOM has many very large reservoirs waiting to be tapped, that contain hundreds of millions of barrels of oil each, that will require some of the most advanced and most expensive vertical wells.

      • Technically, most offshore wells aren’t vertical. Most are directionally drilled. However, most reservoir penetrations are at less than 45 degree angles.

        Horizontal wells are rare in the Gulf of Mexico because most of the reservoirs are soft, very porous (phi>18%, ~30% isn’t uncommon), permeable (often in darcies rather than millidarcies) and in Pleistocene/Pliocene and some Miocene reservoirs with strong water drives, 50% primary recoveries aren’t uncommon.

        Frac’ing in the Gulf of Mexico is also a totally different animal. Sand control is a bigger problem than opening pore space or increasing permeability. The sandstones are so poorly lithified, that unconsolidated sand will often flow into the wellbore without gravel packs, frac packs, or other forms of sand control.

        Deepwater GOM is still huge. Most of the Lower Tertiary potential is still untapped and virtually all of the Mesozoic potential is totally untapped (largely because most of it is offshore Florida).

    • It depends on the reservoir. When spindletop was drilled vertically and the reservoir was penetrated oil came gushing out of the ground. Horizontal drilling plus Fracking enables production of “tight oil” previously locked in small pockets in shale rock formations that would not flow like that with a horizontal well. The Permian basin in west Texas produced prolifically for many years with conventional methods. Horizontal drilling in the area is now accessing multiple layers of shale oil that lie below the original conventional reservoir.

  3. Canada had paralleled USA developments in fracking and has enormous potential including the Bakken Formation in the Williston Basin (famous major oil producing horizon in North Dakota) that extends into Saskatchewan and Manitoba. Socialists have bu**ered up Alberta’s known potential with a carbon tx and lefty pols have stopped pipelines for moving Oilsands oil so I’m not sure where we stand these days.

    I wrote a North American frack sand industry report for Roskill Information Services in UK in 2015 (they publish mineral and metal economic reports for industry) with chapters on oil and gas developments and I even made pretty good O&G price forecasts. This is not an commercial plug for readers – a copy went for $5,000.

    • The pipeline problems in Canada continue and no one benefits but the railroads. The Canadian environmentalists are totally screwing their own country, it is very sad.

  4. We have one new shale gas extraction site in the UK. It was beset with earth tremor problems when it started and the greens jumped up and down (probably the cause of the tremors in the first place as they were so small).

    Not heard anything for the last couple of weeks so hopefully it’s operating well and more will follow.

    • I have no experience of the industry, but what worries me about the UK attempts to get shale going is that they seem a bit half-hearted in the face of determined opposition from many quarters.
      Sure, Cuadrilla have some executives who have worked in the oil industry, but I would feel more confident in their abilities if the board could show some people who are really up to speed with the latest technological advances in the US. As it is, UK shale developments strike me as speculative, maybe hoping for serious players to come and buy them out if they strike something that looks promising.

    • I have heard that the threshold for complaints for earth tremors in fracking in Lancashire is so low such tremors are undetectable without a sensitive seismometer.

  5. Since the 1970’s, and before the fracking and horizontal drilling revolution in the US, everytime the US economy got up and humming in an expansion and our energy demand ramped up (transportation fuels mostly), the added revenue stream due to energy production went into the MidEast oil shieks pockets. Siphoning off hundreds of billions of dollars from the economy was like pulling the plug on the economic bathtub — the inflow wealth creation ups and downs couldn’t keep up as the shieks got richer as OPEC boosted prices on oil demand. That era is over.

    Now the more the US can become energy independent from the MidEast, Venezuela, and Nigeria, the more that energy revenue stays in the US workers pockets to keep the expansion going. Let Europe and Africa become vassals of Russian oligarchs and OPEC shieks if they want. But we’ll also ship LNG to Germany rather than they be held hostage to Putin’s Gazprom shut-off valves. Poland, being under Soviet domination for 45 years understands the consequences of being a Russian puppet and is keeping its coal energy production going for self preservation and sovereignty.

    • Those petro dollars don’t stay in Saudi banks. They money is used to buy stuff so eventually all of it comes back to the US either in the form of exports or purchase of T-bills.

      • Obviously You have never seen how much the Saudis love their gold, Bentley’s, Falcon jets, Swiss chalets, hidden offshore accounts in case of coups,,and of course every type of Rolex ever made. And I’m not talking about the rich shieks, but the multitude of well connected Saudis with the Royal family. And ditto for Kuwaittis, the Emirates, the Bahrainians, Qataris.

        Only a fraction of those dollars came back as defense sales or Treasuries.

        • What happens to the dollars when it is bought by the people who make those things?
          The money always makes it back to the US. Not always directly, but it always does.
          For the simple reason that the dollars have no net worth outside the US. The only reason why any foreigner would accept dollars in trade for something is because they are looking to buy something from the US, so they need dollars.

  6. Here in Australia we have two problems with extracting fossel energy, the Greens who have convincced the farmers that the water from the major underground sources will be contaminaated , and the fact that as the Federaal Government owns the land the owners get almost no return from the wealth recovered, apaart from of course the Aboriginals.

    MJE

    • PM2.5 deaths are not a problem, it pure adult male bovine fetal mater. If it were a smoker won’t last a year and the human race would have been extinct the minute parahumans started to use fire. Keep drinking the Kool aid it you believe the adult male bovine fetal mater the present crop of so called scientist that that post alludes to, to bad if you that kool aid long enough you will get the Jim Jones type and your green adult male bovine fetal mater will indeed kill you I only hope the world not so far gone that that stupidly in todays world does not kill me or my grandchildren, due to a lack of affordable power and food. That were the green are driving us, will killing hundreds of millions like with their DDT band, since that was not good enough they still want to eliminate about 6.5 Billion people and yet they are stupid enough not to believe they or their children would not be in that number.

    • Where are all the dead bodies? The thousands are pure fantasy. There are however real deaths from environmentalist policies that drive up the cost of energy, forcing the most vulnerable to decide between food and warmth.

    • Having followed that link and read it, how in Dog’s name can coal particulates cause type-2 diabetes which also happens to be the malaise that purports to kill the most??

      • I know, it’s a laugh and the reason why I posted it here. Alarmists really are trying very hard to push the coal is bad meme.

    • I always love death attribution statistics and people who push them that don’t realize how stupid they are. You know if you go down this sort of stupidity the thing you are most likely to die of is drinking water. In most countries will have estimates of deaths because of radon in the water, I think it is like 20, 000 in USA and 1800 in Australia. Then there a pile of other minor contamination species and I am pretty sure you will end up in the tens of thousands.

      So Patrick MJD we should go an ban all drinking the deaths are tens of thousands per year and will be millions going forward. Drinking water is at least 10 times as dangerous as the coal power station and you need to go and save the world.

      Hopefully you get the message why that area of medical pseudoscience and statistics is coming attack from medicine itself as it misrepresents the truth. You can’t attribute causes of death based on statistics you get junk that you have no actual scientific evidence to back up.

      So anytime you see the words deaths attributed to .. someone is about to tell you a lie based on junk statistics use.

      • I only posted the link to what we are exposed to here in Australia. Peter Hannam is the SMH’s resident alarmist posting articles like this almost daily calling for the end of coal and to be replaced by renewables.

        We do actually have an energy crisis in Australia brought about by politicians. And no-one is thinking renewables is the problem.

    • Coal in NSW, Australia killing thousands.

      ROFLMAO. Only the most ignorant & credulous could believe such nonsense.

  7. Fracking excellent! And all of that production recycled into plant food in the atmosphere. The only down-side is possibly a slight delay to the next Little Ice Age (or the real deal, a full-blown Glacial epoch?).

  8. I’d never heard of a CNG locomotive, even though it’s been around for a while.

    But the top google result takes you to a website called energyskeptic.

    Holy. Cow. I feel so bad for that lady. She needs to get out more. And by get out, I mean travel around. She seems unaware of just how non-apocalyptic the majority of the world is.

  9. I remember where the economy was going. Then fracking happened. Now the economy is booming. Around four years ago there were a number of articles that observed the effect of fracking on the economy. example Now, everyone is arguing about whether Obama or Trump should get the credit. They have clearly lost site of the economic fundamentals.

    We owe our current prosperity to fracking.

      • Regulations are a two edged sword for sure. The idea that you can fix everything with the right regulations is nuts. Someone will always find a way to thwart you. Always.

        It’s better to err on the side of too few regulations rather than too many.

    • “making the U.S. the third largest LNG supplier after Qatar and Australia”

      I had no idea that Australia was the second largest supplier of LNG. And Australia’s politicans are bankrupting theie Australian economy and its citizens by trying to use windmills to supply their electrical power. That doesn’t make much sense.

      It’s horrific to be led by clueless people such as those leading Australia. That’s the fate of people in many nations. A competent, visionary leader is something to be cherished because they are few and far between..

  10. “Production activities on Interior land under the Trump administration helped generate $292 billion in economic output during fiscal year 2017, a big increase of $400 million from the previous year, according to an economic report released by the Interior Department.”

    I wouldn’t say that $400M is a “big increase” over $292B. That’s 0.14%.

  11. I am sorry but if we look at the data we see that the shale sector has been one of the greatest destroyers of capital over the past two decades. The simple fact is that once you go outside of the small core areas in the better formation, the energy that has to be spent to produce the oil and gas is greater than the energy content of the oil and gas after the royalty payments are taken out.

    The simple fact is that shale is no more a solution than solar or wind. While all may be promising in some niche areas, they all fail the economic scrutiny.

    • Governments are extremely wasteful, but private capitalists are generally not (unless they are spending Federal grant money of course, called crony capitalism).

      If oil companies could not make money out of retrieving oil and gas by fracking, they would not do it. Sure the economics keep changing and some companies that took on too much risk get caught and fail. But I assure you they are not using more energy to retrieve the oil and gas than it puts back onto the market.

      Fracking tight fossil fuels is a great temporary solution that buys us more time. We need more time to convert to nuclear power in a big way. Solar and Wind will always be niche solutions as they are not dependable. They may eventually supply some 20%, or even 30% of the total energy demand – maybe – someday – but meanwhile its got to be coal, oil, gas, and a growing nuclear industry if we can stop the crazies from preventing it.

  12. Andy May, I think someone should remind you that this site is dedicated to climate. It is not dedicated to fossil fuels which your post is dealing with. Maybe you should find a venue more in tune with your predisposed bias.

    • Steve, this site is funded by fossil fuel interests. They want people to think that CO2 has no effect on the climate. Andy May and Dave Middleton promote the interests of the fossil fuel industry on this site.

      • Dave Burton,
        I presume that you have evidence that this site is funded by fossil fuel interests. Otherwise, people are liable to think that you lie and won’t pay any attention to future claims. Therefore, you shoot yourself in the foot and will thus be known as “Peg Leg the liar.”

        • Clyde, the proprietor of this site does not disclose his/her source of funding. Financial support has come from the Heartland Institute which is funded by fossil fuel interests.

          • Burton,

            You said “the proprietor of this site does not disclose his/her source of funding.” In other words, you have no way of knowing if your statement was true, but you said it anyway. That behavior does not speak highly of you!

            When challenged, you attempt to rationalize your willful lie by pointing out that the Heartland institute provided money, without mentioning that it helped publish Anthony’s study of weather stations, not support this website. You specifically claimed that this WEBSITE IS funded by FF interests. That is deliberate misdirection! There are descriptive words for people like yourself, which I won’t use to avoid having this go into moderation. But, you have demonstrated sufficient imagination that I suspect you can figure out just what those words are. Sleep well, if you can, now that you know that everyone besides yourself knows just what kind of a person that you are.

          • Dave Burton, this is Anthony Watts answer to your accusation from the FAQs:
            “Q. Are you paid to blog?
            A. No. There are some people who have this idea that because I put so much effort into WUWT that I must be on somebody’s payroll and that my stories are “pay for play” or something like that. Nothing could be further from the truth. Being a broadcaster, the surest way to kill a career is to run afoul of the FCC’s payola laws, and because I see blogging as just another style of broadcasting, I’d never consider “pay for play”. Besides, most people don’t know how I abhor “dead air”, be it on radio, TV, or in blogging. I’m self motivated to keep it interesting and fresh. Plus, WUWT’s reach gives me a larger sense of purpose.
            WUWT doesn’t run articles for hire, it is not nor has it ever been on the payroll of any company or organization (and that goes for me personally too), and it is managed mostly by myself with the help of about half a dozen volunteer moderators.”

            I would add that there are probably a few more than 6 volunteers today, also Anthony makes a little money from advertising on the site, but I doubt it is enough to cover his expenses, running a site with as much traffic as this one is expensive.

          • I’m neither paid to write blog posts, nor pay for the privilege of helping Anthony and WUWT. I write posts for this blog on numerous subjects that are of interest to me and I think would be of interest to WUWT readers. I support WUWT because I think it is the best venue for countering the junk science that permeates modern climate and environmental “science.” I am eternally grateful to Anthony for affording me this opportunity.

            My posts on fossil fuels, including coal, are positive about the industry because this reflects 100% of my 37+ years of experience as a geologist/geophysicist in the oil & gas industry and comprehension of economic geology and resource economics. My posts about nuclear power are also positive because I can do basic arithmetic.

            My education and experience also give me a strong interest in Quaternary geology and paleoclimatology… Which are the subjects of most of my posts not dealing with the energy industry.

          • Looks like Dave [Burton] is determined to double down on the lies.
            Heartland gave Anthony a one time grant, years ago, to fund a project he was working on.
            Beyond that, Heartland also received a one time grant for a project that has nothing to do with climate.

            If that’s the best lie you can come up with, you really need to find better sources.

            Beyond that, you have admitted that you don’t know who funds Anthony, yet you insist on declaring that he’s funded by big oil.

            Nice of you to admit up front that you are a liar.

          • In my opinion, the fact that you assume this site puts out propaganda based solely on a single grant years ago, says a lot more about you than it does Anthony.

            Psychological projection at it’s finest.

      • Dave Burton, This site is not funded by fossil fuel interests and Dave Middleton and I are not paid for what we write. But, we both work or have worked in the fossil fuel business. I’m retired and not paid by anyone, I’m not even collecting social security yet. I think Dave is still working, but he is not paid for what he writes here, by anyone. Are you saying that we do not have the right of free speech because of where we work?

        Steve Heins, This site has always had posts on energy, both fossil fuel energy and alternatives. After all, the main point of the climate change scare has always seemed to be to kill the fossil fuel industry, correct? The Climate Change Industrial complex and the energy business are completely intertwined.

        • “we both work or have worked in the fossil fuel business”

          Thank you for admitting where your bias comes from.

          • PS Andy, since you know that this site is NOT funded by fossil fuel interests, why don’t you tell everyone here where the funding is coming from.

          • My oil and gas bias shows is head every time I pull up my 26 gallon Chevy Silverado to the gas pump and my monthly home gas bill arrives in the mail.

            Probably not much different than 200+ million other North American adults, at least if they are honest about spending their money.

          • Sometimes these posts are so vapid that they don’t deserve a response. I just want to say that I think it’s cute that laymen accuse experts of bias just because they bothered getting an education and employment as a specialist. You wouldn’t accuse your doctor of bias and seek the medical advice of a voodoo shaman, but these climate crusaders think we should seek the advice of activists and ecologists when it comes to energy policy.

          • So working for an industry automatically means one is biased.

            Nice bigotry you got there.

            Do you also believe that those who receive money from government automatically take the government line? Or are you stupid enough to believe that only other people are automatically corrupted by money?

        • Andy, this site supports fossil fuels. Being that it does so means that it is not taking an unbiased viewpoint on the causes of global warming.

          • Steve and Dave,
            You two energy-imbeciles need a view of reality – here is a small dose:

            85% of global primary energy is fossil fuels – oil, coal and natural gas. The remainder is mostly nuclear and hydro-electric. A miniscule 2% is wind and solar, and that would be zero except for trillions in squandered subsidies. In fact, due primarily to intermittency, the net energy contribution from wind and solar is effectively zero-to-negative.

            IF fossil fuels were eliminated tomorrow, almost everyone in the developed world would be dead in a few months from starvation and exposure. That includes you. Given your obvious stupidity, that outcome would be an intellectual upgrade for society, but even you, and others as stupid as you, may yet contribute to a better world.

          • Heins,
            Just because you disagree with someone does not mean they are biased. Consider the possibility that you are the one who is biased.

          • Andy, this site supports fossil fuels. Being that it does so means that it is not taking an unbiased viewpoint on the causes of global warming.

            A staggering display of bigotry even for a climate warrior troll.

            Those of us who run web sites know that the cost is simply down to renting hosting space. A few hundred dollars a year at most.

            I guess you didn’t actually see the donate button.

            What costs on a site like thus is people’s time. I have had an article here. I was not paid.

            Not all content on the internet is paid for lies. You are confusing this site with Skeptical science.

            Also since the contention if this and other sites is that renewable energy does not work and needs fossil backup, why on earth would any fossil company who shares that view want to publicise it?

            You are labouring under the misapprehension that renewable energy works, and that the likes of Exxon who have very good engineers and analysts didn’t know way back then renewables were total garbage.

            Al Gore was a consultant to Enron’s gas business when he took up the reins of the AGW bandwagon.

            Oil and gas funded the climate change meme to make war on coal.

            Did you not know this?

            Cui Bono?

            Did you ever learn Latin? its a famous quote from Cicero, it means “who benefits?”

            Who benefits from anti-fracking anti- coal, anti-nuclear policy? Conventional oil and gas in the Arab states and in Russia…

            The same people who benefit from windmills and solar panels because there is no economic way to make them work except with gas turbine balancing, and even that is not economic without consumer price hikes.

            Of course AGW is massively funded by foreign oil and gas interests, you are right about that, just wrong about which side they are on.

            Who pays you to troll?

            They are the people they warned you about,

            Bless!

          • Because this site doesn’t believe fossil fuels should be banned, this proves that this site is biased towards fossil fuels.

            This site follows the science. Unlike you Steve.

        • “The Climate Change Industrial complex and the energy business are completely intertwined.”

          Yes they are and that’s why these issues should be discussed on WUWT.

      • Dave says “. . . this site is funded by fossil fuel interests.”

        Dave – This is a site where data is king. Where is your data supporting this claim? I’ve read some of your posts and they present data.

        Who is funding the climate change industrial/bureaucratic complex? If you drive a car or heat your house with gas or fuel oil or use products derived from petroleum, are you funding the fossil fuel interests on a personal level? If you buy items made in China, are you supporting the coal industry on a personal level?

      • Dave Burton is falling for the childish thinking that “big oil is bad” and “green is good.” Granted big oil wants to make a profit; so does Apple. Are we throwing out our iphones? Ford wants to make a profit; does that make them evil? Your car likely depends on fossil fuel interests. Your house might be heated by products of fossil fuel interests.

        WUWT provides the other side of the story, the one the public doesn’t often get to hear, the one that uses science and facts to counter the narrative that the sky is falling because CO2 is doing virtually nothing that we can measure today, except to imagine that reefs are dying because of CO2 or that the climate has been magically stable for thousands of years and now we have all these instruments and can see all these things and we “see” the effects of CO2 on climate. No, we don’t; we see that our finely-tuned instruments are telling us that climate is changing now, while historical evidence tells us that climate has always been changing. But we couldn’t see that then without our finely-tuned instruments and our models and so infer some mythical stability that’s disrupted by a bit of extra W/m2 that’s basically just noise in the ever-fluctuating energy system of earth, which we also pretend has some sort of mythical W/m2 stability that can’t be violated.
        /end rant
        Don132

      • Ah yes, the standard whine. Anyone who disagrees with the the religion of CO2 uber all must be funded by fossil fuel.

        It must be nice to have all your answers given to you, and never have to actually think for yourself.

    • Steve,
      Perhaps you should address your concerns to Charles the Moderator. It seems that you are just looking for something the whine about. Nobody likes a whiner.

    • This site is dedicated to anything that interests Anthony.
      It says so right up there in the description.

      PS: Given the number of posts so far, it looks like there aren’t a lot of people who agree with you.

  13. The “Big Australian” (BHP) has just departed the USA shale oil/gas business.
    They are boasting about the exit (despite losing billions) and are giving the lion’s share of sale proceeds back to shareholders.
    Their last good/sound decision was made in 1883.
    BHP could not organise “you-know-what” in a brothel.

    • That’s because the World’s biggest mining company is now run by the left:
      CEO Andrew Mackenzie = communist.
      Chairman Ken MacKenzie = socialist . . .
      who succeed Jac Nasser = white-collar criminal

    • Let be serious BHP got out of Shale because it was losing money hand over fist, they have a massive debt burden and because there crazy OHS and corporate structure means they can’t compete. The longer they stayed in the more they lost so they took a big hit and exited. The investors were happy they had stopped the bleed and the share price actually lifted.

      Trying to make any more of it than that by any side I think is totally misrepresenting the facts.

      • I should add BHP still has it’s oil assets in the gulf of Mexico and the rumour is looking for more. So the company clearly isn’t looking to exit oil and gas.

      • How do you explain Beenup, HBI, Magma Copper purchase,, being conned by Billiton, selling QLD fertilisers (then 3 months later saying they wanted to get into fertilisers), offloading steel, being a second tier iron ore producer despite having superior assets, exiting coal.
        The gentleman who said they are now run by the left is correct.
        Their forays under their past 7 Chairmen have been jokes.
        BHP is a joke, unfortunately, a sad joke.

        • All you have given is under performance and bad decisions criteria .. ok fine let take that at face value.

          What has that got to do with the left, they aren’t getting out of oil and gas and over half there revenue still comes from coal and gas??? They aren’t doing anything you would associate with being left and it’s just some crazy claim sitting out there.

  14. While it is sometimes entertaining to have someone make statements regarding issues he/she knows nothing about, after the 3rd or 4th time the entertainment value plummets to zero and passes into negative territory. Specific to this post are the twin issues of (a) funding by large oil corporations, and (b) the Heartland Institute.
    These have been brought up several times each year for the past 10 years, so we are now well into negative value.
    Advice: For the next person that feels the urge: Take 2 aspirin, go to bed, and when you next get up take a long hike.

    Regarding what sorts of things are appropriate for this site, read the “About” section.
    There you will find:
    About Watts Up With That? News and commentary on puzzling things in life, nature, science, weather, climate change, technology, and recent news by Anthony Watts
    This science news site features original content from myself as well as several contributors:

    So for those that disparage postings that deal with non-atmospheric things — see “Advice”, above.

  15. Andy,

    Your statement that shale companies make money at $40 is seriously wrong. Let’s take PXD as an example. In order for PXD to earn their equity cost of capital, they need to generate free cash flow of something like $3 billion. They are currently cash flow negative. If you follow PXD, you would know that they are selling off non-core assets and infrastructure to raise cash. Their goal is to grow to 1 million barrels a day of production and I believe they have the assets to do that. However, at current crude prices, they will continually come to the market to raise capital. They have raised equity capital many times over the last few years in order to fund growth. The problem is that they currently need to generate $10 per barrel (at a minimum) of free cash flow to earn their equity cost of capital. They are nowhere close to this. I am amazed at how shale companies have been able to hoodwick people into thinking they can make money at prices around $40. Their cashflow statements tell a different story .

    • From their latest financial review:
      “Production costs averaged $10.50 per BOE. Depreciation, depletion and amortization (DD&A) expense averaged $12.69 per BOE….Pioneer reported second quarter net income attributable to common stockholders of $66 million”

      For the past few years they have been investing large into the Permian and they appear positioned to make a ton of money over the next few years, even with oil at $40.

    • Nelson, You are assuming nothing changes and you are working with averages, both are mistakes. Some areas and wells make money at $40 or less and some don’t. Companies always adjust their portfolios, staff and costs to accommodate the prices they expect. Expensive stuff is sold or shut down in a low price environment. You are oversimplifying to a staggering degree.

  16. Realistically the only thing a horizontal well does is save the cost of drilling 30 vertical wells. All of the other hype is just propaganda to acquire capital. The oilfield for the first time in history was able to acquire capital sources from sources that were historically prohibited from investing because of the potential for 100% loss, i.e. a “dry hole”. The horizontal drilling in “tight” reservoirs eliminated the dry hole risk. The success of the horizontals is based upon the ineffective drainage area of the old vertical wells. Ultimately, the new horizontal will decline dramatically and reach a point that the new well production will only be able offset the decline rate of the old wells and increases in production will begin to wane.

    • More generalizations that aren’t true for the industry as a whole. The only people that were hoodwinked were people that didn’t understand the difference between tight reservoirs and resource plays. Shales such as the Marcellus, Bakken, Eagle Ford, etc., are resource plays, plays such as the tight Mississippi midcontinent play was a tight rock dewatering project that cost bigly for some people that didn’t know the difference between the two. If you treat a non resource play as one, you’re going to have a bad time. Some companies were even leasing up large acreage plays where there wasn’t even any Mississippian in the subsurface, i.e. Apache, almost like the staff didn’t include a single geologist. Meanwhile, the successful resource plays now account for about 5 million barrels of oil per day and the break even price in these successful areas continues to drop.

    • The cost of drilling 30 vertical wells is huge.

      PS: In a field where the oil bearing rock is narrow, the total length of pipe that is in contact with oil bearing rock is orders of magnitude greater in a single horizontal pipe than in 30 vertical pipes.

      • No one would drill 30 Bakken, Haynesville, Eagle Ford, Marcellus wells to produce the equivalent of 1 horizontal well.

    • Horizontal completions and frac’ing enable us to produce more oil & gas, at higher rates than previously possible, as in the Bakken…

      More importantly, it enables economic production from low permeability shale formations (source rocks). This would not be possible with conventional drilling and completion procedures.

      It’s no more a gimmick to drum up capital than offshore directional drilling is. It’s simply a procedure that enables us to access reservoirs, that would be economically inaccessible otherwise.

    • Thanks, great article – and accurate. This bit is interesting:
      “Here’s what happened: Compared to 2010, the United States now produces more than twice as much oil with roughly the same number of drilling rigs and the same number of people. Put inversely: the average cost to produce a barrel has dropped more than two fold.”

      • Andy,

        I concur- a very informative insight/analysis. It seems the fracking revolution has made into some economic models:

        …”To calculate the above-market cost of RPS resources, the CPUC compares RPS procurement costs to the all-in cost of a combined-cycle gas turbine (the “Market-Price Referent” or MPR). Prior to 2017, the CPUC had been using an MPR based on 2011 natural gas prices and other assumptions. For the 2017 report, these assumptions were updated to reflect 2017 conditions.””

        Quote From the bottom of slide 31.

        Web link- http://eta-publications.lbl.gov/sites/default/files/2018_annual_rps_summary_report.pdf

        In my area (Northern CA)a lot of transmission, distribution and storage upgrades have been required to accommodate the higher levels of RE. I guess I should check my utility bill to see if any of these costs end up being allocated to me.

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