America is set to surpass Saudi Arabia in a ‘remarkable’ oil milestone

From CNN Business

New York (CNN Business)Move over, Saudi Arabia. America is about to steal the kingdom’s energy exporting crown.

The United States will surpass Saudi Arabia later this year in exports of oil, natural gas liquids and petroleum products, like gasoline, according to energy research firm Rystad Energy.

That milestone, driven by the transformative shale boom, would make the United States the world’s leading exporter of oil and liquids. That has never happened since Saudi Arabia began selling oil overseas in the 1950s, Rystad said in a report Thursday.

“It’s nothing short of remarkable,” said Ryan Fitzmaurice, energy strategist at Rabobank. “Ten years ago, no one thought it could happen.”

The expected breakthrough reflects how technology has reshaped the global energy landscape. Drilling innovations have opened up huge swaths of oil and natural gas resources that had been trapped in shale oilfields in Texas, North Dakota and elsewhere.

Led by shale, US oil production has more than doubled over the past decade to all-time highs. The United States now pumps more oil than any other country, including Russia and Saudi Arabia.

“The shale boom has driven incredible increases in production,” said Fitzmaurice. “US production is off the charts.”

With ample supply at home, Congress in 2015 lifted the 40-year oil export ban. Overseas oil sales have exploded since then. And the US Gulf Coast is racing to build facilities that can handle surging foreign demand for US crude.

“Excess fossil fuels from America will find plenty of eager buyers in fast-growing Asia,” Per Magnus Nysveen, senior partner at Rystad Energy, wrote in the report.

‘Oil dominance’

Saudi Arabia currently exports each day about 7 million barrels of crude oil, along with 2 million barrels of natural gas liquids and petroleum products, according to Rystad. By comparison, the US exports about 3 million barrels per day of crude oil and another 5 million barrels per day of natural gas liquids and petroleum products.

Rystad expects that gap to vanish this year, although Saudi Arabia would keep a comfortable lead as the world’s largest exporter of crude oil alone.

Read the full story here.

Addendum from Dave Middleton:

Here’s a graph from oilprice.com

100 thoughts on “America is set to surpass Saudi Arabia in a ‘remarkable’ oil milestone

    • It is a delusion. Shale production has not been economic outside of the tiny core areas where it makes a great deal of sense. The entire scam is based on a few changes made by the SEC and a massive QE program that allowed excess liquidity to flow to uneconomic malinvestments.

    • And Obama mocked Romney for saying Russia was our biggest geo-politcal adversary.

      One can pretty much bank on Democrat’s “visions” (their fantasies) being the opposite of the reality. Just like their climate change alarmism and CO2 demonization is the opposite of a coming realization.

    • Obama said we couldn’t drill our way out of it. If his political apparatus is reinstalled again, they’ll go out of their way to destroy it, millions and millions and millions of six-figure blue collar jobs be damned. People in this country better wake the heck up. Blacks and Hispanics better wake the heck up. Without the amount of growth that this sector is generating, U.S. welfare rolls would totally implode. Pension funds would totally implode. For what? Some countries would get richer, just not ours. https://www.wsj.com/articles/in-this-oil-boom-town-even-a-barber-can-make-180-000-11551436210

      • “Obama said we couldn’t drill our way out of it.”

        You can’t unless you find something more economical than shale. Shale is a money loser outside of a few tiny areas where production makes a great deal of sense because it is profitable. Sure the Democrats can be idiotic. But embracing a fiction does not make Republicans smart. We need to look to reality as it is, not embrace fictions because we want something to be true.

    • Previous claims that the US had become a net exporter of oil were based on our refined products exports.
      The amazing thing is that we are currently on track to being a net exporter of crude oil by 2025.

    • Could be. It would require about a 20-30% increase in crude production to 2025. Not impossible.

      The US has been a net exporter of refined products since 2012.

      The fact is that zero net import of crude + refined by volume still means some import measured in terms of energy, since volume increases during refining.

  1. Hmmm …. d’ya think this outcome might somehow have something to do with the Russian money that finances the anti-fracking campaign?

    • Poisoner Putin trying to get his ‘useful idiot’ watermelon catspaws to stop fracking in the USA?
      Not much chance.
      Poisoner Putin trying to get his ‘useful idiot’ watermelon catspaws to stop fracking in the UK, however?
      Well, we’ve had some pretty dumb folk in Government – and Parliament as a whole: – they voted through the UK’s Climate Change Act 2008 (only five [5] Members of the House of Commons [ie MPs] voted against the Bill, so it became a law – an Act of Parliament.

      Auto, despairingly

      • I would have been a lifelong Conservative voter, but no longer.
        I will never vote Conservative until they have, at minimum, promised to scrap the Climate Change Bill and stop squandering huge sums of money on windfarms that don’t work most of the time.

        I’m hoping that, once we’ve regained our freedom from the EU, Boris Johnson will be our next PM. As far as I know he’s not a climate change doom monger like May. He’s also made some mildly sceptical statements about climate change.
        Chris

  2. Thank you Trump who made this all possible and that’s why the Socialist/Marxist cabal is targeting him. He single handedly put a stop to their subversive efforts to cripple the West by destroying the industries that made it successful and denying access to natural resources. Let’s hope the people are waking up to the true goal of AGW.

    • Fracking came into widespread use more a decade ago (and was invented 70 years ago. It is fracking that is the primary cause of the huge increase in oil and gas production in the USA that has been ongoing for many years. Trump had exactly zero to do with any of this – he’s only been in office a little over two years ago.

    • “Thank you Trump who made this all possible and that’s why the Socialist/Marxist cabal is targeting him.”

      I think that you need to become a bit more educated. Directional drilling and fracking were developed long before Trump. In fact, they are rather old technology and are still quite ineffective when it comes to the production of economic oil or gas. Making Trump the fall guy when the shale miracle is exposed as a giant fraud does not help him or the GOP and may divert even more power to the cabal that worries you so much.

      “He single handedly put a stop to their subversive efforts to cripple the West by destroying the industries that made it successful and denying access to natural resources. Let’s hope the people are waking up to the true goal of AGW.”

      Actually, Trump has been rather disappointing because he has left in place so many foolish regulations that are crippling American productivity and added a foolish trade war that hurts both producers and consumers as it threatens domestic and foreign economies.

      While I thought that Trump was much better than Hillary, having a careless man without principles or knowledge wield so much power is still dangerous for American citizens.

  3. Now let’s hope that we can quickly open up additional export facilities on the west (Left) coast, to supply all the Asian markets more easily.

    • You can forget about that. Not a chance that Cal/Ore/Wash will allow new pipelines and terminals. It will have to come out by way of the Gulf as it does now. Anyway that is where most of the pipelines go and refineries and LNG facilities are. The Panamanians are in luck.

      Though a pipeline to some Mexican west-coast port might be a good idea. The mexicans would probably be glad to have it. And it would come in handy once they start fracking the part of the Eagle Ford play that is south of the Rio Grande.

      • If the US prez wanted to force the issue, he could force one of those Left Coast states to allow a refinery and pipeline access because regulating interstate trade is one of Washington’s enumerated powers. But it won’t happen because Republican presidents do not want to provide an unwanted gift to the economies of their opponents, and Democratic presidents do not want to anger their allies.

        • Exactly, the constitution lays out these rules for a reason. They knew that coastal states would have great power over landlocked states when it came to these issues. Without them having the foresight, a state like Texas could prevent the export of Kansas wheat for example, and the union would not hold up well if this were the case.

      • It could be done through eminent domain, but there would be an expensive legal battle.

  4. When are Britain’s politicians going to wake up and start their own fracking on British soil?

    They have this in the ground, and they think it is better to build windmills that don’t work when the wind doesn’t blow, than to frack.

    They say a fool and his money is soon parted. When will Britain be parted from these foolish politicians? Is it going to take a real crisis?

    Unfortunately, it usually does take a real crisis to change direction.

    • You would think that the UK politicians would learn from the success the US is experiencing from the revolutionary fracking process. But sadly we have people in government like Michael Gove who are prepared to ruin British business, in particular the British car industry, in a blind bid to show their support for the global warming hoax. He doesn’t care for our country’s future, he is only interested in placating the stupid global warming cabal in and outside the government in his drive to get the top job at any cost after Mrs May resigns. If you have any real concern for the future of this country Mr Gove, then will you balance your past mistakes that have brought our car industry to its knees, and put your full backing behind the development of fracking in this country, the success of which will have such a marked effect on reducing our national debt, and start the return of sanity to our currently stupid and costly industrial policies.

  5. This is likely why the Norway’s Sovereign Wealth Fund is getting rid of oil-only positions in its portfolio as the crude oil price will remain low for years to come, if not for a few decades. Because if it tries to move above $80/bbl, the shale frackers shift to even higher gear and produce more than they already do in the $50-$75 range. Weepy Bill McKibben can lie to himself all he wants about the End of Oil and Natural Gas, but the reality won’t change. The world will continue to consume fossil fuels in ever greater amounts as the only viable alternative as more and more coal and nuclear plants decommission.

    And then if the world doesn’t get to a large-scale nuclear build-out of some sort by the time oil production begins to fall, then that all coal will be dug up and burned too by a desperate humanity.

      • With so many US nuclear plants needing a second 30 year licensing renewal coming in the next decade, many will just be decommissioned in the stupid political environment that now exists. Similar to what is happening to coal generation plants today. The price of natural gas is setting those economic rules.

    • This is not even wrong:

      “This is likely why the Norway’s Sovereign Wealth Fund is getting rid of oil-only positions in its portfolio as the crude oil price will remain low for years to come, if not for a few decades.”

      The Norwegian Conservative coalition government recently added a tiny liberal party to the coalition.
      The party “Venstre” has turned illiberal and pseudo-sccientific with their energy and climate policy about as sensible as what you get from AOC. In order to continue governing, it was necessary to divest from a number of small oil companies.

      Until the next blackmail attempt it is business as usual in Norway.

      • It was an easy concession for the Conservatives to make to Venstre.
        The climate kooks could claim a win on divestment. The Conservatives could shed likely under-performing assets from the Sovereign Wealth portfolio and gain virtue signalling points.

        Why hang on to a losing or neutral investment position in a portfolio? Both sides could claim win-win.

    • “Because if it tries to move above $80/bbl, the shale frackers shift to even higher gear and produce more than they already do in the $50-$75 range.”

      The average shale well is not economic at $80 oil. I suggest that before people start arguing they take a look at the filings from the shale players. There hasn’t been any sustained free cash flow and never will be. Debt keeps being piled on previous debt. Shale is a Ponzi scheme.

      • Continental Resources, the leading Bakken player, has had positive operating cash flow every year since 2014 and three straight years of positive free cash flow 2016-2018.

        EOG Resources, the leading shale player nationwide, has had positive operating cash flow every year since 2014 and positive free cash flow in 2014 and 2017-2018.

        Chevron, the top US oil producer and major Permian Basin player has had positive operating cash flow every year since 2014 and positive free cash flow 2017-2018.

        Very few oil companies of any kind were generating free cash flow in 2014-2016. $100+ oil made it difficult to reduce spending. The drop from $100-$30/bbl made it worse. However, the drop in prices created leverage to reduce costs, particularly rig rates and service company expenses. Everyone, conventional and unconventional players, ratcheted down spending from 2015-2017. Breakeven prices for the shale plays plummeted over this period.

        Over the last couple of years, E&P companies have become more efficient, forced to create investor returns at $40 – $50/barrel oil. Well productivity has improved as companies drilled longer laterals and used less proppant. After the crash in oil prices, oilfield services companies lowered their prices to compete for limited work. As oil prices recovered, the price of oilfield services was slow to catch up. Additionally, companies have more capital discipline than they ever did at $100/barrel oil prices.

        Even as oil prices have started to recover, companies are showing lower breakeven costs than ever before. As shown in the chart below, breakeven prices in the Midland Basin fell by 50% from $87 in January 2014 to $44 in September 2018.

        https://mercercapital.com/energyvaluationinsights/how-to-interpret-breakeven-prices/

        The vast majority of shale plays are economic at $80/bbl.

        https://www.rystadenergy.com/newsevents/news/newsletters/EandP/eandp-newsletter-september-2018/

  6. Very good. To make it happen, it would help a lot to tell the truth about photosynthesis, “climate optimum” several degrees Celcius WARMER than today and so on. Also the truth about human physiology and carbon dioxide. I think CO2 is life-extending, but we need real, unbiased research to find out for sure, and enough unbiased reporting so that people can find out the truth.

  7. Thank You Fracking Cowboys! They stayed the course when everyone including the US majors told them it was impossible.

    The knock on economic benefits of this change for the US are tangible every single day at the gas pump and grocery store. That we have a political party who’s stated goal is to stop this is a fact that will be brought home to the voters.

  8. A nightmare for the green new dealers. We shouldn’t be allowed this much prosperity. Only way to save the planet is by promoting massive poverty.

  9. Let’s not forget one of the deceits from Our Dear Socialist Leader Barack Hussein Obama:
    “But you and I both know that with only 2% of the world’s oil reserves, we can’t just drill our way to lower gas prices…”

    Frack that canard, Mr. Obama! Yes, we can! Capitalist private enterprise has succeeded in spite of all of his administrations grasping socialist obstruction efforts.

    • Obama was no socialist. And the bit you quoted was out of context. Obama was speaking about long term solutions, not short term fixes. Why do so many people on both left and right have such a hard time being honest about politics anymore?

      • Obama’s “You didn’t build that (business)” comments speaks to his attitude about the relationship between private enterprise and government. Although one can easily (and correctly) argue that Obama wasn’t (isn’t) a Socialist, he most certainly was/is a Pro-Big Government President.

        His objectives of expanding the government’s control of healthcare, directly regulate the banking industry (including setting pay levels to executives) and enact fines and shake-downs to generate non-appropriated cash slush funds, control the mix of electrical generation, attempts to control and directly regulate the internet; those were all attempts to control the winners and losers in the US economy. Such that a pay to play shake-down was/is how the the Democratic Party has always operated in the Big City.

        Obama cut his political teeth on and came out the Chicago Mayor Daley political machine — a pay-to-play political operation just like the Clintons always ran. Whereby if you wanted to be a successful businessman/woman in Chicago or Little Rock, you not only had to play by their rules, you had to show it with campaign cash, and not support the “wrong” candidate.

        So not a socialist dictator, but more like a “benevolent” mob boss like the generous humanitarian Tony Soprano.

        • It doesn’t get more Marxist than this…

          If you look at the victories and failures of the civil rights movement and its litigation strategy in the court. I think where it succeeded was to invest formal rights in previously dispossessed people, so that now I would have the right to vote. I would now be able to sit at the lunch counter and order as long as I could pay for it I’d be o.k. But, the Supreme Court never ventured into the issues of redistribution of wealth, and of more basic issues such as political and economic justice in society. To that extent, as radical as I think people try to characterize the Warren Court, it wasn’t that radical. It didn’t break free from the essential constraints that were placed by the founding fathers in the Constitution, at least as its been interpreted and Warren Court interpreted in the same way, that generally the Constitution is a charter of negative liberties. Says what the states can’t do to you. Says what the Federal government can’t do to you, but doesn’t say what the Federal government or State government must do on your behalf, and that hasn’t shifted and one of the, I think, tragedies of the civil rights movement was, um, because the civil rights movement became so court focused I think there was a tendancy to lose track of the political and community organizing and activities on the ground that are able to put together the actual coalition of powers through which you bring about redistributive change. In some ways we still suffer from that.

          http://michellemalkin.com/2008/10/26/obama-in-2001-how-to-bring-about-redistributive-change/

          • “If you look at the victories and failures of the civil rights movement and its litigation strategy in the court, I think where it succeeded was to invest formal rights in previously dispossessed people, so that now I would have the right to vote. …”

            Have you read The Communist Manifesto? It’s pure hyperbole to claim that text is anywhere near Marx. Obama is advocating change through legislation — the will of the people –rather than relying on the courts. That’s fundamentally a conservative position. He advocates little beyond that.

          • But, the Supreme Court never ventured into the issues of redistribution of wealth, and of more basic issues such as political and economic justice in society. To that extent, as radical as I think people try to characterize the Warren Court, it wasn’t that radical. It didn’t break free from the essential constraints that were placed by the founding fathers in the Constitution, at least as its been interpreted and Warren Court interpreted in the same way, that generally the Constitution is a charter of negative liberties. Says what the states can’t do to you. Says what the Federal government can’t do to you, but doesn’t say what the Federal government or State government must do on your behalf, and that hasn’t shifted and one of the, I think, tragedies of the civil rights movement was, um, because the civil rights movement became so court focused I think there was a tendancy to lose track of the political and community organizing and activities on the ground that are able to put together the actual coalition of powers through which you bring about redistributive change. In some ways we still suffer from that.

            Tyranny of the majority = Tyranny of the proletariat

          • So what if the Communist Manifesto isn’t taken word for word from Marx?

            In both cases there is the desire to take from those who produced in order to give to those who would rather not bother.

          • The only difference is that in a Tyranny of the Majority the proletariat vote “to take from those who produced in order to give to those who would rather not bother” (AKA the proletariat). In a Tyranny of the proletariat, they just take from those who produced in order to give to those who would rather not bother” (AKA the proletariat).

          • David Middleton, You say, “In a Tyranny of the proletariat, they just take from those who produced in order to give to those who would rather not bother”

            Yet those are your words, not Obama’s. You’re not going to find that sort of rhetoric in Obama’s words. More importantly, there is no evidence for “tyranny” in his eight years. The funny thing is, most of these politicians are quibbling over a few percentage points of difference in the tax rates. This difference shouldn’t create the hostility we see from both sides.

          • Agreed. Right-wing collectivism isn’t all that different than left-wing collectivism.

        • Obama was right about that “You didn’t build that” remark. This is the context: “If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business – you didn’t build that. Somebody else made that happen. The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet.”

          Those words are true whether ideologues want to admit it or not. Certainly every true conservative should know they are true. Our success as a nation is in large part due to our culture including our historically stable government. No individual has much chance of creating a thriving business in a country like Haiti.

          My issue is that so many people jump on the opposition without any attempt at giving a person a fair shake.

          • Obama’s comment completely ignores the creative content of a business, and the individual thought and energy that goes into building a successful one.

            One need only look at the mess that was the old USSR to see that. The USSR had plenty of schools, and a whole country of roads and bridges infrastructure, and arguably more material resources than the US.

            Despite the infrastructure, people in the USSR lived in want and poverty (setting aside the fear and tyranny). Because those same people did not have the freedom to be creative and energetic on their own behalf.

            Obama was wrong. They did build that. He was, and is, just too ideologically benighted to see the truth of it.

          • Obama did not claim infrastructure is the only factor in creating a business. That’s a straw man. Nowhere did he dismiss creativity. There is simply no doubt that every American owes a great deal to the government our founders created. There’s no doubt that our prosperity is directly tied to the infrastructure we have at our disposal, an infrastructure that does not exist with weak government. Too many so-called conservatives forget that. Obama merely tried to remind people about that because some ideologues are trying to throw the baby out with the bathwater.

          • Once again, you take Obama’s comment completely out of context in order to make Obama look better than he was. Then you whine that it everyone else who won’t give Obama a fair shake.
            Obama’s comment was in regard to his desire to tax away people’s money and to take away their property on their death.
            His justification was that since they didn’t build it, they didn’t own it and it was therefore the government’s to do with as Obama pleased.

          • Infrastructure does not exist without a strong government?
            Are you really that dense?
            BTW, private companies were building infrastructure centuries before government got into the act.

          • @ Don Jindra March 12, 2019 at 7:04 am

            Obama was wrong. Your own initial commented quote, “Obama was right about that “You didn’t build that” remark. This is the context: “…great teacher … American system … roads and bridges … If you’ve got a business – you didn’t build that.

            … contradicts your own later statement, “Obama did not claim infrastructure is the only factor in creating a business.” In fact, your own initial quote says he did claim that.

            Obama’s wrong. You’re self-contradictory.

          • MarkW, You don’t like higher taxes. Fine. But the desire to balance a budget is not Marxist. So peddle your partisan propaganda on the naive.

          • MarkW, “private companies were building infrastructure centuries”

            In smaller scales for the few, sure. Perhaps you could give an example of what you’re talking about. Then look around the current state of the world. Show me that powerhouse that was built from the ground up by private enterprise alone.

          • Sorry, Don but I think that you are playing along with the corruption of language from the left. When Obama talks about someone giving you some help he lumps into the category economic exchanges together with acts of charity paid for by your own money. When that teacher ‘helped’ you, he was doing what he was paid to do. When people invested in private roads they risked their own capital to link their communities to other communities so that they could trade with other areas more effectively and by doing so get benefits. As for public roads, they are built by money extorted from people that earned the money. It is not an act of charity for government bureaucrats to build a road for twice what it would cost a private company and use stolen money to pay for it. Businesses are built by people who risk their own savings, not by some ‘others’ who provide charity. That is why Obama is dangerous. He may mean well but when it comes to economic knowledge, he is an ignorant fool who plays on the side of the Marxists. Sadly, there are very few voters, academics, businessmen, or politicians on the side of the free markets. That is why things are in such bad shape.

            “No individual has much chance of creating a thriving business in a country like Haiti.”

            Agreed. Haiti is a hellhole because there is no protection for individual property rights. Venezuela is a hellhole because there is no protection for individual property rights. North Korea is a hellhole because there is no protection for individual property rights. All countries that reduce protection for property rights slide towards misery and poverty. I expect that much of the EU will slide over the edge soon as the health and pension programs begin to run out of money. I expect the US to slide into a deep recession because decades of government growth have eroded the foundation on which its economic success was built. Ironically, when the collapse does come, both the Left and Right will find out that some of their cherished beliefs were not just wrong but intertwined with the other side. In the case of the shale miracle, the supposedly free-market side will find that the mirage was made possible by the Fed’s liquidity injections. Shale was never economic outside of a few small areas. While the anti-market left may cheer the demise of the shale bubble, it will find that even its supporters will turn against its anti-coal and anti-nuclear positions. What will everyone do then?

          • Vangel Vesovski, Nowhere does Obama imply that people should work for free. Of course teachers are paid. I have no idea what point you’re trying to make. The vast majority of teachers are employed by the state.

            Please show me a modern highway system (rather than a handful of roads) that was built by private enterprise.

            Your spin about extortion is ideological nonsense. I think that sort of rhetoric is Marxist-like in its shrillness and silliness. Fact is, most of the money for roads comes from gasoline taxes. Nobody is forcing you to drive. The US military is patrolling the world to keep the oil lanes open so you can buy gasoline at a reasonable price. The local police are patrolling the area to help you keep your car in your possession. You must think these are “extortion” too.

            “Haiti is a hellhole because there is no protection for individual property rights.”

            But no individual is capable of protecting his property rights. He needs a policing force. He needs a judicial system. He needs laws enforced by government. Private entities could not do that. Nobody would trust a private entity to do that. A society’s protection is a public affair, not a mafia-like “business” opportunity.

            “I expect the US to slide into a deep recession because decades of government growth have eroded the foundation on which its economic success was built.”

            I expect a recession too but for other reasons. I’ll add that a huge part of our historic economic success is directly due to government, not lack of it. The “big” or “small” characterizations are mostly words for partisan bickering. My position is that people are happy to have “big” government as long as they don’t have to pay for it. And since Republicans refuse to pay for it, they are as responsible for its growth as much as any liberal Democrat. So I agree that both political sides are intertwined. They both are responsible for what we get no matter what lip-service they pay for their own supposedly cherished position.

        • Nowhere is Obama advocating “tyranny of the majority.” That’s your bizarre spin. It’s no different than what the left did to those Covington kids.

          • No he just wants the majority to have everything the majority wants. As long as he is part of the majority.

  10. So, do you think this would have ever happened under Hillary if she had managed to win the election? Talk about blind luck dodging that bullet, or ‘Burnie’ Sanders for that matter. Elections sure do matter.

    It really makes me wonder over at the Democratic/Socialist party what those geriatric senators and especially those punk kid freshman congressman that think they now da new boss, what are they thinking saying out loud they are going to put a stop to this party and by the way, we are going to shut down oil and gas, no more airplane trips and no more beef.

    On voting day in the next presidential election on Nov 3/2020, when the average voter most places is thinking who are they going to vote for, they can either vote for the Dem/Marxists who have admitted out loud they will destroy the economy, or vote for Trump who will guarantee to at least fight for keeping the American economy healthy and keeping the promises he did make. I think this almost guarantees the re-election of Donald J. Trump, especially if the economy is still firing on all cylinders and the Democrats are making fools of themselves.

    • Earthling, Dems should have held a serious retrospective in what Really went wrong and Hillary’s book should have explored “WTF Happened” instead of doubling down on their view of things and wasting all their efforts at trying to undo the last election. Now with the designer-brained youngsters they created in the schools to cement the Dems into government forever, the Dems have guaranteed they are out of government for at least a generation.

      The next 4 elections are the Republicans’ to lose if they don’t complete the switchover to a Trump-style Republican party. They have to get rid of old guard swamp dwellers who basically capitulated to the “progressives” view of things believing the new globalization stuff was too big to fail. Now that Trump has singlehandedly pulled the rug out from under “too big to fail”, they have to put a talented tough bunch together m, campaign like crazy and fix America so that it realizes it can’t let its guard down ever again.

  11. What about Australia, there has been a very successful anti frocking campaign
    here, based on the farmers fear of contamination of their bore water supply.

    Its not helped by the fact that just as in the UK, the Federal government owns
    the land below about 10 metre, so if oil is discovered on say a farmers
    property there is no incentive to drill as no benefit.

    Solution of course is to change that so the owner of the land does at least
    get a percentage of its value when LNP, oil or any other mineral wealth is discovered.

    Regarding the USA now exporting oil, two good things, far less oil money for Saudi Arabia to be able to give to its twin ruler, the Wahebi tribe, who support terrorism around the World, plus all of the thousands of Princes born from the rulers, will have to work for a living.

    The good times are now in the past.

    MJE

  12. The above post about what would have happened had Hillary won?
    In Canada, the federal government,too many provinces and any number of well-funded activists have blocked the expansion of pipelines.
    The same movement has busy in the US, but the industry has been able to expand.
    But there still too many constraints.

    • The Shale “Revolution” largely occurred while Obama was president. It almost entirely occurred on private and State owned leases. The Federal government had very little power to interfere in it.

      • It is not because they (Obama and his NRDC-controlled agencies) didn’t want to.
        The Obama EPA and USFWS service were initially trying mightily to stop drilling on state and private lands too. It is just the methods they had were limited so they tried to over-reach
        .
        – WOTUS rules from the EPA and the Sage Prairie Chicken protection efforts started in 2010. The WOTUS rules were blocked by the courts. WOTUS was a serious over-reach on the EPA Clean Water Act authority to regulate navigable waterways, and a driect attack on private property rights.
        https://thehill.com/policy/energy-environment/256493-court-blocks-obamas-water-rule-nationwide

        And by 2015, even the FWS service had to admit that protecting the Prairie Chicken was not needed, or at least they realized privately they’d lose the battle badly in the courts due to the States efforts and the fact the Grouse populations were actually quite abundant.

        In 2010, the Service determined that the greater sage-grouse warranted ESA protection because of population declines caused by loss and fragmentation of its sagebrush habitat, coupled with a lack of regulatory mechanisms to control habitat loss. However, the need to address higher-priority listing actions precluded the Service from taking action to list the bird. Since that time, actions from state, federal and private partners have added needed protections, increasing certainty that this important habitat will be protected.
        Roughly half of the sage-grouse’s habitat is on federal lands, most of it managed by the BLM and USFS. “

        https://www.doi.gov/pressreleases/historic-conservation-campaign-protects-greater-sage-grouse

  13. After the price crisis of 2008 that followed upon the global peak of conventional oil production in 2006, I am grateful for every additional year that fracking gives me to prepare my affairs for the next peak in combined liquid fuels production. I only wish the US government were planning ahead too. I wish this dilemma were part of the mainstream media discourse and presidential campaign debates. I wish people did not take our energy supply for granted. Technology is not a magic genie that reliably produces miracles on demand just in the nick of time. Hydraulic fracturing was proven technology that had set on the shelf since the 1960’s because it was too costly to deploy. Once that ace in the hole has been played, I doubt there are other obscure technologies waiting to be plucked off the shelf as needed.

    • Hydraulic fracturing was not “set on the shelf since the 1960’s because it was too costly to deploy.” It’s a common well completion technique that has been in continuous use since at least the 1940’s. Most wells are frac’ed to some degree.

      The Shale “Revolution” was the combination of precision directional drilling and frac’ing to enable economic production from source rocks, like the Bakken and Eagle Ford shales and numerous continuous shale resource plays in the Permian Basin. The “revolution” was the realization that the source rocks could be produced.

      The oil from the Bakken, Eagle Ford, etc. is just as conventional was the oil produced from conventional high permeability reservoirs. The only thing that’s unconventional is the use of massive frac jobs in horizontal wells to exploit the source rocks. Unlike conventional discrete accumulations. The source rocks are continuous resource plays. The resource plays in the Permian Basin are so extensive, that they might as well be infinite.

      That’s not to say that shale is a panacea. It’s expensive and the economics are often marginal. But it is YUGE and will not peak for decades.

      • And don’t forget the change from chemical gels to much cheaper slickwater as a fracc agent. In Oklahoma they called it “river fraccing” for a while because in principly you could use river water for it.

      • A friend and colleague of mine used to work at Chevron, as an oil chemist.

        I remember him telling me in the 1980’s that source rock had 10 times (at least) the oil that was in the wells. But source rock oil was held is dense rock, and they couldn’t get it out.

        The fracking revolution is the technological change that let us get it out.

        He’s working now on diamondoids, by the way, which used to be a well-head nuisance until he got interested and began their study.

      • Fracking goes back to the 1860s when invented by a Civil War vet for enhancing waterwell flow. He used gunpowder. This led to development of “torpedoing” the wells using nitroglycerine for enhancing oil and gas flow and it was widely used internationally for conventional wells. Both these methods were not as controlable as modern fracking and notice no one was complaining about the practice. The complaints were promoted by the modern CO2 totes who thought peak oil was putting an end to itself and all they had to do was get rid of coal. When they realized the reversal in O&G fortunes, thats when all the fake news and hype came frothing out.

      • I stand by my claim that the “proof of concept” project was implemented in the 1960’s, but unfortunately I do not have an internet citation for that. And the high prices that followed for a number of years after the peak of conventional production in 2006 were absolutely essential (when combined with a dearth of alternative investments due to the Fed’s ZIRP) to induce investors to fund the Bakken and Eagleford projects:

        “In conclusion, what enabled the oil and gas industry to extract oil from shale rock over the past 7 years was higher prices. If it weren’t for higher oil prices, the capital investment needed in the oil and gas sector, wouldn’t have occurred, and US oil production would have continued to decline.”
        By John Manfreda of Oilprice.com

        https://oilprice.com/Energy/Crude-Oil/The-Real-History-Of-Fracking.html

        • Frac’ing has been in continuous use since the 1940’s. From the same article…

          Even though the birth of fracking began in the 1860s, the birth of modern day hydraulic fracturing began in the 1940s. In 1947, Floyd Farris of Stanolind Oil and Gas began a study on the relationship between oil and gas production output, and the amount of pressurized treatment being used on each well.

          This study lead to the first experiment of hydraulic fracturing, which occurred at the Hugoton gas field, located in Grant county, Kansas in 1947. In this experiment, 1,000 gallons of gelled gasoline and sand were injected into a gas producing limestone formation with a depth of 2,400 feet. This was then followed by an injection of a gel breaker. While this experiment failed to produce a significant production increase, it did mark the beginning of hydraulic fracturing.

          Despite the failure in the Hugoton gas field experiment, research continued. On March 17, 1949, Halliburton conducted two commercial experiments; one in Stephens county Oklahoma, and another in Archer County, Texas. These results were much more successful.

          After achieving experimental success in 1949, fracking quickly became commercialized. In the 1960s Pan American Petroleum began using this drilling technique in Stephens county Oklahoma. In the 1970s, this extraction method was being used in the Piceance Basin, the San Juan Basin, the Denver Basin, and the Green River Basin.

          This widespread use even garnered the attention of President Gerald Ford. In his 1975 state of the union address, President Ford promoted the development of shale oil resources, as part of his overall energy plan, as a means of reducing foreign oil imports (Power Plays, Robert Rapier, P. 222).

          Modern Day Fracking

          Modern day fracking didn’t begin until the 1990s. This originated when George P. Mitchell created a new technique, which took hydraulic fracturing, and combined it with horizontal drilling.

          The Shale Oil Boom

          The technology known as hydraulic fracturing isn’t new, and has been around for 100 plus years. Like the cell phone, computer, and automobile, it’s been innovated, and renovated over long periods of time.

          The Oil Price article was from 2015. Higher oil prices may have explained the past 7 years in 2015.

          They don’t explain the most recent 3 years very well.

          • Just like fracked nat gas which has sold below the cost of production for years, they have to keep the existing operations with sunk costs producing in order to service their debt.

          • Yes, fracking by itself is old technology (and so is directional drilling), but it was in the 1960’s that a demonstration project proved that the two technologies could be combined to extract oil from shale rock formations–but the cost made it commercially prohibitive. The author of the article appears to be unaware of that early demonstration project. It may not be widely known.

          • The DOE and GRI conducted some tests on frac’ing shale in the 1970’s. No one was particularly interested in it except for George Mitchell. It wasn’t a matter of the cost. Most people just didn’t think it would work. The conventional line of thinking was that frac’ed shale would not produce significant volumes of gas.

            Hydraulic fracturing was first developed by private industry in the 1940s. The same is true of directional drilling. In the 1970s after the first oil embargo, the federal government created institutions intended to address declining natural gas reserves and energy technologies to reduce U.S. reliance on foreign oil. Most assessments of these efforts are critical of government sponsored projects and spending. Still, that doesn’t mean that it was all a wasted effort, especially the basic research initiatives.

            According to Yergin, Section 29 was “a provision in the 1980 windfall profits tax bill that provided a federal tax credit for drilling for so-called unconventional natural gas” And it “stimulated activities that would otherwise not have taken place.” But shale gas proved too difficult and uneconomic, and almost all companies tackling the issue dropped out.

            Yet, Mitchell persisted.

            During two decades of effort, he lost a quite a bit of money.” Because of his belief in the potential of shale gas, Mitchell was able to interest the Gas Research Institute—a private-public not for profit organization—and the DOE to allocate research dollars to new technologies. There is evidence that federal R&D dollars contributed to making shale gas commercially viable, earlier rather than later in the process.

            According to Dr. Terry Engelder from Penn State, DOE research “helped expand the limits of gas shale production and increased understanding of production mechanisms.” George King, a consultant with Apache Corporation, wrote that technology developments responsible for fracking can be attributed to “a loose alliance of the U.S. Department of Energy, the Gas Research Institute and numerous operators.”

            Yergin echoes these insights, noting that when George Mitchell put Mitchell Energy on the market in the late 90s, three companies passed on acquiring it after concluding that fracking was a commercial flop. Few years later, one of those companies, Devon Energy, acquired Mitchell after it starting producing shale gas.

            The conclusion that can be drawn from this history is that President Obama greatly overstated the government’s role in making shale gas commercially viable. Politicians do that all of the time and regrettably. The President uses excessive rhetoric far too often. Second, government R&D funding contributed to the development of shale gas technology. What is unclear is how much filled a void in funding how much displaced private funding.

            One example of value added by government R&D is not a reason to generalize about government sponsored R&D. The shale gas revolution could be a useful case study for better understanding where government funding is appropriate, where it merely replaces private sector funding, and why other firms did not share George Mitchell’s vision.

            https://fuelfix.com/blog/2012/03/06/carter-obama-administration-role-in-natural-gas-boom/

          • Directional drilling only became practicable with the development of LWD (Logging while drilling) technology during the 70’s. At least that is what I’m told by a friend who makes an (extremely good) living as a directional drilling/geosteering consultant world-wide.

          • You can drill directional wells without LWD. The downhole directional instruments do a decent job of maintaining the proper inclination and azimuth. LWD enables us to actually “see” where we are. LWD tools + real time + precision directional drilling enables the well to be precisely steered through a formation. The shale revolution wouldn’t have been nearly so successful without LWD tools.

            We don’t drill many horizontal wells in the Gulf of Mexico (I think I’ve drilled one); but almost all of the wells are directionally drilled. LWD tools pulse a signal uphole through the drilling fluid. This enables real time viewing of the data, usually gamma ray and resistivity curves… although we more often also running neutron-density and sonic tools as part of the LWD package. The LWD tool is usually 20-50′ behind the drill bit. So, there is a delay… But real time data makes it a lot easier to pick casing points… And it’s really cool to get to the objective and see the gamma ray curve kick to the left and resistivity curve kick to the right.

      • “The oil from the Bakken, Eagle Ford, etc. is just as conventional was the oil produced from conventional high permeability reservoirs.”–You are spinning. As the term “conventional” is used in the industry, no, it is not conventional oil. It is costly to produce (the industry as a whole had negative cash flow even when oil prices hovered around $100 a barrel for years at a stretch), the wells deplete extremely fast, and the light oil produced is poorly suited for transport fuel unless it is blended with a heavier (usually imported) grade.

        • The term as used in the industry has nothing to do with the nature of the oil. Unconventional refers to the nature of the reservoir and means of production.

          unconventional resource

          1. n. [Geology, Shale Gas]
          An umbrella term for oil and natural gas that is produced by means that do not meet the criteria for conventional production. What has qualified as unconventional at any particular time is a complex function of resource characteristics, the available exploration and production technologies, the economic environment, and the scale, frequency and duration of production from the resource. Perceptions of these factors inevitably change over time and often differ among users of the term. At present, the term is used in reference to oil and gas resources whose porosity, permeability, fluid trapping mechanism, or other characteristics differ from conventional sandstone and carbonate reservoirs. Coalbed methane, gas hydrates, shale gas, fractured reservoirs, and tight gas sands are considered unconventional resources.

          https://www.glossary.oilfield.slb.com/en/Terms/u/unconventional_resource.aspx

          Oil produced from the Bakken Shale is no lighter than oil sourced from the Bakken Shale and produced from conventional reservoirs.

          Shale’s not a panacea. This is a difficult business to make money in. The margins aren’t huge even among the best operators in conventional plays.

          The breakeven price varies widely among different plays, within individual plays and among different operators. In general, the breakeven price in the major shale plays has been cut in half since 2014. The key to making money is to minimize costs, while maximizing production. $50/bbl forces companies to be much more frugal than $100/bbl…

          Over the last couple of years, E&P companies have become more efficient, forced to create investor returns at $40 – $50/barrel oil. Well productivity has improved as companies drilled longer laterals and used less proppant. After the crash in oil prices, oilfield services companies lowered their prices to compete for limited work. As oil prices recovered, the price of oilfield services was slow to catch up. Additionally, companies have more capital discipline than they ever did at $100/barrel oil prices.

          Even as oil prices have started to recover, companies are showing lower breakeven costs than ever before. As shown in the chart below, breakeven prices in the Midland Basin fell by 50% from $87 in January 2014 to $44 in September 2018.

          https://mercercapital.com/energyvaluationinsights/how-to-interpret-breakeven-prices/

          Continental Resources, the leading Bakken producer, has generated positive operating cash flow every year since 2014 and positive free cash flow since 2016.

          https://www.marketwatch.com/investing/stock/clr/financials/cash-flow

  14. I guess this means OPEC and the IEA are no longer predicting U.S. shale oil would be a flash in the pan and a non-factor in (now less than) 10 years time.

    • Resource G: and the fact Trump in two years could reverse the obstruction of pipelines, export of oil and gas loosen regs, open Federal lands that puts America so far ahead shows us the enormous damage to an economy and a people that a “progressive” (I might as well use the term in its present backwards meaning since the word has been irrepairably ruined) politician can do.

    • I don’t know what year they were projecting from when they made that particular round-figure estimate, but recently the state of North Dakota projected that the Bakken would see its peak production year in 2024. Projections are not always on the nose, but the source appears to have nothing to gain from unduly alarming the voters. I doubt that the Eagleford will peak much later (I refer you to Art Berman for details). I think it is curious, and probably not a coincidence, that a striking contrast exists between the political and media establishment’s constant fear-mongering about man-made global warming and its puzzling reticence (lips tighter than those of a mafia don!) regarding the approaching peak in global liquid fuels production, which is mathematically inevitable and, according to most geologists who are in a position to speak publicly, not terribly far off. Democratic politicians will not bring it up, Republican politicians will not bring it up, journalists will not ask them questions about it, and neither private television networks nor PBS will do any stories on the subject, either alarming or reassuring. Yet they constantly try to stampede us into supporting action to “prevent climate change” (as though that were even possible). Curious, indeed.

      • Bakken peaking in 2024? That would be 25 years after large-scale production started in Elm Coulee and 18 years after major production started in the eastern pinch-off. Not a particularly short-lived field.
        And production in the Permian Basin is heading for the sky after more than a century of oil extraction.

  15. The various comments from the readers concerning President Obama give the impression that he was at least a ” Manchurian Canterdate” as per the film, a mix of a Islamic and a Communist, or that he was trying to give the average person a better deal from the excessiveness of Capitalism.

    To us in Australia his Health care made a lot of sense, as we have had a medical system since 1971 which is a safety net to those, a majority of the population, who cannot afford being on Private Health re. its costs.

    I would think that good health care was a essential for the long term security of a country.
    If you have to have conscription again then you will need healthy young men and women to defend the country.

    Capitalism is good, but with reasonable checks and balances. As we here are finding out following the Royal Commission into the financial sector, i.e. the Banks, “Greed is not good” for the country, only for the individual.

    So overall was President Obama a good, or not so good President ? Perhaps we will have to wait for History to tell us that.

    MJE

    • “I would think that good health care was a essential for the long term security of a country.”

      Obamacare was not a good healthcare plan. It raised costs dramatically and forced people to buy it or pay a penalty.

      The way to reduce medical costs and give coverage to everyone is to allow the free market to operate by introducing competition into the healthcare market.

      Trump is slowly doing just that. He could do a whole lot more if he had a Congress that would half-way cooperate with him, but I guess we should probably not expect that to happen, given the present political climate, before the 2020 elections.

      • I think it should be noted that the US has best healthcare system in the world- but it’s probably the most expensive healthcare system in the world.
        Or if someone wants best healthcare, they tend to come to the US- particularly if cost is not the issue.

        I would say, one should compare US healthcare to US educational system. One might say more people from outside of US come to US to use it’s educational system, but despite this, I would say the US healthcare system is much better than US educational system

  16. The shale miracle story is a joke because the sector has been cash-flow negative for the past two decades and there is no way to make the math work for much longer. There is too much debt, too much red ink, and too many false assumptions that the myth of energy independence is based on. Eventually, we will have the curtains pulled back and someone is bound to notice that the king is not wearing any clothes.

  17. Despite the Obama administration war on fracking led by Lisa Jackson, the opposition to pipelines to transport oil and natural gas, fighting against the set aside oil resources in ANWAR, the war on coal the resilient energy industry along with the country’s abundant resources survived and even thrived despite these politics and with the unleashing of vast resources by the current administration the US has become the dominant energy leader in the world. The choice going forward is to whether we accept the unproven scare of Global Warming and allow the naïve lure of Socialism gain control and once again prove how it’s false claims of equality will lead to corruption, despotic rule and ultimately the impoverishment of the world’s beacon of Freedom and Democracy.

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