The trouble faced by not only shale oil companies but also Big Oil can be summarized in one chart from a recent BP presentation.
As much as one thinks times are tough now for the tight oil sector, these 5 triggers arriving within the short term horizon have the ability to upset the entire apple cart and then some.
After raining on the EIA’s Monterey shale oil parade resulting in the department’s subsequent jaw dropping 96% sobering haircut of the formation’s oil reserve, David Hughes, in Drilling Deeper and its latest updates, further challenges the EIA’s tight oil and shale gas production predictions.
The repressive interest rate policy of the Fed drove stupid money into the tight oil industry, the commercial viability of which is at best questionable at the price of oil much higher than the current level.
A recent 2.5-hour solar eclipse over Europe had the equivalent effect of shutting down a medium size power plant every minute for a full hour and turning them back on at the same rate, resulting in a major stress test to the continent’s power grids.
Geological consultant and expert in petroleum exploration and production explains in this video why the US has years, not decades of shale oil and natural gas, why the current price slump and where the industry is heading.
With the twin benefits of cost reduction and technology improvements, solar energy has achieved grid parity in many global markets. The next few years will witness worldwide mass adoption of this renewable energy.
A latest snapshot of oil production of the OPEC-12 nations, majority producers of the world’s cheap conventional oil.
A progress report on Germany’s efforts to transition from fossil and nuclear fuels shows impressive gains in solar and wind energy. At the same time, the road to a completely fossil fuels free power grid remains daunting.
The tight oil revolution is brought on by cheap debt and leverage. Should it unravel one day, then it would not be surprising that the first domino to fall will likely be from the capital markets.