Some growing physical limitations in the U.S. oil patch – especially in the booming Permian Basin – could put a cap on the ongoing domestic oil boom during the second half of 2018.

The DrillingInfo Daily Rig Count reached a peak for 2018 in the middle of the month, coming in at 1,105 on April 16.  Since that time, the count has dropped by 20 rigs to its current level of 1085.  With crude oil prices hovering near four-year highs, the U.S. Energy Information Administration (EIA) continuing to predict that the domestic industry will set all-time production records with each succeeding month, and OPEC and Russia pledging to continue their production limitation deal into 2019, we have reached the time of the year when the big independent producers re-evaluate the market and set their drilling budgets for the second half of the year.

So, have we seen this year’s peak in drilling activity, or are these companies setting the stage to ramp things up even further during the last two quarters of 2018?  It’s a good question.

When we came to this same point in 2017, the industry had spent the first 4 months of the year dramatically increasing its rig count and overall production in response to a WTI oil price that had risen from around $43/bbl to above $50 in the final few months of 2016.  That rapid price response had in turn caused the price for WTI to fall back into the mid-$40s as mid-year re-evaluation season dawned.

As a result, companies pulled back on their drilling budgets for the second half of the year, and cut them back even further during the fourth quarter of 2017 as investors demanded they focus more capital on investor returns than on drilling new wells.

Although the increase in the rig count thus far this year has not been nearly as dramatic as it was in 2017, the industry has created a very significant supply response to 2018’s rising crude prices.  The fact that the OPEC/Russia limitation agreement is hanging together and the global surplus appears to have dried up at this point create a very bullish atmosphere that agitates in favor of ramped-up drilling budgets for the second half of 2018.

But several big limiters to growth may put an artificial cap on how much expansion in drilling can ultimately come about:

• First, companies are finding it increasingly difficult to obtain the sand needed for their frac jobs, especially in the Permian Basin.
• Second, companies are finding it difficult to staff the growing number of frac crews needed to fully complete the wells they are drilling and place them on production.  This is one of the main reasons why the EIA’s inventory of drilled but uncompleted wells (DUCs) grew to an all-time high of 7,692 in mid-March.
• Third, despite the best efforts of midstream companies to construct a dozen new pipeline projects, Permian producers are beginning to see constraints on takeaway capacity for both oil and natural gas coming out of the basin.
• Fourth, just as happened in the Eagle Ford region when it was booming in 2010-2014, the road infrastructure in some parts of the Permian region are being strained to full capacity by all the truck traffic necessary to conduct oilfield operations.  This is especially true in the relatively new but highly-attractive Delaware Basin in far West Texas.  There is no quick fix available for this physical limiter to growth.

Thus, while current prevailing market forces agitate in favor of the industry’s fulfilling the EIA’s projections of new production records as far as the eye can see, we have a set of real-world physical constraints that will likely place at least a temporary ceiling on just how much higher domestic U.S. production can ultimately rise.

Taking all these factors into consideration, the best guess for the second half of the year favors an outlook for a slowly-rising rig count and more modest domestic production growth than some of the experts are anticipating.

Forbes

45 Comments on "Oil Boom Is Starting To Run Into Limits To Growth"

MASTERMIND on Fri, 27th Apr 2018 3:26 pm 



Looking Back on the Limits of Growth – Smithsonian
https://www.smithsonianmag.com/science-nature/looking-back-on-the-limits-of-growth-125269840/

World Scientists “Warning to Humanity” Signed by 15,000 Scientists from 184 Countries Including the Majority of all Nobel Prize Winners
https://academic.oup.com/bioscience/article/67/12/1026/4605229

Long-run evolution of the global economy: Hindcasts of innovation and growth (Garrett 2015)
http://adsabs.harvard.edu/abs/2015ESDD….6..655G

Scientific American: Apocalypse Soon: Has Civilization Passed the Environmental Point of No Return?
https://www.scientificamerican.com/article/apocalypse-soon-has-civilization-passed-the-environmental-point-of-no-return/

Peer Reviewed Study: Limits to Growth was Right. Research Shows We’re Nearing Global Collapse (Turner, 2014)
http://sustainable.unimelb.edu.au/sites/default/files/docs/MSSI-ResearchPaper-4_Turner_2014.pdf

https://imgur.com/a/pYxKa

twocats on Fri, 27th Apr 2018 4:08 pm 



i’m sure there will be a texan along here any second about how they’re laying down them roads and pipe and sand and water and all the things they need to keep this black gravy train going for another 10 years. because its been a breezy easy lemon squeezy so far and that’s with unlimited funds and the strong end of the business cycle and skyhigh prices. Lets see how well they do when all those switches are flipped to off.

MASTERMIND on Fri, 27th Apr 2018 5:39 pm 



On incomes, Russia and the US are now equally unequal

https://qz.com/1250100/income-inequality-russia-and-the-us-are-now-equally-unequal/?utm_source=qzfb

Boat on Fri, 27th Apr 2018 6:04 pm 



Teocats

Those high prices are recent. Texas was growing production when oil was at $40. If no more wells were drilled and complections remained at the currrnt levelbthere are 18 months of drilled but uncompleted Wells to frack. Even the MSM doesn’t grasp this. No new roads or pipelines needed.

Boat on Fri, 27th Apr 2018 6:14 pm 



Mm

Russia has tiny population. Take away foreign born immigrants and the numbers would improve dramatically in the US. Go to Homeland Security and read the stats. Some countries immigrants do better than others. The P’s for example don’t adjust well and rate highest for deportation. Lol You don’t notice so much because they’re veo short.

MASTERMIND on Fri, 27th Apr 2018 6:27 pm 



Boat

Russia has about 2/3 the population size of America. And most of our immigrants who come here are the children of the wealthy elites of other countries. Maybe if we took away the bible belt then the numbers would improve. I know our violence and crime rates would go down

Boat on Fri, 27th Apr 2018 6:29 pm 



Mm

Mexican immigrants did not come from elites. Lol You be a crazy one.

Davy on Fri, 27th Apr 2018 6:37 pm 



“Russia has about 2/3 the population size of America.”

US 325.7MIL Russia 144MIL

2/3?

MASTERMIND on Fri, 27th Apr 2018 6:55 pm 



Look I found an old pic of Clogg..Casual KKKFriday!

https://imgur.com/6WXzXhm

Shortend on Fri, 27th Apr 2018 8:17 pm 



MM , Perfect pic of Cloggie, hope he appreciates your post!
Drill, baby , Drill

Anonymouse1 on Fri, 27th Apr 2018 8:54 pm 



Boatretard is innumerate dumbass, its comes with his sub-70 IQ. You know, a FEATURE. He doesn’t even know where, or even what Russia actually is. Dumb, even by your standards.

dave thompson on Fri, 27th Apr 2018 10:03 pm 



“Oil Boom Is Starting To Run Into Limits To Growth”
How stupid can one be? The sofas,plastic kids toys,plastic lawn furniture, old tires and other derbies is keeping me well into the 2018 year with plenty of room to grow.

My backyard furnace/boiler/incinerator, keeps me in plentiful clean green energy my neighbors are oh so jealous. Most look on in wonder as I use the embedded energy that comes from all the pumped plastic crap others discard.
HA HA HA Stupid Idiots!

twocats on Fri, 27th Apr 2018 10:38 pm 



http://www.rrc.state.tx.us/oil-gas/research-and-statistics/production-data/texas-monthly-oil-gas-production/

boat is a high level idiot – just smart enough to assemble lots of barely coherent words together that I imagine make sense in his vast but empty noggin. to actually argue with what he says would be a waste of time.

Anonymous on Fri, 27th Apr 2018 10:47 pm 



The conclusion was weak. He says he has a lower growth forecast than some, but does not say who or how much. Also, no price caveat.

Cloggie on Fri, 27th Apr 2018 11:00 pm 



Are you ready for a new round of substantial cost reductions in PV-solar?

Thin film solar mass produced in new US factory:

https://cleantechnica.com/2018/04/27/in-a-win-for-the-robots-first-solar-to-open-new-us-factory/

In a few years time a solar panel will cost as much as a plate of plywood at Walmart, like $100,-

Do you remember, grand-dad? Peak oil?
Yeah sure, peak oil.

dave thompson on Fri, 27th Apr 2018 11:13 pm 



$100 for a plate of plywood aint no great shakes.

Cloggie on Fri, 27th Apr 2018 11:31 pm 



Chip board.

Davy on Sat, 28th Apr 2018 4:54 am 



“In a few years time a solar panel will cost as much as a plate of plywood at Walmart, like $100,-“

Neder, talk your own shit quit acting like you understand the US because you don’t and you never been here. You don’t buy plywood at Walmart. You buy it at Menards, Lowes, Home depot and or any of a multitude of locally based hardware stores. It does not come in plate it comes in sheets. A normal sheet of plywood is around $30.

Davy on Sat, 28th Apr 2018 4:59 am 



Solar panels are indeed relatively cheap but that is where it ends. I paid $230 for 1 – 300 Watt Hanwha Q.Peak-G4.1 Solar Panel. I purchased 6. That was not too bad but what gets pricy is all that comes afterwards. The rest of the project cost me $15,584.

I have an interesting system because I am on and off grid. I use transfer switches to govern which system I use for my various circuits. I learned this from the boats I was on with my grandfather. When I was young I sailed with my grandfather. On these boats you had line, generator, and battery power on boats. There was a mother board you did all the switching at. I do the same with my house.

Another strategy I use is I am not cycling my batteries. I am gathering solar energy during the day. I am on grid at night. I use demand management to maximize my wood boiler/solar system. I save my batteries for a power down situation. I want to extend battery life out to their maximum. You do this by not cycling them. I also have a generator I can hook up at my grid connection where I have a throw switch disconnect. The generator is a welder too which is a plus on the farm. In a power down situation and poor sunlight I can charge batteries.

I can cook with charcoal or gas. We use electric to cook with normally. If I desire and it is a hot sunny day I can easily choose to run say my A/C mini split. I paid more for this system but it works wonderfully with my solar system and is the most efficient heating cooling system I could buy. If the power goes out I can run my well pump to get water. After my oversized pressure tank is filled I can turn my wood boiler on and get hot water for a shower. Since a well pump uses close to 30 amps I can’t run it and the wood boiler at the same time. My solar system is 48V 30amp. My well pump is ½ horse 30 amp system. Through demand management and transfer switches I can get my hot water. All my lights are LED. Every appliance is high energy star related. I can easily run the washer. I can dry cloths outside. My next investment is wind power unit but that will be $10K and will have to wait. At my location the wind blows often when the sun is not good. This would make the system even more resilient and useful because I could gather power also at night too where now I am bound by the sun.

I am using this solar system to offset electric cost so I get a payback but more important is back up in grid down situations. I feel in just a few years to a decade the grid will become less stable as our inevitable power down of modernism begins. I am ready. If a mad max occurs then maybe I am raided and my system destroyed but maybe there is just a slow death of modernism then I will do well.

So yea, price is coming down but for the masses who don’t have money they can’t afford such a setup so your hypothetical $100 panel is not to scale. I agree municipal utilities and corporations have the money to buy your cheaper solar panels but it still must scale and even with these deep pockets it only partially scales. When we get to a continent it becomes an issue of once the boundaries of grid intermittency is reached. Storage and grid changes will raise the cost significantly so at that point your $100 panel will become a $1000 panel. If Europe does not watch it will have created an expensive trap. It will systematically made itself less resilient to the decline ahead. This is why I argue with you constantly with your renewable hype. You are like a loud mouth Baptist preacher making little sense sometimes. You hold out your bible and say “SEE” “BELIEVE”. Many of us see right through your exaggerations and embellishments.

Cloggie on Sat, 28th Apr 2018 5:38 am 



Yesterday national holiday in the Netherlands: “King’s Day”.

https://www.youtube.com/watch?v=4Pk1TFmfKf4

King Willem-Alexander traveled to the Groningen province this year, not just for the traditional scenic pictures, but because for a serious reason. The Groningen province is in a state of anxiety because of the ever more prominent soil subsidence, caused by natural gas exploitation since 1960. Buildings are “cracking up” on a large scale and the battle has started about who is going to pay for the damage. The Groningers want to see natural gas exploitation halted completely.

This is of course exactly the kind of news offshore wind developers in Holland want to hear:

Offshore wind going into the overdrive with planned 30 GW wind park in the North Sea:

https://deepresource.wordpress.com/2018/04/28/dutch-company-tennet-plans-30-gw-offshore-wind-park/

30 GW would be twice the current offshore capacity in Europe and represent 10% of the total EU average electricity consumption (nameplate) or 5% realistically (50% capacity factor).

Cloggie on Sat, 28th Apr 2018 5:46 am 



Solar panels are indeed relatively cheap but that is where it ends. I paid $230 for 1 – 300 Watt Hanwha Q.Peak-G4.1 Solar Panel. I purchased 6. That was not too bad but what gets pricy is all that comes afterwards. The rest of the project cost me $15,584.

Where the hell do you spend this $15k on??!!

I have 6 panels as well of 285W each and had them installed for an all-in price (no batteries, but including grid connection and feed-in) for exactly 3000,- euro (end 2015).

Now you can buy at IKEA a 2160W system that is 33% bigger than mine for less money (2740,- euro).

https://www.ikea.com/nl/nl/zonnepanelen.html

In other words 40% per Watt price decay in two years time, with more to come.

Davy on Sat, 28th Apr 2018 5:53 am 



“Where the hell do you spend this $15k on??!!”

2 transfer switches $604
Steel casing, concrete, conduit, wire, $542
6 circuit transfer switch $308
8 trojan L16 AGM batteries and cable $4,210
conduit and wire $540
solar system equipment $7,313
labor $3,600
plus odds and ends

Davy on Sat, 28th Apr 2018 5:54 am 



“I have 6 panels as well of 285W each and had them installed for an all-in price (no batteries, but including grid connection and feed-in) for exactly 3000,- euro (end 2015).”

You are a grid tied fool.

Davy on Sat, 28th Apr 2018 5:55 am 



“Now you can buy at IKEA a 2160W system that is 33% bigger than mine for less money (2740,- euro).”

Again grid tied and I wonder if that includes installation. If it does include installation someone else is paying for that cost. Quit your hyping neder.

MASTERMIND on Sat, 28th Apr 2018 7:05 am 



Solar is a scam. it will never pay for itself. It produces a tiny amount of electrify, only during the daytime. when you use the least amount of power. Too many clouds and night time. That is why investors won’t support solar companies and governments around the world have to subsidize them all.

MASTERMIND on Sat, 28th Apr 2018 7:07 am 



Peak Saudi Arabia

https://imgur.com/a/1ZIvRnR

Cloggie on Sat, 28th Apr 2018 7:25 am 



You are a grid tied fool.

This “grid tied fool” has electricity 24/7/365, where a “battery-tied-fool” like you looks pretty daft in the middle of the Winter. Zero electricity. But hey, you can always attach your home trainer to a generator. Happy pedaling! This is how they did it in Holland during the war:

http://resolver.kb.nl/resolve?urn=urn:gvn:NFA03:chb-0025-9&size=large

Perhaps something for you?

Again grid tied and I wonder if that includes installation.

It does as you can verify for yourself in that IKEA link:

Een kant-en-klaar pakket inclusief installatie en garantie

Solar is a scam. it will never pay for itself.

Would be a difficult thing to do with that $20 pocket money your mum is forking over to you on a weekly basis.

Oh wait, I vaguely remember you had income from renting out property in the Vancouver area.

Solar is a scam. it will never pay for itself. It produces a tiny amount of electrify, only during the daytime.

Now the facts. Over the last 2 years I had a yield from the 6 panels of 1500 kWh per year. Yearly electricity consumption 1600 kWh, so almost break-even. I have a normal household with the standard appliances, but everything optimized for energy efficiency. Total cost pv installation: 3000 euro. Amount of money saved on electricity: 345 euro/year. Payback time: 8.7 years. After that I will have free electricity for the rest of my life. On the minus side I will probably will have to replace the converter 1 or 2 times a 400 euro per piece (every 10 year or so with high variability). And there is a chance that in a couple of years they are going to scale back on feed-in tariffs, which is now 100% compensation, into a smaller percentage.

Davy on Sat, 28th Apr 2018 7:34 am 



Neder, I forgot to mention I have a wood stove that can heat my house if all power and backup goes out. I also have food being on a farm. You are a grid tied fool in an over populated over complex little statelet. You just peed on yourself.

Davy on Sat, 28th Apr 2018 7:37 am 



Nederliar, these costs are not real cost. These costs are subsidized so if you are going to be real and truthful tell the whole story.

Cloggie on Sat, 28th Apr 2018 8:07 am 



Clogmeister, these costs are not real cost. These costs are subsidized so if you are going to be real and truthful tell the whole story.

Completely BS as far as hardware is concerned. These prices are paid to private companies. I didn’t get a dime of subsidy.

Only the feed-in tariffs are debatable, but not much. I wouldn’t know why my solar kWh is worth less than a kWh from the grid, apart from grid cost, as long as the amount of feed-in solar power is relatively small and can be compensated by reducing the output of fossil power stations. When the amount of privately produced solar kWh will increase and storage aspects come into play, then the real cost will increase.

But it should be remembered that conventional electricity companies still do not pay a price for CO2-emissions. Where are those costs in your scheme, fake green Prozark? Economists have calculated that in order for “Paris” to be effective, a tax of 67 euro or $77/ton CO2 needs to be introduced.

https://www.dnb.nl/nieuws/publicaties-dnb/dnb-working-papers-reeks/dnb-working-papers/working-papers-2017/dnb369465.jsp#

makati1 on Sat, 28th Apr 2018 8:23 am 



Cloggie, Solar in the Ps…

“My parents decided to install solar panels at their home. A 200k ($4,000) php setup net them a reduction of 8k ($160) a month in bills. (Electric here is about $0.30KwH) http://imgur.com/f5wGHaj At this rate, the investment for the entire setup – panels, inverter, and batteries will have paid for itself in little over 2 years.

The panels look like these http://imgur.com/TYhpFTF (there are 4 installed, but these were the first 2). They’re about as tall as a person.

So unlike 20 years ago, solar really doesn’t cost a lot. And they don’t need too much space either.”

Actual user, not a sales pitch.

Davy on Sat, 28th Apr 2018 10:02 am 



“Completely BS as far as hardware is concerned. These prices are paid to private companies. I didn’t get a dime of subsidy.”
The EU renewable effort is one big subsidy nederliar. These subsidies are direct and indirect. I am sure your utility provider is kicking in something as a starter then the subsidies go from there. This is fine but quit lying about the true cost here because you make yourself look fruity.

“But it should be remembered that conventional electricity companies still do not pay a price for CO2-emissions. Where are those costs in your scheme, fake green Prozark? Economists have calculated that in order for “Paris” to be effective, a tax of 67 euro or $77/ton CO2 needs to be introduced.”
Nederliar, the Paris accord is a farce and your primary energy that is fossil fuel driven is still up around 70-80% so quit your self-righteous BS.

Davy on Sat, 28th Apr 2018 10:05 am 



stop it 3rd world you don’t know shit about solar and you are just playing your games. Normally you are hooting and hollering how awful and doomed renewables are and now you are promoting them. Which is it?

Cloggie on Sat, 28th Apr 2018 10:54 am 



ClogMeister, the Paris accord is a farce and your primary energy that is fossil fuel driven is still up around 70-80% so quit your self-righteous BS.

You are nitpicking just jealous that Europe is outshining the US on every front: climate change, renewable energy, Olympic medals, white demographics. So much so that for many European-Americans we are the last hope.

And even Davy wants to run off to his mother civilization if the “shtf”.

Everybody wants to be in Europe: Africans, Muslims, Davy.ROFL

Line up behind the coloreds, Davy-boy. And don’t for a minute hope for a preferential treatment. The coming right-wing-Italian government will be pro-Russia. And they haven’t forgotten the 1943-humiliation.

https://www.youtube.com/watch?v=1jt9MLdg3JQ&t=7s

Davy on Sat, 28th Apr 2018 11:04 am 



At least you are not denying the 70-80% primary energy fossil fuel hole you Eurotards are in and the fact that the Paris accord is a complete farce for lying fake green hypocrites like you. The rest is just your daily cheerleading nonsense.

fmr-paultard on Sat, 28th Apr 2018 11:22 am 



we lost confidence in our empire and as a result we give no operational room for our supertards to make progress so i can continue to have safe electricity and indoor plumbing. then we have information warfare from our adversaries. we used to take care of this by killing them all the way we did in south america. we need to restart this.

breaking our confidence in the world is coming from different angles. for example the islamic nigerian scumbags broke our model of trust. i’d say china has more trust in the world and business is very professional from china. this maybe the scumbags haven’t adapted to learning chinese.

the problem for us could be simple to reestablish trust and develop a better AI to guide nigerian scammers toward china. that’s how we break their confidence. we need to do the same to russia

Cloggie on Sat, 28th Apr 2018 2:19 pm 



The peer-to-peer internet of kWh trading using blockchain technology taking shape:

https://cleantechnica.com/2018/04/28/solar-power-trade-using-blockchain-completed-in-uk/

makati1 on Sat, 28th Apr 2018 7:34 pm 



“The End Of Our Empire Approaches”

“Failing empires end when the elites have exhausted the resources of the masses
Debt/indebtedness is the weapon the State uses to subjugate
Our debt-based money system is designed to make you a serf if it can…

When the Empire of Debt can no longer find stooge countries to pillage with contracts they have to begin preying on their own local populations, which goes a long way towards explaining the actions of the Federal Reserve over the prior 20 years, as well as the student debt chart above. …

https://www.peakprosperity.com/blog/113979/end-our-empire-approaches

“None are so hopelessly enslaved as those who falsely believe they are free.” ~ Goethe

Davy on Sat, 28th Apr 2018 7:38 pm 



“None are so hopelessly enslaved as those who falsely believe they are free.” ~ Goethe”

LMFAO at the 3rd world who thinks he is free but the reality is he is attached to the US by an umbilical cord of that monthly check from SS. What a dumbass.

makati1 on Sun, 29th Apr 2018 5:17 am 



Davy, I fully expect that “umbilical cord” to be severed soon. I keep telling you that it is an extra and I can easily do without. You may need a regular income, but I no longer do. You don’t seem to understand TOTAL FREEDOM, do you? It means unchained from banks, employers or families that support people like you and MM. Yuo CAN lie without them if you are intelligent and open-minded. Things lacking in you an MM. LOL

makati1 on Sun, 29th Apr 2018 5:18 am 



… Yuo CAN lie without them… should be: …you CAN live without them…

Davy on Sun, 29th Apr 2018 5:24 am 



“You don’t seem to understand TOTAL FREEDOM, do you?”

Freedom surely is not a monetary thing beyond a point stupid, it is ultimately in your heart but you wouldn’t know that because you are obsessed with an emotional hatred that consumes you. You are stuck on yourself and daily tell us how special you are probably because your life has been such a failure. Failures make it a point to brag about themselves. You are a narcissist with neurosis because of this life of failure. You can’t believe your whole life was a failure so you trumpet yourself as a success.

makati1 on Sun, 29th Apr 2018 5:52 am 



Freedom is certainly a “monetary thing in the Us. Totally about money Davy. All other “freedoms” come with how much of it you have, not any shredded piece of paper claiming your “Rights”. The “Bill of Rights” is dead. The Us Constitution is dead. You live in a police state worse then Stalin’s USSR or Hitler’s Germany. “Frog in the pot” syndrome or just plain denial, Davy?

Davy on Sun, 29th Apr 2018 6:17 am 



“Freedom is certainly a “monetary thing in the Us.”
Yea for some like you 3rd world

“The “Bill of Rights” is dead. The Us Constitution is dead. You live in a police state”
What we have is better than what is in Asia and where Asia is heading or have you not been reading about China?

makati1 on Sun, 29th Apr 2018 6:24 am 



Davy, you only think the prison you live in is better because your jailers tell you so. Get out and see the world as it really is. Not as the US MSM portrays it.

I know more about what is happening in Asia than you ever will. I live here. You have never been here and never will. You only know what you are told. I know what I see. Yuge difference.

I have no regrets for my decision to move here. You will try to flee to dying Europe when the SHTF but it will be too late. The gate will be closed.