That is a really quite astounding post. Of course this is different. We have picked all the easy and low-hanging oil fruit our technology and economy allows. We failed to produce the last remaining difficult fields; arctic, ultra-deep, Kashagan et al. We failed at $100/barrel. Not likely to be produced at $40. Or $30.
I’m sorry but all of those fields are what is called “a work in progress”. In the oilfield it takes often greater than a decade from discovery to commissioning for fields and when you have something as challenging as Kashagan it is not surprising the number of delays and then couple that with some questionable contract awards and you have unexpected failures. Doesn’t mean it can’t or won’t be fixed. Arctic is an access issue which can be fixed. Yes we picked all the low hanging fruit but back in 1984 we were saying that as well, hence the big push into the Arctic. After that drop in price the mantra was “this time is different” we won’t come back. But costs were cut, efficiencies put in place, new technologies employed which allowed for fields not thought to be economic or recoverable being brought on stream.
The last hurrah truly is US tight-shale. Eau d' bakken (a dark oily cologne specially formulated for wealthy white Americans. "Buy some today. It's on sale!") and the rest were produced on outlandish debt. Is it any surprise that no other shale play was produced at $100? Or $70? Or now at $40? Not Argentina, Poland. Or England. Just more investor hype from an industry flack.
You know nothing about the shale business or what is actually happening anywhere as far as I can tell. The limitation to speed of development in Argentina is lack of service companies (fracking kit) and powerful unions, in England it is an issue with land access blocked by environmentalists as is the case in much of Europe. In places like Algeria and China unconventional gas is increasing each year, they just don't talk about it. The US was uniquely positioned to move quickly on the shale boom….there was lots of competition in the services, lots of rigs and a regulatory system that supported it. As time goes on this will happen in places like Argentina, Australia etc. Schlumberger is already talking about some new technologies they see as reinventing the unconventional business.
And by this time not being different what I am saying is the industry will recover…of course it is dealing with a dwindling resource, no one has ever argued it isn’t. But we were dealing with a dwindling resource each and every time in the past. It becomes harder through time to find and produce reserves but that doesn't mean it is all dead now becuase of a year of low prices.
the US was essentially the ONLY significant oil producing country in the world. Second, the world's economy began a growth spurt post WWII. But notice how little oil we exported from the 40's into the early 70's. Why so if global demand was increasing? Easy answer: the Texas Rail Road Commision was a very effective OIL CARTEL. By state law it could restrict the amount of oil produced in Texas. Texas that was THE primary oil producing region on the planet. And why did the TRRC restrict oil production? Pull up any chart showing inflation adjusted oil prices and you'll see that the 40's thru early 70's was the most stable oil price period in the oil patch's entire history. For almost 30 years Texas politicians set the global price of oil
