coffeeguyzz wrote:
Main point being, there is such a vast, vast supply of hydrocarbons - specifically natgas - poised to enter the market that producers are facing longterm challenges.
Just like the guy selling buckets of seawater down at the beach, CNX - along with many other operators - is dealing with resource abundance, not scarcity.
Starting in January 2005, all commodity prices that the World Bank track to monitor the industrial ecosystem (base metals, precious metals, oil, gas and coal) blew out in an unprecedented bubble. The second worst economic correction in history, The Global Financial Crisis (GFC) in 2008, was not enough to resolve the underlying fundamental issues. After the GFC, the volatility in commodity price continued. This report makes the case that the GFC was created as the entire industrial ecosystem was put under unprecedented stress, where the weakest link broke. That weakest link was in the financial markets. The strain that created this unprecedented stress, was triggered by the global oil production plateauing. This made the oil market in elastic in form. This is postulated to have happened because the Saudi Arabian oil production was unable to increase production in January 2005, in spite a significant increase of operating rig count. If further analysis supports this hypothesis, then the GFC was created by a chain reaction that had its origins in the oil market.
Due to our dependence on oil, it may be the primary, or master raw resource. Oil has a more significant CRM profile (immanent shortage in context of a vital resource) than almost any other raw material supplying industry. It is recommended that oil, gas, coal and uranium are all added to the European CRM list.
Duplicate. Already digested here. It's just regurgitated perma-doomerism.
Growth in GDP therefore amounts to a “debt fueled mirage,” according to the report. As we have not properly planned for the possible phasing out of fossil fuel energy, it is entirely possible that as energy systems, oil in particular, come to contract, we could witness “the peak of industrial output per capita sometime in the next few years.”
shortonoil wrote:
We will witness the peak in industrial output this year. China has closed for business. The existing debt load will make a restart impossible.
Plantagenet wrote:coffeeguyzz wrote:
Main point being, there is such a vast, vast supply of hydrocarbons - specifically natgas - poised to enter the market that producers are facing longterm challenges.
Just like the guy selling buckets of seawater down at the beach, CNX - along with many other operators - is dealing with resource abundance, not scarcity.
Yup.
The huge natgas reserves found in TOS are amazing and have been widely publicized for years. No one should dispute this fact. Obama even boasted in a state of the union address that the USA had a "100y year supply" of nat gas thanks to fracking....and that was only about 5 years ago, so we've got at least 95 more years of nat gas supply to go.....
CHEERS!
Production declines this severe are common in unconventional natural gas wells drilled in shale. If you have a new well or have recently leased your property, it might be a good idea to be very conservative with your long-term royalty expectations
.
Your income from that well is going to fall rapidly at first and eventually decline to zero.
The typical well might yield as much as half of its gas in the first five years of production. Wells might then continue to produce for a total of twenty to thirty years but at lower and lower production rates. Caution with production and royalty expectations is recommended because long-term experience from shale formations in the United States is not available.
https://geology.com/royalty/production-decline.shtml
Plantagenet wrote: No one should dispute this fact. Obama even boasted in a state of the union address that the USA had a "100y year supply" of nat gas thanks to fracking....and that was only about 5 years ago, so we've got at least 95 more years of nat gas supply to go.....
CHEERS!
Oil and gas production in the United States has peaked and is already in decline.
The latest data from the EIA’s Drilling Productivity Report sees widespread production declines across all major shale basins in the country. The Permian is set to lose 76,000 bpd between April and May, with declines also evident in the Eagle Ford (-35,000 bpd), the Bakken (-28,000 bpd), the Anadarko (-21,000 bpd) and the Niobrara (-20,000 bpd).
Natural gas production is also in decline, a reality that occurred prior to the global pandemic but is set to accelerate.
The Appalachian basin (Marcellus and Utica shales) are expected to lose 326 million cubic feet per day (mcf/d) in May, a loss of 1 percent of supply. In percentage terms, the Anadarko basin in Oklahoma is expected to see an even larger drop off – 216 mcf/d in May, or a 3 percent decline in production.
The sudden declines in production illustrates the fatal flaw in the shale business model. Once drilling slows down, production can immediately go negative due to steep decline rates. Shale E&Ps have to keep running fast on the drilling treadmill in order to keep production aloft. But the meltdown in prices has forced the industry to idle 179 rigs since mid-March...
The OPEC+ deal won’t rescue a lot of shale companies. The demand destruction is simply too large for the OPEC+ cuts. With WTI at $20 per barrel on Tuesday, Permian drillers are actually receiving quite a bit less than that...
The WSJ says that oil storage in Cushing, OK could be full by the end of the month, which could abruptly force production shut ins in Oklahoma and Texas.
That suggests the EIA estimate for a decline in U.S. shale production of 183,000 bpd in May could be optimistic.
rockdoc123 wrote:... "I have a stupid idea and want to share it".
asg70 wrote:Wake me when we have gas lines again, and even then I won't care because I drive an EV.
asg70 wrote:Wake me when we have gas lines again, and even then I won't care because I drive an EV.
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