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It’s All Downhill From Here: US Oil Production Peak Already in the Rear-view Mirror

It’s All Downhill From Here: US Oil Production Peak Already in the Rear-view Mirror thumbnail

It’s a shame that the drive for U.S  Energy Independence only lasted for about a year.  Even worse, U.S. Shale Oil Industry responsible for the country’s energy independence is now in serious trouble as the companies have cut drilling by 75% while they are drowning in debt up to the eyeballs.  This is a “No-Win” scenario.  So, watch over the next 3-6 months as the mighty U.S. Shale Industry begins to implode in glorious 3D-Technicolor.

Amazingly, if it weren’t for the 135,000 shale wells drilled since 2007, U.S. oil production would have remained virtually flat.  Yes, that’s correct.  Just about all the U.S. domestic oil production growth from 2007 to 2019 came from shale oil (tight oil).  Even though there was oil production growth offshore in the Gulf of Mexico, it offset the declines in the states.

According to the EIA, U.S. Energy Information Agency, U.S. shale oil production increased from 500,000 barrels per day (bd) in December 2007 to 8.3 million barrels per day (mbd) in December 2019:

As we can see, the Rest of the U.S. net production only increased by 0.1 mbd since 2007 while shale oil increased 7.8 mbd.  Unfortunately, with the U.S. shale oil industry annual decline rate at nearly 50% per year, at some point, the DRILLING HAMSTERS were going to run out of reserves.  While this may have been 1-2 years away, the global pandemic pulled the rug from underneath the U.S. Shale Industry.

While I commend that tens of thousands of workers that helped bring on this much-needed oil production, a 50% annual decline rate is not a long-term sustainable business model.  Well, unless the Federal Reserve can print more oil reserves.  That I would like to see.

So, if we look at the current situation as of June 2020, U.S. total oil production declined 2.1 mbd, mostly from the temporary curtailment of shale oil and offshore wells in the Gulf of Mexico:

While we may see an increase in overall U.S. oil production, with a 75% collapse in the oil drilling rig count, there is no way the shale companies will be able to offset the declines coming in the next 3-6 months.  With the EIA’s latest weekly release, total U.S. oil production has increased to 11.1 mbd.

I believe the ultimate peak in U.S. oil production will be 13.1 mbd as of March 13th, 2020… the week before the Whitehouse announcing shutdowns of economic activity all across the country.

Investors need to realize, without oil production growth, there is no GDP growth.  And, without GDP Growth, the largest Global Financial Ponzi Scheme in history has lost the ability to be PROPPED UP.  Just like with any typical Ponzi scheme, a source of new investor funds are necessary to keep it going.  With oil being the main driver of the Global Economy and U.S. shale oil production accounting for 75% of global oil production growth since 2008, the death of the Global Ponzi Scheme has begun.

Got physical gold and silver?

SRSRocco



26 Comments on "It’s All Downhill From Here: US Oil Production Peak Already in the Rear-view Mirror"

  1. shortonoil on Sat, 25th Jul 2020 9:51 am 

    “Investors need to realize, without oil production growth, there is no GDP growth.”

    World GDP growth and oil production growth have had a perfect correlation as far back as the records go. He is absolutely correct, and we can watch the coming collapse in the world economy by watching oil production. We have a perfect indicator to witness what is occurring, and the curve says its all down hill to zero.

  2. IFuckGlobalismInTheAss on Sat, 25th Jul 2020 10:10 am 

    shortonoil » Sat 25 Jul 2020, 08:27:46

    Globalism was based on extracting unlimited resources from a finite world.

    The math didn’t work out?

    It was well known by the 1970’s that the resources of several world’s would be necessary to bring the entire world up to Western living standards. Some ones decided it could be profitable to try an do it any way. The rest of us sat back, and let them try. Greed, stupidity, and complacency have destroyed our civilization. We now have only to wait for the termites to bring it all down.

    Yes, I agree with that. I would just add, that globalism was based on the hypothesis that oil resource was infinite. Globalism is dependent on maritime cargo shipping and airline shipping. None of this will be possible from now on.

    Globalism is depend maritime cargo shipping. It won’t be possible anymore. Look at the link below for more detail about maritime cargo shipping. Maersk is done.

    https://www.maersk.com/

  3. IFuckGlobalismInTheAss on Sat, 25th Jul 2020 10:18 am 

    I forgot to add that Maersk is a member of the World garbage forum and they often write article for the World Garbage Forum.

    It look like Europe, France, Germany have decided to allied themselves with China. No problems, we don’t need them anyway.

    Let’s restore the old Anglo centrist world.

    By the way, the World Garbage Forum located in Switzerland seem to be controlled the WHO organization and World Garbage Forum.

    Switzerland: Pompeo’s accusations about China are “untrue and unacceptable” – WHO
    https://www.youtube.com/watch?v=rJpzWX8J9P8

    I was not made aware that the WHO is now a political organization lobbying for China. Good for Trump defund the WHO.

  4. IFuckGlobalismInTheAss on Sat, 25th Jul 2020 10:28 am 

    I forgot to add that Maersk is a member of the World garbage forum and they often write article for the World Garbage Forum.

    It look like Europe, France, Germany have decided to allied themselves with China. No problems, we don’t need them anyway.

    Let’s restore the old Anglo centrist world.

    By the way, the World Garbage Forum located in Switzerland seem to control the WHO organization. I also look like the Chinses are controlling Europe through the World garbage Forum. China give big money donations to the World Garbage Forum, this is how they can control Europe.

    Switzerland: Pompeo’s accusations about China are “untrue and unacceptable” – WHO
    https://www.youtube.com/watch?v=rJpzWX8J9P8

    I was not aware that the WHO is now a political organization lobbying for China. Go Trump, defund the WHO

  5. IFuckGlobalsimInTheAss on Sat, 25th Jul 2020 10:47 am 

    Peak oil means that whole continents need to stand on their own feet and build for themselves a civilization running on low net energy.

    Africa need to build for themselves a civilization running on low net energy. If they cannot do it, they should go extinct. I did not create the planet earth, the Whites Nordic race is not responsible for the well being of Africans living in Africa.

  6. On This Day... Jul 25, 2018: Sweida, Syria A wave of ISIS suicide bombings claim scores of lives: 246 Killed on Sat, 25th Jul 2020 10:54 am 


    IFuckGlobalsimInTheAss on Sat, 25th Jul 2020 10:47 am

    Peak oil means that whole continents need to stand on their own feet and build for themselves a civilization running on low net energy.

    IFGITA, i appoint you supertard. your title is “the lover” (of supremacist muzzies).

    Congrats on your promotion

  7. shortonoil on Sat, 25th Jul 2020 11:04 am 

    Hi Steve,
    We have done a lot of work on this subject. I came down with pneumonia and shingles at the same time, so I’m running a little slow. I’ll send you a bunch of graphs as soon as I can. The situation is historic. Petroleum production has disconnected completely from GDP growth. We have entered and economic limbo. The physics of the situation says that the economy will follow the graph, but we still have too few points to draw a definite conclusion. As it stands right now the economy is stuck at where it is; no recovering coming.

  8. Abraham van Helsing on Sat, 25th Jul 2020 11:14 am 

    “World GDP growth and oil production growth have had a perfect correlation as far back as the records go. He is absolutely correct, and we can watch the coming collapse in the world economy by watching oil production. We have a perfect indicator to witness what is occurring, and the curve says its all down hill to zero.”

    Yep, Collapse! As oil is the only source of energy there will ever be.

    Oh wait…

  9. george on Sat, 25th Jul 2020 11:21 am 

    But But But … we have technology lmao

  10. shortonoil on Sat, 25th Jul 2020 11:26 am 

    “Peak oil means that whole continents need to stand on their own feet and build for themselves a civilization running on low net energy.’

    China has turned itself into an ecological waste dump. Its coal mines have been reduced to digging combustible mud, it’s oil fields are pumping slick water, its water has been contaminated beyond use, and its air is unbreathable. It has $40 trillion in debt against a $13 trillion GDP. Western dependence on China is nuts, and self destructive. The CCP will push it until the last China men starves to death, or dies at their work station. The West needs to get out of China as fast as possible. We have got plenty of our own problems to address at home.

  11. Outcast_Searcher on Sat, 25th Jul 2020 12:08 pm 

    Let’s see where we are in a few years when driving demand is solidly back with COVID-19 in the rear view mirror.

    Although crude oil demand for transport will greatly reduce over the next few decades or so as EV’s gradually replace ICE’s, the GRADUAL part of that and ongoing population and economic growth doesn’t say the demand story has peaked yet.

    The doomers have been braying the same claims for 30 to 50 years (depending on which specific issue), and they’ve always been proven wrong within a handful of years.

    Always. The odds say this time isn’t magically different, must because the delusional folk say it must be so.

  12. zero juan on Sat, 25th Jul 2020 12:33 pm 

    Lunatic’s morning:

    On This Day… Jul 25, 2018: Sweida, Syria A wave of ISIS suicide bombings claim scores of lives: 246 Killed said IFuckGlobalsimInTheAss on Sat, 25th Jul 2020 10:4…

    IFuckGlobalsimInTheAss said Peak oil means that whole continents need to stand…

    IFuckGlobalismInTheAss said I forgot to add that Maersk is a member of the Wor…

    IFuckGlobalismInTheAss said I forgot to add that Maersk is a member of the Wor…

    IFuckGlobalismInTheAss said shortonoil » Sat 25 Jul 2020, 08:27:46 Globalism w…

    MANILA (Reuters) – Thousands of Filipinos were crammed into a baseball stadium in Manila on Saturday, breaking social distancing rules despite coronavirus risks, after people wanting to return to their home provinces flooded a government said transportation program. for supertard madcat…

    jef said The “Science” has completely left out…

    Davy said Davys dirty laundry is he hasn’t washed his…

  13. dissident on Sat, 25th Jul 2020 1:19 pm 

    Other energy. LOL. Good luck with the solar and wind sideshow. A big government subsidy induced distortion of the economy if there ever was one.

    I love how the proles are brainwashed with a token wind mill set up in some part of town. As if it is nothing more than a prop for an ad campaign. LOL.

  14. shortonoil on Sat, 25th Jul 2020 1:33 pm 

    “Let’s see where we are in a few years when driving demand is solidly back with COVID-19 in the rear view mirror.”

    You can take a break from trying to cheer us up; such ridiculous hubris only adds to the general sense of depression. Anyone with two brain cells still functioning knows where we are headed. The schedule is the only question; the petroleum production to GDP function is busting up.

  15. printbabyprint on Sat, 25th Jul 2020 3:08 pm 

    Isn’t it strange . shale peaked in last october , the covid 19 has arrived , just a thought .

  16. shortonoil on Sat, 25th Jul 2020 3:25 pm 

    [quote]Isn’t it strange . shale peaked in last october , the covid 19 has arrived , just a thought[/quote]

    The world’s last petroleum growth product peaked, the world reached $370 trillion in debt, and the world’s $trillion a day credit market, the repo market, blew out from 0.35% to 10.5% in one day. COVID showed up immediately afterward to shut the economy down. Anyone who believes that they are going to win the lotto next week can believe that is all a coincidence.

  17. Chrome Mags on Sat, 25th Jul 2020 5:16 pm 

    “Let’s see where we are in a few years when driving demand is solidly back with COVID-19 in the rear view mirror.”

    Yes, it’s called patience (during phase III testing). Once a viable vaccine has inoculated the masses, fear will subside and economic activity of all sorts like sporting events, restaurants, buying big ticket items, services of all kinds will be firing on high as people celebrate BAU being back on track. Pessimism will give way to optimism, smiles and laughter will abound and the roads will once again be congested as oil price rebounds along with the oil service companies trying to keep up with new drilling and fracking.

    It will be like flipping a switch from semi-off to full-on. Never bet against BAU until its dead and buried.

  18. Mick on Sat, 25th Jul 2020 5:16 pm 

    You would think the BAU everything will be fine and we will have a v shaped recovery crowd (trolls) would just chuck in the towel and give up there is so much bad news coming out daily they are looking absolutly riddiculus.

  19. mick the prick on Sat, 25th Jul 2020 5:35 pm 

    juanPee, gay lover

    Mick on Sat, 25th Jul 2020 5:16 pm

    “You would think the BAU everything will be fine and we will have a v shaped recovery crowd (trolls) would just chuck in the towel and give up there is so much bad news coming out daily they are looking absolutly riddiculus.”

  20. Duncan Idaho on Sat, 25th Jul 2020 5:38 pm 

    1970 — Vatican: Cloak & Dagger? Catholic church confirms its condemnation of homosexuality, calling it “a moral aberration that cannot be approved by human conscience.” Meanwhile the Church conscienciously winkswinkswinks as priests around the world bugger the kiddies.

  21. JuanP on Sat, 25th Jul 2020 6:25 pm 

    Duncan, I am Bisexual so I have no issue with gay priests. In fact I would enjoy being with one.

  22. IHateThisWorld on Sun, 26th Jul 2020 3:12 pm 

    I have to watch the news more often. I stop watching the news. Maybe you should disregard my comments above. I don’t have TV nor cable,
    so I have no idea what TVA and Radio-Canada is pushing as propaganda.

    WOW, I just learn there are still BLM protests.

    I had alook at a bunch of data the other day, to see if you could build a low energy society between Canada, US and Brazil.

    I was surprized by the amount of natural resources we have. US has cotton that will allow us to make clothing. Canada has the resource needed to make chemical products for potable water treatment: Chlorine Aluminum Sulfate.

    If we depopulate Canada by migrating people south, we have a shitload of hydro: BC, Manitoba, Ontario (nuclear and hydro), Québec.

    We have two aluminium smelter plant running on hydro: one Québec, one in BC.

    We have stelco https://www.stelco.com/ to produce steel using Nuclear or hydro-energy.

    We also have a train track that runs from Northern Canada (CN train) down to Texas. Trains run on diesel. But it may be possible to run this on electricity using small nuclear reactor like the ones in US aircraft carrier.

    End part 1

  23. IHateThisWorld on Sun, 26th Jul 2020 3:48 pm 

    We are 20 year two late. We are fucked no matter how you look at it. Preparing to die is a wise choise.

  24. this is the problem with muzzie ck it is like doing drugs it feels good for the moment but eventually it takes root in the mouth and it becomes harmful on Sun, 26th Jul 2020 4:53 pm 

    the muzzie ck excretes milk and the subject enjoys muzzie cum but then it changes the mind and the subject becomes angry and hateful

    IHateThisWorld on Sun, 26th Jul 2020 3:12 pm

    I have to watch the news more often. I stop watching the news. Maybe you should disregard my comments above. I don’t have TV nor cable,
    so I have no idea what TVA and Radio-Canada is pushing as propaganda.

    WOW, I just learn there are still BLM protests.

    I had alook at a bunch of data the other day, to see if you could build a low energy society between Canada, US and Brazil.

  25. Abraham van Helsing on Sun, 26th Jul 2020 8:10 pm 

    Any energy shortfall can be offset by tapping my orfices, all copious sources of fumes that burn.

  26. print baby print on Mon, 27th Jul 2020 3:43 pm 

    shortonoil on Sat, 25th Jul 2020 3:25 pm . Good to have you back

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