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Kurt Cobb: The wheels come off shale oil


A flurry of coverage about the gloom and outright calamity in the shale oil business appeared last week. Low prices continue to dog the industry. But so does lack of investor interest in financing loss-making operations for yet another season. Plunging stock prices portend more bankruptcies if circumstances don’t change.

I received considerable pushback last January when I asked whether U.S. shale oil had entered a death spiral. The almost constant refrain of the cheerleaders for the shale oil industry has been that increasing production demonstrates there is something wrong with my analysis and that of others who have been skeptical of the industry’s claims.

We skeptics have certainly been wrong about how long the boom could go on. We could not fathom why investors kept funneling capital into businesses that were consistently consuming it with no hope of ever providing a long-term return.

I can remember when Alan Greenspan, the former U.S. Federal Reserve Bank chair, opined in December 1996 about “irrational exuberance” in the U.S. stock market. His speech turned out to be only an inflection point for the technology sector boom. The tech-heavy NASDAQ stock exchange rose 288 percent between the day Greenspan spoke and the index’s peak in March 2000.

In the subsequent bust the bankruptcy courts were littered with companies that had never made dime.

So far this summer season we have heard two unthinkable utterances come from shale oil industry executives. The first linked above was that the industry has destroyed 80 percent of the capital entrusted to it since 2008. This came from a CEO no longer in the industry.

The second, however, came from one of the largest players in the Permian Basin, the hotbed of shale oil activity. Pioneer Natural Resources CEO Scott Sheffield said that the industry is running out of so-called Tier-1 acreage. That’s oil-speak for “sweet spots.” Those are the circumscribed areas in shale deposits within which extraction costs are low enough to justify drilling.

Outside the sweet spots there is oil, but it is much more costly to extract. The industry at one time likened shale oil production to a manufacturing operation, claiming the one could drill practically anywhere in a shale deposit and get oil out profitably. No one is making such claims credibly any more.

Now, just two years ago the same Scott Sheffield mentioned above compared the Permian Basin to Saudi Arabia. To be fair to Mr. Sheffield, his job is to attract investors so he can drill more wells. So, I fault mostly the investors for not looking carefully at the economics of shale oil which have been free cash flow negative for the industry as a whole for almost a decade.

Some have called shale oil a Ponzi scheme. In a Ponzi scheme the books of the Ponzi operator are kept hidden from the investors so as to make sure they don’t catch on that money from new investors is being used to pay exorbitant returns to old ones. In the case of shale oil, the financials were published quarterly by the publicly traded companies for all to see. And, the wealth extracted by company managements could be calculated practically to the penny.

So, why didn’t investors understand what they were looking at? One possible explanation comes from an oil company executive who explained to me way back in 2009 that oil and gas companies often promote themselves as so-called “asset plays” to investors. They drill a lot of very marginal prospects to get reserves on their books and then tout the growth in their reserves. But much of those reserves will never be exploited at a profit. They are essentially a mirage.

Resource investing is tricky and most investors, even sophisticated ones, can be fooled by the hype. It’s very difficult to know whether something a company calls a reserve is actually a reserve—even more so since 2008 when the Securities and Exchange Commission allowed companies to use “proprietary methods” to determine reserves that are not subject to disclosure.

It’s true that the amount of oil in any one formation can be huge. But that is of no practical consequence if you can’t get the oil out at a profit and do that consistently.

To illustrate, there is enough gold dissolved in the world’s oceans to make all those who are reading this piece millionaires. But the gold remains far too costly to extract.

It seems now that investors are finally realizing that the promise of most of these “asset plays” is never going to be realized.  Even a cheerleading trade publication last week ran a piece entitled “Is the US Shale Boom Winding Down?”

We skeptics said shale oil would not work on the so-called “manufacturing model” asserted by industry. It turned out we skeptics were right. The industry actually focused on “sweet spots” that allowed lower-cost extraction.

We skeptics said that a large portion of the sweet spots would probably be exploited within a decade or so depending on the pace of drilling and the price oil. Now one of the industry’s most prominent CEOs is lamenting in public about the paucity of sweet spots remaining.

We skeptics said that investors would at some point realize that shale oil was a long-term money loser. A former industry CEO did the math and calculated the damage as minus 80 percent for investors in the industry as a whole since 2008. Lately, investors seem to be reacting to facts rather than the hype.

Will shale oil rise again from the dead as it did after the 2014-2016 price decline? That will happen only if two things occur: 1) The oil price rises significantly and 2) investors have a serious bout of amnesia.

Resource Insights

69 Comments on "Kurt Cobb: The wheels come off shale oil"

  1. Brent georgeson on Sun, 11th Aug 2019 7:23 pm 

    Finally a post on this, it definitely now looks like peak oil does not exist right? Everything is perfectly fine Australia is now only warning the are very low on oil supplies. But nope nothing to see here.

  2. Kenz300 on Sun, 11th Aug 2019 7:55 pm 

    Fossil fuels are a bad investment.

    People are divesting.

  3. Famlin on Sun, 11th Aug 2019 7:57 pm 

    The highest us oil production of 12.400 million b/d was reported on the date of 05/31 weekly production report.

    In the next few weeks, it hovered around 12.2 million b/d mark. And the 1st time it hit 12 million b/d was in the week of 02/15. The year started with 11.7 million b/d.

    So even 6 months after this, its increasing, but only slightly. Whether it will hit 12.5 million b/d or stabilize at this rate needs to be seen.

    But the world of ever rising automobiles is expecting more from shale oil especially with output in other oil wells decreasing.

  4. Duncan Idaho on Sun, 11th Aug 2019 8:52 pm 

    The highest us oil production of 12.400 million b/d was reported on the date of 05/31 weekly production report.
    Gee, too bad we use 20 million b/d.
    We are still a huge importer.

  5. Cloggie on Sun, 11th Aug 2019 9:07 pm 

    Just a hint:

    “Renewable Energy Is Now The Cheapest Option – Even Without Subsidies”

    This btw is only true in the range 0-40%. Beyond 40% storage is needed, which increases the price per kWh. But only few countries have arrived at that point, so most are well-advised to invest in renewables to that point and gain time and wait for the price of storage to come down.

  6. Cloggie on Sun, 11th Aug 2019 9:16 pm 

    Interesting graph for Americans to study:

    Energy use per capity:

    US – 7032
    Germany – 3811
    Japan – 3610
    UK – 2997

    Morale: how about bringing US oil consumption back from 20 to 10 mbd? Civilization won’t collapse from that. Abandon these insane SUVs and pickup’s and install double or triple glazing and heatpumps. And compare energy consumption labels before you buy your next appliances.

    People in Germany and Japan are fine with half the energy consumption per capita.

  7. Outcast_Searcher on Sun, 11th Aug 2019 11:50 pm 

    Cloggie, how many kids do you have? How many miles do you drive a year? How many miles do you fly a year?

    There are ways for nearly all of us to reduce our carbon footprints.

    Rural Americans are more spread out, and that’s a chunk of the higher energy usage per capita.

    I’d rather see much higher taxes on things like motor fuels to reign in the use of giant personal vehicles where they’re not needed.

    However, wagging your finger will do far less than reducing your own family’s carbon footprint for the vast majority of people.

  8. Cloggie on Mon, 12th Aug 2019 12:19 am 

    I am glad you asked Outcast_kosher, because there is no one here more committed to reducing my footprint as I am. I do this by, not walking anywhere. Not even to the toilet.

    Now, to answer your questions.

    Kids, as in children?. Zero. I am defiantly doing my part. It is easy when no woman would ever talk to me, let alone, you know. The issue of me potentially creating carbon intensive offspring was never an issue, thankfully. It was a problem that really, solved itself to be honest.

    Miles Driven. I am a shut-in, and am not capable of driving, nor do I own any means of transport beyond my motorized chair.

    Flying. When I do fly, I fly electric passenger jets only, because it is good for Earth. The Israeli’s are world leaders in the field of electric passenger jets and, I respect them for that more than I can tell you.

    The internet is how I get around. I imagine myself in all kinds of places and situations I would never have a hope of getting withing 10,000 km of. It is kind of like astral projection with me, but with a high-tech twist. Very carbon-friendly if I do say so myself. You should all follow my lead and example.

  9. twocats on Mon, 12th Aug 2019 12:54 am 

    production has begun stalling and pausing around the world. at some point the price of oil will rise – unless a massive financial crises hits and stays like a stalled hurricane. prices will rise simply for the fact that so many billions of people need oil on a daily basis. there’s only so much the average person can cut. when prices rise this next time there will be another push to raise production levels. there is a good chance they will be able to boost production one final time, and for good. Will it be the final peak? a secondary post peak rise? who knows. won’t know until 2023 or so.

    in the meantime – say goodbye to all your hopes and dreams for your children, your retirement, or yourself depending on your age.

  10. Cloggie on Mon, 12th Aug 2019 1:31 am 

    “unless a massive financial crises hits and stays like a stalled hurricane.”

    The most effective event to kill off oil for ever would be a war in the Gulf.

  11. Cloggie on Mon, 12th Aug 2019 1:35 am 

    Latest Brandenburg poll:

    AfD 21%
    CDU 18%
    SPD 17% (governing socialists currently 32%)
    Greens 16%
    Left 14%
    Libs 5%

  12. Davy on Mon, 12th Aug 2019 5:04 am 

    Peakers were only partially wrong about shale. It was a game changer but it was also and expensive manufacturing operation and a Ponzi scheme in some respects. Shale has been a check value on prices and a growth segment for the industry as a whole. It is likely also a retirement party for oil in general. It is downhill from here. This is why renewables are so vital. I see shale as remaining relevant but the fantastic growth is likely over soon. I have been talking economics as a key peak oil dynamic for years now. I see all the ingredients for a global economic slowdown or worse. This is going to stunt the industry everywhere but most certainly the higher cost unconventionals. Nationals who rely on oil for funding likewise will be hurting. Economics is the key these days along with tech and geology something ignored in the past. Back then the money was always there but soon it won’t be.

  13. Davy on Mon, 12th Aug 2019 5:27 am 

    “Germany Stalls And Europe Craters” strategic culture via zero hedge

    “German industry is in the deepest slump since the global financial crisis, and threatens to push Europe’s powerhouse economy into full-blown recession. The darkening outlook is forcing the European Central Bank to contemplate ever more perilous measures. “The influential Ifo Institute in Munich said its business climate indicator for manufacturing went into “free fall” in July, as the delayed damage from global trade conflict takes its toll and confidence wilts. It goes far beyond the woes of the car industry. More than 80pc of Germany’s factories are in outright contraction…Clemens Fuest, the Ifo president, says: “All the problems are coming together: It’s China, it’s increasing protectionism across the board, it’s disruption to global supply chains”

  14. Davy on Mon, 12th Aug 2019 5:30 am 

    “Project Fear Panic: Predicted Hard-Brexit Job Losses Across Europe” zerohedge

    “As a no-deal, hard Brexit becomes ever more likely, the fearmongering of the establishment has been turned up to ’11’ as it appears they have little to no control over the process – no matter what they think – now that Johnson (and his cabinet) are in charge. And on the heels of a surprise contraction in GDP in The UK, Statista’s Niall McCarthy notes the latest projections for just how end of the world, a hard Brexit will be… A study by Leuven University in Belgium has predicted that 1.2 million jobs will be lost across Europe in the case of a hard-Brexit. Unsurprisingly, the study finds that the United Kingdom is expected to be the country that will suffer the most with over 500,000 jobs set to be lost. Germany would also be significantly impacted with just under 292,000 redundancies while France and Italy would lose 141,320 and 139,140 jobs respectively.”

  15. Davy on Mon, 12th Aug 2019 5:36 am 

    “Complete List Of Clinton Associates Who Allegedly Died Mysteriously Or Committed Suicide Before Testimony” the gateway pundit via zero hedge

    “Jeffrey Epstein is the latest in a long list of Clinton family associates and acquaintances who died mysteriously or committed suicide before their public testimony. In 2016 CBS Las Vegas posted a list of Bill and Hillary Clinton associates alleged to have died under mysterious circumstances.”
    “Here is that list.”

    Fucking animals.

  16. makati1 on Mon, 12th Aug 2019 5:39 am 

    Davy, a great economic reset is coming and it will be the beginning of a major depression in the West. China, Russia and most Eastern countries will weather the storm, but the US will never be the same. A 3rd world country even now, it will only get worse. Americans are spoiled brats and will go nuts when the SHTF and the social safety net goes away. Imaqgine having to buy your kid bullet proof backpacks…in America!

    Slip slidin’….

  17. Davy on Mon, 12th Aug 2019 5:42 am 

    “Brink of a Global Recession: UK and Germany in Contraction” money mavin via rice farmer

    “UK vs Germany, Italy, France Spain Germany, the Eurozone’s largest economy is also in contraction. Italy, the Eurozone’s third largest economy is flirting with contraction. Brexit Will Take a Toll It’s debatable which economies will suffer more from No Deal, but they all will suffer substantially. I propose the EU will suffer more, as noted in Eight Reasons the EU Will Suffer Far More Than UK in Brexit. What’s not debatable is the idea that Brexit will take a significant short-term toll on both the UK and the Eurozone economies. Manufacturing Recession Has Arrived Meanwhile, thanks partially to Trump’s trade wars, thanks partially to inept policy by central banks, and thanks partially to simple economic exhaustion, a Global Manufacturing Recession Started. Brink of a Global Recession”

  18. Davy on Mon, 12th Aug 2019 6:11 am 

    “Davy, a great economic reset is coming and it will be the beginning of a major depression in the West. China, Russia and most Eastern countries will weather the storm”

    Sure, makato, everything will be OK for you. You can go to bed safe and sound. LMFAO at the delusional old man. BTW lame naked links. You could at least show some content. More irrelevance. Do I need to tuck you in with something soothing? OH, where is your fruitcake buddy this morning with his ID theft and sock puppetry you rely on so much for support and protection?

  19. Davy on Mon, 12th Aug 2019 6:12 am 


    Slip slidin’….

    LOL old and worn out like Mr. ^<^

  20. Truth Buster on Mon, 12th Aug 2019 6:16 am 

    More Davy conspiracy theory nonsense.

    Yeah, wake me up when your crap turns into something.

    If history is any guide, all the allegations you love to parade about will boomarang on the Republicans. Most recent example was all the whining and complaining Democratic voter fraud. Turns out there was voter fraud in another clever game of Republican subterfuge as the RepubliCONS got caught stuffing ballot boxes in North Carolina in what’s turning out to be the largest case of voter fraud in decades. And not a peep of outrage out of your Dear Leader Trump/ what a surprise.

    “Fucking animals. Jeffrey Epstein is the latest in a long list of Clinton family associates and acquaintances who died mysteriously or committed suicide before their public testimony.”

  21. makati1 on Mon, 12th Aug 2019 6:47 am 

    Davy, everything will be OK with me. I have no need of the US. In the last 11+ years, I have relocated my resources to the Philippines and built several new income streams here. Using my US bank(s) and the local ATMs here, I moved as much as $2,000 per day, tax free. Eleven years is about 4,000 days. You do the math.

    The US can crash and burn and I will be fine. I know you want to believe different, but reality is that I am independent of the US. YOU are not. ‘Slip slidin'” describes the US perfectly. Not a day goes by that my analysis is not proven correct.

    BTW: I can live comfortable on less than $500 per month here.

  22. Davy on Mon, 12th Aug 2019 6:59 am 

    Makato, you have been here for years with a failed message. I guess you have not noticed but
    I rarely comment on your contributions anymore. There
    Is no need they prove themselves wrong on their own. This is true of juanpee also and the reason he has turned to ID theft and sock puppetry. Agendas are based on human emotion and carry the baggage of irrationality. Your irrationality is an egotistical belief you are superior and right and the other side sub human and wrong. People like you two fail miserably as you are now.

  23. Truth Buster on Mon, 12th Aug 2019 7:21 am 

    Come on guys, can’t we all just get along?

  24. makati1 on Mon, 12th Aug 2019 7:27 am 

    Davy, I don’t care what you do. It is not important in my life what a deluded Ozark hillbilly thinks or does. I do occasionally comment on your deluded comments but I never read your cut and paste word salads.

    My comments are totally relevant in the real world, one you do not inhabit. I provide refs. You do not because there is no support for your delusions. The US is going down, all the way. It is only a matter of time. If Trump is reelected, it will be during his 2nd term, IF he doesn’t blow it before.

    No president in US history was as insane as he is, or his ‘cabinet’. Warmongers all. It is interesting to watch from 8,000 miles away, in the part of the world that is growing and where the power has shifted.

    Do you even see what the US looks like to someone outside of the asylum? I doubt it. It is being isolated one tweet at a time. So be it. Well deserved.

  25. Cloggie Approves This Official Message on Mon, 12th Aug 2019 7:29 am 

    FLASH REPORT: This is Radio Berlin…..

    Red Army forces have breached a hole in the southern flank of the 7th Hungarian army group north. Chancellor Hitler is ordering the immediate mobilization of Volkssturm and auxiliary military forces in the State of Saxony to counter the communist thrust.

  26. Davy on Mon, 12th Aug 2019 7:30 am 

    “Global Times Shows Dramatic Video Of Chinese Army Preparing For Hong Kong Invasion” zero hedge

    “The Hong Kong/China feud is going from bad to worse on Monday, when as reported earlier, the Hong Kong airport authority advised all passengers to leave the terminal buildings as soon as possible in an unprecedented disruption after thousands of anti-government protesters occupied the airport terminal building. However, what confirmed that as Beijing has been warning for the past week, Hong Kong’s insubordination will no longer be tolerated by Beijing, was a video – complete with dramatic World War III style music – published by the state-owned tabloid Global Times, which showed “The People’s Armed Police have been assembling in Shenzhen, a city bordering Hong Kong, in advance of apparent large-scale exercises.”

    This is the kind of black swan that might tip the global economy into a cascading decline.

  27. Davy on Mon, 12th Aug 2019 7:44 am 

    “Davy, I don’t care what you do. It is not important in my life what a deluded Ozark hillbilly thinks or does.”
    Makato, am well educated and traveled. I lived and worked in Europe. I have run businesses and departments. I am successful in regards to a future where I have investments to utilize. You are just an uneducated ex carpenter who moved to a 3rd word country to retire on the cheap. You whine about money but then talk up your millionaire friend. You attack me for a “so-called” trust fund and then talk about your mom’s inheritance. Do you get my drift? You very much care what I say and do because I moderate your BS as needed. You probably are the primary reason this forum descended into the gutter it is in today. You had a chance to show respect but chose to shove shit down our throats and be a magnet for extremist. The reason you are attacking me now is because Juanpee is going lite with his ID theft and socks. Otherwise you would sit back and laugh. What is amazing is then you whine about ID theft. Total hypocrite is what you are.

    “I do occasionally comment on your deluded comments but I never read your cut and paste word salads.”
    You comment on my comments constantly and the only reason you don’t comment on my longer works is you are not capable. There is too much there for your little mind to digest.

    “My comments are totally relevant in the real world, one you do not inhabit.”
    Your comments reflect your emotional agenda. You cherry pick stories and leave out stories to message your agenda. In this regard you are fraudulent.

    “I provide refs. You do not because there is no support for your delusions.”
    Your references are generally naked links without content and then your comment is usually slip sliding or Go Trump , BS. I provide references as necessary.

    “The US is going down, all the way. It is only a matter of time.”
    No shit sherlock what gave you that clue???lol. Your problem is your team is going down faster and you discount this with “we will weather it”. It used to be it will never happen. What are you going to say when SHTF over in your delusional paradise?

  28. Sissyfuss on Mon, 12th Aug 2019 8:18 am 

    Davy, Hong Kong will be Tienamen Square on steroids. The ruthless leadership of the Communist party is driven mad at any vestige of freedom seeking by their subjects with Muslim reprogramming as a major exhibit of there management style. The irony is that the size and intensity of the protests are insuring a violent and sociopathic response from the mainland government. On topic, the shale industry is waiting for the government and the Fed to nationalize them on the grounds of national security which has some credence. Our addiction to the oily black heroin cannot be remedied by renewables methadone because to be clean and sober means hunter/gatherer. Need billions of ODs to reach that state.

  29. Robert Inget on Mon, 12th Aug 2019 8:55 am 

    Shale Wheels may be losing roundness , no question.
    We should be worried about sending USD out to limb’s end, then, sawing off the branch.
    Read below. (oil price dot com)
    “On Monday, President Trump signed an executive order freezing all government assets and implementing a total ban on transactions with the government. It’s the latest in a multi-year effort that has seen a steady ratcheting up of the economic pressure. It began with sanctions on individuals, and ballooned into restrictions relating to access to U.S. financial markets, and then sanctions on oil sales”.
    (most important to my theory)
    “Now any company – not just American companies – are barred from doing business with the Venezuelan government, according to Washington”

  30. Robert Inget on Mon, 12th Aug 2019 9:21 am 

    In diplomatic terms Trump’s moves are know as a
    ‘circular firing squad’
    Here’s why;

    a) In light of failing shale PROFITABILITY production,
    (drilling NEW wells) stops.
    b)Canada is in the process of diverting crude exports away from US to Asia.
    c) China needs to undermine USD to keep all
    imported crude yuan affordable.

    d)”It’s a significant escalation of the regime change effort. U.S. national security adviser John Bolton delivered a bellicose speech in Lima on Tuesday, declaring “now is the time for action.” He also said that the measures will “work in Venezuela and it will work in Cuba,”

    Putting USD at risk, John Bolton has done the same for our economic future.

    Iran, Venezuela, Russia hold powerful oil cards…
    Will these three cave to Trump’s rudderless demands on world economies? Or, side with China’s ‘Belt Road’ policies, drafting yuan as the world’s alternative exchange currency.

  31. joe on Mon, 12th Aug 2019 9:34 am 


    In the end interest rates will fall, that will reduce risk, but also return. The Great Recession of 2008 is not over, its just postponed untill we are using wheel barrows to collect our wages. That is if we are still using cash…..
    If they are forced up as say German manufacturing needs a strong euro to buy raw materials cheaply then the EU has months, not years left.

  32. Cloggie on Mon, 12th Aug 2019 10:26 am 

    “the EU has months, not years left.”

    Let’s see how many months the UK has left, shall we?

    “Boris Johnson could be the last prime minister of the United Kingdom”

    I’ve planned a fifth vacation this year, now as a disaster tourist, shortly betore the Brexit date of October 31, to Britain and Ireland, just to sniff the atmosphere, before the West will likely break up and perhaps a new Iron Curtain will descend, now over the Channel, separating mongrel Anglos from neo-fascist Europeans/Russians.

    A sort of a touristic collectors item.
    A last minute of a different kind.

    “Donald Trump’s security adviser John Bolton tells Team Boris Johnson ‘get Brexit done so we can do a trade deal’ after flying in to London to boost transatlantic ties”

    One of those is coming, first Oceania and then perhaps Huntington (amended, Eurosphere)

  33. Cloggie on Mon, 12th Aug 2019 10:45 am 

    “Salvini: League ready to make a deal with Berlusconi”

    “Salvini denies plans to leave the euro”

    All signs that Salvini has no intent in leaving the EU.

    Why should he? He is de facto the leader of the European Right and has the potential of becoming “European Imperator”. Berlusconi, who is strongly pro-EU and wants to turn the EU in a superpower, together with Putin, will have a moderating influence on Salvini.

  34. Robert Inget on Mon, 12th Aug 2019 10:45 am 

    “That is if we are still using cash”

    Bang on, Joe.
    World currencies have yet to endure a ‘digital mega inflation’. Bitcoin market is tiny compared to

    No need for wheelbarrows.
    So called digital ‘currencies’ prove as much.

    Amazon, Apple are trying to launch currencies making it possible to actually ‘buy’ stuff.
    (look out above if theses two get together)

    If China, India, Vietnam, Japan, the Koreas settle differences, come together fighting Trump’s War On Free-Trade, that basket of currencies could swing some big dick buying power.

  35. Cloggie on Mon, 12th Aug 2019 10:51 am 

    Why the EU needs an army:

    – pacify Lybia and close the southern border
    – prevent a potential white genocide in South-Africa
    – Capture Gibraltar
    – declare Medittarenean European, together with Russia
    – counter Chinese colonization attempts in Africa
    – intervene in CW2 in the US
    – guarantee Irish and perhaps Scottish independence
    – #1 reason: contain PLA

  36. Robert Inget on Mon, 12th Aug 2019 11:08 am 

    Brexit means a short dim future for Boris.
    I see the United Kingdom, Ireland, Whales, Scotland, England NOT disbanding, NOT leaving the EU, Not allowing itself to become an historic

    Let’s look at the ‘new right’s’ actual enemies;

    1)Can any radical movement bring all political factions together to mitigate effects of climate change?
    a) migration, agriculture, religious conflicts, energy shortages due to mandated cut-backs in fossil fuel consumption.

    When the Right discovers, as it has in the US,
    its current course is suicidal, adjustments will be made. True, it may be too late to stop climate change. Not too late to understand reality, money can be made selling green paint.

  37. shortonoil on Mon, 12th Aug 2019 11:14 am 

    “Why the EU needs an army:”

    Which has to do with what?

    Shale is a diluent and feed stock. It is a necessary cost to the industry, and will be extracted until oil is no longer used. It never has, nor will it ever make money. It is just one more indication of the ongoing depletion of oil.

  38. Robert Inget on Mon, 12th Aug 2019 1:15 pm 

    It’s NG, Not Shale oil, that keeps America Truckin.

    U.S. natural gas demand is at a record – and prices keep dropping
    in General Energy News 12/08/2019

    U.S. natural gas demand is at an all-time high and expected to keep rising – and yet, prices are falling.

    U.S. gas futures this week collapsed to a three-year low, while spot prices were on track to post their weakest summer in over 20 years. In other markets, such lackluster pricing would cause investment to retrench and supply to contract.

    But gas production is at a record high and expected to keep growing. Demand is rising as power generators shut coal plants and burn more gas for electricity and as rapidly expanding liquefied natural gas (LNG) terminals turn more of the fuel into super-cooled liquid for export.

    Analysts believe the natural gas market is not trading on demand fundamentals because supply growth continues to far outpace rising consumption. Energy firms are pulling record amounts of oil from shale formations and with that oil comes associated gas that needs either to be shipped or burned off.

    On the New York Mercantile Exchange, gas futures NGc1 this week dropped to $2.03 per million British thermal units (mmBtu), the lowest since May 2016. For the summer, spot gas prices at the Henry Hub NG-W-HH-SNL benchmark in Louisiana were on track to fall to their lowest since 1998.

    Gas speculators last week boosted their net short positions to the highest on record, according to the U.S. Commodity Futures Trading Commission.

    “All the bulls are gone,” said Kyle Cooper, consultant at ION Energy in Houston.

    The market is expecting a big boost in gas output this fall after Kinder Morgan Inc’s (KMI.N) Gulf Coast Express pipeline comes online in September and releases some of the gas currently stranded and being burned in the Permian.

    So much associated gas is coming out of the ground that gas prices in the Permian basin in Texas and New Mexico, the biggest U.S. shale oil formation, have turned negative on multiple occasions this year.

    Meg Gentle, CEO of U.S. LNG company Tellurian Inc (TELL.O), said current pipeline expansion plans will not meet record gas production in the Permian, leading to severely depressed prices at the Waha Hub in West Texas, which touched a record low of negative $9/mmBtu in April.

    “Negative $9. I’d be happy taking it all for $1,” Gentle said earlier this year at a conference. Tellurian is developing the Driftwood LNG export plant in Louisiana and pipelines to transport gas from fields like the Permian to the Gulf Coast.

    The rising production has offset a nominally bullish factor like persistently low inventories. While recent declines in oil and gas prices have prompted energy firms to cut spending on new drilling, a drop in production growth is still considered far away.

    The U.S. Energy Information Administration projects gas production will rise 10% to 91 billion cubic feet per day in 2019 after soaring 12% to a record 83.4 bcfd in 2018, its biggest annual percentage increase since 1951.

    One billion cubic feet is enough gas to fuel about five million U.S. homes for a day.

    U.S. LNG exports, particularly to Asia, are powering increased demand. They are expected to rise from a record 3.0 bcfd in 2018 to 6.9 bcfd in 2020, according to EIA projections, making LNG the nation’s fastest-growing source of demand. Still, LNG exports account for only about 5% of total U.S. gas use.

    “LNG is still not a significant enough portion of the consumption pie to independently push prices higher,” said Jim Ritterbusch of Ritterbusch and Associates of Galena, Illinois.

    Meanwhile, U.S. power generators’ gas use may be peaking, rising to an expected record 30.6 bcfd in 2019 but then falling to 29.6 bcfd in 2020 as renewables produce more electricity, EIA data shows.

    Daniel Myers, market analyst at Gelber & Associates in Houston, said “persistent low prices are beginning to crimp producers’ growth expectations” in gas-heavy shale formations such as the Marcellus in Pennsylvania or the Haynesville in Texas, Louisiana and Arkansas.

    But the sheer volume of gas produced in oil-heavy plays like the Permian means that supply could remain robust.

    “Production in the Permian is nearly entirely oil-driven and independent from gas prices,” said Myers.
    Source: Reuters (Reporting by Scott DiSavino; Additional reporting by Stephanie Kelly in New York; Editing by Dan Grebler)

  39. Robert Inget on Mon, 12th Aug 2019 1:23 pm 

    Snap Quiz:
    What industries prosper with cheap NG energy?

    Could American’s keep warm in bad times w/o
    cheap natural gas?

    With the rise of EV Plug-in’s, new electrical appliances, air conditioning, growing populations, would coal choke all joggers on planet to death?

  40. Robert Inget on Mon, 12th Aug 2019 2:33 pm 

    Samir Madani Retweeted a photo from, Inc.⚓️
    BREAKING: The UK-held GRACE 1 VLCC supertanker containing 2.1 million barrels of light Iranian crude oil is now signaling #Morocco as its next destination after having spent 5 weeks in Gibraltar due to arrest. #OOTT #Grace1 Data by @MarineTraffic Photo by @elpaisinenglish (link:

  41. makati1 on Mon, 12th Aug 2019 4:35 pm 

    “If China, India, Vietnam, Japan, the Koreas settle differences, come together fighting Trump’s War On Free-Trade, that basket of currencies could swing some big dick buying power.”

    Robert, Americans don’t want to hear any positives about Asia. They are fed anti-East bullshit 24/7/365 until it comes out of their ears. Davy leads the pack of deniers.

    From my observation point inside Asia, I will take Asia anytime for my future survival. Yes, it has problems. However, it also has survivor cultures. The US doesn’t. It has a dependency culture obvious by the exponential drug problem and suicides. Snowflakes anyone? LOL

    As the pressure increases on the tax serfs, the violence will increase. I prefer to be where it is still safe to go outside my home. I prefer cobras to AK-47 wielding maniacs.

  42. joe on Tue, 13th Aug 2019 6:19 am 

    Like I keep telling you. I dont care if the UK holds together. The biggest losers would be Scotland and Nth Ireland, the first because of accessibility to trade and services, the second will have to join a country that even the EUSSR claims is a tax haven, if they want to leave, good luck to em…
    The problem is, they dont really want to leave, they just want to overthrow the result and remain….

  43. Cloggie on Tue, 13th Aug 2019 7:42 am 

    Majority German finance branche expects no deal Brexit:

    …and don’t mind as they (and Amsterdam and Paris) will step in the void that will be created by a retreating City of London (“The Mile”).

    British empire = Rule Brittania
    British EU membership = Cool Britannia
    Post Brexit Britain = Fool Britannia

  44. JuanP on Tue, 13th Aug 2019 7:51 am 

    “…and don’t mind as they (and Amsterdam and Paris) will step in the void that will be created by a retreating City of London (“The Mile”).”

    Yea, right clog, How is Deutsche Bank doing these days and the French banks are not far behind. You Europeans have a clock cleaning coming.

  45. JuanP on Tue, 13th Aug 2019 8:34 am 

    This person is leading the ECB!! WOW

    Blain: “What A Complete ClusterF**k”

    Profile picture for user Tyler Durden
    by Tyler Durden
    Tue, 08/13/2019 – 08:03
    Blain’s Morning Porridge, submitted by Bill Blain of Shard Capital

    Global Credibility Under Pressure – We’ve been Tangoed!

    This morning’s headlines are screaming how Argentina and President Mauricio Macri have precipitated yet another crisis on the stressed geopolitical battlefront… Relax. We are more than used to dealing with Argentina defaults… But, its far more complex than that. The latest Argentina Dance Macabre is all about Global Credibility. It’s another Massive Fail!
    What does it say about the credibility of Global Institutions and Policy when Argentina’s whole market collapsed following a primary for an election in December? Ex-IMF president, and soon to be head of the ECB, Christine Lagarde personally staked her support for President Mauricio Macri’s pro-market government when she steamrollered through the IMF’s biggest ever bailout of $56 billion for Argentina last year.

    Virgin Hyperloop Goes on Tour to Show Off Future of Fast Travel
    It now looks an extremely poor call on Lagarde’s part. Macri won a mere 32% of the vote, while former president Cristina Fernandez de Kirchner won 47%. Don’t Cry for Me Argentina indeed… Domestic Argentine Politics have left the IMF looking stupid.

  46. Cloggie on Tue, 13th Aug 2019 8:39 am 

    Dutch banking giant ING increases likelyhood no-deal Brexit to 25%:

  47. Cloggie on Tue, 13th Aug 2019 9:46 am 

    Boris “get off me” Johnson deluding himself:

    “Boris Johnson ‘believes the EU will cave in and give a new and improved Brexit deal at the eleventh hour because Ireland would be “f****d” by No Deal’”

    The only one who will be really f* is the UK, if the Commons will let no deal happen in the first place.

    More likely it will be BoJo who will be f*.


    You can have em, Donnie! Last time the US stripped the UK of its empire, now the country itself is going to be plucked.


  48. JuanP on Tue, 13th Aug 2019 12:27 pm 

    I think I’m all my socks and my ID thefts, therefore I am.
    That’s not crazy. Or is it?

  49. Truth Buster on Tue, 13th Aug 2019 12:28 pm 

    STFU stupid. Go see a therapist Juan

  50. Anonymouse on Tue, 13th Aug 2019 12:30 pm 

    Juan, it’s ok. I did it. The first step is the biggest

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