The new shale tech that terrifies OPEC

Posted: June 3, 2018 by oldbrew in innovation, shale oil
Tags:

Credit: mining.com


Trying to write off shale drilling as a here-today-gone-tomorrow fad isn’t working out too well, it seems. The WSJ investigates.

What doesn’t kill you makes you stronger says The Wall Street Journal @ the GWPF.

Two years ago, it looked like Saudi Arabia was winning its fight against the U.S. shale oil industry by furiously pumping crude to drive down prices.

Some drillers went bust and many more flirted with bankruptcy while oil drilling in places like West Texas and North Dakota collapsed.

The Saudi effort backfired.

Instead of killing shale it spurred a wave of innovation that transformed drilling in the U.S. into a highly efficient industrial process, dramatically lowering costs and boosting output. During the next oil bust, it will be the Saudis who have to worry.

“High prices tend to create sloppiness in this industry because people focus only on growth,” says Doug Suttles, chief executive of shale driller Encana. “Downturns make you focus on cost because it’s the only thing you can control—the oil price is out of your hands.”

Meanwhile, something remarkable is happening. The U.S., where production was once thought to have peaked nearly 50 years ago, will become the largest oil producer on the planet by next year.

One region alone, the prolific Permian Basin, recently passed 3.1 million barrels a day of output. Stretching from West Texas to New Mexico, it would now rank No. 4 of the 14 members of the Organization of the Petroleum Exporting Countries and may soon produce more than No. 3, Iran.

The amount of oil being pulled from the ground there is already driving global markets. But what should really frighten energy ministers in Riyadh, Tehran and Moscow is how that oil is produced. The number of drilling rigs now active in the Permian is the same as back in October 2011, yet the region is producing three times as much crude.

Continued here.

Comments
  1. BLACK PEARL says:

    The whole world must be sitting on vast reserves of untapped shale with the USA supplying the know how …. years of lower priced oil …… the silence of our lefty based media is deafening .. aint it.

  2. Phoenix44 says:

    Perhaps some of the ardent Remainers might like to compare what happened to shale oil in the US with their Apocalyptic predictions about UK farming and industry if we did away with tariffs?

    The idea that businesses that don’t have to really compete are as efficient as they can be is disproven time after time after time, yet still people trot out the claims.

  3. E.M.Smith says:

    @Black Pearl:

    What we know exists:
    https://en.wikipedia.org/wiki/Oil_shale_reserves

    Remembering that until recently folks were not even actively looking for this stuff…

    World: (in MILLIONS of bbls) 4,786,131

    So over 4 TRILLION barrels of the stuff…

    United States: 3,706,228

    We’ve got most of it 😉 with “only” 1 Trillion bbls in the rest of world.

    But expect more to be found as folks actually look.

  4. oldbrew says:

    So much for ‘peak oil’…

    But despite the fall-off in new field discoveries, and record-high production rates, the reported proved reserves of crude oil remaining in the ground in 2014, which totaled 1,490 billion barrels, not counting Canadian heavy oil sands, were more than quadruple the 1965 proved reserves of 354 billion barrels.
    . . .
    But because of the practice of “backdating,” any new reserves within a field, even those to be discovered decades after the field discovery, are attributed to the year of initial field discovery, creating an illusion that discovery is not keeping pace with production.

    http://en.wikipedia.org/wiki/Peak_oil#Discoveries

  5. Bitter@twisted says:

    This is great news.
    Not only should fracking bring down the price of oil and gas it will, without ignorant political interference, free us from dependency on the tyranny that is Putin and the Middle East.

  6. Alasdair says:

    Meanwhile here in the UK we sit on this wealth and indulge in creating wind driven austerity and solar heat islands.

  7. craigm350 says:

    Reblogged this on WeatherAction News and commented:
    Hopefully the UK will follow suit so we don’t rely on unreliables

  8. oldbrew says:

    UK unreliables hardly worth a mention just now…

  9. oldbrew says:

    Must be time for the next climate scare…oh, here it is…

    Carbon ‘bubble’ could cost global economy trillions
    By Matt McGrath
    Environment correspondent
    1 hour ago

    A rapid reduction in demand for fossil fuels could see global economic losses of $1-4 trillion by 2035 according to a new report.

    Energy efficiency and low carbon technology could cause the downturn, even if governments fail to take new steps to meet the Paris climate goals.

    The resulting “carbon bubble” could cause losses larger than the 2008 financial crisis, the authors say.

    The US and Canada would be the biggest losers, the study finds.

    http://www.bbc.co.uk/news/science-environment-44357243
    – – –
    Gotta keep the fears going.

  10. p.g.sharrow says:

    I just read that Matt McGrath article twice to make sure I understood it…………..I think, I’m confused. Ecoloons are pointing out the economic cost of instituting their low Carbon Policies?

    Only someone that is collage educated could believe that reducing the cost of energy to modern society would result in decreased wealth creation. Believe that energy production in America is a net cost to the American Nation or that America is a high cost producer.

    The latest figure on cost of new oil production in America is $36 a barrel, in spite of the government and that is on private land.

    Only fuels bought offshore are a net cost to the nations GDP and reduce a country’s standard of living…pg

  11. Stephen Richards says:

    It’s not frightening Riyadh. Very soon they will control all the oil in Europe and there are massive bassins of schist in UK, France and Germany as well as Poland Czech and other eu countries.

  12. oldbrew says:

    UK oil production now is around a third of the 1999 peak.

    Oil and Petroleum Products, production, trade and consumption, demand for transport fuels and oil stocks
    http://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/695790/Oil.pdf

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