OPEC Wants to "Crush US Shale"

[eridani]

http://www.commondreams.org/views/2015/01/14/opec-wants-crush-us-shale

The price drop threatens to re-write the energy landscape in the US. The oil price plunge is already hurting, with 35 horizontal fracking rigs idle last week in North Dakota and Texas fracking hotspots, the biggest single-week drop since the drilling boom started six years ago.

And now the business community are warning of the dangers of this new reality. As one commentator in Fortune magazine wrote at the end of last week “The recent drop in oil prices poses a major challenge to the frackers. But oil producers, Wall Street analysts, and most industry experts claim the setback will be brief and minor. Don’t believe them.”

The magazine warns that the basic economics of fracking – that it now costs much more to drill than what oil is selling for “spells big trouble for the shale boom”. The energy utopia of America’s so-called shale driven oil independence is now “gravely endangered”.

The article argues that conventional drilling can withstand the oil price dip, the short-life span of fracking wells – where there is a breakeven price of $65 – will not be able to.

Fortune outlines how: “In the Bakken region straddling Montana and North Dakota, a well that starts out pumping 1,000 barrels a day will decline to just 280 barrels by the start of year two, a shrinkage of 72%. By the beginning of year three, more than half the reserves of that well will be depleted and annual production will fall to a trickle”.

The magazine finishes by saying that an oil-driven bonanza of jobs and economic recovery in the US may now be a “fading vision.”

[Fred Sanders]

1. What is being crushed is the lie of the benefits of shale oil and gas ripped from the cracked earth.

Scientists Discover Two New Pollutants In Fracking Waste

http://thinkprogress.org/climate/2015/01/14/3611503/two-new-fracking-pollutants/

[newfie11]

2. Good , crush it

We can live without it.

[Brigid]

3. They're actually doing us a favor.

Our environment thanks them. So do those who live in areas where fracking is going on.

[Half-Century Man]

4. Works for me.

[Man from Pickens]

5. Mission accomplished

something like 2/3rds of US shale projects are uneconomical at today's price

[rhett o rick]

6. Maybe I've underestimated Pres Obama. He supports fracking which to any one with a brain

is terrible. But maybe he is playing 11th dimensional chess. By pretending to support fracking he is driving the price of oil down. LOL, good for him. Granted a few people have had to give up their drinking water and live with multiple earth quakes, but that's a small price to pay for lower gasoline prices.

[Jamastiene]

8. You are being sarcastic...

I hope.

I'm glad to see fracking stopped at least for now. I hope they can keep stopping it. There are better ways to find alternative energy. Plus, NC now allows it. I don't want it. Guess where they want to do the fracking? My county...Actually, it is 2, but the county next to us made an ordinance saying no fracking.

My county? They are all for it. They didn't mind dumping so much mercury in the local rivers and streams for decades when textiles mills were still going either. We can never safely eat the fish caught in local water, because of so much mercury. Now, they are drooling to put all their eggs in this fracking basket. When the mills closed down here, jobs dried up completely, except Walmart, because they put all their eggs in one basket. They relied so heavily on the textiles mills, alone, and "defended" them from anything that might offer alternative industries here, because they were the only major source of jobs back then. Walmart is our major employer in this county now. They are literally the company that hires the most people.

Even done "right" fracking is unsafe and polluting to the nth degree. I don't trust these idiotic local yocals where I live to do it "right." They would make Homer Simpson look downright competent and like the most magnificent genius ever.

[rhett o rick]

17. Yes I was. Fracking is not the "bridge" to whatever Pres Obama said. It's a bridge to ecological

disaster.

[sharp_stick]

7. It will return the second

oil rises again. Everybody has a weird connection to oil prices, when it's high they think it'll never drop when it's low they think it'll never climb again. Even Saudi Arabia can only handle so much deficit economics and when the price of oil is where it is right now they are running one hell of a deficit.

[Nobel_Twaddle_III]

9. Oil at less than $28/barrel is on it's way

[Ilsa]

12. What is your source for <$28/barrel?

I have seen estimates of $55/barrel in a year. I'm not arguing with you; I'd just like to read your sources.

[Nobel_Twaddle_III]

19. just me

[AZ Progressive]

10. The Idiocy was thinking that domestic oil was the solution to foreign oil dependence

instead of renewable and alternate forms of energy. Domestic oil could not be tough enough to withstand the power of Saudi Arabia when doing a Rockefeller esque "sweating" move. Everyone should've known this when it costed Saudi Arabia just $20 to produce a barrel of oil and Saudi Arabia has saved up vast amounts of money in order to endure a lengthy period of making little to no profit.

[AwakeAtLast]

11. "Drill, baby, drill!"

Who's smirking now?

[karadax]

13. Wait until fracking begins in lesser developed nations.

The labor costs will be far cheaper and there will be less environmental regulation / oversight than the process recieves currently in the US. Sure, the Saudi's can slow the loss of control but it's only a matter of time. The equipment that isn't being used doesn't suddenly disappear. It'll be moved to where it's cheaper to operate.

[WheelWalker]

14. Yippee-ki-yay... works for me

[YOHABLO]

15. Cheap oil = more cars on the road. Is that a good thing? VROOOOOOOOOOOM VROOOOOOOOOM

[mountain grammy]

16. If cheap oil slows fracking, I'm ok with that.

What worries me is cheap oil will slow the development of wind and solar.

[herding cats]

18. I've read this before and I don't understand the logic behind it.

The only thing these low prices will do is slow down fracking while they are low. Even if they were to bankrupt the current owners the wells will be sold, at a discounted price, to other corporations to use later when prices once again make it profitable. As it is right now they are laying off workers in some areas, sure, and they aren't starting new fracking wells, but even if the smaller ventures die off there are vultures waiting to pick the bones of their corpses. Unless there's some way they can sustain prices low enough to keep prices below the threshold of profitable fracking (which is fine with me) it won't crush the industry, just the smaller individuals involved who don't have the capital to ride it out.

Yes, fracking wells are short-lived and usually see a decline in output in a few years, but just to be clear that has nothing to do with the current decline in fracking. It has to do with a future decline when the wells begin to stop producing and they've run out of new places to frack. That will be the real breaking point in the industry when it's eventually reached.

[eridani]

23. Fracking wells are quickly exhausted, making reinvestment unlikely n/t

[NightWatcher]

20. If the Saudis save the acquifers here under where KXL was supposed to go

Then a fine thank you is in order.

[Trillo]

21. It's a good time to outlaw fracking.

Last edited Fri Jan 16, 2015, 12:47 AM - Edit history (1)

It's always a good time, but now is a particularly good time, while nobody can make any money off it. We should be moving to more renewables. Advanced energy. It's been a growth sector. Make it illegal to drill, and save the earth for future generations.

[Rex]

22. Oooh...predatory capitalism vs. predatory capitalism!

Yeah this will end well! Enjoy the cheap gas while we got it.