PowerSwitch

[PS_RalphW]

I am not sure what fraction of US shale oil production is today owned by the big six companies, but generally they were late onto the scene. A LOT of private investor money went into the independent companies with little financial reserves into building up the industry. These investments will only see returns if oil prices remain high over a significant portion of the fracked well's life - and these wells have a very high decline rate - so most of the oil they produce is in the first few years after drilling. The implication is that the companies are classic Ponzi schemes to the extent that they only keep from going broke by attracting more and more investment money - at current prices they will remain at negative cash flow.

To some extent they are the architects of their own downfall - they have drilled so fast that they flooded the market and killed the golden goose. The oil majors are big enough to weather the losses and pick up the bankrupt wells at firesale prices, so they are happy.

A lot of private investors are going to lose a lot of money. New investment will dry up for this kind of well, the subcontractors who actually do the work will find themselves out of work (again), and the production of shale oil will decline fairly quickly (due to the high decline rates) until a year or two after the next oil price shock, when (hopefully) more measured investment picks up preventing another supply glut.

[vtsnowedin]

While US gas prices remain low at $2.589/Mcf the oil WTI price has risen to $55.48/bl so drilling activity will move away from gas towards oil until the over supply of gas gets absorbed. Perhaps we will begin exporting more LNG to the EU and post brexit UK.

[raspberry-blower]

[vtsnowedin]

[raspberry-blower]

[vtsnowedin]

The Germans are businessmen. If USA LNG is cheaper then Russian gas they would buy it in a heartbeat. It will at least keep the Russians in check on the price front.

[PS_RalphW]

The Germans are also long term thinkers. The Nord Stream pipeline is a massive investment with a many decades life expectancy. US LNG is a new kid on the block because it is only in the last few years that US supply has exceeded US demand. Given the price sensitivity and fast depletion rates of fracked gas wells, that surplus supply could vanish in a few years, as would ALL US LNG exports .

[raspberry-blower]

Successful challenge to UK Government's support for fracking:

https://drillordrop.com/2019/03/06/breaking-campaigners-win-court-challenge-over-government-support-for-fracking/
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A common mistake that people make when trying to design something completely foolproof is to underestimate the ingenuity of complete fools - Douglas Adams.

[emordnilap]

There we go again, forever ‘transitioning’ by extracting more fossil fuels.

The big transition is happening.
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I experience pleasure and pains, and pursue goals in service of them, so I cannot reasonably deny the right of other sentient agents to do the same - Steven Pinker

[kenneal - lagger]

I presume that the Mobbs report is from our own Paul Months.
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Action is the antidote to despair - Joan Baez

[kenneal - lagger]

Anti fracking campaigners win partial victory over "draconian" Ineos injunction.
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Action is the antidote to despair - Joan Baez

[raspberry-blower]

On the recent resignation of the UK's Shale Gas Commissioner - it would appear that Ms Engels has been suffering from delusions of adequacy.

[fuzzy]

Presumably she will follow Cedric Brown who was the highest paid public employee when gas was nationally run. He was last seen fiddling about with Ukrainian gas.

[BritDownUnder]

[kenneal - lagger]

If the government insulated our homes properly we wouldn't need so much gas. Such insulation could reduce the national requirement by 30% at least on the basis that 40% of gas is used in home heating and an 80% saving is possible.
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Action is the antidote to despair - Joan Baez