Peak Oil is You
Donate Bitcoins ;-) or Paypal :-)
Page added on September 17, 2015
Is This The End Of The U.S Shale Gas Revolution
While everyone is watching the oil bust, there is another bust going on – one for natural gas.
Before there was a boom in oil production in the United States, there was the “shale gas revolution.” That is where we all became familiar with terms like “fracking.” And the Marcellus, Haynesville, and Barnett Shales were famous long before the Bakken or Permian.
The surge in natural gas production crashed prices, fueling a huge increase in activity in petrochemicals and causing a major switch from coal to natural gas in the electric power industry. Aside from a few brief moments (such as the winter of 2014), natural gas has mostly traded around $4 per million Btu (MMBtu) or lower since the financial crisis of 2008.
(Click to enlarge)
But unlike oil, the boom in shale gas did not stop with plummeting prices. U.S. natural gas production continued to climb. For example, production from the prolific Marcellus Shale – which spans Pennsylvania, West Virginia and Ohio – skyrocketed from less than 2 billion cubic feet per day (bcf/d) in 2009, to a record-high of over 16.5 bcf/d this year. And the dramatic ramp up in production occurred over several years when prices were extremely low.
Related: Oil Industry Influence Waning Amid Oil Price Slump
So only after oil prices busted did natural gas production start to slow down. In fact, while the markets are eagerly watching for declines in oil production, few are noticing that natural gas production is also declining. The EIA reports that in October, several of the largest shale gas regions will post their fourth month in a row of production declines. With a loss of around 208 million cubic feet per day expected in October, the four-month drop off will be the longest streak of losses in about eight years.
It is no surprise that the Eagle Ford will represent the largest losses, with a decline of 117 million cubic feet per day expected in October. That is because oil is a much more prized commodity in South Texas, so the decline is largely attributable to disappearing crude oil rigs.
While U.S. shale gas remained resilient through several years of low natural gas prices, the collapse in oil prices are finally putting an end to the boom.
By Charles Kennedy
101 Comments on "Is This The End Of The U.S Shale Gas Revolution"
Plantagenet on Thu, 17th Sep 2015 7:25 pm
If you don’t drill you don’t produce.
Low oil and NG prices are causing oil and NG drilling to slow and that is causing production to fall.
At some point in the future the oil glut will end and oil and NG prices will go back up again, and then it will be time for another round of “drill baby drill” to get the oil and NG flowing again.
CHEERS!
Makati1 on Thu, 17th Sep 2015 7:45 pm
The end of fraking is not any too soon. All the US did was turn up the planet’s heat another notch, speeding the end of humans. The great leveling has begun.
shortonoil on Thu, 17th Sep 2015 8:33 pm
At some point in the future the oil glut will end and oil and NG prices will go back up again, and then it will be time for another round of “drill baby drill” to get the oil and NG flowing again.
We have had a 1 to 2% increase in demand in the face of a 55% decline in price. A price that is so low that many producers are no longer returning their full life cycle production cost, and none of them can afford to replace the reserves they are extracting. Now with this booming (sarc) demand for oil that no one can afford to produce — who exactly is going to be buying all this extra high priced oil.
Inquiring minds are wondering?
Harquebus on Thu, 17th Sep 2015 8:59 pm
The economy will soon tank due to massive unrepayable debt. Most will not be able to afford oil at any price.
Nony on Thu, 17th Sep 2015 9:50 pm
It’s an important topic, but not a very good article. And I’m not even talking about the comments on technology that Rock will react to or the boners like saying dry gas is associated with oil. (WTF, isn’t oil wet?) While there are some second order interactions of oil and gas prices/markets (associated gas from oil plays or associated liquids from wet gas), they are primarily pretty different markets: oil is world priced and US production, while important at the margins, is only about 10-15% of the world price and LTO is about 6% of total oil. OTOH, natural gas is not easily transported and US production is 95% of the US market [and you might as well consider US/CA as a system, but it’s a side point] and US shale is about 50% of the total market.
I wouldn’t expect the Marcellus or Utica production to increase until either there is more local demand or there is more out of region takeaway. Local prices are in the 1.00s, some times/places even below that. Add onto that, the price drop of oil (i.e. condensate). And then we actually have ethane rejection and even propane (huge glut). CHK is actually charging leaseholders for NGL removal in OH. That’s right, the NGLs are NEGATIVE on the royalty statements.
All that said, the more important issue is not that Marcellus and Utica are not growing (what peakers will crow about), but that PRICE is so low in the region. And the number of rigs so small.
ennui2 on Thu, 17th Sep 2015 10:48 pm
“extra high priced oil.”
Not….yet.
GregT on Fri, 18th Sep 2015 1:08 am
“Not….yet.”
Glad to see that you’ve crawled out of your cave ennui2. You must have missed the past few years of life on the planet Earth, or were you simply blinded by the tinfoil that you believe that you see all around you?
GregT on Fri, 18th Sep 2015 1:20 am
Nony,
Time to get beyond the eCON-101 cult ideology, and embrace reality dude. It’s the 21st century for dog’s sake. That shit has been proven wrong for so long now, that it’s getting ancient.
Davy on Fri, 18th Sep 2015 3:20 am
The NOo said “That’s right, the NGLs are NEGATIVE on the royalty statements.” NOo your statement points to something absurd. Should we have a vital resource in such a circumstance? No. The whole system is broke and you are crowing how amazing it is. Your econ 101 amazement will be our deaths. That is the amazement for me.
Kenz300 on Fri, 18th Sep 2015 8:05 am
The sooner we reduce the use of fossil fuels the better.
Climate Change is real…. we need to deal with the cause.
Fat Lady on Fri, 18th Sep 2015 9:56 am
I would argue that “the shale gas revolution” was over when it began. The upfront capex proved that, If oil had stayed above $100, essentially forever, it would still have ended in a bust.
Nony on Fri, 18th Sep 2015 10:11 am
Upfront CAPEX was justified by later profits (at $100). This is how an investment works: put down some money now and get more back later. Peakers routinely confused this by expecting shale companies to be cash flow neutral when they were investing heavily (and growing).
$45 oil is a whole ‘nother kettle of fish. 🙁
But $100? Disco, baby. 🙂
Mike989 on Fri, 18th Sep 2015 10:49 am
I’m still totally amazed the pollution industry is Totally Blind to what’s going on in Wind and Solar.
I guess there’s really nothing you can do to an industry that, seemingly for “political” reasons, doesn’t see the Tsunami approaching.
Bankruptcies as far as the eye can see, soon.
Fat Lady on Fri, 18th Sep 2015 10:50 am
The problem with $100 oil begins and ends with affordability at the consumers end. AKA demand destruction. The fracking process is an expensive ongoing (red Queen)capex proposition. Simple fact is, that over all, these fracked wells put together as a whole do not make a long term profit even at $100. The “sweet spots” drilled initially to rope investors in might for a while be profitable at $100, however, long term from the start fracking is/was a bust.
Plantagenet on Fri, 18th Sep 2015 10:56 am
Kenz
You don’t “deal with the cause” of global warming by ramping up oil drilling in the US and then opening up the Arctic to oil exploration, as Obama has done.
Those things just make global warming worse.
Cheers!
Fat Lady on Fri, 18th Sep 2015 11:06 am
Yes plantagnat, “You don’t “deal with the cause” of global warming by ramping up oil drilling in the US and then opening up the Arctic to oil exploration, as Obama has done.” That is a good point, I would add however that Obama is at least having a conversation on the effects of man made climate catastrophe unfolding as we speak, unlike deniers of the republican ilk. We should all be used to politicians talking out of both sides of there mouths by now. TRA LAAAAA!!!
Plantagenet on Fri, 18th Sep 2015 11:14 am
@Fat Lady
You are welcome to applaud Obama for talking about stopping Climate Change while taking actions that make global warming worse.
However, most people would consider that to be big time hypocrisy. And the problem with hypocrites like Obama is that well meaning people are duped by their lies and fooled into thinking Obama is stopping global warming, when his policies are actually making it worse.
Cheers!
GregT on Fri, 18th Sep 2015 11:18 am
Nony said:
“This is how an investment works: put down some money now and get more back later.”
“Money” is a claim on future production Nony, that must be paid back with interest. Money does not create energy, quite the opposite.
Fat Lady on Fri, 18th Sep 2015 11:33 am
My dear mr. P., In no way am I applauding the President and his contradictory policies, all thinking people see through hypocrisy that any politician might bloviate. That being said, I take then you yourself (mr.p.) do not like the President, well good for you. Obama has less than two years to go. Perhaps the next one will be more to your liking. TRA LAAAA!!!!
Plantagenet on Fri, 18th Sep 2015 11:43 am
@Fat Lady
You are wrong about my opinion of Obama. I like the president quite a bit. He is a very likable guy, don’t you think?
However, you are right that obama, like most politicians, is an inveterate liar.
I rather doubt the next one will be any better, given the current crop of candidates (although Bernie Sanders is intriguing).
TRA LAAA and CHEERS!
GregT on Fri, 18th Sep 2015 11:44 am
@Mike989,
“I’m still totally amazed the pollution industry is Totally Blind to what’s going on in Wind and Solar.”
And others are still totally amazed that you are unable to see that wind and solar are both extensions of the “pollution industry”.
BC on Fri, 18th Sep 2015 11:56 am
Obummer/Obomba has no more power to do much of anything than you or I do, Plant. Like Slick Willie, he was vetted and hired by the Rockefeller-Rothschild int’l banking syndicate and the Wall St. branch as CEO of the Anglo-American imperial corporate-state.
The guy is as much an empty suit as was Dumbya (who also had an empty cranium), which is precisely what the rentier Power Elite want for imperial CEO.
Hell, if a Kenyan-born, mixed-race, weed-smoking, bisexual Muslim can be “selected” CEO of the imperial corporate-state, just imagine who will be “selected” in the future. Suetonius’s “The Twelve Caesars” will appear amateurish compared to our time. 😀
Plantagenet on Fri, 18th Sep 2015 12:01 pm
@BC your belief that Obama has “no more power then you or I” is just silly.
Tell it to the people of Libya, who now live in a lawless country after Obama bombed their government into the dust. Tell it to the people of Europe who are now belng deluged by “immigrants” after O stood back and let the ME dissolve into chaos.
And tell it to the people of California as the drought worsens and Global Warming intensifies while Obama opens the Arctic to oil drilling.
Cheers!
GregT on Fri, 18th Sep 2015 12:05 pm
“Obummer/Obomba has no more power to do much of anything than you or I do, Plant. Like Slick Willie, he was vetted and hired by the Rockefeller-Rothschild int’l banking syndicate and the Wall St. branch as CEO of the Anglo-American imperial corporate-state.”
Many of us here have tried repeatedly to get through to planter BC. Like I have said before; You’re flogging a dead horse. planter either doesn’t want to ‘get it’, or is incapable of ‘getting it’. My best guess would be the latter.
Fat Lady on Fri, 18th Sep 2015 12:05 pm
Mr.P. You and I am/were talking about Obama’s policies and politics not about his likability as a person. So let me restate; That being said, I take then you yourself (mr.p.) do not like the President’s POLICIES, well good for you.
Nony on Fri, 18th Sep 2015 12:10 pm
GT:
““Money” is a claim on future production Nony, that must be paid back with interest.”
Exactly.
“Money does not create energy, quite the opposite.”
Money does not create the potential energy in the chemical bonds of the hydrocarbons. What it does is move it to be useful. Takes the oil out of the dirt, moves it to a refinery, distills it and modifies it, and then puts it your car’s gas tank. Then you get to go vroom, vroom.
Plantagenet on Fri, 18th Sep 2015 12:10 pm
@Fat Lady
Yes…you’ve finally got it.
The facts are clear—-Obama says nice things but his policies are adding †o global warming.
I don’t like that. I think Global Warming is a dangerous threat.
TRA LAAA
Say hi to Mr. BIggles for me!
Cheers!
GregT on Fri, 18th Sep 2015 12:15 pm
“Money does not create the potential energy in the chemical bonds of the hydrocarbons. What it does is move it to be useful. Takes the oil out of the dirt, moves it to a refinery, distills it and modifies it, and then puts it your car’s gas tank. Then you get to go vroom, vroom.”
Your understanding of how money works appears to be overly simplistic Nony. You’ll just have to figure it out the hard way. All in good time.
Fat Lady on Fri, 18th Sep 2015 12:27 pm
Mr P. I do not know a Mr BIggles. Your mocking tone only makes you sound disrespectful of others opinions and negates anything of significance you might have to add to the conversation. Being a newbie here on this site and looking over your conversational technique, I conclude, you are either an asshole seeking attention or some kind of mindless bot. In either case you are a waste of time. Good by.
Davy on Fri, 18th Sep 2015 12:51 pm
Fat Lady here is my take:
ir·ri·tat·ing
ˈiriˌtādiNG/
adjective
1.
causing annoyance, impatience, or mild anger.
“an irritating child”
synonyms: annoying, infuriating, exasperating, maddening, trying, tiresome, vexing, vexatious, obnoxious, irksome, nagging, niggling, galling, grating, aggravating, pestilential
“a slow website is irritating to your customers”
Fat Lady on Fri, 18th Sep 2015 12:58 pm
Thanks Davy, I am thinking irritating bot.placed here to slow and or stop any real meaningful conversation perhaps by the oil industry??????? on the other hand thinking it over for a second, I think it is just an asshole seeking attention.
GregT on Fri, 18th Sep 2015 1:04 pm
planter said:
“I think Global Warming is a dangerous threat.”
Then why do you continue to pursue activities that exacerbate that threat? Mitigation isn’t going to come from the top down planter. Governments are controlled by big interests in oil companies and corporations. Stop trying to lay blame on others. Do your part, or you have no right to say anything about anybody else.
Plantagenet on Fri, 18th Sep 2015 1:05 pm
@Fat Lady
Your potty mouth is overflowing. Please flush.
CHEERS!
apneaman on Fri, 18th Sep 2015 1:53 pm
Planty, isn’t flying to India (just for fun) contributing to global warming? But it’s all on Obama. When you left for your little trip, your beloved state of Alaska was on fire and the permafrost and glaciers were melting (still is). Don’t you think you are the last person who should be judging anyone about their global warming hypocrisy? See planty you can’t even stop yourself from high carbon spewing luxury activities in the face of your own regional disaster. Your own home, due to it’s high northern latitude, is on the front line of AGW consequences and is only going to continue to get trashed at a much fast pace than almost anywhere else. The power of dopamine hits you get from your trip and the perceived status boost from bragging about it are why we are going bye bye. You are actually quite common in your dopamine and status seeking – reward seeking. See planty you are not really in control. Apes are not in control. Apes are hard wired to reward seek in the here and now – fuck next tuesday. Fuck AGW. Fuck the 6th mass extinction and fuck ocean acidification and fuck the planet. I need my dopamine fix NOW. We can’t help it, it’s just an evolutionary maladaptation that will soon be an evolutionary dead end.
Plantagenet on Fri, 18th Sep 2015 2:14 pm
Hi Apey
If you can’t see that Obama is being hypocritical to claim he opposes global warming while making policy decisions that INCREASE CO2 emissions and INCREASE global warming, then I can’t make it any clearer for you.
More CO2 means more global warming. Get it now?
CHEERS!
augjohnson on Fri, 18th Sep 2015 2:21 pm
Plant, it’s very easy to see that both Obama and you are being hypocritical. Because Obama is hypocritical doesn’t make it OK for you to be. You are BOTH wrong.
GregT on Fri, 18th Sep 2015 2:23 pm
CO2 emissions are not increased by policy decisions planter. They are increased by the burning of fossil fuels. If you, and everyone else, cut back on their use, emissions would decrease, regardless of pressure from the big oil company lobbyists.
apneaman on Fri, 18th Sep 2015 2:26 pm
planty 3.86 Tons of planet destroying CO2 for a round trip flight from Anchorage to Delhi for one person. That a whole lot of hypocrisy. 3.86 Tons 3.86 Tons 3.86 Tons 3.86 Tons 3.86 Tons 3.86 Tons 3.86 Tons 3.86 Tons 3.86 Tons 3.86 Tons 3.86 Tons 3.86 Tons 3.86 Tons 3.86 Tons 3.86 Tons
GregT on Fri, 18th Sep 2015 2:39 pm
And a further 3.49 tons of CO2 generated by you planter, during your return flight from Anchorage to Spain. Your two little trips alone added 7.35 tons of CO2 into the environment. Which is the equivalent of driving some 30,000 miles.
JuanP on Fri, 18th Sep 2015 2:53 pm
Plant, I hope you are getting paid for all the time you spend here, since doing it for free would have been a complete waste of the last decade of your life.
I, personally, don’t think Obama is a nice person. He is a narcissistic, lying, conniving, manipulating, murdering SOB. What’s nice about that? Obama is a disgrace of a human being, and people like him are why I consider myself a member of a sui generis species, rather than a human being. I will never accept that scum like Obama and I belong to the same genus, much less the same species.
“Sui generis: In the taxonomical structure “genus → species”, a species is described as sui generis if its genus was created to classify it (i.e., its uniqueness at the time of classification merited the creation of a new genus, the sole member of which was initially the sui generis species). A species that is the sole extant member of its genus (e.g. the Homo genus) is not necessarily sui generis: extinction may have eliminated other species of that genus.” https://en.m.wikipedia.org/wiki/Sui_generis
Plantagenet on Fri, 18th Sep 2015 3:14 pm
JuanP, I hope you are getting paid for all the time you spend here, since doing it for free would be a complete waste of the last decade of your life.
Your personal dislike for Obama is misplaced, IMHO. Yes, he is a flawed human being, but so is everyone else. You are wasting your time attacking Obama on a personal basis. The real problem with Obama is not that he is a bad person, as you suggest, but that his policies are INCREASING CO2 emissions and INCREASING global warming that is taking the entire planet into climate catastrophe.
Cheers!
GregT on Fri, 18th Sep 2015 3:17 pm
The equivalent of driving some 30,000 miles in less than 3 days, I might add.
augjohnson on Fri, 18th Sep 2015 3:19 pm
Plant, are you going to address any of the statements about your own hypocrisy? Or just blast others?
Plantagenet on Fri, 18th Sep 2015 3:20 pm
@GregT, Apey, and augjohnson
None of your understand the math involved with global warming. Yes, my taking a plane to India or Apey driving downtown for his cocaine fix or GregT and Augjohnson driving cars and heating their home and taking vacations all emit CO2.
But the amount of CO2 we individuals emit is TINY compared to the huge amount of CO2 that Obama will release through his policy decisions to open the Arctic Ocean and Eastern Seaboard to offshore oil development, and the huge amount of CO2 Obama has already emitted with his unnecessary wars and policies favoring oil shale development and fracking.
Try to get some perspective dudes. You’re just being ridiculous to claim that any individual has a carbon footprint equivalent to the carbon in the billions of bbls oil in the US part of the Arctic Ocean.
Cheers!
GregT on Fri, 18th Sep 2015 3:21 pm
planter,
You are making yourself look like even more of an idiot than usual. Do you not find that to be an embarrassment?
Plantagenet on Fri, 18th Sep 2015 3:21 pm
@augjohson
You don’t understand what you are reading. I haven’t blasted anyone—even you. I just pointed out that your math skills are very limited—which they clearly are if you think my carbon footprint is somehow comparable to the carbon footprint of the Arctic Ocean oil development that Obama just signed off on.
Cheers!
augjohnson on Fri, 18th Sep 2015 3:24 pm
But it’s us individuals who are the ultimate consumers of that oil. If WE don’t reduce our own consumption, it WILL be burned. You are just looking for a way to shift blame to someone else, just like the vast majority of people. You are making your own individual contribution to ensuring the continued warming. I have made massive reductions in my footprint and am continuing to do so.
If you just blast back with your same old crap, it’ll be totally obvious that you don’t give a rat’s ass in hell about warming, but just are here to harass people. If so, I don’t understand why the management hasn’t banned you, as you just inhibit good discussions.
augjohnson on Fri, 18th Sep 2015 3:27 pm
Obama wouldn’t have signed off on that Arctic Development if it wasn’t for you and millions like you demanding that oil. Whether you like it or not, YOU ARE PART OF THE PROBLEM. Again, you are just looking for a way to deflect the blame.
Plantagenet on Fri, 18th Sep 2015 3:31 pm
@augjohnson
Yes, you are right that individuals consume a lot of oil. OF course you should take every step you can to reduce your own personal carbon footprint. However, you shouldn’t confuse your own personal carbon footprint with the carbon footprint of the US Army in Afghanistan, or the carbon footprint of the US Air Force bombing Libya and Syria, or the carbon footprint produced by Arctic Ocean oil development like that just approved by Obama. Your own personal carbon footprint is infinitesimal compared to the others I listed.
Get it now?
CHEERS!
Plantagenet on Fri, 18th Sep 2015 3:36 pm
@augjohnson
You are totally wrong to claim that Obama only signed off on the Arctic Oil drilling because the public is demanding it. Where did you get this bizarre idea? Why are you fantasizing that the public demanded it?
The reality is quite different than your fantasy.
You must have missed the Greenpeace demonstrators hanging from a bridge and the brave Kayak demonstrators who tried to block the oil drilling rig, and you must not know that there are many environmental groups and scientific groups and political groups that oppose Obama’s decision to open the US arctic to oil drilling.
Open your eyes. NO one demanded Obama open the Arctic except Shell Oil.
CHEERS!