I mostly agree. Good graph! I do remember a period when a lot of people were freaking out that “the frackers were getting wiped out” by low prices — I suspect there’s a bit of a blip in that curve, just to the right of 2015 — but I argued that the “tech” would come through, and it did - remarkably so. Now, the fracker’s bet has really paid off.
OTOH, the “tech”, while not applicable everywhere, of course, is applicable to SOME places outside the US, and surely with time more such fields will be found, and the tech applied. So, it behooves us to keep every advantage, and to reduce / eliminate disadvantages, such as Obama-type over-regulation. That last “component” of the “shift” was what I was referring to as only being a year old.
Interestingly, while they are a “smaller” competitor when it comes to fracking, I wonder if the Euro’s can even follow with a moderation of regulations? Only if the Muslims take over there, perhaps, in a few decades?
“I do remember a period when a lot of people were freaking out that “the frackers were getting wiped out” by low prices — I suspect there’s a bit of a blip in that curve, just to the right of 2015”
You are right, that is when “war” over the future of the oil market took place, and prices dipped into the $20’s. Great advances in productivity/technology, and innovative financing enabled the frackers to outlast the siege, and OPEC/Russia essentially conceded to the continued existence of American fracking - which means their own diminished future income and market power.
“reduce / eliminate disadvantages, such as Obama-type over-regulation. That last “component” of the “shift” was what I was referring to”
Oh, I did miss that. The de-regulation, and the opening of vast new leases off shore and in ANWR by Trump, are themselves a new revolution of sorts. They are the largest openings for leasing in American history, by a wide margin.
Such leases are for long term deals - decades long, with big capital investments up front. There is a strong rationale to hurry and lock in good long term deals now, while there is a favorable Administration in office - once in a generation favorable. The tax cut also strongly improves the investment calculus. So Trump is likely to set in motion significant long term investment in American production by big oil majors.
“I wonder if the Euro’s can even follow with a moderation of regulations?”
The big producers in Europe itself are the North Sea (Brent) producers of the UK and Norway (Netherlands/Denmark/Germany have a smaller piece as well). The Governments there, as in most of the rest of the world, play a much bigger role in the operation of oil and gas production (relative to the private sector), and definitely take big cuts of the revenue. As a practical matter, they will do whatever they can to improve their revenue, in terms of regulation. Their off shore fields are declining, and they have not found significant technology to reverse that. Bottom line: the things that are sending the Americans off to races, are not promising to have impact in the North Sea.
In addition to the North Sea though, European oil companies (like British Petroleum (BP) and (French) Total) have extensive operations around the world. In some of those places (like the French in their former African colonies), those European major oil companies can pretty much write their own regulations, so in some of those places, shale technologies will likely eventually have an impact.
There are huge shale oil deposits around the world. Large producers in Russia and in the Middle East have large deposits that have not yet been developed - but other countries with large deposits (like Argentina and China), have not been significant producers before. So as the technology eventually spreads, worldwide supply will likely increase. So far, it seems that the Russians have been most active in investing in the US companies, to learn the new shale technologies.