Posted on 11/03/2014 2:09:43 PM PST by SeekAndFind
Technological advances in hydraulic fracturing have fueled what some call the Great American Shale Boom. Oil and natural gas extracted from shale basins have left the US flush with energy. It's been a boon for US energy-related jobs and equipment suppliers.
But it's not cheap to tap these so-called unconventional plays.
In other words, crashing oil prices will soon make many of these energy sources money-losing projects. Morgan Stanley estimates the average breakeven oil price for these US plays to be about $76 to $77 per barrel. Goldman Sachs puts that number at closer to $75.
If the price of oil can't cover production expenses and these companies are forced to idle their operations, then you could expect spending to drop, jobs to get cut, and delinquencies and defaults to rise.
To make matters more complicated, many of these energy companies are financing their operations by borrowing in the junk-bond market, which means borrowing rates are relatively high.
(Excerpt) Read more at businessinsider.com ...
I am smack dab in the middle of four well pads that are fracking. Unless you know it is going on, you will never know there is a pad in your area. The companies that are fracking in my area actually IMPROVE the land surrounding the pad and it is evident the royalties are hitting a lot of properties; home improvements, new vehicles, restaurants PACKED on the weekends. People now have more disposable income and it is starting to show. Now I question how PA will F it up with regulations and taxation.
Total BS.
We have done that for as long as we have produced oil.
The US is producing 8.6 MMBPD.
http://www.eia.gov/dnav/pet/pet_crd_crpdn_adc_mbblpd_m.htm
We import a total of 7.5 MMBPD and that has been falling.
We import 3.0 MMBPD from OPEC. 1.8 MMBPD from the Persian Gulf and 1.0~0.9 MMBPD from Saudi.
http://www.eia.gov/dnav/pet/pet_move_impcus_a2_nus_epc0_im0_mbblpd_m.htm
So what happens when it’s not profitable to pull it out of the ground in North Dakota?
When government steps in it is precisely to end or control the free market because it does work, but it doesn't do what they want it to do.
Government doesn't want market power and econpmic power in the hands of the people - they want the power themselves.
Then we just continue to increase our production, and offer the excess to Europe and Asia at a better price than the Saudis are giving them.
Lack of gathering and transmission lines is what is holding up a good part of development of the Utica and Marcellus shale plays here in the NE. Low prices aren’t helping but once the Cove Point LNG export terminal opens at Lusby, MD, then our natural gas will be exposed to international price pressure. When last I checked, Germany was paying $11-$18 per mcf vs. getting $4 here.
And there’s no export restriction on gas. Yet.
Heh, heh.
It stays there a little while longer.
“Now I question how PA will F it up with regulations and taxation.”
Part of that will be answered tomorrow night since this stupid state has a sick fascination with teachers unions. Of course, had Corbett shown 1/2 the resolve of Walker up in WI (and not toyed with the gas tax), he’d have probably coasted to a second term.
Wolf, come hell or high water, will find a way to screw things up to pay off the teachers unions for a couple of years ... when those ticks and leeches blow all of that money and wreck that industry, they’ll whine about something else for exploitation.
Its sad ... PA could be a great state ... cancer in Philadelphia and Pittsburgh screw it up royally.
There has been quite a lot of restriction on building LNG export plants. Lots of federal permits before it can be built. The won't approve them all.
Flaring gas just bothers me. Maybe I should buy a couple of those well head gas capture/compression machines?
No, that would be you. All states have a two letter abbreviation, both capital letters and no period after.
ie: AL, AK, AZ, AR etc.
It will become profitable again when consumer products and consumable prices rise due to the shortage of “oil” that support said items.
Excellent post, sums it up well.
Just wait until Wolf pushes through $15.00 minimum wage; this state is done and done.
No, in the older daze there was a variety of abbreviations. No law against still using them....
What prevents US oil companies from charging what ever they need for natural gas? Are US consumers going to go elsewhere to buy their gas?
Are power plants going to switch bavpck to coal?
It is a waste, I agree. There’s regulatory pressure building on venting and flaring. Unlike CO2, methane really is a greenhouse gas, plus it contains some fractions that can be toxic, like benzene.
The industry is steadily starting to implement capture rather than flaring. The problem is then transporting it. The flaring and venting happens at a stage of development that typically comes well before there is a gathering line to take the gas away.
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