The cure for high prices are high prices. The cure for low prices are low prices.
At $20/barrel, shale is not profitable. It’s largely not profitable at $70/barrel.
Fracking is financing intensive. Lenders loan money and watch oil come out. A fracked well is about $10 million. First year flow from a Bakken well is typically 800 barrels/day in year 1. At $20 and X 365 that’s $5.8 million.
Debt 1/2 repaid. The problem is shale wells crater rapidly. That 800 bpd becomes 400 in year 2. $2.9 million revs. The other costs (trucking of oil, water disposal (all oil wells produce water and oil both), salaries, overhead. They become a big portion of the $2.9M.
Flow declines again in year 3, but salaries increase. Costs do. And . . . really good wells at really good price per barrel can pay back their loan. The vast majority cannot.
Result: the lenders won’t lend anymore. Flow gets reduced. Price will rise.
Doesn’t have to have anything to do with politics. It has to do with the fields depleting. Globally.
Bullshit.
It’s Biden’s fault.