Jeffrey J. Brown: Hurricanes & US Oil Production
Hurricane Harvey took offline over 50% of Texas' refining capacity and shut down large percentage of the wells in the major Eagle Ford shale play.
This week, Hurricane Irma threatens to deliver a similar massive punch to the oil patch in the Gulf.
To discuss the ramifications from these storms on the oil markets, geoscientist and oil explorer Jeffrey Brown returns to the podcast. He calculates that Harvey alone will have long-lasting effects such as lingering supply shortages, but his greater focus is attuned to the growing validation of his Export Land Model, which calculates the rate at which oil-producing nations cease to become net exporters as their domestic consumption increases. Since it's formulation in 2005, more and more countries have switched from being net-exporters to net-importers, and the data in aggregates is strongly suggestive of a flat-lining in world oil production — the consequences of which are immense:
But if you look at the available data — basically we have to rely on some US data and some OPEC data — it strongly suggests is that actual global crude oil production virtually stopped increasing in 2005.
I think it was 69 million barrels a day is what I estimated in 2005, we might have had 70, 71 million barrels a day in 2016 — which is a very slight increase over 2005. So, in other words, if you look at the trillions of dollars spent on global upstream capex post-2005, all we’ve been able to do is basically keep crude oi production from collapsing. What has increased is global natural gas production and associated liquids, condensate and natural gas.
So my thesis is the increase in condensate natural gas liquids is obscuring flat-lining actual global crude oil production. Add to this tremendous shortfalls in discoveries and the fall-off in capex, and to me that’s just a very strong probability of actual ongoing material decline in real global crude oil production.
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Jeffrey J. Brown: Hurricanes & US Oil Production
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Chris: Welcome, everyone, to this Peak Prosperity podcast. It is August 31, 2017. I am your host, Chris Martenson. Hurricane Harvey had flooded an immense stretch of the Texas and western Louisiana coasts. The situation is still developing, and we do not yet have anything close to a complete accounting of the damage, let alone when repairs might begin, how long they’ll take or what the costs will be. Of vital importance, however, to everyone in the US, as well as global energy markets, is the impact Harvey has had on the petroleum extraction and refining industries that are absolutely crammed into the bullseye of Harvey’s wrath. Will there be shortages? Will transport fuels like gasoline, diesel and jet fuel spike in price? How can we begin to understand these complex and very important issues?
On that front to help us understand and appreciate the importance of export quantities, we have Jeffrey J. Brown back with us today. Jeffry is a licensed professional geoscientist responsible for the discovery of several oil and gas fields in west central Texas, and currently managing an exploration joint venture. He’s authored numerous articles with a special emphasis on global oil exports. In 2006, Jeff first proposed a simple, mathematical model for oil exporting countries called the Export Land Model, or ELM, which I featured in the crash course video series and book, because it’s essential to understanding the future of oil. I think the model has some insights for us here today as we try and unravel the complexities of the US refining and distribution system in our search for clues as to what may unfold in the near future. Welcome, Jeffrey.
Jeffrey Oh, thank you very much. I’m happy to be on your podcast today.
Chris: Well, thank you. First, you're in Dallas. How did you fare there, and have you noticed any impacts all the way up there from Harvey so far?
Jeffrey: We began to see the first impacts yesterday, and it’s really beginning to hit full force today. Several gas stations out of gasoline and long lines at several others. One of the principle companies, Quick Trip, in the area was basically doing a triage operation. They announced they're gonna cut off gas to half of their gas stations on Labor Day weekend, and direct the remaining fuel they have to select ones on a scattered area across the metroplex. Basically, they found that in a gas shortage situation, if they tried to keep every station supplied everybody might of ran dry, so they're basically doing a triage operation. But it’s certainly hitting with full force right now.
Chris: Well, I’m sorry to hear that, but not unanticipated, not surprising, as you and I exchanged in an email string a few days ago. You were expecting regional shortages to develop as a consequence of what happened down there.
Jeffrey: Yes. I had a little email correspondence with a Wall Street Journal reporter, and I kind of took issue with a statement they made that we had roughly 23, 24 days of supply of gasoline in inventory. And I pointed out the critical mistake they're making is not accounting for the minimum level of inventory we need to keep the whole system running. Pipelines, tanker trucks, terminals, etcetera. There’s a good deal of gasoline that always in transit that’s counted in the inventory, but it’s not usable. And the various numbers I’ve heard is between 170 and 185 million barrels as a minimum operating level. And I think a few years ago the Congressional Research Service put the number at 185. But as of last week we had 230 million barrels in inventory – gasoline – and in round numbers they were basically producing about 10 million barrels more or less. So, we actually have roughly 45 million barrels of gasoline above minimum operating level. So, for the sake of argument, let’s say the inventory drops by 10 percent, drops about 23 million barrels; well, it’s only a ten percent reduction in inventory, but that would wipe out roughly half of the available inventory.
Chris: So this is an important point, Jeffrey, which you directed me to a Tom Whipple article from 2007 that he wrote about this. And what he wrote in there was, he said that the next important point about gasoline stockpiles is not that all of it is usable. As gasoline is largely delivered by pipeline, barge, and coastal tankers these days, a lot of the gasoline hey, it’s tied up in transit; thus the amount of gasoline trapped in transport is substantial. This trapped gasoline is known as the minimum operation level.
So, let’s take a pipeline. This seems easy to understand. The pipeline is a tube. It’s got a volume. There’s gasoline in there. I guess they count that – the amount of gasoline in the tube – as part of our inventory. For the sake of argument, let’s say there’s 20 million gallons filling a pipeline. You can’t use that 20 million gallons. You’d have to put a gallon on one end to get a gallon out the other end. Is that the concept here?
Jeffrey: Correct. Yeah. It’s… you basically have to prime the pump, so to speak. You’ve got this base cushion level inventory that is always necessary simply to keep the system running. And the implication of the Wall Street Journal article was we’ve got nothing to worry about because with – even with zero refineries out – that if every refinery in the country was shut down, we get gasoline for three weeks. I said, no. We’re gonna see spot shortages very quickly, probably in a few days. And in fact, that’s basically what’s transpired here in, I guess, probably throughout Texas, but certainly here in north Texas.
Chris: Well, let’s hope people understand the complexities of this because for most people their experience with gasoline involves a credit card and a pump handle. And that’s how it works. But when we look at the EIA reports, they break down gasoline into regions of the country. So California is a region, I guess they call them pads for some reason, but the east coast is a region. So these regions have their own supply and demand balances. And so what you're noticing down there in Dallas is already, even though you're in the heart of petroleum country, refining country and all of that, that somehow that local region is already suffered – it’s fallen below, obviously, the minimum operation level it you're already triaging. Is that a fair way to look at it?
Jeffrey: Correct. There are, I think, roughly somewhere between 25 and 30 percent of the US refining capacity is currently offline. But what that means for Texas is, I suspect, somewhere between 60 and 80 percent of Texas refining capacity is currently offline. So that’s an enormous reduction in output. And as a matter of fact, the big Colonial pipeline that transports diesel jet fuel and gasoline up to the east coast partially shut down yesterday. I think they're totally shutting down today.
Chris: And they're doing that just because there isn’t the feedstock coming out of refineries to fill it and move it. Is that a correct assessment?
Chris: So the pipeline itself is fine, but it just doesn’t have product to put in there. I did read an article where they were soft pedaling it, again in the Wall Street Journal like Lieber, this might have been Bloomberg, I can’t quite remember now, but basically, they found somebody to say, it’s okay, if the Colonial pipeline shuts down all is not lost. We can still get gasoline up to the northeast using trucks, trains, and barges. And I thought, well, if you don’t have it to put in the pipeline what are you putting in the barges? I was confused. So is there a possibility here that there are other stockpiles here that don’t tie to the pipeline that would be available?
Jeffrey: Well, certainly I don’t think so from the Texas area. Maybe some in Louisiana and they may be talking about moving gasoline from the mid-continent. And the EPA has got rid of their restrictions on boutique gasoline blends. As you know, we’ve got these boutique blends for specific areas based on air quality considerations. I think they’ve abolished those so they can easily transport gasoline from one part of the country to another part of the country.
Now, on an optimistic note, so far I don’t think we’re seeing any reports of serious long term damage to refineries. So, this should be a fairly transient situation. On the other hand, I think the Beaumont/Port Arthur area was probably hit even harder than the refineries in Houston. In fact, the New York Times said – or Harris County where Houston is located – was 25 to 30 percent flooded, to an average depth of about 33 inches. The mayor of Port Arthur this morning said they had 100 percent flooding in Port Arthur. Every single house in Port Arthur had some degree of flooding. And I think the actual refineries are actually flooded themselves in Beaumont/Port Arthur. So that may be a somewhat longer recovery time than what we’re gonna see in Houston and Corpus Christi. I think they're initiating startup procedures in Corpus where the storm hit first.
Chris: Right. But I believe the storm came ashore to the east of Corpus Christi, so they weren’t on the bad side of the eyewall, as it were.
Chris: Yep. All right. So good to hear that those are starting up. But I want to just confirm for you that I also heard just what I could through the news that the Port Arthur area just really got walloped very, very hard. The announcements that were coming out from the officials in the rescue Office of Emergency Management and all those officials – it was really dire yesterday. They just said every man for himself. We can’t respond, we can’t get out there ‘till nightfall is over and all that other stuff. So it sounded pretty dire. I haven’t seen any reports yet, but we do know that all the way up where the Arcana plant was, which is very far north of there, they had six feet of standing water there, which was enough to obviously scuttle that plant and take out all of its backup generators and whatnot.
So my understanding is a refinery’s a very complex piece of equipment. Shutting it down is not easy. It’s not done lightly, and starting it up is not just as easy as just saying, well, we turn the switch and on it starts again. There’s a whole procedure there. But things can happen. If anything did get damaged or was shut down improperly or anything did get itself physically damaged by water – electrical relays, generators, whatnots – would then have to be replaced, that would be a whole other matter entirely. Do you have a sense of if we had a refinery actually fully damaged by flooding before? Do we have anything to go back on here?
Jeffrey: You know, I suppose the analogs would be Rita and Katrina, especially Rita. I think there’s more refinery damage. As a matter of fact, the same area – Beaumont and Port Arthur with Rita. Reportedly, they’ve actually tried to build more robust dikes, levees around the refineries for better flood control. This thing was such an enormous rain event that apparently it completely overwhelmed them. I don’t recall how long it took them to come back after Rita, but that would probably be the best guide for how long it will take to come back after Harvey.
Chris: All right. Well, it’s not just the United States that’s impacted here as well. The United States, and particularly that region of Texas, is becoming very dominant in the global energy market. I understand that the Houston area is now involved in shipping daily out some eight million barrels a day of refined product plus a little bit of what we’re calling crude, but we can quibble over what’s actually being put in those tankers, whether that light, light, light stuff that’s coming out of the shale fields – we’ll call that crude. But at any rate, we are shipping eight million barrels a day. That’s apparently all stocked for the moment. I did a little tanker count on the little tanker count website, saw about 30 just parked off of the Houston port. They're not moving. So, this is gonna probably throw a few wrenches into the global energy markets, in particular, I understand Mexico gets a lot of its gasoline from those refineries on that coast. And so that’s shut off now. Do you think this – we’re gonna start reading about reports in Mexico of shortage?
Jeffrey: I don’t know. The big question is to what extent they can find gasoline elsewhere, and I assume that they’ll probably be redirecting a lot of cargos from Europe. However, I would guess that there’s not gonna be sufficient supply to completely make up for the shortfall of supplies from the US. And in addition, you’ve got a significantly longer transit time.
Chris: Well, I'm sure they're probably firing up as many of these cargo vessels as they can. Certainly, also aiming them towards the east coast of the United States. But even if you come from those refineries in Europe, you're probably – let’s max those tankers out – what are we going, 14 knots?
Jeffrey: Yeah. Oh, probably, a back envelop calculation, I’d guess it probably takes two to three times longer than US to Mexico.
Chris: Yeah. So there’s just a little spot here to manage. Now, the real question is how quickly these things come back online. We don’t really know. I’ve heard good reports that there doesn’t seem to be too many commercial outages of electricity. I was kind of surprised. I thought a few substations might get taken out, but just help people understand. You live in Texas. Maybe people who maybe don’t understand – Corpus Christi to that Beaumont/Port Arthur – how long of a stretch is that in miles?
Jeffrey: It’s 322 miles. And it’s such an unusual storm because as you know the typical hurricane path is a linear, curving path. Basically, primarily a linear trend. It hits the coast, it’s very concentrated in that area, and you’ve got flooding rains along the path going inland. This thing hit just north, northeast of Corpus, did heavy damage to small towns north of Corpus, and then moved slightly in. Stagnated, and then backed up into the gulf, and then drifted farther northeast. So this entire time period Houston’s is just getting this dirty side of the hurricane. Wave after wave after wave of rain. And then as it moved farther up the coast, and Beaumont/Port Arthur is getting the same thing that Houston got. But actually, I think Beaumont/Port Arthur had a more intense 24-hour rain period than Houston did.
Chris: And they got clocked on the second pass of Harvey after he backed out on to the gulf and came back in for, what was that, the third time? Or however many times it had been. But certainly second.
Jeffrey: Yeah. Second time to hit the US. I think it was a previous landfall in Mexico or something.
Chris: Yeah. That was it. Yeah, so they just got clocked again. I think they got something obscene is 20 some inches in a single 24-hour period after already being drenched on the first pass.
Jeffrey: So, this bizarre storm basically shut in the entire gulf coast refining capacity from Corpus Christi to Beaumont to Port Arthur. With Corpus probably be the first to come back, and then Houston ship channel area second, and then Beaumont/Port Arthur presumably the last to come back.
Chris: Now, you mentioned it already, this is happening right at the start of probably the most gasoline intensive weekend on the calendar, Labor Day Weekend. That’s certainly going to exasperate things a bit we would think, right?
Jeffrey: Yeah. And one thing that kind of frankly shocked me is I would have expected the governor to ask people to curtail nonessential driving in order to maintain the void reducing the gasoline inventory we’ve got.
Chris: Yeah. That would have been a good call.
Jeffrey: I guess they don’t want to have a negative impact on business, but this really is a state crisis situation. I mean, certainly state crisis, certainly the damage and the flooding and the impact, incredible impact. It’s definitely a short-term gasoline supply problem.
Chris: Mm-hmm. So, we know that the port, too, is closed and that also has impacts well beyond the petroleum industry, obviously. Houston is a very active port for all kinds of things moving in and out. And again, as of now, the latest I’ve got is that Galveston/Houston Port Officials hope to restart limited ship movements “soon.” That’s all we got right now, but certainly it’s closed to all major ship traffic as yet. And every day, of course, is just creating a logistics sort of bottleneck nightmare for a lot of companies out there. So that’ll take a while to unravel, I guess.
Now, I heard as well that the Eagle Ford had been largely shut down. I was surprised by that because much of it lies sort of to the west and outside of where I thought Harvey was hitting, but a lot reports came in and said that whole area had been shut down. Do you have any information for us on that?
Jeffrey: Nothing specific other than the media reports, but a huge question is going to be to what degree those wells come back. And these very tight, low permit build reservoirs, they're kind of notorious for suffering long-term productivity declines once they're shut in for a lengthy period of time.
Chris: And how would you define lengthy?
Jeffrey: Well, days, weeks. These micro Darcy permeability connections are easy to get, are easy to become clogged and closed off to get a material decline in well productivity if they're shut in for a day’s, weeks period. But the whole infrastructure has been impacted. I’m sure you’ve had an enormous number of roads washed out – a lot of road crossings, low water crossings – under water. A lot of flooded well locations. And then, they’ve got to get their refineries back up and running, so there’s a market for the crude oil. So it’s got all the various pieces put back together, all the way from the tank batteries of the roads, the tanker trucks may have a fair amount of difficulty as many as all the roads are.
Finally, you’ve got to get the refineries back up and running. And then, at the end of the day, as I said, there’s probably a real question of how strongly those wells come back online.
Chris: Well, that will be fascinating. I know it’s just a bad time for a lot of the shale operators to suffer any sort of a reversal of fortunes. Many of them sort of hanging on, as it were, with low profitability as it is. So in that region, in particular, I think we would expect – every day I’ve heard that it’s shut down its roughly $800 million of revenue that’s not flowing to those companies who are all revenue starved. Is there any sort of a forced majeure provision that can help these companies out? I know the Dallas Fed did them a real solid favor, I think it was in January, where they allowed banks to skip the whole mark to market thing on select energy firm debt that the banks were holding. Do you suspect there’s gonna be some sort of a – I wouldn’t call it a bailout – do you think there’s some relief coming here?
Jeffrey: I seriously doubt it. I think the only place a force majeure might come into play is in regard to lease requirements where they're required to drill a well or maintain certain level of production. I think they probably have a good case for invoking force majeure there. I don’t think they – I seriously doubt that they’d be successful in getting any kind of government aid.
Chris: All right. Well, let’s turn now to the wider part of this story. In your area of deepest expertise, you’ve been writing about the export land model. I would like you right now if you could, just a brief description of what that is for people who are not familiar with it yet.
Jeffrey: Well, back circa 2005 or so I started wondering what happens to the net export decline rate, given a production decline in the net oil exporting country, and I simply hypothesized a simple little mathematical model. I assumed a country with two million barrels of production, a million barrels a day of consumption that exports a million barrels a day. And then assumed a five percent fairly rapid decline rate and assumed consumption kept increasing at two and a half percent per year. And it just had an astronomical rate of decline in net exports. And so by the time that production fell to about 1.3 million barrels a day, net exports went to zero. And it’s actually somewhat analogous to the inventory situation because you assume – let’s say you got two million barrels a day production, a million barrels a day consumption, that’s a million barrels a day in net exports, if you have a 25 percent drop in production, half a million barrels per day, that translates to a 50 percent drop in net exports.
So you can only export what you don’t consume. So you have a cut in production that’s a disproportionate decrease in net exports. And so that’s very analogous to the inventory situation where I use the example of 23-million-barrel decline of gasoline inventory is against 230 is a ten percent decline, but if you only got 45 million barrels usable inventory, that’s basically half of – ten percent decline in gross inventory – is a 50 percent cut in net available inventory. So, it’s basically the same math as an export model, but you get a decline in production has a disproportionate effect on net exports. And the simple way to state it is, given an ongoing, and what is an inevitable decline in production, a net oil exporting county, unless they cut their consumption at the same rate as the rate of decline in production, or at a faster rate, the rate of decline in net exports will exceed the rate of decline in production, and the net export decline rate will accelerate with time.
Also, if consumption outpaces the rate of increase in production, you can have falling net exports even as production increases. And that’s actually what we’ve been seeing in Saudi Arabia since 2005. They’ve been showing rising production, rising consumption, but their increase in consumption has outpaced the increase in production, and they're net exports have been below the 2005 rate for eleven straight years through 2016.
Chris: Let’s look at these specific countries again. I want to get to Saudi Arabia and Russia in just a second. But let’s go to maybe some easier ones on the other end. Are there former exporting nations over this time frame that you’ve been looking, former exporting nations that have now stopped exporting, maybe even become importers in this story?
Jeffrey: Yeah. I used a model, or a case history, in a couple, six, country case history of major exporters that approached or hit zero net exports in a thirty-year time period from 1980 to 2010. It’s Indonesia, UK, Egypt, Viet Nam, Argentina, and Malaysia. And I looked at it several different ways, and I’ve got a quantitative measure I call export capacity ratio, or ECI ratio. It’s simply a ratio of production consumption. And I look at production consumption, net exports, from 1995 to 1999 the six countries showed increasing production, increasing consumption, small decline in net exports because consumption exceeded the rate of increase in production, and declining net exports. But in that four-year period as they showed increase in production, they shipped 54 percent of their total supply of post 1995 cumulative net exports.
So again, production is increasing from 1995 to 1999, but now in that four-year time period, they shipped more than half of all the net exports that they would ever ship. And so that is analogous to Saudi Arabia currently, 2005 to 2016. But the only thing anybody ever pays any attention to is the top line production number. Very few people ever look at net exports, and what also no one pays any attention to is depletion. These net export declines tend to be characterized by a ferocious rate of depletion in the early years of the net export decline period. And in fact, a rough but fairly consistent rule of thumb is, if it takes twenty-one years to go to zero net exports, roughly one-third of the way, about seven years into that net export decline period, they’ve already depleted half of their remaining supply of net exports.
Chris: So, this is something that just really bears mentioning. It’s just such a powerful idea, which is everybody is looking at top line. Is there 98 million barrels, is there 100 million, what’s the total gross output of the world? But for every country that’s an importing nation, which by the way, is pretty much every major industrialized nation at this point, what we care about in the industrialized nations is, is there any for export? I don’t care if the world produces 100 million barrels if it also consumes 100 million barrels without exporting any if I'm in a nation that needs to import eight, nine, ten million barrels a day to keep going.
So, it’s obviously the amount floating around on the surface of the ocean that matter a lot. And that’s what everybody who’s an importer is in competition for and what the export land model says as well, if you have these decline rates coming out of your reservoirs for whatever reason, and you’ve got increase in consumption, those two things are an exponential squeeze from the top and an exponential squeeze from the bottom because those are on percentage terms usually, and so you put two exponentials together and you got x squared. You know, it’s times another number. It’s a big ferocious decline.
So let’s put this in some context. This must be – I don’t think the consumption has been increasing too much in Mexico. I think it’s pretty flat the last time I looked, but they’ve have a pretty amazing decline rate in their output. They must be getting squeezed pretty hard at this point.
Jeffrey: Yeah. Their production peak was 2004 and they started declining after Cantarell went into terminal decline. And they’re down form, I think, roughly 3.8 million barrels a day in total petroleum liquids in 2004. I think it’s around 2.8 or so in 2016. And I'm sorry, no, they're down to 2.5. They fell from about 3.8 in 2004 to 2.5 in 2016. Their net exports fell from 1.9 million barrels a day in 2004 to only about .6 – 600,000 barrels – in 2016. If you look at their 2017 numbers, it looks like they may only average around 2.2 million barrels a day for 2017, and assuming no changes in consumption, that’s gonna equate to about a fifty percent simple percentage decline year over year in net exports. And estimate as of the end of this year Mexico is probably shipped about 90 percent of their total post 2004 supply of cumulative net exports. So Mexico, one of your chief sources of foreign crude oil, I think they’ve already shipped about 90 percent of what they're going to net export post 2004.
Now, absent any increase in production which would be theoretically possible. They show only trying to bring foreign investment. But personally I think it’s kind of iffy. Onshore you’ve got pretty high operation costs. You’ve got a question of what kind of production sharing agreements are gonna do. You’ve got a lot of corruption. You’ve got sky high crime rates. And then on a macro basis, both onshore and offshore, you’ve got to remember that Mexico nationalized once. So coming in and get their production up, what’s to prevent Mexico from nationalizing again? But we shall see what happens.
Chris: Absolutely. Yeah. All those risks of course apply to Mexico. And a lot of people have asked me – I was in Mexico City giving a seminar, I don’t know, two or three years ago, and a woman said, what’s gonna happen to the peso? It was about, I think at that point, it was about 13 to the dollar or so, and I said, well, just look at this chart of exports over here and see the direction it’s going. And the peso is supported by having this foreign currency flow which is mostly in dollars. That helps the peso quite a bit, but if you can, unless and until you think the exports are gonna turn around, my prediction would be that peso is gonna continue to weaken. And what we saw with Egypt was I think they became a net energy importer for the first time 2010. 2011 was the Arab spring.
So these are really important things to track because I'm not saying it’s as soon as people run out of energy you have an Arab Spring, but the pressures socially and politically suddenly mount all of the sudden because people are used to having this flow of funds and foreign money and hard currencies that enable them to do fancy things like I don’t know, like Venezuela did with subsidizing gasoline, or Egypt did with subsidizing bread, or whatever you're gonna do, but to your point, the ELM says, hey, as long as you understand where production is going and where consumption is going you can understand that this is gonna evolve a lot more quickly than most people are going to appreciate if they're just getting their news out of the newspaper.
Jeffrey: Yeah. And that’s the – once production decline kicks in, again, unless they cut their consumption at the same rate, what you see is not an exponential decline rate, exponential is five percent, five percent, five percent. A net export decline rate in virtually every case history I looked at, is an accelerating decline rate. Even Denmark, which has had a very successful effort curtailing their domestic liquids consumption, even Denmark has shown an accelerating net export decline rate, because they were not successful in cutting petroleum consumption at the same rates that the production was falling. Production is falling faster than consumption. And even Denmark showed an accelerating rate of decline in net exports.
Chris: Wow. And of course, they're fantastically rich, but they better manage their sovereign wealth fund carefully. Good luck to them because they just announced they're gonna start pouring a lot more on a percentage basis into stocks and equity. So, I think, good luck with that given where we are in this particular equity cycle. We’re rooting for you Norway.
Let’s widen this out just one more step though. I’ve been writing about, for a while, the historic – the absolutely historic – collapse in both upstream oil spending and in discoveries globally. 2014, 15, and 16 saw the lowest three-year total for ne
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