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shale oil

Image | The Shale Oil Revolution Actually Reflects a Nation in Decline
The Shale Oil Revolution Actually Reflects a Nation in Decline
by Chris Martenson

For several decades now the US has been getting its energy policy very badly wrong.  It's so short-sighted, and rely so heavily on techno-optimism, that it barely deserves to be called a 'policy' at all. 

Which is why we predict that in the not-too-distant future, this failure to plan will attack like a hungry wolfpack to bite down hard on the US economy’s hamstrings and drag it to the ground.
The Shale Oil Revolution Actually Reflects a Nation in Decline
 by Chris Martenson

For several decades now the US has been getting its energy policy very badly wrong.  It's so short-sighted, and rely so heavily on techno-optimism, that it barely deserves to be called a 'policy' at all. 

Which is why we predict that in the not-too-distant future, this failure to plan will attack like a hungry wolfpack to bite down hard on the US economy’s hamstrings and drag it to the ground.
Image | Off The Cuff: A World Of Rising Interest Rates
Off The Cuff: A World Of Rising Interest Rates
 PREVIEW
by Adam Taggart

In this week's Off The Cuff podcast, Chris and Charles Hugh Smith discuss:

  • The Crashing Treasury Curve
    • Interest rates are on the move
  • Get Ready For Interest Rates To Start Rising
    • The end of a 30-year downtrend
  • When Rates Rise, Prices Will Fall
    • Bonds, stocks, housing — nearly everything
  • What's Next For Bitcoin?
    • We're witnessing a historical moment

Charles and Chris discuss the implications to anticipate should interest rates indeed start rising. The quick summary? It will change everything…

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio and other premium content today.
Off The Cuff: A World Of Rising Interest Rates
 PREVIEW by Adam Taggart

In this week's Off The Cuff podcast, Chris and Charles Hugh Smith discuss:

  • The Crashing Treasury Curve
    • Interest rates are on the move
  • Get Ready For Interest Rates To Start Rising
    • The end of a 30-year downtrend
  • When Rates Rise, Prices Will Fall
    • Bonds, stocks, housing — nearly everything
  • What's Next For Bitcoin?
    • We're witnessing a historical moment

Charles and Chris discuss the implications to anticipate should interest rates indeed start rising. The quick summary? It will change everything…

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio and other premium content today.
Image | The Coming Shale Debacle
The Coming Shale Debacle
 PREVIEW
by Chris Martenson

Executive Summary

  • How bad will "bad" get?
  • What will happen to world supply and prices?
  • Who is most vulnerable?
  • How quickly could this occur?

If you have not yet read Part 1: Why The Shale "Miracle" Is Becoming A "Debacle" available free to all readers, please click here to read it first.

How to Position Yourself

Okay, here’s the summary so far.  The shale companies are burning cash and they’ve done so every year. At every oil price point. And there’s nothing in the data to suggest that will change this year, or next.

So the first question to ask is: When will investors wake up and stop funding these companies?

This should be immediately followed by: How much financial and economic damage will then result? And how soon afterwards?

Well, if the companies stop drilling because their funding dries up, the decline rates of the various shale basins would translate into the immediate and sudden loss of a huge amount of oil production.  

How much?

According to the EIA the decline rates each month for the three biggest shale fields would be between 53,000 and 158,000 barrels per month.

Taken together, one month of not bringing any new wells online for these three fields would result in a drop in oil output of -314,000 barrels.  And a similar (but slightly smaller) drop the next month.  And the month after that, the same thing.  And so on.

After just 3 months the US would be down more than -1,000,000 barrels per day when all the other shale fields are taken into account. 

Now that’s extreme, and it’s very unlikely that drilling would just suddenly stop one day. But the point here is that…

The Coming Shale Debacle
 PREVIEW by Chris Martenson

Executive Summary

  • How bad will "bad" get?
  • What will happen to world supply and prices?
  • Who is most vulnerable?
  • How quickly could this occur?

If you have not yet read Part 1: Why The Shale "Miracle" Is Becoming A "Debacle" available free to all readers, please click here to read it first.

How to Position Yourself

Okay, here’s the summary so far.  The shale companies are burning cash and they’ve done so every year. At every oil price point. And there’s nothing in the data to suggest that will change this year, or next.

So the first question to ask is: When will investors wake up and stop funding these companies?

This should be immediately followed by: How much financial and economic damage will then result? And how soon afterwards?

Well, if the companies stop drilling because their funding dries up, the decline rates of the various shale basins would translate into the immediate and sudden loss of a huge amount of oil production.  

How much?

According to the EIA the decline rates each month for the three biggest shale fields would be between 53,000 and 158,000 barrels per month.

Taken together, one month of not bringing any new wells online for these three fields would result in a drop in oil output of -314,000 barrels.  And a similar (but slightly smaller) drop the next month.  And the month after that, the same thing.  And so on.

After just 3 months the US would be down more than -1,000,000 barrels per day when all the other shale fields are taken into account. 

Now that’s extreme, and it’s very unlikely that drilling would just suddenly stop one day. But the point here is that…

Image | Why The Shale Oil “Miracle” Is Becoming A “Debacle”
Why The Shale Oil “Miracle” Is Becoming A “Debacle”
by Chris Martenson

The central point of this report is that the US is deluding itself when it comes to energy abundance (generally) and oil (specifically).

The bottom line is this: The US shale industry resembles a fraudulent Ponzi scheme much more so than it does any kind of "miracle".
Why The Shale Oil “Miracle” Is Becoming A “Debacle”
 by Chris Martenson

The central point of this report is that the US is deluding itself when it comes to energy abundance (generally) and oil (specifically).

The bottom line is this: The US shale industry resembles a fraudulent Ponzi scheme much more so than it does any kind of "miracle".
Image | Richard Sylla: This Is An Inherently Dangerous Moment In History
Richard Sylla: This Is An Inherently Dangerous Moment In History
by Adam Taggart

“The rates we’ve had in recent years, including right now, are the lowest in history. The book that I co-authored on the history of interest rates traces back to the code of Hammurabi, Babylonian civilization, Greek and Roman civilization, the Middle Ages, the Renaissance, and early modern history right up to the present. And I can assure our listeners that the rates that they’re experiencing right now are the lowest in human history.”

So says Richard Sylla, Professor Emeritus of Economics and the Former Henry Kaufman Professor of the History of Financial Institutions and Markets at New York University’s Stern School of Business. He is also co-author of the book A History Of Interest Rates.

We invited Professor Sylla onto the podcast after hearing his work favorably referenced by the panel convened at the recent hearing held by the US Congress titled: “The Federal Reserve’s Impact on Main Street, Retirees and Savings.”

Based on his deep study across the scope of millennia of human history, Sylla warns we are at a dangerous moment in time.

Richard Sylla: This Is An Inherently Dangerous Moment In History
 by Adam Taggart

“The rates we’ve had in recent years, including right now, are the lowest in history. The book that I co-authored on the history of interest rates traces back to the code of Hammurabi, Babylonian civilization, Greek and Roman civilization, the Middle Ages, the Renaissance, and early modern history right up to the present. And I can assure our listeners that the rates that they’re experiencing right now are the lowest in human history.”

So says Richard Sylla, Professor Emeritus of Economics and the Former Henry Kaufman Professor of the History of Financial Institutions and Markets at New York University’s Stern School of Business. He is also co-author of the book A History Of Interest Rates.

We invited Professor Sylla onto the podcast after hearing his work favorably referenced by the panel convened at the recent hearing held by the US Congress titled: “The Federal Reserve’s Impact on Main Street, Retirees and Savings.”

Based on his deep study across the scope of millennia of human history, Sylla warns we are at a dangerous moment in time.

Image | Art Berman: The Coming Moonshot In Oil Prices
Art Berman: The Coming Moonshot In Oil Prices
by Adam Taggart

In spite of the recent low prices for oil and natural gas, an energy supply crunch is looming warns geological consultant Arthur Berman.

Berman's perspective should not be lightly dismissed: he has 37 years of experience in petroleum exploration and production with 20 of those years at Amoco (now known as BP). He has published more than 100 articles and reports on geology, technology and the petroleum industry during the past five years –more than 20 of those focused on the shale industry including the Barnett, Fayetteville, Haynesville, Bakken and Eagleford plays.
Art Berman: The Coming Moonshot In Oil Prices
 by Adam Taggart

In spite of the recent low prices for oil and natural gas, an energy supply crunch is looming warns geological consultant Arthur Berman.

Berman's perspective should not be lightly dismissed: he has 37 years of experience in petroleum exploration and production with 20 of those years at Amoco (now known as BP). He has published more than 100 articles and reports on geology, technology and the petroleum industry during the past five years –more than 20 of those focused on the shale industry including the Barnett, Fayetteville, Haynesville, Bakken and Eagleford plays.
Image | Devastating Shale Oil Losses
Devastating Shale Oil Losses
 PREVIEW
by Chris Martenson

Sometimes it helps to examine one narrow slice of the pie as a means to understanding the entire pie. In the case of the shale oil Ponzi scheme, we can both wrap our minds around the scale of the predicament and also answer the question of who the losses will be foisted on.

Once we’ve done that, you should be able to simply apply the same logic and learning to other sectors of the financial universe.  Learn one sub-bubble, learn them all; like a fractal foam of misadventure.
Devastating Shale Oil Losses
 PREVIEW by Chris Martenson

Sometimes it helps to examine one narrow slice of the pie as a means to understanding the entire pie. In the case of the shale oil Ponzi scheme, we can both wrap our minds around the scale of the predicament and also answer the question of who the losses will be foisted on.

Once we’ve done that, you should be able to simply apply the same logic and learning to other sectors of the financial universe.  Learn one sub-bubble, learn them all; like a fractal foam of misadventure.
Image | Mauldin Makes A Very Basic Error on Shale Oil
Mauldin Makes A Very Basic Error on Shale Oil
 PREVIEW
by Chris Martenson

There’s really nothing much more important than knowing where we are in the oil story…but if you follow the hypesters from Wall Street or the technology lovers, you're likely to be misled.  A particularly wrong piece of analysis was recently released by John Mauldin, who has both bought into the hype and loves technology.

He even singled out our friend James Howard Kunstler for being wrong, yet then goes on to be spectacularly wrong himself.
Mauldin Makes A Very Basic Error on Shale Oil
 PREVIEW by Chris Martenson

There’s really nothing much more important than knowing where we are in the oil story…but if you follow the hypesters from Wall Street or the technology lovers, you're likely to be misled.  A particularly wrong piece of analysis was recently released by John Mauldin, who has both bought into the hype and loves technology.

He even singled out our friend James Howard Kunstler for being wrong, yet then goes on to be spectacularly wrong himself.
Image | The Shocking Data Proving Shale Oil Is Massively Over-hyped
The Shocking Data Proving Shale Oil Is Massively Over-hyped
by Adam Taggart

Hooray, oil is suddenly much cheaper than it used to be. That's great news, right?

Not so fast. For certain it's not good news for those counting on a continued rise in US oil production from the "shale miracle". Many drillers were challenged to operate profitably when oil was above $70 per barrel. Very few will remain solvent with oil in the $50s (as it is as of this writing).

So, expect US oil production to suffer from these lower prices if they persist. But even if oil prices rise and rise soon, there's new data that indicates the total amount of extractable oil from America's shale plays is less — much less — than what we're being told (or better put, "sold").
The Shocking Data Proving Shale Oil Is Massively Over-hyped
 by Adam Taggart

Hooray, oil is suddenly much cheaper than it used to be. That's great news, right?

Not so fast. For certain it's not good news for those counting on a continued rise in US oil production from the "shale miracle". Many drillers were challenged to operate profitably when oil was above $70 per barrel. Very few will remain solvent with oil in the $50s (as it is as of this writing).

So, expect US oil production to suffer from these lower prices if they persist. But even if oil prices rise and rise soon, there's new data that indicates the total amount of extractable oil from America's shale plays is less — much less — than what we're being told (or better put, "sold").
Image | About that Shale Oil ‘Miracle’…
About that Shale Oil ‘Miracle’…
by Chris Martenson

It's been said that humans are rationalizing — not 'rational' — animals. The deep truth in that statement is that we humans have strongly-held beliefs that color the information we take in an accept. We're often guilty of recognizing only the data that supports those beliefs while rejecting the rest.

For example, today most people place a great deal of faith in the potential for technology to fix whatever predicaments society may face in the future. And they support that view with cherry-picked data, while conveniently overlooking evidence suggesting technology is instead a sword with two edges.
About that Shale Oil ‘Miracle’…
 by Chris Martenson

It's been said that humans are rationalizing — not 'rational' — animals. The deep truth in that statement is that we humans have strongly-held beliefs that color the information we take in an accept. We're often guilty of recognizing only the data that supports those beliefs while rejecting the rest.

For example, today most people place a great deal of faith in the potential for technology to fix whatever predicaments society may face in the future. And they support that view with cherry-picked data, while conveniently overlooking evidence suggesting technology is instead a sword with two edges.
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