{"id":58648,"date":"2021-07-17T14:46:05","date_gmt":"2021-07-17T19:46:05","guid":{"rendered":"https:\/\/olduvai.ca\/?p=58648"},"modified":"2021-07-17T14:46:05","modified_gmt":"2021-07-17T19:46:05","slug":"the-u-s-shale-revolution-has-surrendered-to-reality","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=58648","title":{"rendered":"The U.S. Shale Revolution Has Surrendered to Reality"},"content":{"rendered":"
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The U.S. Shale Revolution Has Surrendered to Reality<\/a><\/h3>\n<\/div>\n<\/div>\n
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Fracking companies aren\u2019t drilling as investment continues to dry up.<\/strong><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n
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\"Oil<\/picture>
Image: Fossil fuel oil well. Credit:\u00a0CL Baker.\u00a0<\/a>CC BY 2.0<\/a><\/figcaption><\/figure>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n
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\u201cDrill, baby, drill is gone forever.\u201d<\/p>\n

That was the recent assessment of Saudi Prince Abdulaziz bin Salman of the American oil industry\u2019s future potential. As\u00a0Saudi Arabia\u2019s energy minister<\/a>, Prince Abdulaziz is one of the most influential voices in the global oil markets.\u00a0Fortune termed it<\/a>\u00a0a \u201cbold taunt,\u201d and a warning to U.S. frackers to not increase oil production.<\/p>\n

The response by the U.S. producers \u2014 to shut up and take it \u2014 quietly confirms this reality. Shale oil\u2019s era of growth appears to be over. The reason is that even as global oil demand and prices rise, the economics of the shale oil business model continue to not work. The U.S. shale industry has lost\u00a0hundreds of billions of dollars<\/a>\u00a0in the past decade producing oil and selling it for less than it cost to produce.<\/p>\n

This was possible because despite the losses, investors kept giving the industry money. But now investors appear to have grown tired of losing money on U.S. shale companies and new lending to the industry has dropped dramatically.<\/p>\n

As\u00a0reported<\/a>\u00a0this month by The Wall Street Journal, \u201ccapital markets showed little interest in funding expansive new drilling campaigns\u201d for the U.S. shale industry. Shaia Hosseinzadeh, a partner at investment firm OnyxPoint Global Management LP,\u00a0 told The Journal that the problem facing fracking companies is that \u201cthey can\u2019t access cheap capital any longer.\u201d<\/p>\n

Without new infusions of money, the industry can\u2019t drill for more oil, and that is why the Saudis feel confident taunting the U.S. oil industry. Prince Abdulaziz\u2019s confidence is based in the financial realities of U.S. shale.<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n","protected":false},"excerpt":{"rendered":"

The U.S. Shale Revolution Has Surrendered to Reality Fracking companies aren\u2019t drilling as investment continues to dry up. Image: Fossil fuel oil well. Credit:\u00a0CL Baker.\u00a0CC BY 2.0 \u201cDrill, baby, drill is gone forever.\u201d That was the recent assessment of Saudi Prince Abdulaziz bin Salman of the American oil industry\u2019s future potential. As\u00a0Saudi Arabia\u2019s energy minister, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2,3],"tags":[5317,331,412,11782],"class_list":["post-58648","post","type-post","status-publish","format-standard","hentry","category-economics","category-energy-2","tag-desmog-blog","tag-fracking","tag-hydraulic-fracturing","tag-justin-mikulka"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/58648","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=58648"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/58648\/revisions"}],"predecessor-version":[{"id":58651,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/58648\/revisions\/58651"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=58648"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=58648"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=58648"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}