“In August 2015, Saudi Arabia declared war on shale oil development in the United States.”
“In October 2016, Saudi Arabia capitulated.” Quote from, Saudi Arabia Capitulates.
This has now been confirmed by an agreement among OPEC producers to cut production by 1.2 million barrels per day. Whether the cut ever actually materializes is immaterial: U.S. shale oil producers will be off and running in 2017.
The number of U.S. oil shale drilling rigs, at the end of November, had increased by 154 since the low point in May 2016.
The number of DUCs (Drilled but Not Completed) is currently around 3,800, not counting 900 natural gas DUCs.
The stage is set for rapid growth of shale oil production in the United States.
Initially, it could be unexpectedly rapid, and capped only by the surge in oil production forcing the price of oil lower.
We are likely to enter a period where U.S. shale oil production dictates the price of oil.
When the price of oil drops, due to an increase in supply caused by U.S. producers, U.S. producers will back off completions, and increase the number of DUCs. When the price of oil increases, U.S. producers will once again aggressively complete the DUCs and resume drilling.
This cycle could dictate the price of oil on world markets for many years in the future.
Much will depend, however, on growth in demand. If environmental activists succeed in getting governments to restrict the use of fossil fuels, demand growth could slow.
COP 21 established a program for cutting CO2 emissions that could result in the use of less energy.
The United States can reject this scenario of energy deprivation that harms people around the world, and lead the world to increased use of low-cost energy.
Low-cost energy over the past century has resulted in worldwide benefits, and the United States could provide the leadership for another century of improving economic growth and improved living standards around the world.
Natural gas from shale could also change the world markets for natural gas, and improve the availability of low-cost electricity for millions of people.
The shale revolution originated in the United States, and will spread to other countries over the next decades.
OPEC’s grip on the oil market has been broken, and the world will benefit from low-cost energy as a result of this revolution, assuming a belligerent Iran or terrorist action doesn’t upset this equation.
OPEC is still relevant, but it seeks oil price stability within a range of prices it can live with.
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Nothing to Fear, Chapter 15, An Alternative Hypothesis, describes why the sun is the far more likely cause of global warming..
Nothing to Fear is available from Amazon and some independent book sellers.
Link to Amazon: http://amzn.to/1miBhXy
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