Environment & Energy
Related: About this forumShale Reckoning Arrives For Texas; Rig Count Now 11% Of Decade High; National Count Lowest On Record
Yesterday, President Trump left Midland, Texas, after arriving in the states Permian oilfield region for a $2,800 a plate luncheon and a roundtable that required each participant to pony up $100,000. The west Texas Mr. Trump left behind bears little resemblance to the region as it was when he first took office in January 2017, as the shale rush resumed following 2016s oil price plunge.
Today, the shale boom of the 2010s is officially bust, battered not only by the USs outsized failure to control COVID-19 outbreaks and an oil price war in which foreign producers proved their ability to steer oil prices, but also a wave of multi-billion dollar write-downs by oil giants write-downs that predated both the price war and the pandemic and resulted from the industrys perpetual struggles to generate profits from shale drilling and fracking regardless of the price of oil. Last Friday, just 103 active drilling rigs dotted Texas, according to data from Baker Hughes. Thats down from 403 drilling rigs as 2020 began and the states peak this decade of 930. Just 251 active oil and gas rigs could be found across the entire United States, the lowest number recorded since Baker Hughes began tracking the rig count back in 1940.
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On Friday, Exxon is expected to report a $2.63 billion second-quarter loss, according to Refinitiv Eikon data, on sharply lower prices and weaker production, the first back-to-back quarterly losses in at least 36 years, Reuters reported today. Rivals BP Plc, Royal Dutch Shell and Total have slashed up to $45 billion in the combined value of their oil and gas properties.
Anyone whos spent a long enough time in the oil industry, particularly in Texas, has seen oil booms and busts before. But this years collapse, according to industry insiders, has the potential to forever break that cycle not because the boom days are here to stay, but because its possible that oil may never make a full comeback. I believe it is likely to assume that demand will take a long time to recover, Shell CEO Ben van Beurden said today as he announced his companys second quarter loss, an unprecedented $18.38 billion, if it recovers at all. In April, Scott Sheffield, the chief executive of Pioneer Natural Resources, testified before the Texas Railroad Commission (which serves as the states oil regulator) that the shale rush had been an economic disaster. Nobody wants to give us capital because we have all destroyed capital and created economic waste, Sheffield testified, warning that without state intervention, we will disappear as an industry, like the coal industry.
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https://www.desmogblog.com/2020/07/30/trump-leaves-texas-some-question-if-shale-bust-marks-permian-oilfield-s-final-boom
gab13by13
(20,849 posts)Central banks can pump trillions of dollars into Wall Street for so long and the next interest rate drop will be negative. Tax breaks work better when income is high.
This virus has exposed the myth of supply side economics. It has always been about demand. People are using less fossil fuels, it is a dying dinosaur even without the virus.