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The US Shale Oil Miracle Disappears

Tyler Durden's picture




 

Submitted by Chris Martenson via Peak Prosperity,

The US shale oil "miracle" has about as much believability left as Jimmy Swaggart. Just today, we learned that the EIA has placed a hefty downward revision on its estimate of the amount of recoverable oil in the #1 shale reserve in the US, the Monterey in California.

As recently as yesterday, the much-publicized Monterey formation accounted for nearly two-thirds of all technically-recoverable US shale oil resources.

But by this morning? The EIA now estimates these reserves to be 96% lower than it previously claimed.

Yes, you read that right: 96% lower. As in only 4% of the original estimate is now thought to be technically-recoverable at today's prices:

EIA Cuts Monterey Shale Estimates on Extraction Challenges

May 21, 2014

 

The Energy Information Administration slashed its estimate of recoverable reserves from California’s Monterey Shale by 96 percent, saying oil from the largest U.S. formation will be harder to extract than previously anticipated.

 

“Not all reserves are created equal,” EIA Administrator Adam Sieminski told reporters at the Financial Times and Energy Intelligence Oil & Gas Summit in New York today. “It just turned out it’s harder to frack that reserve and get it out of the ground.”

 

The Monterey Shale is now estimated to hold 600 million barrels of recoverable oil, down from a 2012 projection of 13.7 billion barrels, John Staub, a liquid fuels analyst for the EIA, said in a phone interview. A 2013 study by the University of Southern California’s Global Energy Network, funded in part by industry group Western States Petroleum Association, found that developing the state’s oil resources may add as many as 2.8 million jobs and as much as $24.6 billion in tax revenues.

(Source)

From 13.7 billion barrels down to 600 million.  Using a little math, that means the hoped for 2.8 million jobs become 112k and the $24.6 billion in tax revenues shrink to $984 million.

The reasons why are no surprise to my readers, as over the years we've covered the reasons why the Monterey was likely to be a bust compared to other formations. Those reasons are mainly centered on the fact that underground geology is complex, that each shale formation has its own sets of surprises, and that the geologically-molested (from millennia of tectonic folding and grinding) Monterey formation was very unlikely to yield its treasures as willingly as, say, the Bakken or Eagle Ford.

But even I was surprised by the extent of the downgrade.

This takes the Monterey from one of the world's largest potential fields to a play that, if all 600 million barrels thought to be there were brought to the surface all at once, would supply the US' oil needs for a mere 33 days.

Yep. 33 days.

And along with that oil come tremendous water demands, environmental, infrastructure and air pollution damages.

So if you do go for it California, the rest of the country will be your best buddy for a little more than 4 weeks. But don't keep calling us afterwards, as we'll be off to the next oil party (if there are any other ones to be had). But know that, sure, we still respect you.

Of course I'm being sarcastic here. But if I lived over or near a shale formation, I would be putting up a hell of a fight to prevent the many long-term damages and airborne pollutants that inevitably accompany such short-lived fracking operations.

At this point, you might be wondering just how the EIA got its estimate so badly wrong. The answer is that the EIA relied on a private firm, one now scraping corporate relations and PR egg off its face:

U.S. officials cut estimate of recoverable Monterey Shale oil by 96%

May 20, 2014

 

Federal energy authorities have slashed by 96% the estimated amount of recoverable oil buried in California's vast Monterey Shale deposits, deflating its potential as a national "black gold mine" of petroleum.

 

Just 600 million barrels of oil can be extracted with existing technology, far below the 13.7 billion barrels once thought recoverable from the jumbled layers of subterranean rock spread across much of Central California, the U.S. Energy Information Administration said.

 

The new estimate, expected to be released publicly next month, is a blow to the nation's oil future and to projections that an oil boom would bring as many as 2.8 million new jobs to California and boost tax revenue by $24.6 billion annually.

 

The 2011 estimate was done by the Virginia engineering firm Intek Inc.

 

Christopher Dean, senior associate at Intek, said Tuesday that the firm's work "was very broad, giving the federal government its first shot at an estimate of recoverable oil in the Monterey Shale. They got more data over time and refined the estimate."

(Source)

Wait a minute. The 2011 California shale oil estimate that launched a flotilla of excited "shale miracle" headlines, led the EIA to publish an estimate of the Monterey at 13.7 billion recoverable barrels, and helped to form a national narrative around potential US "energy independence" was done by a Virginia engineering firm?

Okay, well who are they exactly?

Looking at their website, clearly put together using cheesy stock photos, early Internet font formats, and touting the fact that they've been a business "since 1998" doesn't quite project the hoped-for aura of gravitas and seasoned competency:

(Source)

Seriously? A clock in an arch? Typing fingers? A woman gesturing in a meeting and a guy on a phone?

I mean, does anyone other than me have a "no lame stock photos" requirement of the businesses they use to generate the data used to justify a major geopolitical energy realignment? It's the closest thing I have to a hard rule.

Okay, just kidding again....sort of.

At any rate, the bottom line here is that the EIA relied on this firm's back-of-the-envelope calculations which turned out to be -- surprise! -- unreliable. And now, Occidental Petroleum is scrambling to get its assets out of the Monterey and deployed somewhere more promising.

The lesson to be learned here is: don't believe every headline you read. Consider the source, and more importantly -- stock photos or not -- always question the data.

Price, It's Always About Price

However, I cannot completely write off the entire 96% as 'gone' because the media has left off the most important part, as they always do: the role of price.

Without having access (yet) to the latest well data to know exactly what sort of potential disaster we're dealing with, the correct way to write-down an oil resource is to say: at today's oil prices, this asset can yield (or is worth) $X.

At higher prices, it is certainly true that more of the resource will be 'worth' going after.

But as you and I know, the price mechanism is just a means of obscuring the most important variable: the net energy that will be returned from a given play. Generally speaking, the higher the price (which is often a function of the energy required to extract), then the less net energy will come from that play.

So anytime we hear that a given play is being 'written down', as the Monterey is in rather spectacular fashion, what's really being said is that the net energy from the play is a lot less than prior and/or existing plays, and will not be useful to us until higher oil prices come along. In the case of the Monterey, much higher prices.

Whether we have an intact, functioning and highly complex economy of the sort necessary to develop and deliver the technology required to prosecute such low-yielding plays is another matter entirely. My best guess as of today is, 'probably not.'

Conclusion

Today's write down of the Monterey shale asset is a huge blow to Occidental Petroleum specifically, to California's energy and employment dreams more broadly, and to the US's energy dreams at a national level.

This is not surprising at all to anybody following the shale story with a critical eye. We always knew that the best plays were being prosecuted first for obvious reasons; it's human nature to go after the easy stuff first. And this is especially true for the folks in the oil patch.

The best plays were tapped first, not by some accident of technology or lucky holes plunged into the ground, but because they were cheapest to prosecute. The remaining shale deposits are less rich, more costly to explore, and the profitable pockets much harder to find.

Your main take-away is this: the US has a lot less shale reserves on the books today than it did yesterday. Look for future downward revisions as the other remnant shale plays are poked and prodded and found to be wanting.

Investors need to be wary here too. The hype about shale prospects are wedded to a Wall Street cheap capital machine that is showing clear signs of over-heating:

Shale Drillers Feast on Junk Debt to Stay on Treadmill

Apr 30, 2014

 

Rice Energy Inc. (RICE), a natural gas producer with risky credit, raised $900 million in three days this month, $150 million more than it originally sought.

 

Not bad for the Canonsburg, Pennsylvania-based company’s first bond issue after going public in January. Especially since it has lost money three years in a row, has drilled fewer than 50 wells -- most named after superheroes and monster trucks -- and said it will spend $4.09 for every $1 it earns in 2014.

 

The U.S. drive for energy independence is backed by a surge in junk-rated borrowing that’s been as vital as the technological breakthroughs that enabled the drilling spree. While the high-yield debt market has doubled in size since the end of 2004, the amount issued by exploration and production companies has grown nine-fold, according to Barclays Plc. That’s what keeps the shale revolution going even as companies spend money faster than they make it.

 

“There’s a lot of Kool-Aid that’s being drunk now by investors,” Tim Gramatovich, who helps manage more than $800 million as chief investment officer of Santa Barbara, California-based Peritus Asset Management LLC. “People lose their discipline. They stop doing the math. They stop doing the accounting. They’re just dreaming the dream, and that’s what’s happening with the shale boom.”

(Source)

I guess there's a little less dreaming going on in the Monterey shale patch this morning.

Not to pick on RICE here, because they are more typical than not, but when you are spending $4 to earn $1, somebody ought to be asking some hard questions. Especially the investors.

More broadly, I have been clearly concerned by the recent reports indicating that the shale operators have been spending far more in CAPEX than they’ve been generating in operating earnings.

That's a larger subject that I've covered in more detail in recent reports, but the summary is this: over the past four years, free cash flow (FCF) has been negative for most of the major shale players.

Which leads us to the really big question: When will all these shale drilling efforts actually generate positive FCF?

In the case of the Monterey, and at today's prices, the answer looks to be 'Never.'

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Thu, 05/22/2014 - 14:08 | 4785519 Fuh Querada
Fuh Querada's picture

It's all a shale game.

Thu, 05/22/2014 - 14:12 | 4785531 lordylord
lordylord's picture

Still closer than Fed predictions for GDP next quarter.  So who profited from the sale of land that had such high estimate of oil? 

Thu, 05/22/2014 - 14:15 | 4785553 Pladizow
Pladizow's picture

Frack me!

Thu, 05/22/2014 - 14:18 | 4785558 Latina Lover
Latina Lover's picture

So now we REALLY know why the USSA wants to attack Syria and Iran, and is trying to keep the Kiev coup government in power:  it's all about the oil and gas, and how we can steal for the insiders, like Biden's puke boy.

 

Who would have thought it?

Thu, 05/22/2014 - 14:20 | 4785565 hedgeless_horseman
hedgeless_horseman's picture

 

 

Shale oil production in Texas and ND still looking strong.

I don't like to say I told you so...

 

 

Thu, 05/22/2014 - 14:20 | 4785572 James_Cole
James_Cole's picture

The 2011 California shale oil estimate that launched a flotilla of excited "shale miracle" headlines, led the EIA to publish an estimate of the Monterey at 13.7 billion recoverable barrels, and helped to form a national narrative around potential US "energy independence" was done by a Virginiaengineering firm?

The wall street funded oil miracle. 

Thu, 05/22/2014 - 14:25 | 4785585 hedgeless_horseman
hedgeless_horseman's picture

 

 

...but I told you so.

This chart depicts crude oil production, not Natural Gas, yet it appears that the big shale plays in Texas and North Dakota are exactly where the new crude oil production is coming from.  This correlates with what I wrote a couple years ago on zerohedge, that a neighbor of mine who is
in the fracking business told me they were getting A LOT of crude from
South Texas shale, even though they originally thought they were
fracking for natural gas.  From the looks of this chart, it appears he
was telling the truth.

 

http://www.zerohedge.com/contributed/2012-12-17/fracking-responsible-big...

Thu, 05/22/2014 - 14:32 | 4785619 SafelyGraze
SafelyGraze's picture

as srsrocco teached me, the price and availability of resources (like oil and minerals/metals) are not important

you can always just keep extracting more

forever

 

Thu, 05/22/2014 - 14:34 | 4785626 hedgeless_horseman
hedgeless_horseman's picture

 

 

On a long enough timeline the survival rate for everyone drops to zero.  My investment horizon is much shorter.

Thu, 05/22/2014 - 14:41 | 4785643 Quus Ant
Quus Ant's picture

Use those wise investment $ollars to earthquake proof your house and truck in some non-combustible H20.  Then sit back and let the good times roll.

Thu, 05/22/2014 - 14:47 | 4785700 knukles
knukles's picture

For some strange obscure reason… maybe that I’ve been lied to more in my last 10 years by those who I am supposed to trust… than all other previously that I can discern, my toughts turn to the following…?
1.)  CA does not want shale oil recovery/fracking because it causes earthquakes   Du-fucking-h  And CA has a lot of active earthquake zones?
2.)  CA is notorious for its ecological bent.  And tracking is not “Ecologically Correct”?
3.)  NIMBY?
4.)  Nobody.  Well, maybe close to nobody…. makes fuck-ups like this.  Unless you’re a governmental agency.  Like French railways and who’d-a thunk, huh?
5.)  Just in time for mid term elections out here in CA.  Hah ha ha ha ha?
6.)  You just gotta be fucking kidding me anyhow…. From energy Independence to "Uh-Oh!  We better be real nice to them A-Rabs, Eye-rainians, Rooskies, Chinese and who ever the fuck we arrogantly trod all over…?"
7.)  Fuck it all…  More BS.

Thu, 05/22/2014 - 15:13 | 4785844 tenpanhandle
tenpanhandle's picture

Occidental Petroli-um, um um...doesn't that tie in with Al Gore - through Al Gore senior RIPurgatory?  Hiding those big reserves for a rainy day Al?

Thu, 05/22/2014 - 16:31 | 4786234 Chris Jusset
Chris Jusset's picture

Let's make a list of all the frauds and bubbles currently taking place. 

 

I'll start:

 

1. Shale gas/shale oil fraud.

Thu, 05/22/2014 - 20:03 | 4786949 old naughty
old naughty's picture

full speed build: Keystone.

Thu, 05/22/2014 - 23:28 | 4787371 MiguelitoRaton
MiguelitoRaton's picture

Chris is an outsider looking at one geology and claiming that the whole method of extraction is doomed. Mother nature is heterogeneous. Petroleum engineers have known for some time that Monterey is immature and a poor target for fracking. To then use that to paint all US reserves as overstated is silly at best. Dig deeper CM...literally.

Fri, 05/23/2014 - 01:17 | 4787527 MrPalladium
MrPalladium's picture

Wrong!!

The burden is on those claiming that shale formations in the continental US will get us to energy independence to prove exactly where there are economic zones and what they will produce. Pointing to large shale formations and claiming that they will be productive is just so much hype.

That being said because of the hype, I will be making a nice living for 8 or 10 years off the backwardation in the crude contract.

So hype on dude!!

Fri, 05/23/2014 - 03:41 | 4787631 doomandbloom
doomandbloom's picture

Aaand its gone!

Thu, 05/22/2014 - 22:21 | 4787237 mccvilb
mccvilb's picture

An inconvenient truth.

Thu, 05/22/2014 - 15:14 | 4785855 power steering
power steering's picture

Little or no serious oil companies drilling there is the real tip off. Get a life already!

Thu, 05/22/2014 - 16:41 | 4786282 Stuck on Zero
Stuck on Zero's picture

Knukles is right.  Now add in corruption and you've got a new reason to doubt the estimates.  The oil majors will pay their buds in the government to vastly underestimate the amount of oil in a formation.  The leasing price will then drop dramatically.  Many years ago one of the majors paid about $90/bbl to lease a Santa Barbara formation.  Oil was selling for $30/bbl at the time.  They are still pumping it and the estimated yield gave them a final price of about $2/bbl.  No matter how you measure it ... the public gets screwed.

 

Thu, 05/22/2014 - 23:24 | 4787341 deflator
deflator's picture

Yep, bubblin' crude just like Jed Clampett shootin' up some food. Does it not take an abundance of (fresh)water for hydraulic fracturing to be viable?

 

 While I would never discount fraud in anything humans are involved in I tend to believe reserves are overestimated because it supports the notion that there is and never will be such a thing as scarcity.

 

 Why have sound money if there is no such thing as scarcity?

Thu, 05/22/2014 - 23:33 | 4787383 MiguelitoRaton
MiguelitoRaton's picture

Inconvenient Facts: (a) they are reusing water from prior wells; (b) they recover some of the water; (c) the water to irrigate a single golf course for a year can frack enough wells to provide heating, cooking and water heating for all of Houston for a year...there are about 160 golf courses in houston

Thu, 05/22/2014 - 23:50 | 4787400 deflator
deflator's picture

 Dude, I am a truck driver and have pulled tankers (of water and fracking fluids)for the oil and gas industry. Blow that copy/paste smoke up somebody else's ass.

 They are calling a time out on estimated reserves in CA cuz they ain't stealin water from CA agriculture industry. They could use seawater for fracking but what would,"salting the earth" do to CA agriculture?

Thu, 05/22/2014 - 23:54 | 4787425 Flakmeister
Flakmeister's picture

You should have a professional interest in this then:

http://www.postcarbon.org/reports/Drilling-California_FINAL.pdf

The  Monterey Shale has only superficial similarities to the Bakken and EFS....

Fri, 05/23/2014 - 00:35 | 4787454 deflator
deflator's picture

 Do you not find it amusing that most, "Libertarians" argue vehemently against the concept of scarcity when their Gods Von Mises and Rothbard made scarcity a key element in their arguments for sound money?

 

 Idealistic me enjoyed reading Von Mises and Rothbard because of their views on scarcity. Most "Libertarians" are Keynesians in sheeps clothing.

Fri, 05/23/2014 - 00:51 | 4787500 Real Estate Geek
Real Estate Geek's picture

What's more amusing is .gov trolls being directed to smear Libertarians.

Fri, 05/23/2014 - 01:52 | 4787529 deflator
deflator's picture

 Ok, I'm on my 12th beer now but I gotsta wonder why a .gov troll would argue pro scarcity?

 

 I know why .gov Keynesians argue against the concept of scarcity! They think that their "money" that they can create out of thin air will always produce more resources.

 

Yes I wonder...

Fri, 05/23/2014 - 03:07 | 4787601 Seer
Seer's picture

How's that lobotomy working for you?

Fri, 05/23/2014 - 03:07 | 4787598 Seer
Seer's picture

Glad(?) to hear that I'm not the only other one scratching my head on this.  It's a perfect example of why I don't stick labels on myself (they only cause you to lock your brain).

Fri, 05/23/2014 - 05:36 | 4787711 EscapeKey
EscapeKey's picture

Im wouldn't call them Keynesians in sheeps clothing. I would call them "convenience libertarians", just as most socialists really are "convenience socialists". The very second it doesn't pay for them to be socialist, they won't be.

It was pretty telling when the Tea Party got a stick up the arse because they wanted to cut Medicare/MedicAid. Convenience libertarianism. True libertarianism is rising above it all, and consider what's best for society, not the individual. As is socialism, of course, but where socialism addresses ends (what it's all supposed to do), libertarianism addresses means (what's legal and what's not). Hence, libertarianism actually has a chance to work, whereas socialism doesn't, explicitly because it doesn't say who's supposed to do the shit jobs.

Fri, 05/23/2014 - 09:55 | 4787926 Flakmeister
Flakmeister's picture

Libertarianism has serious issues dealing with the exploitation of the commons. For that reasons it fails, especially when projected unto a finite world...

Most of the ideological strongpoints are subsumed into classic liberalism... Modern "scocialists" greatly value personal liberty and freedom of choice if you have not noticed...

Fri, 05/23/2014 - 10:57 | 4788451 GoinFawr
GoinFawr's picture

not to mention their, contrary to popular conditioning, propensity for fiscal responsibility

Thu, 05/22/2014 - 19:19 | 4786841 post turtle saver
post turtle saver's picture

it's California... give this area time and it will frack itself, as it has for some time now

tar volcanoes pop up all the time through there when the tremors hit

Fri, 05/23/2014 - 01:59 | 4787559 bunnyswanson
bunnyswanson's picture

http://www.yousign.org/en/signthepetition.php?t=28645&page=188&high=3756...

 

The following story has been told by Tim Holliday, a Michigan resident, on his Facebook profile.

The man was on his way home when he noticed an adult turtle crossing the road. No cars were coming from either way, but our witness did not feel comfortable getting out of his truck. Instead, he stopped his car with its front end barely over the centerline, so that other cars that came could be alerted.

Moments after, a Comcast pick-up truck stopped about 150 feet of him. Meanwhile, the turtle had almost crossed the road. Sensing the turtle was okay, the man straightened his truck and drove off. But to his utmost surprise, the man saw in his rear mirror how the Comcast truck veered off the road, kicking up gravel to run over the turtle.

Luckily, the man managed to write down the license plate number of the car and a photo of the man.

Thu, 05/22/2014 - 14:41 | 4785661 0b1knob
0b1knob's picture

Estimates are all just POOHA figures.  The current ANNUAL production of the Bakken shale area is more than the entire recoverable reserves estimated several years ago.

Thu, 05/22/2014 - 18:07 | 4786599 CrashisOptimistic
CrashisOptimistic's picture

How do you know that's oil and not 20% NGLs in those rail cars that blow up?

Fri, 05/23/2014 - 00:14 | 4787466 That Peak Oil Guy
That Peak Oil Guy's picture

"On a long enough timeline the survival rate for everyone drops to zero.  My investment horizon is much shorter."

Yeah, fuck the grandkids.

Fri, 05/23/2014 - 02:57 | 4787589 Seer
Seer's picture

"My investment horizon is much shorter."

Wasn't it that kind of thinking that got us into this mess in the first place?

And when all the crooks out there take this same view?

Tomrrow's children will "reap" the outcome.

Fri, 05/23/2014 - 02:24 | 4787571 August
August's picture

America's greatest, future-oriented gurus don't do price.  Let the little people worry themselves about prices.

Fri, 05/23/2014 - 03:12 | 4787607 Seer
Seer's picture

Yep, and it's the "little people" working hard that essentially subsidize all of this insanity.  It's always the first tier folks in selling the "dream" that make the money; scaps are left for everyone else to chase after (with the belief that there's more there to be had [that's the trick/scam]).

Thu, 05/22/2014 - 14:57 | 4785753 Agstacker
Agstacker's picture

With no gas lines nearby, the flaring from the Bakken can be seen from space.  I don't know if it's true, but I was told that $120,000 worth of natural gas is flared every day from just 1 well.

 

http://geology.com/articles/oil-fields-from-space/

Thu, 05/22/2014 - 15:36 | 4785943 tenpanhandle
tenpanhandle's picture

They should be flaring these wells through nat gas powered generators and tieing into the grid.  Even portable generation capacity will do.  Emitting carbon for no return is plain economic laziness in these instances.  Talk about putting people to work on infrastruture projects.  Factory production of portable nat gas generation units, pipeline and collection point construction, temp powerline constructiuon and maintenance and total project(s) administration and maintanance could employ thousands while utilizing a product that is going to waste.  Temp capacity could be moved site to site or region to region as production dictates.  Fuck the lazy. Fuck the FSA.  Put em to work I say.

Thu, 05/22/2014 - 18:08 | 4786602 Mitzibitzi
Mitzibitzi's picture

That's what they've done at a test frack well near Warrington, in the UK. Since there's gas coming out of the hole anyway and you may as well use it for something as flare it off, they've brought in one of those big mobile generators like they use for power at large concerts. By all accounts, selling the power to the grid pays for the whole shebang, so they're gathering valuable data on the process (and, believe it or not, doing a LOT of study into environmental impact, too. Not that they'd bother much if it was a nice money-spinning field of 50+ commercial wells, I suspect!) and possibly even making a modest profit.

Thu, 05/22/2014 - 18:09 | 4786605 CrashisOptimistic
CrashisOptimistic's picture

Nope, the problem is the nature of the geology.

The wells die so fast you can't complete the pipelines.  The pipelines can never pay for themselves.  These things are miles from any paved roads.  It's all dirt roads that get muddy or snowblocked in winter.

And it's likely the trucks hauling the oil out have about 20% NGLs in them, not 100% crude.

That geology is difficult.  If you slow down somehow to capture the flared gas, then the decline rates of the other wells overwhelm your finances.

Thu, 05/22/2014 - 22:43 | 4787278 OceanX
OceanX's picture

Well, I can tell you how much crude oil they are carrying 0 - Yes zero, Shale is no more light sweet crude than poop.  Go over to the oil drum and read their archives.  This was thouroughly gone over years ago, by Geophyisist, Geologist and Petroleum Engineers..  At the oil drum you can learn about E.R.O.I. and the difference between a resource, reserve, proven reserve and recoverable reserve...

Thu, 05/22/2014 - 23:22 | 4787352 Oliver Klozoff
Oliver Klozoff's picture

The Oil Drum closed its doors cuz there's so much fucking oil that they needed a fucking adding machine to figure it out.

Thu, 05/22/2014 - 23:57 | 4787432 Flakmeister
Flakmeister's picture

The above is a clinical example of projection....

 

Fri, 05/23/2014 - 00:12 | 4787463 That Peak Oil Guy
That Peak Oil Guy's picture

TOD closed shop due to the realization that we were at the peak "plateau" and that the plateau was likely to go on for some years.  So the work of the people of that particular site was done and the people moved on.

If you want proof of the plateau you only have to look at the declining EROEI.

Thu, 05/22/2014 - 22:58 | 4787308 KansasCrude
KansasCrude's picture

Winner Winner.....Crash well said and the devil is in the details.  Most still don't realize sizeable oil fields produce a large majority of the AFFORDABLE production.  From what I am told you need a lot more years to amortize infrastructure than the shale fields will provide thus the scale to make it work $$$$ does not exist.  The end is near for expanding production from these plays the question remains what percentage of the producers will ever produce wealth for their shareholders....so far not many.

Bottom line reality of the expected bonanza is well below expectations.   Better come up with a real plan cause the current one ain't even close to sustainable.  Its really all about NET energy.

Thanks Mr. Martenson

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