Future U.S. Oil Production Will Collapse Just As Quickly As It Increased

SRSrocco Icon

By the SRSrocco Report,

While U.S. oil production reached a new record of 10.25 million barrels per day, the higher it goes, the more breathtaking will be the inevitable collapse.  Thus, as the mainstream media touts the glorious new record in U.S. production that has both surpassed its previous peak in 1970 and Saudi Arabia's current oil production, it's a bittersweet victory.

Why?  There are two critical reasons the current record level of U.S. oil production won't last and is also, a house of cards.  First of all, oil production profiles tend to be somewhat symmetrical.  They rise and fall in the same manner.  While this doesn't happen in every country or every oil field, we do see similar patterns.  For example, this similar trend is taking place in both Argentina and Norway:

Here we can see that oil production increased, peaked and declined in a similar pattern in both Argentina and Norway.  However, many countries had their domestic oil industries impacted by wars, geopolitical events, and or enhanced oil recovery techniques that have resulted in altered production profiles.  Regardless, the United States experienced a symmetrical oil production profile from 1930 to 2007:

As we can see in the chart, U.S. oil production from 1930 to 2007 increased and then declined in the same fashion.  On the other hand, the new Shale Oil Production trend is much different.  What took 23 years for U.S. oil production to double from 5 million barrels per day (mbd) in 1947 to a peak of nearly 10 mbd in 1970, was accomplished in less than a decade with the new shale oil industry.  Total U.S. oil production doubled from 5 mbd in 2009 to over 10 mbd currently.

For those Americans or delusional individuals who believe the U.S. oil industry will be able to continue producing a record amount of oil for the next several decades, you have no idea about the financial carnage taking place in the U.S. shale oil industry.  This leads me to the second reason.  The U.S. Shale Industry hasn't made any money producing oil since the industry took off in 2008.  And it's even worse than that.  Not only have they not made any money, but they have also spent a lot of investor money (most that will never be returned) and added a massive amount of debt to their balance sheets.

According to the Financial Times article, In Charts: Has The US Shale Drilling Revolution Peaked?, they provided the following chart on the negative free cash flow in the U.S. Exploration and Production Industry:

Because the U.S. Shale Oil Industry was a Ponzi Scheme from day one, the shale oil companies had to design clever investor relations presentations to bamboozle, hoodwink, swindle and hornswoggle investors from their money.  And boy did it work.  Even though two-thirds of the U.S. shale energy companies are still losing money, investors continue to flood the energy sector with gobs of Dollars and Pennies from Heaven.  Without these much-needed funds, the U.S. Shale oil industry would go belly-up.

Now, there's another downside to the U.S. Shale Oil Industry that I haven't yet mentioned.  Because shale energy industry is producing a grade of oil that has a very high API gravity (very light oil), we have to export more and more of it as our refiners can't use it all.  The notion that the U.S. decided to start exporting oil because we have become a leading oil producer is pure BOLLOCKS.  The real reason the U.S. Government allowed the exporting of oil in 2015 was that our refining industry couldn't use it all...LOL.

If you have your thinking cap on, why would we have to export oil if we could use it ourselves??  Well, again... the answer is that we cannot use all of our "light tight" shale oil.  Here is a chart from one of the members of the PeakOilBarrel.com site:

According to the U.S. Energy Information Agency (EIA), the majority of growth in U.S. oil production is in the very light API gravity oils above 40.  Unfortunately, there is a glut of high API Gravity oils (light oil) in the United States and the world.  In the Petroleum Economist article, U.S. Tight Oil:  Too Light, Too Sweet, stated the following:

While the US runs on light products, with gasoline making up nearly 48% of the de­mand barrel, the rest of the world has a stron­ger taste for middle distillates. The global de­mand barrel is 36% middle distillates and only 32% gasoline. European and Eurasian mid­dle-distillate demand is an enormous 49.3% of the barrel, according to the latest BP Statistical Review. Middle-distillate demand is widely ex­pected to grow as worldwide trucking volumes increase and maritime fuels begin a major shift to marine gasoil from heavy fuel oil so they comply with new sulphur-emissions limits. Product consumption patterns outside the US argue for processing middle-gravity crudes such as Arab Light, Iranian Light and Russian Urals, rather than extra-light barrels such as 48°API gravity Eagle Ford.

The weighted average API gravity of EU crude imports in 2016 was 35.2°, according to Eurostat. Refinery inputs look similar: the current average API gravity of the crude entering American refin­eries is approximately 32.3°, nearly unchanged for the past 30 years despite the recent rise in light oil output. Worldwide investments into more complex, higher conversion refineries have eroded very light sweet oils' long-prized light-distillate yield advantage.

As the article states, the rest of the world demands more middle distillate fuels that come from medium grade oil stock.  Furthermore, the weighted average API gravity of EU (European Union) crude oil imports in 2016 was 35.2°.  However, the majority of U.S. Shale oil API gravity is 40-50°+.  

Thus, as the U.S. shale oil industry continues to produce more light oil, exports will likely increase.  And we already see this taking place.  The U.S. net oil imports have risen from 2 mbd in Oct 2017 to 4.4 mbd currently.  It is difficult to tell how much net oil imports will be over the next six months, but it is quite interesting to see the U.S. importing more oil even though we just hit a record of 10.25 mbd.

In conclusion, U.S. oil production in the future will collapse just as fast as it increased.  It is hard to forecast when U.S. oil production will finally peak for good because there is so much fraud, leverage, and debt propping up the system.  But, when the Greatest Financial Ponzi Scheme finally pops... I believe U.S. oil production will collapse much faster than we realize.

Check back for new articles and updates at the SRSrocco Report.


BobEore BobEore Sun, 02/11/2018 - 22:37 Permalink

Beware the toxic rubble.\


\cause otherwise... you'll become just another one of those voiceless zombie dudes... locked in a twlight zone of 'vote meter' popularity contests, witless mutterings, and prayers to dead gods for relief from the endless suffering...

of being 'bagholdered'


In reply to by BobEore

Cloud9.5 cheka Mon, 02/12/2018 - 08:16 Permalink

I think that most of us who have taken the time to study examples of German engineering, have noticed that the Germans have a penchant for precision.   In 2010, The German Army produced a study on the strategic importance of oil.  These are a few excerpts from the introduction of that study.  Believe what you will, but  you ignore this at your own risk. 

“It is a fact, however, that oil is finite and that there is a peak oil. Since this study is mainly focused on understanding cause-effect relations following such a peak oil situation, it is not necessary to specify a precise point in time. Some institutions claim that peak oil will occur as early as around 2010. Depending on the development of globally relevant factors, we cannot rule out that peak oil could have serious security policy implications within the review period of the 30-year investigation perspective chosen for the SFT series…..This study is intended to sensitize to the potential security policy consequences, risks and cascade effects that may arise from peak oil excess….Today approximately 90% of all industrially manufactured products depend on the availability of oil…. 90% of all oil imports to Germany come from countries that reach or have already exceeded their national peaks during the study’s period of review….”



In reply to by cheka

Benjamin123 bshirley1968 Mon, 02/12/2018 - 03:16 Permalink

Bullshit. Its been peak oil since 1960. Sixty years of doomcasting. These "financial" topics are a side distraction, oil is money and nothing is more expensive than not having oil. At the level of civilization the price doesnt matter, just the total supply of oil. Individual oil companies may go broke due to financial shenanigans and be replaced by different companies, it doesnt matter as long as someone extracts the oil.

In reply to by bshirley1968

bshirley1968 Benjamin123 Mon, 02/12/2018 - 08:58 Permalink

All you had to say to reveal your limited understanding was, "the price doesn't matter".

That's why 5 billion people on the planet live on less than $5 a day.....because "price doesn't matter". You better wake your middle-class-American dumbass up. 20% of the population uses 90% of the oil.

Not only that, the "price" you speak of is not denominated in money, it is denominated in debt. Money creates wealth, debt destroys wealth. I'll let you take that and think about how this will turn out. "Price doesn't matter." Lmao!

In reply to by Benjamin123

Gerrilea bshirley1968 Mon, 02/12/2018 - 12:10 Permalink

You really are attempting to distract from the actual point, aren't you?  Anyone that doesn't agree is a "dumbass" or has a "limited understanding".

What's your point? That We Americans use too much? While the rest of the world suffers??? BULLSHIT.

The reason the majority on this planet suffer is because of multinationals. They've stolen everything of value, including your mind and called it "free trade".

As for your "money, wealth and debt"...are you kidding?  Labor creates wealth, exchanged into money. Debt is incurred when you trade your future labor for money you don't have, today.

Then you add in the ponzi scheme of the Federal Reserve and poof, in less than 100 yrs, your a perpetual slave. $1 dollar in 1913 equals $24.76 today. Meaning, you have to labor 25x more to break even.

Where did all that value go?  To the banksters and multinationals. It doesn't matter how much we consume, as long as we understand, we must!

"You are free to buy whatever you wish, but you may own nothing!" ~GLB


In reply to by bshirley1968

Gerrilea arrowrod Tue, 02/13/2018 - 08:36 Permalink


Seriously? Are you trying to claim that the outright theft and forced perpetual poverty is how we created this "wonderland" we exist in today?


Your first assumption that we need these things is truly absurd.

Edward Bernays and his quintessential book, "Propaganda" is how we got to this point.

“The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. “Men (people) are rarely aware of the real reasons which motivate their actions.”


"If we understand the mechanisms and motives of the group mind, it is now possible to control and regiment the masses according to our will without their knowing it In almost every act of our daily lives, whether in the sphere of politics or business, in our social conduct or our ethical thinking..."


I dare you to look around your own home, look at all the trinkets and shinny objects you've acquired. How much of it actually contributes to your existence? How much of it adds true value to whom you are or wish to be?


In reply to by arrowrod

bshirley1968 Gerrilea Fri, 02/16/2018 - 09:55 Permalink

Not attempting to distract at all, rather trying to wake people out of their stupor.....present company included. Allow me to explain.

I love the way you ask what my point is and then proceed to answer yourself. It's not that I think the problem is Americans use too much (even though they do), it is rather they will suffer greatly once their lofty level of living is adjusted downward. Millions will die if it happens quickly.

"Multinationals"? Now who's avoiding the subject?

Labor creates money (real money not fiat), money creates capital, capital creates wealth. Obviously you have never had any capital and therefore don't know what it is or how it works.

I agree with your federal reserve stuff.

Raising the price of oil won't pay to get it out of the ground when it cost more in ENERGY to get it out of the ground. Dumbass!

In reply to by Gerrilea

Gerrilea bshirley1968 Mon, 02/12/2018 - 11:06 Permalink

Okay dumbass, "peak cost" or "peak oil", no difference.  This piece is propaganda to rationalize the raping of the consumer through artificial high prices. "It's gonna cost us too much to get the oil out of the ground, so we are gonna have to charge more for it".

We use 93 million barrels a day. You do the math. Recall under The Bush/Cheney Crime Syndicate, oil was trading at $154 a barrel. They made billions.

Now they've got some lackey writing articles to convince people what's left to get out of the ground will "cost too much", hence "peak oil".

I call bullshit on your assessment and understandings here.


In reply to by bshirley1968

Sid Davis Gerrilea Mon, 02/12/2018 - 00:00 Permalink

We could produce unlimited amounts of oil, that is, if we were willing to spend more energy than we acquired. But what matters is the energy in a barrel of energy acquired, and the energy expended to get this barrel from in the ground to the consumer, the net energy in a barrel so to speak.

We are fast approaching the point where it won't make sense to explore for oil, and whether that oil originated from plant and animal decomposition, or from an abiotic process is a moot point.  When oil is no longer economic to acquire more people by far will die than will survive.  This is just decades away, and the little production blip that resulted from tight oil won't mean anything but that we were desperate and wasted energy by going after it.

Without sufficient energy, try going to work, manufacturing goods, farming, or any other activity that is now artificially supported by energy.

In reply to by Gerrilea

Gerrilea Sid Davis Mon, 02/12/2018 - 10:47 Permalink

When oil is no longer economic to acquire more people by far will die than will survive.

Are you trying to say we'll have a MadMax future?  If we do, it is because the TPTB want less people. Not because we don't have energy.  Maybe less garbage and toys but not less energy.

We have enough Natural Gas in to give us power for 400+ yrs.

We have enough Coal to give us 10,000+ yrs of power.

Solar, geothermal and nuclear can always be increased.

Stop building square boxes to live in, Monolithic homes cost less than the power of 4 100 watt light bulbs to heat and cool.

Anyone claiming we're running out of anything, including options,  has an agenda to become rich on your lack of critical thought.

In reply to by Sid Davis

King of Ruperts Land desertboy Mon, 02/12/2018 - 10:42 Permalink

"fossil" Origins for oil and gas is the fairy tail. True for coal beds but there is scant evidence to extrapolate to most oil and gas deposits. How do you explain hydrocarbon oceans on Saturn's moon? Organic molecules are seen throughout the cosmos. Conditions in the crust including temperature, pressure and the presence of mineral to act as catalysts are similar to the Fisher Trope process which creates longer chain hydrocarbons from carbon and hydrogen which are abundant in the crust.

In reply to by desertboy

desertboy King of Ruperts Land Tue, 02/13/2018 - 02:30 Permalink

More questions than answers.  There are simple organic molecules like ethane throughout the universe, and more complex organics apparently coming in on meteorites - this might tell you how you got here.  It doesn't demonstrate that the incredibly complex and highly evolved chemistry of crude is generated by inorganic precursors between inorganic rocks.  Look around you - the very geographic laminae is constructed of dead sea life.   Ever made a compost pile?

In reply to by King of Ruperts Land

Setarcos Gerrilea Tue, 02/13/2018 - 04:54 Permalink

Rubbish.  Next you'll be saying that coal is abiotic too.  In fact, if you bothered to do some geological research, you'd find that coal, oil and gas have very similar origins, i.e. the burial, over many millions of years, of biological material, from trees, to algae.  You can see early coal formation today in bogs which are forming peat, which can be dug and used as fuel from older bogs.  When buried by sediments, volcanic events, etc. the material is compressed and transformed, thus giving rise to low grade brown coal closer to the surface and dense, high grade anthracite at great depth ... many years ago I went down a mile-deep coal mine in England producing high grade coal.  Of great interest to me, as a school boy in the early 1950s, was specimens of insects in amber (fossilized tree resin) found in the coal, as well as some other fossils and leaf imprints.

A difference between coal and oil is that the latter is liquid, probably formed from algae and can permeate upwards through porous rocks to form reservoirs, from which we now pump the stuff.  Some wells can replenish somewhat because of more oil (and gas) permeating from deeper levels, but not fast enough to stop depletion.  Even if oil was abiotic - which it isn't - obviously it doesn't replenish fast enough.  If it did then all of the old dry wells in the US would still be producing (strictly a well is never dry, its just that it is not possible to extract all of the oil).

In reply to by Gerrilea

Gerrilea Setarcos Tue, 02/13/2018 - 08:51 Permalink

I never said that oil or coal doesn't form, in part, from life that is now dead. Both occur. But to claim its runny out is like saying we're running out of salt too.  Our "term", salary, comes from the word, salt. It's production, control and distribution was tightly controlled by the monarch or "state", hence our phrase, "worth his weight in salt". People were told salt was a limited resource and was "valuable". Roman soldiers were paid in salt.

Today, oil is the new salt.

And to claim our oil wells have run dry is pure propaganda. The Bush Crime Syndicate shutdown our oil production and our refineries...WAIT FOR IT...to artificially increase scarcity and raise the price.

Alaska has more proven oil than the entire Middle East.

Will oil eventually run out, of course, but not in our lifetimes nor for the next 1000 yrs.  We have enough time to find other options.


In reply to by Setarcos

jmack Evil Liberals Mon, 02/12/2018 - 05:08 Permalink

The only fraud being conducted here is SRSrocco.



  From the first article he links to: "Those productivity data from the Energy Information Administration (EIA) are an imperfect measure, however. For a start, they do not take into account the extent to which companies are drilling wells and then deliberately not bringing them into production as they wait for higher prices. (These are known as DUCs, or drilled but uncompleted wells.)"

          There is a large backlog of uncompleted wells.  This will put a ceiling on price, where that ceiling is depends on where (what price point) these companies determine it is worth while to complete and produce from these wells.  That is complicated, it has to do with the companies debt burden, how bad they need the money, how greedy the executives are, do they have a bonus target coming due and need to show increased profits, do they have the production to supply their hedges, etc, etc?  who knows how that will play out across the whole industry. but SRSrocco is painting a very misleading picture in his fever dream doom porn thesis.


     He is perhaps the only person in the whole  world that thinks higher gravity api oil is bad.   The reason we are exporting it is because it was a faster way to monetize it rather than fighting the political battles to reduce regulations such that it would allow the building of new refineries that can process the very light oils.  oils which need very little processing relative to sub 40 gravity oils, and thus draw a much higher price.    Perhaps the refining industry has specialized on certain oil gravity's, but that is easily fixed by reducing regulatory moats that inhibit new refineries from being built, allowing new entrants to expand the gradient of refineries, and making new markets for wider api gravity varieties.  exporting it is merely the quickest way to make a buck on it.

Finally.  just as you have bubbles in "the internet" and  real estate and crypto, so too do you have bubbles in shale oil,  a new tech producing real product that is much needed everywhere.  There was definitely some overzealous investors with too much money, spending too easily and getting taken advantage of, both maliciously, and by incompetents who themselves were in the black gold rush mentality thru the 2000's.   But Shale oil is no more a fraud than housing, or crypto, or the internet, or any other human endeavor that garners much attention of people seeking quick riches, during a period of unprecedented easy money credit terms and widespread searches for yield.

In reply to by Evil Liberals

troubledasset Sun, 02/11/2018 - 17:57 Permalink

I live and breath in this space (energy). You’re right that there is a lot of leverage and secondary offerings that will come home to roost one day. However, it’s basically just a game of financial musical chairs. Through asset sales and M&A they can keep the game alive for quite a while. It’s really only commodity price and low cost of capital that keep the music playing. Lose one of those to things and some people won’t have a chair to sit in.

As for declines, we can already look at the Bakken and Eagle ford and now what to expect. Most likely 6-8% overall basin declines once you’re out of growth phase and the number of rigs starts to come down.

I would point out that there are still probably around 1,000 rigs not being put to work today (off the top of my head, could be more like 700 but it’s a lot whatever the actual figure is).

MK ULTRA Alpha troubledasset Sun, 02/11/2018 - 19:02 Permalink

Bakken and Eagle Ford are not in decline, the investment is going into the Permian basin because there are TEN LAYERS OF SHALE, this makes it cheaper to produce.

For a person who says he knows something about this "space" the above knowledge is known through the entire oil industry.

The above article is based on anti-American communist defeatism. Unfortunately for this fools, he has used the shale argument to shut down the entire petroleum industry. Major oil companies are investing big for the long term because of the tax reform act.

The US has over 2 trillion barrels of recoverable oil in shale, the US has the largest deposits of shale in the world. If it was such a bad play, then why are the major oil companies throwing away their money on shale?

The other input is Alaska North Slope on and off shore, the under estimate is 30 billion barrels, it's more because that's at $40 barrel oil, above that price more oil is recoverable. And there is a huge oil shale deposit, that is being processed for exploration and eventual production.

And if this jack ass knew his business, then everyone knows, offshore Alaska is richer than the Gulf of Mexico. Did you know, the US sold a tanker full of shale oil to the UAE, that's from Houston to the Persian Gulf, it was sold because of the clean quality of the shale oil.

Official US oil reserve is 100 billion barrels of crude oil reserves. And I haven't mentioned the other shale benefit of unlimited natural gas. The nation is in the early phase of converting to natural gas, freeing up more crude oil for export.

The article is a typical example of the anti-American defeatist doom and gloom which ZH editors promote. ZH contributes to fake news and fake reality and this article is a perfect doom and gloom, we're all going to die because we're Americans. It doesn't influence the US, but providers a feed back loop for all the domestic and foreign anti-Americans.

My prediction is 12 million barrels per day to 14 million barrels per day over the next three years, can this be sustained, it will be easy to sustain because the coming wave of production will be from TRADITIONAL RESERVOIRS. This is because of the recent opening of restricted highly productive regions.

In reply to by troubledasset

troubledasset MK ULTRA Alpha Sun, 02/11/2018 - 20:42 Permalink

In 2014 Bakken production reached a high of 1.2 MMBOPD. At the end of 2016 production was only 75% of that figure providing a discernible trend of production declines once capex ceases. In the last year production has risen to 1.15 MMBOPD.

They are fighting a decline and the ones doing it are companies who are forced to produce at a loss to service debt.

Whiting has lost 94% of its market cap since summer ‘14.

In reply to by MK ULTRA Alpha

MK ULTRA Alpha troubledasset Sun, 02/11/2018 - 22:07 Permalink

Major oil companies are investing in the Permian basin oil shale, Exxon is a good example. There are many oil shale fields in many regions making money, and it's not just Shale oil, it's the natural gas.

There is a dispute between those who believe oil shale isn't profitable and those who believe it's profitable.  There are over leveraged companies all over this country, low borrowing costs has created weak players in many industries.

Weak firms are bought and sold, assets like wells drilled, hydrocarbon reserves, wells completed, and prospect properties are bought and sold all the time, it's SOP restructuring after a massive drop in price.


In reply to by troubledasset

Kickaha desertboy Mon, 02/12/2018 - 10:14 Permalink

Good questions.  I'd like to know the answer.  I've always opined that major oil companies would always distance themselves from all fracking activity due to the lack of any assurances that the caps placed on exhausted fracking wells will last more than a couple of decades.  Better to have a driller who went out of business 15 years prior be the only liable party than a multi-billion immortal international corporation.


In reply to by desertboy

roddy6667 MK ULTRA Alpha Sun, 02/11/2018 - 23:02 Permalink

"anti-American communist defeatism" When I hear somebody resort to name-calling like this, I know they don't have an argument. Especially the "Commie-Commie-Commie" chorus left over from the 1956 CIA propaganda pamphlets. 

I'll bet that Mr. Ultra couldn't even define communism, never mind spot it. Oh wait, he has Commies hiding under his bed. Never mind.

In reply to by MK ULTRA Alpha

Gusher Sun, 02/11/2018 - 18:38 Permalink

Doom and gloomers have never been right about oil supply and oil demand. There is still plenty of oil and we are finding ways to get more out of the same well.  Add to that the opening of A.N.W.R.

everything1 Sun, 02/11/2018 - 18:54 Permalink

Maybe they just stopped drilling new holes, waiting for the old ones to run out, I don't get my drill out unless I really need to drill a hole.  Then you only have so many rigs, why buy another rig if the price may not pay for it.  I can say for sure the equipment is all in place to make oil happen big.

I think oil and energy demand in general is one of peaks and ebbs.  With economies flying right now, we should be in peak productions, waiting for economic conditions to slow down, which they may not have to again with low interest rates.



shortonoil Cycle Sun, 02/11/2018 - 21:12 Permalink

The average Bakken well that comes in with an OP of 450 b/d, and an ERoEI of 11:1 reaches the "dead state" of an ERoEI of 6.9:1 in about 10 months or 70,000 barrels. After that its only contribution to the economy is as feedstock material. The Eagle Ford and Permian have fairly similar profiles. Energy independence from shale is a joke. After the first 10 months it takes as much energy to extract, process, and distribute it as is returned by the oil. It is no wonder why they are losing money hands over fists.



In reply to by Cycle

bshirley1968 shortonoil Sun, 02/11/2018 - 22:39 Permalink

^This and the EROEI issue.

The goobermint has printed so much debt and built so many bridges to nowhere (ethanol, wind farms, solar, etc.) that will NEVER pay back what it cost to build that there are a lot of goobers out there, and in here, that believe anything is possible forever.....always.....never ending.....for all times.....

Goobers. They're like that.

In reply to by shortonoil

Benjamin123 Cycle Tue, 02/13/2018 - 02:39 Permalink

EROEI is not measurable. You cant measure EROEI. Its a useless buzzword.

It is obvious that the collective energy industry, coal, gas, oil, nuclear and hydro, added up as a whole, produces far more energy than it consumes because otherwise the earth's economy would stop, but the specific, exact ratios (energy in-energy out) cannot be measured. 

In reply to by Cycle