• 4 minutes England Running Out of Water?
  • 7 minutes Trump to Make Allies Pay More to Host US Bases
  • 10 minutes U.S. Shale Output may Start Dropping Next Year
  • 14 minutes Washington Eyes Crackdown On OPEC
  • 1 hour One Last Warning For The U.S. Shale Patch
  • 8 hours Russian Effect: U.S. May Soon Pause Preparations For Delivering F-35s To Turkey
  • 5 hours Chile Tests Floating Solar Farm
  • 15 hours Poll: Will Renewables Save the World?
  • 15 hours China's Expansion: Italy Leads Europe Into China’s Embrace
  • 15 hours New Rebate For EVs in Canada
  • 6 hours Trump Tariffs On China Working
  • 9 hours Trump sells out his base to please Wallstreet and Oil industry
  • 6 hours Biomass, Ethanol No Longer Green
  • 1 day Oil-sands recovery by solvents has started on a trial basis; first loads now shipped.
  • 24 hours Boeing Faces Safety Questions After Second 737 Crash In Five Months
  • 18 hours The Political Debacle: Brexit delayed
  • 13 hours 3 Pipes: EPIC 900K, CACTUS II 670K, GREY OAKS 800K
  • 9 hours Read: OPEC THREATENED TO KILL US SHALE
Ross McCracken

Ross McCracken

Ross is an energy analyst, writer and consultant who was previously the Managing Editor of Platts Energy Economist

More Info

The IEA’s Search For A New Narrative Of Doom

rig

The International Energy Agency (IEA) released its Oil 2019 report March 11, providing forecasts to 2024. The IEA paints an extraordinary picture of transition for the oil industry, but it is not the ‘energy transition’ driven by climate change; the impacts on the oil market of policies designed to mitigate climate change appear relatively weak over the next five years. The seismic changes illustrated by the IEA are those wrought by the US shale industry.

The IEA’s former narrative on US shale was that once it had burst upon the scene it would eventually burn itself out in the mid-2020s. The sweet spots would be exhausted, marginal costs would rise as oil became harder to locate, and more oil would constantly have to be found to replace the level of decline from wells drilled during the expansionary phase, eventually making it impossible to sustain growth – essentially the classic path of a conventional oil basin.

To a large extent this story remains in place, but it is also clearly under constant re-evaluation, the problem being that the depth and longevity of US shale is not known and remains a function of price and productivity – which means the ultimate recoverable reserve should be treated as elastic rather than finite.

If a bell curve in the style of Marion King Hubbert were used to predict US shale oil production, 2018’s mammoth expansion would have moved the predicted peak higher and further back in time, resulting…




Oilprice - The No. 1 Source for Oil & Energy News