• 19 mins Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 7 hours Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 12 hours British Utility Companies Brace For Major Reforms
  • 16 hours Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 18 hours Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 19 hours Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 20 hours OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 21 hours London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 22 hours Rosneft Signs $400M Deal With Kurdistan
  • 1 day Kinder Morgan Warns About Trans Mountain Delays
  • 1 day India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 1 day Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 2 days Russia, Saudis Team Up To Boost Fracking Tech
  • 2 days Conflicting News Spurs Doubt On Aramco IPO
  • 2 days Exxon Starts Production At New Refinery In Texas
  • 2 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 3 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 3 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 3 days China To Take 5% Of Rosneft’s Output In New Deal
  • 3 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 3 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 3 days VW Fails To Secure Critical Commodity For EVs
  • 3 days Enbridge Pipeline Expansion Finally Approved
  • 3 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 3 days OPEC Oil Deal Compliance Falls To 86%
  • 4 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 4 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 4 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 4 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 4 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 4 days Aramco Says No Plans To Shelve IPO
  • 6 days Trump Passes Iran Nuclear Deal Back to Congress
  • 7 days Texas Shutters More Coal-Fired Plants
  • 7 days Oil Trading Firm Expects Unprecedented U.S. Crude Exports
  • 7 days UK’s FCA Met With Aramco Prior To Proposing Listing Rule Change
  • 7 days Chevron Quits Australian Deepwater Oil Exploration
  • 7 days Europe Braces For End Of Iran Nuclear Deal
  • 7 days Renewable Energy Startup Powering Native American Protest Camp
  • 8 days Husky Energy Set To Restart Pipeline
  • 8 days Russia, Morocco Sign String Of Energy And Military Deals
Alt Text

Corbyn Seeks To Renationalize Britain’s Utilities

Jeremy Corbyn wants to renationalize…

Alt Text

The New Challenger To Lithium Batteries

The lithium-ion battery is head…

Alt Text

Oil Prices Spike On Middle East Tensions

Oil prices jumped upwards on…

This Week in US Energy … Shale Ups and Downs

This Week in US Energy … Shale Ups and Downs

As the US Energy Information Administration (EIA) notes this week that US net natural gas imports fell 14% last year on record production, a report from Bloomberg suggests that the US shale industry is suffering from enormous debt, while revenues continue to disappoint.

On Wednesday, the EIA said total imports in 2013 fell to 1,311 billion cubic feet, the lowest level since 1989, with dry natural gas production rising 1% to 24,282 billion cubic feet. At the same time, however, the debt among shale oil and gas companies has nearly doubled over the last four years, according to Bloomberg.

Revenues have expanded at a miniscule 5.6% during that time period, dangerously outpaced by debt. “Debt hit $163.6 billion in the first quarter, according to company records compiled by Bloomberg on 61 exploration and production companies that target oil and natural gas trapped in deep underground layers of rock. And companies including Forest Oil Corp. (FST),Goodrich Petroleum Corp. (GDP) and Quicksilver Resources Inc. (KWK) racked up interest expense of more than 20 percent.”

Bloomberg’s take on this is that the shale industry is ripe for a shakeout, and as a result, massive investment into liquefied natural gas (LNG) terminals might look a bit out of place.

In the meantime, evidence is mounting that the US shale industry is becoming an increasingly polarized one, from state to state. As Oilprice.com’s Daniel Graeber reports this week, two bills working their way through state legislatures show a divided house that skews the EIA’s perception of future natural gas production.  The stories unfolding in Illinois and California, for instance, are wildly different.

While Illinois is trying to skirt new legislative drafts to avoid delays that are bad for business, California is considering applying the brakes to the state’s impressive shale progress.

At the same time, the proposed Keystone XL pipeline is coming under greater scrutiny after reports of significant construction defects in the southern leg of the pipeline. The defects include bad welds, dented pipe and damaged pipeline coating. This news has led to some more rigorous journalistic endeavor to drudge up some additional safety requirements for the pipeline’s construction at the bottom of the January environmental impact statement.

One of the new requirements is for pipeline operator TransCanada to hire a third-party contractor chosen by the US federal Pipeline and Hazardous Materials Safety Administration to monitor and report on construction. Another is a requirement for TransCanada to adopt a quality management program.

So the bigger picture for shale may be an impressive one, but it serves one well to remember that bigger pictures are the compilation of many smaller pictures that don’t necessarily tell the same story.

By. James Stafford of Oilprice.com




Back to homepage


Leave a comment
  • Lee James on May 31 2014 said:
    I've observed that folks just don't seem to be paying attention to the economics of shale oil and gas. Is it because people get all excited about increased production volume, without regard to cost?

    Are people not paying attention because shale resources are an emerging industry, with understandably higher initial cost? And, we fully expect that technology will save the day?

    My take is that there's a significant trend going on with fossil fuels, and especially petroleum. The trend is toward increasingly higher cost. Now, just think of the costs energy consumers would face if had to, in addition, directly pay-as-you-go for social and environmental damage! --So much easier to pay later!

    What's wrong with this picture? Time for a switch!

Leave a comment




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