America’s biggest shale operator says more drilling will hurt the industry

[Scott]

 

The head of America’s largest shale oil operator has hit back at White House claims that his industry is acting against the national interest by failing to speed up drilling, insisting that doing so would hurt energy stocks.

 

Putting profits into rapid production growth at the expense of shareholder returns will drive investors away and leave the “back down” sector of the stock market, said Scott Sheffield, chief executive of Texas-based Pioneer Natural Resources.

 

Amos Hochstein, the White House’s chief energy adviser, told the Financial Times it was “un-American” for companies to funnel record profits linked to Russia’s full-scale invasion of Ukraine into shareholder returns.

 

https://biz.crast.net/americas-biggest-shale-operator-says-more-drilling-will-hurt-the-industry/#:~:text=America's biggest shale operator says more drilling will hurt the industry,-by Harold Vazquez&text=Putting profits into rapid production,Texas-based Pioneer Natural Resources.

 

[placeholder]

Lots of finger pointing from the right accusing the Biden administration of slowing development of natural gas. What these accusers forget is the huge financial bath frackers took during the Bush, Obama and Trump administrations. 

U.S. Shale Has Lost $300 Billion In 15 Years

• In the 15 years since the first U.S. shale boom, the industry as a whole has failed to return a profit.
• Deloitte estimates that the coming wave of write-downs could amount to $300 billion.
• The next stage for U.S. shale is going to be consolidation, but over half of all shale companies may be superfluous  

https://oilprice.com/Energy/Energy-General/US-Shale-Has-Lost-300-Billion-In-15-Years.html

It's only in the past 2 years, that gas producers have been profitable.  

[Tug]

Common sense dictates it’s in big oils interest to keep prices high as long as possible they know that once renewable energy really takes hold there will be less demand for their products  

[malathione]

UnAmerican? Very American to maximize profits for shareholders just as God and McKinsey intended. I'm not complaining. 

[thaibeachlovers]

I'm confused. Didn't Biden profess to be against oil? If so, why does he want more drilling?

[Lantern]

^ Seems to be the way of all politicians. Say one thing then do the opposite.

[Andrew65]

The life-span of a shale well is much shorter than for a conventional gas well?

[Isaan sailor]

Open up Keystone Pipeline, and do shale wells later.

[placeholder]

15 minutes ago, Isaan sailor said:

Open up Keystone Pipeline, and do shale wells later.

Actually, the Keystone Pipeline has been a bit too open lately

Keystone Has Leaked More Oil Than Any Other Pipeline in US Since 2010

The major conduit runs from Canada into the US Midwest
Pipeline was shuttered last week after crude leaked in Kansas

https://www.bloomberg.com/news/articles/2022-12-12/tc-energy-keystone-has-leaked-more-oil-than-any-other-pipeline-in-us-since-2010?leadSource=uverify wall

 

[kwonitoy]

1 hour ago, Andrew65 said:

The life-span of a shale well is much shorter than for a conventional gas well?

Fracking is the breaking apart of the oil bearing shale, it's too tight to flow on its own.

Depending on how far the sand and chemicals go into the formation to break it will determine how long the well will produce

About 3-5 years on average for a fracked well.

[digger70]

2 hours ago, thaibeachlovers said:

I'm confused. Didn't Biden profess to be against oil? If so, why does he want more drilling?

https://www.whitehouse.gov/briefing-room/statements-releases/2022/10/18/fact-sheet-president-biden-to-announce-new-actions-to-strengthen-u-s-energy-security-encourage-production-and-bring-down-costs/

[BritManToo]

10 hours ago, Tug said:

Common sense dictates it’s in big oils interest to keep prices high as long as possible they know that once renewable energy really takes hold there will be less demand for their products  

Renewable energy will never take hold because most of the western world has an unsuitable climate for 'renewables'

[placeholder]

16 minutes ago, BritManToo said:

Renewable energy will never take hold because most of the western world has an unsuitable climate for 'renewables'

Care to back that assertion up with facts? I won't hold my breath.

[malathione]

2 hours ago, placeholder said:

Actually, the Keystone Pipeline has been a bit too open lately

Keystone Has Leaked More Oil Than Any Other Pipeline in US Since 2010

The major conduit runs from Canada into the US Midwest
Pipeline was shuttered last week after crude leaked in Kansas

https://www.bloomberg.com/news/articles/2022-12-12/tc-energy-keystone-has-leaked-more-oil-than-any-other-pipeline-in-us-since-2010?leadSource=uverify wall

 

He's obviously referring to KXL.

[thaibeachlovers]

17 minutes ago, malathione said:

He's obviously referring to KXL.

Correct. The one Biden cancelled.

[malathione]

5 minutes ago, thaibeachlovers said:

Correct. The one Biden cancelled.

Yup. Obama yanked the permits and Trump reinstated them. TC Energy gave up on the project once Biden yanked the permits again. Sure, it was mostly oil for export but that does have a price impact.

[roquefort]

4 hours ago, thaibeachlovers said:

I'm confused. Didn't Biden profess to be against oil? If so, why does he want more drilling?

You're not the only one. Poor old Joe's so confused doesn't know if he's coming or going.

 

Politicians don't have the slightest grasp of basic economics anyway. Companies exist to make returns for their shareholders, not to push some fluffy ESG agenda or bail out politicians for their dumb decision to impose sanctions that hurt their own countries more than Russia.

[candide]

46 minutes ago, thaibeachlovers said:

Correct. The one Biden cancelled.

How can this pipeline increase oil production in the U.S.?

[ballpoint]

3 hours ago, Andrew65 said:

The life-span of a shale well is much shorter than for a conventional gas well?

In a conventional gas / oil field, the hydrocarbons have migrated from a source rock and accumulated in a large porous reservoir over millions of years.  You drill your wells and it either comes out under its own pressure, or you suck it out, until you've recovered all that is possible to with today's technology, which may be some time - the largest oil field in the world (Ghawar Field in Saudi Arabia) has produced 65 billion barrels since 1951 and is still going.

 

In a shale gas / oil field, the hydrocarbons are unable to migrate from the organic source material, because shale is impermeable, so they are adsorbed to it, building up in layers that may only be one or a few molecules thick.  Drilling is done along layers that have high amounts of this organic carbon, or kerogen, in shales that have sufficient "brittleness" to be artificially fractured, which is why it's not suitable for every shale deposit.  The more kerogen the well intercepts, and is able to be reached by fracking, the more hydrocarbons you produce, and the longer production will last.  As someone said earlier, typically around three years.  Multiple wells are drilled horizontally along these layers, and spaced apart so that the fractures from one just about meet the fractures from the ones around it in order to access as much kerogen as possible from as few wells as possible.

 

It's a bit like having a rain water tank that, once the time is taken to fill up, provides a lot of readily accessible water, compared with going onto your roof and sucking up the individual drops lying on it one by one.

[Venom]

6 hours ago, malathione said:

UnAmerican? Very American to maximize profits for shareholders just as God and McKinsey intended. I'm not complaining. 

The pharmaceutical industry is far worse. 

[malathione]

1 minute ago, Venom said:

The pharmaceutical industry is far worse. 

Yes, wildly money grubbing. They spend the most for lobbying, by far. Oil's a poor 5th in that regard. Better from a stockholder's perspective, of course. Until they need healthcare that their insurance does not cover.

[placeholder]

3 hours ago, malathione said:

Yup. Obama yanked the permits and Trump reinstated them. TC Energy gave up on the project once Biden yanked the permits again. Sure, it was mostly oil for export but that does have a price impact.

And an especially nasty environmental impact as well.

[malathione]

2 minutes ago, placeholder said:

And an especially nasty environmental impact as well.

The potential for one, yes. But then there should be no complaints about gas prices, energy costs, etc. when oil prices go up. That's the cost of being environmentally friendly.

[placeholder]

5 minutes ago, malathione said:

The potential for one, yes. But then there should be no complaints about gas prices, energy costs, etc. when oil prices go up. That's the cost of being environmentally friendly.

If there were a free market in petroleum, you might have a better point. As observers of the oil market have noted, OPEC is once again the swing supplier after an era in which it was the USA.

[AgMech Cowboy]

7 hours ago, Andrew65 said:

The life-span of a shale well is much shorter than for a conventional gas well?

 

3 hours ago, ballpoint said:

In a conventional gas / oil field, the hydrocarbons have migrated from a source rock and accumulated in a large porous reservoir over millions of years.  You drill your wells and it either comes out under its own pressure, or you suck it out, until you've recovered all that is possible to with today's technology, which may be some time - the largest oil field in the world (Ghawar Field in Saudi Arabia) has produced 65 billion barrels since 1951 and is still going.

 

In a shale gas / oil field, the hydrocarbons are unable to migrate from the organic source material, because shale is impermeable, so they are adsorbed to it, building up in layers that may only be one or a few molecules thick.  Drilling is done along layers that have high amounts of this organic carbon, or kerogen, in shales that have sufficient "brittleness" to be artificially fractured, which is why it's not suitable for every shale deposit.  The more kerogen the well intercepts, and is able to be reached by fracking, the more hydrocarbons you produce, and the longer production will last.  As someone said earlier, typically around three years.  Multiple wells are drilled horizontally along these layers, and spaced apart so that the fractures from one just about meet the fractures from the ones around it in order to access as much kerogen as possible from as few wells as possible.

 

It's a bit like having a rain water tank that, once the time is taken to fill up, provides a lot of readily accessible water, compared with going onto your roof and sucking up the individual drops lying on it one by one.

@ballpoint That was a pretty good explanation and analogy. Sadly so many just see the 'current' big numbers and feel they've been gouged not realizing the years of zero and lost profits.  It's the same with the workers.  During the down years they leave for other work or don't have any work and live on savings. So when there is work, they make a lot of money.  As in any life some make a killing (Joe Biden, Vlad Putin, Xe Jinping, Scott Sheffield, Roman Abramovich, Elon Musk, Li Keqiang, Zhang Dejiang or Justin Trudeau), doesn't matter which Government or style.  What matters is the free market which enables more than just the elites to 'profit'.

Wow, I went on a tangent,

@Andrew65 Khun ballpoint, answered you question very well.

[malathione]

Just now, placeholder said:

If there were a free market in petroleum, you might have a better point. As observers of the oil market have noted, OPEC is once again the swing supplier after an era in which it was the USA.

Certainly, but the reason OPEC can do that is because demand is relatively inelastic. So, essentially, it is still the market that sets the price in relation to supply, not the companies. A company's job is to make money.

 

I do agree with you, though, that supply is manipulated and I am no fan of pipelines.

[AgMech Cowboy]

15 minutes ago, placeholder said:

And an especially nasty environmental impact as well.

@placeholder the nasty environment will come from all the iron ore, cobalt, lithium, Silica, Alumina, Magnesia, Calcium Sulfate and Lime that needs to be mined. Plus the ton of plastics that will be required for the wind turbines and solar farms.  

[placeholder]

7 minutes ago, AgMech Cowboy said:

@placeholder the nasty environment will come from all the iron ore, cobalt, lithium, Silica, Alumina, Magnesia, Calcium Sulfate and Lime that needs to be mined. Plus the ton of plastics that will be required for the wind turbines and solar farms.  

Renewable power’s growth is being turbocharged as countries seek to strengthen energy security

The global energy crisis has triggered unprecedented momentum behind renewables, with the world set to add as much renewable power in the next 5 years as it did in the past 20

https://www.iea.org/news/renewable-power-s-growth-is-being-turbocharged-as-countries-seek-to-strengthen-energy-security

The thing is, you're confusing a the use of petroleum as a fuel, with the use of these metals and compounds as generators. . And the world is rapidly switching over to renewables. So the fuels are increasingly sunlight and wind.

 

Renewable power’s growth is being turbocharged as countries seek to strengthen energy security

The global energy crisis has triggered unprecedented momentum behind renewables, with the world set to add as much renewable power in the next 5 years as it did in the past 20

https://www.iea.org/news/renewable-power-s-growth-is-being-turbocharged-as-countries-seek-to-strengthen-energy-security

[Isaan sailor]

2 hours ago, placeholder said:

As observers of the oil market have noted, OPEC is once again the swing supplier after an era in which it was the USA.

Ah yes, the good old days.  High prices come with with the ruling party.

[rudi49jr]

8 hours ago, BritManToo said:

Renewable energy will never take hold because most of the western world has an unsuitable climate for 'renewables'

Then what do you suggest we do once we run out of oil and gas? Start burning coal again?