Drilling Deeper: Interview with J. David Hughes

Off the microphones of J. David Hughes, Monsta & RE

Follow us on Twitter @doomstead666
Friend us on Facebook

Aired on the Doomstead Diner on December 1, 2014

logopodcast

Discuss this Interview at the Podcast Table inside the Diner

Drilling Deeper: A Reality Check on U.S. Government Forecasts for a Lasting Tight Oil & Shale Gas Boom

cover_Drilling-Deeper_300w (2)http://shalebubble.postcarbon.org/wp-content/uploads/2013/02/David-Hughes-debate.jpgAbout a month ago, we had an opportunity to interview J. David Hughes, author of the recent report Drilling Deeper for the Post Carbon Institute.  The report takes a detailed look at the fracking plays being made around the country which the MSM and Oil Industry shills have claimed will develop energy Independence for the FSoA.  We held onto the podcast until December 1st, at the request of the PCI media department.

In the intervening time since we recorded the broadcast, the price of Oil has further dropped from the $80 or so it was then, now down to around $69 in the last price quote I saw for WTI Crude.  This price is now down so low it is below the “Best Estimate” and is a worst case scenario for the drillers.  Oil Rigs are already being shut in in the Bakken, and the longer the low prices are maintained, the more will go down.

From the Texas Star-Telegram:

Falling oil prices could cause pullback in Texas production

Posted Friday, Nov. 28, 2014

OPEC’s decision to maintain production levels instead of cutting them caused oil prices to plummet, leading some analysts to predict a “pullback” in domestic oil production.

The price of U.S. crude fell by 10 percent Friday to $66.15 a barrel after the oil cartel decided at its meeting in Vienna on Thursday to leave production at 30 billion barrels a day. Member nations are worried they’ll lose market share if they lower production.

Shares of companies across the energy industry fell, with Chevron sliding 5 percent and Irving-based Exxon Mobil falling 4 percent. Halliburton, the oil field services company, saw its shares drop nearly 11 percent.

Bernard Weinstein, an economist at Southern Methodist University’s Maguire Energy Institute, said it is too early to tell the full impact of the falling oil prices. But for Texas, the No. 1 oil- and gas-producing state, it is not “good news.”

“I think we’re definitely going to see some pullback. We’ll see the rig count go down,” Weinstein said. “Wells that are already producing will not be shut down, but we’ll see less drilling activity.”

Tom Kloza, chief oil analyst at the Oil Price Information Service, had told the Star-Telegram that Thanksgiving week would be a “Super Bowl week on oil fundamentals” because of the OPEC meeting. He now expects the price to fall an additional $5 or $10 a barrel before stopping.

“It’s that kind of rout,” Kloza told The Associated Press on Friday .

Partly because of the shale production boom in the U.S., the world is awash in oil at a time when demand from major economies is weak — so prices are falling. Citibank analysts wrote in a report Thursday that global supplies exceed demand by about 700,000 barrels a day now.

Overall, the slide is a boon for consumers, with gasoline prices at their lowest point since 2010.

The national average was $2.79 on Friday. Kloza expects gas to eventually be a full $1 below its June peak of about $3.70 a gallon. That would save typical households $60 a month for those that burn 60 gallons of fuel.

“It’s a nice easy calculation,” Kloza said. “These are numbers that we would have regarded three or four months ago as something from the lunatic fringe.”

The bottom should come between $2.50 and $2.70, Kloza said.

But there are some negatives to the euphoria over paying less at the pump, Weinstein said.

A decade ago, the oil and gas industry accounted for about 2 percent of the gross domestic product. Now it’s more like 8 percent, he said.

Besides the energy companies themselves, the industry includes those that provide materials needed for drilling, he said.

The companies that will immediately feel the impact are the small to midsize energy firms that started in the past few years and took on too much debt, he said.

“They went to the bank and they borrowed $100 million and so their revenue stream is down and they can’t cover their costs,” Weinstein said. “They will cut back first.”

So a big drop in the price of oil sends a “ripple effect throughout the economy,” Weinstein said.

In our interview, David also highlights the CapEx problems with natural gas, and the reason building expensive pipelines and export terminals doesn’t make economic sense given the rapid depletion of these fields, even in the “sweet spots”.

For the rest, listen to the Interview, and read the report if you have a lot of time on your hands.

Leave a Reply

Your email address will not be published. Required fields are marked *

Support the Diner
Search the Diner
Surveys & Podcasts

NEW SURVEY

Renewable Energy

VISIT AND FOLLOW US ON DINER SOUNDCLOUD

" As a daily reader of all of the doomsday blogs, e.g. the Diner, Nature Bats Last, Zerohedge, Scribbler, etc… I must say that I most look forward to your “off the microphone” rants. Your analysis, insights, and conclusions are always logical, well supported, and clearly articulated – a trifecta not frequently achieved."- Joe D
Archives
Global Diners

View Full Diner Stats

Global Population Stats

Enter a Country Name for full Population & Demographic Statistics

Lake Mead Watch

http://si.wsj.net/public/resources/images/NA-BX686_LakeMe_G_20130816175615.jpg

loading

Inside the Diner

Hyderabad: After dilly-dallying for some time, monsoon remained slightly active during the last one week over Telangana State with above normal rainfall (+36) being received during the week. Light to moderate rainfall occurred at many places on most of...

(Phys.org)—A small team of researchers with the Chinese Academy of Sciences has conducted a study of organic matter in parts of China and in so doing has concluded that the southern drift of the East Asian monsoon rain belt will reverse itself and trav...

I am not a member of this collective.RE

This is a response to requests I received to clarify what I meant by “stupidity” in the following tweet:Meticulo...

Congress’ biggest climate denier visited the Arctic. What happened next will disappoint you.Earlier this month, BuzzFeed News re...

Recent Facebook Posts

Retweeted Eugene Gu, MD (@eugenegu): Trumpcare is Deathcare. We need to repeal and replace the President of the United States. #SaveACA

36 minutes ago

Retweeted Jeb Sanford (@JebSanford): Do you approve of the job that @realDonaldTrump has done as President? Retweet to spread poll!!

37 minutes ago

Retweeted Jon Favreau (@jonfavs): Heller was a no until billionaire casino magnate Steve Wynn threatened him almost daily. What a sad, perfect..

40 minutes ago

Retweeted David Corn (@DavidCornDC): Will cancer-stricken @SenJohnMcCain help a draft-dodger who called him a loser take health care from millions?..

42 minutes ago

Xeni Jardin on Twitter

This is important. https://t.co/d65EFbf1rq

46 minutes ago

Diner Twitter feed
Knarf’s Knewz

This is a response to requests I received to clari [...]

Congress’ biggest climate denier visited the Arcti [...]

New research offers a reminder that dietary supple [...]

Diner Newz Feeds
  • Surly
  • Agelbert
  • Knarf
  • Golden Oxen
  • Frostbite Falls

Just Because. Watch a Master Magician Slice an Oli [...]

Sperm Counts Have Plummeted Among Western Men, Sci [...]

Thanks for posting the article on Greenland.  [...]

RE on his "charm offensive" as he works [...]

Congress’ biggest climate denier visited the Arcti [...]

Quote from: Eddie on Today at 10:50:39 AMQuote fro [...]

Quote from: agelbert on Today at 09:58:23 AMElectr [...]

Electric Car Drivers: Desires, Demands & Who T [...]

This is a response to requests I received to clari [...]

Congress’ biggest climate denier visited the Arcti [...]

New research offers a reminder that dietary supple [...]

Quote from: K-Dog on July 20, 2017, 01:36:05 PMOil [...]

Oil for gold. Black Russian gold, no Texas tea.Whi [...]

As I remember the deal was struck & signed on [...]

Martin Landau was probably most famous for his rol [...]

If the Nukes don't get ya, the STDs will.  Th [...]

I'm jealous. I wanna go to collij. [...]

I have been doing research for my next adventure w [...]

https://www.washingtonpost.com/national/governor-d [...]

Alternate Perspectives
  • Two Ice Floes
  • Jumping Jack Flash
  • From Filmers to Farmers

Have You a Positive Personal Practice? (Part Two) By Cognitive Dissonance   My apologies for how tar [...]

Have You a Positive Personal Practice? By Cognitive Dissonance   Those who dive deeply into unmaskin [...]

Dark Homes By Cognitive Dissonance   While we closed on the purchase of our mountain cabin in March [...]

The Greater Depression By Cognitive Dissonance   Once or twice a month Mrs. Cog and I pack up the ca [...]

SkyNet is Sentient and Will Destroy Your Investments and Pension By Cognitive Dissonance     Do you [...]

Event Update For 2017-07-23http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.html Th [...]

Event Update For 2017-07-22http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.html Th [...]

Event Update For 2017-07-21http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.html Th [...]

Event Update For 2017-07-20http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.html Th [...]

Event Update For 2017-07-19http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.html Th [...]

Well, at least it was made sure that the Svalbard Global Seed Vault looks real pretty (photo courtes [...]

Now it's data that makes the world go round? It's comfortably accepted by many that what w [...]

I left off last week's post – "Money Doesn't Grow on Trees, Industrial-Scale Renewabl [...]

When you wish upon a star the Blue Fairy sends Tinker Bell, who plants a magic seed, which grows int [...]

Wendell Berry: "What I stand for is what I stand on"; Fanfare Ciocărlia: "What we pla [...]

Daily Doom Photo

man-watching-tv

Sustainability
  • Peak Surfer
  • SUN
  • Transition Voice

Can Foodies Save the Planet?"Facing all of these grave threats, humans collectively have chosen to go insane."Having a [...]

Snowflake Summer"Why has academia descended into neo-fascist regimentation?"We didn’t give serious thought [...]

Maya Theater States"What generally occurs when a civilization over-extends is not a complete disappearance but a r [...]

The Ragweed Tribe"We bonded much more deeply than crash-pad stoners or cubicle rats. More like soldiers in a com [...]

Concrete Solutions"We want to take the atmosphere back to its pre-industrial chemistry as quickly as possible. Fo [...]

The folks at Windward have been doing great work at living sustainably for many years now.  Part of [...]

 The Daily SUN☼ Building a Better Tomorrow by Sustaining Universal Needs April 3, 2017 Powering Down [...]

Off the keyboard of Bob Montgomery Follow us on Twitter @doomstead666 Friend us on Facebook Publishe [...]

Visit SUN on Facebook Here [...]

In the echo-sphere of political punditry consensus forms rapidly, gels, and then, in short order…cal [...]

Discussions with figures from Noam Chomsky and Peter Senge to Thich Nhat Hanh and the Dalai Lama off [...]

Lefty Greenies have some laudable ideas. Why is it then that they don't bother to really build [...]

Democracy and politics would be messy business even if all participants were saints. But America doe [...]

A new book argues that, in order to survive climate change and peak oil, the global money economy ne [...]

Top Commentariats
  • Our Finite World
  • Economic Undertow

https://engineering.stanford.edu/news/who-will-control-swarm "The world is already well on its [...]

Those three guys with their hands crossed (one behind his back) all look like they know (or have hea [...]

It might be best to separate what machines need to do from humans. it's the machines that need [...]

Hopefully we are smart enough to use scarce electricity to keep water pumping over the nuclear fuel [...]

Welcome to new day, added 's' to 'http' so everyone should feel more secure ... [...]

Just to be clear about all the different administrations mentioned; All the while not one thing that [...]

Clintons job was to keep the party going, BJs under the desk for all! Bushs job was to tell jokes an [...]

Hey Steve, why don't you look into becoming REs neighbor. After the great power down, you can l [...]

Think Vermont. All you need is a wood stove and an internet connection. I'll bet you have a lot [...]

RE Economics

Going Cashless

Off the keyboard of RE Follow us on Twitter @doomstead666...

Simplifying the Final Countdown

Off the keyboard of RE Follow us on Twitter @doomstead666...

Bond Market Collapse and the Banning of Cash

Off the microphone of RE Follow us on Twitter @doomstead666...

Do Central Bankers Recognize there is NO GROWTH?

Discuss this article @ the ECONOMICS TABLE inside the...

Singularity of the Dollar

Off the Keyboard of RE Follow us on Twitter @doomstead666...

Kurrency Kollapse: To Print or Not To Print?

Off the microphone of RE Follow us on Twitter @doomstead666...

SWISSIE CAPITULATION!

Off the microphone of RE Follow us on Twitter @doomstead666...

Of Heat Sinks & Debt Sinks: A Thermodynamic View of Money

Off the keyboard of RE Follow us on Twitter @doomstead666...

Merry Doomy Christmas

Off the keyboard of RE Follow us on Twitter @doomstead666...

Peak Customers: The Final Liquidation Sale

Off the keyboard of RE Follow us on Twitter @doomstead666...

Collapse Fiction
Useful Links
Technical Journals

There is evidence that access to green spaces have positive effects on health, possibly through bene [...]

The objectives of this study are to use a clustering technique to identify homogeneous rainfall regi [...]

The city of Rio de Janeiro (Brazil) is located in a tropical zone of the planet, in medium latitude [...]

Drought is one of the major threats to societies in Sub-Saharan Africa, as the majority of the popul [...]

Follow on our http://www.doomsteaddiner.net/forum/