There’s been plenty of hand-wringing in recent weeks as America’s oil rig count has dropped precipitously in the face of plunging crude prices. This has sparked worries that the shale boom’s best days are behind it. It seems reports of fracking’s death have been greatly exaggerated. –Walter Russell Mead, The American Interest, 18 February 2015
For oil output in Texas to more than double in the last three years, and increase so dramatically that the state now produces more than 37% of US oil, is undoubtedly one of the most remarkable energy success stories in US history. At the current pace of consistent annual increases of 25%, daily Texas oil production is on track to surpass the 4 million barrel milestone by as early as July of this year. With those projected increases in Texas oil output, the state could soon surpass Iraq and even Canada to move up in the international oil production rankings to become the world’s No. 5 oil producer this year. –Mark J. Perry, AEIdeas, 2 March 2015
Oil prices have collapsed, drilling rigs are being idled, and energy companies are cutting jobs. All signs suggest a slowdown in the US oil industry – and yet output continues to grow, reaching highs not seen since Richard Nixon occupied the Oval Office. That’s because shale oil production has proven resilient. What’s more, companies are getting more bang for their buck, redoubling on the most productive oil wells and finding new drilling efficiencies. –Jared Gilmour, The Christian Science Monitor, 3 March 2015
Over the next 18 months BHP plans to cut its spending on US shale fields by $2.4bn, and reduce the number of rigs drilling its acreage by 40 per cent to 16 by the end of June. However, the slowdown in activity, flagged in this week’s half-year results, does not mean that production will drop by 40 per cent. Improved productivity and efficiency is allowing BHP to do more with less. And it is not alone. It is something that is being repeated across the industry. BHP says its drilling costs in the Black Hawk field in the Eagle Ford shale declined by 17 per cent in the six months to December to $3.7m a well, while drilling time improved 11 per cent to 21 days per well. “We had rig moves that were taking eight days, they are now taking three,” Tim Cutt, BHP’s petroleum boss, told the Financial Times in an interview. –Neil Hume, Financial Times, 26 February 2015
“I HONESTLY thought it was a joke,” says Sandy Pinney. She means the threat that Windsor, her hometown, along with 14 other towns along New York’s border with Pennsylvania, may secede and join Pennsylvania. But it is deadly serious. The towns are in New York’s Southern Tier. They sit on top of the Marcellus Shale, which is full of natural gas. New Yorkers, unlike their Pennsylvanian neighbours, are not allowed to tap the gas because of a state ban on hydraulic fracturing (fracking) announced by Andrew Cuomo, the governor, on December 17th. Hours later on the same day, a state panel rejected a bid to build a casino in the Southern Tier. That was the last straw. A state lawmaker sent a survey to constituents asking about secession, and the idea began to take hold. —The Economist, 27 February 2015
Bulgaria’s parliament scrapped preferential prices for new renewable energy installations on Thursday as the country is struggling to cut deficits in the energy sector and keep a lid on consumers’ utility bills. High utility bills had sparked protests which toppled the government in February 2013. —EurActiv, 27 February 2015
The solar, hydro and wind sector exploded following the introduction by many European countries of favourable feed-in tariffs (“FiTs”) that paid renewable-power generators above-market rates for their output and provided subsidies to consumers who installed renewable energy solutions in their homes. With generous and long-lasting FiTs promised by governments, investment poured in. However, demand was grossly underestimated, which led to a substantial increase in consumer energy prices as the FiT costs were passed on, and ever-increasing deficits in the energy budgets of many governments. As governments rolled back FiTs and failed to honour other governmental guarantees, investors in the renewable sector have seen their investments decimated, or at least substantially reduced. —Jones Day, February 2015
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