Most underplayed story imo: the rise of shale oil
Now, I know all carbon fuels are horrible for global warming, but this post is just about the economic impact of shale oil on the US. Part of me can't help but be happy that the countries hurt most by the rise of shale oil are Russia and Saudi Arabia. OPEC's price war to drive US shale oil out of business has been an utter failure.
Eventually, the US is projected to produce more oil a year than Saudi Arabia. If you had said that even 5 years ago, people would have thought you had gone crazy. Yes, there's a lot of talk about shale oil, but I personally think it's the most surprising and significant geopolitical and economic development of the century so far. Some stories:
Global technically recoverable oil shale reserves have recently been estimated at about 2.8 to 3.3 trillion barrels of shale oil, with the largest reserves in the United States, which is thought to have 1.5–2.6 trillion barrels.
https://en.wikipedia.org/wiki/Shale_oil
Following a painful war with OPEC, U.S. oil output is poised to rebound this year, thanks to healthier prices and a strengthened business model.
That could set the stage for America to set a record-breaking 2018, taking out the all-time oil production high set in 1970, according to new forecasts published this week by the U.S. Energy Information Administration.
The U.S. oil comeback is being led by the Permian Basin, a hotbed of shale drilling in Texas and New Mexico. The Permian is so rich in shale oil that frackers can profitably drill even in today's modest prices in the low $50-a-barrel range.
"Shale has proven to be remarkably resilient. The key is that any dollar invested today is double as efficient as it was two years ago," said Tamar Essner, energy director of Nasdaq Advisory Services.
http://money.cnn.com/2017/03/08/investing/record-us-oil-production-eia/
And yet, shale has defied the naysayers. By the time OPEC meets in Vienna on May 25, U.S. output will be approaching the 9.5 million barrels a day mark -- higher than in November 2014 when OPEC started a two-year price war. The rebound has been powered by turbocharged output in the Permian basin straddling Texas and New Mexico.
Forced to adjust to lower prices, shale firms reshaped themselves into leaner operations that can thrive with oil just above $50 a barrel. Brent crude, the global benchmark, added 5 cents to $50.82 a barrel as of 9:59 a.m. in New York.
Since OPEC agreed to cut output six months ago, U.S. shale production has risen by about 600,000 barrels a day, wiping out half of the cartel’s cut of 1.2 million barrels a day and turning the rapid victory Saudi Arabia foresaw is turning into a stalemate.
https://www.bloomberg.com/news/articles/2017-05-11/in-its-fight-against-u-s-shale-oil-opec-risks-lower-for-longer