| The RFS was ALL ABOUT reducing our reliance on foriegn imported Crude so that we don't have to GO BACK to defend our supplies like during the Iraq war.
The US Shale producers are on the ropes.. ( http://www.energyintel.com/pages/worldopinionarticle.aspx?DocID=907... )
Debt Bomb Ticking for US Shale | | November 2015 | Paul Merolli |
The US E&P sector could be on the cusp of massive defaults and bankruptcies so staggering they pose a serious threat to the US economy. Without higher oil and gas prices — which few experts foresee in the near future — an over-leveraged, under-hedged US E&P industry faces a truly grim 2016. How bad could things get and when? It increasingly looks like a number of the weakest companies will run out of financial stamina in the first half of next year, and with every dollar of income going to service debt at many heavily leveraged independents, there are waves of others that also face serious trouble if the lower-for-longer oil price scenario extends further.
"I could see a wave of defaults and bankruptcies on the scale of the telecoms, which triggered the 2001 recession," Timothy Smith, president of consultancy Petro Lucrum, told a Platts energy conference in Houston last week. Much has been made about the resiliency of US oil production in the face of low prices, but the truth is that many producers are maximizing their output — even unprofitable volumes — because they need the cash flow to service their debt (related). "As an industry, we're at the point where every dollar of free cash flow now goes to paying back debt," Angle Capital's Steve Ilkay told the same conference. Ilkay, who advises North American producers on asset management, said during the boom years of 2012-14 about 55% of the sector's free cash flow, which is calculated by subtracting capital expenditures from operating cash flow, was allocated toward debt repayment. |
Consequently US Crude Oil production is going to fall.. even the Big boys can't make it work at these prices..
( http://www.fool.com/investing/general/2015/11/29/another-sign-us-oi... )
Prognosticators who once expected a half-million-barrel decline off that peak by the end of the year are now estimating that production could fall by 700,000 barrels from the peak before the year is out. Given current industry activity levels, another 900,000 barrels per day of production could be lost in 2015. That number might even prove to be conservative, given some of the preliminary capex budgets producers are putting out, suggesting that activity levels could be heading meaningfully lower in 2016.
Big oil backs off on shale
One company that's clearly tapped the brakes on shale-fueled growth is ConocoPhillips(NYSE:COP). Before the downturn, the company had been enjoying strong double-digit year-over-year production growth from its Bakken and Eagle Ford shale assets. However, it now anticipates that its fourth-quarter production will be modestly lower. That's not because it's run out of opportunities, but simply because the company isn't running enough rigs to even maintain its production, let alone grow it. That's something that Matt Fox, ConocoPhillips' EVP of E&P, detailed on its third-quarter conference call: So to keep Eagle Ford production flat probably requires between seven and eight rigs. Currently we're running six. The Bakken requires about closer to five rigs. We're currently running four. So you'd be looking at maybe three additional rigs to maintain production flat. And if you look at all-in cost, drill, complete, hookup and so on you can use an order of magnitude of $150 million, per rig line per year. So maybe $400 million.
In other words, just to keep its production flat in those two shale plays, the company would need to add three more rigs at a cost of upwards of $400 million for the full year. However, given where commodity prices are right now, the company doesn't see a need to keep its production flat in these two plays. That's partially a function of ConocoPhillips' global business model, where it has about a half dozen major projects that are just beginning to ramp up. So, with production growth coming elsewhere, it could cut back on shale for now.
As Growth energy said in response to EPA's Annoucement.. "It's time to BUST THROUGH the BLEND WALL."
say what you will but with the updated numbers this does it.
| | | | | | | | Total | | | | | | | | | | | | Gasoline supplied | | | | Ethanol | | ethanol | corn bu. Byn | | Plant Capacity | | | | | myn bbls | byn gallons | domestic | byn gallons | percentage | WASDE | | | | | | | | per year | per year | % chng | | exports | per year | % chng | domestic | | 9/1/xx | difference | | | | | 2001 | 3143 | 132.01 | | | | 1.77 | | 1.34% | 0.64 | | | | | | | | 2002 | 3229 | 135.62 | 2.74% | | | 2.14 | 21.25% | 1.58% | 0.78 | | | | | | | | 2003 | 3261 | 136.96 | 0.99% | | | 2.81 | 31.31% | 2.05% | 1.02 | | | | | | | | 2004 | 3333 | 139.99 | 2.21% | | | 3.40 | 21.00% | 2.43% | 1.24 | | | | | | | | 2005 | 3343 | 140.41 | 0.30% | | | 3.90 | 14.71% | 2.78% | 1.42 | | | | | | | | 2006 | 3377 | 141.83 | 1.02% | | | 4.88 | 25.13% | 3.44% | 1.77 | 1.6 | -0.17 | | | | | | 2007 | 3389 | 142.34 | 0.36% | | | 6.52 | 33.61% | 4.58% | 2.37 | 2.12 | -0.25 | | | | | | 2008 | 3290 | 138.18 | -2.92% | | | 9.31 | 42.79% | 6.74% | 3.39 | 3.05 | -0.34 | | | | | | 2009 | 3284 | 137.93 | -0.18% | | | 10.94 | 17.51% | 7.93% | 3.98 | 3.71 | -0.27 | | | | | | 2010 | 3282 | 137.84 | -0.06% | 12.902 | 0.398 | 13.30 | 21.57% | 9.36% | 4.84 | 4.59 | -0.25 | | | | | | 2011 | 3195 | 134.19 | -2.65% | 12.735 | 1.195 | 13.93 | 4.74% | 9.49% | 5.07 | 5.02 | -0.05 | | | | | | 2012 | 3178 | 133.48 | -0.53% | 12.479 | 0.741 | 13.22 | -5.10% | 9.35% | 4.81 | 5 | 0.19 | | | | | | 2013 | 3228 | 135.58 | 1.57% | 12.671 | 0.619 | 13.29 | 0.53% | 9.35% | 4.83 | 4.64 | -0.19 | | | | | | 2014 | 3256 | 136.75 | 0.87% | 13.454 | 0.846 | 14.30 | 7.60% | 9.84% | 5.20 | 5.12 | -0.08 | | | | | | 2015 | 3336 | 140.11 | 2.46% | 13.93 | 0.870 | 14.80 | 3.50% | 9.94% | 5.34 | 5.23 | -0.11 | | 95.48% | | | | 2016 | | 142.80 | 1.92% | 14.27 | 1.005 | 15.27 | 3.18% | 9.99% | 5.51 | 5.28 | -0.23 | | 98.52% | | | | 2017 | | | | | | | | | | | | | | | | | | | | | 2.40% | 15.52% | 3.18% | | | | | | | | | | | | | | | | | | | | Grain | Other | | | | | | | | | | | | | | | | | | | | | | | | | | | | plants | 214 | 15.5 | | 95.48% | 15.356 | 0.144 | 0.94% | | | | | | | | | | | | | | | 1001.70 | 9.39 | k bbl/day capacity | | | | | | | | | | | | | | | | | | | So are we going to have a DOMESTIC Energy sector...?
Or are we gonna go back to the Middle East to protect our energy supplies?
That's the choice.
Edited by JonSCKs 12/1/2015 07:08
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We need to BUST THROUGH the E-10 Blend Wall.
