Domestic Shale Oil & Gas Production Take the Spotlight in Stabilizing U.S. Economy

The View from Jamestown - ShaleOil

Shale gas output growth just beginning

Matt Smith, commodity analyst at Schneider Electric says that the shale-driven growth in U.S. natural gas production is still likely “in the first half” of the game. He went on to say, “As natural gas prices gradually increase, we should see more production coming online because it’s incentivized by these higher prices. And so the unconventional gas story in the U.S. has a log way to run yet.” Although some countries can experience surging production from shale, they will not be able to replicate the U.S. boom, he added.

North Dakota tops 1M barrels per day

North Dakota oil production rose from 977,000 barrels per day in March to more than 1 million barrels per day in April, data from the state Department of Mineral Resources shows. Most of the output came from the Bakken Shale play and the Three Forks formations.

Domestic petrochemical exports expanding because of increased U.S. shale production

ExxonMobil Chemical President Steve Pryor said that the U.S. is joining the Middle East as a major petrochemical exporter because of the shale boom. Eventually, U.S. shale gas will find its way to Asia and Latin America in the form of resin pellets, according to the article. The American Chemistry Council estimates a total of $71.7 billion in new shale-related petrochemical investments.

Iraq’s impact on oil prices mitigated by U.S. shale boom

Nansen Saleri, CEO at Quantum Reservoir and former head of reservoir management at Saudi Arabian Oil said that the U.S. shale boom, which has driven growth in crude oil production, has prevented oil prices from increasing at a higher rate amid the crisis in Iraq. “Were it not for the increase in U.S. production that’s gained close to 2 million barrels a day, we would see a $20 to $30 rise in prices,” he said.

Even non-producing states benefit from U.S. gas boom say industry experts

In a Fuel Fix article, IHS Vice Chairman Daniel Yergin told Congress’ Joint Economic Committee that the surge in domestic natural gas production is contributing to the economic growth of U.S. states, even in states that don’t drill. Yergin said that approximately one-fourth of the 2.1 million jobs related to unconventional production can be found in those nonproducing states. Business leaders also noted that other industries are gaining from the boom.

Study reveals that oil and gas capital spending declined in 2013

According to an Oil & Gas Journal article, Deborah Byers, oil and gas leader at Ernst & Young said that capital expenditures by U.S. oil and natural gas firms in 2013 decreased by 7% from 2012, leading to a 9% gain in oil and gas reserves and strong energy prices. The decrease “is due in part to the advancement in technologies and processes that are making exploration and production less expensive and more efficient,” she said.

ExxonMobil shale gas exploration with Turkey almost certain

Turkish energy ministry official Salami Incedalci said that ExxonMobil and state-controlled Turkish Petroleum Corp. could team up on shale natural gas exploration in parts of Turkey.

The Reuters Newswire confirmed the claim in a report that quoted a Turkish energy official as saying that U.S. oil firm ExxonMobil is in talks with state-run Turkish Petroleum Corporation over a venture to explore for shale gas in the country’s southeast and northwest regions.

According to the report, Exxon held talks with TPAO in 2012 to cover a partnership in shale, but the negotiations were inconclusive. Turkish officials say talks have since advanced and are likely to result in an agreement.

The partnership could take the sting out of the possible loss in revenues suffered in the Iraq conflict if the crisis is not resolved in the near future.

Chicken Little—Is the sky really falling?

Economy - The Chemical Company

Whenever a market peaks, investors, financial advisors, and the media raise the alarms about a major sell-off. The S&P 500 and Dow Jones Industrial Average peaked less than two weeks ago. The Wall Street media in its unconscionable effort to sensationalize information and sell news at any cost immediately predicted a market collapse that will dwarf the great depression, sending everyone into panic mode.

Fortunately, cooler heads occasionally prevail and look at the overall picture more realistically. According to Jon C. Ogg of 24/7 Wall Street, a market correction is inevitable, but there are several key indices to watch that put the condition of the marketplace in perspective. Keep in mind that no matter what the indicators say, none of them signal serious or grave concerns for the broader markets in unison. The entire market is not going to collapse overnight.

Nonetheless, if half of the key issues to watch grow beyond the threshold levels, then there will be too many items occurring simultaneously to ignore. The eight items to watch are: The 10-year Treasury; Russia and Ukraine: gold prices; oil, black gold; alternative energy; market volatility—the VIX; momentum stocks; and biotech.

Ogg concluded his article saying there are more things to consider. However, the aforementioned appears to be a reasonable guide to predicting trends so investors can respond to the market appropriately instead of reacting to hype generated by the Wall Street media. Chicken Little and Henny Penny have time to put their eggs in the right baskets. The sky is not falling today.