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Economy
Who Will Wind Up Holding the Bag in the Shale Gas Bubble?
2014-11-26
We've been writing off and on about how the sudden fall in gas prices has been expected to put a lot of shale gas development on hold. In fact, quite a few analysts believe that one of the big Saudi aims in refusing to support oil prices was to dent the prospects for competitive energy sources, not just renewables like wind and hydro power, but shale gas.

Even though OilPrice reported that US rig count had indeed fallen as oil prices plunged, John Dizard at the Financial Times (hat tip Scott) gives a more intriguing piece of the puzzle: the degree to which production is still chugging along despite it being uneconomical. The oil majors have been criticized for levering up to continue developing when it is cash-flow negative; they are presumably betting that prices will be much higher in short order.
Posted by:badanov

#7  Be real Besoeket, soon the the world will get wise to our fix it again tony currency and demand real money like the Euro for oil and they will refuse to sell us anything at all. Then they'll dump the dollar and replace it with a currency based on something else and all we'll have is cases of tuna fish and out-of-repair elevators. Srsly peak oil is nothing to sneer at, Drake saw it coming clearly righted before he singed the Spanish because they had peak silver. Buy low, sell high, or get volume.
Posted by: Shipman   2014-11-26 15:21  

#6  Seems to me there is some law about flooding a market to reduce prices in order to put competition out of business. The US should apply sanctions to Saudi Arabia.

Yeah, I like cheap oil, but I'd rather keep the Wahhabi out of my oil. It gunks up everything it touches.
Posted by: rjschwarz   2014-11-26 15:12  

#5  I wonder why there has been little reporting on the fact that many small shale oil producers have hedged their output through 2015 (and some even later, and most at $85+). Thus, they have no incentive to cease drilling for the time being.
Posted by: Ulique Pelosi8805   2014-11-26 10:16  

#4   The world will run out of money to pay for that oil long before it runs out of the oil itself.
You read it here first!
Posted by: Anguper Hupomosing9418    2014-11-26 06:52  

#3  IMA taking the 'long view.' I've been hearing stories of the oil patch playing out and the world running out of oil since the 1950's.
Posted by: Besoeker   2014-11-26 06:06  

#2   Betting on infinite expansion in a finite world has never been a good idea, but it might pay off for those who bail out the soonest.
Posted by: Anguper Hupomosing9418    2014-11-26 05:58  

#1  Since the EPA and the entrenched mindset at DOE are antifossil fuel, if there is a bubble and a collapse of shale gas, there will not be any help.

If on the other hand if were solar, wait, that's already happened...wind, that too, or some other cockamamie alternate energy source, there would be/has been a bail out.

If this were coal, the Dems would try to regulate it out of business.
Posted by: Mystic   2014-11-26 00:49  

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