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Economy
Texas drilling permits drop 50 percent
2014-12-26
Oil drilling activity in Texas is falling dramatically, as the steep decline in crude prices since the summer takes hold, state regulators reported Tuesday.

The Texas Railroad Commission issued 1,353 permits for oil drilling last month, 50 percent less than it did the previous month. And in the months ahead, that will likely translate to rigs being shut down and layoffs across oil fields in West and South Texas.

“There’s more to come in the months ahead,” said Pavel Molchanov, an energy analyst with Raymond James. “This isn’t pleasant, but this is how the market rebalances itself.”
Posted by:badanov

#19   New/planned wells are being affected, however according to railroad stats, existing wells are still pumping as car loadings haven't dropped significantly. This has impacted capital markets for all the various planned pipelines, so CBR (Crude By Rail) is going to be with us for a long time.

Nothing is more penny wise and pound foolish than Crude By Rail, but the Obamagarches love it, SO....
Posted by: Thing From Snowy Mountain   2014-12-26 22:03  

#18  +1 on the tariffs, except I think they should be reserved for advanced energy production - supercapacitors, black solar cells, innovative fusion research, development of thorium fission and other small reactors, magneto-hydrodynamics, and so forth. Putting it in the general fund just pisses it away.
Posted by: KBK   2014-12-26 21:00  

#17  Old Spook, that might be an idea but of course the government would not use the windfall wisely, as usual
Posted by: European Conservative   2014-12-26 20:55  

#16  This is one place where I might deviate from my usual libertarian economic viewpoint, and say the US should emplace tariffs to maintain $75-80 per barrel, as an incentive for maintaining domestic production -- as a matter of strategic importance. Put the tariff money into an account like most states have, that are "rainy day" money. This would be used only to expand, fill and maintain the strategic petroleum reserve.
Posted by: OldSpook   2014-12-26 20:21  

#15  Nickel-and-diming the use of natural gas in cars, trucks, and trains is the EPA's way of protecting foreign oil producers.

IMHO.
Posted by: Thing From Snowy Mountain   2014-12-26 17:42  

#14  AP: LNG/CNG is being used in more OTR rigs; especially the daily delivery types with fixed routes; lack of infrastructure is preventing the long haul use to spread. And the Federal Railroad Admin hasn't (or won't) define requirements for the LNG/CNG tank car style tenders needed to supply the road locomotives. BNSF and UP have done studies and the results are promising; but until the tender issue is solved, it isn't going to happen. UP is currently using LNG in yard switchers in the LA area; the servicing trucks can top them off readily from the access roads.
Posted by: USN, Ret.   2014-12-26 15:06  

#13  We need to get independent of the ME oil ticks. We have had scary relations with them with respect to our oil supply. Read "The Oil Kings" if you are game for a factual horror story. I see us using coal and nuclear for electricity, some natural gas. Get dual fuel diesel/LNG for long haul trucks and railroads. Save oil for petrochemicals and gasoline.
Posted by: Alaska Paul   2014-12-26 13:36  

#12  The Soddies probably can keep it going. It's the other countries that are "fracked."

I'd like to see the US put a tariff on all imported oil. It would keep domestic industry going and be a source of revenue for the deficit.

Al
Posted by: frozen al   2014-12-26 13:26  

#11  Foolish strategic move. We should push the industry to continue to grow in the US. The Soddies cant hold them this low for long. They are doing it to get exactly this outcome from the US. Never let an addict grow his own. Even the soddies get it.
Posted by: 49 Pan   2014-12-26 11:30  

#10  New/planned wells are being affected, however according to railroad stats, existing wells are still pumping as car loadings haven't dropped significantly. This has impacted capital markets for all the various planned pipelines, so CBR (Crude By Rail) is going to be with us for a long time.
Posted by: USN, Ret.   2014-12-26 10:30  

#9  Falling wages will make oil cheaper to produce, and probably more productive as less productive staff are no longer employed.
Posted by: Bright Pebbles   2014-12-26 09:15  

#8  How's this hitting the boom in Dakota?
Posted by: OldSpook   2014-12-26 08:44  

#7  Ima waiting for your choice of Double Green-Stamps, flatware, or a drinking tumbler with each fill-up.
:-(
Posted by: Besoeker   2014-12-26 08:21  

#6  1980s: "Please God let there be another Oil Boom I promise not to piss it all away next time."
But we always do.
Posted by: Glenmore   2014-12-26 06:24  

#5  Glenmore's comment could have bee written by Drake.
Posted by: Shipman   2014-12-26 04:44  

#4  Of course none of this is new to those who smell the sulphur, but a lot of Drillers, roustabouts, pumpers, gaugers and pipeliners made a living and put kids through school when oil was less than $4.00 per barrel. Investors and speculators made money too, and some went bust. The embargo of the early 1970's changed everything and created a 'new normal' in crude oil production and pricing. American ingenuity and technology eventually caught up. Geologic and drilling technologies exist today that no one could have dreamed of back in the 1950-70's. Supply and demand will dictate the price, it always has. I'm optimistic about oil and gas.
Posted by: Besoeker   2014-12-26 02:03  

#3  Yeah, waiting to see how that hits us out here in the gulf. Off shore rigs cost so much frigging more to operate than land rigs, this may shut down exploration/production wells out here for a while.

Which is seriously going to suck in a bad way.
Posted by: Silentbrick   2014-12-26 01:11  

#2  Over 20 fracking trucks are just now mothballed at Sure Fire fracking company out of Houston, Texas. (Link)
Posted by: Ebbomosh Hupemp2664   2014-12-26 00:57  

#1  We've released the rig that's been working for us in Louisiana. About $80 per barrel is needed to justify spending millions on the kind of well we can drill in the field I work. Drilling costs will come down as demand for rigs and services falls. Oil supply will decline as new wells are not drilled. Then prices for oil will rise. And we'll drill again. Until/unless costs rise and prices drop again. So rar we haven't started layoffs, but we've cut hiring, and layoffs next summer would not surprise me if prices look like they'll stay low for a significant time.
Posted by: Glenmore   2014-12-26 00:54  

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