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Being heavily invested in North American unconventional oil producers, I always look forward to the Bakken billionaire Harold Hamm appearing to share his wisdom.
What I have been looking for these days is his opinion on how much American oil production is going to impact the oil price going forward. He addresses that and several other issues:
- 9 out of 10 Americans believe that the U.S. should strive for energy independence.
- Hamm is Romney’s energy adviser.
- Hamm has been talking about energy independence two years ago; in response to the question of whether Obama has contributed to the current boom Hamm says not in any way.
- The boom is due to the industry’s ability to now produce non-mobile oil, or oil that is trapped in tight rocks.
- There will not be a crude oil glut created by the boom in American production the way there has been with natural gas. Oil has one giant unconventional oil field (Bakken) and a couple of smaller ones. There are 15 shale gas plays.
- Tax breaks for oil companies are necessary to encourage exploration and experimentation which allows for plays like the Bakken to have breakthroughs.
Bakken Billionaire Harold Hamm – There Will Be No Glut of Oil in the US
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CanadianValue - 10 months ago
"Now if consumers shift to natural gas".......oil demand is all about transportation. How many folks do you know that are looking to buy a natural gas powered car within?
I know none. I wouldn't even know how to buy one. Or where to fill it up. And I couldn't really fill it up, because there is no infrastructure in place.
That isn't to say that the rig count shifting to oil isn't going to result in American production increasing. But after five years of tight oil drilling American total oil production has increased about 200k barrels per year. Meanwhile global oil demand grows at a pace of one million barrels per year.
The situation is improving, but it is going to be hard to create a glut when the market is global and we have a swing producer (Saudis) willing to keep the market tight enough for their desired price.
I am biased though as I am long oil, so keep that in mind.
I know none. I wouldn't even know how to buy one. Or where to fill it up. And I couldn't really fill it up, because there is no infrastructure in place.
That isn't to say that the rig count shifting to oil isn't going to result in American production increasing. But after five years of tight oil drilling American total oil production has increased about 200k barrels per year. Meanwhile global oil demand grows at a pace of one million barrels per year.
The situation is improving, but it is going to be hard to create a glut when the market is global and we have a swing producer (Saudis) willing to keep the market tight enough for their desired price.
I am biased though as I am long oil, so keep that in mind.
Rajprasad - 10 months ago
oil price will go down as more and more nat gas will be used for transportation. school buses are run on nat gas, WM, AT&T, Fed Ex UPS are all converting their fleet to nat gas. Oil will go dn to 60 and gas will go up to 5 and economy will go up 5%/year for next 20 yrs
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In the meantime there's a huge glut of natural gas at very low prices and huge remaining untapped reserves. So it would seem rational for as many energy consumers as possible to shift to natural gas consumption.
Now if consumers shift to natural gas wouldn't there be a commensurate reduction or slowing in oil demand? Wouldn't the combined effect of drilling and the backing off of demand growth create a scenario for a glut in oil?