Uh, natural gas production increased in 2005 because the price increased! In 2005 Tillerson was investing XOM’s windfall profits into Qatar’s LNG infrastructure and planning to import LNG into America. The fracking revolution wasn’t realized until 2010 because $12 Henry Hub natural would never have worked for America.
After the Inauguration and regulations decrease, our production should increase. There could be an opportunity to “Top Off” the Strategic Petroleum Reserve.
The Climate Alarmist haven’t given up and will again try to destroy our home grown energy production.
I agree, John. Topping off the SPR is a good use of the increased oil production that is on the way. Yes, the Climate Alarmists are not likely to give up, but their voices are going to be drowned out by the pro-oil and gas voices that will be controlling all energy agencies in the federal government. It will be a beautiful thing to watch! Thanks for your comment, John. Great to hear from you. Ed
"We're not going to see anybody in 'drill, baby, drill' mode," ExxonMobil Upstream President Liam Mallon said at the Energy Intelligence Forum conference in London.
"A radical change (in production) is unlikely because the vast majority, if not everybody, is focused on the economics of what they're doing," Mallon added.
“So the thesis of this book stands or falls with the correctness of the decline rate that Brown gives us. Therefore I have calculated with several different parameters as regards the decline rate, and all point in the same direction. The difference between them is a few years at most. Therefore I assume that my thesis is solid, which is that the end of global net oil exports in 2030-2032 (Brown’s scenario) is a best-case scenario.
Collapse can, I think, begin in earnest already in 2026, only because of too little diesel exports. Observe that oil exports vanish successively, more and more, not all at once.”?
Ed, I have been reading you for a while, but I was not aware of your background.
This may be a long-shot, but have you met my father, Les Magoon? He was a petroleum geologist at the USGS for 30 years and recently earned a lifetime achievement award with the AAPG for writing the standard textbook for petroleum geology. His “Petroleum System” theory is now widely used in the petroleum industry. He is now a professor at Stanford.
Michael, I have not met your father but knew his name as an icon in the oil and gas industry. I wondered if you might be related, so thanks for passing along that information.
I think you are broadly correct. There’s no incentive for the Operators to increase drilling and production. The Trump environment will allow Companies to prepare for the up coming price increase by building drill pads and other infrastructure, and will enable drilling but not completing wells until the price is right. This allows for pre-investment and gives huge improvements in flexibility. Not sure, but that’s my take.
I'll bite. Increasing supply that outstrips demand lowers prices.
Is it realistic to expect domestic oil and gas companies to increase drilling significantly? This would lead to overproduction and price collapse. What incentive do companies have to increase production given the likely outcome?
Would regulatory relief alone prompt oil and gas companies to act against their financial interests? What am I missing?
Mark and Chris, you both make great points and pose good questions about the possibility of increased production. The oil and gas industry learned hard lessons in the past about over production, so I don't expect huge increases. The increases will be in segments that have been constrained due to unlawful policies by the Biden Administration such as "pausing" the permitting of new LNG facilities and constraining offshore leasing. I've seen estimates that offshore drilling could easily increase by 2 million barrels a day when normal leasing resumes. Likewise, the pausing of LNG permits has caused all kinds of dislocations such as pausing new natural gas pipelines out of the Permian Basin to the Gulf Coast which has caused negative natural gas prices in the Permian and reduced drilling for crude oil. Tthe near-term benefits of an industry-friendly Trump Administration will be the removal of artificial barriers in various aspects of the oil and gas industry that have caused dislocaations and inefficiencies, which will allow production to increase to where it would have been without the Biden Administration anti-oil and gas policies. Ed
Energy exports answers your question. US production is out-stripping US demand, so the producers export energy to other nations. Additional increases of production lead to additional exports.
I agree, Michael. LNG exports have been artificially reduced as a result of the Biden "pause" on LNG permitting, so increased exports of LNG as well as crude oil and petroleum products can absorb a lot of new production without pushing oil and gas prices down. Ed
Uh, natural gas production increased in 2005 because the price increased! In 2005 Tillerson was investing XOM’s windfall profits into Qatar’s LNG infrastructure and planning to import LNG into America. The fracking revolution wasn’t realized until 2010 because $12 Henry Hub natural would never have worked for America.
After the Inauguration and regulations decrease, our production should increase. There could be an opportunity to “Top Off” the Strategic Petroleum Reserve.
The Climate Alarmist haven’t given up and will again try to destroy our home grown energy production.
I agree, John. Topping off the SPR is a good use of the increased oil production that is on the way. Yes, the Climate Alarmists are not likely to give up, but their voices are going to be drowned out by the pro-oil and gas voices that will be controlling all energy agencies in the federal government. It will be a beautiful thing to watch! Thanks for your comment, John. Great to hear from you. Ed
"We're not going to see anybody in 'drill, baby, drill' mode," ExxonMobil Upstream President Liam Mallon said at the Energy Intelligence Forum conference in London.
"A radical change (in production) is unlikely because the vast majority, if not everybody, is focused on the economics of what they're doing," Mallon added.
“So the thesis of this book stands or falls with the correctness of the decline rate that Brown gives us. Therefore I have calculated with several different parameters as regards the decline rate, and all point in the same direction. The difference between them is a few years at most. Therefore I assume that my thesis is solid, which is that the end of global net oil exports in 2030-2032 (Brown’s scenario) is a best-case scenario.
Collapse can, I think, begin in earnest already in 2026, only because of too little diesel exports. Observe that oil exports vanish successively, more and more, not all at once.”?
https://un-denial.com/wp-content/uploads/2024/07/lars-larsen-the-end-of-global-net-oil-exports-13th-edition-2024.pdf
Thanks for your comments and the reference by Lars Larsen. Interesting stuff! Ed
Ed, I have been reading you for a while, but I was not aware of your background.
This may be a long-shot, but have you met my father, Les Magoon? He was a petroleum geologist at the USGS for 30 years and recently earned a lifetime achievement award with the AAPG for writing the standard textbook for petroleum geology. His “Petroleum System” theory is now widely used in the petroleum industry. He is now a professor at Stanford.
Michael, I have not met your father but knew his name as an icon in the oil and gas industry. I wondered if you might be related, so thanks for passing along that information.
Interesting.
I actually did not know what a big deal he was within the industry, until he won the life-time achievement award last year.
To me, he was just “Dad!”
And let me know if you want to talk with him, he is always willing to chat about petroleum geology.
I think you are broadly correct. There’s no incentive for the Operators to increase drilling and production. The Trump environment will allow Companies to prepare for the up coming price increase by building drill pads and other infrastructure, and will enable drilling but not completing wells until the price is right. This allows for pre-investment and gives huge improvements in flexibility. Not sure, but that’s my take.
Thanks for the comments, Chris. I agree and have some additional thoughts written in the comments below Mark's. Ed
I'll bite. Increasing supply that outstrips demand lowers prices.
Is it realistic to expect domestic oil and gas companies to increase drilling significantly? This would lead to overproduction and price collapse. What incentive do companies have to increase production given the likely outcome?
Would regulatory relief alone prompt oil and gas companies to act against their financial interests? What am I missing?
Mark and Chris, you both make great points and pose good questions about the possibility of increased production. The oil and gas industry learned hard lessons in the past about over production, so I don't expect huge increases. The increases will be in segments that have been constrained due to unlawful policies by the Biden Administration such as "pausing" the permitting of new LNG facilities and constraining offshore leasing. I've seen estimates that offshore drilling could easily increase by 2 million barrels a day when normal leasing resumes. Likewise, the pausing of LNG permits has caused all kinds of dislocations such as pausing new natural gas pipelines out of the Permian Basin to the Gulf Coast which has caused negative natural gas prices in the Permian and reduced drilling for crude oil. Tthe near-term benefits of an industry-friendly Trump Administration will be the removal of artificial barriers in various aspects of the oil and gas industry that have caused dislocaations and inefficiencies, which will allow production to increase to where it would have been without the Biden Administration anti-oil and gas policies. Ed
Energy exports answers your question. US production is out-stripping US demand, so the producers export energy to other nations. Additional increases of production lead to additional exports.
I agree, Michael. LNG exports have been artificially reduced as a result of the Biden "pause" on LNG permitting, so increased exports of LNG as well as crude oil and petroleum products can absorb a lot of new production without pushing oil and gas prices down. Ed