Homegrown Shale Oil Suffering in America According to the public, mining the earth’s natural gases and oil seems to be the industry. Prices always seem to be rising in the carbon fuel department, meaning that profits must be good for these industries.
Skyrocketing Oil Prices Look at the gas stations all over the valley to find out exactly where they’re coming from. Prices seem to be on a never ending hike and consumers are reaching deep into their pockets to pay for these commodities. It makes you wonder how much the people at the top are making. Especially since every ounce burned decreases the supply. It makes sense that the market would increase its selling price. As supply decreases and the demand continues to rise, prices will rise on these precious commodities as well. But since many of these commodities are imported, there’s been a large push of interests to mine it at home. If America could produce its own oils and gases, and become completely independent from foreign markets, then those prices could finally come down.
The Solution is to Go Local It’s the perfect solution to lowering our debt and dependence on foreign oil. Recent events have shown this theory to not be all that reliable. According to recent reports, shale oil seems to be suffering in America. Shale oil is one of those natural grown oils that provide thermal power for things like steam turbines, while providing heat from homes and businesses in districts. Turbines have the power to crank out energy for electricity in Texas and surrounding areas. It’s an incredibly useful element that is relied upon in many places, if not just for energy for electricity in Texas, than for the heat it provides for homes and businesses nearby. Since its uses abound, oil companies have worked on mining it in the homeland, looking to remove the need for importation. Should they accomplish this great dream, they might be able to lower the overall price of shale oil for the country because America could be in charge of the price for once. According to a report from Forbes*, American oil producers are finding that this could be nothing more than a dream. Since 2008, local production of shale oil has increased by almost 50%, up to almost 6.5 million barrels per day.
Two new oil fields in Bakken and Eagle Ford are to thank for this recent increase. The only problem is that the investment to find and produce new oil is costing much more than is requisite to make prices come down. Oil companies are having to drill deeper and harder, increasing costs and decreasing profits. For example, this resulted in $26 billion dollars of natural gas reserves becoming virtually worthless to the company due to the excessive price to drill to it. In the grand scheme of things, even with an increase as great as 2 million barrels a day from 2008 to today, the price of mining and production is still expensive. The companies aren’t getting the bang for the buck they were looking for. The question to ask is whether or not this trend continue to be found across all of the natural oil and gas industries? Will becoming oil independent as a country really reduce the price of oil and gas you see steadily rising? Will the oil be so difficult to get to that companies have to increase prices to make it worth it? Or is it time to find an alternative form of energy that will be cheaper from the beginning?
http://www.forbes.com/sites/christopherhelman/2013/06/13/why-americas-shale-oil-boom-could-endsooner-than-you-think/?ss=business%3Aenergy