Collapse Of U.S. Shale Oil Production Has Begun

We no longer have to wait for the collapse of U.S. shale oil production, it already has begun.  Unfortunately, this is bad news for the U.S. Government and domestic economy.  Falling U.S. oil production will put severe stress on the highly leveraged debt based financial system over the next several years.

According to the U.S. Energy Information Agency (EIA) recent Drilling Productivity Report, shale oil production from the top fields is forecasted to decline 116,000 barrels per day in January 2016.  Even though overall U.S. shale oil production is forecasted to be down 12% from its peak in March 2015, one of the largest fields in Texas is down a whopping 30%:

Texas-Eagle-Ford-Shale-Oil-Production

The Eagle Ford Shale Oil Field in Texas peaked at 1.7 million barrels per day (mbd) in March 2015 and is forecasted to drop to 1.2 mbd next month (Jan 2016).  Again, this is according to the EIA Drilling Productivity Reports which base their figures on estimates.  However, even larger declines in some of these fields may be experienced when the real data comes out in the following months.

For the Eagle Ford to be down 30% (500,000+ barrels per day) in less than a year… THIS IS A BIG DEAL.  I have been warning about the coming collapse of U.S. shale oil production for more than a year now.  The idea that the United States would become energy independent is now DEAD FOR GOOD.

Here is the chart showing the top four U.S. shale oil field production:

Top-US-Shale-Oil-Fields-Production-JAN-2016

Total U.S. shale oil production in January 2016, is forecasted to be 4.67 mbd, down from the peak of 5.3 mbd in March 2015.  This is a decline of 630,000 barrels per day from the peak.

Here are the individual shale oil field data from peak:

Eagle Ford = -510,000  barrels per day

Bakken = -140,000 barrels per day

Niobrara = -142,000 barrels per day

Permian = +144,000 barrels per day

Permian oil production is up compared to the other shale oil fields because a large percentage of the field consists of conventional oil wells.  Thus, companies in the Permian are still adding conventional wells which is the reason production continues to increase.

Here is a graph from Jean Laherrere on the peak and decline of North Dakota (Bakken) oil production:

Jean-Bakken-Aug-2015

If U.S. shale oil production has already experienced a 12% decline in overall production, then the forecast for the Bakken (North Dakota shown above) will more than likely occur.  Which means, overall U.S. shale oil production could fall 80-90% by 2025.  This will be very bad news for the Fed and U.S. Treasury.

No longer will the U.S. Government be able to buy foreign oil with paper Dollars or U.S. Treasuries.  If we consider collapsing U.S. oil production and falling oil imports, the U.S. economy will be in a world of hurt by 2020… and in dire straights by 2025.

This is the very reason why I believe physical gold and silver are the best assets to own during this time.  Why?  Because the value of most paper and physical assets (such as Real Estate) will collapse in value along with U.S. oil production.

For those who think Solar and Wind power are going to save us… you can just FORGET IT.  I will be putting out an article shortly why Solar & Wind are DEAD-ENDS and should not be counted on to provide the world with a large percentage of reliable energy production.

REMINDER:  I have including a donation feature on the site for those who requested I do so for the public content.  I have received many donations and thank everyone for their contributions.  Just wanted to let new and old followers of my site know that I really appreciate the support.

Please check back for new articles and updates at the SRSrocco Report.  You can also follow us at Twitter, Facebook and Youtube below:

Enter your email address to receive updates each time we publish new content.

I hope that you find SRSroccoReport.com useful. Please, consider contributing to help the site remain public. All donations are processed 100% securely by PayPal. Thank you, Steve

37 Comments on "Collapse Of U.S. Shale Oil Production Has Begun"

  1. Harryflashmanhigson | December 8, 2015 at 1:11 pm |

    I absolutely agree on wind and solar, fossil fuel extenders only, when fossils are finished so are they. They might act to cushion the blows for an extra 10 years though…..

    • Harryflashmanhigson,

      You would be surprised (or maybe not) at the amount of supposedly intellectual individuals who think Solar & Wind are going to save our skins. Solar & Wind are nothing more than fossil fuel derivatives.

      steve

      • Of course politicians too, although they may fit in under “supposedly intellectual individuals”.

    • Every country & individual on earth should be energy independent. This has been possible since the 1930’s. Nicola Tesla invented an energy box, that when hooked up inside a 1930’s Pontiac, could run indefinitely without stopping. The energy box used the electric currents around the earth. Since then so many Free Energy Inventions’ go to Start Page and search them out easily.
      Just recently Power Film Solar . com sells flexible cheap solar energy collectors you can take with you. Another company is producing solar collecting glass windows…can be installed in homes & cars… no more grid..is possible right now….

      • Tesla was a genius but there is no free energy savior, inventions or otherwise, that will replace the massive low cost energy from oil.

        “Nicola Tesla invented an energy box, that when hooked up inside a 1930’s Pontiac, could run indefinitely without stopping”. There are stories out there like this. Where is this technology? Was it changing matter to energy? Did this innovation die with Tesla?

        Let’s see one free energy device that really works. One could argue the petroleum industry has suppressed other energy sources or innovation that could have lessened dependence on oil. OK. But come close to replacing it? I don’t think so.

        • lastmanstanding | December 11, 2015 at 7:52 am |

          Tesla was controlled by John D Rockefeller, JP Morgan and the like. You can bet your last buck that if this (Tesla’s) invention was real, they took, hid, stole it.

          Money was/is power…control over the masses even better. With energy, you have both.

          With all of the technological advances that we have had in our lifetimes, everyone should have a roof system on their homes that catches the sun’s rays to heat the home and water…but I digress, let’s just continue blow the hell out of everybody that has oil under their ground to control it. Funny how all those countries gold supplies disappeared as well.

          IMO, there would be far more oil left, but it is the right of those around the world, especially in the US to get it for free off the backs of the producer. No job, no effort, attempt to scam producers…no oil, no gas, no heat for you. Nada, zip.

          Harsh and affective.

  2. If the political will would be there, fossil energies could have been replaced with alternative forms of energy long ago but that political will is not there. As long as the big petrol companies and the OPEC have so much influence on politics we are not going to see a shortage in oil in the near future. At the moment there is a flood of oil on the world market and it doesn’t look as this would change any time soon unless a major war would break out.

    • Max,

      Unfortunately, you are making some lousy assumptions. Solar & Wind would have never replaced fossil fuels because their full cycle EROI- ENERGY RETURNED ON INVESTED is way too low. Furthermore, U.S. oil production will fall precipitously over the next several years and global oil production will follow suit shortly there after.

      steve

      • Steve, as usual you are spot on, and this is from an Engineer (Electrical) and MBA economist. It defies my comprehension why green energy thinkers believe they can defy the laws of physics….energy can neither be created nor destroyed. A winding windmill produces nothing next to a nuclear reactor. The cost to dig gold from the ground is a function of the labor and materials needed. Price is another matter….supply and demand less futures and sentiment manipulation.

      • Steve, i never said that wind and solar will solve the whole energy problem of the world. I think in other methods of energy extraction which are either not yet known or insufficiently developped. What i want to say is, that we could be far more advanced in the development of alternative energies than we currently are, if the political will would be there to really invest into this sector.

        However, I don’t think that the fate of the world is depending on fossil energy, unless the drop in fossil energy supply would be so fast, that it could not be replaced with alternative energy forms availlable today.

        To come back to solar energy. I don’t know where you’ve got the information from that the ROI of a solar plant is way to low. Current Solar systems need between 2.5 and 6 years to reach break even with an average lifetime of 25 years. That’s not all that bad.
        Where i live, most home owners are installing solar cells on their roof and they certainly wouldn’t do it if they would end up with a loss.
        So when you say oil production will fall, wich it will (just a question how fast), then it would be wise to think now, how that fossil energy could be replaced and i’m not talking about nuke plants. Bearing in mind that it takes years or even decades to develop those new forms of energy makes it even more urgent to work on it today.

        • Solar is not going to work without a combined purchase of very-efficient appliances and a dedication to conservation. Expect to pay more and be deprived, if you are a careless HVAC user, love lots of electric-heated hot water, have electric resistance ranges, run heavy shop equipment, or have thousands of square feet of under-insulated space to live in. Nothing beats $0.12KW/Hrs from the grid.

          In an urban or sub-urban place with roads and power lines, solar is lame. It’s a beacon for looters or a “me so green” sign like his & hers Priuses.

          Off-grid, yep solar can be cost-effective when compared to running 5+ miles of copper up 2000 feet of no-road. Better than running genset alla tha time. Batteries stay trickle charged without gas. Unabomber shack or trailer can get by with 200W in panels and a Group31 to run an LED light over the manual typewriter.

          • lastmanstanding | December 11, 2015 at 8:00 am |

            “Nothing beats $0.12 kw/hr. from the grid”

            No kidding brother…Less than $3 a day at our place…a bargain a twice the price!

            Electricity, by far the most undervalued commodity in the US…for now!

    • Modern man has been trying to defy the laws of physics for centuries…never worked and never will.

      This is why we have engineers and scientists (the real ones).

      Want true leverage against fossil? Go nuclear. Unfortunately the metrosexual male cringes at that!

  3. Steve (from an Aussie)

    Quote in the above report

    “the U.S. economy will be in a world of hurt by 2020… and in dire straights by 2025”

    The US economy is in Dire Straits now, never mind waiting another 5 or 10 years. For new investors the BANKS have already reached their growth potential.

    E.G. The CBA (Commonwealth Bank of Australia). Over the last 22.5 years (Back to 1992) the CBA grew 250% every 5 years on average, 50% per year, 1% a week. If this bank continues to grow at the rate it has over the last 22.5 years for the next 22.5 years it will only grow by around 90%, 4% per year, 0.07% per week. This applies to BANKS all over the world. There is no money for the next generation investing in BANKS.

    Your time frames of years 2020 and 2025 are “I think a bit pessimistic”. One gets the feel, things (whatever those things are … LOL ) are moving much faster than we think. The BANKS have to fall and I don’t think that is too far away. I reckon MONTHS not YEARS.

    To all you readers in here, “you should look after this BLOKE” he is a one of and so are his reports. You may not believe he is correct all the time BUT I reckon he is most of the time.

    Get in their with a DONATION !!!!! LOL (Just giving you a PLUG Steve) WoooHooo !

    .

    • Correction on the 90% growth figure.

      That is 90% over the next 22.5 years. The CBA grew 1500% over the previous 22.5 years.

      Sorry about that ….. lol

    • Graham B,

      I agree with you. The present situation is out of hand in the states. However, I don’t want to sound like a nut on the corner of the sidewalk saying “THE SKY FALLS TOMORROW.” I believe the condition in the U.S. will disintegrate over the next several years, but by 2020 and 2025… it will be off the CLIFF.

      steve

  4. Don’t know about any of this Steve because every politician i know, particularly those in Paris at the moment are saying with the new “Price on carbon” we’re going to have reduced “consumption” there by saving the planet., but “increased Growth” could you please explain the math with on that?

    • We are seeing reduced consumption related to deflation. That’s why there is an oil glut right now.

      I don’t think one can logically explain politicians’ proposed solutions on energy; they have no idea what they are talking about. What they say are solutions [like tons more wind and solar] aren’t backed by logic, math, or science. Aside from EROI considerations there isn’t enough available silver to manufacture the quantities of solar panels they propose.

  5. It has been said that there has been silver deficits for 30 years. Does anyone have a clue where all this silver is coming from? No one seems to have any idea. Maybe they have found a way of printing it.

    • My guess… secret gubbermint stacks, etfs, distressed miners and weak-handed retail. They are shaking the tree real good this time round, so hang on tight.

  6. Steve
    Now don’t laugh , but what about the free energy devices that are being talked about.
    Salt water engines and the like.
    Apparently patents galore and proven to work but just held under cover by the mafia criminal
    Governments and oil companies..
    Then of course you have ,now definitely don’t laugh. Alien disclosure with even newer technology.
    Of course we will first have to have an economic collapse,martial law and a reset first.
    Hopefully not a cabal ,IMF,BIS one world government reset.
    Any thoughts on such matters

    • buddy,

      Yes, I have heard about many of these supposed FREE ENERGY SOURCES. I have correspondence with Ugo Bardi Professor of Chemistry in Florence Italy. He did a great job destroying the myth of the E-Cat. While I have no objection to new advanced energy technologies, I think there is more HYPE than REAL SCIENCE.

      Lastly, even if there is some advanced Alien technology… the Elite will not allow us to get it. So, it really doesn’t matter in the end.

      steve

  7. Steve,

    This may very well be the straw that crashes the credit house of cards.

    The total debt of US gas & Oil companies is about $170 billion and “According to Standard & Poor’s, the firm’s “distress ratio” – the percentage of high-yield bonds trading at distressed levels – has reached 20.1%. This is its highest level since 2009, when it peaked at 23.2%, and suggests the credit-default cycle has begun.” Stansberry Digest 12/8/15

    With those shortages their debts and bonds are now junk.

    No one will accuse you of being Chicken Little – it is the truth.

    Thanks for another spot on report.

    SteveW

    • More information on corporate “high yield” or junk bonds discussed in this article:

      http://investmentresearchdynamics.com/the-system-is-starting-into-a-final-collapse/

    • lastmanstanding | December 11, 2015 at 8:15 am |

      Isn’t it strange how there is never any mention of pm’s in the Stansberry Digest anymore. Going from my feeble memory, it has been years.

      In 2011-12-12 it was all they talked about…get some, buy miners, slv, gld, etc. Now, absolutely nothing.

      • lastmanstanding.

        You’re absolutely right. Their big thing now is buying special deals on devalued corporate bonds. They are no different than Dent or Maloney. They have all had their 15 minutes of fame and are using it to sell, sell, sell.

        The mistake they all make is not recognising that this time is very different. Porter Stansberry doesn’t even believe we have reached peak oil. They do not understand or believe in EROI. They do not understand that after the next monster market crash, the devaluation of the dollar and our abject failure of not building nearly enough nuclear power plants, we will be back to the horse and plow economy.

        For anyone that believes or thinks that somehow solar or wind power or some magic alien tech will somehow save us, I strongly urge you to read Prieto & Hall. Spain’s Photovoltaic Revolution. The energy Return on Investment, Springer, 2013. For those that want just the analysis got to http://energyskeptic.com/2015/tilting-at-windmills-spains-solar-pv.

        Those that have enough stacked will probably get by, for everybody else you need to plant your yard with things you can eat. Before the advent of the tractor, we spent over 50% or our time working for food. In the 1950’s we spent 20% of our income on food. Today it is less than 10%.

        When TSHTF this time it is back to the bad old days.

        Get ready.

        SteveW

  8. Wind and solar are not dead ends – trey are solutions for totally different consumption patterns and energy intensity of life.
    How many people will watch TV if the electricity necessary to power TV sets and broadcasting equipment should be produced by themselves using kind of bicycle dynamo machines? That’s dropping TV satellites out of the picture.

    • Solar is a great idea on a small scale, i.e. an individual homeowner [or building] who has the $ to invest now in something with a 5+ year storage battery life, a 10+ year life for the solar panels, and longer for some components like wiring. Of course it doesn’t replace incoming 220v lines with 15+ amps supplying 24/7.

  9. Harryflashmanhigson | December 9, 2015 at 10:07 am |

    Nonsense. See 2nd law of thermodynamics and collapse in the shame.

  10. Thanks for your great articles & I read them all the time! I myself have studied the Peak Oil problem for the last 10 years & I have given Peak Oil presentations to Town Halls & Colleges here on Long Island NY. I also read Jeffrey Brown’s articles because he does know that world net exportable oil is in decline and Peak Oil is structurally locked- in for the world in the next 5-10 years. You are always spot on with the Peak Oil issue & how it interrelates with the economic & monetary system of fraud that we have. I donated $ to you just a minute ago because I feel compelled to gift you something because I always go to your website everyday & print out your articles and read them at night with a glass of wine. Keep up the great work. You can check out my website attached above and I also authored a science fiction book that embodies the current fascism happening here in this country. Thanks Izzy

  11. Steve,
    Have a great christmas, my last comment was meant as satire, i think the point was missed by some. The return on input theories’ make a hell of a lot more sense than a lot of the political spin. Keep up the site it really is appreciated. Love the charts.

  12. Harryflashmanhigson | December 11, 2015 at 2:34 am |

    http://euanmearns.com/uk-solar-pv-vital-statistics/

    All the answers you could ever want about the viability of solar PV to power industrial civilization. IT@S NEVER GONNA HAPPEN! Listen with fresh ears to the author.

Comments are closed.