EV Fan
10-20-2014, 03:38 PM
Financial markets are in a tizzy with the drop in oil prices and I recently read an article from the Financial Times (http://www.ft.com) (free reg reqd.), "Falling Oil Prices Raises Questions on Viability of Shale (http://www.ft.com/intl/cms/s/0/9cc592a4-537d-11e4-8285-00144feab7de.html?siteedition=intl#axzz3G7pXY7k8)," on shale drilling could be in trouble due to a strategic play by Saudi Arabia.
It's great reporting, a must read. Here are some takeaways from the article:
Saudis oil barons are producing a lot barrels of oil while far exceeding demand. Why? The Financial Times article reveals to business readers not familiar with the oil and gas business that shale drilling companies—mid-size and smaller—are in heavily in debt to meet the fracking boom and will have a hard time surviving with such low oil prices for any extended period of time.
This is serious business from the Saudis as they take a profit hit in the near term, but try to displace compressed natural gas's (CNG) fuel as an option for more business and government fleets—shale oil and natural are gas tied together. Encana, mentioned in the FT article, is a familiar natural gas advocate in many industries and is pushing natural gas hard as a fuel as long as abundant supply is present.
Not to mention the push of Liquefied Natural Gas and terminal growth to Europe.
http://www.electricvehicleparade.com/storage/post-images/140805gasprices.png?__SQUARESPACE_CACHEVERSION=141 3484369877Source: Energy Policy Information Center
More... (http://www.electricvehicleparade.com/blog/2014/10/16/energy-focus-drop-in-oil-prices-and-its-effect-on-electric-v.html)
It's great reporting, a must read. Here are some takeaways from the article:
Saudis oil barons are producing a lot barrels of oil while far exceeding demand. Why? The Financial Times article reveals to business readers not familiar with the oil and gas business that shale drilling companies—mid-size and smaller—are in heavily in debt to meet the fracking boom and will have a hard time surviving with such low oil prices for any extended period of time.
This is serious business from the Saudis as they take a profit hit in the near term, but try to displace compressed natural gas's (CNG) fuel as an option for more business and government fleets—shale oil and natural are gas tied together. Encana, mentioned in the FT article, is a familiar natural gas advocate in many industries and is pushing natural gas hard as a fuel as long as abundant supply is present.
Not to mention the push of Liquefied Natural Gas and terminal growth to Europe.
http://www.electricvehicleparade.com/storage/post-images/140805gasprices.png?__SQUARESPACE_CACHEVERSION=141 3484369877Source: Energy Policy Information Center
More... (http://www.electricvehicleparade.com/blog/2014/10/16/energy-focus-drop-in-oil-prices-and-its-effect-on-electric-v.html)