IMO, the big news is NATGAS, not oil. I suspect as more and more NATGAS is developed, that the byproduct condensibles will get cheaper and cheaper (relatively), and displace at least some oil.
The real business that is going to "take it in the shorts" is coal. I see no way for coal to compete with NATGAS over the long run, for both economic and environmental considerations....which is why I am glad to see that the shale plays are basically in the heart of coal country, and can give the miners new employment as the mines shut down.
Wages in the patch have finally risen to reasonable levels compared with, say, union auto workers, and be thankful there is no dead weight in the patch, no one sitting in the 'break room', just guys who work 12 hour days in virtually any weather, two weeks on, two weeks off.
Others of us do our jobs 'for the duration', and only get time off during rig moves and casing runs, and we're not going to work cheap after living off our savings during price crashes over the last few decades more than once. It goes out a lot faster than it stacks up. For many of the old hands out there, this is the shot at retirement. There are fewer than 20,000 people in the world who do what I do, and likely fewer than half that.
As far as building rigs, some are, but stop and consider that the drilling contractors aren't in a hurry to invest millions in rigs and the equipment to run them and the hands to man them to have them sit idle. They, too keep a sharp eye on demand, and will not oversupply the market or they could end up with a yard full of iron bought at top dollar and selling for scrap.
Some oil will be displaced by natural gas, which is already a prime heating fuel in this region (Northern Plains), and a lot will go to power generation.
With the ever moving target of EPA regs, coal has been hurt, but while it is down, I do not think it is out just yet. It is still a viable fuel, available in mind-boggling supply, and cheap. The destruction of the coal industry has been a government construct from day one, using regulations to pick 'winners' by eliminating the competition, one of the standard operating tactics of this administration. As the power plants got cleaner, they moved the bar. It amazes me that any UAW member would vote Democrat this time around.
Wages in the patch have finally risen to reasonable levels compared with, say, union auto workers, and be thankful there is no dead weight in the patch, no one sitting in the 'break room', just guys who work 12 hour days in virtually any weather, two weeks on, two weeks off.
Others of us do our jobs 'for the duration', and only get time off during rig moves and casing runs, and we're not going to work cheap after living off our savings during price crashes over the last few decades more than once. It goes out a lot faster than it stacks up. For many of the old hands out there, this is the shot at retirement. There are fewer than 20,000 people in the world who do what I do, and likely fewer than half that.
As far as building rigs, some are, but stop and consider that the drilling contractors aren't in a hurry to invest millions in rigs and the equipment to run them and the hands to man them to have them sit idle. They, too keep a sharp eye on demand, and will not oversupply the market or they could end up with a yard full of iron bought at top dollar and selling for scrap.
Some oil will be displaced by natural gas, which is already a prime heating fuel in this region (Northern Plains), and a lot will go to power generation.
With the ever moving target of EPA regs, coal has been hurt, but while it is down, I do not think it is out just yet. It is still a viable fuel, available in mind-boggling supply, and cheap. The destruction of the coal industry has been a government construct from day one, using regulations to pick 'winners' by eliminating the competition, one of the standard operating tactics of this administration. As the power plants got cleaner, they moved the bar. It amazes me that any UAW member would vote Democrat this time around.