Energy Report: The Shale Road Back

The US shale patch recovery has been a rocky road and now is facing more challenges, unlike anything they have seen before. As oil prices reached the highest level since October 2018, The Energy Information Administration (EIA) reported that US shale oil production increased by 38,000 barrels a day in July. That puts US shale oil production back to 7.8 million barrels a day which is the highest we have seen since last November. Finally, we are starting to see some signs of life in the US shale patch but it is still a shadow of its former self and is still under fire by the Biden administration and the green movement.

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Image Source: Unsplash

Not only does shale have to try to increase output to meet demand, but the sector also has to deal with a lack of investment dollars that are being diverted elsewhere because of climate change fears. There is still a shockwave surrounding a Reuters report that "Royal Dutch Shell is reviewing its holdings in the Permian Basin, which accounted for around 6% of the company’s total oil and gas output last year. The holdings could be worth more than $10 billion. The company lost a lawsuit and is under major pressure to cut carbon emissions.

This pressure is also on the back of investors that are turning away from fossil fuels. US shale producers have shown restraint partly because their shareholders are pressuring them to show a profit and because of the lack of investment. Fossil fuel investment has become unpopular and that is going to harm the US and global oil production. The push to become more green and more carbon neutral is forcing investment dollars away from the oil and gas sector which is putting the global oil market on the path to an energy crisis. 

Argus reports, "Climate activists aiming to stop new oil and gas drilling in Norway's Arctic territory are taking the issue to the European Court of Human Rights. Environmental groups Greenpeace Nordic and Young Friends of the Earth Norway alongside six activists have filed an application to the court arguing that Norway has breached fundamental human rights by allowing new oil drilling amid a climate crisis. In December, the Supreme Court of Norway dismissed their attempt to halt oil exploration in the Arctic.

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