"Increasingly, U.S. shale firms appear unable to pay back investors for the money borrowed to fuel the last decade of the fracking boom. In a similar vein, those companies also seem poised to stiff the public on cleanup costs for abandoned oil and gas wells once the producers have moved on."
By any measure, the amount of private money currently allocated in the U.S. to plug and reclaim oil and gas wells is a small fraction of the real costs. That means oil and gas wells — and the U.S. had one million active wells in 2017, and even more abandoned — will either be left to fail and potentially contaminate the surrounding water, air, and soil, or the public will have to pick up the tab. This represents just one of the many ways the public subsidizes the oil and gas industry."
When oil peaked at $150/bbl in 2008 that was the wake up call to copious dunces that there are not enough resources on this planet to enable the consumption-oriented lifestyle for everyone. For the past decade of subsequent deflation, the economy has been a zero sum game: Robbing Peter to pay Paul, where Peter is the working class and Paul is Bill Gates & Co.
Today's denialists are not capable of accepting facts or reality, nor third grade math. The oil industry has been massively subsidized by creditors, speculators, and tax payers. Losses that are just now becoming known.
A measure of crude futures speculator losses can be visualized by looking at the U.S. Oil ETF which embeds futures rollover losses. Down -90% from the peak.
Another measure of insolvency can be derived via Saudi Arabia's astronomical fiscal deficit. Which was -15% at the lows in 2015. A mere fraction of what is about to come.
Despite record U.S. oil production, the Energy sector's share of S&P market cap is the lowest in 40 years. It's a non-scalable, environmentally disastrous, economically insolvent industry.
Peak oil was reached in 2008; what we've seen for the past decade is MASSIVE subsidization of a failed industry. And a failed way of life. The perpetual growth fairy tale isn't going to raise global living standards, it's going to collapse them.
This failed industry will be the first casualty of the Trump carbon tax.
This failed industry will be the first casualty of the Trump carbon tax.
