The best of EcoWatch, right in your inbox. Sign up for our email newsletter!
U.S. Holds More Oil Reserves Than Saudi Arabia and Russia
By Andy Rowell
According to a new analysis, the U.S. now holds more oil reserves than Saudi Arabia and Russia, the first time this has happened. And more than half of the U.S.'s remaining oil reserves are in shale oil.
The analysis, by Rystad Energy, has concluded that recoverable oil in the U.S. from existing fields, discoveries and yet undiscovered areas is equivalent to 264 billion barrels, which easily beats Saudi Arabia's 212 billion barrels and just squeezes past Russia's 256 billion.
Photo credit: Paul Lowry
The crux though will be whether the U.S. shale industry can access the finance to carry on exploiting shale. And that remains to be seen.
The mini-revival in the oil price may be over. Having rallied since its low point earlier in the year of $27, oil had reached the $60 a mark, but has slipped back to below $50 a barrel on concerns about a slowdown in the global economy has increased.
And those looking for a rapid increase in the next few months look set to be disappointed. The CEO of the world's largest oil trader, Vitol, which trades about 6 million barrels a day, has told Bloomberg that oil prices will not rise much further over the coming months.
Vitol's boss, Ian Taylor said: "I cannot see the market really roaring ahead. We have a lot of oil in the system and it will take us considerable time to work that off."
The international benchmark will probably end the year "not too far away from where we are today" and rise to about $60 by the end of 2017, Taylor said.
According to Bloomberg: "The wild card for next year is U.S. shale supply, which appears to have reached a bottom, but it's too early to say whether growth will resume."
But shale growth is not looking certain, with the industry still struggling with a low oil price and access to financing. And one of the key way to access financing is via bond sales.
As the Financial Times reported: "Bond sales by U.S. independent oil and gas companies have fallen to their slowest rate for more than a decade, in a warning sign of financing constraints that could hold back the industry's recovery."
In the second quarter of this year, the U.S. shale sector sold a paltry $280m of bonds in the second quarter, making it a slower period than any since the financial crisis of 2008-09.
In contrast, the paper points out, the industry raised almost $860bn from bond sales and bank loans during the boom years of 2007-2014. It is an industry still sitting on a crumbling pile of debt.
And the bottom line is that the industry is still spending more than it is earning. According to the FT, the leading U.S. exploration and production companies cut their capital spending to $14.9 billion in the first quarter of this year, which is a whopping $10 billion more than they earned.
This is totally unsustainable and will constrict the smaller players from accessing bonds and finance. Gary Ross of Pira Energy told the FT: "It's not going to be easy to reconstruct this industry."
YOU MIGHT ALSO LIKE
EcoWatch Daily Newsletter
Get ready to toast bees, butterflies and hummingbirds. National Pollinator Week is June 17-23 and it's a perfect time to celebrate the birds, bugs and lizards that are so essential to the crops we grow, the flowers we smell, and the plants that produce the air we breathe.
The U.S Forest Service unveiled a new plan to skirt a major environmental law that requires extensive review for new logging, road building, and mining projects on its nearly 200 million acres of public land. The proposal set off alarm bells for environmental groups, according to Reuters.
By Teju Adisa-Farrar & Raul Garcia
In the summer of 1969 a banner hung over a set of condemned homes in what was then the predominantly black and brown Brookland neighborhood in Washington, DC. It read, "White man's roads through black men's homes."
Earlier in the year, the District attempted to condemn the houses to make space for a proposed freeway. The plans proposed a 10-lane freeway, a behemoth of a project that would divide the nation's capital end-to-end and sever iconic Black neighborhoods like Shaw and the U Street Corridor from the rest of the city.
Michigan prosecutors dropped all criminal charges against government officials involved in the Flint water crisis Thursday, citing concerns about the investigation they had inherited from the Office of Special Counsel (OSC) appointed by former Attorney General Bill Schuette, CNN reported.