Idle Chatter On Friday Morning -- March 26, 2021

It's a slow Friday. 

Two things. 

First, just a reminder.

When I refer to the "Bakken" or the "Bakken revolution" as a metonym, it refers to the tight oil / unconventional drilling / shale drilling in the United States.

The "Bakken," based on context, generally refers to any one of the three:

• the footprint and geology of the Bakken play in the Williston Basin;
• the science and technology in exploring and producing in the Bakken; and,
• the interplay of operators, mineral owners, and surface owners in North Dakota.
  

But in a very broad sense, to repeat, the "Bakken" or the "Bakken revolution" as a metonym, it refers to the tight oil / unconventional drilling / shale drilling in the United States.

That's the "Bakken" I am thinking of when I wrote posted this earlier:

Don't underestimate the Bakken: link here.

• so much for that promise to focus on free cash; slow production growth;
• from the linked site:

U.S. oil drillers are no longer sitting in the trenches, waiting for the pandemic storm to pass. They are once again in growth mode, according to the first-quarter energy survey by the Dallas Federal Reserve. As oil prices rebound, activity in the oil patch is expanding, respondents to the Dallas Fed Energy Survey said. And it is expanding strongly: from a reading of just 18.5 for the fourth quarter of 2020, the business activity index of the survey soared as high as 53.6 over the first quarter of this year. 

The data supports evidence from other agencies: the number of active drilling rigs is steadily rising. So is production: according to the latest weekly report by the Energy Information Administration, oil production last week averaged 11 million bpd. That’s still 2 million bpd below the average for this time last year, but above the average for a week earlier and the four-week average for the period ending on March 19. 

The signs seem to point to what OPEC feared the most: U.S. shale is returning. Capital spending is returning, the Dallas Fed reported in its survey. From an index of 12.5 for the fourth quarter of 2020, it has now gone up to 31. What’s more, the industry is upbeat about the future, too, planning to boost spending further next year.

I am not referring simply to North Dakota. I am referring to the entire unconventional oil and gas industry in the United States. 

Second.

The stories coming out of the Permian are absolutely mind-boggling. That also goes for the Appalachian. The most recent reminder: Warren Buffett's plan for new natural gas plants in Texas. A few days before that, the stories on the new LNG export terminals along the Texas / Louisiana coast. I get the feeling that Americans, in general, have no idea what an energy powerhouse the US is. 

I am absolutely convinced Saudi oil exports could go to zero and the US could fill the void. That's a bit of hyperbole but I don't think I'm far off. Look at the numbers reported by Reuters for Saudi export data in December, 2020. In fact, let me re-phrase that. I am absolutely convinced Saudi oil exports could go to zero and North America could fill the void. 

The fact that the Biden administration is already backtracking on plans to shut down the US oil and gas industry is a reminder how important that sector is to the US. It is pretty funny: one of the many big stories that came out of the Texas Deep Freeze this past February: a huge national shortage of plastic. LOL. Texas oil fields shut down for one week; refiners shut down for one month; and the plastics industry is severely affected.