You’ve never met my friend Doug, but he’s a danger to you and your family.
I met him a few years back when I took an impromptu trip to Harrisburg, Pennsylvania. I was strolling past the foot of the Capitol building when I first heard him. He was among a group of protesters chanting about the vileness of hydraulic fracturing.
At the time, I made a silent list of things that derived from petroleum: from his clothes, boots, and glasses to the toothbrush he used that morning. Believe me, the list seemed endless, with virtually every facet of his life having some tie to the petroleum industry.
Never mind that up to 90% of oil and natural gas wells will need to receive some form of fracture stimulation or that without hydraulic fracturing, the supply glut responsible for lower oil prices would never have taken place.
Let’s also take away the 5.6 million barrels per day from our domestic oil production. After all, the Saudis would be happy to pick up the slack… and charge us an arm and a leg for it.
But I wasn’t there to denigrate his hatred of hydraulic fracturing, even though it was hard to take him seriously when he pointed towards his rusted Chevy pickup from the 1970s that he drove to get there.
Doug is only one example of how disconnected from reality some people can be regarding our energy consumption.
Believe me, he isn’t alone…
Down with Oil… Wait, What?
There’s a reason my fractivist friend was on my mind recently. Rather than standing on the steps of the Capitol, these “kayaktivists” used a different type of soapbox.
And it wasn’t the chants, the slogans, or even the rhythmic beat of their paddles drumming away against their kayaks that amused me.
It was that they are just as disconnected as Doug was… something far more dangerous than the semisubmersible rig they were surrounding.
For now, I’ll assume that the hundreds of kayaks in the waters weren’t made from plastic and were carried there by hand or some Tesla vehicle. Certainly these good-intentioned folks didn’t drive anywhere — that wouldn’t be hypocritical in the least.
Don’t get me wrong; the very definition of a non-renewable resource means that a shift away from fossil fuels will take place.
The problem, however, is that we’re talking about a decades-long transition.
In the meantime, petroleum will remain the dominant source of fuel for transportation in the United States. My readers know full well the disparity between petroleum and other fuels…
And in case you’re wondering about the sensational headlines telling us that oil demand is plummeting, I can only hope my readers can see through this facade. The Energy Information Administration reported in its most recent Annual Energy Outlook that energy consumption in the transportation sector will decline by a whopping 2%… over the next 30 years!
Look, I’m not suggesting anyone abandon their principles.
I’m saying be realistic.
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Facing Our Energy Reality
It’s true that not all oil plays are created equal, and the same goes for areas within every shale play in the Lower 48.
In states like North Dakota, home to the now-famous Bakken/Three Forks play, where you drill is a major part of the equation. The breakeven costs — that is, the price at which new drilling would cease — can run as high as $77 per barrel in counties like McLean.
Yet in places like Dunn County, where companies are drilling into the Bakken’s sweet spots, that same breakeven cost runs as low as $29 per barrel.
In the case of another prolific oil-producing region, drilling for crude is like playing with a loaded deck.
And despite the fact that oil has been flowing steadily from this area for more than 90 years, analysts still believe this play is in its infancy!
Thing is… bigger isn’t necessarily better — especially in the case of this little gem pumping oil in West Texas.
More impressive is that this tiny oil company is sorely undervalued right now, trading for less than $1.
Get ready for that boom to re-ignite… and I’ll tell you all the details behind this oil revival Thursday morning.
Stay tuned.
Until next time,
Keith Kohl
Check us out on YouTube!A true insider in the technology and energy markets, Keith’s research has helped everyday investors capitalize from the rapid adoption of new technology trends and energy transitions. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital, as well as the investment director of Angel Publishing’s Energy Investor and Technology and Opportunity.
For nearly two decades, Keith has been providing in-depth coverage of the hottest investment trends before they go mainstream — from the shale oil and gas boom in the United States to the red-hot EV revolution currently underway. Keith and his readers have banked hundreds of winning trades on the 5G rollout and on key advancements in robotics and AI technology.
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