The cost of shale oil in the US in 2014

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2020-05-25 19:00:25

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The World's media are excite the public, disclosing the fact that happened in the U.S. "shale revolution". Based on what facts such statements might be appropriate? There are, in particular, the idea that the cost of shale oil in the US in 2014 decreased so that American industry for the extraction of "black gold" in principle, anyway, what are the current world price for this product. He is it right? What are the factors affecting the cost of production of shale oil by American companies?

What is oil shale

First, a little theoretical insight into the subject matter. What is shale oil? The cost of a product, we're going to define?

The fact that there are actually two types of oil with the Russian language on the level of the layman General title of "shale". The first is the product, as well as one that is produced with the classic method contains in particular layers of the earth's rocks. They are called "slates". But there is another product. Under an appropriate variation of oil can also be understood as such slates, also called "combustible". They, in fact, contains a product very similar properties to oil - shale resin. And also by using certain technologies extracted and subjected to processing.

the Cost of shale oil in the US

Thus, the term "oil shale" can be interpreted in three ways. Namely:

- as a synonym for "oil shale";

- the closest analogue of the traditional oil type, but occurring in different kind of fields;

- extract from shale resin.

The quality of the product on the basis of which it is possible to produce the fuel used, thus, the second and third. Before studying the cost of production of shale oil, note: the number of experts is of the view that the costs associated with obtaining each of the two observed products, can vary significantly. Usually, oil obtained from oil shale, more expensive.

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Where underlain by shale oil?

Considering the factors affecting the cost of production of shale oil, we will examine the peculiarities of the deposits, which carried out the relevant work. According to the reports of a number of analytical agencies, the US is the world leader on stocks of natural resources, referred to. Major oil fields are related to the category of shale, the Americans lie in the state of Texas, on the Western coast and North-East of the country. Also significant reserves in the so-called "oil Sands" that is located in Canada.

Shale oil production costs

There are significant deposits of "oil shale" and in many other countries, including Russia and those States that seems to be not considered for the energy powers - Slovakia, Poland, Ukraine. Assessment of potential oil recovery from shale is very different among the experts. Largely due to the fact that the figures allow for the qualitative dimension, not always transparent, the forecasts from the various sectoral agencies, reflecting, in particular, the value of the stocks in the fields, may be inaccurate or repeatedly revised.

Unit costs

To find out what would be the estimated cost of shale oil in the United States, refer to a number of expert sources. Published information on relevant studies conducted in different years, gives us a very ambiguous data. Why? Is it true that the cost of shale oil in the US is directly dependent on the subtype of the product (above, we highlighted two main)? On the basis of information in a number of sources, it is.

In 2012, Time magazine published the following data. They, however, relate to global trends. However, the idea of what can be the cost of production of shale oil in the US, this information we can give.

the Cost of shale oil in the US

In accordance with the experts, based on which the Time magazine has published figures, extraction of 1 barrel of oil from oil shale in 2012 amounted to about $ 100. In turn, an indicator for oil that lies between the layers, neither more nor less, and is twice lower - $ 50. Thus, voiced by us at the beginning of the article, the idea that the cost of shale oil in the United States and in other countries depends on the specific subtype of the product is confirmed if we take the figures for 2012.

Oil in USA and worldwide

If you compare recorded for the same year with those that reflect the costs of production of this mineral in Russia, the difference, even in the case of a cheaper product will be obvious. The "classic" oil extracted in Russia costs about $ 15. And in Saudi Arabia, by the way, and even cheaper - about 8. However, about all these figures, experts ' opinions also differ. So these are just approximate guidelines.

Are there Any more recent data, for the current year? Increased, or, Vice versa, decreased by the estimated cost of production of shale oil in the US? 2014 - the year of the fall of the world prices for "black gold". Is there any relationship between the pace of shale oil and this market trend?

Expert Opinions on this score are incredibly different. First of all, the very different methodology of counting the cost. The criterion which causesthe biggest debate, the production tax.

Taxes or no?

A Number of economists count the cost of shale oil in the United States, focusing on the fact that its production is subject to minimum tax. However, with regard to the same product produced in the traditional method, the fees to pay still need. The benefits are in relation to shale oil. In Russia, for example, as well as in many other countries exporting "black gold", the relevant fee above.

If the rate of tax for the United States and other countries were comparable, even if we take into consideration the figures of 2012, experts believe that American oil would have a very attractive cost. Now shale product from the United States, because of tax incentives, can indeed have, say analysts, a cost of around $ 50 or less.

the Cost of shale oil in the US in 2014

In turn there is a view that the appropriate fees to the us Treasury, a measure that is not significant in terms of calculations of costs for oil production, since shale product, made in the USA, mainly focused on the domestic market. And because American taxpayers do "provide" yourself a cheap fuel.

The Trend is to cheaper?

Among the experts is the thesis that the cost of shale oil in the US falling. At the core of the argument - to improve the manufacturability of production. Expert opinions on this account are also separated. There are estimates for which a barrel of shale oil now costs Americans about $ 48 - and is indeed lower than the world average recorded by analysts in 2012. And adjusted for inflation - in principle, it is indicative of the cost of production. Unless, of course, agree that the US figure in 2012 was the same as the world average (after all, Americans are unconditional leaders of the global market). And again, if we take into consideration the oil extracted from the bowels, not from shale by processing.

The Profitability of production and the price of oil

The correlation between the cost of shale oil in the United States, other countries and world prices for "black gold"? Expert opinions and this time very different. But it is important to study them to better navigate and understand the factors that affect the cost of shale oil. 2014 also very ambiguous in terms of oil prices. Now they fell significantly. Will growth - exactly nobody can tell.

Analysts OPEC, in particular, believe that if the world oil prices will remain below $ 90 per barrel, the work of the order of half of the American "shale" corporations will be unprofitable. In turn, IHS experts believe that the business of oil production will keep feasibility even if the world price drops to 57 dollars per barrel. A compromise in the evaluation of offers, the International energy Agency. According to experts of this structure, the production of shale oil in the US will remain quite profitable if the world price drops below $ 80 per barrel. Analysts from Citigroup, in turn, believe that to maintain the shale industry in USA will be sufficient to $ 75.

the Cost of shale oil in the US 2014

There is an interesting version: if world crude oil prices will decline, the American Corporation, the mining of "black gold" will be somehow forced to upgrade the technological base in order to reduce costs. The experts who are close to this point of view, believe that the "shale" industry is big in this respect the potential. Existing technologies, they believe, is largely experimental and, in some aspects, the effectiveness of even inferior to those used in the production of oil in the traditional way. Over time, analysts say, the Americans will increase the manufacturability. Due to this, the cost of shale oil in America can be reduced. According to the Agency Accenture, costs could fall by 40%.

Barrel need to grow

Anyway, among the experts, common point of view: even if the cost of shale oil the US is about $ 50, its production will remain, one way or another, cost effective for American companies. But under one condition - when you save in oil prices, actual approximately to the beginning of the summer 2014 - about 110 dollars per barrel. But then they don't have to think about how to reduce the cost of shale oil. $ 80, however, the current price of "black gold". That is, if you stick to this perspective, American firms on the verge of profitability. About mass bankruptcies of firms yet, judging by the information background in the media, it still is not.

Factors cost

Does it matter in what conditions to produce shale oil? Cost what factors determine, on the basis of production processes in the extraction of "black gold"?

Among the significant terms of the costs of the circumstances - the life of the well. The fact that shale oil is produced through a completely different technology in comparison with traditional development fields. As a rule, testing of one well is several times faster. Because the equipment that is installed for the extraction of shale oil, soon after the development of a local resource must eitherto write off because of wear and tear, or move to other objects. This, of course, may be accompanied by significant costs.

Another factor is the depth of the oil shale. As well as access to fresh water nearby, which is involved in the extraction of "black gold" with the use of appropriate technologies. Depending on the depth of the resource, the costs can vary significantly.

the Cost of shale oil

The Next important factor - the adequacy of the assessments of the size of shale reserves. It may well be that the investment made on the basis of optimistic forecasts, will not have time to pay off due to the fact that oil is simply going to end on a specific field. There is an interesting precedent in the Los Angeles Times has published an article stating that one of the oil fields in California forecast evaluation and real went in 25 times.

Another circumstance - the presence in the neighborhood with similar deposits of shale gas deposits. The fact that, according to some experts, the structure of the wells can involve profitability, but only if production of both fuels.

The prospects of the "shale revolution"

However, regardless of what numbers reflect the cost of shale oil in the US, 2013 and 2014 mark the unstoppable growth of production by the Americans of this fossil by alternative sources.

According to forecasts of various experts and agencies in the coming years, figures will only grow. For example, the energy information Administration (one of the sectoral agencies in the United States) believes that in 2019 the production of shale oil in America will reach 9.5 million barrels a day (now about 3 million).

Among the factors that might hinder corporations from the United States to develop, already noted by us above trend, which consists in a relatively small alternative resource deposits. If ordinary deposits can be developed for many years, the standard rate for shale is 3-5 years. During this time, the oil resource well can be used for 90% or more.

the Cost of shale oil 2014

Forecasts of the American experts regarding the prospects for the development of "slates" are very different. A simple example. The energy information Administration predicts that on one of the largest deposits of the United States - the Bakken - in 2040, shale oil production will be approximately 1 million barrels per day. At the same time, according to the industry Post Carbon Institute, the rate for the Bakken will be no more than 73 thousand barrels. The difference in forecasts more than tenfold. There are differences between the estimates of these two structures and also in respect of certain reserves of shale oil in California. By the way, in some cases, energy information Administration substantially revises their predictions in fields. In one case the assessment was reduced by 96%. However, according to some experts, investors, before deciding to invest in the industry, could focus on the first forecast.

However, experts urge not to hurry with conclusions and forecasts. You need to observe how you will develop those technologies to provide more efficient and, very importantly, more environmentally friendly production of the product. The most important factor in the development of American industry in the development of alternative fields of "black gold" will also world oil prices.


Article in other languages:

AR: https://tostpost.com/ar/business/22444-2014.html

BE: https://tostpost.com/be/b-znes/39905-sabekosht-slancavay-nafty-zsha-2014-godze.html

DE: https://tostpost.com/de/business/39420-produktionskosten-von-schiefer-l-in-den-usa-im-jahr-2014.html

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JA: https://tostpost.com/ja/business/22014-2014.html

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UK: https://tostpost.com/uk/b-znes/40762-sob-vart-st-slancevo-nafti-do-ssha-u-2014-roc.html

ZH: https://tostpost.com/zh/business/27906-2014.html






Alin Trodden - author of the article, editor
"Hi, I'm Alin Trodden. I write texts, read books, and look for impressions. And I'm not bad at telling you about it. I am always happy to participate in interesting projects."

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