US Shale and LNG need coffins (Canada’s too?): Frac’ers/LNG bite themselves in the ass “at the cost of enormous job loss.” Costs rising fast, inventories depleting faster; greed and stupidity creating huge global supply glut. Here we go again.

‪@lleopard11.bsky.social‬:

The era of falling breakeven costs in the U.S. shale patch may soon come to an end, and a new era of higher costs and depleted core inventory could reduce America’s sway in meeting the global demand growth.

U.S. Shale Costs to Soar to $95 per Barrel Within a Decade by Tsvetana Paraskova, Sep 25, 2025, Oil Price

Enverus warns U.S. shale is entering a new era of higher costs.

Breakevens may rise from ~$70 to as much as $95 per barrel by the mid-2030s as core inventory depletes.
Permian shale growth slows while Canadian oil sands expand.

That’s the latest take from analytics firm Enverus Intelligence Research, which said in a new report this week that the marginal cost of U.S. oil supply is projected to rise from $70 per barrel WTI price at present, to as much as $95 per barrel by the mid-2030s. The expected $15 per barrel surge in costs would be driven by a shift from economically proven inventory to more speculative locations as the core inventory is depleting, according to Enverus Intelligence Research (EIR).

Soaring Cost, Waning Global Influence

The looming depletion of North America’s core oil and gas inventory will have implications for global energy markets, especially the U.S. ability to meet global demand, Enverus’ report says.

“North America’s dominance in supplying global oil demand growth is waning,” Alex Ljubojevic, director at EIR, said in a statement.

“Over the next decade, its contribution to consumption growth is expected to fall below 50% – a stark contrast to the previous 10 years when it supplied more than 100%,” Ljubojevic added.

Still, the Permian basin in West Texas and New Mexico and the Canadian oil sands are and will continue to be North America’s lowest-cost sources of scalable oil supply, Enverus reckons.

The oil sands would benefit from strong Western Canadian Select (WCS) prices and sunk infrastructure costs, and additional takeaway infrastructure capacity could unlock significant upsides to the estimates of Canadian oil production growth. Currently, Enverus expects Canada’s oil output to rise by 450,000 barrels per day (bpd) by 2030, up from an expected record-high for 2025.

The U.S. shale patch, however, will have to contend with flatter growth curves going forward amid oil prices close to current breakevens and depleting core inventory, which will make companies change investment strategies.

“As core shale oil inventory in the U.S. depletes, the industry is entering a new era of higher costs and more complex development. This shift will reshape the cost curve and redefine investment strategies across the continent,” Enverus’ Ljubojevic said.

U.S. Shale Slows Drilling

Amid lower oil prices this year, the U.S. shale patch is in a wait-and-see mode, expecting to ride the price decline with minimal tweaks to strategies. U.S. oil producers are trimming capital expenditure budgets, relying on efficiency gains from current drilling activity to keep output levels.

American oil production is rising, due to the lag between oil price slides and drilling, but large shale producers are already calling the peak of oil output, despite the Trump Administration’s best efforts to support the fossil fuels industry.

For example, efficiency gains, as well as synergies from the Endeavor merger and lower service costs, allowed Diamondback Energy to reduce its 2025 capital budget by another $100 million, or about 3%, from the prior midpoint, to $3.4 – $3.6 billion.

“With volatility and uncertainty persisting, we see no compelling reason to increase activity this year,” CEO Kaes Van’t Hof told shareholders in a letter in early August.

Since the Q1 letter to shareholders, Diamondback “Continue to believe that, at current oil prices, U.S. shale oil production has likely peaked and activity levels in the Lower 48 will remain depressed,” Van’t Hof said.

Higher costs and continued uncertainty, including with U.S. trade policies, led to another decline in oil and gas activity in the Permian, executives from producers and services firms said in the latest Dallas Fed Energy Survey published this week.

In the survey, most executives, 57%, estimate that regulatory changes since the Trump Administration took over in January 2025 have reduced their firms’ breakeven costs for new wells by less than $1 per barrel. An additional 25% estimate reductions between $1 and $1.99 per barrel, while none of the large E&P firms have seen more than $5 per barrel cost reduction, according to the executives polled.

Moreover, most executives report they have delayed investment decisions in response to heightened uncertainty about the price of oil and/or the cost of producing oil, the survey showed.

“The administration is pushing for $40 per barrel crude oil, and with tariffs on foreign tubular goods, [input] prices are up, and drilling is going to disappear. The oil industry is once again going to lose valuable employees,” one E&P executive commented to the survey.

Another one outright blamed both the previous and current administrations for breaking the U.S. shale business.Pfffft! Greedy shale companies busted themselves.

“What was once the world’s most dynamic energy engine has been gutted by political hostility and economic ignorance,” the executive said.Pathetic fool. Read the fucking room! Your worshipped orange Nazi regime is giving you everything you demand, still you frac’ers are fucking yourselves because of your own insatiable greed, stupidity and harmful operating practices poisoning communities everywhere you go.

The previous administration vilified the industry and cheered when Wall Street walked away from shale, they added, but noted that “Now the current administration is finishing the job.”WTF! Shale was booming under Biden. You frac fools are the problem, not any politicians in USA or Canada – you own all our feeble politicos eagerly bending over for you, deregulating like mad, and handing out $billions in freebies, gifties, and subsidies while letting you walk from clean-up and letting you get away with refusing to pay rent and refusing to pay taxes.

“Guided by a U.S. Department of Energy that tells them what they want to hear instead of hard facts, they operate with little understanding of shale economics,” the executive said.

“Instead of supporting domestic production, they’ve effectively aligned with OPEC-using supply tactics to push prices below economic thresholds, kneecapping U.S. producers in the process.”

The shale patch consolidation has been fueled by the collapse of capital availability. This consolidation, in turn, is pushing out independents and entrepreneurs who once defined the shale revolution, according to the executive.

“In their place, a handful of giants now dominate but at the cost of enormous job loss and the destruction of the innovative, risk-taking culture that made the U.S. shale industry great.”

@ssteingraber1.bsky.social‬:

LNG = Hell on earth

24/7 industrial noise and light pollution plus toxic air contaminantsmost unpleasant, I’ve been abused by these since 2001, with one hell of a lot more to come linked to asthma, heart disease, birth defects, childhood leukemia, and Alzheimer’s disease

The US LNG industry risks becoming victim of its own success by Ron Bousso, September 22, 2025, Reuters

Summary

Global LNG capacity to grow by 60% by 2030, US to make up half of additions
LNG market expected to enter period of heavy oversupply
At the same time, growing demand for domestic US power generation to boost gas costs

The breathtaking expansion of U.S. gas exports in the last decade has reshaped global markets, but a looming global oversupply along with rising power prices domestically could leave the industry exposed on both sides of its value chain.

The U.S. has become the world’s top exporter of liquefied natural gas (LNG), thanks to its abundant gas supplies from onshore shale. Energy Secretary Chris Wright expects LNG to overtake oil as the top U.S. export in the coming years.

Liar buffoon NaziPresident Donald Trump’s administration has touted LNG purchases as the best way for countries to reduce their trade deficits, and Europe’s purchases of U.S. LNG are playing a key role in efforts to end the region’s reliance on Russian energy. The super-chilled fuel has therefore become a critical political tool as well as an economic juggernaut.

But the U.S. LNG industry risks being a victim of its own success.

The rapid build-out of American gas liquefaction capacity in recent years is poised to create a huge global supply glut, possibly comparable to last decade’s surge in U.S. shale oil output, which led to one of the biggest downturns in the sector’s history.Fucking frac’ers never learn

Global LNG capacity is set to increase by a staggering 60% by the end of the decade from 550 bcm in 2024 to 890 bcm in 2030, according to LSEG estimates. U.S. capacity is expected to make up half of that global growth.

Demand growth is unlikely to match that pace. While supply and demand is largely in balance this year, the market is expected to tip into an oversupply of nearly 50 bcm in 2026 and as much as 200 bcm in 2030, based on current LSEG projections.

Such a gap would have a profound impact on the industry.

First, global gas prices will likely decline, particularly in Asia and Europe. This, in turn, could generate new demand from price-sensitive power generators and heavy industry.

For producers, low LNG prices would obviously cut into profit margins. Since U.S. feedstock gas costs are higher than those of Qatar, the world’s second-largest producer, American producers may have to curtail some production, ceding market share.

“There will definitely be an LNG glut, but the depth and length depend on liquefaction project attrition rates and Qatar’s LNG marketing strategy,” said Seb Kennedy, founding editor of analysis platform Energy Flux.

DOMESTIC PRESSURE

The issue in the domestic U.S. gas market is quite different. While an LNG supply glut should weigh on global prices, domestic U.S. gas prices could actually rise in coming years due to slower deployment of renewable power and a spike in energy demand driven by the artificial intelligence boom.

Trump’s “Big Beautiful” tax bill, signed into law on July 4, slashed around $500 billion worth of tax credits for low-carbon energy projects that were introduced by former President Joe Biden.

The tax credit cuts led research firm Wood Mackenzie to reduce its estimates for solar power deployment by 35% by 2030 compared with forecasts one year ago. Wind capacity additions over the next decade are expected to be almost one-quarter lower than previous estimates.

At the same time, U.S. electricity demand could spike in the coming year, due to the growth of data centres powering the AI industry. They are expected to account for nearly half of U.S. electricity demand growth through the end of the decade, according to the IEA.

If the entire incremental demand indicated by the IEA’s most aggressive AI growth scenario is met by gas-fired power, it would require an additional 100 bcm of supply by 2035, an amount larger than the planned increase in LNG export capacity during this period.

Regardless of which scenario plays out, the growth in electricity demand and lower renewables deployment should increase demand for power, putting data centres in direct competition with LNG plants.

The U.S. Energy Information Administration already forecasts benchmark Henry Hub gas prices will rise from $2.94 per million British thermal units (mmbtu) in 2025 to $3.43 per mmbtu in 2030. The figures could be larger if demand for gas grows aggressively.

POLITICAL PRESSURE

We may already be seeing this upward price pressure play out.

U.S. electricity prices rose on average nationally by 4.5% between January and June 2025 from a year earlier, according to EIA data. Some states saw much larger increases: prices in Maine, Utah and Connecticut all rose by at least 15% over the period. Texas and Louisiana, which host the vast majority of the country’s LNG plants, reported price increases of 3.0% and 7.5%, respectively.

Mounting pressure on gas prices from LNG plants and the power sector might not be a political hot potato yet. But if data centre demand grows, rising domestic gas prices could become an issue ahead of U.S. mid-term elections next year or presidential elections in 2028.

To lower prices, the Trump administration could restrict the volume of gas supplies available for export, prioritizing the country’s AI push.

So even though the U.S. LNG industry is growing rapidly in scale and importance, this dynamic could crash with harsh market realities in the coming years

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