Filed in Economy, Energy, Precious Metals by on September 12, 2016

The Death of the Great Bakken Oil Field has begun and very few Americans understand the significance.

Just a few years ago, the U.S. Energy Industry and Mainstream media were gloating that the United States was on its way to “Energy Independence.”

Unfortunately for most Americans, they believed the hype and are now back to driving BIG SUV’s and trucks that get lousy fuel mileage.  And why not?  Americans now think the price of gasoline will continue to decline because the U.S. oil industry is able to produce its “supposed” massive shale oil reserves for a fraction of the cost, due to the new wonders of technological improvement.

I actually hear this all the time when I travel and talk to family, friends and strangers.  I gather they have no clue that the Great Bakken Oil Field is now down a stunning 25% from its peak in just a little more than a year and half ago:

bakken-field-oil-production-sept-2016

The mighty Bakken oil field located in North Dakota reached peak production in December 2014 at 1.26 million barrels per day (mbd) and is now down to 942,000 bd.  This decline is no surprise to me or to my readers who have been following my work for the past several years.

I wrote about the upcoming crash of the Bakken oil field in my article (click on image to read article)– Published, NOV. 2013:

the-coming-bust-of-the-great-bakken-oil-field

I ended the article with these sobering words:

There are only so many drilling locations available and once they run out, the Great Bakken Field will become a BUST as the high decline rates will push overall oil production down the very same way it came up.

Those who moved to the frigid state of North Dakota with Dollar signs in their eyes and images of sugar-plums dancing in their heads will realize firsthand the negative ramifications of all BOOM & BUST cycles.

Well, the Bust of North Dakota economy has arrived and according to the article, “The North Dakota Great Recession“:

Unfortunately by April 2015 it was clear that the oil markets were in a secular decline brought on by oversupply in the global energy markets fueled by a deep recession in China. As a result, companies started to lay off workers, and over the following months caused a massive exodus of people as jobs were eliminated. Nobody is exactly sure how many people have left the state, but some put estimates as high as 25,000.

The strongest real estate market continues to be Watford City with the weakest in Minot. However, even in Watford City the price of a three-bedroom rental home has come down from $2,500 in 2015 to a current price of $1,400. This represents a 44 percent decline of the rental price in the market.

Some folks believe the reason for the decline in oil production at the Bakken was due to low oil prices.  While this was part of the reason, the Bakken was going to peak and decline in 2016-2017 regardless of the price.  This was forecasted by peak oil analyst Jean Laherrere.  I wrote about this in my article below (click on image to read article)– Published,APRIL 2015:

what-will-the-death-of-the-great-bakken-look-like

I took Jean Laherrere’s chart and placed it next to the current actual Bakken oil field production:

bakken-oil-decline-vs-jean-laherrere-forecast

As we can see in the chart above, the rise and fall of Bakken oil production is very close to what Jean Laherrere forecasted several years ago (shown by the red arrow).

According to Laherrere’s chart, the Bakken will be producing a lot less oil by 2020 and very little by 2025.  This would also be true for the Eagle Ford Field in Texas.

According to the most recent EIA Drilling Productivity Report, the Eagle Ford Shale Oil Field in Texas will be producing an estimated 1,026,000 barrels of oil per day in September, down from a peak of 1,708,000 barrels per day in May 2015.

Thus, Eagle Ford oil production is slated to be down a stunning 40% since its peak last year.

 

texas-eagle-ford-oil-production-sept-2016

As we can see in the chart above, the rise and fall of Bakken oil production is very close to what Jean Laherrere forecasted several years ago (shown by the red arrow).

According to Laherrere’s chart, the Bakken will be producing a lot less oil by 2020 and very little by 2025.  This would also be true for the Eagle Ford Field in Texas.

According to the most recent EIA Drilling Productivity Report, the Eagle Ford Shale Oil Field in Texas will be producing an estimated 1,026,000 barrels of oil per day in September, down from a peak of 1,708,000 barrels per day in May 2015.

Thus, Eagle Ford oil production is slated to be down a stunning 40% since its peak last year.

texas-eagle-ford-oil-production-sept-2016

Do you folks see the writing on the wall here?  The Bakken down 25% and the Eagle Ford down 40%.  These are not subtle declines.  This is much quicker than the U.S. Oil Industry or the Mainstream Media realize.

And… it’s much worse than that.

The U.S. Oil Industry Hasn’t Made a RED CENT Producing Shale

 

Read More