Shock warning: US energy sector could collapse

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Tucker Carlson of Fox News recently interviewed former Secretary of Energy Rick Perry regarding the depressed energy market in the US.

Perry, also a former governor of Texas, a big oil state, warns that a weak energy sector in the US economy will make the US vulnerable and dependent on countries like Saudi Arabia for our energy. Foreign oil producers could decide what US citizens pay for energy. Do we want that again?

The US became an energy-independent nation because of the “fracking” method of extracting oil out of shale and sand. Many states like South Dakota and Texas are enjoying the benefits of a strong energy economy and thereby the whole nation, except for California, benefitted.

All of that changed when Russia and Saudi Arabia started an oil price war earlier in March, flooding the open market with cheap oil, exceeding demand and driving down the price of oil under $30 to even as low as $19 dollars a barrel.

American independent oil producers

These low prices threaten many independent oil companies, the backbone of the fracking revolution. Without their presence in the market, we would be at the mercy of “big oil,” companies rich enough to absorb the losses of not only the Saudi-Russian price war but also the decreasing domestic demand due to coronavirus lockdown.

People are doing a lot less driving as the “shelter in place” to slow the coronavirus. No driving equals less demand for gas. Less demand for gas equals plunging prices.

Many independent oil companies need to make a certain amount per barrel to pay their bills and make a profit.

According to oilprice.com: Breakeven prices for U.S. shale basins range between $39 and $48 per barrel, according to data compiled by Reuters. Meanwhile, West Texas Intermediate (WIT) is trading below $25 a barrel and has been for over a week now.

US companies that survived the low prices in 2014 and 2015 are lean and frugal, and some 50% of them could breakeven at $30 per barrel but the price has dropped below $20 per barrel, now. Perry says: “We are on the verge of a massive collapse.” At these unsustainably low prices, companies will stop production as it will no longer be economically sound to continue to drill.

There is also a storage problem. The oil glut is filling all the storage and when the storage is full, prices could drop even more. Again according to oilprice.com:

Meanwhile, pipeline operators in Texas are asking producers to stop pumping oil because storage space is filling up. The storage problem is becoming critical on a global scale. According to the chief analyst of data analytics firm Kayrros, if storage continues to fill up, oil prices could fall close to zero.

Forbes ran an article back in early March explaining how Russia is manipulating the market to crush US shale oil production. The author points to US sanctions as the reason Russia wants to retaliate. You can read the article here.

Lower prices always seem good to the consumer, and we enjoy getting a bargain at the pump, but US energy producers need to make money for the US to remain independent and that is critical to our economy and our national security.

Watch:

186 Responses

  1. Gee, why not offer more bad and potentially devastating news right now, to add to the panic and stress people are already suffering from?? Not to mention further tanking the stock markets!!! 🙁 I say enough!! Let’s focus on the numbers of people who AREN’T getting the virus, and the very large percentage who DON’T die from it. Let’s open our businesses back up, put people back to work, put cars back on the streets, public transportation back in operation, get our economy moving again, and give people hope!! Frankly, I — and I imagine there are millions of others out there who feel the same way — would rather get the virus any day of the week, than die from stress, desolation, and isolation! Those things will cause illness and kill as quickly or quicker than any virus — FACT! Just please stop this madness! 🙁

    1. Hogwash put your big girl pants on and stay put . If you can’t handle keeping up with what’s going on in the world quit listening and act like you are on a paid vacation and decided to stay home and get a much needed rest.

    2. I believe I speak for many, many others when I say we feel exactly the way you stated in your comments Carol. We are so very tired of these writers predicting doom. I frankly am sick and tired of it and if it doesn’t stop, I will unsubscribe from all of these blogs and only listen to OAN and not comment at all. I will miss commenting but I won’t miss some of the inane comments and even more inane articles of late. Oh, and many of the headlines that try to sensasonalize to get us to read the articles, by most of these blogs is the worst! Just tell it like it is people. We are conservatives, not illiterates and don’t need baiting to be enticed to read an article. As I have said many times, let us please be frank and everyone just grow up!

    3. AGREED. Thank you Carol for stating what we all need to hear. Liberals have been trying to devastate our Country for years but majorly since we got sick and tired of it and voted in President Trump.
      The Powerful Dems and their billionaire cohorts will do anything to turn us into a Communist Country. Their followers should either be enjoying what’s going on OR, hopefully some realize that this is not the way they want to live. The Deep State cares more for having POWER than for “We The People”.

  2. Carol,
    You are 1000% correct.
    Just get rid of mainstream media death and doom mongers.
    It’s like they all thrive on their own misery making opinions.
    They should put the statistics on how many survive and how many people died from whatever virus was going around this last winter.
    People would be shocked!
    I’m with you. Tell people to STAY HOME if you’ve been exposed or are sick and get our country back to normal.
    But people have no common sense anymore, they listen to the lying crazed media and they are on a blind agenda to ruin our nation.
    God Bless you and keep you and your family safe.

  3. Dear GOD 🙏
    We come before You and seek Your abundant Blessings in our Nation (USA) and in the Life of our President Trump and the Life of our VP Pence. We pray that You, LORD turn all the Curses and all The Negative talkings to Blessings.
    We pray for those in Democrats who curse, attack and try to destroy our beloved President Trump, that You forgive them, and touch their hearts and cast out demons from them, so that they may have new hearts.
    Kyrie Eleison 🙏
    Christie Eleison 🙏

  4. This for sure isn’t good news. I agree about the lying liberal media. Accentuate the positive, eliminate the negative. Best policy, truth!
    Question. Why don’t we build more storage for our oil? We need to have these sanctions on these other countries, by not allowing them to bully us. And start manufacturing products for our own country and not depend on any other. But they only way that will work. Is to stop the deep state from being greedy and power hungry!
    BTW, I think President Trump has done an supremely remarkable job in America! I don’t always like his verbiage with some ppl. But I mean, come on! He has done about everything he said he would and more. He’s been under constant extreme attack, very minute of every day! And the ppl whom have been attacking him, don’t really care about us or love America. They just want power!
    Jesus please forgive us, and help us out of this plague and the mess we’ve gotten ourselves into. America get on your knees!

  5. The Dems are trying to prepare us for COMMUNISM, haven’t you figured it out yet. They are trying to figure out who the weakest links are. (They are) They have no idea what world war 3 will be all about. Read the book of Ezekiel and the book of Revelation in the Bible. Our God is a God of love, but even HE can only take so much! Remember the flood?

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