New U.S. Energy Secretary Dan Brouillette believes the U.S. shale boom is far from over and that the slowdown in the Permian Basin will only be temporary.
It’s what he said in an interview this week in Washington, D.C. with the Houston Chronicle. Brouillette said as activity in the Permian is expected to slow due to investor demands for capital restraint, he thinks the shale boom will have more life.
“Maybe there are some folks who — for whatever reason — thought they could make some quick money in this and they are learning that production is not as easy as you might think,” Brouillette said Tuesday in an interview in Washington. “You may see some of them go by the wayside.”
The new Energy Secretary who replaced Rick Perry explained drilling technology improvements means companies are better prepared to respond to the fluctuations in oil and gas prices than they have in the past. Also, prices are not as volatile as they used to be.
In September, a drone attack in Saudi Arabia temporarily knocked out half of the country’s production, while OPEC and its allies this month announced deeper-than-expected output cuts.
“The recent events in Saudi Arabia, the recent events with OPEC — none of those had any sort of dramatic or extraordinary move of the market associated with them,” he said. “We’re just not subject to the same types of price shocks that we used to be subjected to.”
The producer group “just doesn’t matter in the same way that it did a generation ago,” Brouillette said.
According to Brouillette, one risk to the growth of U.S. production and exports comes from Democratic presidential candidates including Elizabeth Warren and Bernie Sanders who have promised to ban hydraulic fracturing, the process by which shale rock is broken apart to release oil and gas.
“It would be detrimental to the U.S. economy if folks were seriously considering that” given the shale boom has saved American consumers billions of dollars, he said.
Source: Houston Chronicle