The International Energy Agency forecasts that the U.S. will overtake Russia to become the world’s…
The International Energy Agency forecasts that the U.S. will overtake Russia to become the world’s largest oil producer by 2023. Not so fast says an analyst – there are limits to the shale boom:
- Shortages of sand used to hydraulically fracture shale wells
- Limited water and capability to dispose of it
- Lack of truck drivers (where have we heard that before?)
- Rising labor costs
- Limit to the number of rigs
Meanwhile OPEC is debating target prices – the Saudis want $70 – and generally they get what they want. And the projections are for oil consumption to rise and traditional oil extraction to be handicapped because none of the major oil producers are investing in the “mega” projects.
What does this mean for diesel and trucking?
- Labor costs will be driven by the frackers grabbing truck drivers
- Diesel prices in the short term will likely rise and over the longer term, go up markedly