ExxonMobil CEO Rex Tillerson is wrong about the resilience of U.S. tight oil production. “…Mr. Tillerson pointed out that the collapse in natural-gas prices similarly had led the number of rigs drilling for that fuel to drop to 280 from north of 1,600 in 2008. Gas output jumped 50% in that time, he said. That is what you call resilience…While he didn’t see a perfect parallel between shale gas and shale oil, he said there were “lessons” to be learned.” His point is that we should not expect a big drop in U.S. tight oil production just because the rig count is falling. He bases this prediction on what happened with gas production in 2008-2009 and afterward. That is wrong. The fact that gas production didn’t decrease much in 2008-2009 despite a huge drop in rig count is incorrectly attributed to the high productivity of shale gas wells. The […]