Back when we first warned of impending doom to the crude sector in early and mid-2013, the US had just crested a month of oil production at 7.7 million barrels per day (MBD). America is now producing over 9 MBD, and staying more steady at that level than many had assumed it could.
While painful, the oil industry created its own problem – it was too successful!
Now, they are working to mesh costs with the “new paradigm” revenues – an equally painful process – but one which tends to work out if time is provided. You can be relatively comfortable with the idea that oil prices will stabilize and rise again – in a normal cycle. But the cycle range has changed.
If we get lucky enough to see $60 per barrel again, rest assured we will see a new flood of oil, the spigots will be turned on in earnest and capped wells will run freely.
That’s all good news by the way.
While the world is being told to fret over cheap oil and its damaging effect, more and more buildings are being built with different energy sources. I just read this weekend that one storage company had just opened their 10th completely self-sufficient rental center – all done with solar. Indeed, they create more power than they need.
US GDP is not going negative because of a) the demographic benefits brewing under the surface, and b) real shifts in future jobs and industry growth.
Instead, America is creating brand new industries; self-driving cars, robotics, the cloud, nanotech, solar, wind…etc., etc.
In the not too distant future you will see new fleets of service vans. We are accustom to the ones that advertise, windshield replacement, plumbing and air conditioning services.
Wait for the ones which promote robot repairs and solar panel refurbishment services!
And when the energy world has re-balanced and companies have right-sized their expenses and production levels, we will find we are in a different world.
New industries will be strong and growing, with plenty of higher-tech jobs to fill and higher wages becoming the norm as Generation Y kids further expand into the work-force.
It’s just a question of time…
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