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Peak Cheap Oil Is A Myth, NGLs, & Winding Down Wind Farms

Peak Cheap Oil Is A Myth, NGLs, & Winding Down Wind Farms

Jan 15, 2024

Peak Cheap Oil Is A Myth, NGLs, & Winding Down Wind Farms

The energy sector is a complex and evolving landscape, influenced by technological advancements, geopolitical shifts, and environmental considerations. A recent discussion on the Big Digital Energy show from the Digital Wildcatters Network brought forth various perspectives on the future of energy production, particularly focusing on oil and gas, renewable energy, and the implications of policy decisions.

Oil and Gas Production

U.S. Production Growth and Inventory Runway

Recent trends in U.S. oil production have surprised many, with significant growth despite expectations to the contrary. The concept of "inventory runway" has been central to these discussions, referring to the duration for which producers can maintain or increase output levels.

Debates on Peak Oil and Resource Abundance

A contentious debate has emerged between those who argue for the concept of "peak cheap oil" and those who view it as a myth. Proponents of the "peak cheap oil" theory assert that the industry is facing diminishing returns from existing wells, particularly in major basins such as the Permian, Bakken, and Eagle Ford. They point to data indicating a reduction in estimated ultimate recovery (EUR) rates and suggest that aggressive well spacing and interference could lead to a decline in production.

In contrast, others argue that technological innovation, combined with the vast resource in place, ensures a future of abundance. They highlight the significant contributions of natural gas liquids (NGLs) to the overall oil production figures and suggest that advancements in drilling efficiency and enhanced oil recovery (EOR) techniques will sustain and even increase production levels.

U.S. NGL Production

The United States has seen a substantial increase in NGL production, reaching levels that position it as a major global player. The inclusion of NGLs in the definition of oil and their contribution to refinery inputs has been emphasized as a factor in assessing the country's energy abundance.

Renewable Energy and Indigenous Land Rights

Wind Farm Removal in Oklahoma

A federal judge in Oklahoma has ordered the removal of a 150-megawatt wind farm built by Italian energy company Enel on Osage Nation lands. The ruling came after the company allegedly ignored the tribe's claim that a mining lease was required before harvesting wind energy on the land. The decision to dismantle the wind farm, estimated to cost over $300 million, sets a significant precedent for indigenous land rights and resource extraction.

Energy Policy and Emissions

Germany's Emissions and Energy Imports

Germany has reported a reduction in emissions and coal usage, attributing the decrease to an increase in renewable energy sources. However, this achievement coincides with a mild winter and an 8% reduction in total energy usage. Furthermore, neighboring France has increased its nuclear electricity production, much of which has been exported to Germany, raising questions about the true extent of Germany's renewable energy progress.

The Closure of Everett LNG Terminal

The Everett LNG regasification terminal in Massachusetts is set to close following the cancellation of a power plant contract. This closure highlights the challenges faced by regions dependent on imported energy sources and underscores the consequences of energy policies that restrict domestic infrastructure development, such as pipeline development to transport natural gas from Appalachia to the Northeast.


The energy sector continues to navigate a landscape marked by technological innovation, policy debates, and environmental concerns. The interplay between oil and gas production, renewable energy adoption, and the rights of indigenous communities will undoubtedly shape the trajectory of energy policy and production in the coming years. As the industry and policymakers grapple with these issues, the importance of a balanced and informed approach to energy development becomes increasingly clear.


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