No wonder OPEC member United Arab Emirates backed Matt Damon’s anti-fracking film “Promised Land” last year.
Shale plays like the Eagle Ford in South Texas, the Bakken in North Dakota and the Marcellus in Pennsylvania/Ohio have the Organization of Petroleum Exporting Countries (OPEC) worried that someday soon, we’ll end the decades-long marriage in favor of domestic oil and gas.
Leaders of the group this month formed a task force to discuss how oil shale shakes up the world market they’ve dominated for so long. They ultimately decided to keep oil prices at $100 a barrel and vowed to continue producing a maximum of 30 million barrels a day.
I talked to Chris Faulkner, CEO of Dallas-based Breitling Oil & Gas, who has traveled the world talking about U.S. energy independence. He doesn’t buy the threats that OPEC will ramp up production to run shale drillers out of business.
In his own words:
“They can only do that so much unless they’re going to put themselves out of business because at $84 bucks, that’s what they need to meet their budget numbers. If they don’t sell oil at $84, they start losing money as a whole country. A lot of those countries start losing money in the $90s.
When you go in those oil fields and see it for yourself, I know for a fact that in Ghawar (Saudi Arabia), which is their biggest field, they pump 7 million barrels a day of saltwater into the ground to pump the oil up. They have no pressure left. No pressure gives you an idea that they’ve pulled on it too hard and they damaged the reserves and lack of pressure means you get lack of reserves.
It’s just a matter of time, and I think it’s going to be a short amount of time, before America is in the driver’s seat as far as oil production in the world and I think that scares a lot of people in the Middle East.”