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The U.S. oil giant ExxonMobil recently purchased Pioneer Natural Resources for just under $60 billion. The purchase reveals the promising potential of the shale revolution for the U.S. economy, including reducing energy prices for consumers.
Straight Arrow News contributor Peter Zeihan reviews the history of extracting oil from shale, tracing its roots back to the oil crisis of the early 2000s, to understand how shale has now come to play such a large role in U.S. oil production and national energy security.
An excerpt from Zeihan’s Oct. 18 “Zeihan on Geopolitics” newsletter:
With ExxonMobil’s acquisition of Pioneer, it’s time to kiss the days of mom-and-pop shale operations goodbye. But before we look at what’s next, let’s look at the shale journey over the last two decades.
Thanks to high oil prices in the early aughts, small shale operations could innovate and develop new techniques for extracting that black gold. Once the U.S. was close to achieving energy independence, super majors caught a whiff of the money and started buying up those smaller producers.
This recent acquisition signals the end of an era as the super majors now dominate shale production. So what does that mean for U.S. shale? While there will be less innovation and slower production growth, ExxonMobil will provide more stability to the industry.
But that’s only the beginning of this story… we’ll be breaking down the second shale revolution tomorrow.
