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  • Jeffrey Goldfarb

Shale

Shale | Energy | Renewable | Growth | B Corp


The US Call for energy independence may have been premature. Though there is no doubting the quantity of shale gas under the surface, the aggressive pursuit of retrieval may have countered the original intent. With loose regulations and poor estimates energy companies saw an immediate boom of 7% growth in 2018 only to come up short of even 1% growth in 2019.[1]


This is not due to global slowdowns or trends. It is mostly operational issues.[2] Wells have been placed too closely to one another and are cannibalizing the results. Rather than working together for efficient extractions competitors have scrambled to collect as much as possible resulting in “sweet spots running out sooner than anticipated.”


This slowdown is coming at an inopportune time as the demand for shale oil is growing worldwide. It is also impacting employment as hiring in shale regions have slowed down.[3] The growth of shale’s presence in global markets has softened the blow of oil’s volatility these past few years but this recent plateau only demonstrates a one for one trade on energy is not the answer. The answer to fossil fuels isn’t introducing more to the market but taking times of fortune as an opportunity to invest in alternatives.


In order to maintain steady growth in energy, there has to be multiple collection streams, in the form of renewable energy. This will not just diversify our consumption habits, and balance the market, but it will answer long term supply & demand conflicts.


While the rest of the world gathers to address climate concerns, it’s important that America remains a thought leader on the topic. It’s important that we allocate our resources into the research and development of new technologies that help produce affordable, renewable energy before an energy crisis hits. Add on top of that the growing climate change concerns and the need for proper renewable investments compound.


Any opinions are those of Jeffrey Goldfarb and not necessarily those of Raymond James. Expression of opinion are as of this date and are subject to change without notice.

[1] https://www.businessreport.com/newsletters/u-s-oil-production-grew-less-than-1-in-early-2019

[2] https://www.wsj.com/articles/shale-companies-adding-ever-more-wells-threaten-future-of-u-s-oil-boom-11551655588?mod=searchresults&page=2&pos=6&mod=article_inline

[3] https://www.wsj.com/articles/shale-boom-is-slowing-just-when-the-world-needs-oil-most-11569795047

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