03-26-2015, 12:12 PM
The Bureau of Land Management estimates that the compliance cost for its new policies will run about $11,400 per well, or roughly $32 million per year to the industry in total, the agency wrote in its nearly 400-page final rule, released Friday. On the other hand, an analysis of a draft rule from research and consulting firm Advanced Resources International estimated total annual costs associated with the regulation could range anywhere from $30 million to $2.7 billion in total. And at least one industry group leader puts the cost higher than that.
Annual cost estimates of new fracking rule range from $32M to $2.7B
But there were plenty of jobs over the last several years when oil prices were high even though the export ban was in place. That is because over-supply has lowered oil prices and over-production, not the export ban, is the problem.
Lifting The U.S. Oil Export Ban Is No Solution To Low Oil Prices
The biggest problem with making an economic argument to lift the oil export ban is that U.S. tight oil companies were losing money at WTI oil prices of more than $90 per barrel. The table below summarizes 2014 year-end financial data from the oil-weighted U.S. land-based companies that I follow.
Lifting The U.S. Oil Export Ban Is No Solution To Low Oil Prices
Chesapeake Energy Corp. has reduced its 2015 capital budget—including capitalized interest of $500 million—to $3.5–$4.0 billion for 2015, which is a $500 million reduction from its previous guidance of $4.0–$4.5 billion.