When I say, repeatedly, that the U.S. exports oil and natural gas to foreign countries "below costs" it is because I include debt that was never paid by the sector, lost, and debt that is still outstanding. I am old school oil man that believes free cash flow is not free as long as the operator is still in debt and does not have all its plugging, abandonment and decommissioning costs set aside. When these liabilities are completely paid, then U.S. shale will be profitable. Not until then.

Today the shale oil sector in the Permian Basin is still pushing $200B of unpaid long-term debt. I don't have a clue what it's going to cost to plug all those HZ wells and clean that infrastructure up someday but it's a liability that MUST be paid, along with long term debt.

The cost then of the shale phenomena, unpaid and/or unlikely…

I saw a video today, and maybe I can get feedback on it.

There is a 200' deep sinkhole in Winkler County. It's growing.

Under the Permian, there is a large layer of compressed salt. The salt used to be stable, but now the salt is slowly being dissolved by deep injection of produced water. Other causes are abandoned wells and the fact that groundwater is able to seep deep underground due to so much alteration of the subsurface due to drilling.

The result is caverns under the Permian. Every once in a while, the ground collapses and forms a sinkhole. There are about 50 areas in the Permian with this problem, and some of them have pipelines, tanks, towns, etc. over them.

No one has a solution to stabilize the ground. Professor Mike, is this true? Ever heard of this?

Sable Offshore has been directed by the Trump Administration to restore operations off the Santa Barbara coast and reopen the Santa Ynez pipeline system. Asking people smarter than me (especially Professor Shellman) their opinion on if this is a wise move or not. I think it could be IF it is used to keep our emergency stockpile filled, but I am just a lowly peon in this area.

Mike

This week the STEO issued its updated US March production forecast out to December 2027. When compared with the February issue, they have upwardly revised December 2027 production by 633 kb/d and production reaches a new high in early 2027. In comparison, the February report was showing production falling steadily from October 2025 to December 2027, 13,864 kb/d to 13,211 kb/d.

I was stunned by the change. I wondered what could have changed over one month. WTI was up but the STEO was showing the same price for WTI in December 2027 as December 2025.

I found this article below which says the Permian needs more gas pipelines before oil production can increase. Maybe the March STEO knows that new gas pipelines will be operational in the Permian later this year.

This is a quote: "Analysts have long said negative prices, which force some energy firms to pay others…