The Death Spasm's of OPEC and the Rise of American Energy Independence.

"It isn’t often you see the death of a major worldwide industry. Last week I saw the death of the “Big Oil” economic model. It just died at the hands of Texas oil frackers who have developed a new “disruptive technology” that has made obsolete all the pillars of technology underpinning large, vertically integrated oil companies. More importantly, the same is true of all the petro-states that nationalized Big Oil’s assets in the 1960s to make all the state oil companies around the world today.

I found this out doing my day job last week as a Defense Department quality auditor visiting a mid-sized oil service company diversifying into federal contracts. The meeting was about issues with the contract they won and touched on others they have bid on. As a side bar at lunch the following points about their main business came up:

1. Oil field spending has died. Rig count in the USA is the lowest it has been since 1940.

2. One oil rig controller company these folks worked with saw a year over year drop of 72% in its business.

3. Another company they supplied had their “Cap-X” budget drop from ~$400 million for 2015-2016 to little over $30 million for 2016-2017.

4. One drilling company they supplied went from 120(+) new wells last year to _12_ this year.

5. This supplier sold a lot of copper tubing for “frack-log” drilling. That is the drilling of holes in good oil-bearing rock without fracking rock for oil immediately — and here is the new part — to take advantage of a new long-flow fracking technique.

While most of the points above are due to the Saudis’ oil price war on Texas frackers. An ex-Big Oil geologist I know put it this way —

The entire reason for the price drop was because the Saudis wanted to destroy fracking in the United States in order to keep us dependent upon them in order to keep them getting a free defense. The Saudis will have to diversify and start spending money on defense before the price goes back up, or they will be in serious trouble.

The technique in Point #5 above marks another “fracking revolution” that is of growing importance to the USA. This new fracking energy revolution will upend the world order as we know it. Political winds willing, America may well be a net hydrocarbon exporter in five to eight years."

What this means, is that the possibility that America, might be able to knock down the influence of not only Saudi Arabia, Russia and China, but also, Iran and it's proxies ie: ISIS

If the US can dominate the Oil Markets and Dictate the price of a barrel of oil, America can make it so Iran, Saudi Russia China and all the other rabble rousing countries can't AFFORD to bankroll their proxies anymore.