Cover of the Rolling Stone - Shale Econ 101 from Oil & Gas Financial Journal

A few weeks back Rusty Braziel sat down with Don Stowers, Chief Editor of Pennwell’s Oil & Gas Financial Journal, to talk about the big picture – some of the most important issues facing the oil and gas industry, the lasting impact of the Shale Revolution, and Rusty’s thoughts from 40-plus years in the energy business.  It turned into the cover story of their June 2016 issue.  Today, we recap a few of the interview questions. You can download the full article (along with Rusty’s smiling face on the cover) at the bottom of the blog.

Don’s interview questions covered the waterfront, including industry challenges, Rusty’s Base Oil Theory (see All About That Base), boom-bust cycles, when we’ll see prices recover, the outlook for LNG exports, midstream infrastructure, and (as you might expect) Rusty’s new book, The Domino Effect.   Rusty talks about how the winners from this cycle of the Shale Revolution will be those companies that position themselves to thrive in a cyclical market, and ultimately ride the next boom back up.  The first six of seventeen interview questions are included below.

What is the most important question facing the oil and gas industry today?

Depends on your timeframe.  Right now, the big question is - How will the industry adapt to today’s price environment?   Up until the crude price crash, there was a general expectation of sustained high prices that would support continuing investment as far out as the eye could see.   After two years in the school of hard knocks, it is now clear that these markets will be much more treacherous.  Some companies will figure out how to thrive in this environment.  Some won’t.

But that is not really the most important question.  Our much larger challenge is that public sentiment continues to shift toward a view that over the long term our industry should be phased out.  Momentum behind this view seems to be building.  Whether such a momentous shift could happen in 30 years or even 100 years is not the issue.  The fact that our industry will be facing a large movement that wants it to happen is now a permanent fixture of oil and gas markets.  We have to deal with that reality.  Not assume that somehow it will go away.