US Shale: Other Topics Other Than Supply Growth

One can't lie, the Permian Basin is booming. Per the Dallas News:

The oil industry has such a ferocious appetite for workers that it'll hire just about anyone with the most basic skills. "It is crazy," said Jazmin Jimenez, 24, who zipped through a two-week training program at New Mexico Junior College in Hobbs, about 100 miles north of Midland, and was hired by Chevron Corp. as a well-pump checker. "Honestly I never thought I'd see myself at an oilfield company. But now that I'm here -- I think this is it." That's understandable, considering the $28-a-hour she makes is double what she was earning until December as a guard at the Lea County Correctional Facility in Hobbs. 



Side note: notice that New Mexico pays guards at jails about $14 an hour. That's about $28,000 a year. That got me curious as I always read about how California prison guards make a lot of money. So I did a quick google search and came up with this Mic article:

The average annual salary for prison guards nationally is about $45,000. California's prison guards, however, pocket a cool $72,400 — 60% above the national average. But that doesn't even take overtime pay into account. Once that's factored in, California prison guards often make more than $100,000 per year.

The Permian Basin has a wealth of good news. And with it comes bad news like a labor shortage and also another interesting problem, a lack of pipelines. Via Oil Price:

“We think that in Texas by end-2019 there will be a net 575 kb/d of additional pipeline capacity beyond our earlier number, albeit with most of it coming on line in the second half of the year,” the IEA wrote. “In the meantime, capacity will likely remain tight but production will still be able to grow strongly, by 1.3 mb/d this year and 0.9 mb/d in 2019.”

Yep, they can't get the oil out of the Permian Basin due to pipeline capacity issues.

And interesting topic regarding the Permian Basin to keep an eye out on is the issue of productivity.

Per BP:

But it does perhaps suggest that the very rapid increases in tight oil productivity that characterised much of the initial phase of the shale revolution may be beginning to fade. 

I'm obviously leaving off the key details, but I'm doing so as I need to better understand those details. I think for now the key is that productivity gains might be ending. The reason I find that interesting is because there is constant talk about the negative free cash flow for the shale industry. Is productivity gains are gone, how profitable can shale oil really be?