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From battles on the front lines to social distancing from friends and family, COVID-19 has caused a massive shake-up of our daily lives.

After second-guessing everything from hugging our loved ones to delaying travel, Visual Capitalist’s Iman Ghosh notes that there is one big question that everyone is likely thinking about: will we ever get back to the status quo? The answer may not be very clear-cut.

Today’s graphic uses data from New York Times’ interviews of 511 epidemiologists and infectious disease specialists from the U.S. and Canada, and visualizes their opinions on when they might expect to resume a range of typical activities.

Life in the Near Future, According to Experts

Specifically, this group of epidemiologists were asked when they might personally begin engaging in 20 common daily activities again.

The responses, based on the latest publicly available and scientifically-backed data, varied based on assumptions around local pandemic response plans. The experts also noted that their answers would change depending on potential treatments and testing rates in their local areas.

Here are the activities that a majority of professionals see starting up as soon as this summer, or within a year’s time:

The urge to be outdoors is pretty clear, with 56% of those surveyed hoping to take a road trip before the summer is over. Meanwhile, 31% felt that they would be able to go hiking or have a picnic with friends this summer, citing the need for “fresh air, sun, socialization and a healthy activity” to help keep on top of their physical and mental health during this time.

Public transport and travel of any form is one aspect that has been put on hold, whether it’s by plane, train, or automobile. Many of the surveyed epidemiologists also lamented the strain the pandemic has had on relationships, as evidenced by the social situations they hope to restart sooner rather than later.

The worst casualty of the epidemic is the loss of human contact.

– Eduardo Franco, McGill University

On the other hand, there are certain activities that they considered too risky to engage in for the time-being. A large share are putting off attending celebrations such as weddings or concerts for at least a year or more, out of perceived social responsibility.

Perhaps the most surprising finding is that 6% of epidemiologists do not expect to ever hug or shake hands as a post-pandemic greeting. On top of this, over half consider masks necessary for at least the next year.

The Virus Sets the Timeline

Of course, these estimates are not meant to represent every situation. The experts also practically considered whether certain activities were avoidable or not—such as one’s occupation—which affects individual risk levels.

The answers [about resuming these activities] have nothing to do with calendar time.

– Kristi McClamroch, University at Albany

While many places are trickling out of lockdown and re-opening to support the economy, some officials are still warning against prematurely lifting restrictions before we fully have a handle on the virus and its spread.

Authored by Diane Dimond, op-ed via The Epoch Times,

What the hell is going on in this country? When did we, the majority, stop speaking up for ourselves? Crimes against common sense seem to happen every week, yet most of us stay silent.

Or is it that the media only highlights those who scream the loudest, leaving the impression that what they demand must be implemented?

The most vocal citizens today are the self-righteous members of the so-called woke pack. You know, those who see themselves as the arbiters of all social and racial justice, and if you don’t believe as they do, you are the enemy.

The ideals of critical thinkers seem to go virtually unremarked upon.

So, I ask here, since when did it become acceptable for politicians to order police to abandon their station and allow demonstrators—some armed with guns—to occupy square blocks of an American city? Seattle’s mayor has explained away her occupying force as a “summer of love protest” group.

Does no one worry that this takeover of downtown Seattle might end badly or spread to other cities?

It is every citizen’s constitutional right to assemble and peacefully protest. But who in their right mind thought joining those recent, massive street demonstrations in the midst of a life-threatening pandemic was a wise idea? And now that we see a rise of COVID-19 cases in several states, many of the woke, bizarrely, point the finger of blame at opposition party politicians for not halting the spread of the disease.

Do we lack the common sense to see the coronavirus spike is our own doing?

The “cancel culture” that exists today pushes aside all clear thinkers who dare express an opinion or ask a clarifying question. “All white people are racist. … The rich are criminals. … All police are bad,” they say. Even television cops are to be condemned. TV producers of “Live PD” and “Cops” crumbled to demands and canceled their programs. The main police-dog character on the kid’s cartoon “Paw Patrol” was targeted for elimination.

Think of the negative effect all this anti-cop fervor will have on both children and future police recruiting.

But if you disagree with these new revolutionaries, who are determined to make the rest of us bend to their beliefs, you are bitterly attacked and ostracized.

Author J.K. Rowling of “Harry Potter” fame nearly fell victim to the cancel culture squad recently when she chided a headline that read, “People Who Menstruate.” She accurately pointed out that it is women who menstruate. Well, that brought howls of condemnation from the LGBTQ community and reminders that some people who have transitioned from female to male still have a monthly reminder of their assigned birth sex.

Since when does a tiny minority of a population get to decide how the rest of us think or express ourselves? Isn’t their hyperbolic response to contrary views exactly like the bullying they so frequently rail against?

And, OK, I will ask: Why isn’t it OK to stand up for all humanity and state the obvious that “all lives matter”? That statement does not denigrate black lives; rather, it places black lives on the same high platform as all others. I am weary of the word play and the twisted meanings given to innocent statements.

And, finally, let’s consider the recent move to destroy our history, as if it, too, could or should be erased. Protestors have demanded countless statues of Civil War leaders—including the emancipation president, Abraham Lincoln—be removed. Likewise for monuments depicting conquistadors who colonized the American west. Did some of those historical figures act in ways we consider abhorrent today? Absolutely, but pretending history didn’t happen is to bury our heads.

If you follow their line of thinking, we should stop teaching students about World Wars I and II because atrocities took place. The horrors of Hitler’s pogrom against Jews should never be mentioned. The Vietnam War, the civil rights struggle of the ’60s and Kent State all had decidedly ugly aspects. Do we ignore those events because remembering might make someone uncomfortable?

Students of this country’s history know the shortcomings of our system. Nothing is perfect, and adjustments are underway. But considering radical ideas like disbanding law enforcement, criminal takeovers of inner cities and controlling others’ conversations is just plain foolish.

As the virus pandemic has metastasized into an economic downturn, tens of millions of Americans have lost their jobs and are struggling to service mortgage payments.

New research offers a glimpse into struggling households, discovers out of the 2,000 American homeowners polled, over half (52%) of respondents say they’re routinely worried about making future mortgage payments and nearly half (47%) considered selling their home because of the inability to service mortgage payments. 

The study, conducted by OnePoll and the National Association of Realtors, determined 81% of respondents had experienced unexpected financial stress due to the virus-induced recession. Over half (56%) reduced spending so they could service mortgage payments.

Since mid-March, or about the time when the lockdowns began, nearly half (47%) of homeowners have explored alternative ways of making money. About two-thirds of respondents (64%) started side projects, while 53% sold valuables to supplement income. 

“The swift and unprecedented impact of COVID-19 left many people in a financial emergency, and we want to make sure struggling homeowners know they have relief options, especially during Homeownership Month,” said the National Association of Realtors President Vince Malta.

“Realtors and lenders can identify programs and aid designed to help meet loan obligations. Acting quickly may help homeowners stay in their homes and keep the money they have already invested into it,” Malta said. 

From clothing (71%) and take-out (66%) to streaming TV services (46%) and groceries (45%), respondents said their spending habits had been significantly reduced so they could service mortgage payments. 

In a separate report, more than 4 million homeowners are in mortgage forbearance plan – representing 7.54% of all mortgages, delinquencies are set to surpass the great recession, which peaked at 10%. 

Oxford Economics said 15% of homeowners would fall behind on their monthly mortgage payments in a ‘tidal wave’ of delinquencies, which was similar to the prediction by Moody’s chief economist, Mark Zandi, who said that as many as 30% of Americans with home loans – or around 15 million households, may stop paying if the US economy remains closed through the summer or beyond.

Google search “sell home” rose during lockdowns. 

All of this says a lot about the economy: households are struggling, they cant afford real estate, consumption will remain low, as the prospects of a V-shaped recovery this year continue to wane. 

Authored by Ben Norton via TheGrayZone.com,

Mexico’s oligarchs and establishment political parties have united in a secret alliance to try to remove left-wing President López Obrador from power, with help from the media, Washington, and Wall Street. Leaked documents lay out their devious strategy.

Some of the most powerful forces in Mexico are uniting in a campaign to try to topple the country’s first left-wing president in decades, Andrés Manuel López Obrador. And they apparently have support in Washington and on Wall Street.

Known popularly as AMLO, the Mexican leader is a progressive nationalist who campaigned on the promise to “end the dark night of neoliberalism.” He has since implemented a revolutionary vision he calls the “Fourth Transformation,” vowing to fight poverty, corruption, and drug violence — and has increasingly butted heads with his nation’s wealthy elites.

López Obrador has also posed a challenge to the US foreign-policy consensus. His government provided refuge to Bolivia’s elected socialist President Evo Morales and to members of Evo’s political party who were exiled after a Trump administration-backed military coup.

AMLO also held a historic meeting with Cuba’s President Miguel Díaz-Canel, and even stated Mexico would be willing to break the unilateral US blockade of Venezuela and sell the besieged Chavista government gasoline.

These policies have earned AMLO the wrath of oligarchs both inside and outside of his country. On June 18, the US government ratcheted up its pressure on Mexico, targeting companies and individuals with sanctions for allegedly providing water to Venezuela, as part of an oil-for-food humanitarian agreement.

The value of the Mexican peso immediately dropped by 2 percent following the Trump administration’s imposition of sanctions.

These opening salvos of Washington’s economic war on its southern neighbor came just days after López Obrador delivered a bombshell press conference, in which he revealed that the political parties that had dominated Mexican politics for the decades before him have secretly unified in a plot to try to oust the president, years before his democratic mandate ends in 2024.

The forces trying to remove AMLO from power include major media networks, massive corporations, sitting governors and mayors, former presidents, and influential business leaders. According to a leaked document, they call themselves the Broad Opposition Block (Bloque Opositor Amplio, or BOA).

And they say they have lobbyists in Washington, financial investors on Wall Street, and major news publications and journalists from both domestic and foreign media outlets on their team.

El pdte. @lopezobrador_ difundió un documento llegado a Palacio (cuyo origen y autenticidad desconocemos) que propone la conformación de un bloque opositor para arrebatar la presidencia en el 2021, en el que participan partidos, empresarios, medios, intelectuales, periodistas. pic.twitter.com/zfXSlGdUYP

— Jesús Ramírez Cuevas (@JesusRCuevas) June 9, 2020

‘Broad Opposition Block’ BOA plot to demonize AMLO with media propaganda

In a press conference on June 9, the Mexican government published a leaked strategy document purportedly drafted by the Broad Opposition Block, titled “Let’s Rescue Mexico” (Rescatemos a México). The AMLO administration said it did not know the origin of the leak.

These pages consist of an executive summary of “Project BOA,” outlining what it calls a “plan of action” – a blueprint of concrete steps the opposition alliance will take to unseat AMLO.

The cover of the leaked document, the executive summary of the Project BOA plan, “Let’s Save Mexico”

One of the key points in the plan is the following: “Lobbying by the BOA in Washington (White House and Capital Hill) to stress the damage that the government of the [Fourth Transformation] is doing to North American investors.”

The lobbying strategy depends heavily on turning the US against AMLO: “More than comparing it with Venezuela,” the document reads, “BOA should highlight the very high mass migration of Mexicans toward the United States if the crisis of unemployment and insecurity gets worse.”

Then the BOA adds: “Repeat this narrative in the US and European media.”

The section of the BOA plan on lobbying in Washington and using the media to push anti-AMLO messaging

The leaked pages say that BOA has the “international press (USA and Europe)” on its side, along with “foreign correspondents in Mexico.”

The document even names specific media outlets, along with individual journalists and social media influencers, who could help spread their anti-AMLO propaganda. On the list are some of the top news publications in Mexico: Nexos, Proceso, Reforma, El Universal, Milenio, El Financiero, and El Economista.

The list of sympathetic anti-AMLO media outlets and journalists in the BOA document

The “plan of action” makes it clear that this powerful opposition alliance seeks to use its extensive control over the media to obsessively blame AMLO for “unemployment, poverty, insecurity, and corruption” in Mexico.

BOA even states unambiguously in its plan that it will use “groups of social media networks, influencers, and analysts to insist on the destruction of the economy, of the democratic institutions, and the political authoritarianism of the government of the 4T” (using an acronym for the Fourth Transformation process).

This makes it especially ironic that the BOA document reluctantly acknowledges that the López Obrador “government has managed to mitigate the economic impact of the health crisis of coronavirus by giving large amounts of public money to the affected, through social programs.”

The leaked pages likewise admit that AMLO has an approval rating of more than 50 percent — lower than his peak at 86 percent support in the beginning of 2019 or his 72 percent at the end of the year, but still impressive for a region where US-backed leaders like Chile’s Sebastián Piñera or Colombia’s Iván Duque have routinely enjoyed approval ratings of 6 percent and 24 percent, respectively.

#ConferenciaPresidente. Presentan un documento confidencial de un presunto Bloque Opositor Amplio (BOA) para desplazar a Morena y al gobierno actual en las elecciones del 2021. pic.twitter.com/ffoGXoWuVH

— Jenaro Villamil (@jenarovillamil) June 9, 2020

Mexico’s establishment political parties and former presidents unite to oust AMLO

With backing from the US government and utter dominance of media narratives, the Broad Opposition Block plan is to unite all of Mexico’s establishment political parties.

Together, these parties could potentially run candidates under the BOA umbrella, according to the document. Their goal would be, in the 2021 legislative elections, to end the majority that AMLO’s left-wing party Morena won in Mexico’s Chamber of Deputies.

After that, BOA states clearly that it plans to block reforms in the Mexican legislature, and ultimately impeach President López Obrador by 2022 — at least two years before his term ends.

Quite revealing is that the “Let’s Rescue Mexico” document does not mention anything about average working-class Mexicans and their participation in the political process. Nor does it acknowledge the existence of labor unions or grassroots activist organizations, which make up the base of AMLO’s movement and his Morena party.

This is not surprising, considering the BOA alliance lists some of the most powerful figures in the Mexican ruling class.

All the major political parties are included: the right-wing National Action Party (Partido Acción Nacional, or PAN), the center-right Institutional Revolutionary Party (Partido Revolucionario Institucional, or PRI), the centrist Citizens’ Movement (Movimiento Ciudadano, or MC), and even AMLO’s former Party of the Democratic Revolution (Partido de la Revolución Democrática, or PRD).

The list of political parties included in the BOA document

BOA also includes the new political party México Libre, a vehicle for former right-wing President Felipe Calderón, a major ally of George W. Bush who declared a catastrophic “war on drugs” in Mexico, leading to tens of thousands of deaths.

Along with Calderón, BOA lists former President Vicente Fox, another right-wing US ally, as a coalition ally. Fox worked closely with the Bush administration during his term as president to isolate the leftist governments in Latin America, and even tried to undemocratically remove AMLO as mayor of Mexico City and ban him from running for president.

BOA also says it has support from the governors of 14 states in Mexico, along with opposition lawmakers in both the Senate and Chamber of Deputies, judges from the Electoral Tribunal of the Federal Judiciary (TEPJF), and officials from the National Electoral Institute (INE).

Wall Street investors and Mexican oligarchs back anti-AMLO alliance

Joining the entire Mexican political establishment in the Broad Opposition Block is a powerful financial oligarchy, both domestic and foreign.

Along with its “anti-4T lobbyists in Washington,” the leaked document says BOA has “Wall Street investment funds” behind it.

BOA adds that it is supported by “corporations linked to T-MEC,” using the Spanish acronym for the new “United States–Mexico–Canada Agreement” free-trade deal, known popularly as NAFTA 2.0.

The powerful business groups and corporations listed in the BOA document

Some of the richest capitalists in Mexico are associated with BOA. Named in the leaked document is the Mexican corporate behemoth FEMSA and oligarchs from its associated Monterrey Group, which the New York Times once described as a “a tightly knit family of wealthy and conservative businessmen.”

The BOA pages also point to Mexico’s powerful Business Coordinating Council (Consejo Coordinador Empresarial) and Employers Confederation of the Mexican Republic (Coparmex) as allies.

Opposition denies involvement in BOA, while turning up heat on AMLO

In the days after López Obrador’s press conference exposing the Broad Opposition Block, some of the prominent figures implicated in the alliance, such Felipe Calderón, denied involvement.

Some of these political and economic elites even claimed BOA doesn’t exist, seeking to cast doubt on the president’s scandalous revelation and accusing him of fabricating the scandal.

But their efforts are clearly part of a larger campaign by Mexican opposition groups to remove President Andrés Manuel López Obrador from power. As AMLO’s Fourth Transformation moves forward, their destabilization tactics have grown increasingly extreme.

López Obrador himself has warned of the radicalization of the right-wing opposition. As The Grayzone previously reported, the president made an ominous reference to the threat of a potential coup in November 2019.

Referencing Mexico’s former President Francisco Madero, a leader of the Mexican Revolution and fellow left-winger who was assassinated in 1913, AMLO tweeted, “How wrong the conservatives and their hawks are… Now is different… Another coup d’état won’t be allowed.”

Ahora es distinto. Aunque son otras realidades y no debe caerse en la simplicidad de las comparaciones, la transformación que encabezo cuenta con el respaldo de una mayoría libre y consciente, justa y amante de la legalidad y de la paz, que no permitiría otro golpe de Estado.

— Andrés Manuel (@lopezobrador_) November 2, 2019

The next part in this investigative series by The Grayzone will show how far-right forces in Mexico are pushing for a coup against AMLO.

On Friday, we relayed the latest observations from BofA chief investment officer, Michael Hartnett who concluded that there is just one bull market to short – namely credit – “and the Fed won’t let you” by which he means all central banks. As the following table shows, the balance sheet of the G-6 central banks has exploded, with the Fed’s total asset expected to double in 2020 amid an avalanche of money printing.

And visually:

Of course, it’s not just central banks: as Hartnett also explained there is also the 2020 fiscal bazooka which has a way to go, with the massive fiscal stimulus unleashed post-covid taking 3 forms in 2020: spending, credit guarantees, loans & equity.

Hartnett also noted that according to BIS data, US & Australia lead spending (>10% GDP), Europe is using aggressive credit guarantees (e.g. Italy 32% GDP), while Japan/Korea are stimulating via government loans/equity injections.

But the most staggering fact was when one puts it all together.

According to BofA calculations, in addition to the record 134 rate cuts YTD, the amount of total global stimulus, both fiscal and monetary, is now a “staggering” $18.4 trillion in 2020 consisting of $10.4 trillion in fiscal stimulus and $7.9tn in monetary stimulus – for a grand total of 20.8% of global GDP, injected mostly in just the past 3 months!

And to think none of this would have been possible if officials had not collectively decided to shutdown the global economy in response to the coronavirus pandemic.

For the interested, here is a full breakdown of all the fiscal and monetary stimulus as compiled by BofA:

 

Authored by Simon Black via SovereignMan.com,

Are you ready for this week’s absurdity? Here’s our weekend roll-up of the most ridiculous stories from around the world that are threats to your liberty, risks to your prosperity… and on occasion, inspiring poetic justice.

Eight year old boy arrested for asking if he could buy candy with fake money

At a parade in Switzerland, fake money was thrown around for children to collect.

The obviously fake cash is called “spirit money.” Featuring Chinese symbols, it is meant as an offering to the dead so they can prosper in the afterlife.

An eight year old Swiss boy later asked a shop clerk if he could use the play money to buy candy. To be clear, the kid did not try to trick the shopkeeper, or pass off the money as real.

A normal person would laugh, and politely explain that only central banks are allowed to use fake money.

Instead, this shopkeeper opted to call the police.

Again, a reasonable officer could have stopped it all there.

Instead, the boy and his ten year old brother were taken to the police station. Police took their mugshots, but did not charge them with a crime.

Police did however search the family’s home, where police found some other play money.

These cops essentially confiscated Monopoly money, as if they were busting a counterfeiting operation.

Click here to read the full story.

*  *  *

Police called over BB-gun in background during virtual class

Due to Covid-19 lockdowns, plenty of schools have been holding virtual video classes.

In one class, someone on the call took a picture of an 11 year old boy’s screen. It showed him in his bedroom with a BB gun in the background.

This anonymous snitch told the Principal, who compared this to bringing a weapon to school.

Yeah that makes sense– because a Boy Scout with a BB gun in his room is totally the same thing as a school shooter.

Then the school administration became involved, and alerted the police department.

Police went to the family’s home to search for an unsecured weapon.

If there is any silver lining to this story it’s that police concluded no laws had been broken, and left.

Just a reminder to be wary who you might be inviting into your child’s bedroom.

And if you’re already a member of our premium service Sovereign Man: Confidential, this might be a good time to check out our recent alert about homeschooling.

Click here to read the full story.

*  *  *

Hertz admits its stock is worthless, as it planned to sell half a billion dollars of new shares

The rental car company Hertz is going through bankruptcy.

But Hertz announced Monday in an SEC filing that the company would sell an additional $500 million worth of new shares. And the bankruptcy judge in the case approved!

Hertz then openly admitted that the stock would almost certainly soon be worthless. That’s because as Hertz goes through bankruptcy, senior debt holders will be paid back before the common stockholders.

But that hasn’t stopped people from buying the worthless stock, apparently hoping to “buy the dip”.

But after the plan received a little too much attention– and questions from the SEC– Hertz decided to drop the plan.

Click here to read the full story.

*  *  *

US National debt increased by nearly $1 trillion in the last month

In the past 30 days, the United States national debt has increased by nearly $1 trillion– screaming past $26.2 trillion total, or 128% of GDP.

That means the US government is borrowing over $23 million per MINUTE.

But that’s just the last 30 days. The US government has gone nearly $3 trillion further into debt since March 1.

That is over $9,000 for every man, woman, and child living in the United States. And all you received was a $1200 check…

Now the “Save our Country Coalition” has penned a letter to Congress stating that the federal budget is dangerously close to $10 trillion this fiscal year.

On an inflation adjusted basis, that means the government will spend more fighting Covid than it spent fighting every single 20th century war– plus the 21st century Wars in Iraq and Afghanistan– COMBINED.

The cost of World War I, World War II, The Korean War, The Vietnam War, The Gulf War, The Iraq War, and the War in Afghanistan combined, does not add up to this fiscal year’s budget.

Click here to read the full story.

*  *  *

On another note… We think gold could DOUBLE and silver could increase by up to 5 TIMES in the next few years. That’s why we published a new, 50-page long Ultimate Guide on Gold & Silver that you can download here.

Travel and tourism have been some of the hardest-hit sectors by COVID-19. The pandemic has been a massive blow to the cruise ship industry, with operators, shipowners, and shipyards feeling the pinch amid a collapse in sails. Now, a bankrupted cruise ship onwer is set to auction one of its vessels next week as there is no travel recovery in sight. 

Bunny’s Adventure and Cruise Shipping Co. Ltd., the registered owner of RCGS Resolute, a five-star ice-strengthened expedition cruise ship that sleeps 184 in 88 cabins, will be auctioned off on Monday, June 22 in Curaçao, a Dutch Caribbean island. 

According to Cruise Industry News, RCGS Resolute has been leased over the last several years by One Ocean Expeditions, a cruise operator specializing in polar expeditions that recently filed for bankruptcy in a British Columbia court. The vessel has had at least two different voyages interrupted by authorities attempting to collect unpaid bills. 

With new management by Columbia Cruise Services, the vessel has been in Curacao for two months. The ship is operating with a skeleton crew, and ship owners are responsible for debts around $4 million. 

Due to the virus pandemic and collapse in travel and tourism, this is probably the worst time to auction off a cruise ship, limited bidders could make the sale of the vessel at a steep discount. 

If cheap enough, maybe Barstool Sports’ Dave Portnoy, since he’s such a big fan of cruise ship stocks (as we’ve previously noted Robinhood traders pile into cruise ship stocks), should look into the auction slated for next Monday. 

What’s a couple of million to Portnoy, who routinely says he’s a better investor than Warren Buffett and claims trading is easy… 

Authored by Arthur Berman via OilPrice.com,

• U.S.’ energy dominance agenda is dead as the country’s shale industry is looking at a steep production decline.

• The U.S. tight oil or shale rig count has fallen 69% this year from 539 in mid-March to 165 last week.

• U.S. oil import dependence is set to grow in the next couple of years.

U.S. energy dominance is over. Output is probably going to drop by 50% over the next year and nothing can be done about it. It has nothing to do with the lack of shale profitability or other silly memes cited by people who don’t understand energy.

It’s because of low rig count.

The U.S. tight oil or shale rig count has fallen 69% this year from 539 in mid-March to 165 last week. Tight oil production will decline 50% by this time next year. As a result, U.S. oil production will fall from to less than 8 mmb/d by mid-2021.

What if rig count increases between now and then? It won’t make any difference because of the lag between contracting a drilling rig and first production.

The party is over for shale and U.S. energy dominance.

Energy Dominance is Over

Tight oil is the foundation of U.S. energy dominance. The U.S. has always been a major oil producer but it moved into the top tier of oil super powers as tight oil boosted output from about 5 to more than 12 mmb/d between 2008 and 2019 (Figure 1).

Conventional production has been declining since 1970. It fell from almost 10 mmb/d in 1970 to 5 mmb/d in 2008.

Figure 1. Tight oil is the foundation for U.S. Energy Dominance.

Conventional production has been in decline since 1970. Tight oil boosted U.S. production to more than 12 mmb/d in 2019.

Source: EIA and Labyrinth Consulting Services, Inc.

Tight Oil Rig Count and Oil Production

Rig count is a good way to predict future oil production as long as the proper leads and lags are incorporated.

It takes several months between an upward price signal and a signed contract for a drilling rig. It takes another 9-12 months from starting a well to first production for tight oil wells. With pad drilling, usually all wells on the pad must be drilled before bringing in a crew to frack the wells.

Tight oil horizontal production reached 7.28 mmb/d in November 2019 when the lagged rig count was 613 (Figure 2). That corresponded to 12.9 mmb/d of U.S. oil production—tight oil is about 55% of total output. Approximately 600 rigs are needed to maintain 7 mmb/d of tight oil and 12.5 mmb/d of U.S. production.

The horizontal rig count is now 165 so it is unavoidable that production will fall. The considerable lags and leads mean that production decline cannot be expected to reverse until well into 2021 assuming that it starts to increase immediately. That won’t happen because of constrained budgets and low oil prices.

Figure 2. 600 tight oil rigs to maintain 7 mmb/d tight oil/12 mmb/d total U.S. output.

May tight rig count was 207 so U.S. decline to 8 mmb/d by Q2 2021 is unavoidable. Production should increase this summer with shut-in re-activation then fall in Q4 2020.

Source: Baker Hughes, IEA DPR, Enverus and Labyrinth Consulting Services, Inc.

U.S. producers shut in most of their wells in May because oil prices had collapsed and storage had reached its limits. Tight oil production has fallen more than 1 mmb/d to 6.2 mmb/d and total U.S. output is around 10.5 mmb/d.

With the storage crisis now apparently averted and with somewhat higher oil prices, most tight oil wells are being re-activated. Production should increase until all shut-in wells are back on line and then, it will resume its decline.

Based on rig count analysis, U.S. oil production will probably be about 8 mmb/d by mid-2021 or more than 4 mmb/d less than peak November 2019 levels.

Killer Decline Rates Require Lots of Rigs

Lower U.S. crude and condensate production is unavoidable with rig counts where they are today. That is because tight oil decline rates are really high.

Figure 3 shows Permian basin shale play decline rates by year of first production. The average of all years is 27% per year. More recently drilled wells decline at higher rates because of better drilling and completion technology. The problem is that the wells don’t have greater reserves—they just produce the reserves faster. That means higher decline rates.

Figure 3. Permian basin annual decline rate is 27% for horizontal tight oil wells

Decline rates generally increase for wells drilled in more recent years because of higher initial production rates.

Source: Enverus and Labyrinth Consulting Services, Inc.

This is not a criticism of the plays or the companies. It’s just a fact.

And that’s why it’s critical to keep 500 or 600 rigs drilling all the time—to replace the 30% of output lost every year to depletion.

Production can be turned off and on as it was in May and June. Production cannot be increased without adding rigs and drilling new wells. Assuming there was infinite capital available to add rigs and drill wells, it would take several years to increase rig count to levels needed to maintain 2019 output levels.

Drilled, uncompleted wells (DUC) may be brought on to slow the rate of production decline somewhat. It is important to note, however, that completion accounts for at least 50% of total well cost. Capital constraints and low oil prices will affect the ability and enthusiasm of companies to complete DUCs.

After the last oil-price collapse, it took 2.5 years for tight oil rig count to increase from 193 in May 2016 to 618 in November 2018 (Figure 3). There were thousands of DUCs during the last oil-price collapse in 2014-2017 but they didn’t have much effect on production decline.

The current June rig count of 165 will continue to fall for several months because of low oil price & capital budgets.

Figure 4. It took 2.5 years for tight oil rig count to increase from 193 in May 2016 to 618 in November 2018.

June rig count of 165 will fall for several months based on oil price & capital budgets.

Source: Baker Hughes, IEA DPR, Enverus and Labyrinth Consulting Services, Inc.

Rigs Don’t Produce Oil, Wells Do

I’ve shown how rig count, lagged production and decline rates are used to estimate future levels of production. That approach is useful but the truth is that rigs don’t produce oil—wells do.

Another approach, therefore, is to compare the number of tight oil wells that were drilled and completed during each of the last 5 years to the corresponding average production rates for each of those years. Then, using year-to-date drilling and completion data, we can annualize and project what 2020 production is likely to be.

This approach suggests that 2020 tight oil production will be about 30% less than in 2019 (Figure 4). Since tight oil represented 56% of total U.S. output in 2019, we may then estimate that U.S. production will average about 8.7 mmb/d in 2020.

Figure 5. 2020 U.S. production will be less than ~8.7 mmb/d vs 12.3 mmb/d in 2019.

Number of completed tight oil wells expected to be ~30% less than in 2019. 8.7 mmb/d is about 25% less than EIA U.S. forecast for 11.6 mmb/d in 2020.

Source: EIA and Labyrinth Consulting Services, Inc.

That is similar to the estimate obtained from the rig count approach. It is, however, about 25% less than EIA’s 2020 forecast for U.S. crude & condensate production.

Energy Dominance and Green Paint

Much lower U.S. oil production is bad for Trump’s Energy Dominance anthem and its corollary that the U.S. is energy independent. It’s even worse for oil prices and the U.S. balance of payments once demand recovers. We will have to import even more oil than we do today and it will cost more.

The idea of U.S. energy independence is ignorant at best and fraudulent at worst. The U.S. imported nearly 7 mmb/d of crude oil and condensate in 2019 and more than 9 mmb/d of crude oil and refined products. That’s almost as much as China—the world’s second largest economy—consumes.

The U.S. is a net exporter in the same way that shale companies are making huge profits—by accounting sleight-of-hand.

The U.S. imports other people’s crude oil, refines it and then, exports it. If a country imports unpainted cars, paints them green and then exports them, is it a net exporter of cars? No. It’s an exporter of green paint.

The U.S. is screwed when it comes to near- to medium-term oil production. It’s not because of Covid-19. U.S. rig count began to decline 15 months before anyone had heard of Covid-19. Even if the road to economic and oil-demand recovery is faster than I believe it will be, it will take a long time to get back to 12 or 13 million barrels per day of production.

There are good reasons to expect that much lower U.S. oil production will eventually lead to higher oil prices. That may result in renewed drilling and another cycle of over-supply and lower oil prices. That is how things have developed in the past.

But a new phase of economic reality and oil pricing is unfolding and no one knows where it will lead. Lower demand may mean that reduced U.S. oil output is appropriate. The only thing that seems certain is that the U.S. will not be the oil super power it was before 2020.