Good morning, here's what the Oilman has for you today:

• U.S. Oil Moves from Shale to Offshore

• Carmakers Hit at Biden’s Fuel Efficiency Plans

• Upcoming Oil and Gas Events

• Tweet of the Day

U.S. Oil Moves from Shale to Offshore

Oil output from the shale patch is set for a further decline next month, the EIA said this week.

That might come as a surprise, but the figures seem to confirm it.

Shale output is falling, but offshore production is on the rise.

Permian leads the way again… but down

If one shock is not enough, here’s another.

Per the EIA, the Permian will see the sharpest output contraction in November, at 30,000 bpd.

What is happening with the star play?

More importantly, what is happening with that higher-than-expected well productivity?

Well, there is more than one possible answer to these.

First, the higher productivity might have been temporary. It was also likely not universal.

And then there’s the financial discipline and newfound caution of shale drillers.

The rig count has been on a declining streak for weeks.

It only broke that streak last week, led by the Permian, again, but it’s just one week.

Offshore moves slower but surer

Offshore oil takes billions and years to develop.

Unlike it, shale takes a few months and a lot less money.

But everything has a price.

For shale, it’s much faster depletion.

Offshore conventional wells, on the other hand, can keep going for decades.

And that’s exactly what’s happening in the Gulf.

While shale output is falling, Gulf output is on the rise.

Investment in offshore is on the rise, too, although, to be fair, so is investment in shale.

Perhaps there’s a reversal of shale fortunes on the cards yet.

Today’s Edition Is Brought To You By ROX Exploration

Invest in the future of energy with ROX Exploration – a family-owned, independent company dedicated to exploring, developing, and producing oil and natural gas assets. ROX's team of experts drills and operates properties throughout Oklahoma.

If you're an accredited investor looking to diversify into direct oil & gas working interest offerings, connect with ROX Exploration today.

Carmakers Hit at Biden’s Fuel Efficiency Plans

All major carmakers in the U.S. came together this week to slam a fuel efficiency plan by the NHTSA.

That plan, the industry said, would cost carmakers $14 billion in fines.

The desirable versus the possible

The NHTSA has proposed to boost fuel efficiency by 2% for passenger vehicles and 4% for trucks.

Every year.

That would make a cumulative efficiency boost of 10% for passenger cars and 20% for trucks between 2027 and 2023.

Carmakers say this would be impossible to do.

So they would be fined for failing to do what is impossible to do.

And those fines will also make cars more expensive, adding $2,000 to the price.

Even EVs are a target: regulators want to revise how their fuel efficiency equivalence is calculated.

This will lead to lower efficiency equivalence numbers.

And that, in turn, might compromise their appeal, per their makers.

Auto industry target acquired

The carmaking business is a natural enemy of transition rule-makers.

Most of the oil produced on the planet is used to convert into fuels for cars, after all.

That makes the auto industry a big fat target for transition advocates.

It’s bad luck; so many of them work in the federal government.

To be fair, carmakers have been on board with the transition.

Not that they have a choice, but they did go all in on EVs…

Only to see sales plunge before they took off properly.

Now, Big Auto is losing money on every EV it sells.

If the NHTSA gets its way, they might start losing money on regular cars, too.

Upcoming Oil & Gas Events

• October 17-19: Permian Basin International Oil Show, Odessa TX

• October 19: PIOGA Annual Membership Meeting & Reception, Canonsburg, PA

• November 1: Oil and Gas Electrification Symposium, Longmont, CO

• November 2: LOGA State Industry Series, Benedict’s Plantation, Mandeville, LA

Around the Global Patch

🇳🇴 Norwegian duo fast-tracks exploration well project.
🇨🇳 Chinese giant partners with Kazakhstan for oil and gas growth.
🇷🇺 Russia's nuclear power projects in Burkina and Myanmar.

Tweet of the Day

Thanks for reading today's Oil Patch!

Stay oily, my friend.

Two quick requests before you go:

• If you found this useful, forward this email to a friend to spread the word. 👇

• Take 1 second to answer the poll below, and please tell us what you think 👇👇