Fracking: A new dawn for misplaced optimism  

Posted by Big Gav in , ,

The Independent has a jaundiced look at the shale gas boom in the US - Fracking: A new dawn for misplaced optimism.

You would think we were swimming in oil. The International Energy Agency's (IEA) latest World Energy Outlook forecasts that the United States will outstrip Saudi Arabia as the world's largest producer by 2017, becoming "all but self-sufficient in net terms" in energy production. While the "peak oil" pessimists are clearly wrong, so is a simplistic picture of fossil fuel abundance.

When the IEA predicts an increase in "oil production" from 84 million barrels a day in 2011 to 97 in 2035, it is talking about "natural gas liquids and unconventional sources", which includes a big reliance on "fracking" for shale gas. Conventional oil output will stay largely flat, or fall.

The IEA has been exposed before as having, under US pressure, artificially inflated official reserve figures. And now US energy consultants Ruud Weijermars and Crispian McCredie say there is strong "basis for reasonable doubts about the reliability and durability of US shale gas reserves". The New York Times found that state geologists, industry lawyers and market analysts privately questioned "whether companies are intentionally, and even illegally, overstating the productivity of their wells and the size of their reserves." And former UK chief government scientist Sir David King has concluded that the industry had overstated world oil reserves by about a third. In Nature, he dismissed notions that a shale gas boom would avert an energy crisis, noting that production at wells drops by as much as 90 per cent within the first year.

The rapid decline rates make shale gas distinctly unprofitable. Arthur Berman, a former Amoco petroleum geologist, cites the Eagle Ford shale, Texas, where the decline rate is so high that simply to keep production flat, they will have to drill "almost 1,000 wells" a year, requiring "about $10bn or $12bn a year just to replace supply". In all, "it starts to approach the amount of money needed to bail out the banking industry. Where is that money to come from?"

In September, the leader of the US shale gas revolution, Chesapeake Energy, sold $6.9bn of gas fields and pipelines to stave off collapse. Four months ago Exxon's CEO, Rex Tillerson, told a private meeting: "We're making no money. It's all in the red." The worst-case scenario is that several large oil companies at once face financial distress. Then, says Berman, "you may have a couple of big bankruptcies or takeovers and everybody pulls back, all the money evaporates, all the capital goes away."

0 comments

Post a Comment

Ads

Ads

Statistics

Locations of visitors to this page

blogspot visitor
Stat Counter

Total Pageviews

Ads

Books

Followers

News

Loading...

Blog Archive

Labels

australia (583) global warming (366) solar power (339) peak oil (322) electric vehicles (193) renewable energy (185) wind power (173) ocean energy (156) csp (144) geothermal energy (142) smart grids (139) solar thermal power (133) tidal power (133) coal seam gas (127) nuclear power (122) oil (116) lng (112) geothermal power (111) solar pv (111) china (109) iraq (108) energy storage (105) green buildings (104) natural gas (102) agriculture (85) oil price (77) biofuel (76) smart meters (72) wave power (68) electricity grid (63) energy efficiency (63) uk (63) google (55) coal (53) internet (51) surveillance (49) food prices (48) shale gas (48) bicycle (47) big brother (47) thin film solar (41) canada (39) biomimicry (38) ocean power (37) scotland (36) new zealand (35) air transport (34) algae (34) water (34) shale oil (33) queensland (32) credit crunch (31) politics (31) bioplastic (30) concentrating solar power (30) california (29) geoengineering (28) offshore wind power (28) population (28) cogeneration (27) saudi arabia (27) resource wars (26) arctic ice (25) batteries (25) bruce sterling (25) censorship (25) cleantech (25) woodside (25) drought (24) tesla (24) ctl (23) economics (22) carbon tax (20) coal to liquids (20) distributed manufacturing (20) indonesia (20) iraq oil law (20) limits to growth (20) origin energy (20) brightsource (19) buckminster fuller (19) rail transport (19) ultracapacitor (19) santos (18) ausra (17) exxon (17) lithium (17) cellulosic ethanol (16) collapse (16) electric bikes (16) mapping (16) michael klare (16) ucg (16) atlantis (15) bees (15) geodynamics (15) iceland (15) psychology (15) concentrating solar thermal power (14) ethanol (14) fertiliser (14) al gore (13) ambient energy (13) biodiesel (13) brazil (13) carbon emissions (13) cities (13) investment (13) kenya (13) biochar (12) bucky fuller (12) internet of things (12) matthew simmons (12) otec (12) public transport (12) texas (12) victoria (12) chile (11) cradle to cradle (11) desertec (11) energy policy (11) lithium ion batteries (11) terra preta (11) amory lovins (10) fabber (10) gazprom (10) goldman sachs (10) gtl (10) hybrid car (10) severn estuary (10) tinfoil (10) toyota (10) volt (10) alaska (9) biomass (9) carbon trading (9) distributed generation (9) esolar (9) fuel cells (9) jeremy leggett (9) pge (9) sweden (9) afghanistan (8) antarctica (8) arrow energy (8) big oil (8) eroei (8) floating offshore wind power (8) four day week (8) guerilla gardening (8) linc energy (8) methane (8) methane hydrates (8) nanosolar (8) natural gas pipelines (8) pentland firth (8) relocalisation (8) us elections (8) western australia (8) bloom energy (7) boeing (7) chp (7) climategate (7) copenhagen (7) fish (7) stirling engine (7) vinod khosla (7) airborne wind turbines (6) apocaphilia (6) bolivia (6) ceramic fuel cells (6) cigs (6) futurism (6) jatropha (6) local currencies (6) nigeria (6) ocean acidification (6) saul griffith (6) scenario planning (6) somalia (6) t boone pickens (6) space based solar power (5) varanus island (5) garbage (4) kevin kelly (4) low temperature geothermal power (4) oled (4) tim flannery (4) v2g (4) club of rome (3) global energy grid (2) norman borlaug (2) peak oil portfolio (1)