Saturday, July 27, 2013

Irrational Exuberance--Fracking Frenzy

Since it's been the better part of a year since I wrote a post, a few things have happened.  The strangest one hands-down has been the hysteria over the blip in U.S. oil and gas production due to use of hydraulic fracturing on "tight" sediments.  A few days ago, George Mitchell passed away.  His company, Mitchell Energy and Development Corporation, developed the techniques that have spurred that production blip-- http://cgmf.org/p/family-statement.html.

It's pretty interesting that Mitchell became quite interested in sustainable living and created a foundation for that purpose.  Hydraulic fracturing, "fracking", is an inherently unsustainable production method for gas and oil.  A frack well is expensive to drill and has a miserable production curve.  And many reasonable people are concerned about the long-term environmental effects of adding fractures and fluids to sedimentary rock layers underlying vast regions of our country.  Dave Summers on his blog, Bittooth Energy, explains the specific case of Bakken (North Dakota) hydrofracking, where new wells must be drilled at a furious rate to attempt to compensate for the rapid production drop off of a shale oil well.  The Bakken is often pointed to as our salvation relative oil production; not so.

Despite the production problems with frack wells, many commentators project wondrous output for years to come, even claiming the U.S. could become a net producer and exporter of oil and gas.  Here's two studies that try to puncture these trial balloons of fantasy.  The New Economics Foundation out of Great Britain, explains that the expense of new sources of oil combined with declining production of conventional sources, will force economic contraction across the developed world.  The Energy Watch Group from Germany does a comprehensive analysis of all the major non-renewable energy sources; oil, gas, coal, and uranium.  They conclude that worldwide oil production actually peaked in 2012 and is on the the decline.  Other hydrocarbons and uranium, don't really look any better.

Review at least the executive summary of those two reports.  Then you decide if the exuberance you've heard in the popular press regarding U.S. energy production prospects has any rational basis.  I think it's a pretty classic example of wishful thinking on a national, perhaps a global, scale, but maybe I'm becoming curmudgeonly :)

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