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Shale Revolution Deniers Face An Inconvenient Truth
Investor's Business Daily Brain Trust ^ | September 23, 2014 | Mark Perry

Posted on 09/24/2014 5:01:46 AM PDT by 2ndDivisionVet

Despite turning the U.S. into the world's largest producer of natural gas and driving a 3 million barrel per day surge in U.S. oil production in just the last three years, the shale revolution still has its doubters. They couldn't be more wrong.

The Montreal-based Centre for Research on Globalization recently dismissed shale fracking as a "Ponzi scheme" and "this decade's version of the dot-com bubble" that's about to burst. But time and again over decades, the naysayers and "peak oil" advocates have grossly underestimated the energy industry's ability to innovate and beat production forecasts. Today's shale pessimists continue to do so.

Shale pessimism is constructed on the theory that U.S. development has so far largely centered on sweet spots — the most resource-rich areas of geologic formations. As drilling continues and moves further from these sweet spots, productivity of newly drilled wells will allegedly fall. Shale development is already a complex and highly capital-intensive process. The profit margins between an economic well and an uncompetitive well can be razor-thin. In theory, less productive wells, drilled in the margins of shale plays, will quickly become uneconomic and put producers in the red.

Shale pessimists also point to the sharp decline curves of shale wells to support their bubble theory. While newly drilled and producing wells may be highly productive initially, their output falls sharply over time — nearly 50% a year. Continuing to increase overall production, much less just maintain it, supposedly takes constant drilling.

Theory Vs. Data

The sharp decline curves and the movement of drilling into the margins of shale plays seem like a recipe for production to peak and then fall, according to the "peak oil" advocates....

(Excerpt) Read more at news.investors.com ...


TOPICS: Business/Economy; Government
KEYWORDS: energy; fracking; hydrofrac; marcellus; naturalgas; oil; shale

1 posted on 09/24/2014 5:01:46 AM PDT by 2ndDivisionVet
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To: 2ndDivisionVet
The whole idea of "peak oil" came from M. King Hubbert, an oil geologist. He plotted cumulative production of petroleum, and projected it using a Logistic Curve. Such a curve has a peak then declines. At the time, there were numerous articles in the forecasting literature that showed this was an incorrect way to produce a forecast. However, the doomsayers grabbed the idea and ran with it. In reality there is only a finite amount of oil "down there" and eventually it will run out. Worse, it will become more and more expensive to recover it. The last barrel of oil will never be recovered because it will be too expensive. However, technological progress so far has allowed us to get more and more of the existing oil resource at acceptable cost. No one really knows when we'll "hit the wall" and quit drilling. That time, it seems fair to say, is a long way off.
2 posted on 09/24/2014 5:24:53 AM PDT by JoeFromSidney (Book: RESISTANCE TO TYRANNY. Available from Amazon.)
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To: JoeFromSidney

That’s if the Russians aren’t right, and I’m starting to think they might be.


3 posted on 09/24/2014 5:28:05 AM PDT by 2ndDivisionVet (The question isn't who is going to let me; it's who is going to stop me.)
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To: 2ndDivisionVet

The inconvenient truth is most Democrat politicians are having a daily multiple orgasm over the mere thought of the additional revenue streams.


4 posted on 09/24/2014 5:57:27 AM PDT by Buckeye McFrog
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To: 2ndDivisionVet

Another inconvenient fact is that according to he USGS, the untapped Green River Formations weigh in at about 3 Trillion barrels of oil with 1 Trillion exploitable with todays technology.


5 posted on 09/24/2014 6:25:51 AM PDT by spokeshave (He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people,)
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To: spokeshave

Indeed the shale oil “revolution” has opened a lot of opportunities for the U.S. Ridding ourselves of obumdo would open to door to more gas and oil than any of could ever use. Odumbo’s allegiance is NOT to the U.S. but to his benefactors in the middle east.


6 posted on 09/24/2014 6:46:32 AM PDT by DaveA37
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