Skip to comments.Why Shale Fracking Is An Economic Game-Changer That Cannot Be Overhyped
Posted on 02/23/2013 1:24:14 PM PST by Ernest_at_the_Beach
Yesterday, we published a presentation by oil analyst Arthur Berman suggesting the potential of fracking to extract fossil fuels buried in shale rock has been way overhyped.
But there are many who would argue that the assumptions Berman makes are off the mark.
Using data from the Energy Information Administration and Canadian energy consultancy ITG, we have put together the counter-argument to Berman's thesis.
(Excerpt) Read more at businessinsider.com ...
But the cost of fracking means that fuel prices must remain high to keep it economical to do.
And the cost of fuel will rise without it.
Break even on Saudi oil is under $10.
I did a little more research...
The break even on USA off shore oil is around $65, too.
I had no idea costs are that high.
Right. I am all for fracking. But it won’t be some Panacea that is going to bring back days of cheaper gas.
Even if the price does not come down much it will still be money flowing into our country not some terrorist supporting country.
Right. I work for a general contractor in their cabinet shop. Big boss has been spending a lot of time in North Dakota. Trying to get in the housing game up there. Among other things. They are trying to seal a deal on a group of duplexes that would feed us for over a year. And times have been lean. A solid year would be good.
Well I believe natural gas has dropped from above $10 down to less than $3 per MCF since fracking really got going. So gasoline is not dropping, apparently. NatGas is WAY down.
Why don’t we add in the cost of fighting two wars to preserve the Saudi oil field$
Having fracking puts a ceiling on how high OPEC oil prices can go.
Believe me, Obama and his Marxist lackeys will find a way to torpedo it.
It is true- fracking ain’t free. Seems like this was already discussed today, but yes, in order for a well to be economical certain production targets have to be met due to extraction and other costs. But the good news sucessful operators are learning how to levarage new processes or refining techniques either independently thru experience and/or via sharing of institutional knowledge in a given area.
Not all formations are the same and there is a learning curve involved in new plays. But the key thing is they are getting more effecient and the extraction costs will drop, but how fast it declines is unkown. We will see the value at the pump sooner or later. Alternatively we could leave all that oil locked up in formation and unreachable via tradtional vertical drilling and keep playing sweetly with our ME enemies forever. And wating for cold fusion to come to fruition, i suppose.
He is wrong about the decline rate, especially on Eagle Ford wells. Most are still producing at a shallow decline between 50 and 100 BOPD in the sweet spots after a couple years. And with wells IP’ing around 2000 BOPD, the payout is only a couple months which is the most important factor.
At the moment Crude Oil is sitting in tankers around the globe and in Cushing Oklahoma Tank farms.
It’s “an economic game-changer” in part because the money will stop going to jihadists paying for flight lessons and box-cutters.
Re: “Plus, the cost of two wars.”
Yes - I did overlook that.