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Shale gas: 'The dotcom bubble of our times'
Telegraph (UK) ^ | 04 August 2014 | Tim Morgan

Posted on 08/04/2014 5:51:58 PM PDT by Lorianne

On the one hand, many environmental and conservation groups are bitterly opposed to shale development. Ranged against them are those within and beyond the energy industry who believe that the exploitation of shale gas can prove not only vital but hugely positive for the British economy.

Rather oddly, hardly anyone seems to have asked the one question which is surely fundamental: does shale development make economic sense?

My conclusion is that it does not.

That Britain needs new energy sources is surely beyond dispute. Between 2003 and 2013, domestic production of oil and gas slumped by 62pc and 65pc respectively, while coal output decreased by 55pc. Despite sharp increases in the output of renewables, overall energy production has fallen by more than half. A net exporter of energy as recently as 2003, Britain now buys almost half of its energy from abroad, and this gap seems certain to widen.

The example held up by the pro-fracking lobby is, of course, the United States, where fracking has produced so much gas that the market has been oversupplied, forcing gas prices sharply downwards.

The trouble with this parallel is that it is based on a fundamental misunderstanding of the US shale story.

We now have more than enough data to know what has really happened in America. Shale has been hyped ("Saudi America") and investors have poured hundreds of billions of dollars into the shale sector. If you invest this much, you get a lot of wells, even though shale wells cost about twice as much as ordinary ones.

If a huge number of wells come on stream in a short time, you get a lot of initial production. This is exactly what has happened in the US.

(Excerpt) Read more at telegraph.co.uk ...


TOPICS: Business/Economy; United Kingdom
KEYWORDS: bubble; energy; fracking; hydrocarbons; methane; natgas; naturalgas; oil; opec; petroleum; shale; shalegas
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Tim Morgan was global head of research at Tullett Prebon 2009-13 and is the author of 'Life After Growth'
1 posted on 08/04/2014 5:51:58 PM PDT by Lorianne
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To: Lorianne

2 posted on 08/04/2014 5:54:10 PM PDT by 2ndDivisionVet (The most dangerous man to any government is the man who is able to think things out for himself.)
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To: 2ndDivisionVet

Unlike the majority of the DOT.COM businesses; Shale gas is an actual product that is acquired through the exploration process of drilling wells and not vaporware.

For me that is a BIG difference between the two.


3 posted on 08/04/2014 5:57:26 PM PDT by The Working Man
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To: 2ndDivisionVet

Spot on, Vet...


4 posted on 08/04/2014 5:58:56 PM PDT by Russ (Repeal the '17th amendment)
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To: thackney

Malarkey alert!


5 posted on 08/04/2014 6:05:03 PM PDT by Fractal Trader
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To: 2ndDivisionVet
Yes, I glanced at the story and I saw the word "fracking" so I know it's a bad thing, right?

I sometimes wonder if England is gonna make it.

6 posted on 08/04/2014 6:08:16 PM PDT by Wingy
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To: Lorianne

Global commodity, toilet mouths


7 posted on 08/04/2014 6:11:08 PM PDT by dila813
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To: Lorianne

He made a dystopian prediction and he’ll be damned if anyone stops it from happening.


8 posted on 08/04/2014 6:11:56 PM PDT by Bogey78O (We had a good run. Coulda been great still.)
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To: Bogey78O

How could anyone stop it from happening?

It will either turn out to be true or not true.


9 posted on 08/04/2014 6:14:32 PM PDT by Lorianne (fedgov, taxporkmoney)
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To: Wingy

As my father used to say, some people just can’t stand prosperity.


10 posted on 08/04/2014 6:15:37 PM PDT by ChildOfThe60s ((If you can remember the 60s.....you weren't really there)
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To: The Working Man

Its okay Eurotwits. Keep building windymills and solar.
And you can get your real energy from the US or you can be slaves to the USSR, er Russia.


11 posted on 08/04/2014 6:16:19 PM PDT by Kozak ("It may be dangerous to be America's enemy, but to be America's friend is fatal" Henry Kissinger)
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To: The Working Man
And the revenue and income from shale gas is relatively easy to predict...unlike the dotcoms.

This is a bullsh!t comparison.

12 posted on 08/04/2014 6:29:11 PM PDT by RoosterRedux (Obama: Race is his cover...jihad is his game.)
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To: Lorianne

Obviously, this maroon does not understand what the ‘dot com bubble’ was really all about. The ridiculous notion that anyone could through together vaporware and promises of grandiosity based on no product and no ideas is what caused the ‘dot com bubble’. The failure of companies that had nothing to offer is what always happens in a market economy. Giving fancy names to things that don’t exist and that people neither need nor want guarantees you won’t be around five years from now.

On the other hand shale, like so many in the hardware business, is a product that will still be around years from now.The only question will be whether or not it is economical to produce it.


13 posted on 08/04/2014 7:43:30 PM PDT by Nifster
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To: The Working Man

precisely


14 posted on 08/04/2014 7:43:52 PM PDT by Nifster
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To: The Working Man
For this to be like the dot com bubble, they would have to be throwing millions at anyone who has a shovel and announces his intention to dig a hole. I do not think that is happening.
15 posted on 08/04/2014 7:50:13 PM PDT by beef (Who Killed Kennewick Man?)
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To: Lorianne

OK let us please sell you some of our clean burning fracking gas from Texas. The LNG tankers are revving up. How does $14 an mcf sound? Normal?


16 posted on 08/04/2014 8:23:34 PM PDT by FlyingEagle
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To: Bogey78O
The US is already littered with [shale] wells that have been abandoned, often without the site being cleaned up.

I live in the midst of the Barnett shale, the very first shale gas play in the U.S.

And I have no idea what he's referring to. It's certainly not the case around here...

17 posted on 08/04/2014 8:36:26 PM PDT by okie01 (The Mainstream Media: Ignorance on parade.)
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To: Lorianne

There will always be windmills....
Just don’t count on them when the wind dies down.


18 posted on 08/04/2014 8:48:22 PM PDT by minnesota_bound
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To: Lorianne

It would seem that shale oil should be in the news. It’s not likely that shale oil is breaking even, while WTI crude is less than $99 per barrel.


19 posted on 08/04/2014 9:13:05 PM PDT by familyop (We Baby Boomers are croaking in an avalanche of corruption smelled around the planet.)
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To: Lorianne
Shale Oil is why U.S. natural gas is $4.50/mcf, rather than $15.00 as in Tim Morgan's country and elsewhere in the world. If Europe is foolish enough not to develop its own shale gas resources, then U.S. entrepreneurs will compress U.S. natural gas to LNG, ship it to Europe, decompress it, all for around $4.00/mcf and sell it to the Europeans for $15.00/mcf, pocketing a nice $6.50/mcf profit.

Go ahead Europe, leave it in the ground and make yourselves a customer of ours. While we gear up our LNG facilities, Putin will have his way with you.

The Telegraph and the UK Conservative Party have become what Margaret Thatcher referred to as "wets".

20 posted on 08/04/2014 9:40:04 PM PDT by Praxeologue
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