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Page added on February 11, 2011
Massive New US Oil Supply—’Peak Oil’ Fears Overblown?
New drilling techniques may open up “vast fields of previously out-of-reach oil” in the United States—and cut our dependence on foreign oil in half within a decade.
Ed Morse, the head of commodities research at Credit Suisse, predicts that oil imports could be cut by 60 percent—driven by the kind of news announced today—including the discover of additional supplies and improved extraction techniques.
Of course, new technologies aren’t entirely without controversy:
“Oil engineers are applying what critics say is an environmentally questionable method developed in recent years to tap natural gas trapped in underground shale. They drill down and horizontally into the rock, then pump water, sand and chemicals into the hole to crack the shale and allow gas to flow up.”
Nonetheless, the search for additional supply inexorably drives the process forward:
“Because oil molecules are sticky and larger than gas molecules, engineers thought the process wouldn’t work to squeeze oil out fast enough to make it economical. But drillers learned how to increase the number of cracks in the rock and use different chemicals to free up oil at low cost. ‘We’ve completely transformed the natural gas industry, and I wouldn’t be surprised if we transform the oil business in the next few years too,’ says Aubrey McClendon, chief executive of Chesapeake Energy, which is using the technique.”
Yesterday, with peak oil fears roiling nerves, I wrote a piece called “Don’t Panic: The World Won’t Run Out of Oil Before the Weekend”
The basic point was this: The peak oil theory has been around since 1956—and the world hasn’t come to a grinding halt yet—so perhaps a deep breath is in order.
More specifically, I wrote about how market forces drive new oil development—about how reserves that were previously infeasible to access can later come online:
“And recoverable reserves are based on the economic feasibility of extraction. Which means that the supply curve builds in a self-correcting mechanism: when prices rise it becomes economically feasible to go after oil that is more expensive to recover. And new technology is-and will continue in the future-to increase our ability to extract oil in more cost effective ways.”
(Sometimes, the Gods of the news cycle smile on you.)
Prepare for the debate: Tolerating “environmentally questionable” extraction techniques—or the benefits of increased energy independence.
Anyone care to wager now on which position the smart money will take?
7 Comments on "Massive New US Oil Supply—’Peak Oil’ Fears Overblown?"
DC on Fri, 11th Feb 2011 7:34 am
More dont worry be happy propoganda. Americans have done absolutely nothing to halt there dependence on all that “dirty arab oil” they are always harping about in the last 6 decades. Dont expect anything to change, america will only stop importing oil when there is no more oil left to import. Till then, they will keep printing funny money and guzzle it down as fast as they can. Dependence will keep doing whats it been doing all along-increase. There is no massive supply, unless fudgy numbers on a spreadsheet count as massive supply. All those chemicals they refer to, cause even more damage than regular old oil, which is damageing enough. And what does this guy think hes trying to prove by stating PO theory has been around since 1956. Well yes, it has, but no one was saying in 1956 that PO had occured, only that it will in future and wed better be ready for it. The world didnt come to a grinding halt in 1956 no one made that claim then and no one is makeing that claim now. In one way he is sort of correct tho, there still will be lots of oil left in the ground when industrial civiliazation runs of gas(can debate what massive is supposed to mean), it will be there because it was too expensive and or damageing to actually extract it.
happyhobo on Fri, 11th Feb 2011 7:53 am
Yippie! so all they had to do was drill horizontaly and pump sand and water down the well and our oil imports are cut by 60%. Well golly gee whiz that sure was easey. I’m gonna call those crazy Canadians digging up those tar sands and tell them not to bother.
Harquebus on Fri, 11th Feb 2011 11:25 am
“the world hasn’t come to a grinding halt yet” but, it is slowing down.
Don S on Fri, 11th Feb 2011 12:58 pm
Save us from these idiots! Just because the theory was around in 1956 doesn’t mean production was peaking in 1956…
Kenz300 on Fri, 11th Feb 2011 1:59 pm
Don’t put all your eggs in the oil basket.
It is time to diversify our energy types and sources. Wind, solar, wave energy, geothermal and second generation biofuels are a good start on diversification and sustainability.
SilentRunning on Fri, 11th Feb 2011 2:26 pm
It’s so comforting to *know* that our Peak Oil Fears are overblown, and it is utterly impossible that our techno-fantasies that are overblown.
I am so re-leaved, that I am going to abandon planting a garden this spring, and instead go out and buy a new monster SUV….
James on Sun, 13th Feb 2011 7:20 am
These are just stripper wells that the oil companies are going back to old wells and using the “New Techniques” to strip the last drops of oil from old wells. They will never produce that amount of oil we would need to meet our needs and keep the price of gasoline low. Some of the chemicals used to get the oil out are extremely toxic, remember BP telling us that the dispersants used in the Gulf were harmless? Well, the same thing is going to happen with our underground water sources. The EPA won’t be around to mitigate this problem since the Feds are practically dismantling the agency.