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Page added on March 16, 2015
Debunking America’s Energy Fantasy: Shale Gas and Tight Oil Peak in Next Decade
We’ve written from time to time on how reports of America’s coming energy independence and continuing access to lots of affordable domestic shale gas and oil are based on studies that more careful geological work have demonstrated to be optimistic, and by a large margin. We’ve repeatedly pointed out, for instance, that shale gas production will peak in 2020 and decline gradually for a few years after that, then tail off more rapidly.
Oil and gas expert Arthur Berman gave a detailed talk last month about hype versus reality as far as the outlook for US shale gas and oil production is concerned (hat tip Pwelder). The presentation is followed by Q&A with geologists, so the level of discourse is higher than what you typically see.
Since the presentation is long, I’ve also embedded the slides. A quick and dirty way to get much of the content is to read the slides, and then zero in on the sections that interest you, or just listen to the Q&A, which starts is at 1:08.
Some key points from Berman’s remarks:
The US is a much smaller player, in global terms, than the cheerleading would have you believe
The EIA (which if anything has a bullish bias) projects that US oil production will peak in 2016
Shale gas production is falling for all US plays except Marcellus, and that is estimated to peak in 2020
LNG export is a bad idea; the US can’t compete with Russian prices
He also has a long and intriguing discussion of how ZIRP and financialization have played into what he calls “the beautiful story”. And he’s not terribly optimistic about the prospects for US shale gas operators: “a lot of these companies are toast….There’s not a nice, easy solution to this.”
6 Comments on "Debunking America’s Energy Fantasy: Shale Gas and Tight Oil Peak in Next Decade"
dave thompson on Mon, 16th Mar 2015 8:17 am
Good wake up call pointing out that the surplus/bs-glut is non existent.
shortonoil on Mon, 16th Mar 2015 9:49 am
The shale industry, after six years, has now accumulated more than three times as much debt as it has produced in final product. One would have to be delusion to believe that this could in anyway be a sustainable industry. It is a fairy tale propagated by the largest propaganda machine that has ever been put together; and it was sold, hook, line and sinker, to the public!
The few who attempted to warn the public of its complete, and utter futility were shouted down time, and time again by an avalanche of denial propagated by the media. Dear, Mr. and Misses QT Public, “you have been conned”!
Northwest Resident on Mon, 16th Mar 2015 10:01 am
The fabled bottom feeding fish species “marmicos insultivis stupidus” is well known to swallow that propaganda bait “hook, line and sinker” every time!
Kenz300 on Mon, 16th Mar 2015 11:28 am
Quote — “And he’s not terribly optimistic about the prospects for US shale gas operators: “a lot of these companies are toast….There’s not a nice, easy solution to this.”
High cost producers get squeezed………
What about High Cost Canadian tar sands……. are they immune to the drop in prices?
So why do we need the Keystone pipeline?
shortonoil on Mon, 16th Mar 2015 11:57 am
The fabled bottom feeding fish species “marmicos insultivis stupidus” is well known to swallow that propaganda bait “hook, line and sinker” every time!
Quote of the month!
yoananda on Tue, 17th Mar 2015 4:34 am
Wery good presentation indeed.
I would suggest just a slight modification, at 50′ slide on investments, show them inflation corrected, otherwise it’s not fair to compare with production.
I transmited my request to Art Berman on his blog.