Peak Oil is You
Donate Bitcoins ;-) or Paypal :-)
Page added on March 14, 2015
Shale sub-prime and the Ides of March
“Sub-prime” is the term by which became known the debt market segment that served low quality housing in the US. Essentially these were products supporting mortgages to low-middle class families, that in 2006/07, up against the simultaneous rise in interest rates and commodities prices, produced a wave of defaults that lead to the 2008 financial crisis.
The rise in petroleum prices was a key element to the 2008 crisis, but would eventually bring something positive to the US. Petroleum is usually extracted from large underground cavities known as reservoirs. However, it is formed at greater depth, within source rocks, where organic matter is slowly cooked by the internal heat of the planet until it degrades, first into petroleum and finally into gas. Prices persistently above 100 dollars per barrel meant that beyond traditional reservoirs it also became feasible to drill deeper for petroleum, down to source rocks and other rock formations of low permeability.
3 Comments on "Shale sub-prime and the Ides of March"
rockman on Sat, 14th Mar 2015 3:57 pm
“…reservoirs it also became feasible to drill deeper for petroleum, down to source rocks and other rock formations of low permeability.” Once more a blogger to lazy to do 10 minutes of reading Petroleum Geology 101. The hot shales are not low permeability because they are deep. They’re low perm because they are made of clay sized particles. And more to the point a reservoir below 14,000′ is generally considered “deep”. The EFS and Bakken are not classified as deep based on depth, pressure or temperature. In Texas many tens of thousands of wells had been drilled thru the EFS over the last 50 years. The article seems to want folks to think the shales plays were just discovered when we started drilling “deep”.
Asinine, in a word.
Makati1 on Sat, 14th Mar 2015 7:49 pm
Rockman, the author’s lazy writing reflects his lazy readers. He doesn’t care and neither do they, if the facts are real. Look at what passes for news in the Western MSM today. Pure garbage, that a decent reporter would have refused to put his/her name on in the pre-9/11 past. It’s ALL about money.
Amvet on Sun, 15th Mar 2015 6:42 am
Look at the EIA information. Total report.
http://www.eia.gov/petroleum/drilling/