Marcellus Shale

Is the Shale Revolution a 'Ponzi Scheme' or the End of Peak Oil?

"Ponzi scheme" or the end of Peak Oil?

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Shale boom
GWPF

A lot of folks are fervently forecasting that shale gas and oil production is a bubble about to pop, possibly producing an economic collapse similar to the one in 2008. Earlier this week, the left-leaning Center for Research on Globalization in Montreal dismissed the shale revolution as a "Ponzi scheme" and "this decade's version of the Dotcom bubble." In a column last year for The Guardian, Nafeez Ahmed of the Institute for Policy Research and Development cited studies predicting that U.S. shale gas production will likely peak in 2015 and oil production in 2017. In a July 2013 report for the Club of Rome—the same folks who brought us 1972's doom-mongering classic, The Limits to Growth—the University of Florence chemist Ugo Bardi declared that the "idea that a 'gas revolution' that will bring for us an age of abundance is rapidly fading" because "the data show that the gas bubble may be already bursting." A month later, Richard Heinberg of the Post Carbon Institute said, "It turns out there are only a few 'plays' or geological formations in the US from which shale gas is being produced; in virtually all of them, except the Marcellus (in Pennsylvania and West Virginia), production rates are already either in plateau or decline."

So was President Barack Obama wrong in 2012, when he claimed, "We have a supply of natural gas that can last America nearly 100 years"? Perhaps not.

The renaissance of oil and gas production in the United States has largely been the result of applying the technique of hydraulic fracturing (fracking), which releases vast quantities of hydrocarbons trapped in tight shale formations. The bubble theorists make much of the fact that production tends to drop more rapidly in fracked wells than in conventional ones, forcing the frackers to drill more holes just to keep up. They overlook the fact that drillers are working ever faster and cheaper and that newer wells tend to be more productive than earlier wells. How do we know this? Because the number of drill rigs has not increased in most shale fields, yet production continues to go up.

So what about Heinberg's claim that "production rates are already either in plateau or decline"? He's just wrong. The September drilling productivity report from the federal Energy Information Administration (EIA) notes that since 2013, that gas production is up in every one of the "plays" cited by Heinberg. Production in the Bakken region of North Dakota grew 8 percent; the Eagle Ford, Permian, and Haynesville regions in Texas increased 15, 7, and 97 percent, respectively; the Niobrara region in Wyoming and Colorado rose by 29 percent; and the Utica and Marcellus regions in Ohio, Pennsylvania, and West Virginia surged 142 and 47 percent. "We've been tracking this for 10 years, and recovery rates have gone up dramatically," says EIA forecaster Philip Budzik.

Meanwhile, the EIA's Annual Energy Outlook 2014 shows the potential U.S. oil and gas resource bases are increasing, not decreasing. Bubble forecasters insist those estimates are way off-base. They point to the EIA's recent big flub when it came to estimating how much petroleum might be pumped from the Monterey shale formations in California. The agency initially prognosticated that as much as 13.7 billion barrels of oil might be produced, but it cut its estimate by 96 percent, to 600 million barrels, once it recognized the extraction challenges posed by the complicated geology of southern California. Whoops!

That's bad, but in the scope of estimates it's a blip, not a fatal error.

Back in 2000, the EIA Outlook report estimated that the U.S.'s technically recoverable petroleum resources were 124 billion barrels; it put natural gas resources at 1,111 trillion cubic feet (tcf). ("Technically recoverable" basically means that the resource can be extracted using current technology if the price is right.) Proved oil and natural gas reserves amounted to 22 billion barrels and 176 tcf, respectively. ("Proved" generally means the amount of resources that can be recovered from the deposit with a reasonable level of certainty.) When it came to shale and other tight rock formations, the 2000 report estimated that only 2 billion barrels of oil and 50 tcf of natural gas were technically recoverable. "Basically, in 2000 no one was even thinking that you could produce this stuff," says Budzik. 

How time and technological progress make fools of all prognosticators! The 2014 EIA Outlook estimates that the U.S.'s technically recoverable oil resources are 238 billion barrels and natural gas resources are 2,266 tcf. Proved U.S. petroleum reserves have increased from their 2009 nadir of 19 billion barrels to over 30 billion barrels, and proved natural gas reserves are at 334 tcf now. In other words, estimates of technically recoverable U.S. resources of both oil and gas have nearly doubled in the past 15 years. Proved oil reserves have increased 50 percent, while proved gas reserves have also nearly doubled. Technically recoverable resources from shale and other tight rocks is now estimated to be 59 billion barrels of crude and 903 tcf of gas—a 30-fold and 18-fold increase, respectively, over the 2000 assessments.

Take the figure of 2,266 tcf of natural gas. Last year, Americans burned through 26 tcf of natural gas. At that rate, the estimated resource would last 87 years. Not the 100 years claimed by the president, but close enough for government work.

While EIA reserve and resource estimates have been trending steeply upward over the past decade and half, the agency tries to take into account uncertainties by sketching out scenarios to 2040 in which domestic oil and gas supplies are either 50 percent higher or lower than its reference case. Production of shale gas and oil is the key difference in the scenarios. In the high supply case, technically recoverable crude and gas plus proved reserves amount to 431 billion barrels and 3,683 tcf. Consequently, domestic oil production rises to 13 million barrels per day before 2035 and imports decline to near zero. Tight oil production peaks at 8.5 million barrels per day in 2035 compared to the reference case peak of 4.8 million barrels in 2021. Cumulative tight oil production reaches 75 billion barrels, up from 44 billion in the reference case. 

In the low supply scenario, crude oil totals 210 barrels and gas totals 1,814 tcf; oil production reaches 9.1 million barrels per day in 2017 and then slowly falls to 6.6 million barrels per day in 2040. Tight oil production peaks in 2016 at 4.3 million barrels per day with a cumulative production of 34 billion barrels. Interestingly, the difference in price in the high and low supply scenarios is only $20 per barrel—$125 versus $145 (using 2012 dollars) in 2040.

The shale bubble proponents essentially are betting on the EIA low production scenario. They will be proven right if shale oil production does peak in the next year or two. We shall soon see. "The history of the industry is that we are always running out," says Budzik. "So long as we have a well functioning economic system that allows the price mechanism to adjust and encourages innovation we will see the resource base grow rather than diminish." Rising prices at the beginning of the 21st century did, in fact, promote more exploration and faster technological progress, resulting in the shale revolution the U.S. is currently enjoying. If this dynamic is not unduly hampered, it's a good bet that the prophets of bubble-bursting doom are wrong yet again.

NEXT: It Looks Like Pot Will Soon Be Legal in the Nation's Capital, Maybe in Oregon Too (Alaska Is Iffier)

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  1. Just another dishonest tack to try to prevent our energy independence.

    1. What’s the big deal with energy independence? Seriously.

      Energy independence isn’t going to stop the world from buying oil from bad people. So what’s the point?

      I mean, if something is cheaper to import, then import it. If it’s cheaper to produce yourself, then produce it yourself.

      Self sufficiency for the purpose of self sufficiency is the road to poverty.

      1. I think being free from a cartel controlling a vital resource is pretty vital to my economic freedom. Of course, I also want us to be free of the corn cartel and the sugar cartel, too.

        1. Most of our imported oil comes from Canada and Mexico, not OPEC.

          1. Which is relevant to nothing.

            1. If we’re talking about obtaining a resource from a cartel, then how much we depend on the cartel is indeed relevant.

              1. Yeah, it’s not as if the US supplying all of its own oil will stop other places buying OPEC oil.

                1. No. But it does tend to lower overall world demand. Thereby reducing its price as a commodity. That weakens the unholy plans of petroleum exporting villains. Like Iran and Russia.

          2. If oil is fungible, then they negatively affect my economic freedom. More drilling here lessens their size in the market, and therefore their ability to distort the price.

            1. But for how long? The EIA’s reference case has shale oil peaking in 2020 and going into terminal decline. Then the countries with the massive reserves (such as Saudia Arabia who is financing ISIS) holds the cards.

              Don’t take my word for it, read the EIA analysis of US tight oil. The author did his best to talk around this, not to it directly.

              http://www.eia.gov/forecasts/a…..#tight_oil

              1. Oil is a national security issue. So proclaimed by Carter after the embargo of the 70’s.
                In plain English that means we will go take the oil from where ever we have to if it comes down to it. UN be damned.

      2. As further evidence, you’ll note that NYC is pretty damned prosperous (along with corrupt and some other adjectives).
        Did you know NYC is NOT food-independent?! NYC has to ‘import’ almost everything that gets eaten there!

        1. Their trade deficit must be terrible.

        2. Well, I guess we need to tear down those luxury apartments on the Upper East Side and use the land to farm!

        3. Oh, no! My house is not energy, water, or food independent!

        4. Most of NYC’s prosperity is actually not generated in NYC.

        5. NYC is not a country, so the comparison is moot.

      3. Maybe energy independence was a poor choice of words. The point is, there are a group of fuckers who do not want the USA drilling for oil in the US proper, including its oceans.

        Yesterday a report came out that showed that fracking does not contaminate groundwater, which was the big scare the anti-fracking was pushing (along with earthquakes). Now that that claim has been peoven false, they neeeded to find another scare-tactic, ergo, “IT’S A GODDAMN BUBBLE!!!!111111!!!11

        The University of Michigan has released the preliminary findings of its long-awaited hydraulic fracturing study, and the conclusions are likely to upset some of the most fervent anti-fracking activists in our state. Much of what is presented merely reaffirms what anyone who has been paying attention has already known: that the hydraulic fracturing process is safe, can co-exist with a healthy environment, is beneficial to our economy and ? this point is worth stressing ? does not contaminate groundwater

        .

        It’s all about control.

        1. The energy independence movement is a bunch of right wingers who are totally ignorant of economics and want the country to be in a position where it imports no energy at all.

          Yeah, they want to Drill Baby Drill, but for the wrong reasons.

          Liberty is a good enough reason to open up all land to drilling.

          1. Mercantilism isn’t still considered a valid economic model?

            1. Why do you hate jobs?

          2. want the country to be in a position where it imports no energy at all

            An energy autarky.

            You know who else pursued a policy of energy autarky?

            1. I didn’t think there was any way Godwin would get involved in this, but I guess it is a law. Well done, sir!

              1. Ironically, you Godwin-ed it!

            2. Slim Goodbody?

        2. If progressives had their way, we would be living in an economy reminiscent for the old Soviet. Union. It is their dream. And America’s nightmare.

      4. Also, we might want to use up the oil in the Middle East first, and then let those imbeciles fade back into the 14th century, where they apparently want to be in the first place.

      5. Energy independence means jobs, dignity for millions of Americans.

        1. No, it doesn’t mean either one of those things.

        2. did fox news tell you that?

          1. Actually, what he said is pretty obvious. But what if they did? You got a problem with that?

      6. What’s the big deal with energy independence? Seriously.

        Importing oil is expensive. Hugely expensive when you take into account all the military and political costs it entails; in effect, oil is greatly subsidized.

        US energy independence makes energy a lot cheaper, and by making it cheaper, it makes us more prosperous.

        1. Reducing the available supply of something makes it cost less? That’s a new one.

        2. it is a known fact that petroleum oil
          is a nonrenewable resource
          latest projections are it will
          run out in 64 years at current rate
          of consumption, but consumption
          is growing so it won’t take that long
          in the meantime prices will keep
          going up as the oil runs down

          1. From whom is that ‘known’?

  2. Industries are constantly in flux. They only become bubbles if you inject funny money into them.

    1. Also, I think people who use the phrase “bubble may be already bursting” are pretty decidedly biased or need to have a small explosive burst in front of them for comparison.

      You don’t stand around calmly wondering if the IED may already be bursting.

      1. Yeah, and they should short-sell stock in that industry to prove that they mean it.

  3. In other words, estimates of technically recoverable U.S. resources of both oil and gas have nearly doubled in the past 15 years. Proved oil reserves have increased 50 percent, while proved gas reserves have also nearly doubled. Technically recoverable resources from shale and other tight rocks is now estimated to be 59 billion barrels of crude and 903 tcf of gas?a 30-fold and 18-fold increase, respectively, over the 2000 assessments.

    Very important point. The recovery technology improved significantly faster than the rate of extraction. That is not what a bubble looks like.

    1. It’s not even that the recovery technology improved, it’s that the estimates were absurdly low.

      1. I disagree. The state of the art in recovering from North American “tight rock” formations is radically better than at the turn of the century. We’ve known there was a shit-ton of oil we couldn’t get at in Pennsylvania since Standard Oil started drilling there.

    2. All too many people who are in the business of making predictions make the mistake of assuming that nothing changes or improves and that people won’t adapt to changing conditions.

    3. Wrong.

      Conventional oil production peaked in 2005. Demand kept growing so the price increased.

      Those price increases failed to bring more conventional oil to market so the price just kept increasing.

      Fracking and Horizontal drilling have been around for decades.

      The only thing that’s new here is the high price.

      So we could say that the peak in conventional oil production is what made fracking for oil economic.

  4. The Liberal Establishment has an awful lot of political capitol tied up in the expectation of ever-rising energy prices. They desperately need the leverage to impose their nitwit alternative energy solutions (and shovel money to their cronies). They also need dwindling supplies (or at least a public perception of same) to disguise that their opposition to new refineries is a key factor in price increases.

    In short, like most would-be elites, what they deserve is about 15 seconds head start,,,,

    1. Well they are dismantling the Coal plants cost will go through the roof. I know a guy who works for the DOE, he says they are just delusional and have zero idea how the grid works, he’s a big proponent of nuclear as it provides the biggest base loads of energy at the lowest cost.

      1. Nuclear is by far the most expensive energy source. Better off replacing the old coal plants with brand new “cleaner” coal plants. Let the market decide if gas or coal is better. The market already decided nuclear is way too expensive and dangerous.

        1. I’m no fan of the subsidies that nuclear receives, but it’s not fair to say that the market decided it was too expensive and dangerous. A lot of the costs associated with nuclear are due to an overbearing regulatory environment (shocker, I know), and nearly 100% of the fear surrounding nuclear is due to scare mongering and misinformation.

          1. Bellfont nuclear is a dozen miles upwind of my new retirement home. It’s been completedly remodernized 3X’s and never gone online at a cost of $100 billion. The market has NOT disproven nuclear energy. Politics and environmentalist have.

        2. Solar in both forms is by far the most expensive energy source, followed by off shore wind and then a toss up between nuclear and on shore wind depending on you want want to account for the wind capacity factor and backup.

          The NRC hasn’t approved a new reactor design in how many decades? Yeah, tell me the market decided…

          1. My recollection is that nuclear got really expensive at the beginning if the 1970s, in large part due to regulations, and energy companies went to cheaper coal. When TMI had its meltdown, I think NRC hadn’t seen a new set of plans and specs for several years.

        3. No, the PUBLIC decide that nuclear was far too SCARY, and allowed various groups with assorted political agendas to MAKE it too expensive.

          Which isn’t to say that The Government should have stepped in and shoved Nuclear down everybody’s throats. But if shutting down the coal plants (which the Greenies so ardently desire) causes prices to skyrocket and nuclear to become fashionable I will view the Greenies resulting conniptions with amusement.

    2. The fracking industry relies on these high oil prices too.

      The break even price per barrel for fracked oil is upwards of $60 and going up.

      That break even price will skyrocket if the debt used to drill these holes gets more expensive.

    3. guess you never heard of nimby, but
      then most of your post is idiotic

  5. In the neo-lithic (’50s), I remember reading there was only a 20-year ‘supply’ of oil left. And then the same in the bronze age (’60s), etc. It took a while before the light went on, but that is not “news” at all.
    No one running an oil company is going to prospect beyond that sort of a time horizon; in 20 years, who knows, fusion might become the energy source of the ‘now’ instead of the future.
    So malthusians might as well point out (with ALARM!) that you only have 5 days worth of food in your fridge!

    1. Not me. I have Costco hotdogs!

      1. “Forever” food!

    2. By the 90’s, I think we were up to a 50 year supply of oil. Which now is also obviously wrong.
      The technology and scale of oil recovery operations these days is pretty astonishing. I could maybe forgive the people in the 50s for not imagining what people would be doing today.

      1. True, but that is a result of known deposits that were not ‘available’ and changed to ‘reserves as a result of improvements in extraction tech. Sort of like the gob piles at coal mines; it’s there, but no tech exists for harvesting it.
        Again, no business prospects for anything that far in the future.

      2. Yeah nobody ever imagined that a single oil well could cost upwards of $10,000,000 to drill, frack and restimulate and only produce enough oil (over 45 years) to keep this great country running for 90 minutes.

        Nobody thought we were foolish enough to trade that many resources and that much effort for 90 minutes of comfort.

  6. “How time and technological progress make fools of all prognosticators!

    I need to find that website that listed all the previous ‘forecasts’ of the world’s oil reserves….

    There was a wonderful series of historical documents… like this, from 1918, quoting,

    “It is certain that unless radical changes are made from present sources and methods are applied promptly all sources of supply from known drilling methods will be exhausted in the life of your children and mine

    The USGS estimate of proven oil reserves at the time were estimated “not to exceed 25 million barrels

    Fast forward this exact “malthusian doomsday prediction” about 30 years, and you find the exact language repeated again in the 40s, only this time the “proven reserves” were 100X bigger than in 1918, and the Doomsday clock was maybe in “your grandchildren’s lifetime”.

    Fast forward to the 1970s, and you find the same language, only the “proven reserves are 10,000X bigger than in 1918, and the Doomsday Clock is sometime “in the next 100 years”.

    Etc.

    Can’t find the website that put them all in sequence, but it was a hilarious

    1. FYI the excerpt from the 1918 article was here, at a Wikipedia entry on ‘Peak Oil Estimates’

      I think the webpage i was thinking of comparing historical ‘forecasts of proven reserves’ was @ http://www.theoildrum.com, which doesn’t seem to exist anymore.

    2. GILMORE|9.19.14 @ 1:52PM|#
      …”I need to find that website that listed all the previous ‘forecasts’ of the world’s oil reserves….”

      I can help a bit with a book. “The Wages of Destruction” (Adam Tooze) mentions that the push for synfuel in Germany prior to WWII was based on the presumption in the early ’20s that oil would ‘run out’ by 1935.
      Instead, the temporary spike in oil prices lead to a prospecting boom that shoved the prices back down to historical lows and left I G Farben with some very expensive technology and no place to sell it.
      (page 116, BTW)

      1. As a corollary, one can only wonder, since Warfare largely an economic issue, in origin and execution, how much impact doom and gloom predictions feed into Warfare. Toss in all the extra promises made for securing Power (e.g. Welfare, corporate and individual) and the recipe is right there. When the Political Elite are worried about their own security, hungry bellies, and (supposedly dwindling) resources, the country-next-door’s treasury looks awfully enticing. There’s the added bonus that the potentially restless pitchfork and torches crowd are pointed outward rather than inward.

        1. toolkien|9.19.14 @ 3:36PM|#
          “As a corollary, one can only wonder, since Warfare largely an economic issue, in origin and execution, how much impact doom and gloom predictions feed into Warfare.”

          Hitler claimed Germany would never be an economic power without the lebensraum to be stolen from Russia and found out what theft cost.
          Japan wanted to own the reserves in Borneo rather than trade for the oil, and found out how much owning it cost.
          And according to “Downfall”, Hirohito’s concern about his personal safety was one of the reasons for ending the war.

          1. Right. But it still stands what gave rise to War in the first place, not whether it was effective or brought any greater security.

    3. We will all be on fusion power and replicators long before then.

  7. We’re never going to run out of oil.

    If supplies drop, then the price goes up. This creates an incentive to come up with the technology to dig the stuff out of harder to reach places, which then increases supply and stabilizes or lowers the price. That will continue until it will be so expensive to dig out that alternatives will become economically viable without government subsidies, and people will switch all by themselves. And when we do, there will still be plenty of oil left. But because it will just be cheaper to use something else, the oil will stay underground.

    1. This. I have had this conversation with many a dumb ass leftist, most really can’t wrap their head around that concept.

      1. Of course they can’t. It doesn’t involve force, so they can’t comprehend it.

      2. I’m an independent (former stalwart Republican), and have serious doubts about the instant shift to ‘alternatives’, given that such large shifts take decades, and may not be in the levels of supply and price that won’t cause an economic collapse. Even the DoE recognized this in the Bush years, and determined it would take 20 years to make such a shift without economic catastrophe. The report was initially suppressed, of course.

        I encourage you to read the report and offer your thoughts on it;

        http://www.netl.doe.gov/public…..g_netl.pdf

    2. “that alternatives will become economically viable without government subsidies”

      Alternatives like photo-voltaic panels? The fossil fuel business is subsidized to the tune of billions a year in securing the Persian gulf. Alternatives will never compete as long as you are not willing to rethink these subsidies.

      1. Not even close on a per watt/joule basis:

        http://www.cbo.gov/publication/43032

      2. I run into this argument all the time, and it frankly strikes me as swill. Without the oil are we really going to let assorted armed idiots control the Persian Gulf? Maybe we should, but the Political Class of this country are a bunch of buttinskis, on both sides of the aisle.

        What’s going to happen is that we will continue to meddle in the Middle East, less because of oil than because our would-be leaders can’t leave it alone. Ultimately the Jihadists will succeed in pulling off a really horrific attack (9/11 doesn’t count; it was less than 5000 people and some really ugly buildings) and then the United States really will go all Imperial. Which won’t be good for anybody in the long run, but should at least be entertaining.

        1. “Without the oil are we really going to let assorted armed idiots control the Persian Gulf?”

          They already do. They are monarchs and emirs etc, and they are armed by the same folks that arm the pentagon. For at least half a century the US has been promoting Islamism.

          1. mtrueman|9.19.14 @ 6:12PM|#
            “Without the oil are we really going to let assorted armed idiots control the Persian Gulf?”
            “They already do.”

            So, IOWs, you’ve proven yourself to be a hypocrite once again.

            1. Believe me, I’m not alone.

              1. No doubt. You, commie-kid, craig, Tony; liars and hypocrites one and all.

                1. I wonder if they or anyone else, even non liars, would agree with my thesis that the end of oil would mean the end of capitalism, though not necessarily libertarianism.

                  1. mtrueman|9.19.14 @ 10:30PM|#
                    “I wonder if they or anyone else, even non liars, would agree with my thesis…”

                    You don’t have a “thesis”. A thesis is a well thought out concept, including the mechanisms whereby something might occur.
                    You have a fantasy.

                    1. “You have a fantasy.”

                      Happy equinox. Unless the equality of it all makes you sick.

      3. mtrueman|9.19.14 @ 4:50PM|#
        …”The fossil fuel business is subsidized to the tune of billions a year in securing the Persian gulf.”

        Lefty ignoramuses will fall for anything.

        1. I’m surprised that nobody has raised the point that you’d have to cover a good portion of the land mass of the USA before pv could serve as a substitute.

    3. Right now Canada has a proven reserve of oil sands heavy crude that’ll feed the world for 100 years at current consumption rates (but extracting it is costly).

      We’ll be using matter-antimatter warp cores to power everything before we run out of the stuff

      1. “Canada has a proven reserve of oil sands heavy crude that’ll feed the world for 100 years”

        You obviously haven’t a clue what a well placed stick of dynomight can do to a pipeline. A proven oil reserve in the middle of a vast forest isn’t going to feed anyone.

  8. Shale formations aren’t the only places left where we can get oil.

    There are still lots coastal areas that are off limits for exploration and prodcution for purely political reasons. Remove those bans and oil and gas production can be further increased.

    Also there is the fact that Mexico has changed it’s Constitution to allow foreign oil companies into the country for exploration and prodcution for a peice of the action. There are Mexican shale formations that haven’t been touched yet that will developed – as well as more competent development of connventionla oil exploration and production.

  9. And then there is this:

    http://www.theatlantic.com/tec…..ne/371310/

    Supposedly it is a cheap way to turn natural gas into gasoline.

    Consider the implications of that along with the fact that there are vast quantites of frozen methane on the ocean floor that could be extracted for conversion into gasoline.

    Fossil fuels are going to be available for a very long time to come.

    The only reason that the would not be utilized would be if something else even cheaper and more economical were devised to replace them.

    1. Except between maybe 1960 and 1983, naptha has always been a side product of more attractive hydrocarbons. That’s the reason it became a popular fuel. Standard Oil needed to find a use for the stuff that they couldn’t quite turn into kerosene economically. You can’t stop making gasoline as long as you are refining crude oil into diesel and/or kerosene. That’s not how vapor pressure separations work. Right now, gas is “cheap” because diesel is in high demand from refineries. They’re actually optimizing their diesel production and making lots of gas as a result. By contrast, natural gas has huge value as a raw material and as an industrial feedstock. This isn’t a great idea as long as are refining any amount of crude.

      1. It’s not an either/or proposition.

        Gasoline can continue to be refined from oil and more gasoline can be converted from natural gas.

        1. Why would you double the price of ethylene to do this, though? You’re going to (a) crash the price of gasoline (b) raise the price of all sorts of consumer goods and (c)increase the price of electricity when all of the gasoline we need is already produced as a byproduct. We cannot divert the gasoline produced in refineries to a more attractive use. It is already an afterthought. This is a terrible idea. On the scale of turning edible corn into ethanol to make gas cheaper bad. Natural gas is far more valuable where it is.

          1. Agree on the natural gas, but I don’t think US gasoline is just a byproduct of diesel production. We crack differently than Europe does because we burn more gas than diesel. The fact that we do that tells me that gas itself is in demand and diesel is the byproduct.

    2. No one has figured out an economical way to extract (mine?) clathrates, but if/when they do that pretty much solves our energy problems on the scale of centuries.

  10. Tree huggers hate shale gas with a vengeance: It’s cleaner than coal, so converting power plants to it is delaying the arrival of the solar and wind Utopia they want so badly.

    Every day my local paper has anti-fracking letters to the editor, even though we, Pennsylvania, have been fracking for 10 years. Heck, our regulations were written by a Democratic governor with an environmentalist environmental secretary.

    Even the latest study showing that gas migration into water wells is due to leaky casings near the surface, a technical issue that can and should be fixed, not fracking a mile deep.

    1. The Tree Huggers Solar and Wind utopia will never arrive. It is a fantasy based on the presumption (common to Lefty thought on a variety of subjects) that you can get something for nothing.

      If enough solar energy, or enough wind energy are converted into electricity to actually run any significant part of our civilization, we will discover what taking that power out of the environmental cycles it runs now does to the environment. I’m betting that we won’t like it.

      1. Any actual basis to this claim, given that most of the conservative establishment won’t listen to the scientists on global warming?

        1. The ones lying and playing politics with their bad math? Right. The same assholes said we would be in a new ice age by now, back in the 70’s.

  11. my roomate’s mom makes $67 every hour on the internet . She has been without a job for 8 months but last month her income was $14045 just working on the internet for a few hours. see this website …..

    ???????? http://www.jobsaa.com

    1. is she hot? Because I have some other business opportunities in mind.

      1. Hand modeling?

  12. “The shale bubble proponents essentially are betting on the EIA low production scenario. They will be proven right if shale oil production does peak in the next year or two. We shall soon see. ”

    LOL, really? Come on Ron, you know they’ll just move the goal posts. It’s what the Malthusian’s have been doing for decades, if not centuries. Paul R. Ehrlich has one of the worst track records of any prognosticator ever, and yet Lefties still proclaim him as some sort of prophetic genius.

    1. “Paul R. Ehrlich has one of the worst track records of any prognosticator ever, and yet Lefties still proclaim him as some sort of prophetic genius.”

      I swear I’ve heard this so often, it must be imprinted in lefty brains”
      ‘He’s right in general, he just got some details wrong!’

      1. ‘He’s right in general, he just got some details wrong!’

        The answer to such retards is “Julian Simon punked him”. Erlich epically lost. He is wrong. His stupid ideas have been proven wrong.

        1. “The answer to such retards is “Julian Simon punked him””

          Might just as well tell a bleever there is no evidence of an historical Jesus. All you’ll get is defensive BS in return.

    2. The EIA reference case has shale oil peaking in 2020 and going into terminal decline. It’s the cornucopians that are betting on the High Case, which shows output increasing all the way to 2040.

      http://www.eia.gov/forecasts/a…..#tight_oil

  13. What is most notable about the ‘Newest, Latest’ flavor of ‘Enlightened-Progressive Energy-Panic’…

    …is how quickly they seemed to turn on a dime from predictions of “Peak Oil” and consequent, imminent socioeconomic collapse… to the fact that the PLANET IS GOING TO DIE because there *won’t* be a imminent socioeconomic collapse.

    It seems like almost no one even seemed to notice that the script had changed at all. A few media organizations have run, “whither, ‘Peak Oil’?” stories, but they seem to elicit zero attention from anyone…

    …as though a complete Paradigm Shift in the terms of THE GUARANTEED DOOMSDAY SCENARIO was not even worth discussing.

    Seriously – have you actually talked to the fracking-panic progs, and asked them, “What were you freaking out about 7 years ago?”

    (thats assuming they’re not all recent college grads…but…oh wait, yeah, that’s sort of the standard foot-soldier in this game)

    1. We have always been at war with shale.

    2. …as though a complete Paradigm Shift in the terms of THE GUARANTEED DOOMSDAY SCENARIO was not even worth discussing.

      What pisses me off is that these are the people who, in less than a decade, will be crying about how the next evolutionary bottleneck will be bearing down on us and the rest of us are idiots who’s brains have been warped by selective breeding and quirky social pressure to make us acognizant of our own impending doom.

      They know the story of ‘the boy who cried wolf’ and ‘chicken little’, but the actual notion of alarm fatigue and the realization that they are often the source of alarm is lost on them.

    3. Yeah, the same people who told us 30 years ago that we had to stop burning oil because we were destined to run out, are now saying we need to stop burning oil because it’s so abundant and cheap that we’ll burn enough to destroy the entire atmosphere.

      1. Well, that’s what real scientists and not ideologues pushing pop Austrian economics are saying. We should trust one of these groups of people.

        1. Which ones, the ones that were wrong, or the ones that were even more wrong?

        2. I keep waiting for governments to solve global warming. it has all the qualities of a perfect example problem that they’re supposed to be good at solving: activity creates pollution as an externality which goes unpaid by the participants, no single actor contributes greatly to the problem, but they’re combined actions cause damage, requiring coordination to resolve, etc.

          And I keep waiting and waiting waiting.

          Any day now, I’m sure they’ll address this most important problem that’s exactly what they exist to solve (apparently).

          1. They will fly private jets to an exclusive location to have a week long conference. The event will be catered with food that is flown in from around the planet also on private jets.

          2. Are we talking about things like this?

            http://www.dw.de/denmark-leads…..a-17603695

            Or are we talking about old Soviet factories that haunt the imaginations of libertarians?

            1. Renewable energy in the United States accounted for 13.2 percent of the domestically produced electricity in 2012

              By 2012 the EU realized a 14.1% share of energy from renewable sources.

              If you want to compare a country of 300 million people across 9,629,091 km2 to a country with 5 million people across 42,915.7 km2, located on the coast, where the wind is great, go ahead and be stupid.

              The EU has 500 million people and 4,381,376 km2, which is a much better comparison, and they only do 14%. If western socialism is so awesome, why aren’t all the western socialists in the EU turning it into the socialist utopia you think it could be, to which they can look at one of their own member states (Denmark) as a model for?

              Perhaps because it’s not feasible. Still, go ahead and trash the USA and capitalism by proxy (which is a joke) just for following the EU’s example.

              1. “Still, go ahead and trash the USA and capitalism by proxy (which is a joke) just for following the EU’s example.”

                Unfortunately, “the EU’s example” isn’t capitalism. It’s just plain rent-seeking and the asshole commie-kid has no idea WIH that means.
                So your point is gonna leave him as ignorant as he was.

            2. american socialist|9.19.14 @ 8:17PM|#
              “Are we talking about things like this?”

              Oh, for pete’s sake, shitbag! Are you still trying to pick cherries like ten square miles of Wisconsin and somehow promote that as a model for the US?
              Are you that fucking dumb?

        3. american socialist:

          Well, that’s what real scientists and not ideologues pushing pop Austrian economics are saying. We should trust one of these groups of people.

          I think my favorite part is when you whined about Australia’s carbon tax failing because the tax was passed on to consumers, instead of power producers. How, exactly, do you think a carbon tax is supposed to work?

          A carbon tax is supposed to function like a pigovian tax: since the activity (creating CO2) creates negative externalities, the tax is imposed to account for those externalities. In this way, the price reflects the societal costs that the consumer now can’t get around paying. So, hopefully, they consume less as it costs more, reflecting the damage to the environment.

          OK, so what does that look like when power producers eat the tax in their profits? Why, customers pay the exact same as they did before, so they consume as before. The societal cost is paid not by the consumer, but a third party, hence, they avoid the societal costs.

          Somehow, according to your magical socialist thinking, you think you can provide exactly the same power at the same cost to consumers, yet reduce power consumption and CO2 generation. In what dimension does that work?

          It’s like trying to discourage smoking through a cigarette tax, and insisting that customers never pay more for cigarettes, all simultaneously. If you don’t notice the contradiction in all of that, don’t expect to be taken seriously.

          1. The same exact type of magical thinking that minimum wage has no effect on the demand for low skilled labor. I guess we aren’t ‘nuanced’ enough to hold contradictory ideas.

    4. “What were you freaking out about 7 years ago?”

      I was talking about European countries investing in energy conservation and renewables, oil being a driver behind why I was paying thousands of dollars in taxes to fund a war I detested, and global climate change.

      What were you guys talking about 7 yrs ago? Weed? Great. Thanks, bro.

      1. “I was talking about European countries investing in energy conservation and renewables:”

        Yeah.

        Good luck with that ‘utter disaster‘ there, by the way.

      2. I was talking about European countries investing in energy conservation and renewables,”
        Abject failure

        “oil being a driver behind why I was paying thousands of dollars in taxes to fund a war I detested,”
        And now you don’t seem to mind at all

        “and global climate change”
        Which has yet to be shown to require other than what’s being done.

        So, commie-kid, three-for-three fails. Not surprising from an asshole who champions mass murderers.

      3. oil being a driver behind why I was paying thousands of dollars in taxes to fund a war I detested

        When you have a government so out-of-control that you have to fund a detestable war over oil, then you have bigger problems than oil.

        Unless your strategy for dealing with the world is getting rid of everything worth fighting for. That’s not a long-term, forward-thinking, possible solution.

        If you want more choice about what your taxes go to fund, then get on board. The same government that forces people to support what you love it the same one that forces you to support what you hate.

        Problem with that approach, is that you don’t get to spend other people’s money on what you love.

        Damn. Opportunity costs everywhere. What’s a guy to do?

        I know, just keep using democracy and trying to convince everyone to agree with you. Enjoy that.

  14. So are people just calling anything they dislike a Ponzi scheme now?

    1. Any scheme involving money but lacking government direction/oversight, yes.

      1. Technically SS isn’t a Ponzi scheme, as it’s involuntary. Ponzi schemes require the seductive market process, whereas SS just steals laborers’ money from them directly.

        1. So a forced Ponzi scheme. Even worse. 🙁

        2. A Ponzi scheme is one in which “profits” are generated by an ever increasing number of “investors”. by that metric, social security does seem to fit.

          1. By that standard, a Gotti-family investment initiative would be a Ponzi scheme.

  15. All you need to read is the “left leaning” and you can stop. The left is angry that for all their talk of doom and disaster, the oil and gas sector keeps on booming.

    1. Notice the commie-kid asshole above getting holier-than-thou over weed, while his cherished ‘end oil’ crap takes a dive.

  16. “complicated geology of southern California” No, the environmentally beholden poloticians make energy production complicated, the geology is doable.

    Keystone pipeline go ahead, a little advanced planning to sell liquidfied nat gas to Europe, build some refineries, and get a handful of Nuke Power plants online. Energy independence and people back to work!

    1. No, actually the geology is a showstopper in the Monterey case;

      http://www.latimes.com/busines…..story.html

  17. So the derps are saying that the oil reserves are a shale of their former selves?

  18. The author seems to be looking at a different EIA 2014 Energy Outlook than is provided by the EIA. He stated “The shale bubble proponents essentially are betting on the EIA low production scenario.”

    The reference case (which the EIA expects) has shale oil peaking in 2020 and undergoing terminal decline and increasing dependence on foreign oil after that. Hence, this entire article is rhetoric and Orwellian double-speak to talk around the specific facts that obviate his entire thesis statement. To see for yourself, go to the EIA link below;

    http://www.eia.gov/forecasts/a…..#tight_oil

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