An analysis of a report from Energy Watch Group — available here, and other places — contains a couple of real doozies. Let’s hope this is all wrong!
Turning to the US, the report looks in detail at our production and reserve situation. The entire increase in American oil production over the last three or four years has come from Texas and North Dakota, with production elsewhere on balance continuing to decline.
In fact, the growth is only from parts of those states – specifically, 10 counties in Texas and four in North Dakota. The decline rates on those fracked oil wells and the limited areas still offering economic production opportunities suggests that shale (or tight) oil production will only grow for a few more years, and peak by 2017.
Jeeeeeeeeeeeez! This isn’t what you hear from the mainsleeze media, now is it?
. . . and then there’s this:
Surprisingly, the natural gas situation in the US is even worse. Total American gas production has sharply increased due to the fracking boom, but the EWG sees a brief topping out of gas between 2012 and 2014, followed by a sharp decline before the end of this decade. (EWG 153-66)
As I wrote here in January, the fracking reality is vastly different from the public’s perception. Wells are expensive and production volumes decline rapidly. People relying on plentiful and cheap gas for the long term will be very disappointed.
No doubt, there’s bones of contention strewn all over this analysis (and the report on which it is based). However, big energy geniuses like Daniel Yergin have been proven — consistently, in the 2000s — to be WRONG.
Keep this in mind: The average price paid for crude oil in 1998 by U.S. refineries was (national average over the year) around $13/barrel. The market price these days has been hovering (within $3 to $5 either side) around $90/barrel.
There are 15 years separating us from 1998. 7 x 13 = $91. The price of oil has risen SEVEN TIMES in 15 years.
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