Guest commentary by David Middleton
People send Charles things and they sometimes wind up in my inbox…
The Shale Boom Is About To Go Bust
by Tyler Durden
The shale industry faces an uncertain future as drillers try to outrun the treadmill of precipitous well declines.
For years, companies have deployed an array of drilling techniques to extract more oil and gas out of their wells, steadily intensifying each stage of the operation. Longer laterals, more water, more frac sand, closer spacing of wells – pushing each of these to their limits, for the most part, led to more production. Higher output allowed the industry to outpace the infamous decline rates from shale wells.
That sounds impressive, but the industry may simply be frontloading production. The suite of drilling techniques “have lowered costs and allowed the resource to be extracted with fewer wells, but have not significantly increased the ultimate recoverable resource,” J. David Hughes, an earth scientist, and author of the Post Carbon report, warned. ..
What’s wrong with this article?
- Zero Hedge is slightly more reliable than Info Wars and Lew Rockwell.
- Nick Cunningham is probably the second least reliable Oil Price contributor, as it pertains to the oil & gas industry… “Nick Cunningham is a freelance writer on oil and gas, renewable energy, climate change, energy policy and geopolitics.“
- Founded in 2003, Post Carbon Institute’s mission is to lead the transition to a more resilient, equitable, and sustainable world by providing individuals and communities with the resources needed to understand and respond to the interrelated ecological, economic, energy, and equity crises of the 21st century.
- Post Carbon Institute is doing the most important work imaginable, and doing it well –Bill McKibben, Author, Founder of 350.org & PCI Fellow
- Who the hell is J. David Hughes?
I can’t find any meaningful information about J. David Hughes, apart from the assertion that he allegedly is an earth scientist and he clearly has been opposing and/or predicting the imminent doom of shale resource plays since 2008, the dawn of the “Shale Revolution”…
David Hughes is a geoscientist who has studied the energy resources of Canada for nearly four decades, including 32 years with the Geological Survey of Canada as a scientist and research manager. He developed a National Coal Inventory for Canada and coordinated a comprehensive assessment of Canada’s unconventional natural gas potential as Team Leader for Unconventional Gas on the Canadian Gas Potential Committee. In 2008, David founded Global Sustainability Research Inc., a consultancy dedicated to research on energy and sustainability issues. Clients have covered the ideological spectrum from multinational energy companies, including Imperial Oil and Forbes Energy Group, municipal governments, including the City of Edmonton, the Canadian Federal Government, including the Petroleum Resources Branch of Natural Resources Canada, and environmental groups, including ForestEthics. Over the past decade, he has researched, published and lectured widely on global energy and sustainability issues in North America and internationally. He is a board member of the Association for the Study of Peak Oil and Gas – Canada and is a Fellow of the Post Carbon Institute. His work has been featured in the popular press, radio, television and other public media. He is a sought after speaker on global and North American energy issues, as well as on specific aspects of energy including shale gas, coalbed methane, LNG exports, pipeline infrastructure development, scaling issues with alternatives and considerations for long term energy security and sustainability. In recent years he has addressed nearly 200 venues on these issues ranging from municipal-, provincial/state- and Federal-governments, through scientific conferences, universities, environmental groups and industry associations.Physicians, Scientists, and Engineers (PSE) for Healthy Energy
There are a lot of uncertainties in the oil & gas industry; however anytime an article asserts one of the following conclusions, or something to the effect thereof, there’s a 99.9% chance that the author knows nothing about the oil & gas industry:
- Shale is a panacea.
- Shale is a Ponzi scheme.
It’s neither. Next?
What’s that? I only impugned the source and didn’t address their arguments?
This is idiotic…
The suite of drilling techniques “have lowered costs and allowed the resource to be extracted with fewer wells, but have not significantly increased the ultimate recoverable resource,” J. David Hughes, an earth scientist, and author of the Post Carbon report, warned.
“The suite of drilling techniques” have vastly increased the ultimate recoverable resource, by bringing the source rocks and other impermeable reservoirs into the ultimate recoverable resource.
This wouldn’t have happened without “the suite of drilling techniques”…
WASHINGTON – Today, the U.S. Department of the Interior announced the Wolfcamp Shale and overlying Bone Spring Formation in the Delaware Basin portion of Texas and New Mexico’s Permian Basin province contain an estimated mean of 46.3 billion barrels of oil, 281 trillion cubic feet of natural gas, and 20 billion barrels of natural gas liquids, according to an assessment by the U.S. Geological Survey (USGS). This estimate is for continuous (unconventional) oil, and consists of undiscovered, technically recoverable resources.
“Christmas came a few weeks early this year,” said U.S. Secretary of the Interior Ryan Zinke. “American strength flows from American energy, and as it turns out, we have a lot of American energy. Before this assessment came down, I was bullish on oil and gas production in the United States. Now, I know for a fact that American energy dominance is within our grasp as a nation.”
“In the 1980’s, during my time in the petroleum industry, the Permian and similar mature basins were not considered viable for producing large new recoverable resources. Today, thanks to advances in technology, the Permian Basin continues to impress in terms of resource potential. The results of this most recent assessment and that of the Wolfcamp Formation in the Midland Basin in 2016 are our largest continuous oil and gas assessments ever released,” said Dr. Jim Reilly, USGS Director. “Knowing where these resources are located and how much exists is crucial to ensuring both our energy independence and energy dominance.”