Richard Ha writes:

From ShaleBubble.org:

THEY TELL US

WE’RE ON THE CUSP OF AN OIL & GAS REVOLUTION.

But what if it’s all just a short-term bubble?

The Reality is that the so-called shale revolution is nothing more than a bubble, driven by record levels of drilling, speculative lease & flip practices on the part of shale energy companies, fee-driven promotion by the same investment banks that fomented the housing bubble, and by unsustainably low natural gas prices. Geological and economic constraints – not to mention the very serious environmental and health impacts of drilling – mean that shale gas and shale oil (tight oil) are far from the solution to our energy woes.

This makes total sense to me.

In 2009, at the Association for the Study of Peak Oil and Gas (ASPO) conference in Denver, I attended a panel discussion on natural gas production.

Arthur Berman, a petroleum geologist and energy consultant, talked about analyzing 4,000 Barnett Shale wells. He found that an average well produces 70 percent of its production in the first year. This made sense to me: It’s a gas.

An industry person on the panel said that life span of the wells is calculated to be 22 years. Obviously, they must produce at a very low rate later in their life span, compared to their first year’s production. One has to keep drilling more just to stay in one place.

In this landmark report “Drill Baby Drill,” J. David Hughes of Post Carbon Institute takes a far-ranging and painstakingly researched look at the prospects for various unconventional fuels to provide energy abundance for the United States in the 21st Century. While the report examines a range of energy sources, the centerpiece of “Drill, Baby, Drill” is a critical analysis of shale gas and shale oil (tight oil) and the potential of a shale “revolution.”

From the Executive Summary of “Drill Baby Drill:“

World energy consumption has more than doubled since the energy crises of the 1970s, and more than 80 percent of this is provided by fossil fuels. In the next 24 years world consumption is forecast to grow by a further 44 percent—and U.S. consumption a further seven percent—with fossil fuels continuing to provide around 80 percent of total demand.

Where will these fossil fuels come from? There has been great enthusiasm recently for a renaissance in the production of oil and natural gas, particularly for the United States. Starting with calls in the 2008 presidential election to “drill, baby, drill!,” politicians and industry leaders alike now hail “one hundred years of gas” and anticipate the U.S. regaining its crown as the world’s foremost oil producer. Much of this optimism is based on the application of technologies like hydraulic fracturing (“fracking”) and horizontal drilling to previously inaccessible shale reservoirs, and the development of unconventional sources such as tar sands and oil shale. Globally there is great hope for vast increases in oil production from underdeveloped regions such as Iraq. 

However, the real challenges—and costs—of 21st century fossil fuel production suggest that such vastly increased supplies will not be easily achieved or even possible. The geological and environmental realities of trying to fulfill these exuberant proclamations deserve a closer look.

Click here to see a report about the role of Wall Street investment banks in the recent shale gas drilling frenzy and related drop in natural gas prices, written by Deborah Rogers from Energy Policy Forum.

The petroleum age is not even 150 years old, and already we are worrying about supply. In contrast, consider that the Big Island will be over the “hot spot” for 500,000 to a million years.

We don’t need $200/barrel Aina Koa Pono biofuel, which will make us less competitive. What makes sense is the $57/barrel oil equivalent that is geothermal.

We in Hawai‘i need to prepare for worse case scenarios.

So how much time do we have and how do we take care of all of us?

We need to be practical: What works, works.

This is about competition. Low cost trumps high cost.

It’s about net energy. The energy left over from what’s expended in getting the energy is what we have left to use.

And it’s about common sense. When kids picking guava or waiawi in a pasture hear hoof beats, they run first. Then they look to see if it’s a horse or the wild bull.