Fracking (hydraulic fracturing) for oil and natural gas extraction a game changer for peak oil?

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ynanlin's picture
ynanlin
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Fracking (hydraulic fracturing) for oil and natural gas extraction a game changer for peak oil?
I was a firm believer of peak oil, but the recent widespread use of fracking (hydraulic fracturing) to retrieve oil and natural gas has change my view. Right now, peak oil becomes a less urgent problem compared to global warming, sovereign debt crisis, persistent jobless youth, and probably overfishing.
 
I read first about the assessment probably in Science News a while ago, and a quick search just now found an article on Wired (http://www.wired.co.uk/news/archive/2012-02/23/peak-oil). What's your thought on this recent development, my fellow forumer?
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MarkM
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Another perspective

http://theautomaticearth.org/Finance/shale-gas-reality-begins-to-dawn.html

"It has long been our position at The Automatic Earth that North America is collectively dreaming with regard to unconventional natural gas. While gas is undeniably there, the Energy Returned On Energy Invested (EROEI) is dramatically lower than for conventional supplies. The critical nature of EROEI has been widely ignored, but will ultimately determine what is and is not an energy source, and shale gas is going to fail the test."

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cmartenson
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About all that 'new' oil

I am busily preparing reports on the gains that have come from the frac'ing of shale to produce oil and gas.

The headline is this: Technology did not 'ride to the rescue' and give us something new.

The simple fact is that both frac'ing and horizontal drilling have been around for decades and have been used and tried in all the shale plays that are currently in the news.

What did change?  The price of oil and gas.  The short answer to the question "what was responsible for unlocking the energy in the shale plays?" is "price."

If it costs $70 per barrel to drill, produce and deliver oil from the Bakken, then no drilling or new incremental production will occur at at price below $75-$77 (because profit needs to be there too).

So the mistake in simply looking at the amounts coming out of the plays is to then assume they are equivalent to the amounts we used to get from the prior conventional (cheap and easy) plays.  They are not.  They are more expensive, which is a derivative of the idea that they return less net energy.

Once we accept the idea that these new plays are giving us less net energy to play with elsewhere in our complex economic and financial markets, then we have to wonder what the implications are for an exponentially based system of credit creation.    One answer might be "nothing to worry about" while another might be "they simply won't work the same as before, possibly even at all."

Whether we choose to ignore the potential risks or mitigate them is a matter of personal choice.  

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ynanlin
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I know the so-called 'tight
I know the so-called 'tight oil' may not be an economically viable option when oil price drops to certain level, but the readily available technology and the very interesting numbers for 'fracking potential' around the world (such as the one from Forbes (http://www.forbes.com/sites/kenrapoza/2012/02/13/china-closer-to-joining...) really raise my hope that peak oil may be happening later than sooner.
 
I am still very much worried about our future, but maybe this will give us some more time to deal with many other urgent problems while pumping much more greenhouse gas into the atmosphere. We will have more draughts, more flood, and more environmental refugees to warn us about the cost of inaction.
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Doug
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What Chris said

Safewrite posted this on DD:

http://www.zerohedge.com/news/guest-post-oil-price-differentials-caught-between-sands-and-pipelines

It reinforces Chris's theme.  One of the problems with fracking in shale is the short life of a well.  For oil, within two years production drops by 80%.  That means that peak production within a field is going to occur much sooner than on traditional oil plays.  Although the Bakken seems like a recent development, in reality there are already thousands of wells in that formation.  When does saturation occur?

I don't remember whether it was Dmitri Orlov or John Michael Greer, but one of them pointed out at the Age of Limits weekend a few weeks ago that fracking companies are abandoning the Marcellus shale formation in PA because they aren't making any money.  Part of that, of course, is the low price of NG, but part is also an indication that there just isn't that much easily retrievable NG left in a formation that has been producing oil and gas for over a century.  

My guess is that the supposed boom in NA production will be a blip on Hubbert's curve.

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tom.
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Marcellus Wells going dormant early

Some good charts on fractracker (link below) from last year show how quickly the Marcellus horizontal injection wells are going dormant, necessitating starting more new wells quickly enough to keep the illusion of natural gas prosperity rolling on …

http://www.fractracker.org/2011/09/marcellus-shale-production-decline-in...

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ckessel
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Ynanlin, I think we would all

Ynanlin,

I think we would all like to have the predicament go away but the reality is that sooner ...... or later........... we will have to face the fact that fossil fuels are a finite resource contained within our finite planet. We may speculate on the when, the where and the how fast change is coming but it is underway.

Personally I have decided that the time to deal with it is now. That provides a better chance for an improved outcome if for no other reason than it allows more time to work on it IMHO. And the activity that comes from doing something now seems to relieve much of the worry and anxiety of the situation.

Hope for me is more of a thought process than an action related activity. So when you said:

"really raise my hope that peak oil may be happening later than sooner." I can relate in that it may provide more time but hope alone does not seem to be effective in changing the possible outcome. And I consider that all of our problems are urgent. 

Best,

Coop

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logicalunatic
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What's your thought on this

What's your thought on this recent development, my fellow forumer?

Like others have noted it isn't the technology that is new but our ability to afford to use it.

The act of burning this tight/expensive oil in a business-as-usual fashion is quickly turning Hubbert's Peak into Seneca's Cliff.

Every 40 minutes the world consumes as much oil as a single tight oil well will pump in a 35 year lifetime.

Tight oil is only making it worse.

Plan Ahead - Plant A Garden

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kelvinator
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New Nat Gas Makes a Difference, But Not >The< Difference

Ynanlin, my understanding is that the new fracked gas probably makes a bit of difference for peak oil timing, but not enough of a difference to make a big difference.

First, the most immediate peak energy problem is supposed to be a liquid fuels problem in particular - particularly fuel for transportation.   The infrastructure requirements for setting up a distribution system to use nat gas for tranportation are huge - I've heard estimates in the trillions of dollars.  A high percentage of people then have to buy new cars or have expensive retrofits.  Of course, these things are a challenge for companies, govt's and individuals in tough economic times.  

The fact that nat gas isn't a fit for the liquid fuel crisis is indicated by the fact that nat gas prices are historically low while gas prices remain historically high - there's no cross over, at least at this point.

The other thing to realize about all the falderall related to "the new nat gas boom" is that, in part, there's always an incentive for investors, schemers and scammers and their enthusiastic friends in the media to over-sell whatever the next great new thing is - like shale plays - to put out statistics that set up a pump and dump, mafia capitalist style operation:  get people excited (and greedy), get great production stats happening initially - and I understand there tend to be good stats when they first start cracking the rocks - sell the heck out of the whole operation to investors and new stock buyers, then, in turn, sell the whole property or company based on outlandish long term profit projections, make a giant cash score and stand clear when the tech bubble, the housing bubble, oh, that's right, the steenking natural gas bubble pops and comes down to the real world reality that, just like housing values won't really go to the moon, nat gas fracking production and its long term possibilities may be worthwhile, but may yield quite a bit less ultimate production and take a much larger infrastructure investment and environmental toll than was included in the pitch by the original promoters.

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Jethro
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ABC Catalyst Peak Oil Report

Says it all really

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LesPhelps
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Prioritizing the Problems we face

Regarding peak oil, I have yet to see a graph that shows any meaningful growth in global oil production since 2005.  Even if oil production does nose up from the essentially flat production that has been occurring since 2005, the increased demand from China and India will result in the same issue.  The problem exists if demand exceeds supply by a few percentage points, regardless of whether peak oil has occurred.

The order you chose to list the problems we face is interesting.  You put global warming ahead of all other issues including the debt crisis and didn't even mention soil erosion or water quality/availability.  You must be more forgiving of the shenanigans that the global warming crowd have been engaging in since the beginning of the controversy in the 1970s.

I personally believe that debt crisis is the first game changer we will face.  When the debt bubble bursts, I expect the demand for oil to soften considerably.

Frankly, one of my largst fears is that continued inflation may result in food prices that are beyond the means of significant portions of the global population.

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ynanlin
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I watched the ABC report and

I watched the ABC report and somehow still got a similar conclusion. Peak oil may have been reached in 2006, but the surge of 'extractable' oil in several areas (widespread frackable oil fields [albeit seemlingly short-lived], deep oil, and artic oil) feels like it will follow the recent Russia history (if there is oil to be extracted for profit now, we will do it). The extracted oil available to the market should follow a slower decline slope than my earlier expectation, and the world economy is not likely to go the same route using borrowed money and excessive leverage in the next decade. AND that mean I would have a little more time to prepare for the real PEAK-OIL world ahead.

I agree with LesPhelps that some other problems, like food production or water availability, will manifest themselves earlier in more erratic fashions than the true episode of peak-oil world. However, after more than a decade of extensive researching, my opinion is that global warming is the the major trend-setting force in addition to the growing population for most of our problems. I am currently 39 and working my head off for my postdoc job in biomedical research. The extra time borrowed from those extractable oil should fill the curves corresponding to the yet-to-be-found and yet-to-be-developed oil until a probable cliff fall. There is no doubt that everyone should prepare for that, but I do appreciate the likely extra time for me to gather enough resources in the next decade or two before digging my hole for safety.

 

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