The production boom in shale oil has momentum, and that is likely to carry on for some time, even in the face of sharply falling prices, as has been the case for natural gas. The rig count in shale oil production is skyrocketing, even as the rig count for natural gas falls, and production lags rig count.
The quantity of recoverable oil has been considerably hyped, and this resource is not going to represent a game-changer. In fact it would not even if we were not facing economic circumstances set to crash production.
http://theautomaticearth.com/Energy/unconventional-oil-is-not-a-game-changer.html
Here is the link to George Monbiot's new article in the Guardian claiming that, with the new upsurge in oil production, Peak Oil will not arrive until many many years to come. http://www.monbiot.com/2012/07/02/false-summit/
He bases this on a Harvard report by oil executive, Leonardo Maugeri, which is found here: http://belfercenter.ksg.harvard.edu/files/Oil-%20The%20Next%20Revolution.pdf
His conviction is rather strong:
Peak oil hasn’t happened, and it’s unlikely to happen for a very long time. A report by the oil executive Leonardo Maugeri, published by Harvard University, provides compelling evidence that a new oil boom has begun(9). The constraints on oil supply over the past ten years appear to have had more to do with money than geology. The low prices before 2003 had discouraged investors from developing difficult fields. The high prices of the past few years have changed that.
Maugeri’s analysis of projects in 23 countries suggests that global oil supplies are likely to rise by a net 17m barrels per day (to 110m) by 2020. This, he says, is “the largest potential addition to the world’s oil supply capacity since the 1980s.” The investments required to make this boom happen depend on a long-term price of $70 a barrel. The current cost of Brent crude is $95(10). Money is now flooding into new oil: a trillion dollars was spent over the past two years, a record $600bn is lined up for 2012(11).
The country in which production is likely to rise furthest is Iraq, into which multinational companies are now sinking their money, and their claws. The bigger surprise is that the other great boom is likely to happen in the US. Hubbert’s Peak, the famous bell-shaped graph depicting the rise and fall of US oil, is set to become Hubbert’s Rollercoaster.
Investment there will concentrate on unconventional oil, especially shale oil (which, confusingly, is not the same as oil shale). Shale oil is high-quality crude trapped in rocks through which it doesn’t flow naturally. There are, we now know, monstrous deposits in the United States: one estimate suggests that the Bakken shales in North Dakota contain almost as much oil as Saudi Arabia (though less of it is extractable)(12). And this is one of 20 such formations in the US. Extracting shale oil requires horizontal drilling and fracking: a combination of high prices and technological refinements has made them economically viable. Already production in North Dakota has risen from 100,000 barrels a day in 2005 to 550,000 this January (13).
So this is where we are. The automatic correction – resource depletion destroying the machine that was driving it – that many environmentalists foresaw is not going to happen. The problem we face is not that there is too little oil, but that there is too much.