Sir, Martin Wolf, in ‘Cheap oil puts humanity on a slippery slope’ (December 2) states: ‘The emergence of shale oil underlines what was already fairly clear, namely, that the global supply capacity is not only enormous but expanding. Forget peak oil.’ He is mistaken. Even the International Energy Agency acknowledges that conventional oil production peaked in 2005. Add other sources of liquid production, in particular tight oil (often misleadingly called shale oil) production from the US, and there has been a modest increase since then, giving a kind of ‘undulating plateau’ as Shell would have it. What the burst of unconventional production from the US has done is to mask the underlying reality of peak oil. This will become apparent as the tight oil potential itself proves limited in time. [1]
There are certain realities about the recent spike in U.S. fossil fuel production which can be masked or misrepresented in only so many ways. Tight oil production generated from hydraulic fracturing [fracking] has shown itself to be more expensive and not as energy “dense” or efficient, for starters. [No one can dispute what an impressive effort it proved itself to be in the past few years, of course.]
But current production and cost issues call into question the level of short-term production spikes we might expect from fracking efforts in the next few years. Fracking is a more expensive, time-consuming process. The production rate of fracked wells declines very quickly, so more and more wells must be drilled to keep pace. Prime locations are not infinite, so that limitation must refactored in. It requires high prices in order to supply the needed investment and effort Low prices are good news for consumers, but there’s a price to be paid there, too.
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