Just like most people I know, I hear things from authority sources and do not question accuracy. News presented to us in major media is given automatic credibility, even as I know that it is that credibility that allows lies to own us. I have read and heard repeated stories that fracking technology has opened up new strata previously inaccessible, and that we now have a century of natural gas under our feet. Similar claims are made about oil, especially the Bakken reserves in Montana, North Dakota and Alberta.
Not so, says F. William Engdahl in a very long article at Voltaire. He says it is hype, another bubble, and that smart investors are waiting to pounce when the gas frenzy subsides. Fracked gas reserves are just like those developed by older technology – they decline at an exponential rate, so that a drilling frenzy is required just to stay even on production. But they cannot keep up, and eventually we will realize that that far from a century’s worth of reserves, we have more like 10-25 years supply. At that time prices, currently in the $3-4 range, will bounce back. A few will be ready for this as they buy up existing underpriced reserves.
The 100-year figure, often repeated, is nonsense, and anyone famliar with oil and gas jargon should know that it came from adding together “proven,” “probable,” and “potential” reserves. It is that last word, “potential,” that is the kicker, as these reserves are better called “speculative.” Together with decline rates even steeper than gas produced under older technology, is creating the false confidence that we have solved our domestic energy shortage.
Piece of Mindful 
Maybe we have a consumption problem, not a supply problem. Already, like “excess” production of electricity generated in Montana, “fracked” natural gas is being exported to Europe to capture higher prices. The idea there is a “domestic” energy supply, or market, is laughable. The ports are pushing raw materials — coal, grain, wood fiber, oil and gas, and minerals — out of the country at staggering rates. Damn trade agreements.
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That’s a really good point – my mind is still in country and political boundary framework, when it is all about concentrations of political and economic power.
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Oil out of nowhere.
http://www.aei-ideas.org/2013/03/the-eagle-ford-shale-oil-field-came-out-of-nowhere-and-had-an-61-economic-impact-on-texas-last-year/?utm_source=twitter&utm_medium=web&utm_campaign=032713
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Hardly the point. Bakken oil is having a huge impact up there. The question is long-term prospects – how reliable are current forecasts, and are we being lied to?
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And where are those vaunted “savings at the pump,” Swede? In 2012, the U.S. shipped (in dollars) more gasoline, diesel, and jet fuel than any other single export. For the last five or six years, America’s top export was aircraft fuel.
The port City of Corpus Christi is rapidly transforming into an exporter of Eagle Ford Shale gas and oil production. Crude is shipped by barge from Corpus Christi to refineries in Louisiana and other states. Once refined, much of it is exported as gasoline and diesel. Port Corpus Christi working on an export terminal for liquefied natural gas to export natural gas from the Eagle Ford to foreign markets like Japan, China, and Korea. Louisiana ports are also anticipating huge liquified natural gas export expansion. What makes us so different from any other resource-export colony?
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Inflation and gas prices are interrelated.
http://inflationdata.com/Inflation/images/charts/Oil/Gasoline_inflation_chart.htm
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I also wonder why people think there such a thing as “domestic” energy supply. I just put up a post about the Missoulian Editorial board’s awful shilling for the Keystone pipeline, where they talk about the benefit of adding to our national energy infrastructure. it’s really sad how easily misled people are.
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