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.




