Slate magazine: The Myth of "Saudi America"
Comment of the Day

February 08 2013

Commentary by David Fuller

Slate magazine: The Myth of "Saudi America"

My thanks to a relative for this interesting article by Raymond T Pierrehumbert. Here is his main point on shale
There are certainly huge amounts of oil locked up in shale formations worldwide. In the United States alone, the Bakken and Eagle Ford shales contain up to 700 billion barrels, and the Green River shale under Colorado, Wyoming, and Utah has a whopping 2 trillion barrels. However, only a tiny fraction of this total is recoverable. For Bakken (in Montana and North Dakota) and Eagle Ford (in Texas), which account for most of the current surge in U.S. oil production, the estimated recoverable fraction ranges from 1 to 2 percent. Though all of these deposits are loosely referred to as "shale oil," Bakken and Eagle Ford oil is more precisely called "tight oil," because it is actual, fluid oil that is trapped in the pores of shale, and it can be liberated by fracturing the rock to allow the oil to flow. In contrast, the hydrocarbon in the Green River shale is not really oil at all but a waxy substance that must be cooked at around 500 degrees Celsius to turn it into flowing oil. The technology for extracting oil from deposits like the Green River shale is far more challenging than what is required to tap into tight oil, and it has never been profitably implemented at any significant scale. There is thus no credible estimate of how much oil can be recovered from the Green River formation.

At the high end of the estimates, predicted production from Bakken and Eagle Ford together amounts to perhaps a two-year oil supply for the United States at 2011 consumption rates. That's significant but not a game-changer. Even if it were to prove possible to achieve production rates comparable to those of Saudi Arabia, that would only mean that we would deplete the resource faster and bring on an oil crash sooner.

David Fuller's view There is a political tilt to this article, including that "we won't be much better off in the long run if cheap gas only succeeds in killing off the nascent renewables industry and the development of next-generation nuclear power."

In Europe, Germany has pressed ahead with its renewable energy, while also phasing out rather than upgrading its nuclear power facilities. Consequently, energy costs have soared and predictably weakened the productive German economy. German citizens have also discovered that parts of their countryside is now festooned with ugly, gigantic, noisy windmills which soon loose their appeal when one is anywhere near them. They are also having to build more coal fired power stations to prevent blackouts.

The lead article above is much more pessimistic about the amount of actually recoverable oil and gas from tight shale deposits than most of the other articles that I have posted on this subject. I think the graphs of rapidly declining yields shown in that article are somewhat misleading because only a small area is tapped by horizontal drilling and fracking, before it makes more sense to move a little further along the field and drill another well.

Meanwhile, production of oil and gas from shale fields in the US continues to rise. This is without any subsidies from the government and US energy costs are now much lower than in any other large developed economy. Since natural gas burns more cleanly than coal and oil, pollution levels in the USA have actually declined, even though their manufacturing base is expanding once again.

Mr Pierrehumbert's point about the improbability of recovering waxy oil in the huge Green River deposit appears important. Nevertheless, I have always assumed that this was a technological problem worth solving. However, some of you will know far more about this than I do so any thoughts that subscribers would like to contribute on this subject in future will be welcomed.

Back to top