Rational observers have told us from the beginning, on this and many other venues, that the so-called revolution of American energy based on fracking was bogus. If you chose instead to believe the fevered pitches of the corporate con men — we have a hundred years supply of gas, no two hundred, we’re moving “toward” energy independence, we’re going to surpass Saudi Arabia, all that crap — then consider the developments reported in the past ten days or so:
Natural gas prices have been going up steadily for a year, from under two dollars per million BTUs last spring to over four dollars now (according to the US EIA Weekly Update). The new era of cheap, plentiful natural gas ushered in by the “revolution” had a shelf life (if you define it as prices below $3) of exactly six months.
Also since last spring, not coincidentally, the amount of coal being burned to produce electricity has been increasing steadily as the use of natural gas in generation declines. A Washington Post blogger had the details two days ago. Remember when everywhere you looked there were stories about the end of coal, and how much our carbon emissions were going to improve?
A whole raft of plans to build massive superports from which to export natural gas to Europe — part of that “surpassing Saudi Arabia” thing — are withering quietly on their respective drawing boards, with about as much chance of getting funded as Newt Gingrich’s moon colony.
The entire shale gas scenario is collapsing, as the director of the Energy Policy Forum, Deborah Rogers, explained to a Senate committee last week:
“Shale wells deplete alarmingly. Overall field declines are running at the troubling rate of 30-50% per annum. It will take approximately 7000 new wells every year at a staggering cost of about $42 billion simply to maintain a flat production profile. Moreover, every shale gas play in the U.S., with the exception of the Marcellus [in the northeastern US], has already peaked and is in decline. Some have gone through almost a complete life cycle in a matter of a mere five years or so, negating entirely the notion of plentiful supply for 30, 40 or even 50 years. Even the Marcellus is showing signs of late middle age.”
It was all a con, aimed at lathering up investors so they would dump their unearned wealth into improbable gas-bonanza scenarios. With the side effect of distracting everybody from the stern prospects of peak gas and oil that are about to become realities.