US media: The shale gas revolution is actually a scam

[United States "Foreign Policy Focus" website January 10 article] Title: Oil Big Scam (author Hafiz Ahmed)

The headline news of the 2012 International Energy Outlook (WEO) released by the International Energy Agency (lEA) in mid-November last year will make you think that we are simply swimming in oil.

The report predicts that by 2017, the United States will surpass Saudi Arabia and become the world's largest oil producer, almost “self-sufficient” in terms of the “net value” of energy production. This concept has been almost verbatim reports from media around the world, from the BBC to Bloomberg News.

The overall conclusion of the IEA report has been echoed by several other reports this year. ExxonMobil's 2013 Energy Outlook predicts that natural gas demand will grow by 65% ​​by 2040, and 20% of global production will come from North America, mostly from non-traditional sources. The report concludes that by 2025, the shale gas revolution will make the United States a net exporter. The US National Intelligence Council also predicts that by 2030, the United States will achieve energy independence.

In the past summer, the headline news of the media was also unanimous in the publication of a Harvard University report written by Leonardo Majer, a former senior executive of the National Hydrocarbon Corporation of Italy. Environmentalist George Monbilt wrote in the British newspaper The Guardian, the title of the column is "We are wrong in the peak oil production problem." Monbilt's article echoes a series of earlier reports. A month before, the BBC had asked: "The shortage: Can the concept of 'the daily limit of oil production' be rested?" The title of the Wall Street Journal reported thoughtfully - "Is the peak of oil peaked?" And Andrew Rifkin, the chief environmentalist columnist for the New York Times, "reviews the long-term farewell of oil."

The main point of all this is that “peak oil” is now just an irrelevant cultural concept. It is completely wrong to be out of touch with actual data. This has been proved by the cheap and unconventional oil and gas that existed in large numbers.

Can shale gas solve the energy crisis?

Contrary to the media's big blows caused by Mao Jieli's report, the three peer-reviewed reports published in the famous scientific journals in the first half of 2012 proposed a less optimistic perspective. Sir David King, the former chief scientist of the British government, published a paper in Nature, saying that although there are reports of oil reserves and increased production of tar sands, natural gas and shale gas, the world’s existing oil and gas fields The depletion continues to grow at a rate of 4.5% to 6.7% per year. They dismissed a notion that the shale gas boom would avoid an energy crisis and noted that in the first year of operation, shale gas well production fell by 60% to 90%. The paper did not cause a big report from the media.

In March last year, Sir Kim’s team at the Smith School of Business and Environment at Oxford University published another peer-reviewed paper on energy policy, which concluded that the industry overestimated the world’s oil reserves by about one-third. It should be reduced from 1.15 trillion to 1.35 trillion barrels to 850 billion to 900 billion barrels. The author believes that “although there are certainly a large number of fossil fuel resources left underground, the amount of oil that can be commercially exploited at the price customary to the global economy is limited and will soon decline.” The study basically Not reported by the media (except for a solitary report that the Daily Telegraph praised).

In June, the same month that Mao Jieli’s flawed analysis report was published, Energy published a long analysis of the oil industry data by US financial risk analyst Gail Tweberg. He found that since 2005, the "world's traditional 'oil supply has not increased." He believes that this is "the main reason for the economic recession in 2008-2009, the expected impact of the reduction in oil supply", which means that "the financial crisis may eventually deteriorate."

However, all media attention has focused on the report written by the oil company under the auspices of the oil industry. Tweberger's peer-reviewed research report published in a famous scientific journal has been neglected because of the pessimistic message.

Shale gas industry or false prosperity

What happens when the shale gas boom occurs?

These research reports are not the only indication that the IEA's assessment of shale gas production and the prospects for subsequent economic prosperity is extremely wrong.

In fact, the commercial insider network reported that the shale gas industry is not only far from the profit, but also facing huge financial obstacles. American financial journalist Wolf Ritchett said: "The economic principle of hydraulic fracturing is terrible. Production has fallen from the cliff from the first day, and this decline lasted for about a year until the initial production The result is about 10% down.” As a result, “Drilling is destroying capital at an alarming rate. The drilling company has left a mountain of debt, and the decline has begun to cause havoc. In order to avoid the rate of decline, the income statement is disrupted. The company had to drill more new wells and the output of the old wells fell. Hey, the plan hit the wall and the wall is a reality."

The oil industry is actively and deliberately trying to cover up the challenges of shale gas production. A groundbreaking survey by the New York Times in 2011 found that although the US oil industry took an extremely optimistic stance in public, it was "in privately skeptical about shale gas."

In other words, the ultimate consequence of the current excess natural gas may be that unsustainable shale gas bubbles collapse under their own gravity, accelerating supply collapse and price increases. The shale gas revolution will not stimulate prosperity, but will fuel this kind of prosperity, which masks deeper structural instability. This instability will inevitably collide, leaving us with a bigger financial mess and slipping faster to the costly environment.

So, when is the key moment? According to a recent report by the New Economic Foundation, the “peak of economic oil” will come – when supply costs will “beyond the ability of the price economy to pay without seriously damaging economic activity” – it will be around 2014 or 2015.

It seems that this dark gold is not the answer to our question.

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