A few days ago I discussed how the shale oil boom in California fizzled before it got started and the boom was going to go bust in North Dakota and Texas in less than a decade. Well now the I.E.A. agrees:
National Public Radio’s “Morning Edition” reported this morning:
NPR’s Business News starts with the outlook for oil. This is a change of course – the International Energy Agency has released a report on global energy investment. And this group predicts the United States will have to rely more heavily on Middle East oil in the coming years, as North American sources start to dry up a little bit. U.S. energy production has boomed recently, much of it coming from oil and gas extracted from shale. But the IEA says U.S. production will start to lose steam around 2020, and that would put more bargaining power back in the hands of OPEC countries, such as Saudi Arabia.
This is quite interesting, given that in 2012, the IEA forecast that the U.S. would overtake Saudia Arabia in oil production by 2020, and would be a net oil exporter by 2030. The International Energy Agency (I.E.A.) is a watchdog organization considered the world’s leading energy analyzing institution. This new stance coincides with a similar about-face from the U.S. government’s EIA (Energy Information Administration), which suddenly downgraded its assessment of the Montery Shale “tight oil” fields by 96%.
Well, that Shale bubble, didn’t last long, did it? As Sylvia says, “we told you so!” One of the best recent analysis of the current energy situation, I believe, was done by Steven Kopits, which I wrote about here. and with a follow-up here.
This does not come as a surprise to many of us that follow the industry but it will come as a surprise to many of the American people who have been deceived by the fossil fuel industry. In North Dakota and Texas they first went for the so called “hot spots” where production would be greatest. They are increasingly being forced to drill in less “hot spots.” Apparently the Montery Shale didn’t really have any “hot spots” and I noted in the previous post pumping millions of gallons of water into the ground in an earthquake prone area is probably not a really good idea anyway. I think there was a James Bond movie about that.
The bottom line is we have been sold a bill of goods and a false sense of security by the fossil fuel industry.