It takes all the running you can do, to keep in the same place
~The Red Queen – Through the Looking Glass by Lewis Carroll
Tight/shale oil is thought by many to be the path to U.S. energy independence. But is it? Probably not. Conventional wells deplete over time but fracked tight shale oil wells deplete very rapidly, often in excess of 50% a year. In addition the first wells are drilled in so called “sweet spots” where production is maximized. This is where The Red Queen hypothesis kicks in. You have to drill more and more wells just to keep production constant. Horizontal fracked wells are very expensive so the price of oil must constantly increase to keep the operations profitable and at some point that oil will simply become too expensive for the economy to absorb. Ron Patterson looks at the latest EIA data on tight oil production in the U.S. and it looks like it’s very near the peak.
Of note: We finally have production data and decline rate data on Eagle Ford. We also have Permian data, which produces more oil than either the Bakken or Eagle Ford but the Permian has peaked or nearly so. It is still increasing by about 1 kb/d but each rig is only producing 79 new barrels per month and that just barely keeps up with declines. New Production is estimated to be 35 kb/d in November and declines are expected to be 34 kb/d. for a gain of about 1 kb/d.
So tight/shale oil gave us a temporary respite from peak oil but not a fix.