Why The Frackers' Language "Overhaul" Is Doomed To Fail

Top: Fracking well despoiling water and emitting volatile organic chemicals in a Colo. town. Bottom: Students get ready for global climate strike

Today, as the global  climate strike revs up, it is well to consider the not insignificant role of fracking.  True, fracked shale oil is still a minor part of fossil fuel consumption but it has an outsized impact on the environment and public health. We've known this since the excellent two-part documentary ("Gasland")  by Josh Fox.  See e.g.

http://brane-space.blogspot.com/2013/07/gasland-ii-fracking-is-worse-than-you.html

Less well known is that fracking - apart from wasting precious ground water reserves and contaminating the environment with fine particulates e.g.

• A New Pollutant Category Appears ( PM_2,5) And L...

has been a bottomless money pit for investors.  This is  given it takes more energy to generate a quantity of fracked shale oil than the extracted amount delivers.  Thus, the June article in The Wall Street Journal's Business and Finance Section (' Frackers Scrounge For Cash As Wall Street Shuts Spigot'', p. B1, June 7) didn't really astonish or surprise me.. Especially on reading:

"The companies behind the U.S. fracking boom are turning to asset sales, drilling partnerships and other alternative financing to supplement their cash flow. These forms of funding often come with higher interest rates or other downsides  - such as giving outside investors a hefty share of future oil and gas profits."

And further (p. B2):

"Producers have been forced to get creative about financing because Wall Street began shutting off the cash spigot  last year after frackers routinely failed to turn a profit over the last decade."

Worse, only a tenth of large shale companies saw a positive cash flow in the first quarter of 2019.   This according to a Rystad  Energy analysis of 40  drillers.  To sustain  or increase their production these companies had to keep drilling new wells, as opposed to seeing greater production from each existing well .

The piece also noted some companies had become so desperate for cash to jump start new wells that they turned to junk bonds.  The central question emerged:  Why have the frackers - who seemed to be all over the place -- failed to turn a profit over a decade? 

I explained this in earlier posts in terms of the lower energy returned on energy invested (EROEI) say compared with the light  crude oil of the past, non-shale based. I also pointed out the difference in EROEI translated into some bad economics given the lower energy content of shale oil (kerogen) meant the frackers would always be in "catch up" mode so struggling in an energy (and hence economic)  hole.  A less efficient energy source means you have to extract more of it, and at ever higher costs given the innate diminishing returns. (According to the Federal Reserve Bank of Dallas in a report issued as recently as May 31::"The average breakeven price of oil has fallen 4 percent (or $2 per barrel) over the past year, to $50 per barrel, according to the latest Dallas Fed Energy Survey." )

The entire issue of sinking oil shale fortunes pivots on the breakeven price: that amount which the recovered oil needs to earn to have made its extraction worthwhile  If that per barrel amount tends to be below what the market offers, a loss occurs and over years the losses pile up. In many cases, as seen in recent years there is the added factor of an oil glut from over production.  In this case one has an excess supply and so oil prices tend to plummet creating a bigger financial hole for an already marginal operation.

The issue first surfaced some six years ago in Richard Heinberg's book, Snake Oil: How Fracking's False Promise Imperils Our Future', ( p.115).   Therein we learned from a report by a London -based brokerage firm,  Tullett Prebon:

 "Our calculated EROEIs both for 1990 (40:1) and for 2010 (17:1) are reasonably close to the numbers cited for those years by Andrew Lees. For 2020, our projected EROEI of 11.5 to 1 is not as catastrophic as 5: 1 but would nevertheless mean that the share of GDP absorbed by energy costs would have escalated to 9.6% from about 6.7% today. Our projections further suggest energy costs would absorb as much as 15% of GDP (at an EROEI of 7.7 to 1)  by 2030."

Now we flash forward to a WSJ Business & Finance piece from Sept. 10  (p. B1):  'Fracking Lingo Gets An Overhaul' where we learn that:   "Frackers are changing how they talk and how they drill to show they can live within their means."   The problem is that  changing the language doesn't really address the core problem: The low EROEI of shale oil which makes it a fundamentally inefficient mode of oil extraction and use.  But what language overhauls are we talking about?  Some examples from the piece:

1) "Where once top shale executives promised to 'ramp up/ production, these days they are more likely to assure investors they can deliver 'free cash flow'."


According to the article this is "the trendiest term in the industry right now".  It has become synonymous with the promise "not to spend beyond their income and to then generate profits which can be returned to investors."

So, in other words, the execs are promising to lowball the costs of their fracking operations because they can't deliver the fracked oil at the price needed for investors to make a buck.. So the interpretation seems to be forget "production growth" and instead look to "discipline" - meaning the frackers will cut more corners to try to ensure costs of extracting the stuff are within bounds.  But this is impossible if the shale oil itself is of such low grade in terms of EROEI.  After all (ibid.)

"Many of  the companies have yet to show they can deliver consistent returns or live within their means as oil prices hover below $60 a barrel"

Again, WHY is this? Well, it's because it costs MORE to extract a barrel of shale oil than $60 a barrel. So  at that price it's a breakeven world and  below that price it's a LOSS.  If companies have YET to show they can live within their means then they never will unless oil prices spike much much higher.  The EROEI of shale is simply too low compared to light sweet crude to support its consistent profitable production.  Hence, no surprise that "shale stocks have hit historic lows with many companies all but cut off from capital markets and many filing for bankruptcy protection."

In other words, the classic losing operation, or "batting on a losing wicket" in Bajan parlance

2) The frackers promised investors they would "downspace" the wells , i.e. move them more closely. In this case, the frackers claimed "they could boost production by placing wells in closer proximity".  

However, .they  found "doing so meant the wells produced less as they draw down the same resources".  

 Quick to parse the lingo, the industry called it the "Parent-child well problem"   but I call it the "not enough shale energy to go around" problem."  Obviously if two wells are placed closer together and the extracted oil from the combo is less than expected it means there wasn't enough there to supply 2 wells to begin with.   Or to put it another way: the energy returned from the two wells is still too low to make a profit because the oil extraction process itself is too inefficient to support the cost. Because the shale itself (kerogen) is too unprofitable.

Supporting this thesis is the revelation (ibid.) that:  "as financing dries up many companies are retreating to the sweetest spots in the best basins and shutting down drilling elsewhere."  Again, why is that being done?  It's because the frackers - with so little capital to work with on account of the oil price being too low, e..g.  to make it profitable -  have to go to the most productive basins to even break even.  Hell, and "even stalwart fields where the shale boom began, including North Dakota's Bakken, are declining in popularity with drillers."  Why?   Because it takes more energy and effort to snag the few barrels left than the barrels are worth!  The amount of energy processing for kerogen, given its cost, is simply too much for the quality of energy resulting.

  As  Richard Heinberg explains (op. cit.,  p. 110):

"Kerogen is not oil. It is better thought of as an oil precursor that was insufficiently cooked by geologic processes. If we want to turn it into oil, we have to finish the process nature started: that involves heating the kerogen to a high temperature for a long time. And that in turn takes energy- lots of it, whether supplied by hydroelectricity, nuclear power plants, natural gas, or the kerogen itself. "

Oil shale fracking is a symptom of diminishing quality supplies of oil, that of high EROEI (energy returned on energy invested) not oil abundance. Anyone with half a brain would know that, which is why Heinberg  refers to it as "snake oil". It simply can't deliver the energy solution promised and in fact its continued use will result in ever lower quotas of useful energy- at ever higher cost.

While we're on the topic of fossil fuel production and global climate issues, let's bear in mind the Dems are not all pure as driven snow in regard to fossil fuel impacts, campaign cash flows etc.. (At least they seem to be better  in comparison to the climate change denying Reeps.)  On Wednesday, the 103-member New Democrat Coalition saw its Pac BP, ExxonMobil and the Edison Electric Institute all max out on donations to this year –then  outline a series of incremental and “pro-market” steps to curb carbon emissions.

 A suite of legislation unveiled on Wednesday would do many great things, like investing in clean energy research and development via ARPA-E and limiting emissions of methane, a potent greenhouse gas. It is not, however, a plan for fulfilling the challenge laid out by the IPCC, leaving the door open to define coal as a potential source of “clean energy” in pursuit of a “technology-neutral, market-oriented standard for electric energy generation” and providing a financial incentive for fossil fuel companies to capture carbon dioxide and funnel it back into pumping out more fossil fuels.

Sadly. Greta Thunberg’s right. And establishment Democrats pushing doomed strategies and policies are denying climate reality nearly as much as Republicans.

Those who want to access all 340 pages of the 'Climate Deception Dossiers' can go here:

www.ucsusa.org/decadesofdeception

See also:

Environmental Policy | Social Justice and Activism

It’s Time to Strike for the Climate

And:

https://www.youtube.com/watch?v=uGlDSFrLX4A


And:

Energy Policy | Environmental Policy

The Climate Crisis Means the Wrong People Are Running the World

And:

Energy Policy | Environmental Policy

We Have a Decision to Make. Change the System or Face Climate Catastrophe.

"Death Knell" For Peak Oil? Not So Fast!

It is easy to understand why some folks, including the nattering nabobs of the mainstream media, might somehow mistake the current glut of oil for evidence that Peak Oil is fiction or never existed at all. This would be a tragic error but as we see in today's Denver Post editorial ('The Death Knell for Peak Oil', p. 19A) it is definitely being made.

The Post's editor gushes that the "world is now awash in oil"- with Iran set to add its millions of barrels next, and in effect:

"It's as if the whole world were conspiring to bury the tattered remains of the 'peak oil' thesis so popular a few years ago."

Nowhere in his misplaced screed, not in one single paragraph, does this genius tie the consistently low economic growth rates in the advanced nations to the reduction of oil's efficiency. This is a result of having used up all the best quality oil and now going for the 'leftovers'.  As I pointed out to wifey this a.m.: "The moron doesn't even realize the shale oil we're pulling out of the ground is the next thing to garbage, which in fact proves the peak oil primary contention."

Yet the Post editor, blinded by BS, actually praises the fracked crap - devastating Colorado's landscape, air and water, btw -  as he merrily goes on:

"Little did the peak oil theorists - who insisted the planet was running out of oil- realize the shale oil revolution in the U.S. - already under way-was about to push domestic production to unforeseen heights"

First, peak oil "theorists" - like Richard Heinberg ('The Party's Over') never said the world was "running out of oil".  What they said is that the planet is running out of the highly efficient, high grade cheap oil (light sweet crude in particular) that is capable of driving the intense energy demands of industrial societies - from glass factories to military hardware and jet planes. Obviously, this point is too subtle for the editor at the Post to seemingly grasp. But let's try again to break it down for him - and others.

The planet was originally endowed with ~ 3,000 billion barrels of oil  – of which we’ve consumed one third and another one sixth of relatively cheap oil remains. Afterwards (say by 2030) there will reside another third of “break-even” oil (costs as much to access as it delivers), after which one -sixth of very expensive oil remains (costs much more to reach it than it delivers in energy).  At the heart of these considerations is the net energy eqn. (cf. Weisz, in Physics Today, July, 2004, p. 51)

Q (net) = Q (PR) – [Q (op)  + E/T]

In effect, for break-even oil one would find Q(net) = 0

For the last 700 billion barrels:    Q(net) = negative quantity =  - Q

Since the rate of energy production (Q (PR) must be debited by the energy consumed for its operation Q(op), and the energy E invested during its “lifetime” T. Thus its Q(PR) will be small in relation to the bracketed quantity.  In a similar vein, Richard Heinberg uses the quantity EROEI or ‘Energy returned on energy invested’ which for oil reached a high of 30 (ratio) in the 70s and is still the highest of all energy sources at around 22.   Thus, the problem in a nutshell is not “running out of oil’ per se but running out of CHEAP oil.

Right now, to fix ideas, we are very nearly at this Q(net) = 0 level with shale oil - which is why once its price falls to much lower than $50 /bl. it makes little economic sense to take it out of the ground. Compared to light sweet crude it is effectively garbage fuel. Bottom line, we need not run out of the stuff before the world economy runs into problems of untold, unspeakable proportions! We already have ample economic indicators showing the signs.

Alas, fracking shale oil - drilling into shale rock to get kerogen, or alternatively, natural gas, is in fact evidence of grabbing BREAK EVEN oil NOT high EROEI oil!  It is a sign of defeat and desperation.  not success - just like deep sea drilling for oil.

As Richard Heinberg explains (p. 110) it in his book, 'Snake Oil: How Fracking's False Promise Imperils Our Future':

"No evidence suggests that the technology of fracking has actually raised the EROEI for natural gas production. It temporarily lowered prices but only by glutting the market."

Get that? Adding it to the total world pool of higher quality oil merely "glutted the market". This is also what's dragging your 401k down right now, though yeah, you will catch kind of a break at the pump. Let's also grasp that this crap oil isn't even used here in the U.S. it's shipped off to places like China - where it fouls their skies and creates health havoc along with the CO2 and SO2 from factories and autos.

Also (ibid.) :

"A  study of the EROEI for electrical heating of methane hydrate deposits between 1000 and 1500 meters deep yielded ratios from 2:1 up to 5:1, depending on the source of the electricity"

Regarding the promises for kerogen or oil shale, he writes: 

"Kerogen is not oil. It is better thought of as an oil precursor that was insufficiently cooked by geologic processes. If we want to turn it into oil, we have to finish the process nature started: that involves heating the kerogen to a high temperature for a long time. And that in turn takes energy- lots of it, whether supplied by hydroelectricity, nuclear power plants, natural gas, or the kerogen itself. 

Therefore the EROEI in processing oil shale is bound to be pitifully low. According to the best study to date, by Cutler Cleveland and Peter O'Connor, the EROEI for oil shale production would be about 2:1. That tells us that oil from kerogen will be far more expensive than regular crude oil."

In other words, conflating oil shale (kerogen) with actual light crude oil of high EROEI is like mixing up cow turds with cow's (calves') liver.  One can be eaten, the other can't - and for the oil - one requires additional energy inputs to put to use, the other only refining.

These are crucial points to process, but the Post editor never does as he goes on to cavil about "peak oil handwringing".   The guy would be better served having studied the issue in more depth before putting out an editorial. In particular, that Heinberg's numbers and projections are reinforced by sound sources such as the London-based brokerage firm Tullet Prebon, whose Strategic Insight report declares:

"Our calculated EROEIs both for 1990 (40:1) and for 2010 (17:1) are reasonably close to the numbers cited for those years by Andrew Lees. For 2020, our projected EROEI of 11.5 to 1 is not as catastrophic as 5: 1 but would nevertheless mean that the share of GDP absorbed by energy costs would have escalated to 9.6% from about 6.7% today. Our projections further suggest energy costs would absorb as much as 15% of GDP (at an EROEI of 7.7 to 1)  by 2030."

The Report goes on to note that the "diminishing dismal energy returns" (and again one needs to separate Q(PR)   from Q(net))  means that "the economy we have known for two centuries will cease to become viable at some point."

We are already seeing the initial signs in the entrenched low growth (barely 2 percent)  confounding the nation's politicos and economists who - up to now - haven't tied this to the degraded oil slopping around the world..  

Stop and think - and read - before you buy into the bullshit that cheap oil prices (or an "oil glut") mean Peak Oil is or was a myth. And should you disbelieve it, then take note of this forecast from yours truly: as high quality, efficient oil becomes ever scarcer, look for returns on investments to sink ever lower and the world economy to 'bottom out' with growth barely 1 percent per year. Look also for common goods including food to become ever more expensive since oil is the fuel needed to produce it, as well as transport it. Not to mention the water resources consumed as well.

Oh, and look for your energy bill - relatively low now - to go through the freaking ceiling when shale is exposed for the snake oil it is..

Will Collapsed Oil Prices Drive Your Kids' College Tuition Sky High?

While many people may have read about the collapse in oil prices, from a high of $100 a barrel in June, 2014 to an international benchmark of $50 a barrel now - few may have made the connection to how these prices adversely affect college funding in energy- heavy states.   As a recent Denver Post piece ('Millions of Reasons for Colleges To Worry') has noted, however, there is lots of cause to worry. In particular, how colleges in the energy states (TX, OK, AK, LA) may have to jack up tuition to make up for donation losses.

As the piece observes:

"The latest bust and tumbling crude prices are now pinching off the largesse that helps universities in oil-rich states afford what they want when state budgets are strained, which is especially the case now. Already the consequences are becoming obvious"

A few examples cited (ibid.):

- Campus construction projects are being stretched or put in limbo (the Univ. of Oklahoma has already scaled back a planned $370m stadium renovation)

- Scholarship funds are taking a hit across the Southwest

- Donors are asking for more time to make good on pledges (at LSU, energy sector gifts have fallen from a quarter of all fund raising to one tenth)

All told, U.S. colleges received some $38b in charitable donations in 2014, according to the Council for Aid to Education - a "sum that helped to make up for the continuing appropriations from state governments".  That sum now stands to be decreased, with the result that "tuition hikes are back on the table" at many colleges and universities such as in Texas. (Ibid.)

As the piece notes (ibid.):

"Texas' public universities are closely tied to oil because the royalties from the state's 2.1 million acres of oil and gas lands go directly to the University of Texas and Texas A&M system. But only a dozen of the previously 100 -plus rigs in the Permian Basin shale are working".

It has simply become too unprofitable to run them when the price dives below $60 a barrel because the extracted energy is too near the breakeven point. (Cost of energy extracted equals cost of energy put in to get it.)

Is there any sense this might soon change for the better? Not according to a headline article in the Wall Street Journal Business & Tech section, 'Oil Giants See No Relief On Prices' (October 30,p. B1).  As noted therein:

"Continued oversupply means that next year, Brent crude prices will average $58 a barrel and West Texas Intermediate, the U.S. oil benchmark, will average $54 a barrel,  according to 13 investment banks polled by The Wall Street Journal. Many of the same banks were predicting $70 a barrel in 2016 just a few months ago."

Recall that as recently as Aug. 21,  the Wall Street Journal ('As Rout Deepens, Oil Producers Keep on Pumping',  p. A1) reported:

"When oil prices started to edge down a year ago, most energy mavens thought the drop would be small and short lived. Instead the price of crude has plunged by almost 60 % from its 2014 peak  - and suddenly looks likely to stay low for years and months to come."

What happened? The oil producing nations including the U.S. (with fracking for shale oil or kerogen) simply couldn't put a lid on their production even when it was blatantly obvious more oil would drive prices lower - because of oversupply. Everyone appeared to be "locked into pumping as much oil as possible" (WSJ, 8/21) to the detriment of all.  As the Journal noted (ibid.) even the Saudis had increased their production in the face of falling prices.  The result has been "an energy version of trench warfare, with producers all trying to gain an inch of market share no matter the cost."

(Note:  On Thursday, according to the 10/30  WSJ piece, "Brent crude settled at $48.80 a barrel while WTI ended at $46.06 a barrel.")

Again, bear in mind oil - including shale oil - doesn't emerge from the ground without cost. It takes a lot of energy just to extract it, not to mention store it and transport it.

You might want to consider that if your kid is attending college in an "oil state" his tuition will likely go up next year which means also higher college loan debt. It's much better to be prepared for this beforehand than get surprised at the last moment.

Robert Samuelson: "Peak Oil in Retreat" - Don't Believe It!

As I've shown in numerous earlier blog posts, WaPo Neoliberal hack Robert Samuelson generally gets more things wrong than he does correct. For example, on the issue of deficits under JFK, see:

http://brane-space.blogspot.com/2012/07/thats-right-now-blame-60s-jfk-for.html

We also know Samuelson has frequently played fast and loose with economic facts, e.g.

http://brane-space.blogspot.com/2011/08/more-ridiculous-lies-from-robert.html


So, it should be no surprise to those of us who've followed his career of PR hijinks that he'd also dissemble and spin about one of the most important energy milestones in recent human history: Peak Oil.   For reference and perspective, let's recall  peak oil theory was developed in the 1950s by oil geologist Marion King Hubbert, who predicted domestic U.S. oil production would peak by 1970 and decline steadily thereafter. In exploiting an individual oil field, Hubbert contended, production ramps up quickly and hits a peak at about which time about half the recoverable oil has been extracted. As the oil becomes increasingly difficult and costly to pump out, the field goes into decline.

More importantly, Hubbert maintained that his theory was applicable to the continental U.S. oil production and even the entire world, which he predicted would peak around 2000.In fact the evidence shows that global Peak Oil occurred around 2005-06. But what about the so-called "oil boom" due to fracking etc. It's all bogus!  It arises by conflating all oil sources as having the same efficiency to deliver energy.

This is exactly the error made by Samuelson in his article, as when he writes ('The Retreat of Peak Oil', Denver Post, June 15, p. 17A):

"Supply and demand have unexpectedly expanded the global surplus, reducing prices. The increase in U.S. shale oil unexpectedly boosted supply....the world now used 93 million barrels daily but can produce 95 mbd or a bit more"

The problem is that cheap shale oil is a mirage, which doesn't detract from the validity of Peak Oil. Let's examine this at length. The shale oil, from drilling into shale rock to get kerogen, is in fact evidence of grabbing near BREAK EVEN oil NOT high EROEI oil!  It is a sign of defeat and desperation.  not success - just like deep sea drilling for oil.

The planet was endowed with ~ 3,000 billion barrels of oil  – of which we’ve consumed one third and another one sixth of relatively cheap oil remains, after there will reside another third of “break-even” oil (costs as much to access as it delivers), after which one -sixth of very expensive oil remains (costs much more to reach it than it deliver in energy).  At the heart of these considerations is the net energy eqn. (cf. Weisz, in Physics Today, July, 2004, p. 51):

Q (net) = Q (PR) – [Q (op)  + E/T]

In effect, for break-even oil one would find Q(net) = 0

 

Thus, there is no net gain in energy given the quantity that must be used to obtain it.

For the last 700 billion barrels:    Q(net) = negative quantity =  -Q

Since the rate of energy production (Q (PR) must be debited by the energy consumed for its operation Q(op), and the energy E invested during its “lifetime” T. Thus its Q(PR) will be small in relation to the bracketed quantity.
 

In a similar vein, Richard Heinberg uses the quantity EROEI or ‘Energy returned on energy invested’ - which for oil reached a high of 30 (ratio) in the 70s and is still the highest of all energy sources at around 22.   Thus, the problem in a nutshell is not “running out of oil’ per se but running out of CHEAP oil.

 

Contrary to Samuelson's descriptor, shale oil at an EROEI currently of 4-5 EROEI is not "cheap oil"  The reason is that its low EROEI relative to earlier more accessible light sweet crude (at 22-30 EROEI) makes it necessary to consume more of it to get the same jobs done. That ALSO includes exploration, drilling for new, degraded oil sources. So one is effectively squandering higher EROEI oil to extract lower EROEI shale oil- resulting in a radical lowering of efficiency which ultimately affects energy consumption across the board, and the GDP. See e.g.

 

http://brane-space.blogspot.com/2015/05/cheap-oil-turns-out-not-to-be-economic.html

 

And while shale oil is currently "cheap" in the monetary sense, this doesn't mean that the condition will be sustained. It can't be since we are adding more people every day who use more energy and a low EROEI source is not tailored to incessant demand on account of population growth.

 

This error leads to an inevitable compounding of confusion as when Samuelson asserts (ibid.):

 

"Peak oil would occur when new oil discoveries no longer offset annual consumption and provide for future growth. This seems unavoidable. Oil is a finite natural resource  There's only so much of it- when it's gone it's gone. The trouble is that this compelling logic has yet to play out in the real world"

 

But in fact, it IS playing out in the real world!  As noted in the previous link, the London -based brokerage firm Tullett Prebon (whose customers are mostly investment banks). already warned in a Strategy Insight report that: energy costs would absorb as much as 15% of GDP (at an EROEI of 7.7 to 1)  by 2030."

In other words, the low EROEI is adversely impacting economic growth into the future! This is exactly meeting Samuelson's criteria but he can't see it on account of mistaking the shale boom for a true energy boom that contributes to economic growth.

 

As Richard Heinberg explains (p. 110) it in his book, 'Snake Oil: How Fracking's False Promise Imperils Our Future':

 

"No evidence suggests that the technology of fracking has actually raised the EROEI for natural gas production. It temporarily lowered prices but only by glutting the market."

 

Also:

 

"A  study of the EROEI for electrical heating of methane hydrate deposits between 1000 and 1500 meters deep yielded ratios from 2:1 up to 5:1, depending on the source of the electricity"

As I noted, energy costs absorbing as much as 15% of GDP by 2030 means our present energy-intensive civilization with its HDTVs, Nooks, Ipads, Smart phones, F35 bombers, Dreamliner jets,  drones and SUVs is literally on life support.  Other costs from degraded oil production are hidden, such as the clean up costs and devastated environment arising from exploding shale oil trains, oil leaks from pipelines, as well as escape of oil effluent such as benzene, xylene etc. into the air and water.  These costs, exacted over time in cleanups and health costs - also limit GDP.

Now, let's affix our heads on straight. In the real world, the top part of the oil production curve for the high EROEI we've been conditioned to use  is nearly flat (cf. A. Bartlett, Physics Today, op. cit. p. 54)  In more practical terms – what it means is that if 2005  was the actual year of peak oil production then the worldwide oil production in 2025 will be the SAME as in 1985, demanding that Q(net) > 0.   Also, it means that 2045 will be the same as 1965, and 2065 will be the same as 1945, and 2085 will be the same as 1925!

In fact, the situation is likely much worse than this given we are desperately trying to substitute degraded oil to do the earlier work of high EROEI oil!   Hubbert predicted U.S. oil production would peak around 1970,  which it did (at 2.2 liters per person per day). He also predicted world production would peak around 1995, which it would have – had the severe OPEC-induced oil crises not created an artificial supply problem in 1973, thereby pushing this critical peak back 10 years (to 2005).

So when someone like Samuelson offers this micro-byte of misinformation:

"Oil is not inexorably fading from the world stage. Peak oil remains distant"

Stop and think - and read - about the declining EROEI aspect before you buy into the bullshit that cheap oil prices mean Peak Oil is in retreat or a myth. And should you disbelieve it, then take note of this forecast from yours truly: as high quality, efficient oil becomes ever scarcer, look for returns on investments to sink ever lower and the world economy to 'bottom out' with growth barely 1 percent per year. Look also for common goods including food to become ever more expensive since oil is the fuel needed to produce it, as well as transport it. Not to mention the water resources consumed as well.
 

The U.S. Wants Arctic Oil When Fracked Stuff Runs Out....Really?

Comparison images of Arctic (top) and Antarctic sea ice changes for summer minimum and winter maximums. (From National Snow and Ice Data Center)

The news that a U.S. Energy Dept. advisory council  wants a push for more oil drilling in the Arctic once the fracked shale oil runs out, borders on insanity.  For one thing, grabbing that extra oil will almost certainly hurl us into the maw of the runaway greenhouse effect, see e.g.

http://brane-space.blogspot.com/2015/03/life-changes-at-cusp-of-runaway.html

It will also push the planet past the critical 550 gT threshold noted by Bill McKibben, meaning much harsher climate conditions once we pass the 2C increase mark. Why take this reckless action? Energy greed and fossil fuel addiction. In the latter case, the gov't predicts the shale boom won't last beyond the next decade - which is true.

By then, most of the U.S. landscape will have been gutted into a near Moonscape by the frackers, emulating sci fi flicks when the aliens invade and extract all our resources - leaving only craters and deserts. Water also will have reached crisis shortage levels on account of the water-intensive nature of fracking (4 mil gallons used per frack well, then toxic brine removed after the frack that must be disposed of).  And we won't even go into the pollution of soil and air, e.g.

http://brane-space.blogspot.com/2014/05/now-fracking-pollutes-soil-as-well-as.html

So, because the powers that be have decided the U.S. must "keep domestic production high" the push is on to drill the Arctic into submission. According to Rex Tillerson, CEO of Exxon and chairman of the council's committee:

"There will come a time when all the resources supplying the world's economies today are going to go in decline. So this will be what's needed next."

And then when that runs out, what will you do? The fact is every last drop of oil - more than the 4,400 gT McKibben asserts we mustn't touch, will be needed to "support economies" if population continues growing along with demand. Also, if alternate energy isn't developed, such as solar.

Even if the Arctic is drilled it won't slow the decline in economic growth and living standards which is tied to the degraded nature and difficulty of getting contemporary oil.  For example, current fracked oil (from shale) costs on average $70 a barrel to extract. If the oil price is less than this (as it is now at $50. bl), that means the source isn't even at "breakeven" point in terms of energy returned on energy invested.. By contrast, the light sweet crude oil we'd been getting earlier returned nearly 18 times more than the cost to extract it per barrel. These are signs Peak Oil has come and gone (estimated in 2005) but most people don't even know what Peak Oil means. It doesn't mean the oil has stopped or slowed in production, it means the era of cheap oil is over,  making everything more expensive.

Neil Lawrence, Alaska Director for the National Resources Defense Council, has said (Denver Post, Sunday, p. 19A):

"If there's a worse place to look for oil, I don't know what it is".

He's correct.

In a blog post 4  years ago, I warned about the impending signs of ice sheet breakup and melting in Greenland in connection with the phenomenon known as "Jokulhlaup" (cf. ‘Jokulhlaup Observed in Greenland ice sheet’, appearing in Eos: Transactions of the American Geophysical Union (Vol. 89, No. 35, 26 Aug. 2008, p. 221). The cited paper specifically noted an increased frequency in occurrence of “jokalhlaups”or sudden glacial bursts of melting runoff from glaciers.

It was this phenomena that also played a role in the “unusual cracks" that set off the separation of a “chunk of ice the size of Manhattan” (19 sq. miles)from Ellesmere Island in Canada’s northern Arctic. In the case of the increasing Greenland Jokulhlaup we are looking not just at one massive breakoff, but the loss of perhaps 45% of the entire Greenland ice sheet on account of the underground splintering effects producing ever larger cracks in the ice and the inability of it to support the overlying permafrost and other ice. Thus, onset will be sudden and perhaps more like a "terror attack" from nature.

Needless to say, if drilling commences on the scale suggested for the Arctic, jokalhlaups will dramatically increase, and arguably ...the end of human reign on this planet will be much closer.