A report (October, 2014) by J David Hughes of the Post-Carbon Institute suggests that the US 's so-called Shale Gas Revolution may not be such an nirvana as it is portrayed to be.
The following extract is instructive. In particular, it should be observed that the EIA reference case forecast for the top seven shale gas plays overestimates cumulative production through 2040 in this report’s “Most Likely” scenario by 64%.
This would mean that gas production is likely to peak by 2016, instead of well beyond 2040 as claimed by IEA forecasts, leaving aside the question of uncertain impact on soil and water ecology as illustrated in my earlier blog Sobriety needed in Shale Gas Exuberance.
This report shows that the EIA’s optimistic forecasts for future U.S. tight oil and shale gas production are based on a set of false premises, namely that:
High-quality shale plays are ubiquitous, and there will be always be new discoveries and production from emerging plays to fill the gap left by declining production from major existing plays.
Technological advances can overcome steep decline rates and declining well quality as drilling moves from sweet spots to poorer quality rock, in order to maintain high production rates.
Large estimated resources underground imply high and durable rates of extraction over decades. Actual production data from the past decade of shale gas and tight oil drilling clearly do not support these assumptions. Unfortunately, the EIA’s rosy forecasts have led policymakers and the American public to believe a number of false promises.
That cheap and abundant natural gas supplies can create a domestic manufacturing resurgence and millions of new jobs over the long term.
That abundant domestic oil and natural gas resources justify lifting the oil export ban (imposed 40 years ago after the Arab oil embargo) and fast-tracking approval of liquefied natural gas (LNG) export terminals.
That the U.S. can use its newfound energy strength to shift geopolitical trends in our long-term favor.
That we can easily limit carbon dioxide emissions from power plants as a result of natural gas replacing coal as the primary source of electricity production.
The promises associated with the expectation of robust and relatively cheap shale gas and high-cost but rising tight oil production have also led to a tempering of investments in renewable energy and nuclear power.
If, as this report shows, these premises and promises are indeed false, the implications are profound. It calls into question plans for LNG and crude oil exports and the benefits of the shale boom in light of the amount of drilling and capital investment that would be required, along with the environmental and health impacts associated with it.
Conventional wisdom holds that the shale boom will last for decades, leaving the U.S. woefully unprepared for a painful, costly, and unexpected shock when the shale boom winds down sooner than expected.
Rather than planning for a future where domestic oil and natural gas production is maintained at current or higher levels, we would be wise to harness this temporary fossil fuel bounty to quickly develop a truly sustainable energy policy—one that is based on conservation, efficiency, and a rapid transition to distributed renewable energy production."