Steve Horn | Shale Gas Bubble About to Burst: Art Berman, Bill Powers

"the U.S. has nowhere close to a 100-year supply. This myth has been perpetuated by self-interested industry, media and politicians...In the book, I take a very hard look at the facts. And I conclude that the U.S. has between a five- to seven-year supply of shale gas, and not 100 years."

"Put simply: There is production decline in the Haynesville and Barnett shales. Output is declining in the Woodford Shale in Oklahoma. Some of the older shale plays, such as the Fayetteville Shale, are starting to roll over. As these shale plays reverse direction and the Marcellus Shale slows down its production growth, overall U.S. production will fall."

" Arthur Berman, another investment insider, echoed Powers in a recent interview with Oil Price, remarking that the decline rates in production in shale basins nationwide are "incredibly high."

"Berman is a petroleum geologist, Associate Editor of the American Association of Petroleum Geolgists Bulletin and Director of the Association for the Study of Peak Oil. He maintains the blog Petroleum Truth Report.

"In the Eagleford shale, which is supposed to be the mother of all shale oil plays, the annual decline rate is higher than 42%," he stated. "They're going to have to drill hundreds, almost 1000 wells in the Eagleford shale, every year, to keep production flat. Just for one play, we're talking about $10 or $12 billion a year just to replace supply."

Maybe, maybe not. Keep informed. There is a lot of natural gas in Alaska that will be VERY expensive to get out. The latest quote I've seen is $65 billion to build a pipeline and liquification plant to a shipping port in Southeastern Alasaka.

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That's the best news I've had all week.

My oil and gas stocks should do very well. Now will be the time to buy more shares in oil and gas companies.

Kind of a silver lining thing.

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100 years or 5-7 years ? me thinks that oil companies are smarter than investing billions in something that's only gonna last 5-7 years


in the sixties when I was in high school, we were told there was only 25 years of oil left, that was almost 50 years ago

my theory is that oil and gas are forming faster than we can use it under the seas, contrary to popular mythology, oil doesn't come from rotting dinosaurs, its found in ancient seabeds, from millions of years of plankton dying and settling to the bottom.

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At the Dr's office were some oil market magazines that had articles about oil/gas finds around the globe. I saw them several times over a period of months. They seemed to indicate that new sources were constantly being discovered.
Now either the industryu is blowing smoke all our butts and potential investors too or another faction is misreading all the reports and just wants to revert to a prior centuries industries.
Buy all the wild horses you can, we'se reverting back to horse and buggy! Oh, Plant your alfalfa early!
Get ready to go whaling so we can light the lamps!

It is not mythology. It is science and technology. The supplies were underestimated and technology made it easier to find, provided ways to get at places that were previously not possible, and improve overall yield (recovery and production).

Oil is not being "produced" faster than we eat it.

Let's ride!

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+1. Fracking has become the latest environmental boogieman, but it's been around for many years. With the advent of horizontal drilling it can be used much more effectively now to release hydrocarbons of all sorts. That's the primary reason for the increase in attainable supplies. And it will probably only become more effective as techniques are improved. I went to a gas seminar in Houston about 10 years ago and heard them talk about liquefied natural gas ships that would be transporting gas to the US. Now, they are talking about using them for exports. And prices paid to producers are so low now that they are concentrating on natural gas liquids as better moneymakers (propane, butane, benzine, natural gasoline, etc)

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I need to be on TV so my father and family don't know what a loser I really am.

Well I guess I have to pull a chicken little out of my bag and declare some DOOM so I get published.

Meanwhile natural gas controls are being produced in China by child sweat shop labor from substitute materials... smoking hole. Thorium based energy is ignored.

Further comments would be considered political

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+1 The oil companies are not the government who is proven to be careless with other people's money. They invest their own cash where there is a payoff. The 5-7 years sounds a credible as the "small amount of oil" available in ANWAR. Another example of where we are supposed to believe the oil companies are a reckless with their money as Washington is with ours.

Easy to think someone who runs "Petroleum Truth Report" has an agenda. Face it, some people just hate the fact that we use more energy than they feel we should. They will do everything possible to make sure it's as expensive as possible in an attempt to force us to use less.

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"Their money" and "their cash" used to be yours. As long as producers can depend on higher and higher energy prices to offset production costs what do they care? If you are an oil company exec making huge bucks you would be well advised to build your nest egg as large as possible right now and let tomorrow take care of itself. That's just human nature, and we have seen it time and time again with Enron, Lehman Bros, etc., etc.

And as for ANWR (not Anwar, that was the late Egyptian President Sadat's first name) the amount of oil there is purely speculative since no drilling has ever been done. So "small amount of oil" is every bit as credible as "large amount of oil." And if you are one of those Bible-thumpers who believe the world is only 6000 years old there can't be any oil at all since there hasn't been enough time to convert buried carbonaceous material to petroleum. I wonder why fundamentalists have missed this obvious point.

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The article stated that some of the major players such as Chesapeake Energy are heavily involved in flipping real estate leases rather than exploiting the gas themselves. While fracking is not new, the extraction from some of these shale beds is new, and no one knows how much gas will come out vs. the amount that won't come out.

Yes, but at what cost? There is no doubt that we have reached the end of cheap oil. Remaining oil & natural gas will continue to cost much more to extract and get to market. An example is the Alaskan North Slope gas. The oil companies need firm priced contracts before they spend their money on commercial development of the fields they have leased. Then add the $65B for the pipeline and liquefication terminal. Add billions more for a fleet of ships. Add more for regasification plants at the destinations. The earlier proposal of an Alaskan gas pipeline through Canada to the midwest failed due to the high cost of the pipeline, the lack of firm priced contracts for the producers, and the dropping of the U.S. natural gas price.

Liquidified natural gas tank ships are nothing new. The first took a cargo of LNG from Louisiana to England in 1959. They are simply floating thermos bottles. The gas is cooled until it becomes a liquid at -260°F. The ship's tanks, piping, and pumps are similarly cooled to avoid cold shock, then the gas is loaded. The pressure in the insulated tanks is near atmospheric, so the gas must be allowed to boil off to keep the temperature down. The boil off gas is either used as part of the fuel for the ship's engines (a waste of expensive gas vs. cheap fuel oil) or re-liquified in a very expensive refrigeration plant aboard ship. At the discharge port either part of the liquid gas must be left in the tanks to keep them cool on the return leg of the voyage, or on ships fitted with a reliquification plant it must be run--both are expensive.

Excellent article about peak oil in the U.S.
http://www.theoildrum.com/node/9619#more

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Manage the unavoidable.
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