Snake Oil: How Fracking's False Promise of Plenty Imperils Our Future Read Free

natural gas production had been declining for years, and prices were soaring. Peakists said this was evidence of an approaching natural gas supply crisis. 3 Instead, high prices provided an incentive for drillers to refine and deploy costly hydraulic fracturing technology (commonly referred to as “fracking”) to extract gas trapped in otherwise forbidding shale reservoirs. Small- to medium-sized companies crowded into shale gas plays in Texas, Louisiana, Arkansas, and Pennsylvania, borrowed money, bought leases, and drilled tens of thousands of wells in short order. The result was an enormous plume of new natural gas production. As US gas supplies ballooned, TV talking heads (reading scripts provided by the industry) and politicians all began crowing over America’s “game changing” new prospect of “a hundred years of natural gas.” We Peakists hadn’t foreseen any of this. Point to the Cornucopians.

    Figure 5. US Marketed Natural Gas Production by Region, 1998–2012. Oil prices started surging past historic highs just prior to 2005.
    Source: J. David Hughes, “Drill, Baby, Drill,” Figure 18; data from Energy Information Administration, December 2012, fitted with 12-month centered moving average. Note that marketed production is wet gas and includes gas used for pipeline distribution and at gas plants and leases that is not available to end consumers.
    Not only did supplies of natural gas grow, but prices plummeted. In the pre-fracking years of 2001 to 2006, gas prices had shot up from their 1990s level of $2 per million Btu to over $12. But after 2007, as the hydrofracturing boom saturated gas markets, prices plummeted back to a low of $1.82 in April 2012. Gas was suddenly so cheap that utilities found it economic to use in place of coal for generating base-load electricity. The natural gas industry began to promote the ideas of exporting gas (even though the United States remained a net natural gas importer), and of using natural gas to power cars and trucks. Again, Peakists had completely failed to forecast these developments. Point Cornucopians.

    Figure 6. US Natural Gas Production and Prices, 2000–2012.
    Source: Adapted from J. David Hughes, “Drill, Baby, Drill,” Figure 34; data from Energy Information Administration, December 2012. Production data fitted with 12-month centered moving average.
    Then, using the same hydrofracturing technology, the industry began to go after deposits of oil in tight (low-porosity) rocks. In Texas and North Dakota, US oil production began growing. It was an astonishing achievement, especially since the nation’s oil production had generally been declining since 1970. Suddenly there was serious discussion in energy policy circles of America soon producing more oil than Saudi Arabia. None of us Peakists had predicted this. Point Cornucopians.

    Figure 7. US Crude Oil Production, 2000–2013. US oil production reversed decades of decline in 2008 and then surged in late 2011.
    Source: Energy Information Administration, May 2013. Data include lease condensates and exclude natural gas plant liquids, refinery process gain, and biofuels.
    That brings us to the present. As of 2013, the game is tied and headed into overtime. Cornucopians have the momentum and the historic advantage, so they’ve been quick to claim victory. Meanwhile, at least one prominent Peakist has publicly conceded defeat: in a widely circulated essay, British environmental writer George Monbiot recently proclaimed that “We were wrong on peak oil.” 4
    It doesn’t look good for my team. It appears to most people that the “Shale Revolution” (the tapping of shale gas and tight oil, thanks to advanced drilling techniques) has changed the game for good. Is it time for us to exit the playing field, heads bowed, shoulders slumped?
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    As you’ve probably guessed from the title of this book, the pages that follow are not intended as a capitulation. Rather, my purpose is to alert readers to relevant