Fracing is as old as the hills. What most are missing, is that the play has been oversold. The internationals and supermajors have already written down their acreage, for billions of dollars. It defies economics to drill 4 million dollar wells, with 3 million dollar frac jobs, a 30%/year decline rate, and gas at $2.00/mcf. That just cannot work. The early, smart money has already exited the play. No doubt, shale oil and shale gas will be an important component of energy in the future. But it is not any real long term answer. The long term answer is probably nuclear, with judicious employment of renewables, when, and where they make economic sense. Thing is, people get excited over the idea of "energy". Well "energy" is to the oil business what "justice" is to lawyers. It is an all purpose weasel word, with no defined meaning. And so, it is largely irrelevant. What IS important is POWER. This comes in two forms: Liquid Fuels (gasoline, diesel, jet fuel, heating fuel) and electricity (with coal, nuclear, and natural gas as the source fuels). That is the name of the game.
Posted on: Mon, 26 Aug 2013 06:14:24 +0000
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