An observation worth noting and pondering, from Ron Patterson, discussing 2013 barrels per day production from seven locations: Six Shale Fields, The Bakken, Eagle Ford, Haynesville, Marcellus, Niobrara, and Permian. That information was provided by the federal Energy Information Administration, along with the EIA's own 2013 estimates:
[A]ll wells in these fields must increase production by almost 200,000 barrels per day just to break even. And that number is increasing by about 4,500 barrels per month.
New or additional wells must increase production by at least 200,000 barrels per day just to break even and currently they are increasing production by 250,000 to 260,000 barrels per day, increasing total production by 50,000 to 60,000 bp/d. But the decline rate is gaining and according to my calculations it should catch production in about 12 months.
For all the talk about this wonderful (and legitimate) increase in oil production from the fossil fuel industry's stable of cheerleaders, the annoying fact they all unfailingly neglect to acknowledge is that the tight oil formations being relied upon for the uptick deplete much more rapidly than do the conventional crude oil fields we've been relying upon for decades. And that's just one issue conveniently overlooked.
That's a problem, of course. While the conventional fields continue their inexorable declines, what's required just to keep pace is much more costly and calls for much more drilling in places like the fields mentioned above (which represent the biggest plays.) Those higher costs aren't absorbed by the companies out of the goodness of their corporate hearts. We pay.
And since it's extremely unlikely than any exploration has been conducted first in the worst locations, it's a safe assumption that once there's movement away from the prime spots identified, the effort and expense will only increase. No one should think that's good news.
We can keep doing this, but only up to a point. Investors are now taking much more careful looks at the potential opportunities, as are oil producers. When funding is no longer available in the same amounts as is now required, there go profit motivations. When they disappear, so does the increase in production.
We could--novel thought--start paying more attention to the factual side of the discussion regarding all of this good news and recognize what's now being required to satisfy our near-total reliance on oil.
No one suggests that making the needed changes or transitioning away from fossil fuels is going to be quick, cheap, or easy. But when information such as that presented above is considered for more than a moment or two, not quick, not cheap, and not easy may be the better long-term option.
Better to start the process of transition--with all of the planning and complexity it will entail--a day sooner rather than a day later.
Adapted from a blog post of mine