[Peakoil] The Amazing Reversal of the U.S. Oil Industry

[Michael Skeggs mike@bystander.net]

I like Robert Rapier's analysis, and he usually is on the money, but I
think this article misses some very important elements, because of his US
perspective.
Firstly, I'll say a US perspective has been fine for peak oil commentary
until very recently - the largest consumer and a post-peak producer was a
fair place to comment from.
However, the glut in US gas, caused by a combination of the way petroleum
exploration permits are handed out in the US (you must drill or lose the
permit for that acreage) coupled with their ban on gas export (who ever
thought the US would have enough gas to export again!) has, I think,
blinded some US commentators to think fracking will do more to solve peak
issues than it actually will.
On the bright side, in Australia, we can probably extract many decades of
gas for around $8/Gj. This is about double current/historic prices, and, to
be fair, east cost retail prices are about three times this, so the impact
of higher resource prices will be fairly muted.
The trouble for me, and the thing I think the US commentators are missing,
is the cost/resources/EROEI issue.
As the list knows, crude from Saudi Arabia can be produced easily, at $2 a
barrel (or 1 barrel spent for 100 barrels-ish recovered), but with fracking
it is closer to 1-to-6. So if the new fields deliver 600m barrels, 100m is
false, because it is used to power the others. When it costs $80 to produce
oil, there is zero chance we will ever have cheap oil again.
All this is no panacea, but just exactly what was predicted - high prices
limiting global economic growth resulting in high unemployment and reduced
wealth. Look at Spain or Italy.
You've started living peak oil already.
So far for my family it hasn't hurt too bad, but we do seem to know more
people being made redundant than we used to.
regards,
Michael Skeggs



On 23 January 2013 17:35, Antony Barry <antonybbarry at me.com> wrote:

>
>
>
>
> The Amazing Reversal of the U.S. Oil Industry
>
> http://www.financialsense.com/contributors/robert-rapier/amazing-reversal-us-oil-industry
>
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> Antony Barry
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