Oil and gas execs are gearing up for next week's 25th annual Rocky Mountain Energy Summit in Denver, a four-day back-slapping celebration of the boom in hydraulic fracturing -- or the "Shale Revolution," as the true believers call it. But even as the industry ogles the vast reserves of natural gas and tight oil that can now be tapped through fracking, a few doom-and-gloomers are dissing the boom, muttering a few obscene words you don't hear much in energy circles these days. Like these two: Peak oil.
A few years ago, no energy policy discussion was complete without some invocation of the phrase "peak oil" -- the notion that, since fossil fuel supplies are highly finite, production must inevitably peak and then enter an ominous, terminal decline, during which prices will rise sharply and the global economy could topple. By 2006, signs of stagnation in global oil production had led some analysts to declare that the moment of peak oil was at hand or not far off. But the recent resurgence in fossil-fuel production, aided by the use of fracking to extract oil and gas from tight shale formations that had previously been considered unrecoverable, has altered the game and sent the Peak Oilers back to their calculators.
Still, disaster delayed is not the same as disaster averted. Check out this rumination on Grist by Richard Heinberg of the Post Carbon Institute, author of Snake Oil: How Fracking's False Promise of Plenty Imperils Our Future. Heinberg concedes that fracking's ability to generate "an enormous plume of new natural gas production" took the Peak Oilers by surprise and extended the era of cheap fossil fuels beyond their forecasts.
But Heinberg also points to government data indicating that by 2020, the production levels will again begin to decline. It's not that we're going to run out of oil and gas in that time frame, but the price of production will start going up, up, up, with many attendant consequences. What we've got here, he suggests, is a little breather we should use wisely:
"The temporary surge of production may yield a very few years of lower natural gas prices and may temporarily improve the U.S. balance of trade by reducing oil imports. What will we do with those years of reprieve? In the best instance, the fracking that has already been accomplished could provide us a bonus inning in which to prepare for life without cheap fossil energy. But to make use of this borrowed time we must build an energy infrastructure of wind turbines and solar panels rather than drilling rigs and pipelines. This will constitute the biggest investment, and the most ambitious project, of our lifetimes. Currently, instead, many renewable energy efforts are being hampered by the false perception of vast, long-term supplies of cheap natural gas."
Hmm. Nothing on the program for the Rocky Mountain Energy Summit about getting into wind turbines rather than drilling rigs. That may be a discussion for another forum, or perhaps it will be addressed in Senator Mark Udall's speech to the faithful, titled, "Opportunity Before Us; How History Will View Us."
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