Fracking Part II: “Peak Oil” Was Overtaken by Events

On a recent road trip through Oklahoma, Texas, New Mexico, Colorado, Wyoming and Montana, most of the oil well jack pumps that we saw were motionless – even though a few pumps continued rocking. Since pumps run while it’s economic to operate, most wells could not yield enough crude to pay for electric to the pump’s motor.

 

US crude oil production reached 10 million barrels per day (mb/d) in the 1980s, troughed at 6.9 mb/d in 2008, rose to 8.1 mb/d in 2011 and should reach 11.3 mb/d by 2020.  The recovery is due mostly to hydraulic fracturing (fracking) and horizontal drilling in shale petroleum reserves.

 

Fracking has an even bigger impact on natural gas, where in 2011 US production leaped 8% and imports dropped 8%. The US is slowly beginning to export compressed natural gas to markets such as Europe, once dominated by Russian gas exports.

 

Fracking injects a water/chemical solution that cracks the shale or rock thousands of feet below the surface. Those cracks create pathways for the oil and gas that are tightly trapped in rock to find their way through well pipes into storage tanks and pipelines at the surface.

 

A few years ago, most observers feared a gloomy future where the US imported an ever- increasing volume of crude, but with fracking crude imports are expected to be just 3.4 mb/d in 2035. Although not independence, it is a major improvement from our current reliance on unstable or hostile suppliers from the Middle East and Russia.

 

The reduced dependence on oil imports means freedom to consider our broader national interests, not just our survival, and reduced imports means an improved balance of payments instead of enslavement to crude oil payments. Cheap natural gas can also begin replacing manufacturing jobs that use natural gas as feedstock for making chemicals and plastics.

 

As with other serious energy production ventures, resources could be wasted and result in damage to the environment. But when fracking is done with care it yields proven large gains in energy supplies and it will lead to economic independence.

 

Alan Daley is a retired businessman who lives in Florida and who writes for The American Consumer Institute Center for Citizen Research

 

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