US Fracking Industry Reserves Overstated By At Least 100%: Report
More on the benefits of shale gas as touted by fracking companies being overstated: According to new independent analysis, published in The Oil Drum, of extent of the US' shale gas reserves and the economics of extracting those finds that "industry reserves are over-stated by at least 100 percent".
Furthermore, the analysis raises questions about the economic viability of many fracking projects, stating, "Despite impressive production growth, it is not yet clear that these plays are commercial at current prices because of the high capital cost of land and drilling and completion."The report sums up the bigger political picture:
The marketing of the shale gas phenomenon has been so effective that important policy and strategic decisions are being made based on yes unproven assumptions about the abundance and low cost of these plays. The "Pickens Plan" seeks to get Congressional approval for natural gas subsidies that might eventually lead to conversion of large parts of our vehicle fleet to run on natural gas. Similarly, companies have gotten permits from the government to transform liquefied natural gas import terminals into export facilities that would commit the U.S. to decades of large, fixed export volumes. This might commit the U.S. to decades of natural gas exports at fixed prices in the face of scarcity and increasing prices in the domestic market. If reserves are less and cost is more than many assume, these could be disastrous decisions.
Read the full analysis: US Shale Gas: Less Abundance, Higher Cost
image: Marcellus Protest/CC BY
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