FT Alphaville has a nice summary of a report from Bernstein Research’s Bob Brackett about how the Fracking industry is progressing nearly a decade into the boom. The emphasis is on the Shale Oil industry, but this applies equally well to the Natural Gas fracking deception.
Shale Oil Everywhere
First, lets take a look at how that Fracking boom is working out for the shales in Montana (which is the same Bakken formation as in North Dakota).
The decline cannot be explained simply by the number of wells being operated — because those have increased. A per-well average looks like this:
As you can see, these wells simply can't maintain a high production rate for very long. This isn't some big breaking story, the rapid fall off of well production was not only predicted, it was observed a long time ago. Fracking has actually been around a long time. It's the combination of improved techniques and horizontal drilling that allows rapid extraction of the EASY stuff. The hard stuff is a whole different story.
Remember that over this same time period, the E&P industry invested hundreds of billions of dollars in horizontal drilling and hydraulic fracturing, rolling out new innovations and new completions techniques, longer laterals, higher stage counts, etc. Yet this wave of innovation was insufficient to increase average well productivity.
Below are a couple graphs to show how fast these fracked wells become "stripper" wells. A "stripper" well just means it's about reached the end of it's life cycle and is almost to the point of not being profitable.
That’s it — a mere six years to “stripper” status.
Two-hundred modern Bakken horizontal wells are now strippers, says Brackett. He has some other interesting little facts: these ‘stripper’ wells initially cost about $10m to drill and have a lateral length of almost two miles. Once they hit “stripper” status of about 15 barrels/day, they produce oil “at the same rate that rain falls in Seattle”. They can keep producing for years at that rate, of course — as long as it’s economic to do so. A quarter of the expected output from a Bakken well will be delivered during its post-peak “stripper” phase.
Well there you have it folks. All this BS talk about how Fracking will make the U.S. oil independent, or that we have 100 years of Natural Gas thanks to fracking, it's all a deception, a fraud, as fake as the Romney/Ryan budget plan.
And now, let's take a look at Natural Gas prices over the last couple of years.
See that bounce that's occurred since April? That actually represents about a 50% rise in NG prices. Why in the world would NG prices be rising in a slow economy and if we're just beginning a Fracking revolution that will give us 100 years of NG? My guess is, big time investors have woken up and can no longer be fooled by the Fracking lie.
And now, one last chart, the cost of installing Photovoltaics.
Now you know why the Carbon industry has to build these elaborate deceptions about how we are about to become oil independent and it's the century of Natural Gas. Without the heavy subsidies to the Carbon industry, and with the truth be known that the price of these fuels is destined to be in continuous boom/bust cycles, they will soon have no chance of competing with solar/wind electricity.
So the next time you hear the "Drill Baby Drill" crowd screaming about oil independence, tell them the Fracking truth!
UPDATE: Some of the comments are asking why I used Fracked Oil well graphs rather than Fracked NG wells. A good point. It was really just a matter of convenience since I've seen similar graphs for NG wells. Here is a nice article from slate, that discusses similar results from the Barnett formation in the east, and has a nice graph of how fast those fracked NG wells fell off, 50% in 2 years.
Fracking: Is there really 100 years?