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Friday, December 5, 2014

Good morning,

Is Peak Oil dead? Or at least postponed for our lifetimes thanks to the miracle of the shale oil boom in the United States?

Maybe, but not likely.

To read the news and listen to the media lately, the U.S. is prepared to out-produce even the big oil suppliers in the Middle East, like Saudi Arabia. There has even been talk of becoming energy independent.

But shale oil is no miracle. It is dirty, expensive and its sustainability looks to be very limited. So why is everybody acting like the energy crisis is over?

Let's take a look at some of the major problems with shale oil and why it is not a long-term solution to energy production in the United States.

Thanks for reading,

Your Living Green editor

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There are three big problems with shale oil;

1. A shale oil well depletes by a whopping 70 percent in the first year alone, and is down by 80 to 90 percent after just three years. Forget about hitting a "gusher" and producing reliably and steadily for ten or twenty years. With production declines this dramatic, twice as many wells have to be sunk each year as the last year just to maintain production.

2. Shale oil is expensive. In a conventional oil well, the kind that made the U.S. an oil producing powerhouse 80 years ago, a rig might have to drill down a thousand feet or so before hitting a gigantic pool of oil which would produce thousands of barrels per day for years.

Shale oil can only be extracted by "fracking" which involves drilling down much deeper than a conventional well, and then drilling LATERALLY for thousands of feet through very dense oil-saturated rock. Extremely high pressure liquids are then pumped into the wells to 'FRAC'ture the rock and allow the oil to be pumped out. This is a much, much more expensive process which, once again, will only produce significant returns for the first few years.

3. Shale oil is environmentally expensive. A single shale oil well requires acres of land be scraped flat, huge collection ponds be dug and millions of gallons of water purposed. Water which sometimes has to be taken from communities or agricultural purposes.

Then there is the fracking fluid itself, which is an extremely toxic mix including Benzene, Toluene and other chemicals which are protected trade secrets of the oil companies. These chemicals can leach into the water table and poison drinking water wells, which it already has in many instances.

There is an oil boom in the United States right now thanks to fracking, but it is expensive, marginally profitable, environmentally destructive and is not sustainable.

The question is; what will be do with the ten or fifteen years of energy abundance shale oil is going to provide us; better prepare for the future, or burn through it as fast as we can, making every dollar we can until the inevitable bust?

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