Common Sense Canadian

Has fracking peaked?

PostedJune 12, 2015 by in International
Bloomberg graph shows cresting of production at 5 major US shale gas plays

Bloomberg graph shows cresting of production at major US shale oil plays

Read this June 9 EcoWatch story by Aanastasia Pantsias on the declining production at the big US shale oil plays.

Since fracking began its boom period in the last decade, its supporters have promoted it as the answer to all of  the U.S.’s energy issues. It would free us from dependence on foreign oil, they said, thereby strengthening national security. And in fact, the U.S. has become the world’s largest exporter of fossil fuels, while prices at the gas pump have dropped steeply as fracked oil and gas production has exploded. States like Texas, Colorado, North Dakota, Pennsylvania and Ohio have welcomed frackers to their shale deposits, even though others, such as New York and Maryland, have resisted the lure due to concerns about fracking’s impacts on human health and the environment.

But could the gravy train be derailing? While production is still at record levels, there are signs that should worry any company or economy that is heavily invested in the fracking process.

Compared to conventional wells, fracked wells tend to be initially productive but taper off quickly and then are shut down as operators move to new locations. And that is starting to catch up with them.

“Production has to come down because rigs drilling for oil are down 57 percent this year,” James Williams, president of Arkansas-based energy consultancy WTRG Economicstold Bloomberg News. “Countering that is the fact that the rigs we’re still using are more efficient and drilling in areas where you get higher production. So that has delayed the decline.”

According to the U.S. Energy Information Administration (EIA), some of the largest shale deposits will see a downturn in their output, and very soon. Output will shrink 1.3 percent this month. Texas’ Eagle Ford shale deposit will be pumping 49,000 barrels less a day in July, the EIA projects, while North Dakota’s Bakken shale region will lose 29,000 barrels a day. Overall, the EIA is projected that fracking will fall by 93,000 barrels a day in July, the biggest drop since the onset of the boom in 2009.

Not only are existing wells less productive, but remaining shale gas and oil becomes progressively harder and more expensive to extract. In Montana, whose northeast corner sits over a section of the Bakken shale region, no major new drilling rig has opened since April for the first time since at least 2009. Meanwhile, OPEC has been playing a game of chicken with U.S. oil producers, refusing to cut its rate of production and driving plummeting prices. Even though drilling technology is improving, the lower prices make it less attractive to go after the harder-to-reach deposits, as the price per barrel has dropped below what’s needed to make these expensive wells profitable.




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Common Sense Canadian



    Harper says LNG tankers too dangerous for East Coast.


    Fracking is becoming more and more ecomically viable with each passing year. The relative low costs involved to set up a drill site and “frack” as compared to oil rigs and off shore drilling forced to move further and further offshore to more expensive drill sites.
    The advancement in technology allowing fracking to drill horizontally for miles. and the ease at which fracked sites can be capped and “shelved”( to be tapped when the price of oil/gas increases) is ongoing.
    Its no secret why the Saudi’s have hammered the big players by dropping the price of crude in their quest to regain total control of the international oil pricing. The US has become energy self sufficient and dont think for 1 minute China isnt looking at exploiting its own untapped reserves( if only they had enough water for 1.1 billion people AND fracking).

    Nah, I think fracking is here to stay(unfortunately).
    Until villages, towns and cities have their water resevoirs rendered undrinkable due to fracking “leakage” it will be business as usual.

    Oh and then there’s THIS minor issue to deal with….,d.cGU

      Damien Gillis

      It’s the geology that’s inescapable. Decline rates are way too high. A play looks good initially, production is high. Sure, cost efficiencies are discovered too (many through cutting more corners, which amounts to an externality). But the average decline rate over 3 years across the 5 big US plays is a whopping 82% – in BC it’s 69%, according to esteemed geoscientist and shale gas expert David Hughes:

      And therein lies the big problem for the financial viability of the industry. Shale gas is proving to be a shitty resource, geologically. We can argue about the impacts on water and climate (OK, not really, but there are plenty who will anyway). But this is an entirely different matter: the Bottom Line. And whether shareholders care about all the environmental issues – even earthquakes, as you allude to – it’s the money that will eventually cause them to bail. It’s already happening.


    Prices at the pump have dropped steeply!!!!!!! what planet are you on?…why don’t you give them a reason to put prices up?….They certianly havn’t gone down where i live,maybe for a month or so when the price of a barrel dropped in half,we got a 20 cent a litre drop …I call B.S.

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