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Why America’s Shale Oil Boom Could End Sooner Than You Think

Christopher Helman, Forbes
America’s oil producers are nervous. They’ve had a great run the past few years. Domestic oil production is up 43% since 2008 to 6.5 million barrels per day, the highest level in decades. The majority of that 2 million bpd jump comes out of the two most successful new oil fields, the Bakken and the Eagle Ford. To develop these and all the other fields nationwide, the top 50 operators invested $186 billion in 2012, according to Ernst & Young. That was a record level of spending, up 20% over 2011.

You’d think that with drillers getting better, honing techniques and driving down costs, that a 20% increase in investment would bring about a more than commensurate increase in oil and gas production volumes, right? And yet according to Ernst & Young, total U.S. oil and gas production was up “just” 13% on the year… I think the American Oil Boom is at a crossroads. Growth has been remarkable; we now produce more oil than we import. But contrary to wishful thinking we will not become independent in oil by the end of the decade. There’s just not enough available capital to both combat hyperbolic decline rates and add meaningful incremental volumes. The returns on investment just aren’t good enough for players late to the game. (A well in the Bakken does 500,000 barrels; the average well in Alaska’s Prudhoe Bay produced 10 million.)…
(13 June 2013)

Boulder and other Colorado cities try to fight fracking

John Upton, Grist
Colorado Gov. John Hickenlooper (D) loves fracking — he once even drank fracking fluid to prove it — but other elected officials in the state are not so gung ho. A handful of Colorado cities are trying to limit or ban the practice — and are finding that it’s not so easy to do.

Boulder is the latest Colorado municipality to take on the frackers.

Several residents asked the City Council to go further by approving a longer fracking moratorium, an all-out ban or turning the issue over to voters. … [But a]n analysis by Boulder City Attorney Tom Carr determined a one-year moratorium was the safest option because it addresses public health and safety concerns while protecting the city against potential lawsuits.

Fear of lawsuits prompted the Fort Collins City Council last month to ease its recent ban on fracking…
(10 June 2013)

First County In The U.S. Bans Fracking To Save Its Water

Rebecca Leber, ThinkProgress
As oil and gas executives look to New Mexico as the next major area to develop natural gas, one county is taking preventative measures to protect its water. The Los Angeles Times reported this week that Mora County in New Mexico became the first county in the U.S. to ban oil drilling and the controversial technique of hydraulic fracturing.

For Mora County, fracking is particularly contentious because everyone relies on water wells. The county is the first county to ban fracking, but it joins many cities that have already banned it…
(31 May 2013)

EIA: Shale Fields May Hold 10% of World’s Crude Oil, 32% of Gas Resources

David Bird, Wall Street Journal
Ten percent of the world’s recoverable crude-oil resources and nearly one-third of natural-gas resources may be held in shale formations in the U.S. and in dozens of other countries where exploitation of resources trapped in the rock is in the early stages, according to a report released by the U.S. government Monday.

The Energy Information Administration said these shale-oil and shale-gas resources in the U.S. and in 137 shale formations in 41 other countries are considered "technically recoverable resources," or those that can be produced using current technology without reference to economic profitability.

Scott Stevens, a senior vice president at Advanced Resources International Inc., a consulting firm commissioned by the EIA to carry out the study, said the "early-stage estimates are not yet considered proved reserves…"

(10 June 2013)
Link to report

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