OKPOLICY.ORG
By Susan Hylton
Domestic oil and gas production is discussed with great passion today among those who talk of an energy renaissance that is revolutionizing the industry and perhaps U.S. policy.
They credit new hydraulic fracturing technologies in horizontal drilling for creating the potential of the United States being energy secure, if not independent, and promote the popular idea of being less reliant on countries that are not strong allies.
Critics on the other end of the spectrum, however, aim to burst their shale gas bubble.
Writers like Steve Austin of Oil-price.net goes so far as to call it delusional that the shale gas boom has the potential to solve the country’s energy problems. Austin uses a towel-soaked-in-water analogy to describe fracking.
“The first time oil companies twist the towel, a stream of oil comes dripping out. Success! The second time around, surprise: just a few drops, and the third time and subsequent times … nothing. This is what high depletion rates mean and this is what is happening,” he wrote in an article last month.
Horizontal wells tend to produce fast and fade quickly, some industry analysts argue. David Blatt, director of the Oklahoma Policy Institute, which looks at gross production tax rates, has said production from horizontal wells trails off considerably after five or six years.
But many in the industry point to the vast reserves of oil and gas still in the ground and the constantly developing technologies that are making it possible to bring it to the surface.
“There probably is an end game out there, but it’s nowhere in sight now,” said Kelly Swan, spokesman for Tulsa-based WPX Energy Inc., which has rigs in the Niobrara, Bakken and Marcellus shale plays. “It will probably be decades before we need to have this discussion in earnest.”
