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Peak ‘Cheap’ Oil: Shale Oil Proves Peak Oil Is Indeed Upon Us

user profile picture Chris Martenson Sep 30, 2013
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Ever the contrarian, I have been quite skeptical of the many breathless claims being made by wide swaths of the media about how a new energy bonanza is going to overtake the U.S. and eventually the world.  The subject, of course, is the new shale plays in both natural gas and oil.While these plays are in special cases quite extraordinary, and the technology is just brilliant, many of the more exuberant claims made in the past about the potential contributions of these plays are now being dialed back. 
The reason?  Just like any other resource, the shale plays were 'high graded,' meaning the best ones were drilled first.  (As they say in Texas: We drill the best spots first.)
The reason I say in the title that shale oil proves that Peak Oil is upon us is that we would not be drilling them if there were anything better left to drill.  The simple yet profound reason that we're going after this more difficult and expensive oil is – drum roll please – the easy and cheap stuff is all gone.
Rather than proving that Peak Oil is dead, as many have claimed, the new focus on shale plays indicates to me that we've indeed moved down the resource ladder to the next best (i.e., less good) options because the better ones are all gone.
Again, I think the technology and ingenuity on display in the shale plays is extraordinary. And I think, in the end, we're going to drill all of these plays up – not just here, but elsewhere in the world.  These are legitimate wells.
But they are not the same as the old conventional plays. Not by a long shot.
They are expensive. And they consume a lot of water and a lot of land. A typical shale play will involves tens of thousands of wells with drill pads all over the place – something that will pretty much prevent their widespread adoption in more populated areas of the world. 
A Peak Oil Mistake
A big mistake of the Peak Oil community (of which I am a self-described member) was in not qualifying statements about oil reserves and production in terms of price.  Obviously, the higher the price goes, the more exuberant and elaborate will be the attempts to get more oil from harder, deeper, and more expensive places.
That is, up to a point, the amount of oil that we will drill for will depend on…

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Perhaps this is a good thing, the slow downward grind drives the point home and gives all time to adapt.  Anything we can do to...
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