Well, depends on how you count, I suppose. It looks like the US has, for now, dodged the bullet through shale oil. Shale oil is, however, quite more expensive than the kind that used to spurt out of the ground, but there is no denying that the amount of US oil produces is sky-rocketing. For how long? Hard to tell, the depletion-curves of these wells is, well, VERY STEEP, but there seems to be a lot of them, on the other hand.
Now, making sure we are honest, the new US oil wells do not cover the decline in oil extraction that is seen in many other countries, but for the US this is undoubtedly a large plus. While countries like Saudi-Arabia has flatlined and Venezuela and Mexico are seeing dropping output, the US has started up again. IF the US became “energy independant” as they say, this will at least make it easier to dismantle the empire when the money runs dry.
Bill Powell has a nice map of said empire. Brrrr.
I just found your blog. I wonder what you think of the oil boom in the Bakken area of North Dakota? It’s caused quite a population boost–which brings housing issues and oil impact on the state highways to the surface–but it’s also kept North Dakota going strong when so much of the nation has been in distress. If you’ve ever discussed this, please let me know which blog post to look at. Thanks!
Actually, I’ve just peeked at the subject from time to time. From what I can tell there are two sides of the story : First, this is of course great for the US, and as long as oil keeps flowing from North Dakota, this should enrich the region substantially. The other side is A ) Are there significant negative environmental impacts? The greenies of course scream and shout, but I rarely listen to those. Still though, from what I’ve gathered there is a need for enormous amounts of water to “frack” the shale rock. On the other hand, I’ve heard there is new tech to re-use the same water multiple times. Worth watching.
B ) What is the depletion rate of these finds? From what I’ve understood, each well depletes really fast, on the other hand if there are a million wells waiting to be drilled than that might not matter so much. Are the companies drilling being fair in their estimates of how much recoverable oil they have found? Opinions differ. But unless we start seeing mass bankrupcies of the companies that are engaged in this line of business, we can at least be certain that current oil production is economic.
My gut feeling is that North Dakota may not be a bad place to be, at least the coming decade. But thats a guess, and a fairly uneducated one.
I really love learning about the new technologies. I got a chance to write about them recently, but when I’m given an assignment like that I have a pretty direct focus. I don’t always get the big picture, which seems pretty important to me. I always appreciate the perspective of people who really follow the issues. Thanks so much!
From what I’ve read (according to Stansbury & Associates Investment Group) Shale Oil should remain viable up to $40 a barrel; I expect to see heavy brakes put on the industry by Obama and company, and it’s the perfect opportunity to start releasing that avalanche of inflationary dollars they’ve kept pent up – but I think it’ll be enough to prevent the hard cliff.
I don’t know if Obummer is that suicidal actually, despite no re-election looming. Additionally, I would figure that local state authorities might flip the bird on too much new regulations. But the inflation is coming, regardless of new oil. It is, after all, strictly a monetary fenomenon in the end.
I’ve started realizing that in an at least semi-functioning market economy, there rarely are any “cliffs”, more like “slopes”. Additionally, I have to start wondering what its all good for in the end. We seem to have been quite able to have a pretty decent standard of living in the 50′s and 60′s, despite using radically lower amounts of oil and energy. Maybe some falling living-standards would do the proles some good (despite what many wish to think, the middle class of the west are a bunch of proles, at least on the intellectual/emotional/spiritual levels. An iPad never made anyone a decent person.
I tend to agree with you on the moral principles; the True Right never loses sight of frugality, of owning-not-renting, of building-not-consuming; a good cold spell will wake people up.
Unfortunately this will happen during a period when we’ve shipped our manufacturing overseas (making it A: impossible to manufacture competitively in the West, and B: depleted our skill base), while simultaneously creating an enormous make-work industry which people mistake for normal, jobs they feel entitled to.
We should be colonizing the moon right now; instead we’re introducing a new iPhone every 18 months, with nary a thought of backward compatibility.
Another interesting point-of-view here :
http://www.zerohedge.com/contributed/2012-12-28/cushing-50-million-boom-busts-cycles-us-debt-recession