As the price of oil continues its recent decline, I am reminded once again to broach the topic of Peak Oil. It is something I have followed throughout the years because it is intimately linked with the topic of anthropogenic global warming (AGW). If we are going to run out of oil real fast, then the prediction of catastrophic AGW is probably a bit off.
I am not here to say that Peak Oil theory is complete bunk but it has not had a good track record as of late. Oil production seems to have plateaued a bit and will probably decline slowly in coming years, but the oft predicted ‘crash back to the stone age’ has not materialized. Human ingenuity and dynamic markets continue to ensure a steady supply of energy. As oil becomes more expensive, people use less or find alternatives. Here is a recent article I came across that explains the situation pretty well.
One of the alternative fuels that has come on the market in full force recently is natural gas and I have promoted it as a bridge fuel as we move away from oil and coal toward cleaner alternatives. Nat gas has a lot going for it but it might be in some short term trouble according to some analysts. Apparently, the productive life of a fracked gas well is a lot shorter than oil wells. A lot of drilling operations could go broke in this extended period of very low prices. This in turn could push the price of nat gas up a few dollars. I had a nagging suspicion over the last couple of years that the fracking operations were not as profitable as indicated in the beginning. I see the frack-sand mining here in Wisconsin and wonder how it can be profitable to mine the sand, ship it to North Dakota or Pennsylvania, and inject it into the ground, all to retrieve the nat gas. I hear they have to use and ship a lot of water as well. Even if the price of nat gas rises a few dollars, or even back up to $10, there are many reasons it is still a good bridge fuel. Here is a recent article about the profitability of natural gas wells.
Have a good Thursday! Meteorologist Justin Loew.