Shale Oil Revolution A Symptom Of Broken Energy Policy

Not only does that “raise questions” about the role of the U.S. as an oil superpower, it ought to raise alarm bells about its entire energy strategy. 

A Quick Lesson On Strategy

To take a minor detour, I spent several years of my life as a corporate strategy consultant.These efforts involve teams of people, complex processes, and loads of work.But if you strip away all of the complex nonsense, a strategy is quite simple.

A strategy is nothing more than thoroughly addressing both parts of this question: Where are you going, and how are you going to get there?

Or put another way: What’s your vision and what are your resources?

This is true whether you're a major international corporation, a nation, or an individual.If you know where you're going and how you'll get there – congratulations! – you have a strategy.

Because it's easy to dream up more “vision”, the vital part of having a strategy is being sure that your vision is both grand but achievable given your resources.

The US has been blessed with abundant oil and natural gas resources.What it lacks is any sort of a vision about where we’d like to be when those wind down and eventually run out.

Will the US resemble a 3,000 mile wide version of Detroit, full of decay and misery? Or can it engineer an intelligently-planned and executed transition to a complex network of clean and sustainable energy sources, full of hope?

It’s really not an overstatement to say that the US is currently operating without an energy strategy. The vision, such as it is, seems to rest on the idea that sufficient oil will always be found and produced to meet its needs. End of story.

No, It Won’t

While I have a lot of admiration for the technology, the expertise and the diligence of the people working in the oil sector, I have even more respect for geology.

The US began its love affair with oil by going after the conventional reservoirs that sat atop ancient marine shale basins where 400 million years' worth of ancient sunlight was stored in the form of deposited plankton and algae.

Those conventional reservoirs eventually were all found and tapped. Everyone in the oil space agrees that the biggest of them have all been discovered and there are very few conventional finds left. 

What the shale "revolution" (or "retirement party" as Art Berman more accurately calls it), did was to drill straight into the source rocks themselves. Which require much more energy and cost to coax oil from.

What’s left after the source rocks?Nothing, that’s what.There are no “pre-source” rocks to drill into next. 

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