Why the Fracking Miracle Is Becoming A Debacle

Posted: August 26, 2017 in Uncategorized

Authored by Chris Martenson via PeakProsperity.com

Energy is everything. This is an amazingly important concept. Yet it’s almost universally overlooked.

Sometimes it’s hard to appreciate the magical role energy plays in our daily lives because most of what we experience is a derivative of it. The connection is hidden from direct view. Because of this, most people utterly fail to detect or appreciate the priceless and irreplaceable role of high net-energy fuel sources (such as oil and gas) to our modern lifestyle.

With high net-energy, society enjoys increasing complexity and technological advances. It\’s what enables us to pursue massive goals like desalinating billions of gallons of seawater, or going to Mars. But without high net-energy fuel sources, our capabilities quickly regress to those of decades — or even centuries — past.

Which is why understanding where we truly are in the ‘net-energy story’ is so incredibly important. Is the US on the cusp of being ‘energy independent’ from here on out? Is the ‘shale miracle’ ushering in a glorious new ‘boom’ era that will vault America to unprecedented prosperity?

No. The central point of this report is that the US is deluding itself when it comes to energy abundance (generally) and oil (specifically).

Yet that’s not what we hear from the cheerleaders in the industry or in our media. From them, we hear a silver-tongued narrative of coming riches — a narrative that contains some truth, some myth, and a lot of fantasy. It’s those last two parts — the myths and fantasies — that are going to seriously hurt many investors, as well cause a lot of extremely poor policy and investment decisions.

The bottom line is this: The US shale industry resembles a fraudulent Ponzi scheme much more so than it does any kind of ‘miracle.’

How do I know that? Because, collectively, US shale companies have lost cash in every year of their existence. The burned through cash when oil was $100 — and again when it was $90, $80, $70, $60, $50, $40, and $30 a barrel. They burned through cash in 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015 and 2016. . .

Source: Why The Shale Oil “Miracle” Is Becoming A “Debacle”

Comments
  1. Alan Scott says:

    And why are they doing it? Do destroy the economies of Venezuela and Ecuador. Wait and see. As soon as they manage to install military dictators in those countries, they’ll stop fracking, go back to being a net oil importer, and world oil prices will rise again. The Saudis will have weathered the storm because of their slave labour.

    It’s a short-term strategy, of course. I’m convinced the 1% know they are destroying Planet Earth, and they’re just determined to get as much out of it as they can before the curtain falls.

  2. Alan, I think it’s too late. Renewable energy is so cheap now that in five years fossil fuel companies won’t be able to compete with them. Already the fossil fuel companies (and the lines transmission companies) can’t get bank financing. It’s all going to renewable energy.

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