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New Report on Shale Exposes EIA Predictions as Extremely Optimistic

 

Corvallis, Oregon - November 12, 2019 (Investorideas.com Newswire) The latest report from energy expert, J. David Hughes, shows that while the most recent Energy Information Administration (EIA) forecasts indicate a need for over 1.5M new domestic shale oil and gas wells at a cost of $11T by 2050, production will actually fall short of the EIA's own estimates by 10B barrels, or 10% of the required production volume. Shale Reality Check 2019 assesses current and historical production by county, well- and field-decline rates, geographic distribution of well quality, and projected number of wells, density, and capital investment required to meet the EIA forecasts.

The EIA anticipates that tight oil production will be 38% higher in 2050 than in 2018 and shale gas 81% higher. Tight oil would provide nearly 70% of all US oil production over the next three decades and shale gas 74% of all gas produced over that same period. This would consume most of the proven reserves and unproven resources of tight oil the EIA estimates exist by 2050.

Other key findings in the report include:

  • Production from individual wells falls 70–90% in the first three years, and first-year field declines without new drilling typically range from 25–50% per year. High rates of capital investment in new drilling are therefore required to avoid steep production declines.
  • Of the 13 shale plays analyzed in this report (comprising 90% of the EIA's Annual Energy Outlook 2019), nine of the EIA's forecasts are rated as extremely optimistic, three highly optimistic, and one moderately optimistic.
  • In some cases, EIA play-level production forecasts through 2050 exceed the EIA's own estimates of proven reserves plus unproven resources, and all plays are forecast to recover all proven reserves and a high percentage of unproven resources by 2050.
  • In most cases, forecasts exit 2050 at high production levels, often significantly higher than current production rates, implying that vast additional resources would remain after 2050.
  • Well productivity has increased in most plays through focusing on sweet spots and due to longer horizontal laterals and increased volumes of water and proppant, as well as more fracking stages. The limits of technology and exploiting sweet spots are becoming evident, however, as in some plays new wells are exhibiting lower productivities.

Although there is no doubt that the U.S. can produce substantial amounts of shale gas and tight oil over the short- and medium-term, unrealistic long-term forecasts are a disservice to planning a viable long-term energy strategy.

The fact that all U.S. tight oil resources would be consumed by 2050 in this best-case scenario, assuming that the EIA estimates of proven reserves plus unproved resources are correct, should be extremely troubling for long term energy security planning and policy development. And given the extremely optimistic nature of most of the EIA's play-level forecasts, it is by no means assured that even this much oil and gas can be produced.

"Though Hughes is careful to focus his analysis only on the geological and technological feasibility of the EIA's forecasts, I have to stress that when viewed from the broader perspective of economic, energy, and climate security, the EIA's Annual Energy Outlook is borderline insane," said Asher Miller, Executive Director of Post Carbon Institute, the organization that commissioned the new report, "Shale Reality Check 2019," by author David Hughes.

For more information, consult the report by David Hughes and published by Post Carbon Institute, Shale Reality Check 2019.

David Hughes and Asher Miller are available for interviews.

About David Hughes:

David Hughes is an earth scientist who has studied the energy resources of Canada for four decades, including 32 years with the Geological Survey of Canada as a scientist and research manager. He developed the National Coal Inventory to determine the availability and environmental constraints associated with Canada's coal resources. As Team Leader for Unconventional Gas on the Canadian Gas Potential Committee, he coordinated the publication of a comprehensive assessment of Canada's unconventional natural gas potential.

About Post Carbon Institute:

Founded in 2003, Post Carbon Institute's mission is to lead the transition to a more resilient, equitable, and sustainable world by providing individuals and communities with the resources needed to understand and respond to the interrelated ecological, economic, energy, and equity crises of the 21st century.


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