For starters, there’s good evidence to suggest that the amount of economically recoverable reserves of both shale oil and gas are not as much as previously hyped.
J. David Hughes, a geoscientist and fellow at the Post Carbon Institute, who spent 32 years with the Geological Survey of Canada, found that while short-term production of shale oil and gas is undoubtedly significant, the long-term view shows that the growth is not sustainable. His research reveals production peaking in both shale oil and gas in most of the significant plays in the United States by 2020.
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The Energy Policy Forum’s Lawrence has been comparing the financials of some of the industry’s top companies for years; she found that they lack free cash flow.
“They were spending a lot in capital expenditures—the money needed to drill and complete the wells,” she said. “And that was growing every year while the money they were actually making, the cash that was left over at the end of the day, was deteriorating. It was never positive.”
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Despite the bad news on shales, Lawrence sees a lot of good economic news when it comes to renewable energy.
“I have this feeling that we are on the cusp of a new energy paradigm and things are changing so rapidly,” says Lawrence. “I think you’re going to see a lot of disruption in the next five to 10 years, and I don’t think the oil and gas industry really thinks it’s coming.”
Read more at Why Are Americans Switching to Renewable Energy? Because It’s Actually Cheaper
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