If you haven't noticed, I am skeptical of much of the technology that has come up in this class. To explain the pitfalls of optimism, I want to travel back in time to a year called 2007. Oil prices were high (and boy were we complaining!) and people started to discuss the possibility of oil being SCARCE in the future (imagine that!). But then we were saved by a little thing called the Bakken Formation. Investment emails (buy an interest now!) and conservative web forums (liberal whining disproved again!) all crowed about this discovery of "super massive 200 billion barrel oil field." Oil reserves were said to be five-hundred billion barrels, making the U.S. the next Saudi Arabia.
The U.S. Geological Survey report came out. Mean Estimated "Technically Recoverable" Reserves: 3.65 Billion Barrels. And remember that's "technically" recoverable. "Technically" Toyota could build cars that go 275 mph. "Economically," however, they cannot. So the reserves that will be "economically" recoverable will be much smaller than this number. We also must consider the costs associated with extracting oil contained in pockets surrounded by shale oil, so this oil will cost MORE to produce than the oil from Saudi Arabia it replaces.
But let's see what has happened since 2000. Production from this field primarily occurs in Montana and Nebraska, and production in these states has increased 90,000 barrels per day. Since that time, California's production has decreased 113,000 barrels per day. So, Bakken Oil rigs have ALMOST made up for the loss of oil production of ONE PART (not the largest) of ONE COUNTRY (not the largest). The proof is in the metaphorical pudding: U.S. oil production keeps falling. Bakken oil and other developments may help to decrease the rate of this decline, but they have not yet managed to stop it all together (over the long run).
So, what have we learned? We learned that energy rarely gives us a free lunch. We cannot expect to find a "second Saudi Arabia;" in fact, energy problems will more likely largely be solved by an increase in prices that promotes fuel-switching and energy efficiency. We cannot expect the transition to be painless; if we do, we can expect some... unpleasant surprises over the next thirty years.
For the figures I mentioned: http://tonto.eia.doe.gov/dnav/pet/pet_crd_crpdn_adc_mbblpd_a.htm
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