Sunday, September 3, 2017

35. Fracking Killed Peak Oil

The advent of fracking (also known as hydraulic fracturing) has greatly increased the perceived amounts of available crude oil and natural gas supplies as fracking became widespread in the U.S. from ~2007 (guesstimate) through the present  (2/3rds through 2017). This increased supply from fracking has greatly reduced the price of oil and natural gas (with numerous downstream effects and cost reductions). Due to these price reductions which have had tremendous benefits throughout the greater overall economy, fracking has essentially killed peak oil/natural gas concerns (and likely been a substantial driving force of the bull market from 2009 through the present).

The combination of concern over climate change plus peak oil/natural gas was the primary impetus for the "nuclear renaissance" during the period from ~2004 through 2011, and sparked many other initiatives, including many of the subsidy programs for wind and solar power and the start of Tesla Motors (now simply Tesla) as a company.

Climate change concerns alone are far, FAR weaker than climate change concerns combined with peak oil/natural gas (NG) concerns in providing a driving impetus for finding truly capable alternative primary energy sources to crude oil and natural gas.

The 100% renewable "plans" (many would call them dreams or fantasies) would have been untenable in the age of concerns over peak oil/natural gas combined with climate change concerns and would have been given almost no credence whatsoever by those understanding the scale of energy use within the overall economy (my knowledge and biases suggest that electrical and mechanical engineers are maybe the two professions best-qualified in having a true gauge of this magnitude, along with mining and petroleum engineers). These renewable-only plans are only given credence at the level they are because peak oil/NG concerns have subsided thanks to fracking. The extra supplies of oil and natural gas that have become available as a result of fracking gave resulted in energy prices in the 2009 through 2017 period that have been considerably lower than those in the 2000 through 2008/2009 period (Note, these high prices provided a big part of the "fuel" for the all-too-brief nuclear power "renaissance").

Fracking will eventually be shown to not be enough. I have no clue when this will occur, but at that point, I envision nuclear power finally experiencing its full renaissance (barring a complete loss of knowledge). The 100% renewable plans/dreams will likely continue to seduce people as being possible for the period until fossil fuel prices again rise to levels where peak oil and natural gas re-emerge as real, viable concerns within single digit numbers of decades. Peak oil and natural gas are simply not concerns presently with gasoline at less than $2.60/gallon in most of the U.S. and with electricity price remaining in a reasonable range (<$0.15/kW-hr for large portions of the U.S.).

An additional proxy of this line of thinking is the delta between Al Gore being given a Nobel Prize following the first "An Inconvenient Truth" (released during the period of combined Climate Change + Peak Oil concerns). Alternately, Vice President Gore has gotten substantially less traction with the inconvenient sequel (released during the era of Fracking having killed Peak Oil/NG).

My posting here is not intended to provide a value judgment of whether climate change concerns alone should be an impetus for taking actual steps towards a more and more decarbonized economy (best done by far by increasing usage of nuclear power, imo). Instead, I am simply presenting my observation that climate change concerns during a period of seemingly abundant fossil fuels for transportation and intermediate/peaking power are insufficient (as shown by events from 2009 through mid-2017) for causing people/societies to take big steps towards legitimate, meaningful decarbonization.