The 'drill baby drill' crowd operates out of the belief that unrestrained drilling for oil, shale gas, or natural gas, will somehow keep the party going indefinitely. Gail Tverburg just put up a post at The Oil Drum questioning the Department of Energy's latest effort at priority setting. The article is, as usual, thoughtful and well reasoned. Gail is an actuary by trade, and evaluating risks and mitigations is her life. However, it is in the comments section where the real conversation occurs.
Once again, Rockman does not disappoint. He is a driller by trade, and in the field at least 30 years and likely longer. When a driller starts giving back parts of his budget because no one is giving him a site to drill, then it might be time for the 'drill baby drill' crowd to sit down and shut up, if only to get schooled. Class is now in session.
Rockman's take on Gail's article, especially the graphs, should be required reading for anyone who thinks we can just drill our way to continued growth and prosperity. As the Rock puts it, the capital expenditure costs exceed the capability of his calculator to compute them. That alone should get your attention. Then there is the small matter of the rapid decline in production values, whether you are talking about natural gas or shale gas. Getting to the level of production needed, and keeping it at the level needed, will be an expensive proposition. That means the price of the resource has to be high enough to justify the capital expenditures to produce it. Will we be able to afford it?
Do we really think we have enough money, public or private, to drill without restraint? Do we really think we can make it happen and not have a negative impact in the long term on our economy? If we can keep the party going for a few more decades until the production permanently drops off the plateau, what are we going to have in place for those who come after us? Or is that going to be their problem to solve, with few or no resources to soften the landing?
Until the 'drill baby drill' crowd takes a reality check they are going to continue to raise expectations that cannot be met for the long haul. Natural gas and shale gas have something to offer, but neither can save us. They are not Messiahs or silver bullets. Rockman knows this, and now you do too.