Doubts about the sustainability of the North American oil and gas boom center on rapidly declining output from many shale wells after they are initially drilled.
John Kemp is a Reuters market analyst. The views expressed are his own
LONDON, Aug 29 (Reuters) - Doubts about the sustainability of the North American oil and gas boom centre on rapidly declining output from many shale wells after they are initially drilled.
Shale sceptics point to the need to drill an ever-increasing number of new holes just to replace the declining output from existing wells, let alone expand production. At some point it will become impossible to keep up, they argue.
The problem has been likened to the Red Queen's Race in Lewis Carroll's "Through the Looking-Glass" where the chess piece warns Alice that "it takes all the running you can do, just to keep in the same place".
Geologists have worried about the problem of replacing declining output from old wells for more than a century. U.S. geologist Carl Beal voiced concern that the "limit of production in this country is being approached" as long ago as 1919.
"Although new fields undoubtedly await discovery," he wrote, "the yearly output must inevitably decline, because the maintenance of a given output each year necessitates the drilling of an increasing number of wells."
"Such an increase becomes impossible after a certain point is reached, not only because of a lack of acreage to be drilled, but because of the great number of wells that will ultimately have to be drilled," Beal explained in a careful monograph for the U.S. Bureau of Mines on the "Decline and Ultimate Production of Oil Wells".
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