Forest Man

 

 

On the whole, the shale oil industry has been unprofitable. It hasn't in fact made any money, just burned through mountains of debt-money and investor money. It has lost money, and much. Steve St. Angelo on the blog SrsRocco Report has documented this very well. 

 

So it was from the very beginning. 

 

You would suppose, that it being so from the very beginning, i.e. at the beginning of the US shale boom in 2007-2010, it will be increasingly so as time goes by, because the oil industry operates according to the "low hanging fruit principle" (Richard Heinberg's term). It means that the most profitable and easiest oil is produced first. Of course. It has to be that way if oil industry wants to make a profit. 

 

So, in the wake of the peaking of conventional oil in 2005, we went after the dregs. And what now? 13 years after the shale boom began? We go after the dregs among the dregs, the "dregs of the dregs", it's like you have eaten potato peel for a long time instead of real potatoes, potatoes themselves, because you're running out of food, but you brag about your food in your pride, showing how you can feed on potato peel without starving, showing your muscles, but then you run out of enough potato peel, too, and you have to feed on the potato water that the kitchen nearby is cooking its potatoes in, and you are so proud that you cannot even then concede that you are starving. 

 

Such a proud business the oil industry is, for sure. But still it feeds mainly on potato peel, especially in the US, it has not reached the "potato water phase" yet. But it is probably close, at least in US. And then civilisation will lose weight, quickly. In fact we are already losing weight. Energy consumption per capita is declining, according to Gail Tverberg. See this graph from Gail's blog "Our finite World":

 

 

What is the "potato water phase" of the oil industry? It's probably moving into Tier 2-acreage in its shale oil production. This means it is running out of "sweet spots" and now goes to less productive shale areas. And it just gets worse after that, because still the industry operates according to the "low hanging fruit-principle". 

 

Oil geologist and peakoiler Art Berman has for a long time warned about this. Irina Slav warned about it in February 2022, in this article on www.oilprice.com (a very serious and educated site), and just recently David Messler, oilfield veteran with 38 years of experience in the oil industry, warned about it in the article "Will U.S. Shale Ever Return To Its Glory Days?", on www.oilprice.com, on February 2, 2023. 

 

So this is really insider information. We should take heed of it. 

 

Still the shale oil industry is growing, albeit at a slower pace than before. How long can it grow enough, compensating for the decline in the conventional oil industry? It will be very interesting to follow the development of this industry. I will keep you updated. I spy for signs of Babylon's fall and the Second Coming of Jesus. 

 

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For deeper study, I recommend this article/youtubevideo by Chris Martenson and Art Berman from 2019.