Really? A Shale Bubble?

Say it ain't so:

Many US shale companies that have been beating the drums of shale “revolution” are now facing oil and gas well depletion. In February 2013 the US Energy Information Administration (EIA) warned that “diminishing returns to scale and the depletion of high productivity sweet spots are expected to eventually slow the rate of growth in tight oil production”. It was a cautious but intriguing statement.
Arthur Berman, a prominent shale skeptic who runs Labyrinth Consulting firm in Sugarland, Texas, is not surprised. “The shale gas phenomenon has been funded mostly by debt and equity offerings. At this point, further debt and share dilution are less feasible for many companies” – he wrote in The Oil Drum blog several months ago.
Just like the famous Gold Rushes of the 19th century US shale gas development turned out to be a limited and regional market opportunity.
The average depletion rate of wells in the Bakken Formation (the largest tight oil play in the US) is reported to be 69 percent in the first year and 94 percent over the first five years (37 percent and 50 percent in the Barnett Formation). Due to the lack of reliable data on shale industry many experts (for example, Deborah Rogers from Energy Policy Forum) await possible future write-downs in shale assets. Naturally smaller investors will not hear about the write-downs in the news.
Rock-bottom gas prices on the American market make it extremely difficult to drill more wells and maintain current levels of production, unless technology radically changes.
“The cheap price bubble in the US will burst within two-to-four years,” believes David Hughes, a geoscientist and former team leader on unconventional gas for the Canadian Potential Gas Committee. “At a high enough price, the supply bubble will burst perhaps 10-to-15 years later, when drilling locations become sparse.”
There are also sensational industry reports that reveal how investment bankers promoted shale bubble in order to profit from a short-lived energy boom. Subprime mortgage crisis has shown that the Wall Street is very good at creating financial bubbles.
A lot of the small investors now being solicited by respected investment publications may lose their money, forecasts Professor Robert U. Ayres in Forbes. The shale gas boom was profitable in 2009 but now small players are late for dinner.

Wait, investment bankers may just be selling shit to muppets?  No! Who would have ever guessed that?   I don't know what the shale plays hold.  Apparently, there is a hell of a lot of gas there.  The problem is that it can only be produced right now for more than what it sells for.  I think we'll find that shale oil is overhyped and that the peak in production will come sooner than most folks think.  I will predict that we probably won't here many Chesapeake Energy ads on the Ohio State radio broadcasts this year, unless they were dumb enough to sign a multi-year deal.