More Fracking Pessimism

More detail on why fracking is most likely a very short-term boost for U.S. oil production:

Canadian geologist David Hughes has some sober news for the Kool-Aid-drinking boosters of the United States' newfound eminence in fossil fuel production: it's going to go bust sooner rather than later.
Working with the Post Carbon Institute, a sustainability think-tank, Hughes meticulously analyzed industry data from 65,000 US shale oil and natural gas wells that use the much-ballyhooed extraction method of hydraulic fracturing, colloquially known as fracking. The process involves drilling horizontally as well as vertically, and then pumping a toxic cocktail of pressurized water, sand, and chemicals deep underground in order to break apart the rock formations that hold deposits of oil and gas.
Hughes found that the production rates at these wells decline, on average, 85 percent over three years......
Hughes explained that more than 80 percent of the nation's shale oil comes from just two plays, the Bakken field in North Dakota and Montana and the Eagle Ford in Texas. He estimates that production in those regions will recede back to 2012 levels in 2019. Overall production across the nation's shale oil fields will peak in 2017.
In just the Bakken, Hughes calculates that 1,400 new wells are needed per year to offset current production decline, which right now is 45 percent of current production rates of about a million barrels per day, or 450,000 barrels per day each year.
"You need 1,400 $8 million wells to keep production flat, and they're drilling more than that — they're drilling 2,000 wells per year," he explained. "So production in the Bakken will continue to go up. But it's because at the moment they're continuing to drill the sweet spots."
As those sweet spots are tapped, though, they will also begin to decline.
The scenario is similar to that of the nation's shale gas plays, where 80 percent of production comes from just five areas, several of which are already in decline, according to Hughes.
"Take a look at the Haynesville play, which is primarily in Louisiana and East Texas," he said, referring to an area whose natural gas deposits were fracked starting in 2008. "It was the biggest shale gas play in the US in 2012, when it peaked, and it's now down 46 percent below its peak."
In order to maintain current levels of shale gas production, Hughes estimates that the high rates of deterioration of such wells across the country will require the drilling of 7,000 new wells a year at a cost of $42 billion annually. For maintenance of the overall production of shale oil, some 6,000 new wells would need to be drilled every year, an endeavor that would cost $35 billion.

If Hughes and other naysayers are right (and I believe them way more than I believe the industry hacks spewing rainbows and unicorns), severe oil price increases aren't far away. I'd put off buying that new SUV if I were you.