the "Shale Gas Bubble" Alarm
Arthur Berman, another investment insider, echoed Powers in a recent interview with Oil Price, remarking that the decline rates in production in shale basins nationwide are "incredibly high."
Berman is a petroleum geologist, Associate Editor of the American Association of Petroleum Geolgists Bulletin and Director of the Association for the Study of Peak Oil. He maintains the blog Petroleum Truth Report.
"In the Eagleford shale, which is supposed to be the mother of all shale oil plays, the annual decline rate is higher than 42%," he stated. "They're going to have to drill hundreds, almost 1000 wells in the Eagleford shale, every year, to keep production flat. Just for one play, we're talking about $10 or $12 billion a year just to replace supply."
Berman believes there's a possibility that this could lead to an economic crisis akin to which happened during the Big Bank bailouts of 2008.
"I add all these things up and it starts to approach the amount of money needed to bail out the banking industry. Where is that money going to come from?," he asked the interviewee.
Who Will Be Left "Cold, Dark and Hungry" and Living in the "Dark Ages"?
It's a deep dive into shale gas production numbers that have led insiders like Powers, Berman and others to conclude that the behavior of the industry is akin to Enron's behavior in the 1990s, described by some as a "Ponzi Scheme" in a June 2011 investigation by The New York Times.
"What a glorious vision of the future: It's cold, it's dark and we're all hungry," Chesapeake Energy CEO Aubrey McClendon said of anti-fracking activists in Sept. 2011. "I have no interest in turning the clock back to the dark ages like our opponents do."
The reality, though, is far murkier. It appears the real culprit "turning the clock back to the dark ages" may