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|User Info||Climate Lies: These People Must Be Removed; entered at 2019-07-24 11:31:27|
I'll also note that fracking simply ups the depletion rate.|
That is, let's say you stick a straw in the ground and can pump-jack 2 bbls a day out of it. Ok, that sucks given the cost of sticking the straw in there. BTW there are a LOT of holes out there already that will produce a couple barrels a day, and at a certain price it's worth it to run the pump jack given that the money to drill the hole has already been spent. Below that price it's not. Whether those jacks run or not depends on the price of the barrel of oil that they pump out; if it costs $20 in electricity and maintenance to do it and the oil price is $50, bully for you. If the cost is $50 and the oil sells for $40 you (obviously) turn it off.
Now we drill the hole and run the casing, then squirt a ****-ton of water down there under extremely high pressure. Since water and oil are not miscible this doesn't "pollute" the product; they're easily separated. Now the well flows 20bbl/day. Much better.
Or is it?
At 2bbl/day the well will pump at that rate for a very long time. At 20bbl/day in a year it's dry. Oops. Now we have to put another straw in the ground. The TOTAL amount of recoverable oil and gas is somewhat higher, but we get it much faster. This isn't necessarily good, especially when you consider that the cost of the fracking (water + equipment lease + power to run the high pressure pump) has to be recovered too.
What enables this lunacy is being able to borrow at a rate under GDP expansion. Essentially you're being paid to grab cash for the drilling of the holes. But when you're done and the hole is dry that loan is still out there and whether you can ever possibly recover it before depletion stops you from producing anything worthwhile is another matter.