EIA has the US approaching total energy independence but not quite making it.
The major reason why we don’t quite make it is because the surge in oil production from fracking is expected to peak and total oil production will then resume a long-term gradual decline.
Given this projection, the conclusion is that oil imports, while lower, will have to continue indefinitely.
An article by Asjylyn Loder in Bloomberg Businessweek explains what is behind these predictions and introduces us to the Red Queen syndrome.
Wells produced by fracking behave differently than traditional wells. They are characterized by a large initial surge followed by a rapid drop off and then a more gradual but steady decline.
Production from these wells drilled into rock and shale tend to lose 60 to 70 percent of their production in the first year. This rapid decline means that if one wishes to maintain a steady supply of oil from fracking it is necessary to continue to keep drilling in order to just stay even. Thus arises the Red Queen syndrome.
The level of sustained drilling is enormous and may be reaching diminishing returns as evidence accumulates that the drilling companies started with the most promising sites, and future efforts may not be quite as productive.
Loder indicates that the costs for these wells are high and vary considerably with terrain.
He also provides this illuminating breakout of the costs.
The fracking industry may yet run into environmental restrictions. It has avoided serious problems thus far, but the constant extraction of fresh water needed for this process and the large fraction that returns as waste water can be a long-term problem. Cost is also an issue. Currently around $70 per barrel is the breakeven point. If yields fall, or the cost of business increases, then drilling may decline.
Industry spokespersons will counter with the claim that fracking is still a developing technology and yields will improve and costs will go down.
We shall see. Meanwhile, the surest path to energy independence requires lowering demand.