Are Lower Costs to Produce Shale Oil Only a Mirage?

Every now and again it’s fun to read Peak Oil people and their wild theories that oil will run out any year now. Such theories have been exposed as complete bunkum, mainly because those crusty old guys (and gals) in the U.S. oil patch keep figuring out how to do new things to extract oil, at cheaper prices. Technology gets better, procedures get better, we do more with less. And we produce more oil, year after year. But it’s still good to read those with a different viewpoint from time to time, just to keep us on our toes. Sometimes they even make some good points. That’s what we found in an article that posits the theory that shale oil really isn’t as good as it may appear. Why? According to this peak oil author, better technology now being used is not nearly as important as the technique currently employed called “high grading”–or targeting the sweetest of the sweet spots, which are far more productive than the run-of-the-mill drilling locations. The author maintains we’ll run out the best areas to drill soon, leaving us with less-than-optimal areas and therefore much higher costs. And then shale is toast. That’s the theory anyway…