AEIdeas

The public policy blog of the American Enterprise Institute

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Discussion: (2 comments)

  1. skh.pcola

    Hmm. Vange-ina will be along shortly to pooh-pooh this news and ramble about the veil of deceit behind any positive news about hydrocarbon production. That simpleton will never cease his campaign of fear-mongering and teddy bear hugging.

    1. I do not dispute the fact that production is increasing. I simply point out that capital destruction is not the positive that some make it out to be. Some were cheering shale gas as this wonderful thing even as the real world production data was showing that given the actual ultimate returns, rather than the imagined EURs that some were claiming, the producers were underestimating their depreciation costs and were overstating their returns. Now that the industry has admitted that gas is a loser some are simply shifting their focus on the new claims that shale oil is profitable. And while it is clear that a few wells in the core areas can be profitable it is a certainty that the average shale oil well isn’t. That makes shale a bubble just like housing and tech.

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