eak Shale Gas Proves As Wrong As Peak Oil
Comment Now Follow Comments
Since the beginning of the shale gas boom, there have been skeptics and uncertainties, which is hardly surprising for a new type of production. How much could be recovered, what were the costs, could processes be transferred from one shale to another, and especially, what impact would high production decline rates have. Quite a bit of analysis has been done by any number of companies and scholars (broadly speaking), and many of the worries have been dismissed, not least because of continuing increases in production and an apparent ceiling on prices near $5/Mcf.
Some continue to sound alarms, however, and it seems worth revisiting them. For one thing, shale gas was described as a “bubble,” which, after the 2008 financial collapse, causes some fear and trembling on Wall Street. Stories of high debt levels and companies selling off leases and reserves have provided some ammunition to such claims. Analysts like Arthur Berman and Bill Powers have made particularly apocalyptic projections.
On closer inspection, this seem clearly to fall into the “chicken little” school of petroleum supply forecating. (Arthur Berman is an actual member of the peak oil school, which doesn’t give one confidence in his lack of bias.) Aside from his insistence that the price needed to be about $6/Mcf, which is hardly unreasonable, he has predicted a huge decline in production that has not occurred as of yet.
English: Schematic cross-section of the subsurface illustrating types of natural gas deposits (Photo credit: Wikipedia)
Especially by relying on decline rates at individual wells, he calculated that every year 22 bcf/d of production needed to be replaced just to maintain production at flat levels.  Yet after prices dropped to $1.89/Mcf in 2012, and rigs drilling for gas dropped from 933 to just over 300 now, production actually continued increasing, rising another 8% in two years. Either the production technology has increased phenomenally or his calculations are flawed (possibly a combination).
Bill Powers, for his part, argued that shale gas reserves are grossly estimated, amounting to a five-to-seven year lifespan (that is, of total production, not just shale) instead of the 100 years that the EIA estimated. And he argues that we face “a gas crisis, a supply crunch that will lead to much higher prices similar to what we saw in the 1970s” 
Now granted that it’s only been two years since he said that, but if shale gas were so limited, we should be seeing some strong negative effects in production or well productivity. Instead, the opposite is happening, again implying analytical shortcomings.
 Arthur Berman, “After the Gold Rush: A Perspective on Future US Natural Gas Supply and Price,” 2/8/12 on www.theoildrum.com.