…is Rearden metal:
Rand’s fictional progressives don’t want Reardon Metal to succeed any more than their modern, real-life equivalents want shale gas to succeed.
Why not? For the same rag-bag of made-up, disingenuous reasons which progressives have used to justify their war on progress since time immemorial: it’s unfair, it uses up scarce resources, it might be dangerous. Rand doesn’t actually use the phrase “the precautionary principle.” But this is exactly what she is describing in the book when various vested interests – the corporatists in bed with big government, the politicised junk-scientists at the Institute of Science (aka, in our world, the National Academy of Sciences or the Royal Society), the unions – try to close down the nascent technology using the flimsiest of excuses.
It was supposed to be a cautionary tale, not an instruction manual.
I never understood the urge to be bit villains in a clunky sci fi novel, but I guess it’s a natural fit for busybodies with no sense of irony and the creativity of a pet rock.
So out of curiosity what do the grade school teachers of New Mexico think of shale gas?
Dellingpole must’ve touched a nerve because his article already has over a thousand comments.
Its going to happen the luddites be damned. US, Canada, Venezuela, and probably the UK and China as well and the rest will follow in suite because expensive energy only generates economic misery.
Until Venezuela throws off Chavez (Third way socialism, aka Fascism v1.1), I don’t think their own oil companies are in a position to do much of anything regarding innovation, and foreign oil companies are reluctant to do anything new there because the state will just seize all the production equipment. The place can’t even manage to feed its people while sitting on top of one of the most productive agricultural regions on Earth. They’re even rationing toilet paper and blaming hoarders and speculators for the shortage.
Chavez is dead. Maybe you mean his pimp Maduro.
http://en.wikipedia.org/wiki/Orinoco_Belt
That is in tar sands alone.
Godzilla, Venezuela has lots of natural resources, but since Chavez and his minions ran the economy into the ground with socialism, they have shortages of things like corn flour, butter, and toilet paper, and their oil production dropped about 40%.
They still are trying to extract the oil. They are just inept at it.
He’s wrong. In the novel, shale gas is shale gas. Shale gas produced by Wyatt oil is the reason for the John Galt rail line.
It is pretty funny how things turned out. Makes you wonder if there’s a conspiracy to enact Atlas Shrugged in real life.
Pray they don’t build Project X.
putting aside the problems of shale gas leaking and carrying a lot of contaminants into drinking water and the earthquakes caused by ShaleGas,
the fact much of this industry is a ponzi scheme will put an end to it, long
before the regulators stop it.
Ah, yes. I believe we saw similar flimsy objections in Atlas Shrugged. Sure, there are probably Ponzi schemes and other cases of fraud hidden in this massive economic activity. So what? There always are. My take is that there’s considerable real value being pumped out of the ground in the form of cheap natural gas. That trumps vague problems and slightly elevated levels of white collar crime.
Well, that’s similar to why we need to eliminate welfare and Social Security payments. What if the checks catch on fire? They could burn somebody’s house down. Or someone might steal one, cash it, and spend it on weed killer that they might spread on their lawn contrary to the directions on the label.
Or someone might steal one, cash it, and spend it on weed killer
Or they might buy killer weed. Which probably is more likely under the circumstances. One illegal activity leads to another.
True that. There’s just too many risks and too many unknowns to writing welfare checks. The precautionary principle demands we stop doing it until all such risks are well understood and we have ways to mitigate any resulting environmental damage.
the energy market is at it’s core a simple business, whenever you see complex finance enter a simple business it’s usually because someone has figured out a fraud scheme. Enron had at it’s core a bunch of utilities, a simple sleepy business, they layered on all that finance to make the company a ponzi scheme. Didn’t turn out well for the shareholders, employees or the customers.
if you look at the stock prices for Devon and Cheaeapeake you don’t see great performance which you would expect in a growth industry, and the model of drilling frack wells and then selling them will result in the victims no longer buying in.
if fracking were a really good cash business, the companies would keep the wells. they sell the wells because they want to get out before it’s trouble.
Look, if you think Fracking is such a great economic activity, i’d suggest you buy a couple of these wells.
In 2005 the US produced 18.9 million cubic feet of natural gas. Last year, thanks to fracking, we produced 25.3 million cubic feet, a 34% increase in production in just seven years.
In 2008 the US produced 1.83 billion barrels of oil. In 2012 the US produced 2.38 billion barrels, a 29.8% increase in four years, thanks to fracking in the Bakken and Eagle Ford.
That’s why this Friday Carl Icahn bought a $1.1 Billion dollars worth of Chesapeake Energy shares (64.5 million of them).
http://geology.com/royalty/production-decline.shtml
Those wells are sold based upon the early production and the
buyers get stuck with that decline rate. I don’t doubt Icahn bought
into a scheme to rob endbuyers, but, if you wanted to prove your point, show me how Icahn bought and kept a billion dollars in Horizontal wells.
Some very smart analysts like fracking and the potential for long term change to the market, but I look at that decline curve and the multiple refracks needed and it doesn’t seem like it’s a good economic investment.
If the investors take it in the shorts they will walk.
Gold is around a $1300 an ounce, and I’ll bet you wouldn’t touch a gold mine, either. Because if production declines, making gold worth even more, your mine’s production won’t be as high as it was, so you won’t be printing money quite as fast. Of course to some of us, even if gold plummeted to $200 an ounce, a gold mine using a highly productive technique would still be producing boatloads of money.
And this is the fundamental problem with liberals. They hate production because they think it must somehow be rigged. It has to be a scam, because people can’t just go out and create enormous wealth out of the ground, because to them wealth is a zero sum game.
They don’t understand geology, much less petroleum geology, and don’t think they need to, and the rest of us bless your little heart for your ignorance, because your ignorance is what makes us rich.
Even if you’re correct in your assertion that a massive scam is going on, that still doesn’t mean that fracking isn’t highly profitable. It’s really hard for any physical process to beat the ROI of a good and successful scam.
For example, in the massively multiplayer space game, Eve Online, just about everything you can do is wildly profitable by real world standards. But for our purposes the game has a special feature. There are almost no repercussions to scamming. For example, you can drop a play character that was involved in a scam and start fresh untainted characters who retain traceless access to the ill-gotten wealth. This particular activity has become a large and very notorious industry in the game with ROI that can eclipse anything else that can be done for the same amount of effort, but only if you get the right suckers.
So just because there are scams (of the mostly legal sort) and a lot of dumb money around fracking right now doesn’t mean that fracking isn’t profitable in itself. But anyone who has studied history of emerging industries knows that there is usual a period at the start where considerable profit can be made, then the industry eventually matures with higher competition levels and lower profit margins in the long run.
The process of drilling and selling fracking wells indicates that a number of businesses realize that the business is settling down, but that the dumb money still retains overly high expectations about the industry. In other words, there’s a bunch of fairly gullible investors who think that the relatively high profit margins of yesterday will continue indefinitely. Thus, I wouldn’t, based on what you’ve said, invest in oil wells at this time (though I probably never would, just due to the stories I heard from some old mining engineer friends). I see this as a short term phenomenon which has little to do with the long term viability of fracking.
Sure there is a risk of groundwater contamination and low grade earthquakes. But the economic benefits outweigh those.
So how does this groundwater contamination happen? They’re pumping water and sand into the oil and gas bearing layers. Those of use with brains, when we’re drinking out of a well, tend to drink out of the shallow water wells, not the deep oil and gas wells.
And of course, your groundwater is already contaminated with things like aluminum, antimony, arsenic, barium, beryllium, boron, cadmium, chromium, cobalt, lead, lithium, manganese, molybdenum, strontium, thallium, uranium, radon, crude oil, natural gas, and all sorts of other nasties because ground water is in the ground, where all the nasties come from. Stupid people probably don’t realize this.
And the effects of low grade earthquakes are zero. It’s the ones that shake buildings down that you have to worry about. The quakes associated with deep injection are below magnitude three, and we already have almost 3,000 of those in the US every day. Maybe you haven’t been noticing them.
George, if the pipes aren’t properly sealed, then you can get leakage either out of the pipes directly or along the drill hole. But this is just a regulatory issue for a well known problem.
True, but with fracking and horizontal drilling you have far less drill pipes cutting through the upper strata, which would greatly reduce contamination.
And of course the real groundwater contamination comes from all the customers who dump their old oil in their yards or spray it on weeds. My geologist housemate spends all week taking groundwater samples from gas stations all over the state. Some of the shallow sampling wells have six inch layers of oil (floating on water) that looks good enough to put back in your engine, and of course gas and diesel saturation for a hundred feet in any direction.
At one site a few months ago a gas station had one of their tanks rupture and dump all the gas into a cave (and spring) that nobody had been very aware of. So he had to go in and support the installation of a big (50-amp) explosion-proof electric air blower to try and keep the spring from blowing up and taking the gas station with it, all of course paid for by EPA emergency funds. The production end, in comparison, might as well be a clean room.
dcguy, you’re a perfect example of what the article was about.
I bet you’re afraid of methane getting into your drinking water, too.
Personally, I’m far more concerned with the fact that there’s detectible dihydrogen monoxide in my drinking water than I am with any of the “dangers” of fracking.
Be careful. Dihydrogen monoxide is lethal if inhaled.