They want to be able to slow life down and require less and enjoy more. I need to pay the bills. If you gave me more of a choice, and it involved more than willing myself to sit inside the house by myself and use less electricity, I would do it. There is not much of a choice in America, at least not like other countries.
This is a fundamental mistake of our economy today. You can choose to drive car A, or car B, but you cannot choose between a car and no car, most of the time.
Book Review | The Frackers
And cars are destructive. Russ — Thanks for the great discussion and a fair treatment of both the frackers and the dissenters. I personally am of the opinion that the concerns that Mr. Zuckerman brought up are quite valid and are the issues that should be addressed by the appropriate regulators. This would allow independent third parties to give the drillers transparency and legitimacy for those that are doing a good job, and will separate the wheat from the chaff, so to speak. Like the discussion today focused on how innovators found a way to make natural gas more abundant from local resources, other innovators CAN find a way to make life better in other ways too.
Just wanted to shed some light on the methods used to map the subsurface and begin comprehensive reservoir analysis. It all starts with the very first well. Typically geologists attempt to map the subsurface geology in existing oil fields, and make guesses though hopefully educated ones about how the geological structures in one area might persist to areas outside of the currently developed field.
Dozens of oilfield services companies provide, at a very high price, sophisticated logging tools. They are lowered down the recently drilled hole, or sometimes during drilling, and used to map the stratigraphy and composition of the subsurface using sensors. These sensors can detect electrical current passed through the surface of the wall from the tool at another location.
This is called a resistivity log, and due to the electricity resistivity of hydrocarbons, it is used to detect their presence. Logs can also detect radioactive signatures of some types of rock. The logs are also studied to demark at which depths there are stratigraphic changes. Also very important is the use of cuttings, which are flowed to the surface during drilling.
As the drill bit crushes and cuts subsurface rock, water pumped down the hole to lubricate the bit pushes these cuttings to the surface. They are then analyzed by a geologists for the presence of hydrocarbons and correlated to the logs taken with the sensor. There are also tools that shoot into the walls of the well bore and break off small cylinders of core. As you can imagine, these tools are very sophisticated and very expensive.
If hyrdocarbons are discovered, they complete the well and put a pump on it. If the company is interested in doing further reservoir characterization, they can shut the well in for a shut-in test. Shutting in the well allows the wellbore to pressure up until it reaches pressure equilibrium with the reservoir. During the shut in, oil from the reservoir pushes into the wellbore until the column of fluids in the wellbore pushing down on the reservoir becomes equal with the pressure pushing out.
The rate of the pressure buildup is monitored and plotted and can be used to give us information about the permeability, and the size of the reservoir. Since every day the well is shut in you are potentially losing a heck of a lot of money, wells are shut in for as short a period as possible. Permeability is the ease with which fluids can flow through reservoir rock. With highly permeable rock, this equilibrium is more quickly reached. Fracking is used to create cracks in the rock, which are then kept open with sand fracking fluid is primarily water and sand , to increase the permeability of the tight rock formation.
As more wells are drilled. More logs are taken and geologists continue to indicate the depths at which they encounter certain geological structures. As more wells are drilled, our understanding of the subsurface which can be incredibly complex gets better and better.
There are other techniques like 3d seismic surveys which use explosives land , shake trucks land , or bursts of air sea , to send sound waves deep into the earth. Sensors are spread out in an array to detect the reflections as they return to the surface reflected off of various subsurface structures. Then, using some very sophisticated mathematics and signal analysis, a 3 dimensional image is constructed of the subsurface. Hope this was helpful! Please push harder to make Russ a more prominent figure in the media.
His breadth of knowledge, and his exposure to so many different economic ideas on this podcast, makes him one of the most credible economists of this generation. I think a lot of good could be done. Best Wishes!
Very interesting, thank you! I would appreciate more real life-oriented interviews with non-economists like this one. Most Americans love the rags to riches stories, especially about hard-working, blindly optimistic immigrants. I appreciate the fair-handedness of the discussion. Energy production is economically and environmentally risky.
And the kinds of people Zuckerman chronicles are the type that appear to defy experts. Zuckerman produces no clear estimate of failure rate. We all benefit from this chance, which means we should be a bit more sober about those individuals who risked and won.
It could be just as fair to say these folks won due to chance as perseverance. Now that fracking technology has passed its provability hoops, if China turns its will towards the technology it will acquire the knowledge and gain its advantages. In an age where innovation can be acquired quickly by others, by itself it grants very short term advantage. Fast followership has different rates of speed. More frackers and wildcatters in the old oil days risked and lost and their entrepreneurial story is hardly ever recounted. Russ, I am an avid listener and have been for years but occasionally your biases seem to take you off the rails.
The Frackers: The Outrageous Inside Story of the New Billionaire Wildcatters
Is it inconceivable to you that we can participate in the fossil fuel era AND expect some mitigation of the negative consequences of resource extraction to the environment? As Zuckerman points out, there are many examples of the damage caused by coal mining, as well as improperly reinforced casings, etc. Surely it is reasonable to expect that companies can remove resources from the earth and take responsibility for cleaning up to the extent possible after they are done. Perhaps this costs the consumer more as a result.
There is no imperative that says that the removal of natural resources must be done as cheaply and quickly as possible.
The price of the material can include the cost of remediation. It is not incompatible to believe that resource extraction and use of fossil fuels can be done responsibly and still want to participate in a technological era. Russ, thanks for another enjoyable podcast. I agree with Jesse that your portrayal of environmentalists in an extreme form is unhelpful — and more over it is harmful to the podcast if the aim is to discuss issues without being seen to be partisan.
One thing that was only briefly touched on was what happens to the water that is injected. The water comes back out, either soon after the frack is done or later during production and it is contaminated with various substances. The water can be held in ponds from which volatiles can escape or tanks before disposal. And disposal of this water is a real problem. Also at issue is the apparent behavior of the companies in the face of problems. There have been many occasions where land or water has been contaminated but the response often seems to be to pay off the landowner and impose a gagging order.
The Frackers: The Outrageous Inside Story of the New Billionaire Wildcatters
In other words there is compensation but nobody is allowed to hear about it. Talk of exports conflicts with the US still being a net importer of gas and prices of gas around the US varying widely. Your guest also did not mention the vast losses and write-offs that have occurred in recent years in the gas sector and that the break-even cost of natural gas is thought to be above current prices. Opening export facilities for the gas might help raise prices to a profitable level but then arguments about increased domestic use suffer. In due course the regulations covering fracking may be improved to protect people and the environment, but translate the technology to China where the rules are even weaker and more likely to be bent and one can imagine what the environmental effects might be.
Of course that would be their problem not ours…. Gas is so cheap relative to oil right now in NA that it is powering changes in the petrochemical industry. For a dollar you can buy times as much energy if you buy gas compared to buying oil. There is therefore a great incentive to convert gas into oil and make money. This is beginning to happen in a small way, but if the price disparity stays in place it will gather momentum. There is also great pressure to reduce the waste of gas through flaring.
The amount of oil that could be produced from wasted and stranded gas round the world is quite staggering. Definitely one to watch. Furthermore, as we also reported back in March, the US may well have hit the tipping ROI point, as shale costs have exploded in recent months. In fact, the one thing that may be masking the increasing unprofitability of shale production in the US is that old standby: debt.
Should the United States allow its citizens to buy oil from countries run by bad men? Is this a case where morality trumps the usual case for free trade? Leif Wenar, professor of philosophy at King's College, London and author They talk about why prices have risen, the implications for America's standard of living and the implications for public policy. Justin Jun 24 at am. Russ, Just wanted to shed some light on the methods used to map the subsurface and begin comprehensive reservoir analysis.