“[T]hough the oil-market crash has put the nation’s energy boom on hold, some oil-technology companies are pursuing what they say will be a second American shale revolution … That belief lies partially in re-fracking — giving oil shale deposits a second blast of water, chemicals and sand — to get more oil out of depleted or underperforming wells. The process could be up to two-thirds cheaper than drilling a new well….”
– Collin Eaton, “Oil Firms Promise New Life for Shale,” Houston Chronicle, August 16, 2015.
The fossil-fuel era is new–and in all likelihood still young. In fact, compared to renewables, natural gas, coal and oil are the real ‘infant industries.’ Remember, for most of the last thousand years, and all of the time earlier, renewable energy (primitive biomass, falling water, wind, solar) held a virtual 100 percent market share; carbon-based energies have dominated only since the onset of the Industrial Revolution.…
“There is evidence that experience reduced the scope and severity of earlier errors [with the Strategic Petroleum Reserve]–that the 1981–84 performance was superior to the 1977–79 performance. But new facets of the program have brought new problems.”
“Combined with the $5 per barrel handling and storing expense [as of 1984], the overall market value of SPR oil is billions of dollars less than its embedded average cost of over $35 per barrel.”
A sacred cow of U.S. energy policy is the Strategic Petroleum Reserve. The case for the reserve assumes that another energy crisis lies around the corner, the reserve will be efficiently managed during the crisis to alleviate the emergency, and private inventories and entrepreneurship alone would be inadequate. The reserve is seen by proponents as the nation’s insurance policy against the inherent instability of the world oil market.…
“Compared to Ford and Carter, the SPR experienced a ‘Reagan Revolution’ – although hardly of the free-market variety. Two reasons explained Reagan’s bullish SPR [buy and fill] policy. First, the reserve was the centerpiece of Reagan’s ‘free market’ energy policy, which precluded the need for standby price and allocation controls to deal with future emergencies. Second, the reserve was an instrument of foreign policy should U.S. intervention and confrontation lead to reprisals by oil-exporting countries as it had in 1973 and 1979.”
“With the Reagan acceleration at a time of record crude prices, the reserve program became a major cost item, and with budget deficit problems, a group of proposals came forth to reduce cost while maintaining fill rates. Global settlements with refiners accused of product price overcharges was one tapped source.”…