Texas GOP? #Fracking bubble more reason to stop depleting Rainy Day Fund

The Texas Republican Party, rather than being responsible, and actually paying for general budget items out of the general budget, seems to be getting ever more fond of having voters make the tough choices for them by passing constitutional amendments to pay for necessary water supply improvements (Proposition 6, last year) and transportation upgrades (Proposition 1, this year). Unfortunately, for the second straight year, voters were suckers at the polls.

Not only is this an abdication of GOP responsibility, it may not be sustainable.

Those of us who know a bit about fracking, not just its environmental concerns but the difference between actual reserves and rate of extraction of reserves, have known for some time that natural gas fracking's claims of an explosion of new resources have been somewhat bubbly. And, the latest confirmation of that is here.

Now, the evidence that the same is true of fracked shale oil is continuing to increase.

(N)oted Canadian energy analyst David Hughes says that even if the drilling could somehow continue, the bounty simply will not last. 

Last month, Hughes released “Drilling Deeper,” a report he authored for Santa Rosa-based Post Carbon Institute, scrutinizing the U.S.’s two largest oil booms in the Bakken and Eagle Ford fields. By examining industry data, Hughes projects that the booms in both fields will peak before 2020 and, by 2040, will be producing at a tiny fraction of their current levels. “[If] the future of U.S. oil and natural gas production depends on resources in the country's deep shale deposits, as the Energy Department contends, we are in for a big disappointment in the longer term," Hughes said in a press release. 

The fundamental problem, Hughes explains, is the ephemeral nature of the average deep shale oil well, which declines in production by 83 percent after three years. This, Hughes explains, translates to an annual decline rate in the Bakken and Eagle Ford fields of over 40 percent. (The Bakken and Eagle Ford, he says, are not unique in this regard. All shale oil plays are afflicted with steep decline curves.)

In other words, the Texas GOP, as incorporated in the Texas Legislature passing these constitutional amendments, is officially running a Ponzi scheme. (All emphasis in the above quote is mine.) 

And, it's a Ponzi scheme based not only on ephemeral production, but also ephemeral production that's not's being adequately taxed for all of its destructiveness.

Click the links within that pull quote, as well as clicking the main link for more. It should open your eyes. For example, Hughes expects Eagle Ford oil production to peak in 2016! That's from his "Drilling Deeper" report. And, it needs to open the eyes of people at larger media companies than me. The latest installment of the alleged Texas miracle of economics simply doesn't appear to be sustainable.

And, in a related issue, feel free to vote on my poll about Obama and the Keystone XL, at top right. (Note: The plunge in oil prices may also affect Obama's decision.)

Meanwhile, on both oil and gas, it seems like the Energy Information Administration become less trustworthy all the time.

Update, Jan. 16, 2015: Houston Chronicle columnist Chris Tomlinson notes that more recently fracked wells give some signs of not declining so quickly. That said, Hughes' graphs, linked above, do not show a sharp decline for either the Eagle Ford or the Bakken formations, among others, so I don't think Chris' note really undercuts Hughes' analysis.