Fracking boomlet, fracking bust...

Well, that was fun, folks.  Back at the height of the housing bubble, natural gas prices spiked.  This made it economical to adopt an existing oil-industry technique (developed in no small part by the federal government), hydraulic fracking, in the pursuit of natural gas trapped in shale rock.  This set off a gold rush, and like California in the 1850's, a lot of people are losing their shirts and the only people making money are those selling equipment to the suckers.  The rush mentality set off a huge burst of production, which preceded to cause, in combination with the recession, for prices to fall from nearly $11 per thousand cubic feet at their peak in 2008 to under $2 at their bottom last April.

So what is the status of fracking now?  A new report from the PostCarbon Institute lays it out in gory detail. Besides a lot of investors drowing in a mountain of red ink due to the rock-bottom prices, production has flat-lined.  Worse yet, the production rates of fracked wells plummets from the moment they are first tapped, falling by over 60% on average the first year and around 50% per year for the next few years.  Even to maintain flat production, something like $40 billion dollars of new equipment and drilling needs to be purchased every year.  In true Red Queen fashion, the fracking industry has to run faster and faster as its old wells' production falls like a rock, and new replacement wells, which are drilled ever further from the "sweet spots", have even less initial production and faster declines than the wells they are replacing.  It is a race they cannot win.  Even if they can outrun their creditors, they can't outrun physics and geology.  There just isn't that much frackable natural gas out there.  Below is a map of the major shale gas plays.  Note that they span about a quarter of the lower 48.  We've already poked and prodded everywhere, folks.  There are no more big plays to be found, and the biggest ones we have either leveled off or already in decline.

So no, fracking is not the long-term solution to anything.  It is an unsustainable boomlet that buys us at most a dozen years or so.  The same is true for the shale oil boomlet as well - it is a decade's worth of very expensive oil.  Both will peak sometime around 2020 and then we will enter yet another phase of long-term decline in production.  When we burn it and it is gone, and our only remaining choice to go after something that is deeper, thinner, dirtier, and even more expensive.  We need to start immediately on a major effort to plan for and construct the necessary infrastructure for a world where both oil and gas are very expensive, and we should be focusing on protecting our remaining high-quality oil and gas reserves rather than gold-rushing them into oblivion.  Our current path is madness.

The Opposite of Sustainable, Helium Edition

One way to attempt to define any word is to think about its opposite.  In that vein, the situation concerning our helium supply may well be the absolutely least sustainable element of our entire industrial system.  I won't get into the details about the Helium Stewardship Act of 2012 (details here, and here), but let's just say the situation is so bad that Republicans and Democrats are agreeing.  So what is the problem?  It is not just the mismanagement of our helium reserves - the largest in the world -which the HSA is attempting to address.  Rather, it is the twin facts that there just isn't very much helium on earth, and that if we loose it, we lose it - forever.

Helium is unique among all elements in the fact that is both very light and inert.  Hydrogen is even lighter, but highly reactive, which means that is generally found bound to heavier elements such as oxygen, forming water.  Helium, however, floats around all by itself.  Now if you remember your freshman chemistry course, you may recall that kinetic energy is proportional to 0.5 x mass x velocity squared.  You may also remember that temperature is basically nothing more than average kinetic energy.  This implies that at any given temperature, small things must be moving faster.  Well, helium is so small that its velocity at the temperatures found in the upper atmosphere (where it inevitably floats, being lighter than normal air) is so high that it often exceeds the escape velocity of the earth.  So if you pop that balloon, your helium floats up and up, and doesn't stop until it leaves the earth's grasp forever.

For this reason, helium only exists as a trace as in the atmosphere (roughly 5 parts per million), making it all but impossible to extract from air.  Rather, our helium sources here in earth are natural gas wells.  Helium is naturally formed as the by-product of some nuclear decay processes.  In a few special locations deep beneath the earth, a combination of high concentrations of radioactive elements and impermeable cap-rock has allowed small pools of helium to accumulate over millions of years, trapped beneath the earth.  This virtually always are co-located with natural gas, which is trapped under the same rock layers.  Our National Helium Reserve in Texas, whose contents we have been selling off at below-market rates for years, contains 30% of the world's known helium reserves...and will be gone by 2018.  Experts estimate that there are only 25-30 year's worth of extractable helium left on earth.

With respect to all other elements, the worst we can say is that we are trashing our high quality ores and resources, and our kids and grandkids will be forced to go through a time and labor-intensive process of picking those valuable atoms out of our trash, or extracting them at great effort from whatever low-quality resources we may have overlooked.  Not so with  helium.  If we don't catch it and recycle it, it is gone.  Our descendants will be forced to either do without, or harvest it from space at an astronomical cost.  Lest you think helium is just for balloons and blimps, it is also critical for any number of industrial and technological processes, such as MRI scanners.  All sorts of our latest and greatest inventions either cannot work or cannot be manufactured without it.  The Helium Stewardship Act is a step in the right direction, or at least a cessation of the outright stupidity of heading in the wrong direction, but we need to act far beyond what is in this bill.  Helium use should be restricted to only the highest value applications immediately, and the reserves protected rather than sold.  Likewise, helium recycling should be enforced.  This resource, more than any other, is one that we need to protect.