It was about 2018 or so, I recall. Maybe 2019. The Wall Street Journal published an article on the fracking of crude oil in the United States. The argument was pretty alarming: the fracking of tight oil – in rocks – in the United States was looking pretty dubious, what was going to be needed to increase production is drilling of new wells. And quite a few of them. The reaction to the article was predictable, most everyone figured its thesis was correct. Fracking operations had relied heavily on expanding their production by borrowing from the bankers – at very low rates of interest. The result was boom times and rapidly increasing production. Then the Covid-19 epidemic hit and the price of crude oil dropped to very low levels, so low that the storage of crude oil in Cushing, Nebraska became full up. You could not store your crude so you sold it – crude then sold for almost nothing. This was for several days.

American oil production has since those days increased dramatically. The reason turns out to be that the existing fracking wells are producing more than was expected in 2018. Over 13 million barrels/day now, currently. This is with Biden and Harris opposed to drilling, opposed to using and consuming hydrocarbons to maintain living standards. Biden and Harris – and the Democratic Party – are lunatics, that's obvious. Many Americans are credulous, and believe this kind of nonsense. Maybe up to 50% of the population. It is shocking.

Several days ago, on September 11, 2024, my friend Gail Tverberg published an article at her web site ourfiniteworld.com. Her thesis: she is proposing that peak oil is very likely here. American production has possibly, likely, peaked in December 2023. “I think it is quite possible that US crude oil production will start a gradual downward decline in the coming year. It is even possible that the December 2023 monthly peak will never be surpassed,” Ms Tverberg asserts.

Is she right? I do not think so and here is my argument:

Tight oil is a renewable resource, crude oil is a renewable resource, and I think this is the reality: it is called tight oil for a reason, they have to crack open rock fissures to extract the oil, to pump it out. But there is a lot of pressure in these small formations, so when you get the oil it comes out fast. With the large reservoirs, where the crude is stored in the Earth, you have a much more difficult time extracting the crude once the pressure drops. You've gotten too much out of the well and so the pressure drops and you cannot practically get any more out. Production then peaks, and it declines pretty rapidly. Yes, peak oil. It's a fact, not theory.

But we now see – and this is my thesis – that these “tight oil” wells are getting replenished. They are filling up, I would argue. These are tight spaces, so therefore the pressure is maintained – to a significant degree. This is not what happens in the large crude reservoirs in the Earth. Pump it out and then the well empties, pressure drops sharply. Production declines. We must remember however that the large reservoirs did feature huge amounts of pressure. Once you successfully drilled and hit the crude oil reservoir the oil exploded out of the well. Right? John D Rockefeller was the richest man in the world.

Because at least 50% of American oil production is from fracking – it could be more, I am not sure what the percentage is but it is a lot, maybe 60% even as high as 75% – there is the possibility even likelihood that American oil production will continue to increase perhaps even reaching 20 million barrels/day at some point in the future. Russian oil production is certain to increase, I have written an article addressing that thesis. I would say it will increase a lot, perhaps up to 30% even 50%. And what about OPEC? I will argue that their production will increase a little but not much, it depends on how much they want or are willing to spend to increase production. I am in contact with OPEC and I think they agree with me. They have been warning for the past year or so that record amounts of capital will be required to maintain production not to speak of increasing it.

The Earth produces methane, a hydrocarbon. The Earth also produces petroleum, or crude oil. That is my thesis. It is ridiculous that crude oil is not renewable, of course it is. We simply deplete the reservoirs very quickly, much more quickly than they can fill up again. Russian petroleum engineers have argued of course that they have seen depleted wells fill up again. Go to the internet and look all of this up.

Electric cars are a joke, in 10 years no one will be buying or driving electric cars. Elon Musk will not be the richest man in the world forever. His wealth will plummet. We will be driving automobiles powered by diesel engines.

Tverberg is right about one thing, the cost of extracting crude oil from the Earth cannot be too high, or higher than we can afford. If the retail price of crude is too low, there will not be any production. Costs have to be covered, right? It turns out that the cost of extracting tight oil is considerably higher than extraction from conventional wells. So we have seen the price of crude oil rise dramatically in the past 70 years. Crude in the United States in the 1940s was very inexpensive, maybe cheaper than water from springs. Russia and the United States and OPEC – these are the big crude oil production powerhouses. They will all continue to produce more, although as I have argued above it is likely that OPEC is close to peak production. Maybe 5-10 years off in the future.