We Cannot Frack Our Way Out of an Energy Crisis

World Economic Forum

Why We Can’t Frack Ourselves Out of an Energy Crisis

From an Article by Alex Kirby,  Climate News Network, January 24, 2014

 Davos, an annual meeting of global political and business elites in Switzerland, will be hearing a different story about fracking.  They usually hear the opposite view.

Jeremy Leggett, a former Greenpeace staff member who founded a successful solar energy company, Solarcentury, has been invited to the annual World Economic Forum (WEF) meeting this week in Davos. The theme of the meeting is “The Reshaping of the World: Consequences for Society, Politics and Business.”  (If you know about the Davos meeting, you realize that is what it is really about, reshaping the world.)

Leggett told the Forum the world could not frack to prosperity, the opposite of what they heard last year when the fracking champions had their turn.  ‘You’re in grave danger of repeating the mistakes of the financial services industry in pushing a hyped narrative.”

Leggett says the conventional oil industry is facing an imminent crisis, because existing crude oil reserves are declining fast, it is having to find the money for soaring capital expenditure, and the amount of oil available for export is falling, “but it is fast approaching sunset..”  The major oil companies have lost their reserves to national oil companies.

“Gas? Unless the price goes up, the whole U.S. shale gas industry is in danger of becoming a bubble, even a Ponzi scheme. All but one of the biggest production regions have peaked already (recognize which one?), and losses are piling up. This is an industry that’s in grave danger of committing financial suicide.”  Investments in oil and gas are at risk of becoming worthless.

There is a need, he says, to channel funds withdrawn from oil, gas, and coal into clean energy instead—though he acknowledges that, as a renewable energy entrepreneur himself, he may be accused of self-interest.

“The military are better than your average politician or consultant to big energy at spotting systemic risk,” he says.  One 2008 study, says: “Psychological barriers cause indisputable facts to be blanked out and lead to almost instinctively refusing to look into this difficult subject in detail. Peak oil, however, is unavoidable.”