Don't count on a US energy boom

Which of the following statements is true? The US now has a 100-year supply of natural gas, thanks to the miracle of shale gas. By 2017, it will again be the world's biggest oil producer. By 2035, it will be entirely "energy independent", and free in particular from its reliance on Middle Eastern oil.

Unless you've been dead for the past couple of years, you've been hearing lots of enthusiastic forecasts like this, but not one of them is true. They are generally accompanied by sweeping predictions about geopolitics that are equally misleading.

For example, we are assured that the US, no longer dependent on Arab oil, will break its habit of intervening militarily in the Middle East, since what happens there will no longer matter to Washington. We're also told that this new era of cheap and plentiful energy from fossil fuels will also result, alas, in sky-high greenhouse gas emissions and runaway global warming.

These statements are based on quite mistaken assumptions. The original error is the belief that "fracking" - hydraulic fracturing of underground formations of shale rock to release the gas trapped within them - has fundamentally transformed the energy situation of the US. Huge amounts are being invested in the newer shale plays like the Eagle Ford formation in Texas and the Marcellus in Pennsylvania, but the numbers just don't add up.

Production of shale gas has soared in the US in the past 10 years, but it is only compensating for the decline in conventional gas production in the same period. Moreover, while the operators' calculations assume a 40-year productive lifetime for the average shale gas well, the real number is turning out to be around five to seven years.

That means that in the older shale plays they have to drill like crazy just to maintain current production - and since drilling is very expensive, they aren't making a profit. As Exxon CEO Rex Tillerson told a private meeting six months ago: "We're making no money. It's all in the red."