Experts Skeptical of Energy Boom

January 11, 2013 10:28 AM

Natural gas and crude oil have been in the news a lot over the last few years. New advances in drilling and production have poised the United States to become energy independent on the backs of robust domestic crude and natural gas. Prices are at or near historic lows, stocks on hand for both are above five-year averages and both crude and nattie are making headlines. Some have gone so far as to say that the industry may well prove to be as fundamentally important to the American way of life as the Internet.

But not everyone agrees. Motley Fool reports on a fresh perspective from industry experts that is not nearly as "rosy". At an energy conference at the University of Texas, Motley Fool notes that principal and consulting Geologist at Labyrinth Consulting Services Arthur Berman sees these tight oil plays as deceptively productive. According to Berman's research, output from the Bakken shale could fall as much as 40% within a year unless over 1,500 new wells are drilled.

The idea is that, while these tight formations are highly productive in early stages, the falloff in output has yet to be understood fully. The potential is for domestic supply to fall short of projections in a hurry, and the resulting shortfalls could do more harm than good for the U.S. economy.

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