If you’ve ever shaken a can of soda pop good and hard and then opened it, you know something about fracking that countless column inches of media cheerleading on the subject have sedulously avoided. The technique is different, to be sure, but the effect of hydrofracturing on oil and gas trapped in shale is not unlike the effect of a hard shake on the carbon dioxide dissolved in soda pop: in both cases, you get a sudden rush toward the outlet, which releases most of what you’re going to get. Oil and gas production from fracked wells thus starts out high but suffers ferocious decline rates—up to 90% in the first year alone. Where a conventional, unfracked well can produce enough oil or gas to turn a profit for decades if it’s well managed, fracked wells in tight shales like the Bakken and Marcellus quite often stop becoming a significant source of oil or gas within a few years of drilling.

The obvious response to this problem is to drill more wells, and this accordingly happened. That isn’t a panacea, however. Oil and gas exploration is a highly sophisticated science, and oil and gas drilling companies can normally figure out the best sites for wells long before the drill bit hits the ground. Since they are in business to make money, they normally drill the best sites first. When that sensible habit intersects with the rapid production decline rates found in fracked wells, the result is a brutal form of economic arithmetic: as the best sites are drilled and the largest reserves drained, drilling companies have to drill more and more wells to keep the same amount of oil or gas flowing. Costs go up without increasing production, and unless prices rise, profits get hammered and companies start to go broke.

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What made this barrage of propaganda all the more fascinating was the immense gaps that separated it from the realities on and under the ground in Pennsylvania and North Dakota. The drastic depletion rates from fracked wells rarely got a mention, and the estimates of how much oil and gas were to be found in the various shale deposits zoomed upwards with wild abandon. Nor did the frenzy stop there; blatant falsehoods were served up repeatedly by people who had every reason to know that they were false—I’m thinking here of the supposedly energy-literate pundits who insisted, repeatedly and loudly, that the Green River shale in the southwest was just like the Bakken and Marcellus shales, and would yield abundant oil and gas once it was fracked. (The Green River shale, for those who haven’t been keeping score, contains no oil or gas at all; instead, it contains kerogen, a waxy hydrocarbon goo that would have turned into oil or gas if it had stayed deep underground for a few million years longer, and kerogen can’t be extracted by fracking—or, for that matter, by any other economically viable method.)

Those who were paying attention to all the hoopla may have noticed that the vaporous claims being retailed by the mainstream media around the fracking boom resembled nothing so much as the equally insubstantial arguments most of the same media were serving up around the housing boom in the years immediately before the 2008 crash. The similarity isn’t accidental, either. The same thing happened in both cases: Wall Street got into the act.

http://www.resilience.org/stories/2013-02-27/the-end-of-the-shale-bubble