We are no friends of shale gas/oil as it has the potential to poison the lands exploitation is practised on. But that does not garantee it is not going to happen. Here is why. But first we consider what a barrel of oil factually represents. Imagine you have a hometrainer with metal grips and a display as shown in the picture. You click your iPad in a holder so you can watch a number of youtube videos you have collected during the past few days and off you go. You have configured the apparatus such that the effort is high, but not that high that you can’t concentrate on the videos. The room where the hometrainer is located is not heated, which means that the temperature in the winter is ca. 10 degrees Celcius. After five minutes the display says pulse = 100 and generated power = 100 Watt. By that time you pull off your shirt as you have generated enough internal heat to no longer feel discomfort from the 10 degrees Celcius room temperature. After an hour you are finished, a little tired, but not exhausted. You produced 100 Watt * 1 hour = 0.1 kWh. Market value in the US: 1 dollar cent (double that in Europe). In order to produce 1 kWh it would require you to sit on the thing for 10 hours, that’s much more labour than any western trade union would allow to happen. Market value of the electricity fruits of your labour: 10 dollar cent for a hard days work. How many kWh are contained in a barrel of oil? Answer: 1628.2 kWh. A year has 240 workdays. We just figured out that a man can produce slightly less than a kWh per day. This means that one barrel of oil contains the amount of energy the equivalent of which would require you to be glued to your hometrainer for a whopping eight years. Market price one barrel of oil ca. 100$.
Back to shale. If a team of say 20 drillers is able to produce 500 barrel a day, then they convert 20 man days of physical labour into 4000 man year of physical labour equivalent, that is a (redefined) EROEI of zillion. Take into consideration additional labour to produce the drilling equipment, the drivers of trucks carrying all that water and fracking fluids and allow for a factor of three (we are guessing here) and we still have a (newly defined) EROEI of zillion. In the end all costs are labour costs as mother nature does not charge for resources, at least not in dollars. That is the proper way of looking at it and not the volatile financial side of it, which to a large extent consists of high labour costs. If you consider that an average Ukrainian makes 500 dollar a month and an American oil worker maybe 5000$ a month… and both survive… and that Americans are not ten times as good/productive/efficient as Ukrainians, then it is not difficult to guess that after a great default American oil workers could also make 500$ a month (in present day value) and that from that moment on the price of shale oil could come down considerably with collapsing wages. Moral: the question whether shale oil will be exploited or not is determined by EROEI in terms of human physical labour equivalent and not volatile finance. The only hope that remains for fracking not to be applied on a grand scale is that the cost of solar and wind will be lower than that of fracking, otherwise we are ummm… fracked.
P.S. these considerations only apply if one can ‘harvest’ more energy than it takes to produce the harvest. In fact the energy costs for the production of shale oil are relatively high. Wikipedia cites a study from 1984 estimating EROEI values for shale oil 3-10. A more recent study by Adam Brandt even gives a figure of 2.5. We don’t know where the EROEI tipping point is, below which nobody will bother to extract the shale oil from the ground… 2? 3? 5? But considering the enormous energy content of a single barrel of oil, that EROEI value will not be very high. By that time you will certainly not be driving 50 miles to a house party. The scarce amounts of oil will be used for more pressing tasks like ploughing and harvesting.