The EIA is grossly overestimating US shale

In short, Hughes says that of the 13 major shale plays analyzed in the PCI report, the EIA has "extremely optimistic" outlooks for nine of them. Of the remaining four, three of them are "highly optimistic," and only one – the Woodford Play in Oklahoma – is ranked as "moderately optimistic."

He notes that in some instances, the EIA's forecasts are so optimistic that the production volumes exceed the agency's own estimates for proven reserves plus unproven reserves. The EIA also assumes that every last drop of proven reserves is produced, along with a high percentage of unproven reserves by 2050.

"Although the 'shale revolution' has provided a reprieve from what just 15 years ago was thought to be a terminal decline in oil and gas production in the US," Hughes writes, "this reprieve is temporary, and the US would be well advised to plan for much-reduced shale oil and gas production in the long term."

Regardless of the geology, climate policy and waning investor interest will likely result in a lot of oil being left in the ground. Hughes says that the EIA's figures are optimistic, even without considering any mandates to cut greenhouse gas emissions. "If US energy policy actually reflected the need to mitigate climate change…the EIA's forecasts for tight oil and shale gas production through 2050 make even less sense."