Last week when I laid out seven misconceptions about energy shared by the public and policymakers, the pushback I received had little to do with the actual data I used to demonstrate my point. This is probably because the data are from official public sources and available to anyone with an Internet connection to inspect and verify. Most of the pushback bore the sentiment, "Well, you are right about the data. But, just you wait. There are big things that are going to happen in the future with (fill in your favorite fossil fuel) because of (fill in your favorite technology and/or name of supposedly large fossil fuel deposit)."

This is what I refer to as the "wonders-yet-to-come argument." It's an argument that ought to be familiar (and tiresome) to most everyone. It's been used frequently since the oil price hit a long-term low of $10.72 a barrel in December 1998. Even as prices rose ten-fold and supplies advanced only at a snail's pace from 2005 onward, we were treated to frequent pronouncements about how the wonders of technology would deliver cheap, abundant oil soon. Though technology has failed to provide cheap oil, the wonders-yet-to-come argument is still being used to great effect on unsuspecting minds.

We've actually had a good test of this argument since 1998 in the oil markets. Around that time it was deepwater drilling that was going to keep the world awash in cheap oil for decades to come. Check out how many times both the International Energy Outlook 2000 produced by the U.S. Energy Information Administration (EIA) and the World Energy Outlook 2000 produced by the International Energy Agency (IEA) mentioned the key role deepwater oil development was expected to play in raising world production and keeping prices low.

That didn't quite work out. In the decade that followed, during which deepwater drilling was going to conquer the world and the oil markets, oil prices embarked on a sustained upward trajectory hitting an all-time record of $147 a barrel in 2008. After dipping in the face of the financial meltdown in the second half of that year, the oil price has stabilized at the highest average daily price ever over the last three years.

But, we are now supposedly in for a second wave of wonders-yet-to-come with regard to oil, that is, the use of high-volume, slickwater hydraulic fracturing combined with horizontal drilling to extract previously inaccessible oil from deep shale deposits. This wonder--currently centered in the United States--is supposed to glut the world with oil and drive down the price; and this time, the wonder-workers proclaim, it'll work.

Well, the record so far is not compelling. And, even government and international agencies that had been cheerleaders during the boom are seeing the writing on the wall. The IEA has curbed its previous enthusiasm and now says in its latest World Energy Outlook that, while fracking and deepwater exploration have been successful in extracting previously inaccessible oil deposits, "this does not mean that the world is on the cusp of a new era of oil abundance."

The EIA nows believes that U.S. crude oil production will peak in 2016 and then begin to decline after 2020. So much for America leading the charge to a new long-term era of cheap, abundant oil. As Steve Andrews recently wrote, this forecast implies negligible supply from what has until now been touted as America's largest deposit of frackable tight oil, Calfornia's Monterey Formation.

It seems that the most fracking can do for now is to keep worldwide oil production from sagging--which would have happened without the fracking boom. So, the results are palpable, but less than wondrous. This particular wonder hasn't cratered prices as foretold. And, in fact, if it did, fracking would no longer be profitable since it requires prices above $80 barrel. So, the fracking experiment is now delivering marginal increases in world supply at historically expensive prices. It's no wonder that few people find fracking wonderful on their wallets or their surrounding environment.

But, I am told that we are going to see the fracking phenomenon spread across the world and then--finally, then--we'll see the previously forecast wonders-yet-to-come actually unfold.

I wonder.

By now, if you purchase gasoline or fuel oil or any of the derivatives of oil, you should be suffering from wonder-fatigue. When is all this wonder actually going to take down the price of oil? Keep in mind that it took just five years for the oil price to fall from the mid-$30 range per barrel in 1981, the top of the last oil boom, to $10.83 per barrel in mid-1986. A comparable fall from oil's 2008 high of $147 would have oil trading around $45 today.

But now, five and one-half years after the previous absolute price peak, the world benchmark Brent Crude closed at $107 (January 3). In fact, the average daily price of Brent Crude has been over $100 for each of the last three years, remaining in record territory. Those years beat out even 2008, the year of the oil price spike when daily prices averaged $96.94. So, people are paying more for their oil on a daily basis now than they did in the year of the supposed top.

Yes, I'm wondering, but not about the magic of new technologies; rather, I'm wondering about their limits. Geology is now showing that even impressive new technologies cannot necessarily conquer high-priced oil.

"Ah," you say, "you're leaving out natural gas. The fracking boom has certainly been a real wonder in the natural gas industry."

Actually, it turns out that what we should really be wondering is how so many smart people could get sucked into an investment scheme that lost so much money. The U.S. natural gas industry overproduced badly and is still suffering today from that mistake. It is doubtful that all but the most prolific shale gas wells are making any money--even at current prices which have more than doubled since the bottom. Some will say this is an incorrect assessment; but, these people tend not to include the cost of land and lease acquisition. Exxon Mobil Corp.'s CEO Rex Tillerson, whose company has one of the largest portfolios of U.S. shale gas assets, was succinct about shale gas profitability in mid-2012: "We are losing our shirts."

Early last year another industry insider, Matt Fox, ConocoPhillips' executive vice president of exploration and production, suggested that U.S. natural gas prices would have to go much higher from here to entice drillers back into the natural gas fields in force.

We now see the results of what shale gas expert Art Berman called "an improbable business model" deployed in the shale gas fields of America. That model was one "that has no barriers to entry except access to capital, that provides a source of cheap and abundant gas, and that somehow also allows for great profit." As it turns out, the model doesn't actually produce cheap natural gas. It produces mostly expensive natural gas that must be sold at a loss. And, this is the model that the natural gas industry's wonder-workers somehow believe will succeed abroad on deposits that to date haven't proven to be that easy to tap.

(We may soon see the flip side of this model because U.S. drilling for gas has declined precipitously in the face of financial losses. The result has been essentially flat production of U.S. marketed natural gas since January 2012. As the quickly declining shale gas wells give out, expect more price action on the upside in the natural gas market.)

In the past we've been served up wonders-yet-to-come in nuclear power which turned out to be much more expensive and much more dangerous than its proponents had advertised. And, we await the wonders of fusion energy which used to be 25 years away 25 years ago, and today is 40 years away from commercial application if the website for its main testing and development facility is to be believed. Sometimes wonders don't arrive on schedule.

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Despite all this, wonders-yet-to-come seem to dominate U.S. energy policy. There is talk of changing laws to allow the exporting of oil and natural gas. There is talk of American energy independence. There is talk of an American energy renaissance and the ruination of OPEC. It is all very breathless and essentially baseless.

It is an hysteria created by an industry that can no longer deliver on the promise of cheap, reliable energy--an industry that finds itself in the fight of its life, a fight against physics and geology that is increasingly unbending in the face of wonders-yet-to-come.