Boone Pickens, BP Capital founder, shares his thoughts on what oil production would look like without the United States.
73 Comments on "Peak oil without US?"
Nony on Tue, 23rd Dec 2014 12:47 pm
HAHA! It is good to be a cornie now. 🙂
Rusty Baker on Tue, 23rd Dec 2014 1:14 pm
All these doomsayers have been predicting peak oil ever since the first rock oil well was drilled in Titusville, Pennsylvania. They proclaim every year that we’re gonna run out of oil ad nauseum; and every time , they are wrong. Oil production is growing in the USA, the economy is growing, the stock market is hitting all time highs practically every week. I think peak oilers are just mad that their so-called predictions have utterly failed, and they cant admit that they’re wrong.
Rusty Baker on Tue, 23rd Dec 2014 1:29 pm
I’ve been working the oil patch in the Eagle Ford shale in South Texas, and whenever I talk to people in the bars around here , they tell me that oil production will last well over 50 years at current rates of production. If any of you doomers have been paying attention to the news, you would know that fracking in the Bakken and Eagle Ford shales have caused an oil glut in the world, hence lower oil prices. Moreover, I heard from a oil insider buddy of mine that fracking in the Eagle Ford is profitable at 20 dollars a barrel. So, you peakers can keep crying wolf all day long, but I’m gonna pop some champagne bottles and toast to the death of peak oil. The CNBC anchors in this video made Boone Pickens look like a complete fool. Lol
Apneaman on Tue, 23rd Dec 2014 1:40 pm
Notice how the cheery pickers disregarded T Boone saying peak oil occurred in 2005. Compartmentalization is what all deniers do. Peak oil, climate change, addictions it’s all the same cognitive process. See what you want to see hear what you want to hear and ignore anything that does not fit.
Nony on Tue, 23rd Dec 2014 1:50 pm
HAHAHA. We reached peak oil in 2005. Oh…if you exclude the Bakken and the Eagle Ford. Peakers, peakers. TOD is dead for a reason.
How’s that Saudi Arabia decline working out for Staniford? Nosedive toward the desert. Scary, scary. What a joke. And then you peakers don’t even have the manhood to face the music on your failed predictions.
Rusty Baker on Tue, 23rd Dec 2014 2:32 pm
Preach it , brother Nony! Richard Heinberg, James Howard Kunstler, Dmitry Orlov, Boone Pickens and all the rest of the peaker gang are eating crow right now. Peakers just cant handle the truth. They want economic collapse to happen so bad, but unemployment keeps going down and oil production and job growth keeps going up thanks to technological progress. The proof is in the pudding, as they say. C’mon guys, cheer up and enjoy the cheap gasoline- theres plenty to go around. And this is only the beginning of the shale revolution. The Saudis and Russians are a bit angry that America is becoming energy independent. LOL
ghung on Tue, 23rd Dec 2014 2:59 pm
Do any of you fish or hunt? I’ve been fishing and hunting my whole life, and one thing I’ve learned is patience. My point is that I archive (locally) these comments for the moment (could be a while) that they will, as sure as the sun rises, come back to haunt those who revel in pointing out others’ “wrongness”. He who casts the last stone casts the last stone, indeed. I doubt any of you will (as Nony is want to say) “man up”. Those who spend their time criticising others always run for cover WTSHTF; nowhere to be found.
Nony on Tue, 23rd Dec 2014 3:10 pm
That’s my point about the peakers. Look at Hamilton with his $100 is here to stay. He’s had several columns since the crash and has his own blog available. And not a single straight column that says I WAS WRONG.
Nony on Tue, 23rd Dec 2014 3:19 pm
The funny thing is youtube is LITTERED with peaker videos from 2005-2008 saying that TSWHTF by 2013 “at the latest”. And it didn’t happen. Crap. This stuff is more like religious cults who predict the end of the world.
banjo on Tue, 23rd Dec 2014 3:33 pm
Limits to growth revisited says we are on track based on the 1970s study.
You can have the illusion that all is perfect. Then poof it’s gone.
Look at the crazy market actions wild swings ZIRP QE debt at 18trillion?
I hope you understand the economy can be going down the toilet while the market is rising aka inflation.
Now we count consendates as oil and high sulfur grades that give less energy eg 10 bbl of high sulfur oil is eqyivalent to 7.5 bbl in energy of light sweet crude. there has been massive demand destruction aka reduced economic activity.
I’m with you enjoying every second but keeping a close eye on energy.
Happy Christmas everyone
banjo on Tue, 23rd Dec 2014 3:41 pm
Also related is geopolitical situation. Syria Malawi Lybia Ukraine. Arab spring occupy wall street coup in Thailand the list goes on
Every society excluded eg see above add a Iraq Afghanistan severe recessions in Greece and Southern Europe. Means more for anyone left standing.
Point is it’s not all sunshine and roses.
banjo on Tue, 23rd Dec 2014 3:43 pm
Can’t resist the above is part of the collapse
Nony on Tue, 23rd Dec 2014 3:49 pm
Limits to Growth? That thing was MASSIVELY WRONG. Hippy doomer 70s crap.
Nony I hope you’re right. I’ve just booked business class tickets for a six week vacation to south east asia next year.
Nothing doomer about that and should be way cool. Thailand, Burma, Cambodia, Vietnam.
Only seven months to go so before take off but who’s counting 🙂
Nony on Tue, 23rd Dec 2014 4:12 pm
Have fun, banjo. You deserve it.
GregT on Tue, 23rd Dec 2014 4:59 pm
“Limits to Growth? That thing was MASSIVELY WRONG. Hippy doomer 70s crap.”
Thats right Nony. There are no limits to growth on a finite planet.
Once again, you have proven yourself to be a self appointed genius.
Newfie on Tue, 23rd Dec 2014 5:16 pm
Oil is finite. But we’re never going to peak ? Gosh.
antaris on Tue, 23rd Dec 2014 5:25 pm
Nony, she’s not just a pretty face.
tahoe1780 on Tue, 23rd Dec 2014 6:39 pm
Let’s see, 2005 “Oil” production peaks. 2011 the EIA changes the definition of “Oil” and Crude and Condensate production continues to grow, though the ratio starts favoring Condensate. “Steam-washed sand” and “Paint thinner/diluent” provide all of the global, incremental production growth. While the EIA’s graph of “Oil” and other liquids makes it appear supply is growing, nowhere do they publish a graph of “oil” available to society, NET of the increasing amount consumed by oil production itself. Oh, and as the Limits-to-Growth follow-up points out, ore quality has fallen drastically over the past few decades. What once took a barrel of oil to extract now takes 10 or more. So, party on?
shallowsand on Tue, 23rd Dec 2014 6:43 pm
I don’t understand how someone who works in the Eagle Ford is happy about $50 oil.
Nony on Tue, 23rd Dec 2014 7:20 pm
Tahoe: you’ve been listening to too much doomer self-referential yammering. Bakken output is ~WTI. Same API and even sweeter. It gets same price at the refinery door. Its volumes affect the market for crude. It is not even a close substitute for WTI, it’s OIL.
Eagle Ford is a bit higher API (it has gassier sections to the play). But even condensate is crude oil as far as export is concerned and ends up in gasoline (that is the largest use of naptha). And it only sells of 10-20 less than WTI. IOW, a similar delta as oil that is heavy and sour.
It’s actually funny listening to peakers complain about new oil resources being too light when the meme previous to 2005 was that “there wouldn’t be any more light sweet”.
Believe me the refinery customers and the financial markets could CARE LESS about what EIA defines as oil. They just care about chemical composition and how that works in a refinery and what products you can get from the source. Bakken is GOOD OIL.
Rodster on Tue, 23rd Dec 2014 7:20 pm
Rusty says: “the economy is growing, the stock market is hitting all time highs practically every week.?
What a load of bullshit !
If you believe the US economy is growing at 3.5-4% which is what the US Govt claims then I want to sell you the Brooklyn Bridge. Did you mention that 46 million are on either food stamps or on some form of government assistance? You didn’t mention that the US Dept of Labor has been fudging it’s numbers by not counting people who have given up looking for work.
According to John Willimas from shadowstats.com and i’ll take what he says over your BS is that IF and tha’s a big if, the US Govt were really telling the truth and using U3 instead of U6 unemployment figures we’d be in the 23-26% unemployment.
The stock market is at a all time high thanks to The Fed feeding it free money. Did you mention the new law CON-gress just passed where the Banks can use depositors money and pensioners money? Nope.
With all the increased activity in the oil patch and gas and increasing employment,in these United States, how come the miles driven per capita keep plummeting? http://www.eia.gov/todayinenergy/detail.cfm?id=19191
And why has my county resigned itself to just maintaining its roads instead of working on their prior goal (getting them all paved).
And is it just me, but this is 2 days before Christmas and We have yet to get more than a handfull of catalogs, and the stores just don’t seem to have the usual frenzy.
The Sound of Music, is running here in the living room as I post, only the Captain sees the reality coming their way.
See page 2: less than one million of the US C&C is above 50 API.
Page 9 shows EF as 20% condensate. And Bakken as less than 5% condensate.
It’s OIL! There’s a reason why it drives the WTI price down.
P.s. And even condensate is pretty freaking “oily”. It ain’t junk. You can sell it for $$$ to refineries. It affects global supply and demand. It’s not NGLs (which have more limited substitution). It’s not even pentane (the API of pentane is 90!)
Nony on Tue, 23rd Dec 2014 8:10 pm
farmlad: demographics? usage patterns?
I don’t think you can simultaneously blame the decrease on high prices (per Kopits, et al.) and then complain that useage not going up with low prices. But prices are still “relatively high” compared to much of th 80s and 90s. and we are very early in the “moderately lower prices” regime. and there could be some lag.
Nony on Tue, 23rd Dec 2014 8:26 pm
Greg: great article. I had read it also. Huge and relevant.
Figure almost 50% reduction in capex. Even if you can get some cost savings with less drilling (maybe 10%?) it’s still like a 40% reduction in intensivity [is that a concept?]
And the 53* to 34 rigs shows that. They might get some high-grading or increase in pad drilling but then they also may have to do some HBP drilling in the SCOOP/Springer (with consequent rig moves). And a few of the rigs are dedicated to a gas play in connection with Korean partner funding (CANA).
I actually wonder how they can still project a growth this year, with such a massive reduction in CAPEX, especially given their high decline rates. I guess they have a calculation to back it up. They are a pretty decent sized company with a LOT of detail in the 10ks…so I don’t think they would just lie and plan on missing 2015 guidance.
Maybe a bit of the growth in BOE is based on more SCOOP (gassier, thus helping the BOE count more than total oil count.
Anyhow, the comments about pivoting to the SCOOP kinda show that Bakken will take it hard. You gotta figure that transport cost is fixed per barrel. So as price drops eventually Bakken oil becomes less attractive than OK, TX oil because of eating away the profit margin by just transport. Hamm has also publicly said he expects rigs down to 90 in the Bakken this summer. That will cause the field to decline. They need something like 140 rigs to keep up with the Red Queen. We’re already down to 170.
*It was projected as 53 a few months ago.
farmlad on Tue, 23rd Dec 2014 8:35 pm
Nony What’s the possibility that these changes in “usage patterns” are primarily caused by the pattern makers, not being able to fund prior patterns with their current budget?
Nony on Tue, 23rd Dec 2014 8:43 pm
I think it’s a combination of demographics and price. Kopits was right to blame some of that decline on price. If we sustain $60 oil for the next couple years, let’s see if there’s a measurable uptick.
I don’t think it’s only price as there is a pretty smooth buildup and dropdown over the course of 30 years (much of which had some price variations).
Probably 80% demographics and usage patterns and 20% price (with some of the price action having some lag to it…takes people time to decide to live nearer to work and visa versa). They are making tradeoffs of yard size, school quality, crime rate versus commute cost, time, and hipness.
Rusty Baker on Tue, 23rd Dec 2014 8:50 pm
Farmlad, haven’t you heard that automobile sales are picking up with gusto in the USA? More SUV’s and Trucks are being sold in response to lower oil prices. Also, per capita miles driven are already increasing because more people are able to afford more fuel and other consumer goods. And the American economy is revving up like the HEMI under the hood of my Dodge Ram because people have extra cash in their pocket from gas savings. Further farmlad, you citing Shadowstats.com is a blatant example of Doomer/Peaker confirmation bias. We are not living in an economic depression similar to that of the 1930s; John Williams is fudging his stats more than the government could ever hope to do.Your rebuttal to the reality of the shale American Renaissance is absolutely laughable. LOL. Get a grip, buddy; “Peak Oil” is so 2005; get with the times. Anybody with a modicum of common sense is laughing at the absurdity of the Peakers who have been screaming that the sky is falling since the early 2000’s. Texas and North Dakota are swimming in light sweet crude. Why cant yall peakers just show some humility and admit that your predictions were wrong? Have some dignity for God’s sake.
Rusty Baker on Tue, 23rd Dec 2014 9:01 pm
P.S. farmlad, John Williams has been predicting Hyperinflation in the United States for the past 5 years or so- and every year he is completely wrong. You might as well be citing the Mayans predicting the end of the world in 2012 or the people saying that , in the year 2000, everything would collapse. HAHAHA
tahoe1780 on Tue, 23rd Dec 2014 9:04 pm
Nony, I’ve read one definition of OIL is 37.5 API doesn’t have value. Comments on the Eagle Ford? Comments on NET available? Comments on oil/ore processing? Can anyone assure me that the volume of very light stuff sold to Canada as diluent is not counted twice, one at the wellhead when produced and again as part of the volume of “dilbit” imported back?
Northwest Resident on Tue, 23rd Dec 2014 9:06 pm
“More SUV’s and Trucks are being sold in response to lower oil prices.”
Which proves that there is no shortage of ignorant fools in America. Subprime auto loans combined with “cheap” (because they told you it is cheap) gasoline combined with massive doses of propaganda, lies and targeted advertising is GALVANIZING the moron population in America. They are yee-hawing and golly-gee-whizzing their way all the way to signing on that dotted line, thereby playing their idiot roles in keeping the auto industry afloat, for just a little while longer.
Hey, Rusty. You aren’t another one of Nony’s sock puppets, are you? Only reason I ask is we’ve never seen you on this forum before. Then, suddenly, Nony goes off on another post-extravaganza, and you show up to converse with and back up Nony’s really weird and goofy comments. Do you know Papa Smurf too, by any chance?
tahoe1780 on Tue, 23rd Dec 2014 9:07 pm
should read – 37.5 API doesn’t…
tahoe1780 on Tue, 23rd Dec 2014 9:09 pm
I give up. There’s no editing ability. Sheesh!
Nony on Tue, 23rd Dec 2014 9:22 pm
Tahoe: oil at 41 (WTI) is actually slightly more valuable than oil at 37 (Brent).
Even though they are very close, Brent has traditionally traded a hair under WTI. The only reason it trades higher now is the US export restriction.
oil has value all the way from 15 to 80. It’s highest value is right around the middle, 42 or so. If it’s 20, it actually is worth LESS than at 40. And similarly at 60, it’s worth less than at 40. [And of course, if it has more sulfur it is worth less…btw LTO is VERY low sulfur.]
Bottom line: I remember the peakers in 2005 saying that any new sources of oil would be very heavy and sour (like tar sands). What happened was the reverse. Almost pure WTI, with a bit of a slant towards condensate. And VERY low sulfur. Very “sweet”. and sweet is good, sour is bad.
It’s just peaker crybaby silliness that tries to say LTO is not valuable. The refinery customers are very happy to buy it. And it has a direct impact on the world supply-demand balance.
Get out of peaker land. You will hear too much repeated BS. Read real industry sources: IEA, IEA, Platts, NDIC, IHS, NDIC, TX RRC, etc.
“WTI has a gravity of 39.6 API degrees and sulfur content of 0.24 percent. Brent has a gravity of 38.06 API degrees and sulfur content of 0.37 percent. That means the crudes are just about equal in quality, and therefore should be priced about the same if they are trading in the same geographic market. Historically that was the case, and WTI and Brent prices tracked closely, with WTI generally having a slight premium over Brent – until August 2010.”
Nony on Tue, 23rd Dec 2014 9:30 pm
There’s NOTHING WRONG with oil that’s above 37. 39.6, 40, 42, 45 are all fine. 49 ain’t the awful thing that Jeffrey makes it out to be. And there’s plenty of market even for 60.
And sour 25 ain’t “better” than Brent. You can see that by the price.
Lower is not “better”. Middle is best. And all of it is valuable.
Nony on Tue, 23rd Dec 2014 9:34 pm
This is like the 10 millionth time I’ve destroyed the peaker “not oil” meme. But it comes up again and again. Because at the end of the day, you are not scientists, engineers, business analysts. You’re hippies on the Internet who want to read stuff that reinforces your worldview. Rather than learning facts…and having that possibly change your worldview.
Peak oil is more like religion, like political preferences. It’s NOT analytical and truth seeking.
Nony on Tue, 23rd Dec 2014 10:04 pm
btw, Saudi sales prices to Asia in June 2014 (differentials versus a reference grade):
Super light (50.6 API) = +6.45
Extra light (38.5 API) = +4.00
Arab Light (32.5 API) = +1.65
Arab Medium (31) = -.55
Arab Heavy (27) = -3.55
Heavier is NOT better. Yes, at some point you get too light. But whining about 45 API oil and acting like you’d be better off with 25 is JUST SILLY.
shallowsand on Tue, 23rd Dec 2014 10:10 pm
Rusty Baker. You are working in Eagle Ford? How is the mood there about oil dropping about $50 since June. People in the field in Mid-Continent pretty anxious.
Nony on Tue, 23rd Dec 2014 10:19 pm
SS: I welcome Rusty’s personal comments. Everything I can google says the EF is going to do better than some other regions. Really nice rock and good takeaway infrastructure. Bakken has even better rock but has miserable takeaway. Just can’t be doing $12 transport with these low prices (add onto that the new flaring and conditioning regs). Midcontinent and Permian are more marginal and will get hit. [But I’m just a reader.]
shallowsand on Tue, 23rd Dec 2014 10:21 pm
Non, problem w Bakken is location/transportation. Go to Plains price bulletin on their website, it lists dozens of locations/grades posted prices.
Don’t disagree w you and Rusty that shale has had tremendous impact. However, concerned they’ve went too fast and racked up too much debt, and of course crashed the crude price, which impacts all who have production, particularly the shale people themselves.
They have been cash flow negative the whole time for the most part. You or I couldn’t go on like that in a business so why is it going to work for them?
Nony on Tue, 23rd Dec 2014 10:30 pm
Yeah…Bakken transport is going to hit them very hard. There’s actually enough long term volume for more pipelines but significant opposition from MN and IA slowed down putting them in. (Rock likes to say it’s shipper doubt but there’s a lot of evidence of NIMBY opposition to lines that had commercial commitments.)
Nony on Tue, 23rd Dec 2014 10:32 pm
SS:
How could shale crude have crashed the price? All the peakers said it would never amount to anything. I mean, it’s only 4 million barrels added in 4 years. Isn’t that just tiny and small and slow? 😉
btw I would not be surprised if in the next 5 years deflation will destroy more than hyperinflation. Your jumping to conclusions is making you look silly.
ps Enjoy these gas prices, just don’t cry if your investments take a hit.
wildbourgman on Tue, 23rd Dec 2014 10:43 pm
Look, many of these guys that helped create lower oil prices are going to go bankrupt due to lower oil prices, so declare victory while workers in shale plays get pink slips. I’ve been through the ups and downs of the oilfield my entire life and the sad thing is that a whole bunch of folks in the shale plays are so new to it that they aren’t preparing for whats coming. One bright spot is that they will probably have a good holiday season as long as they remain ignorant.
Nony on Tue, 23rd Dec 2014 12:47 pm
HAHA! It is good to be a cornie now. 🙂
Rusty Baker on Tue, 23rd Dec 2014 1:14 pm
All these doomsayers have been predicting peak oil ever since the first rock oil well was drilled in Titusville, Pennsylvania. They proclaim every year that we’re gonna run out of oil ad nauseum; and every time , they are wrong. Oil production is growing in the USA, the economy is growing, the stock market is hitting all time highs practically every week. I think peak oilers are just mad that their so-called predictions have utterly failed, and they cant admit that they’re wrong.
Rusty Baker on Tue, 23rd Dec 2014 1:29 pm
I’ve been working the oil patch in the Eagle Ford shale in South Texas, and whenever I talk to people in the bars around here , they tell me that oil production will last well over 50 years at current rates of production. If any of you doomers have been paying attention to the news, you would know that fracking in the Bakken and Eagle Ford shales have caused an oil glut in the world, hence lower oil prices. Moreover, I heard from a oil insider buddy of mine that fracking in the Eagle Ford is profitable at 20 dollars a barrel. So, you peakers can keep crying wolf all day long, but I’m gonna pop some champagne bottles and toast to the death of peak oil. The CNBC anchors in this video made Boone Pickens look like a complete fool. Lol
Apneaman on Tue, 23rd Dec 2014 1:40 pm
Notice how the cheery pickers disregarded T Boone saying peak oil occurred in 2005. Compartmentalization is what all deniers do. Peak oil, climate change, addictions it’s all the same cognitive process. See what you want to see hear what you want to hear and ignore anything that does not fit.
Nony on Tue, 23rd Dec 2014 1:50 pm
HAHAHA. We reached peak oil in 2005. Oh…if you exclude the Bakken and the Eagle Ford. Peakers, peakers. TOD is dead for a reason.
How’s that Saudi Arabia decline working out for Staniford? Nosedive toward the desert. Scary, scary. What a joke. And then you peakers don’t even have the manhood to face the music on your failed predictions.
Rusty Baker on Tue, 23rd Dec 2014 2:32 pm
Preach it , brother Nony! Richard Heinberg, James Howard Kunstler, Dmitry Orlov, Boone Pickens and all the rest of the peaker gang are eating crow right now. Peakers just cant handle the truth. They want economic collapse to happen so bad, but unemployment keeps going down and oil production and job growth keeps going up thanks to technological progress. The proof is in the pudding, as they say. C’mon guys, cheer up and enjoy the cheap gasoline- theres plenty to go around. And this is only the beginning of the shale revolution. The Saudis and Russians are a bit angry that America is becoming energy independent. LOL
ghung on Tue, 23rd Dec 2014 2:59 pm
Do any of you fish or hunt? I’ve been fishing and hunting my whole life, and one thing I’ve learned is patience. My point is that I archive (locally) these comments for the moment (could be a while) that they will, as sure as the sun rises, come back to haunt those who revel in pointing out others’ “wrongness”. He who casts the last stone casts the last stone, indeed. I doubt any of you will (as Nony is want to say) “man up”. Those who spend their time criticising others always run for cover WTSHTF; nowhere to be found.
Nony on Tue, 23rd Dec 2014 3:10 pm
That’s my point about the peakers. Look at Hamilton with his $100 is here to stay. He’s had several columns since the crash and has his own blog available. And not a single straight column that says I WAS WRONG.
Nony on Tue, 23rd Dec 2014 3:19 pm
The funny thing is youtube is LITTERED with peaker videos from 2005-2008 saying that TSWHTF by 2013 “at the latest”. And it didn’t happen. Crap. This stuff is more like religious cults who predict the end of the world.
banjo on Tue, 23rd Dec 2014 3:33 pm
Limits to growth revisited says we are on track based on the 1970s study.
You can have the illusion that all is perfect. Then poof it’s gone.
Look at the crazy market actions wild swings ZIRP QE debt at 18trillion?
I hope you understand the economy can be going down the toilet while the market is rising aka inflation.
Now we count consendates as oil and high sulfur grades that give less energy eg 10 bbl of high sulfur oil is eqyivalent to 7.5 bbl in energy of light sweet crude. there has been massive demand destruction aka reduced economic activity.
I’m with you enjoying every second but keeping a close eye on energy.
Happy Christmas everyone
banjo on Tue, 23rd Dec 2014 3:41 pm
Also related is geopolitical situation. Syria Malawi Lybia Ukraine. Arab spring occupy wall street coup in Thailand the list goes on
Every society excluded eg see above add a Iraq Afghanistan severe recessions in Greece and Southern Europe. Means more for anyone left standing.
Point is it’s not all sunshine and roses.
banjo on Tue, 23rd Dec 2014 3:43 pm
Can’t resist the above is part of the collapse
Nony on Tue, 23rd Dec 2014 3:49 pm
Limits to Growth? That thing was MASSIVELY WRONG. Hippy doomer 70s crap.
https://www.google.com/search?q=limits+to+growth+failed+predictions
banjo on Tue, 23rd Dec 2014 4:07 pm
Nony I hope you’re right. I’ve just booked business class tickets for a six week vacation to south east asia next year.
Nothing doomer about that and should be way cool. Thailand, Burma, Cambodia, Vietnam.
Only seven months to go so before take off but who’s counting 🙂
Nony on Tue, 23rd Dec 2014 4:12 pm
Have fun, banjo. You deserve it.
GregT on Tue, 23rd Dec 2014 4:59 pm
“Limits to Growth? That thing was MASSIVELY WRONG. Hippy doomer 70s crap.”
Thats right Nony. There are no limits to growth on a finite planet.
Once again, you have proven yourself to be a self appointed genius.
Newfie on Tue, 23rd Dec 2014 5:16 pm
Oil is finite. But we’re never going to peak ? Gosh.
antaris on Tue, 23rd Dec 2014 5:25 pm
Nony, she’s not just a pretty face.
tahoe1780 on Tue, 23rd Dec 2014 6:39 pm
Let’s see, 2005 “Oil” production peaks. 2011 the EIA changes the definition of “Oil” and Crude and Condensate production continues to grow, though the ratio starts favoring Condensate. “Steam-washed sand” and “Paint thinner/diluent” provide all of the global, incremental production growth. While the EIA’s graph of “Oil” and other liquids makes it appear supply is growing, nowhere do they publish a graph of “oil” available to society, NET of the increasing amount consumed by oil production itself. Oh, and as the Limits-to-Growth follow-up points out, ore quality has fallen drastically over the past few decades. What once took a barrel of oil to extract now takes 10 or more. So, party on?
shallowsand on Tue, 23rd Dec 2014 6:43 pm
I don’t understand how someone who works in the Eagle Ford is happy about $50 oil.
Nony on Tue, 23rd Dec 2014 7:20 pm
Tahoe: you’ve been listening to too much doomer self-referential yammering. Bakken output is ~WTI. Same API and even sweeter. It gets same price at the refinery door. Its volumes affect the market for crude. It is not even a close substitute for WTI, it’s OIL.
Eagle Ford is a bit higher API (it has gassier sections to the play). But even condensate is crude oil as far as export is concerned and ends up in gasoline (that is the largest use of naptha). And it only sells of 10-20 less than WTI. IOW, a similar delta as oil that is heavy and sour.
It’s actually funny listening to peakers complain about new oil resources being too light when the meme previous to 2005 was that “there wouldn’t be any more light sweet”.
Believe me the refinery customers and the financial markets could CARE LESS about what EIA defines as oil. They just care about chemical composition and how that works in a refinery and what products you can get from the source. Bakken is GOOD OIL.
Rodster on Tue, 23rd Dec 2014 7:20 pm
Rusty says: “the economy is growing, the stock market is hitting all time highs practically every week.?
What a load of bullshit !
If you believe the US economy is growing at 3.5-4% which is what the US Govt claims then I want to sell you the Brooklyn Bridge. Did you mention that 46 million are on either food stamps or on some form of government assistance? You didn’t mention that the US Dept of Labor has been fudging it’s numbers by not counting people who have given up looking for work.
According to John Willimas from shadowstats.com and i’ll take what he says over your BS is that IF and tha’s a big if, the US Govt were really telling the truth and using U3 instead of U6 unemployment figures we’d be in the 23-26% unemployment.
The stock market is at a all time high thanks to The Fed feeding it free money. Did you mention the new law CON-gress just passed where the Banks can use depositors money and pensioners money? Nope.
Nony on Tue, 23rd Dec 2014 7:33 pm
http://www.turnermason.com/blog/2014/08/04/ndpc-releases-bakken-crude/
API=41 with a min of 36 and a max of 45, from 150 samples!
That is WTI, dude. Kissing cousins to it.
Nony on Tue, 23rd Dec 2014 7:39 pm
http://inside.mines.edu/~jjechura/Refining/02_Feedstocks_&_Products.pdf
(see pages 23 and 24)
It’s oil. It’s oil. It’s oil.
People will pay you for it.
Nony on Tue, 23rd Dec 2014 7:42 pm
http://www.argusmedia.com/~/media/Files/PDFs/White-Paper/Bakken-Crd.pdf?la=en
It’s TRADED.
“Bakken crude at Clearbrook is light sweet crude oil with a typical stream quality of 0.17-0.20% sulfur and 40-42° API gravity.”
GregT on Tue, 23rd Dec 2014 7:57 pm
“Continental Resources cuts spending in Bakken oil field by $2.5B”
“Falling price of oil eats into capital rollout by pioneer of shale oil”
http://www.cbc.ca/news/business/continental-resources-cuts-spending-in-bakken-oil-field-by-2-5b-1.2882476
farmlad on Tue, 23rd Dec 2014 7:58 pm
With all the increased activity in the oil patch and gas and increasing employment,in these United States, how come the miles driven per capita keep plummeting? http://www.eia.gov/todayinenergy/detail.cfm?id=19191
And why has my county resigned itself to just maintaining its roads instead of working on their prior goal (getting them all paved).
And is it just me, but this is 2 days before Christmas and We have yet to get more than a handfull of catalogs, and the stores just don’t seem to have the usual frenzy.
The Sound of Music, is running here in the living room as I post, only the Captain sees the reality coming their way.
Nony on Tue, 23rd Dec 2014 8:02 pm
http://www.eia.gov/analysis/petroleum/crudetypes/pdf/crudetypes.pdf
See page 2: less than one million of the US C&C is above 50 API.
Page 9 shows EF as 20% condensate. And Bakken as less than 5% condensate.
It’s OIL! There’s a reason why it drives the WTI price down.
P.s. And even condensate is pretty freaking “oily”. It ain’t junk. You can sell it for $$$ to refineries. It affects global supply and demand. It’s not NGLs (which have more limited substitution). It’s not even pentane (the API of pentane is 90!)
Nony on Tue, 23rd Dec 2014 8:10 pm
farmlad: demographics? usage patterns?
I don’t think you can simultaneously blame the decrease on high prices (per Kopits, et al.) and then complain that useage not going up with low prices. But prices are still “relatively high” compared to much of th 80s and 90s. and we are very early in the “moderately lower prices” regime. and there could be some lag.
Nony on Tue, 23rd Dec 2014 8:26 pm
Greg: great article. I had read it also. Huge and relevant.
Figure almost 50% reduction in capex. Even if you can get some cost savings with less drilling (maybe 10%?) it’s still like a 40% reduction in intensivity [is that a concept?]
And the 53* to 34 rigs shows that. They might get some high-grading or increase in pad drilling but then they also may have to do some HBP drilling in the SCOOP/Springer (with consequent rig moves). And a few of the rigs are dedicated to a gas play in connection with Korean partner funding (CANA).
I actually wonder how they can still project a growth this year, with such a massive reduction in CAPEX, especially given their high decline rates. I guess they have a calculation to back it up. They are a pretty decent sized company with a LOT of detail in the 10ks…so I don’t think they would just lie and plan on missing 2015 guidance.
Maybe a bit of the growth in BOE is based on more SCOOP (gassier, thus helping the BOE count more than total oil count.
Anyhow, the comments about pivoting to the SCOOP kinda show that Bakken will take it hard. You gotta figure that transport cost is fixed per barrel. So as price drops eventually Bakken oil becomes less attractive than OK, TX oil because of eating away the profit margin by just transport. Hamm has also publicly said he expects rigs down to 90 in the Bakken this summer. That will cause the field to decline. They need something like 140 rigs to keep up with the Red Queen. We’re already down to 170.
*It was projected as 53 a few months ago.
farmlad on Tue, 23rd Dec 2014 8:35 pm
Nony What’s the possibility that these changes in “usage patterns” are primarily caused by the pattern makers, not being able to fund prior patterns with their current budget?
Nony on Tue, 23rd Dec 2014 8:43 pm
I think it’s a combination of demographics and price. Kopits was right to blame some of that decline on price. If we sustain $60 oil for the next couple years, let’s see if there’s a measurable uptick.
I don’t think it’s only price as there is a pretty smooth buildup and dropdown over the course of 30 years (much of which had some price variations).
Probably 80% demographics and usage patterns and 20% price (with some of the price action having some lag to it…takes people time to decide to live nearer to work and visa versa). They are making tradeoffs of yard size, school quality, crime rate versus commute cost, time, and hipness.
Rusty Baker on Tue, 23rd Dec 2014 8:50 pm
Farmlad, haven’t you heard that automobile sales are picking up with gusto in the USA? More SUV’s and Trucks are being sold in response to lower oil prices. Also, per capita miles driven are already increasing because more people are able to afford more fuel and other consumer goods. And the American economy is revving up like the HEMI under the hood of my Dodge Ram because people have extra cash in their pocket from gas savings. Further farmlad, you citing Shadowstats.com is a blatant example of Doomer/Peaker confirmation bias. We are not living in an economic depression similar to that of the 1930s; John Williams is fudging his stats more than the government could ever hope to do.Your rebuttal to the reality of the shale American Renaissance is absolutely laughable. LOL. Get a grip, buddy; “Peak Oil” is so 2005; get with the times. Anybody with a modicum of common sense is laughing at the absurdity of the Peakers who have been screaming that the sky is falling since the early 2000’s. Texas and North Dakota are swimming in light sweet crude. Why cant yall peakers just show some humility and admit that your predictions were wrong? Have some dignity for God’s sake.
Rusty Baker on Tue, 23rd Dec 2014 9:01 pm
P.S. farmlad, John Williams has been predicting Hyperinflation in the United States for the past 5 years or so- and every year he is completely wrong. You might as well be citing the Mayans predicting the end of the world in 2012 or the people saying that , in the year 2000, everything would collapse. HAHAHA
tahoe1780 on Tue, 23rd Dec 2014 9:04 pm
Nony, I’ve read one definition of OIL is 37.5 API doesn’t have value. Comments on the Eagle Ford? Comments on NET available? Comments on oil/ore processing? Can anyone assure me that the volume of very light stuff sold to Canada as diluent is not counted twice, one at the wellhead when produced and again as part of the volume of “dilbit” imported back?
Northwest Resident on Tue, 23rd Dec 2014 9:06 pm
“More SUV’s and Trucks are being sold in response to lower oil prices.”
Which proves that there is no shortage of ignorant fools in America. Subprime auto loans combined with “cheap” (because they told you it is cheap) gasoline combined with massive doses of propaganda, lies and targeted advertising is GALVANIZING the moron population in America. They are yee-hawing and golly-gee-whizzing their way all the way to signing on that dotted line, thereby playing their idiot roles in keeping the auto industry afloat, for just a little while longer.
Hey, Rusty. You aren’t another one of Nony’s sock puppets, are you? Only reason I ask is we’ve never seen you on this forum before. Then, suddenly, Nony goes off on another post-extravaganza, and you show up to converse with and back up Nony’s really weird and goofy comments. Do you know Papa Smurf too, by any chance?
tahoe1780 on Tue, 23rd Dec 2014 9:07 pm
should read – 37.5 API doesn’t…
tahoe1780 on Tue, 23rd Dec 2014 9:09 pm
I give up. There’s no editing ability. Sheesh!
Nony on Tue, 23rd Dec 2014 9:22 pm
Tahoe: oil at 41 (WTI) is actually slightly more valuable than oil at 37 (Brent).
Even though they are very close, Brent has traditionally traded a hair under WTI. The only reason it trades higher now is the US export restriction.
oil has value all the way from 15 to 80. It’s highest value is right around the middle, 42 or so. If it’s 20, it actually is worth LESS than at 40. And similarly at 60, it’s worth less than at 40. [And of course, if it has more sulfur it is worth less…btw LTO is VERY low sulfur.]
Bottom line: I remember the peakers in 2005 saying that any new sources of oil would be very heavy and sour (like tar sands). What happened was the reverse. Almost pure WTI, with a bit of a slant towards condensate. And VERY low sulfur. Very “sweet”. and sweet is good, sour is bad.
It’s just peaker crybaby silliness that tries to say LTO is not valuable. The refinery customers are very happy to buy it. And it has a direct impact on the world supply-demand balance.
Get out of peaker land. You will hear too much repeated BS. Read real industry sources: IEA, IEA, Platts, NDIC, IHS, NDIC, TX RRC, etc.
Nony on Tue, 23rd Dec 2014 9:27 pm
https://rbnenergy.com/are-they-never-ever-getting-back-together-again
“WTI has a gravity of 39.6 API degrees and sulfur content of 0.24 percent. Brent has a gravity of 38.06 API degrees and sulfur content of 0.37 percent. That means the crudes are just about equal in quality, and therefore should be priced about the same if they are trading in the same geographic market. Historically that was the case, and WTI and Brent prices tracked closely, with WTI generally having a slight premium over Brent – until August 2010.”
Nony on Tue, 23rd Dec 2014 9:30 pm
There’s NOTHING WRONG with oil that’s above 37. 39.6, 40, 42, 45 are all fine. 49 ain’t the awful thing that Jeffrey makes it out to be. And there’s plenty of market even for 60.
And sour 25 ain’t “better” than Brent. You can see that by the price.
Lower is not “better”. Middle is best. And all of it is valuable.
Nony on Tue, 23rd Dec 2014 9:34 pm
This is like the 10 millionth time I’ve destroyed the peaker “not oil” meme. But it comes up again and again. Because at the end of the day, you are not scientists, engineers, business analysts. You’re hippies on the Internet who want to read stuff that reinforces your worldview. Rather than learning facts…and having that possibly change your worldview.
Peak oil is more like religion, like political preferences. It’s NOT analytical and truth seeking.
Nony on Tue, 23rd Dec 2014 10:04 pm
btw, Saudi sales prices to Asia in June 2014 (differentials versus a reference grade):
Super light (50.6 API) = +6.45
Extra light (38.5 API) = +4.00
Arab Light (32.5 API) = +1.65
Arab Medium (31) = -.55
Arab Heavy (27) = -3.55
Heavier is NOT better. Yes, at some point you get too light. But whining about 45 API oil and acting like you’d be better off with 25 is JUST SILLY.
shallowsand on Tue, 23rd Dec 2014 10:10 pm
Rusty Baker. You are working in Eagle Ford? How is the mood there about oil dropping about $50 since June. People in the field in Mid-Continent pretty anxious.
Nony on Tue, 23rd Dec 2014 10:19 pm
SS: I welcome Rusty’s personal comments. Everything I can google says the EF is going to do better than some other regions. Really nice rock and good takeaway infrastructure. Bakken has even better rock but has miserable takeaway. Just can’t be doing $12 transport with these low prices (add onto that the new flaring and conditioning regs). Midcontinent and Permian are more marginal and will get hit. [But I’m just a reader.]
shallowsand on Tue, 23rd Dec 2014 10:21 pm
Non, problem w Bakken is location/transportation. Go to Plains price bulletin on their website, it lists dozens of locations/grades posted prices.
Don’t disagree w you and Rusty that shale has had tremendous impact. However, concerned they’ve went too fast and racked up too much debt, and of course crashed the crude price, which impacts all who have production, particularly the shale people themselves.
They have been cash flow negative the whole time for the most part. You or I couldn’t go on like that in a business so why is it going to work for them?
Nony on Tue, 23rd Dec 2014 10:30 pm
Yeah…Bakken transport is going to hit them very hard. There’s actually enough long term volume for more pipelines but significant opposition from MN and IA slowed down putting them in. (Rock likes to say it’s shipper doubt but there’s a lot of evidence of NIMBY opposition to lines that had commercial commitments.)
Nony on Tue, 23rd Dec 2014 10:32 pm
SS:
How could shale crude have crashed the price? All the peakers said it would never amount to anything. I mean, it’s only 4 million barrels added in 4 years. Isn’t that just tiny and small and slow? 😉
farmlad on Tue, 23rd Dec 2014 10:36 pm
Rusty
Whats up with all this BS The only citing I did was from The US government
http://www.eia.gov/todayinenergy/detail.cfm?id=19191
Where did I cite shadowstats?
btw I would not be surprised if in the next 5 years deflation will destroy more than hyperinflation. Your jumping to conclusions is making you look silly.
ps Enjoy these gas prices, just don’t cry if your investments take a hit.
wildbourgman on Tue, 23rd Dec 2014 10:43 pm
Look, many of these guys that helped create lower oil prices are going to go bankrupt due to lower oil prices, so declare victory while workers in shale plays get pink slips. I’ve been through the ups and downs of the oilfield my entire life and the sad thing is that a whole bunch of folks in the shale plays are so new to it that they aren’t preparing for whats coming. One bright spot is that they will probably have a good holiday season as long as they remain ignorant.