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Shale Gas Reality Check

Shale Gas Reality Check: Revisiting the U.S. Department of Energy Play-by-Play Forecasts through 2040 from...

In October 2014, Post Carbon Institute published the results of what likely remains the most thorough independent analysis of U.S. shale gas and tight oil production ever conducted. The process of drilling for shale gas and tight oil is known colloquially as “fracking” and has drawn a great deal of controversy—considered by some as an energy revolution and others as an environmental and human health catastrophe.

Much of the cost-benefit debate over fracking has come down to the perception of just how much domestic oil and gas it can produce and at what cost. To answer this question, policymakers, the media, and the general public have typically turned to the U.S. Department of Energy’s Energy Information Administration (EIA), which every year publishes its Annual Energy Outlook (AEO).

In Drilling Deeper, PCI Fellow David Hughes took a hard look at the EIA’s AEO2014 and found that its projections for future production and prices suffered from a worrisome level of optimism. This lead us and others to raise important questions about the wisdom of some energy policies and infrastructure projects (for example, the approval of Liquified Natural Gas export terminals and the lifting of the crude oil export ban) that have been pursued largely on the basis of the EIA’s rosy forecasts.
Recently, the EIA released its Annual Energy Outlook 2015 and so we asked David Hughes to see how the EIA’s projections and assumptions have changed over the last year, and to assess the AEO2015 against both Drilling Deeper and up-to-date production data from key shale gas and tight oil plays. What follows are Hughes’s findings regarding shale gas. The AEO2015’s tight oil projections will be reviewed in early September 2015.
Key Conclusions
  • The EIA’s Annual Energy Outlook 2015 is even more optimistic than the AEO2014, which we showed in Drilling Deeper suffered from a great deal of questionable optimism. The AEO2015 reference case projection of total shale gas production from 2014 through 2040 is 9%, or 36 tcf, greater than AEO2014. Cumulative production from the major plays in AEO2015, which account for 80% of this production, is 50% higher than Hughes’s “Most Likely” case in Drilling Deeper, and the projected production rate in 2040 is 170% greater. In AEO2015, the EIA is counting much more on unnamed plays or ones—like the Utica Shale—that aren’t as yet producing very much shale gas.
  • The only way to meet projections for most of these plays would be for production to ramp up massively years from now. But because the best wells are drilled first, and decline rates are so steep, this means that the EIA is likely counting on new technologies that aren’t yet proven or even developed.
  • It’s very difficult to see how unknown new technologies would be brought online, and be sufficient to overcome poorer and poorer quality drilling locations, without the price of natural gas going up well beyond what the EIA forecasts.
  • As it has acknowledged, the EIA’s track record in estimating resources and projecting future production and prices has historically been poor. Admittedly, forecasting such things is very challenging, especially as it relates to shifting economic and technological realities. But the below-ground fundamentals— the geology of these plays and how well they are understood—don’t change wildly from year to year. And yet the AEO2015 and AEO2014 reference cases have major differences between them; production rates have been revised both down and up by amounts exceeding 40% in some plays.
After closely reviewing the Annual Energy Outlook 2015, David Hughes raises some important, substantive questions: Why is there so much difference at the play level between AEO2014 and AEO2015? Why does Marcellus production surge post-2025, rising to a new all-time high by 2040? Why does Haynesville production surge beginning in 2016, rising to a new high that is triple current production rates in 2038? How can Eagle Ford production reach a plateau in 2021 and remain on it for the next two decades?
America’s energy future is largely determined by the assumptions and expectations we have today. And because energy plays such a critical role in the health of our economy, environment, and people, the importance of getting it right on energy can’t be overstated.
It’s for this reason that we encourage everyone—citizens, policymakers, and the media—to not take the EIA’s rosy projecti

Post Carbon Institute



40 Comments on "Shale Gas Reality Check"

  1. buddavis on Tue, 28th Jul 2015 7:50 am 

    Read the report and it is interesting. The main point for me and the biggest negative to the EIA estimates in future years is how they predict rates to decline, then increase in future years. Regardless of how you feel about the shale plays, in my opinion, once these plays start to decline, it will require an unrealistic number of rigs to reverse the decline. Especially since so many of the best locations are drilled up.

  2. Idontknowmyself on Tue, 28th Jul 2015 8:09 am 

    Statoil profit falls on foreign hit

    OSLO– Statoil ASA’s ambitious expansion in oil production beyond Norwegian shores is increasingly yielding an unwanted byproduct: losses.

    The state-run oil and gas company posted a 16% drop in second-quarter profit on Tuesday, hit by the continuous slide in oil prices as well as further losses from overseas operations.

    Net profit, boosted by gains from disposals, stood at 10 billion Norwegian kroner ($1.22bn) in the three months to June 30, compared with 11.9 billion kroner in the same period a year earlier. Revenue fell 13% to 124 billion kroner, beating expectations of 122 billion kroner.

    Statoil said that while its Norwegian business generated diminished operating profit of 17.9 billion kroner, foreign businesses had an operating loss of 0.1 billion kroner, its third consecutive quarter of red ink.

    “A marginally negative result isn’t satisfactory,” Chief Executive Eldar Saetre said in an interview. “We are working quite actively on this now.”

    The steady erosion in oil prices could jeopardize Statoil’s 15-year drive to offset declining output in Norway by investing in foreign fields.

    Statoil’s foreign output reached 744,000 barrels a day last year, from under 100,000 barrels a day at the turn of the Millennium. The company now pumps oil in 11 foreign countries, including Angola, Canada, the U.S. and Brazil.

    But much of that expansion was conducted when oil prices exceeded $80 or even $100 per barrel. As a result, many of Statoil’s foreign fields require higher prices than the current $53 per barrel for Brent crude to be profitable.

    In contrast, many of Statoil’s Norwegian fields were developed decades ago in a $20-per-barrel environment, and can produce cheaper oil.

    Statoil said it booked a one-off gain of 12.3 billion kroner in the second quarter on the sale of its interest in Azerbaijan’s Shah Deniz gas field.

    Pareto Securities analyst Trond Omdal said he expected Statoil to continue selling or slimming down assets, notably in Algeria and Norway, to fund future dividends and capital expenditure, and avoid taking on too much debt.

    “At current prices, Statoil’s international operations aren’t profitable, especially in North America,” Mr. Omdal said.

    Formed in 1972, Statoil is the second-biggest exporter of natural gas to Europe after Russia’s Gazprom. The company grew significantly during the 1980s on the back of vast field developments off Norway, including Statfjord, Gullfaks and Troll, and was listed in 2001.

    http://www.marketwatch.com/story/statoil-profit-falls-on-foreign-hit-2015-07-28?link=MW_home_latest_news

  3. Kenz300 on Tue, 28th Jul 2015 8:30 am 

    The sooner we transition to safer, cleaner and cheaper alternative energy sources the better.

    Wind and solar are the future.

    Fossil fuels are killing the planet……..

  4. Idontknowmyself on Tue, 28th Jul 2015 9:09 am 

    Things in life are never simple and complexity and interaction between different component is always there.

    https://www.youtube.com/watch?v=7whL9jvdL5s

  5. shortonoil on Tue, 28th Jul 2015 9:26 am 

    The bean counters, and their vested interest have insisted that shale is an economically viable industry. The energy balance equations tell a different story. With the industry now irrevocably in debt by more than a $trillion it should be imminently obvious that credulous investors are easier to deceive than are the Laws of Physics.

    http://www.thehillsgroup.org/

  6. Plantagenet on Tue, 28th Jul 2015 9:42 am 

    According to Obama the U.S. Has a 100 year supply of NG. David Hughes can publish all the reports he wants, but there is no way he can dispel the misinformation coming from the Obama administration

  7. Idontknowmyself on Tue, 28th Jul 2015 9:44 am 

    Economical theory ans data are useless and completely discredit right now as a real science. Yet we are still using it to make decision

    One Economic Datapoint, Two Vastly Different Interpretations

    http://www.zerohedge.com/news/2015-07-28/one-economic-datapoint-two-vastly-different-interpretations

  8. davey thompsony on Tue, 28th Jul 2015 10:22 am 

    Yes planty we are in an oil glut as you do not point out very often and apparently our president agrees with you for the next 100 years.

  9. joe on Tue, 28th Jul 2015 10:38 am 

    Hard not to think that there’s allot of wishful thinking on both sides. A situation is never as good or as bad as they seem. Post carbon institute put us right in the depths of peak oil by their calculations about 7 years ago. Oil prices rose due to globalistion and expanding money supply. At the peak of growth supplies got tight, globalisation has run its course, now we enter a new phase of shoring up the blocs to prevent any diviation from the globalist agenda. Every time the world does not follow globalism there is war. There are too many vested interests. Peak oil only happens as a supply led phenomenon if the cost of getting oil exceeds the reward. Even if oil were 200 bucks a liter, society would pay it because the cost of not having it is too great. Society would figure out a model of economics to manage. Which is kinda the whole point that the pci missed. The presume rational economic actors and rational decisions, but the world is run by human beings. So while I do believe that peak oil is coming, we won’t see it in the rational pattern they think.
    This tight/easy oil economic battle is just phase 1 of a multiphase downward spiral which will take decades.

  10. shortonoil on Tue, 28th Jul 2015 11:35 am 

    “Even if oil were 200 bucks a liter, society would pay it because the cost of not having it is too great. Society would figure out a model of economics to manage.”

    Society is not going to figure out how to get around petroleum depletion any more than they are going to figure out how to put 6 gallons in a 5 gallon pale. We have now reached the physical limits of petroleum production as defined by the Laws of Physics. Any such delusion that we can escape this because we are somehow a clever monkey is pure hubris, and Wish Upon a Star thinking. Need in no way establishes the ability to achieve success. It merely provides a motivation to attempt it. If it is impossible to accomplish in the first place, it is not going to happen! When the world’s oil reserves are 100% depleted, $2,000,000 per liter oil is not going to produce it. Anyway, it is not price increases that ends the oil age. It is that the price goes down until producers can no longer afford to produce it. The ever rising price scenario is merely a part of the ongoing Peak Oil mythology.

    Look at the M. King Hubbert quote on our first page. It is in a big blue oval at the top of the page. Understanding that quote is understanding petroleum depletion, and depletion is as inevitable as the sun rising tomorrow.

    http://www.thehillsgroup.org/

  11. rockman on Tue, 28th Jul 2015 12:03 pm 

    And again a reminder that the validity of any model hinges on the correctness of the assumptions used in the model. A key assumption in any model for future shale production is pricing. So if anyone wants to argue for or against any model of future shale production they must first defend their ability to accurate predict the price of oil and NG many years into the future.

    So lets hear those easily defensible price predictions…

  12. Northwest Resident on Tue, 28th Jul 2015 12:03 pm 

    The easy way for any idiot to understand the reality of oil depletion is this: when it takes an equal amount or greaterxz energy to get oil out of the ground and delivered to end users than the extracted oil delivers, THEN there won’t be any more oil produced.

    In the dying days of the Age of Oil, there will be scattered oil wells still producing oil at an energy-positive ratio — and there are, but as those last remaining sources of net-energy-positive oil go dry, there won’t be any others to replace them.

  13. apneaman on Tue, 28th Jul 2015 12:10 pm 

    Halliburton, Baker cut workforces deeper, bringing layoffs to 27,000

    http://fuelfix.com/blog/2015/07/27/halliburton-baker-cut-workforces-deeper-bringing-layoffs-to-27000/#28502101=0

  14. zaphod42 on Tue, 28th Jul 2015 12:34 pm 

    “Anyway, it is not price increases that ends the oil age. It is that the price goes down until producers can no longer afford to produce it. The ever rising price scenario is merely a part of the ongoing Peak Oil mythology.”
    The concept of price increase is devious; consider the deflationary scenario. As wages drop faster than oil prices, the impact is exactly the same as prices going up.

    What ends the frac’ing ‘revolution’ is the enormous debt that does not deflate. And it will, indeed, take decades for this to play out.

    Interesting times indeed.

  15. marmico on Tue, 28th Jul 2015 1:06 pm 

    We have now reached the physical limits of petroleum production as defined by the Laws of Physics.

    What a crock of shit. You ain’t no physicist. You are just another crackpot doomer who fails to empirically demonstrate where the extraction, process and distribution of oil btus are consumed in a produced gallon of gasoline before it gets to my vehicle tank at the fueling station.

  16. apneaman on Tue, 28th Jul 2015 1:14 pm 

    Don’t need to be a physicist to see that more energy goes into extracting it than ever.

    Heavy Fraffic

    https://www.youtube.com/watch?v=KZZQxe6FiGA

  17. Davy on Tue, 28th Jul 2015 1:28 pm 

    Marm, sorry it is not either or like a light switch. It is depletion of which you are unwilling or unable to acknowledge. You are not anything special either though you think your shit don’t stink. Your an intelligent guy why not act like one.

  18. Pennsyguy on Tue, 28th Jul 2015 2:01 pm 

    Does anyone know where I might find reasonable (as in unbiased) numbers for the EROI of U. S. Light Tight Oil and shale gas?

  19. marmico on Tue, 28th Jul 2015 2:28 pm 

    Heavy Fraffic

    Nice turn of phrase. 🙂

    However, show me the extraction btus in Saudi Arabia’s Ghawar and Texas’ Eagle Ford. Show me “global” average weighted btu extraction numbers.

    Show me a physicist that agrees that global cumulative oil production is 84% completed, i.e. 16% left.

  20. Nony on Tue, 28th Jul 2015 2:53 pm 

    David Hughes predicted peak natural gas around 2006-7 with subsequent declines of 1.5 BCF/d/year. You couldn’t be more wrong on what happened. And he never faced up to his bad predictions. How anyone should trust him with more doomer predictions is beyond me.

    Rock is also right that he does not discuss price. For instance, in the Marcellus, it is currently selling for a dollar or more less than HH. That’s a positive insight. If we can deliver what we do at 1.50, imagine what they can do at 3.00. What will happen as more takeaway pipelines are built?

    Hughes also has not come to grips with the Utica. He basically ignores it (couple words is all) in his reports. But it has already passed the Fayetteville!

  21. idontknowmyself on Tue, 28th Jul 2015 2:59 pm 

    I usually don’t make negative comment about other commenter.

    Nony you are a fucking loser. You write like someone that has dementia and is mentally unstable.

  22. marmico on Tue, 28th Jul 2015 3:28 pm 

    David Hughes predicted peak natural gas around 2006-7 with subsequent declines of 1.5 BCF/d/year

    True. One strike. So did the rest of the ASPO/The Oil Drum soothsayers, crackpots, bobbleheads, etc.

    But Hughes has now predicted that U.S. shale gas production peaks in 2016. If he is wrong, it is strike two. In baseball, two strike hitters are defensive and hit for lower averages. In other words, ignore him.

    The probability is growing that Hughes will strike out. 2015 production is higher than his 2016 peak production prediction.

  23. apneaman on Tue, 28th Jul 2015 3:47 pm 

    David Hughes is a God damn 21st century peak oil hero.

  24. Plantagenet on Tue, 28th Jul 2015 4:15 pm 

    Hero worshippers are mindless dummies.

  25. BC on Tue, 28th Jul 2015 4:49 pm 

    @short: ” With the industry now irrevocably in debt by more than a $trillion it should be imminently obvious that credulous investors are easier to deceive than are the Laws of Physics.”

    Don’t despair, short, I suspect that the global economy decelerated to “stall speed” and into recession in Q4 2014-Q1 2015, so be prepared for another round of QEternity by the Fed to print $1 trillion/year deficits again to bail out bad bank loans to the shale sector; junk shale debt; subprime auto loans; unreal estate bubble mortgage paper; and probably buy bank and insurer stocks to prop up Blankfein and Dimon’s billionaire status.

    So, stay tuned for 1% 10-year yield, price deflation, bursting housing, stock market, and junk debt bubbles, and another global deflationary recession.

    It’s all good. We deserve it.

  26. Nony on Tue, 28th Jul 2015 4:50 pm 

    Marm: DH doesn’t think in terms of price. He makes all these implicit analogies to resource exploitation as if it were a life-form or a product cyle (born, grows, plateus, declines, ends). However, it is pretty clear that some resources will turn on/off at various prices. The Haynesville is an easy example. Lot of gas left there and we know how to get it out…but need a better price to justify the deep wells.

    Rock is right to point out the lack of price discussion in Hughes’s work. Berman’s price assumptions have been drastically wrong, but at least he tries to make some. Hughes doesn’t even acknowledge the role of price or try to think about it.

    I don’t see shale gas peaking in 2016, because the key thing limiting it is demand. Even with lack of pipes from Appalachia, there would just be other regions (e.g. the Haynesville) that could supply increased demand. Given the harsh sanctions on coal power generation, the closing of nuclear plants, and the start of LNG exports, you have to foreseen more total demand. and where will that be supplied from? Probably shale. It looks to be more competitive than CBM and conventional gas (in general, of course each project is different). You may have some little glitches from filling NG storage (part of the reason for last year’s extreme production was refilling empty storage from the bad winter before) or the opposite, based essentially on weather. But if you figure average weather, then demand should continue to increase and it will just get satisfied by the ample resource.

    idnm: You have a fair point and I wonder if I should stay away from this site out of respect for the group, here.

  27. apneaman on Tue, 28th Jul 2015 4:52 pm 

    An inability to pick up on social cues (sarcasm) and pathological passive aggressive behavior (always redefining others comments) are clear indicators of a mental disorder. Maybe it’s time to go back on the meds planty?

  28. apneaman on Tue, 28th Jul 2015 4:55 pm 

    Holy fuck! nony-marm is actually responding to himself. Planty, order a double dose and split it with the split personality troll.

  29. apneaman on Tue, 28th Jul 2015 5:04 pm 

    Climate Change Changes Everything — Massive Capital Flight From Fossil Fuels Now Under Way

    Massive Investor Flight Away From Fossil Fuels

    “And this year it appears that a number of investors are starting to get it. Get the fact that there’s no future left in burning coal, oil or gas. No future worth living in at least. For investors by the droves are now engaged in removing their assets from fossil fuel based companies. Some are being pushed out by divestment campaigns run by responsible college students. Students who look to the future and don’t like what they see and so, encourage their schools to scrub carbon emissions from their investment funds. It’s campaign that has also touched churches — including the great Catholic Church itself — setting off a broadening wave of religious-based divestment. And it’s a campaign that has reached into the sovereign wealth funds of entire nations.”

    http://robertscribbler.com/2015/07/28/climate-change-changes-everything-massive-capital-flight-from-fossil-fuels-now-under-way/

  30. davey thompsony on Tue, 28th Jul 2015 5:24 pm 

    Apneaman, I am leery of this idea that people/Universities are divesting away from the oil industry. True meaningful divestment means we the people, give up industrial civilization all together to make any type of ecological difference. Even then FF will be burned someplace, by the rest of the people who do not care.

  31. joe on Tue, 28th Jul 2015 5:50 pm 

    fact is that from around the year 2000 when china started really going we really saw the emerging reality of what Capitalism in the next 50 years or more will be. Oil is fundamental to this future, no Paris agreements will change that. For every megawatt a nuclear fusion power plant creates, its going to have to be used to replace that megawatt of transport energy. Otherwise climate change is certainly going to destroy us.
    All I see I is a world connecting more, becoming ever more culturally homogenus. Just as we see ISIS is really an attempt to use religion to cow and control a region just as communism once did, so goes it for the ‘civilised’ world as the great governments of the day squash and squish their people to forget all they were taught about National Identity and embrace the umbrella government of the monolithic powers of to big to fail banks propping up too big to fail egos. I know what Abu Bakr Al Baghdadi has for breakfast, but I don’t know who on my street is going hungry tonight, and thats how they want it. They want me to think my neighbour is a psycho so that I’ll trust the government before relying on my local town.
    Dare I say it? Alienation….
    Peak oil? I wish to God it would happen. Middle class English boys wouldn’t have dreams of chopping off Arabs heads if they had to work to fill their bellies instead of getting welfare.
    But God will not grant my wish. I even believe that the true salvation of society is in simpler living. Hawking wants to ban AI weapons, yet if he was offered an AI designed from weapon making to give him freedom, he would never say no. That’s the human paradox. That’s why as we worship the God of oil, we will pay any cost to keep drinking deep; its benefits.

  32. apneaman on Tue, 28th Jul 2015 5:55 pm 

    Until fossil fuels are no longer used, most will not understand how their lives are shaped by them. Even a serious economic crash will not convince liberals of that. We may see more electrical generation from solar and wind, but that does not get made without using fossil fuels. See how worldviews cause people to compartmentalize. Divestment movements are good PR for making people think something meaningful is being done when it is not.

  33. Jimmy on Tue, 28th Jul 2015 7:27 pm 

    Nony/Marm is talking to himself. What a nut job lol just need Quintard to join in and it’s three way. What a fucking loser lmfao

  34. BobInget on Tue, 28th Jul 2015 9:59 pm 

    If you feel depressed don’t look at June’s auto sales almost world-wide.
    USA;

    Nora Naughton Twitter
    Automotive News
    July 2, 2015 – 10:12 am ET
    AutoNation Inc. said today its U.S. new-vehicle sales rose 9 percent in June from a year earlier to 27,862, making it the retailer’s best June since 2005.

    Industrywide, U.S. light-vehicle sales rose 3.9 percent in June.

    For the second quarter, the nation’s largest new-vehicle retailer posted sales of 86,794 vehicles, up 7 percent from the same period in 2014.

    For June, AutoNation reported a 14 percent increase in luxury deliveries from June 2014 to 6,470. Sales of its domestic brands climbed 9 percent to 8,282 and import brands rose 8 percent to 13,110.

    Same-store retail sales advanced 7 percent from the previous June.

    For the second quarter, luxury-vehicle sales increased 17 percent from the second quarter of 2014 to 18,950. Domestic brands rose 8 percent to 26,826, and import brands eked up 1 percent to 41,018.

    World;

    http://www.statista.com/statistics/200002/international-car-sales-since-1990/

    What’s most discouraging must be a return to SUV’s, 4X4 pick-up and muscle cars.

    Just guessing when we see fuels shortages, this year or next.

    People forgot why we started to import crude in the first place. For the same reason all the clothes we buy are made by low wage work forces. It WAS, no longer, cheaper to import then drill domestically.

    Like global warming, effects of peak oil are already showing up everywhere. All this year
    while nations suiting up for long duration oil wars, we’ve been subject to endless, ‘all you can eat’ propaganda spelling out “glut”. Oil going to $30. “good times are here again”.

    Like global warming it takes a serious crisis to get everyone’s attention.
    When Saudi Arabia, with US help set out to destroy Yemen it set both nations on a road to certain disaster.

  35. Boat on Tue, 28th Jul 2015 10:02 pm 

    apneaman

    Until fossil fuels are no longer used, most will not understand how their lives are shaped by them. Even a serious economic crash will not convince liberals of that. We may see more electrical generation from solar and wind, but that does not get made without using fossil fuels.

    That is a large assumption, I think most of the educated world knows the impact of oil. Become more well read and you to will see the light. It is the worlds largest traded commodity and the world is about money.
    This ridiculous argument does not get made without FF is ridiculous.
    As we switch to an electric economy of course we will use oil. And lot’s of it, well duh, and there is lot’s left. And lots of Nat gas left. And a 20 to 30 is an easy forcast/bridge to a electric economy.
    I am sorry you haven’t read my links over the years showing how one step at a time we are getting smarter, faster and are stretching our FF use with technology and efficiency. Conservatives, dictators, etc have created strong headwinds against common sense but China to Europe to the US to Japan energy is changing.

  36. apneaman on Tue, 28th Jul 2015 10:45 pm 

    Sure boat, if only I was as well read as you, I’d done be a smarter. And then I might understand what the fuck you are babbling about. It sure doesn’t have anything to do with the point I was making which you obviously did not get. You and a great majority of the world are not educated, your schooled, trained up to do a few tasks. How much more efficient is an automobile today then one of the first ones off the assembly line? You can tell me in MPG since you highly educated Americans have not quite grasped the 300 year old and much more efficient and simpler metric system yet. How many more MPG does a car get then the very first ones Boat? How efficient is an incandescent light bulb and why do you need legislation to get people to stop using them? One would think that highly educated people would not need to be forced to stop using something that is only about 2% efficient- about the same as your brain.

  37. rockman on Wed, 29th Jul 2015 7:08 am 

    Penn Guy – “Does anyone know where I might find reasonable (as in unbiased) numbers for the EROI of U. S. Light Tight Oil and shale gas?” There are a lot of guesses out there…pick one. LOL. But understand that the EROI never has and never will a direct determining factor in the decision to drill or not drill. The amount of energy used to drill and complete a well is relatively small compared to the total cost. Typically around 10% and sometimes less. Once the EROI gets to around 5 or 6 the economic evaluation of a proposed well will kill it. And that was at the higher oil/NG prices.

    Think about this: the EROI of an Eagle Ford Shale well drilled today is no different than if it had been drilled in Sept 2014: same amount of oil recovered and same amount of diesel and embedded energy utilized. Yet look how many EFS wells aren’t being drilled today: the lower oil price has killed the economic value of thousands of those wells. And if/when oil prices increase many of those same wells will be drilled…wells with an identical EROI as the ones NOT being drilled today.

  38. shortonoil on Wed, 29th Jul 2015 8:42 am 

    “Does anyone know where I might find reasonable (as in unbiased) numbers for the EROI of U. S. Light Tight Oil and shale gas?”

    The point where a well is no longer producing energy is called the “dead state. Work can no longer be extracted from its production. We have not tried to calculate it for the entire shale industry but we have looked 4,598 wells in the Bakken through 05/12. The average Bakken well of the 4,598 reviewed reached the “dead state” after 77,000 barrels had been extracted, or about 10 months. That is an ERoEI of 6.9:1.

    We calculated that result using the thermodynamic equation s2-s1 = m*c*lnT2/T1; where s= entropy, m= mass, c=specific heat, and T1 is the temperature of the environment, and T2 is the temperature of the reserve in Rankine, or Kelvin. As a comparison conventional crude now has an ERoEI of 9.1:1 (that is at the well head).

    As the ERoEI has been historically closely associated with price, and price has been until 2012 primarily a function of production cost, it is reasonable to assume that as the ERoEI of the world’s petroleum reserves falls that the lower ERoEI sources will be shut-in first; their cost of production will exceed the price:

    http://www.thehillsgroup.org/depletion2_009.htm

    Because of the huge diversity in shale wells, it is difficult to put an absolute average ERoEI onto them. It does, however, looking at the information that we do have seem reasonable to assume that it is much lower than conventional.

    Hope that helps?

    http://www.thehillsgroup.org/

  39. roxy on Wed, 29th Jul 2015 12:59 pm 

    I’m sick of reading opinions from some of our commentators that are always criticizing the peak oil predictions from some of the most respected people in the energy world. Maybe they should instead talk about the predictions of some of the cornies that seem to be more wildly way off.

  40. shortonoil on Wed, 29th Jul 2015 3:29 pm 

    PS: in graph# 16 above year zero (0) = 1900. That is, year 100 on the graph equals 2000, 105 equals 2005, etc. Sorry for not stating that earlier?

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