[Econ101]

The pipeline was designed to take maximum anticipated flow from the full development of the federal arctic resources. Thats why it was granted permits and funding. Unfortunately the politics changed under jimmy Carter and have held ever since. The reduction in floage rates is a poltitical consequence of the policies of shortage, or as some call it peak oil.

America is not using its natural resources and we are all suffering.

A solution to the country's growing national debt sits right beneath Americans' feet, according to a report from the nonprofit Institute for Energy Research.

That's the $128 trillion in technically recoverable oil and gas resources below 41 million acres of federally owned land, according to the group, which advocates for "freely-functioning energy markets."

http://money.msn.com/now/post.aspx?post=99f0e8e3-3839-4196-9e41-b13066eb67bd

Federal assets below the ground are primarily mineral and energy resources, such as oil, natural gas, and coal. For example, the United States owns millions of acres and billions of barrels of oil that can be developed on federal lands and waters. Currently, the government leases only 2 percent of federal offshore areas and less than 6 percent of federal onshore lands for oil and natural gas production. Areas that the federal government could open to oil and gas development include:

The 10.4 billion barrels of oil and 8.6 trillion cubic feet of natural gas in the Arctic National Wildlife Refuge

The 86 billion barrels of oil and 420 trillion cubic feet of natural gas in the outer continental shelf of the lower 48 states

The 896 million barrels of oil and 53 trillion cubic feet of natural gas in the Naval Petroleum Reserve-Alaska
The 25 billion barrels of oil in the outer continental shelf of Alaska

The 90 billion barrels of oil and 1,669 trillion cubic feet of natural gas in the geologic provinces north of the Arctic circle

The 982 billion barrels of oil shale in the Green River Formation in Colorado, Utah, and Wyoming.

These technically recoverable resources total 1,194 billion barrels of oil and 2,150 trillion cubic feet of natural gas that is owned by the federal taxpayer. At $100.00 per barrel of oil and $4.00 per thousand cubic feet of natural gas, the oil resources are worth $119.4 trillion and the natural gas resources are worth $8.6 trillion for a grand total of $128 trillion, or about 8 times the U.S. national debt.

http://www.instituteforenergyresearch.org/?p=15346

The point being as production pressures continue to mount new supplies will begin to flow from new developments. Some already mentioned and others to come, most notibly the russians. The pipeline will get used and I anticipate an upward trend in the flowage rates over the next several years.

[MrEnergyCzar]

Wow, thanks for the great feedback. Love that oil production graph for Alaska being maintained. It sounds like there are ways to keep it alive despite the 5% decline rate which is huge..... how did they build the pipeline around the permafrost in case it starts melting more...? Wouldn't he pipeline sink unevenly or crack?

MrEnergyCzar

[Econ101]

It would be far more meaningful if you put that production in context with developed acres and working rigs.

[Econ101]

The decline rate in Alaska results from lack of development which is a political event, much like the global warming nonsense. If the arctic had been developed as planned we would not have shales in production yet. We would be looking at astonishing production figures for generations to come.

Fortunately the arctic is being developed, at least by the other nations also in possession of vast resources up there.

Anybody feeling that peak oil and climate change are losing political clout? Is it time to que up a picture of a polar bear standing in the sun by open water or an oily duck?

[PeakOiler]

Here's the latest chart. The EIA data are through January, 2013. Looks like the seasonal peak is over and it's now going downhill again. Weeeeee!!!

[Keith_McClary]

It would be far more meaningful if you put that production in context with developed acres and working rigs.

OK, HUGE developed acres and VAST numbers of rigs. Is that meaningful enough for you?

[Arthur75]

Funny how Econ101 and similar airheads are always asking people for data but never going looking at them by themselves ..

[Beery1]

Funny how Econ101 and similar airheads are always asking people for data but never going looking at them by themselves ..

That's because looking for evidence implies doubt, and true faith demands that there be no doubt.

[Tanada]

Funny how Econ101 and similar airheads are always asking people for data but never going looking at them by themselves ..

That's because looking for evidence implies doubt, and true faith demands that there be no doubt.

I think you are mixing up BLIND faith and True faith. Blind faith hides its eyes, true faith embraces what it is shown and reasons it through as a test of faith. Blind faith leads to blowing up things that the faithful oppose, True faith argues against things the faithful oppose in the sure and certain hope that their faith will be rewarded, sooner or later. Blind faith is hateful, true faith is love filled.

[PeakOiler]

Here's the latest graph with data through March, 2013:



Down to 519 tbpd...

[ROCKMAN]

PO – Thanks for the update. Thinking back on some of the raging debates (in which I tended to not participate) about NS production declines, MOL’s, pipeline maintenance issues, technologies to lower MOL, etc. you chart brought it into perspective. Basically none of those are very relevant issues today IMHO. Consider how much oil we’ve increased from the Bakken, Eagle Ford and Canadian oil sands less the demand destruction caused by higher oil prices. And then consider that the NS production today represents less than 6% of US consumption. Not completely insignificant but not front page news anymore.

The NS was certainly a big item in its early days. Now it seems to be taking on the perspective of the original exciting Elvis and the later day chunky Elvis: still worth listening to but lost a good bit of the thrill.

[Tanada]

Which is better, 2 million bbl/d at $22.00 each or 500,000 bbl/d at $85.00?

At these prices it is in the best interests of the producers to keep producing as long as they possibly can, despite the maintenance costs increasing as the pipeline ages and has lower flow rates.

Is there a railroad track parallel to the Dalton Haul road? Building a track from Fairbanks to Prudhoe Bay would give them a great deal more flexibility on production rates once the rate drops below the 300,000/d that the pipeline can sustain.

[ROCKMAN]

Tanada - Valid point about the pricing but in whatever $'s used it still only about 5% of US consumption and declining. Again, not insignificant but not a game changer either. Couldn't find anything about the potential of shipping NS crude directly by rail but did catch this. Not sure how realistic the proposal may be but it's interesting. From: http://alcanrr.com/

“In simplest conceptual form we (perhaps a joint venture between First Nations and AFN) build a railroad from the North Slope of Alaska to Fort Nelson, BC, or Ft. McMurray, Canada. We ship Bitumen on that railroad from Alberta to Alaska, dilute it with North Slope condensates to make synthetic crude oil and inject it into the Trans Alaska Pipeline which carries it to Valdez and oil tankers haul it to Pacific markets. We then load the same Dual Use Cryogenic tanks that moved the bitumen to Alaska with LNG. The tanks need to be returned to Alberta anyway so the Natural gas now gets a free ride to Alberta. The Bitumen producers buy the LNG and use it to extract more Bitumen and the process repeats. Excess LNG is re-gasified and sold into the North American gas pipeline grid. Everybody wins. Here are the High Points.”

[PeakOiler]

Here's the updated graph. Data are through May, 2013:



Next update in two months.

[dsula]

what's the straight line, the curved line and the red line?

[ROCKMAN]

dsula – I think the red line is 300k bopd which is the assumed minimum level the p/l can still flow oil. The straight line would represent a projection of future rate at the historic decline rate. The curved line is probably the assumption that as the field matures further the decline rate will decrease. That’s not unusual as a field approaches end of life. It may also express an expectation of efforts in the field to extend the productive life.

[PeakOiler]

Back on page four I posted the first graph and explained what the Red Line represents: It is the estimated lowest flow rate of the TAPS as ROCKMAN correctly surmised. The straight black line, as I also explained earlier, is just a simple linear regression line that MS Excel can apply to a set of data. The curved line is an exponential trend line, again a "standard" math function in Excel.

So what the careful reader should do is to go back and look at where the trendlines reached the 300k bpd flow rate red line to see what year the TAPS could (or will) shut down in the first chart, then look at the second, etc. (I wish I was computer savvy enough to make an animation of the charts as more data is added to the set to see how the trendlines move).

As more data is added to the set, the trendlines will narrow in on a smaller and smaller estimated range when the oil may (will) stop flowing.

This assumes no new heaters are installed on the pipe, but I think some of the companies may just do that if they can justify the extra dollars. Same thing with adding any new wells in the harder-to-extract areas on the North Slope. Can the cost be justified?

I understand Alaska just decreased the amount of taxes on new exploration and drilling up there, so we'll have to wait and see if any new additions can stop or reverse the trend...

A recent PO.com front page article reported the new legislation that was passed in Alaska.

[PeakOiler]

Here's the updated graph with data through July 2013:



Next update in two months.

Edit: I saw this article: Business Insider Article

The picture is not entirely gloomy. The Department of Interior has ramped up leasing on Alaska's North Slope, but it's been slow going, as we saw with Shell's failure to [get] off the ground.

Judith Dwarkin, chief energy economist at Calgary-based ITG Investment Research, told us by email that the worst may still be in store: the TransAlaska pipeline, the main artery for transporting Alaskan hydrocarbons, is in danger of being shut down as it gets squeezed by lower-48 infrastructure.

[Alaska North Slope] production has been in decline since the early 1990s, to the point now that the TransAlaska Pipeline (which carries it to port) is at risk of not maintaining minimum throughput to remain operational.

[ROCKMAN]

PO - I have a vague memory of a story sometime ago about the potential to move the oil via rail from some point along the pipeline. My imagination?