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Economics vs. ETP

General discussions of the systemic, societal and civilisational effects of depletion.

Re: Economics vs. ETP

Unread postby rockdoc123 » Fri 08 Dec 2017, 17:46:07

When they say they have replaced reserves all they are saying is that they have found a place and secured the rights to drill in a as yet unexploited area so they know where they will be drilling next year or next decade.


No it is defined pretty well by everyone in the business. When you produce "reserves" those are proved producing reserve barrels that have left the barn. In order to replace reserves the exact amount of produced must be either elevated from existing "probable' or "possible" or "contingent resource" to the proven reserve category or additional proven reserves must be discovered by the drill bit. Reserves cannot be credited by having the rights to drill as the definition is very explicit. It has to have been discovered, proven to produce and proven to produce economically at the current price. If it is drilled but uneconomic at the moment it is classified as "resource", either as contingent resource (has been drilled and proven productive ) or prospective resource (not drilled as yet but demonstrated to be there through adjacent wells or seismic). So when E&Y or BP talked about reserve replacement they mean that the produced reserves have been replaced by proven reserves.
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Re: Economics vs. ETP

Unread postby vtsnowedin » Fri 08 Dec 2017, 17:54:33

onlooker wrote: Also, ask yourself why the entire planet is so slow and reluctant to diversify away from FF.

Could it be that fossil fuels are still readily available at modest prices and still deliver more utility for dollar paid then any of the alternatives?
When that equation changes people will change, but not until it changes.
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Re: Economics vs. ETP

Unread postby farmlad » Fri 08 Dec 2017, 23:44:48

The fact that everything costs money (i.e. all energy inputs) and the oil industry will not operate if it is not making money is all one needs to know.


Rockdoc
Wow I had no idea that you oil industry folks were that principled, Do you guys all like live in a monastary? You sure are some saints compared to us farmers. So long as we can keep our hands on the family farm we will farm, we have no idea how to do anything else. So long as the banker keeps forking it out we don't even think about quiting. We will twist and bend the books for him and talk up our greatest plans and If he still refuses to lend more we run up the credit cards.

The last thing we would ever think of doing is show any indication to the neighbors that we have run the family farm into the ground. We will lie and cheat to buy the latest combine, we will hire illegals and pay them all slave wages, you name it, until the day the bank takes it all away. But until that day No one could have seen it coming.

But I sure do appreciate you all's looking out for all us heathens and devils.
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Re: Economics vs. ETP

Unread postby rockdoc123 » Sat 09 Dec 2017, 00:15:46

Wow I had no idea that you oil industry folks were that principled, Do you guys all like live in a monastary? You sure are some saints compared to us farmers. So long as we can keep our hands on the family farm we will farm, we have no idea how to do anything else. So long as the banker keeps forking it out we don't even think about quiting. We will twist and bend the books for him and talk up our greatest plans and If he still refuses to lend more we run up the credit cards.


well, I guess the first thing you should do is actually post something in the English language that the rest of us can understand. You apparently have a rant, unfortunately, it does not seem to be in any language I have in my vocabulary and I do have 4 so that is surprising.
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Re: Economics vs. ETP

Unread postby Cog » Sat 09 Dec 2017, 07:07:13

As near as I can cipher out, by my knowledge of doomer-speak, farmland believe the oil industry is perpetuating some sort of scam on the American people. They know they are broke and instead of doing the logical thing like laying down their drill pipes, shut down their oil production, and go home to die in the dark, they continue the scam by borrowing money. That is my best interpretation of it. This is also pretty much what shorty and the rest of the ETP mafia think about the situation as well.
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Re: Economics vs. ETP

Unread postby onlooker » Sat 09 Dec 2017, 08:50:39

Okay, can Doomers and non Doomers agree that we came to rely too much on FF and we are not transitioning fast enough to accommodate in the years to come our modern ways of living
You can ignore reality but not its consequences
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Re: Economics vs. ETP

Unread postby Cog » Sat 09 Dec 2017, 09:14:45

onlooker wrote:Okay, can Doomers and non Doomers agree that we came to rely too much on FF and we are not transitioning fast enough to accommodate in the years to come our modern ways of living


That depends on what the downslope of oil depletion looks like. A shark fin or a more gradual bell shaped curve. There are of course doomers here that would argue that the planet can not support 7.5 billion people regardless of what transition we make to alternative power sources and that our modern way of life should be rejected. Throw in the climate change doomers who say our goose is cooked no matter what we do.

Its not an easy question to answer onlooker.
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Re: Economics vs. ETP

Unread postby onlooker » Sat 09 Dec 2017, 09:22:09

There are of course doomers here that would argue that the planet can not support 7.5 billion people regardless of what transition we make to alternative power sources -----
I wholeheartedly believe that. Some tough questions for our entire species
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Re: Economics vs. ETP

Unread postby Yoshua » Sat 09 Dec 2017, 10:43:12

Saudi Arabia has been producing an increasing amount of energy to try to maintain their crude exports.

Image
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Re: Economics vs. ETP

Unread postby Yoshua » Sat 09 Dec 2017, 10:56:22

Saudi Arabias nat gas production and consumption has doubled since 2000 and count for 40% of Saudi primary energy consumption.

Image

Add to this all the technology, machines and steel they are importing for their megaprojects and the energy consumption is starting to be high.

And since Saudi Arabia's largest share of exports is crude oil that needs to be refined and distributed before the net energy of Saudi Arabia's petroleum production can be calculated, then Saudi Arabia might all ready be close to the energy half way point...EOR would certainly push them over the energy half way point.
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Re: Economics vs. ETP

Unread postby pstarr » Sat 09 Dec 2017, 11:23:45

"Add to this all the technology, machines and steel they are importing for their megaprojects and the energy consumption is starting to be high."

Folks don't understand the money we shove down the drill pipe in our need for oil. Out of sight, out of mind. The idiots think oil grows on trees lol Here's another example Yoshua (not dissimilar to the $100 of billions spent by SA getting at the last drops). It's all about net-energy losses in the energy producing system. Money, wealth, technology thrown away down the drill hole.
https://qz.com/196057/kazakhstan-kashag ... two-years/
In recent weeks, word has dribbled out that Kashagan—one of the largest supergiant oil finds of the last half-century—may lie dormant through the summer (paywall) and perhaps longer. But this is the first concrete report that the gravity of the problem means that Kashagan will produce no oil through at least 2016 and possibly 2017.

Russia will replace replace two 55-mile pipelines, one for oil, one for gas at it's Kashagan field which is still hardly producing after 20 years of development. Get this . . . with nickel alloy. Who can afford nickel alloy sink fixtures? They have already spent $50 billion . . . just on the rework. We are surely going broke.
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Re: Economics vs. ETP

Unread postby AdamB » Sat 09 Dec 2017, 11:39:32

Yoshua wrote:Saudi Arabia has been producing an increasing amount of energy to try to maintain their crude exports.

Image


A wonderful graph showing 3 peak oils for Saudi Arabia. Anyone like to guess at how many more might be possible?
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
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Re: Economics vs. ETP

Unread postby AdamB » Sat 09 Dec 2017, 11:44:05

pstarr wrote:Folks don't understand the money we shove down the drill pipe in our need for oil.


If by "folks" you mean peak oilers and the citizen at large, you are correct. As you so ably demonstrate on a near daily basis, peak oilers don't want to understand...anything really...when it comes to the resource economics of extracting oil and natural gas.

pstarr wrote:Out of sight, out of mind. The idiots think oil grows on trees lol


As you represent the type, it is nice to see you confirm the suspicions of those of us who are very well aware of the size of the AFE for any particular well, or the economics of an entire drilling program.
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
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Re: Economics vs. ETP

Unread postby rockdoc123 » Sat 09 Dec 2017, 11:55:05

Folks don't understand the money we shove down the drill pipe in our need for oil. Out of sight, out of mind. The idiots think oil grows on trees lol Here's another example Yoshua (not dissimilar to the $100 of billions spent by SA getting at the last drops). It's all about net-energy losses in the energy producing system. Money, wealth, technology thrown away down the drill hole.


the industry certainly knows simply because they have to pay for all of energy that goes into a well including all of this technology you speak of. The fact that a profit can be made on a barrel of oil is instructive that there is much less energy going into drilling and producing than comes out.
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Re: Economics vs. ETP

Unread postby Yoshua » Sat 09 Dec 2017, 12:02:22

"In 2014, primary energy production for Saudi Arabia was 27.59 quadrillion btu. Though Saudi Arabia primary energy production fluctuated substantially in recent years, it tended to increase through 1995 - 2014 period ending at 27.59 quadrillion btu in 2014."

https://knoema.com/atlas/Saudi-Arabia/P ... production

"In 2014, primary energy consumption for Saudi Arabia was 10.21 quadrillion btu. Between 1995 and 2014, primary energy consumption of Saudi Arabia grew substantially from 3.83 to 10.21 quadrillion btu rising at an increasing annual rate that reached a maximum of 10.82 % in 2000 and then decreased to 4.28 % in 2014."

https://knoema.com/atlas/Saudi-Arabia/P ... onsumption

For some reason the energy consumption in Saudi Arabia is increasing at very high rates.
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Re: Economics vs. ETP

Unread postby shortonoil » Sat 09 Dec 2017, 12:10:00

There are of course doomers here that would argue that the planet can not support 7.5 billion people regardless of what transition we make to alternative power sources -----


Image

Without an economy the planet is not going to support any people, at least there won't be enough to make it worth counting them. The central banks, in an effort to support their fiat currencies, have pumped up assets values all across the planet. Bit Coin at $20,000; -- Whow! $250 trillion in debt, double -- Whow! This effort has benefited a few, and left 99% out in left field. However, it is the 99% that burns most of the oil!

This asset expansion policy now seems to have hit oil. The price of oil is more than the economy can afford; at least 99% of it can't. It hasn't yet reached the rich nations, except that the average US household is growing debt 60% faster than its income. They are still eating three meals a day, with an able supply of junk food thrown in for good measure. The Bangladesh farmer is not quit so well off. He needs 2 gallons of gasoline to grow enough food to feed his family, but can only afford a gallon and a half. His family now eats two meals a day, and no junk food. They slowly grow weaker.

20 million people are now facing famine. Nigerians displaced by Boko Haram in northern Nigeria, Somalia and Yemen. And this week, the United Nations declared famine in a patch of South Sudan.

The UN has a definition of famine:

"Famine is a rare and specific state. It is declared after three specific criteria are met: when one in five households in a certain area face extreme food shortages; more than 30 percent of the population is acutely malnourished; and at least two people for every 10,000 die each day."


What the New York times, and the UN doesn't tell us is that this all stems from Middle Eastern and North African oil wars. The fight for the last few dollars generated from ever increasing production costs, and a falling price. The developed nations aren't paying much attention, and probably won't until the Dow falls 15,000 points. Without oil that the economy can afford, 7.4 billion will be quit a few more than the planet can support!
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Re: Economics vs. ETP

Unread postby Yoshua » Sat 09 Dec 2017, 12:15:12

Kashagan's cost of $50 billion equals 1 billion barrels of crude. As long as cost isn't a problem, then Kashagan is a nice cash hole...
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Re: Economics vs. ETP

Unread postby rockdoc123 » Sat 09 Dec 2017, 12:24:35

The price of oil is more than the economy can afford; at least 99% of it can't.


why then is global oil demand ever increasing? Seems to me if they can't afford it there would be no demand.

except that the average US household is growing debt 60% faster than its income.


not according to all the data out there.

US household debt as a % of GDP decreased steadily from 2008 to 2016 according to FRED
Likewise, US household debt to income decreased steadily for 2008 to 2016. It is now at a level last seen in 2004.
Also according to FRED US household debt service payments as a percentage of disposable income decreased from a high in 2008 of 13% to 10% in 2016. That is lower than has been seen in the last 35 years.
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Re: Economics vs. ETP

Unread postby pstarr » Sat 09 Dec 2017, 12:36:45

Yoshua wrote:Kashagan's cost of $50 billion equals 1 billion barrels of crude. As long as cost isn't a problem, then Kashagan is a nice cash hole...

1 billion barrels that doesn't reach the productive consumer society. One billion barrels that should have been spent on hospitals, education etc. etc. * We count the oil produced as if it were oil used. It is not used, not for money, capitalistic or social gain. It is used to get more oil. Does anyone understand this yet? Or am I swimming in a sea of idiots **

* note: Make no mistake: this is not a bleeding heart exercise. I don't really give a good god-damned about the loss of human life, not here in this forum. This is a place for debate of ideas

** note: not you onlooker, short, yoshua, ghung and a few others :)
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Re: Economics vs. ETP

Unread postby rockdoc123 » Sat 09 Dec 2017, 13:22:58

1 billion barrels that doesn't reach the productive consumer society. One billion barrels that should have been spent on hospitals, education etc. etc. * We count the oil produced as if it were oil used. It is not used, not for money, capitalistic or social gain. It is used to get more oil. Does anyone understand this yet? Or am I swimming in a sea of idiots **


Given that Kashagan has somewhere in the order of 30 - 50 Gbbls in place and recovery could be up to 10 Gbbls one has to ask what the issue is with spending a billion bbls to get back 10? A 10:1 return on equity seems like not too bad a deal.

No, I think you are swimming in the idiot sea....not too many of you in there though :roll:
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