[Tanada]

Hi Everyone

TPTB do not determine what generators are built, the best they can do is alter regulatory conditions to nudge decisions in a certain direction.

Simon

IMO that is a distinction without a difference. Also as someone pointed out even if that is true in western Democracy countries, but the majority of the planet is not Democratic in the same sense. Sure China is officially the People's Republic of China, but the higher ups in the party who make all the decisions do not answer to the man on the street. They do not have to curry favor from J6P to get into office. Russia is the same way. Heck with the gerrymandering in the USA the Congress here is pretty much the same way, they mouth the platitudes of whatever voter base they have too but do as they will once secure in office.

[Simon_R]

Hi Tanada

I cannot answer for Russia and China etc.

However the cost of compliance or emission (eg Carbon costs) are computed and depending on the long term aims of the organisation this would determine the type of fuel used (Along with long term forecasts)

Whilst I appreciate your point, I think it is a matter of degrees of influence, I see a far lower degree of influence than yourself (Assuming the western world)

I guess the definition of 'nudge' is what it all comes down to

thanks

Simon

[Pops]

What is interesting to me is each of those trends looks like it has a rounding "top" that would fit a bell curve perfectly

[Plantagenet]

I would blame the CEOs and the politicians they buy for exporting massive amounts of jobs to China.

If you're worried about US jobs going to China and other overseas locales, just wait and see what happens when Obama gets his TPP free-trade treaty in place. And the more jobs that go to China, the more their coal use and CO2 emission go up.

Remember---Obama and China have already agreed that China can burn as much coal as they want with no limits set on Chinese CO2 emissions.

[Tanada]

What is interesting to me is each of those trends looks like it has a rounding "top" that would fit a bell curve perfectly

The problem I have with that graphic is fairly simple minded. Different resources do not all peak at the same time unless an outside constraint is the cause. For example Prudhoe Bay oil flowing down TAPS peaked at 2 Million bbl/day because that was the capacity of TAPS. If TAPS had been built to only transport 1 Million bbl/d then the peak would have been 1. If the TAPS had been sized to move 3 Million bbl/d then the peak would have been 3, but it would not have been sustained for very long. Actually based on production history it might never have reached 3 Million, it only reached full capacity of 2 Million for one year, 1988. So if the TAPS had been sized larger it probably couldn't have produced more rapidly anyhow, and if it had been sized lower it would probably be just now falling from full capacity instead of struggling to maintain operation at 25 percent of design capacity.
http://www.alyeska-pipe.com/TAPS/Pipeli ... Throughput

Anyhow that graph shows everything peaking at once from the foundation of coal, however today coal use is still growing in the majority of countries around the world. If Coal and everything else peaks all at once that means despite a growing world population we would be getting much less energy per capita, and I think that will spell major trouble.

[Pops]

Of course its simple, I just drew in some lines, LOL

[Pops]

Although, since you mentioned it, per capita would fit under a similar line

[ROCKMAN]

Pops - Here's another idea next time you get the urge to doddle: don't make the curve symmetric. I've never seen production from a single well, field, county, trend or country follow a symmetric path on the backside. The decline side has typically been at half the rate or less then the build up side. Just look at the US oil production curve for the last 70 years or so. Even ignoring the recent ramp up notice how asymmetric it has been.

[Plantagenet]

Pops - Here's another idea next time you get the urge to doddle: don't make the curve symmetric. I've never seen production from a single well, field, county, trend or country follow a symmetric path on the backside. The decline side has typically been at half the rate or less then the build up side.

How about Cantarell in Mexico?

It peaked just a few years ago, and then production dropped extremely rapidly. The injection method they used to boost production resulted in an extremely rapid decline curve.

There is an argument to be made that giant oil fields like Cantarell and Ghawar in KSA will decline extremely rapidly. The use of water injection at Ghawar means that the producing zones get smaller and smaller, and once production starts to drop its basically all over. There is will be precipitous decline.

This is why some projections call for the decline rate after the oil production peak to be STEEPER then the build up in production. A rapid fall in oil production at Ghawar alone after it peaks should drive down global oil production really quickly.


How much oil is left in Ghawar?

[Pops]

Crap, twice in one day I'm agreeing with Plant! ROCK, this is all your fault!

I think on the up side of the curve demand plays the most important role but on the downside it is all about supply. If as you've said ROCK there just isn't much place left to look, then the downside is going to be about increasing recovery rates where you've already been. Seems like that will make for a different outcome than just going from this nice play to the next likely field.

Don't know what that means as far as the curve but this IS Shark WEEK!


http://www.motherjones.com/kevin-drum/2 ... e-we-think

[C8]

I remember seeing these bell shaped drawings years ago on the Oil Drum- except they had the peak at 2009 and we were all supposed to be losing 5% per year by 2015 and using Donkey's (Gail's idea I think).

I think this slope just keeps going up for a longer time than anyone expects- a trend doesn't reverse until it does.

[StarvingLion]

I remember seeing these bell shaped drawings years ago on the Oil Drum- except they had the peak at 2009 and we were all supposed to be losing 5% per year by 2015 and using Donkey's (Gail's idea I think).

I think this slope just keeps going up for a longer time than anyone expects- a trend doesn't reverse until it does.

Yeah, it will go up forever because fracking will make up any shortfall and since TPTB already own everything profitability does not matter.

[Tanada]

I remember seeing these bell shaped drawings years ago on the Oil Drum- except they had the peak at 2009 and we were all supposed to be losing 5% per year by 2015 and using Donkey's (Gail's idea I think).

I think this slope just keeps going up for a longer time than anyone expects- a trend doesn't reverse until it does.

I just hope that Rockman is wrong on this one. As Colin Campbell said in Crude Awakening, sometimes when you get to the peak you see a slope going down the other side, but sometime the going is quite stiff. Or something like that, been about a year since I last watched it.

[ralfy]

It's also helpful to look at production costs and energy returns.

[ROCKMAN]

Pops - "There is an argument to be made that giant oil fields like Cantarell and Ghawar in KSA will decline extremely rapidly." The reservoir drive for those two fields are at the opposite ends of the spectrum and can't be compared. In the world of all oil reservoirs, even small ones, the gas cap expansion drive they've been doing at Cantarell is rare. But the sudden decline of such reservoirs is very certain and easily predicted. The simply monitor when the N2 cap progressively reaches each down dip well. They might not have wanted to broadcast it but PEMEX has a good model for the decline. The reason for the high decline rate is that when the gas cap expands to a down dip producer it has to be immediately shut in. Otherwise they begin depleting the N2 which is very counter productive.

OTOH when the water level rises to the perforations on a Ghawar producer they can keep producing oil for decades even as the oil cut decreases. If one has the ability to get rid of the water cheaply (as the KSA can) one can profitably produce a well down to 1% or 2% oil even at the current price. As pointed out before the average US oil well produces less than 15 bops. But equally significant they are nearly all water drive reservoirs for the most part and probably have a 10% oil cut...of less. Thus the origin of "brown stained water".

[ROCKMAN]

Pops - Also be specific when your talking about decline curves. You have to separate a production decline as a result of decreased new drilling from the decline rate of existing wells. I was talking about the decline of existing wells, reservoirs and fields. The EFS is a perfect example. The production from the trend from NEW WELLS might fall quickly. But consider wells that have already been drilled. Look at this typical EFS curve:

https://www.google.com/search?q=eagle+f ... oKWrJ9E%3D

Nothing close to symmetric there. That curve also highlights the point I keep making: the Eagle Ford Shale is not a field...it is a trend composed of many individual accumulations. Which from a decline curve point of view would have no similarity with fields like Cantarell and Ghawar.

So again the same challenge to everyone: post a decline curve from any well or field on the planet that comes even remotely close to symmetric. I doubt any one will find one even with millions of produced wells.

[Pops]

I bow to your greater knowledge of curves ROCK, which is not to say I think you've gone around the bend, LoL. Thanks for that explainer.

I'm actually of the opinion (even more so lately) that what we'll experience is more akin to the shark fin rather than the nice bell shaped curve. OPEC getting in the game in the '70s is proof if any is required that "all other things" are not equal and the smooth curve of the Hubbert theory is, as He said, just hypothetical. OPEC changed the curve, lowered the peak and extended the period of peak production. Which of course doesn't change or disprove the theory, rather it shows that money actually doesn't make oil, if it did the curve would have continued skyward indefinitely.

In the end, the area under the curve is going to be somewhere around the amount that will be "profitable" whatever number that turns out to be. Lowering and extending the shape of the "peak" doesn't change that, it merely causes the most dramatic declines to occur sooner rather than later.
Here is Hubbert vs Shark:




Obviously geology sets the parameters but markets are what matter and the desire to maintain the old BAU is great. We are trying very hard to increase production and doing OK at the moment, but to do that we're resorting to the less optimal resources. Deep water and shale LTO and arctic and perhaps the MRC wells are all faster decliners than the old vertical wells that slowly flooded out are they not? As the old giants (and giant number of tiny strippers) dwindle, we have to resort to both the fast decliners and slow rampers like x-heavy and tar, neither of course are as cheap to sprout as the one ole Jed made while squirrel hunting.

But also more general economic factors are involved like the current low price, which although a result of a surplus has the perverse effect of lowering investment for the old fashion, long lead time projects of yore. Ditto the maturation of developed markets and the slowing of their population growth that is in turn causing a slowdown in consumption growth. A good thing in many respects but also something that affects oil markets. Ditto renewables.

So, long story longer, the nice round curves a few posts back were merely to highlight the round tops they are showing, which could easily turn down... at whatever rate.

[ROCKMAN]

Pops - Shark fins are a relative metric: difficult to put a number to it. It's also somewhat dependent on the nature of the reserves being added. In the US the rapid decline rate of NEWER shale wells and the decrease in the number of NEW wells drilled will see a relatively sharp decline in SHALE PRODUCTION. OTOH look at the decline of US oil production prior to the shale boom: hardly a shark fin by anyone's definition. The US, along with the KSA et al, have a very steady and slowly declining base of conventional reservoirs. As we discussed earlier the Mexican Cantarell Fld is an exception due to the gas cap expansion recovery effort. But that situation is very rare in the world especially for the mega fields. The other group of fields that will have a higher decline rate then the old heritage production are the Deep Water flds especially in the GOM. A DW field could be abandoned in 6 or 7 years due to the high operating costs. If such a field were onshore it might produce for an additional 15 to 20 years at an ever decreasing rate. But it would still be producing.

Of course with the KSA et al ramping up production they are pushing faster to URR. But they are also producing a lot of “brown stained water” which by its very nature has a very slow decline rate. And while US shales have bumped us way above a plateau the downslide will be nearly as fast. But that isn’t how global production has increased. That has happened by the addition of relatively small conventional fields and increased production for the old conventional fields. And in both cases those situations don’t lend themselves to high decline rates. IOW global oil decline will be a combination of a very few shark fin declines (shales), few modest shark fin declines (DW) and a lot of very slowing declining heritage fields. I don’t guestimate the net result will be very shark finny. LOL.

[Pops]

Notice I don't put numbers on my pictures, ROCK. LoL

Someone, maybe Art Berman, described the situation currently as similar to "phase change" in that the market changed incrementally to a point but then came a rapid change and the rules are now different.

The thought in the back of my mind is the change is a world of no real spare capacity. The excess KSA brags about, completely unaudited by anyone, has gone away and they are like Texas in 1970: pumping flat out just like the rest of OPEC, and Iran will be soon as well. Obviously the US has been pedal to the metal since 1970 and even though overproduction last report was 3.3mb/d no one is gonna be the chicken.

Just goes to shows a true doomer can find a cloud behind even the silveriest lining, lol