[tita]

Pop - Of course we can live on very much less luxury than we do. And yes, transport is a luxury we spend a lot on. This doesn't mean that there is no economy behind it. Swiss watches employs thousands of people to make expensive watches. Something that only a few people can afford, and only work when you have enough rich people willing to buy them. And from an african POV, the way we use cars for individual transport is the same way as we see very rich people buying these watches.

When the sales of these watches fall, it has a lot of consequences in just the swiss industry. But when the sales of the car industry fall? Well, it happened only very briefly in 1973 and 1980 and 2008. The last one being the worse, because like you say car is used in a more luxury way than before. Not sure about the consequences, but it implies quite a lot more people than just a small country like switzerland.

[ROCKMAN]

tita - Which brings us back to what folks CAN DO vs WILL DO. very few folks give up what they want to do r have until they are forced to. There's not single person on this site that doesn't consume fossil fuel they WANT TO CONSUME as opposed to what they MUST CONSUME. It might not be a huge amount for some but whatever it is could still be classified as an luxury by some.

[Revi]

I think the danger of peak oil won't pass until we have non fossil fuel substitutes for most of what we do. That's going to be a while.

There's a new way of living that is happening now. My nephews and nieces don't have cars and don't want them. I don't know if they even have drivers licenses. They don't want to live in our world. I'm pretty sure they all have cell phones, though.

[ROCKMAN]

Revi - But here's the point: after we reach PO and there's much less affordable fossil fuels what will those "substitutes" cost the economies...both US and global. There seems to be a general assumption that when we run low on fossil fuels suddenly we'll be flooded with substitutes that cost considerably less. Why? We just went thru a fairly long period of high oil prices (but continued relatively low NG/coal prices) and no great surge of alternative energy. Except for wind in Texas, of course. But that weren't cheap. LOL. The state alone paid $7 BILLION in tax payer monies to expand the grid so we could ship the wind power from where it's generated to where it's consumed. Again, made very good long term sense but still not low cost.

So is the assumption that as we get closer to global PO the price of oil will fall? That makes no sense. And as we approach GPO will the price of the alts (for which there should be greater demand) decline? trhat'snot how the free market works: less competition and higher demand = higher prices. If it works that way with oil and eggs why wouldn't the pricing dynamics be the same with the alts?

[rockdoc123]

Again as long as there's no hard definition of "significant" it remains a relative proposition.

looking back at what oil prices were when US production was only 5 MMB/d one could argue that if there was a return to the supply and demand scenario of that time (taking into account the recession of 2008 2009) the revenue from half the current production would be higher than current revenues. So as you say "significant" is in the eye of the beholder.

Something I said a long long time ago on this site is the issue we face is there are too many "leave it in the ground" folks around who whether it be for lack of education or being saddled with a double digit IQ think that the world can transition to a carbon free economy if a few years. Not going to happen for two reasons....one as Rockman points out people aren't going to take on hardship if they don't have to and more importantly it is physically impossible. Because of the intermittent nature of solar and wind a viable large storage system is required and there just has not been enough headway in that direction as far as I can see. Elon Musk cancelled development of his large battery storage cells, there are some other things in development but that's just it nothing viable currently nor in the immediate future. Nuclear, with the proper regulatory environment, could provide some of the required steady state energy needs but there is a huge mistrust for its safety or the ability to get rid of the waste. Now having wind and solar and nuclear all support a base capacity powered by natural gas would make some sense and I think that is where we should be going. That requires well regulated government subsidies (not handouts to presidential friends) that look to the energy storage issue as well as making solar more economically viable. But this does not leave it in the ground and even to get to a place where you are only using 40% natural gas would take decades to my mind. But then how do you fuel vehicles. An EV owning population may seem like utopia but again it doesn't make a lot of sense when you think that there are a lot of people who live in very cold parts of US and Canada for much of the year and EV's just do not work well. There is also a long way to go in terms of providing enough distance from said vehicles, reliability and battery life. I can see a world where the cities are mainly EV's and rural communities are more fuel based but even that is decades away. But then the elephant in the room is petroleum products such as plastics and chemicals. Pray tell how these will be replaced if you "leave it in the ground". Those EV's still have rubber tires and hoses and all sorts of plastic parts.
This is why I think we are in trouble. The politicians seek to set goals that are ludicrous at best (free carbon society in 20 years etc). In experience the best way to reach a long term goal is to set short term goals that are attainable. If your short term goals are not attainable even under the best scenario there is no way the long term goal will be met. A bit of realistic thinking is required on everyones part I believe.

[Pops]

Pop - Of course we can live on very much less luxury than we do. And yes, transport is a luxury we spend a lot on. This doesn't mean that there is no economy behind it.

Of course oil drives much of civilization, we'd not be talking about it if not.

Look at Sub's quote from Gail on the last page:
the energy profit from oil is no longer sufficient

again, this is what I've been railing against for a couple of years now, since the glut. The meme is the "net energy" of gasoline has fallen so low it is not worth what it was the year previous. Hence the low price.

Not only did this theoretical decline take place overnight but

The price of oil will continue to be low because oil isn't worth anything

But lo and behold, high price reduced consumption and low price increased it. Just as one would expect with any market. The "energy profit" for oil is just fine, it is the scarcity premium that will bite once overall decline sets in.

[AdamB]

After all the discussion we had he about the Red Queen's Race back in 2012-2014 I came to the conclusion that no matter what in geologic terms fracking will be a decade scale flash in the pan.

So fracking being a process invented in the 1940's, that Rockman was doing in the 1970's, indicates we are talking about perhaps a half century long flash in the pan. And the experts, otherwise known as the folks who have the time, resources and expertise to study and model this, and didn't fall for peak oil (which ups their credibility considerably) certainly continue to see resource development well beyond just the most recent burst of boom activity.

When half your production comes from such a technique, one thing you can bet on is that it won't be stopping anytime soon.

http://www.eia.gov/todayinenergy/detail.cfm?id=25372

[AdamB]

If we get 15 or 20 years of additional growth in the oil supply beyond the 2005 peak in conventional oil, that will be great.

All the better to warm the planet, right? Whither thy crocodile tears about AGW, my dearest, most sincere climate activist?

The planet is currently in an icebox phase, when you consider current temperatures against the past. So if the planet has decided it wants to look more like it has in the past, for far longer, who are we to object? Pond scum on the surface is about the value of our contribution to the geologic record of our globe, so cry for whomever you wish, just don't do it for the pond scum pretending arguing like an ant debates his property rights with the owner of the human driving the bulldozer over his anthill.

[AdamB]

Pop - Of course we can live on very much less luxury than we do. And yes, transport is a luxury we spend a lot on. This doesn't mean that there is no economy behind it.

Of course oil drives much of civilization, we'd not be talking about it if not.

Our use of energy to generate power and do work is what drives civilization, oil is just one of the supplies of said energy, and primarily for transport. Which is stupid, but then we have enough of it, and it is cheap enough, that we can afford to be stupid with it.

The only reason oil is in even in the mix isn't because it is a wonderful elixir of the Gods, but because the precursors to chemical engineers figured out how to change it into something useful. Give me a chemical engineer with some ingenuity any day of the week over some preference for the materials you use for chemical feedstock, and he'll hand you back far more useful things, plastics, fertilizer, electricity, liquid fuels, propane, all the manufactured goodies that those guys can come up with.

[ROCKMAN]

Adam - True. Too many folks think philosophies or business plans control the oil patch. It's really just driven by the economics. Not just the evonomies of individual wells but the impact on pubco stock prices by giving the impression of growing asset value.

If oil prices get high again the shales will get hot again. And stay hot until the remaining locations are drilled up. That might be 5 years of 25 years but it will happen.

[Tanada]

After all the discussion we had he about the Red Queen's Race back in 2012-2014 I came to the conclusion that no matter what in geologic terms fracking will be a decade scale flash in the pan.

So fracking being a process invented in the 1940's, that Rockman was doing in the 1970's, indicates we are talking about perhaps a half century long flash in the pan. And the experts, otherwise known as the folks who have the time, resources and expertise to study and model this, and didn't fall for peak oil (which ups their credibility considerably) certainly continue to see resource development well beyond just the most recent burst of boom activity.

When half your production comes from such a technique, one thing you can bet on is that it won't be stopping anytime soon.

http://www.eia.gov/todayinenergy/detail.cfm?id=25372

Nice evasion and cherry picking but I made it clear in that post that I was referring to the LTO we get from tight shale formations using modern techniques. Using vertical wells from the 1940's and conventional formations from the 10970's as counter examples is a non sequitur if there ever was one, like apples and oranges.

[AdamB]

If oil prices get high again the shales will get hot again. And stay hot until the remaining locations are drilled up. That might be 5 years of 25 years but it will happen.

The forecasts of the experts at the EIA would appear to validate your position, 5x5.

Show industry the money, and it's drill baby drill until there is nothing left to drill. Considering how fast production ramped up in just a couple of years, on prices quite a bit lower than the 2008 maximum, it probably wouldn't take even that much to kick off the next ballgame.

[AdamB]

Nice evasion and cherry picking but I made it clear in that post that I was referring to the LTO we get from tight shale formations using modern techniques.

Modern techniques? Hydraulic fracturing was described in that EIA reference I mentioned. Let me quote it here.

Hydraulic fracturing involves forcing a liquid (primarily water) under high pressure from a wellbore against a rock formation until it fractures. The fracture lengthens as the high-pressure liquid in the wellbore flows into the formation. This injected liquid contains a proppant, or small, solid particles (usually sand or a manmade granular solid of similar size) that fills the expanding fracture. When the injection is stopped and the high pressure is reduced, the formation attempts to settle back into its original configuration, but the proppant keeps the fracture open. This allows hydrocarbons such as crude oil and natural gas to flow from the rock formation back to the wellbore and then to the surface.

http://www.eia.gov/todayinenergy/detail.cfm?id=25372

By using the word modern you are implying that this isn't the same definition utilized not only when Rockman was doing it in the 70's, but when this modern procedure began in the 1940's?

Rockman, you want to chime in, is this a bad definition on the part of what hydraulic fracturing is today, or during the yesteryear when you were doing those big fracks in the 70's? Perhaps you didn't use liquids, or perhaps the fracture didn't expand back then, or when the flowback begins, the formation DOESN'T settle back on the proppant?

Inquiring minds want to know.

Using vertical wells from the 1940's and conventional formations from the 10970's as counter examples is a non sequitur if there ever was one, like apples and oranges.

Hydraulic fracturing isn't drilling. It is a completion technology. And regardless of whether or not it is used in a vertical well, or a horizontal one, its purpose is generally the same. Today, just as it was back when boomers were born, about to unleash their consumerist ideology upon the world....

Increase cross sectional flow area.

[ROCKMAN]

Adam - "Considering how fast production ramped up in just a couple of years, on prices quite a bit lower than the 2008 maximum, it probably wouldn't take even that much to kick off the next ballgame." True: the US pubcos (and their creditors) are looking for any opportunity to rekindle the process. But they need to do it very fast: in another couple of years many of the surviving companies today won't be around.

As far as the frac’ng process the definition posted fits the same for a vertical well drilled in 1955 and a horizontal Eagle Ford Shale well drilled in 2015. There has been some tweaking of the fluid chemistry but nothing very radical. And while some new down hole mechanical systems had to be developed to frac hz wells the frac dynamic once pumped into the formation hasn’t changed in more than 50 years: the rocks don’t care how the pressure and proppants got there. LOL.

So let’s focus on the horizontal drilling aspect. That was perfected in the late 90’s primarily in the Austin Chalk formation in Texas. In fact AC hz wells were drilled as far or further than most recent shale wells. Another interesting aspect of the AC: drilling multiple h laterals from the same vertical wells became common…rather rare in the recent shale boom. Fortunately the AC has much natural fractures so frac’ng was seldom used. But the hz well paths were drilled in both the AC and EFS for the same reason: to increase the exposure of the formations to the well bore. The vertical thickness of either formation was typically less than 100’. By drilling hz laterals thousands of feet long mimic drilling dozens of vertical well which allowed a very much improved probability of hitting any of the nearly vertical fracture systems.

[AdamB]

Looks like the EIA is on the ball again, quantifying how much of our natural gas abundance is coming through the use of hydraulic fracturing.

Half of US oil:

http://www.eia.gov/todayinenergy/detail.cfm?id=25372

2/3's of natural gas:

http://www.eia.gov/todayinenergy/detail.cfm?id=26112

Our tax dollars at work, cutting through the crap of speculation and arm waving. Shale revolution indeed.

[AdamB]

Adam - "Considering how fast production ramped up in just a couple of years, on prices quite a bit lower than the 2008 maximum, it probably wouldn't take even that much to kick off the next ballgame." True: the US pubcos (and their creditors) are looking for any opportunity to rekindle the process. But they need to do it very fast: in another couple of years many of the surviving companies today won't be around.

As far as the frac’ng process the definition posted fits the same for a vertical well drilled in 1955 and a horizontal Eagle Ford Shale well drilled in 2015.

I know. But the idea that our government representatives know this, when others don't, is heartening.

By drilling hz laterals thousands of feet long mimic drilling dozens of vertical well which allowed a very much improved probability of hitting any of the nearly vertical fracture systems.

Increase cross section flow area.

The beauty of the physics involved. Doesn't matter if you were doing the process in the 1940's, or plan a job tomorrow afternoon. The physics remain the same. Go physics!

[rockdoc123]

Hydraulic fracturing isn't drilling. It is a completion technology. And regardless of whether or not it is used in a vertical well, or a horizontal one, its purpose is generally the same. Today, just as it was back when boomers were born, about to unleash their consumerist ideology upon the world....

Increase cross sectional flow area.

not to nitpick but I can't resist. The vast majority of vertical well fracking back in the sixties through early nineties was simply to get past formation damage caused either through the drilling process or completion process. For those not in the business formation damage is basically something that happens in a short radius distance around a well bore. Sometimes it is due to very permeable rocks and overbalance during the drilling process which can push mud back into the reservoir and essentially seal off the good reservoir from the well. Other times it is due to a chemical reaction between drilling/completion fluid and the formation or formation fluids, other times it might be mobile clays. The point of the frack in this case is to create a conduit from the wellbore to the undamaged reservoir section. As time went on unconventional tight reservoirs (lower permeability) were fracked in order to create a communication from pore space to the well bore. I believe Rockman's early experience with fracking was in the Austin chalk which is a good example of a reservoir which has extremely high porosity but very low permeability. A frack in this case creates a "sink" for the pore space fluids to travel to the well bore. The same can be said for the really tight (<0.5 md) clastic reservoirs in the Deep Basin of Alberta which were first chased by Jim Grey and John Masters at Canadian Hunter. As time went on horizontal wells were added. Initially these wells were drilled without fracking the idea being one of two concepts either 1. to connect as many natural fractures in the reservoir to the well bore or 2. to allow for production under low drawdown pressure which allows for water cut management of high vertical permeability in very porous and permeable reservoirs which are subject to water coning. Fracks in horizontal wells were intially to cleanup wells but became popular in tight reservoirs as they created a large network of created and natural fractures. With regards to the shales fracking in multi-stages attempts to avoid naturally fractured areas simply because to create the fracture you must increase pore fluid pressure to the failure strength of the rocks. IF there were natural fractures present the fluids would naturally go to the fractures and pore fluid pressure would not build up to the point of virgin rock failure (this is what happened to Cuadzilla in England).

So in reality there are a range of differences, small yes but significant nonetheless. I like to think of this as not increasing cross sectional flow but rather to increasing Kh or permeability height. A horizontal well by its very nature has larger h so when compared to a vertical well the Kh will be much higher. A horizontal well in a virgin shale versus a horizontal well in a fracked shale similarily have differences in K (permeability) which means Kh in a fracked horizontal shale well will be higher than in a non fracked well (all things being equal).

Perhaps more detail than anyone cares to hear, but who cares?

[AirlinePilot]

I think most of us here would agree that the fracking going on pre 2000 was nothing near the scale of what we are seeing post 120$/bbl oil. The fracking today is only happening because of high priced crude. Prior to these high prices fracking was nothing more than a special purpose technique for wells which required its use. I.E. on a much lower scale of total production than what we see today in the Bakken etc.

For Rockman and rockdoc....please correct me if that is not a valid assumption.

[Revi]

I think peak oil is what is causing the economy to tank everywhere. Okay we have a "glut" of oil, but why? If the economy was going full bore and creating demand for lots of wave runners and big trucks and other nonsense it would be using all that oil and more. We are so down around here that I have heard that the demand for food is down so much that a guy in the local market who cuts meat only gets 15 hours a week. Every 6th house or business is abandoned.
Is it like that where you live?

[Pops]

Thanks for the lesson on rocks, rocks!

The obvious reason for making $10 million dollar holes is that $1 million dollar holes are over, extinct.

H drilling and fracking a shale well with a mile of contact in a shale layer 2 miles down and only 50' thick is a pretty amazing thing. The mobilization and tech to produce the frack boom is pretty awesome. But the mere fact the boom happened, is proof enough of the conventional peak. Again, why make $10M holes if $1M holes would do?

I have no idea if the same will happen elsewhere, but the EIA reference case from last year was for the US boom to peak 2020-ish then tail off over the following decade. Pretty well just as Tanada said.

The variable will be supply/demand as always. If demand comes roaring back, the price will jump and so will drilling and the local peak will come faster. If demand rises slower, so will price and drilling will stay confined closer to the sweetie places.

But as ever, depletion and decline continues. Lower demand growth means production will continue to fall and even eventual high price won't be able to bring it back to the previous level.

IOW, even $10M holes will be become extinct
.