Here Comes The Double Dip Pt. 3

[OilFinder2]

Two or three of those plants are already "done deals," which leaves just another two or three in the actual "may" category.

[Daniel_Plainview]

Moreover, as we all know, the US's current GDP bump due to fracking is only a very short-term phenomenon, given that 60-80% of all fracking production nosedives and becomes fully depleted after ONLY ONE YEAR ...

Poor, poor doomers. They're going to have to wait a very, very long time to get this doomsday hope to come true. Their "short term" will turn into years, then decades, to the point where they'll forget they ever predicted it in the first place. Just like all those other failed predictions from the past 2 or 3 years.

Richard Heinberg: "a new well drilled in the Bakken may lose 80 percent of its production rate by the end of the first year ..."

Paul Santos: "shale [fracking] shows a production profile with steeply decreasing production in the first few years. Indeed, the production after the first year can drop by almost 80%, so if for some reason the drilling of new wells slows down enough in one year, this can already have profound implications as early as the next year."



Dave Hughes: "the depletion rate on fracking wells is 63-85 percent in the first year according to Dave Hughes of the Geological Survey of Canada. This can mean fruitless drilling down the slippery slope of diminishing marginal returns."

Frank Clemente (prof at Penn State): "Decline rates in shale gas wells can approach 70 percent the first year, creating a constant treadmill to find additional resources and drill new wells. ... The impact of the fracturing process is a matter of growing concern, particularly in New York and Pennsylvania regarding the Marcellus shale play. The Congressional Research Service, for example, recently reported, “The hydraulic fracturing treatments used to stimulate gas production from shale have stirred environmental concerns over excessive water consumption, drinking water well contamination, and surface water contamination from both drilling activities and fracturing fluid disposal.” In the Marcellus shale region, for example, the Delaware River Basin Commission, responsible for a watershed that serves more than 10 million people, has identified three major areas of concern: reduction of stream flow, pollution of ground and surface water and proper disposal of 'frac water.'”

Joyce Nelson (pdf): "Now some geologists are saying that the use of horizontal drilling and fracking for shale gas production exhausts the well within a mere seven to eight years, with a decline in output of 75% in the first year alone. Some are even calling the sector 'a speculative bubble.'"

FACT: the productive capacity of ND wells depletes between 60%-80% in the FIRST YEAR. A depletion rate of 60-80% DURING THE FIRST YEAR is just plain crazy, and it's the most obvious sign yet as to how desperate the oil junkies have become to acquire their quick heroin fix.

As new wells are opened up, we can expect them to produce 80% of their capacity during the 1st year ... but then in the 2d & 3d years we're left with dribbles and trickles. So unless you're predicting that the entire surface of the US will be fracked (and we're confident that you would readily endorse such a scenario), then the Bakken bump is a limited, one-shot, short-term adrenaline rush. It's just a quick-fix for the fossil fuel junkie.

[Anvil]

I dont think i am a doomer.
Its only realistic to expect the fraud based western economies to collapse under the weight of there own socialist infinite debt based finical systems.
Causing a great depression and cement the power of the new world order lead by china.
The current western system of taxing more, regulating more and stimulating/printing more to achieve growth is insanity.

It doesn't take a genus to see that most western economies are not on a stainable path shifting wealth to the 1%.

[OilFinder2]

Oops! Just when the doomers were getting all excited at the regional Fed manufacturing surveys, along comes the national ISM manufacturing survey, and - WHAM! Doomer hopes get dashed!



ISM Manufacturing survey rises to 54.8% in April

The U.S. manufacturing sector expanded at a slightly faster pace in April, according to the closely followed ISM index. The index climbed to 54.8% last month from 53.4% in March, the Institute for Supply Management said Tuesday. Any reading over 50 indicates that more manufacturers are expanding instead of shrinking. Economists surveyed by MarketWatch had forecast the index to dip to 53.3%. The new-orders index rose to 58.2% from 54.5% in March, while the employment index edged up to 57.3% from 56.1%.

[Lore]

FACT: the productive capacity of ND wells depletes between 60%-80% in the FIRST YEAR. A depletion rate of 60-80% DURING THE FIRST YEAR is just plain crazy, and it's the most obvious sign yet as to how desperate the oil junkies have become to acquire their quick heroin fix.

As new wells are opened up, we can expect them to produce 80% of their capacity during the 1st year ... but then in the 2d & 3d years we're left with dribbles and trickles. So unless you're predicting that the entire surface of the US will be fracked (and we're confident that you would readily endorse such a scenario), then the Bakken bump is a limited, one-shot, short-term adrenaline rush. It's just a quick-fix for the fossil fuel junkie.

Not to mention an average cost per frack well is between 5 - 7 million dollars. Only to watch your investment tail off to nothing in a few short years. Given that they are now fracking the cream, how long will it really be before they hit the wall on EROEI?

[dsula]

Given that they are now fracking the cream, how long will it really be before they hit the wall on EROEI?

EROEI is not important. What is imporant is the price, or better, the PROFIT.

[radon]

Oops! Just when the doomers were getting all excited at the regional Fed manufacturing surveys, along comes the national ISM manufacturing survey, and - WHAM! Doomer hopes get dashed!

Why do you always label bears as "doomers"?

[pstarr]

Daniel/Lore, thanks for the tight-shale depletion overview. It is important to counter the constant drumbeat of lies and distractions from the drillers and their investment-scheme front men. It's almost a classic ponzi scheme. The bubble depends on a vast reservoir of constant new cash at the bottom to keep the scammers afloat. Watch your wallet.

[pstarr]

doomers

Why do you always label bears as "doomers"?

It is one of the practiced techniques OF uses to marginalize folks who don't agree with him. Another is his forced cheerfulness in the face of bitter derision. He hardly ever loses his temper even when your drag him through the rhetorical mud

If it makes you feel better radon, you can also turn derogatory insulting nicknames back on him. I often resort to OilLoser or just plain Oily

[Lore]

Given that they are now fracking the cream, how long will it really be before they hit the wall on EROEI?

EROEI is not important. What is imporant is the price, or better, the PROFIT.

In a sence it's the same thing. Translate the cost to drill, energy invested, on the amount you can make at profit. Factor in demand destruction and it becomes impossible to raise the routine earnings barrier to make a profitable return on that investment.

[dsula]

Given that they are now fracking the cream, how long will it really be before they hit the wall on EROEI?

EROEI is not important. What is imporant is the price, or better, the PROFIT.

In a sence it's the same thing. Translate the cost to drill, energy invested, on the amount you can make at profit. Factor in demand destruction and it becomes impossible to raise the routine earnings barrier to make a profitable return on that investment.

I guess it's much more complicated. In the same way as it is profitable to sell batteries (even though they have a lousy EROEI), it is possible to sell <1 EROEI oil, extracted with the help of NG.

[Lore]

I guess it's much more complicated. In the same way as it is profitable to sell batteries (even though they have a lousy EROEI), it is possible to sell <1 EROEI oil, extracted with the help of NG.

Batteries are profitable because people are willing to pay a price that exceeds the amount of energy lost for the connivance of portable power on demand. Storage batteries are also not a finite base resource. However, in the case of oil you can never exceed the supply, especially at a loss, over the actual demand at profit. You only have to witness the slow down in NG fracking due to oversupply to view this at work.

[pstarr]

Given that they are now fracking the cream, how long will it really be before they hit the wall on EROEI?

EROEI is not important. What is imporant is the price, or better, the PROFIT.

In a sence it's the same thing. Translate the cost to drill, energy invested, on the amount you can make at profit. Factor in demand destruction and it becomes impossible to raise the routine earnings barrier to make a profitable return on that investment.

I guess it's much more complicated. In the same way as it is profitable to sell batteries (even though they have a lousy EROEI), it is possible to sell <1 EROEI oil, extracted with the help of NG.

It is more complicated. (That is an admission from me. ) Way back here at PO.com during GW's corn-ethanol ramp up, I was pretty adamant regarding crappy eroei. I ignored your line of reasoning (but that was okay really because corn ethanol remains a loser). It's true that corn ethanol is a way to convert sunlight, electricity (from coal and natural gas via milling/fermentation/distillation) and lots of diesel (growing/harvesting corn) but as others pointed out, you might as well use the coal and NG directly.

[dsula]

I guess it's much more complicated. In the same way as it is profitable to sell batteries (even though they have a lousy EROEI), it is possible to sell <1 EROEI oil, extracted with the help of NG.

Batteries are profitable because people are willing to pay a price that exceeds the amount of energy lost for the connivance of portable power on demand. Storage batteries are also not a finite base resource. However, in the case of oil you can never exceed the supply, especially at a loss, over the actual demand at profit. You only have to witness the slow down in NG fracking due to oversupply to view this at work.

Exactly, me too, I would be willing to pay for gas to power my chainsaw, even if the gas was made at a loss (energy wise). It's the convinience factor, it's worth a lot, and goes way beyond EROEI.

[dsula]

(but that was okay really because corn ethanol remains a loser). It's true that corn ethanol is a way to convert sunlight, electricity (from coal and natural gas via milling/fermentation/distillation) and lots of diesel (growing/harvesting corn) but as others pointed out, you might as well use the coal and NG directly.

I don't know about corn ethanol. However I have everything lined up to plant sunflower to be processed into bio diesel. Cost of production (all included, also depreciation of equipment, and processing into diesel), approx $2/gallon. How can that be ?

[pstarr]

(but that was okay really because corn ethanol remains a loser). It's true that corn ethanol is a way to convert sunlight, electricity (from coal and natural gas via milling/fermentation/distillation) and lots of diesel (growing/harvesting corn) but as others pointed out, you might as well use the coal and NG directly.

I don't know about corn ethanol. However I have everything lined up to plant sunflower to be processed into bio diesel. Cost of production (all included, also depreciation of equipment, and processing into diesel), approx $2/gallon. How can that be ?

I am also going to give sunflowers a shot here, but mostly as a nutritional oil crop. (it's difficult to grow oil in coastl california)

Regarding biodiesel eroei; here is a link to Pimentel's seminal paper on the subject. Go to page 73 of the report where you will find a chart. Notice how comprehensive the chart is; he depreciates everything! So did you include all farm inputs in your energy accounting? Lime is a big number for soybeans. (don't know about sunflower) Notice the cost of steam to process the oil into biodiesel. Lots of hidden energy costs.

[Lore]

I guess it's much more complicated. In the same way as it is profitable to sell batteries (even though they have a lousy EROEI), it is possible to sell <1 EROEI oil, extracted with the help of NG.

Batteries are profitable because people are willing to pay a price that exceeds the amount of energy lost for the connivance of portable power on demand. Storage batteries are also not a finite base resource. However, in the case of oil you can never exceed the supply, especially at a loss, over the actual demand at profit. You only have to witness the slow down in NG fracking due to oversupply to view this at work.

Exactly, me too, I would be willing to pay for gas to power my chainsaw, even if the gas was made at a loss (energy wise). It's the convinience factor, it's worth a lot, and goes way beyond EROEI.

But there in lies the catch because at a certain point in which that price exceeds the benefit, or your ability to pay for that benefit, you then must seek an alternative. On top of which, fossil fuels are fungible commodities traded on a global market. So you compete for its use by being the next world wide highest bidder, unlike batteries.

While a few precious gallons may still make sense for your chain saw so you can cut wood for the winter, it may just be too expensive to be justified for use in your auto.

[dsula]

So did you include all farm inputs in your energy accounting? Lime is a big number for soybeans. (don't know about sunflower) Notice the cost of steam to process the oil into biodiesel. Lots of hidden energy costs.

I included all the costs relevant to me which is planting and harvesting (including fertilizer etc). For processing it goes to a bio diesel plant that charges me. I have no idea if they operate at a loss or are subsidized.
Sunflowers are hard on soil, you can only plant them one out of 5 years in the same spot. My calculation assumes that the land is not idled but used for other purpose 4 out of those 5 years.

[dsula]

I guess it's much more complicated. In the same way as it is profitable to sell batteries (even though they have a lousy EROEI), it is possible to sell <1 EROEI oil, extracted with the help of NG.

Batteries are profitable because people are willing to pay a price that exceeds the amount of energy lost for the connivance of portable power on demand. Storage batteries are also not a finite base resource. However, in the case of oil you can never exceed the supply, especially at a loss, over the actual demand at profit. You only have to witness the slow down in NG fracking due to oversupply to view this at work.

Exactly, me too, I would be willing to pay for gas to power my chainsaw, even if the gas was made at a loss (energy wise). It's the convinience factor, it's worth a lot, and goes way beyond EROEI.

But there in lies the catch because at a certain point in which that price exceeds the benefit, or your ability to pay for that benefit, you then must seek an alternative. On top of which, fossil fuels are fungible commodities traded on a global market. So you compete for its use by being the next world wide highest bidder, unlike batteries.

While a few precious gallons may still make sense for your chain saw so you can cut wood for the winter, it may just be too expensive to be justified for use in your auto.

I agree, but it has nothing to do with our conversation.
The point is, energy is produced (extracted, processed, pumped, collected, whatever) not on the basis of EROEI, but on basis of PROFIT.

[pstarr]

While a few precious gallons may still make sense for your chain saw so you can cut wood for the winter, it may just be too expensive to be justified for use in your auto.

Key point. Americans are practically immobile without their cars, inexpensive gasoline, and expensive-to-maintain roads, gas stations, pipelines, traffic lights, highways, parking lots, curbs, pothole repair, highway police, salt-spreaders, line-painters, road lighting, traffic signs, overpasses, underpasses, tree pruning, grass cutting, dead-deer-removal, trash collection, roadside assistance, power lines. We Americans are a pricey people.