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Improving Peak Oil Credibility

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

Re: Improving Peak Oil Credibility

Unread postby onlooker » Fri 23 Mar 2018, 20:40:37

"In a depression cash is king but in our non gold standard system today nobody has any actual cash so those that hold real assets debt free will be the only ones with any purchasing power."
That is right, nobody possesses much cash. Except the very rich and the banks. Thus they will be the only ones buying back anything. Also, in analyzing the sequence of events, one should see that inflation has been controlled because the QE has been directed towards the investment class ,banks and key industries . They invest the money or park it and don't outright spend it like an average American. Also, bonds have been purchased by Banks and stocks bought back by companies. So money not necessarily circulating in the Economy.
So the sequence would be inflation being initiated by higher gas prices, setting the stage for really higher interest rates that will upend the stock market frenzy leading to wholesale crash in stocks and other assets . The really higher interest rates is the intentional catalyst which is why they have remained so low for so long. And because the stock market frenzy has truly enriched the already wealthy and well positioned
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Re: Improving Peak Oil Credibility

Unread postby vtsnowedin » Fri 23 Mar 2018, 20:56:17

onlooker wrote:"In a depression cash is king but in our non gold standard system today nobody has any actual cash so those that hold real assets debt free will be the only ones with any purchasing power."
That is right, nobody possesses much cash. Except the very rich and the banks. Thus they will be the only ones buying back anything. Also, in analyzing the sequence of events, one should see that inflation has been controlled because the QE has been directed towards the investment class ,banks and key industries . They invest the money or park it and don't outright spend it like an average American. Also, bonds have been purchased by Banks and stocks bought back by companies. So money not necessarily circulating in the Economy.
So the sequence would be inflation being initiated by higher gas prices, setting the stage for really higher interest rates that will upend the stock market frenzy leading to wholesale crash in stocks and other assets . The really higher interest rates is the intentional catalyst which is why they have remained so low for so long. And because the stock market frenzy has truly enriched the already wealthy and well positioned

Econ 101 and 102 were a few years ago but I think you have a couple of things wrong there. The Fed uses higher interest rates to curb inflation so high gas prices and higher interest rates would have the net effect of curbing inflation. That might well depress the economy and hold back the stock market but not necessarily cause a market collapse. And just why would anybody intentionally cause a collapse?
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Re: Improving Peak Oil Credibility

Unread postby Yoshua » Sat 24 Mar 2018, 05:06:19

The destruction of the real economy continues. US non financial corporations have now $20T in debt, their debt to GDP ration is 100% today. Half of US corporations are losing money.

The tax cut will keep the corporations alive a bit longer. The governments $2T in deficit spending will pump in money into the economy and the corporations as well.

Trump has now started his promised trade war. We will now find out if he's a genius...or if he's just batshit crazy.

Owning the global reserve currency demands that the US floods the world with dollars so that global trade can continue. One way to flood the world with dollars is through trade deficits. These trade deficits must grow as we go down the net energy cliff?

Trump wants to negotiate the trade deals to reduce US trade deficits since the US now own the world close to $20T.
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Re: Improving Peak Oil Credibility

Unread postby marmico » Sat 24 Mar 2018, 05:32:18

One needs to be aware of what is going on with the Utica in order to give perspective to Laherrere's work.


I beg to differ. The EIA says that 2016 proved reserves (latest call out) in the Utica is 15.5 TCF. The Marcellus is 84.1 TCF. Both align with Laherrere.

See Table 4 - https://www.eia.gov/naturalgas/crudeoilreserves/

There is a paucity of evidence supporting your current position that the Utica ultimate recovery is equal to or greater than the Marcellus.
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Re: Improving Peak Oil Credibility

Unread postby coffeeguyzz » Sat 24 Mar 2018, 09:22:13

Proved Reserves from the EIA is a different animal from the Technically Recoverable Resource from the USGS, which is the general approach taken by the consortium led by West Virginia University with their "A Geologic Playbook for the Utica Shale ..." report.

The WVU study pegged 782 Tcf as TRR with over 3,100 Tcf as OGIP.

I personally find it non productive to debate future potentialities as - being in the future - no immediate, conclusive resolution is possible.

People will believe what they wish, but knowing the techniques, timing, available resources employed by various organizations - in addition to ongoing events such as Aikens 5M, 5J, Richhill, Marchand, et al - can provide direction for future developments.
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Re: Improving Peak Oil Credibility

Unread postby vtsnowedin » Sat 24 Mar 2018, 09:31:52

Yoshua wrote:The destruction of the real economy continues. US non financial corporations have now $20T in debt, their debt to GDP ration is 100% today. Half of US corporations are losing money.

The tax cut will keep the corporations alive a bit longer.

A corporation that is losing money didn't owe any federal tax to begin with so the tax cuts are no help beyond stimulating the economy so their customers might buy more of their product.
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Re: Improving Peak Oil Credibility

Unread postby onlooker » Sat 24 Mar 2018, 09:52:23

The Fed uses higher interest rates to curb inflation so high gas prices and higher interest rates would have the net effect of curbing inflation

Precisely, which is why interest rates would be moved higher by the Fed.
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Re: Improving Peak Oil Credibility

Unread postby marmico » Sat 24 Mar 2018, 14:48:17

I personally find it non productive to debate future potentialities as - being in the future - no immediate, conclusive resolution is possible.


Sure. In 2018 you align with the 100 year reserve production ratio (RPR) and I align with the 12 year RPR. As the future becomes the present the RPR will fall in between.
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Re: Improving Peak Oil Credibility

Unread postby AdamB » Sat 24 Mar 2018, 20:05:10

pstarr wrote:
AdamB wrote:I'll believe Lahettete when he shows his geologic work. Until then we've got the USGS on the low side, Doug Patchen and the state geologists at the high end, and the EIA and Texas BEG in the middle. I'll stick with the middle for now, and not just because my estimates are right in there ball park as well.

Since when does Aubrey McClendon's failed intern and the current PO.com office assistant get to compare bragging rights with the pros? "Your" estimate? ha ha ha

Don't make me laugh


Wasn't trying to make you laugh pete. Are you implying that people capable of doing their own estimates, should not?
Last edited by AdamB on Sat 24 Mar 2018, 20:18:21, edited 1 time in total.
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Re: Improving Peak Oil Credibility

Unread postby AdamB » Sat 24 Mar 2018, 20:12:28

marmico wrote:
I'll believe Lahettete when he shows his geologic work.


Laherrere uses Hubbert Linearization for ultimate. It tends to understate same.


Hubbert Linearization is a joke, and the idea that Laherrere hasn't figured that out is terribly disappointing. You probably haven't seen it, because it was never published, but I recall one clever geoscientist testing all the oil and gas fields in the US, using Hubbert Linearization. The game was to determine the sensitivity to only 1 thing...the number of points used for the linearization. Similar to Cavallo's work with global oil back in about 2004, it demonstrated a sensitivity beyond imagination to nothing more than what points any single person choose to pick.

In other words....the results were random in nature based on personal preference. I would think Laherrere would know better.

marmico wrote:
Apparently, the EIA still breaks out Marcellus and Utica separately via DrillingInfo state data.

Image


Of course they do. And here is another interesting tidbit...the EIA person who made the graph you reference, was a listed author on the definition you used from the DPR that says they can't do it. Hence my interest in making a phone call, to sort out a glaring inconsistency.

marmico wrote:Eyeballing the chart, the Utica production slope is lower than the Marcellus. Laherrere and UT BEG are on the same page.


For Lahherrere to get something right, he might certainly need to mimic the Texas BEG answers to these types of questions. The difference being, the Texas BEG will give anyone a demonstration of their geologic work in their industry consortium. And Laherrere doesn't show his geologic work.
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Re: Improving Peak Oil Credibility

Unread postby AdamB » Sat 24 Mar 2018, 20:17:24

marmico wrote:There is a paucity of evidence supporting your current position that the Utica ultimate recovery is equal to or greater than the Marcellus.


Well, that depends on what you consider evidence, doesn't it? The largest resource assessment number out there right now between the Utica and Marcellus resides with the Utica, based on the work of the Utica consortium involving Doug Patchen and Mike Hohn. The USGS, based on assessments done circa 2011 or so, puts the Utica at half the size of the Marcellus (37 TCF to 84, if memory serves?).

The EIA carries reserve and resource numbers within OGSM about the same as the Texas BEG, give or take, in the 350-500 TCF range. Both are reasonable based on USGS and Texas BEG in place estimates (1200 or so, and 1700 TCF respectively).
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Re: Improving Peak Oil Credibility

Unread postby Yoshua » Sun 25 Mar 2018, 15:09:33

It feels like we are at a breaking point. The oil price has been high for some time now. Twice the oil price spiked above 65 USD and both times the stock markets started to crash.

According to fx traders macro trends the dollar is about to spike any moment now. When the dollar spikes, the oil price will collapse.

The $1.3T omnibus bill will suck up dollars from the global market and with less dollars in circulation the dollar price will rise.

If this really happens then there will be riots in oil exporting nations. Will the Fed reverse its policy at that point and start QE4...or will Trump send in the military to shoot up those nations?

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Re: Improving Peak Oil Credibility

Unread postby onlooker » Sun 25 Mar 2018, 15:20:17

Yes Yoshua. The stage is being set for dramatic economic events this year. Will the manipulations continue to allow the oil price to remain high. Or will the pressures finally collapse the price?
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Re: Improving Peak Oil Credibility

Unread postby AdamB » Sun 25 Mar 2018, 15:43:52

Yoshua wrote:It feels like we are at a breaking point. The oil price has been high for some time now.


No it hasn't. Perhaps you missed the crash that happened a few years back, the glut, oil production from the US rearranging global oil politics?

Yoshua wrote: Twice the oil price spiked above 65 USD and both times the stock markets started to crash.


You mean I have the same buying opportunity after the recent "crash" like I did in March of 2009, or are you just pretending that normal market swings are crashes now because you can't find peak oils, doom, or crashes of any type recently, and are hoping some of us might fall for a projection of bravado?

Yoshua wrote:According to fx traders macro trends the dollar is about to spike any moment now. When the dollar spikes, the oil price will collapse.


And as usual, the fuel using consumers will rejoice. You have a problem with happy consumers, other than it doesn't fit into the doomer world view?
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Re: Improving Peak Oil Credibility

Unread postby marmico » Mon 26 Mar 2018, 05:25:34

puts the Utica at half the size of the Marcellus (37 TCF to 84, if memory serves?).


Either refresh your memory or stand on it. As of 2018, Utica < Marcellus notwithstanding coffee's entreaties to the contrary. Now in coffee's defence, CNX, which produces in both Marcellus and Utica, boosted 2017 Utica proved reserves.

http://investors.cnx.com/news-releases/ ... -114613329
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Re: Improving Peak Oil Credibility

Unread postby asg70 » Mon 26 Mar 2018, 11:37:26

onlooker wrote:Yes Yoshua. The stage is being set for dramatic economic events this year. Will the manipulations continue to allow the oil price to remain high. Or will the pressures finally collapse the price?


So we've gone from being willing to finally concede ETP is fundamentally flawed (see sig) to to the current oil price being a function of "manipulations"?
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Re: Improving Peak Oil Credibility

Unread postby Yoshua » Mon 26 Mar 2018, 12:43:36

IF the dollar is about spike/oil is about to collapse...then NOW would be a good time to hedge your oil production. (I'm not giving any economic advice)

It is interesting to look at the organic movement of the dollar. Does it move in a wave like pattern because it's tied to petroleum and oil prices are cyclical?

Why is the long term movement in decline? Because we are ultimately moving towards the end of the oil age...somewhere in the future?

After the dollar reaches its high in December (if it does) then the direction going forward would be down again...falling dollar/rising oil prices...switching from deflation to inflation.

The dollar is the only real global currency. It looks like a very complex currency with a lot of stuff tied to it. All commodities are priced in dollars. Without the dollar global trade would not be possible at todays level. The Fed has a mandate to maintain dollar liquidity globally...a undisclosed mandate.
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Re: Improving Peak Oil Credibility

Unread postby AdamB » Mon 26 Mar 2018, 14:02:28

marmico wrote:
puts the Utica at half the size of the Marcellus (37 TCF to 84, if memory serves?).


Either refresh your memory or stand on it.


If you insist.

USGS, Utica, 2012, 37.2 TCF at the mean

USGS, Marcellus, 2011, 84.1 TCF at the mean

Looks like no Alzheimers yet. You don't really think I'm as stupid as the average peak oiler that just makes this stuff up are?

marmico wrote:As of 2018, Utica < Marcellus notwithstanding coffee's entreaties to the contrary.


I didn't say anything any different. Provided information that supports this point, if only from the USGS. Now perhaps you will consider that other folks have differing opinions, like Doug Patchen's work for the state consortium when they used the USGS method to do their own estimate. And that estimate of the Utica is higher than either the Marcellus EIA or Texas BEG estimate when compared to the Marcellus. Coffee seems to have already provided that reference, so there is no need for me to do it again.

And industry folks have said the same, at national conferences, we aren't taking about bloggers here. So while some people might think that only what you can see today matters when doing calculations of ULTIMATE recovery, others know better.
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Re: Improving Peak Oil Credibility

Unread postby coffeeguyzz » Mon 26 Mar 2018, 17:12:16

... And as a follow up, Adam, that 2011 Marcellus assessment from the USGS had 1.15 Bcf as the mean EUR with 4 wells/square mile (5,000' laterals).

The 2012 Utica study pegged .6 Bcf (again, that is POINT 6) Bcf EUR.

I'll not go into how so many Appalachian Basin wells do way more than that in 30 DAYS, NOT 30 years, as the USGS assessments called for.

Observations from CNX' Marchand well from people in the neighborhood are very bullish.
Jet engine sound from flare being loudly heard 5 miles away.

XTO should have 1 Jefferson county and 1 Indiana county Deep Utica wells online in the coming months.
If CNX is correct in their DU evaluation - and 1,700 planned Deep Utica wells sure shows their optimism - hydrocarbon world is gonna be rocked.
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Re: Improving Peak Oil Credibility

Unread postby AdamB » Mon 26 Mar 2018, 22:25:31

coffeeguyzz wrote:... And as a follow up, Adam, that 2011 Marcellus assessment from the USGS had 1.15 Bcf as the mean EUR with 4 wells/square mile (5,000' laterals).


Not to bust on your parade Coffee, but the USGS did no such EUR normalizing at all in that assessment, as best I can tell they haven't ever done it since about the time they began using their new methods. They might do it nowadays? Maybe..but I haven't seen the reference mentioning it yet. If you have one, I would appreciate seeing it. As far as the mean cell size for the Marcellus in 2011, that was 149 acres. Page 3, 1st paragraph.

coffeeguyzz wrote:I'll not go into how so many Appalachian Basin wells do way more than that in 30 DAYS, NOT 30 years, as the USGS assessments called for.


And I won't go into the amount of area considered inside a given assessment unit that isn't in the sweet spots where your information most likely comes from. The problem here is how to handle the geologic variability within a huge area like that. The Texas BEG operates at a very small resolution, and arguably the EIA doing EUR averages at the county area in a huge AU like that makes more sense than using a single distribution. But guessing at a distribution across an entire area obviously include more crappy area than prime area, so one of the ways you can simulate that within a big area method like theirs is to go with EURs that don't just reflect sweet spot EURs, but what the distribution looks like after the sweet spots and ram pasture have all been drilled to equal densities.

coffeeguyzz wrote:Observations from CNX' Marchand well from people in the neighborhood are very bullish.
Jet engine sound from flare being loudly heard 5 miles away.


Not hard to do with a CO2 frack in shales back in the 70's and 80's, there is a blue flame looking thing coming out of the wellhead and it was blowing chunks of shale a couple hundred feet into the sky. Easy to make noise. Me...I want sustainable reservoir volume, not just the usual effect when blowing down some casing.

coffeeguyzz wrote:XTO should have 1 Jefferson county and 1 Indiana county Deep Utica wells online in the coming months.
If CNX is correct in their DU evaluation - and 1,700 planned Deep Utica wells sure shows their optimism - hydrocarbon world is gonna be rocked.


And peak oilers will continue to flop around like fish out of water...and all because they have zero imagination when it comes to geologic potential.
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