[rockdoc123]

Your promotions are a waste of time. You need to go back over conversations we've had over the years regarding SAGD and THAI and other expensive gimmicks and explain why they have never panned out.

I hope that you really don't think you understand this simple concept yet. Otherwise you just be a investment scam plant.

God you truly are thick. I point to the fact that SAGD has been produced at significant rates for the last 4 years from a Suncor/PetroCan field and you try to tell us that SAGD never panned out. Its producing, its obviously making profit or they wouldn't still be doing it. This doesn't mean that all SAGD projects will work but those are technical issues or dependent on the availability of gas for power or water for steam creation, and certainly not economic limit at anything over $80-/bbl.

The failure of THAI (to this point in time) also has nothing to do with EROEI. The problem Petrobank are having is control of the fire flood direction.

You are confusing a concept based on energy balance with micro-economics which is the prime driver in oil and gas investment decisions.

[sparky]

.
The research unit of Goldman Sach had warned three weeks ago of a popping of the oil and commodity bubble ,way before the Bin Laden business
From the Financial Times

"On Friday, Jeffrey Currie, Goldman’s head of commodities research, reiterated the bank’s call to sell the raw materials sector, saying: “Mounting downside risks to current exceptionally high crude oil prices are leading us to recommend an underweight allocation to commodities.”

they thus have good credibility , they warn of a severe supply squeeze for later in the year growing to a crisis by early next year


"We continue to see fundamentals tightening over the course of this year, "
"likely reach critically tight levels by early next year should Libyan oil supplies remain off the market. "

For all of us who didn't see it coming , console yourselves you are in illustrious company
Barclays capital got eggs all over their face , they dismissed Goldman warning .

and harsher still

" Clive Capital, the world’s largest commodity hedge fund, has been left nursing losses of more than $400m as a result of the dramatic collapse in the price of oil last week."

I don't know what is going on , but there is a lot of it

[dolanbaker]

Brent has gained $2 already this morning, things are looking very skittish out there.
OPEC claim that the "speculative gain" is about $25 a barrel, looking at the recent flucturations, they maybe correct.

Was that a bear trap?
Could the price ramp up to $140+ (Brent) before crashing at the end of the summer...

[evilgenius]

Pops,

I fear your assessment may be correct. Oil prices seem to be collapsing for the last few days. Today alone we are down over 5%. Maybe oil is a leading indicator for an upcoming depression.

I would say it definitely an indicator for a deflationary depression which would justify QE3 thus sending commodities back up!

Looks like Ben is on a rollercoaster of inflation and deflation but he's always a few steps behind the curve. The moment he thinks of ending QE early everything deflates, then when inflation rears it's head he's forced to continue QE.

I don't think the wild swings are by design but if it get's Obama re elected and GS big bonuses he's doing his job.

We're in the same deflationary depression that began in September 2008. This 2008 Depression was never allowed to cure itself due to unprecedented govt/Fed intervention. The govt/Fed has now created a massively distorted economy which, like a heroin junkie, must remain on drugs lest a fast-crash happen. Except now, in 2011, the US is saddled with 14.4T in debt and cannot afford further massive bailouts and expensive govt stimulus. The US will respond with more money printing (QE3) which eventually will lead to a Wiemar Germany meltdown.

I agree with a lot of what you say, except the Wiemar meltdown. Hyperinflation is caused by a total lack of confidence in a currency. People will probably not be carting wheelbarrows full of dollars around to buy loaves of bread simply because of quantitative easing. It is much more likely that they will be vise clamping their last few dollars and wisely plotting which essential items they will buy with them.

[rockdoc123]

This one small profitable project is not a testimony to the validity of the overall model. The Suncor/PetroCan operation is an exception, an outlier and benefits from subsidies (tax breaks, investment/promotion loss leader, cheap electricity (hydro perhaps?), abundant/convenient/local gas/water supplies). SAGD and THAI are no longer new or interesting and the Suncor success is not fungible

You are so full of it all I can do is shake my head.
Nexen at Long Lake SAGD = 30,000 bopd average in 2010 with several other projects in the works
Suncor at Firebag = 60,000 bopd, 2 more projects in the works
ConocoPhillips at Surmont = 27,000 bopd with the second project supposed to have been completed in Dec 2010 which should bring the production up to 88,000 bopd
A number of others also producing: CNRL at Kirby, Connacher at Alger and Great Divide

Hauling methane from Saturn and water from the Amazon is just too damn costly. Dare I say, POINTLESS.

That statement might have some meaning if they were currently running out of water or gas in the areas where development is ongoing, which, of course, they are not. Natural gas is cheap because there is a lot of it around thanks to the shale gas projects.

No. I. Am. Not. If fire-flood management weren't so damn expensive (in energy/money) then it wouldn't be an issue. This reminds me of pointless discussions with Maddog and Shorty. They refused to understand that energy economics (EROEI) underlies all cost/benefit analysis--ecologic, evolutionary, economic, or industrial. You need to bone up on your Odum, Cleveland, Hall, Hamilton et. al.

Well first off SAGD isn't fire flood, thats THAI. Again, I reiterate....EROEI is not taken into account in petroleum economics, never has been and never will be. How do I know this? I took several course in Petroleum economics many years ago and from time to time have run scoping economics for various potential investments and have been in management positions where I was making decisions based on the companies economic models. I'm not making this stuff up.

For those of you who are interested in how the industry looks at economics for SAGD in particular First Energy has a good presentation they made not that long ago. I draw your attention to the calculation of NPV/bbl which shows it up around $6/bbl at higher prices. My experience is that is a very healthy measure (Colombia is around $5/bbl, Algeria $4/bbl).
http://www.firstenergy.com/research/documents/FirstFocus-I-SAGD-2010-03-17.pdf

[dolanbaker]

Brent has gained $2 already this morning, things are looking very skittish out there.
OPEC claim that the "speculative gain" is about $25 a barrel, looking at the recent flucturations, they maybe correct.

Was that a bear trap?
Could the price ramp up to $140+ (Brent) before crashing at the end of the summer...

Brent now up to almost $117, Didn't expect it to recover that quickly!

[kublikhan]

30,000 bopd. That's nice that some lucky investor is making money. I hope it is you. But. Assuming we are at peak, and IEA's 6.7% depletion rate holds true, then those piddling little spurts amount to . . . piddling little spurts. I'll let you do the math, Rocky. But I am not interested in belaboring this issue.

Alberta SAGD production was just over 300k barrels a day. Projections are for SAGD production to grow to 2 million barrels a day by 2020. 2 million barrels seems much more substantial than 30,000 barrels, but it is still just a drop in the bucket in the big picture and will not offset oil production declines.

Thermal bitumen production in Alberta climbed to 549,024 barrels a day in October, up from 434,096 in October 2009 and 407,558 barrels a day in October 2008.

The October 2010 numbers, based on Alberta Energy Resources Conservation Board data and published on the Oilsands Review website, are the most recent available.

New and expanded SAGD projects accounted for most of the increase.

Alberta SAGD output in October averaged 316,508 barrels of bitumen a day, up from 255,409 in October 2009 and 202,692 barrels a day in October 2008.

In its in situ oilsands overview, Peters & Co. Limited said SAGD production has the potential to rise to nearly two million barrels a day by 2020, based on planned projects.

SAGD output continues to climb despite challenges

In its latest World Energy Outlook, the International Energy Agency (IEA) estimated that the average observed decline rate worldwide is currently 6.7%, and is projected to increase to 8.6% by 2030. Decline rates for the super-giants are 3.4%, 6.5% for giant oilfields, and 10.4% for large fields. Moreover, natural decline rates (a natural decline rate strips out ongoing investment in new production) are estimated at 9% for post-peak fields. The implication of these large and accelerating decline rates is alarming: "The implications are far-reaching: investment in 1 mbd of additional capacity—equal to the entire capacity of Algeria today—is needed each year by the end of the projection just to offset the projected acceleration in the natural decline rate"

Oil Rises, Oil Falls


World Oil Capacity

[sparky]

.
The bounce back in price could be only covering positions for those who ferociously sold off
last week , I don't know and I suspect some serious money is pushing on both sides .

we should have a clearer view at the end of the driving season
the market is in turmoil ,if this is the bottom , that's still in the 100$ range
it would have been seen as ludicrously expensive last year .
when the market is this "Frothy " keeping out is the safest bet

[bratticus]

but once the price drops people (and their software) sees the lower price as a "good buy" and grabs it causing a "dead cat bounce" (as in "even a dead cat will bounce if dropped from high enough".)

[rockdoc123]

30,000 bopd. That's nice that some lucky investor is making money. I hope it is you. But. Assuming we are at peak, and IEA's 6.7% depletion rate holds true, then those piddling little spurts amount to . . . piddling little spurts. I'll let you do the math, Rocky. But I am not interested in belaboring this issue.

sure...just change the argument mid course. First your adamant that SAGD will never be economic (even though there are numerous examples where it is being produced economically) and then you change the argument to...well it can't replace existing world decline. So what? No one said it would. What was said is it is economic, which of course it is.

[Pops]

sure...just change the argument mid course. First your adamant that SAGD will never be economic (even though there are numerous examples where it is being produced economically) and then you change the argument to...well it can't replace existing world decline. So what? No one said it would. What was said is it is economic, which of course it is.

Now yer catchin' on...

.

[ColossalContrarian]

.
The bounce back in price could be only covering positions for those who ferociously sold off
last week , I don't know and I suspect some serious money is pushing on both sides .

we should have a clearer view at the end of the driving season
the market is in turmoil ,if this is the bottom , that's still in the 100$ range
it would have been seen as ludicrously expensive last year .
when the market is this "Frothy " keeping out is the safest bet

I couldn't agree more about serious money pushing on both sides.

I see downward pressure on price (you can post that in the predictions thread) but I don't see this as a good thing. I see oil prices plummeting while extraction prices increase.

Why?

Because with energy prices volatile in the macro spectrum, on the micro spectrum they'll lead to an increase in green energy thinking and conservation. Just like in the summer of 08' we'll see macho trucks for sale everywhere and more people telecommuting -ie. maxed to capacity RTD buses and trains/light rail.

People make money on both sides of the deal. When the "green energy" crew goes into a bubble the price of oil collapses and the folks in fossil fuels pick up. It used to be a 15 year cycle and now it's collapsed into a 2-3 year cycle. Oil skyrockets and solar/wind picks-up. Oil collapses and so does solar/wind. It seems like the waves are getting shorter now.

It's like there is desperation for energy and then there isn't. We need giant batteries to smooth things out a little!

[bratticus]

Guess who's not behind he wheel of a large automobile?

China April Car Sales Growth Slows on Fuel Prices, Quake
Kae Inoue / Bloomberg / May 10, 2011

Total vehicle sales fell 0.25 percent in April to 1.55 million units as sales of commercial vehicles declined, according to the auto group. Commercial-vehicle deliveries dropped 7.8 percent from a year ago to 409,700 units, it said.

India car sales growth slowest in nearly 2 years
By ERIKA KINETZ / Bloomberg / May 9, 2011

India has been struggling with high inflation, and nine rate hikes by the central bank in a little over a year have raised the cost of financing just as carmakers are increasing prices to reflect higher input costs. ... Many anticipate that the central government will further raise gasoline and diesel prices -- which it subsidizes at great cost -- in an effort to reduce its fiscal deficit, giving car buyers an additional disincentive.

[Cyrus]

30,000 bopd. That's nice that some lucky investor is making money. I hope it is you. But. Assuming we are at peak, and IEA's 6.7% depletion rate holds true, then those piddling little spurts amount to . . . piddling little spurts. I'll let you do the math, Rocky. But I am not interested in belaboring this issue.

Alberta SAGD production was just over 300k barrels a day. Projections are for SAGD production to grow to 2 million barrels a day by 2020. 2 million barrels seems much more substantial than 30,000 barrels, but it is still just a drop in the bucket in the big picture and will not offset oil production declines.

Thermal bitumen production in Alberta climbed to 549,024 barrels a day in October, up from 434,096 in October 2009 and 407,558 barrels a day in October 2008.

The October 2010 numbers, based on Alberta Energy Resources Conservation Board data and published on the Oilsands Review website, are the most recent available.

New and expanded SAGD projects accounted for most of the increase.

Alberta SAGD output in October averaged 316,508 barrels of bitumen a day, up from 255,409 in October 2009 and 202,692 barrels a day in October 2008.

In its in situ oilsands overview, Peters & Co. Limited said SAGD production has the potential to rise to nearly two million barrels a day by 2020, based on planned projects.

SAGD output continues to climb despite challenges

In its latest World Energy Outlook, the International Energy Agency (IEA) estimated that the average observed decline rate worldwide is currently 6.7%, and is projected to increase to 8.6% by 2030. Decline rates for the super-giants are 3.4%, 6.5% for giant oilfields, and 10.4% for large fields. Moreover, natural decline rates (a natural decline rate strips out ongoing investment in new production) are estimated at 9% for post-peak fields. The implication of these large and accelerating decline rates is alarming: "The implications are far-reaching: investment in 1 mbd of additional capacity—equal to the entire capacity of Algeria today—is needed each year by the end of the projection just to offset the projected acceleration in the natural decline rate"

Oil Rises, Oil Falls


World Oil Capacity

Wats up OILFINDER2?

[bratticus]

I think it's a dead cat bounce.

WTIC fell under $100 again.


How much longer before DJIA under 8000 again just like in 2008?

‘Peak Demand,’ Yes, But Not the Nice Kind
By Chris Nelder
Friday, March 5th, 2010

... Most people thought the nearly 2 mbpd decline in U.S. petroleum demand from 2007 through 2009 owed to efficiency and people driving less.

In reality, only about 15% owed to reduced gasoline demand. The other 85% was lost in the commercial and industrial sector: jet fuel, distillates (including diesel), kerosene, petrochemical feedstocks, lubricants, waxes, petroleum coke, asphalt and road oil, and other miscellaneous products.

Very simply, when oil got to $120 a barrel it cut into real productivity, and forced the world’s most developed economies to shrink. At $147, it wreaked serious damage. ... the new normal will be cycles of bumping our heads against the supply ceiling, falling dazed to the floor, rising back to our knees, then finally standing, only to bump our heads against the ceiling once more.

http://www.youtube.com/watch?v=-757E56lcqo

[kublikhan]

Wats up OILFINDER2?

Ummm, did you see the graph I posted? It shows we will need to be finding a new Saudi Arabia every 2 years just to break even with oil production(not very likely). Seems pretty doomerish to me.

[Cyrus]

Wats up OILFINDER2?

Ummm, did you see the graph I posted? It shows we will need to be finding a new Saudi Arabia every 2 years just to break even with oil production(not very likely). Seems pretty doomerish to me.

I mean I want Oilfinder to come up with some a google news article to disprove the fact that a pool can be drained.

[bratticus]

Once the price drops people (and their software) sees the lower price as a "good buy" and grabs it causing a "dead cat bounce" (as in "even a dead cat will bounce if dropped from high enough") causing the price to bounce back for a moment despite the fundamentals not supporting that price and the downward trend generally continuing.

OPEC ORB Dead Cat Bounce

The end of April 2011 OPEC average price for oil hit $120 and *kaboom* just like in the summer of 2008:
$120 oil drives businesses into the dirt.
Force Majeure, Bankruptcy, Defaults all add up to demand destruction.

‘Peak Demand,’ Yes, But Not the Nice Kind
By Chris Nelder
Friday, March 5th, 2010

The true import of peak oil, therefore, may not be sustained high prices, but economic shrinkage.