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Peak Permian means Global Peak Oil will happen in 2020

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

Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby tita » Thu 01 Mar 2018, 05:15:39

I think it's clear that operators increased substantially the initial rate of LTO wells using various techniques (proppants and longer lateral among them). The average IR of a 2017 well can be 50% to 100% higher than 2014. This alone can explain how operators could sustain production with fewer rigs (outside the permian). But it still short to explain the surge in the last months of 2017.

What if operators could sustain initial rates a little bit longer? We know the production rate of LTO wells reach a peak at the first full month of production before depleting in an exponential way. But if you could delay the depletion to the second or third full month of production, you get an instant production surge, as new wells just add production instead of replacing production from legacy wells. This also means that, along with higher IR, you recover the oil in place faster. But if the UOR stays the same, this also means that depletion is also steeper when it begins.

This appears to be what happened in the Bakken:
Image

Of course, this should be taken with caution. Another issue is about the performance of new wells when you take out the benefits of the costlier techniques used to improve initial rates, in this article:
https://www.spe.org/en/jpt/jpt-article-detail/?art=3832
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby rockdoc123 » Thu 01 Mar 2018, 10:08:04

But if the UOR stays the same, this also means that depletion is also steeper when it begins.


I think that might be the trick here. Longer laterals access greate amounts of reservoir which will increase per well EUR. Better completion techniques (propants etc) can increase recovery factor which also will increase EUR.
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby peakoilwhen » Sun 04 Mar 2018, 14:35:13

>Peak Permian means Global Peak Oil will happen in 2020
>Permian

False premise : oil is fossil from ancient Earth.
Wrong assertion : there will be a geo-peak

wrong idea leads to a wrong prediction. Oil is not cretacious, permian, triassic or jurassic or any other age other than recent. Like within the last 10 million years, a lot will be less than a million years old. It seeps out the mantle into the crust and then decomposes.
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby tita » Tue 06 Mar 2018, 13:04:47

Quite an interesting skeptic on current forecasts of shale, Mark Papa, former CEO "EOG" and current CEO of "centennial":
https://www.wsj.com/articles/shale-trai ... 1520257595

Forecasts like the one from IEA that see a US production growth of 3.8 mb/d till 2023, only from shale oil and LNG (shale gas).
Image

Which place the US as the major supply growth in the next 5 years:
Image

Yeah, forecasts... this one looks like it stretched last year trend over the next five years, with some adjustments to stick to the forecasted demand.

At the same time, the IEA warn about underinvestment and depletion:
“But as we’ve highlighted repeatedly, the weak global investment picture remains a source of concern. More investments will be needed to make up for declining oil fields – the world needs to replace 3 mb/d of declines each year, the equivalent of the North Sea – while also meeting robust demand growth.”

With even the word "peak" inside one of the slides:
Image
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby Plantagenet » Sun 01 Apr 2018, 17:19:49

A new chokepoint has developed that is slowing the development of the remaining Permian oil---there's more natural gas mixed in with the oil then anticipated.

a-choke-point-in-the-permian

As the best acreage in the Permian is used up, the remaining oil shale is lower quality and just isn't as prolific in oil production. Here's a sign of that----the amount of NG being produced is going up in current wells and the amount of oil is going down.

It doesn't mean Peak Permian is happening now....but it does mean continuing to grow oil production in the Permian is getting harder and harder. And when oil production stops growing, that will be PEAK PERMIAN.

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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby AdamB » Sun 01 Apr 2018, 18:28:21

Plantagenet wrote:It doesn't mean Peak Permian is happening now....but it does mean continuing to grow oil production in the Permian is getting harder and harder. And when oil production stops growing, that will be PEAK PERMIAN.

Cheers!


Sure. Just like there was a peak US back about half a century ago. It was a good one...well...until another came along.

Image
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
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Peak Permian means Global Peak Oil coming ca. 2020s

Unread postby Plantagenet » Sun 01 Apr 2018, 20:52:30

AdamB wrote:
Plantagenet wrote:It doesn't mean Peak Permian is happening now....but it does mean continuing to grow oil production in the Permian is getting harder and harder. And when oil production stops growing, that will be PEAK PERMIAN.

Cheers!


Sure. Just like there was a peak US back about half a century ago.


Oil production in the Permian and in the US as a whole now exceeds the level it reached in 1970. That means neither the peak in Permian oil production nor the peak in US oil production occurred in 1970.

Cheers!

Image
1970 was not the peak in US oil production as many still believe. US production now exceeds the 1970 level and is still going up. Eventually it will peak...perhaps ca. 2020-2022.
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby tita » Fri 20 Apr 2018, 02:09:47

Something maybe overlooked in the forecasted growth of US oil production, especially in the Permian, is the infrastructure needed. It's not only the pipelines or the drilling rigs, but also basically trucks to move the huge amount of sands and water needed in the fracking stage, and the roads for these trucks. Rystad Energy raise concerns on these issues.
https://oilprice.com/Energy/Crude-Oil/A ... Shale.html
https://communications.rystadenergy.com ... :C5ViiKCsI
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby Outcast_Searcher » Fri 20 Apr 2018, 12:08:47

tita wrote:Something maybe overlooked in the forecasted growth of US oil production, especially in the Permian, is the infrastructure needed. It's not only the pipelines or the drilling rigs, but also basically trucks to move the huge amount of sands and water needed in the fracking stage, and the roads for these trucks. Rystad Energy raise concerns on these issues.
https://oilprice.com/Energy/Crude-Oil/A ... Shale.html
https://communications.rystadenergy.com ... :C5ViiKCsI

As usual, it's about money. If global demand for oil keeps growing apace and the overall supply is constrained re the lack of production and new discoveries mentioned recently, then the price of oil will rise as it becomes more obvious that shortages are the risk. Rising prices provide the incentive to invest more and have a shot at reaping serious profits.

Same as it ever was.

For all its flaws, capitalism regulates the flow of self-interested capital better than any pile of government "leaders" could ever hope to.

It produces an ugly, bumpy, risky market, but over time, the market works rather well overall, despite the constant proclaimations of imminent doom (because things aren't ideal).

Such constraints are actually a good thing -- or the market would have even larger and more frequent booms and busts.

Oh, and if the constraints result in high enough prices they cause people to conserve more and burn less, well:

1). That's better for the planet.
2). That should help alternatives like BEV's and PHEV's gain more market share quicker.
3). And clearly, this would be another example of the markets/capitalism working, by adjusting to the reality of market pricing signals.
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby Darian S » Fri 20 Apr 2018, 23:29:43

Outcast_Searcher wrote:
tita wrote:Something maybe overlooked in the forecasted growth of US oil production, especially in the Permian, is the infrastructure needed. It's not only the pipelines or the drilling rigs, but also basically trucks to move the huge amount of sands and water needed in the fracking stage, and the roads for these trucks. Rystad Energy raise concerns on these issues.
https://oilprice.com/Energy/Crude-Oil/A ... Shale.html
https://communications.rystadenergy.com ... :C5ViiKCsI

As usual, it's about money. If global demand for oil keeps growing apace and the overall supply is constrained re the lack of production and new discoveries mentioned recently, then the price of oil will rise as it becomes more obvious that shortages are the risk. Rising prices provide the incentive to invest more and have a shot at reaping serious profits.

Same as it ever was.

For all its flaws, capitalism regulates the flow of self-interested capital better than any pile of government "leaders" could ever hope to.

It produces an ugly, bumpy, risky market, but over time, the market works rather well overall, despite the constant proclaimations of imminent doom (because things aren't ideal).

Such constraints are actually a good thing -- or the market would have even larger and more frequent booms and busts.

Oh, and if the constraints result in high enough prices they cause people to conserve more and burn less, well:

1). That's better for the planet.
2). That should help alternatives like BEV's and PHEV's gain more market share quicker.
3). And clearly, this would be another example of the markets/capitalism working, by adjusting to the reality of market pricing signals.


The rumor is the economy cannot handle significantly higher prices. Word is that will result in demand destruction, so price cannot get too high, and cannot remain at a too high a level for indefinite periods either.
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby Tanada » Sat 21 Apr 2018, 09:47:05

Darian S wrote:The rumor is the economy cannot handle significantly higher prices. Word is that will result in demand destruction, so price cannot get too high, and cannot remain at a too high a level for indefinite periods either.


Just where do you set the benchmark for too high? That is the real issue is it not? While the USA and EU were struggling when Oil was $100+/bbl to a certain extent the Asian powerhouse countries of China, India and yes even Indonesia and Thailand and Vietnam were chugging along just fine and increasing world demand even as USA/EU demand was falling significantly.

In the 1978-80 crash in oil demand in the USA/EU due to the Iran/Iraq war and prices that resulted from that conflict world demand went down because the countries there were the ones most effected economically. But in those days the USA/EU were the bulk of the world economic trading system while the USSR/Warsaw Pact were a separate Second World economically independent of the First World. When the 2005-2008 run up in prices took place as the cheap old fields were unable to meet the new demand from Asia the "First World" had economic problems just like we had in the late 1970's. The USA and EU specifically underwent a significant decline in demand following the same pattern as we had seen in the past. However at the same time demand was growing so rapidly in Asia with small additions elsewhere that as the EU and then USA decreased oil use every drop not consumed in our regions still found buyers even though the price was significantly elevated over the 1986-2004 averages. So this time when 'First World' demand went down significantly that 'loss' in demand was compensated for completely by Asia and as a result while world demand dipped slightly at first it was back to growth quickly and we have since exceeded world demand of 2005 significantly.

I see no reason why even if the USA/EU go back into the economic doldrums as prices head back into the $100/bbl territory for this to stop being true in 2018-2020, and economic projections further than that are pure speculation.

So I repeat, just how high would/will prices have to reach to impact Asian demand growth? Because that region is now the world economic powerhouse, not the USA/EU as it was last century, or the British Empire as it was the century before that.
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby Darian S » Mon 23 Apr 2018, 00:13:19

At least china has artificially massaged their economy. And from what I hear debt has been skyrocketing globally in the recent past.

Global debt has grown by $57 trillion in seven years following the financial crisis

Global debt has increased by $57 trillion in the seven years following the financial crisis, according to a new report, while China’s debt as a share of GDP now stands at higher than that of the US-theguardian
Many economists are particularly concerned about the situation in China, where corporate bank-borrowing has exploded since the global financial crisis. -independent


You can temporarily increase demand for a short while by borrowing against the future, but it is unsustainable. Physics, energy, it underlies the economy, debt cannot drive the economy, real physical activity requires energy at every step, you can camouflage the situation for a while, but inevitability will catch up to you.
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby ROCKMAN » Mon 23 Apr 2018, 11:14:13

Darian - "You can temporarily increase demand for a short while by borrowing against the future, but it is unsustainable." And thus the perpetual problem of using short term trends (a year or 3) to predict long term trends (5 to 10 years). The lag times are just to difficult to factor into the dynamics.
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby Darian S » Mon 23 Apr 2018, 12:17:02

ROCKMAN wrote:Darian - "You can temporarily increase demand for a short while by borrowing against the future, but it is unsustainable." And thus the perpetual problem of using short term trends (a year or 3) to predict long term trends (5 to 10 years). The lag times are just to difficult to factor into the dynamics.


The financial crisis was on 2008. Some of these articles are from 7 years later. 10 years later, and has debt suddenly stopped rapidly rising?

The word is by 2020s demand might start outpacing supply. And this is assuming an everything as usual scenario. We're on increasing anthropogenic climate change + potential world war scenario. A natural disaster or war could interrupt global supply. Some say some of the world's top billionaires' positions appear to show they are betting on a near term global financial crisis arising.
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby ROCKMAN » Mon 23 Apr 2018, 14:22:45

Darian - "The word is by 2020s demand might start outpacing supply." Demand (except during one specific dynamic) cannot exceed supply. Nor can supply exceed demand. Unless you have a very different definition of "demand"...such as demand = what consumers WANT to buy and not what they can afford to buy.

Supply will always equal demand. EXCEPT if oil prices become so low that there are many more buyers with the funds to acquire oil then there is oil production. Which cannot persist for very long because producers would use such demand to increase prices eliminating those potential buyers unable to afford the more expensive oil.

When oil fell to $29/bbl there were buyers for every bbl being sold. A lot of buyers which is why prices increased immediately after that low point was reached. Just as there were buyers for every bbl being sold when oil reached $146/bbl. Not as many buyers which is why prices decreased immediately after that high point was reached.
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby Darian S » Mon 23 Apr 2018, 23:59:08

ROCKMAN wrote:Darian - "The word is by 2020s demand might start outpacing supply." Demand (except during one specific dynamic) cannot exceed supply. Nor can supply exceed demand. Unless you have a very different definition of "demand"...such as demand = what consumers WANT to buy and not what they can afford to buy.

Supply will always equal demand. EXCEPT if oil prices become so low that there are many more buyers with the funds to acquire oil then there is oil production. Which cannot persist for very long because producers would use such demand to increase prices eliminating those potential buyers unable to afford the more expensive oil.

When oil fell to $29/bbl there were buyers for every bbl being sold. A lot of buyers which is why prices increased immediately after that low point was reached. Just as there were buyers for every bbl being sold when oil reached $146/bbl. Not as many buyers which is why prices decreased immediately after that high point was reached.


Supply might equal demand always in those matching graphs were supply meet demands and price can change to allow supply to increase almost divorced from the physical world.

But if price increases cannot be sustained, so as to increase supply, what will happen is that the demand level of a healthy growing economy won't be met, and you will have so-called demand destruction affecting the health of the economy.
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby Plantagenet » Fri 11 May 2018, 11:49:50

Geologist Art Berman predicts imminent peak oil in Eagle Ford and Permian Basin

shale-skeptic-forecasts-imminent-demise-for-permian-and-eagle-ford

"The growth is done" ---Art Berman. That means the oil production rate is about to peak.

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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby pstarr » Fri 11 May 2018, 12:19:09

Plantagenet wrote:Geologist Art Berman predicts imminent peak oil in Eagle Ford and Permian Basin

shale-skeptic-forecasts-imminent-demise-for-permian-and-eagle-ford

"The growth is done" ---Art Berman. That means the oil production rate is about to peak.

Cheers!

Hum??? I thought it already peaked at 82,411 mbpd in Nov. 2016?

TABLE 11.1B WORLD CRUDE OIL PRODUCTION: PERSIAN GULF NATIONS, NON-OPEC, AND WORLD

But I guess the US Energy Information Agency is wrong then?
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby Outcast_Searcher » Sat 12 May 2018, 22:56:12

pstarr wrote:
Plantagenet wrote:Geologist Art Berman predicts imminent peak oil in Eagle Ford and Permian Basin

shale-skeptic-forecasts-imminent-demise-for-permian-and-eagle-ford

"The growth is done" ---Art Berman. That means the oil production rate is about to peak.

Cheers!

Hum??? I thought it already peaked at 82,411 mbpd in Nov. 2016?

TABLE 11.1B WORLD CRUDE OIL PRODUCTION: PERSIAN GULF NATIONS, NON-OPEC, AND WORLD

But I guess the US Energy Information Agency is wrong then?

You do know it's not 2016, right?

Here's a Feb. 2018 look for you from the EIA.

https://www.freightwaves.com/news/2018/ ... th-by-2030

All I see is recent growth and rosy projections.

Is that too confusing? How about this?

https://ycharts.com/indicators/permian_ ... production

All I see is growth of oil production growth in 2016, and accelerating growth in 2017, and 2018 in the Permian.

...

Art Berman has his share of credibility problems:

http://naturalgasnow.org/magical-thinking-art-berman/
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby Plantagenet » Sat 12 May 2018, 23:52:19

Outcast_Searcher wrote:
Here's a Feb. 2018 look .... from the EIA.

https://www.freightwaves.com/news/2018/ ... th-by-2030

All I see is recent growth and rosy projections.


That would be nice, wouldn't it? Lets hope its true.

Outcast_Searcher wrote: How about this?

https://ycharts.com/indicators/permian_ ... production

All I see is growth of oil production growth in 2016, and accelerating growth in 2017, and 2018 in the Permian.


No doubt the growth story in the Permian from 2016 to 2018 has been great. The big unknown here is if the oil production rates in the Permian will continue to grow and grow until 2030, as the EIA projects, or if the Permian will peak and oil production will stop growing sooner then the boosters predict, as has happened at virtually every other tight shale oil are in the USA.

By the way--- its not just Al Berman who is pessimistic----he's just the most recent oil analyst to cast doubt on the idea that the Permian basin oil production can keep growing until 2030. There are a number of other oil analysts who have said that Permian oil production won't keep growing until 2030. The alternative view is that the Permian basin will peak as soon as 2020 or perhaps by the early 2020s. For instance heres a link to a story from 2017:

Is-Peak-Permian-Only-3-Years-Away

Read back through the thread to posts learn more about this interesting subject.

Cheers!
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