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Study: US shale oil production to 1.9 million bpd in 2016

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Re: Study: US shale oil production to 1.9 million bpd in 201

Unread postby Bruce_S » Thu 03 Nov 2011, 07:39:37

ralfy wrote:
Maddog78 wrote:Sorry for the short answer but we have gone around and around on this topic at this site for a good while and I have made multiple posts related to it so I really don't want to go through all that again.

Indeed. As one still manages to get his six-figure salary, then he shouldn't be concerned.


It isn't his salary which interests me, but his experience in industry and his knowledge of how industry uses EROEI. Or doesn't.

Do you have experience in industry which contradicts his, or are you simply using ad homs because his industry pays well?
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Re: Study: US shale oil production to 1.9 million bpd in 201

Unread postby Bruce_S » Thu 03 Nov 2011, 07:43:50

ralfy wrote:How many "industry guys" and "specialists" do we have in this thread? Would you happen to have any proof to demonstrate such, including any studies you made of the issue?


So far, two. And of what value is a study if it is made by some academic who can't even take the time to study the industry to find out if their ideas have any validity whatsoever?

Hall and Cleveland are two of the originators of this net energy type of analysis in the oil and gas business, and often referred to by those who hijacked the idea for use in peak oil scenarios. Do you happen to know how many years in the oil business these two had doing these EROEI calculations which our local experts say isn't used, and doesn't exist as a metric in their industry?
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Re: Study: US shale oil production to 1.9 million bpd in 201

Unread postby peripato » Thu 03 Nov 2011, 09:07:38

Bruce_S wrote:
ralfy wrote:How many "industry guys" and "specialists" do we have in this thread? Would you happen to have any proof to demonstrate such, including any studies you made of the issue?


So far, two. And of what value is a study if it is made by some academic who can't even take the time to study the industry to find out if their ideas have any validity whatsoever?

Hall and Cleveland are two of the originators of this net energy type of analysis in the oil and gas business, and often referred to by those who hijacked the idea for use in peak oil scenarios. Do you happen to know how many years in the oil business these two had doing these EROEI calculations which our local experts say isn't used, and doesn't exist as a metric in their industry?

So, what's behind the relentless rise in the price of oil these past dozen years, if not the increasing costs of production at the margin? Why is the price of oil so high, even though demand has softened since the global economy hit the skids back in 2007/08? Please do not mention "speculators" as the culprits, as this group also seeks to make money when oil is dropping in price, not just when it's rising.
Last edited by peripato on Thu 03 Nov 2011, 09:37:49, edited 1 time in total.
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Re: Study: US shale oil production to 1.9 million bpd in 201

Unread postby Maddog78 » Thu 03 Nov 2011, 09:29:18

rockdoc123 wrote:
I shall search diligently for it then. As often as it is discussed, you would think every industry guy has his own EROEI assistant, to make sure they hew the company line on rate of energy return, report them for bad performance when their EROEI is low, reward them when it is high, etc etc.


Not to be impolite but as I've said we calculate economics not eroei. The two are distinctly different. Shareholders only care about whether you are making money..nothing more. I've worked in the oil industry for 30+ years and have direct knowledge on this very subject.



Exactly.
If the project can make a profit it goes ahead.
If I can't execute it on time and on budget I no longer get to earn my salary.
No one in the pre-project meetings ever asks, What is the EROEI?
In fact I never even heard of the term until I started reading peakoil web sites.

Like I said in so many older posts, it is hard enough to plan a project with a multi year life when you don't really know for sure what your product will sell for when it finally starts to produce.
There are enough variables on start up costs and operating costs and final selling price of the commodity that often you are just making a wild ass educated guess and hopefully it all works.
Throwing in another variable like EROEI is of no value.
Can the project make money? That is the only question that matters. It's hard enough to answer alone.
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Re: Study: US shale oil production to 1.9 million bpd in 201

Unread postby rockdoc123 » Thu 03 Nov 2011, 11:05:28

Hall and Cleveland are two of the originators of this net energy type of analysis in the oil and gas business, and often referred to by those who hijacked the idea for use in peak oil scenarios. Do you happen to know how many years in the oil business these two had doing these EROEI calculations which our local experts say isn't used, and doesn't exist as a metric in their industry?


As to your claims that Cleveland and Hall are “industry experts”. Far from it, they are academics, both long-term university professors. They are industry outsiders who like to characterize oil and gas and other energy through the concept of energy use and return. That is fine and valid for what they do but it does not impact how oil and gas companies make their decisions. They do not work for the industry and apparently have not even consulted to companies who make the investment decisions. They consult to policy makers in government organizations and think tanks and not to oil companies.

Also, the point about economics and EROEI being different isn't right, as energy use can be measured in terms of dollars. Of course, if you're referring to the manner by which credit can be created easily, then you are right, but that only shows the ineffectiveness of using economics for calculations.


From an academic standpoint the two are related, from a practical one (which is what drives industry decisions) they aren’t at all. People on the outside of the oil industry look at Energy use EROEI to compare and contrast the effectiveness of various sources of energy. This concept is of absolutely no value to the oil industry in terms of making decisions.
Put simply when I want to drill a well for oil there are only a few things that matter to me. Firstly I want to insure that on a risked basis I will find a significant amount of hydrocarbon. Finding that hydrocarbon is of course not useful if I can’t do it at a profit. What goes into the equations that I will then calculate are 1. The costs to drill the well, 2. The costs to complete and tie-in the well, 3. The on-going costs to operate that well including manpower, 4.The commodity price minus any adjustments for quality, 5. Transportation tariffs. 6. Royalties and taxes. If EROEI were important I would be worried about how much energy it took to build the rig I plan on using, how much energy it took to build the coiled tubing unit I might employ or the pipeline I will access, but I am not worried about it. All I am worried about is what it costs me. The drilling company is going to charge me a going rate for use of his rig, it will be higher when the industry is booming and there are fewer rigs available and lower when the industry has contracted and there is an abundance of standing rigs. The owner of the drilling company builds his rigs not using the concept of energy but rather cost/benefit. He looks at what it is going to cost him in terms of manpower and kit to build the rig versus what the market demand currently is and what it is projected for the next couple of years. In most cases drilling companies can pay out their rig investment in a couple of years (in good times under full utilization). At no time does the rig company look at how much energy was expended to create the steel used to build the rig nor do they look at how many kcal were expended by workers, they simply look at how much it costs them, and salaries are in no way tied to btu expenditure by workers. Another example would be if I need gas injection to maintain pressure in my reservoir. In this case I couldn’t care less how many Mbtu’s of gas I use other than what it costs me. When gas is in short supply the cost to me to acquire the right amount of gas to inject is going to be much higher and it might threaten the economic value of the project. When gas prices are lower (as they are now) due to a glut of supply my project stands a much better chance of being economic. At no time will I look at how many btu’s I consume versus how many I put out. The incoming product is valued differently in a different market than the outgoing product….if the price/btu is lower for gas than it is for the oil I will extract then I will likely have positive economics and will decide to do that project. On the other hand if the mbtu’s of gas used is lower than the mbtu’s of oil I get out and the gas is more expensive than the profit I can get from selling the oil there is no way in the world I will do the project. Price is not always tied to EROEI.

There are a host of books explaining petroleum economics , software to calculate it and books papers on petroleum decision making. Here are some links
http://www.pandell.com/oilandgas/ea_nexus.html
this is an example of typical oil and gas economic software. You will find no mention of the concept of energy here
http://blogs.bakerhughes.com/reservoir/category/oilfield-economics/page/2/
baker hughes site which has a number of brief discussions on the various aspects of oil and gas economic assessments
http://www.serafimltd.com/pdfs/WellNumbers.pdf
a presentation showing a typical set of calculations conducted in order to determine economic value in an oil project
http://www.ccop.or.th/ppm/document/PHWS3/PHWS3DOC15_oh.pdf
another presentation showing how KNOC (Korean National Oil Company) does it

One of the more referenced text books in this subject is:
Economics of Petroleum Production -A Compendium Volume 1: Profit & Risk • Volume 2: Value & Worth
by Ian Lerche & Sheila Noeth
Vol. 1: published March 2004 • ISBN 0 906522 23 4
Vol. 2: published July 2004 • ISBN 0 906522 24 2

Not surprisingly a look at the table of contents shows no reference to concepts of energy in/energy out


The most referenced textbook for Petroleum economics and decision making is:
Newendorp, P, 1976, Decision Analysis for Petroleum Exploration, Penn Well Books, Tulsa, OK, 668 pp.

The book discusses concepts such as measures of profitability, decision tree analyses, preference theory, principles of profitability, exploration risk analysis, simulations for risk analysis etc. I have this book sitting in my home office library, no mention of EROEI in it.

Or there are numerous publications out there showing how decisions to make investments in the oil and gas industry are made. One from the MMS:

http://www.gomr.boemre.gov/PI/PDFImages/ESPIS/4/4218.pdf

Capital Investment Decisionmaking and Trends: Implications on Petroleum Resource Development in the U.S. Gulf of Mexico

The purpose of this report is to examine the factors that impact the oil and gas exploration
and capital markets. We begin with a general overview of the oil and gas industry and
product demand and supply, provide background information on oil and gas resources,
and describe the defining characteristics of exploration and capital markets. The factors
that impact supply and demand and investment decisions are then reviewed. We then use
this information to relate “conventional expectations” concerning these factors to future
investment trends in the Gulf of Mexico. The “conventional expectation” is a subjective
characterization by the authors of the perceptions, opinions, and analysis prevailing
among those that follow the oil and gas industry. We conclude with a summary outline of
the fiscal systems used in the exploration and production industry.

Again no mention of EROEI
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Re: Study: US shale oil production to 1.9 million bpd in 201

Unread postby Maddog78 » Thu 03 Nov 2011, 14:27:36

rockdoc123 wrote:Put simply when I want to drill a well for oil there are only a few things that matter to me. Firstly I want to insure that on a risked basis I will find a significant amount of hydrocarbon. Finding that hydrocarbon is of course not useful if I can’t do it at a profit. What goes into the equations that I will then calculate are 1. The costs to drill the well, 2. The costs to complete and tie-in the well, 3. The on-going costs to operate that well including manpower, 4.The commodity price minus any adjustments for quality, 5. Transportation tariffs. 6. Royalties and taxes. If EROEI were important I would be worried about how much energy it took to build the rig I plan on using, how much energy it took to build the coiled tubing unit I might employ or the pipeline I will access, but I am not worried about it. All I am worried about is what it costs me. The drilling company is going to charge me a going rate for use of his rig, it will be higher when the industry is booming and there are fewer rigs available and lower when the industry has contracted and there is an abundance of standing rigs. The owner of the drilling company builds his rigs not using the concept of energy but rather cost/benefit. He looks at what it is going to cost him in terms of manpower and kit to build the rig versus what the market demand currently is and what it is projected for the next couple of years. In most cases drilling companies can pay out their rig investment in a couple of years (in good times under full utilization). At no time does the rig company look at how much energy was expended to create the steel used to build the rig nor do they look at how many kcal were expended by workers, they simply look at how much it costs them, and salaries are in no way tied to btu expenditure by workers. Another example would be if I need gas injection to maintain pressure in my reservoir. In this case I couldn’t care less how many Mbtu’s of gas I use other than what it costs me. When gas is in short supply the cost to me to acquire the right amount of gas to inject is going to be much higher and it might threaten the economic value of the project. When gas prices are lower (as they are now) due to a glut of supply my project stands a much better chance of being economic. At no time will I look at how many btu’s I consume versus how many I put out. The incoming product is valued differently in a different market than the outgoing product….if the price/btu is lower for gas than it is for the oil I will extract then I will likely have positive economics and will decide to do that project. On the other hand if the mbtu’s of gas used is lower than the mbtu’s of oil I get out and the gas is more expensive than the profit I can get from selling the oil there is no way in the world I will do the project. Price is not always tied to EROEI.



Again, exactly.
You may recall I said much the same thing when we talked about this a year ago or so.
I explained then about contractor's fixed day rates and that it didn't matter how much the rig cost in energy to build or how many wells could be drilled with the same string of pipe or how much energy it took to build a bbl of drilling mud, etc. etc. None of it mattered to the oil/gas company. The only thing that mattered was the cost to them.
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Re: Study: US shale oil production to 1.9 million bpd in 201

Unread postby Bruce_S » Thu 03 Nov 2011, 18:54:41

peripato wrote:
Bruce_S wrote:
ralfy wrote:How many "industry guys" and "specialists" do we have in this thread? Would you happen to have any proof to demonstrate such, including any studies you made of the issue?


So far, two. And of what value is a study if it is made by some academic who can't even take the time to study the industry to find out if their ideas have any validity whatsoever?

Hall and Cleveland are two of the originators of this net energy type of analysis in the oil and gas business, and often referred to by those who hijacked the idea for use in peak oil scenarios. Do you happen to know how many years in the oil business these two had doing these EROEI calculations which our local experts say isn't used, and doesn't exist as a metric in their industry?

So, what's behind the relentless rise in the price of oil these past dozen years, if not the increasing costs of production at the margin?


Whatever it is (and I am not speculating, but will listen with fascination to our designated industry insiders if they wish tot ackle that one), EROEI certainly has nothing to do with cost, but of energy. As RocDoc so eloquently points out, apparently this energy thing is primarily a construct of academics who couldn't be bothered to take the time to understand the business they then pretend to know something about. Maybe they really wanted to be economists, and their revenge upon academia is pretending? Poorly apparently.

We are fortunate to have energy insiders around here to let us know when the wool is being pulled over our eyes with distractions like this.
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Re: Study: US shale oil production to 1.9 million bpd in 201

Unread postby Bruce_S » Thu 03 Nov 2011, 19:02:43

rockdoc123 wrote:
Hall and Cleveland are two of the originators of this net energy type of analysis in the oil and gas business, and often referred to by those who hijacked the idea for use in peak oil scenarios. Do you happen to know how many years in the oil business these two had doing these EROEI calculations which our local experts say isn't used, and doesn't exist as a metric in their industry?


As to your claims that Cleveland and Hall are “industry experts”. Far from it, they are academics, both long-term university professors. They are industry outsiders who like to characterize oil and gas and other energy through the concept of energy use and return. That is fine and valid for what they do but it does not impact how oil and gas companies make their decisions. They do not work for the industry and apparently have not even consulted to companies who make the investment decisions.


Thanks RocDoc. We need more groundtruthing on topics like this, based on the frequency it is discussed you would think that we will all live or die based on this metric, and more than a few think it matters based on all that chatter. How unfortunate that some basic fact checking wasn't done prior to building an entire pyramid of conclusions on top of it.
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Re: Study: US shale oil production to 1.9 million bpd in 201

Unread postby ralfy » Sat 05 Nov 2011, 07:47:07

Bruce_S wrote:
It isn't his salary which interests me, but his experience in industry and his knowledge of how industry uses EROEI. Or doesn't.

Do you have experience in industry which contradicts his, or are you simply using ad homs because his industry pays well?


How do you know about his background and his experience?

Finally, I'm referring to this post:

study-us-shale-oil-production-to-1-9-million-bpd-in-2016-t61746-75.html#p1086676
http://sites.google.com/site/peakoilreports/
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Re: Study: US shale oil production to 1.9 million bpd in 201

Unread postby ralfy » Sat 05 Nov 2011, 07:50:59

Bruce_S wrote:
So far, two. And of what value is a study if it is made by some academic who can't even take the time to study the industry to find out if their ideas have any validity whatsoever?

Hall and Cleveland are two of the originators of this net energy type of analysis in the oil and gas business, and often referred to by those who hijacked the idea for use in peak oil scenarios. Do you happen to know how many years in the oil business these two had doing these EROEI calculations which our local experts say isn't used, and doesn't exist as a metric in their industry?


Actual names, qualifications, and biblio info on studies will be helpful. Also, why are you criticizing academics when in another forum you asked for scholarly references to EROEI? Finally, several messages in response to you in that forum contained links to studies that involved more than just Hall and Cleveland. See for yourself.
http://sites.google.com/site/peakoilreports/
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Re: Study: US shale oil production to 1.9 million bpd in 201

Unread postby peripato » Sat 05 Nov 2011, 07:53:18

Bruce_S wrote:
peripato wrote:
Bruce_S wrote:
ralfy wrote:How many "industry guys" and "specialists" do we have in this thread? Would you happen to have any proof to demonstrate such, including any studies you made of the issue?


So far, two. And of what value is a study if it is made by some academic who can't even take the time to study the industry to find out if their ideas have any validity whatsoever?

Hall and Cleveland are two of the originators of this net energy type of analysis in the oil and gas business, and often referred to by those who hijacked the idea for use in peak oil scenarios. Do you happen to know how many years in the oil business these two had doing these EROEI calculations which our local experts say isn't used, and doesn't exist as a metric in their industry?

So, what's behind the relentless rise in the price of oil these past dozen years, if not the increasing costs of production at the margin?


Whatever it is (and I am not speculating, but will listen with fascination to our designated industry insiders if they wish tot ackle that one), EROEI certainly has nothing to do with cost, but of energy. As RocDoc so eloquently points out, apparently this energy thing is primarily a construct of academics who couldn't be bothered to take the time to understand the business they then pretend to know something about. Maybe they really wanted to be economists, and their revenge upon academia is pretending? Poorly apparently.

We are fortunate to have energy insiders around here to let us know when the wool is being pulled over our eyes with distractions like this.

Ok, so when can we expect $30 a barrel oil again, outside of the next global economic downturn?
Last edited by peripato on Sat 05 Nov 2011, 08:03:24, edited 1 time in total.
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Re: Study: US shale oil production to 1.9 million bpd in 201

Unread postby ralfy » Sat 05 Nov 2011, 07:54:38

rockdoc123 wrote:
Hall and Cleveland are two of the originators of this net energy type of analysis in the oil and gas business, and often referred to by those who hijacked the idea for use in peak oil scenarios. Do you happen to know how many years in the oil business these two had doing these EROEI calculations which our local experts say isn't used, and doesn't exist as a metric in their industry?


As to your claims that Cleveland and Hall are “industry experts”. Far from it, they are academics, both long-term university professors. They are industry outsiders who like to characterize oil and gas and other energy through the concept of energy use and return. That is fine and valid for what they do but it does not impact how oil and gas companies make their decisions. They do not work for the industry and apparently have not even consulted to companies who make the investment decisions. They consult to policy makers in government organizations and think tanks and not to oil companies.

Also, the point about economics and EROEI being different isn't right, as energy use can be measured in terms of dollars. Of course, if you're referring to the manner by which credit can be created easily, then you are right, but that only shows the ineffectiveness of using economics for calculations.


From an academic standpoint the two are related, from a practical one (which is what drives industry decisions) they aren’t at all. People on the outside of the oil industry look at Energy use EROEI to compare and contrast the effectiveness of various sources of energy. This concept is of absolutely no value to the oil industry in terms of making decisions.
Put simply when I want to drill a well for oil there are only a few things that matter to me. Firstly I want to insure that on a risked basis I will find a significant amount of hydrocarbon. Finding that hydrocarbon is of course not useful if I can’t do it at a profit. What goes into the equations that I will then calculate are 1. The costs to drill the well, 2. The costs to complete and tie-in the well, 3. The on-going costs to operate that well including manpower, 4.The commodity price minus any adjustments for quality, 5. Transportation tariffs. 6. Royalties and taxes. If EROEI were important I would be worried about how much energy it took to build the rig I plan on using, how much energy it took to build the coiled tubing unit I might employ or the pipeline I will access, but I am not worried about it. All I am worried about is what it costs me. The drilling company is going to charge me a going rate for use of his rig, it will be higher when the industry is booming and there are fewer rigs available and lower when the industry has contracted and there is an abundance of standing rigs. The owner of the drilling company builds his rigs not using the concept of energy but rather cost/benefit. He looks at what it is going to cost him in terms of manpower and kit to build the rig versus what the market demand currently is and what it is projected for the next couple of years. In most cases drilling companies can pay out their rig investment in a couple of years (in good times under full utilization). At no time does the rig company look at how much energy was expended to create the steel used to build the rig nor do they look at how many kcal were expended by workers, they simply look at how much it costs them, and salaries are in no way tied to btu expenditure by workers. Another example would be if I need gas injection to maintain pressure in my reservoir. In this case I couldn’t care less how many Mbtu’s of gas I use other than what it costs me. When gas is in short supply the cost to me to acquire the right amount of gas to inject is going to be much higher and it might threaten the economic value of the project. When gas prices are lower (as they are now) due to a glut of supply my project stands a much better chance of being economic. At no time will I look at how many btu’s I consume versus how many I put out. The incoming product is valued differently in a different market than the outgoing product….if the price/btu is lower for gas than it is for the oil I will extract then I will likely have positive economics and will decide to do that project. On the other hand if the mbtu’s of gas used is lower than the mbtu’s of oil I get out and the gas is more expensive than the profit I can get from selling the oil there is no way in the world I will do the project. Price is not always tied to EROEI.

There are a host of books explaining petroleum economics , software to calculate it and books papers on petroleum decision making. Here are some links
http://www.pandell.com/oilandgas/ea_nexus.html
this is an example of typical oil and gas economic software. You will find no mention of the concept of energy here
http://blogs.bakerhughes.com/reservoir/category/oilfield-economics/page/2/
baker hughes site which has a number of brief discussions on the various aspects of oil and gas economic assessments
http://www.serafimltd.com/pdfs/WellNumbers.pdf
a presentation showing a typical set of calculations conducted in order to determine economic value in an oil project
http://www.ccop.or.th/ppm/document/PHWS3/PHWS3DOC15_oh.pdf
another presentation showing how KNOC (Korean National Oil Company) does it

One of the more referenced text books in this subject is:
Economics of Petroleum Production -A Compendium Volume 1: Profit & Risk • Volume 2: Value & Worth
by Ian Lerche & Sheila Noeth
Vol. 1: published March 2004 • ISBN 0 906522 23 4
Vol. 2: published July 2004 • ISBN 0 906522 24 2

Not surprisingly a look at the table of contents shows no reference to concepts of energy in/energy out


The most referenced textbook for Petroleum economics and decision making is:
Newendorp, P, 1976, Decision Analysis for Petroleum Exploration, Penn Well Books, Tulsa, OK, 668 pp.

The book discusses concepts such as measures of profitability, decision tree analyses, preference theory, principles of profitability, exploration risk analysis, simulations for risk analysis etc. I have this book sitting in my home office library, no mention of EROEI in it.

Or there are numerous publications out there showing how decisions to make investments in the oil and gas industry are made. One from the MMS:

http://www.gomr.boemre.gov/PI/PDFImages/ESPIS/4/4218.pdf

Capital Investment Decisionmaking and Trends: Implications on Petroleum Resource Development in the U.S. Gulf of Mexico

The purpose of this report is to examine the factors that impact the oil and gas exploration
and capital markets. We begin with a general overview of the oil and gas industry and
product demand and supply, provide background information on oil and gas resources,
and describe the defining characteristics of exploration and capital markets. The factors
that impact supply and demand and investment decisions are then reviewed. We then use
this information to relate “conventional expectations” concerning these factors to future
investment trends in the Gulf of Mexico. The “conventional expectation” is a subjective
characterization by the authors of the perceptions, opinions, and analysis prevailing
among those that follow the oil and gas industry. We conclude with a summary outline of
the fiscal systems used in the exploration and production industry.

Again no mention of EROEI


How ironic given the OP's use of EROEI!

shale-gas-eroei-preliminary-estimate-suggests-70-or-greater-t61970.html
http://sites.google.com/site/peakoilreports/
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Re: Study: US shale oil production to 1.9 million bpd in 201

Unread postby ralfy » Sat 05 Nov 2011, 08:05:51

Bruce_S wrote:
Whatever it is (and I am not speculating, but will listen with fascination to our designated industry insiders if they wish tot ackle that one), EROEI certainly has nothing to do with cost, but of energy. As RocDoc so eloquently points out, apparently this energy thing is primarily a construct of academics who couldn't be bothered to take the time to understand the business they then pretend to know something about. Maybe they really wanted to be economists, and their revenge upon academia is pretending? Poorly apparently.

We are fortunate to have energy insiders around here to let us know when the wool is being pulled over our eyes with distractions like this.


Of course, EROEI has nothing to do with cost! Cost is measured in terms of dollars, and money can be created easily. Thus, the cost in dollars is just like "this energy thing," a "construct."

Thus, it's the other way round. Those who "couldn't be bothered to take the time to understand the business" will not bother with looking at EROEI and other issues. As long as more oil is produced and they get their six-figure salary, then the situation is fine. Profits in dollars are the real "wool" that's "being pulled over our eyes" and serves as "distractions."

That's the whole point behind this forum and the need to explore issues concerning peak oil: to look at factors beyond the dollar costs and profits!
http://sites.google.com/site/peakoilreports/
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Re: Study: US shale oil production to 1.9 million bpd in 201

Unread postby Bruce_S » Sat 05 Nov 2011, 11:59:41

ralfy wrote:
Bruce_S wrote:
It isn't his salary which interests me, but his experience in industry and his knowledge of how industry uses EROEI. Or doesn't.

Do you have experience in industry which contradicts his, or are you simply using ad homs because his industry pays well?


How do you know about his background and his experience?


I went to the college where they work and looked it up. Plus checked their wikis. How do you determine the depth of experience on the topic for your references?
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Re: Study: US shale oil production to 1.9 million bpd in 201

Unread postby Bruce_S » Sat 05 Nov 2011, 12:04:59

ralfy wrote:Of course, EROEI has nothing to do with cost! Cost is measured in terms of dollars, and money can be created easily. Thus, the cost in dollars is just like "this energy thing," a "construct."


Tell it to Pstarr and the gang over at TOD who provided some numbers to do exactly this type of calculation. I pointed out exactly what you just said within the past week at this very site.

ralfy wrote:That's the whole point behind this forum and the need to explore issues concerning peak oil: to look at factors beyond the dollar costs and profits!


Look out your window. Peak oil happened years ago, how has your world changed since 2005? While macro level hypothetical scenarios are generally much cooler than what has actually happened, I find that reality is a great basis for ground truthing ideas. Which is why asking the local industry insiders about the usefulness of EROEI in their industry and their answers far outways the value of a couple of academics with no experience in the field in question.
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Re: Study: US shale oil production to 1.9 million bpd in 201

Unread postby ralfy » Thu 10 Nov 2011, 03:34:26

Bruce_S wrote:
I went to the college where they work and looked it up. Plus checked their wikis. How do you determine the depth of experience on the topic for your references?


Sorry, I can't see the wikis in this thread or verify forum user names with the forum member's actual ID.

For the references that I use, the author's names and contact info are usually clearly stated.
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Re: Study: US shale oil production to 1.9 million bpd in 201

Unread postby ralfy » Thu 10 Nov 2011, 03:37:41

Bruce_S wrote:
Tell it to Pstarr and the gang over at TOD who provided some numbers to do exactly this type of calculation. I pointed out exactly what you just said within the past week at this very site.



But my point is that using the dollar cost doesn't help because one can create more credit easily. The same can't be said for energy. That is why EROEI is important.

ralfy wrote:
Look out your window. Peak oil happened years ago, how has your world changed since 2005? While macro level hypothetical scenarios are generally much cooler than what has actually happened, I find that reality is a great basis for ground truthing ideas. Which is why asking the local industry insiders about the usefulness of EROEI in their industry and their answers far outways the value of a couple of academics with no experience in the field in question.


But the peak oil that you are referring to is of a global scope, which means the apex won't be acute.

Asking "local industry insiders" doesn't help, but asking "insiders" from different parts of the world does. Hence, we have data like those presented by the IEA, BP, and so on.

Thus, your claim that one set of data comes from "insiders" and the other comes from "academics" is questionable.
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Re: Study: US shale oil production to 1.9 million bpd in 201

Unread postby ralfy » Sat 12 Nov 2011, 00:16:52

Bruce_S wrote:
EROEI, in some context, probably is important. But that context certainly isn't within one related to money, where all value is relative, or within the context of the oil and gas business, which doesn't use it for anything. The only importance appears to be that which is conferred upon it by peak oilers. I don't know why.



Of course, it's not, as credit can be created faster! In short, it's the other way round: it's money that "in some context, probably is important."


The equations people have assigned to Hubbert's work and bell shaped curve do not allow for multi-year plateaus. Sorry.



Even with multi-year plateaus, you should still see one plateau that's the apex. Also, given aggregate information, you should see a blunt apex, not a sharp one, which you were implying in your post. Sorry.


We have all sorts of data, and people generally use only the parts they like.



Exactly! That's why I don't see any worth in your arguments.


Based on the information provided, it is factual. But none of this has anything to do with US shale production, EROEI not bothering those doing the drilling, or the academics who claim that EROEI should have stopped all US drilling back in 2005. Do you have any comments on how this context works within the topic, or are you being argumentative for fun?


But according to the OP's sig, EROEI is 70. Given that, I think you're the one "being argumentative for fun." That is, the EROEI is fine, so there's no problem. But in case that's wrong, there's still no problem because EROEI doesn't matter.

Finally, the BP shows that energy demand globally has been exceeding oil production since 2006, and we're making up for that by using non-conventional sources of energy. The IEA adds that at best we will see only a 9-pct increase in global energy production during the next two decades. Unfortunately, demand may go up by around 2 pct per annum. Birol adds that just to maintain current economic growth we will need the equivalent of one Saudi Arabia every seven years. And given a 4-pct spread, another article states that we will also have to double current global debt.

In which case, if one aims to profit from US shale oil, then this is certainly "exciting" news. But in terms of U.S. and global energy and resource needs, it's not as exciting.
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Re: Study: US shale oil production to 1.9 million bpd in 201

Unread postby ralfy » Wed 23 Nov 2011, 01:10:55

Bruce_S wrote:
I am not discussing what I am implying, I am talking about what Hubbert said, two completely different things. Feel free to refute my point by providing a Hubbert reference for how his bell shaped curve will grow a flat top (rather than the inflection point he built) and I will grant you the point and retract my statement.



It will be flat because we're looking at aggregate information. Obviously, the apex will be sharper if we're looking at only one oil field. Also, if you construct a graph and zoom in, the apex becomes more blunt. Zoom out, and it becomes sharper.

ralfy wrote:
The OP can say what he wishes, as can you. EROEI is irrelevant, not fine. It has nothing to do with why, or why not, shale oil production might reach 1.9 million barrels a day in the US.



Exactly! EROEI has to be ignored, and instead what is technically recoverable must only be mentioned. That way, we will always have "vast" resources.

ralfy wrote:Finally, the BP shows that energy demand globally has been exceeding oil production since 2006, and we're making up for that by using non-conventional sources of energy.


Your statement is incorrect. "Making up for it" means we haven't been exceeding anything, we are using unconventional resources to meet demand, period. This is a good thing (in terms of supply). It has a long history in the US, and it hasn't been a surprise to anyone who understands the actual size of oil and gas resources available to mankind.

[/quote]

Uh, that's what "making up for it" means. :roll:

And it's not "a good thing" if the same "unconventional resources" are used for food, electricity, among other things. If any, the "long history in the U.S." is a good example of that, i.e., striking deals with OPEC and propping up the petrodollar for that.

The "actual size of oil and gas resources available to mankind" cannot be known. On the other hand, using what is technically recoverable and ignoring everything else is what you and other trolls have been doing in this thread.


The IEA also says that peak oil happened 5 years ago, and that everything will be just fine 30 years from now. Perhaps they are of two minds on the issue, and you are cherry picking only from one of them.


That's because you're ignoring demand, which may go up by 2 pct per annum, and the argument that flatlining production for conventional resources, which is propping up the slight increase, isn't based on historical flow rates.

Given that, I have to say that your knowledge of this matter is zero, and it is obvious that we are wasting our time with you. With that, I'm putting you back in my ignore list.
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Re: Study: US shale oil production to 1.9 million bpd in 201

Unread postby kildred590 » Fri 25 Nov 2011, 01:12:03

The technically recoverable amount has a bad habit of becoming...recovered. This process has been going on your entire lifetime. Why would insist it doesn't happen, and why does it make some of us trolls for noticing historical fact?


But it costs more. That's the whole point of "peak oil".
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