[Tanada]

Goner - Looking more and more like the dynamics we saw in the 80's. Back then prices (inflat adj) fell from $120/bbl to $20/bbl in just a few years and then hovered around $30 to $40 per bbl for the next 10 years. OTOH this isn't 1983 either.

I believe in the 1980's the North Sea and Prudhoe Bay, Alaska were in their peak output years as well. The world dynamic now is a whole lot different unless you know of some OECD mega production area's I am unaware of?

World demand in 2016 is also a heck of a lot higher than it was in 1986 so to have the same impact wouldn't new fields have to be proportionally larger than they were in the 1976-1996 period?

[Subjectivist]

Yes, other than fracking have their been any major new sources of Petroleum coming online in the last few years?

[AdamB]

Yes, other than fracking have their been any major new sources of Petroleum coming online in the last few years?

Hydraulic fracturing is a completion technique in use since the late 1940s, and not a source of petroleum.

What has happened is a combination of technologies, horizontal drilling combined with an old oil field completion technique, now done in dense clusters, with each cluster getting it own tuned combination of slickwater and cross linked gels to place a large sand "pill" if you will in just the right place.

This change in application of these technologies did one thing that is important (as compared to those who focus on just the mechanics), and that is change the cross sectional flow area of a given chunk of rock. This allowed a further descent into the resource pyramid, and the same effect still has room to run, be it in the cost of GTL's (utilizing the abundance of natural gas revealed by this descent deeper into the resource pyramid), or the technology necessary for the large scale production of hydrates or American oil shales (as opposed to shale oil or tight oil, depending on ones favorite terminology).

The size volumes available through operating deeper in the resource pyramid isn't the issue though, it is known, it is large, and no one has the ability to deny its existence, only its economic viability. The issue is, SHOULD we use it, even if we can?

[GoghGoner]

From Peak Oil Barrel, the latest graph with EIA data. Big bounce in July should be followed by increases all the way through to the end of the year. Opec produced another record this past month so as the EIA updates this dataset, I would expect 2016 to pull ahead of 2015.




IEA warns of 'relentless' growth in oil supply

OPEC's crude output rose for the fifth consecutive month in October after production recovered in Nigeria and Libya and flows from Iraq hit an all-time high of 4.59 million barrels a day.

[Revi]

So maybe 2016 will edge out 2015. Wow! We'll see. We are still on the plateau. That's a good thing. We'll be falling off soon if this graph is any guide:


It cuts off the end, but you can see them dwindle to nothing in this version:
https://assets.bwbx.io/images/users/iqj ... /-1x-1.png

[GoghGoner]

Most of the international oil company budgets are going into producing oil right now. The major part of the budgets that have been slashed are the exploration budgets. Of course, projects these days have multi-year leads so those chickens won't come home to roost until 2018 or so. Shale companies had to slash their producing budgets right away since they were under-water anyway.

[AdamB]

So maybe 2016 will edge out 2015. Wow! We'll see. We are still on the plateau. That's a good thing. We'll be falling off soon if this graph is any guide:

It isn't. The same graph was used to claim a peak oil a decade ago, and we know how that went...all of us sitting here in the same glut.

You can't claim an end to shoes when what you really mean are red ones. Womens. Size 7. At Walmart. And assume that the trucks will no longer deliver more.

Less discredited propaganda from the good old days, more critical thinking on why it didn't work last time.

It cuts off the end, but you can see them dwindle to nothing in this version:
https://assets.bwbx.io/images/users/iqj ... /-1x-1.png

They should dwindle to nothing. Just as the easy oil was disappearing, never to return by 1901, and the easy oil after that, and that, and that, it is what the old and easier oil does.

What matters is how much is left, and the cost to get it. If the price can't reach that level, Amy Jaffe (Note: actual expert) wins.

[tita]

It isn't. The same graph was used to claim a peak oil a decade ago, and we know how that went...all of us sitting here in the same glut.

And in a decade, we burned 300 billions barrels of oil while we discovered a third of this amount (from the graph). The rate of consumption increases while the rate of discoveries decreases. This means that the options to increase reserves are getting lower and rely mostly on unconventional. We are going to burn more than 350 billions barrels of oil in the next decade.

Sure, we are in a glut. Last one that occured between 1986 and 2000 was a harsh one with oil prices lower (inflation-adjusted) than the actual price (45$). Discoveries were still there. Not the highs of the 1960-1980 era, but enough to increase reserves, increase production and keep the glut going on.

Less discredited propaganda from the good old days, more critical thinking on why it didn't work last time.

We can't discredit data when it doesn't suit us. Conventional discoveries are part of the reasons of the oil glut today. They are the back of our oil production. And I don't think LTO and oil sands can maintain an oil glut like we had between 1986 and 2000. There is no indication of a flow of oil coming at actual price. So, the glut may end quite fast (another 1-2 years) before another situation takes place. Let's see.

[Revi]

I was wondering what it will look like. The price isn't encouraging any upstream production, so the party's going to end, and soon. I think it will be covered by some kind of war or diversion and that will justify starting to ration fuel and cut off things. It might be in the next year or two. Egypt just got turned off by Saudi Arabia, so that signals that they only want to sell to paying customers. I know that there's a glut of oil right now, but that might mean we'll have a sharp drop-off when that oil gets used up. What do you think?

[Pops]

Those "discoveries" are updated as technology, extraction and prices change.

The more oil that comes out of a field "discovered" in 1952, the higher the "discovery" level for that field, backdated to 1952. Ditto the price, higher price allows more production from marginal areas so an increase in price in 2016 increases the amount of oil "discovered" in that field labeled "1952."

So if average extraction is say, 36.295% of the estimated oil in that "Discovery" and technology/price increase that percentage by .001%, the "discovered in 1952" number goes up by .001%

So unless you can predict the changes in price and technology from now on, and it has been proven we can't, the "discovery" number really doesn't tell the whole story.

The picture might look like this



or this

[Pops]

don't think what, Pete?
a few years ago you said (as I did) that LTO wouldn't amount to a thing? its a thing
that reserves don't fluctuate with price/tech? pretty sure they do
Laherrere "normalized " discoveries, what does that even mean?

Campbell & Laherrere predicted an ultimate around 2T bbls and peak in the early oughts. That would have happened right on schedule if extraction mirrored discoveries with a 40 year offset. Thing is, h drilling and fracking came into range and the result is oil production grew past their '98 guess and pusholine is still $2/gallon.

Here is the '98 guess:

https://aleklett.wordpress.com/2015/02/ ... l-in-1998/

If you look close you can see that they knew the N Sea would deplete but they guessed that FSU was toast - doesn't even look like the plot continues. Turns out that both the US and RU are closer to 10 than 5 and the world closer to 32B bbl/yr than 27

--Laherrere is the best. But he says
Don't even think about forecasting in less than trillion barrel units
Ultimate guess now may be somewhere around 3Tbbls, unless it's 4T
production follows discovery with about a 40 year lag (Hubbert did too)

The problem is reserves change with tech and price and exploration and infill and lots of stuff I don't know about but they all change backdated discoveries, If they didn't there would be some huge difference between some guy's WAG for a press release in 1942 and however much is finally extracted.

Really, that last point, production curve must follow discovery curve is the bumper sticker that hooked me. It is the first PO pic I ever drew (and the closest to famous):



But the discovery curve keeps growing, so Laherrer's ultimate keeps growing and the peak keeps receding. Obviously, pointing to backdated discoveries has tarnished somewhat for me as a forecasting tool. Which isn't to say that when all is said and done that discoveries won't match extraction with a 40 year offset, just that it isn't the predictor I thought it was initially.

[GoghGoner]

Based on this estimate, looks like 2016 may come in below 2015. Then Dennis is predicting a big jump up in 2017. Been some oil fields bombed this week in Iraq and Iran; also, have those production cuts that may/may not happen. Hmmm... I don't see 2017 exceeding 2015.

http://peakoilbarrel.com/iea-oil-market-report-december-2016/#more-14372

[Tanada]

Even taking that graph as gospel truth prophecy it shows peak in 2018 and declines below 2015 in 2022. For anyone but a fast crash doomer that graph is very pessimistic. Not that I know how accurate it is, I read as much as I can and try to understand but I am not a petroleum geologist and I don't even try to play one on the Internet.

[vtsnowedin]

Even taking that graph as gospel truth prophecy it shows peak in 2018 and declines below 2015 in 2022. For anyone but a fast crash doomer that graph is very pessimistic. Not that I know how accurate it is, I read as much as I can and try to understand but I am not a petroleum geologist and I don't even try to play one on the Internet.

I'd say the smoothness of the decline show is quite optimistic. Once the decline starts in earnest the strife that will cause will make some fields war zones and add a lot of downward kinks to that curve.

[GoghGoner]

Maybe OPEC is cutting. Also, production was down 310kbd in December so I think that guarantees that 2016 < 2015 annually. My bias is that 2017 will be less than 2016. So we wait and see. Probably know more in 2020

https://www.bloomberg.com/news/articles/2017-01-05/the-oil-trade-that-shows-where-opec-s-cuts-are-starting-to-bite

In 2009, the previous time OPEC cut output, Dubai traded intermittently at a premium to Brent, despite the fact the Middle East crude is normally viewed as being lower quality. At its peak, Dubai traded at a premium of 71 cents to Brent. In 2011, it traded at a discount of almost $8 a barrel.

OPEC pumped 33.1 million barrels a day last month, down 310,000 barrels a day from November, according to a Bloomberg News survey of analysts, oil companies and monitoring of ship-tracking data.

[Subjectivist]

Looks to me as if that 'huge drop' is the same as all the peak forecasts I have seen here for the last decade. That doesn't mean it is wrong, but I need more than a prediction to be convinced after month upon month of failed predictions.

[ROCKMAN]

Sub - As you know the Rockman avoids making predictions as much as possible. And thus always amazed at long running debates over any prediction being correct or not. No prediction "is correct" or "isn't incorrect". They are just predictions that may EVENTUALLY be proven correct or not. Until that time, regardless of any ASSUMED inputs, predictions are just OPINIONS. And while one might have a different OPINION then someone else it doesn't make either correct or wrong. They are just OPINONS and not FACTS. FACTS can be correct..

Have you ever noticed how many future predictions are posted compared to past predictions are posted along with the actual data as it played out? I wonder why. LOL

[GoghGoner]

Back in 2007, as I recall, there were 3 countries with possible large increases in production: Canada, Venezuela, and Brazil. Funny, how history turns out with a huge unexpected rise in US production instead. Anyway, I wouldn't expect much from Canada, Venezuela, or Brazil right now.

[Tanada]

Back in 2007, as I recall, there were 3 countries with possible large increases in production: Canada, Venezuela, and Brazil. Funny, how history turns out with a huge unexpected rise in US production instead. Anyway, I wouldn't expect much from Canada, Venezuela, or Brazil right now.

I agree right now at these prices not much expansion will be happening in any of those three countries, and currently prices are not even high enough to bring the USA into balance between new fracking and depletion.

If prices stay over $50/bbl for several months or slowly creep up all year you might see some significant changes however. The Utah oil sands project and the Vaca Muerta shall fracking project in Argentina are both planning to go into production this year even with prices where they are now. If price hold steady or climb modestly there is liable to be more fracking in the USA as well, and if Venezuela gets some more income it will help relieve some of the mess down there as well.