Donate Bitcoin

Donate Paypal


PeakOil is You

PeakOil is You

The Set Up For a Collapse of Oil Prices

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

Moderator: Pops

Re: The Set Up For a Collapse of Oil Prices

Unread postby AdamB » Mon 20 Mar 2017, 14:28:59

pstarr wrote:
ROCKMAN wrote:"Oil prices collapsed and will never see a sustainable rise." New definition of "collapsed": the current price of oil is higher then the average inflation adjusted price of oil for 20 years from 1985 to 2005.

No doubt. But I define a sustainable rise to $70, the cost for consequential new development


Consequential new development is going on right now in the Permian and increasing the basins production. Perhaps you would like to adjust your price, seeing as how it has already been discredited by...you know...actual oil production in the Permian?
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
AdamB
Fission
Fission
 
Posts: 2577
Joined: Mon 28 Dec 2015, 16:10:26

Re: The Set Up For a Collapse of Oil Prices

Unread postby pstarr » Mon 20 Mar 2017, 14:33:35

'The Permian?' Cute. You sound just like an oil-company insider. Have your own desk yet? Does 'The Permian' offset catastrophic declines in the North Slope? The North Sea? Saudi Arabia? Give me a break lol
There's nothing deeper than love. In fairy tales, the princesses kiss the frogs, and the frogs become princes. In real life,the princesses kiss princes, and the princes turn into frogs

“Bitterness is like cancer. It eats upon the host. But anger is like fire. It burns it all clean.”
― Maya Angelou
pstarr
NeoMaster
NeoMaster
 
Posts: 25720
Joined: Mon 27 Sep 2004, 02:00:00
Location: Behind the Redwood Curtain

Re: The Set Up For a Collapse of Oil Prices

Unread postby AdamB » Mon 20 Mar 2017, 15:08:41

asg70 wrote:This thread represents the sound of hairs being split and goalposts moving.


It does, doesn't it? What else is left though? Some folks are still clinging to the idea that peak oil happened a decade ago..10 million barrels a day less than now...go figure. If people can't even figure out that lower numbers can't be a peak, do you honestly believe they can honestly confront how badly all their other prognostications went on top of it?
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
AdamB
Fission
Fission
 
Posts: 2577
Joined: Mon 28 Dec 2015, 16:10:26

Re: The Set Up For a Collapse of Oil Prices

Unread postby AdamB » Mon 20 Mar 2017, 15:25:57

pstarr wrote:'The Permian?' Cute. You sound just like an oil-company insider.


How would you know? Do they hang out at clear cutting events with you, with t-shirts on so you can identify them? Certainly you never would have met any at the Stoner Instructional Complex.

pstarr wrote:Have your own desk yet? Does 'The Permian' offset catastrophic declines in the North Slope? The North Sea? Saudi Arabia? Give me a break lol


The US offset all those things pretty easily in the recent past, doubled its oil production and created just about another peak in oil production (having previously done the same easily in natural gas production), perhaps you missed it all in yo oil increase denial?
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
AdamB
Fission
Fission
 
Posts: 2577
Joined: Mon 28 Dec 2015, 16:10:26

Re: The Set Up For a Collapse of Oil Prices

Unread postby tita » Mon 20 Mar 2017, 16:25:19

Well, the 50% drop in price in late 2014 was technically a collapse. Even if the stabilized price (50$) is higher than the inflation adjusted mean of 1985-2005. The fall went even further to sub 30$. Still, global economy is not in recession and wasn't the main trigger for this drop (although slowing growth in China didn't help).

But for shale oil. Well, we know it can't be developped with sub 30$ price, but is quite resilient around 50$. Anyway, we can't say that shale producers, oil services and investors got through it without damages. It seems that they are getting up since the price got back higher in the last 6 months. Still, we don't really know fast and how high production can grow with 50$... The correlation between rig count fluctuations and production is not that simple. In short, shale oil has to prove it can live with half the price it was when it became successfull.

And yeah, I doubt it can. But this is just my opinion.
User avatar
tita
Tar Sands
Tar Sands
 
Posts: 214
Joined: Fri 10 Jun 2005, 02:00:00

Re: The Set Up For a Collapse of Oil Prices

Unread postby tita » Mon 20 Mar 2017, 16:32:35

AdamB wrote:http://resourceinsights.blogspot.com/2017/03/saudi-arabia-and-shale-oil-war-that.html

Not exactly sure of what you endorse in this article. You know it was written by a peak oiler and actually state that shale oil is not sustainable? Or is it just a random "oil war between ksa and shale" you picked up?
User avatar
tita
Tar Sands
Tar Sands
 
Posts: 214
Joined: Fri 10 Jun 2005, 02:00:00

Re: The Set Up For a Collapse of Oil Prices

Unread postby asg70 » Tue 21 Mar 2017, 07:31:38

There's no debate over whether ANY oil is sustainable. It's not. The only debate is how long it (and by extension, BAU) will last. On that point, peakers have been, let's say, a little over-eager in their predictions, by a factor of a decade and counting.
asg70
Intermediate Crude
Intermediate Crude
 
Posts: 697
Joined: Sun 05 Feb 2017, 13:17:28

Re: The Set Up For a Collapse of Oil Prices

Unread postby wildbourgman » Tue 21 Mar 2017, 12:33:10

On that point, peakers have been, let's say, a little over-eager in their predictions, by a factor of a decade and counting.


This is not a gotcha, just me being lazy. How are the "peakers" predictions less shale and oil sands production ? Anyone ?

If the math that was done by folks like M Hubbert King and Campbell were based off of conventional reservoirs, to me you can't complain about the math just the lack of vision in predicting at what lengths we would go to in order to get the black stuff. One could predict that a crack addict locked in a house will eventually run out of cocaine, but you didn't think that he would learn how to make crystal meth with everyday household supplies that he had in an adjoining garage. If that analogy is where we are that's not really good.
wildbourgman
Heavy Crude
Heavy Crude
 
Posts: 434
Joined: Sun 07 Jul 2013, 09:05:52

Re: The Set Up For a Collapse of Oil Prices

Unread postby AdamB » Tue 21 Mar 2017, 12:51:37

tita wrote:
AdamB wrote:http://resourceinsights.blogspot.com/2017/03/saudi-arabia-and-shale-oil-war-that.html

Not exactly sure of what you endorse in this article. You know it was written by a peak oiler and actually state that shale oil is not sustainable? Or is it just a random "oil war between ksa and shale" you picked up?


It was written by a peak oiler, someone I would categorize as a standard "got it all wrong" type, but then he comes along with this one and its like...gee...maybe that egg all over his face woke him up?

And sustainable is a function of the time frame you are talking about, so I don't know what you mean by shale not being sustainable, non-renewable resources of any kind are, by definition, unsustainable given a full life cycle, but shale oil has barely begun its lifecycle under the current technology and price combination.
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
AdamB
Fission
Fission
 
Posts: 2577
Joined: Mon 28 Dec 2015, 16:10:26

Re: The Set Up For a Collapse of Oil Prices

Unread postby AdamB » Tue 21 Mar 2017, 12:53:55

asg70 wrote:There's no debate over whether ANY oil is sustainable. It's not. The only debate is how long it (and by extension, BAU) will last. On that point, peakers have been, let's say, a little over-eager in their predictions, by a factor of a decade and counting.


Oh, that is just the modern era of peak. The end of the oil industry was being predicted in 1886, they just didn't call those guys peakers. They were proto-petroleum geologists. The real pretroleum geologists were declaring peaks in the US back in 1919, we are talking about folks getting it wrong by a century at this point, Hubbert was predicting US peaks BEFORE 1950...and yet there we went in 2015, getting about the same sized peak as the early 70's, proving primarily that a single bell shaped curve isn't worth squat to predict oil production.
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
AdamB
Fission
Fission
 
Posts: 2577
Joined: Mon 28 Dec 2015, 16:10:26

Re: The Set Up For a Collapse of Oil Prices

Unread postby AdamB » Tue 21 Mar 2017, 12:59:22

wildbourgman wrote:
On that point, peakers have been, let's say, a little over-eager in their predictions, by a factor of a decade and counting.


This is not a gotcha, just me being lazy. How are the "peakers" predictions less shale and oil sands production ? Anyone ?


So you are saying that peaker ideas only work out if you count some of the oil? Makes perfect sense, if all the oil doesn't give you the answer you want, only count the stuff that does!

This question would make sense if, as a consumer, you or I rolled up to a gas station and purchased the gasoline from oil type A, B or C and the price reflected the difference. But because oil is oil, and it gets manufactured into the same products, this doesn't happen. Which is why the question is irrelevant...because none of us here use oil...we use gasoline and diesel and jet fuel.

wildbourgman wrote:If the math that was done by folks like M Hubbert King and Campbell were based off of conventional reservoirs, to me you can't complain about the math just the lack of vision in predicting at what lengths we would go to in order to get the black stuff.


Feel free to get the "math" for a bell shaped curve to have 2 maxima. In Colin's case, more like 4, since he was calling peak oil in 1990, and at various points in between when became obvious that his math sucked.

wildbourgman wrote: One could predict that a crack addict locked in a house will eventually run out of cocaine, but you didn't think that he would learn how to make crystal meth with everyday household supplies that he had in an adjoining garage. If that analogy is where we are that's not really good.


Good thing crack addicts aren't in charge of finding oil, maybe then a bell shaped curve would have worked. But we've fierce field men like Rockman out there, putting the smackdown on bell shaped curves every day of their working lives. Go Rockman! LOL.
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
AdamB
Fission
Fission
 
Posts: 2577
Joined: Mon 28 Dec 2015, 16:10:26

Re: The Set Up For a Collapse of Oil Prices

Unread postby asg70 » Tue 21 Mar 2017, 13:48:43

wildbourgman wrote:If the math that was done by folks like M Hubbert King and Campbell were based off of conventional reservoirs, to me you can't complain about the math just the lack of vision in predicting at what lengths we would go to in order to get the black stuff.


At present we don't know how far down the road unconventional can kick the can. You can draw unflattering analogies to crack addicts all you want, but if the end result is we've got another decade or more of BAU then it's time to concede that the peaker predictions of 10 years ago were, well, useless. Hubbert himself was dead long before the peak oil movement hit critical mass. What mattered most was how his name was co-opted and his message simplified into an imminent fast-crash end of the world narrative.

Until what's left of the peak oil movement finally capitulates to this they'll continue to look like Harold Camping with all the continued rationalizations and mental back-flipping. AFTER everyone finally agrees they were wrong THEN maybe we can actually have a valid discussion again. But this continued attempt to predict apocalypse now even during an oil glut, of which ETP is merely the rationalization du jour, is just not going to get us anywhere.
asg70
Intermediate Crude
Intermediate Crude
 
Posts: 697
Joined: Sun 05 Feb 2017, 13:17:28

Re: The Set Up For a Collapse of Oil Prices

Unread postby wildbourgman » Tue 21 Mar 2017, 14:45:27

I'll reply to both of you folks here at the same time. First I take AdamB, I'm not saying that you don't count some of the oil. What I'm saying is that if I tell you that my math indicated that a 100 barrel tank will be half empty when you take 50 bbls out of it and then you say your wrong because there is a second tank over in the corner that you didn't account for. Ok well, your right, they overlooked the other tank, but they possibly didn't account for it with good reason and now that reason is being mitigated. I also think the jury is still out if the mitigation that allows us to count the second tank is correct. I think that the price will eventually be reflected in the difference as other conventional supplies continue to deplete, as well as the severe depletion rate of shale resources.

asg70, I'm not a fast crash proponent unless you attach some other catalyst to it such as a war, geological or weather event. I do know that cheap and easy reservoirs deplete and they are replaced by more expensive and not so easy reservoirs. That's been the nature of the oil business for a long time. I really liked my crack addict analogy.

"Good thing crack addicts aren't in charge of finding oil" AdamB, really, brother what oilfield do you work in? Maybe we don't have a bunch of crack heads, but you'll find several vices amongst my co workers. How about that Rock? and yes bluebell ice cream is on the list of vices.
wildbourgman
Heavy Crude
Heavy Crude
 
Posts: 434
Joined: Sun 07 Jul 2013, 09:05:52

Re: The Set Up For a Collapse of Oil Prices

Unread postby AdamB » Tue 21 Mar 2017, 22:46:07

wildbourgman" I do know that cheap and easy reservoirs deplete and they are replaced by more expensive and not so easy reservoirs.
[/quote]

Absolutely. And those cheap and easy were gone by 1901. You've been raised in a world of harder oil, oil that couldn't even be accessed under new technologies came along to find more difficult oil. For some reason, people always talk about harder oil without going back into the history of the oil field to find the truth. But in most cases we are talking about folks who don't have an interest in the history, the ins and outs and hows and whys of oil engineering or petroleum geology, most peakers are really just looking for the rationalization to get the hunting cabin, buy a hobby farm, collect some more guns and gold, perpetually short the markets, whatever. And it hasn't worked out so well, which is why places like this are mostly about climate doom (which isn't near as good, because it will just take so darn long).

[quote="wildbourgman wrote:
That's been the nature of the oil business for a long time. I really liked my crack addict analogy.

"Good thing crack addicts aren't in charge of finding oil" AdamB, really, brother what oilfield do you work in? Maybe we don't have a bunch of crack heads, but you'll find several vices amongst my co workers. How about that Rock? and yes bluebell ice cream is on the list of vices.


I don't work in the oil field. But based on the drug testing requirements on the rigs nowadays, I don't think anyone has any need to worry about crackheads being on one. One of the reasons the industry still can pay good money, it demands people who are clean and know how to actually work...a skill in this country that doesn't appear to be what it once was.
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
AdamB
Fission
Fission
 
Posts: 2577
Joined: Mon 28 Dec 2015, 16:10:26

Re: The Set Up For a Collapse of Oil Prices

Unread postby spike » Wed 22 Mar 2017, 07:00:11

Actually, AdamB, Andrew Carnegie thought, in 1861, that oil production would peak and cease. He bought some oil planning to cash in on higher prices, and did make a profit, but was a little off in his timing.
User avatar
spike
Elite
Elite
 
Posts: 275
Joined: Mon 15 Nov 2004, 03:00:00

Re: The Set Up For a Collapse of Oil Prices

Unread postby wildbourgman » Wed 22 Mar 2017, 07:20:37

I don't work in the oil field. But based on the drug testing requirements on the rigs nowadays, I don't think anyone has any need to worry about crackheads being on one. One of the reasons the industry still can pay good money, it demands people who are clean and know how to actually work...a skill in this country that doesn't appear to be what it once was.


Adam, not to get too far off topic but, I like your boy-scout outlook on my industry. It's somewhat incorrect but I like it. Drug testing is one o those things that comes and goes with the booms and bust. During a boom where competition for employees is fierce you see very lax and very few random drug screens and the random drug screens seem to pick folks that everyone knows can pass. People that have expertise that's highly sought after often get special treatment even after failing drug screens and alcohol test. During a bust the drug screening programs ramp up and the policies are followed with zero tolerance. I'm pretty sure it was a North Dakota drilling outfit during the boom that had a sign that said Now Hiring (no drug screens). On you last comment, I've heard it said that meth heads can get a lot of work accomplished given the right circumstances. They won't sleep or eat until they come down.

One side story I just remembered, I worked for a executive that would call out to an offshore rig to give us direction when he was so drunk that we had to ask him to repeat himself multiple times because he could hardly speak. Now imagine that little nugget being on CSPAN during something like the Macondo hearings. He put us in bad well control situations a couple of times, but we worked our way out of them. So don't think that our industry demands anything. This guy was a drinking buddy with a resume' and in a pinch you could give him a spot. Houston and many other oil towns are full of these types still today, but that's not the face that we put on the industry when we want to drill in your back yard.

Now to bring those comments back to the topic. When you start seeing a boom get so hot that we start advertising "No Drug screens" and we start hiring the dregs of society even in sensitive positions (as we do at times) that's a sign that a top is near. To me the collapse in oil prices allowed us to clean some of this up just as it has done in years past.
wildbourgman
Heavy Crude
Heavy Crude
 
Posts: 434
Joined: Sun 07 Jul 2013, 09:05:52

Re: The Set Up For a Collapse of Oil Prices

Unread postby AdamB » Wed 22 Mar 2017, 09:45:17

spike wrote:Actually, AdamB, Andrew Carnegie thought, in 1861, that oil production would peak and cease. He bought some oil planning to cash in on higher prices, and did make a profit, but was a little off in his timing.


Oh, I think he got beat by Kier. If memory serves, there is a cool graphic out there, him advertising rock oil, and getting it before it runs out! Before Drake even drilled his well. I've seen it referenced before, but couldn't find the graphic. He is the earliest reference I've found for claiming something is running out, I assume since his claim predated Drake, that whatever oil he was collecting and how, it seemed obvious to him that he wouldn't have it forever, "rock oil" disappearing in the near future apparently. Circa 1850 or so.
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
AdamB
Fission
Fission
 
Posts: 2577
Joined: Mon 28 Dec 2015, 16:10:26

Re: The Set Up For a Collapse of Oil Prices

Unread postby rockdoc123 » Wed 22 Mar 2017, 11:06:20

During a boom where competition for employees is fierce you see very lax and very few random drug screens and the random drug screens seem to pick folks that everyone knows can pass. People that have expertise that's highly sought after often get special treatment even after failing drug screens and alcohol test


this hasn't been my experience in 30+ years in the industry. In the early days it was a bit more wild west everywhere but certainly over the last decade I was working Operators (the lease owners) demanded zero tolerance for drugs and alcohol on each and every site regardless of what was going on. This applied to operations around the world. Drilling, seismic and other contractors were required contractually to adhere to those requirements and on more than one occasion I remember a contractor being run off site and put on the "do not hire" list for future reference simply because one of their younger new hires had been caught smoking pot in his trailer.

Most companies operate under the view of a "safety culture" where safety is not just something that you are told to do but rather something that everyone on site embraces as something you want to do. That sort of culture finds it way into reporting at risk behaviour. As an example experienced rig hands would not put up with someone high anywhere near the rig floor or in the tower, the activities undertaken are dangerous enough when everyone is in complete control of their facilities.

That being said my experiences generally went to the reputable contractors out there, those that had proven track records and understood the downside of not adhering to policy. I'm sure in the height of shale development there were a number of fly by night outfits that just wanted a job and weren't too worried about consequences of screwing up. Also probably a lot of startups run by former rig pigs who were great at getting a job done but less so at managing an operation. These companies are the first to go under as work tightens up and for good reason.
User avatar
rockdoc123
Expert
Expert
 
Posts: 5305
Joined: Mon 16 May 2005, 02:00:00

Re: The Set Up For a Collapse of Oil Prices

Unread postby wildbourgman » Wed 22 Mar 2017, 12:05:21

That being said my experiences generally went to the reputable contractors out there, those that had proven track records and understood the downside of not adhering to policy.


There you go Rocdoc123 there's your answer to why you didn't see what I'm talking about. I've worked with the big majors and the small guys and I can't tell you some stories that would make your head spin. Some of the stories are not that old.
I can also assure you that even some reputable companies that "talk the talk" really well will make exceptions for a golden child when deemed necessary. I rather work for the ones that walk the walk.
wildbourgman
Heavy Crude
Heavy Crude
 
Posts: 434
Joined: Sun 07 Jul 2013, 09:05:52

Re: The Set Up For a Collapse of Oil Prices

Unread postby rockdoc123 » Wed 22 Mar 2017, 12:27:46

I can also assure you that even some reputable companies that "talk the talk" really well will make exceptions for a golden child when deemed necessary. I rather work for the ones that walk the walk.


the only time I had the experience of anyone getting cut slack was with some operations in a country governed by Sharia law. One of the idiot field hands decided it was OK to put wet towels around the door to his trailer and then light up a fat one. The slack he was cut was the company snuck him to an airstrip at night and got him out of the country. The country authorities were demanding full enforcement of Sharia law (death penalty) so I suspect he got off light with a dismissal for cause and loss of any bonuses. I am always surprised at how stupid some people can be.
User avatar
rockdoc123
Expert
Expert
 
Posts: 5305
Joined: Mon 16 May 2005, 02:00:00

PreviousNext

Return to Peak Oil Discussion

Who is online

Users browsing this forum: No registered users and 19 guests