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PeakOil is You

PeakOil is You

How much longer can this oil glut last?

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

Re: Draining the storage glut

Unread postby ROCKMAN » Tue 31 Oct 2017, 12:52:01

Sub - So true about irregular distribution. Of the 12 highest initial production rates in the EFS 11 were in just 2 counties:

https://www.ugcenter.com/updated-top-12 ... ord-579416

And in general during the peak in activity in 2012: "The Eagle Ford Shale reaches across 25 Texas counties. But more than 60 percent — 141 of the play's 227 drilling rigs — are operating in five counties: La Salle, Karnes, McMullen, Gonzales and DeWitt."

And of those 25 counties just 6 have produced 80% of the total EFS oil and only 3 account to 50%. Needless to say there's a lot of undrilled acreage left in the 8 counties that have each produced less the 5 million bbls. And not many drill sites left it Karnes Co that has recovered more then any other "sweet spot"...330 million bbls.

The EFS trend is no different then any other trend developed in the world: the well distribution is far from even. The sweet spots get developed during both high and low price periods. The poorer areas only during high price periods...often to the disappointment of the investors.
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Re: Draining the storage glut

Unread postby AdamB » Tue 31 Oct 2017, 21:08:39

Tanada wrote:Pretty much what I have been posting here for a couple months. the Glut, she is abating, and far faster than most predicted would be the case.


Depends on the chucklehead that is your reference point? Like this one.....predicted it would happen immediately...and then it didn't at all

So...you've got chucklehead #1 missing it on the low side, and those who say that oil is abiotic and will last forever on the other side, seems to me somewhere between the two is about right. :)
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Re: Draining the storage glut

Unread postby Smurfs1976 » Wed 01 Nov 2017, 02:50:25

Whilst there is some debate about the specifics the bottom line seems pretty clear to me.

1. Demand is rising and has increased at a faster pace than production

2. There is now a deficit and stocks are being drawn down

3. There is no imminent flood of oil about to hit the market from any source other than OPEC + Russia, and then only if they decide to increase production quotas which won't likely happen in the absence of higher prices.

Higher prices thus appear very likely to me.
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Re: Inflection Point: Oil’s Inevitable Rise

Unread postby tita » Wed 01 Nov 2017, 05:03:45

AdamB wrote:Define cheap. The US has demonstrated that they can grow 1-2 million barrels a day at $100 oil faster than at any time in the history of the country, and turn on more new volume than Ghawar produces in half a decade. At $50/bbl, growth is far lower, allowing demand to overtake new supply. But maybe the price isn't low enough to stop the US from peaking. Again.

I'm not exactly sure how they reduced production by 12 MMbbls per day in 6 years, but part of it was from the Iran-Irak war, part of it was from KSA and other OPEC reducing output. Either way, the fields were already drilled and production increase was possible with a minimum of investment, which is very different from the LTO development. They could probably increase production by whatever they wanted... and in fact they did increase by 2.5 MMbbls/d between 1985 and 1986, and 10 MMbbls/d between 1985 and 1995 although market price was half it is today (inflation adjusted). LTO is just depleting at 30$. At some point, demand has to follow. What I meant was cheap to produce, not cheap on the markets...

We are past this 30$ situation.
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Re: Inflection Point: Oil’s Inevitable Rise

Unread postby Tanada » Wed 01 Nov 2017, 09:32:10

tita wrote:They could probably increase production by whatever they wanted... and in fact they did increase by 2.5 MMbbls/d between 1985 and 1986, and 10 MMbbls/d between 1985 and 1995 although market price was half it is today (inflation adjusted). LTO is just depleting at 30$. At some point, demand has to follow. What I meant was cheap to produce, not cheap on the markets...

We are past this 30$ situation.


Now that I understand better what you were saying I agree, the days when oil fields could be brought online with inflation adjusted payback costs of under $30/bbl do appear to be firmly fixed in the rear view mirror. Sure there are still some sources being developed today that are below that level of cost, but when you are talking about the average shale well that is not the case.

As far as that goes as I understand it deep and ultra deep water wells are all a pretty high cost in terms of needs for pay back within the life of the field and desire for a profit. Government companies like Russia uses in the Arctic Shelf projects don't have to worry overly about direct profit on a particular well, but corporations run by stockholders are a different kettle of fish and one or two bad decisions can push a corporation into bankruptcy protection.
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Re: Inflection Point: Oil’s Inevitable Rise

Unread postby AdamB » Wed 01 Nov 2017, 15:09:18

Subjectivist wrote:Isn't your argument predicated on the idea that drilling sites for fracked oil are extremely abundant and allow an arbitrarily unlimited resource at $100/bbl?


Define "abundant". There are plenty of locations, yes, and I'm sure we could back calculate out how many from some sort of EIA work or another how many there are. But they are not infinite. And there is no unlimited resource at $100/bbl, there might just be more of the same resource, depending on how far off the sweetspots companies can still go and make money at that price. Alternatively, what the performance of infill wells might be, the more of them, the worse the expected per well results, but they would bring in more resources as well.

Subjectivist wrote:You keep posting about how easy it is to increase production a million or more barrels a day as if depketion doesn't matter and we can keep drilling for as long as we need to do so.


It is easy to increase production. The US just demonstrated it on a national scale. But just because it CAN be done, doesn't mean it can be done forever, and it doesn't mean other nations can do it like the US did.

Drill baby drill doesn't have anything infinite sitting behind it...sooner or later...there is an end. This is about the only axiomatic part of Hubbert's work that will never change, and it applies to resource plays the same as it does discrete reservoirs.
But the question is WHEN, hopefully using methods that aren't just slapping all decline, all the time equations on current production rates and imitating Harold Camping every time it doesn't work out because your method stinks.

subjectivist wrote:Meanwhile here in Ohio they drill a fair number of Utica shale wells aiming for wet gas that provides lots of natural gas liquids plus methane for the dry gas market. But they only drill in a few counties because the special conditions that formed wet tas only happened in a limited geographic area.


Wet gas isn't the only valuable commodity in the Appalachian Basin, or in the Utica or Marcellus. And the geologic conditions for the Marcellus stretch over extensive areas, same as the Utica, but productivity within a given area varies. Companies go after high value first. Fortunately for them, sooner or later the proven true forever axiom kicks in, and the acreage that wasn't particularly economic at $2/mcf might be wildly so at $6/mcf.


subjectivist wrote: Everything I have read on the topic says most of the fracked wells in Ohio will be gas with a very little light oil and some wet gas. It won't matter if WTI is $200/bbl because the viable drilling locations run out faster and faster the higher the price goes.


The Marcellus and Utica aren't oil plays. Liquids have a nice secondary phase economic kick to them, but that isn't the main game in town. It should also be noted that these types of resource plays, named "continuous" by the USGS, have an interesting characteristic that works against your idea of it only being in a few counties.

Geologic Nature of Continuous
Accumulations..Page 2, 2nd paragraph in left column



usgs wrote:Common production characteristics include a large in-place petroleum volume, low recovery factor, absence of truly dry holes, dependence on fracture permeability, and sweet spots within the accumulation that have generally better production characteristics but where individual wells still have serendipitous “hit or miss” production characteristics.
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The US Over-Supply Of Oil Is Ending

Unread postby AdamB » Tue 07 Nov 2017, 13:41:22


Shutterstock The U.S. over-supply of oil is ending. Comparative inventory (C.I.) has been dramatically reduced in 2017. Levels have fallen 159 mmb since February and are now approaching the 5-year average for the first time in nearly 3 years (Figure 1). Figure 1. The U.S. Over-Supply of Oil is Ending. Source: EIA and Labyrinth Consulting Services, Inc. An interpreted yield curve that correlates C.I. and WTI price is developed by cross plotting the same data without the time dimension (Figure 2). The yield curve may provide price solutions to inventory reduction assumptions in the near term. Figure 2. Crude + Product Comparative Inventory Have Fallen 159 mmb in 2017. C.I. Could Reach the 5-Yr Avg By & $70 WTI Prices by Early 2018. Source: EIA and Labyrinth Consulting Services, Inc. Accordingly, if C.I. continues to fall at the 9-month average of 4 mmb/week, oil prices may .


The US Over-Supply Of Oil Is Ending
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
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Re: The US Over-Supply Of Oil Is Ending

Unread postby AdamB » Tue 07 Nov 2017, 14:42:24

Of note, in my opinion, is that this is the same author or proclaimed in a news conference staged on the steps of the Forrestal building in October of 2011 that the US was entering an immediate energy crisis we need to prepare for!!

6 years later....maybe the oversupply that made him look the fool is ending? Maybe?

:lol: :lol: :lol: :lol: :lol: :lol: :lol: :lol:
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