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Saudis Fear US Shale Oil Boom

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

Re: Saudis Fear US Shale Oil Boom

Unread postby John_A » Thu 07 Nov 2013, 17:39:33

ROCKMAN wrote:OPEC, which holds 80 percent of the world's conventional oil reserves, wants prices to be around $100 a barrel, which in nominal terms is almost four times their level a decade ago. Higher prices have helped to make a wider range of supply commercially viable, including fracking, oil extraction from tar sands and conventional oil wells in more remote locations and in harder-to-tap reservoirs like ultra deep waters.


So the REAL question becomes...round and round the price goes...where it stops, nobody knows....but the price will be set by...THE MARGINAL BARREL!!!

Anyone want to take a guess at who and what the marginal barrel might be? :!:
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Re: Saudis Fear US Shale Oil Boom

Unread postby ROCKMAN » Fri 08 Nov 2013, 09:41:06

Speaking of the KSA’s ability to cut production to support high prices and still make gobs of revenue:

Reuters – Saudi Arabia has cut back oil output that had held at record rates of around 10 million barrels a day for three months running to help offset a plunge in output from fellow OPEC member Libya. The world's top oil exporter turned down the taps to 9.75 million barrels per day (bpd) in October - versus 10.1 million bpd the previous month. It was typical for there to be a reduction in the amount of crude oil burned for power generation at this time of year. Riyadh lifted output to 10.05 million bpd in August, the highest since records begin in 1980, according to figures from the U.S. Energy Information Administration. It pumped around that record rate during the third quarter before slowing down in October. If production sinks to 9 million, then it would probably be based on a decision to soak up excess oil in the market." The Organization of the Petroleum Exporting Countries meets on Dec. 4 to chart production policy for 2014. Output from the 12 member group fell below its official 30 million bpd target for the first time in two years last month. And demand for the group's crude in 2014 is forecast to sink to 29 million bpd, according to the International Energy Agency, while the cartel's own economists see the call on OPEC oil at around 29.6 million bpd.
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Re: Saudis Fear US Shale Oil Boom

Unread postby JV153 » Sat 23 Nov 2013, 13:56:09

Show talk. SA can export any excess to China.
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Re: Saudis Fear US Shale Oil Boom

Unread postby ROCKMAN » Sat 23 Nov 2013, 16:34:16

"excess"... what's that? BTW: In 2009, Saudi exports to China exceeded those to the U.S. for the first time. That comes as U.S. oil imports are expected to fall overall, thanks to its own domestic energy boom. Chinese investments in Saudi Arabia are on the rise too: China has spent massively on oil refineries in Saudi Arabia and even signed a nuclear cooperation agreement with the desert kingdom.

I suspect what some might view as excess production China views as their oil reserves.
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Re: Saudis Fear US Shale Oil Boom

Unread postby evilgenius » Tue 26 Nov 2013, 13:13:02

How effective is conservation in comparison to the shale boom in terms of its threat to the Saudi marketing position? The US vs the world import position regarding Saudi oil aside, conservation (and possibly serious renewable adoption) used to be more feared. Is this alarm over fracking a red herring? Are the Saudis more alarmed by the support for renewables and the efforts to improve energy efficiency and what they mean for their marketing position in ten years or twenty years time?

The Export Land Model threatens to consume the Saudis over coming generations. The West, especially Europe, is tiring of the flood of economic refugees that the Middle East and the larger environ has foisted upon it due to their refusal to address the ELM.Their elite maintain a firm handshake with stable Western realms in order to protect themselves from sudden social disruption, but what are they doing to protect themselves over the long-term? They seem very interested in what is going on in Syria. Their interest may have something to do with their long-term plan, or not. But is that interest indicative of a 'more of the same' response, seeking a religious fundamentalist or culturally fundamentalist answer over a plan that would create an explosion of jobs?

And what about the actual position of the West? Are the various Western Countries really willing to watch the Saudis and others use more of their own oil in order to promote industry within their own systems that might employ the teeming masses? They've avoided that, by hook or by crook, this long, why shouldn't we expect them to try and continue avoiding it into the crisis moments coming with a further trip along the plateau, or down an actually steeper peak?

Also, I don't know what the Saudis really think about what the US is doing with its fracking advantage vis a vis the tussle they are having with Russia, and their Iranian proxy, in the region. SA has been firmly in the US camp since the Reagan years, but if they want to continue using fundamentalism to control their people, over using a wider net, higher suffrage, prosperity, that back pocket relationship may come to an end. They could change sides.
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Re: Saudis Fear US Shale Oil Boom

Unread postby ROCKMAN » Tue 26 Nov 2013, 18:02:25

Evil : A few of my opinions. First: "Is this alarm over fracking a red herring?" What ''alarm"? Maybe I missed it but I haven't seen any alarm from the KSA...just from various media sources. I'll let you decide how distressed the Saudis are today: KSA oil revenue pre US shale boom = $60 billion. KSA oil revenue post US shale = $300 billion. You can start shedding a tear for our Arab cousins now. LOL.

"Are the various Western Countries really willing to watch the Saudis and others use more of their own oil". And if not exactly what are our options? Take the oil away from them? And risk a military confrontation with China that has tens of $billions tied up in KSA infrastructure? My goes would be: hell no. LOL.

"SA has been firmly in the US camp ". IMHO the KSA has always, and will always, migrated to the camp that benefits them most at that time. At one time that have been the US camp. In the future I suspect that camp will have a more oriental motif. The future of KSA oil production may not hinge as much on their flow rate and internal consumption but on who has the preferential rights to buy that oil they do export. The KSA, even taking into amount ELM may be exporting a significant amount of oil in ten years but that doesn't mean countries importing that oil today will have the same opportunity at that future time.
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Re: Saudis Fear US Shale Oil Boom

Unread postby Tanada » Sun 15 Dec 2013, 16:35:22

If KSA is fearful of fracking in the USA they sure are doing a good job of hiding that fear.
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Re: Saudis Fear US Shale Oil Boom

Unread postby ROCKMAN » Mon 16 Dec 2013, 10:37:52

T - The KSA is actually sitting in the corner trembling if fear. Well, actually they've hired a bunch of foreign worked they pay $10/day to tremble for them. The royal family doesn't have time to do it themselves. They're too busy counting that 500% increase in revenue they've suffered since the US shale revolution began. LOL.
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Re: Saudis Fear US Shale Oil Boom

Unread postby pstarr » Mon 16 Dec 2013, 13:26:22

What ever happened to the "swing producer?" SA used to be the go-to-Kingdom when you needed your crude priced at a reasonable $40/barrel. It seems the Princes don't care anymore. They've gone soft from all that crazy swinging.

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Re: Saudis Fear US Shale Oil Boom

Unread postby ROCKMAN » Mon 16 Dec 2013, 16:21:02

pstarr - "SA used to be the go-to-Kingdom...". Perhaps my memory is fading: when was the last time the KSA manipulated oil prices for the benefit of the US? LOL.
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Re: Saudis Fear US Shale Oil Boom

Unread postby pstarr » Mon 16 Dec 2013, 16:46:13

ROCKMAN wrote:pstarr - "SA used to be the go-to-Kingdom...". Perhaps my memory is fading: when was the last time the KSA manipulated oil prices for the benefit of the US? LOL.
I'm thinking it was around 2005-2007 when they reached their limits. They were claiming an extra 2-3mb/d 'capacity' at the time. Cheap gasoline would have helped stave off the American housing crisis and subsequent world financial meltdown.
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Re: Saudis Fear US Shale Oil Boom

Unread postby ROCKMAN » Mon 16 Dec 2013, 17:31:49

Pstarr - I'm still lost. From 2005 through 2007 oil prices hung around $60/bbl. And that was a 100% increase from 2003. So how did doubling the price of oil benefit the US? And that period was just prior to oil more than doubling again by 2008. Of course when the global economy collapsed that drove prices to $40/bbl for short while but I'm pretty sure that wasn't a KSA plan to help the US. From my limited knowledge of macroeconomics the KSA seems to have always prices their oil for the max the market could bear. But, then again, so have I and ExxonMobil...and we're your "friends". LOL.

But I suspect you were just joshin'.
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The Shale Boom Might Not Last Long

Unread postby AdamB » Wed 07 Feb 2018, 17:39:03



U.S. shale is growing at a scorching rate, but will the shale industry be around for the long haul? A new study calls into question the heady projections for shale oil and gas, arguing that expectations of huge levels of production for decades to come are based on shaky assumptions. The Post Carbon Institute’s report argues that the EIA is overstating the potential of U.S. shale, calling the projections “highly to extremely optimistic, and are therefore very unlikely to be realized.” The report argues that while U.S. oil production has doubled from 2005 levels, and shale gas has also exploded over the same timeframe, there are underlying problems that will always bedevil shale production. For instance, shale wells typically see production deplete by 70 to 90 percent in the first three years, while fields see output drop off by about 20 to


The Shale Boom Might Not Last Long
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
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Re: Saudis Fear US Shale Oil Boom

Unread postby coffeeguyzz » Wed 07 Feb 2018, 20:14:14

I skimmed through Hughes' report earlier, with a focus on the Utica, Marcellus, and the Bakken with which I am most familiar.
Same old Hughes' formula that he used in Drilling Deeper and most probably will be shown to be wildly wrong, as all his other analysis has proven false.

I was a little surprised that he still uses Kevin Thout's 2013 work on well spacing ...when Thout used 12 and 24 month existing wells for comparison, This, then, meant wells drilled/completed a decade ago.
Totally obsolete.

Likewise, he referenced the 2011 USGS Marcellus assessment, which called for 1.6 Bcf cum wells from the area, with 4 wells per square mile.
No need to show how incredibly 'off' that metric is today, but Mr. Hughes' fan base is probably both unknowing and uncaring in these matters.

(It was a little comical to see the Utica included in this work.
Immediately after the extensive WVU study on the Utica was released, Hughes put forth a pithy, single page refutation of the incredibly in-depth report, saying it lacked merit.)

One thing I'll commend Hughes for is consistency ... consistently wrong, and easily shown to be so.
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Re: Saudis Fear US Shale Oil Boom

Unread postby Outcast_Searcher » Thu 08 Feb 2018, 13:22:32

coffeeguyzz wrote:One thing I'll commend Hughes for is consistency ... consistently wrong, and easily shown to be so.

Thanks for the summary. Kind of sad that he can't even be remotely in the ballpark on the facts. Kind of like many fast crash doomers re economics around here.

So I presume he gets away with this since as long as he delivers the message the post carbon institute wants to hear, he still gets paid? So he has the same veracity as, say, tobacco companies who claim smoking doesn't cause cancer (since, for example, they can find one in 10,000 healthy 80+ year olds who smoked for decades?)
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Saudis Fear US Shale Oil Boom

Unread postby coffeeguyzz » Thu 08 Feb 2018, 20:05:53

OS
That's a great question, regarding Hughes' continued production of flawed research and its ready acceptance by like minded followers.

I read the Massachusetts Attorney General-sponsored report claiming New England did not need new natgas pipelines.
I read the recent report claiming a couple of NE distribution companies deliberately oversubscribed gas deliveries and consequently artificially boosted electric bills by billions of dollars. I even skimmed through the EPA's meta study on the effects of frac'ing related to groundwater.

My biggest takeaway from these efforts?

No. One.
Say again ... NO ONE reads these things.
Rather, they are referenced as some sort of "see, this backs up my beliefs" type of effort.

I mean, really, just download and spend 5 minutes reading the Executive Summary from 'Drilling Deeper'.
The man completely dismisses future production from the Permian Basin.
He completely miscast production from the Appalachian Basin.

I do not make these statements in a derogatory fashion towards Hughes.
Rather, I am simply astounded that he is both referenced and deemed authoritative on these matters with such a horrendous track record ... a track record that 15 minutes of Googling readily shows.
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Re: Saudis Fear US Shale Oil Boom

Unread postby Outcast_Searcher » Fri 09 Feb 2018, 23:41:48

coffeeguyzz wrote:OS
I mean, really, just download and spend 5 minutes reading the Executive Summary from 'Drilling Deeper'.
The man completely dismisses future production from the Permian Basin.
He completely miscast production from the Appalachian Basin.

I do not make these statements in a derogatory fashion towards Hughes.
Rather, I am simply astounded that he is both referenced and deemed authoritative on these matters with such a horrendous track record ... a track record that 15 minutes of Googling readily shows.

Thanks for the pointers and suggestions.

I both downloaded and looked through the Executive Summary from 'Drilling Deeper', and did some Googling about production, wells, growth, etc. for both Permian Basin oil fracking and Appalachia NG fracking.

It seems to me that only people more interested in hearing what they want to hear vs. factual accuracy would find this guy credible, if this report is any indication of his typical work (which reflects your comments about his horrendous track record).

It's good to see that in the real world, lots of ongoing new production for both tight NG and oil look very promising, as long as there is the demand for it (which will result in sufficient pricing to support it).
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Saudis Fear US Shale Oil Boom

Unread postby ROCKMAN » Sun 11 Feb 2018, 14:31:27

It just occurred to me that perhaps we should start a companion thread: "Saudis Fear Russian Oil Production". After all Russia is the second largest oil exporter right after the KSA. And virtually all of Russia's production is typically slowly declining conventional oil fields. Consider that the KSA competes for market share with other oil EXPORTING countries. There are 118 countries with larger net oil exports then the US: https://en.wikipedia.org/wiki/List_of_c ... il_exports

US has huge negative exports. Actually Belize competes with the KSA for a portion of the export market. Granted at only 4,300 bopd it's not much competition but more then the US provides in the export market. In reality claiming the US increased production as "competition" is no different then claiming a country that goes into a deep recession and significantly reduces oil imports as being a new competitor against the KSA. In fact, didn't many countries reduce oil imports when prices exceeded $100/bbl? Also consider at the height of US oil imports we represented only about 15% of the oil import market. Not insignificant but the rest of the world imported almost 6X as much oil as the US.
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IEA Predicts Nightmare Scenario For OPEC

Unread postby AdamB » Tue 06 Mar 2018, 10:29:02


The U.S. will supply much of the world’s additional oil for the next few years, according to a new report from the International Energy Agency (IEA). Over the next three years, the U.S. will cover 80 percent of the world’s demand growth, the IEA says in its newly-released Oil 2018 annual report. Canada, Brazil and Norway will cover the remainder, leaving no room for more OPEC supply. The irony is that the substantial gains in output from shale will only be possible because of the OPEC cuts, which has tightened the market and boosted prices. This fact is not lost on OPEC producers. "If you are a shale oil producer, who brought you back? It was OPEC," the UAE’s oil minister Suhail Al Mazrouei, said at a recent industry conference, according to Bloomberg. "Without OPEC there’d be chaos in the market." Indeed, the


IEA Predicts Nightmare Scenario For OPEC
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
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