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Page added on February 3, 2014

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Jean Laherrere uses Hubbert linearization to estimate Bakken shale oil peak in 2014

Jean Laherrere uses Hubbert linearization to estimate Bakken shale oil peak in 2014 thumbnail

In his latest research on shale oil French oil geologist Jean Laherrere from ASPO France

http://aspofrance.viabloga.com/texts/documents estimates a Bakken shale oil peak in 2014.
He uses a Hubbert linearization to calculate a total of 2,500 mb to be produced
In global terms, a total cumulative of 2.5 Gb is just around 10% of annual crude production and 1.3% of daily production.
Well productivity in Bakken is stagnant at around 130 b/d for a couple of years now.
There has been a peak in the number of drilling rigs. A shift of the rigs curve by 2 years suggests a production peak in 2014.
Jean’s research is in line with that published by David Hughes in November 2013:
http://legacy.firstenergy.com/UserFiles/HUGHES%20First%20Energy%20Nov%2019%202013.pdf
Direct link to Laherrere article (PDF)

 

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12 Comments on "Jean Laherrere uses Hubbert linearization to estimate Bakken shale oil peak in 2014"

  1. rollin on Mon, 3rd Feb 2014 12:19 pm 

    This may be slightly premature, but no matter how you look at it the Bakken and Eagle Ford fields will soon peak.
    Then what will the MSM claim as the new oil glut producer???

  2. Davy, Hermann, MO on Mon, 3rd Feb 2014 2:10 pm 

    This report jives with another I read. Check this out: http://www.oilpeakclimate.blogspot.com. This information is right in line with what I am preaching on the slope down the peak. We are in a world plateau bouncing around. We will soon be taking the plunge and that is when the real systematic risks will occur in our global economy. So if the financial crash does not kill the global economy this energy cliff will sometime shortly after 2020. Iraq will not save us. The artic is a dead end. Shell lead the way there. The traditional world producers are all dumping into decline. We are on the cusp of a tipping probably driven by a financial crash and if not a financial crash then a descending liquid fuel supply

  3. Nony on Mon, 3rd Feb 2014 3:22 pm 

    1. Red Queen Rune already calculated (in SEP2012 and reiterated in JAN2013) a Bakken peak at 0.6-0.7 MMbpd. This has been blown out of the water. I think we should beware of wishcasting (cornies predicting lots of oil since they want it to happen, green peakers the opposite). Reality is about geology and economics. Not about what we want.

    2. There is way too little data, to really fair a curve. Also, curious that the line is extended from 2012-2013 data. Surely 2010 and 2011 are part of the same population.

    3. One thing that is a little concerning, for growth, is the stable rig count. Although there is still growth from more efficient execution as well as refraccing and the like…if the opportunity was really inbounded, one would expect expansion of number of rigs. Particularly since it’s really not like they are overtasked nationally (per Rigzone, rig market is a little soft).

    4. I always wonder with these charts if the numbers are just ND or included Montana and Canada. Fine either way, just prefer to know.

  4. Nony on Mon, 3rd Feb 2014 4:58 pm 

    for 4, OK…I see it is ND Bakken (makes sense to track this…easiest.

  5. Plantagenet on Mon, 3rd Feb 2014 5:36 pm 

    Laherrere was wrong in his prediction of the date of the global peak. Lets see if he is wrong again.

  6. Dragon Oil on Mon, 3rd Feb 2014 6:11 pm 

    The ability to acquire recoverable reserves has multiple functions. One of the most impoertant of these is reservoir energy. As compressable gas is produced, available reservoir energy to produce any liquids diminishes just as fast as the gas is produced. The end result is that is no secondary recovery in these plays and the primary spike in production will follow shortly. Thus endeth the lesson.

  7. rockman on Mon, 3rd Feb 2014 6:29 pm 

    Not arguing for or against Laherrere’s analysis. But I think it’s useful to remind folks of the basis of Hubbert’s original analysis. First, he analyzed the statistical distribution of oil FIELDS. Despite the repeated mischaracterizations neither the Bakken or Eagle Ford are FIELDS. They are trends. There are areas of greater and lesser productivity in both trends.

    Hubbert analyzed the development of conventional oil reservoirs. Which hinges on the nature of such exploration: the larger fields are discovered early on with diminishingly smaller fields developed. And it very critical to notice that his population of fields were very old at the time he did his study. The trends he studied had been under development for over 30 years. Not to take anything away from him but a comparable study of, let’s say, the Bakken, would be done in 2040 or later. Something else that benefited has analysis: no significant changes in technology or oil prices. The Bakken and shales development boomed as a result of tech and, to a much greater extent, oil prices.

    Some argue Hubbert’s analysis failed because he didn’t forecast the Deep Water and shales. In fact, his analysis proved very accurate for that POPULATION he analyzed. The DW and shales were not part of that population.

    But one will be able to do a comparable analysis of the Deep Water GOM…in another 20 – 30 years. The shale plays…not so easy. There is no “field size” distribution to analyze. One can analyze the spacial variations of shale productivity. But such analysis would have no similarity to Hubbert’s original work.

    IMHO it amounts to an apple to orange comparison. Studying apples and oranges is find. But trying to Tue on to the other violates logic.

  8. Ted on Mon, 3rd Feb 2014 7:38 pm 

    The peak is not in oil production….there will always be plenty of oil in the ground; the peak will be in cheap easy money from the FED without that the oil drillers in the U.S are toast.

  9. Calhoun on Mon, 3rd Feb 2014 9:59 pm 

    Rockman, would be curious to know if you think Hubbert was aware of deep water and shale oil? I’m guessing he was but that he probably thought they would be relatively insignificant compared with the much bigger picture of the decline of conventional oil resources, but that’s just my guess.

  10. FloridaGirl on Tue, 4th Feb 2014 2:24 am 

    I did a little research in the SEC filings of a few companies that specialize in producing shale oil, and what I discovered is that, at least for the companies that I looked at, that the businesses are not really profitable. They may show a profit but the trick is that the wells are a capital expense and so the depreciated numbers are what show up on the profit/loss sheets. My guess is that the well depreciation rates are based on conventional wells which have a much slower/longer production decline rate. Would they show a profit if the well depreciation reflected the shale oil & gas decline rate which can average around 70% the first year? In all the cases I looked at, the cost of drilling and production in 2013 far exceeded their oil and gas sales. All of them have been increasing their debt substantially. How long can they keep finding exponentially more funding for exponentially more wells?

  11. rockman on Tue, 4th Feb 2014 3:55 am 

    Calhoun – He knew about unconventional reservoirs like the Bakken and Eagle Ford. They had just started to be drilled when he did his analysis. I doubt he had a clue about the DW. But that’s my main point: it didn’t matter if he knew about any other potential trends. His analysis was only based on well known and maturely developed trends. Folks like to say he was predicting the peak in US oil production. But he wasn’t and if you read through his work he clearly states he’s predicting the peak of just those trends he had long production curves for.

    He wasn’t predicting the score of the Super Bowl two months before the game started. He was predicting the final score half way through the 4th quarter. I could probably could make a pretty reasonable prediction of future shale and DW production…if I did the analysis 20+ years from today. The trends that Hubbert were predicting to peak in 1971 began developing in the 30’s and 40’s…15 to 20 years before he made his projection.

  12. rockman on Tue, 4th Feb 2014 4:04 am 

    Girl – Great research. Did you notice the emphasis on the proven reserve additions? That’s what Wall Street cares about. Good that you noticed expenditures exceeded revenue. But that’s not unusual for a start up company. And even though many of the companies existed before the shales represented a new cycle. But even with all your digging did you find one clear statement regarding the rate of return from wells that have already gone through the bulk of their lives? That’s a number the SEC does require companies to make public. See many volunteer to do so?

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