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Of Giants, Super-Giants, And Mega-Giants

Of Giants, Super-Giants, And Mega-Giants thumbnail

Summary

  • The developments in energy in the USA over the last ten years are a miracle.
  • The USA is now and will remain the dominant world energy producer for decades to come.
  • All Americans should know and be proud of the superlative facts of the US energy revolution.

Of Giants, Super Giants and Mega Giants

It sounds like the title should be a lead in for a piece about the Avengers or some other comic book heroes. The only hero in this article is the United States Energy Industry. The revolutionary, innovation inspired growth of the last ten years is nothing short of a miracle. This narrative is not popular with the current White House or Democratic Party. You won’t hear them or the media talk much about it. It is not part of their playbook. Along with the intelligentsia in this country, the media, the White House and the left in general dislike hydrocarbons intensely. You won’t hear about the millions of jobs created, billions (tens or hundreds really) of dollars of taxes and royalties paid or the fact that all of this is from homegrown USA innovation. You certainly will not hear some of the superlative facts that I will lay out for you below that every American should know and be proud of.

A giant oil field is one that has more than 500 million barrels or 79 million cubic meters of natural gas in ultimately recoverable reserves. There are 932 of these on Earth today. A super giant field is one that has 10 billion barrels of oil or oil equivalent reserves or one that produces more than 100,000 barrels per day. There are less than 50 super giants.

Ten years ago, at the height of that masterpiece of Malthusian malfeasance called Peak Oil, Matt Simmons published a book that highlighted oil reserve decline particularly in the Middle East. It is the ultimate irony that the book was published at the dawn of an amazing revolution. America was considered to be extremely vulnerable because of our need to import so much oil. America a powerhouse? No chance.

Here are some facts that all Americans should know. A mega giant field is one that produces more than 1 million barrels per day. In all of history there have only been 9 oil fields that have ever produced more than 1 million barrels per day. OF THAT NINE, THREE (3) OF THEM ARE IN THE USA TODAY! The nine mega giants are Ghawar ( Saudi Arabia), Burgan ( Kuwait), Cantarell ( Mexico), Daqing ( China), Samotlor (Russia), Kirkuk ( Iraq) AND the Bakken ( North Dakota), Eagle Ford ( Texas) and Permian basin(Texas). Read that again and look at the chart below. It is nothing short of a miracle.

In ten short years the Bakken and Eagle Ford fields have come from nothing to join the ranks of Mega Giants. The Permian basin has been around a long time and has been a big producer. Ten years ago production was well over 500,000 barrels per day; already a giant. In the last ten years it has become a Mega giant.

The story of giants does not end there. We obsess about oil because of OPEC, the Middle East, a fascination with Geopolitics and oil is a global market. Natural gas is a topic that is less talked about, but no less important. We have super giant gas fields here as well, two of the very largest in the world by reserves and 4 of the largest by production. The Haynesville shale in Louisiana and the Marcellus gas field in the US east are the 4th and 2nd largest gas fields on Earth as measured by reserves. The Marcellus has 14,600 cubic kilometers of natural gas dwarfed only by the South Pars/north dome field in Iran/Qatar. The Haynesville has 7100 cubic kilometers of gas. In May 2015 the Marcellus is projected to produce 17 bcf per day, the Haynesville 6.5 bcf per day, the Permian basin 6 bcf per day and the Eagle Ford shale 7 bcf per day. The EIA (Energy Information Administration) and SEC use 5800 cubic feet of gas per Barrel of Oil Equivalent for purposes of valuation and comparison of reserves. In terms of Barrels of oil equivalent the Marcellus produces 2.9 million BOE, the Eagle Ford 1.2 million BOE and the Haynesville and Permian both just over 1 million BOE. If we use the 1 million barrel per day Mega field definition each of those gas fields qualify as mega fields in their own right.

(click to enlarge)

I would like to coin a term: the ULTRA MEGA Field. If the Ghawar oil field in Saudi Arabia is the superlative, quintessential Ultra Mega hydrocarbon field then the USA has 3 others. At 2.9 Million BOE per day and still growing the Marcellus is in the same league as Ghawar. If you have been following along this sea of numbers you will have noticed that two others also qualify for this designation. The Permian basin in Texas produces 2 million barrels of oil per day AND an additional 6 bcf per day of gas. The gas is about 1 million BOE. The Permian is thus a 3 million BOE per day field, absolutely Ultra Mega. The Eagle Ford has shot from nowhere 6 years ago to Ultra Mega status. The Eagle Ford will produce about 1.6 million barrels per day in May of 2015 AND about 7 bcf of natural gas at the same time. The gas is about 1.2 million BOE thus making the Eagle Ford a 2.8 million barrel per day Ultra Mega Giant.

The Marcellus gas field deserves its own special mention because it is on the east coast and centered in Pennsylvania where the oil industry began 160 years ago. It deserves special mention because despite its proximity to New York it is utterly ignored there. The size of the Marcellus is mind boggling. It begins in northwest NY State by Binghamton and Syracuse and extends as far south as the Shenandoah Mountains in Virginia and West Virginia. It starts just west of NY City at the Delaware water gap and extends as far west as Central Ohio. There is only one gas field on Earth with more reserves. The Marcellus is one of the largest fields in terms of production in the world.

The chart below shows that the USA is now the largest hydrocarbon producer in the world by a long way. We will be the dominant energy producer for decades to come. In the next 5 years we will become the largest or one of the largest LNG exporters on Earth. We will lead the charge in creating a true global market place for natural gas. The US, Canada and Mexico taken together will become the go to energy suppliers for an energy hungry planet. Ten years ago and even five years ago no one would have thought America was the land of Mega and Ultra Mega Giants. Energy independence was a silly, stupid political slogan not effectively a reality.

No matter what the price of oil or natural gas and no matter what your investment style the energy sector is one which you will want to overweight in your portfolio for years or even decades to come. Keep following the other great contributors to Seeking Alpha for specific advice.

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13 Comments on "Of Giants, Super-Giants, And Mega-Giants"

  1. Nony on Thu, 30th Apr 2015 10:09 pm 

    Cue Rock to make some field versus trend remark in 5, 4, 3, 2, 1. This despite the shales being continuous formations. And this despite even for conventional plays, it is somewhat arbitrary what one labels a trend (e.g. is it only actual individual traps? if not, then how to distinguish from trends).

  2. Nony on Thu, 30th Apr 2015 10:10 pm 

    Although the “Permian” is a lot more complicated than EF or Bakken, multiple layers and the two basins and the like.

  3. Nony on Thu, 30th Apr 2015 10:13 pm 

    All that said, the story is a little silly and covers well known ground.

  4. GregT on Thu, 30th Apr 2015 10:44 pm 

    There are no such things as continuous formations when dealing with finite resources Nony. The silly story is yours.

  5. apneaman on Thu, 30th Apr 2015 10:48 pm 

    Awesome! America will be the filling station for intergalactic space travelers for the next 7 million years….that’s how much hydro carbons they have.

  6. shallow sand on Thu, 30th Apr 2015 11:00 pm 

    I’d like to see how many feet have been drilled in the US “mega fields” versus the remainder of the world’s “mega fields”. I think that would be an interesting and relevant statistic, as would remaining reserves in each. Unfortunately when it comes to the M.E. fields, the accuracy of the information is in doubt.

  7. rockman on Thu, 30th Apr 2015 11:53 pm 

    Uh uh….Nony admitting his lack of understanding the difference between traps, fields, trends and basins. What next…pigs flying? LOL. Since I’ve already given the NON-ARBITRAY definitions and they were too difficult for Nony to absorb I won’t waste any more time. But if other folks are interested there are dozens of easily found references on the web.

    But for the fun of it lets use Nony’s “definitions”. Thus this article is truly full of sh*t. Consider just the one “field” I’m currently drilling wells in: the Frio Field (which some ignorant fool would call a trend just like the Eagle Ford Shale “Field”) has produced over 4 BILLION BBLS OF OIL. There are many dozens of other fields (formerly known as trends) in just the US that have produced much more oil then both the EFS and Bakken are projected to ULTIMATELY recover.

    And that ain’t nothing: the Gulf Coast Basin…sorry…meant field…has produced more oil then the vast majority of COUNTRIES on the planet. Of course the Gulf Coast Field also includes all the Deep Water fields so I guess we need to give the another name. Let’s try Deep Water Padogles. There…got that fixed.

    There…I’m sure no one is confused now. Who needs to use those arbitrary definitions to formulate a clear conceptual vision of this so simple dynamic we call hydrocarbon extraction. LOL.

  8. hiruitnguyse on Fri, 1st May 2015 1:07 am 

    Yawn.

  9. Davy on Fri, 1st May 2015 1:22 am 

    I have read some of seeking Alpha’s stuff on ZH. The guy needs to stick with financial stuff because this was an embarrassment of an article. The guy is drooling an agenda of the greatness of the US in both technology and resources which is a blatant distortion. One need only look at the debt the US shale drillers have generated to realize this was a mal-investment of epic proportions. A debt that was allowed to be generated by an equally huge policy mistake called the Fed Zirp & QE.

    I love how he converts gas to oil comparisons to exaggerate US greatness. I love the stress on US mega field’s classifications. I am surprised he did not mention gas exports and the 12 LNG plants that are in dream phase but soon to be completed. The USA USA USA is irritating but harmless with hockey games with the Russians or the Olympics. It is not OK in the situation of our foundational resources. Oil and gas are foundational resources that mean life or death. Gas less so than oil but still critical to heating our homes, industry and increasingly powering the grid. Alternatives are more of the deceptiveness but part of another story.

    These articles mislead people. Decisions, attitudes, and lifestyles are shaped falsely. MSM grabs messages like this and before you know it brainless congressmen are talking about it. We know here there is more to it and allot more to it. There is recoverable reserves, chemical composition of reserves, and cost of production. None of this was mentioned in this article. It was one big EIA photo shoot with the stars and stripes draped in the background.

    What are the likes of this numb nut going to say once the numbers go south and aren’t pretty? There won’t be any articles. There will be complaints of this or that excuses why there are shortages. This whole American snake oil job is going to leave people extremely angry soon. This is an area where we should have some sobriety because we are setting ourselves up for a huge fall.

    Everywhere we are hearing deceptiveness on how BAU will be powered well into the future and it just ain’t so. This is a lie and a lie on a scale never generated since the beginning of man. The scale of this lie is so big because the consequences are so big. Billions may die because we are deceiving ourselves or being deceived by psychopathic snake oil salesman on Evil Street. I am not against hydrocarbons or alternatives because we are 7BIL people in overshoot. I am not even against BAU temporarily. What I am against is a lie leading us to slaughter when the worst could be less.

    If you are a part of this lie then you should be held accountable. Some on this site are part of this lie. It will be a lie forgotten quickly because people will be too busy looking for food. I won’t forget and I will tell my kids I tried to push honesty and reality. I tried to do something so they might suffer less.

  10. clueless on Fri, 1st May 2015 5:08 am 

    Super drought
    Mega drought
    in
    many States, next
    to yours’ !!!

    lol

  11. buddavis on Fri, 1st May 2015 7:26 am 

    I won’t add to Rock, as he was pretty clear, but is it too much to ask for accuracy for these maps? The map of the Lower 48 US and their plays are completely bogus. The actual productive Haynesville Shale (not to be confused with the Haynesville sand that is also productive) is about 15% of that actual size they show. Large parts of their map, it does not even exist.

  12. Nony on Sat, 2nd May 2015 8:58 am 

    The map source is EIA.

    http://www.eia.gov/petroleum/drilling/images/dpmapv4l-wtitle.png

    Maybe not perfect, who is. But they are professionals. Not bloggers. Not Gayle or Ron or the like.

    And the map is (obviously) county-defined. That is, shows all of a county even if only part of that county has the formation. This is because of how the data is compiled, county by county. If you read up on the methodology, not just jerk around in comment sections, you would know that.

  13. G Observer on Sun, 23rd Oct 2016 4:58 pm 

    Not sure about the biggest LNG exporters in the world, going to be hard to beat Qatar and very soon Western Australia.

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