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Oil Discoveries at 70-Year Low Signal Supply Shortfall Ahead

Geology

Explorers in 2015 discovered only about a tenth as much oil as they have annually on average since 1960. This year, they’ll probably find even less, spurring new fears about their ability to meet future demand.

  • New finds at lowest since 1947 and headed even lower: WoodMac
  • Explorers replacing just 6% of resources they drill: Rystad

Explorers in 2015 discovered only about a tenth as much oil as they have annually on average since 1960. This year, they’ll probably find even less, spurring new fears about their ability to meet future demand.

With oil prices down by more than half since the price collapse two years ago, drillers have cut their exploration budgets to the bone. The result: Just 2.7 billion barrels of new supply was discovered in 2015, the smallest amount since 1947, according to figures from Edinburgh-based consulting firm Wood Mackenzie Ltd. This year, drillers found just 736 million barrels of conventional crude as of the end of last month.

That’s a concern for the industry at a time when the U.S. Energy Information Administration estimates that global oil demand will grow from 94.8 million barrels a day this year to 105.3 million barrels in 2026. While the U.S. shale boom could potentially make up the difference, prices locked in below $50 a barrel have undercut any substantial growth there.

New discoveries from conventional drilling, meanwhile, are “at rock bottom,” said Nils-Henrik Bjurstroem, a senior project manager at Oslo-based consultants Rystad Energy AS. “There will definitely be a strong impact on oil and gas supply, and especially oil.”

Global inventories have been buoyed by full-throttle output from Russia and OPEC, which have flooded the world with oil despite depressed prices as they defend market share. But years of under-investment will be felt as soon as 2025, Bjurstroem said. Producers will replace little more than one in 20 of the barrels consumed this year, he said.

Global spending on exploration, from seismic studies to actual drilling, has been cut to $40 billion this year from about $100 billion in 2014, said Andrew Latham, Wood Mackenzie’s vice president for global exploration. Moving ahead, spending is likely to remain at the same level through 2018, he said.

Exploration is easier to scratch than development investments because of shorter supplier-contract commitments. This year, it will make up about 13 percent of the industry’s spending, down from as much as 18 percent historically, Latham said.

The result is less drilling, even as the market downturn has driven down the cost of operations. There were 209 wells drilled through August this year, down from 680 in 2015 and 1,167 in 2014, according to Wood Mackenzie. That compares with an annual average of 1,500 in data going back to 1960.

10-Year Effect

Ten years down the line, when the low exploration data being seen now begins to hinder production, it will have a “significant potential to push oil prices up,” Bjurstroem said.

“Exploration activity is among the easiest things to regulate, to take up and down,” Statoil ASA Chief Executive Officer Eldar Saetre said Monday in an interview at the ONS Conference in Stavanger, Norway. “It’s not necessarily the right way to think. We need to keep a long-term perspective and maintain exploration activity through downturns as well, and Statoil has.”

The Norwegian company will drill “a significant number” of wells in the Barents Sea over the next two to three years, exploration head Tim Dodson said Tuesday at the same conference. Given current levels of investment across the industry and decline rates at existing fields, a “significant” supply gap may open up by 2040, he said.

Oil prices at about $50 a barrel remain at less than half their 2014 peak, as a glut caused by the U.S. shale boom sent prices crashing. When the Organization of Petroleum Exporting Countries decided to continue pumping without limits in a Saudi-led strategy designed to increase its share of the market, U.S. production retreated to a two-year low.

Global benchmark Brent advanced 0.6 percent to $49.57 a barrel at 2:12 p.m. in London on Tuesday.

Price Spike

“Considering the reduction in the prices, you have to be looking to every dollar you are spending,” Pedro Parente, CEO of Petroleo Brasileiro SA, said Tuesday in an interview outside Stavanger. “It can’t continue forever, because then what we’ll see is a spike in prices in the future.”

Kristin Faeroevik, managing director for the Norwegian unit of Lundin Petroleum AB, a Stockholm-based driller that’s active in Norway, said it will take “five to eight years probably before we see the impact” on production from the current cutbacks. In the meantime, he said, “that creates opportunities for some.”

Oil companies will need to invest about $1 trillion a year to continue to meet demand, said Ben Van Beurden, the CEO of Royal Dutch Shell Plc, during a panel discussion at the Norway meeting. He sees demand rising by 1 million to 1.5 million barrels a day, with about 5 percent of supply lost to natural declines every year.

Less Risk

Persistently low prices mean that even when explorers invest in finding new resources, they are taking less risk, Bjurstroem said. They are focusing on appraisal wells on already-discovered fields and less on frontier areas such as the Arctic, where drilling and developing any discovery is more expensive. Shell and Statoil, among the world’s biggest oil companies, abandoned exploration in Alaska last year.

“Traditionally, it’s the big companies that have had the means to gamble, and they might be the ones that have cut the most,” Bjurstroem said.

Overall, the proportion of new oil that the industry has added to offset the amount it pumps has dropped from 30 percent in 2013 to a reserve-replacement ratio of just 6 percent this year in terms of conventional resources, which excludes shale oil and gas, Bjurstroem predicted. Exxon Mobil Corp. said in February that it failed to replace at least 100 percent of its production by adding resources with new finds or acquisitions for the first time in 22 years.

“That’s a scary thing because, seriously, there is no exploration going on today,” Per Wullf, CEO of offshore drilling company Seadrill Ltd., said by phone.

Bloomberg

 



47 Comments on "Oil Discoveries at 70-Year Low Signal Supply Shortfall Ahead"

  1. paulo1 on Tue, 30th Aug 2016 9:27 am 

    Good mainstream article finally stating what we, on this site, already know.

    Although believing that shale can make up the difference is a little hopeful. Should read ‘some of the difference’, imho.

    regards..(We finally have some rain!! Fire season over except for the south Island.)

  2. ghung on Tue, 30th Aug 2016 10:04 am 

    Meanwhile, happy motoring continues. Every weekend, our area gets rallies of car clubs, groups of motorcyclists (baby-boomers with their absurdly loud Harleys and speed demons testing their skills on our mountain roads); all happily burning cheap fuel. Several towns around here even have annual “Car-B-Ques” on the square where enthusiasts come from all over to show off their restorations and hotrods. The Cherokee Indian casinos attract droves of gamblers from hundreds-of-miles away. Soon we’ll get the Fall ‘leaf watchers’. Our Florida part-timers drive 8 hours or more going back-and-forth to/from their vacation homes (I use the term “driving” generously when referring to Florida drivers; they are absolutely awful drivers).

    All is well from their points of view. Motoring tourism is now a major part of our economy, here in the southern Appalachians. I see no indication that any of these folks (locals or visitors) understand what lies ahead. Wondering who they’ll blame this time.

  3. ghung on Tue, 30th Aug 2016 10:09 am 

    …. And Paulo; congrats on the rain. We’re about 9 inches behind this year; not critical but quite dry for our area. Even the tropical storms out of the Gulf, that usually come here to die, seem to be veering off into the Atlantic this year.

  4. speculawyer on Tue, 30th Aug 2016 10:55 am 

    Good. That should help the struggling oil biz. We also need higher prices because these low prices are making us fat & lazy. People are buying gas-guzzlers that they will regret.

    But I think that we still have a fair amount of time to burn through this glut and the increased production from many OPEC countries like Saudi Arabia and Iran.

  5. Outcast_Searcher on Tue, 30th Aug 2016 12:06 pm 

    As long as the coming price spike is at least several years out, it will give green energy and the EV time to mature and be built out more.

    Then a big spike in oil prices should be just the thing the EV needs to go mainstream (at least for the PHEV), if it isn’t ramping up pretty good already.

    This is the way the oil markets work, responding to market forces, so this isn’t surprising.

    The main question is how soon and at what oil price will the green revolution become truly disruptive. If a big oil price spike helps this happens a decade or two sooner, all the better.

  6. Plantagenet on Tue, 30th Aug 2016 1:44 pm 

    Oil has always been a boom-and-bust biz.

    We’re in an oil glut now and oil prices are low. Of course oil exploration is going to slow.

    Eventually the oil glut will end, and oil prices will go up, and another surge in exploration will begin.

    Of course, the easy oil is gone now, so exploration is now a lot more difficult. Look for even more shale oil fracking in the next up cycle.

    Cheers!

  7. shortonoil on Tue, 30th Aug 2016 2:32 pm 

    “But I think that we still have a fair amount of time to burn through this glut and the increased production from many OPEC countries like Saudi Arabia and Iran.”

    Another $15 down and the Middle East will burn. They will turn on each other like a pack of starving dogs. Each one blaming the other for over producing. That is about three years from now:

    http://www.thehillsgroup.org/depletion2_022.htm

    and about the time that their SWFs have run dry.

  8. Go Speed Racer on Tue, 30th Aug 2016 3:48 pm 

    I got some extra oil to donate. It’s out in the shed. Couple of gallons. Dirty stuff from oil changes.

  9. Boat on Tue, 30th Aug 2016 3:59 pm 

    Over the weekend, Russia signed a deal with Iran to build $1 billion worth of offshore drilling rigs. Speaking to Sputnik, a Russian Iran expert and officials from the Russian and Iranian firms involved in the oil rigs deal commented on the prospects for Russian-Iranian economic cooperation, which in their words, is only just beginning.

    Read more: http://sputniknews.com/politics/20160830/1044793782/russian-iranian-economic-cooperation-commentary.html

  10. Survivalist on Tue, 30th Aug 2016 5:18 pm 

    “Green Revolution” lmfao if by that you mean famine and collapse, otherwise you’re in dreamland. What’s gonna power the manufacturing of wind and solar infrastructure, what’s gonna fuel the mining of elements for EV batteries; unicorn farts?

  11. peripato on Wed, 31st Aug 2016 1:20 am 

    “You can’t produce what you can’t find.” It’s telling that even through the era of QE, which ramped up fracking due to prolonged prices above $100 a barrel, the rate of discovery continued to decline. Physics trumps money every time…and it appears that debt has done nothing but mask the decline.

  12. flashrob01 on Wed, 31st Aug 2016 1:35 am 

    “Another $15 down and the Middle East will burn. They will turn on each other like a pack of starving dogs. Each one blaming the other for over producing. That is about three years from now:”

    Short, I’m sorry, but this comment doesn’t make a lot of sense, based on your previous remarks:

    “Our projections put conventional at 57 mb/d by 2020, and 49 mb/d by 2030.”

    Where will all this production come from? Of course, primarily from the Middle East producers, who have production costs well below $20/bbl. They will not burn; the bulk of the world’s remaining production will come from them. The rest of the world’s attention will be trained on them, and they will have formed alliances with every major government in the world whose interest is in either keeping them in power or perhaps worse, however, they will be the latest producers standing and will be just fine.

  13. Cloggie on Wed, 31st Aug 2016 4:22 am 

    With the oil prices as low as they are, it doesn’t make sense to increase searching for more. Instead the oil majors wait until the prices do recover substantially before beginning to hunt for new reserves.

  14. Davy on Wed, 31st Aug 2016 6:08 am 

    “Of course, primarily from the Middle East producers, who have production costs well below $20/bbl.”
    Peak oil dynamics says there is more to production costs than the basic well head cost. Just like EROI and its interpretation there is more to it. Oil producing nations require much more to satisfy the society this oil lays under than the basic well head cost indicates. Russia is likely the best placed of these oil nations but they are even overly dependent on oil. The US has regional issues related to oil. Oil is a curse and a blessing. Oil has driven our global civilization into overshoot. It has driven oil producing nations the furthest into overshoot. What could be worse than living in a desert with far too many people and dependent on oil exports for your survival.

  15. shortonoil on Wed, 31st Aug 2016 6:35 am 

    “Short, I’m sorry, but this comment doesn’t make a lot of sense, based on your previous remarks: “

    At $46 Saudi Arabia has a $51 billion annual shortfall. At $35 it will be $113 billion. With a government budget of $231 billion their lights are going to go out. Your optimism is sweet, but completely unrealistic.

    Maybe another Care Bear would help?

  16. shortonoil on Wed, 31st Aug 2016 6:57 am 

    “Instead the oil majors wait until the prices do recover substantially before beginning to hunt for new reserves.”

    OH yes, the price is going to go up – just like it has for the last three years? Which particular century are you referring to? The market does not control the price of oil, it sets it. The price of oil as an energy product is controlled by the average per unit energy delivered. Higher energy, higher price; lower energy lower price. Oil is now heading for its average lowest energy delivery level; zero!

    At that point there will be no one producing oil.

    http://www.thehillsgroup.org/

  17. shortonoil on Wed, 31st Aug 2016 7:22 am 

    “costs well below $20/bbl. “

    At $20/ barrel Saudi Arabia can’t feed its population. It now requires a minimum of $57 to do that. 28 million starving people sitting on a 135° sand dune, aren’t going to pump much oil. It is more likely that they will be killing each other over scraps of bread. No imperial big brother is going to be coming to their rescue. He will be far too busy handling his own riots of the masses.

    The end of the oil age appears to be a reality that you seem to be having a hard time getting your head wrapped around. Don’t worry, you will soon have first hand experience. Just think of it as on the job training!

  18. Sissyfuss on Wed, 31st Aug 2016 8:43 am 

    Perapato, soon it will be Trump moneys physics as he turns the world upside down.

  19. flashrob01 on Wed, 31st Aug 2016 10:20 am 

    “It is more likely that they will be killing each other over scraps of bread. No imperial big brother is going to be coming to their rescue.”

    BW, you yourself state conventional production at 57 mb/d by 2020, and 49 mb/d by 2030. If neither the Saudis nor the imperialists aren’t producing this, then who is? Will the oil produce by itself? Or is there a conflict within the statement made ? 🙂

    Rob

  20. rockman on Wed, 31st Aug 2016 11:31 am 

    The KSA budget has always been a function of its oil revenue and not internal requirements. It’s current budget is based upon that revenue just as it was before the price spike. IOW the current budget is larger then it was not too many years ago when oil was around $30/bbl and its production rate was lower. Same reason the KSA had huge budget surpluses when oil prices began to boom: they had not projected that big increase and had thus planned for a smaller budget goal.

  21. shortonoil on Wed, 31st Aug 2016 12:43 pm 

    Prices fall again,

    http://www.zerohedge.com/news/2016-08-31/crude-tumbles-after-big-crude-distillates-build

    The world will never again be able to absorb all of the petroleum produced. It no longer supplies enough energy for the economy to buy all that is produced. Excess inventory is now a perpetual situation, and it will worsen until production begins to be continually being shut in.

    Also, as we have been saying demand is not strong: it has fallen to less than a tenth of its 1960 to 2005 level:

    http://www.zerohedge.com/news/2016-08-31/truth-emerges-eia-admits-it-overestimated-crude-gasoline-demand-first-half

    We expect world production to begin falling at a 5.5% rate until the 2030 dead state is reached at 47 mb/d. Past that point all globalized production will cease, and only some regional production and processing will remain.

    http://www.thehillsgroup.org/

  22. Kenz300 on Wed, 31st Aug 2016 1:32 pm 

    It is time for oil companies to switch to a new business model and become “ENERGY” companies by embracing wind, solar and other alternative energy sources….

    Fossil fuels are poisoning the planet……… it is time to move away from them and embrace the future…….

  23. IPissOnLosers on Wed, 31st Aug 2016 2:21 pm 

    I don’t think we will need to wait until 2030 to see the die off of the human specie.

    We are already low on net energy, so low that we are not capable of extracting Venezuelan tar sand. Canadian tar sand is going the same way Valenzuela tar sand is going. Very soon Canada will look like Venezuela.

    Some part of supply chain are starting to crack because of the lack net energy.
    How long before shortage around the world appear.

    Global Supply Chains Paralyzed After World’s 7th Largest Container Shipper Files Bankruptcy, Assets Frozen

    http://www.zerohedge.com/news/2016-08-31/global-supply-chains-paralyzed-after-worlds-7th-largest-container-shipper-files-bank

  24. IPissOnLosers on Wed, 31st Aug 2016 2:36 pm 

    Another thing I forgot to say, look at the Baltic Dry Index on top of the zerohedge page. The index peaked during 2005-2009 period, during the same period the conventional oil production peaked. One more proof that the peak of net available energy was 2005 at the same time of peak conventional oil.

    http://www.zerohedge.com/news/2016-08-31/global-supply-chains-paralyzed-after-worlds-7th-largest-container-shipper-files-bank

  25. Apneaman on Wed, 31st Aug 2016 3:10 pm 

    Yeah, because the entire Canadian economy is based on Alberta tar sands. There are no other resources in the entire country (2nd largest area). Canada’s approx 2 trillion dollar a year economy (33 million apes) rests solely on the Alberta tar sands. Sounds like a zerohedge article.

    “Venezuela
    Economy

    The economy of Venezuela is largely based on the petroleum sector and manufacturing. Revenue from petroleum exports accounts for more than 50% of the country’s GDP and roughly 95% of total exports. Wikipedia
    Currency: Venezuelan bolívar
    GDP per capita: 14,414.75 USD (2013) World Bank
    Gross domestic product: 438.3 billion USD (2013) World Bank
    GDP growth rate: 1.3% annual change (2013) World Bank
    Gross national income: 544.2 billion PPP dollars (2013) World Bank
    GNI per capita: 17,900 PPP dollars (2013) World Bank
    Internet users: 54.9% of the population (2013) World Bank”

    “Canada

    Economy
    Canada has the 10th or 15th-largest economy in the world, is one of the world’s wealthiest nations, and is a member of the Organization for Economic Co-operation and Development and Group of Seven. Wikipedia
    Currency: Canadian dollar
    GDP per capita: 51,958.38 USD (2013) World Bank
    Gross domestic product: 1.827 trillion USD (2013) World Bank
    GDP growth rate: 2.0% annual change (2013) World Bank
    Gross national income: 1.498 trillion PPP dollars (2013) World Bank
    Internet users: 85.8% of the population (2013) World Bank
    GNI per capita: 42,610 PPP dollars (2013) World Bank”

    Any day now I’ll be forced to start hunting the neighbourhood cats and wipe my ass with tree leaves.

    “Investment

    Between 1999 and 2013, approximately $201 billion was invested in the oil sands industry.

    Oil sands investment was equal to $27.2 billion in 2012, the highest investment to date in oil sands history.
    Statistics Canada’s preliminary actual data for 2013 show the oil sands investment reaching the new record high of $32.7 billion. Source: Statistics Canada, Private and Public Investment in Canada
    Employment

    In 2014, approximately 133,053 people were employed in Alberta’s upstream energy sector, which includes oil sands, conventional oil, gas and mining. Source: Statistics Canada, Survey of Employment, Payrolls and Hours.
    Royalties

    In the fiscal year 2013 – 2014, synthetic crude oil and bitumen royalty accounted for about $5.2 billion or almost 55 per cent of Alberta’s $9.6 billion non-renewable resource revenue. Historical royalty data is available.”

    http://www.energy.alberta.ca/oilsands/791.asp

  26. shortonoil on Wed, 31st Aug 2016 3:57 pm 

    “I don’t think we will need to wait until 2030 to see the die off of the human specie.

    No one mentioned the die off the human species. It appears that you read something into it that wasn’t there. 2030 results from a calculation derived from a thermodynamic equation. Determining the extinction era of humanity would require much more information that what is available. Humans are likely to turn out to be more difficult to extinguish than coach roaches.

  27. IPissOnLosers on Wed, 31st Aug 2016 4:02 pm 

    Short nobody cares about your shitty model that did not pass peer review. You put your model on a physic web site and everyone laugh at the way you use entropy.

    Go back to school boy, nobody with a science back ground take you seriously.

    I look at you model, you are not using entropy correctly and I agree with the other reviewer of your modes

  28. rockman on Wed, 31st Aug 2016 5:08 pm 

    “It is time for oil companies to switch to a new business model and become “ENERGY” companies by embracing wind, solar and other alternative energy sources….” Which makes as much sense as expecting a turbine or solar panel to become a successful oil/NG development company. After all those companies are also in the “energy biz”, right? LOL.

  29. rockman on Wed, 31st Aug 2016 6:09 pm 

    “Canadian tar sand is going the same way Valenzuela tar sand is going. Very soon Canada will look like Venezuela.” Time will tell. BTW does everyone know that the first 1 million bbls per day of oil sand production was developed when oil was selling for at least 25% less then the current price?

    BTW is everyone also aware that in 1998 when the inflation adjusted oil price was $17/bbl Venezuela was producing 3 million bopd which is significantly more then it was producing when oil was going for $100/bbl? And currently it’s at a 13 year low of 2.15 million bopd. It would appear that its current problem is more with management of its huge reserve base then the price of oil.

    Damn…don’t you just hate it when facts get in the way of spin? LOL. Granted there weren’t many websites like this when oil was $17/bbl in 1998 and the world was producing 30% less oil then it is today I don’t recall seeing similar sentiments that are being posted here these days.

  30. flashrob01 on Wed, 31st Aug 2016 7:32 pm 

    “I look at you model, you are not using entropy correctly and I agree with the other reviewer of your modes”

    I may have some questions here and there about the ETP model, and some things are still not fully resolved in my mind, but it’s still far better than anything else that’s out there. FAR better.

  31. rockman on Wed, 31st Aug 2016 10:57 pm 

    Flash – A sincere question since I don’t follow this debate closely. But:”…but it’s still far better than anything else that’s out there. FAR better.” To what end? IOW what is the utility of these models? Drilling decisions? Playing the oil futures market? Prediction the future oil demand/supply dynamic…if so but again to what end?

    Thanks in advance.

  32. Anonymous on Wed, 31st Aug 2016 11:05 pm 

    Rock, Kenz is being even bigger fool than usual with that canned statement of his. I have ZERO desire to see exxon, chevron, Shell, Koch assholes etc, from turning solar and wind into another monopolistic cartel. Only a moron would advocate the current cartel of uS oil corporations taking over, and profiting from, wind, solar, tidal, what have you.

    Suggesting exxon or chevron take charge of ‘renewable energy’ is akin to asking monsanto to take over permaculture or organic agriculture. What sort of village idiot would ever think something like that is a good idea? Unlike ‘kenzeroiq’, I realize we dont need uS oil corporations to be involved in renewable anything-period. Projects can and will continue to be done w/o them, their dollars, their input, or their greasy army of lobbyists, bought politicians, and military strongmen in the pentopicon.

  33. Cloggie on Thu, 1st Sep 2016 4:40 am 

    If in the long term fossil is a declining and renewable a rising business than it does make sense for oil companies to invest in renewables.

    And see: they did and do. Recently Shell announced to return to renewables for a second time:

    https://www.theguardian.com/business/2016/may/15/shell-creates-green-energy-division-to-invest-in-wind-power

    Iin 2008 Royal Dutch Shell had withdrawn from its last commitment to renewable energy:

    https://en.wikipedia.org/wiki/Royal_Dutch_Shell#Alternative_energy

    During the last share holder gathering in Holland, a large chunk of the share holders demanded that Shell would reinvent itself as a renewable energy company. That didn’t happen, not yet.

    In contrast to Anonymous, I would love to see all these billions Shell has to be invested in renewables.

    #RoyalDutchWindmill

    https://s-media-cache-ak0.pinimg.com/564x/aa/3d/25/aa3d250f2f9da6ff31d640c40ad3dbd8.jpg

  34. shortonoil on Thu, 1st Sep 2016 8:09 am 

    “Short nobody cares about your shitty model that did not pass peer review. “

    You sort of have that backward; no one cares about your ignorant opinion. By the way there Mr. Genius, where is your web site. All I see is another blathering troll with nothing to back it up. Just another useless fool pretending to be what they aren’t.

    Then of course you can’t read a graph! The Wood Mackenzie graph above is saying that the oil age is over.

    Which is sort of the same thing that we have been saying for sometime.

    http://www.thehillsgroup.org/

  35. shortonoil on Thu, 1st Sep 2016 8:23 am 

    “I may have some questions here and there about the ETP model, and some things are still not fully resolved in my mind, but it’s still far better than anything else that’s out there. FAR better. “

    “see Dick Head above”, he says that he knows all about entropy, and the Second Law Efficiency of Reacting Systems. He also states that by using the Third Law he can prove that there are little green men canoeing around on the methane seas of Titan. Here is your chance to extract tremendous knowledge from a really brilliant mind??

  36. onlooker on Thu, 1st Sep 2016 8:32 am 

    Your the loser LOSER. Nothing but an empty critique of a respected poster with neither expert links nor any personal credentials to note. Well your the real LOSER

  37. PracticalMaina on Thu, 1st Sep 2016 9:09 am 

    Anon, it is much easier to keep someone from drilling and refining their own oil compared to keeping someone from deploying their own renewables on their land. That is a lot of local building ordinances for them to get their corrupt greedy hands into.

  38. Davy on Thu, 1st Sep 2016 10:43 am 

    Yea, short, did you see the dumbass name “Ipissonloosers”. That says dumbass right there.

  39. shortonoil on Thu, 1st Sep 2016 11:48 am 

    “Well your the real LOSER “

    Thanks!

    Some one is getting real nervous. The evidence is up to our chin that we are in real trouble.

    Oil company profits are gone; whole sovereign oil producing states folding; reserves falling by 90 mb/d, and they try to cover it all up by employing some ass wipe on the internet. So where are their solutions; they don’t have any, and it appears that they don’t want any. We are being handed the short end of the stick , and expected to like it! Its time to dump these lizards, and start your garden!

  40. Boat on Thu, 1st Sep 2016 12:19 pm 

    Tech,

    Supercomputers Deliver $500M Savings In BHP Hunt For Oil

    Supercomputers that create 3-D seismic maps of BHP Billiton Ltd.’s oil and gas assets are accelerating work to bring new fields into production and have already notched savings of $500 million in development costs at a project in the Caribbean.

    The computers are among initiatives aimed at using technology such as drones and robot drills to cut operating costs and lower the development bills of potential projects including the Jansen potash deposit in Canada, Chief Technology Officer Diane Jurgens said Friday in an interview. Crunching exploration data at a center in Houston is cutting the time needed to produce oil from sites in Trinidad and Tobago to three years from seven years

    http://www.rigzone.com/news/oil_gas/a/145908/Supercomputers_Deliver_500M_Savings_In_BHP_Hunt_For_Oil

  41. Boat on Thu, 1st Sep 2016 12:40 pm 

    Royal Dutch Shell expects its Forcados oil pipeline in Nigeria to restart deliveries in mid-September.

    The pipeline was shut down in February when militants blew up the line that feeds into the Forcados terminal. Usually, this line exported about 200,000 barrels of oil per day.

    http://finance.yahoo.com/news/shell-reopen-oil-pipeline-nigeria-150003355.html

    The Iraq government and the Kurds agreed to reopen a pipeline that transports 150 mbpd. Add that to Nigeria and you get 350 mbpd added to the glut.

  42. Apneaman on Thu, 1st Sep 2016 3:13 pm 

    Boat, it looks like the “free market” is finding that it’s a little harder to best big gov projects than they assumed.

    SpaceX rocket explodes at Cape Canaveral ahead of launch

    http://www.bbc.com/news/world-us-canada-37247077

    Could you imagine if there never was a cold war and space race and the “free market” had to develop everything on their own?

    Oh well, it wasn’t as if it had any meaningful or useful purpose – just more dopamine hits for clueless apes.

    SpaceX Rocket Explosion Sets Back Facebook’s Internet Expansion in Africa

    http://www.wired.com/2016/09/spacex-rocket-explosion-sets-facebooks-internet-expansion-africa-back/

  43. taw on Thu, 1st Sep 2016 3:20 pm 

    “Flash – A sincere question since I don’t follow this debate closely. But:”…but it’s still far better than anything else that’s out there. FAR better.” To what end? IOW what is the utility of these models? Drilling decisions? Playing the oil futures market? Prediction the future oil demand/supply dynamic…if so but again to what end?”

    Time will tell if the model is better or not. It is distinctly different however two ways.
    First, Short puts numbers on the extraction-refining-distribution energy budget. Right or wrong, its made for a rousing debate.
    Second, he’s predicting permanent decline in demand. No one is predicting that. Again, time will tell, but ya gotta give him credit for having the cajones to stick his neck out and defend his hypothesis.
    As for peer review in journal submissions, I’ve been through that successfully. Rejection can mean anything. Sometimes its a flawed logic, and sometimes its a projection that cannot be verified. In the case of the ETP model, I would have been astounded if it was accepted in its entirety because of the demand projection which is late in the paper. I’d love to know if the earlier parts of the paper were accepted.

  44. Boat on Thu, 1st Sep 2016 4:50 pm 

    ape,

    A little history.

    Overall rockets from the Falcon 9 family have been launched 29 times over 6 years, resulting in 26 full mission successes, one partial success (with main mission completed), and two failures (with total loss of spacecraft). This yields a reliability record of 93% for primary missions. Six of eleven landing attempts (55%) have succeeded in recovering the rocket’s first stage

    https://en.wikipedia.org/wiki/List_of_Falcon_9_and_Falcon_Heavy_launches

  45. flashrob01 on Thu, 1st Sep 2016 9:20 pm 

    “Flash – A sincere question since I don’t follow this debate closely. But:”…but it’s still far better than anything else that’s out there. FAR better.” To what end? IOW what is the utility of these models? Drilling decisions? Playing the oil futures market? Prediction the future oil demand/supply dynamic…if so but again to what end?”

    Rockman- I work as an analyst in the oil industry, focused on unconventionals. So I have seen first-hand the innards of how the system works, including having experienced much of the spin and hype. I also have an understanding of what the true costs of E&P for unconventionals are.

    No one at my firm saw the price bust coming. Short and Gail T. were the only ones calling it out well before it happened. Also, their logic is pretty sound and ties into what I’ve been seeing, especially since the market crash and the government’s tepid response since 2008.

    My job requires that I forecast demand for the oil industry, so of course I want to go with the most accurate forecast possible. Hence, I find myself looking closely at the work of Short and Gail, who are thinking outside the box and were right when everyone else was wrong..

  46. shortonoil on Fri, 2nd Sep 2016 8:55 am 

    “My job requires that I forecast demand for the oil industry, so of course I want to go with the most accurate forecast possible. Hence, I find myself looking closely at the work of Short and Gail, who are thinking outside the box and were right when everyone else was wrong..

    The Etp Model arose as the result of a few engineers who realized that the traditional approach to analyzing petroleum production was logically inconsistent. The subject is more than can be placed into a blog spot, but I’ll expand on it sometime in the near future. It, suffices to say, that we noticed contradictions that just could not be resolved using the generally held view. That inspired us to begin looking for another explanation. Since we had previously developed thermodynamic models for other applications, and petroleum is primarily an energy product we attempted a thermodynamic approach. One of the greatest impediments in employing such an implementation is eliminating “things that you know – that just ain’t so”.

    To make any new physical model valid requires that it be based on fundamental physical laws that are testable against a verifiable data set. Petroleum has very few data sets that have not been highly influenced by the opinion, or desire of those who compiled them. We settled on the price of petroleum as our control data set (not because everyone thinks that the price is the most important factor) but because it is about the only data set that we can be reasonably sure is probably almost 100% accurate. That opens a huge can worms, as almost everyone has an opinion about the price of oil. Opinion was what we were trying to avoid in the first place!

    The Model is a rigorous mathematically developed structure, with a calculable margin of error, and has been tested against every data set available. It has performed very well to date. To be used effectively it requires an understanding of its thermodynamic foundations, and considerable mathematical acuity. Once mastered, however, it can provide solutions, simply and easily, that would not be possible using any other approach.

    I hope you can find it to be of value in your endeavors. If you have any specific requests you can contact me at our site. We, also, provide a full range of consulting services.

    BW Hill
    http://www.thehillsgroup.org/

  47. Don Stewart on Fri, 2nd Sep 2016 11:43 am 

    shortonoil and flashrob01

    In my travels, I came across this story and an interesting video about the Woolworth mansion on Long Island:

    http://www.therialtoreport.com/2013/11/10/the-porn-mansion/

    (While this is a story about locations used in pornographic moves, there isn’t anything but some nudity in the article or video).

    Cautionary tales were once a staple of children’s stories and even paintings, such as the memento moro of paintings or the welcoming back home of conquering heroes.

    How can one look at these crumbling mansions and fail to make some parallel with the society at the End of the Oil Age? Perhaps someone should film Debbie Does Houston on the ship channel to complete the cycle?

    And if you want some cynicism, take a look at the ‘righteous indignation’ in Rhode Island, followed a week later by willingness to take the same money on Long Island.

    Don Stewart

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