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Page added on June 20, 2018

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Peak Oil? What Peak Oil?

Production

I assume this had something to do with the Bakken revolution.

Under the Hubbert peak oil theory, this was not supposed to happen. The theory, of course, won’t die. In fact, I doubt wiki will even update the facts.

The Hubbert peak theory says that for any given geographical area, from an individual oil-producing region to the planet as a whole, the rate of petroleum production tends to follow a bell-shaped curve. It is one of the primary theories on peak oil.

Not only are we seeing individual oil wells in the Bakken not following a bell-shaped curve, neither are legacy oil fields. Companies like DNR are using tertiary recovery to rejuvenate old fields.

Now this: “US overtake Saudi Arabia in recoverable reserves.” Under Hubbert’s peak oil theory this was never supposed to have happened.

From oilprice.com:

The United States has again outstripped Saudi Arabia as the holder of the world’s biggest recoverable oil resources with current technology, largely due to the doubling of fracking operations in the Permian, according to data by research consultancy Rystad Energy.

The U.S. added nearly 50 billion barrels in 2017 and now has an estimated 310 billion barrels of recoverable oil, which are equal to 79 years of U.S. production at the current pace of output, Rystad said.

Apart from the Permian, where more reserves per well are drilled, new areas and formations that have been geologically proved boosted the U.S. recoverable oil resources last year, according to the Norway-based energy consultancy.

“Texas alone now holds more than 100 billion barrels of recoverable oil, 90% of which is from shale or other tight formations, ie. from wells that require hydraulic fracking to produce commercial quantities of oil,” said Rystad Energy.

The “recoverable oil” figures include expected production from future discoveries that Rystad deems likely.

Much more at the link. Including this:

In terms of oil that has already been discovered, Saudi Arabia continues to be the undisputed leader, holding 246 billion barrels of discovered oil, which is 90 billion barrels more than the discovered oil in the United States, according to Rystad Energy.

As far as commercially proved oil reserves—the industry’s closest definition of oil yet to be produced—are concerned, the world’s total such reserves are 388 billion barrels, equal to just 13 years of oil production. OPEC producers hold around 54 percent of the world’s commercially proved reserves.

Bottom line: one can use any number one wants, but right now, that number is pretty big for the United States.

Texas alone holds more than 100 billion bbls of recoverable oil, 90% of which is from shale or other tight formations. It should be noted that “from shale or other tight formations” actually means that most unconventional oil, as I understand it, comes from dolomite seams (sand) trapped between much tighter shale, the actual source rock. As I understand it, the tight shale formations are not yet providing much oil.

On another note, if the Bakken holds a trillion bbls of original oil in place, and primary production gets to 25% recovery, then we are looking at 250 billion bbls of recoverable oil.

Disclaimer: I am inappropriately exuberant about the Bakken.

By the way, many folks can take (some) credit for the Bakken revolution, but if I had to name just one individual it would have to be Harold Hamm. Not only did he play a great role in doing the “dirty” work, actually drilling, he a) had some kind of glimmer / intuition / genius that all those mineral acres he was buying in North Dakota would some day turn out to be a great investment; b) “sold” the idea to fellow oil drillers and, more importantly, to politicians, government officials, investors, etc. I can only imagine the number of times he was told he was wrong about the potential, either in North Dakota or Oklahoma.

And, then again, he might have been just plain lucky. But I don’t think so.

The Million Dollar Way (The Bakken Oil Blog)



30 Comments on "Peak Oil? What Peak Oil?"

  1. MASTERMIND on Wed, 20th Jun 2018 6:49 am 

    Another idiot who doesn’t understand the difference between conventional oil and unconventional..And thinks shale can make up for the entire worlds declining conventional oil on its own.

    https://imgur.com/a/rBtIrfg

  2. Barry Opseth on Wed, 20th Jun 2018 7:43 am 

    So many erroneous facts in this post, I cannot believe this got posted. The Bakken oil production has most likely peaked, and will exhibit decline soon. By 2020, the remaining tight oil plays in the US will also have peaked and be in decline. Hubbert was totally correct. Conventional oil followed his forecast remarkably well. The US producing oil from tight formations demonstrates we are scrapping the bottom of the barrel.

  3. twocats on Wed, 20th Jun 2018 7:53 am 

    1) drilling was artificially slowed in 2015 and then even more in 2016. otherwise they would have peaked like Everest. but that is one advantage of unconventional – start and stop times are better.

    2) all this talk about reserves and recoverable but not much talk about sustainable flows. at some point its all about flow not stock.

  4. Jef on Wed, 20th Jun 2018 8:05 am 

    Ah yes….the old “I haven’t died yet therefor I never will” argument.

  5. deadly on Wed, 20th Jun 2018 8:15 am 

    What you call ‘irrational exuberance’.

    Discoveries at an all time low.

    Rystad Energy

  6. mark on Wed, 20th Jun 2018 8:50 am 

    Recoverable doesn’t equal proven reserves. And of course we’ll be able to keep the “shale miracle” can keep running in the red for ever.

  7. MASTERMIND on Wed, 20th Jun 2018 9:08 am 

    when we really have a true resource collapse, the rich are all going to get murdered first..And the goons will be breeding their daughters like rabbits..

    LMFAO!

  8. Outcast_Searcher on Wed, 20th Jun 2018 9:49 am 

    Minimind doesn’t understand that oil is oil to things like my car. Pretending like technology doesn’t matter makes HIM the idiot. Not that he’d ever admit to that.

    Not to say in any way that oil or any other resource on earth is infinite. However, technology DOES make Hubbert’s bell curve assumption re all oil is conventional oil obsolete.

  9. Outcast_Searcher on Wed, 20th Jun 2018 9:53 am 

    The Cassndras here are like the Tesla bears. Ignore any facts/data which don’t support your personal intuition. Always bet on the negative?

    So how does that behavior work out for you, decade after decade after decade? But oh yes, THIS time, “the end” is right around the corner, because you folks always claim you’re right, even when your short term predictions are almost always wrong.

    Sure. That makes sense. /s

  10. MASTERMIND on Wed, 20th Jun 2018 9:55 am 

    Outcast

    Not all energy is equal..Let me educate you my deluded friend..

    It will take 2,500 new wells a year just to sustain output of 1 million barrels a day in North Dakota’s Bakken shale, according to the Paris-based International Energy Agency. Iraq could do the same with 60 conventional wells. Ultra-light oil makes poor-quality gasoline that has to be put through an additional process (and cost) called catalytic reforming that boosts octane to sales specifications. And most crucial is that this light oil lacks the middle distillates needed to produce diesel and jet fuel. Those are the three biggest refined product markets so ultra-light oil has a lot going against it.

    Right now, the main approach is to blend the ultra-light with heavier grades of oil to create a mixture that can be put into refineries. This has created high demand for heavier oil (20-30 API gravity). The main sources for the U.S. are deep-water Gulf of Mexico, Mexico, Venezuela and Canada. Much of this heavy oil has problems of its own for refiners especially the syn-crude from Canada and Venezuela that contains large volumes of bitumen that requires a special kind of refinery (“cokers”) that can deal with the carbon and sell it as petroleum coke. Most of these refineries are in the Midwest (Chicago area mostly).

    The deep water GOM crude contains considerable sulphur that must be removed before refining further. As you can see, it is a complex problem. It reflects the fundamental premise of Peak Oil—namely, that we have run out of cheap oil.

    https://www.bloomberg.com/news/articles/2014-02-27/dream-of-u-s-oil-independence-slams-against-shale-costs
    https://imgur.com/a/t7ulB

  11. BobInget on Wed, 20th Jun 2018 10:00 am 

    Summary of Weekly Petroleum Data for the week ending June 15, 2018

    U.S. crude oil refinery inputs averaged 17.7 million barrels per day during the week
    ending June 15, 2018, which was 196,000 barrels per day more than the previous week’s
    average. Refineries operated at 96.7% of their operable capacity last week. Gasoline
    production decreased last week, averaging 10.1 million barrels per day. Distillate fuel
    production increased last week, averaging 5.5 million barrels per day.

    U.S. crude oil imports averaged 8.2 million barrels per day last week, up by 143,000
    barrels per day from the previous week. Over the past four weeks, crude oil imports
    averaged about 8.1 million barrels per day, 0.3% more than the same four-week period
    last year. Total motor gasoline imports (including both finished gasoline and gasoline
    blending components) last week averaged 850,000 barrels per day, and distillate fuel
    imports averaged 49,000 barrels per day.
    U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum
    Reserve) decreased by 5.9 million barrels from the previous week. At 426.5 million
    barrels, U.S. crude oil inventories are about 2% below the five year average for this time
    of year.

    Total motor gasoline inventories increased by 3.3 million barrels last week and
    are about 6% above the five year range. Finished gasoline and blending components
    inventories both increased last week. Distillate fuel inventories increased by 2.7 million
    barrels last week and are about 14% below the five year average for this time of year.
    Propane/propylene inventories increased by 3.2 million barrels last week and are about
    15% below the five year average for this time of year. Total commercial petroleum
    inventories increased by 0.2 million barrels last week.

    Total products supplied over the last four-week period averaged 20.3 million barrels per
    day, up by 0.9% from the same period last year. Over the past four weeks, motor gasoline
    product supplied averaged 9.5 million barrels per day, down by 0.9% from the same
    period last year. Distillate fuel product supplied averaged 4.0 million barrels per day
    more than the past four weeks, up by 2.0% from the same period last year.

  12. MASTERMIND on Wed, 20th Jun 2018 10:00 am 

    Outcast

    Sleepwalking Into The Next Oil Crisis
    https://www.forbes.com/sites/rrapier/2018/03/23/is-the-world-sleepwalking-into-an-oil-crisis/#509edc8b44cf

    According to the German Army leaked study. When the oil shortages hit, Wall street will crash, the public will lose all faith/trust in their institutions, and the global economy and world governments will collapse..

    http://www.energybulletin.net/sites/default/files/Peak%20Oil_Study%20EN.pdf

    Scientific American: Apocalypse Soon: Has Civilization Passed the Environmental Point of No Return?
    https://www.scientificamerican.com/article/apocalypse-soon-has-civilization-passed-the-environmental-point-of-no-return/

  13. MASTERMIND on Wed, 20th Jun 2018 10:01 am 

    Bob

    Enough with you spam of the EIA weeklies!

  14. BobInget on Wed, 20th Jun 2018 10:13 am 

    Oh, 1 more thing. US showed No production increase last week.

    High EXPORTS are masking even higher IMPORTS.
    Herein lies the ‘tell’.
    We are paying up to $10 more for Brent. Why?

    Because WTI ($65.55) price is determined by
    how much crude is in stock any given Friday.
    We are selling off your child’s oil curse oil ten bucks cheaper, just to jack up prices.

    To be fair, W/O $65. WTI, we would stop looking
    and drilling.

    Brent is now $75 held in check by OPEC meeting.

  15. Jeff on Wed, 20th Jun 2018 10:15 am 

    This article is a troll.

  16. joe on Wed, 20th Jun 2018 10:18 am 

    Hubbert did mention tight oil, often. He thought it would be too expensive to get. Nowdays of course we don’t worry about useless concepts like money. We just make more in the computer and credit whatever we need to in unrepairable debt mountains to create the illusion that this crap is cheap, it has to be refined with massive amounts of heavy oil to make it useful and this is under the regime of maybe the longest run of cheap money in history. Its like 1928, ‘the markets will never go down buddy!’

  17. Plantagenet on Wed, 20th Jun 2018 11:51 am 

    Hubbert was wrong. US global oil production didn’t peak in 1970 and global oil production didn’t peak in 2005 as he predicted. Obviously oil production will peak at some time in the future, but Hubbert’s predictions of the dates were wrong wrong wrong.

    Cheers!

  18. Boat on Wed, 20th Jun 2018 12:43 pm 

    Peaks and more peaks. This is our future.

  19. Boat on Wed, 20th Jun 2018 12:58 pm 

    The question is as US production rises, what will Canada with their oil. If the US shuts down foreign refineries like Citgo, Venz will collaspe faster. If the Saudi don’t raise production per Trump request. The world’s largest refinery could be closed easily. The US simply has no need for over 1/2 it’s imports other than a few jobs and taxes.
    For those jobs and taxes the US eats the pollution and takes on over 3 mbpd in enviornmental transportation risks.
    With Trump these FF risks are safe. Down the road they will be stranded assets as the world moves to electricity.

  20. Cloggie on Wed, 20th Jun 2018 3:23 pm 

    Now that the US has the largest reserves… has millimind already issued a new, no doubt postponed, collapse date for the US? Can he wait that long?

  21. Davy on Wed, 20th Jun 2018 3:51 pm 

    Good point boat and one the groupie gang of 5 find repulsive.

  22. Anonymous on Wed, 20th Jun 2018 5:12 pm 

    Wallace Pratt (the grand old man of oil before Hubbert) had a very nice letter that he sent to Hubbert after the 1956 paper. Said that Hubbert was obviously strong mathematically and great at explaining his math very simply. (complimentary letter for that notable 56 paper.)

    But.

    Pratt cautioned Hubbert. Pratt said he had been a peak oiler several times in the early 1900s (post ww1, late 20s, 30s). And each time, he had thought they would run out of oil, they darned explorationists and wildcatters and old field worker-overers had found and produced more.

    At the end of the day, he said “oil is found in the minds of men”.

    Now…this doesn’t mean there are no physical limits or hard things that people have to overcome. Sure there are. And “reserve replacement” has been a serious problem for oil companies going back to at least the 1950s.

    But…don’t count the oilmen out. I remember having this argument in mid 2000s that US might produce more. Didn’t even know where. AK or offshore Atlantic or GOM or tired old California fields (which have produced many times more than they were “supposed to”). Or oil sands or what. Turned out it was shale. But…not surprised they got something done. Such a great industry. Still. Romantic.

  23. Anonymous on Wed, 20th Jun 2018 5:25 pm 

    Joe:

    You would have to show me where Hubbert talked about tight oil. He mentioned “oil shale” (kerogen) but NOT shale oil (tight mudrock source rocks). He also was familiar with tar sands (and excluded them from analysis). [But they ae now produced just fine at prices above $40 to $50 per bo (if the pipelines are around). In fact, Hubbert had sort of a blind spot on price (so did Deffeyes). Higher price will lead to more production (and more reserves). And of course this is impacted by demand.

    In terms of actual shale (not kerogen), it is interesting that Hubbert’s main opponent at USGS, a guy not as smart as Hubbert, still ended up being more prescient–he saw the Eastern Gas Shales…a 1970s (!) R&D project as a foreboder of future oil production.

  24. Harquebus on Wed, 20th Jun 2018 7:49 pm 

    Success from unconventional oil can only be claimed when debts are repaid and not just those of the oil industry.

    Over ten years of living post peak oil. Been great, hasn’t it?

  25. tita on Thu, 21st Jun 2018 2:29 am 

    Once again, Hubbert was right on predicting the evolution of the trends of its own time. It was a statistical study, and it was accurate.

    The recent trends (deepwater, oil sands, LTO, etc.), were not taken in his analysis. These trends will follow a similar path as the old ones. In facts, the US LTO trend is so fast that it won’t be long before it reaches a peak.

    LTO is indeed the fastest oil production development in all the US history. 5 MMbbls/d in just 8 years…

  26. rockman on Thu, 21st Jun 2018 8:20 am 

    Tita – “Once again, Hubbert was right on predicting the evolution of the trends of its own time. It was a statistical study, and it was accurate. The recent trends (deepwater, oil sands, LTO, etc.), were not taken in his analysis. These trends will follow a similar path as the old ones. In facts, the US LTO trend is so fast that it won’t be long before it reaches a peak.”

    Well said. Except for one small correction: there is no “US LTO trend”. There are a number of individual and unique TRENDS being developed. I suspect all those fools that ramble on and on about Hubbert being wrong have never actually read his report and are just repeating bullshit posted by other fools. TRENDS, TRENDS, TRENDS. A rather simple concept beyond the understanding of so many. Like those that keep referring to the Eagle Ford Shale play as a field and not as a TREND.

    As you describe Hubbert’s analysis covered only those TRENDS he studied. All current TRENDS will eventually exhibit a bell shaped production curve. But it won’t be as smooth as those Hubbert studied. And that’s a result of the Texas Rail Road Commission acting as a fairly effective cartel. It did a good job of stabilizing oil prices and production. Stability the market has lost since the 70’s. This will produce wiggles in the production curves of the more recently developed. But eventually all those curves will develop those constantly diminishing tails.

    All TRENDS eventually die. Just as every TREND has since Col. Drake poked that first hole. The latest big TRENDS are the shales in the Permian Basin. The key question for future US production remains: what other significant oil TRENDS remain to be developed?

  27. Gstar on Thu, 21st Jun 2018 9:57 am 

    “Sechin, Russia’s most influential oil executive and a close ally of President Vladimir Putin, said an oil deficit of around 700-750 million tonnes a year was estimated by 2025.”
    750 million tonnes equals to 750,000,000/0.136=5,514,705,882 barrels/years equals 15.1 mb/d if I converted correctly.
    It’s a big amount.
    https://www.reuters.com/article/us-russia-rosneft-sechin/russias-rosneft-sees-chance-to-increase-global-oil-market-share-idUSKBN1JH0GO

  28. Jerome Purtzer on Thu, 21st Jun 2018 3:51 pm 

    Even if the US makes it to the end of this century before running out of oil all it will prove is that we can burn through an extremely valuable resource, that took millions of years to form, in a few hundred years . We are as a group dummer than a box of rocks.

  29. Newfie on Thu, 21st Jun 2018 8:39 pm 

    If the US makes it to the end of this century before running out of oil the planet will be fried to a crisp.

  30. Makati1 on Thu, 21st Jun 2018 8:44 pm 

    Don’t worry, Newfie, the Us will not make it to 2100. Maybe not even to 2030. We shall see.

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