[Plantagenet]

I'd give Gail a grade of "incomplete" on this essay.

It's unfortunate that in an essay entitled "where are we headed" Gail doesn't say a word about the expansion of fracking in tight shale from the US to other countries around the world. It's pretty clear now that fracking in the US has delayed the peak in global oil production. Thanks to US fracking global oil production is still slowly rising. That's a big deal. Peakers completely missed seeing the importance of fracking in the US---now it appears Gail is completely missing the reality that we are going to see significant overseas production from fracking as well.

How can we know "where we are going" if we don't take into account the likelihood that we will soon see fracking in shales in KSA, China, Australia, and the EU? How much oil will come from these new sources? How soon?

[efarmer]

When a fellow says it ain't the money but the principle of the thing, it's the money. ~ Artemus Ward

If your outgo exceeds your income, then your upkeep will be your downfall. ~ Bill Earle

I just need enough to tide me over until I need more. ~ Bill Hoest

This forum has had a bunch of posting about preemptive strategies to address resource limits and much hand wringing about how they do not gain inertia and manifest to scale. Speculative price peaks are giving way to permanent high prices and this will drive the real response, ad hoc at first, and then organized to a greater degree about 5 years after ad hoc is steamrolling along enough to drive consensus on really doing something. Reduced consumption is going to win big because it is the simplest method of coping available at the lowest granular level of self direction. I also predict a donkey will race the latest water powered cars and win because it is able to move under it's own power.

[AgentR11]

Pops I think your 2 graphs illustrate the answer to why there's not been so much oscillation. SA can, and will, modulate their output in order to keep the price stable. This will be especially true if they start to frack shales; where the high price is required to keep the thing profitable; they may internally be seeing a situation where without fracking they could hit their maximum output and still not be able to keep prices from a spike and crash, which would provide motivation to bring unconventional stuff into the mix.

[Pops]

I don't know what the likelihood of fracing the world is - nobody does obviously or the Monterey guess wouldn't have been so far off.

It's disingenuous to say uninvested "peakers" missed the importance of LTO in the US when every major refinery in the US spent billions to reconfigure in order to handle heavier oil as light oil was forecast to fade away. I have seen no evidence that they are switching back even now.

That certain folks with an uncritical eye to any positive PR fluffing now think fracing is the be-all end-all of PO for now and evermore is somewhat naive.

In fact, the thing that is never talked about here (x ROCK & Doc maybe) and that is more widespread and probably a bigger development than fracking or shale is the increase in horizontal drilling - whether fraced shale or not.


http://marketrealist.com/2014/07/horizo ... igs-arent/

Pops I think your 2 graphs illustrate the answer to why there's not been so much oscillation. SA can, and will, modulate their output in order to keep the price stable.

) Good point, on the downside price anyway, no one seems inclined or able to open the stops to bring the price down.

[Plantagenet]

I'd give Gail a grade of "incomplete" on this essay.

It's unfortunate that in an essay entitled "where are we headed" Gail doesn't say a word about the expansion of fracking in tight shale from the US to other countries around the world. It's pretty clear now that fracking in the US has delayed the peak in global oil production. Thanks to US fracking global oil production is still slowly rising. That's a big deal. Peakers completely missed seeing the importance of fracking in the US---now it appears Gail is completely missing the reality that we are going to see significant overseas production from fracking as well.

How can we know "where we are going" if we don't take into account the likelihood that we will soon see fracking in shales in KSA, China, Australia, and the EU? How much oil will come from these new sources? How soon?

Actually, you are completely wrong. No other country has the combination of technical support, drilling rigs, mineral-rights/financial access, water, pipeline/train/truck collection systems, and a wealthy consumer base.

Your faith in American exceptionalism is noted.

However, every other innovation that the US oil biz has come up with has eventually either been taken overseas by US companies, or has been adopted by foreign oilcos operating in other countries around the world.

I have no doubt we'll eventually see large-scale fracking of oil shales in other countries, just as we have seen in the US.

Your post is an example of a curious blindspot among peakers about fracking. The peakers who made those inaccurate predictions that global oil production would peak in ca. 2005 clearly didn't see fracking coming ---and even though fracking has falsified all the predictions about global oil production peaking in ca. 2005, most peakers want to pretend its not very important. Pstarr thinks fracking can only occur in the US, and Gail doesn't even mention fracking when discussing foreign countries in her essay.

Sorry---technology doesn't work way. If fracking works on a category of rocks in the USA, it will work in similar rocks around the world. KSA has already started testing fracking on a small scale as has China. The EU has some oil shales. South America has some oil shales. The highly productive Eagle Ford trends doesn't stop at the border---it also underlies a bit of NE Mexico. Australia has EXTENSIVE oil shale deposits, and Russia has absolutely gigantic oil shale deposits. Even in the US there are extensive oil shales in Alaska that are just starting to be explored.

Its just a fact that there are extensive oil shales in countries outside the US. I predict many of these will be developed using fracking. I don't understand why peakers can't see large scale fracking of oil shales is going to occur outside the US, and why they don't take this into account when they make predictions about "where are we headed"?


potential global shale resources (not including marine shales)

[Tanada]

Fracked shale may be as abundant as shown on that map, but if they are all going to follow the steep decline rates seen so far in the USA how long will it take until this bubble runs out?

In the mean time fracked shale oil is keeping the oil price relatively stable, what happens if tight oil can not replace conventional decline? That's right, peak oil.

[Plantagenet]

Fracked shale may be as abundant as shown on that map, but if they are all going to follow the steep decline rates seen so far in the USA how long will it take until this bubble runs out?

Yup. Thats what I'd like to know as well. How much oil from tight shales? How long will it last?

In the mean time fracked shale oil is keeping the oil price relatively stable, what happens if tight oil can not replace conventional decline? That's right, peak oil.

Exactly. So far tight oil has helped postpone peak oil by ca. 9 years. Thats OK with me....I'm in no hurry for the global economy to collapse. AND if KSA and/or Russia and/or Alaska and/or Australia and/or EU and/or Africa and/or South America all start producing oil by fracking shales, how much longer will peak oil be postponed? Have we got another 10 years of stable or even slowly rising global oil production to look forward to?

Where are we headed? In order to answer that question you've at least got to ask how much longer can fracked oil from tight shale postpone peak oil?


How much longer?

[JV153]

However, every other innovation that the US oil biz has come up with has eventually either been taken overseas by US companies, or has been adopted by foreign oilcos operating in other countries around the world.

I have no doubt we'll eventually see large-scale fracking of oil shales in other countries, just as we have seen in the US.




potential global shale resources (not including marine shales)

Yes, well I'd give a try at researching out how much conventional US oil fracking uses up per drilled well and multiply by the number of wells. Building roads, moving in 2-4 milion gallons of fracing material per well and piping for drilling rigs and moving out oil must be using up gobs of conventional oil. Now you seem to think that sending out fracing units to 30% of the world's surface area (about what it looks like in that picture) is actually something that will ever happen, let alone quickly.

European countries have incredible taxes on fuel. I'd say that Europe is already suffering from, uh, "crop losses" due to fossil fuel starvation. There, now I said it.

China and African countries might go for fracing though.

[GHung]

Planet asks 'How much longer?'

Perhaps until the water runs out. Or the credit dries up. Or one of the many other deeply systemic problems we face manifests itself to the point where economies simply can't pay the costs of current production. Seems we're already swimming as hard as we can to just stay afloat, even if some of you choose to ignore a broader range of metrics, all necessary to keep your little party going. Robbing Peter to pay Paul only works for so long.

[Pops]

Of all the "potential resources" in the US there are only a few sweet spots producing now even though prices are still at historic highs. Condensate (NGPL) is down a third from 2011 though. Not sure how much more of this exceptionalism we can take.

I notice Plants map still shows the Monterey as a resource and he still ignores that both Peakers and refinery owners are in the same boat - to wit not very impressed with the future of LTO...

[JV153]

Exactly. One has to rob (use) a lot of conventional oil to go after smaller amounts of tight oil spread over 30% of the earth's surface. The sweet spots are ok, but once it goes beyond that it's over.

[Plantagenet]

The sweet spots are ok, but once it goes beyond that it's over.

Absolutely right.

So where are the sweet spots? When will it be over?

Gail's essay was entitled "where are we headed" but she didn't even mention fracking outside the US. Is that realistic? Do people really believe in American exceptionalism to the point that they think even the rocks in the US are unique?

---------------------

Back when I joined this site in 2007 we mostly all assumed we had a good idea of when global oil production would peak. Oil production would peak when Ghawar peaked according to Simmons. Or it would peak in roughly 2000 according to Hubbert, or 2005 according to Deffeyes, or 2007 according to campbell, or some other date depending on how the calculations were made.

Now its different. Now we don't know when global oil production will peak, because fracking of tight shale in the US has changed the game. Aleady we are 9 years past the predicted date of peak oil in 2005 and global oil production is still slowly rising mainly because of US frakked oil. We are just starting to figure out how to calculate reserves for the giant shale oil deposits that are already developed in the US, and we know next to nothing about even larger shale oil deposits in other countries.

So where are the sweet spots for frakking in other countries? You have to understand that first, and then get a grip on the timing of development of those shales, before you can say when it will be over.

[Pops]

The whole point of the post is that trying to shoehorn a complicated world into a single "bell shaped curve" is wrong on the face of it. I would have thought that has become obvious to any casual observer by now.

Your certainty that because there is a lot of shale in the world everything is fine, is quaint but it misses all the other dynamics that are the topics of conversation here.

The short explanation is:
shale≠resource
resources≠reserves
reserves≠profits
profits≠increasing production

[dolanbaker]

A lot of people are still hung up on this "peak", what really matters is the amount of oil that is available per-capita and that amount appears to be already in decline as the number of consumers globally increases.

Many of these new consumers are using the fuel in a more productive way than the western consumers who are using it just for social & domestic uses. This means that they will eventually outbid the western consumers as they continue to grow their emerging economies.

So production may be increasing via fracking, but the number of consumers is most likely increasing faster than production.
Therefore the amounts of oil actually available to individuals is diminishing!

[BobInget]

About a year ago I read Carlos Slim bought a huge chunk of tight shale in Argentina. Naturally, since I owned a tiny slice of YPF, this interested me. If it was good enough for Carlos, I doubled my position.
Since then Exxon and Chevron have also come on board. Someday I'll be stinking through silk.
http://en.wikipedia.org/wiki/Vaca_Muerta

"According to the U.S. Energy Department's Energy Information Administration, Argentina is estimated to hold technically recoverable shale gas resources of 802 trillion cubic feet and estimated shale oil reserves of 27 billion barrels. Owing to the rich Vaca Muerta region, Argentina ranks second in the world for shale gas reserves and fourth for potential shale oil reserves".

(posted note) SA will be the fastest growing region worldwide beginning 2020 thanks in great measure to
this 'dead cow'.

http://www.zacks.com/stock/news/134657/ ... -Argentina

[JV153]

The sweet spots are ok, but once it goes beyond that it's over.

Absolutely right.



So where are the sweet spots for frakking in other countries? You have to understand that first, and then get a grip on the timing of development of those shales, before you can say when it will be over.

You seem to have forgotten something. The above statement is a best case scenario.

1) Fracing requires lots of water, drilling equipment and all the related ancillary equipment and chemicals. The US fraced more LTO wells last year then the entire rest of the world combined. The US has all that equipment and oil production because that oil industry grew up in a favourable environment with high EROEI's and plenty of other raw materials, which only just now is becoming less favorable (that's why they're fracing ).

2) Fracing would increase oil consumption dramatically in every country where it would be done, which would require increased imports of oil - from ? (Russia (?) which is having economic sanctions imposed upon it )

3) Europe has heavy environmental restrictions that would prevent it even if it had the equipment and the fuel do it. These restrictions would have to go.

4. African countries don't have the heavy industry needed for oil drilling - the equipment would have to be brought in from the US. African countries also aren't exactly known for being flush with cash.

5. China - China seems to enjoy a favourable relationship with the US and has cash reserves to buy US drilling equipment and expertise. Environmental restrictions are lax in China. I could see fracing happening in China, otherwise I don't see it happening. Saudi Arabia also has a good relationship with the US and plenty of cash.

So.. widescale fracing will happen when US oil companies are permitted to come in and start extensive fracing operations, bringing in the necessary equipment, and the necessary fuel requirements are met. In return, since fracing will produce so much cheap oil, the US will get a nice share of the produced oil along with significant quantities to be used in Europe, Africa and South America (or else what's the point). Sounds almost plausible .

[Plantagenet]

The sweet spots are ok, but once it goes beyond that it's over.

Absolutely right.

So where are the sweet spots for frakking in other countries? You have to understand that first, and then get a grip on the timing of development of those shales, before you can say when it will be over.

You seem to have forgotten something. The above statement is a best case scenario.

I take your point, but you also seem to have forgotten something. You are the one who posted the rosy scenario about utilization of "sweet spots" quoted above, not me. I just asked you to elaborate on your scenario quoted above.

ANYWAY, here's my opinion: its hard to know whats going to happen with future global oil production levels given the high level of uncertainty about the future magnitude of oil production obtainable by frakking tight shales, particularly in areas outside the US. I'm surprised more people don't acknowledge this now, especially since no one in the peak oil movement foresaw the importance of frakking, and yet here we are 9 years past the 2005 date that was supposed to mark the peak of global oil production, and its still slowly increasing. Why is that? A big reason is the success of frakking in the US. And yet people don't think this technology will be applied elsewhere in the world? Really?

Its easy for you to make a list of things that might inhibit the widespread use of frakking to produce oil from tight shales outside the US. Peter S. posted a similar list earlier in this thread. Buts its also easy to generate a list of reasons why countries overseas will almost certainly follow the US in using this technology to produce oil, i.e.
1. countries that adopt frakking might be able to get rich by taxing oil production
2. countries that adopt frakking can produce good-paying jobs for their people
3. countries that adopt frakking can develop oil industry related economic activity in their countries
4. countries that adopt frakking can improve their strategic position vis-a-vis their neighbors
5. countries that adopt frakking can gain energy security
6. and there are hundreds of other knock-on positive effects from growing wealthy etc. etc.

I think widespread frakking of tight shales will almost certainly spread around the world, starting with those shales that are geologic "sweet spots." The Vaca Muerto tight shale in Argentina, discussed above, is an example of this new overseas use of frakking. This will help cushion the reduction of oil production from conventional oil fields. AND I think Gail and other peakers are making a mistake not to consider this factor.

[JV153]

Plantagenet,

You still seem to have missed the primary point in my previous post, that all that equipment for drilling and actually doing the fracing itself requires large quantities of oil and water. All the infrastructure and expertise doesn't exist (even in many cases even for conventional drilling) in say France, or Argentina or Australia. Technically recoverable reserves of LTO are about 350 Gigabarrels, so we could say that only a quarter of that is economically recoverable (87 Gb) at <200 USD/barrel, and spread over an area much larger than the LTO shale being fraced in the U.S. 87 Gb is 3 years of global oil use.

Your picture seems to include tar sands (expensive to recover), and oil shale, which is incredibly energetically expensive to extract.

LTO production outside of the U.S will develop very slowly, as it's now 8 years after fracing started in the U.S. I don't see it happening for a paltry ultimately recoverable quantity of 87 Gb, of which the sweet spot quantity would be even less.