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New study suggests US fracking boom may not last

Discuss research and forecasts regarding hydrocarbon depletion.

Re: New study suggests US fracking boom may not last

Unread postby ROCKMAN » Sun 29 Mar 2015, 19:32:18

And also: "'...may not last". I think we can consider changing "may" to "won't" given that low oil prices have obviously proven the validity of that point. Like the old joke about the guy that died but didn't have the decency to stop moving. The shale boom days are over. The rig count collapse proves it. But the shale production won't have the decency to "stop moving" up right away thanks to the lag time between rig activity and new production. In a couple of years (if prices stay at current levels) the consumers will likely be begging for any promises they can get. LOL.

Lore - You're correct. But hasn't that been what the Rockman, westexas, Art B and a few others been preaching for years. But, again, think about it: what would life had been like for the US consumer had the shale plays not existed and had not been developed? Remember despite what some logic starved folks thinks the high cost of shale production didn't cause the oil price to increase. A very simple question: where would oil prices be today if you subtracted today's shale production? Or conversely, how damaged would the economy be today had prices jumped to $150/bbl? Perhaps we would have had a repeat of the 80's.

Folks need to remember regardless of the damage inflicted on the oil patch and its investors the US consumers made out much better then had the shales not existed.
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Re: New study suggests US fracking boom may not last

Unread postby Lore » Sun 29 Mar 2015, 19:35:01

ROCKMAN wrote:
Lore - You're correct. But hasn't that been what the Rockman, westexas, Art B and a few others been preaching for years. But, again, think about it: what would life had been like for the US consumer had the shale plays not existed and had not been developed? Remember despite what some logic starved folks thinks the high cost of shale production didn't cause the oil price to increase. A very simple question: where would oil prices be today if you subtracted today's shale production? Or conversely, how damaged would the economy be today had prices jumped to $150/bbl? Perhaps we would have had a repeat of the 80's.

Folks need to remember regardless of the damage inflicted on the oil patch and its investors the US consumers made out much better then had the shales not existed.


I agree Rock, but terminal cancer patients would call this a brief remission.
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EIA: Shale oil boom seen ending May following price collapse

Unread postby Observerbrb » Mon 13 Apr 2015, 19:51:25

WASHINGTON (Bloomberg) -- The shale oil boom that pushed U.S. crude production to the highest level in four decades is grinding to a halt.

Output from the prolific tight-rock formations, such as North Dakota’s Bakken shale, will decline 57,000 bopd in May, the Energy Information Administration said Monday. It’s the first time the agency has forecast a drop in output since it began issuing a monthly drilling productivity report in 2013.

Deutsch Bank AG, Goldman Sachs Group Inc. and IHS Inc. have projected that U.S. oil production growth will end, at least temporarily, with prices near a six-year low. The plunge in prices has already forced half the country’s drilling rigs offline and wiped out thousands of jobs. The retreat in America’s oil boom is necessary to correct a supply glut and rebalance global oil markets, according to Goldman.

“We’re going off an inevitable cliff” because of the shrinking rig counts, Carl Larry, head of oil and gas for Frost & Sullivan LP, said by phone from Houston on Monday. “The question is how fast is the decline going to go. If it’s fast, if it’s steep, there could be a big jump in the market.”

West Texas Intermediate crude for May delivery climbed 27 cents Monday to settle at $51.91/bbl on the New York Mercantile Exchange. Prices are down 50% from a year ago.

The decline in domestic production will come just as U.S. refineries start processing more oil following seasonal maintenance, easing the biggest glut since 1930. The withdrawal from U.S. oil stockpiles is expected to bring relief to a market that’s seen prices drop by more than $50/bbl since June.

Temporary Relief

The relief may prove temporary as U.S. drillers are building a backlog of drilled wells that they plan to hydraulically fracture and place into service as soon as prices rebound. Analysts including Wood Mackenzie Ltd. have estimated that the inventory has grown to more than 3,000 uncompleted wells.

http://www.worldoil.com/news/2015/4/13/ ... llapse-eia

It would be interesting to witness how the situation develops in the oil market...
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Re: EIA: Shale oil boom seen ending May following price coll

Unread postby Ron Patterson » Tue 14 Apr 2015, 10:28:19

Wow! These guys are in for a rude shock when they figure out the shale boom actually ended in January.
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Re: EIA: Shale oil boom seen ending May following price coll

Unread postby copious.abundance » Tue 14 Apr 2015, 15:54:03

Well it appears the EIA cannot make up its mind.

EIA: US Crude Oil Output To Soar Till 2020 Despite Price Rout
NEW YORK, April 14 (Reuters) - The U.S. government on Tuesday forecast domestic crude production will rise even more than expected a year ago, undeterred by the worst price rout since the financial crisis.

U.S. crude oil production will peak at 10.6 million barrels per day in 2020, a million barrels more than the high forecast a year earlier, according to the annual energy outlook by the Energy Information Administration, the statistical arm of the U.S. Energy Department.

Crude production will then moderate to 9.4 million bpd in 2040, 26 percent more than expected a year ago, the agency said.

The reference case in the report forecasts Brent prices of $56 a barrel in 2015, rising to about $91 a barrel in 2025, $10 a barrel less than levels expected a year ago. The report uses the 2013 value of the dollar as its measure.

Despite lower prices, higher production will result mainly from increased onshore oil output, predominantly from shale formations, the agency said.

[...]
Stuff for doomers to contemplate:
http://peakoil.com/forums/post1190117.html#p1190117
http://peakoil.com/forums/post1193930.html#p1193930
http://peakoil.com/forums/post1206767.html#p1206767
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Re: EIA: Shale oil boom seen ending May following price coll

Unread postby anarky321 » Tue 14 Apr 2015, 20:55:52

would've collapse even without the price collapse.....shale recovery is a spike not a curvy gentle plateau
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Re: EIA: Shale oil boom seen ending May following price coll

Unread postby ROCKMAN » Wed 15 Apr 2015, 08:40:23

anarky - Not necessarily collapse per se. All plays come to an end once most the viable locations are drilled. Back to my old story about the horizontally drill carbonate shale, the Austin Chalk. It was the hottest oil play on the planet in to 90's when oil prices were lower then they are today even when adjusted for inflation. When oil got up to $100 there was a small uptick in AC drilling in Texas but nothing like the 90's boom. So why with oil price 3X higher didn't the AC boom again? Easy...it was eventually drilled up for the most part. IOW it doesn't matter how high oil prices get: if the great majority of the potential locations have been drilled then there's very few places left to poke a hole. The Eagle Ford and Bakken plays will eventually wither regardless of the prices of oil. The only effect of that price is the time span.

I believe to popular word is these parts is "finite". LOL
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Re: EIA: Shale oil boom seen ending May following price coll

Unread postby Subjectivist » Wed 15 Apr 2015, 09:09:05

ROCKMAN wrote:anarky - Not necessarily collapse per se. All plays come to an end once most the viable locations are drilled. Back to my old story about the horizontally drill carbonate shale, the Austin Chalk. It was the hottest oil play on the planet in to 90's when oil prices were lower then they are today even when adjusted for inflation. When oil got up to $100 there was a small uptick in AC drilling in Texas but nothing like the 90's boom. So why with oil price 3X higher didn't the AC boom again? Easy...it was eventually drilled up for the most part. IOW it doesn't matter how high oil prices get: if the great majority of the potential locations have been drilled then there's very few places left to poke a hole. The Eagle Ford and Bakken plays will eventually wither regardless of the prices of oil. The only effect of that price is the time span.

I believe to popular word is these parts is "finite". LOL


Do you happen to know the percentage of the Eagle Ford and Bakken that were drilled in the last five years? That might give us a rough idea of how effect the high prices were in driving exploitation.
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Re: EIA: Shale oil boom seen ending May following price coll

Unread postby ROCKMAN » Wed 15 Apr 2015, 12:20:13

sub - Virtually all the EFS wells producing today were drilled in the last 5 or 6 years. From 1945 to 2005 only 118 EFS leases were produced. From 2005 to Jan 2009 only 6 EFS leases were produced. every bit of tech used in recent years when the play boomed existed between 2005 and 2009. What didn't exist back then was the sustained period of very high oil prices we had experienced since then.
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Re: EIA: Shale oil boom seen ending May following price coll

Unread postby rockdoc123 » Wed 15 Apr 2015, 21:33:17

if the great majority of the potential locations have been drilled then there's very few places left to poke a hole. The Eagle Ford and Bakken plays will eventually wither regardless of the prices of oil. The only effect of that price is the time span.


one of the differences with the shale plays and others is the narrow spacing that can be achieved. If you assume that the maximum frack radius is around 150 m from the wellbore then you presumably could have horizontals spaced at 300 m intervals. If the average lateral distance is 1000 m (I have no idea what the average is for EFS) and the lateral drainage is 300 m then each well would drain (ideally) about 7.5 acres. Not sure what the average spacing is now in the EFS....40 acres, 20 acres? There might be room for downspacing.
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Re: EIA: Shale oil boom seen ending May following price coll

Unread postby ROCKMAN » Thu 16 Apr 2015, 15:16:20

Doc - "if the great majority of the potential locations have been drilled then there's very few places left to poke a hole". And as I said when the bulk
of the viable locations have been drilled the play is over. That includes infield wells. Just as operators did in the Austin Chalk was they figured out the size of the typical swept area. They did, the closer space wells were drilled and the AC play petered out.

OTOH a lot of infield wells that would have drilled at $100/bbl won't get drilled at $55/bbl.
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Re: EIA: Shale oil boom seen ending May following price coll

Unread postby rockdoc123 » Thu 16 Apr 2015, 17:57:46

OTOH a lot of infield wells that would have drilled at $100/bbl won't get drilled at $55/bbl.


true but the consequence of low price is eventual higher price and the shale plays can be turned on almost immediately so those down spacing wells will get drilled at some point in time.
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Re: New study suggests US fracking boom may not last

Unread postby onlooker » Sat 24 Dec 2016, 11:40:44

Thought you peak oilers would find this interesting.
2016 Shale Reality Check: Web Presentation
http://www.postcarbon.org/2016-shale-re ... sentation/
A key point I found upon skimming through it was this:
-EIA projections of long term growth in tight oil and shale gas at low prices are extremely optimistic and highly questionable.
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Re: New study suggests US fracking boom may not last

Unread postby ROCKMAN » Sat 24 Dec 2016, 14:22:36

Looker - As mentioned before one cannot forecast production without accuraterly forecasting a number of other factors, the most crtcrtityical one being the oil price. I've dug deep a number of times and found those EIA details yet. Maybe someone here has.

But it doesn't make any difference because what ever it does forecast to 2040 is wrong...absolutely wrong. Easy enough to believe since NO ONE has ever forecast oil prices anywhere close to even roughly accurate over that period of time...NO ONE!

And without an accurate price fgorecassxt none of the other projections have a chance of being correct. IOW how can someone predict how many shale wells will be drilled in 2027 if they don't forecast the price of oil correctly in 10 years. WouiWouild you believe a forecast of $50/bbl? $90/bbl? $25/bbl? Any price?

If one can't beleive any such price forecast how could they believe a production forecast in 10 years let alone 23 years?
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Re: New study suggests US fracking boom may not last

Unread postby onlooker » Sat 24 Dec 2016, 15:21:10

Yes, that is true Pstarr and Rockman. Price is a double edged sword. I think though that since both of you are so well apprised of all these matters, you both have contemplated the scenario painted by Short and his Etp model whereby both the Economy and the Oil Industry together are in a downward spiral because of less Net available Energy. Under these circumstances we will surely be having a tough time transitioning to anything or keeping the marginal shale/fracking business going. Sorry, I try not to over reach my expertise or lack thereof but it just seems to be fairly evident.
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Re: New study suggests US fracking boom may not last

Unread postby shortonoil » Sat 24 Dec 2016, 19:13:27

"This one from ( http://www.euanmearns.com/ ) shows a peak in July 2008:

What is not being considered in this graph is that from 2004 to present condensate production as a total of C&C has increased from 3% to 14%, or more (see post by West Texas: Dr. Brown). Condensate which is >90% pentane does not contain sufficient C7+ molecules for it to be used in the production of fuels. It is primarily a source of feedstock. From a fuel production aspect the ability to produce those fuels has most likely not increased since 2006.
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Re: New study suggests US fracking boom may not last

Unread postby shortonoil » Sat 24 Dec 2016, 21:23:38

"It's used to upgrade tar sands. That would be double counting."

All of the LTO is double counting because it is primarily energy neutral. You take a barrel of crude and go pump out a barrel of LTO. Both barrels go into the count.

Cute trick?
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Re: New study suggests US fracking boom may not last

Unread postby AdamB » Sat 24 Dec 2016, 21:33:29

ROCKMAN wrote:Looker - As mentioned before one cannot forecast production without accuraterly forecasting a number of other factors, the most crtcrtityical one being the oil price. I've dug deep a number of times and found those EIA details yet. Maybe someone here has.


Oil price forecasts? From the EIA? Google is your friend, they are one of the few organizations that publish them. From the AEO2016 I believe.

Image

Rockman wrote:But it doesn't make any difference because what ever it does forecast to 2040 is wrong...absolutely wrong. Easy enough to believe since NO ONE has ever forecast oil prices anywhere close to even roughly accurate over that period of time...NO ONE!


Of course they are wrong. The EIA knows it, and I've seen their Chief Modeler explain it to a group of scientists about a year back. He said "nobody gets this right because there are no facts about the future" ( a great phrase I thought) and that their projections can best be thought of a mode of more than a few conditional probability distributions. He then put together every oil price projection since the dawn of the EIA, and graphed that against average price. And their projections were general in the midst of that cloud of info, and even MORE interesting, you could see the projections shift based on WHEN they were made. 1986? Price didn't increase so much. Same with 1999. 2005? Higher prices coming! More recently? Prices easing down!

Rockman wrote:If one can't beleive any such price forecast how could they believe a production forecast in 10 years let alone 23 years?


Yep. Therein lies the central tendency within a group of conditional probability density functions. I imagine your boss must do it the same way when deciding whether or not to drill a well, and estimate on whether or not it will make more revenue than it costs?
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