[Ibon]

Running the pelton wheel and generator at 100% of their capacity 24/365 would likely make them less reliable and more likely to fail or break. Running them at 80% of their capacity is probably better. I always try to avoid running engines and mechanical systems at 100% of their capacity because of the strain you put on them.

Good point!

[JuanP]

"Russia's oil output plunges to lowest level in almost a decade"
https://www.rt.com/business/511364-russ ... cade-lows/

"Oil and condensate production in Russia fell for the first time in 12 years and reached nine-year lows in 2020, as one of the major global oil exporters supported the historic OPEC+ deal to boost a pandemic-hit energy market.
Last year Russia pumped 512.68 million tons of crude and condensate, meaning that the production volume decreased 8.6 percent compared to 2019, according to TASS, citing data from the statistical unit of the country’s Energy Ministry, CDU-TEK. Last year’s oil production almost reached the levels of 2010, when it stood at 512.3 million tons.

The decline followed a record output level in 2019, when the nation’s production reached 568 million tons, and marked the first drop since 2008."

[Pops]

OPEC+ is trying to maintain a price in the face of low demand due to the pandemic.

An overabundance of supplies, a significant slowdown in demand and a sudden drop in oil prices could, in the short term, hide, or even accentuate, the risks weighing on the oil supply in the medium and long terms.
...
“At less than $ 40 a barrel,” they write, “it is inconceivable to imagine the future of the energy sector calmly. In the first place, insufficient investments could jeopardize the possibility of ensuring the continuity of oil supply in the medium term. But this also risks delaying, or even failing to commit, funding for short-term low-carbon energies which, if they are not subsidized, will de facto become less attractive for end users drowned in inexpensive fossil fuels.

https://aspofrance.org/2020/07/10/apres ... r-le-choc/

The Oughts were instructive because the simple situation outlined PO: high demand, constrained supply, escalating price, peak conventional, recession.
The teens pretty boring tho they showed just how short our horizons.

The 20s are way more interesting. The situation is anything but simple no matter how the cornies wish it to be "normal":
Pandemic, Red Queen LTO, underlying declines growing, possible overall peak, intentional demand destruction via decarbonization —or not, depending on your party. Partisanship in the US that obliterates any useful dialog about the future because we can't even agree on the outlines of the present.

Could be 18 billion vaccines are shipped tomorrow, the economy comes roaring back, LTO spins back up (there is a sucker born every day), Biden convinces all the trumpers to vote for the Green Deal and jobs and infrastructure and RE all flood our lives with goodness.

Or the vaccine rollout is botched and the pandemic rages on, the economy (≠ the stock market) struggles then crashes when the props are kicked out, low demand bankrupts most LTO and investors figure $40B fracked away with little return is enough, other conventional projects are mothballed hindering medium term replacement and long term development. Biden finds out that, surprise!, trump was the republican party all along and they would rather die than vote for anything good for anybody because it might help the mob.
3-4-5 years hence as the economy tries to restart we find, oops, not enough supply, couple more years we find, oops, depletion has caught up and not only can't supply grow, but it can't even stay the same.

I feel like the LTO Ponzi pyramid is nearing its comeuppance right about on schedule. I felt but didn't know that it wouldn't be viable elsewhere, it appears not. Nothing new on the conventional front in 15 years. US democracy is teetering, it has abandoned the world and we know about power vacuums. Debt is soaring because our economy is dependant on growth, yet the population isn't growing...



.
Oops, got a little doomy here in the middle of winter, I get nervous when I live in town, LOL
Our kids are deploying to the lower 48 next year and we are likely to move near them. We'll also likely build something permanent and be a little self-sufficient by '25 or so.

.

[Pops]

Front page of PO.com has this

Global fossil fuel demand should peak in 2027, says consulting firm McKinsey
After a long period of growth, global liquids demand peaks in the late 2020s, followed by a 10% decline in demand by 2050. This is mainly driven by slowing car-park growth, enhanced engine efficiency in road transport, and increased electrification

10% by 2050? LOL, US LTO alone could fall that far in 10 years, 30 years?

[Pops]

Oops, that was a premature submittal.

I was about to say the chart shows demand growth slowing after the post $100/bbl surge around 2015-17. Still it was averaging at least a percent per year. Obviously that was nearing the end of the last economic bubble with the post 2017 period juiced to the max by corporate tax giveaways and 0% interest and trillions in government debt.

Some of us are in a different world now, unfortunately I think COVID won't be some huge reset for the majority. Lots of bankruptcies and foreclosures as soon as the plague allows, then it is off to the races again. Demand will spike for oil in the second half of the 2020s, right up to where it was before.

Unless it can't

.

[Pops]

Oh and to the headline editors, the title should be
Peak Oil 2020s
the premise being, if we peaked in the teens, what do the '20s hold

[dcoyne78]

Pops,

My expectation is a peak around 2030 for World C+C at about 87 Mb/d with US tight oil output at about 9.2 Mb/d at that time, about 11% of World output, so a 10% in World C+C output would be 8.7 Mb/d or about 95% of US tight oil output in 2030. My US tight oil estimate based on Brent real oil prices (2019$) rising to $75/b linearly from $50 to $75/b by June 2030, remaining at $75/b up to 2040 and then declining at a similar rate (as the 2020 to 2030 increase) to $30/b and then remaining at $30/b long term gives US tight oil scenario below. Output falls by about 8.2 Mb/d by 2050, I think it likely that much of World demand for crude will have been replaced by electric transport by that time, likely far more than 10%.

In short, there is likely to be a surplus of oil supply after 2037, rather than a deficit, that's why I project falling oil prices after 2040.



link to image below

https://imgur.com/Y00iLyl

[Plantagenet]

Dennis....did you see in the news today that President Biden just banned all new permits for oil drilling and all oil leases on all federal lands....including banning leases both on land and banning all submarine leasing.

biden-administration-suspends-new-oil-gas-drilling-permits-on-federal-land

So far this is just a temporary suspension of permitting and leasing, but some think the Ds will next move to permanently ban all leasing and drilling on federal lands.

How would your models and projections change if leasing was immediately stopped and oil drilling was banned from here on out on all US federal lands?

A ban on leasing and oil drilling on federal lands would choke off all future production from the Gulf of Mexico, as well as from Alaska, and many other sites across the USA.

I think this would result in peak oil occurring sooner....what do you think?

CHEERS!

[Pops]

Thanks Dennis.

Jibes with McKinsey and BP more or less, eh?

The addition of a carbon tax will significantly increase the cost of oil and lower demand. I looked for your charts in the Wolfcamp troll thread but luckily for us they have been archived and who knows where they are. I looked at POB and don't see a plot specific to carbon pricing right off.

In CA carbon is trading for $195/ton today. If there is a half ton of CO2 in a barrel of crude and the tariff on CO2 is, say $200/ton, my advanced mathematical ability tells me the cost of a barrel of oil would be $155/bbl at today's quoted oil price. But of course that is to the consumer, the producer sees $54.

So how do you model supply/demand when they are at different price levels?
.

[Pops]

McKinsey:
https://www.mckinsey.com/industries/oil ... ctive-2021

[Pops]

So in the whole Pandemic and the Peak Demand scenario, Mike Lynch pretty well sums up what I've been thinking (for once, LOL):

Recent months have seen a growing crescendo of claims that a peak in oil demand may be near, or even be past. Pandemic-related changes in behavior such as working from home are predicted to persist after the emergency ends, and advances in technology are said to make oil-fueled vehicles increasingly obsolete. Michael Lynch and Ivan Sandrea have examined these arguments in a new study by the Energy Policy Research Foundation and found strong reasons for skepticism. People in post-pandemic China do not show major changes in their behavior and the increasing demand globally for SUVs implies consumers are not focused on reducing emissions. Further, battery electric vehicles perform significantly worse than internal combustion engines in key metrics, whereas the previous transition, from horses to cars, was due to major improvements in range, speed and carrying capacity, as well as convenience.

https://eprinc.org/wp-content/uploads/2 ... y-2021.pdf

He goes into detail in this PDF about the problems with a transition to EVs, the cost of the pandemic and the idea that the pandemic will change everything— including oil demand.

I think most of his arguments about peak demand seem fairly sound. EVs ain't all that grand yet, people like their f-150s. Without subsidies they may not get far (sorry) and gov is otherwise occupied—in the trillions— keeping the economy afloat. The CA and now TX blackouts will certainly be blamed on renewables, at least by FOX and that's enough to veto most things. In any analysis, capital inertia, or "stranded assets" like oil leases and coal generators need to be considered. Look at the excitement over the Keystone pipe as an example.

So, just to recap, his argument is always Drill Baby!, in this case predicting oil is the king and those sissy little battery powered toys won't make a dent in 'merican oil demand. Which is kinda my point with this thread, no demand peak— 90 miles and hour down a dead end street.

He also whines a lot about how bad the peakers treated him, I don't think he was treated all that bad the few times he came around here...

[Armageddon]

Is it obvious we are past PO now?

[Pops]

Is it obvious we are past PO now?

Don't think I'd say obvious. What "peak" there was back in '18 was all the big 3 fiddlin around, the rest of the world was already flat for 5-6 years. Really everyone but the US has been flat. Some is political but some always is political.

Look at POB, Ron has lots of charts up right now.

Saudi Arabia likely already in decline, Russia likely at a peak plateau, the USA very near its peak, and the rest of the world is, cumulatively, post-peak. Is the world at, or near, peak oil? Or, can the USA continue to increase production enough to overcome the decline in the rest of the world?

The thing is, the point of the thread in fact, is depletion continues even though we see a reduced production level forced by depressed demand from Covid — not some natural demand peak. If 2020 thru say 2023 might have shown a stagnant or declining supply against a typically increasing demand (1-2%) it would be obvious by '24, not least with a higher price. But as we all know, I think, depletion never sleeps even if demand is constrained. And demand will be constrained least through the next year— likely '22 too if the vaccines don't work a overnight miracle.

So when demand comes back (because EVs aren't going to change anything soon) and tries to go to 110mmbd —and can't— maybe not even back to 105 mmbd, $150 may be a rude awakening
.

[mousepad]

Saudi Arabia likely already in decline, Russia likely at a peak plateau, the USA very near its peak, and the rest of the world is, cumulatively, post-peak.

can't all those places use fracking? I can't imagine that fracking only works in the US. Or does it?

[OutcastPhilosopher]

Saudi Arabia likely already in decline, Russia likely at a peak plateau, the USA very near its peak, and the rest of the world is, cumulatively, post-peak.

can't all those places use fracking? I can't imagine that fracking only works in the US. Or does it?

Fracking ? LOL the shale industry never turned a profit.

It can only exist in a world of zero to negative interest rates with massive monetary expansion.

That world is rapidly coming to its end right now.

Look up Red Queen Syndrome to understand why fracking is complete nonsense and largely a scam that cannot power a civilization.

[AdamB]

Saudi Arabia likely already in decline, Russia likely at a peak plateau, the USA very near its peak, and the rest of the world is, cumulatively, post-peak.

can't all those places use fracking? I can't imagine that fracking only works in the US. Or does it?

Fracking ? LOL the shale industry never turned a profit.

But companies certainly did. With oil <$20/bbl and natural gas <$2.00/mcf no less. Not everyone in industry is some $$ addled borrowing fool, once upon a time us industry folks had to scratch, claw and work for every nickel after the 1979 global peak oil, and the following price crash in the mid-80's.

It can only exist in a world of zero to negative interest rates with massive monetary expansion.

Well, I was doing it during the mid-80's through the mid-90's. Would you call that negative interest rates and massive monetary expansion, or is this opinion unsupported by the facts at the time, and you are just saying things because...well...you can't think....so babbling is all you can do?

Look up Red Queen Syndrome to understand why fracking is complete nonsense and largely a scam that cannot power a civilization.

The red queen effect didn't bother me at all, back in the day. And 2/3's of all hydraulic fracturing took place in the last century, according to the USGS around 2015. It isn't even a new thing, the only new thing is someone without a seconds understanding of the history of this completion technique pretending they know anything about it. But then, you do that with everything, don't you? Now shout upstairs to mommy and tell her you need your medication. Alternatively, try and learn something before speaking, which gives away how little you know instantly.

[mousepad]

Well, I was doing it during the mid-80's through the mid-90's. .

What about the rest of the world? Do they use all this advanced recovery stuff?
If they don't, is there any reason to believe they won't?

[Pops]

Saudi Arabia likely already in decline, Russia likely at a peak plateau, the USA very near its peak, and the rest of the world is, cumulatively, post-peak.

can't all those places use fracking? I can't imagine that fracking only works in the US. Or does it?

I'd expected them to. There are lots of places seemingly perfect. One thing is fracking works on nice solid source rock, so in a place like Cali where there is lots of oil containing rock but it is already fractured by tectonics, the frack juice pumped down to open the pores just leaks out the cracks. And the US has more wells than anywhere, 500k IIRC, that gives an entire midstream infrastructure I guess no one else has. There must be other tech reasons.

Surely in the US starting when prices were the highest, building skill and infrastructure when it was profitable was key. Now profits are not necessarily assured, maybe someday. Also mineral rights here are owned by the landowner, elsewhere they are owned by the state, who many times is the developer too so you run into roadblocks with the powerbrokers. And wide open space, lots of other places ain't Oklahoma and would frown on disposal wells that turn the country into earthquake central.

I'm sure there are more and better reasons. Like I said I expected it to roll out faster everywhere.

[Pops]

I'd like to keep this thread above the now typical ad hom level please. There is plenty to say without the childishness.

[AdamB]

There must be other tech reasons.

And infrastructure and geopolitics. A country that drills 5 wells a year, confronted with needing to drill 5 a week to generate the kind of volumes they want/need, for internal or export use, suddenly needs to both pay a bunch up front (all oil field operations have front loaded capital requirements) and then move a bunch of heavy equipment here, there and everywhere. A hotshot call costs $1000 for some minor piece of equipment in North Dakota, when you make the call from a rig drilling in the Vaca Muerta, and the item is in Houston...well....it doesn't cost $1000 anymore, and you aren't down for 18 hours to have it hotshotted to your rig. Argentina not having a full suite of specialized oilfield supply stores, compared to the US.

Other countries certainly have shale of similar quality to that in the US. They don't have the infrastructure of the world's largest oil and gas producer. Or the capital to start the process very easily.

Like I said I expected it to roll out faster everywhere.

I didn't, when asked the question back in 2010-2012. This was an example I used, when asked by representatives of foreign governments, as to the difficulty of them developing their resources like the US.

Take a large, uninhabited, empty area. Now...what would you need to do if you wanted to build a Ford auto factory, for crank out 200,000 F-150's a year. You need roads. You need people. Those people need McDonalds and diners and movie theaters and houses and schools and a hospital and water soccer fields....plus the factory itself, everything needs to be brought in so the workers can build the F150's, the finished products themselves need taken away to market, etc etc.

If you can envision that level of ancillary activity, to get your F150's, then you are beginning to understand what it takes to feed working drilling rigs at scale, the people, the steel, the water, the specialty products, heavy equipment, and so on and so forth.