[ROCKMAN]

"Producers able to ship by pipeline came out slightly better, making $2.97 per barrel after transportation fees." So if the author knows what the f*ck he's talking about and the vast majority of the 3+ mm bopd of Canadian imports are being shipped by pipeline then those producers (at the current price) are making around $3 BILLION PER YEAR. And for every $1 increase in the price of oil they make an extra $1 BILLION PER YEAR.

Don't think I'll be shedding many tears for them anytime soon. LOL.

[Revi]

I heard that we may have hit peak oil. The results from 2016 will tell us if we have or not, I guess...

http://peakoilbarrel.com/world-oil-prod ... more-15362

Here are the results up to 2015, and it looks like we are somewhere near the peak at least.

[ROCKMAN]

Revi - Same old problem: you cannot prove global peak oil when it's happening. Just one more reason why the timing of GPO is of little relevant. It will take decades to be confident that we've reached GPO right now. Consider how certain almost every thought the US would never produce more then we did 4 decades ago. And had oil prices held another year or so we might have set a new US PO.

As pointed out before there are no other metrics that can define GPO other then the rate. Decades after GPO can be confirmed we might look back and see historic high or low oil prices during that time. Same true for rig counts, global GDP, political stability or any other measure. Which just emphasizes why it's of little importance to predict the date of GPO because it doesn't predict any of the other conditions that are critical to the human condition.

[AdamB]

I heard that we may have hit peak oil. The results from 2016 will tell us if we have or not, I guess...

Again. It isn't even really what is important any more, the more important question how many MORE peak oils there might be. Most of us remember the one from first 2005, then 2006 then 2008, so now we have another? Cool...the good news being that it brought with it glut and low prices which the consumers are out enjoying.

Here are the results up to 2015, and it looks like we are somewhere near the peak at least.

Just like it did all those other times as well. 1979 was still my favorite for global peak, right up until that created glut and oversupply same as this one, and from the industries perspective, 1986 just flat out sucked.

[Darian S]

I heard that we may have hit peak oil. The results from 2016 will tell us if we have or not, I guess...

Just like it did all those other times as well. 1979 was still my favorite for global peak, right up until that created glut and oversupply same as this one, and from the industries perspective, 1986 just flat out sucked.

There's a reason we're on unconventional higher cost to produce rumored to be rapidly depleting in many cases wells. Conventional it seems has already peaked, and many places in the world seem to be in a recession and seemingly cannot handle substantially higher energy costs.

With conventional production in many fields falling, and part of the unconventional also falling but more rapidly. Whatever comes into place has to replace all the places that fall in production.

[AdamB]

I heard that we may have hit peak oil. The results from 2016 will tell us if we have or not, I guess...

Just like it did all those other times as well. 1979 was still my favorite for global peak, right up until that created glut and oversupply same as this one, and from the industries perspective, 1986 just flat out sucked.

There's a reason we're on unconventional higher cost to produce rumored to be rapidly depleting in many cases wells.

What do you mean? "we're on unconventional higher cost to produce"....?

Conventional it seems has already peaked, and many places in the world seem to be in a recession and seemingly cannot handle substantially higher energy costs.

Peaks happen for all kinds of reasons, price just being one of them. The cost of the marginal barrel being produced from source rock another. And that has nothing to do with conventional peaking because of lack of availability, but of being undercut on a cost basis, perhaps even because of geopolitics. Not much in there related to the imagined peaks of the past at all.

With conventional production in many fields falling, and part of the unconventional also falling but more rapidly. Whatever comes into place has to replace all the places that fall in production.

All oil and gas production falls, regardless of whether or not it is discretely reservoired or source rock based. It is what oil and gas production does. Amateurs who discover this for the first time seem to think it is new, because they just learned of it. Those who have dealt with it since their first day in industry know it down to their core.

[Subjectivist]

World oil production reached a zenith in +-2005. Subsequent additional production came from >45 API petroleum, ie shorter-chain molecules of less value that require more processing (and result in more volume and energy loses) at all steps in the production chain. Gas-oil separators, additional pipelines, return shipping/refining, more entropic carbon and significantly less net fuel for the consumer.

So condensates and natural gas liquids (from lousy tight-shale plays and treated by the interns/industry flacks here, EIA and captured media as oil ha ha ha ha ) enter the refinery chain but atmospheric pollution, camp fuel and plastic feedstock leaves the refinery. Less net liquid less volume less economy

Denial, its not just a river in Egypt.

[Subjectivist]

Exactly, eight years you have been insisting light oil is useless and for eight years you have been proven dead wrong.

[sparky]

.
Beside the rhetorical ping pong , there is a point pstarr is trying to make .
the worldwide depletion of "conventional" crude .
crude oil fields deplete , that's hardly new , always was the case , always will be

is it the case now ?
the two most quoted crude price index , West Texas and Brent ,
have their nominal product replaced by a mix of others , because of depletion
the Tapis crude used as an index traded in Singapore is past secondary recovery and is now in "enhanced recovery"
the present low price put question on its continued exploitation .

recent movement in the price , set a point for the balancing of the supply/demand above 50 $
the commercial use of the very heavy and very light end of the crude resources
indicate supply shortage of the "good" oil.

[onlooker]

Yes, the geopolitical situation is fast deteriorating!

[wildbourgman]

To me this is become a silly debate because there's so many factors and so many caveats to every prediction.

For instance have we seen peak oil in certain major fields. Yes but could these field possibly with enough inputs get back to where they were? maybe. It all depends on how much your willing to spend in some cases, but like in many shale plays they couldn't make a profit at $100/BBL. I'm of the opinion that we can break 10 million bbls/day in the US and maybe even be energy independent but at what oil price and what rig count would that take? Also how many places such as all of the North Slope of Alaska would we open?

There's way too many direct macro and ancillary factors (such as FED funds rates) and it's not a stationary target that's what makes this very difficult.

[ROCKMAN]

"...two most quoted crude price index , West Texas and Brent..." Just a small point to make sure everyone understands that by definition WTI is light oil and always has been: it is a light crude oil with an API gravity of 39.6. It contains about 0.24% sulfur thus is rated as a sweet. IOW it's right at the edge of the window that some classify as "condensate". Which is why it has always been considered a key component of the refining process since it would be blended with heavier crudes to yield the 32 to 33 API gravity oil most refineries can maximize. So no: WTI is not the primary oil Gulf Coast refineries desire. They want the blended oil from mixing WTI with the heavy oil imports. Which is why US imports of LIGHT OIL decreased as more Eagle Ford production came on line: it was not as needed for blending purposes. IOW the EFS condensate was valuable since it reduced light oil imports which cost significantly more the our heavy oil imports.

So valuable that foreign buyers imported 190 MILLION BBLS of our light oil in 2016 according to the govt's EIA. Yes, in 2016, the year before the "ban" on exporting US was lifted.

And these days, “Brent” actually refers to oil from four different fields in the North Sea: Brent, Forties, Oseberg and Ekofisk. It has gravity of 38.06 API. Which also makes it a good candidate for blending with the less expensive heavy oils.

[shortonoil]

@Don

To answer your question of the other day, as to why refinery yields are going down, it is because the crude being produced is getting further away from the 30 to 45° API range. That range contains most of the molecules that are used to produce fuels (the C7+ molecules). As you get further away from the preferred range refineries must take apart, and put back together heavier and lighter molecules to produce fuels. That requires a lot of energy which comes from the crude input stream. Consequently, yield falls as they must consume more energy (oil) to accomplish the processing.

Don't confuse this with refinery input API. Refinery input API results from the blending of all ranges of liquid hydrocarbons to produce what is needed to get the crude through the pipes. That is an API of about 33°. That average API of 33° may contain a broad range of molecules from Canadian bitumen with an API of 8, to condensate with an API of 93 from the Bakken. The blended crude has the correct API for the refinery to operate, but it does not have the molecules needed to produce fuels without reconstruction. Incidentally, that is why most of the world's great fields were found at about the 4000 foot level. It was where the temperature and pressure was just right to make good quality crude. Bitumen sits on top of the ground, and the Bakken at 12,000 feet is producing ultra light.

Hope this helps,
BW

[shortonoil]

"For instance have we seen peak oil in certain major fields. Yes but could these field possibly with enough inputs get back to where they were?"

The point of this discussion is not about the quantity of crude extracted. It is about the point where processing cost becomes too high for producers to economically produce finished products. As the yield falls the amount of crude to produce a barrel of finished product increases. The refineries must purchase that crude in the market place. To pay for that extra crude the price of the crude must go down, or the price of the finished products must go up. Either way that eventually puts the extraction portion of the industry out of business.

There is no shortage of liquid hydrocarbons and never will be. The shortage is in liquid hydrocarbons that can be converted to fuels economically; which can then be used to power our IC driven world. Once we are back to the Stanley Steamer stage all of this will be pasted. Unfortunately, so also will our present civilization, and we will likely have about 6 billion very hungry people to deal with. With yield down to 50% by 2019 that will probably only be a couple of years away.

[donstewart]

@shortonoil
'The blended crude has the correct API for the refinery to operate, but it does not have the molecules needed to produce fuels without reconstruction.'

Thanks. That's what I thought, but I am not an oil expert. Whipping olive oil and vinegar gives you a useful emulsion, but it doesn't change the molecules.

Don Stewart

[AdamB]

.
Beside the rhetorical ping pong , there is a point pstarr is trying to make .
the worldwide depletion of "conventional" crude .
crude oil fields deplete , that's hardly new , always was the case , always will be

is it the case now ?

Sure. And it has been happening since 1859. Even more amusing, the definition of "conventional" has changed along the way, with improvements in drilling and production technology.

So, now that source rock production is thoroughly conventional, we'll work our way through depleting all of that as well. The USGS has been busily increasing their estimates all along of source rock potential, have been for more than a decade now, no sign it is ending anytime soon,

[AdamB]

There is no shortage of liquid hydrocarbons and never will be. The shortage is in liquid hydrocarbons that can be converted to fuels economically; which can then be used to power our IC driven world.

According to the USGS and EIA, not only all liquid hydrocarbons but non-liquid ones can be converted to fuels "economically". Economically meaning, at a given price.

And I'll take the expert's word for that rather than internet pamphleteers, thanks.