[Oil-Finder]

Ugh- you win Oil-Finder- we will have oil....forever!

Now you're beginning to see the light.

[thuja]

LOL- well at least you made me smile

[Oil-Finder]

Oh, and just because I like to rub it in . . .

Let's see how doable this is . . .

The US side of the Williston Basin, which contains the Bakken formation, encompasses approximately 143,000 square miles.

My research on Bakken well production indicates that, after an initial period of high production lasting a few months to a year, flow rates stabilize at around 150-300 bpd and stay that way for an extremely long time (source, source, and source).

I have read well spacing patterns in the Bakken including 160 acres, 40 acres, and 640 acres (1 square mile). Let's be conservative and go with 1-square-mile spacing.

Let's say that only 1/4 of the square miles in the Williston Basin end up with oil wells on them (sounds reasonable?). That would be 35,750 square miles, and thus, 35,750 wells using our spacing pattern.

Let's assume a low-ish average production rate of 200 bpd per well. With that figure, 35,750 wells would produce 7.15 million barrels/day.

According to this here, the average cost of a well in the Williston Basin is up to $3-$5 million, though I've seen figures as low as $2 million, and even less for some Canadian sources.

Let's go with an average of $4 million each. At that price, 35,750 wells would cost $143 billion total.

Sounds like a lot, doesn't it? But keep in mind that Petrobras expects to spend $50-$100 billion just to develop the 5-8 billion barrels in Tupi. Suddenly the Bakken looks like a bargain.

And before you gasp at the 35,750 wells, keep in mind that Pemex expects to drill 13,500 wells to develop Chicontepec over the next 15 years.

To be sure, developing the Bakken to high production rates could take 10-20 years, but there's nothing un-doable about it. And it would hardly be the first time a large oil formation took a decade or more to fully develop!

Not only have I done this little analysis, we're not talking some junk heavy oil. The stuff in the Bakken is super-duper, high-quality oil, among the best in the world!:
http://nationalcitizens.ca/cgi-bin/news ... 1197295246
^

The Bakken is a geological formation of siltstone and sandstone about 300 metres below the Mississippian formation, where most Saskatchewan light oil production comes from. Bakken wells tend to be highly productive (200 barrels a day or more), producing sweet, light crude oil with 41 degree gravity, basically the highest grade of crude oil you can find anywhere.

So there!

[thuja]

Well done! Hey I'm done with the debate tonight brother...

But just a comment- the arguments you make for how oil production will last...forever..needs to be backed up by petroelum geologists, think tanks and reserach institutes to have much validity here. I tried to point to the most cornucopian of the bunch, CERA, to describe their views. You seem to be meandering past their rosy views to a world that has a ceaseless supply of never ending crude...

No credible person believes that...because the evidence isn't there...

Take it back a notch. We'll still debate you...but we won't think you're a loon...

[Oil-Finder]

Well done! Hey I'm done with the debate tonight brother...

But just a comment- the arguments you make for how oil production will last...forever..needs to be backed up by petroelum geologists, think tanks and reserach institutes to have much validity here. I tried to point to the most cornucopian of the bunch, CERA, to describe their views. You seem to be meandering past their rosy views to a world that has a ceaseless supply of never ending crude...

No credible person believes that...because the evidence isn't there...

Take it back a notch. We'll still dabate you...but we won't think you're a loon...

All of the figures I've used come from petroleum geologists, academics, and the like. I'm not making up a single number myself.

-- The 200-500 billion barrel figures for the Bakken come from a series of geologists starting in 1999 and most recently in 2006:
http://www.nd.gov/ndic/ic-press/bakken-form-06.pdf

-- The 7.5 billion barrel figure for Bohai Bay comes from PetroChina's geologists (I assume - same as any other oil discovery):
http://news.mongabay.com/2007/0508-china.html

-- The 100+ billion barrel estimate of Bohai Bay's ultimate reserves comes from an academic at a Chinese university:
http://www.petroleumworld.com/story07051011.htm

-- The 5-8 billion barrels in Tupi comes from Petrobras' geologists (I assume - same as any other oil discovery):
http://www.bloomberg.com/apps/news?pid= ... refer=news

-- And the "conservatively 50 billion barrels" for all of offshore Brazil comes from a former Petrobras official now working as an oil industry consultant. And a larger figure has been touted by the Brazilian government:
http://ipsnews.net/news.asp?idnews=40086

[Nicholai]

That's not what he means.

Everything is coming up roses, eh Oil Finder?

[Nicholai]

Double post.

[Oil-Finder]

That's not what he means.

If you mean why haven't CERA, the EIA and the IEA not included these things in their analyses, it's probably because they all prefer to be very conservative when putting out figures to be digested by the public. And in some cases, they might not be aware of some of these very recent developments. CERA's analysis last November, for example, was made before both the Bohai Bay discovery in May of this year and the Tupi discovery early last month were announced. Both Bohai Bay and Tupi, it now appears, are just tips of the icebergs. And I've got a hunch CERA did not know about the Bakken. The only one of those entities I'm aware of that's been aware of the Bakken is the EIA, but they've chosen to minimize its significance until the USGS finishes its study.

Everything is coming up roses, eh Oil Finder?

Things usually do work out for the best, don't they.

[Nicholai]

For rich people, yes.

Lucky for me.

I will try and get a picture of it but there is a $12 million dollar home being built just a little ways from my house right now. It looks like the Imperial Palace in China.

[JohnDenver]

But I am a tad surprised by your talk JD- I seem to remember you always talking about how peak oil is a joke- it doesn't matter, etc. But here you are talking about being at a plateau phase. Plateau is another word for peak- just a longer and less sharp peak...have you come around to that idea that we are surfing the top of the peak now?

Personally, I think liquids still have some room to grow. Ordinary crude appears to have peaked in May 2005, but it's still too early to call it for sure. It's very important to remember that oil prices only began to move up in 2004 -- 3 years ago -- and the oil industry can't respond immediately to price signals. We'll have a much better idea where things are going in a year or two.

That said, I think it's good, from a debunking standpoint, to accept the peak oiler claim that we are peaking now, and show that, even then, we aren't in serious trouble. If it turns out that we aren't peaking now, so much the better.

[TheDude]

One more bit of Bakken, comments on the 24th at TOD: Permalink

A little perspective on the Bakken formation:

My grandfather had a little spare cash and bought a piece of land (1/2 section) from a real estate broker who had bought it at a tax sale shortly after WWI. Just into Montana from the North Dakota border where the Yellowstone River is located (Richland County). They knew there was oil when he bought or soon after.

The problem--it was too little, too deep. In today's dollars it might cost a million dollars to drill down 2 miles to the oil. If you borrowed the money from a bank, you would get enough oil to pay about 1/3 of the interest on the loan. The rest you would have to pay out of your own pocket. If you didn't have it the bank would foreclose, sell the well (and associated mineral rights (leased or owned) and take a loss and someone would buy it at fair value of a couple of hundred thousand. You would not drill again and the bank would not lend again on such a venture.

About 10 years ago horizontal drilling became good enough to exploit oil in the Bakken and similiar formations. A horizontal well might cost 3 million dollars but a bilateral horizontal well would have about a mile of pipe exposed to the Bakken and bring up mayvbe 20x the oil of a vertical well. Enough oil to pay off the well in 3-9 months. After that a lot of profit. There are about 70 drilling rigs operating in Richland County according to a cousin who took a look last summer. So this is a "hot" area for drilling today. Scary because wells there according to 1-2 year old statistics I looked up from the Montana Oil Conservation Board show Bakken horizontal wells produce from zero to about a thousand barrels a day (initially). Call it 500 barrels average.

What is scary to me is that this is an exciting and "hot" drilling area today. Remember that the Spindletop well that started the Texas oil rush in that particular field initially produced over 100,000 barrels per day. One figure I saw was 140,000 barrels per day. Now that was something to get excited about! 500 barrels per day is pretty pathetic by comparison. Yet that is what excites oil drillers today.

But that is where we are today. Exploration companies can make good money on the Bakken. But it will never replace the big stuff that was discovered in the past.

FWIW

p.s.

The Bakken wells seem to have a short life. The first well on grandfathers mineral rights (the land was sold without rights) and adjacent (it takes 1280 acres (2 square miles)) to drill a horizontal Bakken well in Montana) after about 2 1/2 years is only producing about 1/3 of initial rate. If Spindletop had been drilled as a horizontal well it might have had a shorter life too. But if they got 20x the flow that would be almost 3,000,000 barrels per day. So horizontal wells do produce faster. But with just so much oil in place, they do not last as long.

No free lunch. Higher production rates do produce shorter lived wells.

Sounds like this horizontal drilling right from the start is having the same effect as when applied in EOR. 35,750 wells might face a few land use snags, too.

I'd like to see a detailed analysis of the Bakken formation's potential. There doesn't seem to be much interest in it at the moment online though, making me think there's bigger fish to fry. Estimates of URR are all over the map, according to your link your link. High as 50%, low as 3%, which equates to a whopping 12 billion. How long will that take to make much difference?

Oh, and did I mention financial mayhem or global warming or natural gas peaking soon?

JD will bring up Laherre's figure of 2020 as a repost for NG. Too bad we can't build pipelines under the Pacific! Or more than four LNG terminals in the lower 48.

[skyemoor]

Bakken is held back by its flow rates, as I've explained about 20 times.

Yes, though some persist in spinning cornucopian fantasies. Let's examine one such...

The US side of the Williston Basin, which contains the Bakken formation, encompasses approximately 143,000 square miles.

My research on Bakken well production indicates that, after an initial period of high production lasting a few months to a year, flow rates stabilize at around 150-300 bpd and stay that way for an extremely long time (source, source, and source).

I have read well spacing patterns in the Bakken including 160 acres, 40 acres, and 640 acres (1 square mile). Let's be conservative and go with 1-square-mile spacing.

Let's say that only 1/4 of the square miles in the Williston Basin end up with oil wells on them (sounds reasonable?). That would be 35,750 square miles, and thus, 35,750 wells using our spacing pattern.

Let's assume a low-ish average production rate of 200 bpd per well. With that figure, 35,750 wells would produce 7.15 million barrels/day.

According to this here, the average cost of a well in the Williston Basin is up to $3-$5 million, though I've seen figures as low as $2 million, and even less for some Canadian sources.

Let's go with an average of $4 million each. At that price, 35,750 wells would cost $143 billion total.

Sounds like a lot, doesn't it? But keep in mind that Petrobras expects to spend $50-$100 billion just to develop the 5-8 billion barrels in Tupi. Suddenly the Bakken looks like a bargain.

And before you gasp at the 35,750 wells, keep in mind that Pemex expects to drill 13,500 wells to develop Chicontepec over the next 15 years.

To be sure, developing the Bakken to high production rates could take 10-20 years, but there's nothing un-doable about it. And it would hardly be the first time a large oil formation took a decade or more to fully develop!

Let's walk through the problems with the above one at a time;

1. The paper on nd.gov that Oil-Finder relies on is non-attributed; there are no authors or date of publication on it anywhere. Hence, we have little to go on with regards to the knowledge and veracity of the author/authors besides the gross indicator of the website itself.

2. The author/authors state "The methods used by Price to determine the amount of hydrocarbons generated by the Bakken are different from the traditional petroleum geochemical practices and are under dispute."

3. The 'research' performed by Oil-Finder (OF) resulted in these findings;

The first well drilled was the Burau 4 well in Burau County. Although oil and gas indications were not detected during drilling, the well was completed and is producing at a stabilized rate of approximately 25 barrels per day of oil with 65% water cut.

Hardly suggesting that "flow rates stabilize at around 150-300 bpd and stay that way for an extremely long time", whatever 'extremely' means. While 2007 production from Elm Coulee averaged ~53,000 barrels per day, there is no confidence in extrapolating any figure over 1000s of wells without well-documented drilling data from all of the sites in question.

4. Well numbers and spacings: OF's provided reference ( http://www.secinfo.com/d11MXs.v1Eu2.c.htm ) states that well spacings are 640 acres and the gross acreage of the Williston Basin - Bakken Oil Play is 90,000 acres. This translates to 140 wells, not 35,000. 140 wells at the above referenced 25 barrels per day equates to 3500 barrels of oil per day, which is chump change at best. Even at 'higher' production figures of 200 barrels per day, Williston-Bakken is still a very minor player at best.



With the premises of OF's analysis debunked, the rest of the house of cards is meaningless. Sorry to pop any bubbles, but unmitigated enthusiasm has gotten us into economic difficulties more than once, and PO shows promise as being the granddaddy of them all.

[Twilight]

If you mean why haven't CERA, the EIA and the IEA not included these things in their analyses, it's probably because they all prefer to be very conservative when putting out figures to be digested by the public.

I don't think the public is uppermost in their minds. The public doesn't read this stuff, it reads a one-line summary in some journalist's piece about broader economic events.

I also disagree with your characterisation of these agencies / consultancies as conservative. The agencies are packpedalling their earlier predictions, lots of notes of caution are being sounded these days, which suggests their conservatism is not a fixed quantity. I also wonder whether accepting OPEC reserve data at face value, reproducing it and including it as an assumption in forecasts is conservative. To me, the word means assuming a high risk factor when handling unaudited accounts. Lastly, consultancies pretty much give you what you pay for. If the market asks for a hard assessment potentially embarrassing to several participants and is willing to pay for the reputational risk, that is what CERA and its peers will produce. I guess it is late enough that this is now one of those times when unvarnished honesty does more harm than good.

[thuja]

That's not what he means.

If you mean why haven't CERA, the EIA and the IEA not included these things in their analyses, it's probably because they all prefer to be very conservative when putting out figures to be digested by the public. And in some cases, they might not be aware of some of these very recent developments. CERA's analysis last November, for example, was made before both the Bohai Bay discovery in May of this year and the Tupi discovery early last month were announced. Both Bohai Bay and Tupi, it now appears, are just tips of the icebergs. And I've got a hunch CERA did not know about the Bakken. The only one of those entities I'm aware of that's been aware of the Bakken is the EIA, but they've chosen to minimize its significance until the USGS finishes its study.

Everything is coming up roses, eh Oil Finder?

Things usually do work out for the best, don't they.

Oil-Finder- this is why I am suggesting you are treading into loon category here. For you to say that you have learned about finds that are likely to change everything forever, and to state that groups such as the EIA, IEA and CERA are minimizing or worse, haven't seen the data yet...while you are aware of how unbelievably tremendous they are...is ludicrous.

Step back from the edge Finder...on the other side you will be laughed at for making assumptions based on your own research without any backing from established Agencies and thinktanks.

Take a look back at a lot of old threads where people went tooth and nail at each other over Yergin/CERA vs. Campbell/ASPO. You aren't even in the Yergin camp anymore- you are in the world of make-believe. Again, take it back a notch. Most folks won't agree with you if you take a CERA position here...but at least you'll be in the realm of the sane...

[thuja]

But I am a tad surprised by your talk JD- I seem to remember you always talking about how peak oil is a joke- it doesn't matter, etc. But here you are talking about being at a plateau phase. Plateau is another word for peak- just a longer and less sharp peak...have you come around to that idea that we are surfing the top of the peak now?

Personally, I think liquids still have some room to grow. Ordinary crude appears to have peaked in May 2005, but it's still too early to call it for sure. It's very important to remember that oil prices only began to move up in 2004 -- 3 years ago -- and the oil industry can't respond immediately to price signals. We'll have a much better idea where things are going in a year or two.

That said, I think it's good, from a debunking standpoint, to accept the peak oiler claim that we are peaking now, and show that, even then, we aren't in serious trouble. If it turns out that we aren't peaking now, so much the better.

I am not yet comfortable with saying we peaked two years ago- we are in the plateau phase so there could be a little surge here or there. That being said, I don't think we will ever ramp up again- this plateau is it in my mind.

I guess when you say debunking, you mean peaking and then declining oil production won't cause "serious trouble". If by that you don't believe we will turn into Mad Max road warriors overnight...then sure.

But we are already experiencing "serious trouble" in the form of accelerating energy prices...which in turn has had an effect on the world economy, inflation, which in turn is already having an effect on the world's poor and middle class. Extrapolating out with a continued plateau and then a deline in available oil is likley to exacerbate these economic effects. So to say there is no "serious" effect is just strange...because I consider you to be intelligent.

[TonyPrep]

That said, I think it's good, from a debunking standpoint, to accept the peak oiler claim that we are peaking now, and show that, even then, we aren't in serious trouble. If it turns out that we aren't peaking now, so much the better.

What a bizarre statement. So you're saying that it's good to believe something because it allows yiou to rubbish the ideas of others? Well, believing something is rather different from it actually being true, so that belief does nothing to help your debunking arguments other than to make them look weak.

Whilst many here think we may be in the plateau period, few would claim it as a certainty. As for your assertion that lack of serious energy problems in the developed nations proves that an actual decline in oil will never cause serious problems for anyone, that hypothesis has been debated elswhere and, as I've said there, you don't address the scale and smooth transition aspects in your assessment of how alternatives are going to save us.

As for the original question in this discussion, it matters not whether anyone wants peak, since we have ample evidence, from areas that are already acknowledged to have peaked, that a global peak with definitely occur, and probably quite soon (years rather than decades).

[Oil-Finder]

Yes, though some persist in spinning cornucopian fantasies. Let's examine one such...


Let's walk through the problems with the above one at a time;

1. The paper on nd.gov that Oil-Finder relies on is non-attributed; there are no authors or date of publication on it anywhere. Hence, we have little to go on with regards to the knowledge and veracity of the author/authors besides the gross indicator of the website itself.

2. The author/authors state "The methods used by Price to determine the amount of hydrocarbons generated by the Bakken are different from the traditional petroleum geochemical practices and are under dispute."

Man, how many times do I have to link these things?

Here are the complete technical papers by Leigh Price:
http://www.undeerc.org/price/

You can find more here - this is some of the work by 2 of the other geologists mentioned in the state of ND piece:
http://www.searchanddiscovery.net/docum ... /index.htm

3. The 'research' performed by Oil-Finder (OF) resulted in these findings;

The first well drilled was the Burau 4 well in Burau County. Although oil and gas indications were not detected during drilling, the well was completed and is producing at a stabilized rate of approximately 25 barrels per day of oil with 65% water cut.

Hardly suggesting that "flow rates stabilize at around 150-300 bpd and stay that way for an extremely long time", whatever 'extremely' means. While 2007 production from Elm Coulee averaged ~53,000 barrels per day, there is no confidence in extrapolating any figure over 1000s of wells without well-documented drilling data from all of the sites in question.

I gave you 3 links here, here and here stating that flow rates from Bakken wells have been maintained at 200 bpd, 300 bpd and 175 bpd, respectively. I can find you other sources too, if you like.

4. Well numbers and spacings: OF's provided reference ( http://www.secinfo.com/d11MXs.v1Eu2.c.htm ) states that well spacings are 640 acres and the gross acreage of the Williston Basin - Bakken Oil Play is 90,000 acres. This translates to 140 wells, not 35,000. 140 wells at the above referenced 25 barrels per day equates to 3500 barrels of oil per day, which is chump change at best. Even at 'higher' production figures of 200 barrels per day, Williston-Bakken is still a very minor player at best.

[deleted]

Those 90,000 acres are one company's leases, not the entire size of the Bakken formation!!!! Specifically they're the leases of Teton Energy - which isn't even a particularly big company!!

Just FYI, Marathon Oil own leases for another 200,000 acres in the Bakken:
http://www.marathon.com/content/documen ... r_2006.pdf
And just the other day they added 70,000 more:
http://www.kfyrtv.com/News_Stories.asp?news=14471

And there are many other companies with lots of additional land tied up in leases, too.

Here is a map showing the extent of the Williston Basin, which contains the Bakken formation.


Source

{ad hominem deleted by SPG}

[Oil-Finder]

Oil-Finder- this is why I am suggesting you are treading into loon category here. For you to say that you have learned about finds that are likely to change everything forever, and to state that groups such as the EIA, IEA and CERA are minimizing or worse, haven't seen the data yet...while you are aware of how unbelievably tremendous they are...is ludicrous.

Step back from the edge Finder...on the other side you will be laughed at for making assumptions based on your own research without any backing from established Agencies and thinktanks.

Take a look back at a lot of old threads where people went tooth and nail at each other over Yergin/CERA vs. Campbell/ASPO. You aren't even in the Yergin camp anymore- you are in the world of make-believe. Again, take it back a notch. Most folks won't agree with you if you take a CERA position here...but at least you'll be in the realm of the sane...

I am simply saying that CERA wrote its analysis before Brazil announced its Tupi discovery, and before China announced it's Bohai Bay discovery. Both of those were announced within the last year (less, actually, Tupi was announced less than 2 months ago!). How can these agencies possibly have incorporated information into their detailed analyses when this information is mere months old? They haven't had time to incorporate it yet.

And as for the Bakken, as I've said before, that too is very new - estimates of large reserves have only been made in the past few years by a few geologists. So if any of these agencies have heard about it, they probably aren't going to incorporate it into their analyses until some more drilling successes occur and, specifically, until the USGS completes its study (which I think should happen this year). They're probably taking a "wait-and-see" attitude.

[Oil-Finder]

One more bit of Bakken, comments on the 24th at TOD: Permalink

[...]

Sounds like this horizontal drilling right from the start is having the same effect as when applied in EOR. 35,750 wells might face a few land use snags, too.

I already took that into account when I assumed only 1/4 of the square miles in the Williston Basin would eventually have oil wells on them.

I'd like to see a detailed analysis of the Bakken formation's potential.

Hundreds of pages to read here:
http://www.undeerc.org/price/

Collection of maps and figures by 2 geologists here:
http://www.searchanddiscovery.net/docum ... /index.htm

The USGS is currently doing a study on the Bakken which should be out this year.

There doesn't seem to be much interest in it at the moment online though, making me think there's bigger fish to fry.

That's only because you haven't been looking:
http://www.google.com/search?hl=en&q=ba ... gle+Search
And news:
http://news.google.com/news?hl=en&q=bak ... a=N&tab=wn

Estimates of URR are all over the map, according to your link your link. High as 50%, low as 3%, which equates to a whopping 12 billion. How long will that take to make much difference?

The reason why estimates of URR are all over the place is because no one really knows. The only thing to do is to start drilling.

Oh, and did I mention financial mayhem or global warming or natural gas peaking soon?

JD will bring up Laherre's figure of 2020 as a repost for NG. Too bad we can't build pipelines under the Pacific! Or more than four LNG terminals in the lower 48.

Nice change of topic.

[JohnDenver]

I guess when you say debunking, you mean peaking and then declining oil production won't cause "serious trouble". If by that you don't believe we will turn into Mad Max road warriors overnight...then sure.

But we are already experiencing "serious trouble" in the form of accelerating energy prices... which in turn has had an effect on the world economy, inflation, which in turn is already having an effect on the world's poor and middle class. Extrapolating out with a continued plateau and then a deline in available oil is likley to exacerbate these economic effects. So to say there is no "serious" effect is just strange...because I consider you to be intelligent.

The world has been a festering mass of crises and problems since the day I was born (and for centuries before that), so I don't think pointing out examples here and there of people having a problem proves much. The poor and the middle class always have been, and always will be getting screwed. Therefore, we need a quantitative standard for what constitutes a serious problem. I personally use growth of the global economy as a criterion. If peak oil cannot at least cause a global recession, then peak oil was (is) a joke. (That's not to say that peak oil has no effects. It does have effects, but -- at worst -- they are minor, and primarily involve cosmetic/lifestyle changes like switching to carpooling or riding a scooter.)

The stats show that global oil production has been declining since May 2005, almost 3 years ago:



Meanwhile, world economic growth has been booming:
2005: +3.4%
2006: +4.0%
2007: +3.4%
Source(pdf)

Growth rates in 2007 break down like this:
World output: +3.4%
Developed economies: +2.3%
Economies in transition (i.e. Southern/Eastern Europe/CIS): +7.1%
Developing countries: +6.4%
Least developed countries: +7.0%
Sub-saharan Africa: +7.1%

That doesn't look like "serious trouble" to me.