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The Imminent Peak in US Oil Production

Discuss research and forecasts regarding hydrocarbon depletion.

Re: The Imminent Peak in US Oil Production

Unread postby Pops » Thu 14 Aug 2014, 10:13:14

Tanada wrote:Given the last 9 years of anemic to non existent economic growth that green zone seems hopelessly optimistic. When I first joined this looney bin back in 2005 I thought we were dead set for the yellow zone because I have seen humans historically speaking connive their way through one disaster after another. Unfortunately after 9 years of following the topic closely I have seen little if any movement towards adaptation for an orderly contraction.

Sounding pretty doomy there T, LOL

The shark-fin is kinda my worst nightmare too. It is the whole basis of The Fan or the Slide discussion from a way back.

"Orderly contraction" assumed (I think) the immediate onset of a forced decline in which the oil companies simply accepted the fact there was nowhere left to drill, so they stopped looking. I'm pretty sure that is what all the TOD crew anticipated, otherwise why would they have forecast a 3 or 4 or 5 percent annual decline when that is the underlying decline of existing wells?

What we got instead was a huge push to find new oil and or sorta-oil and to exploit the higher prices to go back and extract what was previously unaffordable oil. The net effect is to pull supply forward as in this blast from the past artist's [sic] conception:

Image
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Re: The Imminent Peak in US Oil Production

Unread postby vtsnowedin » Thu 14 Aug 2014, 11:52:37

Orderliness and humanity seldom go together very long. I think you can see some orderly adaption in the developed world. Smaller cars becoming more standard fare and people moving closer to work whenever the opportunity presents itself , Some wind farms and PV solar plants being put in place etc. Where the cliff is the sharpest is in the third world where population is still growing at unsupportable rates. The Arab spring and the current rise of ISIS or what ever their name is today are perhaps the first of that bubble bursting. When real year on year decline becomes a fact there will come a time when the developed world will not be able to produce and ship food to the third world and what is going on today will seem like a picnic by comparison.
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Re: The Imminent Peak in US Oil Production

Unread postby Pops » Thu 14 Aug 2014, 13:01:39

True, I think it was presumed as well that there would be an overall realization of the fact of limits and so efforts at mitigation. That might happen eventually but at this point a general acceptance that there might ever be a peak is not very apparent. In fact there is a big effort to promote the opposite.

Add in the "we'll all boil in our skins" faction who thinks burning FFs should be curtailed right away and orderliness is quite the pipe dream, LOL
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Re: The Imminent Peak in US Oil Production

Unread postby Graeme » Thu 14 Aug 2014, 18:28:51

Pops, I just read Staniford's post and saw the following conclusion at the end. Let's hope he's right.

What this suggests is that for the next few decades we will mostly be in the green zone (shocks aside). The US economy can probably get 3-4% less oil intensive each year by slowly replacing the vehicle stock with more efficient vehicles. As Econbrowser has been noting, this has begun. I don't doubt growth will be affected - there is very unlikely to be enough oil for the developing countries to grow their economies as they would like. The fact that BRIC countries will continue to grow faster than the US and Europe will place more pressure on the western economy's oil usage than a global analysis might suggest. However, this theory does imply that some economic growth will be possible for quite a long time.
Human history becomes more and more a race between education and catastrophe. H. G. Wells.
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Re: The Imminent Peak in US Oil Production

Unread postby Pops » Fri 15 Aug 2014, 17:39:36

We can hope G, I'd do my planning on the alternate outcome tho... that way even if you're wrong you still come out right.

Matt at CrudeOilPeak.info has a new post on this very subject - but instead of EIA data he's using IEA data:

Image

Same conclusions though ... he's always worth a look.
http://crudeoilpeak.info/iea-report-imp ... -peak-2016
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Re: The Imminent Peak in US Oil Production

Unread postby JMB » Fri 15 Aug 2014, 18:06:51

Looking at the IEA graph of the peak in 2016, it looks like we fall off the shale peak, and move to a ... plateau? As I suspected, we're on a plateau forever.
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Re: The Imminent Peak in US Oil Production

Unread postby ralfy » Fri 15 Aug 2014, 22:56:43

One can also consider the cost of increasing production, the price that the global population is willing to pay for it, and the effect of high prices on various middle class conveniences that are part of global economic growth.
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Re: The Imminent Peak in US Oil Production

Unread postby Pops » Sun 24 Aug 2014, 16:24:18

Pops wrote:LTO decline rate is important because it could compound the shock of our underlying decline. We (US) could experience a greater decline over the next 10 years than we have in the preceding 40 if shale declines as advertised. Like so:

Image


Looks like Mr Laherrere has been copying my homework again! (jk)

My forecast on USL48 is based on ultimates estimated from different ways, with the breakdown of Texas, North Dakota and deepwater.

Image

EIA forecasts the US crude oil production at over 7 Mb/d in 2040 when I forecast USL48 crude oil production at less than 1 Mb/d. The difference is huge!
EIA forecasts 140 $2012/b in 2040, allowing expensive oil to be produced when my forecasts on price is not numbered but I feel (MIT April paper) that in the past production was constrained by a ceiling at 120 $2011/b: expensive oil will stay in the ground.

http://peakoilbarrel.com/bakken-oil-pea ... #more-4302
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Re: The Imminent Peak in US Oil Production

Unread postby dcoyne78 » Wed 27 Aug 2014, 21:40:38

I wonder if the proved reserves for North Dakota reported by the EIA are accurate? At the end of 2012 they were at 3.7 Gb, typically 2P reserves would be a little higher than this maybe 5 Gb. Laherrere is estimating a North Dakota URR of 6.2 Gb.
From 1981 to 2012 about 1.7 Gb of oil was produced in North Dakota (EIA data) so that would be a minimum URR of 6.7 Gb if my 2P estimate is correct, this would also mean no reserves are added in the future in North Dakota, a questionable assumption at best.

I would love to hear from experts on EIA proved reserves and reasonable estimates of 2P reserves based on proved reserves.
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Re: The Imminent Peak in US Oil Production

Unread postby Plantagenet » Wed 27 Aug 2014, 22:55:04

wrote:Image


I just don't see how US tight oil production will precipitously decline and disappear just a few years from now. Individual wells decline quickly---but new wells are being constantly drilled that replace the declining production.

The Bakken is estimated to have 7 BILLION bbls of oil. Current production is about a million bbls/day---and at a million bbls/day the Bakken should take 20 years or so to work through. The Eagle Ford is a bit bigger, and also should take a couple of decades or so to go through.

The Permian is just ramping up now. Its estimated to have about 70 BILLION bbls of oil. If it gets up to 3 million bbls day it would still take 70 years to work through.

I think its highly unlikely that US tight oil production will decline to zero in just 3-4 years.

Image
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Re: The Imminent Peak in US Oil Production

Unread postby copious.abundance » Thu 28 Aug 2014, 02:06:46

Good god, WHEN are some of you going to learn? :roll:

Jean Laherrere a year ago, on the Bakken
In the figure, Laherrere finds a time lag of just around one year. And, since we see a drop in the number of exploration rigs in 2012, it seems likely that production will start declining soon, perhaps during the present year.

No sign of a peak yet. Just pauses during bad winters:
http://www.eia.doe.gov/dnav/pet/hist/Le ... RFPND2&f=M

Not to mention the dozens of times someone has said in the Bakken thread that Bakken production was just about to peak - really really soon! Like this one:

July 6, 2013
According to data supplied by North Dakota Dept of mines, new drilling permits have receded to 150 in June, 2013 (the height of the drilling season) from an average of over 200 during the previous year. Tight-shale well declines average 67% in the first year. Production is peaking.


And this, from July 17 of last year
Since September 2012, production in the Bakken has been beginning to flatten. There's no clear trend line yet - nothing to show a definite curve towards a peak, but my feeling is it's going to peak by the end of the year. So I think by this time next year, all the folks trumpeting the death of peak oil due to "THE FRACKING REVOLUTION!!!" are going to be pretty quiet.

To that one I have to say, "HA HA HA!!!"

Not to mention some really, really funny ones I can find over in TOD. Some real doozeys there. :razz:
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: The Imminent Peak in US Oil Production

Unread postby copious.abundance » Thu 28 Aug 2014, 02:17:09

Oh yeah, can't forget this Laherre from 1998. :lol:

http://www.hubbertpeak.com/laherrere/ogj1998/

Image

Oops!
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: The Imminent Peak in US Oil Production

Unread postby vtsnowedin » Thu 28 Aug 2014, 06:00:08

Plantagenet wrote:[

The Permian is just ramping up now. Its estimated to have about 70 BILLION bbls of oil. If it gets up to 3 million bbls day it would still take 70 years to work through.


What??? They have been water flooding and CO2 injecting the Permian oil fields for decades and have already pumped out 15 BBO. Here is what one recent study comes up with for the Region.
. The mean
USGS estimate is that an additional 2.68
BBO could be added to reserves in the
18 fields evaluated. There is little chance
that reserve additions could be more than
4.5 BBO or less than 1.05 BBO.

http://pubs.usgs.gov/fs/2012/3051/fs2012-3051.pdf
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Re: The Imminent Peak in US Oil Production

Unread postby Pops » Thu 28 Aug 2014, 07:44:53

copious.abundance wrote:Good god, WHEN are some of you going to learn? :roll:

Not exactly sure why you posted that chart, it shows pretty convincingly that shifting the discovery curve forward is an easy way to come up with a guess at ultimate production. The discovery plot (green line) actually has a little bump right about now, LOL


There are only 2 ways oil production can go; it either increases forever as OF obviously thinks will happen, or it won't. If one thinks oil is finite and may stop rising at some point, then the next question is when?

Shifting discovery forward is a simple way to guess because at the heart is the rule that you can't pump what you can't find.

--
I'm glad you posted that link though because I don't remember seeing this before:

Image

US drilling has shown several cycles and these cycles are symmetrical, so it is easy to model the allwells curve with four cycles, one basic peaking in 1970 and three temporary with peaks in 1920, 1956 and 1982 (crazy years): figure 8 . The question is to know if a new cycle will occur?

The difference between Lahaerre and yourself OF along with most other pundits is he is straightforward in describing his uncertainty.
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Re: The Imminent Peak in US Oil Production

Unread postby dcoyne78 » Thu 28 Aug 2014, 09:08:20

On the Bakken there is often confusion about the USGS April 2013 assessment for 7.4 Gb of undiscovered technically recoverable resources (UTRR).

This is for North Dakota and Montana with about 80 % from North Dakota (5.8 Gb) and does not take any account of economics to determine the economically recoverable resources (ERR), which depends on many factors, especially the price of oil.

The proved reserves in North Dakota have increased from 0.5 Gb in 2007 to 3.7 Gb in 2012 and most of these added reserves are likely to be Bakken/Three Forks reserves (about 3.2 Gb), in addition about 0.5 Gb of oil was produced from the ND Bakken through 2012 so the minimum ND Bakken/Three Forks URR would be 3.7 Gb if no more Bakken reserves are added after 2012.

If oil prices were very high (so that economic constraints on oil production were low) then possibly 5.8 Gb might be added to Bakken reserves in North Dakota (ND) for a total URR of 9.5 Gb.

A final thought is the proved reserves are typically about 75% of proved plus probable reserves (2P reserves) so if the EIA reserve estimate is correct and this 75% estimate is also correct then ND Bakken/Three Forks 2P reserves would be about 4.3 Gb and the technically recoverable resources would be 10.6 Gb.

If we model Bakken output and use reasonable transport costs, discount rates, OPEX, well costs, and royalty and tax assumptions and the EIA's AEO 2014 reference scenario oil prices to find the ERR for a scenario that results in a TRR of 10.6 Gb, the ERR ends up at about 9 Gb with a peak of about 1250 kb/d in late 2017 to early 2018, decline is gradual until 2021.

Would be interested in comments on EIA proved reserve estimates.

Economic assumptions, Transport costs $12/b, OPEX $4/b, royalties and taxes 24.5% of wellhead revenue, real discount rate 7% (costs done in inflation adjusted $), well cost $9 million, NG revenue assumed to offset other costs, real oil price follows AEO reference case, average new well EUR30 is 364 kb in Dec 2013.
Chart attached (I hope)
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Re: The Imminent Peak in US Oil Production

Unread postby Plantagenet » Thu 28 Aug 2014, 12:13:06

vtsnowedin wrote:They have been water flooding and CO2 injecting the Permian oil fields for decades and have already pumped out 15 BBO. Here is what one recent study comes up with for the Region.
. The mean
USGS estimate is that an additional 2.68
BBO could be added to reserves in the
18 fields evaluated. There is little chance
that reserve additions could be more than
4.5 BBO or less than 1.05 BBO.

http://pubs.usgs.gov/fs/2012/3051/fs2012-3051.pdf


The 15 billion bbls so far came from conventional oil deposits. The 2012 USGS estimate is for conventional oil only. Conventional oil is oil that leaked out of source rocks and accumulated in various geologic oil traps. Where did that oil come from?

Turns out the source rock for that oil are tight shales and related rocks. The source rocks in the Permian basin contain over 70 Billion bbls of oil that can be produced by fracking.

estimate there is over 70 billion bbls of tight shale oil in the Permian basin

Its highly unlikely that tight shale oil production will end in the next few years when the amount of tight shale oil in the Permian basin is so huge. :)
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Re: The Imminent Peak in US Oil Production

Unread postby Pops » Thu 28 Aug 2014, 12:35:22

Plantagenet wrote:Its highly unlikely that tight shale oil production will end in the next few years when the amount of tight shale oil in the Permian basin is so huge. :)

Yeah, just look at how much they are getting from the Monterey.
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Re: The Imminent Peak in US Oil Production

Unread postby ROCKMAN » Thu 28 Aug 2014, 12:39:16

Plant - "Its highly unlikely that tight shale oil production will end in the next few years..." Unless oil prices crash. Which I think isn't likely to happen either. At current prices there are still a lot of holes left to poke. A finite number but still a fairly large one.
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Re: The Imminent Peak in US Oil Production

Unread postby Pops » Fri 29 Aug 2014, 11:22:10

I thought I'd link to the relatively new drilling productivity report for those who haven't come across it yet. You can see a PDF here:
http://www.eia.gov/petroleum/drilling/pdf/dpr-full.pdf

Or the viewer on slideshare here:
http://www.slideshare.net/MarcellusDN/e ... ugust-2014

here is the first slide, bakken:
Image

The big picture is the second row graphs showing the increasing rate of depletion in leagacy wells (>1 month since start of production).

Kudos to the EIA on making the info readable finally, whether or not it is accurate is another discussion, LOL
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Re: The Imminent Peak in US Oil Production

Unread postby Plantagenet » Fri 29 Aug 2014, 11:50:34

Of course it is possible that oil production in the Permian will fall to zero if the price of oil drops too low, or a giant meteor hits odessa, or zombies rise from their tombs and start eating fracking rigs, but all those things seem highly unlikely.
Last edited by Plantagenet on Fri 29 Aug 2014, 12:02:57, edited 1 time in total.
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