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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 ROCKMAN » Thu 07 Jan 2016, 14:27:29

pstarr - The interesting aspect of Ron's projection is that it's based mostly on data generated during periods of much higher oil prices then we currently have. especially true for the Bakken. That seems to imply a geologic limit. Now superimpose the effect of prices being as much as 1/3rd less on top of the apparent geologic limit and it might make his projections look a tad optimistic. As I've said before we'll get a clear picture by the end of 1Q 2017. In the meantime everyone can just speculate to their heart's content. lol
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Re: The Imminent Peak in US Oil Production

Unread postby Subjectivist » Thu 07 Jan 2016, 15:47:34

ROCKMAN wrote:pstarr - The interesting aspect of Ron's projection is that it's based mostly on data generated during periods of much higher oil prices then we currently have. especially true for the Bakken. That seems to imply a geologic limit. Now superimpose the effect of prices being as much as 1/3rd less on top of the apparent geologic limit and it might make his projections look a tad optimistic. As I've said before we'll get a clear picture by the end of 1Q 2017. In the meantime everyone can just speculate to their heart's content. lol


Have no fear Rock, people on this board are champion level speculation typing experts!
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Re: The Imminent Peak in US Oil Production

Unread postby Tanada » Mon 06 Feb 2017, 18:57:58

Pops wrote:Hats off to Ron Patterson at POB for continuing good work, this is from a post by David Archibald

Image


Just over a year ago I commented that it looked like Ron had done a pretty darn good job with his projection.

I have come to rethink that a bit. That isn't to say Ron Patterson was wrong and Peak Oil isn't real. However it has turned out that once you get past that first year of 50-70 percent depletion rate things start to stabilize and by the time a fracked well has been producing for three years its decline rate is much more pleasant for all of us. Sure it is only producing 15 percent more or less of what it lifted in that first month. But 15 percent of a 500 bbl/d well is still 75 bbl/d which generates a good chunk of money if you were able to pay the well off during the high depletion phase. For wells from say 2013 and earlier the sunk costs were pretty much paid off when the price crash came in late 2014, and we need to remember something. The price pre crash was around $80/bbl. From December 2014 right through June 2015 it held at around $60/bbl. It was only in July 2015 that prices started their slide to critical levels which bottomed out in January 2016 when Iran sanctions were lifted. That bottom was unsuitably low and by March 2016 prices were bouncing around $45/bbl and they gyrated up and down all summer around that until OPEC set their new quota's in November 2016.

For close to three months prices have been holding over $50/bbl. In the last four or five months the depletion rate for USA oil in general has fallen off as the vast majority of wells completed and put into service were completed before June 2015 which puts us now 18 months or longer into their 'rapid depletion' phase. IOW they have passed out of the rapid depletion period and are in the steady depletion period. At the same time as prices have stabilized new drilling and completions are up a little from where they were a year ago. We are not yet at the price point where new drilling offsets depletion, but we are not all that far away from it any longer either. If or when prices get back to $60/bbl or perhaps $65/bbl the USA fracking industry will be able to offset the declines with new wells.

I have searched several times over the last year to try and find out how many of the wells drilled and fracked in 2008-2011 are still producing and at what rate. Unfortunately it seems like either nobody is tracking that data, or the data is proprietary and not published to the general public. That does seem like the kind of information the finance companies would want access too before lending more money to any fracking company, I know if it were my money being lent I would want details on depletion rates and well lifetimes.
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Re: The Imminent Peak in US Oil Production

Unread postby Plantagenet » Mon 06 Feb 2017, 22:57:20

Tanada wrote:
Pops wrote:Hats off to Ron Patterson at POB for continuing good work, this is from a post by David Archibald

Image


Just over a year ago I commented that it looked like Ron had done a pretty darn good job with his projection.

I have come to rethink that a bit. That isn't to say Ron Patterson was wrong and Peak Oil isn't real. However it has turned out that once you get past that first year of 50-70 percent depletion rate things start to stabilize and by the time a fracked well has been producing for three years its decline rate is much more pleasant for all of us.....

I have searched several times over the last year to try and find out how many of the wells drilled and fracked in 2008-2011 are still producing and at what rate.


The long term depletion rate of the wells is very important, but even without knowing the actual depletion rate its clear that this prediction of the peak in US shale oil production occurring in 2015 is totally wrong.

According to this project US shale oil production should fall by 50% by 2017 and drop to near zero in few more years. This is totally, completely and absolutely wrong.

Consider just shale oil production from the Permian in Texas. It hasn't peaked at 1 million bbls per day as the clowns who made that prediction said it would---its up near 2 million bbles/day and still going up. And the estimated shale oil reserves in the Permian are something like 60 BILLION barrels---thats as big as Saudi Arabia. At current rates of production it should last for decades.

Image
Permian shale oil production much bigger then prediction, and it isn't collapsing as many predicted.

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Re: The Imminent Peak in US Oil Production

Unread postby Subjectivist » Mon 06 Feb 2017, 23:06:43

Well the Permian did have a hicough right when the peak was predicted, then it resumed the upward march.

I could be mixed up, but I have the impression that the Permian is actually so thick that it doesn't use long laterals, I believe they use the "bottle brush" design with a vertical well with short laterals in all directions just a hundred yards or so but stacked on top of each other several times. Those wells are cheaper to drill than long laterals so they can make a profit at $45/bbl, perhaps even lower.
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Re: The Imminent Peak in US Oil Production

Unread postby AdamB » Tue 07 Feb 2017, 14:42:18

Plantagenet wrote:According to this project US shale oil production should fall by 50% by 2017 and drop to near zero in few more years. This is totally, completely and absolutely wrong.


But of course. No different than many other half baked analysis of these things, the ETP springing instantly to mind as well.

Hubbert Linearization never worked for squat when the Oil Drum debunked it, before the reality of oil production debunked them.

Until folks include the supply response to price, and then lay out that price to underpin their production estimate, they are just pulling a "etp", find two independent variables traveling in the same direction over a period of time, and pretend they will always continue doing so. Works great as long as it works, and has nothing to do with the relationship between those two variables.

Plantagent wrote:Consider just shale oil production from the Permian in Texas. It hasn't peaked at 1 million bbls per day as the clowns who made that prediction said it would---its up near 2 million bbles/day and still going up. And the estimated shale oil reserves in the Permian are something like 60 BILLION barrels---thats as big as Saudi Arabia. At current rates of production it should last for decades.


Would anyone here like to guess where the increased oil production in the Permian is coming from? I'll bet the Rockmeister knows!
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Re: The Imminent Peak in US Oil Production

Unread postby GoghGoner » Sun 12 Feb 2017, 09:08:35

Plantagenet wrote:Consider just shale oil production from the Permian in Texas. It hasn't peaked at 1 million bbls per day as the clowns who made that prediction said it would---its up near 2 million bbles/day and still going up. And the estimated shale oil reserves in the Permian are something like 60 BILLION barrels---thats as big as Saudi Arabia. At current rates of production it should last for decades.


The latest graph of the Permian has more production in 2014 than Dave has at its peak. Didn't any flashing lights go off in your head that maybe you were not interpreting the graph correctly? You are not. The graph is for shale production!

Right now, the LTO Permian shows the peak pretty close to the original graph. I have no opinion of the original prediction -- I do think we have many, many DUCs that have been completed during the low oil price period and the LTO decline may pick up unexpectedly this year. Just a scenario, not a personal prediction.

Here is the latest for the LTO Permian:

https://shaleprofile.com/index.php/2017 ... ober-2016/
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Re: The Imminent Peak in US Oil Production

Unread postby ROCKMAN » Sun 12 Feb 2017, 09:23:12

Goner - And to save space here's the link to my fresh hot of the presses post explaining why the debate of the potential for the "imminent peaking in US oil production" is rather pointless IMHO. See the last post after Spike's comment:

the-michael-c-lynch-thread-merged-t129-240.html
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Re: The Imminent Peak in US Oil Production

Unread postby AdamB » Sun 12 Feb 2017, 23:03:23

ROCKMAN wrote:Goner - And to save space here's the link to my fresh hot of the presses post explaining why the debate of the potential for the "imminent peaking in US oil production" is rather pointless IMHO.


You do realize that this entire website is built on the premise that the claims of US peak, past, present or future, isn't pointless, right? You are completely correct of course, it is apparent the instant people discuss only supply without a second's thought of how demand can change all the outcomes just as fast as supply can. Peak demand being not near as cool a doomer porn topic...I mean really....the US not using more crude year over year like they once did? Decreasing energy intensity per capita, or per $$ GDP? The horror!
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Re: The Imminent Peak in US Oil Production

Unread postby yportne » Sun 12 Feb 2017, 23:55:56

My demand has changed. Circa 35 to 40 years ago I owned a big Ford station wagon and a used Cadillac. Both got about 10 mpg. At that time manufacturers were having drivability problems at least partly related to the phase-out of tetraethyl lead. Today I own a Honda Accord and a Prius, averaging 3 to 4 times better. The current cars are also more dependable. Surely such changes have impacted the timing of oil deprivation.
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Re: The Imminent Peak in US Oil Production

Unread postby AdamB » Mon 13 Feb 2017, 13:03:48

yportne wrote:My demand has changed. Circa 35 to 40 years ago I owned a big Ford station wagon and a used Cadillac. Both got about 10 mpg. At that time manufacturers were having drivability problems at least partly related to the phase-out of tetraethyl lead. Today I own a Honda Accord and a Prius, averaging 3 to 4 times better. The current cars are also more dependable. Surely such changes have impacted the timing of oil deprivation.


For some people, such as those who don't use liquid fuels anymore, and better yet don't even have to go to the fuel/ripoff stations, I'm not sure it matters what the timing is, or even if it happens or not. The wife plugs her car in, in the garage, and unless the power goes out for the house, wouldn't even notice all the gas stations suddenly going out of business, others in the neighborhood following her lead. There are now bashed in Chevy Volts being driven by high school kids, hand me down cars, the kids themselves not even realizing they need to stop at one of those rip off stations to put this nasty smelling expensive liquid stuff in.
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Re: The Imminent Peak in US Oil Production

Unread postby GoghGoner » Mon 13 Feb 2017, 13:15:01

Published on the EIA's website today:

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Re: The Imminent Peak in US Oil Production

Unread postby AdamB » Mon 13 Feb 2017, 14:31:58

pstarr wrote:Actually Pop's post and chart from 2014 was widely optimistic.
Image
What it really looks like. Yes Planty, a collapse.


Not the claim made by those who are energy experts. Hot off the presses!


EIA’s recently released Annual Energy Outlook 2017 (AEO2017) Reference case projects that U.S. tight oil production will increase to more than 6 million barrels per day (b/d) in the coming decade, making up most of total U.S. oil production. After 2026, tight oil production remains relatively constant through 2040 in the Reference case as tight oil development moves into less productive areas and as well productivity decreases. Side cases with different resource and technology assumptions result in different tight oil and total U.S. oil production projections.

http://www.eia.gov/todayinenergy/detail.php?id=29932


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Re: The Imminent Peak in US Oil Production

Unread postby AdamB » Mon 13 Feb 2017, 16:56:32

[quote="pstarr"]You omitted the ridiculous accompanying chart
Image

You are referring to their habit of continually underestimating shale oil and gas production perhaps? I agree that they should perhaps be a little less conservative in their estimates, in light of how badly they underestimated shale oil and gas production in the recent past.
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Re: The Imminent Peak in US Oil Production

Unread postby AdamB » Mon 13 Feb 2017, 16:58:36

pstarr wrote:It's very funny funny Adamb. Reminds me of this:
Image
lol


You are referencing the IEA in this graph, those who fell for peak oil in 2006. You are right, those who were that gullible deserve to be LOL'ed, proving with their 2006 peak claim that they have no more understanding of peak oil than the likes of those Spike castigates in his outstanding video series.
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