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New study suggests US fracking boom may not last

Discuss research and forecasts regarding hydrocarbon depletion.

Re: New study suggests US fracking boom may not last

Unread postby shortonoil » Sat 24 Dec 2016, 21:15:58

"He said "nobody gets this right because there are no facts about the future" ( a great phrase I thought) and that their projections can best be thought of a mode of more than a few conditional probability distributions."

In our Report in section:
4.3 - EIA Determination of CPF:

We show that the EIA estimate (through an energy analysis) could not have deviated between 1960 and 1999 by more than 1% from the actual production volume. The EIA's production determinations were extremely good. The probability distribution that they were following was the CDF (cumulative distribution function) not the PDF of the logistics function. The PDF was for presentations to the API.

A chip off the old Hubbert block!

Before you even ask? There is 140,000 BTU in the average gallon of crude that comes out of the ground.
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Re: New study suggests US fracking boom may not last

Unread postby AdamB » Sat 24 Dec 2016, 22:37:24

shortonoil wrote:"He said "nobody gets this right because there are no facts about the future" ( a great phrase I thought) and that their projections can best be thought of a mode of more than a few conditional probability distributions."

In our Report in section:
4.3 - EIA Determination of CPF:

We show that the EIA estimate (through an energy analysis) could not have deviated between 1960 and 1999 by more than 1% from the actual production volume. The EIA's production determinations were extremely good. The probability distribution that they were following was the CDF (cumulative distribution function) not the PDF of the logistics function. The PDF was for presentations to the API.

A chip off the old Hubbert block!

Before you even ask? There is 140,000 BTU in the average gallon of crude that comes out of the ground.


Sure, we know the EIA was doing pretty well because they are one of the few organizations that didn't fall for peak oil, but their price path has been all over the place. Their estimates bracket well the reality of oil prices, but lets face it, they have experts and stuff, whereas peak oilers have like..you know...bloggers and stuff.
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Re: New study suggests US fracking boom may not last

Unread postby ROCKMAN » Sun 25 Dec 2016, 11:31:34

In our Report in section: 4.3 - EIA Determination of CPF: We show that the EIA estimate (through an energy analysis) could not have deviated between 1960 and 1999 by more than 1% from the actual production volume."

Just f*cking amazing: for the 14 prior to its creation the EIA was so accurate. Nothing like a little revisionist history to make a point. LOL.

"The first law to address these needs was the Federal Energy Administration Act of 1974 and, over the years, many subsequent laws have contributed to EIA's evolution and growth."

"1976: Energy Conservation and Production Act (P.L. 94-385, 15 USC 790)
Established within the FEA, the Office of Energy Information and Analysis (which later became the Energy Information Administration (EIA))"

Just currious: in 1960 what did the EIA predict US production would be in the early 70's when we reached PO?
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Re: New study suggests US fracking boom may not last

Unread postby shortonoil » Sun 25 Dec 2016, 13:26:54

"Just currious: in 1960 what did the EIA predict US production would be in the early 70's when we reached PO?"

The EIA did not come into existence until 1973 (? - memory) so they were not predicting in 1960 what might happen in the 1970's; seeing how they were not there yet.

The problem that the EIA, and anyone else who attempts to calculate production, has been that they must rely on production reports from producing countries. In the case of the old Soviet Union they were notorious about inflating production reports. Many nations, like Saudi Arabia, just didn't provide information on any kind of regular bases, and there was no way to verify what they did report. To adjust for poor and incomplete data they used a mathematical model, and the one they picked was the logistic function; as originally proposed by Hubbert.

As the Etp Model is totally dependent on the EIA's production data set, we sought a method to verify its accuracy. The constant that we compared it too was the exergy content of the average gallon of crude. That is a constant that is totally dependent on the molecular structure of the crude, and is a calculable value using standard, and generally accepted thermodynamic premises and equations. We accomplished that by solving the combustion equations for a number of fractions, calculating their exergy content, and plotting the results. The calculated values, and the EIA's published results up until 2005 varied from 140,000 BTU per gallon calculated, to 140,075 BTU/gallon reported by the EIA. The difference essentially resulted from rounding error.

Since the EIA's result of 140,075 BTU/ gallon (which was measured) agrees almost exactly with the our calculated value of 140,000 the EIA's earlier production numbers must be correct. That has changed since more non conventional crude products have been included in their data set. But prior to that they did an amazing job at recording world production. Of course construction of the original data was only possible because of the very through job done previously by agencies such as the RRC of Texas.

We owe a great deal of gratitude to the EIA, and many state agencies. Without them we would have almost no knowledge of the present status the world's petroleum situation.

http://www.thehillsgroup.org/
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Re: New study suggests US fracking boom may not last

Unread postby onlooker » Sun 25 Dec 2016, 13:35:46

Almost Short not 1973 but 1974
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Re: New study suggests US fracking boom may not last

Unread postby ROCKMAN » Sun 25 Dec 2016, 15:07:27

Shory - I'n not the one who said the EIA made exdtimates back in 1960: "We show that the EIA estimate (through an energy analysis) could not have deviated between 1960 and 1999..." Am I reading your statement wrong?

Looker. Yes, just as the history I posted.
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Re: New study suggests US fracking boom may not last

Unread postby AdamB » Sun 25 Dec 2016, 18:51:45

ROCKMAN wrote:Just currious: in 1960 what did the EIA predict US production would be in the early 70's when we reached PO?


Well, A) it would have been wrong because folks haven't figured out how to project oil prices any better than they do the stock market and B) the EIA wasn't formed until the late 1970's, so they weren't around to do it.

Formed in response to claims that you can't trust industry...gee...who would have thunk that?

https://www.eia.gov/about/legislative_timeline.php
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Re: New study suggests US fracking boom may not last

Unread postby efarmer » Mon 26 Dec 2016, 12:53:00

When something is self described as a boom I fully expect it to be transitory in nature.
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Re: New study suggests US fracking boom may not last

Unread postby ROCKMAN » Mon 26 Dec 2016, 14:35:39

farmer - Astute point: anything much better then "normal" is a boom. And much less...a bust. In either case the return to normal should be anticipated since if you don't it wouldn't be the normal condition.
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Re: New study suggests US fracking boom may not last

Unread postby Zarquon » Mon 26 Dec 2016, 17:23:48

The one time I looked at a few older EIA/IEA predictions for oil production and prices, I had the impression they were mostly just taking a straight ruler to the current trend curves and prolonging them to 2035. Except for those that were pointing down.
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Re: New study suggests US fracking boom may not last

Unread postby AdamB » Mon 26 Dec 2016, 19:12:54

onlooker wrote:Thought you peak oilers would find this interesting.
2016 Shale Reality Check: Web Presentation
http://www.postcarbon.org/2016-shale-re ... sentation/
A key point I found upon skimming through it was this:
-EIA projections of long term growth in tight oil and shale gas at low prices are extremely optimistic and highly questionable.


Sources matter. Check out the work and history of the author, and you will understand why he needs to slant the argument in the direction he does.
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Re: New study suggests US fracking boom may not last

Unread postby Zarquon » Tue 27 Dec 2016, 14:22:42

shortonoil wrote:"This one from ( http://www.euanmearns.com/ ) shows a peak in July 2008:

What is not being considered in this graph is that from 2004 to present condensate production as a total of C&C has increased from 3% to 14%, or more (see post by West Texas: Dr. Brown). Condensate which is >90% pentane does not contain sufficient C7+ molecules for it to be used in the production of fuels. It is primarily a source of feedstock. From a fuel production aspect the ability to produce those fuels has most likely not increased since 2006.


What *is* condensate, anyway?

http://www.reuters.com/article/us-oil-c ... BU20141008

"The Energy Information Administration (EIA) is now trying to remove that uncertainty by defining condensate and quantifying its output.

"We hope to have this sorted out so that policymakers will know what the numbers are," EIA's chief Adam Sieminski said late last month in New York.

The agency, the independent statistics branch of the Department of Energy, aims to launch by mid-2015 a new survey that would capture the quality of oil from each well.

It also held a closed-door "Condensate Workshop" for officials from several agencies and energy experts last Friday, one of its first efforts to produce a firm definition, according to two participants.
...
The term refers broadly to any type of oil that "condenses" into a liquid after being freed from high-pressure wells, where it often lurks in gas form, or separated from gas.

But once it becomes a liquid, there is no agreed way to tell condensate from ordinary crude. Most state regulators do not even measure it; those that do, only measure gas-related condensate, not that from the hydraulically fractured oil wells.
...
Refiner Phillips 66 (PSX.N) and midstream giant Plains All American (PAA.N) have said condensate is oil with an API gravity of 45 or above. Meanwhile, Marathon Petroleum Corp's (MPC.N) top executive said in a recent interview he believed condensate should have an API gravity of 60 and above.

Without a universal standard, production data vary wildly. The EIA's own figures suggest that anywhere from 8 percent to 16 percent of U.S. crude oil production is condensate - a difference of more than half a million barrels a day."

IOW if it's not black but burns, we count it. Or we don't.

And I tried to find a recent article I read, saying that US Gulf refineries *do* refine blends of crude & condensate into fuels, but they can only take a limited amount of it, and the blends they get from Cushing contains more and more of the stuff. Crude gets blended with condensate up to max. gravity of 45° so they can legally call the blend WTI, as indexed on the NYSE. Some refineries now pay a premium for unblended crude.

Anyway, I found this, from 2013:
https://rbnenergy.com/dont-let-your-cru ... condensate

"A new analysis made available this past week by one of the largest producer in the Eagle Ford – EOG Resources - throws a curve ball into the ongoing debate about how much condensate is being produced in Eagle Ford. The “official” score keepers of the Eagle Ford production data are the Texas Rail Road Commission (RRC). The latest RRC statistics tell us that January to November 2012 Eagle Ford production averaged 340 Mb/d of crude and 72 Mb/d of condensate or 17.5 percent condensate. Most observers including the RBN team believe that these numbers do not reflect reality. They are far too low.

For one thing, the statistics averages for the year to November 2012 and they are based on data known to lag actual production for months because of late reporting. It is also the case that the RRC data is based on the honor system – and lets just say that could lead to some producers being “economical with the truth” about their condensate. That is because crude marketers who buy at the wellhead discount condensate. The posted price for 60 API Eagle Ford condensate averaged $17.5/Bbl below 40 API crude during 2012. As a result, producers are nervous about telling investors that their output is condensate because that makes it less valuable than crude oil. Up until now we had heard estimates that Eagle Ford production might actually be as much as 40 to 50 percent condensate. Finally, a lot of Eagle Ford condensate seems to ‘disappear’ – blended off into the crude oil stream. To the extent that happens it would show up on the RRC statistics as crude oil, not condensate. For all these reasons we have discounted the RRC numbers. But if we can’t rely on the State of Texas, who can we rely on?

How about EOG? Last week one of the largest producers in the Eagle Ford, EOG Resources, presented a chart at their quarterly earnings conference call implying that 7 out of 10 production companies surveyed were actually producing 100 percent condensate in the Eagle Ford –i.e. no crude oil. The data EOG presented (originating from a survey carried out by IHS) said that for these 10 producers condensate represents 70 percent of their total crude and condensate production."

Honor system? Economical with the truth? In the oil business? There's *gambling* going on in my casino?
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Re: New study suggests US fracking boom may not last

Unread postby ROCKMAN » Tue 27 Dec 2016, 16:35:48

Z - Anyone can define "condensate" as they choose...even my dog. LOL. The problem develops when trying to consolidate different numbers. And as far as Texas production goes there is only one uniform definition of condensate and that's the number we have to work with. And that definition has nothing to do with API gravity, the producing formation or if it comes from a conventional or unconventional reservoir...frac'd or not.

It's based solely on the physical condition of those hydrocarbon molecules as they exist IN THE RESERVOIR. So it is very easy to know if that tank of 40 API hydrocarbon is oil or condensate: the Texas Rail Road Commission will have already made that designation before it came out of the well head: in Texas if those hydrocarbons existed in the reservoir as a liquid then that's 40 API oil in that tank. If it existed in a gaseous phase in the reservoir then that's 40 API condensate in that tank. And that's the LAW and neither the EIA or anyone else is going to change that state LAW.

And if that doesn't confuse the issue try this: as reservoir pressure decreases that hydrocarbon in a gaserous phase in the reservoir might CONDENSE into a liquid phase while still in the reservoir and is then produced. Yes: a well, by Texas LAW, might produce 100,000 bbls of CONDENSATE during the first half of its life and then during the second half produce 100,000 bbls of OIL as prescribed by Texas LAW. And that's exactly how the production is tabuilated and REPORTED n Texas.

The determination of the phase those hydrocarbon molecules exist in the reservoir is a well established engineering calculation. And the distinction of oil vs condensate is no trivia oddity in Texas: $billions of revenue and thousands of wells have hung in the balance over the decades. The TRRC has strictly regulated "spacing rules". It varies from field to field but here's a reasonable example. Field A is classified as an oil reservoir. As such the operator is allowed to drill a well every 40 acres. So a 480 acre reservoir = 12 wells. But if Field A is classified BY LAW as a "gas/condensate" reservoir spacing could be set at 120 acres = 4 wells. First, 12 wells will produce the reservoir a lot faster the 4 wells. Second, the operator can hold the entire 480 acre g/c reservoir "HBP" (Held By Production) past the primary term by drilling just 4 wells. If classified as an oil reservoir if the operator doesn't drill each 40 acre "unit" it will lose the mineral lease under any undrilled portion once the primary lease term ends.

I'll stop there. Believe it or not I dumbed down the explanation to avoid adding another few hundred words to this post...including a lot more explanation of Texas mineral ownership laws. There's actually an entire set of consulting companies that handle such issues for companies (including some of the biggest) because it's that complex.

This wouldn't be a big issue if Texas wasn't the largest producing state and home to one of the largest unconventional oil AND gas/condensate plays. BTW how many remember in the early days of the Eagle Ford Shale play there was mentioned an "oil window" and a "gas window"? Might make more sense now.
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Re: New study suggests US fracking boom may not last

Unread postby ROCKMAN » Tue 27 Dec 2016, 16:56:52

Z - With respect to what EOG reports in any public statement regarding oil vs condensate I can't say for a fact but more likely they are using the TRRC designation. Otherwise being a public company it might raise issues with the federal govt SEC regulators.

And just the reminder to everyone that as a general rule refineries don't process 60 API condensate or 18 API bitumen from Alberta: they refine "blended oils" with a gravity around 31 to 33 API. Which is why prior to the US shale boom they had to import a lot of light oil to blend with the heavies. Same reason hundreds of millions of bbls of Eagle Ford condensate were shipped half way around the country to eastern Canadian refineries. Likewise didn't forget the 350,000 bbls of US CONDENSATE PER DAY that has been exported to Alberta to blend with the heavy oil sands production so it can be pumped down the pipelines BACK TO THE US. About 25% of those imports are actually the light oils.
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MIT Researchers: US Oil Production Estimates May Be Flawed

Unread postby AdamB » Wed 31 Jan 2018, 17:29:55


There's something odd about the U.S. oil production boom. Yes, the U.S. is now a player on the world energy stage, producing enough to strike fear into the hearts of OPEC's member states. Crude oil production in the U.S. has practically doubled in just 10 years and is now approaching the production levels of OPEC's leader, Saudi Arabia. US Crude Oil Production data by YCharts. That the shale revolution changed the very fabric of the American oil industry is an understatement. Until the ability to frack rock and drill horizontally came along, U.S. oil production had been on a slow, downward slog from its peak in the early 1970s. Now, the sky is the limit -- with the president of the United States calling for U.S. energy independence. But according to researchers at the Massachusetts Institute of Technology (MIT), there is something very wrong with


MIT Researchers: US Oil Production Estimates May Be Flawed
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Re: New study suggests US fracking boom may not last

Unread postby onlooker » Fri 02 Feb 2018, 14:12:09

http://america.aljazeera.com/articles/2 ... ylast.html
He said that even if technologies are invented to access the deeper and less productive shale, they would likely be[b] prohibitively expensive, given that the price of oil is falling rapidly, recently dipping below $90 a barrel.

“When you go out into the fringe areas, it’s not going to be worth it to drill unless oil is [b]$130 a barrel,”
he said.


How did it work out for the Economy last time the Oil price meandered around this level. NOT WELL
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Re: New study suggests US fracking boom may not last

Unread postby AdamB » Fri 02 Feb 2018, 14:19:01

onlooker wrote:http://america.aljazeera.com/articles/2014/11/10/sapping-the-sweetspotshowlongwillusenergyboomreallylast.html
He said that even if technologies are invented to access the deeper and less productive shale, they would likely be[b] prohibitively expensive, given that the price of oil is falling rapidly, recently dipping below $90 a barrel.

“When you go out into the fringe areas, it’s not going to be worth it to drill unless oil is [b]$130 a barrel,”
he said.


How did it work out for the Economy last time the Oil price meandered around this level. NOT WELL


True, but it wasn't doing poorly because of the price of oil. As many others have previously explained, admittedly zealots being zealots, there is no guarantee that they can read very well, so some might still mistake aliens, ocean temperatures, the price of rice in china, or Brent prices, for the ponzi housing game circa 2007-2008 that was the primary mechanism for this particular recession.
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