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Peak Tight Oil By 2022?

Discuss research and forecasts regarding hydrocarbon depletion.

Peak Tight Oil By 2022?

Unread postby vox_mundi » Wed 21 Feb 2018, 11:15:08

Peak Tight Oil By 2022? EIA Thinks It's Possible, Without Even Accounting For This Risk

Robert Rapier:

... Here are the EIA's projections:

Image

Every case assumes at least a few more years of tight oil supply growth. The Reference case shows shale/tight oil production growth of two to three million BPD over the next three years, before leveling off and remaining at approximately that level until 2050.

The Low Oil Resource case projects tight oil growth of another million barrels per day through about 2022, and then a steady production decline until 2050.

... But there's one item that barely gets a mention in the EIA's Annual Energy Outlook. It is something I witnessed firsthand when I was recently in the Permian Basin. Oil production can expand only as quickly as infrastructure can keep up. And it is struggling to keep up.

It's not just crude oil pipelines that are an issue. Along with oil comes associated natural gas. In some cases, producers have no outlet for this gas, so they flare it. But there are various legal limits to flaring. This week, I heard about a producer who is having to reduce production because they are bumping up against their permitted limits for flaring.

In addition to potential infrastructure constraints, higher oil prices also lead to greater demand for oilfield services providers. That leads to higher costs for the oil producers and higher profits for drilling and fracking services providers.

At present, one of the bottlenecks in the Permian Basin is with the fracking service providers, and that is leading to a growing backlog of drilled-but-uncompleted wells (DUCs). This is helping to constrain production in the Permian Basin but was not a risk identified in the EIA's production projections.


BP: Demand for Oil Could Peak By Late 2030s

Global demand for crude is likely to "plateau" during the late 2030s, mostly because of the rise of electric cars and trucks, BP predicted Tuesday in its annual outlook.

BP thinks 320 million electric vehicles will be on the road by 2040, compared with about 2 million in 2016. The company thinks electrics will hit a tipping point and really take off after 2035.

... BP acknowledged its outlook considered a "range of scenarios." Its central case, the "evolving transition" scenario, assumes that government policies, technology and societal preference evolve in a similar manner to the recent past.

BP's forecast for "plateauing" oil demand by 2040 differs from OPEC's view of the future. In November, the oil cartel led by Saudi Arabia predicted that the global appetite for crude would keep growing through 2040.

But even OPEC conceded that oil demand would "decelerate steadily" due to slower economic growth, higher oil prices, energy efficiency and "strong competition from other energy sources."

Another oil giant, Royal Dutch Shell, has predicted peak oil demand could come within 15 years.

BP has become much more bullish on electric cars over the past year. The oil company now expects 190 million electric vehicles will be on the road by 2035, compared with about 2 million today. Last year's BP annual outlook called for a much more modest 100 million electric vehicles in 2035.

By 2040, BP expects oil to contribute to 85% of total transportation fuel demand, compared with 94% today. BP anticipates alternative fuels will "penetrate the transport system" and traditional vehicles will become vastly more efficient, meaning they will guzzle much less gasoline.

BP acknowledged that future electric vehicle popularity is "hard to predict with any certainty" because it depends on factors like government policy, technology and social preferences.

Unlike their American counterparts, big European oil companies are increasingly putting their money where their mouths are by betting on electric cars.
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Re: Peak Tight Oil By 2022?

Unread postby Tanada » Wed 21 Feb 2018, 12:27:51

I find the 'reference case' optimistic, but then again I have been wrong often enough you would think I would learn better.
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Re: Peak Tight Oil By 2022?

Unread postby asg70 » Wed 21 Feb 2018, 13:01:51

There seems to be a 50/50 split between people talking about peak oil supply and peak oil demand. The two are actually not mutually exclusive. It's possible that both may happen simultaneously. Either way, the early 2020s will see the true crest of the EV wave. The more peak oil supply pushes prices up, the more this will goose EV sales, which in turn moderates prices.

It would suck to still be paying off one of those high-priced SUVs people are buying if gas prices spike above 3-4 bux a gallon, but those who are smart will shift over to EVs and carsharing.
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Re: Peak Tight Oil By 2022?

Unread postby Plantagenet » Wed 21 Feb 2018, 13:26:42

The EIA is projecting US tight oil production will increase......and then increase some more.....and then increase even more....and then even more....off into the future for decades to come.

There is no guarantee this will happen. Its more likely the economists at the EIA are simply drawing a straight line or fitting a simple curve through the rising production going on right now and projecting that increase into the future. Its kind of like the opposite of what Hubbert did-----Hubbert came up a simple mathematical that predicted peaks in oil production----the EIA comes up with simple models that project oil production growth for decades into the future.

Meanwhile, when you look at what the people on the ground dealing with the geology and production issues in the Permian Basin and elsewhere in the TOS world have to say....they mostly aren't nearly as optimistic as the economists in the EIA.

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Re: Peak Tight Oil By 2022?

Unread postby ROCKMAN » Wed 21 Feb 2018, 14:07:10

70 - "It's possible that both may happen simultaneously." And that brings us back to the same question I've tossed out numerous times: define "dem. and". Is it (A) the amount of oil buyers would like to buy or (B) the amount of oil buyers are actually acquiring? And now define (A) the volume of oil suppliers would like to be selling or (B) the volume of oil suppliers are actually selling? If (B) is the answer in both cases the demand = supply. Of course there is that amount that goes into storage. But remember much of that oil was BOUGHT by consumers/speculators and thus represent an amount of SUPPLY that satisfies an amount of demand. And let's look at the speculated 20 million bbls that Iran may have stored in tankers. Supposedly it was heavy oil with a high sulfur content that few refineries had any interest in using. IOW there was an insufficient demand. As a result, even though it was produced, it was not supplied to consumers. IOW it was ZERO SUPPLY for that ZERO DEMAND. Or. if you prefer, that 20 million bbl SUPPLY = the 20 million bbl DEMAND = ZERO.

But even without those factors the highest total amount of oil estimated in storage never amounted to more the a weeks worth of global consumption. And that included the "working storage": oil in the process of being transferred between producer an consumer.

But always glad to see how others define supply and demand.

But that's my take on the relationship between supply and demand. Some appear to feel the price of oil. regardless of the volume sold/purchased determines demand. IOW low prices = insufficient demand. Which strikes me as rather odd since the big decrease in oil prices a few years ago lead to both increased production and consumption. And thus we've gone full circle back to supply = demand.
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Re: Peak Tight Oil By 2022?

Unread postby AirlinePilot » Tue 27 Feb 2018, 13:58:13

One has to remember that the EIA tends to be more "political" these days. My guess is with the Trump administration they are being "leaned on" to produce a certain picture. Those projections look VERY optimistic to me.
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Re: Peak Tight Oil By 2022?

Unread postby AdamB » Tue 27 Feb 2018, 22:36:28

Plantagenet wrote: Its more likely the economists at the EIA are simply drawing a straight line or fitting a simple curve through the rising production going on right now and projecting that increase into the future.


It isn't what the EIA is doing at all.

Page 7 from their AEO 2017 documentation.


Plantagenet wrote:Meanwhile, when you look at what the people on the ground dealing with the geology and production issues in the Permian Basin and elsewhere in the TOS world have to say....they mostly aren't nearly as optimistic as the economists in the EIA.


The EIA that underestimated the shale revolution for half a decade? And might I mention the non-economists that work for them, or will that make you just change the subject and pretend you didn't say that economists are doing all the work when you respond with your standard trolling game?
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Re: Peak Tight Oil By 2022?

Unread postby AdamB » Tue 27 Feb 2018, 22:40:13

AirlinePilot wrote:One has to remember that the EIA tends to be more "political" these days.


Really? Have you even talked to any of the people who do this work, or are you just making this up because it sounds good, sort of food for the doomer sheeple type game?

They give presentations on their work, I've seen several. Not a hint of anything political. Have you seen them speak and what, they were wearing make america great again ball caps?

AirlinePilot wrote:My guess is with the Trump administration they are being "leaned on" to produce a certain picture. Those projections look VERY optimistic to me.


The only big forecasting gang that didn't fall for peak oil, so they get more street cred in their projections than anyone else ever known in the history of modern Happy McPeaksters.
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Re: Peak Tight Oil By 2022?

Unread postby marmico » Wed 28 Feb 2018, 10:24:23

How does the super-sizing "cube" fracking work?

Made a pad, drill 30 wells and frack the crap out of it.

http://business.financialpost.com/commo ... or-shale-1
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Re: Peak Tight Oil By 2022?

Unread postby Outcast_Searcher » Wed 28 Feb 2018, 10:47:28

asg70 wrote:It would suck to still be paying off one of those high-priced SUVs people are buying if gas prices spike above 3-4 bux a gallon, but those who are smart will shift over to EVs and carsharing.

By carsharing are you referring to ridesharing via Uber, Lyft, etc? If so, that won't be cheap until fully automated cars become commonplace. Aside from Musk, articles I've read recently are saying the aggressive predictions of automakers, like fully autonomous cars in a few years are mostly marketing hype, and they're tending to back off.

Musk, of course, is not, but who really believes his hyper-aggressive predictions re Tesla except Tesla fanbois? His claims that lidar aren't needed for fully autonomous cars are greeted with incredulity by other makers developing such cars, for example. So we'll have to see. I predict several more delays from his 2018 prediction of a fully self-driven coast to coast drive in a Tesla with Autopilot -- unless he reneges on fully self-driven by a lot.

So for probably something like a decade or more, going to ridesharing may be convenient, but as long as you're paying a human driver, it isn't going to make getting around by car cheap, even if ridesharing is using EV's.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Peak Tight Oil By 2022?

Unread postby tita » Thu 01 Mar 2018, 01:58:16

AirlinePilot wrote:One has to remember that the EIA tends to be more "political" these days. My guess is with the Trump administration they are being "leaned on" to produce a certain picture. Those projections look VERY optimistic to me.

I don't think that the eia is politically biased. They follow their own methodology to forecast oil production, which is mostly based on past data they gather quite accurately.

Long-term forecasts have strong limits in accuracy. EIA just make assumptions about current trends. There is a lot of incertitude, which is why their forecasts have a big range, depending on multiple scenarios.
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Re: Peak Tight Oil By 2022?

Unread postby Pops » Sat 04 Aug 2018, 10:30:17

I know this isn't really a peak oil site anymore but for a bit of variety...

Cunningham @ OilPrice
Some of the surge in U.S. oil production this past spring might have been “a mirage.”

On July 31, the EIA released monthly data on U.S. oil production, which revealed a decline in U.S. output of 30,000 bpd in May, compared to a month earlier. The dip is a surprise, given the widespread assumption that U.S. shale production was continuing to grow at a blistering pace.

To be sure, a big reason for the decline in overall output was the 75,000-bpd decline in production from offshore Gulf of Mexico. But Texas production only rose by 20,000 bpd, a disappointing figure that likely came in far below what most analysts had expected.
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Re: Peak Tight Oil By 2022?

Unread postby Plantagenet » Sat 04 Aug 2018, 11:49:26

Production increases in the Permian of Texas are on hold for 1-2 years because they need to build more pipelines before they can get more oil out. so this plateau in Permian production is purportively temporary.

Still, several lines of evidence actually do suggest US tight oil will peak ca. 2020-22. And since US tight oil production is the main reason global oil production didn't peak 10-15 years ago, IMHO we're right back looking at the same scenario.

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Re: Peak Tight Oil By 2022?

Unread postby Pops » Sat 04 Aug 2018, 12:17:09

I did read where you reported that plant. The interesting thing is Cunningham point out the flattening is earlier than the EIA predicted. FWTW
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Re: Peak Tight Oil By 2022?

Unread postby coffeeguyzz » Sat 04 Aug 2018, 21:42:06

Marmico

That Cube development is only one of several approaches operators are trying.
The big motivation for Encana was to have uniform pressure depletion across one horizon and thereby eliminate parent/child issues going forward.

A different approach is being taken by QEP. (Check out slide #7 in their Dec. 2017 presentation).
QEP is creating pressure walls and buffer zones by targeting several (7?) horizons simultaneously and working across the pad.

Other operators continue to try different approaches with Bakken operators very successful in re-frac'ing/repressurizing with water the parent wells as child wells are completed.

Oh, yeah, Rapier's article ...
No mention of SCOOP, STACK,
and the recent MERGE in Oklahoma?
How about the stacked Powder River Basin?
Rogersville?
Conasauga?
Uinta?
Tuscaloosa Marine Shale?
Paradox?
Trenton Black River to name just a few formations/basins?

Fact is, for folks who do not follow this stuff, unconventional production is INCREASING as smaller operators are targeting fringier, shallower areas like the Clinton Sandstone, Upper Devonian and many more.
New hardware and techniques are giving these little guys this opportunity.

Of course, the True Disbelievers will not accept this as they continue to put credance in sources such as Rapier despite the recognized, long running record of failure.
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Re: Peak Tight Oil By 2022?

Unread postby ROCKMAN » Mon 06 Aug 2018, 12:12:34

Coffee – And as usual some folks fixated on the timing of peak this trend or peak that trend while ignoring the huge positive/negative effects on the consumers/petroleum industry that are at the heart of the peak oil dynamic which have been related to the timing of such peaks. In reality it has been those dynamics that influenced the timing of such peaks or at least the appearance of such peaks.

And no logical reason to believe the POD won’t to have such control for some time into the future. Any trend will peak when oil prices are to low to justify drilling. And the same trend will continue adding production as long as prices are high enough to make drilling economic. IO predicting peak production is essential predicting future oil prices correctly. A feat no one has yet been able to do CONSISTANTLY.
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Re: Peak Tight Oil By 2022?

Unread postby coffeeguyzz » Mon 06 Aug 2018, 17:03:18

Rock

Exactly.
Sure never stops people from trying, though.

As this entire hydrocarbon scarcity/availability topic is so crucial to all of us, I have found it so frustrating that emotions, ideology, politics and rampant ignorance have been so prominently displayed for years now.

Fact is, the amount of natgas that is now accessible in the US is a stupendously large measure.
Oil will be less, but the financial incentives to transition from oil to gas are many and the move is well underway.

Decades of economic growth will be had in regions such as the Gulf and Appalachia as these areas are embracing the bounty beneath their feet.

(North Dakota and Oklahoma are also running with this, much to the benefits of their residents).
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Re: Peak Tight Oil By 2022?

Unread postby AirlinePilot » Wed 05 Sep 2018, 19:39:09

coffeeguyzz wrote:Fact is, the amount of natgas that is now accessible in the US is a stupendously large measure.
Oil will be less, but the financial incentives to transition from oil to gas are many and the move is well underway.

(North Dakota and Oklahoma are also running with this, much to the benefits of their residents).


My brother and I tried very unsuccessfully to come up with a business case to the major gas players in the US and Canada about 8-9 years ago. This included amongst other things, a plan to vigorously move the trucking Industry AND personal automobiles to CNG usage. Unfortunately the MAJOR roadblock involves still on the books regulations (put in place by the Oil industry lobbies over 30 years ago) which make it not cost effective or quick to transition. This plan would have been a boon to the gas players as it would aggressively increase demand for the resource over the course of the next 20-25 years.

We even pitched it. My brother was and still is involved in the industry and had the connections and financial backing. We lacked the ability, AND SO DID THESE COMPANIES we talked to, to remove these restrictions. Their comment on more than one occasion was and probably still is "we dont have the money required to change things through lobbying". Thats the only way shit like this gets done in Washington unfortunately as we learned.

It s a Catch 22, and until the PTB can remove these roadblocks I do not see any real or measurable transition occurring. In other words BAU. I DO NOT DISAGREE with you that we will be flush with this stuff, but until we can make the trucking industry and the personal auto markets move far more quickly we are not really transitioning IMHO. Its just incremental and again, in my opinion, we should have been aggressively shifting many years ago.
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Re: Peak Tight Oil By 2022?

Unread postby coffeeguyzz » Thu 06 Sep 2018, 14:42:56

Pilot

As a long time entrepreneur, I greatly empathize with your brother and your attempts regarding CNG.
Crossing the threshold into commercialization, then effective commercialization, is a ratified achievement for any great idea.

Points to consider now, however...
Energy/price spread between oil and gas is almost 4 to 1.
That is, heat energy equivalent in gaseous form is nearly 1/4 price of same energy in oil form. Obviously, a HUGE economic advantage to whoever can capture this spread succrssfully

Keep an eye out on adsorption technology.

The traditional activated carbon approach is rapidly being supplanted by the explosion in MOF technology. (Metal Organic Frameworks).
Flexible MOFs, liquid MOFs, Interpenetrated MOFs, on and on.

Nanotechnology and material innovation is overwhelming labs worldwide.

The Iranians just claimed to have developed a sub 500 psi container that is much larger than earlier models.
When homeowners can fuel their own cars in their driveway with house supply, big changes will occur.
Retail CNG is under $1.50/GGE all over Oklahoma today.

On a bigger scale, the rapid evolution surrounding LNG hardware, especially in the modularization and down sizing of components is accelerating the Age of Gas into reality sooner than most people would think.
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Re: Peak Tight Oil By 2022?

Unread postby Outcast_Searcher » Thu 06 Sep 2018, 16:59:23

coffeeguyzz wrote:Pilot

As a long time entrepreneur, I greatly empathize with your brother and your attempts regarding CNG.

Agreed. It's tough to get major things to change, especially when logic and politics conflict.

coffeeguyzz wrote:When homeowners can fuel their own cars in their driveway with house supply, big changes will occur.
Retail CNG is under $1.50/GGE all over Oklahoma today.

On a bigger scale, the rapid evolution surrounding LNG hardware, especially in the modularization and down sizing of components is accelerating the Age of Gas into reality sooner than most people would think.

I think you've hit on the major point here. Over time, the big point will be whether there is a very high probability of a sustained (say, over decades) huge cost saving by making such a shift from oil to NG consumption for transpo.

If the cost differential is large enough, other folks with lots of money will come up with a way (bribes, threats, legal incentives? -- it's GOOD to be an elected beltway official) to get it done.

IMO, if the price of oil goes up significantly (say to $150 or more per BBL) and seems likely not to broach, say, $100 for a LONG time -- that would do it. How long near $150 to give that impression? Too hard to tell unless/until it happens, it seems to me.

....

And there are other variables to consider. (These things are NEVER simple, as the world and economy aren't simple.) Some examples, off the top: What will the EV industry be doing to the projected cost of oil as it scales up? What will the clean energy industry be doing to the projected cost of NG as it continues to scale up? What will the increase in NG demand if the trucking (and maybe passenger cars to some extent) shift to NG from gasoline/diesel do to the likely price of NG re the futures market (which WILL react to such inputs)?

Always remember folks -- there's a reason it's super difficult to get rich trading energy futures. If it weren't, the clowns who make a living selling "investment data" pretending they have a clue about future prices could/would simply act on their own advice (instead of sharing it) and become WILDLY rich.
Last edited by Outcast_Searcher on Thu 06 Sep 2018, 17:56:01, edited 1 time in total.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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