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Peak conventional oil

General discussions of the systemic, societal and civilisational effects of depletion.

Peak conventional oil

Unread postby tita » Wed 12 Oct 2016, 03:14:54

Well, we all know that conventional oil peaked 10 years ago, right? Or it is at least something we usually read on various website or forums, and that we entered the era of expensive oil, which brought shale and oil sands and NGL etc. to replace the depleting cheap ressource we had.

Actually, conventional oil didn't peak in 2005, and didn't deplete. It increased to new heights in 2014:
Image

Probably went even higher recently with the increases from OPEC, Russia, return of Iran. Of course, without unconventional shale and tar sands, global oil production would not be at the levels of today (and thus causing an oil glut). But conventional oil is the biggest contributor... Just by not depleting. But how did this happened after the thought peak conventional oil happened following a peak in discoveries.

Well... Producers simply drilled new wells in fields that were not yet fully developped (or not at all), but yet discovered. Vankor field in Russia is a typical example. It was discovered in 1988 but only began production in 2009 (21 years later), with 300kb/d aimed to increase to 500kb/d at its peak. And this is not a lone example around the world, some of them being fully developped 30 years later.

Small fields, with reserves of a few millions barrels and rates of less than 10kb/d became also economic to develop with high prices, while they were simply dismissed at the time of they discovery. It's not much, but there is a lot of them, so you end up with big numbers in the end.

EOR is another answer, increasing known reserves from oil fields actually producing, thus increasing the rate. But it is not really new technology, as it began to be applied in the 70's.

But the list of options gets lower as time passes. As we develop all known fields, discover not enough new ones and apply EOR wherever it's possible, only depletion can happen. Price doesn't correlate with bigger discoveries. It increases options on what we found.

So, at some point, conventional oil will deplete and we will have to rely only on unconventional to replace and increase production for our needs. It will be interesting to watch if it is possible.
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Re: Peak conventional oil

Unread postby sparky » Wed 12 Oct 2016, 14:39:32

.
What you are writing is true , but the main question is can the unconventionals be scaled up to 50Mb/d ?
can it even be scaled to 10 M/b/d ?
I don't know for sure but would be pretty skeptical
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Re: Peak conventional oil

Unread postby Outcast_Searcher » Wed 12 Oct 2016, 14:51:52

Is the debate even important, re the details?

I think the big question is, can sufficient supplies of crude be maintained to supply the demands of the global market, without raising prices to levels high enough to badly hurt the economy over time?

(I know 99% of motorists don't much care whether supplies are conventional, unconventional, fracked, etc. They care how much transpo fuels cost, and whether they have to stand in line or worry about suppies in future months.)

So we need to define "badly hurt the economy over time" since that seems to mean much different things to, say, the short term economic hard-crash doomer crowd than to the cornies. I'll define it as not throwing the world into a global recession. I'll define a global recession as OVERALL negative global growth, since so many here want to define, for example, growth in China under 7% as a recession or even a depression.

Over time, green alternatives are going to continue to grow. Whether they can grow faster than the overall global demand for transpo fuels (given third world growth in demand) is, IMO, an open question, as there are a LOT of moving parts in play, plus technology continues to change.

I suspect that over the next couple of decades that it will be a more interesting horse race than the fanbois of various scenarios are willing to admit.

There, I've made a prediction, so of course that will rapidly be proven wrong. LOL
Popcorn in hand, I plan to enjoy the ensuing show.
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 conventional oil

Unread postby ROCKMAN » Wed 12 Oct 2016, 19:41:10

tita - "Small fields, with reserves of a few millions barrels and rates of less than 10kb/d became also economic to develop with high prices, while they were simply dismissed at the time of they discovery."

Certainly you're not including the US, are you?. We've had hundreds if not thousands of fields that fall into that category. As far as EOR goes it is a great way to pull more oil out of old fields. Which is why it's been applied to the vast majority of fields for 30+ years where it has made economic sense.
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Re: Peak conventional oil

Unread postby ROCKMAN » Wed 12 Oct 2016, 19:46:21

sparky - "...can the unconventionals be scaled up to 50Mb/d ? can it even be scaled to 10 M/b/d ?"

Don't you think the last 10 years (thanks to record high and apparently unsustainable oil prices) has provided a hint?
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Re: Peak conventional oil

Unread postby AdamB » Thu 13 Oct 2016, 10:54:04

tita wrote:Well, we all know that conventional oil peaked 10 years ago, right?


Define conventional oil please.

42API light sweet from Yates, as opposed to 42API light sweet from the Bakken.

How is one oil more conventional than the other?

I ask because the term is both time dependent (Ghawar was once completely unconventional in terms of ability of humans to access it) and is generally used among the adherents to peak oil theory (yesterday, today or tomorrow, them being confused quite a bit on the when) to claim that one oil is more important than another. Based on any and all physical characteristics of the oil they choose, color, density, geographic location, whether or not the drilling takes place on a drill ship, jackup or land rig, and a host of things that have nothing to do with the oil. Or the rock it resides in. Perhaps carbonate reservoirs are unconventional? Perhaps clastics? Low perm? High perm? Natural fracture production from the devonian shales or overlying Mississippian, produced during the late 1800's in Ohio and West Virginia? All producing the same quality of oil?

So...what is conventional oil? And when? Unless you are just looking to support the poor idea that these subdivisions are needed to help the peak oil movement keep up hope in the face of their peak oil claim of a decade ago having been drowned in all the oil that folks knew about, and technology and price allowed to be produced?

Because THAT is the key here, not the conventionality of the oil, or reservoir, or water depth, or oil density or color, or the rock it is in.

This matters. And note, as we go deeper within the pyramid, the resources available go up. Substantially.

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Re: Peak conventional oil

Unread postby tita » Thu 13 Oct 2016, 12:06:52

Rock - I wasn't specifically thinking about US when I talked about very small fields. Even France, who produce only 20 kb/d, still drill some prospects and bring new production. Of course, it is ridicully low, but nontheless part of the global production. What happened in France happened also in the US, but on a very much larger scale, and also in the rest of the world. But it was hindered by the shale boom, which occupy most of the debate.

My point here is to take out the unconventional oil (which is a debate where we don't have all the answers) and focus on the dynamics of conventional. Like: did conventional oil production increased in the US in the last ten years? EIA tells that in the US 4.9Mb/d of shale were produced in 2015, while total production was 9.4 Mb/d. That means that 4.5Mb/d were conventional, 700kb/d lower than 2005. So, even with sustained prices, conventional oil is due to deplete at some point. This wasn't the case in the beginning of the 80's, when US was increasing production (at the cost of thousands rigs).

"...can the unconventionals be scaled up to 50Mb/d ? can it even be scaled to 10 M/b/d ?"

I don't know. Yes we have some hints that it's costly, needs a lot of rigs, depletes quickly the first year, can ramp up fast. We don't know if it can be reproduced on a large scale outside US, how much reserves we have (vary with the price).
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Re: Peak conventional oil

Unread postby tita » Thu 13 Oct 2016, 13:23:55

AdamB wrote:Define conventional oil please.

Very good question. Why do we label LTO unconventional when the final product is the same? I'm not an expert, so I ask wikipedia:
These oil sands resources are called unconventional oil to distinguish them from oil which can be extracted using traditional oil well methods


Voilà. If you just drill a well and pump oil from a reservoir where it was accumulated, this is conventional oil. If you have to do anything else to get that oil (like fracking), then it is unconventional. And we can argue about EOR, and if it means that reserves developped with it are unconventional or not...

Well, I just wanted to put LTO and oil sands apart to see how the "cheap" and "easy" oil is doing right now. And I didn't created this subdivision in the first place. I read frequently that conventional oil peaked 10 years ago, and wanted to understand what it meant and if it was true.
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Re: Peak conventional oil

Unread postby ROCKMAN » Thu 13 Oct 2016, 17:56:31

tita - "If you just drill a well and pump oil from a reservoir where it was accumulated, this is conventional oil. If you have to do anything else to get that oil (like fracking), then it is unconventional. And we can argue about EOR, and if it means that reserves developped with it are unconventional or not..." And back to the same boring point I've made for years: there are no definitions for "convention" or "unconventional" oil because there are multiple definitions. You can make up any you want. For instance there have been THOUSANDS of vertical non-shale wells drilled and FRAC'D decades ago and produced exactly as vertical wells that weren't frac'd. So...conventional or unconventional? Which ever you like since you're as free as everyone else to do so.

But do you know where the terms conventional and unconventional came from? Certainly not sites like this. They were picked up from the oil patch where we've used those terms for many, many decades. And guess what they infer about the oil...nada, zip, NOTHING. We describe conventional and unconventional RESERVOIRS...not oil. As an aside: have you have rarely if ever seen conventional or unconventional NATURAL GAS used? Wonder why?

The terms describe the character of the POROSTY in the reservoir. Porosity is the void (non-rock) portion of the reservoir where the oil, NG and water exist. Imagine a hand full of sand. The space between the sand grains is the porosity...a conventional RESERVOIR. Imagine the pores have a lot of minerals grown in the pores...especially in the tiny passages between the bigger pores...we call them "pore throats". If those pore throats are plugged off to a fair degree it can be very difficult for the oil/NG to move through the reservoir.

What to do, what to do? You FRAC the mother f*cking CONVENTIONAL RESERVOIR. LOL. Connecting millions of those pores which now have a much easier flow path to the well bore. So what do you can the oil produced from a FRAC'D CONVENTIONAL RESERVOIR? Easy: we call it OIL.

What's an unconventional reservoir? Think of a rock with pores and fracture planes. And those long but very narrow fracture planes contain oil or NG. No argument there: every geologist would call it UNCONVENTIONAL. Now here's a question for you: you drill and complete such a well BUT DO NOT FRAC IT but it flows hundreds of bopd. So tell me: conventional or unconventional OIL? That's not a theoretical question: during the 90's that was the hottest play on the planet...thousands of well drilled in the Austin Chalk formation in Texas. So Well A is producing conventional OIL by some definitions from the Austin Chalk. But Well B that is 5 miles away is a poor non-frac'd Austin Chalk well so it's frac'd and becomes a good producer. So is this well producing UNCONVENTIONAL OIL? CONVENTIONAL OIL?

But what would the Rockman call it? Easy answer: it's just f*cking oil. LOL. IOW it's oil being produced from an UNCONVENTIONAL RESERVOIR. And that oil might have the identical composition of production coming from a CONVENTIONAL RESERVOIR.

Shales and some limestones can actually have a lot of porosity but the pore throats are so small (the much largest pores are very tiny compared to a sandstone reservoir). But the fractures could be filled with oil/NG. A vertical well might cut very few of those near vertical fractures and thus produce little oil/NG. But now drill a 3,000' horizontal well bore and instead of cutting just a few fractures it cuts many dozens of fractures and you make a great NON-FRAC'D HORIZONTAL well in an UNCONVENTIONAL reservoir producing oil...just plain ole OIL. And that's what the Austin Chalk play was.

So why frac some naturally fractured reservoirs even when you drill a horizontal well bore? Easy answer: the well bore didn't cut enough fractures. So you frac the hz well bore to reach out to cut the existing natural fractures. Which is why we've seen longer laterals and frac stages go from a half dozen to 64 or more: to cut more natural fractures. Very necessary when drilling into less sweet areas containing fewer natural fractures.

But now you can prepare yourself for mucho different definitions. Enjoy. LOL.
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Re: Peak conventional oil

Unread postby ROCKMAN » Thu 13 Oct 2016, 18:13:10

"...and wanted to understand what it meant and if it was true." If that stat is correct the proper phrasing would be: oil production from conventional reservoirs (or fields) peaked 10 years ago. But it still isn't that simple: some of the oil produced 10 years ago was coming out of UNCONVENTIONAL reservoirs, such as the Austin Chalk. The only way to determine the date of peak "conventional oil" is to go back at least 60 years and separate oil production from the conventional and unconventional reservoirs.

Now you see why so many hang their opinions on undocumented GENERALITIES...the FACTS really take a lot of work. LOL.
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Re: Peak conventional oil

Unread postby sparky » Thu 13 Oct 2016, 18:16:18

.
On the possible scaling up of unconventionals crude , OK there has been a growth of ~ 2 Mb/d
but I'm not aware of other sites having been opened for serious production beside the US tight oil and Canadian tar sands .
there is the X-heavy of the Orinoco , nothing much is happening there ,
Russia and Brazil haven't ramped up their extraction much beside pilot projects
and the rest of the world is struggling with environmental opposition , unsuitable geology and price turmoil

So back to my query , unconventionnals have some record of producing , even at low price
can extraction be increased ten fold to 20Mb/d for a decade ?

Maybe , maybe not .

P.S. found this site , they have some fun pictures
http://www.tarsandsworld.com/
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Re: Peak conventional oil

Unread postby ROCKMAN » Thu 13 Oct 2016, 22:12:09

sparky - "...the possible scaling up of unconventionals crude , OK there has been a growth of ~ 2 Mb/d". I don't get your numbers...where did they come from? The EIA shows an increase in US shale production alone of a tad over 4.5 mm bopd at the peak and has fallen about 500k bopd as of the most recent count.

http://www.eia.gov/energy_in_brief/arti ... states.cfm

And given that during a high oil pricerpricer period the US accounted for almost every bbl of shale production while the rest of the gained nothing worth mentioning I wonder why anyone bothers to hold out hope for global shale boom. If it didn't happen after years of high oil prices and many hundreds of $BILLIONS invested what future price and budgets would be needed for such a global surge?
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Re: Peak conventional oil

Unread postby sparky » Thu 13 Oct 2016, 23:27:43

.
Sheer necessity if (when) crude oil surge would certainly make all environment objections moot
geology and infrastructure access are more permanent limitations ,
after all Siberia is not Dakota
and the sad case of Poland unsuitability for fracking has demonstrated that having deposits doesn't means one can get them out .
Is an horizon line of 10Mb/d possible for North America ?
one must consider the problem of the horrendous depletion rate of the best deposits ,
leaving the not so good not so rich fields to be picked over
there is good grounds to believe unconventionals wouldn't be the savior of the gas guzzling economies
still , I'm sure with a solid price support , production would pick up quite fast .
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Re: Peak conventional oil

Unread postby Tanada » Fri 14 Oct 2016, 09:00:30

ROCKMAN wrote:sparky - "...the possible scaling up of unconventionals crude , OK there has been a growth of ~ 2 Mb/d". I don't get your numbers...where did they come from? The EIA shows an increase in US shale production alone of a tad over 4.5 mm bopd at the peak and has fallen about 500k bopd as of the most recent count.

http://www.eia.gov/energy_in_brief/arti ... states.cfm

Given that during a high oil price period the US accounted for almost every bbl of shale production while the rest of the gained nothing worth mentioning I wonder why anyone bothers to hold out hope for global shale boom. If it didn't happen after years of high oil prices and many hundreds of $BILLIONS invested what future price and budgets would be needed for such a global surge?



What about the Vaca Muerta in Argentina? I am under the impression that exploration and development has continued and they will be starting substantial production there within a few months? I also seem to recall that KSA is exploring for shale methane right now as a way to refit their electric grid to burn Natural Gas instead of petroleum?
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Re: Peak conventional oil

Unread postby sparky » Fri 14 Oct 2016, 09:09:27

.
As I've said , all the other non-North America are at the project or pilot stage .
should some sustained output take place then OK
until then it's no more than some flourish
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Re: Peak conventional oil

Unread postby ROCKMAN » Fri 14 Oct 2016, 11:59:32

T - Lots of optimism about the future but not much to brag about today as far as actual production goes:

"In an interview with Bloomberg TV from Buenos Aires, Dudley said BP is planning on acquiring more assets in the Vaca Muerta. And it isn’t just the “enormous potential” from the oil and gas reserves in the shale basin, but also the friendly policy put forth by the new Argentine government led by President Mauricio Macri. “I’m really encouraged by what I see,” Dudley said. “There’s a lot of future here.” BP has a joint venture with Bridas Corp. – BP owns 60 percent of Pan American Energy LLC and Bridas controls the other 40 percent. BP will expand its presence in Argentina through this JV.

Argentina is quickly becoming one of the few countries that has achieved shale development outside of North America. One of the biggest incentives the government has offered is regulated oil prices, set at levels higher than the international price. Several of BP’s peers are already drilling in the Vaca Muerta, including Chevron, ExxonMobil, and Royal Dutch Shell."

Right now the Argentina govt wants to be Big Oil's f*ck buddy. And while companies (especially Big Pubcos) are desperate to add reserves to their books they haven't forgotten the country's history of how they've treated ex-pats in the past.
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Re: Peak conventional oil

Unread postby AdamB » Sat 15 Oct 2016, 18:11:13

tita wrote:
AdamB wrote:Define conventional oil please.

Very good question. Why do we label LTO unconventional when the final product is the same? I'm not an expert, so I ask wikipedia:
These oil sands resources are called unconventional oil to distinguish them from oil which can be extracted using traditional oil well methods


Voilà. If you just drill a well and pump oil from a reservoir where it was accumulated, this is conventional oil.


Wikipedia doesn't know any more about conventional oil than it did peak oil apparently. I remember back in the day when they considered Richard Heinberg an "industry expert" rather that what he really was trained in.

But the question remains unanswered, because of A) your belief that wiki knows much of anything and B) the question, it was about conventional OIL, not the technologies involved to reach it or produce it.

tita wrote: If you have to do anything else to get that oil (like fracking), then it is unconventional. And we can argue about EOR, and if it means that reserves developped with it are unconventional or not...


You aren't described anything about conventional, or unconventional, oil.

tita wrote:Well, I just wanted to put LTO and oil sands apart to see how the "cheap" and "easy" oil is doing right now. And I didn't created this subdivision in the first place. I read frequently that conventional oil peaked 10 years ago, and wanted to understand what it meant and if it was true.


The subdivision was created when peak oil didn't happen as expected, because peak oilers don't know much about petroleum geology. Or economics. So they invented another category so they could say that peaked, in order to make a distinction without a difference to the consumers. Who, at least in America, are now running around appreciating the current glut caused by new supply, regardless of source. Because really, they don't care, and it doesn't matter.

"Conventional" also has a time component, "conventional" oil as defined only by the producing technology used to get it ended in 1901 when the rotary table unleashed spindletop, using a new and more efficient method of drilling than had previously been the primary provider of crude oil.

Peak oilers tend to miss this one as well, because the history of the industry they misrepresent isn't known to them either.
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Re: Peak conventional oil

Unread postby AdamB » Sat 15 Oct 2016, 18:16:57

ROCKMAN wrote:tita - "Small fields, with reserves of a few millions barrels and rates of less than 10kb/d became also economic to develop with high prices, while they were simply dismissed at the time of they discovery."

Certainly you're not including the US, are you?. We've had hundreds if not thousands of fields that fall into that category.


Tens of thousands according to the Nehring Database Rockman. If I recall correctly, back in the late 90's the Dallas office of the EIA maintained a file of all fields in the US, including some that would knock a history buffs socks off, and that number of fields was >45,000, probably 44,000+ being of the size class being discussed here.

ROCKMAN wrote: As far as EOR goes it is a great way to pull more oil out of old fields. Which is why it's been applied to the vast majority of fields for 30+ years where it has made economic sense.


Oh, there are more requirements than just making economic sense. Political sense has become an issue as of late as well.
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Re: Peak conventional oil

Unread postby ROCKMAN » Sun 16 Oct 2016, 00:36:07

Adam - And adding to the confusion...from the EIA:

Tight gas (or oil) refers to natural gas (or oil) produced from low-permeability sandstone and carbonate reservoirs."

So how does one classify production from a Permian Basin well drilled horizontally and frac'd in a low permeability sandstone and carbonate CONVENTIONAL reservoir?
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Re: Peak conventional oil

Unread postby AdamB » Sun 16 Oct 2016, 09:04:14

ROCKMAN wrote:Adam - And adding to the confusion...from the EIA:

Tight gas (or oil) refers to natural gas (or oil) produced from low-permeability sandstone and carbonate reservoirs."

So how does one classify production from a Permian Basin well drilled horizontally and frac'd in a low permeability sandstone and carbonate CONVENTIONAL reservoir?


I attended the most recent EIA conferences and spoken with those folks, they really don't like calling shale production shale production, because of the issues of migration from source rock to a nearby by "tight" formation, such as the Middle Bakken, compared to the upper and lower , which are shale, and the middle which isn't. Shales being low permeability, it really seems easier to just lump shales with tights and call everything tight gas or oil.

So that scheme makes perfect sense in terms of how to differentiate normal production from tight production, WITHOUT getting conventional/unconventional involved. The terms I've heard them use are "discretely reservoired" versus "light/tight oil/gas", skipping the entire conventional/unconventional nonsense altogether. Seems like a reasonable compromise, and recognizes that nobody gives a crap about unconventional/conventional when in fact oil is oil, gas is gas, it is trapped in rocks of all types and permeability, and regardless of the rock it sits in, it can be turned into the products the consumer wants, and in the end that is all that matters.
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