Peak Oil is You
Donate Bitcoins ;-) or Paypal :-)
Page added on December 19, 2012
Future production from U.S. shale or tight oil
I attended the American Geophysical Union meeting in San Francisco two weeks ago at which I heard a very interesting presentation by David Hughes of the Post Carbon Institute. He is more pessimistic about future production potential from U.S. shale gas and tight oil formations than some other analysts. Here I report some of the data on tight oil production that led to his conclusion.
A number of analysts have issued optimistic assessments of the future production potential of U.S. shale or tight oil. For example, the International Energy Agency recently predicted that the U.S. would be producing over 10 million barrels per day of oil and natural gas liquids by 2020 before resuming a gradual decline. Citigroup is even more optimistic.
 |
 |
David Hughes has been studying detailed data on each individual well in shale gas and tight oil formations in the United States as part of a study that will be released by the Post Carbon Institute in February. The most successful new oil-producing region is the Bakken in North Dakota and Montana, which currently accounts for 42% of the U.S. tight oil total and accounts for about 1/5 of the tight oil production that is projected by Citigroup for 2022. Hughes finds that once output from a typical Bakken well begins to decline, within 24 months its production flow is down to 1/5 the level achieved at its peak. This is in line with estimated decline rates separately published by the North Dakota Department of Mineral Resources.
 |
Given the observed decline rates on existing wells, it is then a straightforward mechanical exercise to ask the following question. Suppose that no new wells were drilled after 2010. What would the path of Bakken oil production then look like?
 |
Increasing the annual production thus requires not just new wells but an increasing number of new wells each year; Hughes estimates that 820 new wells are needed just to offset Bakken field decline. But a second feature in the data posing challenges for that plan is that while a few wells in the Bakken have proven to be very productive, the average well productivity is much lower. A limited number of lucrative sweet spots account for much of the success so far.
 |
 |
Hughes argues that there are limits to the number of new wells that will plausibly be drilled each year and the number of available well locations. These factors make achieving the IEA or Citigroup objectives difficult and mean a much more rapid decline in the production rate after the peak is reached. For example, here are Hughes’ calculations if the current drilling rate were maintained– 1500 new wells per year leading to a tripling in the number of operating wells– and if the EIA’s estimate of remaining productive locations is accepted. By contrast, the Citigroup projection of a continuous plateau after reaching peak production would require tens of thousands more well locations than estimated to be available by the EIA.
|
Oil produced from shale or tight formations is going to be very helpful to the U.S. economy. But this is an expensive way to try to get oil, and there may have been some overselling of how much these fields are actually going to deliver.
3 Comments on "Future production from U.S. shale or tight oil"
Plantagenet on Wed, 19th Dec 2012 11:05 pm
Dr. Hughes seems to have forgotten the basic stratigraphy he learned in Geology 101. The Bakken is just one of a series of tight shale formations in North Dakota. The same drilling location can be used over and over again to access different oil shale formations. Even more striking, the same drilling locations can be used to access huge areas around each pad using horizontal drilling—i.e. many more than one well is drilled from each drilling site.
The problem with the Bakken and other shale oil formations is not a lack of drilling sites—its a lack of oil production over time.
BillT on Thu, 20th Dec 2012 3:28 am
As all of the choice sites are already under the pumps, I see this fuel source declining, not growing over the next decade. Where is the money going to come from to drill these new wells, and what is the EROEI of this type of production?
Basically, how much energy is used to get how much energy? Funny that that is the most important statistic or graph, but it is NEVER mentioned in ANY articles? Are the authors afraid to publish the FACT that the per capita energy supply has been CONTRACTING since the mid 90s and nothing is or will change that decline into the far future. Eventually an energy ‘Sandy’ will hit and it will no longer be ignored.
mustang1919 on Thu, 27th Dec 2012 6:56 pm
you sound pretty concerned bill