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Page added on July 14, 2014
Tech Talk – Here we go again, again
A couple of posts or so ago I mentioned that there are three major problems sitting relatively un-noticed as we head into the mess of Peak Oil. Of these, perhaps the one that gets the least attention is the steady decline in production from existing wells. We are just about at the point where the Alaskan Pipeline will tip over into feeding less than half-a-million barrels a day down from the North Slope. (It sent 501 kbd down the pipe in June with a 98.6% reliability factor). At the same time those in control of the oilfields in the Russia are reporting that Russian exports have fallen to the lowest level in 6 years. This brings back the relatively unrecognized reality of the Export Land Model which Jeffrey Brown first introduced on The Oil Drum back in 2007.
It is worth resurrecting that thinking (which time has proven to be only too true) as we look at the continued declines in production from the UK, as an example. It is not easily discernable from the official Department of Energy and Climate Change, which plots oil production on a monthly basis (with different months having a variety of days):
Figure 1. Monthly production of oil from the fields of the UK continental shelf (DECC ).
Euan Mearns has, however, done the necessary arithmetic and clearly shows the reality of the situation once one converts it back to barrels per day:
Figure 2. UK production of oil and natural gas over the past decade (Euan Mearns)
The steady decline has also been noted by the EIA who commented that UK production fell by 9% from 2012 to 2013. There was a time, back in the days of The Oil Drum, where we debated whether an estimate of 5% for field decline rates was or was not too high. Obviously those days are now behind us, and reality is starting to show numbers that far exceed the rates that, at the time, some thought rather pessimistic. To continue the UK numbers, as OPEC recently anticipated, the decline this year will take the total down to 800 kbd with an 8% decline expected for this year.
The Export Land Model, in its simplest form, can be illustrated with the following plot:
Figure 3. A simplified illustration of the changing production, internal use and exports for an oil producing country, once it reaches a peak in production (Sam Foucher )
The argument that produces the above plot goes along the lines that, as an oil producer (think for a moment of Russia for eg) produces larger volumes of oil, so the economy of that country starts to grow. As that growth continues it demands an increasing amount of energy to sustain the increased internal demand (the green line). However, once production stabilizes or starts to decline (the blue line above) so the amount available for export becomes reduced (the red line).
The three top producers of petroleum products in the world are the United States, Russia and the Kingdom of Saudi Arabia. The United States consumes far more than it produces, and thus is already a net importer of petroleum products, although in the short term, as I noted earlier production gains from the Bakken and Eagle Ford are hiding the problems of decline rate. It is increasingly unlikely that any significant volume of US oil will make it onto the world market.
Saudi Arabia has, for years, controlled the amount of oil that it puts on the market, based on the anticipated global demand, and the supply available from the rest of the world – so that the global price remains at a level to sustain OPEC economies. That has been illustrated over the past couple of years by the increase in production from the KSA to cover the decline from Libya as about a million barrels a day disappeared from the global market. The gains in production from the US helped in meeting global demand and the strain in supply was thus relatively easily hidden. But the KSA has an imminent problem that has largely disappeared from public view now that the eyes of The Oil Drum correspondents have lost that focus.
The major oilfields of the Kingdom are old, and to sustain production perimeter wells were located around the oilfields that injected millions of barrels of seawater a day, to drive the oil towards the center of the fields, where it could be relatively easily recovered from Maximum Reservoir Contact wells drilled along the very top of the reservoirs. But as folk such as JoulesBurn have noted, those wells slowly change in nature, over time, as the oil migration continues, and water injection must move inwards to ensure continued production.
Figure 4. Layout of initial wells at the Haradh III development in the Ghawar oilfield in Saudi Arabia (JoulesBurn at The Oil Drum)
He noted, in the original post, that Aramco had to drill some 52 wells, rather than the estimated 32, to get the production they needed, and that was back in 2010. Since then Ghawar has continued to produce for the Kingdom, but with daily levels of up around 10 mbd, the volumes in the crests of the anticlines along which the oil wells sit within the Ghawar field have been steadily contracting, and although they have carried out some of the most advanced oilwell engineering to sustain production from the attic oil in the older parts of the fields, there are only so many ways you can squeeze a rock before you get out all the oil that you will – and those days are approaching fast.
At the same time (relating back to the ELM) while Saudi production has remained at just under 10 mbd for the past few years, internal demand has been rising at a steadily more rapid rate.
Figure 5. Internal consumption of oil in Saudi Arabia (Index Mundi ).
Hoping to transition some of the current internal demands to natural gas, the KSA has been looking for internal resources to allow it to move away from oil. However the search has not been as successful as hoped, particularly with the search for natural gas, Shell having backed out of the program as a result of the poor results to date.
With internal consumption continuing to rise at more than twice the rate anticipated by the ELM shown in Figure 3, and, at best, stable production, global exports from the Kingdom are of increasing concern.
Which brings us back to Russia, where the new fields that must be exploited to sustain production are in remote parts of Eastern Siberia and the Yamal Peninsula – if not offshore in the Arctic.
Russian oil production has been peaking for some time (falling from 3.4% growth in 2012 to 1.3% in 2013) and is now reported to likely fall by 6.3% over the next two years. Since this implies that Russia is now at peak, the decline in overall production initially will fall below that of Figure 3, though likely only for a year or so, before the rate will be, at minimum, that shown. (The reason for this conclusion comes from the lack of enough investment in the fields where growth can be expected). At the same time internal demand is rising at around 100 kbd or 3% pa slightly above the value assumed for Figure 3.
If none of the three largest producers can even sustain exports, and the ELM explains why they can’t, and world demand continues to rise at the rates projected, then, in even the short-term, something is going to have to give. The logical weakest link is price, with the consequence, that invalidates a lot of the other arguments, of a significant impact on global economic health. As we have seen before, significant increases in price lowers the demand for oil, and thus demand from the various nations will become even more skewed.
The only problem, with this next iteration, is that there isn’t another Bakken or Eagle Ford conveniently sitting waiting to be tapped.
35 Comments on "Tech Talk – Here we go again, again"
rockman on Mon, 14th Jul 2014 8:20 am
There’s a relatively simple way to handle the analysis. I’ve down corporate acquisitions off and on for the last 40 years. Every operator (including moi) does the same thing when you know you’re going to sell: you polish the b*tch up. LOL. You do what ever you can to increase net cash flow: increased production rates even if it decreases URR, you cut maintenance projects, etc. Which is why you don’t take a companies production stream for the last several years on face value. So you take something like the 10 years or so prior and establish a baseline for the company’s decline and calculate a value. Then do the same for the last several years.
And you end up with the perspective they describe above: establish a production model pre-oil price/shale boom and ad a separate boom model. Obviously in the case of the shale boom these two models will differ greatly in their individual decline rate. This would also establish very different URR for each model. The great advantage is that while the heritage production will be little affected by changes in oil/NG prices the late stage model, which is very dependent upon continued drilling efforts, becomes hypersensitive to prices and thus reveals a significant risk factor.
Northwest Resident on Mon, 14th Jul 2014 10:04 am
Very interesting to read how those clever geologists and engineers are using perimeter wells to push remaining oil from the outlying edges of the Ghawar oilfield toward the center where they can suck it out of the ground. I wonder how long that tactic is going to work.
J-Gav on Mon, 14th Jul 2014 10:16 am
The article is a good reminder that the ELM remains pertinent and will bite harder as the years go by.
Nony on Mon, 14th Jul 2014 10:23 am
It’s 2014. What ever happened to the “nosedive into the desert” and “twilight in the desert”? Ghawar hasn’t declined the way Simmons, Saniford, etc. predicted.
Nony on Mon, 14th Jul 2014 10:27 am
The ELM has been a collasal failure and its author has not manned up and admitted it.
From the 2007 essay,
“Figure Two shows Total US Crude Oil and Petroleum Product Imports, which have increased at about 5% per year since 1990. In my opinion, we will see an epic collision between the conventional wisdom expectations of a continued exponential rate of increase in net oil exports, versus the rapidly developing new reality of an exponential decline in net oil exports.”
How are those US imports looking now? Fail, fail, fail.
Davy on Mon, 14th Jul 2014 10:31 am
Noo, get a friggin grip, the US is a butt pimple on total world reserves and who’s latest production surge will peak maybe 2020. Nooster, what about much of the rest of the world?
Calhoun on Mon, 14th Jul 2014 10:33 am
Nony, DUDE! Glad to know that someone has a direct line to KSA and can tell us how Ghawar is doing. While you’re at it can you fill us in on the status of the other fields? Nobody else seems to get that data.
Northwest Resident on Mon, 14th Jul 2014 10:38 am
Davy — Nony’s goal in life is to disprove peak oil. To do so, he obviously spends enormous amounts of time digging through past articles and posts to try to find where in the past 10 – 20 years someone made a prediction regarding peak oil that has not turned out to be accurate. Then, he highlights those inaccurate predictions and uses them to make his case that peak oil is a false “meme”.
In the meantime, the world’s conventional oil fields are collectively in decline and there is no denying that fact. Nony pins his predictions for future oil-aplenty on shale gas/oil formations, and the wonderful technology that will extract that oil from the rocks it is embedded in.
Reality is a bitch, however, and Nony has date with her coming up in the very near future. When the two meet, there is going to be a lot of bitch-slapping going on, and it isn’t Nony who will be on the “giving” end.
JuanP on Mon, 14th Jul 2014 11:25 am
Ah, TOD and ELM, what warm memories. I lurked in the background there every day for many years, but almost never posted a comment, but I remember many of the people here from there.
When I first read Jeffrey Brown’s definition of the Export Land Model, it changed my awareness. While I already understood the mechanics behind it at an intuitive and subconscious level, Jeffrey helped me put a number of pieces in place and get a better picture of the puzzle at a conscious one.
Thanks go to Mr. Jeffrey Brown for his work on the ELM.
Nony on Mon, 14th Jul 2014 11:27 am
Here’s* Red Queen Rune:
“Maugeri does not describe any future decline in average well productivity. My analysis Will the Bakken “Red Queen” have to run faster? of actual well data from NDIC documents a significant decline in average well productivity from 2010 which during H2 2011 stabilized at a total of 85 kb for the first 12 months of flow.”
Enno (a guy on “your side”, but a truth-seeker and sharp as a tack), did an analysis, looking at cum curves. For all intensive purposes, they have stayed the same 2008-2013.
*Last post before the TOD death notice!
Nony on Mon, 14th Jul 2014 11:34 am
The ELM totally fails to account for the US oil boom. I had this round the rosie with Jeff before. He thinks (somehow bizarrely ignoring the history of arithmetic) that the amount of imports going down is irrelevant and the only thing that matters is exporting countries having lower production or more internal consumption. He ignores the impact of importers own production (notably the US and of their reduction in consumption, notably the US).
I like Kopits way, way more. Oh…and he spams the same comments over and over and over. Don’t make the obvious retort, NWR. 😉
rockman on Mon, 14th Jul 2014 11:36 am
NR – Actually in one since peripheral water injection works forever. You just keep injecting water down dip and produce the oil up dip. But the key is how much income you net from that production. Injecting water doesn’t cost a great deal. Lifting the production and separating the oil from the water is the big expense. I haven’t seen reliable numbers for the water cut (WC – the % water in the production stream) for Ghawar but field wide I think it’s above 80% to 90%. Maybe more.
The 4.5 billion bbls of produced oil in the trend I’m currently working came out of the ground with very high WC. My one field recovered 26 million Bo and probably more than 150 million bbls of salt water. Though the trend was developed over 60 years ago many of the original wells are still producing. But typically the WC is 98% to 99%. IOW a typical well might be producing 2 bopd and almost 200 bwpd. Thus the term “oil stained water production”. Had oil prices not boomed many of those wells might have been plugged and abandoned by now.
Ghawar is very different then my field due to scale: netting 12 bopd from the 6 old wells in my field isn’t relevant…if oil were still $30/bbl they might have been P&A by now. But my new hz well producing 125 bopd from the same reservoir is relevant. And my WC is currently 80%. Ghawar producing millions of bopd, regardless of the WC, is a very different animal. And that’s one of the reasons they drilled hz wells in Ghawar: it allowed a much higher total FLUID production rate: a lot more water but, more important, a lot more oil. Their injection, separation and water disposal costs are significant so thus the need to keep the absolute volume of oil as high as possible.
Northwest Resident on Mon, 14th Jul 2014 11:45 am
Nony, let’s go with your very unlikely position that Bakken and other shale oil plays will maintain their productivity far into the future.
We still have the problem that the net energy gain from shale oil is minimal and certainly not enough to power the global economy. The amount of oil used to get that shale oil out of the ground, processed and delivered to market are enormous.
The other problem is that the shale oil extraction only works with prices for barrels of oil produced that are unsustainable. Unless of course you believe that the governments of the world can continue to print trillion$ of QE to compensate for the extremely high cost of shale oil. Do you, or does anyone, think the current economy is sustainable?
Northwest Resident on Mon, 14th Jul 2014 11:51 am
rockman — Thanks for that additional info. Very interesting! I think continued significant production from Ghawar is important to a lot more people than just the Saudi royalty and its loyal subjects.
Bob on Mon, 14th Jul 2014 11:54 am
The Saudis have been forced to bring on other fields for production to maintain exports. Ghawar is getting tired. with increasing internal demand for its own oil, with greatly increasing population now bought off with oil revenue money, it will be interesting going forward.
I suspect the Bakken will peak around 2018-2020 and the US Gov’t agrees with that.
Of course, if the price of oil rises significantly, oil demand will drop and the ‘peak’ moves on out. Like in Kunstler’s Long Emergency where you are on a see-saw of ups/downs in prices. Rising prices lead to fall in economies…will lower demand..which drops price of oil…which then leads to increased economy…which then forces rise in prices as supply can’t keep up…..and the cycle repeats over and over again for two decades….if governments even hold together.
World economies are already struggling with the high oil prices. Without growth, debt can’t be easily paid off. Economies will be staggering under high debt loads going forward. The US has 100 trillion in unfunded liabilities and debt.
J-Gav on Mon, 14th Jul 2014 11:56 am
Nony “The ELM has been a colossal failure.”
Really? The whole idea of it is that, over time (and, granted, nobody knows exactly how much), producers will be exporting less in order to maintain supply and social stability in their own countries. Why is that so hard for you to grasp?
Calhoun on Mon, 14th Jul 2014 12:01 pm
I’m still waiting for Nony’s vision of where oil production is headed. (crickets chirp)
Nony on Mon, 14th Jul 2014 12:02 pm
NWR: I think the debt crisis (moral hazard, banksters) are the bigger problem. I know it sounds weird, but I think the agitated people on the Left (Occupy) and Right (Tea Party) are right. And the Washington establishment (bailout loverz) are wrong. Conventional economics (think Milton Friedman) supports the vast majority of the country which thought it was insane for tax payers to bail out failed derivatives trading desks.
It’s not even just the immediate damage, but the future damage of more of the same. And the erosion of moral standards. (Look at Greece, Iraq, Somalia). There is a progression. Once it becomes “OK to cheat, to lie, to steal” that leads to a damage to the ability to have and enforce contracts.
On the energy, I agree that we are running out of cheap oil. Well, actually I think there is a buttload left in Arabia (if it were drilled like Texas by independents) the price would crash. But if I had wings, I’d fly.
I think the Bakken and Eagle Ford move the needle a bit, but not that much. If you want to make the argument that they don’t matter because of peaking in a few years, because of being only a handful of percent of global oil, that’s a great argument to make and I agree. I just don’t like how peakers weren’t objective. Always believing the negative and disbelieving the positive. They have had the same data as EIA, USGS, Maguiri, investment banks. And at every instance, they talked the Bakken and EF down…and then the US LTO outperformed not just what the peakers said, but even what the objective analysts said. There’s a lesson there. Be careful…and don’t believe anyone’s BS. Even your own.
Northwest Resident on Mon, 14th Jul 2014 12:10 pm
Nony, “the US LTO outperformed not just what the peakers said, but even what the objective analysts said.” True. But the “dent” it made on overall world oil supply was STILL minimal, except that it drastically raised the price for ALL oil sold on the world market.
When it comes to believing one’s own BS, you Nony are the master. You also excel at making big deals out of very minor points — all the better for you to avoid having to deal with the larger reality, which is, we are living peak oil and it is only getting worse. No amount of shale oil/NG will change that fact any more than a gnat landing on an elephant’s ass will register on the weight scale. But it is that gnat — shale oil — that you are primarily focused on, and from which all your know-it-all arguments derive.
Nony on Mon, 14th Jul 2014 12:17 pm
Calhoun: I’ve made predictive comments before.
1. I’ve actually talked about NOT KNOWING. This in contrast to the Ace, Rune, Deffeyes, Campbell types who want to be predictive gurus. (Even Hubbard had a little bit of this wanting to “be the man”.)
2. If I have to make a prediction, I take the middle course. I trust EIA, etc. more than I do the ASPO types picketing on the street (or even worse the die hards hanging here or Gail shark fin or the like).
3. In terms of price, I predict based off the futures curve. After all, that is the Vegas betting line. I lack any insider info…so I go off of that. It remains backwarded.
4. Given, 3, what can we extrapolate? Well, it’s not a price shock (oil has been similar price for 6 years). So it’s predicting either demand drop or supply rise.
5. Given the stock market(s) being high, the markets are not predicting a deeper recession (I agree we are still in a prolonged recession compared to normal BAU), but not one that will get worse. Therefore, supply is likely to increase.
6. Where will it increase? Well, KSA, Kuwait will try to keep prices high…look how they reacted to $40/bbl in 2008! So added production will be from non OPEC (US, CA) or return of smaller, poorer countries like Iran/Libya with constrained supply. Iraq could go up geologically, but has high political risk. Predicting it…could be way more or way less. I guess I would split the difference and assume continued same level.
——-
Net, net: continued plateau of crude plus condensate, edging up slightly over time. Not a shark fin. Not Campbell’s 2% per year declines.
Nony on Mon, 14th Jul 2014 12:20 pm
NWR:
The supply of Bakken oil did not raise the price. It was a RESPONSE TO RAISED PRICE. And it served to limit the raise of price, rather than increase it. Think Le Chatlier’s Principle from chemistry.
If you chat with some of the economists on your side (Kopits, Hamilton), they will validate what I said. Not you. This is quite honestly econ 101.
Nony on Mon, 14th Jul 2014 12:20 pm
NWR:
The supply of Bakken oil did not raise the price. It was a RESPONSE TO RAISED PRICE. And it served to limit the raise of price, rather than increase it. Think Le Chatlier’s Principle from chemistry.
If you chat with some of the economists on your side (Kopits, Hamilton), they will validate what I said. Not you. This is quite honestly econ 101.
Nony on Mon, 14th Jul 2014 12:26 pm
NWR:
You seem to be bimodal. Either Bakken is a complete fraud. Stock manipulation and crap oil and cheated reserves estimates, etc. OR it will go on forever, getting bigger and better. If I don’t believe the former, I must believe the latter.
Northwest Resident on Mon, 14th Jul 2014 12:39 pm
Nony — You’re here to argue about minor points and generate controversy, not to engage in serious discussion. You have claimed in your posts several times that you have been banned from other forums, and it is easy to see why. Which came first — the chicken or the egg? I’ll leave that for you to pompously expound on, since it is the type of subject matter you seem to dwell on. Whether Bakken raised the price of oil, whether I ever even made that claim, or whether the raise price of oil made the Bakken shale production possible — go with it Nony, do your thing.
Shale oil is a brief blip on the radar, a fleeting moment in time. We live in that fleeting moment. Shale oil, like all fleeting moments will soon pass, and along with it so will Nony’s absurd and argumentative “authority” on the subject.
It’s been fun this time around Nony. We’ll do it again sometime. Now, I have to actually get some software development done — deadlines, you know. You take it from here Nony — the last word is all yours.
Nony on Mon, 14th Jul 2014 12:48 pm
Good luck with the deadline, man. I should be working too, not Internet surfing.
nemteck on Mon, 14th Jul 2014 3:28 pm
Why wasting time to respond to Nony. I just skip the comments. He/she may be a lonely person and wants to engage in conversation. Do do this effectively one needs to present ridiculous views to draw attention.
Nony on Mon, 14th Jul 2014 3:35 pm
What does a sadist do to a masochist?
Nothing! 🙂
🙁
Nony on Mon, 14th Jul 2014 3:35 pm
What does a sadist do to a masochist?
Nothing! 🙂
🙁
Northwest Resident on Mon, 14th Jul 2014 4:07 pm
nemteck — It is my natural desire to reach out and help troubled individuals get a grip that leads me to engage Nony, I think. Most of the time I just skip it, as you suggest. Also, for those coming to this forum who are trying to decide whether peak oil is a reality or not, I like to think it is useful for those people to see the discussion between the “regular Joe” role represented by Nony and the “doom is upon us” role played by me.
westexas on Mon, 14th Jul 2014 5:54 pm
Changes in production and consumption in net oil importing countries certainly affect the demand for Global Net Exports of oil (GNE), but by definition, changes in production and consumption in net oil importing countries have no direct impact on the supply of GNE.
Energy Investor on Mon, 14th Jul 2014 7:00 pm
Nony,
I am only an energy investor because I discovered in 2004 that the EIA and IEA were fiddling the figures for both future production volumes and price of crude oil. It is impossible to be dramatically wrong every year for five years in the direction of gross over-optimism and not notice it. Then it is impossible to justify the reason for continued over-optimism.
After several successive years of study, I came to the conclusion that the reason was simply for governments to avoid “frightening the horses” while they tried for substitutes and alternatives. For oil companies, the need to raise money to drill and thereby stay in business trumped everything and hence the pattern of lies and deceit spun by officialdom.
Oil prices came to the rescue, allowing more sophisticated and costly extraction techniques and new finds continued, merely sufficient to justify the rubbishing of “peak oil theory”.
And so BAU continues. But at some point it will not do so.
My analysis of the financial crisis of 2008 is similar to your own, but mine was sophisticated enough for me to predict the GFC in mid 2007 – down to collapse month in 2008.
The EROEI and oil price impacts on global prosperity have been a drag since 2004 or so. Yes we do have more “all liquids” but the drag on the financial system is getting worse and not improving if you look behind the official stats.
The next financial crash – probably due sooner than you think – will not lead any economists to recognise the nexus between oil and prosperity. But plans have been laid for the next crash to be paid for directly by the world’s savers via “bail-ins”. Governments and central bankers can then avoid public displeasure for bailing them out.
Already the total derivatives are over USD750 trillion once again and no banks hold reserves to cover their contingent derivatives liabilities because none show them in the balance sheets. No one party with significant exposure has any greater ability to understand their exposure to the failure of counter-parties than they had in 2008.
The BIS understands what is coming and why – but only from an economic perspective…unable to understand causation. It is the causation that will stop us recovering from GD1. This may interest you?
http://www.telegraph.co.uk/finance/markets/10965052/Bank-for-International-Settlements-fears-fresh-Lehman-crisis-from-worldwide-debt-surge.html
Eventually, the dynamics of new technology and extreemely high prices will allow us to migrate much of our transport energy away from oil. But in the coming period of transition, the extent of damage will be as unpredictable as the timescale for the horrific transitional strife.
I would encourage you to spend more time looking at the interface between money-printing and credit expansion and the deterioration of the net benefit we derive from “all liquids” as opposed to what once was crude oil. You will eventually find the relationship, but it will worry you as it did me because it looks more like a “perdicament” than a “problem”.
May I rudely suggest you research more and post less here while you do that? I apologise for my arrogance but it is due to my reluctance to keep sifting through your frequent posts to work out which are informed and which are not.
My specialisation is consulting to distressed organisations as a CMC. I am well used to clients trying to fix symptoms while ignoring causation. Like with peaking of inexpensive crude oil, no-one in authority is game to fess up to dealing with the core issue. As is invariably the case, it is because that is seen as too difficult or unpalatable in the short term.
The “law of holes” works for most of my clients when I consult to them. When they accept they are in a hole, I encourage them to stop digging. It works every time.
But finding effective, cost competitive and scalable energy storage alternatives to oil? Now that is a bigger problem than any I have faced to date.
It makes me regret that I am at the end of my career. 🙂
Nony on Mon, 14th Jul 2014 7:11 pm
I will stop posting so much.
Calhoun on Mon, 14th Jul 2014 7:22 pm
Nony,
The NOT KNOWING part I can easily believe. But that’s just a dodge and I’m sure you know it. If you are unwilling or unable to offer a vision (not an exact prediction) of where oil production is headed in the next ten years then you have no basis to criticize others who have made honest attempts to do so. You’re like the kid in the Simpsons whose role is to say “Ha ha” every time something happens to someone else.
So let’s have it. Let’s have your vision? Oh, you don’t have one? After all your reading, all your blogging, all you rants you don’t have any opinion about where things are headed? It’s all just que sera sera? Then I can only conclude that you have nothing to add to the conversation, though I am certain nothing will stop you.
Norm on Mon, 14th Jul 2014 10:38 pm
No need to worry. I was driving my 40 foot motorhome thru Nebraska last week,
http://www.motorhomeclassifieds.com/images/5444/189709/1_4.jpg
and on Sunday morning pulled into a church and the preacher said Jesus will refill the wells from below. That was such a sweet thing to hear, i put a hunndred dollars into the collection plate then went to a fillup station, after that a nice big pancake breakfast at a roadside diner.
Dragon Oil on Tue, 15th Jul 2014 1:08 pm
KSA will continuen tom produce increasing amounts of water to maintain flat oil production regardless if it is for internal or external consumption. The injected water is only for pressure maitenance and is counter productive from a relative permeability standpoint. That principle simply states that permeability to the “non-wetting fluid” is inversely proportional to the permeability of the wetting fluid. Water is the wetting fluid and oil is the non-wetting fluid. ie. if you pump more water in, the permeability to oil will go down. The KSA knows this and has known it for decades, but water is cheap (seawater) and non-compressable. Of course once you pump the water out, you have to pump it right bach in + make-up water for the oil you took out. Thus water input will increase over time and eventually oil production will decline. I’m guessing that some time before that happens, KSA will allow CO2 from Europe to be pumped into the field(s) along with water as a make-up for produced oil.Eventually this will result in decreasing amounts of water being pumped in and a gradual increase in reservoir energy since the CO2 will be recycled. This will reverse the relative permeability problem created by increasinly pumping water in and oil out.KSA is not stupid. Just wait for it. The europeans are destined to pay for their imported oil twice. Once as oil coming out and again as CO2 going back in.