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Page added on June 13, 2015
“There Could Be Trouble” As US Fracking Revolution Prepares to Go Global
A new report showing the U.S. overtaking Russia as the leading producer of oil and gas in the world should put to rest any doubt that the fracking revolution that has occurred in the U.S. is for real, or as BP’s chief economist put it, “profound.”
And now with the recent Environmental Protection Agency report on the impacts of fracking on drinking water being touted by the American Petroleum Institute as proof that fracking is safe, the industry’s insatiable greed got another boost. More recently, the Harvard Business School has also joined in the discussion calling for the end of the ban on exporting U.S. crude oil and warning about the implications of missing the “opportunity” offered by fracking.
So with all of this momentum, what does ExxonMobil CEO Rex Tillerson think should be next? Less regulation. As previously mentioned on DeSmog, at this year’s CERAweek conference Tillerson complained that the industry was overly regulated and held back by “the noise.”
“Regulators must look at facts and they must look at sound science and not just respond to the noise,” Tillerson said.
As Tillerson and the industry get set to roll out the fracking revolution to every possible shale location in North America and the rest of the world, now is a good time to review what the inventor of modern fracking had to say on the subject of regulating his invention.
Fracking Inventor Warned of Trouble
George Mitchell became a billionaire due to fracking but even that amount of money didn’t keep him from speaking the truth about his invention. In an interview with MarketPlace a year before his death in 2013, Mitchell was clear that without strong regulations, fracking was a serious danger to the environment.
“I’ve had too much experience running independents,” Mitchell says. “They’re wild people. You just can’t control them. And if it doesn’t do it right [sic], penalize the oil and gas people. Get tough with them.”
As with many inventors, Mitchell was a bit of a dreamer. Thus his tendency to spout fantasies about the government getting tough with the oil industry.
Mitchell reiterated his concerns about fracking in an interview with Forbes when asked why fracking needed strong regulations saying, “if they don’t do it right there could be trouble.”
He wasn’t even talking about the earthquakes or “frackquakes” like the ones that Exxon is being questioned about in Texas. Mitchell was talking about drinking water contamination, which he was well aware of.
According to Russell Gold’s book “The Boom,” Mitchell’s fracking efforts led to well water fires way back in 1977 — and lawsuits from landowners with contaminated water. Mitchell really earned his title of The Father of Fracking.
While Mitchell was considered a fool by many in the years he struggled to figure out fracking with little success, he now has an international cult of believers in the most powerful boardrooms and government positions around the world.
And so the plan to frack the globe is in motion.
Will The Fracking Revolution Go Global?
Energy consultancy IHS, and its vice chair Daniel Yergin who is a champion of fracking and all things oil, recently released a new report detailing estimates for all of the conventional oil fields around the world that could be revived by fracking.
The estimated amount of oil that could be fracked is 141 billion barrels. To put that in perspective, the proven reserves of oil in the U.S. are 36 billion barrels.
Based on information in the new report, two locations likely to move into fracking in the near future are Mexico and Saudi Arabia.
Mexico, which shares known shale resources with the U.S. like the Eagle Ford play that straddles the border between Mexico and Texas, can’t wait to start fracking.
“The United States and Canada are exploiting their shale resources on a massive scale, and we’re still in the prospecting stage,” Gustavo Hernandez, the director of exploration and production at Pemex, said in an interview with the Washington Post. “But we believe the volumes we have are enormous.”
Nighttime satellite photos of the Texas-Mexico border clearly highlight the border between the two countries in the Eagle Ford. In Texas, flares burning off excess natural gas as a result of the fracking operations light up the sky. Southwest of the border, nothing but darkness. With Mexico’s plans for fracking, along with opening up their country to foreign investment, it shouldn’t be long before the whole Eagle Ford is lit up at night.
As with the U.S., Mexico isn’t looking to proceed in a cautious way. Fracking uses large amounts of water — something Mexico doesn’t have. So how are they planning to deal with this issue?
Mexican geologists and petroleum engineers told The Washington Post that they will worry about water later.
Much like North Dakota created a dangerous oil-by-rail industry because they fracked oil before building infrastructure to move it safely, it appears that the appeal of fracking will also lead the Mexican oil industry down a similar “profits before all else” approach. And since it will be many of the same multi-national corporations running things, this should come as no surprise.
In 2011, Mexico suffered a massive drought and at the time the Wall Street Journal quoted Coahuila’s deputy minister of rural development, Reginaldo de Luna Villarreal saying, “The intensity of this drought surpasses the ability of government resources to address it.”
But when it comes to fracking, they are going to “worry about water later.”
And how about those strict regulations the father of fracking recommended to avoid trouble? Highly unlikely in a country Forbes called “among the world’s most corrupt nations.”
Rex Tillerson and the oil industry should have a wild time in Mexico. Will they bring the Texas earthquakes with them?
Saudi Arabia – If You Can’t Beat ‘Em, Join ‘Em
With the volume of misleading headlines about the demise of OPEC due to U.S. fracked oil production, it is no surprise that oil producers in the Middle East want to join the fracking revolution. At the recent OPEC conference, ConocoPhillips CEO Ryan Lance was welcomed to speak about the success of fracking shale.
In the past, Lance had predicted shale oil would be a game changer but wasn’t taken seriously. However, at this year’s OPEC meeting he stated “shale is here to stay,” and Lance’s words were definitely not met with skepticism this time around.
In a classic case of “if you can’t beat ‘em, join ‘em” the Saudis are currently investing heavily in fracking or “unconventional” technology as it is often called by the oil industry. The IHS report estimated that there are 70 billion barrels of oil that could be accessed in the Middle East via fracking old conventional oil fields. However, in the short term, the Saudis will be fracking for gas, and the head of Saudi Aramco is optimistic.
“Saudi Arabia will be the next frontier after the U.S., where shale and unconventional will make a significant contribution to our energy mix, especially gas,” said Saudi Aramco’s chief executive Khalid al-Falih.
In addition to the rollout of fracking technology around the globe, a reason to believe predictions like “shale is here to stay” is that fracking technology is rapidly developing and costs are coming down, as explained by ConocoPhillips’ CEO.
Lance said that shale break-even costs have dropped 15 percent to 30 percent in recent months while the amount that drillers are able to suck out of the ground from each well has increased up to 30 percent.
While fracking has been going on for many decades in the oil and gas industry, the fracking of shale is still relatively new and the techniques used are being refined and upgraded. This reality was explained to Marketplace by a former Saudi Aramco official.
“The level of the intelligence is very low,” said Nansen Saleri, a former top manager at the Saudi national oil company. He thinks people will look back at today as “the initial dinosaurish phase of shale and unconventional resource development.”
Fracking the Future
There is no arguing that fracking hasn’t been a very successful and revolutionary invention for the oil and gas industry. Fracking essentially killed the concept of peak oil. It is now well known that the technology exists to extract far more oil and gas (and subsequent pollution) than will be needed to create catastrophic climate change. The fear isn’t that the world will run out of oil but that the world won’t be able to stop consuming it before it is too late.
Ironically, George Mitchell wasn’t solely focused on making money and fracking oil and gas. He donated large amounts of money to support the idea of creating a sustainable planet.
But Mitchell’s genie is out of the bottle and it is highly likely that he will have unleashed a technology on the world that will play a critical role in supporting the cult of permagrowth and greed that, if left unchecked, will ultimately result in a chaotic, overheated world.
61 Comments on "“There Could Be Trouble” As US Fracking Revolution Prepares to Go Global"
Plantagenet on Sat, 13th Jun 2015 12:27 pm
Of course fracking is going to go global. Can you think of any major US invention that isn’t copied by other countries. Just as surely as Samsung copied Apple’s iPhone, Argentina, Mexico, Saudi and other countries will copy US fracking methods.
apneaman on Sat, 13th Jun 2015 12:29 pm
Whatever happened to the great European fracking boom?
http://theconversation.com/whatever-happened-to-the-great-european-fracking-boom-38550
Perk Earl on Sat, 13th Jun 2015 1:20 pm
Fracking anywhere in the world will only make sense if it’s profitable, which depends on oil price, depending on consumer affordability, depending on capitol to lend, depending on investors, depending on net energy, depending on degree of depletion…
Watch the bouncing ball as all these factors are interconnected…
shortonoil on Sat, 13th Jun 2015 1:24 pm
“Regulators must look at facts and they must look at sound science and not just respond to the noise,” Tillerson said.
Good idea Rex. Now how about telling us now about how the shale industry is going to pay back the $1 trillion they have borrowed on their gross annual sales of $360 billion when they have never made a dime! 5000 year bonds backed by the government you say? That must be why you are CEO of EXXON, and all I ever did was run a few mining companies. Gee, I could have grown up, and learned how to stick it to pension funds, window and orphans, and the tax payer. Bad upbringing I guess?
GregT on Sat, 13th Jun 2015 1:26 pm
***US Fracking Boom Goes Bust***
http://wolfstreet.com/2015/02/13/the-fracking-bust-drilling-for-oil-plunged-34-since-october/
Apneaman on Sat, 13th Jun 2015 3:58 pm
Rex Swindlescum and his puppet James Inhofe better watch out Big Papa is getting angry.
Pope Francis: The Encyclical
https://www.youtube.com/watch?t=38&v=76BtP1GInlc
G Bruce on Sat, 13th Jun 2015 5:55 pm
I have been saying this for months! We are about to see a world-wide fracking explosion and more oil than anyone every dreamed of. Welcome to the real world.
Energy consultancy IHS, and its vice chair Daniel Yergin who is a champion of fracking and all things oil, recently released a new report detailing estimates for all of the conventional oil fields around the world that could be revived by fracking.
The estimated amount of oil that could be fracked is 141 billion barrels. To put that in perspective, the proven reserves of oil in the U.S. are 36 billion barrels.
Apneaman on Sat, 13th Jun 2015 6:24 pm
What country is this almighty fracking revolution supposed to take place Bruce?
GregT on Sat, 13th Jun 2015 6:54 pm
G Bruce,
141 billion barrels is a four and a half year supply for the world. If it could be produced that quickly, which it cannot.
36 billion barrels would last for 13 months.
Davy on Sat, 13th Jun 2015 7:10 pm
Bruce, spare me the stale cornbread. I am not into Danny Yergin action dolls either. Bruce are you related to the NOo?
Charles on Sat, 13th Jun 2015 7:20 pm
I heat my home with NGAS so let the drillers Frack away……..
Makati1 on Sat, 13th Jun 2015 7:57 pm
More BS from the dreamers…
keith on Sat, 13th Jun 2015 11:52 pm
Fracking only works with a QE model. EU could do it, but they will only create more debt and another bubble. Drilling ten wildcat wells costs between 50 and 70 million U.S. dollars. If they come up dry, you just pissed that money down a drain. Now, if your printing the money on demand, no big deal. But once everyone recognizes that your money is toilet paper, then its another story. This is why the BRICS exist, they have recognized what the Petrodollar is, just a valueless trinket. It will be slow, on a generational time frame, but it is happening. Like depleting finite resources at a glutinous pace, money printing only hurts the young and yet to be born. They will be so proud of us. Just think of all the books they’ll write about our greatness.
meld on Sun, 14th Jun 2015 3:36 am
smells like puff, sounds like puff, maybe is puff?
Thanks for the laugh 😀
Makati1 on Sun, 14th Jun 2015 4:26 am
Hmmmm…
http://www.dailyimpact.net/2015/06/09/its-official-the-shale-oil-boom-is-over/
http://www.reuters.com/article/2015/06/05/conoco-poland-shalegas-idUSL5N0YR2R320150605?feedType=RSS&feedName=utilitiesSector
https://search.yahoo.com/search?fr=mcafee&type=B111US91006D20131004&p=hydraulic+fracturing+in+europe
http://www.nytimes.com/2013/10/12/business/international/france-upholds-fracking-ban.html?_r=0
And on and on….
james_boags on Sun, 14th Jun 2015 5:17 am
Keith pretty much stated our whole predicament its basically the next generations problem nothing to see hear move along
Kenz300 on Sun, 14th Jun 2015 7:39 am
Wind and solar energy production are growing in use around the world. Producing local energy with local labor is better for energy security and economic security.
Renewable energy targets quadrupled globally since 2005
http://www.biodieselmagazine.com/articles/416978/renewable-energy-targets-quadrupled-globally-since-2005
Cloud9 on Sun, 14th Jun 2015 7:41 am
Sorry guys but blowing up the currency does not just kill of the young. It wipes out the savings of the old as well. Have any of you paid attention to what the current interest rate is as compared to the actual inflation rate. There is no real safe place to park your money unless it is in gold and silver. Those guys that crow about 6% earnings want to sell you Greek bonds.
shortonoil on Sun, 14th Jun 2015 8:03 am
According to the USGS the world has perhaps 4,200 Gb of liquid hydrocarbon resources. 40% of that is useable, 60% isn’t. The unusable portion would require more energy, and/ or money to extract than it would return. Shale is part of that 60%. 36% of it can not be converted into transportation fuels; it is just a feedstock. The last thing that the present depressed economy needs is more feedstock! The US with its reserve currency/ petrodollar status has been able to fund the production of shale. It has resulted in over $1 trillion in debt that can never be payed back. It seems extremely doubtful that any other nation would engage, or could afford such a money losing endeavor as major shale development. It also seems unlikely that the world will long continue to finance US financial/ economic self destruction.
Articles such as the one above are intended to produce support for a losing proposition. They are meant to allow a few to profit from the loss of the majority. Shale is part of the end game, where money is no longer made, just moved from one pocket to another. Unless you are connected to the right organizations, it won’t be your pocket. In a world where wealth can no longer be created, the master thief becomes king.
http://www.thehillsgroup.org/
rockman on Sun, 14th Jun 2015 9:22 am
Just a few facts to mix with all the opinions. First, Mitchell was a clever guy and tweaked frac’ng with the “slick water” concept. But it was not revolutionary…it just changed the chemistry of the frac fluid a bit. That made some formations better candidates for frac’ng…in others it made matters worse. Frac’ng was developed before Mitchell even began his company. Hundreds of thousands of vertical wells were frac’d before the recent shale boom. Many hundreds of horizontal wells were frac’d before the shale boom. Though laterals are longer and many more frac stages are done there is essentially nothing being done differently today that wasn’t being done long before the shale boom.
Second, there’s nothing for the KSA et al to “copy” from the recent frac’ng boom in the US: any company in the world could have drilled and frac’d a hz shale well at the same time Chesapeake was hitting the Eagle Ford Shale. The tech does not belong to the US…it belongs to the service companies including INTERNATIONAL service companies like Halliburton. Consider how impressed some are with 6,000′ laterals in the US: Maersk was drilling and frac’ng 30,000’+ laterals in the OFFSHORE Persian Gulf since before the EFS took off. Anyone anywhere in the world could have been frac’ng shale wells at the same time the EFS and Bakken were booming. Especially when oil was $120+/bbl.
So why didn’t it happen when oil was $100+/bbl? First, consider who were the big US shale players: the trends were dominated by the smaller independent PUBLIC companies…not Big Oil and NOC’s. Shell Oil tried and spent $3+ BILLION on just one EFS lease in S Texas. That effort burned them so bad they gave up all their shale developments in the US. The independent pubcos latched on to the shales (once oil prices got high enough) for a simple reason: a lack of conventional oil/NG plays.
As far as viable international shale plays no one knows that potential with any reliability IMHO. Consider all the initial hype about US shale potential. After $billions were spent evaluating other shales in dozens of other formation 80%+ of oil coming from shales today are just from the EFS and Bakken. Collectively those two formations are less the 500′ thick. In the US alone there are (collectively) over 50,000′ of hydrocarbon bearing shales. And they have been evaluated to varying degrees. IOW less the 1% of the US shale formations have been proven to have significant oil potential. I doubt many outside the oil patch, including all the “expert” pundits realize how rare and unique the EFS and Bakken are. Shales don’t produce commercial oil. Fractured shale containing hydrocarbons don’t produce significant commercial oil. Only a very few fractured shales produce commercial oil volumes but only those drilled by US independent pubcos that have no other options other then to close down their operations.
Want to see the shales boom around the world? No problamo: just reproduce the conditions we have had in the US…including $100/bbl oil. Drop me a line when you do and I’ll buy you a beer to celebrate. LOL.
Davy on Sun, 14th Jun 2015 10:02 am
Short said “The US with its reserve currency/ petrodollar status has been able to fund the production of shale. It has resulted in over $1 trillion in debt that can never be payed back. It seems extremely doubtful that any other nation would engage, or could afford such a money losing endeavor as major shale development. It also seems unlikely that the world will long continue to finance US financial/ economic self destruction.”
Short the sad truth of our current global predicament is the other major powers especially China have done just that and worse. China created 25 trillion out of thin air in a very short time and created the greatest mal-investment human history has ever experienced. This will never be paid back and what is worse the country will never recover ecologically. That is a double whammy with financial and ecological time-bombs ready to blow up in the face of 1.4BIL people.
DMyers on Sun, 14th Jun 2015 10:21 am
Excellent point, Shortonoil. Other countries will not pursue what is a losing proposition in so many respects.
Other countries will likely be more sensitive about water destruction than the US with its history of water abundance. Water is going to be a political problem and an existing constraint on fracking, whether they choose to “worry about water later” or not. But if other countries do give fracking a try, then it will become more transparent. The coverup will lose its reach, and the world will learn the true affects of fracking.
judging from the title, the idea of the article is to consider what the “Father of Fracking,” George Mitchell said about it. Does his title make him an expert on the subject? It would seem it does.
He learned that fracking does contaminate drinking water aquifers, according to the article. Is this a little bit of the transparency for which we are searching? Mitchell is saying, in effect, that fracking can go wrong. We know from Murphy’s Law that if it can go wrong, it will go wrong (Murphy’s Law was derived from laboratory, scientific experiments, not an Irish drunk who occasionally said something wise). Therefore, water pollution will result from fracking, and Mr Mitchell had that all figured out from very early on.
Boat on Sun, 14th Jun 2015 10:35 am
rockman on Sun, 14th Jun 2015 9:22 am
Just a few facts to mix with all the opinions. First, Mitchell was a clever guy and tweaked frac’ng with the “slick water” concept. But it was not revolutionary…it just changed the chemistry of the frac fluid a bit. That made some formations better candidates for frac’ng…in others it made matters worse. Frac’ng was developed before Mitchell even began his company.
Rock, you would never make a salesman for horizontal drilling with fracking. What you fail to mention is that in 2005 about 5-6% of wells were horizontally drilled. Today that number is closer to 80%. I haven’t seen the percentage of those fracked. We can read about wells per pad going way up, multi depths and much longer pipe with more fractures per line. You should consider giving a little more credit to improved tech. I would call all of these changes to drilling very revolutionary,
Chuck on Sun, 14th Jun 2015 10:50 am
Greed will prevail over common sense and widespread fracking will probably trigger a seismic event to end civilization!
Nony on Sun, 14th Jun 2015 10:53 am
Rock: “Shell Oil tried and spent $3+ BILLION on just one EFS lease in S Texas. That effort burned them so bad they gave up all their shale developments in the US.”
Wrong.
http://www.ogj.com/articles/uogr/print/volume-2/issue-5/shell-expands-leasehold-position-in-marcellus-utica.html
Shell exited some plays, but still has very significant holdings in the Marcellus and Utica. Even as they were exiting Pinedale and EF, they were buying up acreage in Pennsylvania. They also made an extremely notable discovery in the Utica (the stepout to huge IP wells in NE PA).
And FWIW, XOM, COP, Chevron all have large efforts in US shale. So picking Shell is a cherrypick anyways.
——–
You may have your own interpretation, but not your own facts.
Nony on Sun, 14th Jun 2015 11:16 am
I would urge interested readers to look more at what other industry veterans say about evolution in hydraulic fracturing, geo-steering, seismic, etc. Rock tends to underplay evolution of technology or to make a false duality of completely new versus everything already known. He is just one guy and nothing special within the industry. And FWIW, his recent experience in current shale development is incredibly light. You are much better off talking to Rockdoc who has a Ph.D. in geology and was a VP at a shale company. Or you can just look at other industry veterans or people who have really studied this stuff in depth like USGS (Rock often doesn’t even know what a quick Google search would show.)
Here is a good paper on evolution:
http://pubs.usgs.gov/sir/2014/5131/pdf/sir2014-5131.pdf
“Increases in horizontal drilling also coincided with the emergence of water-based “slick water” fracturing fluids. As such, the most current hydraulic fracturing materials and methods are notably different from those used in previous decades and have contributed to the development of previously inaccessible unconventional oil and gas production target areas, namely in shale and tight-sand reservoirs.”
Nony on Sun, 14th Jun 2015 11:18 am
And again, it shows a contradiction to try to get Hubbert (or Campbell, etc.) off the hook for their flawed predictions by saying they caveated current practices only [and they didn’t but that’s another story] while also saying the shale revolution is nothing new.
Apneaman on Sun, 14th Jun 2015 11:28 am
There is nothing revolutionary about fracking. It has changed nothing. Increasing costs and complexity to squeeze the last drops is not a revolution. You could apply the same strategy of higher costs/complexity to any resource and you will most likely see an increase in extraction, at least for awhile. What would be revolutionary would be to extract more at a cheaper price without the increase in environmental/social costs. Revolutionary does not mean what most think it means – it’s an misused/overused PR term that is hauled out every time someone wants to embellish. They have free dictionaries online.
Nony on Sun, 14th Jun 2015 11:33 am
Ape, you need to be open to learning from data. Otherwise you are more religious than scientific. I was open to the argument that high prices indicated a scarcity premium (“POD”) and said it was the peakers best argument. You also need to be open to the volume increases, to the drop from 100+ to 60 for oil and to the all around successes of shale gas (volume, price, reserves/resource).
Nony on Sun, 14th Jun 2015 11:37 am
From the hydraulic fracturing report:
“These analyses have demonstrated that hydraulic fracturing treatments are neither temporally nor spatially
equivalent; therefore, comparisons and
assumptions regarding attributes of individual applications should be made
with caution. There have been significant advancements in both drilling and treatment fluids since
their initial applications, most
strikingly since 2000. The most recent hydraulic fracturing production methods have resulted in a dramatic increase in oil and gas development, particularly in shale reservoir rocks previously considered too impermeable or uneconomic for exploitation.”
Again, this is from an academic report, by non-commercial industry experts. They have studied the problem much more carefully than the mudlogger has.
Apneaman on Sun, 14th Jun 2015 11:41 am
Nony what has this so called revolution changed? Let’s just go back one decade to 2005. How is America faring in it’s decade of revolutionary energy abundance? The whole purpose of fossil fuels is to power our economies, so where is this great change in national fortune? Is the average person better off than a decade ago? No your country is spiraling out of control and the only thing that has changed is the concentration of wealth and power. Of course counting barrels is a great way not to look at the big picture. The prediction I remember the most was the very loud and hyperbolic shouting of how the Shale boom-fracking revolution was going to transform the American economy – bring back the golden years. What happened Nony?
Nony on Sun, 14th Jun 2015 11:45 am
Ape-man: per the peakers, we were supposed to have collapsed into individual walled ranches by now. Instead life goes on. Thanks frackers!
Nony on Sun, 14th Jun 2015 11:46 am
But if you want some corn porn:
https://www.youtube.com/watch?v=v5RwY1GXAzA
Davy on Sun, 14th Jun 2015 11:48 am
NOo said regarding Rock: “He is just one guy and nothing special within the industry. And FWIW, his recent experience in current shale development is incredibly light.”
NOo, please state your qualifications and achievements? If you can’t or won’t then who are you to criticize the Rock. What makes you so learned on the subject? You are just another industry cheerleader likely a paid troll.
Davy on Sun, 14th Jun 2015 11:53 am
Here you go NOo :read: :weep:
http://www.artberman.com/for-oil-price-bad-is-the-new-good/
Apneaman on Sun, 14th Jun 2015 11:56 am
That’s right Nony. Everything you think you know come out of your little cyber connection. You cherry pick your charts, graphs and numbers like a bible code detective, but have you ever even been on any site? Even a company tour? Pumping your own gas does not qualify as real world petroleum industry experience.
Nony on Sun, 14th Jun 2015 12:03 pm
Davy, Ape:
I’m just a person who likes to read stuff on the Internet.
Apneaman on Sun, 14th Jun 2015 12:05 pm
No, BP, the U. S. did NOT surpass Saudi Arabia in oil production
“Even the paper of record for the oil industry, Oil & Gas Journal, got it wrong. With the release of the latest BP Statistical Review of World Energy, media outlets appeared to be taking dictation rather than asking questions about which countries produced the most oil in 2014.”
“If they had asked questions, they would have ended up with a ho-hum headline announcing that last year Russia at 10.1 million barrels per day (mbpd) and Saudi Arabia at 9.7 mbpd were once again the number one and number two producers of crude oil including lease condensate (which is the definition of oil). The United States at 8.7 mbpd remained in third place.”
http://resourceinsights.blogspot.ca/2015/06/no-bp-u-s-did-not-surpass-saudi-arabia.html
Nony on Sun, 14th Jun 2015 12:43 pm
Ape, agreed. I knew when they posted that article that they were missing in the NGLs. The other one you see sometimes is total hydrocarbons (NG, NGL & C&C). C&C is the relevant metric in MHO.
shortonoil on Sun, 14th Jun 2015 1:50 pm
“The other one you see sometimes is total hydrocarbons (NG, NGL & C&C). C&C is the relevant metric in MHO.”
You want to equate a barrel of lease condensate, API 94.5, that contains 4.51 million BTU to a barrel of 37.5 API conventional crude that contains 5.88 million BTU. No doubt about it, your the expert! Relevant seems to be getting more relative every day?
Do you enjoy trying to pull the wool over peoples’ eyes. You seem to.
rockman on Sun, 14th Jun 2015 8:05 pm
Boat – ” I would call all of these changes to drilling very revolutionary…”. You need to read my post more closely. I said nothing about the amount of hz drilling being done. It should be clear to most I’m talking about the tech not having changed much. Which it hasn’t: everything done from a tech standpoint, INCLUDING SLICK WATER FRACS, existed in 2005 when so few hz wells were drilled and frac’d. In fact just about all the equipment used to create the Eagle Ford Shale boom existed in 2005. What didn’t exist in 2005 was high priced oil that justified the development.
As far as Nony goes you guys need to cut some slack. The Rockman is far from being an expert on the EFS. All he has is access to all the actual drilling/production data. And access on a regular basis to many of the folks actually drilling the EFS. So know the Rockman isn’t an expert…he just get info from them.
zoidberg on Sun, 14th Jun 2015 10:12 pm
Well if the energy is there and can be extracted it will. Even at a loss for wartime emergencies. Ignore it at your peril!
Nony on Sun, 14th Jun 2015 10:34 pm
short: 94.5 is pretty extreme. Pure straight chain pentane. Typical lease condensate is more like 55-70. BE careful when looking at price differences. A lot of the value change for condensate is because of the high recent production in the US combined with export restrictions. Look at prices in Asia for more of a World price.
Nony on Sun, 14th Jun 2015 11:01 pm
Here’s an article discussing condensate differentials versus Brent.
http://www.reuters.com/article/2013/08/29/asia-condensate-idUSL4N0GS0Y620130829
Says some grades were a few dollars under and some a few dollars over Brent. and this in a period when Brent was 100+.
We all know the export restrictions cause WTI to get less than Brent. For condensate, the effect is even more extreme.
Bottom line is that in the US we’ve had a boom in condensate production and the trade restriction prevent free export. So it trades at a big discount.
But all of that is just a local phenomenon and a recent one.
Condensate is not rat piss. It is valuable hydrocarbon.
GregT on Mon, 15th Jun 2015 2:12 am
“Condensate is not rat piss. It is valuable hydrocarbon.”
And just like ground beef and rump roasts aren’t rib eye steaks, condensates are not crude oil. Another example of how the industry has changed definitions to fool the ignorant and uniformed masses. Meanwhile, as every year goes by, our chances of building out alternate energy infrastructure become less and less.
marmico on Mon, 15th Jun 2015 6:06 am
The wholesale price of 60° API Eagle Ford Light is higher than 40° South Louisiana Light (Onshore). That tells you something about its value.
https://www.plainsallamerican.com/getattachment/d77ab898-9882-45d0-90f2-fef99d7d2eb6/2015-110-June-12-2015.pdf?ext=.pdf
Davy on Mon, 15th Jun 2015 6:16 am
NOo, if as you say “Condensate is not rat piss. It is valuable hydrocarbon” then why the slowdown in US condensate activity? If condensates was so valuable there would be an expansion to maintain revenues even with the current excess supply. US producers would be ramping up to maintain market share instead rig count is dropping.
I think you are missing Shorts point about thermodynamic economic value and touting market price without production costs. Shorts point is so simple and basic I can’t understand why a wonder boy like you cannot connect the dots. Something may have value to the market sure but there is no value to a commodity that have production costs that exceed its economic value to the producer or in a macro sense to society.
This is typical for a kind of guy who can’t see the forest for the trees. You place a value on most things in life according to the market and price. Currently NOo, it is well know that normal price discovery in almost all markets has been distorted by central bank activity.
The US shale sector is appearing to be a huge mal-investment in a low grade hydrocarbon caused by investors with money seeking yields. When all the easing and rate repression was strongest over the last few years commodities were bid up making oil sources of all kinds attractive for production.
This does not indicate value in a thermodynamic economic sense. You may dismiss EROI but it is coming in to haunt you now. Your shale heroes are falling and yet you are crowing all is well. Cheerleading is that way. The loudest and most intense cheerleading is right before the towel is thrown in. Your days as a cheerleading cornucopian are nearing their climax. I am not sure what will be left for an unemployed cornucopian cheerleader. You will be able to find work cheerleading peak oil and doom. What a life change that will be.
Nony on Mon, 15th Jun 2015 10:26 am
Davy, condensate production has tripled, but trade restrictions prevent its (general) export.
Historically (in somes currently) lease condensate has been priced above WTI and CERTAINLY above heavy or medium density crude. You can look it up in the basic books on refining.
The US refining industry is geared towards using heavier crudes. Too much light stuff causes a problem for them. They don’t have condensate splitters (standalone distillation towers, sans vacuum dist). And they can only blend so much into their heavy crude streams without underutilizing the cat crackers and the cokers and visbreakers and such. However, there remains a market overseas.
P.s. There’s no conspiracy or anything here. It doesn’t matter if you vote for a donk or a ‘phant. This is just basic facts. Ask anyone buying or selling US cargoes of crude.
Nony on Mon, 15th Jun 2015 10:29 am
Davy, read this article and a few of the linked articles.
https://rbnenergy.com/dancing-in-the-dark-will-gulf-coast-condensate-splitting-trump-the-export-market
None of this stuff is controversial or political. It is basic industry economics.
Davy on Mon, 15th Jun 2015 11:54 am
Geeze, Wonder Boy, that blew past you like a pussy fart:
Davy said: If condensates were so valuable there would be an expansion to maintain revenues even with the current excess supply. US producers would be ramping up to maintain market share instead rig count is dropping.
NOo, pleezzze answer the question of above and not blather about export restrictions and refiners.