[Plantagenet]

$this->bbcode_second_pass_quote('Pops', ' ')I think the perception is generally similar to Plant's (by those that pay enough attention to perceive anything about it) that the US LTO boom is going to change everything

[Pops]

$this->bbcode_second_pass_quote('Plantagenet', 'I') wish you wouldn't attribute your ideas to me.
...
As to whether your suggestion that this will "change everything" is correct, I frankly think you are completely wrong.

[Plantagenet]

$this->bbcode_second_pass_quote('Pops', '
')As to your prediction that H. drilling and frac'g will become widespread outside the US, it isn't even widespread in the US. IIRC only about 6 of 30-something possible shale plays are doing much.

[Plantagenet]

If Pops is right and there are six places in the USA with fracking/horizontal drilling for LTO going on, then having three of them turn out to be giant multi-billion barrel oil fields now producing together about 3.6 million bbls of oil per day really isn't too bad.

Why not admit the facts? Drill baby drill and frack baby frack has been pretty darn successful. By some accounts oil production in the USA has now grown to the point that the USA is approaching being the largest oil producing nation in the world.

[westexas]

My tight/shale comments:

Tight/Shale Plays to the Rescue?

The conventional wisdom is that increased production from North American and global tight/shale plays will power the globe to a virtually perpetual rate of increase in global oil and gas production.

However, while the strong rebound in US oil and gas production has been very impressive—and critically important to the US economy–it’s interesting to look at some regional declines in US oil and gas production, e.g., marketed Louisiana natural gas production (the EIA doesn’t have dry processed data by state).

According to the EIA, the observed simple percentage decline in Louisiana’s annual natural gas production from 2012 to 2013 was 20%. This would be the net change in production, after new wells were added. The gross decline rate (from existing wells in 2012) would be even higher. This puts a recent Citi Research estimate in perspective.

Citi estimates that the gross underlying decline rate for overall US natural gas production is about 24%/year. This would be the simple percentage change in annual production if no new sources of gas were put on line in the US. In round numbers, this requires the US to add about 16 BCF/day of new gas production every year, just to maintain about 66 BCF/day of dry processed natural gas production. To put 16 BCF/day in perspective, dry processed natural gas production from all of Texas was probably at about 18 BCF/day in 2013.

Based on the Citi report, the US would have to replace 100% of current natural gas production in about four years, just to maintain a dry processed gas production rate of 66 BCF/day (24 TCF/year) for four years.

Or, based on the Citi report, the US has to replace the productive equivalent of all of the 2012 dry natural gas production from the Middle East, in a little over three years (3.3 years), in order to maintain a dry production rate of 24 TCF/year. Over a 10 year period, we would need to put on line three times the 2012 production rate from the Middle East, in order to maintain current production for 10 years.

On the oil side, according to the EIA, the observed 10 year exponential rate of decline in Alaska’s annual Crude + Condensate (C+C) production from 2003 to 2013 was 6.5%/year. This would be the net change in production per year, after new wells were added. The gross decline rate from existing wells would be even higher.

If we assume a probably conservative gross decline rate of 10%/year from existing US C+C production, in order to just maintain current production for 10 years, we would have to replace the productive equivalent of every oil field in the US over the next 10 years–the productive equivalent of every oil well from the Gulf of Mexico to the Eagle Ford to the Permian Basin to the Bakken to Alaska.

Of course, the general consensus is that the tight/shale revolution will spread around the world, and it’s certainly possible, but note that in 2013, while overall Bakken Play production was still increasing, the average Bakken oil well produced a little over 100 bpd, while the median production rate was less than 100 bpd, with a very high per well decline rate. Furthermore, this does not take into account wells that have already been plugged and abandoned. I have a hard time believing that per well production rates like this will work in much higher operating cost areas around the world.

In addition, as the Monterey Shale Play case history shows (the EIA reduced their estimate of possible recoverable reserves by 95%), not all US shale plays will be commercially productive in meaningful quantities, and most commercial plays in the US tend to be gas prone.

[Pops]

$this->bbcode_second_pass_quote('Plantagenet', 'I')s there really any doubt in your mind that horizontal drilling and fracking will someday be used in other areas around the world?

[JV153]

$this->bbcode_second_pass_quote('Plantagenet', '
')Drill baby drill and frack baby frack has been pretty darn successful.

[westexas]

A slight clarification. The 15% number refers to the latest annual (2013) RRC data for Texas condensate (basically natural gasoline) as a percentage of Texas Crude + Condensate (C+C). Based on EIA (C+C) versus RRC data (crude only) for Texas, it looks like the Condensate/(C+C) ratio was about 3% in the early Eighties (and probably 3% around the so far peak in 1972).

Natural gas liquids (NGL's) would most commonly be defined as ethane, propane, butane (and related liquids).

My point about global production is that I suspect that actual global crude oil production (45 and lower API gravity crude oil) probably peaked in 2005, while global natural gas production, and related liquids--condensate and NGL's--have so far continued to increase.

[Plantagenet]

Suggestions that all the oil shale will be fracked out and used up in a few years are just silly.

For instance, Oilcos are just now ramping up spending for drilling, fracking, etc in the Wolfcamp Shale of the Permian to ca. 12 billion next year, getting close to the ca. 14 billion spent each year in the Bakken

But the Wolfcamp is far far larger then the Bakken. The total recoverable oil in the Wolfcamp is estimated at 50-100 BILLION barrels, giving it a good shot to be even bigger then Ghawar with its 60 BIllION barrels of recoverable oil---the largest previously largest known oilfield.

Wolfcamp Shale is a world class play---its as big or bigger than Ghawar


Wolfcamp Shale, Texas is comparable in size to Ghawar, KSA

[JV153]

$this->bbcode_second_pass_quote('Plantagenet', 'S')uggestions that all the oil shale will be fracked out and used up in a few years are just silly.

Wolfcamp Shale is a world class play---its as big or bigger than Ghawar

Wolfcamp Shale, Texas is comparable in size to Ghawar, KSA

[JV153]

$this->bbcode_second_pass_quote('Plantagenet', '')$this->bbcode_second_pass_quote('Pops', ' ')

tight oil from Russia

[Pops]

This story was kind of hard to find again after I stumbled across it the first time, try searching on "fracing and exports" and not getting a stampede of rainbow farting unicorns, LOL

$this->bbcode_second_pass_quote('', 'A') European export ban on advanced oil technologies to Russia could hinder Moscow’s attempts to drill in the Arctic Ocean. It could also harm the businesses of global energy firms that are angling to help Russia tap its offshore reserves, analysts say.

The embargo is one of a slate of economic sanctions that European Union and United States leaders agreed on this week. Europe’s measures, approved on Tuesday, target Russia’s energy, financial and military sectors and follow more modest sanctions from last week, which included visa bans and asset freezes for Russian individuals considered responsible for the country’s escalating intervention in Ukraine.

European officials had previously shied away from stringent sanctions that would damage the Russian economy, worried that a fallout with Moscow would lead to soaring natural gas costs and batter European economies. But the July 17 downing of Malaysia Airlines Flight MH17 over territory held by pro-Russian separatists -- and Vladimir Putin’s refusal to scale back support for rebels -- has elevated the international pressure to take action.

The oil technology ban targets the two sectors Russia wants to develop most: deep-water and artic drilling, and shale exploration. Both areas are crucial for replacing declining output at Siberia’s on-land oilfields and ensuring the government a steady stream of cash. (Russia gets about half of its fiscal revenues from oil and gas.) Yet both methods are far more expensive and technically challenging than conventional oil drilling, and the Russian energy industry relies heavily on Western aid and expertise to carry out projects.