[Graeme]

$this->bbcode_second_pass_quote('Pops', 'T')ight oil & gas doesn't "bubble up" that's kind of the problem.

$this->bbcode_second_pass_quote('Graeme', 'Y')ou'll know the U.S. energy industry is really on the rebound when North Dakota's newfangled Bakken oil field starts pumping more crude than Alaska's stalwart Prudhoe Bay.

[Crazy_Dad]

This is an interesting thread.

But what is the cost of the uptick in Canadian production?
Are we factoring in the long term environmental damage of Tar Sands exploitation?
What is the long term prognosis of this level of planetary vandalism?
Food for thought.

[MD]

$this->bbcode_second_pass_quote('Crazy_Dad', 'T')his is an interesting thread.

But what is the cost of the uptick in Canadian production?
Are we factoring in the long term environmental damage of Tar Sands exploitation?
What is the long term prognosis of this level of planetary vandalism?
Food for thought.

[seahorse3]

Graeme, I haven't seen the reports that Canadian production will save the day, certainly not enough to make NA energy independent. All the reports from Canada suggest they can, in the next decade, increase oil production to about 3mbpd (going from memory). Even if it's 5mbpd in the next 10 years that's not enough to make NA energy independent. At best we would probably be on a plateau, but to grow GDP we need production growth. The downside is as far as I know the canadiens are still using masive amounts of NG to produce the oil from their shale, which is dumb if you ask me. We simply deplete two resources to get one. Instead of transitioning to NG like you always argue will happen, we are burning it to get oil from rocks. This tells me that the transition to NG is just not going to happen. It's so cheap we burn it to make oil but not cheap enough to transition to it as a transportation fuel? The market isn't going to make the transition. It will take govt action as Hirsch argues to force a transition. But maybe the market is right. Maybe we aren't using NG as a transportation fuel bc it's not the right choice. Maybe it means NG isn't the right choice ever. Maybe it takes more money and resources than we have available to make a big jump into NG in a way that would significantly dent out demand for oil. I ask these questions earnestly bc it is a fact that we are burning NG to make oil in Canada andnit makes me asks why? If the market is always right, why do we still burn NG to make oil when NG is so cheap and oil so expensive? I would like to know the answer to that question. It seems NG would be best used to generate electricity for powering EV cars bc that does away with the need for NG infrastructure for NG cars, but the market isn't doing that.

[Frank]

Re the Obama Administration and peak oil, the ~35 mpUSg mileage standard already mandated by executive order and the discussion on 54 mpUSg seem to acknowledge the problem. I too would like to see a more comprehensive energy policy but every time the government tries to "pick a winner" they are criticized. Granted, the above numbers are an end-run around CAFE via air pollution/CO2 emissions but they accomplish the same thing.

[peripato]

$this->bbcode_second_pass_quote('seahorse3', 'U')nfortunately these new technologies have yet to refill once mighty reservoirs now depleted or depleting. This mighty Baken touted in the article barely offsets the decline of Alaska. So, the article is misleading about the reality of the energy situation. Why the slant? Why the omission of key facts? There's an angle.

[Graeme]

Well, here's another article from the UK stating much the same thing, namely an oil and gas boom in the US! Anybody got further comments?

A Shale-Fuelled Economic Miracle for 2012

$this->bbcode_second_pass_quote('', 'A')s economist and professor of energy policy Dieter Helm’s recent excellent article pointed out, the UK’s current bias towards expensive renewables is a direct result of energy secretary Chris Huhne’s unwavering faith that the price of fossil fuels can only go on rising.


That’s precisely the mistake an incoming Conservative Government made in 1979. Then oil prices peaked at $39 a barrel (the equivalent of $150 today). In the mid-1980s, however, the bottom dropped out of the oil price ‘barrel’ taking over 25 years to recover. As Helm points out, it is the peak oil and gas brigade – today, a useful ally to the green lobbies – who assume depleting resources based on then known reserves. As Helm says: “Nonsense – and some of it dangerous nonsense”.


Helm rightly asserts, “The Earth’s crust is riddled with fossil fuels” adding “there is enough oil and gas (and coal too) to fry the planet several times over.” And his words echo Huber and Mills’ definitive quote on the subject, “Energy supplies – for all practical purposes – are infinite”. The issue is not (and never has been) too much or too little of a given resource. It has always been whether prices are too low or too high to make extraction viable. Today, the shale gas and oil “miracle” – or rather man’s ingenuity in finding new ways to tap previously unrecoverable resources – has yet again blown a gaping hole in the peak-ist argument; as the end of year figures make only too plain.


According to EIA figures at the end of 2011, U.S. net imports of oil hit 45 percent from its high of 60 percent in 2005. That’s its lowest level since the mid-1990s. While reduced demand and greater energy efficiency played a part, a significant element is imputed to increased U.S. oil production, especially from shale-oil rich North Dakota. At the end of 2011 oil production in the ND Bakken formation hit a record high of over 600,000 barrels a day. In 2000, the formation was producing less than 100,000 barrels a day. Production here is now set to see the state outstrip California and Alaska early in 2012, making it America’s second largest oil producing state. While much of the United States is suffering economic hardship with employment at around 9 percent, North Dakota’s Bakken region has less than 2 percent joblessness. Further, the region has significant income levels, tax revenue growth, and the housing market is holding its own with the lowest number of foreclosures nationally.


The Eagle Ford oil shale field in Texas has generated 13,000 jobs and more than $500 million in salaries. All since drilling began in 2008. By 2020, Eagle Ford is projected to create up to 68,000 jobs as the formation hits the greatest oil boom in Texan history. The Tuscaloosa Marine Shale that stretches through Louisiana is estimated to hold around 7 billion barrels of oil. The impact of development on the local economy in the Baton Rouge area alone is expected to be “huge”.


Over in the north-east’s enormous Marcellus shale gas field, the economic outlook is just as dramatic. Since 2006, gas production has rocketed by 25 percent making the United States global top dog in gas production, eclipsing even Russia. U.S. natural gas prices have fallen significantly, with prices around the world holding steady as result. It doesn’t take a math professor to work out the economic benefit gained in a country seeking, in the case of oil, to break the yoke of OPEC’s dictatorial largesse, and, in the case of gas, enabling industrial electricity production to switch from coal to gas halving CO2 emissions. Not bad for a country vilified for refusing to sign the ill-fated and increasingly abandoned Kyoto Protocol.


Shale Gas: A renaissance in US manufacturing, a report by PriceWaterhouseCoopers, published in December 2011 projects a litany of associated benefits for the U.S. economy. Chief among them: greater energy affordability for industry (reducing fuel costs by as much as $11.6 billion annually through 2025), higher product demand (with evidence showing how shale gas developments have driven demand for industrial products) and, amazingly in the current downturn, around 1 million new jobs through 2025.

[Pops]

$this->bbcode_second_pass_quote('Graeme', 'A')nybody got further comments?

[MD]

Yeah I've got a comment.

there's enough "good news" floating around to justify investing in oil again.

[Graeme]

Pops, I'm merely posting what anyone can read on the Internet. I'm trying to find out what is accurate and what is not. I've already pointed out that WSJ report is misleading but that doesn't mean that all of what they publish is wrong. Lets check the Bakken production mentioned in the Energy Tribune news release. It appears from the EPRINC report that production from Bakken is indeed rising. And natural gas production from Marcellus Shale and employment in the region has also been rising. This is hardly an exhaustive survey (see Oilfinder2's reports on this board). Are there any other "facts" you want to dispute?

[Graeme]

Western oil firms remain as US exits Iraq

$this->bbcode_second_pass_quote('', 'W')hile the US military has formally ended its occupation of Iraq, some of the largest western oil companies, ExxonMobil, BP and Shell, remain.

On November 27, 38 months after Royal Dutch Shell announced its pursuit of a massive gas deal in southern Iraq, the oil giant had its contract signed for a $17bn flared gas deal.

Three days later, the US-based energy firm Emerson submitted a bid for a contract to operate at Iraq's giant Zubair oil field, which reportedly holds some eight million barrels of oil.

Earlier this year, Emerson was awarded a contract to provide crude oil metering systems and other technology for a new oil terminal in Basra, currently under construction in the Persian Gulf, and the company is installing control systems in the power stations in Hilla and Kerbala.

Iraq's supergiant Rumaila oil field is already being developed by BP, and the other supergiant reserve, Majnoon oil field, is being developed by Royal Dutch Shell. Both fields are in southern Iraq.


A White House press release dated November 30 titled, "Joint Statement by the United States of America and the Republic of Iraq Higher Coordinating Committee", said this about "energy co-operation" between the two countries:

"The United States is committed to supporting the Republic of Iraq in its efforts to develop the energy sector. Together, we are exploring ways to help boost Iraq's oil production, including through better protection for critical infrastructure."

Iraq is one of the largest oil exporters to the US, and has plans to raise its overall crude oil exports to 3.3m barrels per day (bpd) next year, compared with their target of 3m bpd this year, according to Assim Jihad, spokesman for Iraq's ministry of oil.

Jihad told Al Jazeera that Iraq has a goal of raising its oil production capacity to 12m bpd by 2017, which would place it in the top echelon of global producers.

According to Jihad, Iraq's 2013 production goal is 4.5m bpd, and in 2014 it is 5m bpd. The 2017 goal is ambitious, given that Iraq did not meet its 2011 goal, and many officials say 8m bpd capacity is more realistic for 2017.

Unexplored regions of Iraq could yield an additional 100bn barrels, and Iraq's production costs are among the lowest in the world.

[ralfy]

I think deals with China are also in place. Ultimately, in such conflicts, multinational corporations profit, the military get their hardware, and the sheeple are saddled with war costs.

[Graeme]

U.S. Says Gas Output to Rise in 2012, 2013 on Shale Growth

$this->bbcode_second_pass_quote('', 'N')atural gas production in the U.S. will rise to record levels this year and in 2013 on increased output from shale formations, the government said.

Marketed gas production will average 67.34 billion cubic feet a day this year, up from 65.92 billion last year, the Energy Department said in its monthly Short-Term Energy Outlook, released today in Washington. The department had pegged 2012 output at 67.72 billion in its December report. Production in 2013 was estimated at 68.04 billion cubic feet a day.

[Graeme]

Saudis have 2.5m barrels spare oil capacity, PFC says

$this->bbcode_second_pass_quote('', 'S')audi Arabia, the world’s largest oil exporter, is able to boost production to its officially-announced peak of 12.5 million barrels a day, according to PFC Energy.

Proposed European Union sanctions to block imports from Iran have raised the prospect that other suppliers may need to make up any shortfall.

Oil Minister Ali al-Naimi, who has said the kingdom can reach a level of 12.5 million, said last month that it’s pumping at about 10 million a day.

“The market always questions how much spare capacity Saudi Arabia actually has,” Jamie Webster, an analyst at the consulting company, said by phone from Washington.


“When you talk to people that have a hand in the oil business, the closer you are to a handshake relationship with Saudi Aramco, the more likely you are to believe that they have the 12.5 million barrels,” Webster said.

[KingM]

I doubt it. This is probably intended to force the Iranians to the negotiating table. If they think they can strangle the global economy with few missiles they'll feel invulnerable. If the Saudis had the oil, they'd probably be flooding the market right now to bring Tehran to its knees is the same way they undermined the Soviet Union thirty years ago.

[JohnRM]

What did Matthew Simmons say was the upper limit for Saudi production? About 12, 12 and 1/2 million bpd. I think that those were his exact words. This doesn't surprise me. Mr. Simmons was a smart guy.

[Pops]

All you can believe is what the people who count ships say lol, They do appea to have made a bunch more holes last year - after saying they wen're going to develop any more because the market is well supplied - at the all time high price.



ETA, that chart is from Early Warning

[vtsnowedin]

So assuming everyone is telling the truth, all we need is a shortage of 3.0 mpd to kick off a world changing event. Anybody know of any producer that could fill such a major gap between demand and production on short notice?

[Pops]

The US just announced a couple of weeks ago that we're selling 80-something F-15 fighters to KSA, updating a bunch of others, etc, the UK is doing something similar though I'm not sure what.

This comes just months after KSA said they weren't developing new fields and didn't plan to ship much more oil than they were but then jumped up and filled in for Libyan production.

[vtsnowedin]

$this->bbcode_second_pass_quote('Pops', 'T')he US just announced a couple of weeks ago that we're selling 80-something F-15 fighters to KSA, updating a bunch of others, etc, the UK is doing something similar though I'm not sure what.

This comes just months after KSA said they weren't developing new fields and didn't plan to ship much more oil than they were but then jumped up and filled in for Libyan production.