[ROCKMAN]

Pops – Everything I know about the Bakken is what I read from the folks actually chasing it. Amongst those experts I think there’s still some variation as to which portion of those different reservoirs are producing how much of the oil. I know one thought is that while the best wells will be completed in the more porous/permeable intervals much of that production is coming from other intervals via the fracture systems that transect the entire interval. There are some folks who are toying with a similar concept with the Eagle Ford Shale and the formations immediate above and below it. Also, as I understand it, many of the better EFS wells are drilled in that portion of the formation that has a high calcite concentration and aren’t pure shale. Those intervals are more brittle and thus easier to fracture.

BTW: Not all geophysicists are geologists and only a small number of geologists are geophysicists. The best geophysicists I’ve worked with were geologists also. Some of the worst geophysicists I’ve worked with had little geology training. Some of the worst geologists I’ve worked with thought they understood geophysics. Many reservoir engineers know little geology and much less about geophysics.

And then there are those of us who have stuck our noses into other people’s business their whole career. The Rockman is a geologist that has been doing geophysical and reservoir engineering analysis his entire career. My boss, a production engineer, understands geophysics better than most geologists…I started training him about 20 years ago. He also handles economic analysis better than any hand I’ve ever worked with. My current geophysicist is one of the best in the biz and is a geologist who understands drilling mechanics better than many drilling engineers. The Rockman handles the drilling operations for our group and just deals with the geology/geophysics from more of an observational position.

The point isn’t so much that the three of us are that clever but we are survivors of the numerous busts in the business. In the oil patch the best strategy is to be as useful a mammal in as broad an area as possible. Of course there’s the potential of “knowing just enough to be dangerous” so it’s important to keep egos in check.

And yes: an unfortunate large percentage of upper level managers I’ve dealt with for 4 decades knew a little bit about all aspects and not enough about any one area. We tend to classify many of them as politicians regardless of that their framed degree they have hanging on their office wall. I also don’t recall any of the best geologists, geophysicists or engineers I’ve worked who hung their diplomas on their office walls.

[rockdoc123]

$this->bbcode_second_pass_quote('', 'D')r. Laherrere is an engineer---not a geologist. I'm not sure he has a real grasp on geology. For instance, Dr Laherrere doesn't think the Bakken is an "unconventional" oil field---he says the "trapping" there is "conventional" when it clearly isn't. In reality the production in the Bakken isn't at all dependent on any kind of conventional structural trap. There are good spots and bad spots, but these seem to be related to the original sedimentology of the shale rather than the presence or absence of "conventional" structural traps.

Dr. Laherrere also says the production zone for the Bakken isn't the shale at all----Dr. Laharrere thinks the Bakken shales are actually producing from a "dolomitic reservoir" between shale beds. This is the exact opposite of what the USGS said when they recently doubled their estimate of oil in the Bakken to 7.4 billion bbls by including both the upper and lower SHALES.

[Pops]

Thanks rock-s

When looking at these nice smooth curves I always wonder, 'what if the curve isn't bell shaped?' What if technology and price make the line rise higher, longer than Hubbert predicts?


The period we're in right now, let's call it the peak era just for conjecture's sake, we have both high "legacy" demand, where traditional uses like long single driver commutes and V8 4x4s haven't had a chance to be eliminated plus growing demand in poorer areas of the world, along with lots of cheap capital looking for a boom, combining to make all out extraction efforts attractive and profitable.

I imagine us pulling forward every bit of flowable oil production we can from the the future, the period just over the "peak" of the curve, so that instead of topping the rise and starting a gentle downslope we run off a cliff.

In addition to "pulling forward production" what if those great conditions of legacy demand and profit hungry capital at cheap rates wane? What if permanent demand destruction from the high price erodes the price, think movement from 'burbs to city centers, increased vehicle fuel efficiency, etc. Add in a credit drought after the artificial glut and perhaps the nice rounded peak is lopped off.

Instead of a nice geologists "bell", the curve then becomes a not so nice cresting wave?


That is the pessimistic side of the coin relative to what I posted in the "no oil crash" thread.

.

[ROCKMAN]

Pops - longer response later. But in 38 years I have not once generated a nice symmetric bell curve. And many were very skewed. Neither theoretical or actual data

[Arthur75]

$this->bbcode_second_pass_quote('John_A', 'D')oesn't mean their projections are any better, or worse, than flipping a coin and trumpeting the path they believe it leads down as valid. From his and Campbell's 1998 paper. Check out the volume listed for the world circa 2013. Looks like about 22 billion barrels to me, otherwise known as 63 million a day. Current world crude oil production? 72 million a day.

[Arthur75]

$this->bbcode_second_pass_quote('Pops', '
')
I imagine us pulling forward every bit of flowable oil production we can from the the future, the period just over the "peak" of the curve, so that instead of topping the rise and starting a gentle downslope we run off a cliff.

.

[Plantagenet]

$this->bbcode_second_pass_quote('Pops', '')$this->bbcode_second_pass_quote('Plantagenet', ' ')Dr Laherrere doesn't think the Bakken is an "unconventional" oil field---he says the "trapping" there is "conventional" when it clearly isn't.

[Pops]

You're right Plant you merely said he didn't know what he was talking about, my mistake.

$this->bbcode_second_pass_quote('Plantagenet', 'S')uch differences are very important in evaluating the oil reserves in the Bakken.
For instance, if Laherre is right and the USGS are wrong then the USGS estimate of 7.4 BILLION bbls of oil in the Bakken are in error. On the other hand, if the USGS is right and Laherrere is wrong, then the oil potential in the Bakken is significantly greater then Laherrere is predicting in his new report.

[Plantagenet]

$this->bbcode_second_pass_quote('Pops', 'B')ut Plant, so what?

Say there is 7.4billion barrels recoverable? Maybe there are 14 or 21 billion, so what?

Laherrère estimates remaining world reserves at a 1,000 billion barrels, what difference does 7 billion make more or less?

I'll tell you, it makes no difference...

[ROCKMAN]

Pops – At the risk of pissing everyone off a little let me repeat my worn out complaint: I’ve seen a variety of reserve numbers for the Bakken. So some simple questions. Which of those numbers is based upon oil selling for $90/bbl for the next 30 years with no escalation? Which is based on oil selling for $90/bbl and inflating at 4%/yr for the next 30 years? Which number is based upon $90/bbl and declining to $60/bbl in 2 years and then staying there for 5 years and then jumping to $120/bbl for 4 years before demand destruction knocks it down to $70/bbl for 6 years and then Iran does nuclear, Israel blows the hell out of them, oil goes to $180/bbl for a year and the US drains every drop of the 700 million bbls in the SPR?

OK, OK…I’m being a tad of an ass. But how much oil would ND be producing today and how many here would even be familiar with the word Bakken if oil were still selling for $45/bbl as it was just 7 or 8 years ago? And that’s just the debate about what the recoverable commercial reserves the Bakken contains based upon some price assumption. Now let’s jump to the really important prediction: the amount of oil produced every day from the Bakken for the next 30 years. A prediction that also hinges on the future price of oil.

There’s nothing wrong with debating how much oil is in place in the Bakken. A tough estimate for sure but why not try. And debating how much of that oil will be produced over an extended period of time is fine also except that any such estimate without using some price platform amounts to nothing more than a guess. Which is also OK to IMHO: a wild ass guess may have the same possibility of being correct as the most detailed analysis using a fine tuned price platform. But guesses can’t be debated. They are essentially opinions and most of us have one. One might agree or disagree with any of my opinions. But they can't tell me I'm wrong. My opinion is just that...mine.

[rockdoc123]

$this->bbcode_second_pass_quote('', 'P')ops – At the risk of pissing everyone off a little let me repeat my worn out complaint: I’ve seen a variety of reserve numbers for the Bakken. So some simple questions. Which of those numbers is based upon oil selling for $90/bbl for the next 30 years with no escalation? Which is based on oil selling for $90/bbl and inflating at 4%/yr for the next 30 years? Which number is based upon $90/bbl and declining to $60/bbl in 2 years and then staying there for 5 years and then jumping to $120/bbl for 4 years before demand destruction knocks it down to $70/bbl for 6 years and then Iran does nuclear, Israel blows the hell out of them, oil goes to $180/bbl for a year and the US drains every drop of the 700 million bbls in the SPR?

[ROCKMAN]

All true doc. But I was referring to our brethern here and the numbers they bandy about. Thanks: I forgot to also toss in the distinction between "reserves" and "resources". Besides pricing another distinction some don't include when they talk about X billion bbls...bbls of reserves or resources?

[Pops]

The distinction between reserves and resources is hard for amateurs like me to grasp. USGS says "technically recoverable" is such and such with current technology and we figure OK and put it on the front page in display type.

The fact it will stay in the ground unless someone can make a profit extracting it just doesn't cross our little consumer oriented minds.


A trillion barrels sounds like a lot, at todays volume it's only 40 years. The good news is it will last a lot longer, the bad news is it will not be at today's volume.

[AirlinePilot]

Of all the thousands of articles, papers, expert analysis, ive read over the last 8 years one thing has always stuck out for me. On the grand scale of historic oil production the shift in where the peak comes and decline begins isnt affected greatly by plays like the Bakken. Yes it does have some small effect, but that is the crux of this. The difference of a few years one way or another doesnt really matter other than to some of us who are interested in the details. The shift is so small that we might as well be trying to count how many angels can fit on the head of a pin.

It doesnt matter. The effects of plateauing Crude oil production and decreasing Global net Exports are already being felt. We are dealing with it right now. The evidence is all around you. Deep water, Tar Sand, Tight oil, it's all simply an increasingly difficult and expensive proposition to keep BAU alive as long as possible. For me the most interesting part of this is we are all going to get to see what happens, how decline unfolds, and its global effects very soon.

[ROCKMAN]

AP - Good point. Sometimes we (and moi) get so focused on the details we tend to not put it into a larger framework. And the “larger framework” may not be as inclusive as it should be. Even if someone has a very good crystal ball and could accurately predict global oil production for the next 40 years or so it still doesn’t address how much oil will be exported nor does it imply how those exported bbls will be distributed.

Pops – I’m with you in that when I see “X billion bbl of oil” I don’t think of “resource” and not “reserve”. Resource is really such an alien concept to me. Perhaps I sometimes snap too quickly at some numbers that are tossed out. Anyone’s resource number is fine by me since they don’t really mean anything from a practical standpoint IMHO. Not once in 38 years have I heard one person I’ve dealt with in the oil patch mention “resource bbls”. They just don’t exist in my world.

[Plantagenet]

$this->bbcode_second_pass_quote('ROCKMAN', ' ')Even if someone has a very good crystal ball and could accurately predict global oil production for the next 40 years or so it still doesn’t address how much oil will be exported nor does it imply how those exported bbls will be distributed.

[ROCKMAN]

P - I agree: anyone who can come even close occasionally is doing great. As hard as it can be to predict geologic and technology trends in the end it still hinges on accurately predicting the price of oil/NG in the long term. So at the end of the day I still want to see someone predict the price of oil/NG for the next 30 years or so. And explain why anyone should accept that forecast as credible. From there we can work on the very complex calculus of the dynamic. Otherwise any prediction of oil/NG reserves or production rates is just a guess. No better supported than letting an random number program generate the prediction.

[Plantagenet]

$this->bbcode_second_pass_quote('ROCKMAN', 'I') still want to see someone predict the price of oil/NG for the next 30 years or so. And explain why anyone should accept that forecast as credible.

[ROCKMAN]

P – And the more I dig into these refining JV's, the Export Land Model, in ground oil acquisition and trading blocks like Brazil with Africa the less concerned I am about global PO and more about…what do we call it: NOAOTOM…Net Oil Available On the Open Market. Just what we needed, eh...a longer acronym. LOL.

No one in this country gives a rat ass about how much oil Brazil will be producing eventually or if China has a refinery JV with the KSA. They want to know how much it will cost them for a tankful. And that will depend upon the global economies and the amount of oil for sale on the open market. The economies? Who knows what those details will be. Available oil for sale? Where…overseas…stateside? More crystal ball stuff.

But in general the dynamics seem set: higher oil prices are allowing the US more oil…at least for a while. And China et al are pulling more oil off the long term market along with ELM and depletion. And where do these dynamics put us in 10 to 15 years? Give me an answer…go ahead, punk. You feel lucky…make my day. LOL.