[Oily Stuff]

Like Mr. Rockman I have been in the oil and gas business a very long time and I too have seen estimates and predictions of individual well and reservoir performance that were so grossly incorrect entire companies were obliterated because of it, political regimes in small countries were changed because of it, peoples hopes and dreams were destroyed forever because of it. The oil and gas industry is notorious for misleading the public, some of it intentional lying and deception, some of it stretching the truth, some of it simply having unrealistic expectations of mother nature. I think basically it is no more possible to predict production capacity in the world 10 years from now than it is to predict what your IRA will look like 10 years from now. There are simply too many unknowns that will affect the ultimate outcome.

The internet and the "world of information" we now live in seems to guarantee that everyone should know everything about everything, immediately and forever. If the EIA, or the USGS, or public companies under the watchful eye of the ever protective SEC, says its so, it must be so. There is no lying on the internet. As Mr. Argamante implies, however, these entities get paid for making predictions. There guesses about the future are a means of self preservation and pleasant, happy guesses, as we know, are always better received than gloomy guesses. I don't think very many people in the world trust the oil and gas business and I can just about guarantee that not too many people like or appreciate oil companies. But now, all of a sudden, when it comes to the tight oil, energy independence, lets party hardy propaganda campaign the industry has undertaken, the world trusts the oil and gas business. We're good guys again...lets have another round of SUV's, thanks very much. Go figure.

I would say Mr. John A that most people in the world already know what they need to know about our energy future, or they should know by now. If you buy gasoline, and lots of folks do, something is not right, is it? I don't believe people will deal with the energy future until 9 dollar gasoline is upon them like a hungry bear. If demanding accurate, reliable predictions for future supply is necessary so that Americans can know how much time there is left, how many more BTU's they can piss off before getting eaten by the bear, my advise to people is to forget about supply and start conserving, now. Yesterday. At least lets do it for our kids.

[Tanada]

That's a non sequitur, of course every forecast ever made about anything is conditional, even if that isn't stated when the forecast is made. All sorts of assumptions go into every forecast, some assume no future growth, some assume a decline, others assume growth.

Forecasting that the USA will get to the point where we produce more oil than we consume is an assumption that oil production growth will exceed consumption growth by a large margin if the time frame is short. Personally the only way I see it happening in my lifetime is if demand is replaced by some other source or eliminated completely through economic collapse.

[John_A]

$this->bbcode_second_pass_quote('Oily Stuff', ' ')I think basically it is no more possible to predict production capacity in the world 10 years from now than it is to predict what your IRA will look like 10 years from now. There are simply too many unknowns that will affect the ultimate outcome.

[John_A]

$this->bbcode_second_pass_quote('Tanada', 'T')hat's a non sequitur, of course every forecast ever made about anything is conditional, even if that isn't stated when the forecast is made. All sorts of assumptions go into every forecast, some assume no future growth, some assume a decline, others assume growth.

[Oily Stuff]

Darn, I always wanted to be a Phoobah.

$this->bbcode_second_pass_quote('John_A', 'W')hat is the first thing you do to make estimates of what is going to happen 10 years from now...better?

[John_A]

$this->bbcode_second_pass_quote('Oily Stuff', 'D')arn, I always wanted to be a Phoobah.

$this->bbcode_second_pass_quote('John_A', 'W')hat is the first thing you do to make estimates of what is going to happen 10 years from now...better?

[ralfy]

Related:

"The Myth of 'Saudi America'"

http://www.slate.com/articles/health_an ... dance.html

[agramante]

John_A:

M. King Hubbert, "Nuclear Energy and the Fossil Fuels", page 9: "The production rate will be zero when the reference time is zero, and the rate will again be zero when the resource is exhausted; that is to say, in the production of any resource of fixed magnitude, the production rate must begin at zero, and after passing through one or several maxima, it must decline again to zero."

It's a good paper. I suggest you read it.

In a data series with several maxima, the question is which of the maxima is global, and which others are local. You can look at crude oil production data (Source EIA):

US Crude Production.jpg

as well as rig count data:

Oil Rig Count.gif

and see a pretty clear linear relationship between the current production spike and rig count. For the US to surpass Saudi Arabia that count will have to climb much higher, and of course geology and pricing will have to cooperate. (I think pricing, in general, will.) And since the drillers are going for the sweet spots first, it's hard to guarantee that future wells will produce even as well as the ones drilled already. Our current production maximum still isn't all that close to the 1970 maximum. In 1970 production was roughly 10 million barrels a day; in 2008 it was roughly 5 million; now it's 7.5 million. So we need to double this performance to pass Saudi Arabia (assuming, of course, that their production remains consistent, which it might not). A few promotional estimates don't convince me that we will.

[Oily Stuff]

Mr. Aragament is of course correct in a very big way. At the moment Texas has 48% of the domestic rig fleet running flat out, over 30% of that in the Eagle Ford shale. I do not believe that available iron, qualified labor, qualified supervision, service company support, etc. exists whereby the rig fleet can increase too much more in the the EF, or anywhere else in America for that matter. We could have 150 rigs built and ready to work down here in Texas, which we do not, but we do not have the qualified labor to run those rigs. Its hard, hot, dangerous work and clearly young men and women today still believe that degrees in political science and film history are the ticket to success. Lots of attorneys can't make what a floor hand for Nabors makes but who wants to really work these days?

http://eaglefordshale.com/drilling-rig- ... #more-3229
http://www.rrc.state.tx.us/eagleford/Ea ... uction.pdf
http://www.rrc.state.tx.us/eagleford/Ea ... uction.pdf
http://www.rrc.state.tx.us/eagleford/im ... -large.jpg

C+C production from the EF thru April of 2013 was 644,000 BPD. There are currently 4900 EF wells producing in the EF and for the most part I think everyone is pretty much caught up on frac'ing delays. If you drive thru S. Texas there is a lot of frac pumps parked in service yards and frac tanks are stacked up like cord wood.

So, after 5 years of huevos to the wall drilling in the EF in S. Texas the average well is making 131 BOPD. Forty percent of the wells drilled next year in the EF will be needed to simply replace the decline from existing wells. In my hood lots of EF wells are on rod lift making 50-60 BOPD and bucoos of water and all of a sudden there are no rig lights to be seen in the evening sky. Some re-fracs (after only 3 years of production life!) being done by the biggest company in the entire play, at 3 million dollars a pop, are not doing so well, I am told by production hands.

Saudi America my hinie.

[Ron Patterson]

John A wrote:
$this->bbcode_second_pass_quote('', 'T')his is a conditional forecast. Of course if production stops growing it will be a sign...that production has stopped growing. The people doing this for a living, like the EIA and whatnot, are trying to figure that out based on economics and resource sizes TODAY, they need to know now when production will stall out to even refute the claim of others.

[Ron Patterson]

$this->bbcode_second_pass_quote('', 'p')starr wrote
Ron, when is the next update on those production permit numbers?

[John_A]

$this->bbcode_second_pass_quote('agramante', 'J')ohn_A:

M. King Hubbert, "Nuclear Energy and the Fossil Fuels", page 9: "The production rate will be zero when the reference time is zero, and the rate will again be zero when the resource is exhausted; that is to say, in the production of any resource of fixed magnitude, the production rate must begin at zero, and after passing through one or several maxima, it must decline again to zero."

It's a good paper. I suggest you read it.

[John_A]

$this->bbcode_second_pass_quote('Oily Stuff', '
')So, after 5 years of huevos to the wall drilling in the EF in S. Texas the average well is making 131 BOPD. Forty percent of the wells drilled next year in the EF will be needed to simply replace the decline from existing wells. In my hood lots of EF wells are on rod lift making 50-60 BOPD and bucoos of water and all of a sudden there are no rig lights to be seen in the evening sky. Some re-fracs (after only 3 years of production life!) being done by the biggest company in the entire play, at 3 million dollars a pop, are not doing so well, I am told by production hands.

Saudi America my hinie.

[John_A]

$this->bbcode_second_pass_quote('Ron Patterson', '
')Wake up and smell the coffee. Tight oil is nothing but a flash in the pan. That fact will be obvious by the end of this year and all those folks who say the US is the new Saudi Arabia will be spitting out feathers from all that crow they have to eat.

[Ron Patterson]

$this->bbcode_second_pass_quote('', 'J')ohn A wrote:
When crap rock with nothing but a little help from a frack job can cough up oil production larger than Prudhoe Bay and Cantarell COMBINED (largest conventional oil fields in the Western hemisphere for those unfamiliar with them) it just doesn't seem fair to think of what is going on as flash in the pan.

[TheAntiDoomer]

Suuuuure Ron whatever you say. Hey still expect 2016 we will be in total doomer collapse as you have been preaching on TOD for years?

[Ron Patterson]

$this->bbcode_second_pass_quote('', 'A')ntidoomer said: Suuuuure Ron whatever you say.