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Re: 10 Basic Arguments of Peak Oil

General discussions of the systemic, societal and civilisational effects of depletion.
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Re: 10 Basic Facts of Peak Oil

Unread postby John_A » Mon 09 Dec 2013, 17:55:58

$this->bbcode_second_pass_quote('pstarr', 'D')rilling horizontally and fracturing shale structures is more than a decade old. The former dates back to the 1980's


can't you just STOP already?

The only person I have ever seen insist that horizontal drilling was a 1980's invention was Art Berman at a SIPES meeting at the Denver Athletic Club, April of 2011. And he was wrong as well.

Google is your friend, be you oilignorant or a claimed professional (King and Morehouse, 1993).

Texon Texas, 1929. By the 40's folks were trying it out in California as well. Come on people, Hughes Christensen? John Eastmen? Whipstocks? BHA's? This is a peak OIL forum, how about we up our game on the OIL part of it?

King, R.F., Morehouse, D., 1993,Drilling Sideways -- A Review of Horizontal Well Technology and Its Domestic Application, Energy Information Administration, April 1993, DOE/EIA-TR-0565, p. 7

$this->bbcode_second_pass_quote('pstarr', '
') and the latter from the beginning of the oil age. They use nitroglycerin back then.


Drake didn't use a "torpedo" as they were called. And neither did those who began the oil age in West Virginia and Ohio either. It took until the war ended (the Big War, more Americans killed than ever, etc etc) that people were doing this one, and nitroglycerin has nothing to do with the HYDRAULIC part of HYDRAULIC FRACTURING, so no, it isn't the same anyway.
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Re: 10 Basic Facts of Peak Oil

Unread postby Threepwood » Tue 10 Dec 2013, 08:56:01

$this->bbcode_second_pass_quote('Strummer', '')$this->bbcode_second_pass_quote('Threepwood', 'M')althus found it extremely hard to believe that we wouldn't have run out of everything a long time ago, even while vastly underestimating growth rates. I'd hope China and the rest of the world continues to grow economically, raising standards of living and lowering pop growth globally.


Ah, the good old "Malthus got it wrong" argument. Tell that to the 90 million Egyptians.


Tell them Karl Marx got it wrong also
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Re: 10 Basic Facts of Peak Oil

Unread postby Threepwood » Tue 10 Dec 2013, 09:10:24

$this->bbcode_second_pass_quote('', '
')Next year could test your theory. 3Mbd could come back online overnight from Iran, Iraq, Libya. I'd guess OPEC will defend price rather than production so don't expect a 50% drop, 15%-25% maybe, any more than that and LTO drilling will stop soon after, I'm guessing.


Yes, I'm talking about the price of oil the global commodity, not the cost of the U.S. becoming energy independent which is clearly much higher per barrel. Though a political landscape that would not block necessary infrastructure development would help lower this cost also.

i.e. the rest of the world still has a lot of 'conventional' oil to bring on line- as you note Iran, Iraq, Libya... highlights my point that politics, not geology, drives the cost of oil.
So I'd be willing to make a bet on $50 oil, but I wouldn't bet the farm!
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Re: 10 Basic Arguments of Peak Oil

Unread postby Strummer » Tue 10 Dec 2013, 09:20:51

$this->bbcode_second_pass_quote('Threepwood', 'T')ell them Karl Marx got it wrong also


What does Marx have to do with the fact that today's Egypt is a pretty good confirmation of Malthus? It's a textbook case of a population outbreeding the natural limits of its environment and resources.
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Re: 10 Basic Facts of Peak Oil

Unread postby Pops » Tue 10 Dec 2013, 09:30:08

$this->bbcode_second_pass_quote('Threepwood', '')$this->bbcode_second_pass_quote('', '
')Next year could test your theory. 3Mbd could come back online overnight from Iran, Iraq, Libya. I'd guess OPEC will defend price rather than production so don't expect a 50% drop, 15%-25% maybe, any more than that and LTO drilling will stop soon after, I'm guessing.


Yes, I'm talking about the price of oil the global commodity, not the cost of the U.S. becoming energy independent which is clearly much higher per barrel. Though a political landscape that would not block necessary infrastructure development would help lower this cost also.

i.e. the rest of the world still has a lot of 'conventional' oil to bring on line- as you note Iran, Iraq, Libya... highlights my point that politics, not geology, drives the cost of oil.
So I'd be willing to make a bet on $50 oil, but I wouldn't bet the farm!

The world has lots of conventional oil, I think somewhere around 80% of production is from 50+ year old regions. But if there were lots of oil just waiting to be had as you imply, wouldn't someone simply open the taps and start pumping it?

That 3Mbd off the market is maybe 4% of production, if there is oddles of oil why can't we just pump some more?

The idea is oil production will reach a peak and thereafter decline, presumably somewhere around the midpoint of the amount ultimately to be produced. That implies that after the peak there is still as much to be produced as has been produced so far . . . the second half must come from somewhere. Since we've used something north of 1Tb of oil we have at least that much left to go.

Peak oil is about rate, not about "running out" or Malthus" or any other strawman you might want to construct, we've heard them all, LOL.
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Re: 10 Basic Arguments of Peak Oil

Unread postby Threepwood » Tue 10 Dec 2013, 09:42:12

$this->bbcode_second_pass_quote('Strummer', '')$this->bbcode_second_pass_quote('Threepwood', 'T')ell them Karl Marx got it wrong also


What does Marx have to do with the fact that today's Egypt is a pretty good confirmation of Malthus? It's a textbook case of a population outbreeding the natural limits of its environment and resources.


It's a textbook case of a country's economy after many years of socialist rule.
It's the limits of their economic model that has hurt them, not their resources.
With a productive economy, you have something to trade for those resources you don't have

China has a pretty big population v resources, it's economy is thriving while being the world's largest importer of oil.
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Re: 10 Basic Facts of Peak Oil

Unread postby Threepwood » Tue 10 Dec 2013, 09:48:59

$this->bbcode_second_pass_quote('', 's')imply open the taps and start pumping it?


In a free market yes, in an oil cartel, no- it lowers the price too much- politics again not geology.

But much of the world is busy installing those taps, and many will soon be opened. Remember we are still not too long passed the massive global glut that saw oil prices in the teens per barrel- nobody- far less Malthusians like Hubbert, predicted that

I don't think we are in danger of burning all the oil any time soon
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Re: 10 Basic Arguments of Peak Oil

Unread postby Pops » Tue 10 Dec 2013, 09:58:42

So, no one noticed that there is a supply problem these last 10 or 12 years?

LOL, here is a picture of all that new oil.

Image
The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves -- in their separate, and individual capacities.
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Re: 10 Basic Arguments of Peak Oil

Unread postby Threepwood » Tue 10 Dec 2013, 10:06:28

$this->bbcode_second_pass_quote('Pops', 'S')o, no one noticed that there is a supply problem these last 10 or 12 years?

LOL, here is a picture of all that new oil.


yes, all the new oil has allowed production to rise as we see here , did you mean to post a different chart?
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Re: 10 Basic Arguments of Peak Oil

Unread postby Pops » Tue 10 Dec 2013, 10:18:03

All that new oil is from 14 counties in the US, enabled by the highest annual average prices ever and half the worlds oil rigs.

The entire rest of the world's production is flat for the last 8 years.

Yea that's the one.
The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves -- in their separate, and individual capacities.
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Re: 10 Basic Arguments of Peak Oil

Unread postby Threepwood » Tue 10 Dec 2013, 10:35:56

$this->bbcode_second_pass_quote('', 'A')ll that new oil is from 14 counties in the US, enabled by the highest annual average prices ever and half the worlds oil rigs.


come on pops you sound like an intelligent guy..

look at the bands, Canada for example- it's WIDER at the right hand side- representing it's GROWING production as I'm sure you're aware of. Most of those bands represent growing production, The only reason they tilt downwards overall is because they are stacked on top of the downward tilting base- it's an old statistical trick
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Re: 10 Basic Arguments of Peak Oil

Unread postby Strummer » Tue 10 Dec 2013, 11:49:57

$this->bbcode_second_pass_quote('Threepwood', 'T')he only reason they tilt downwards overall is because they are stacked on top of the downward tilting base- it's an old statistical trick


It's not a trick, it's called "the global market".
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Re: 10 Basic Arguments of Peak Oil

Unread postby Strummer » Tue 10 Dec 2013, 11:57:01

$this->bbcode_second_pass_quote('Threepwood', 'W')ith a productive economy, you have something to trade for those resources you don't have


Nonsense. For every exporter, there needs to be an importer that is able to pay for the imports, and that ability depends either the fact that he has some abundant resources of his own, or is able to export something to a third party. A world where everyone is manufacturing stuff for everyone else, ad infinitum, is a fantasy and it was never even remotely real. It's an economist's equivalent of a perpetuum mobile.
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Re: 10 Basic Arguments of Peak Oil

Unread postby Pops » Tue 10 Dec 2013, 12:07:38

$this->bbcode_second_pass_quote('Threepwood', '')$this->bbcode_second_pass_quote('', 'A')ll that new oil is from 14 counties in the US, enabled by the highest annual average prices ever and half the worlds oil rigs.


come on pops you sound like an intelligent guy..

look at the bands, Canada for example- it's WIDER at the right hand side- representing it's GROWING production as I'm sure you're aware of. Most of those bands represent growing production, The only reason they tilt downwards overall is because they are stacked on top of the downward tilting base- it's an old statistical trick

No trick, read the title, I plotted it that way because those dozen countries are increasing production while the other 60 or so are flat or decreasing. The whole picture looks like this.

Image


To look at it a different way, the rest of the world is flat aside from Iraq and those 14 counties in the US:

Image
The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves -- in their separate, and individual capacities.
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Re: 10 Basic Arguments of Peak Oil

Unread postby kublikhan » Tue 10 Dec 2013, 12:19:37

$this->bbcode_second_pass_quote('Threepwood', 'Y')es, I'm talking about the price of oil the global commodity, not the cost of the U.S. becoming energy independent which is clearly much higher per barrel. Though a political landscape that would not block necessary infrastructure development would help lower this cost also.
...
look at the bands, Canada for example- it's WIDER at the right hand side- representing it's GROWING production as I'm sure you're aware of. Most of those bands represent growing production, The only reason they tilt downwards overall is because they are stacked on top of the downward tilting base- it's an old statistical trick.
It doesn't matter how friendly the political landscape is if the geology renders the oil hard to extract. Yes, political factors can raise the price of extraction. But so can geology. By alot. The friendliest political atmosphere in the world can't change geology. US tight oil and Canadian tar sands will always be more expensive to produce than Ghawar. And if oil prices really did drop to a sustained price of $50, don't expect much more US tight oil to be drilled at that price. And remember how fast US tight oil depletes. The only thing stopping US tight oil production from crattering is new drilling.

$this->bbcode_second_pass_quote('Threepwood', 'i').e. the rest of the world still has a lot of 'conventional' oil to bring on line- as you note Iran, Iraq, Libya... highlights my point that politics, not geology, drives the cost of oil.
You mean that 4% that Pops mentioned? Sure adding in that oil is going to lower the price of oil. But expert oil traders are predicting a much more modest price fall. Not to $50. Even $75 oil could start to turn off the oil drills in the US.

$this->bbcode_second_pass_quote('', ' ')Oil prices could drop by as much as $15 per barrel should countries such as Libya restore production and sanctions on Iran be eased, forcing some of the most expensive US oil projects to stop pumping, the head of the world’s largest oil trader said. Taylor said that if most supply problems were solved, European benchmark Brent prices could come down to $90-$95 per barrel from the current $105 while US WTI prices may decline to $80-$85 from the current $95.
Top trader Vitol sees chance of steep oil price fall

$this->bbcode_second_pass_quote('', 'H')ow much geopolitical risk is baked into the price of a barrel of oil? At the height of former President Ahmadinajad’s bellicose anti-Israel rhetoric and threats to blockade the Straits of Hormuz, it was understood that as much as $20 per barrel represented a risk premium. About that much could quickly melt off of benchmark prices in the days and weeks to come, bring crude oil down from about $100 a barrel in the U.S. into the $80 range.

In the long-term a gush of Iranian oil could soften oil prices enough to kill the economics of America’s tight oil boom. If crude oil benchmarks were to fall to $75 a barrel and stay there for a couple months you’d see drilling rigs across Texas and North Dakota fall silent. The U.S. onshore oil industry has been perhaps the brightest spot in what passes for America’s economic recovery. How ironic that it could end up being a casualty of the Middle Eastern peace process.
Iran Deal Could Lead To Scuttling Of The Great U.S. Oil Boom
The oil barrel is half-full.
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Re: 10 Basic Arguments of Peak Oil

Unread postby Threepwood » Tue 10 Dec 2013, 12:34:46

"All that new oil is from 14 counties in the US"

Obviously that’s what the chart was designed to suggest but the same trick can be used to suggest many other conclusions

I.e. I could just as easily split new ‘post Saddam oil’ 'new Canadian oil' or any new production sources from any part of the world of which there are many- into it’s own color-band & slap that on top to show that THIS is where 'all the new oil is coming from'- but I wouldn't expect it to fool anybody

This is exactly the sort of thing that makes me skeptical of peak oil- all this chart needs is a Carmina Burana soundtrack , a grim voice over and it could fade to some nice apocalyptic footage then it would be really convincing!
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Re: 10 Basic Arguments of Peak Oil

Unread postby Threepwood » Tue 10 Dec 2013, 12:51:13

$this->bbcode_second_pass_quote('', 'T')aylor said ...


I'm aware that financial pundits are conservative in straying from current prices, it's not wise to expose yourself too far out on a limb and have that blunder on your record, underestimating a move can always be more easily attributed to unforeseen variables
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Re: 10 Basic Arguments of Peak Oil

Unread postby John_A » Tue 10 Dec 2013, 12:52:10

$this->bbcode_second_pass_quote('Pops', 'S')o, no one noticed that there is a supply problem these last 10 or 12 years?

LOL, here is a picture of all that new oil.


The people saying there are requirements of "new" oil are the same ones who use IEA and EIA projections to baseline their production numbers against and declare, "Look! We need 3 new Saudi Arabias!" And then, of course, we need no new Saudi Arabias and supplies go up anyway, and it turns out that when you baseline against unreasonable expectations you are being just as unreasonable.

Anyone remember the good old days of "supply can't match demand!". It implies zero understanding of how economists think about this, utilizing price, substitution and conservation to predict that what happened in the USA over the past few years makes PERFECT sense. Price goes up. People change their behavior (sell monster trucks, buy crossovers). Some conserve and stop using liquid fuels. Increased price drives largest increases in US oil production in 150 years. Consumption plummets.

The rest of the world doesn't operate with the same freedom in their markets that the US does, doesn't even allow private ownership of mineral rights, an issue demonstrated in the US by the increased production mostly coming from privately owned mineral rights rather than federal or state.

So the rest of the world sits on tremendous resources with thumbs stuck up their hindparts and wonders "gee...why can't we increase oil production like the US when we have all these billions of barrels of shale oil or extra heavy...wwwaaaaaaaahhhhhhh".

The USA can lead them to water, but it cannot make them drink.
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Re: 10 Basic Arguments of Peak Oil

Unread postby Strummer » Tue 10 Dec 2013, 13:03:01

$this->bbcode_second_pass_quote('John_A', 'T')he USA can lead them to water, but it cannot make them drink.


Will the USA give its drilling rigs (you know how many are there) to those countries? And build roads and everything else, the whole infrastructure that already existed in the Bakken and Eagle Ford? Because that's some very heavy capex advantage there. Or do you think that all the other countries did not do their math on the billions of dollars that it would cost them to even start thinking about shale?
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Re: 10 Basic Arguments of Peak Oil

Unread postby Threepwood » Tue 10 Dec 2013, 13:22:18

$this->bbcode_second_pass_quote('Strummer', '')$this->bbcode_second_pass_quote('John_A', 'T')he USA can lead them to water, but it cannot make them drink.


Will the USA give its drilling rigs (you know how many are there) to those countries? And build roads and everything else, the whole infrastructure that already existed in the Bakken and Eagle Ford? Because that's some very heavy capex advantage there. Or do you think that all the other countries did not do their math on the billions of dollars that it would cost them to even start thinking about shale?


You're illustrating John's point, profitable private ventures don't need people to 'give them free stuff' they are self funding, including infrastructure like roads and pipelines- no shortage of capital investment for this where it's permitted
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