[Plantagenet]

$this->bbcode_second_pass_quote('Pops', 'A')h, here's the Guardian, a recognizable and PO "friendly" media source:

Write-down of two-thirds of US shale oil explodes fracking myth


The Monterey formation, previously believed to contain more than double the amount of oil estimated at the Bakken shale, and five times larger than the Eagle Ford shale, both in Texas, The EIA's original survey for the US Department of Energy published in 2011 had been contracted out to Intek Inc. That report found that the Monterey shale constituted "64 percent of the total shale oil resources" in the US.

[Pops]

You're right Plant, after the 2011 report came out giving the Monterey 15B in C+C, the EIA upped all their estimates. Looking at other plays in the same light caused them in 2013 to increase world US shale resources from 35 to 345 billion barrels.

Feel better?

http://www.eia.gov/analysis/studies/wor ... erview.pdf

Edit world to US

[Plantagenet]

$this->bbcode_second_pass_quote('Pops', 'Y')ou're right Plant, after the 2011 report came out giving the Monterey 15B in C+C, the EIA upped all their estimates. Looking at other plays in the same light caused them in 2013 to increase world US shale resources from 35 to 345 billion barrels.

Feel better?

http://www.eia.gov/analysis/studies/wor ... erview.pdf

Edit world to US

[Pops]

;^)

[ROCKMAN]

Pops - "technically recoverable resources," Dang...they made up a new category. Here's the definitions from the US Geologic Survey. Identified resource: these include economic, marginally economic and sub economic resources. Reserve: that portion of the resource that can be economically and legally extracted. Proved reserves: oil/NG that "have been determined, with in 20% margin of error, by quantitative data, including appropriate analysis, from loosely spaced and geologically well known sampling sites.

So I guess "technically recoverable resources" would include the marginally and sub economic oil/NG extraction. No wonder their number was so large: technically recoverable resources included ever bbl of oil and cubic foot of NG that could be produced even if it were NOT profitable to do so. At least that's how the USGS would interpret their statement. Good enough for me.

[Pops]

You said the plan is to sell the sizzle!

LOL

[Pops]

Just noticed this, an example of unfortunate press timing

$this->bbcode_second_pass_quote('', '[')url=http://www.bloomberg.com/news/2014-05-19/europe-has-28-year-shale-gas-rebuff-to-russia-chart-of-the-day.html]Europe Has 28-Year Shale Gas Rebuff to Russia: Chart of the Day[/url]
By Ladka Bauerova and Radoslav Tomek May 19, 2014 5:00 PM CT

The European Union has enough gas trapped in shale to free the bloc from reliance on Russian energy supplies for about 28 years if only the constituent countries are prepared to extract it.



The CHART OF THE DAY ranks EU countries by recoverable shale-gas reserves expressed in years of domestic consumption, led by Sweden with 250 years, according to Bloomberg calculations using U.S. Energy Information Agency data of 10 European countries. Among them, France and Bulgaria have outright bans on extraction, while the Netherlands and Germany are among states that have issued moratoriums.

[Pops]

And here is this tidbit:

$this->bbcode_second_pass_quote('', 'R')ussia signs a $400 billion natural gas contract with China. The EU has enough shale reserves to tell Russia to take a hike. And it turns out the Monterey Shale has about 13.1 billion fewer barrels of recoverable oil than the feds first thought. Yes, it has been a busy week on the Energy front, with lots of news about supply and wheeling and dealing. And lots of speculation about the economic and geopolitical impact.

[TheDude]

To illustrate the dilemma at hand graphically, here are pics of two producing shale plays:





Nothing to it - send directional drill down formation, frack stages, extract oil, Bob's Your Uncle.

On a finer scale those formations are as predictable as these simplified renditions make them appear, too. Dust off your copy of Roadside Geology of Texas, the chapters on the Gulf Plains inland from the coast are nothing short of interminable, and as Texans will gladly point out, their state is fricking huge, it's quite a slog to even read about, never mind actually drive through. These are depositional environments that haven't done much of anything tectonically since the Mesozoic - the perfect environment to send a drill down.

Now, the Monterey up close is like this:



This is a land that's chockablock with uplifts, anti/syn clines, innumerable faults, an unceasing barrage of quakes, and more. It'd be a bit of a trick to send your bore down such a twisty bunch of rocks, hence the emphasis on vertical wells and acid fracks. The technological miracle we're presumably waiting for would be a smart bore that could turn on a dime - perhaps literally? Microbores perhaps? Who the hell knows? But for the time being all the oil cos can think of to do is punch holes and burn rocks and see what comes up. Apparently it's paying off a very little bit, but nothing like the copious volumes that would validate the 16 BBO type figures thrown around.

This is all part and parcel of the legacy of CA oil, which is, frankly, crappy stuff. Imagine a slightly more runny version of La Brea and you get an idea of its quality, it's just part of the American legacy that so much attention has been paid to it over the centuries.

Now, admittedly, 8 years ago it didn't look like drillers in TX had done much of anything beyond arresting the stall they were in, and CA doesn't look to be doing anything exciting at the moment either. But still...I'm far more interested in the prospects for tight oil abroad, in northern Mexico, or Russia - or the Paris Basin.

[Pops]

Thanks Dude. Had to look up some of the technical jargon tho...

$this->bbcode_second_pass_code('', 'Bob's your uncle
It's a catch phrase dating back to 1887, when, in a blatant case of favoritism, British Prime Minister Robert Cecil (a.k.a. Lord Salisbury) decided to appoint his nephew Arthur Balfour to the prestigious and sensitive post of Chief Secretary for Ireland.

So "Bob's your uncle" is another way of saying "your success is guaranteed."')

--
Just curious, what is the scale of the photo would you say? Are those layers inches, feet, yards hundreds of yards thick?

[steam_cannon]

$this->bbcode_second_pass_quote('Pops', 'Y')ou're right Plant, after the 2011 report came out giving the Monterey 15B in C+C, the EIA upped all their estimates. Looking at other plays in the same light caused them in 2013 to increase world US shale resources from 35 to 345 billion barrels.

[steam_cannon]

I got the story up on slashdot.org

US Officials Cut Estimate of Recoverable Monterey Shale Oil By 96%

[Pops]

Steam, I think they extrapolated the results from a few wells out to 1,700 sq miles or some such in the Monterey and I'd guess it was meet with such joy that the did the same for lots of other places as well.

If it was just some oilmen and deep pocketed investors doing the gambling it would be one thing, but big politics and big economic bets and big deferments of PO mitigation attempts are being played out on the strength of those extrapolations.

[Plantagenet]

$this->bbcode_second_pass_quote('steam_cannon', '
')The two thirds number comes from a NYTimes article in 2013.
Quote: "Monterey Shale...Comprising two-thirds of the United States’s total estimated shale oil reserves" (2013)<br>

What percent of shale reserves do you think this downgrade impacts?

[TheDude]

$this->bbcode_second_pass_quote('Pops', 'J')ust curious, what is the scale of the photo would you say? Are those layers inches, feet, yards hundreds of yards thick?

[Graeme]

What Happened to My 13 Billion Barrels?

$this->bbcode_second_pass_quote('', 'H')owever, technology comes with costs. The current tight oil boom in North Dakota and Texas would not have happened absent the context of historically high oil prices. But even with oil at $100 per barrel, the EIA now thinks only a very small portion of the Monterey formation’s oil resources can be produced profitably. Maybe with oil at $150 or $200 per barrel that percentage would change. But how high an oil price can the American economy bear before it falls into recession? Evidence suggests that $100 per barrel oil is already acting as a brake on economic expansion.

[ROCKMAN]

A little more detail about the consultant company that came up with the 13 billion bbls: That’s nothing compared to how much shale oil “resource” the prez of Intek believes there is under just the western federal lands and in the world: 1.8 TRILLION BBLS and 10 TRILLION BBLS respectively.

Couldn’t find info on prez but here’s his #2 Peter Crawford: 1977 – 1983 BSFS in International Politics – Georgetown University; 1976 – 1977 Political Science – University of Maine

Another Intek VP. Only 4 years experience but at least a degree in Pet Engineering: MS in Petroleum Engineering – University of Kansas; 1985 – 1989 BTech in Mining Machinery – Indian School of Mines

Here’s the abstract of a paper written by Intek’s fearless leader and three cookers. BTW took a while to find this. Found more than a half dozen links that had reviews etc. about the company and they were all dead including their own web site:

Abstract

World oil prices have nearly doubled in 2008, and have risen by 400% since 2004. Crude oil prices reached more than $145per barrel before pulling back significantly. High oil prices, and the national security issues associated with the United States’ reliance on unstable foreign sources of crude oil, have reignited interest in America’s enormous domestic oil shale resources. Oil shale is one of the world’s largest known fossil fuel resources. Global resources well exceed 10 trillion barrels. More than 1.8 trillion barrels of oil are trapped in shale in Federal lands in the western United States in the states of Colorado, Utah and Wyoming, of which 800 billion is considered recoverable. This amounts to three times the proven reserves of Saudi Arabia. During the past decade, much attention has been given to advancing various extraction technologies to make oil shale economically feasible. This paper describes many of these technologies and recent and ongoing advances. The objective of this paper is to quantify the costs and benefits of oil shale industry development and consider the hurdles to such development. Detailed economic analysis has been conducted on the potential development of oil shale. This paper will describe the four representative production technologies being considered by companies for oil shale development. The paper will provide details of various components of capital and operating costs for each of these technologies and the price at which each of these technologies will be economic. In addition to presenting an evaluation of the economic viability of an oil shale industry, this paper also describes the costs and benefits of such an industry to local, state, and Federal governments. Measures such as jobs created contribution to Gross Domestic Product, and imports avoided will be described.

[ROCKMAN]

And speaking of one of the Big Oils not planning on chasing those 600 million bb's of MS resources. Just had a fought of how we might punish Russia for the Ukrainian situation: get Shell Oil to export their shale development technology to them as well as show them how to make refined products. LOL.

"Shell has approximately $80 billion of capital employed combined in oil products and North Americas resources plays, and the financial performance there is frankly not acceptable,” van Beurden said at Shell’s Annual General meeting May 20, according to a statement. “These two businesses have been the largest drag on Shell’s profitability in 2013.”

[Pops]

I may be alone on this but it seems a big deal to me. Maybe because I've been skeptical from the beginning regarding the long term viability of LTO from shale, especially in CA but all shale.

I've been scanning the news pretty regularly to try to figure the reaction to this story and as I noted above, the best I can get is the spin from the Chamber is that "the rocks are still down there." I'll be anxious to read the actual EIA report and what it has to say about whether they think the oil is still down there. The investor/anti-environmentalist/pro-growth bloggers I've read are hanging their hat on the idea that the entire play is just saturated with oil and all that is needed is a little Can-Do. As noted above in this thread that is not at all clear.

Beyond that of course is the obvious conclusion that should be drawn, extrapolating thousands - millions, of square miles of potential production from a tiny number of exploration wells ain't all that reliable.

Yet as soon as the contracted report that originally sent the Monterey "EUR" into the stratosphere was released in july 2011 (to thunderous virtual applause and checkbook exercising) the EIA proceeded to begin applying the same method to shale everywhere. Then came Maugeri and the "harvard" study in 2012 which the MSM picked up overnight and after the EIA last year upped world shale like it had done the Monterey, it was really off to the races.

Not surprisingly as I was looking around the web this am (while PO.com was offline) I ran into just a buttload of old PO blogs that showed no posts since that same 2011-2012 period. It was really a big PR coup to put such a firm kibosh on an idea that was beginning to make some waves. But even the few blogs out there still blogin and boards still messaging didn't have much to say.

Am I wrong thinking this is the beginning of a sea change in how the world looks at shale or am I reading too much into this, the monterey is just different and all the other plays are going to be just peachy?