[Plantagenet]

I'd give Gail a grade of "incomplete" on this essay.

It's unfortunate that in an essay entitled "where are we headed" Gail doesn't say a word about the expansion of fracking in tight shale from the US to other countries around the world. It's pretty clear now that fracking in the US has delayed the peak in global oil production. Thanks to US fracking global oil production is still slowly rising. That's a big deal. Peakers completely missed seeing the importance of fracking in the US---now it appears Gail is completely missing the reality that we are going to see significant overseas production from fracking as well.

How can we know "where we are going" if we don't take into account the likelihood that we will soon see fracking in shales in KSA, China, Australia, and the EU? How much oil will come from these new sources? How soon?

[efarmer]

When a fellow says it ain't the money but the principle of the thing, it's the money. ~ Artemus Ward

If your outgo exceeds your income, then your upkeep will be your downfall. ~ Bill Earle

I just need enough to tide me over until I need more. ~ Bill Hoest

This forum has had a bunch of posting about preemptive strategies to address resource limits and much hand wringing about how they do not gain inertia and manifest to scale. Speculative price peaks are giving way to permanent high prices and this will drive the real response, ad hoc at first, and then organized to a greater degree about 5 years after ad hoc is steamrolling along enough to drive consensus on really doing something. Reduced consumption is going to win big because it is the simplest method of coping available at the lowest granular level of self direction. I also predict a donkey will race the latest water powered cars and win because it is able to move under it's own power.

[AgentR11]

Pops I think your 2 graphs illustrate the answer to why there's not been so much oscillation. SA can, and will, modulate their output in order to keep the price stable. This will be especially true if they start to frack shales; where the high price is required to keep the thing profitable; they may internally be seeing a situation where without fracking they could hit their maximum output and still not be able to keep prices from a spike and crash, which would provide motivation to bring unconventional stuff into the mix.

[Pops]

I don't know what the likelihood of fracing the world is - nobody does obviously or the Monterey guess wouldn't have been so far off.

It's disingenuous to say uninvested "peakers" missed the importance of LTO in the US when every major refinery in the US spent billions to reconfigure in order to handle heavier oil as light oil was forecast to fade away. I have seen no evidence that they are switching back even now.

That certain folks with an uncritical eye to any positive PR fluffing now think fracing is the be-all end-all of PO for now and evermore is somewhat naive.

In fact, the thing that is never talked about here (x ROCK & Doc maybe) and that is more widespread and probably a bigger development than fracking or shale is the increase in horizontal drilling - whether fraced shale or not.


http://marketrealist.com/2014/07/horizo ... igs-arent/


$this->bbcode_second_pass_quote('AgentR11', 'P')ops I think your 2 graphs illustrate the answer to why there's not been so much oscillation. SA can, and will, modulate their output in order to keep the price stable.

[Plantagenet]

$this->bbcode_second_pass_quote('pstarr', '')$this->bbcode_second_pass_quote('Plantagenet', 'I')'d give Gail a grade of "incomplete" on this essay.

It's unfortunate that in an essay entitled "where are we headed" Gail doesn't say a word about the expansion of fracking in tight shale from the US to other countries around the world. It's pretty clear now that fracking in the US has delayed the peak in global oil production. Thanks to US fracking global oil production is still slowly rising. That's a big deal. Peakers completely missed seeing the importance of fracking in the US---now it appears Gail is completely missing the reality that we are going to see significant overseas production from fracking as well.

How can we know "where we are going" if we don't take into account the likelihood that we will soon see fracking in shales in KSA, China, Australia, and the EU? How much oil will come from these new sources? How soon?

[Tanada]

Fracked shale may be as abundant as shown on that map, but if they are all going to follow the steep decline rates seen so far in the USA how long will it take until this bubble runs out?

In the mean time fracked shale oil is keeping the oil price relatively stable, what happens if tight oil can not replace conventional decline? That's right, peak oil.

[Plantagenet]

$this->bbcode_second_pass_quote('Tanada', 'F')racked shale may be as abundant as shown on that map, but if they are all going to follow the steep decline rates seen so far in the USA how long will it take until this bubble runs out?

[JV153]

$this->bbcode_second_pass_quote('Plantagenet', '
')
However, every other innovation that the US oil biz has come up with has eventually either been taken overseas by US companies, or has been adopted by foreign oilcos operating in other countries around the world.

I have no doubt we'll eventually see large-scale fracking of oil shales in other countries, just as we have seen in the US.




potential global shale resources (not including marine shales)

[GHung]

Planet asks 'How much longer?'

Perhaps until the water runs out. Or the credit dries up. Or one of the many other deeply systemic problems we face manifests itself to the point where economies simply can't pay the costs of current production. Seems we're already swimming as hard as we can to just stay afloat, even if some of you choose to ignore a broader range of metrics, all necessary to keep your little party going. Robbing Peter to pay Paul only works for so long.

[Pops]

Of all the "potential resources" in the US there are only a few sweet spots producing now even though prices are still at historic highs. Condensate (NGPL) is down a third from 2011 though. Not sure how much more of this exceptionalism we can take.

I notice Plants map still shows the Monterey as a resource and he still ignores that both Peakers and refinery owners are in the same boat - to wit not very impressed with the future of LTO...

[JV153]

Exactly. One has to rob (use) a lot of conventional oil to go after smaller amounts of tight oil spread over 30% of the earth's surface. The sweet spots are ok, but once it goes beyond that it's over.

[Plantagenet]

$this->bbcode_second_pass_quote('JV153', 'T')he sweet spots are ok, but once it goes beyond that it's over.

[Pops]

The whole point of the post is that trying to shoehorn a complicated world into a single "bell shaped curve" is wrong on the face of it. I would have thought that has become obvious to any casual observer by now.

Your certainty that because there is a lot of shale in the world everything is fine, is quaint but it misses all the other dynamics that are the topics of conversation here.

The short explanation is:
shale≠resource
resources≠reserves
reserves≠profits
profits≠increasing production

[dolanbaker]

A lot of people are still hung up on this "peak", what really matters is the amount of oil that is available per-capita and that amount appears to be already in decline as the number of consumers globally increases.

Many of these new consumers are using the fuel in a more productive way than the western consumers who are using it just for social & domestic uses. This means that they will eventually outbid the western consumers as they continue to grow their emerging economies.

So production may be increasing via fracking, but the number of consumers is most likely increasing faster than production.
Therefore the amounts of oil actually available to individuals is diminishing!

[BobInget]

About a year ago I read Carlos Slim bought a huge chunk of tight shale in Argentina. Naturally, since I owned a tiny slice of YPF, this interested me. If it was good enough for Carlos, I doubled my position.
Since then Exxon and Chevron have also come on board. Someday I'll be stinking through silk.
http://en.wikipedia.org/wiki/Vaca_Muerta

"According to the U.S. Energy Department's Energy Information Administration, Argentina is estimated to hold technically recoverable shale gas resources of 802 trillion cubic feet and estimated shale oil reserves of 27 billion barrels. Owing to the rich Vaca Muerta region, Argentina ranks second in the world for shale gas reserves and fourth for potential shale oil reserves".

(posted note) SA will be the fastest growing region worldwide beginning 2020 thanks in great measure to
this 'dead cow'.

http://www.zacks.com/stock/news/134657/ ... -Argentina

[JV153]

$this->bbcode_second_pass_quote('Plantagenet', '')$this->bbcode_second_pass_quote('JV153', 'T')he sweet spots are ok, but once it goes beyond that it's over.

[Plantagenet]

$this->bbcode_second_pass_quote('JV153', '')$this->bbcode_second_pass_quote('Plantagenet', '')$this->bbcode_second_pass_quote('JV153', 'T')he sweet spots are ok, but once it goes beyond that it's over.

[JV153]

Plantagenet,

You still seem to have missed the primary point in my previous post, that all that equipment for drilling and actually doing the fracing itself requires large quantities of oil and water. All the infrastructure and expertise doesn't exist (even in many cases even for conventional drilling) in say France, or Argentina or Australia. Technically recoverable reserves of LTO are about 350 Gigabarrels, so we could say that only a quarter of that is economically recoverable (87 Gb) at <200 USD/barrel, and spread over an area much larger than the LTO shale being fraced in the U.S. 87 Gb is 3 years of global oil use.

Your picture seems to include tar sands (expensive to recover), and oil shale, which is incredibly energetically expensive to extract.

LTO production outside of the U.S will develop very slowly, as it's now 8 years after fracing started in the U.S. I don't see it happening for a paltry ultimately recoverable quantity of 87 Gb, of which the sweet spot quantity would be even less.