[Pops]

As far as the price of fuel goes, the simple question to ask is, where will it affect your driving. If you are honest and can gauge your ability to pay compared to others I think you can get a good idea.

>$4 hasn't really affected us much even though I'm a PO prepper from way back and on the low end of the income scale and that surely has effects. We drove to Wally's Sunday to spend $60. It is (in even numbers) 60 miles round trip and we get a little over 20mpg so we spent around $12 in gas, 20%.

That's a pretty high ratio for us. We usually don't go to Wally's unless we are spending a couple of hundred. When gas was close to $4 and we were driving the 4w4 we went much less. OTOH we are older, pay no rent and lots of other factors, including still having a paycheck. Lots aren't there anymore.

[Pops]

JD always said PO would be a non-event, he lived in a city and didn't drive. That of course is a limited view since we aren't all in the same boat. Even if you are the same, odds are you won't be buying Airliner Delivered Lobster at the same rate if the price increases due to cost.

[dorlomin]

http://peakoilbarrel.com/texas-rrc-july ... #more-3905

Goes into details as to why there is a divergence between the Texas Railroad Commission and the EIA.

Interesting and worth keeping an eye on.

[Pops]

Something specific happened to condensate last May that I'm gonna guess has more to do with data than oil wells - in fact more to do with marketing than drilling. Not sure what that might be, perhaps simply blending the condensate into the crude?

$this->bbcode_second_pass_quote('', 'T')he huge volume of this gassy new oil [LTO] has created a glut, pushing prices to $10 or more below the level of traditional crude. Energy companies think they could get higher prices by sending the new oil abroad, which explains some of the push to lift a U.S. ban on exporting crude. Federal officials recently gave two companies permission to export condensate under certain circumstances.
...
Greg Garland, the chief executive of Phillips 66, PSX +0.67% told analysts recently that there was no question that "people are blending condensate" into West Texas Intermediate, the U.S. benchmark, to try to pass it off as regular crude and get more money for it.

[Subjectivist]

As I understand it Butane and Pentane are counted as condensate when they are in natural gas wells so if you blend them into crude oil say 5% by volume you will make oodles more money than if you sell them as straight products.

[ROCKMAN]

Sub - Again this is where the Texas Rail Road Commission makes the crude oil/condensate discussion complicated. They neither categorize the liquid production coming out of a well based upon on it's gravity nor composition. It's based upon the reservoir conditions at the time of production. Two wells could be producing 300 bbls/day of liquid hydrocarbon with identical gravity and composition and the TRRC might classify one as crude oil and the other as condensate. And I've pointed out before: a well might have it's 300 bbls/day of liquid hydrocarbons classified as condensate in 2008 and then be producing 300 bbls/day of liquid hydrocarbon in 2014 that would be classified as crude oil.

It's based upon the NG/oil ratio, reservoir pressure and "dew point" as well as few other metrics. I won't try to explain the calculation process. If anyone is interested enough they can visit the TRRC website and burn up several hours of their life working it out. LOL.

[Synapsid]

Blending condensate into West Texas Intermediate to try to pass it off as regular crude:

WTI isn't regular crude?

What does "regular crude" mean, anyway?

[copious.abundance]

This has been discussed ad nauseum. The TRRC does not include stripper and old wells when it initially reports a month's production. Those are added in gradually, and IIRC sometimes it takes a couple years. Notice how, as you go back in time, TRRC data eventually does catch up with EIA data.



And here is this process in action. Notice how (I think) January's production was initially reported as a sharp drop from December's when the March report came out. But 4 months later, as the older production was added in, it was revised upward to a definitive increase. Over time it will be revised up still more.



EDIT: And notice that the time when all 5 reports in the 2nd chart are pretty much in agreement with each other - approximately spring 2012 - is when the TRRC data finally corresponds to EIA data. Thus, about 2 years from now you'll see TRRC data be close to the current EIA data.

[ralfy]

To maintain economic growth, the global economy will need that amount of production every two years or so.

[ROCKMAN]

"The TRRC does not include stripper and old wells when it initially reports a month's production." Now that's just absurd. First the most obvious flaw: oil production in Texas isn't reported by well. Never has been...never will be. Production is only reported on a lease basis. For instance in my monthly report to the TRRC I show 900 bbls of oil or about 30 bopd coming from the Smith lease. So do I have 1 well on that lease doing 30 bopd or 6 stripper wells doing 5 bopd each? You do know and neither does the TRRC. This is due the archaic heritage of allowing an operator flowing all his oil wells on a lease into one tank where he takes a collective measurement. This is one of the most frustrating aspects of researching oil production in Texas. Real example: right now I'm evaluating a 60 go field for hz drilling potential. The target reservoir has produced 150 million bbls of oil from several hundred wells. It's currently producing 260 bopd from 4 different leases. From the TRRC data base I can't determine if it's coming from a hundred stripers or 10 wells doing an average of 26 bopd each. And nether can the TRRC.

So if the TRRC can't tell if all that production is coming from strippers how do they not add it to the monthly stats. And they don't count "old wells" each month? Even sillier. In the field I'm currently drilling in two years ago the operator recompleted a stripper well drilled in 1958 that had been producing less than 10 bopd for years. The shallower reservoir came at 45 bopd...not a stripper. So the TRRC isn't going to post that non-stripper production because the well is "old"? LOL. Last time I saw the stat the vast majority of Texas oil wells were strippers. In fact the average here is less than 10 bopd for all our wells...not just strippers. Something like 20% of Texas oil production comes from strippers. So the TRRC is supposedly currently under reporting by that much? And by production from "old wells" also?

[copious.abundance]

Perhaps it isn't stripper wells and old wells, per se, though I seem to recall reading somewhere that a lot of mom-and-pop wells get counted in the RRC stats with quite a bit of lag. Regardless, there is definitely a lot of production that does not initially get reported.

http://www.rrc.state.tx.us/oil-gas/rese ... nt-factor/
$this->bbcode_second_pass_quote('', 'E')ach month the Commission reports preliminary Texas production of crude oil and gas well gas based on producer filings of Form PR. Preliminary production totals are key indicators for many industry analysts, who use the data to forecast U. S. oil and natural gas supply and demand and to measure industry activity and performance.

The Commission recognizes, however, that this preliminary snapshot of Texas monthly production underestimates the final and complete total. In subsequent months of producer filings, the Commission receives many corrected or delinquent production reports.

The Commission may need to resolve problems in data collection, format, or processing that again result in subsequent upward revisions to monthly production totals. Company mergers and acquisitions may also delay timely producer filings. This ongoing process of reconciling operator data typically pushes the actual production totals higher.

In an effort to estimate actual monthly production more accurately, the Commission will calculate a supplemental production adjustment factor each month to be applied to the preliminary, reported statewide total of oil and gas well gas. The production adjustment factor, multiplied by the preliminary production total, is the Commission's estimate of the expected, final statewide production for a given month.

[MD]

Ultimately it's bad for North America to always lead the way in fossil fuel extraction. We'll be dry first. The rest of the world is shying away from fracking, for now, which will just serve to slow them down long enough to enjoy one more wave of production later, once all the drilling rigs from NA become available on the used market. That will happen about the same time the dollar loses it's reserve currency status. Oh boy I just can't wait for that...

Unless fusion magic appears here first, which is looking unlikely. Our entire system is looking long toothed at the moment. Helpless incompetents mostly in control.

[ROCKMAN]

MD - "Ultimately it's bad for North America to always lead the way in fossil fuel extraction." And therein lies the flaw in what appears to be rationality on your part. "North America" does lead the way in fossil fuel extraction...NA energy companies lead the way in fossil fuel production. There is virtually nothing in their business plans to preserve reserves for future production. In fact, federal law as per the SEC requires companies to maximize current profits for the benefit of the shareholders. If ExxonMobil voluntarily cut production significantly they would be immediately subject to lawsuits by share holders and legal action by the SEC. Companies, especially pubcos, are dependent upon their cash flow to service debt, pay salaries, pay dividends and provide capex for new projects to replace produced reserves. If a pubco does show at least a static asset base, if not an increasing one, it's stock price will suffer...Wall Street will make certain of that.

Of course the politicians could mandate a significant production reduction. And that would result in the loss of tens of thousands of good paying jobs, a loss of tax revenue from those laid off workers as well as corporate taxes, a loss of royalty from gov't leases from which a large portion of our oil comes, numerous loan defaults damaging the banking system, increased dependence on imports in an unstable global market along with a large increase in our trade deficit and, lastly, an increase in costs to the American voters. Do you envision a lot on congress critters signing on to such a bill?

The goal of your proposal is reasonable. It's those pesky unintended consequences that mess it up. As has been said before you can't preserve your cake and eat it too. Don't eat it now and you die of starvation before you get to eat it in the future. LOL.

[Pops]

$this->bbcode_second_pass_quote('copious.abundance', 'T')his has been discussed ad nauseum.

[copious.abundance]

I did not mean to infer that the topic had been discussed vis-a-vis condensate or oil specifically, I was referring to the general topic of the RRC methodology, and how they gradually revise things upward over time.

[marmico]

The EIA contracts with Drillinginfo (formerly HPDI) to provide it with RRC C+C production data. The RRC "fudge factor" aka the production adjustment factor has been materially understated for years.

http://www.rrc.state.tx.us/oil-gas/rese ... nt-factor/

[marmico]

EIA contracts with Drillinginfo (formerly HPDI) to provide estimated TRRC C+C production volumes. The TRRC "fudge factor" aka the production adjustment factor has been materially understated for years.

http://www.rrc.state.tx.us/oil-gas/rese ... nt-factor/

[copious.abundance]

Not only has Texas reached 3 million bpd, the Permian Basin alone could very well reach 3 million barrels a day.

Permian Basin in Texas to Drive Down Oil Prices
$this->bbcode_second_pass_quote('', 'E')veryone knows the U.S. is now pumping oil and gas in new places from North Dakota to Alabama. But less-known is that Texas remains the powerhouse when it comes to oil output—and may be on the verge of producing a glut.

One of the state's oldest oil fields, the Permian Basin in West Texas, is booming again, thanks to advanced technologies such as hydraulic fracturing and horizontal drilling. And Permian oil output shows no signs of stopping at its current 1.7 million barrels a day.

"You're definitely going to hit the 2 million barrel mark," Bob Reeves, chief executive of Athlon Energy Inc., ATHL -1.59% which is based in Fort Worth, Texas, said at an investor conference recently. "I think it's not a matter of if, it's just a matter of when." Production could ultimately reach 3 million barrels a day, he said.

[...]

The oil flowing from the Permian is so plentiful that it is threatening prices. A barrel of oil in Midland, Texas, the Permian's trading hub, cost $78.97 in mid-August. In Cushing, Okla., the national storage and transportation center for oil, the same crude fetched $96.48—$17.51 more.

[...]

The Permian is producing more oil than local pipelines can handle. Count on the next couple of years being full of pipeline planning, construction and community fights. Trains full of crude also will continue to rumble out of towns like Wink, Texas, to California and the Gulf Coast.

[...]

[Tanada]

If you look at the shape of the curve and the steep decline rate of the wells after just a few short years of production it looks to me as if this is nothing but a Superstraw phenomenon. Oil that would have been produced slowly for 50 years is all being produced in 5 years giving a very large bump for the next 5 years, then disappearing from the market just as quickly as it arrived.

[ROCKMAN]

T - The PB is a different animal in one important way then the Eagle Ford and Bakken. Those plays are drilling wells in areas that had little or no production from those formations. Much of the increase in the PB has come from redevelopment of existing fields. Which is still great for the country: oil is oil regardless of the details. But again a reality check: "...the Permian Basin in West Texas, is booming again, thanks to advanced technologies such as hydraulic fracturing and horizontal drilling." Horizontal wells have been drilled in the PB for more than 20 years and frac'ng has been the heart of PB production for more than half a century. In fact the PB was the big motivation for developing frac'ng technology. Didn't need no stinking frac'ng in our nice permeable Gulf Coast reservoirs back then. LOL. What is new is high priced oil. But again: oil is oil. But in all the plays: oil is high priced oil.