[Pops]

$this->bbcode_second_pass_quote('Subjectivist', 'W')hat do you think about the shale loan crisis that seems to be shaping up?

[Tanada]

$this->bbcode_second_pass_quote('Pops', 'M')y copyrighted rule of thumb is $1/mbd of total supply, so if we want 95mbd we will need to pay $95/bbl. If we want something less we can pay less, I don't see that happening without a recession.

The hitch in that scenario is still, just the same as ever, geologic constraints in conventional oil. 4 years of the highest oil prices and investment ever barely replaced C+C depletion - and likely mostly of the replacement is due to an increase in the second C, condensate. Which ain't nothin' but ain't crude.

When investment can't replace conventional depletion, that is peak.

[PeakOiler]

I selected "How should I know?" since I think the "rear view mirror" should be a duration of about 10 years.

[zoidberg]

2016 might be early. Iran is going to ramp up as is the rest of Opec looking for money. Don't be so impatient lol. Shale and oil are looking to be resilient enough to keep going for a long while yet. Id be reluctant to hazard a guess, but since it scarecly matters im going to say around 2020. All bets are off if war gets into saudi Arabia though and odds of that are increasing.

[Subjectivist]

$this->bbcode_second_pass_quote('zoidberg', '2')016 might be early. Iran is going to ramp up as is the rest of Opec looking for money. Don't be so impatient lol. Shale and oil are looking to be resilient enough to keep going for a long while yet. Id be reluctant to hazard a guess, but since it scarecly matters im going to say around 2020. All bets are off if war gets into saudi Arabia though and odds of that are increasing.

[Tanada]

$this->bbcode_second_pass_quote('zoidberg', '2')016 might be early. Iran is going to ramp up as is the rest of Opec looking for money. Don't be so impatient lol. Shale and oil are looking to be resilient enough to keep going for a long while yet. Id be reluctant to hazard a guess, but since it scarecly matters im going to say around 2020. All bets are off if war gets into saudi Arabia though and odds of that are increasing.

[zoidberg]

Iran was part of the answer. Theres also the issue of unrestricted investment to boost capacity over today's limits which should start helping as the initial surge from storage and idled infrastructure benefits wear off.

The other part is the break down of opec and its cartel to impose supply restrictions. They seem to have given up for now to control price and as revenues go down and debts pile up they will scramble to boost production.

Another big variable is worldwide shale oil resources which are huge. How long will the tech and will to use remain with the US?

[Tanada]

$this->bbcode_second_pass_quote('zoidberg', 'I')ran was part of the answer. Theres also the issue of unrestricted investment to boost capacity over today's limits which should start helping as the initial surge from storage and idled infrastructure benefits wear off.

The other part is the break down of opec and its cartel to impose supply restrictions. They seem to have given up for now to control price and as revenues go down and debts pile up they will scramble to boost production.

Another big variable is worldwide shale oil resources which are huge. How long will the tech and will to use remain with the US?

[Pops]

You might look at that chart and say
Around 2012, OPEC lowered production in an attempt to support the price.
Frackers kept right on fracking on the dime of investors looking for any kind of return (ZIRP)
Since the frackers were not going to exercise any restraint and continue producing flat out, OPEC (KSA) decided to open the spigot, use their spare capacity to break the frackers.
It is working.

[Tanada]

$this->bbcode_second_pass_quote('Pops', 'Y')ou might look at that chart and say
Around 2012, OPEC lowered production in an attempt to support the price.
Frackers kept right on fracking on the dime of investors looking for any kind of return (ZIRP)
Since the frackers were not going to exercise any restraint and continue producing flat out, OPEC (KSA) decided to open the spigot, use their spare capacity to break the frackers.
It is working.

[ralfy]

$this->bbcode_second_pass_quote('zoidberg', 'I')ran was part of the answer. Theres also the issue of unrestricted investment to boost capacity over today's limits which should start helping as the initial surge from storage and idled infrastructure benefits wear off.

The other part is the break down of opec and its cartel to impose supply restrictions. They seem to have given up for now to control price and as revenues go down and debts pile up they will scramble to boost production.

Another big variable is worldwide shale oil resources which are huge. How long will the tech and will to use remain with the US?

[Ibon]

I had for the first time a guest here from the oil industry. He worked his career as an engineer doing exploration along the gulf coast and did some overseas exploration in Turkey. Worked for Exxon along with other firms. He owns a beach resort on an off shore island here in Panama and came up to get some cool mountain air. I played innocent about peak oil and the oil industry in general and I asked him at one point... " Hey I recall about 6-7 years ago this concept of peak oil was in the news and all this speculation that during this century we will feel a big squeeze as conventional crude and non conventional sources of fossil fuels go into decline. What do you think about that?

His response..... "Hell, they've been saying we're going to run out of oil since I was college. Fracking been around for decades. It's the horizontal technology that's new. Long before we run out of oil we're going to have nuclear fusion with the advances they've been making recently".

Thought I would share that very brief dialogue here. I could have carried on and went far deeper into the topic but there was a social scene happening at that moment that did not compel me to carry the conversation further. Interesting that this guy did not even entertain peak oil as a factor to be concerned about. In conclusion, before we get to any serious constraints we will start ramping up further alternatives with nuclear at the forefront lead by advances in fusion etc.

Just another voice chiming in with his humble opinion.

[ROCKMAN]

pstarr - "Yes, worldwide shale oil resources which are huge but not available at a reasonable price the world can afford." Really??? Let's just focus on the US and not the world. WE have the infrastructure and personnel magnitudes greater than anywhere else on the planet. And yet when oil was priced at record levels and hundreds of wells tested dozens of shale formations in the US no new trends of any significance compared to the EFS and Bakken were proven. How many of the dozens of other us shale formations (which collective are a 1,000+ times thicker then the EFS and B can you name off of the top of your head? The overwhelming majority of just the US shales have no meaningful oil potential at any price close to "reasonable". In fact little potential at even very high unreasonable prices.

As the old saying goes: you can't get blood out of a turnip...no matter how much you're willing to spend. Shale wells that produce very little oil, no matter how long the laterals and the number of fracs, aren't going to be developed regardless of how high sustained oil prices might reach. In that sense, IHMO, many of those huge "technically recoverable resource" volumes tossed out are grossly overstated. Just consider our very well known Eagle Ford Shale. Most don't realize that the entire formation, even though not much more then 500' thick, is not a prolific oil producer. Eventually companies learned to target specific intervals within the formation. I'm not talking geographically but vertically. Which is why before the learning curve was established hundreds of EFS were drilled that didn't produce enough oil to be commercial successes even at an oil price over $200/bbl.

[Pops]

I don't have "confidence" that frackers or anyone will do anything, I voted "How should I know?"

LoL I'm just throwing out ideas,

I think the '80s were different in that the glut then was of longer-lived conventional wells. Back then the TRRC then OPEC came along to keep drillers from cutting each other's throats because a little overproduction hung around a long time. The were/are monopolies colluding to fix the market price.

I mean think about it, this is the first time there is an actual open market for oil without collusion (or the at least the impression) among producers since maybe 80 or 90 years.

We know that LTO wells have a quick decline but maybe forget that they are not really speculative (in the known sweet spots) like conventional wells were. They have evolved to be "mass produced" so are a pretty sure thing in those areas. All they need is the right price.

--


That is from Bermanand this is him quoting the IEA OMR

$this->bbcode_second_pass_quote('', '�')��On the face of it, the Saudi-led OPEC strategy to defend market share regardless of price appears to be having the intended effect of driving out costly, “inefficient” production.”

[Ibon]

$this->bbcode_second_pass_quote('pstarr', '&')quot;Just another voice chiming in with his humble opinion." Or another cog in the wheel who has absolutely no overview of his life and times. I don't mean that as an insult, but rather an explanation of our predicament.

[Tanada]

$this->bbcode_second_pass_quote('Pops', 'I') don't have "confidence" that frackers or anyone will do anything, I voted "How should I know?"

LoL I'm just throwing out ideas,

I think the '80s were different in that the glut then was of longer-lived conventional wells. Back then the TRRC then OPEC came along to keep drillers from cutting each other's throats because a little overproduction hung around a long time. The were/are monopolies colluding to fix the market price.

I mean think about it, this is the first time there is an actual open market for oil without collusion (or the at least the impression) among producers since maybe 80 or 90 years.

We know that LTO wells have a quick decline but maybe forget that they are not really speculative (in the known sweet spots) like conventional wells were. They have evolved to be "mass produced" so are a pretty sure thing in those areas. All they need is the right price.

--


That is from Bermanand this is him quoting the IEA OMR

$this->bbcode_second_pass_quote('', '�')��On the face of it, the Saudi-led OPEC strategy to defend market share regardless of price appears to be having the intended effect of driving out costly, “inefficient” production.”