[Cog]

Sooner than when?

[ROCKMAN]

As I’ve said before nothing wrong with predicting a date for global peak oil production. Or global peak oil demand for that matter. It's just for sport IMHO.

But compared to the constantly changes dynamics of global oil production and consumption such dates are of little importance compared to the impacts of the POD…Peak Oil Dynamic. Just look back (let’s say over the last 50 years) at the periods of great suffering and expenditures of wealth/lives as a result of the POD. And all obviously developing long before those PO or PD dates are reached.

Just look at today’s concerns by everyone. By consumers: will oil prices continue to rise? By oil producers: will prices crash? By govts: will major military conflicts develop in major oil exporting countries? How many members of this collective can’t sleep tight worrying about the date of peak oil production or demand?

[Tanada]

$this->bbcode_second_pass_quote('Cog', 'S')ooner than when?

[ROCKMAN]

Interesting that oil production development in the Arctic by other countries doesn’t get as much protesting as when the US develops plans. From

https://www.rigzone.com/news/wire/norwa ... 8-article/

Reuters - Norway's parliament gave a green light on Monday for Equinor's $5.85 billion plan to develop the Johan Castberg oilfield in the Arctic Barents Sea. Johan Castberg Field, which is expected to start in 2022, would become the second producing oilfield in the Norwegian sector of the Barents Sea after Eni's Goliat field, which started in 2016. Equinor, which changed its name from Statoil last month to become a broader-based energy firm spanning everything from oil to wind, has dropped plans to build an onshore oil terminal to handle exports from the 558 million barrel field, to cut costs.

The costs of developing Johan Castberg have been reduced…meaning that production could be profitable at an oil price of $31 a barrel rather than over $80 a barrel. Sweden's Lundin and Austria's OMV are looking at the possibility of developing the Alta/Gohta and Wisting discoveries in the Barents Sea.

[Outcast_Searcher]

$this->bbcode_second_pass_quote('ROCKMAN', '
')The costs of developing Johan Castberg have been reduced…meaning that production could be profitable at an oil price of $31 a barrel rather than over $80 a barrel. Sweden's Lundin and Austria's OMV are looking at the possibility of developing the Alta/Gohta and Wisting discoveries in the Barents Sea.

[misterno]

US oil production set to reach record high; imports on pace for 60-year low

The U.S. Energy Information Administration increased its forecast for crude oil prices through 2019 as U.S. production remains on pace to break record highs and as domestic imports drop to their lowest levels in almost 60 years.

The agency said Brent crude oil spot prices averaged near $77 per barrel in May, an increase of $5/bbl from the April average to reach its highest monthly average price since November 2014.

Looking ahead, the EIA forecasts that Brent spot prices will average $71/bbl in 2018 and $68/bbl in 2019, marking a near $2/bbl increase in the 2019 forecast since last month.

West Texas Intermediate crude oil prices are seen averaging near $64.50/bbl in 2018 and near $62/bbl in 2019.

The EIA estimates that U.S. crude oil production averaged 10.7 million barrels per day in May, up 80,000 bbl/d from the April level, with output continuing to rise in the coming years. The agency projects that U.S. crude oil production will average 10.8 MMbbl/d in 2018, up from 9.4 MMbbl/d in 2017 to its highest annual average since 1970, before rising to an average 11.8 MMbbl/d in 2019.

At the same time, the EIA forecasts that total U.S. crude oil and petroleum product net imports will fall from an annual average of 3.7 MMbbl/d in 2017 to 2.5 MMbbl/d in 2018 and to 1.6 MMbbl/d in 2019, which would be the lowest level of net oil imports since 1959.

Outside the U.S. the EIA forecasts that crude oil production from OPEC will average 32.0 MMbbl/d in 2018, down 0.4 MMbbl/d from the 2017 level, but will increase slightly to an average of 32.1 MMbbl/d in 2019. The EIA assumes increasing production from Persian Gulf producers, primarily Saudi Arabia, will offset decreased production in Venezuela and Iran.

[kublikhan]

$this->bbcode_second_pass_quote('', 'F')or the first time since 1973, the United States is the world's largest producer of crude oil. The feat demonstrates how the US shale oil boom has reshaped the global energy landscape. American oil output has more than doubled over the past decade.

Texas is the epicenter of the shale boom. Production in the Permian Basin of West Texas has grown so much that in February the United States vaulted above Saudi Arabia for the first time in more than two decades. US output kept climbing in June and August, reaching nearly 11 million barrels per day. That nudged the United States ahead of Russia for the first time since February 1999.

'Changed the game'
The achievement underscores the profound impact of rapid technological advances in drilling. Fracking unlocked vast sums of oil and natural gas that had been trapped underground. Drilling costs declined dramatically. "That changed the game for the US. It meant we could be resilient and competitive"

That resilience was required after oil prices crashed beginning in late 2014. OPEC launched a price war to regain market share lost to the United States and other oil producers. Falling prices knocked dozens of US oil companies out of business and caused widespread job losses. US oil production declined -- but not as dramatically as feared. And when prices began to rebound in 2016, US shale companies were able to quickly ramp up output. Their expenses were lower -- and technology had improved.

Texas is an oil superpower
Major oil producers including BP (BP) and ExxonMobil (XOM) have shelled out billions of dollars in recent years to get a piece of the action in the Permian Basin. The Lone Star state is on track to produce more oil than either Iran or Iraq. That would make Texas No. 3 in the world if it were a country. And the state's biggest port district recently exported more crude oil than it imported. "It's all about technological improvements, supported by ample capital to invest, and the ingenuity of American oil drillers."

[ROCKMAN]

“The achievement underscores the profound impact of rapid technological advances in drilling. Fracking unlocked vast sums of oil and natural gas that had been trapped underground.”

Guess I’ll have to rant about the same FACTS I’ve done many times before. First, the same frac’ng equipment used in the shale boom existed long before the boom. I mean the actual pump trucks and piping existed many years earlier. The same horizontal drilling equipment also existed 15+ years earlier: I was using it to drill hz wells offshore in the GOM. The same reservoirs were known to contain oil in their fracture systems DECADES earlier.

What was uncertain was the production potential to combine all the known technology to go after that oil. The same wells could have been drilled 10 years earlier but the price of oil did not justify the risk. Another important factor was the growing desperation of public companies to add reserves. Especially when NG prices had collapsed a few years earlier. Once a few early wells came in at high rates the race was on. Just as the race hit a huge speed bump when oil prices collapsed.

And thus the cycle continues today.

[kublikhan]

Thanks for the correction Rockman. I should have just omitted that section of the article and left in the part talking about production numbers.

I was just reading an article that echoed much of what you just said. It talks of how the US Department of Energy partnered with private companies to combine technologies as far back as the 70s(fracking alone goes back as far as the 1850s). I didn't know that, I thought it was all private developments. But I guess it's not that surprising given the uncertainty you mentioned. Government helps pay for the risky uncertain stuff, private companies run with it if it's a success(and the price is there to justify it). It's a pattern that has been followed in other industries as well.

$this->bbcode_second_pass_quote('', 'S')hale rock presented a particular challenge because of the difficulty in accessing the hydrocarbons in these tight formations. In the mid-1970s, the US Department of Energy (DOE) and the Gas Research Institute (GRI), in partnership with private operators, began developing techniques to produce natural gas from shale. These included the use of horizontal wells, multi-stage fracturing, and ‘slick’ water fracturing (GEO ExPro Vol. 9, No. 2).

[kublikhan]

Some oil importers like India are squealing under the higher oil prices. The oil companies on the other hand have seem to have hit a sweet spot. They spent years cutting costs and tightening their belts driving costs to an eight year low. Meanwhile oil is selling at a four year high. Low costs + high revenues = lots of cash. In 2018 they will generate more free cash flow than the previous five years combined.

$this->bbcode_second_pass_quote('', 'W')ith oil above $80 a barrel as costs remain at an eight-year low, the industry is seeing green. In 2018 alone, it will rake in as much extra money as it did in the previous five years combined. You could liquidate Facebook Inc. and it wouldn’t touch what oil companies will generate in free-flowing cash over the next three years.

Free cash flow at international oil companies is expected to more than double this year, to a record $175 billion. Then it will rise again in 2019, to close to $200 billion, and stay around that level for at least two years after that. The estimate comes with a big caveat. Oil prices can’t fall from today’s level of more than $80 a barrel, and companies can’t return to pre-crash spending heights. There are reasons to doubt the sustainability of crude’s rally. Oil prices have surged in the past year, in part because a snap-back of U.S. sanctions on Iranian exports is driving fears of supply shortages. BP Plc Chief Executive Officer Bob Dudley said those concerns could subside by the end of the year and that prices “feel high.”

Investors are also uncertain whether they can trust oil company executives to exercise restraint as crude keeps soaring. Firms committed to increasingly large projects, buoyed by a bullish crude market from 2008. By 2014, when prices collapsed, costs and investments for international oil companies rose to $560 billion, while free cash flow fell to less than $50 billion, not enough to cover dividend payments. While the same companies cleaned up their balance sheets and are now more profitable than before the price crash, investor confidence in the sector hasn’t been fully restored.

[Outcast_Searcher]

$this->bbcode_second_pass_quote('kublikhan', 'S')ome oil importers like India are squealing under the higher oil prices. The oil companies on the other hand have seem to have hit a sweet spot. They spent years cutting costs and tightening their belts driving costs to an eight year low. Meanwhile oil is selling at a four year high. Low costs + high revenues = lots of cash. In 2018 they will generate more free cash flow than the previous five years combined.

[asg70]

$this->bbcode_second_pass_quote('pstarr', 'T')he all-time greatest moment of oil production quantity occurs just before peak. That occurred yesterday.
Tomorrow is the decline.

[Outcast_Searcher]

$this->bbcode_second_pass_quote('pstarr', 'T')he all-time greatest moment of oil production quantity occurs just before peak. That occurred yesterday.

Tomorrow is the decline.

[Outcast_Searcher]

$this->bbcode_second_pass_quote('pstarr', '
')Did I miss anything??

[asg70]

$this->bbcode_second_pass_quote('pstarr', '.') . . this is peak now. Wanna bet?

[ROCKMAN]

". . . this is peak now. Wanna bet?". A foolish wager IMHO. Unless you're willing to wait decades before finding out if it's correct. Global PO can only be confirmed with any degree of confidence by looking in the rear view mirror. A very long term rear view mirror.

[Tanada]

$this->bbcode_second_pass_quote('ROCKMAN', '&')quot;. . . this is peak now. Wanna bet?". A foolish wager IMHO. Unless you're willing to wait decades before finding out if it's correct. Global PO can only be confirmed with any degree of confidence by looking in the rear view mirror. A very long term rear view mirror.

[Outcast_Searcher]

$this->bbcode_second_pass_quote('pstarr', 'O')il is not just another commodity. Supply and price at the margins can have a profound effects on fragile industrial and economic sectors. See Taintner's Diminishing Returns of Complexity.

The Greatest Recession never ended, it was merely glossed over by untenable debt that will never be paid. Few countries do not now struggle with some sort of severe economic disruption or crisis.

There will no longer be rear view mirrors in "a few decades." Certainly not attached to the mirror post on a late model car. Perhaps hanging from the bed post in the boudoir of some tribal hotties hut lol

[Outcast_Searcher]

$this->bbcode_second_pass_quote('asg70', '')$this->bbcode_second_pass_quote('pstarr', '.') . . this is peak now. Wanna bet?

[asg70]

$this->bbcode_second_pass_quote('pstarr', 'Y')ou do realize that maximum production occurs right before the peak?