[John_A]

$this->bbcode_second_pass_quote('Oily Stuff', '
')I absolutely do not agree that in the US we are growing oil production faster than "any time in history."

[Econ101]

Do you believe the public agencies are above hyping for political reasons?

Both sides have motivation. Estimates made by oil companies are governed by strict rules. Estimates made by governments are political. You can bet the optimistic estimates are closer to the truth. History proves that out.

[John_A]

$this->bbcode_second_pass_quote('Econ101', 'D')o you believe the public agencies are above hyping for political reasons?

[Econ101]

I think the president told the IRS.

I think your graphs are well crafted. We have never run out of oil even though a lot of nice graphs have told us we should be out by now. Those graphs were well crafted too. I refer you to google the actual oil production graphs.

[John_A]

$this->bbcode_second_pass_quote('Econ101', 'I') think the president told the IRS.

[ROCKMAN]

OS – As far as growth rates in US oil production there have been short periods in the early 50’s and late 70’s when we had rapid games but the current bump up has already exceeded the time span of those previous periods.

http://www.csmonitor.com/Environment/En ... e-the-hype

How much longer that growth spurt continues remains to be seen. But as long as oil prices stay up and companies continue to drill more wells in the next 12 months than they did in the last 12 months then IMHO the growth will continue to accelerate. Everyone gets an equal vote but I don’t think the oil patch can continue expanding drilling activity as it has for the last few years. We’ve discussed why before.

As far as interpreting what this spurt means we have a wide range of opinions. As you know I see the root cause behind the spurt as great evidence of the Peak Oil Dynamic. In addition to much higher oil prices as a driving force we also have public companies drilling unconventional reservoirs as fast as possible so they can continue posting y-o-y reserve growth since the wells, and thus their proved remaining reserves, decline so quickly. I’m pretty sure this debate will be over in the next 2 to 3 years. Until then we can speculate all we want.

And as far as : ”We have never run out of oil even though a lot of nice graphs have told us we should be out by now.” I would love to see links to those graphs. I’ve read post from some pretty over the top pessimists but not once seen a chart showing oil being gone at any time in the future.

[John_A]

$this->bbcode_second_pass_quote('ROCKMAN', '
')And as far as : ”We have never run out of oil even though a lot of nice graphs have told us we should be out by now.” I would love to see links to those graphs. I’ve read post from some pretty over the top pessimists but not once seen a chart showing oil being gone at any time in the future.

[ROCKMAN]

John - Nice try but that wasn't my request: "a lot of nice graphs have told us we should be out by now.” I would love to see links to those graphs.”

Granted the "..anytime in the future" was poorly phrased. But I would expect some oil will still be used 100 years from now. But since we're not living in the future all we can do is focus on what I considered the rather foolish hyperbole that anyone has published a chart showing we would "run out of oil" before 2013. Then again, we have seen some very bizarre projections, haven’t we? As the great Texas comedian Ron White has said: “You can’t fix stupid”. LOL.

[Beery1]

$this->bbcode_second_pass_quote('John_A', 'W')hat is the difference between zero and almost zero? Because unless I squint, I could sure see zero out there at the end.

[John_A]

$this->bbcode_second_pass_quote('ROCKMAN', ' ')But I would expect some oil will still be used 100 years from now.

[John_A]

$this->bbcode_second_pass_quote('Beery1', '')$this->bbcode_second_pass_quote('John_A', 'W')hat is the difference between zero and almost zero? Because unless I squint, I could sure see zero out there at the end.

[Oily Stuff]

John, I do not pretest to be smarter than the EIA, no. Nor am I particularly enamored with a government agency making future predictions about crude oil reserves and production growth. I am a big boy and try and make up my own mind on things. I am not going to go buy 4 new company pickups that get 12 MPG simply because the EIA (and Lord knows not the IEA) says don't worry, be happy.

We have grown domestic production by some 1.35 MBO in the last 5 years and except maybe for minor DWGOM gains all of that has come from tight oil. If that 5 year interval is the highest "rate" of production increase in the history of the country, yahoo. If I had the time today I bet I could determine that if that is actually true, it is not by much. The Wilmington, East Texas, Yates, Kelly-Snyder, Midway-Sunset all comes to mind. After Prudhoe was discovered in 1968 it took about 3 years of delineation to add over 10 billion barrels of reserves to our domestic inventory. I think those estimates are actually pretty close to being realized.

Conventional resources that have been developed in the US over the past 100 years or more seem to me to have been, for lack of a better word, sustainable. Those reserves made the US, as Pops said, and we could bank on them. Tight oil production is definitely not sustainable. The minute the drilling treadmill stops production is going to take the elevator straight down to the parking garage.

There is a point in the exploration process whereby casing is set, logs and drill stem tests, side wall cores, all the data is in and evaluated and the well looks pretty good. You get excited and dream of big numbers. It can be the best time in the entire exploration process; you go to the Petroleum Club (or my case, the Whataburger) and brag. Weeks or even months later the completion rig moves in and the well goes on test and more often than not the results are less than what you had hoped for. You are disappointed. THATS the oil business. As my dad use to always say about that time in exploration..."anticipation is often way better than realization."

I believe another term for all that too is something like..."a geological success but a pipeline failure."

I agree with Rockman, lets have the tight oil debate in 3-5 years. I think the lipstick on all this tight oil will be smeared off by then.

[ROCKMAN]

OS - This might seem like a bit of a stretch to most but it’s how my warped mind works. The increase in oil rates we’ve seen in the US is rather unprecedented. Those big fields you mentioned added a lot of reserves but smaller production increases then we’ve seen with the shales. But, as you know, those increases from conventional reservoirs were much longer lived. The individual shale wells…not so much.

And this is where I confuse folks: I feel the rapid increase in US oil production rate is a clear sign of PO…or better said the POD. Crazy, eh? How could increasing US oil production at such a rapid clip indicate a pending energy crisis?

Follow the logic: the US/world is slowing moving towards less oil availability. Thus higher prices. Companies respond to higher oil prices by wanting to increase oil drilling activity. But we lack enough conventional reservoirs to satisfy the demand for new prospects. So we go after the unconventional reservoirs. Of course, though they significantly increase US production rates due to the nature of fracture production, those high decline rates require ever more drilling to make up for those depleting proven reserves on the books of the pubcos.

There you go…simple: less conventional oil to develop = higher oil prices = developing the now viability shale reservoirs = higher production rates but high decline rates = necessity of more shale drilling. Which, interestingly enough, doesn’t lead to lower oil prices which would lead to less drilling which should produce lower oil production rates.

There you go…clear as mud: the increase in US oil production rate is a clear sign that we are heading into an energy crisis. Glad we got that cleared up. LOL.

[John_A]

$this->bbcode_second_pass_quote('Oily Stuff', '
')I agree with Rockman, lets have the tight oil debate in 3-5 years. I think the lipstick on all this tight oil will be smeared off by then.

[ROCKMAN]

John - And that's why I never cared for the debates over PO per se. IMHO the POD has been effecting us for at least the last 35 years. And the $10 bbl of oil in 1986 was just as much a part of the POD as was the $146 bbl a few years ago. And if the Japanese eventually get the hydrates producing they would be just one more brick in the POD wall just as the shales are today.

I really have become a podaholic, haven't I? LOL

[SeaGypsy]

Rockman- your POD focus brings together many realities those of us who have been around a while are aware of whilst neatly doing away with dumbass arguments: "We aint runnin' out of oil yet; there's plenty for 100 years etc." The POD also allows for a lot more flexibility in possible scenarios for the future than the simplistic PO view. Challenging some of the more concrete assumptions many have made about the effects of peak oil is not a bad thing and the evidence for the dynamic is already evident. peakoildynamic.com ? (Interestingly Google doesn't link the terms as directly as you have- strange considering how obvious the concept is once given a bit of thought.)

[ROCKMAN]

SeaGypsy – As you look back on the thousands of discussions/debates we’ve constantly been having most have focused on the POD. We just didn’t have a nice short hand name for it like “PO”. The POD will never replace the use of “PO” but it does allow us to look at that very big integrated picture that will determine the quality of life for everyone on the planet. Much more so than when the world hits that “magical” PO date IMHO.

And J6P doesn't give a crap if the Saudis have some excess capacity or have reached their PO. He has zero interest in listening to any of those conversations. He just wants to know what it will cost him to fill up when he's driving the kids to Disneyland this summer. LOL

[AirlinePilot]

I like the POD moniker. It makes a lot of sense and its intuitive to me.

On the Shale/Tight oil discussions, TOD did a very good piece last fall I believe which likened the current tight oil boom to the Red Queen's dilemma in Alice In Wonderland. She could not understand why the faster she ran, the quicker she went nowhere! This is exactly the problem the oilco's will see very soon. I put up a chart here recently which depicted the LOSSES in capital expenditures for this drilling frenzy. The problem of tight oil decline will become very evident soon, as the company's are basically at or near the drop dead point for losses when it comes to capital required. They are at the end of their ropes when it comes to the amount of money required/borrowed/or levered to keep the pace of drilling up for GROWTH. I dont believe they stop drilling, but very, very soon I believe we do see the point where they cannot keep the pace and growth will be finished. IMHO this is the problem with respect to agencies predicting future exponential growth from tight oil. I do not believe that it can possibly happen given the current price of oil, the demand picture, and the present state of our economy.

Red Queen Indeed!

[calhoun]

"So, what is the point in all this never ending propaganda?"

You're kidding, right? The point is, and always has been, money. Being at odds with the facts never stopped patent medicine sellers, quack doctors, or corporate shills from exaggerating their product's qualities.

Oil exploration in ND has been ongoing since the mid 1950s -- the geology was well understand, the technology has been around, the only thing new is higher prices. But there's a catch -- eventually companies need to make a profit. The cost per well is going up faster than the price of oil. The piper is in the wings waiting to be paid.

Drain America First!

[rockdoc123]

$this->bbcode_second_pass_quote('', 'O')il exploration in ND has been ongoing since the mid 1950s -- the geology was well understand, the technology has been around, the only thing new is higher prices. But there's a catch -- eventually companies need to make a profit. The cost per well is going up faster than the price of oil. The piper is in the wings waiting to be paid.