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Guest Post: U.S. Shale Goes Boom, Rest Of World Goes Bust

Tyler Durden's picture


Submitted by Daniel J. Graeber of,

OPEC, in its World Oil Report, said there's an overall sense that developing shale oil and natural gas could start to redefine the global energy mix. In the United States, the cartel said shale natural gas production alone grew by more than 60 percent from 2010 to 2012.  For shale oil, supplies in the United States have already passed the 1 million barrel-per-day mark. Though shale reserves may ultimately be a game changer, said OPEC, outside the United States, the sector is in its infancy.

The Organization of Petroleum Exporting Countries published its 300-page World Oil Outlook this week. The cartel said it was "evident that this resource (shale oil and gas) will contribute to the overall energy mix."  The cartel found total shale natural gas production in the United States increased from 15 million cubic feet for day in 2012 to 25 billion cubic feet per day two years later. There is a clear potential for shale natural gas on the global energy stage, said OPEC, as clean natural gas starts to replace coal as a source of electricity and becomes a major feedstock in the petrochemicals industry.

U.S. President Barack Obama last year said there was "perhaps a century's worth" of shale natural gas available in his country. The Ohio Department of Natural Resources, in a November report, said the Marcellus shale play contains as much as 363 trillion cubic feet of natural gas. Spanning an area from New York to Ohio, that reserve alone has enough natural gas potential to meet U.S. energy demands for the next 14 years.

Related Article: US Shale Gas Supplies won't Last Ten Years: An Interview with Bill Powers

In terms of shale oil, OPEC said it expects to see a rise in the importance in the reserve potential, whereas last year, "no significant shale oil contribution to liquids supply was envisaged."  Resource development in the Bakken play in the northern plains states, the Eagle Ford play in the U.S. south and the Niobrara formation in an around Nebraska has pushed production over the 1 million barrel per day mark. For its WOO reference case, OPEC said as much as 3 million barrels of shale oil production could emerge per day in the United States by 2035.

OPEC, however, is less optimistic when it comes to a more comprehensive look at shale oil and natural gas. On a global scale, the report finds that shale natural gas production is coming mainly from the United States. Reserves exist elsewhere, like China and Eastern Europe, though the cartel cautioned there are "considerable" uncertainties when it comes to assessing the size of those resources. For shale oil, it said, there's been "no serious attempt" at estimating reserve potential, where recovery factors a "very low."

"Globally, shale oil and gas development is in its infancy, and there are thus considerable uncertainties about the size of the resources, the economics of development and the potential contribution to future supply," the report read.


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Mon, 11/12/2012 - 17:59 | 2974115 Stochdoc
Stochdoc's picture

We have greater oil assets in the Western US than Saudi Arabia and Russia combined.  THe asshats in Washington just need to open these lands to our oil companies.  Then we can tell the Middle East to fuck off.

Mon, 11/12/2012 - 18:05 | 2974137 centerline
centerline's picture

First you trade paper for thier oil... and be sure to keep them fighting amongst themselves.  Never use your own supply first!

Mon, 11/12/2012 - 18:22 | 2974190 Zer0head
Zer0head's picture

job one is to kill the shale boom

starting with CA cap n trade

Mon, 11/12/2012 - 18:46 | 2974277 francis_sawyer
francis_sawyer's picture


How about we all just tell YOU to fuck off & call it a day?

Mon, 11/12/2012 - 20:11 | 2974548 SafelyGraze
SafelyGraze's picture

mag 4.3 quake in KY on nov 10

the quake was *not* from mining

that's because there's no natural gas in eastern KY

Mon, 11/12/2012 - 22:27 | 2974884 TruthInSunshine
TruthInSunshine's picture

This must be why Nestle and other multinationals have moved fast & hard to stake "pre-existing" claims to tap indirectly into the Great Lakes (on the "provable" claim that the volume of water taken will be replenished in equal or greater amounts; the Great Lakes contain 20% of the world's fresh water) that Michigan, Minnesota, Illinois, Wisconsin, Ohio & Canada border, and why an international treaty between the U.S. & Canada is on the fast track to being significantly revised.

Tue, 11/13/2012 - 00:09 | 2975122 markmotive
markmotive's picture

According to the same IEA report everyone is salivating over, peak conventional crude production occured in 2008:

And has anyone in the MSM considered the financial and environmental cost of getting that sludge out of the ground so fat bastards can drive their Hummers?

Mon, 11/12/2012 - 19:12 | 2974379 CrashisOptimistic
CrashisOptimistic's picture

The "shale boom" is going to kill itself.  It won't require any help at all from anything but geology.

Mon, 11/12/2012 - 19:37 | 2974456 Bicycle Repairman
Bicycle Repairman's picture

This is utter nonsense.  Fracked natural gas wells only produce for like a week.  The methane out of your ass has more energy value.  Shale oil is best used on salads.  The USA ran out of energy 40 years ago.

Why do these guys even bother?

Mon, 11/12/2012 - 19:43 | 2974468 falak pema
falak pema's picture

hey you used to be abiotic man and you swore there would never be peak oil. When did you convert to Islam?

Mon, 11/12/2012 - 20:01 | 2974517 CrazyCooter
CrazyCooter's picture

If we are talking about fracked shale wells that produce liquids, then those are making money

If we are talking about fracked shale wells that produce natural gas, those wells require approximately 8 bucks per million cubic feet in the market to break even. These wells have high capital costs due to the drilling and cyclical refracking required over time (e.g. re-frack required every 12 months).

Given that gas has been under 2 bucks per million cubic feet for a long time now just shows you how stupid investors are because when this goes tits up, the big boys will get the best leases/infrastructure at fire sale prices and investors will lose their shirts. The price of gas will go to the moon as supply is constrained and the new lease owners will profit nicely.

As far as actual shale oil goes, assuming we are talking about mining rocks and extracting "oil" then the process has not ever been shown to be economical. Folks been working on that forever. We will be driving mules to work before it will ever be economical.



Mon, 11/12/2012 - 20:11 | 2974547 francis_sawyer
francis_sawyer's picture

Mules bitchez!

Mon, 11/12/2012 - 20:39 | 2974592 DoChenRollingBearing
DoChenRollingBearing's picture

Burros bitchez!  Actually, Peru is NOT going bust.  In fact, things are pretty good, bearings are MOVING down in Peru.

"Another Digit, Another Comma!"

Mon, 11/12/2012 - 20:44 | 2974600 francis_sawyer
francis_sawyer's picture

Burros need bearings?... Whocoodanode?...

Tue, 11/13/2012 - 01:02 | 2975203 redpill
redpill's picture

Just ask everyone to eat Del Taco and hook a hose up to their ass.  Energy problem solved.  Master blaster runs barter town.

Mon, 11/12/2012 - 21:46 | 2974756 Bicycle Repairman
Bicycle Repairman's picture

I'm f'ing you, man.  It's how I roll.

This should have been your first clue: "The methane out of your ass has more energy value."

Ever try lighting a cigarette off of a lit fart?  No?  For real?

Mon, 11/12/2012 - 18:31 | 2974227 Facemelt
Facemelt's picture

Never get involved in a land war in Asia!

Mon, 11/12/2012 - 19:54 | 2974507 SILVERGEDDON

"Save Gas. Fart in a jar." First seen as a bumper sticker on a Caddilac Eldorado in 73, during the Arab oil embargo. Everything's the same, nothing has changed.

Mon, 11/12/2012 - 18:17 | 2974139 TruthInSunshine
TruthInSunshine's picture

If your claim is true, then the USD won't need U.S. hegemonic military power to retain reserve currency status, but merely some form of somewhere above nearest competitor power, coupled with a proven M.A.D. deterrence doctrine.

I'm not a scientist specializing in carbon chains nor a geologist, though.

Forward Bakken formation & Leigh Price ???

Mon, 11/12/2012 - 18:27 | 2974204 1100-TACTICAL-12
1100-TACTICAL-12's picture

Yea polluting the H20 supply is a real good idea. unfracking beliveable.

Mon, 11/12/2012 - 18:36 | 2974242 oddjob
oddjob's picture

Seems thats the goal, by mistake of course.

Mon, 11/12/2012 - 18:47 | 2974283 francis_sawyer
francis_sawyer's picture


Not an option until the poppy crop gets going in the 'seceded' state of North Dakota...

Mon, 11/12/2012 - 23:41 | 2975061 TruthInSunshine
TruthInSunshine's picture

The Marines guarding the Afghan poppy fields were told that Afghanis absolutely love poppy seed bagels.

Mon, 11/12/2012 - 19:42 | 2974467 macholatte
macholatte's picture


If your claim is true, then the USD won't need U.S. hegemonic military power to retain reserve currency status,


Think it thru......

If the Arabs stop getting wealthy from oil sales, then they can't afford to buy weapons and will have to become peaceful. If China remains the manufacturing hub for the world, then "real" jobs are not created anywhere else. If the USA becomes energy independant, then who will buy our weapons?  If the EU collapses, who cares?

NO no no. Don't change anything. Keep the gerbal wheel right there in plain sight.

Mon, 11/12/2012 - 18:11 | 2974159 Motorhead
Motorhead's picture

Man, I sure hope no country attacks the US for its oil.

Mon, 11/12/2012 - 18:48 | 2974289 francis_sawyer
francis_sawyer's picture

Not to worry... The jews are already here...

Mon, 11/12/2012 - 19:45 | 2974160 SILVERGEDDON

Yeah, sure. Good one, Stochdoc.





You go there, girl. I'm long on sources of pure water for farming and drinking.

There won't be much of that around once the multinationals finish polluting the water table completely with fracking the living rat fuck out of every acre in the USA.

Just so you can feed your Expedition for the Costco trip a few years longer.

So, I can tell you to fuck off.


Go suck on some frack water, ass breather.

Mon, 11/12/2012 - 21:34 | 2974724 Ignatius
Ignatius's picture

I'm sure we -- as a nation -- will despoil everything so we can crank up the 4-banger and cruise the gut on Friday night.  What a world.

Mon, 11/12/2012 - 21:06 | 2974642 post turtle saver
post turtle saver's picture

"Don't get high on your own supply."

Mon, 11/12/2012 - 22:44 | 2974940 PD Quig
PD Quig's picture

The entire environmental movement turns out to have been a clever plot to allow the US to suck the rest of the world's oil wealth dry (for a fair price, mind you) and to leave their well heads spitting dust...just as our shale oil deposits come on line.

The beauty of this is three-fold: 1) we can tell the Sand N***ers to f*ck themselves (which they will actually greatly enjoy) 2) we can retain control of the wealth of the world by owning a huge source of cheap, plentiful energy, and 3) we can turn their sh*thole countries into glass with no serious economic ramifications if they can't learn how to play nice.

Mon, 11/12/2012 - 18:01 | 2974121 ZippyBananaPants
ZippyBananaPants's picture

+1 for anyone using the term Asshats!

Mon, 11/12/2012 - 18:04 | 2974135 Stochdoc
Stochdoc's picture


Mon, 11/12/2012 - 18:02 | 2974123 Catflappo
Catflappo's picture

And you'll be able to repatriate all your troops

Mon, 11/12/2012 - 18:02 | 2974126 Cathartes Aura
Cathartes Aura's picture

and there we have it, water will indeed be the commodity most scarce, Blue Gold. . .

Dubya's investment in the Guarani Aquifer, uh huh.

Mon, 11/12/2012 - 18:51 | 2974298 francis_sawyer
francis_sawyer's picture

So tell me... Who owns Antarctica again?...

Mon, 11/12/2012 - 19:34 | 2974446 Bunga Bunga
Bunga Bunga's picture

Next wars won't be about oil but clean water.

Mon, 11/12/2012 - 20:03 | 2974516 francis_sawyer
francis_sawyer's picture

refer to ^^^ comment... (an entire continent ~ packed a mile high with the stuff ~ ready to be transported by tanker vessels to the Agenda 21 location of your choice)...

Hell ~ & I ain't even a Rockefeller...

Mon, 11/12/2012 - 22:09 | 2974831 Dr. Sandi
Dr. Sandi's picture

I assume the water tankers will be powered by fracked oil then.

That makes a shitload of sense.

Tue, 11/13/2012 - 05:22 | 2975438 francis_sawyer
francis_sawyer's picture

I'm not saying it makes any sense... I'm saying that in some weird way, it's possible... & then you stop to think... What [in the world today] makes sense?...

- We print debt money out of thin air and enforce its use globally as legal tender by way of military force projection...

- All of Tesla's work [which, arguably, could provide free energy] lies buried somewhere & instead we're hogtied to energy production channels which include nuclear reactors built on fault lines

- Don't get me started on the medical profession


So all in all... I'd expect the MOST RETARDED solution to emerge when the water crisis hits... A feature of this being only a handful of profiteers... After that, it'll be the air you breathe...

Thu, 11/15/2012 - 19:45 | 2986174 Dr. Sandi
Dr. Sandi's picture

Damn, I have to agree with you. History has your back.

Mon, 11/12/2012 - 18:03 | 2974129 centerline
centerline's picture

What is the EROEI here?

Mon, 11/12/2012 - 18:11 | 2974148 Manthong
Manthong's picture

You nailed it.

Not to say that we can't vastly improve and even become independent, and shale can play a big part.. but somehow the words "prices will necessarily skyrocket" keep coming to mind.

This regime cannot possibly pick the best energy path for the US with it's constituency.

Mon, 11/12/2012 - 18:21 | 2974187 buzzsaw99
buzzsaw99's picture

Negative, as is ethanol.

Mon, 11/12/2012 - 22:17 | 2974858 Matt
Matt's picture

no problem, just make it up with volume.

Mon, 11/12/2012 - 21:12 | 2974661 post turtle saver
post turtle saver's picture

It's a function of the price of conventional oil over time.

Mon, 11/12/2012 - 18:03 | 2974131 mc_LDN
mc_LDN's picture

Hmmmm.Mis-information going on here by the Oil industry and even ZH is falling for it. Read...

Mon, 11/12/2012 - 18:23 | 2974189 rhinoblitzing
rhinoblitzing's picture

Agreed - MIS Information - distraction - as Saudi's shift exports to China

Mon, 11/12/2012 - 22:17 | 2974861 Matt
Matt's picture

it is a guest post ...

Mon, 11/12/2012 - 18:07 | 2974142 yabyum
yabyum's picture

Stuff takes a lot of water to produce. Utah and the west slope of northern Colorado are very dry. This oil is going to be damned expensive.

Mon, 11/12/2012 - 18:10 | 2974155 Motorhead
Motorhead's picture

The easy stuff's been hard to get for a while.  In fact, we are about due for Goldman Sachs to run the price up to $150/'s been a while.

Mon, 11/12/2012 - 19:03 | 2974342 MeBizarro
MeBizarro's picture

Depends on where you at but yeah it isn't even competitive until you hit aobut $75-80/barrel and you really need an outlook for sustained prices above $100/barrel on West Texas prices before you will really a much bigger effort.   

Mon, 11/12/2012 - 20:55 | 2974622 Bunga Bunga
Bunga Bunga's picture

So much for cheap oil.  Simply make oil so expensive, barely someone can afford it. Then reserves will last forever.

Mon, 11/12/2012 - 18:08 | 2974149 q99x2
q99x2's picture

'"Globally, shale oil and gas development is in its infancy, and there are thus considerable uncertainties about the size of the resources, the economics of development and the potential contribution to future supply," the report read.'

Well can't you find a better report than that to read? Sounds like a politician wrote it.

Mon, 11/12/2012 - 18:09 | 2974153 Motorhead
Motorhead's picture

So, if true and not just a 'feel good' story, will President Barry Soetoro allow the drilling?

Mon, 11/12/2012 - 18:10 | 2974157 Rainman
Rainman's picture

Years ago I knew I could turn poop into fuel when I finally fired up a big bacon grease gasser. I was only short $40 million or I coulda made it a game changer.

Mon, 11/12/2012 - 18:14 | 2974168 Pancho Villa
Pancho Villa's picture

Poople power?

Mon, 11/12/2012 - 18:53 | 2974302 francis_sawyer
francis_sawyer's picture

So now I know why Kim Kardashian bought a $100K toilet... With that ass, she could singlehandedly become the next Saudi Arabia...

Mon, 11/12/2012 - 19:02 | 2974158 THE DORK OF CORK
THE DORK OF CORK's picture

1 million BPD is only 5 celtic Tiger Irelands.........................200 KBD (and that was just the oil and not the nat gas)

Its not really that big.

now down to -135 KBD.....

This is what happens when you lose that kind of supply.........



Eurostat reporting major declines in road freight during 2011 with Italy the worst hit ………..this explains the weakness of diesel consumption but Italian diesel consumption only really dived in 2012 so we can expect much worse figures for 2012.

Poland was  the golden child for 2011

In the road freight transport by distance class (Mt Km) Ireland was the worst hit from 2007 to 2011 with major declines in all distances.
With sub 50km routes showing a simply fantastic 73.9 % decline
It also shared top place with Romania more or less in the 50 – 149 km bracket with 43.6% & 43.9%
Infact total Romanian figures look almost as bad.
Given its massive drop of car sales and the above figures it looks like another neutron bomb has gone off in that country.


Its time to ban car imports into Ireland me thinks , not unlike the post war norwegian policy........

This will free up capital / oil to do useful work.

Of course we need to get the fuck out of the Euro.


Mon, 11/12/2012 - 19:12 | 2974375 css1971
css1971's picture

good numbers bookmarked.

Mon, 11/12/2012 - 19:53 | 2974500 machineh
machineh's picture

'Its time to ban car imports into Ireland me thinks'

Sure, we all remember how protectionism made Ireland so conspicuously rich by the 1970s. /sarc

All the bar staff in NYC were Irish ...

Mon, 11/12/2012 - 20:51 | 2974527 THE DORK OF CORK
THE DORK OF CORK's picture

Have you looked at a Irish energy balance sheet lately ?


On the contrary - Ireland was destroyed by  a private car boom in the 70s.........

Which we paid for in the 80s..... mini depression

The capital was blown.

It went up in smoke


Irish private car reg

Y1975 : 53,076

Y1976 : 69,514

Y1977 : 82,310

Y1978 :105,582 (peak)

Y1979 :  95,910

Y1980 :  91,728

Y1981 : 104,645

Y1982 :  73,330 (crash)

Y1983 :  61,094

Y1984 :  55,893

Y1987 :  54,341 (trough) right back to 1975 levels and what did we build - more fucking roads.

Mon, 11/12/2012 - 18:11 | 2974162 Oldwood
Oldwood's picture

No need to worry. At the rate we are currently going, firewood and cow chips will likely be the next source of energy as nobody will be able to afford oil or gas.

Mon, 11/12/2012 - 18:11 | 2974163 Motorhead
Motorhead's picture

Go long Estonia...shale oil galore!

Mon, 11/12/2012 - 18:29 | 2974218 falak pema
falak pema's picture

djoko wins, damn.

Mon, 11/12/2012 - 21:35 | 2974728 Flakmeister
Flakmeister's picture

Ahh... do you understand the difference between Kerogen and oil trapped in low permeablity shale?

Mon, 11/12/2012 - 18:14 | 2974166 Saucy-Jack
Saucy-Jack's picture

The U.S. is brilliant in that we have bought and used a whole bunch of Middle Eastern oil for paper dollars. Then when their oil runs out, we tap into our own. Ha ha ha.

Mon, 11/12/2012 - 18:32 | 2974230 lemonobrien
lemonobrien's picture

i suck your milkshake motherfucker. whats you got to say, bitch!

Mon, 11/12/2012 - 22:02 | 2974810 Sabibaby
Sabibaby's picture

Watch out, tough guy with a milkshake! Does it bring all the boys to the yard so you can do more sucking?

Mon, 11/12/2012 - 19:06 | 2974354 MeBizarro
MeBizarro's picture

Reserves in the combined Middle East and Central Asia dwarf what is in the US even if you combine shale oil deposits.  Why do you think the US cares so much about Afghanistan?  It isn't because of Islamic terrorists who are located and isolated in remote regions.  That's just a convenient excuse.  

Mon, 11/12/2012 - 20:21 | 2974559 Schmuck Raker
Schmuck Raker's picture

You dummy, the US invaded Afghanistan to make it safe for China to exploit. Duh

Mon, 11/12/2012 - 19:08 | 2974362 Kaiser Sousa
Kaiser Sousa's picture

"The U.S. is brilliant in thatwe haveboughtand used a whole bunch of Middle Eastern oil for paper dollars. Then when their oil runs out, we tap into our own. Ha..." a good American u have once again fallen for "the bananna in the tailpipe routine".....

Mon, 11/12/2012 - 20:09 | 2974542 Mad Mohel
Mad Mohel's picture

The fact that you acknowledge it is just paper means oil or not we're fucked. In the quest of being the best of the greedy bastards and getting stuff for free, we shat where we ate and destroyed our society.

Mon, 11/12/2012 - 18:17 | 2974175 THE DORK OF CORK
THE DORK OF CORK's picture


Slovakia and Slovenia are showing major declines in air passenger numbers for the first half of this year at -14 &  -13%…..

Its the banking crisis I guess.
I like this headline from September ,it cracks me up really.

Turning Greek again………..every country is turning Greek it seems.

The Airport data is showing major weakness in all Spanish airports except Barcelona
Alicante :-12% (jan -April)
Malaga :- 4% (jan – April)
Palma : – 4% (jan -April )
Gran Canaria : -4% (Jan -April)
The above are tourist towns and explains the lack of money for public transport in the south of the country but Madrid looks real bad also at -8 %


Mon, 11/12/2012 - 23:42 | 2975067 DaveyJones
DaveyJones's picture

nice posts dork

Mon, 11/12/2012 - 18:34 | 2974181 falak pema
falak pema's picture

that statistic to be compared with this projection by IEA report on 2020 US oil/gas producton.

The US To Become The World's Top Oil Producer Before The year 2020 - Business Insider

This report is much more optimistic. It sees oil  prod. at 10 MMBPD in 2020. But it is contested for the quaity of NGL+ condensate liquids, incl bio fuels in this "oil" mix.


Mon, 11/12/2012 - 19:08 | 2974363 MeBizarro
MeBizarro's picture

This is a pretty much a garbage report with some really 'pie in the sky' assumptions.  I wouldn't put too much stock in it.  

Mon, 11/12/2012 - 18:20 | 2974182 Motorhead
Motorhead's picture

"99 barrels of oil on the wall, 99 barrels of oil...."

Mon, 11/12/2012 - 18:20 | 2974186 CrashisOptimistic
CrashisOptimistic's picture

These celebratory projections are all simply wrong.

Nat gas production is up because Natural Gas Liquids or outright Crude get found in those fomations AND FUND THE NAT GAS.   When the oil is gone from a play, the drilling stops, and so does that source of natgas.


In general these guys have taken two data points for two years and drawn an exponential curve on them.  It's all profoundly absurd.  If you even hit 2 million barrels per day, why would you celebrate if you can only hold that number for, say, a week?


Mon, 11/12/2012 - 18:30 | 2974222 Floodmaster
Floodmaster's picture

Why American Aren’t Driving Natural Gas Powered Cars ???

Mon, 11/12/2012 - 18:36 | 2974241 THE DORK OF CORK
THE DORK OF CORK's picture

Because your Gasoline is too cheap...............

Mon, 11/12/2012 - 19:00 | 2974325 Oldwood
Oldwood's picture

The fuel tanks are bulky and expensive, a lot higher pressure than lp gas. Most of it is used in short range vehicles that run relatives short routes and return to a home station where they can easily be refueled. There is no fuel station distribution like gas or even diesel. The nice thing is that if you are willing to spend the $4k for the compressor, you can fuel at home if you have piped in natural gas there. There is no energy policy other than to hype something or another that a political contributor is pushing. All of these alternative energy deals are "flash in the pans" as the politcally connected have to get in and out fast to steal the bucks. Real business concerns understand that sustainability is about the long haul, and that means an actual tangible policy that you know will be there for more than two years.

Mon, 11/12/2012 - 19:19 | 2974407 Ident 7777 economy
Ident 7777 economy's picture






" Why American Aren’t Driving Natural Gas Powered Cars ??? "


Too stoopid to understand the difference between liquids and gases (under high pressure), I take it.


Stay on the sidelines and watch the engineers and professionals, consumer; ppl like yourself (like cheerleaders) just get in the way, adding little in way of value (exc eye candy in the case of REAL cheerleaders) ...



Mon, 11/12/2012 - 18:33 | 2974235 Dr. Engali
Dr. Engali's picture

I was just listening to CNBS and the propaganda is thick about energy independence by 2035( hmmm think anybody will remember that declaration by then?). Gartman is all bullish about the time frame. Saying its going to happen much sooner,2020 than suggested. Of course there is a caveat... It won't help the consumer if we don't have more refining capability. Of course they neglect to mention the expense of getting it out of the ground and if oil prices drop below these levels it won't be cost effective to get it. Idiots make me sick.

Mon, 11/12/2012 - 18:38 | 2974250 fonzannoon
fonzannoon's picture

They just followed it up with their resident hedge fund whore anthony someobody saying (with an extremely constipated face) that this is a risk on market. Hedge funds are actually diving in to this market (even some of the resident meatheads were skeptical) and the fiscal cliff is a non event.

Very constipated.....I think he knows one big dump from here could be a career ender. I am guessing CNBS was shocking his balls pretty hard while he was speaking.

Mon, 11/12/2012 - 18:48 | 2974286 Dr. Engali
Dr. Engali's picture

I didn't stick around that long. I had to turn it off before I barfed.

Mon, 11/12/2012 - 18:51 | 2974299 fonzannoon
fonzannoon's picture

If they put mini shark tanks underneath each trader and then rehashed the picks they made the day before I would tune in. They need to go running man style with these shows if they want my attention for more than 30 seconds.


Mon, 11/12/2012 - 20:15 | 2974554 francis_sawyer
francis_sawyer's picture


Wasn't that the same boast that Jimmy Carter used in '77 for starting the, now bloated DOE?...

Mon, 11/12/2012 - 18:40 | 2974258 Money Squid
Money Squid's picture

Peaked about 71' and no temporary minor increase in production from oil shale, shale oil, or oil sands is going to change that

Mon, 11/12/2012 - 18:40 | 2974260 Bunga Bunga
Bunga Bunga's picture

Most claims are simply bogus, because reports neither mention EROI nor economic growth. In 100 years we need 7 times the amount of energy at GDP growth rate of 3%/year and energy efficiency improvement of 1%/year (historical average over the last 200 years). Driving efficiency up and using these shale/tar sand based fossil fuels with low EROI is an oxymoron.

Mon, 11/12/2012 - 18:46 | 2974280 fonzannoon
fonzannoon's picture

A long time ago Truthinsunshine posted the report from Hank Paulson in 2006 projecting that in the year 2035 the US debt to GDP would hit 100%. That should put the capability of all 2035 projections in perspective.

Mon, 11/12/2012 - 23:52 | 2975085 TruthInSunshine
TruthInSunshine's picture

You have a wicked memory, boss.

Mon, 11/12/2012 - 18:49 | 2974295 MikeMcGspot
MikeMcGspot's picture

Per Wikipedia the USA burns through 19 million barrels of oil per day.

"For its WOO reference case, OPEC said as much as 3 million barrels of shale oil production could emerge per day in the United States by 2035."

Imagine by 2035 the United States will be oil energy independent!

By that time we will all have electric horses and no longer need oil.


Mon, 11/12/2012 - 19:25 | 2974428 krispkritter
krispkritter's picture

'By that time we will all have electric horses'...Oh you mean the Chevy Colt? Hey! DCFusor! You buyin' this?

Mon, 11/12/2012 - 19:58 | 2974511 machineh
machineh's picture

It's a typo; should read 'For its w00t reference case ...'

Mon, 11/12/2012 - 20:11 | 2974546 BearOfNH
BearOfNH's picture

Wow ... it'll be too cheap to meter.

Mon, 11/12/2012 - 22:26 | 2974889 Matt
Matt's picture

The good news is, to attain energy independance, energy consumption will only need to be cut by 85%.

Mon, 11/12/2012 - 19:02 | 2974336 css1971
css1971's picture

When anyone says "100 years supply of " anything, they are lying quite deliberately. What they really mean is.

I have a shit tonne of stock in producers of "anything" and I want a bunch of naive muppets to kick my pyramid scam of a stock into high gear and that bought and paid for hack you see up on the podium will tell you anything I want him to.

What they have done is not qualify their 100 year supply figures. They have a 100 year supply as long as the current granny and her disabled son remain the only consumers. If anybody else wants to make use of this 100 year supply it suddenly becomes a 50, then 25 then 12 then 6 year supply.

Go watch Albert Bartlett.

Mon, 11/12/2012 - 22:21 | 2974870 Dr. Sandi
Dr. Sandi's picture

I have a 100 year supply of world class bullshit available. And a cabal of well connected political families, able to supply plenty more, long after we're all dead.

Unlike other natural resources, this bullshit regenerates biennially, with production peaking in early November of years ending with an even number.

Admittedly, a lot of energy is wasted during its production, but the end result is plentiful, rich, loamy bullshit.

I'm looking for a few good hedge funds to jump on this one. Excellent incentives to select brokers. There must still be a few gullible retirement funds ready to invest in this once in a lifetime opportunity.

Safe, cheap, abundant bullshit.


Mon, 11/12/2012 - 19:04 | 2974346 Bossuet
Bossuet's picture

Sur le site de Nature : 

Gas and air Natural-gas operations could leak enough methane to tarnish their clean image.


Thu, 11/15/2012 - 22:05 | 2986533 Dr. Sandi
Dr. Sandi's picture

Hell, the nearby residential water taps at some of these sites could leak enough methane to heat a small city.

Mon, 11/12/2012 - 19:07 | 2974361 Waterfallsparkles
Waterfallsparkles's picture

I know that in Maryland there was a Gas Moratorium on Natural Gas hook ups for quite a while for home service.

I wish they would build more pipe lines for residential real estate so more people could have natural gas for cooking, water heaters, clothes dryers and cooking.

I know that I am totally electric with Oil heat.  Wish I could change to Natural Gas heating, cooking and my water heater.

That would help for America to use more of our natural resource of natural gas.  Instead of relying on Foreign Nations to supply us with basic needs.

Mon, 11/12/2012 - 19:29 | 2974438 krispkritter
krispkritter's picture

Thing that worried me about gas lines was what you saw in Sandy. Gas mains burning, along with house lines and what looked like open sewers or drainage on fire. My sister said they evacuated some beach communities near her because they couldn't get the gas under control. They pulled everyone out of the neighborhoods and cordoned them off.  Also, San Bruno...

Mon, 11/12/2012 - 20:54 | 2974541 francis_sawyer
francis_sawyer's picture


You don't need nat gas hookups... For cooking?

Go get yourself some 100lb propane tanks, fill 'em up & keep em in a shed... I'd say 200 lb., but you'd need SERVICE to fill them... 100 pounders you can load into a back of a pickup and bring them yourself to be refilled...

One 100 pounder will EASILY take care of hefty cooking use for a whole year... It costs me not much more than $70 bucks a year to cook this way... (I didn't junk you BTW)...

- Clothes Dryers... Go Italian style & line dry (your clothes smell fresher anyway & cottons don't shrink or break down)...

- Space heat with individual wood burning or pellet stoves...

Mon, 11/12/2012 - 19:12 | 2974374 archon
archon's picture

I don't see any other way the USA will be able to pay for its welfare state unless we really go full steam ahead to develop natural gas.  Heck, they'll be able to put at least 2/3 of the nation on government assistance instead of the measly 50% they support now.

Mon, 11/12/2012 - 19:18 | 2974395 lakecity55
lakecity55's picture

I am afraid our shale will not be recovered properly. I have an EO (Enabling Order) here to Nationalize all Oil and the money will go into a special offshore account I have access to. This way, Oil income will be distributed properly.

Field Marshall O-Phone I.

Forward, Comrades!

Mon, 11/12/2012 - 19:18 | 2974403 Hannibal
Hannibal's picture

The Chinese planning to invade, drone and/or blockade the US for its oil and regime change?

Mon, 11/12/2012 - 19:38 | 2974458 Money Squid
Money Squid's picture

That would make for a good movie: To secure America's energy needs and deny the Chinese access to the oil and gas reserves it so desperately needed, America sent all of its armed forces, equipment and supplies to fight ongoing battles in the Middle East and EurAsia and garrison areas not currently engaged in battle and left the Homeland totally undefended. The Chinese simply parachuted in a relatively small force and took over the country laughing all the way.

Mon, 11/12/2012 - 19:50 | 2974492 SILVERGEDDON

Why would they do that ? Nothing left here except fat sheeple. Unless they plan on farming sheeple to feed the Yellow Peril back home. Are human beings a bunch of fucking locusts, or what ? Bullish on interplanetary colonization. It's the only way out - expand, consume, pollute, and die. What a legacy for the universe. McDonalds on Mars, baybee !

Tue, 11/13/2012 - 09:24 | 2975637 Aegelis
Aegelis's picture

You're scary.  And need a vacation.

Mon, 11/12/2012 - 21:49 | 2974583 GoinFawr
GoinFawr's picture

 Finally, a skittle shitting unicorn that can be ridden! 

Meanwhile S&P plans to cut the WTI contract’s weight and raise Brent's next year in its GSCI commodities index.

 So what gives, really? While at the Bilderberg's last May did the leader of the debt-addicted 'Conservatives' of Albertia, Canuckistan threaten to review their laughingstock-of-the-oil-producing-world's royalty regime again, a la 2008?

This story is all over the Canadian MSM,  mentioned at least twice every 'essential news update'. It's even getting more airtime than the 'Hummer Hero' or the usual slough of ice-fishing updates and other such flummery; which is absolutely unheard of. 

They're one and all screaming that Canada (which is apparently the equivalent of the oil companies that operate there) desperately needs a pipeline to a Canadian coast, any Canadian coast, so that they can expand their market past the below low price of WCS... and subsequently kick NAFTA's 'Proportionality Clause' into high gear.

Heh, at least Mexican leaders were smart enough to steer clear of that particularly thinly disguised trap. Donde est a la casa de Pepe? Est a extremo Norte! (Pardon my latin; I've been told that I 'have no French' either)

Thank goodness Canachumps are the most easily manipulated suckers of the Americas.

Mon, 11/12/2012 - 20:49 | 2974609 Fix It Again Timmy
Fix It Again Timmy's picture

You know, running out of oil may not be a bad idea, how do you have a war without oil?  I suppose you could drag that Abrahms Tank around with about 20 work horses...

Tue, 11/13/2012 - 09:22 | 2975632 Aegelis
Aegelis's picture

Dup post

Tue, 11/13/2012 - 09:21 | 2975633 Aegelis
Aegelis's picture

The military doesn't run out of resources, the citizens do.  Check dictatorships like the former Soviet Union and North Korea.  Did their military suffer at all?  Hard to ignore the bread line when answering that one.

Mon, 11/12/2012 - 20:57 | 2974626 Quantum Nucleonics
Quantum Nucleonics's picture

OPEC says they are not worried about US shale oil/gas.  That's like your crack dealer telling you he's not worried about you entering rehab.

Mon, 11/12/2012 - 21:03 | 2974627 Taint Boil
Taint Boil's picture



Complete bullshit. Need to check out The Oil Drum ...... start with the coments would be a good start:

Mon, 11/12/2012 - 21:17 | 2974678 THE DORK OF CORK
THE DORK OF CORK's picture

Europe has lost 1.5MBD ~ since 2009...........


No need to pump more .......just wait a little bit.


Mon, 11/12/2012 - 22:01 | 2974808 orangegeek
orangegeek's picture

Not surprising that oil is on its way down.


Alberta, Canada will likely be the first to shut down - cost of extraction from oil sands is higher.

Mon, 11/12/2012 - 22:24 | 2974879 loveyajimbo
loveyajimbo's picture

Speaking of the environment... view and pass along...

Mon, 11/12/2012 - 23:35 | 2975039 Flakmeister
Flakmeister's picture

Required reading for anyone wishing to learn a bit about the impact Bakken and the diffrerence between "liquids" and crude oil...

Tue, 11/13/2012 - 05:43 | 2975448 Iconoclast
Iconoclast's picture

Erm, if the USA only has 2% of the globes reserves, yet consumes 25% does it need to increase it's own reserves by 600% and half consumption to become flat? Someone do the sums for me please..

Tue, 11/13/2012 - 09:16 | 2975624 jughead
jughead's picture

The rise of shale oil/gas only proves the theory of peak oil to be correct. If OPEC had the production capacity they could easily increase production to bring down the price of oil back to the point where going after shale well as other more expensive types of oil extraction, would be economically unfeasible. 

Of course then they might not have the margins needed to keep their populations properly bribed or oppressed.   

Tue, 11/13/2012 - 09:37 | 2975677 Flakmeister
Flakmeister's picture

A comment by BlueTwilight copied from TOD:


The estimate that John Kemp of Reuters makes is based on this:

At the moment the industry has completed just 5,000 wells in the Bakken at an average spacing of less than 1 well per 1,280-acre unit. But Continental estimates the core could support up to 52,000 wells with four to eight wells per 1,280-acre unit for full development. Bakken contains about 577 billion barrels of oil and gas, of which about 24 billion barrels should be technically recoverable, according to Continental. But underneath Bakken in the same area is the Three Forks formation, which Continental believes could contain an even greater 900 billion barrels, of which perhaps 32 billion barrels might be technically recoverable.

Continental's estimates are probably coloured by a developer's natural optimism. But the company has been the leading innovator in what has become North America's hottest oil play, and it has been proven consistently right. More conservative estimates still show that the combined resources of the Bakken and Three Forks are enormous.

The USGS estimates up to 4.4 billion barrels of crude oil is technically recoverable from Bakken. Packing wells closer together will probably result in less total oil from each well. I guess he means that 5,000 well have been drilled in the Bakken during the last 4 years. No time interval is specified for drilling up to 52,000 wells (47,000 more to go). To do this during the next 8 years would require an average of 5,875 new wells per year. Are there enough drilling rigs, water, fracking chemicals and workers to sustain this rate of drilling assuming 56 billion barrels of URR from both formations?

With a cost of $7 million to drill each well and a price of $100 / barrel for the oil, each well must produce 70,000 barrels of oil to break even ignoring the cost of production and distribution. 3.6 billion barrels must be extracted from 52,000 wells to break even. The USGS estimate would have to be incorrect for the oil companies to make profit.

The article states the output from Bakken was 631,000 barrels/day in August 2012. The average production for the current 5,000 wells is 126 b/d. To get to 5 Mb/d one needs 39,600 wells with this average rate of production. This estimate assumes the production from the older wells drilled in 2008 will not decrease and produce at least 552,000 barrels each over 12 years. Yet the average well in the Bakken does not have this production profile. From Rune Likvern's article here at TOD, Is Shale Oil Production from Bakken Headed for a Run with “The Red Queen”?, Sept. 25, 2012, figure 15:

the average well is down to about 14 b/d after 12 years. Over 12 years they produce less than 300,000 barrels. Far more than 52,000 wells would have to be drilled over a 12 year period to get production up to 5 Mb/d.

Is Bakken set to rival Ghawar? No

Tue, 11/13/2012 - 15:15 | 2976999 DaveyJones
DaveyJones's picture

so other than lying about the size of the source, the difficulties of extraction, and, compared to oil the dramatic reduction on the energy returned on energy invested, the report was fairly accurate

Wed, 11/21/2012 - 01:40 | 3001262 Scrilla
Scrilla's picture

OPEC's admit of defeat.

Do NOT follow this link or you will be banned from the site!