This page has been archived and commenting is disabled.
Guest Post: The Coming Bust Of The Great Bakken Oil Field
Submitted by Steve via SRSrocco Report blog,
There has been a lot of Fanfare on the huge increase of oil production coming from the Bakken Field located in North Dakota. There are many stories of people moving to the state to take advantage of the new OIL BOOM. It seems like everyone is going there to start a new life and make it rich in one of the coldest areas in the United States.
However, with all BOOMS, comes the inevitable BUST. This was true shown by the famous example of the 1800′s California gold rush:
According to the article, “The Bakken Boom: The Modern Day Gold Rush”:
Despite the low productivity of the labor-intensive process of gold panning, annual production grew from just over 1,400 ounces in 1848 to more than 3.9 million ounces by 1852. To put this into perspective, prior to 1848, cumulative U.S. gold production amounted to just over 1 million ounces.
Of course nuggets are easier to find than flakes, and the great majority were discovered in the first few years. By 1852, only four years after gold was first discovered, California gold production began a rapid descent. Production declined 50% by 1862 and 80% by 1872.
The decline was only barely checked by the adoption of ‘hydraulic mining’ – a process by which massive amounts of water under intense pressure is used to disintegrate entire hillsides. At the North Bloomfield mine, for example, 60 million gallons of water per day eroded more than 41 million cubic yards of debris between 1866 and 1884. (http://www.sierranevadavirtualmuseum.com/docs/galleries/history/mining/hydraulic.htm)
Typical of all BOOMS, production increases exponentially, peaks and then declines in the same fashion. However, Even with high-tech hydraulic water mining techniques, the industry could never produce more gold than it did in 1852 when it reached nearly 4 million ounces.
BAD NEWS FOR THE BAKKEN: Decline Rate of 63,000 Barrels A Day
The EIA – U.S. Energy Information Agency is now putting out data on the individual shale oil and gas plays in the country. While the American public and world have been made aware of the huge increase in oil production coming from the Bakken, few are privy to the dark side of the equation. The Bakken’s daily decline rate from their existing oil wells has reached a staggering 63,000 barrels a day.
This means, that every day the Bakken pumps oil, its existing wells are now declining 63,000 (bd) barrels a day. As you can see from the chart above, the rate really started to decline in a big way after 2011 when the average daily decline was only 20,000 bd. In less than 3 years, this rate has increased more than 3 times (63,000 bd).
This next chart gives us the total as well as net oil production increases month over month:
The EIA is showing what is indicated to take place in December over November. If we look at the actual data that comes out of the North Dakota Department of Mineral Resources, Bakken oil field production in September hit 867,123 bd. The difference to reach that 1 million barrels a day is coming from the Montana portion of the Bakken.
Here is an actual screenshot of the ND DMR’s monthly report released November 5th:
Moreover, if we look at total production, again using the North Dakota DMR’s data, their total oil production data for the state in September was 931,940 bd. This includes oil production outside the Bakken and Three Forks (data for Bakken in the EIA charts includes Three Forks).
Astonishingly, 93% of North Dakota’s oil production comes from the Bakken region alone.
The Bakken Drilling Frenzy Gives The Illusion of Sustainable Growth
The typical American believes the United States has all this hidden oil and gas resources that we can easily tap into. I just had a conversation with a neighbor yesterday who told me that he couldn’t understand why we weren’t “ENERGY INDEPENDENT.” Gosh, if I had a dollar for every time someone said that…
Again, the public is only told about all the huge increases in production, but for some strange reason, MSM tends to omit the negative side. The only way oil production is increasing in the Bakken is due to the massive amount of new wells that have been added. The chart below reveals the illusion of this sustainable growth:
First, the figures in white represent North Dakota’s total wells producing for their production of the Bakken. Even though the graph includes Montana’s production, it still gives us a good idea of the huge increase in oil wells it takes to grow production.
Second, in 2008, the Bakken in North Dakota only had 479 producing wells, however at last count in September when then Bakken was producing 867,123 barrels of oil a day, it took 6,447 wells to do so. Thus, the energy companies drilling and producing oil in the Bakken have to keep increasing wells each month (and year) to offset the huge 63,000 bd decline.
For example, there were an additional 135 new wells (ND) producing in Sept. over Aug. which added 20,589 bd of production. If there were only say 100-105 new wells added that month, production would have remained flat or possibly declined for Sept.
Lastly, the best and most productive wells are exploited first leaving the dead-beats for last. This will make things even more fun as the peak and subsequent bust finally arrives.
The Coming Bust of The Great Bakken Field
As with all oil fields, there are only so many sweet spots and areas to drill. The 63,000 bd decline rate at the Bakken only has one way to go — and that’s higher. If the present trend continues (highly likely) then we are going to see a daily decline rate of 75-85,000 barrels a day by the end of 2014.
Thus, the shale oil players are going to have to make those drilling hamsters work even harder as they will need to increase more wells each month just to grow production. At some point in time (sooner rather than later), the daily decline rate will reach a figure that these companies will be unable to offset.
There are only so many drilling locations available and once they run out, the Great Bakken Field will become a BUST as the high decline rates will push overall oil production down the very same way it came up.
Those who moved to the frigid state of North Dakota with Dollar signs in their eyes and images of sugar-plums dancing in their heads will realize firsthand the negative ramifications of all BOOM & BUST cycles. At this time, the word “Cold” will have more than one meaning.
Once the Bakken and Ealge Ford oil fields peak and decline, the United States has no other “ENERGY RABBIT” in its hat. This is precisely why investors need to understand energy and why its important to own physical assets such as gold and silver.
»
- 47987 reads
- Printer-friendly version
- Send to friend
- advertisements -
Not another Bubble!
the United States has no other “ENERGY RABBIT” in its hat
Thats not really true. There are vast untapped reserves in the eastern gulf of mexico, mid atlantic coast, california coast and ANWR. There are also the massive shale reserves in Colorada/Utah/Wyoming
Shhhhhhhhhh........you're not singing the Peak Oil Theory song.
Now watch as the Peak Oil Theorists pop out of a hat like rabbits to prove you wrong.
This article is below ZH standards.
And............exactly what are those standards?
I don’t get it. In order to hedge against the boom that is about to bust, I am supposed to buy a thing that busted in 1888?
on a long enuf time line, what goes up must come....oh never mind
"I wouldn't want to belong to any club that would have someone like me as a member." - Groucho Marx
An article with this level of obfuscation and illogic makes me question my own membership in the gold bug club.
Umm, if you guys find it difficult to understand let me try and simplify it for you. First, about buying a thing that busted in 1888, that just means that the product is worth EVEN MORE since the supply is reduced (although it is true that a gold mine with no gold is indeed a bust).
Next, the logic in the article is: when the stuff being dug out of the ground runs out, then the field is not worth anything anymore. Does that clarify it for you? Do you need even less "obfuscation"?
Logic? This article above simply states the facts of existing well declines. It is measured, thus it is real. How then does the short high production life span of these shale wells effect the boom in North Dakota. I think that is all the article was about really. Logic dictates that with such a high decline rate, the drilling of new wells will have to be very high, this means overall cost of oil coming out of these shale plays will be high, thus profit margines will be low and going lower.
Some people earlier in comments were using this as par tof the old Peak Oil debate. For some reason the idea of Peak Oil was named badly. It is not peak oil, it is peak cheap easy to produce oil. That is what is peaking. If you do not believe me, go to Alberta and see what man is prepared to do to cook tar out of sand and process it down into a thich sludge to put into the pipelines. Tar Sands runs at a low profit margine, and could collapse if any cheap easy to produce oil comes on line. Logic? Here it is. The Canadians are going all in on Tar Sands because they know Peak Cheap Oil is here. In short, they know Alberta high cost low quality tar sands oil will be profitable going forward because there are NO Cheap Oil finds. For all the claims of lots of oil, there is NOT lots of easy and cheap to produce oil. There is almost unlimited oil at $500 a barrel . That is the logic of it. There will be a bust, shale reserves that can be produced at current prices are limited and will blow up. Now if we jack oil to $200 a barrel, then shale has a longer life span.
As a Canadian I am really happy for Alberta. May they reap much riches from their oil! (I'm a Manitoban but that's ok because some of that money gets spread over here LOL)
Bakken was dead 20 years ago.
10 years ago they said the Bakken might produce some oil. Maybe...200,000 barrels a day (bopd). This was due to new technology, aka fracking.
5 years ago the Bakken started to boom and everyone all of a sudden noticed. They said might go to 500,000 bopd by 2020 or so. SRocco, though, started to trash the Bakken about this time.
September 2013, North Dakota alone produced 867,000 bopd and will reach over 1,000,000 bopd by early 2014. Will it peak at some point? Of course, but there won't be this big crash, that's just academics talking and not real life.
What the academics also miss is technology can advance that allows more recovery. Right now, they can recover only 5-10-15% (estimates vary widely) of what's in the ground. Double the recovery rate and SRocco dies of old age before it "busts".
All that and more, JLee. I am starting to wonder what the heck is going on with so many intelligent people (such as Jack B up above) not seeming to see what is unfolding before our eyes.
One small example ... the Wolfkamp/Spraberry field in west Texas had been pretty much written off years ago as a diminishing field. Now, implementing the horizontal/fracking technologies where heretofore only vertical wells were drilled, there are estimates put out that the recovery going forward will be in the tens of billions of barrels ... possibly second only to Ghawar.
And that is just one field.
These new and ever-evolving techniques will enable the massive, known shale reserves in Argentina, Russia, China accessible for recovery.
"the recovery going forward will be in the tens of billions of barrels"
hittin' the crack pipe again?
No, just reading many of the estimates put forth by professionals who are intimately involved in fully developing this play with its many strata of of oil bearing shale.
Forgot to mention the billions in debt being racked up by having to drill so many wells. Or how fracking plugs up the ground, defeating its own purpose. Methinks more than a few ZH'ers are long the Bakken by the comments here.
He provided stats, argue the stats, not the writers' bias.
Bakken gives Americans another shot of belief. Yes, there are plenty of ZH people long Bakken Plays. Their blind belief in fracking will come crahing down within a decade. Till then, lets party!
Americans are long belief. They always have been. But there comes a time when delusional thinking poses a serious hazard to survival. Accept reality. The world oil supply has peaked. A lot of other commodities have peaked as well. Economy by growth is over. We now have to learn how to live sustainably on this planet.
well said
Here in AK, Dakota stories have led our legislature to cave to the oilco's crying that they are over taxed.
What billions in debt? These are all private industry companies drilling out there...hello. There are several fracking methods, not all do as you claim.
Sounds like you've drank the Koolaid.
Your ad hominem attacks belittle all those who hold your Peak Oil beliefs and can and do attempt to conduct reasoned debate. I, too, once vociferously called all who disagreed with me big, fat, stinky no-goodskys ... but somewhere along the way - by second or certainly third grade - I was able to move on ...
awwww....did some one hurt your feelings?
Would you like to make a list of what I have been called here...
There are any number of people on this thread that can attest to the abuse that was hurled at me here,,,
No, Flak, my feelings have most certainly not been hurt, but I increasingly find it a misuse of my time to read juvenile exchanges that more and more mimic my grandkid's having a spat on a Sunday afternoon.
Did not! Did Too! You all are increasingly devolving this once great site where a wide range of divergent views/backgrounds/opinions could be put forth for the perusal, enlightenment and edification for one and all. Shame for that.
The way it works here, at least with energy articles, bring something to the table, not just handwaving stuff, bring meat, defend it and you will be cut some slack by the energy crowd here... It is a meritocracy...
Crap like E-Cat makes you look very foolish and unprofessional....
The wells regularly payout in less than a year. That does not create a large debt requirement.
Profits are not issue with the Bakken.... Unlike shale gas where you better have some liquids in your mix...
Retained earnings are still crap though...
Yes, keeping in mind, everything busts eventually, I believe the author, might be calling this one a little prematurely.
Less than zero?
On a long enough timeline even Zero Hedge articles deteriorate in intelligence to the point that even the idiocracy can understand them.
Yeah the guys been trashing the Bakken for years. It's clearly an agenda based article.
No, it is the too-informed to idly suck on the hopium pipe that have also pointed out the expected decline curve based on actual well data....
This has been known for 2 years at the ~20% uncertainty level in the peak... Math works...
Math works Flakmeister. But most Americans are operating on a public school education and a college degree in beer drinking. It is true, the well declines are measured, they are in the public record. Doing the math gives the answer. The Bakken is hopium in a very large dose. Lets revisit it in 2 more years. Declines of existing wells will be worse than expected. Just the nature of fracking to break oil free from the shale, the very physics of it, makes it logical that the wells can't maintaine a steady flow, the high you get from the first fracking blast declines at lightning speed, as only a limited area is actually broken up to free oil. Physics are in play, and they will not be denied.
All I can say is if you spend 5 million for a well in the Bakken you get more than 5 million in oil out - pretty much everywhere in the Bakken. So, the decline rate is known, expected and factored in, before you start. That math works pretty well too and is more important.
Yes, you can make money if you got in early, but the Bakken ain't the Permian...
The Bakken is the oil equivalent of "Take the money and Run", whereas the Permian is "The Long and Winding Road"....
Considering the growth potential, it's still early in the Bakken. And will be for years.
Have you ever even looked at a map of the field and what has been drilled?
With the existing wells colored coded to show output?
The best plays always get drilled first..
So unless you can show me otherwise...
Oh, and for the record, I always said that the Bakken was a nice field, I expected anywhere from 400,000 to 700,000 bpd out of it. And I have already been proven wrong Hell, I even made a few bones with CLR and KOG. But understand, this is no game changer. It is a nice field and some people are going to get rich out it. Nothing more and nothing less... The Bakken will be primarily stripper wells by 2030, producing maybe 20,000 wells x 5 bpd or 100,000 bpd. And that will go on for a very long time... As I said, nothing to sneeze at...
Jack, two years from now I'll wager a beer that you are incorrect and I'll tell you why ,., the decline rates are ALREADY starting to flatten due to the latest innovations in well completions and stimulations. More (most?) wells going forward will have ten thousand foot laterals, be cemented to the toe, be zip-fracked in 50 or so stages (closely-spaced), using multiple perf clusters that produce much wider fissures that penetrate a shorter distance. The entry holes into the wellbore will be 120 rather than the 30 or so now. These innovations cause a dramatically higher level of stimulation and production.
One of the intriguing consequences of this high stimulation close to the well bore is the viability of running numerous, closely spaced laterals - with the separating distance of as little as 700 feet.
This is all new, evolving stuff.
This will lower the cost of operating/drilling.
This has the potential to recover far, far more of the oil that is in place.
By far the most important consequence of these developments will be the already-started global rush to develop shale plays world-wide.
(Andrea Rossi's E-Cat/LENR work will sooner rather than later make its impact felt, to all our benefits, INMHO, making all fossil fuel potentialities moot.)
Andrea Rossi.
ROFL.
It seems to me, you still believe in fairy tales.
Yes, a lot of credibility went out the window when he brought Rossi in as an exhibit...
Flak! I'm CRUSHED! I woulda thunk you carbon-haters would embrace anything that didn't cause us miscreant humanoids to burn up any more of ol' Dino the Dinosaur and his long-deceased buddies! (Hush ... you're not secretly one of them thar abiotic oil types now, are ya?)
Seriously though, Flak, you are a pretty well informed guy ... incorrect for the most part but still and all pretty well-read. Ol' Rossi just had a test performed this past March (actually two tests, the earlier in December 2012. It seems several of the highly respected scientists are still somewhat scratching their heads over the seeming evidence of some kind of reaction that produced way, way more heat than conventional physics would expect.
Now, there is no way I would claim any kind of knowledge of what these guys are up to ... but I would not be surprised if something develops from all this and probably sooner rather than later.
I suggest you read this very carefully as an example of how a real scientist takes the E-Cat hoax apart
http://scienceblogs.com/startswithabang/2013/05/21/the-e-cat-is-back-and-people-are-still-falling-for-it/
Don't you think that a real physicist could not figure out how to fool an ammeter?
Science works because it is full of real skeptics....
And if you don't know who Ethan Siegal is, I suggest you google him...
"Seriously though, Flak, you are a pretty well informed guy ... incorrect for the most part but still and all pretty well-read"
yes God
it is about 2 years many people and scientist are waiting for a working and teStable prototype of
the E-cat
Yeah, Scot, I sure do not want to sound authoritative on this subject, but the testing done this past December, 2012 and March 2013 seems to have given pause to a number of scientists - including some who had been openly skeptical prior to the test.
it is about 2 years many people and scientist are waiting for a working and teStable prototype of
the E-cat
And they will be waiting for a lot longer....
"All good things come to those who wait" ... Godot :)
See my post above....
I was at BNL when P+F came up with their scam...
A "left-wing" physicist by the name of Art Olin from TRIUMF whom I used to lunch with waited ~10 days and then shorted Palladium, he cleaned up...
Nothing like getting close to the truth to bring out the finest comments...LOL
Amazing the amount of negative comments. Again, you know you're getting to the truth when you see this sort of response.
God Hath A Sense of Humor
Indeed! The closer to the truth the more violent the reaction. As a long time follower of climate science I have looked into the physics for a couple decades, when I present these physics in a public forum like ZH, the better science facts I present the more violent the response, till it reaches hysterics. Not that I have any desire to open that debate on climate science and the global warming due to CO2 rises. That subject is like standing up to your lips in gasoline and striking a match. The denial is off the charts.
Well, you might find this exchange to be in the same vein:
http://www.zerohedge.com/news/2013-11-16/nobel-winner-dares-go-there-no-reason-fear-deflation-greece-may-benefit-gold-standar#comments
Hedge has declined over the years. There used to be a lot more intellectual firepower on this site. Now it seems to have become a home for conspiracy nuts, joo haters, thug bufoons, and other anti-intellectuals like the AGW deniers. A far cry from the likes of Cognitive Dissonance and the other big brains who once gave this site its reputation. They've all been run off by the dregs and low lifes.
Believe it or not, in those days this site was not Peak Oil aware and denial of AGW was even more pronounced. I was there and there are no few here that will back my assertion...
Correctomundo there, Flakmeister. A lot of us reality-based types have been run off by "anti-intellectuals" and unceasing ad hominem attacks which are always and everywhere indicative of weak arguements and - in the area of these ZH comments, ever-encroaching adolescent expression.
Peak intelligence is bumped into long before Peak Energy is visited. And everytime Peak Oil is bleated out, the cost of individual BTU/calorie sources is conveniently ignored.
Yes, that is why oil use per capita peaked in 1980....
And California became a ghost town when the gold fields became exhausted?
That's a great point. Perhaps some new industry will sprout and provide jobs in ND. It seems very likely that ND will see growth in the future since ND is so sparsley populated but rich in resources.
California was a nice place to live (still is, right up until you talk to the people or deal with the government) .... North Dakota? Not so much.
North Dakota? I have been there. Frankly any place in Siberia has got North Dakota beat all to hell. I love cold climates, I live in one as cold or colder than ND. Seriously ND? It's a fucking hell hole.
Born and raised in ND. It's not that bad. The people are decent, the crime rates are low, the general view of the world is reserved (see, for instance, our lack of a housing boom or our rainy day fund). We've got food, guns, coal, oil, water, few people, deer, pheasant, and soon two oil refineries on the reservations. If you're in the US you don't live anywhere colder than here though; unless you live in Alaska, ND has the coldest cities in the lower 48.
When TSHTF, I wish all you Californians luck. We'll just have to turn back the clock a hundred years, while you'll be in a world of hurt.
And few ICBM silos...
Why on earth would you make a string of well thought posts and then ruin the run with something completely stupid? One mans hellhole is anothers heaven.
No kidding. Were the peak oil people Al Gore-type new energy nuts first and environmentalists second or the other way around? Because they sure as hell don't know anything about fracking and these multiple (and increasing yearly) oil/gas plays. There is so much wrong with this article that it shouldn't even be posted on ZH. Guess it was a slow weekend.
@Pure Evil: "Shhhhhhhhhh........you're not singing the Peak Oil Theory song."
You mean must mean "Shh........don't piss off the Oil Services (Drilling!) sector, or the real Pure Evil guy (Dick Cheney) and his old outfit(ters): Helliburton."
They'll tell you "Yup, yup, yup. There's OIL in them thar hills & plains, dales, vales and shales. Yup, yup, yup." [horks & spits]
the solution is as simple as it is obvious:
start pumping oil *into* the oil field at a faster rate than the decline
it just makes good economic sense
and addresses all the concerns about sustainability
hugs,
the bush twins
Lots of energy rabbits left. Say what you want but the usa has the best infrastructure and skilled workers in the world. What other country has a major water based comerce rout right thru the middle of the country.
Granted our politicians do all they can to fuk everything up .
we will succede inspite of the loosers in DC.
I was wondering where your tits had been lately.
America's infrastructure GPA: D+
Dude, D is for diploma! Wake me when it hits F.
F is for, "F*ck! The bridge is collapsing!"
That "other country" would be Germany and the Rhine River.
"What other country has a major water based comerce rout right thru the middle of the country."
Erm,
Panama? Brazil? Egypt? Germany? Iraq? China? India?
Lots of countries in fact. Some much bigger and better water ways than the US.
guess it depends on your definition of vast
and your definition of oil and energy
and your return on energy (and now massive water) invested
compared to world consumption and world production
in a credit economy built on a false presumption of infinite growth
When we first discovered "oil" the energy return was at least 1 ot 100, it's single digits now and dropping
like a lot of other things here, it's just math:
"Like the Bakken, the Eagle Ford formation in Texas consists of oil (and natural gas) in tight formations that are being accessed via fracking. The amount of technically recoverable oil in the Eagle Ford is estimated by the U.S. Department of Energy to be 3.35 billion barrels of oil.
Without a doubt, these two formations are a major factor in the current resurgence of U.S. oil production. But the Green River formation is the source of talk of those enormous oil resources -- larger than those of Saudi Arabia -- and it is a very different prospect than the tight oil being produced in North Dakota and Texas. The oil shale in the Green River looks like rock. Unlike the hydrocarbons in the tight oil formations, the oil shale (kerogen) consists of very heavy hydrocarbons that are solid. In that way, oil shale more resembles coal than oil. Oil shale is essentially oil that Mother Nature did not finish cooking, and thus to convert it into oil, heat has to be added. The energy requirements -- plus the fact that oil shale production requires a lot of water in a very dry environment -- have kept oil shale commercialization out of reach for over 100 years.
Thus, while the U.S. might indeed have greater oil resources than Saudi Arabia, U.S. oil reserves (per the BP Statistical Review of World Energy) are only about 1/10th those of Saudi Arabia. The distinction is important.
Summarizing the Definitions
To summarize, let's review the definitions for the important terms discussed here:
Oil resource -- the total amount of oil in place, most of which typically can't be recovered
Oil reserve -- the amount of oil that can be recovered economically with existing technology
Oil shale -- sedimentary rock that contains solid hydrocarbons called kerogen (e.g., Green River Formation)
Shale oil -- the oil that can be obtained by cooking kerogen
Tight oil -- liquid hydrocarbons that are obtained by hydraulic fracturing of shale formations (e.g., Bakken Formation and Eagle Ford Formation)
Conclusion: Resources are not Reserves, and Tight Oil isn't Shale Oil
It is pretty clear that at current oil prices, developments in the tight oil formations will continue. It is not at all clear that even at $100 oil the shale in the Green River formation will be commercialized to produce oil, although a number of companies are working on it and will continue to do so. Oil shale is commercially produced in some countries like Estonia, but it is primarily just burned for power.
In order to commercially convert the oil shale into oil, a more energy efficient method of producing it must be found (or, one would have to have extremely cheap energy and abundant water supplies to drive the process). I have heard from multiple industry sources that the energy return for producing oil from oil shale is around 4 to 1 (lower than for oil sands production), and that is before refining the oil to finished products. At this sort of energy return, oil sands will continue to be a more economical heavy oil option.
Thus, my prediction is that despite having an oil shale resource that may indeed be far greater than the oil resources of Saudi Arabia (I don't think I have seen an estimate of Saudi's total oil resources), the reserve will continue to be close to zero for the foreseeable future because there are still many technical hurdles to overcome to realize a scalable, commercially viable process.
Finally, I would say that if a commercially viable process for shale oil production from the Green River formation is developed, the environmental blowback will be enormous. The production of shale oil is more energy intensive (i.e., has higher carbon emissions) than for the oil sands, it has a high water requirement in a dry climate, and it is potentially a huge new source of carbon dioxide emissions. The environmental protests that would arise in response to a growing commercial shale oil operation would make the Keystone XL pipeline protests pale in comparison."
By. Robert Rapier
Source: The Oil Drum
DJ, the "intellectuals" denounce you as a denier! You are a denier! A heretic! You must be stoned!
What are you babbling about?
And whats this about getting stoned?
"eastern gulf of mexico, mid atlantic coast, california coast and ANWR. There are also the massive shale reserves in Colorada/Utah/Wyoming"
every bit of it more expensive to extract than the previous barrel. diminishing returns.
yes, there are (expensive) reserves still out there, no doubt. but at what cost (both economic and evironmental) relative to the return?
you can try to deny peak oil - or perhaps try to argue that it hasn't yet arrived - but it's still a closed-system problem dictated by the laws of physics... and the end of cheap oil will be a dangerous time. why not mitigate/diversify while time allows? i find this all-or-nothing attitude towards national resources to be short-sighted and risky. we have to play our cards much better than that...
and worse than peak oil has been our "leaders" reaction - lies, wars, oil waste, and procrastination, decades behind on transition systems that are necessary on every level
The USA is fucked!
Not as fucked as others, like Japan and Britain, both smallish islands that don't have energy.
The US does have energy, there's no question about that. The issue is CONSUMPTION (and, of course, rates of consumption).
The issue will be ocean acidification from CO2 release into the atmosphere. It would have been far better if we had run out of cheap oil sooner. Being able to extract more oil profitably ensures that the entire earth will be a tragedy of the commons.
Yes, that will be the thing that crushes the biosphere and the food chain...
yeah, when I first started studying the issue I thought cool will run out just in time. Damn.
It is funny how we bitch about criminal bankers
and laugh about this
Sure. And how expensive will it be to develop those reserves? The era of cheap "Uncle Jed" oil is over. If it takes two barrels of oil to get one out of the ground then that isn't particularly efficient is it?
Stackers, back when I was studying Geology, the profs used to joke about the exploration principle of "nearology"; that is, huge oil finds tend to be near other huge oil finds. For example, it is no coincidence that Saudi Arabia, Iraq and Iran are near each other, or that Oklahoma fields are near Texas fields, or especially that the big finds in the GoM are extensions of the onshore trend in Texas and Louisiana. That said, tell me about the huge onshore oil fields in Florida and the Mid Atlantic states.
BTW, "shale reserves" are not oil at all, but a waxy stuff called kerogen.
Propaganda Parroting won't be received well on ZH.
I gave you a +1 for your good analysis, but Propaganda Parroting is ZH's stock and trade LOL
Point of information ,,, kerogen is what is being called "oil shale". What is coming out of the Bakken, at the rate of near million barrels a day, is light, low sulpher world class oil. There is a wide range of the quality and composition ot the hydrocarbons located in shale formations worldwide.
Yes, that is why it is called "tight oil" by honest people and shale oil by those that wish to sow confusion with oil shales...
Very simple...
" There are vast untapped reserves in the eastern gulf of mexico, mid atlantic coast, california coast and ANWR. There are also the massive shale reserves in Colorada/Utah/Wyoming. "
What will be the costs of extraction, exactly ..., how many barrels of oil will you need to extract one in those reserves ?
This moron is all over the Doomersphere with his fucking energy "analysis"--guess he's cracked the ZH barrier...
It's a tad worse than that.
Since The Oil Drum shut down because the academics running it refused advertising (and the high traffic drove up their hosting costs) and felt they couldn't justify the costs with enough original scholarly work, the most sophisticated pure numbers oil types gravitated elsewhere (to a site I won't quote here lest Darwinian's hosting costs get hit).
But this article lifts rather large chunks of thought / text / numbers from there, and in fact he was asking questions in the comment section there this morning, the answers to which he then saw fit to splash above without attribution.
Sitting all that aside, the decline rates are high. They will get higher. They should not be projected higher linearly because year 2 declines in a well are at a lower % than year 1 declines. OTOH, initial day 1 production will likely fall as time passes.
As was true last winter, this winter will see some monthly declines in Bakken output.
CrashisOptimistic,
So we are on the same page here. The charts in the article all came from the EIA, not TheOilDrum. This is readily apparent if one looks at the bottom of the charts. All comments made in the post did give attribution to Jeff Brown, Rune Likvern as well as Art Berman and Bill Powers.
Just wanted to set that straight.
This reply fails to set the relevant point straight (Montana as part of the Bakken) and I didn't say anything about you lifting from TOD.
It doesn't matter. Go ahead and pimp your blog.
Crash,
Okay, I get your drift now if you are talking about the answer I got from Ron over at PeakOilBarrel.com as it pertained to Montana and the Bakken. Then yes, you are correct, I did not mention his (your) name in my post when I corrected my mistake.
You called that one right. However, I always give credit to any of the graphs I get there and I do put links to the PeakOilBarrel from my site.
Lastly, while the figures, text and data is discussed on the PeakOilBarrel, if anyone goes to the EIA website, the front page has the all the Shale data in a highlighted article. I check out the EIA website at least 2-3 times a week.
I'm not him, and I carefully didn't mention that site. You likely just did him damage.
CNBC assured me America is energy independent.
If Bakken is drying up, then Cramer will give us another of his great investment tips by saying it's a sure thing and to invest in it!
"If Bakken is drying up"
Its Peaking, not drying up.
Maria Bartaromo assured me that JPMorgan is a great and honerable company.
You sure? Better #AskJPM
Inflation/operation costs will do the rest. Part of Obama's grand illusion.
Still think it is odd that Petrodollars are invented and US production declines and well as EPA rises and restricts drilling.
It's kinda like diarrhea: it starts off with a trickle, exponentially grows into a gusher, and ultimately dries up.
The Green River Formation makes Bakken look like a mud muddle.
But whatever, I'll let Flak come along and prove I'm wrong ;-)
A Command performance, and so polite, how could one refuse...
Just like Rapier was probably quoted saying above, its kerogen, the precusor to oil... It is even worse than the shittiest coal as far as energy density goes...
There is also near by some unminable bitumen in Utah, there is also zero water to extract it,
google SAGD Hint: S is for Steam...
There wasn't much information here. All resources go through the same exploitation curves. Coal is doing the same thing but it drags out over two hundred years. Whale oil, same thing. Technology moves on. Within a score of years solar panels will be running at 50-60% efficiency and that will put the remnants of fossil fuels out of business.
Of course, it's just a Doom and Gloom report to stampede the lemmings into PM's.
"This is precisely why investors need to understand energy and why its important to own physical assets such as gold and silver"
Hopefully he has a $250 monthly newsletter that can cast a light on how dummies can invest in gold and silver through his website of course, at immensely inflated premiums.
Its all for your own good silly rabbit.
Yes it's silly to own gold. We all know the $ will remain world reserve currency forever and remain strong like bull ($hit)
We're talking PHYSICAL resources. Technology is a PROCESS.
"Coal is doing the same thing but it drags out over two hundred years."
Yes, and had oil not come along that coal would, if one were to parlay it into today's BTU consumption, have been exhausted.
"Within a score of years solar panels will be running at 50-60% efficiency and that will put the remnants of fossil fuels out of business."
You're a city boy, aren't you?
Go to any sizable truck stops and repeat what you say here. I'll wager that every single one of the truckers that you'd say this to would laugh you right out of there.
ENERGY DENSITY.
http://en.wikipedia.org/wiki/Energy_density
My tractor would never be able to carry around enough solar panels to run, even if they were 50%-60% efficient (that's quite a jump given today's numbers- and we're going to achieve this how? we're flat broke). Batteries? HA HA HA HA!
Seer, you wouldn't be able to put solar panels directly on vehicles, because how would you drive on a cloudy day? What I am saying, is that there is enough energy for a large centrally located plant to convert the solar into some other 'carrier'. Here are the numbers: there is approximately 1 kilowatt/hour per square meter of solar energy hitting the Earth (at the equator at 12 noon on a sunny day). That's a heavy level of energy.
"there is enough energy for a large centrally located plant to convert the solar into some other 'carrier'."
"Enough?"
There are two issues that one needs to consider to see why it's not such a slam dunk:
1) Energy density- people just don't understand the scale of the existing transport demand (sit next to some major road and count the trucks; or, sit by a major waterway and watch the ships and tugs);
2) Given the vastness of 1) above, figure that a LOT of it is subsidized by way of all other transportation demand; if you remove POVs you'll then significantly impact economies of scale for the other (per-unit costs would shoot up because you're still operating the same P&E).
Regarding intercepting solar energy, yes, there's a lot there. But, that energy is also used by the planet, to mention soil heating for one (anyone who knows anything about farming knows that soil temps are important). Comes down to storage... (that or complex distribution systems, and "complex distribution systems" also come with govts [central planning]).
Whether we can do something is not the only question. Does it scale? (if we're talking growth then we have to ask for how long? [because growth cannot take place in perpetuity]
I use passive solar and wood to heat my home. With the exception of the wood stove (which is, when compared to tech-like things, pretty low-tech), it's about as close to sustainable as you can get: the land that I manage is able to generate more biomass than what I take from it (I'm within limits).
Oh, I was being somewhat facetious about putting solar panels on my tractor. I'd be knocking them off just like about everything else that gets knocked off on the thing! (I always think about a canopy, but then I look at all the major scratches on the ROPS, the busted lights etc, and I just promptly figure there's easier/safer ways to waste money- LOL)
Yes, if those efficiencies can be reached then solar is the solution (the sheer power hitting the Earth is huge)
I remember in the '70's and '80's the Devonian Shale was all the rage in the Appalachians. You don't hear anything about the Devonian any more. Did they drill it all up? No, they just ran out of hype.
The reason I own an electric car.
And you charge it from what?
Solar power and a generator that runs on wood gasification (wood chips)
I'm sorry to have to do this but, do you really expect me to believe that and do you think thats viable for metro (sexual or otherwise) areas?
You do realize wood burning emits CO2 right?
It's carbon neutral. The metro area is on it's own. Maybe Obama can help.
Only Al Gore gets away with that kind of equivocation. If you're burning something- anything- you're evil in the eyes of the almighty government.
BTW- I just burned the giant brush pile out back of my house this weekend. Didn't get a lick of anything useful out of it, either. Other than some warmth and a pretty fire that attracted a few neighbors and initiated a few conversations (none of them political).
It dosen't matter if termites eat the trees or you burn them ends up being the same carbon that was there in the first place. The new carbon comes in when you dig it out of the ground and add it to the mix.
Decaying trees, in the forest, emit...CO2 into the atmosphere.
I'm really not wanting to do this cuz you're a good guy.
I'm done.
The green growing things need-feed off the CO2, right? We need CO2 I thought.
How fast do they decay vs. how fast when you chip and create wood gas?
I've got a fair amount of wood. It's my source for heating my home. It's on my list to revisit wood gas, though I doubt that I'll ever mess with it.
I would be carbon neutral if I harvested no more mass than what regenerates ON MY PROPERTY. You are NOT carbon neutral unless you can do it, or are dealing with entities that can demonstrate that they replant/regenerate new growth.
No, its not.
Burning wood emits CO2. Period. End of story.
Just because you choose to believe its "neutral" because you get some fraction (or satisfaction) out of your total energy usage by investing in solar does not mean CO2 is not released from solid form by you.
Now look, solar, wind, geothermal, nuclear etc. all have their place and what you choose to do in your life is fine, but we are not going to run out of "energy" in our lifetimes or our childrens lifetimes.
Yes, oil/gas/coal is a finite resource and the world is a big place, most of it in water.
Don't sweat the small stuff, there is hydrogen ;-)
The tons of wood chips are delivered by a big diesel truck, too.
They are delivered by a stanley steamer. Problem is, by the time the steamer gets to its destination, its all outa woodchips and has to go back and get more!!!
You had me until you tried to make a case for hydrogen.
Check out H's EROEI.
I know.
Gainseville Regional Utilities (GRU) just got sucked into the vortex of "stimulus shovel ready jobs" via green energy. Not that it impacts me (I'm outside of it) but now those people will be paying through the nose to be "green" as the outlying counties are denuded of trees to feed a "biomass plant" fully dependent on diesel trucks for fuel. Not to mention the cronyism of large land owners & "the state".
Very, very green...lol.
Right back to central planning at its very finest.
I get them from my property. I have a wood lot.
Sweden has a whole city running on wood waste. It's certainly not a solution for everyone though.
http://www.planetthoughts.org/?pg=pt/Whole&qid=2771
Google it and find out for yourself, it's considered carbon neutral. We won't run out of energy but we might just poison ourselves with the byproducts from burning it. I'm not saying my solution is perfect and as a matter of fact I have cars and trucks that run on gas and it's much easier for me to use those in most cases. I bought the electric car for the same reason I have PM's it's insurance to protect me from the insane mother fuckers running this planet.
When the majority of the world's population lives on $3/day or less then I'd have to say that, with your boasting about how you have everything, to them YOU are insane.
..but we are not going to run out of "energy" in our lifetimes or our childrens lifetimes. "
You're absolutely right. We will run out of life before we run out of energy. The government will see to that.
More Green bullsheeto...
They are getting sold all over the world to folks to don't have the good fortune of being part of the petro dollar crowd;
http://www.gekgasifier.com/
I seem to be the contrarian on this site maybe I'm on to something here.
When I am in Vermont, I heat my house with firewood - 1 x 400 lb cast irn VT castings wood stove + 2 electric fans heats 3,000 sq ft. Burn about 60 pounds of dry hard wood per day. Clean the stove out every third day.
But, when I am not there, I have to burn fuel oil to keep the house heated to at least 50 degrees.
JOE GO - how many tons of wood chips do you need to generate say 5,000 watts 24/7 - who is going to shovel the wood chips in and clean them out - do you have a boiler tender man on site - a decent wood waste boiler with 60 foot chimney would set you back at least $20,000 - and burning wet and green chips makes one hell of a lot of smoke.
Solar power - one panel ( 4 x 8 = 32 sq ft) will product about 150 watts ( when the sun is shining). That means that you need 5 panels to produce one horse power ( 750 watts). So, you need to cover about 160 square feet of land or building to make one horse power during daylight hours. A person probably needs 100 horse to operate a modern house - 16,000 sq ft of panels
Only a person with massive overwealth can afford solar power.
my days- the powers that be have seen your equation 100 hp / home and have devised an answer, see japanese mini hotels for your answer, small less light less heat and mimium ac, just enough power to keep your Icrap charged while you eat out at mcd's or some sim resturant..no home food prep, or just raw vegan meals we will be living in 10hp homes soon enough.
He just plugs it into his arsehole.
He's got a converter shoved up there somewhere that burns methane and transforms it into electricity.
Just look at all the smoke coming out of his ears.
What will you be driving when Isreal lobs one into Iran? Im sorry that you guys can't seem to evolve past your addiction to dino juice. Good luck to you when all the proficies of ZH come to pass.
"proficies"?? Nice...
A bike....
That also works.
Just dickin' around with ya dude.
Prophecy states that we'll all have flying cars in just a few years, only problem, they'll all be crashing into the drones filling up the airspace to spy on everyone.
Just imagine what will happen to globalization when Iran is attacked.
I think golbalization is a big part of the problem. As long as energy is cheap we can ship containers of Chinese crap all over the world and destroy local economies. The sooner the globlal economy blows up the sooner we can repair our country.
Repair?
What does that mean? Seriously. Folks talk about stuff like this as though everyone knows that it is. If someone is asking/telling me to get involved in "repairing" something then I fully expect them to say what that is, just as I would expect others to query me as to what my notion of "repairs" would be should I be championing such.
There's a fair amount (well, not by total energy standards, but much more than most folks are aware of anyway) of methane production. Landfills. Farms (for on-site consumption).
Drawback is you never know when Barbie is going to want it back.