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Wall Street's Shale 'Fraud' Exposed
Via Jim Quinn's Burning Platform blog,
U.S. energy independence, we're told, is at our fingertips thanks to the so-called “shale revolution”. Offsetting declines in conventional oil and gas production, shale gas and tight oil (shale oil) are being heralded as the means by which the U.S. will become energy independent – a net exporter of natural gas and once again the world’s largest oil producing nation.
But two new reports by Post Carbon Institute and Energy Policy Forum show that the hype simply doesn’t stand up to scrutiny.
KEY FINDINGS, SHALE GAS
- High productivity shale gas plays are not ubiquitous: Just six plays account for 88% of total production.
- Individual well decline rates range from 80-95% after 36 months in the top five U.S. plays.
- Overall field declines require from 30-50% of production to be replaced annually with more drilling – roughly 7,200 new wells a year simply to maintain production.
- Dry shale gas plays require $42 billion/year in capital investment to offset declines. This investment is not covered by sales: in 2012, U.S. shale gas generated just $33 billion, although some of the wells also produced liquids, which improved economics.
KEY FINDINGS, TIGHT OIL (SHALE OIL)
- More than 80 percent of tight oil production is from two unique plays: the Bakken and the Eagle Ford.
- Well decline rates are steep – between 81 and 90 percent in the first 24 months.
- Overall field decline rates are such that 40 percent of production must be replaced annually to maintain production.
- Together the Bakken and Eagle Ford plays may yield a little over 5 billion barrels – less than 10 months of U.S. consumption.
KEY FINDINGS, THE FINANCIAL PICTURE
- Wall Street promoted the shale gas drilling frenzy which resulted in prices lower than the cost of production and thereby profited [enormously] from mergers & acquisitions and other transactional fees.
- Industry is demonstrating reticence to engage in further shale investment, abandoning pipeline projects, IPOs and joint venture projects.
- Shale gas has become one of the largest profit centers in some investment banks, in direct parallel with the decline of natural gas prices.
- Due to extreme levels of debt, stated proved undeveloped reserves (PUDs) may have been out of compliance with SEC rules at some shale companies because of the threat of collateral default for some operators.
- With natural gas prices far higher outside the U.S., exports are being pursued in an effort to shore up ailing balance sheets invested in shale assets.
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Wall Street runs on hype. How else then would you fan the flames of Greed and Fear?
The money meme writ large.
The Shale Monster! OHHHH Scary stuff kids!
Don't worry. Godzilla King of Monsters will kick his Shale Monster's ass.
“Shale Fraud” rhymes nicely with “Schadenfreude”. I ain’t no Limerick King, but… I did stay at a Holiday Inn once. ;-)
Looney
No complaints here. I sell to oil field service companies.
Meh, none of this really matters.
No matter how destructive any method method of extraction, engineers will be able to figure out how to extract more, especially with an election on deck.
Example: California - the green state, right...why does it have the worst air quality in the US?
And why did it just offer environmental waivers for a Tesla? Apparently, saving the water is not as important as saving the air, hmm?
All about getting re-elected, nothing else.
Thanks Tylers. I'll take the other side of that trade.
Ka-ching!
Oh look some anti-oil "green" groups hate fracking, so they make propaganda pieces saying it is a financial fraud...yet they offer not energy alternative....I'm shocked /sarc
ZH is always whining that there is no difference between the Repubs and the Dims, while dragging out every ridiculous Lib scam since Adam, just for the halibut. Sounds fishy to me.
As I sit here in West Texs drilling one of the above mentioned wells.. Let me ask this question. Does the decline rate matter more or less or inversly in conjuction with the intial prodoction rate of a comparable vertical well? We return 100% ROI on these wells in an average of 14 months... so does it matter what the prodction fall of is if it is on 100% profit? Tyler... I appreciate much of what you put out on this site but you are out of your depth on this one.
Well it's not like the USA isn't consuming a lot less either.
Forget just shale oil...look at ethanol production. Everyone agrees of course "when prices fall this is bad.". But hey...the sun doesn't just "also rise"...it rises and shines everyday!
Kinda annoying actually....
So Close: Good work.
If you can continue these type of numbers the declination wll be moot.
However, I think that your rate is an abberation of shale fracking rather than the norm.
You play, most likely, is the exception that proves the rule.
Yeah... we are all out here pissing money away as fast as we can because we work for non-profits.... wake up.
Damned right. If it's not profitable, why would you be doing it?
I have no "idealogical" position on shale, fracking or anything related to the "drill for energy" industry. If your company fucks up and comes up short on production to cover expenses, that's on you. If you make a profit, good for you.
There's a weird undercurrent of "the government should do something about this" that permeates all the articles on this subject (including ZH, but not just on ZH).
Bottom line, that's YOUR business. Not mine. Not the business of internet posters. Drill your ass off. Make money. Fill my gas tank. You'll get nothing but thanks froom me. Just don't come to me for a bail-out if shit goes all pear-shaped for you.
If we can agree on that, I couldn't ask you for any more.
The general thinking I get is that QE is the only reason that interest rates are low enough to allow people to borrow to keep drilling.
The Central Bank / Federal Government are the only reason that fracking is happening on this scale. Some of the most profitable wells might still exist at higher interest rates, but probably far fewer.
Which is the problem of So Close's company. Not my problem, not yours. If you think it's going to back up on them and throw them into financial trouble, don't invest in their company. Or short their stock, if you feel strongly about it.
I agree with your general point, but only insofar as I think it applies to a LOT more companies than just drillers. The whole damned economy is riding on that principle.
You, sir, are correct. Gail had a graph up just the other day showing that all the oil majors have been cash-flow negative since 2012. There is no realistic way to amortize that debt, and without the low interests rates all the financial shenanigans in the world will not prevent frackers from going bankrupt. US oil production is being subsidized by savers and taxpayers via the rather recondite route of financial repression.
This is par for the course in American economics; we've been subsidizing airlines, agriculture, and entitlements this way for decades. But now that the vital petroleum industry is also a rentseeker, we've reached an inflection point where the physical economy has gone catabolic on itself. Airlines are a luxury and could be subsidized. You could even make the case that the cost was worth it, since commercial air travel added value and cachet to out economy in exchange for a pittance of financial repression that the average person hardly even noticed. However, petroleum is an integral part of the physical economy. You can't fund oil extraction on the airline model for very long, especially not when you use the stuff as wastefully as we do.
You, sir, are NO moron (in the traditional sense of the word)!
If it's not sustainable (good luck finding ANYTHING that is) then it IS subsidized. The trick is to find how something is subsidized. As you correctly note, the low interest rates (market manipulation) is in fact THE mechanism for the subsidy for shale oil production (and so very, very much more).
At the very least one can say that the subsidy is a pull-forward from the future: based on the future outlook for our continuing the things that we've been doing I'd have to say that the subsidies have been HUGE (growth, in the Big Picture, is pretty much totally pulled forward).
IF, and I don't believe its a very big if any more, extensive fracking correlates with underground water resource contamination as well as seismic activity and subsidence, your companies certainly include in their business model the eventual compensatory costs, RIGHT? IF NOT, does that mean the US taxpayer eventually provides a further subsidy to YOUR PROFITS? Just asking!
I doubt God would have left us here without enough fuel to live an d cook with.
The folks on Easter Island were obvioulsy praying to the wrong God then.
" The folks on Easter Island were obvioulsy praying to the wrong God then. "
Or maybe their hubris, that same hubris which made them destroy their island, prevented them to pray other gods than themselves.
I have tried to explain this before. Note that they fail to mention the Wolfcamp in this article and it's going to be bigger than Eagle Ford the way it's going in Reeves and Culberson Counties right now.
wrs1, please do not inject any facts into this thread ... didn't the above article say only TWO shale plays , the Bak and the EF? Omitting the Permian basin which is producing somewheres around more than these two COMBINED would just diminish the negative tone of the article, dontchano.
The way those boys are marching those big rigs into west Texas, you all are going to be ass-deep in oil for decades to come.
The equation doesn't change.
As I've been saying for some time now, economies of scale in reverse. Margins will only continue to get squeezed until it don't work any more. There isn't enough readily available, CHEAP, energy to push global growth. Without global growth there won't be the volume to support economies of scale. There may be "huge" pockets of extractable energy, but that doesn't mean that there are buyers and that there is price support to maintain any margins: 2/3 of the world's population lives on $3/day or less- there is no sign that this will improve (not in the US, that's for sure).
What all this shale oil does is give us time. A number of relevant advances are coming out of the lab and starting to get deployed in the energy field. The later the oil runs out, the less painful transition will be and the more likely that something's going to get cheaper than oil on a durable basis, ending the age of oil before the oil runs out.
I remember when the figure used for 2/3 of the world was a dollar a day. The dollar's lost value but not quite that much. Saying they live on $3 a day is admitting that there's been significant progress in reducing global poverty. A long way to go yet to beat it, but $3 a day is real improvement.
You should read this one;
http://srsroccoreport.com/condition-red-fracking-is-destroying-oil-gas-c...
Scraping the hash pipe for one last desperate hit, like the addicts that we are. Not seeing tomorrow, too busy just trying to get through today.
" Does the decline rate matter more or less or inversly in conjuction with the intial prodoction rate of a comparable vertical well? We return 100% ROI on these wells in an average of 14 months... so does it matter what the prodction fall of is if it is on 100% profit? "
The main point of the article is not the profitability, it is the so-called energy independence.
This is the first line of the article: " U.S. energy independence, we're told, is at our fingertips thanks to the so-called “shale revolution”. "
So .......................................
Buy XOM, CVX, SLB, HAL, BHI, MRO .................... Right?
The solution is drastic reduction in energy consumption. Only viable solution.
Some energy may be gained in very specific locations with well designed renewables, but for the most part the solutions are going to be through efficiency and reduced consumption.
I'd have to state that there is no "solution," as the very word means final/permanent.
Jevons Paradox speaks to the fallicy of effeciency.
For sure, "reduced consumption" is in our future (that and or reduced population size).
Jevon's Paradox only occurs if there is more supply to be added. If the energy supply is a constraint, only 100% can be used, it is just a matter of how efficiently.
Without question the second dumbest thing in the last 6-months I have seen posted on ZH.
Taking out the red pen:
1.) Drilling treadmill; 30 to 50% dry gas production does not take into account the shallowing of the type curves, or injection sweeps and only is talking to the nominal number. After the 18 month, even ultra-tight plays will shallow out, bi-lateral or refracing improves OGIP by around another 18%. Realistic replacement rates, even for the most ass-rotten plays (TMS, Granite Wash) come at well below a 1.1x replacement rate at 4/acre downspacing. 7,000 is a number out of their ass and means nothing esp. with context where that number has zero weight in a NAV report.
2.) Shale oil; see 1, go on USGS and feel free to find a 40% field blowdown rate. Go ahead I'll wait; this argument has been around as long as Sleeping Giant. 40% is the first 10 month decline, but fails to encapture the full recovery and secondary zone recovery factors. Simple numbers, for simple statistics traders.
3.) Top 2 plays, out of 9 discovered "tight oil" plays with proven booked production. Yup, great selective statistics. For those who actually read & follow along, go fetch the total recoverable oil, at the 10% type curve estimate at 80/bbl oil.
4.) Shale gas. 42B is a fugazzi and without knowing what type of configuration, design and development scheme that number does not break down into the 7,000 per well at any logical capex for a full drill, completion & tie back in line with current industry trends and goes to show you how out of depth the fact-checker (and audience) is. Compare and contrast a 6/pad; 32-stage Eagle Ford gas window well in 2014 with a 2012 2/pad, 10-stage configuration. Amuse us.
5.) Steep declines. An old trick bears use. Take calendar days, Shock with the inital hockey stick, show a 45 month cutoff of dry gas only. Add in the condensate cuts and apply reinjection after month 30.
6.) Shale oil: sucks when you manipulate the Y-axis to prevent laymen from seeing what the type curve looks like, and you take broad 10-year data to calculate your mean production decline. Making it too small for laymen to properly read is another nice touch.
7.) The final zinger: Compare the Field level recovery and per well economics with the recent spate of dry-hole and offshore costs to those of the Barnett. Go make a chart of it, added bonus if you can square the recent gazprom recovery rates to those of the DJ or Utica.
Now square the recent spate of Zero Hedge's lack of financial articles, increasing energy illiteracy, reposts vs. original posts with when they started to cater to the wingnuts. Correlation is not causation, but it's really starting to rhyme; and I am strongly thinking this site is now run by someone who has not worked at a long/short event driven fund.
It's subprime in the oil business.
You are just getting bullish at the top
Typical
Idiot
Thanks for this post. It's very difficult even for laymen who have followed the water floods and CO2 plays of the past (not to mention traditional down-spacing dry gas plays) to understand the new shale plays. The economics and techniques are a lot different and decline curves don't tell the whole story.
But when the laymen see Shell and others taking big write-offs of recent shale investments, they start wondering about shale plays in general and just how much hype is applied to these situations.
There is clearly a lot of variability in the quality of shale plays and you cannot help wondering how much hype is applied to some of the marginal shale plays.
You are obviously an expert and I would be damned grateful if you would share your thoughts on what's real in shale and where you are skeptical or perceive too much hype (Marcellus/Utica?)
Thanks!
Great post, Captain. There certainly is a lot of variability, rapid change and tons of noise surrounding the shale revolution. The fact that the major oil companies are being left in the dust should in no way cast doubt on the viability of this industry. To the contrary, in a few years, we will see a new major - EOG - assuming the mantle of being the largest onshore producer of oil in the USA.
The supply, the economics, the follow on business opportunities from this stunning and long lasting source of hydrocarbons are real and still in its early stages ... Regardless of the ruffling of so many people's ideological preferences.
"Viability?"
It's NOT sustainable. PERIOD.
There's insufficient quantities of this "stunning and long lasting source of hydrocarbons" to perpetuate global growth. And, especially, as long as our economic system is global this limitation stands. The downward growth trend is clear (and inevitable).
Your problem is in your maths. Reduce the 5.4 Billion number of humans denominator to 500 million or so and run your numbers again.
Just more evidence that the price will have upward pressure, while the unwinding /tanking economy will give downward price pressure. Lots of people predicting oil at $200 or 2$ any day now. It makes me think it will grind along fairly steady since the increasing cost of production is what is causing the dropping economy. Since our governments always plan the future on what happened last time, they cannot think their way out of this one by diversifying the economy or pushing for an alternate way of doing things.
Among other things, this is the pitfall of having a world run by old people who are cynical, thinking more of their own deaths than the deaths they cause, and can't imagine a world that changes they way it runs.
Up-arrow for your first paragraph. I refer to the pressure here as "economies of scale in reverse" (one day most people will get it; it's taken years for people to finally realize that growth is dead). As energy is what drives everything else it's, energy's, price (affordability) impacts is much more direct. EROEI, it's basically law (physics).
As to the second paragraph, well, no fucking idea what you're suggesting here. Kill off a bunch of old people? Or, that we can get around our issues by "hope and change?" I don't care what "wonderful" minds proliferated, if we were a total collective of "happy, optimists," as long as our underlying philosophy is that of perpetual growth on a finite planet we WILL, eventualy, be forced to endure the impact with the WALL (natural forces/physics).
Saying we need more young middle class leaders, not old rich ones.
Que the "Drill!" Shills.
"Drill, baby, drill!" Sarah Palin
Funny how this logic is seen clearly for so many other things, but when it comes to energy (and or Sarah Palin [another fucking politician]) people unplug from logic.
Strength through exhaustion. Come on you down-arrowers, defend your positions!
The independent shale oil drilling companies will go bust, the aquifers poisoned by fracking injection wells will stay contaminated for centuries and the EPA will pick up the cost to remediate some of the damage done. With several hundred more Superfund sites due to fracking and illegal disposal of drilling waste fluids, that will leave taxpayers holding the bill for a few trillion dollars worth of hazardous waste removal and remediation. Unless the Ogallala Aquifer gets contaminated.
Sure glad I live in drought land where there's no water
There's plenty of water near CA, just off the coast.
Of course, drinking it as-is may result in severe kidney damage and death, but no matter.
Carlsbad CA 92008- DESAL PLANT under const
Hey, Knuks, you may find it of interest that as per a July 2014 NY Times article, Chevron is providing one half of Bakersfield's water district's water supply from their filtered produced water.
How noble of them: I'm sure that the shareholders are asking them to do LOTS more of this humanitarian aid (I'm sure that it's being written off). And when Chevron goes bust and leaves (which it WILL), then what?
It costs 5 million to drill a well in North Dakota Bakken and you make your money back in less than a year, anything after is a profit. There are no dry holes. So, the decline in production is not important. It's not a scam.
The "scam" is in the perpetuation of this being sustainable (which it isn't).
This is deperation. And the folks how are able to leverage all the cheap money are going to get more of that cheap fiat, all at the expense of everyone's future. No, no scam at all...
Totally untrue. Every well turns a profit, just drill another one. It won't run out for decades at the current known extration rate. And new technology will continue to increase the rate.
Because there will always be a bigger bagholder, eh?
Did you notice how back around WW I they invented this thing called gas-to-liquid conversion or Fischer Tropsch process? Did you notice about a decade ago, we started to get production cost figures on FT plants that were below what a barrel of oil would cost? Then shale oil hit and dropped local cost figures so FT plants looked like a risky rerun of the 1970s when we built a few and then abandoned them in the 1980s when oil prices cratered.
There's a huge supply overhang for producing liquid hydrocarbons. It's called US coal. Unless they're banned, FT plants will start getting built when the shale oil/shale gas starts running out. We're not going to be running out of coal anytime soon. It gives us a century or two to find the next solution, a time frame that is way beyond any realistic prediction horizon.
Sasol (South Africa) has lots of experience with FT coal to liquids. Sasol's main plant in the province of Mpumalanga, the ONLY commercial coal-to-liquid plant in the world, produces about 150, 000 barrels of synthetic fuel a day. But that was only possible thanks to apartheid-era subsidies (and trade embargos), and over 50 years after their first CTL plant came online they are still producing a tiny drop in the world's bucket.
CTL is completely viable, you are right on point there, but results in $150+/bbl "oil". The US economy cannot survive that, unless something drastic changes first.
To the Techno-Utopian.
Yes new technology will come to increase rates of extraction. Old techniques already in play will be improved.
This just hastens the decline rate.
We have not....with all the Sh(it)ale oil we are dredging up from the bottom of the shallow sea that bisected our continent millions of years ago.....we have not gotten back to the historical high in oil production we saw in this country in 1970.
Period.....end of story.
And....combination with that sand filled sludge called Tar Sands in Canada....which by the way is where we get most of our imported oil....tight oil from shale has to be massaged back into something like the famous Light Sweet Crude that built our economy. Every step you have to take to make Tar Sands or Tight (shale) oil into a usable product and a product to derive other petrolium based product is a cost that is passed on to me and you directly at the pump....at the Jiffy Lube....and everything oil is used to make from plastics to food....(think fertilizer, farming, storage, shipping and selling at the grocery store)
So....bring it technology. Let's suck it down quicker so we can all finally get our heads out of our asses that much quicker and get on with the task of living in a lower energy world....along with it being poorer.....but myabe...just maybe.....a more honest one. For when everyone has a hard life just to feed themselves, they may just begin to rely on each other more and treat each other better.
Either way.....the quicker the Greatest Scam Ever....that being the Great Ponzi derived fake Middle Class Utopia....collapses the better. Oh...it'll suck.....but so does amputation if you have a arm or a leg with gangrene.
But...do you want to live with a missing limb....or watch yourself rot to death before your very eyes just to hang on to something you can't ?
Attention Biden's Brat:
the shale oil you are trying to frack in the south east Ukraine may not exist in commercial quantities. Suggest you look for another scam or way to steal from others, just like your dad.
Great now he too will pollute the political system with his taint....
How can we doubt those 2 unbiased organizations.
/s
Do you like Jack Daniels?
Ive been to the distillery. They have a natural spring that they use as their water source.
Do they do any fracking in TN?
http://ecowatch.com/2013/06/10/industry-targets-tn-state-passes-fracking...
The distillery is a mere 90 miles from Chattanooga, which lies close to the center of the width of Chattanooga shale field, placing all those mystery fracking chemicals some 45 miles from the Jack Daniels Distillery natural spring.
Re: 45 miles from the Jack Daniels Distillery natural spring
Come on... Do you REALLY think fracking would pollute water used for Jack Daniels? Never happen.
Half way through your daily fifth, you won't notice one bit.
And since alcohol is an industrial solvent, might as well be aware that the "buzz" when drinking is your brain cells being dissolved.
Lemme have a hard boiled egg and oneuhdem sausage sticks
Don't forget to pass the bacteria-laden bowl of peanuts!
I wouldn't be too concerned. Companies like Jack Daniels have a good deal of QA/QC personnel to make sure that stuff like this doesn't enter the product. Then again, perhaps Jim Beam is opening up some wells in the area...
Wonderful point, Flagit; I've been there too, many years ago.
Hmmm...the scoreboard looks real enough...
http://www.zerohedge.com/contributed/2013-11-05/hockey-sticks-day
http://www.zerohedge.com/article/chris-martenson-and-james-howard-kunstl...
Believe what ever you want to, these fuckers are blown. And they know it.
But how can we hope to keep economic growth going without growth in energy consumption? How can consumption continually increase without ever increasing production?
You ask us to contemplate Hell itself.
That was just snark, the last part, that is.
It will be you and me in a FEMA camp if we keep this up.
Ah, they'll just putcha on some strong psychotropics and vodka. Slow yer ass down a bit....
drool
I could get caught up on my fishing.
Is it true you can be too drunk to fish?
One can be too drunk to catch fish.
One is never too drunk to go fishing. ;)
>> you can be too drunk to fish?
I've tested that theory to the limits and I can only conclude the answer is no. Driving home is a completely different matter.
I was always concerned about dirving There! (and the potential for boating accidents- seems fishing and sound investing don't go hand-in-hand)
Heisenburg breaks it down pretty well on that video.
Fail to prep at your own risk. . .
I'm not so sure about that.
get it? physics joke?
Just don't do the half dead cat.
That one always grosses me out.
You mean Dr. Schroedinger's kitty?
And -- even more importantly -- how can we keep demand for Petrodollar going without the Petrol?
Did you read the source of the article? Yea, I'm sure that they aren't biased at ALL.
And the "other" side, the one that's fishing for more money (and subsidies) isn't biased? It's the "other" side that has clear pass through the MSM.
M.L. King Hubbard was biased too. Nothing wrong with being biased toward facts...
The plucky band of greens against the big oil folks is such a tired, false narrative. These oil and gas tight plays are playing merry hell with our FT future and the projected revitalizing of the coal industry. There's plenty of coal field owners who would be happy for the gas to run out so they would get their turn so there's plenty of big energy money on either side of the question.
FT remains as a solution to convert plentiful coal to liquid hydrocarbons that will last us a century or two by which point other solutions to the energy problem will have a chance to mature and replace the coal.
Myself, I'm betting on a multi-fuel future as China, India, and Africa get past socialism and start producing enough value to meaningfully enter the energy markets, raising demand to a level where no one source of energy is going to be able to do it all.
The Banksters have loaned to these shale wildcats, the loans WILL BE BUST ! FUCK THEM ALL !
Clearly, they need to drill MOAR up there in Alaska!
To produce is one thing. Another one is at what price? Then the investment/subsidy/interest schemes pop up. The whole thing looks to be another short term hosana and somewhat longer term another BIG disappointment everything taken into consideration.
What it will do is provide employment while it lasts. Better to spend the capital at home than send it overseas.
I don't see how this could be more meaningful, in the long-run, than just handing everyone vouchers for alcohol. When we all run dry we'll be dry AND broke, wondering what we did... But, as it the historical case, it'll keep TPTB in control (for longer): and in this case we can "thank" all the proponents who are clearly doing it for "the children" (TPTB's children- everyone else’s are going to suck on the growth-deficient gas pipe of the future).
Arrest Loyd Blankfein and Jamie Dimon for blowing up the United States of America. When they trigger that New Madrid we'll all be up nuclear shit creek.
They're no more than character players in the Big Play. We've been running off of parlor tricks for quite some time. Arrest these guys and we'll still be broke and unable to squeeze more growth from this here finite planet. I suppose there's entertainment value... (but, really, I'm tired of hearing their names and seeing their faces)
Isn't "Wall Street" synonymous with fraud?!
An American citizen, not US subject.
"Any unencumbered or un-invested funds will be kept in a safe and secure Corzine account."
While the majority of info presented is correct, it is very disingenuous to use 2012 as an example of NG prices- that was the worst year ever! Since then prices per mcf have been rising, averaging above $4/mcf in 2014- prices only dipped below $4/mcf in the last few weeks.
Obvious Cherry picking of data, and unnecessary at that.
http://www.nasdaq.com/markets/natural-gas.aspx?timeframe=3y
great film: gasland
http://thoughtmaybe.com/gasland/
Gasland = propaganda.
http://www.realclearpolitics.com/articles/2013/07/09/gasland_ii_and_anti...
RCP = David Brooks' favorite website.
Dude's a Zionist... No thanks...
You needed a propaganda site to tell you something was propaganda?
You guys are screwed if that's the highest level of thought you are capable of.
I don't need any website to tell me gasland is pure propaganda.
That news has been out for quite some time.
And those of us who've been around awhile know that everything we read needs to be taken with some salt- some more, some less. There's truth to be had in many sources, and falsehoods to be found among even the trustworthy few.
Google "gasland" for your own sources if you don't like the one posted.
Propaganda? You mean that those people featured did not have their water supplies poisened by nearby fracking? Or that the companies involved actually do reveal the chemicals used in their "proprietary" processes? Or that the money behind fracking does not dominate the political process?
Please do provide some evidence.
Here you go Sonnyboy:
http://wattsupwiththat.com/2011/06/04/the-gasland-movie-a-fracking-shame...
http://ny.water.usgs.gov/projectsummaries/CP30/Marcellus_Presentation_Wi...
http://energyindepth.org/national/debunking-gasland-part-ii/
http://www.commonwealthfoundation.org/policyblog/detail/gasland-part-ii-...
http://www.redstate.com/diary/vladimir/2012/06/23/gaslands-josh-fox-cant...
Of course you could have googled all this yourself without me wasting my time- if you don't want to know the facts don't read.
I know I know- fwaking iz vewy, vewy, skewy! (If you don't fact check).
Glad to know that not only do you not know a thing about theology....you don't know shit about geology either.
Tick Tock.....there's not only a spiritual Revelation coming for you, preacher man....but a geological one as well.
LOL !!!
I do not need to ask someone else (google) if something I am looking at is propaganda. I don't understand why any of you would need to either.
Yeah the shale thing is just a dying ponzi now. The smart money is jumping ship, the majors are selling leases just to make quarterly dividends.
It's over, I mean it's toast.
Watch how they spin all this bullshit now. The ponzi runners are going to be skipping on this like they skipped on every other scam they ever fisted people off with. Both political parties will be right there at the campaign contributions pig trough ears-deep in slop.
Another day, another mind-fuck.
Means futures in oil are under priced.
Coug, I always appreciate reading your posts, but you and anyone else who disputes the profitability and longevity of these shale plays is simply in error ... and a quick read of numerous unbiased sources would readily show this.
"but you and anyone else who disputes the profitability and longevity of these shale plays is simply in error"
Because YOU say so?
Sorry. Spouting superficial words such as "profitability" and "longevity" is MEANINGLESS w/o quantification. Extortion can be profitable. And as for "longevity" there is next to NO way that YOU or anyone else can make a claim on knowing what the duration will be: and if it's shorter than the cornucopians have pushed then the error will be blamed on some "uncontrollable/unforeseen" events.
Shale oil is a scam. PERIOD. In fairness, however, everything that is NOT sustainable is a scam; that's the definition of a PONZI. And our entire economic system, our way of life, is nothing but one huge PONZI of growth.
Year over year marginal cost in the Bakken $10B+
Year over year marginal revene $700M
Search "Bakken oil statistics" or just continue to rely on your ideology.
Not to worry. I hear there will be lots of Russian supply available before long!
Whether intended or not, your humor has a lot of meaning in it. As I've been cautioning, it's about available market, whether what you're producing is affordable. Clearly, Ukraine is no longer able to afford (even discounted) Russian gas. And most of Europe is not too far behind. This DOES place pressure on Russia, and if China wasn't there and able (which will only be for so long, until Russian energy is tapped out [keep in mind that the issue is "peak export," not necessarily "peak production"]...
Interesting that the Shale INNNN-DUST-REEEE is much more trusted than the Financial INNNN-DUST-REEEEE. I wonder why?
These "analysts" are trying to sound the alarm on the (supposedly) dramatic depletion rates of these wells. This is anecdotal, but my wife has been receiving gas royalties from the Barnett Shale for years, and the volume of gas produced in these wells has only gone down by a few percentage points a year. I look at these "reports", and wonder what the heck they're talking about and what their agenda really is.
I agree, my mom is getting royalty checks and the only time it stops is when they have a problem with the pump jack, which isn't often.
How many wells are there now compared to when she started getting the checks?
" and the volume of gas produced in these wells has only gone down by a few percentage points a year. "
I will step in with my "it's the equation" comment here...
We can squabble over the actual numbers, but the equation doesn't change. And the equation is that it is mathematically impossible to support perpetual growth on a finite planet. Our economic system is totally dependent upon growth. Our measure is based on slim percentages, a couple here and there, but, ALWAYS, expected to be INCREASING.
The words "gone down" imply that it is NOT increasing. We KNOW that conventional plays are pretty much all in decline, NOT increasing. The trend confirms what the equation says should happen.
That some can "profit" does not change the equation. The folks in First Class on the Titanic didn't experience a different outcome in the equation (of the sinking ship) than did those in Steerage Class.
Not only has world economic growth stopped, it's reversing: remove all the QEshit, which really only is pulling from future demand to ramp the growth numbers today. The Great Unwind is likely to completely destroy all that we have come to know as the "status quo." Figure that all will behave pretty much as the USPS would if junk mail were to cease... (without a lot of [subsidized] demand there would be insufficient total demand to support the infrastructure)
While looking at the big picture you've obviously forgotton that human beings have a short lifespan, usually under 100 years. There are pump-jacks in North Dakota that are STILL pumping oil from a well drilled in the 1950's.
At 4 bbl a day, yes. If/when they can afford the electricity to run the motors. I'm well acquainted with old OK oil fields and stripper wells.
Jackson Browne - Somebody's Baby (1982)
http://www.youtube.com/watch?v=f-3TZiyY9Sk (4:15)
I'm not sure what that was apropos of, but I always appreciate me some good Jackson Browne. Thanks.
Saw him and David Lindley a few years back. Excellent performance/work.
We almost went broke drilling shale gas wells in Teneessee in the early eighties.
Now we didn't have all the fancy horizontal drilling or the special toxic frac chemicals; we used hydrochloric acid under pressure to pierce the shale. Wells were around 1200 feet deep.
Initial gas flows weren't bad, enough to complete, invest in the (cement the casing, buy the pump,well line to gas line etc.)the wells but a year and a bit later the gas volume had declined 70% and falling fast.
Well, I closed the valves on the wells for a few weeks (pressure builds up over time so when you test volume its like 400% of normal for a few days)while some New York boys-actually I think they were from GS- did their due diligence on the wells-they were impressed with the gas volume and we (the family) sold the field for around a million which wasn't much more than we had spent on it.
Anyways, they really didn't care as they just put all the oil/has assets into a Limited Partnership and sold it kit and kaboodle (with mark ups and commissions of course) as a tax dodge.
I was a believer in shale gas then, for a brief period, but I think now, other than a couple of stellar fields the shale revolution is a mirage.
Counter intuitively an old friend of mine sells high level metal saws ($60,000-700,000 each); made in Italy, most of his market is in the US, . Business had been spotty last few years but the last 18 months or so, he's been making it. He says most of the saws he sells now are for the pipe industry-,drillingfracking. So, even though fracking is bascially nonsensical economically as this article asserts, a lot of pipe is being produced in the US to keep up with the huge shale formation depletion rates.
You gotta be at the right place at the right time.
"We almost went broke drilling shale gas wells in Teneessee in the early eighties."
You also didn't have the $100 a barrel prices needed to support this net energy loser. This higher energy cost also has nothing at all to do with the shitty economy either right?
George: Oil back then was arond $35-$40 at the peak. It's probably, putting in inflation, much more than $100/.bbl today.
Gas was much lower then, roughly about the same as it is today in the US, very low historically.
Sorry, I don't understaqnd your second senternce; perhaps, my 2 double vodka and lemonade has something to do with it.
what special toxic frac chemicals would those be?
You'd have to ask Halliburton its their secret, patent.
Since Haliburton frac'd my well last month, I have. There is no secret toxic chemical, it's basically guar for the gel, hcl for the acid and water and various types of sand as the main components of the frac process.
Gerry Rafferty - Baker Street (Long Version)
http://www.youtube.com/watch?v=lSIw09oqsYo (6:11)
Jerry Doucette
https://www.youtube.com/watch?v=pfGTA-kkf2o
Gee, business men defrauding everyone and everything in an effort to make a buck. Who woulda thunk it?
Anyone with half a brain has been saying Shale was a con since before the crash. They have suckerd a lot of smart money (HAHAHA) with that crap about energy independant, and exports, etc.. In spite of the prevailing opinion in these comments, Murka is fucked for energy. The end of cheap oil is marking the end of economic growth, since it has been the enabler for growth for the entire industrial age. And guess what? Nobody knows how to manage without growth, not even dear mother nature.
The only growth to be seen over the next 100 years will be in methane, increasing sea levels, and graveyards full of ex-players.
Ah, the Growth Ponzi! Yes, it's the equation that everything else is subject to. Those boasting of the robustness of the shale oil industry are either ignorant or deceitful (humans are deceptive, in which case that's how I'm leaning on this- BIG MONEY does DECEPTION really well).
TulsaTime Anyone with half a brain has been saying Shale was a con since before the crash. They have suckerd a lot of smart money (HAHAHA) with that crap about energy independant, and exports, etc.. In spite of the prevailing opinion in these comments, Murka is fucked for energy. The end of cheap oil is marking the end of economic growth, since it has been the enabler for growth for the entire industrial age. And guess what? Nobody knows how to manage without growth, not even dear mother nature.
The only growth to be seen over the next 100 years will be in methane, increasing sea levels, and graveyards full of ex-players.
----
Anyone with half a brain would know that what you just said happens to every market.
These two eco-utopian organizaitons are known for pushing the extremes of logic, which is fine.
But it's just one point of view.
My point of view comes from being involved in the industry.
One BTU of energy from gasoline costs nearly 7 times as much one BTU from natural gas.
This price for natural gas is much closer to free than a fair price for the energy.
Therefore, if you can make money on natural gas from shale @ $3.81 mcf (which many of the newer wells do), then the technology is awesome, period.
Prices are going way up, and this technology will become front and center to our energy economy
until solar is comarpably priced. And of course nuclear will be making a comeback.
Fracking needs to be done responsibly, which it is when seasoned petroleum engineers are invovled.
Have there been problems? Yes. Will there be more problems? Yes. Will we keep fracking? Of course.
The prices will go up and, until the EROEI goes negative, we'll keep doing it.
Of course, you aren't biased! </sarc, kind of>
"One BTU of energy from gasoline costs nearly 7 times as much one BTU from natural gas."
I'm sure that you believe this, but that don't make it so. It all depends on whether we're talking end-to-end, start-up, production, processing and delivery. In all of those you have costs for the infrastructure to consider. Also, USE/application matters. If NG is so much cheaper then why don't we see the trucking industry (which is a HUGE consumer of fuel/diesel) shifting to NG?
I'm pretty sure that one would likely hear that there's just not the infrastructure and that we have to invest in it in order to benefit from the lower "costs." The cost for the infrastructure never seems to be adequately addressed.
It's unfortunate that many people tend to be overly simplistic in viewing things (not saying that this is the case with you here). What may be viewed as "obvious" might be done so through the lens of simplistic thinking, the reality being, with more details, that it's really not so obvious.
I love ZeroHedge but this is bullshit artical with an agenda. Sure there is hype but I trust our members who are in this industry.
slow news day. they need to print more about how a bunch of geeks who don't bath often got anii to pay over $1000 for a long series of digits.
bitscum
The energy available to this world is essentially infinite. The technologies to extract and use it are already known. Why do we limit ourselves to to curent power structure who have monopoly on gas and oil?
Maybe because they murder everyone who challenges them?
There's a nice, handy fusion reactor sitting at a fairly safe distance that could, with the kind of investment put into oil, provide all the energy we need.
The earth recieves as much energy in a day, from the sun, as it uses in a year.
Good for a couple of billion years, at least, too.
I'm a bit hesitant to put such an open-ended claim on anything. That is, I don't think that we can really say how much energy we will ever require. And, keep in mind that we can't just intercept and use all solar energy, depriving the earth from its use, w/o consequences (try growing crops under solar panels- the soil won't be warmed, the plants won't get sufficient rays etc.)
Let's see you fly a fucking cargo plane with that shit???
Solar powered derigibles. Too bad the Helium has been all used up, will have to go with hydrogen.
ALL ENERGY IS EQUAL
But the energy that drives tanks, flies jets, launches missiles and moves locomotives and 18 wheelers is more equal.
No shit!
TRACTORS!
To me, diesel is a god. I do NOT take it lightly.
What the hell is going on with this article?
Post Carbon Institute? Energy Policy Forum?
The Energy Policy Forum is all about an investment banker who blew through a number of firms and ended up making Artisanal Cheese. This topic is her chance to get back into the big time.
The Post Carbon Institute are a bunch of clowns who want something to do.
Who is this snake oil salesman, Jim Quinn?
Quinn's been pushing the end of oil, the end of suburbs, the end of global imports, the end of...well, you get the idea
It sounds like you don't agree with me that we are running out of crude oil so fast (on a macro level) that TPTB actually created the 'sub-prime bubble' late last century to put a brake on crude oil consumption.
Demand, however, keeps chugging along, as the world wide PTB are storing crude oil in all the salt caverns that aren't already filled with natural gas.
Unlike so many of the characters here, I don't mind being wrong. Like voting for Obama. Twice. "A touch. A touch. I do confess it."
Well, as they say in Moose Jaw, the proof of the poutine is in the hurling of it.
It's not important whether we agree or disagree. I'm not sure you grew up with "Coffee Row Senators" but the name of the game is always throw out your best ideas and have fun discussing the merits/demerits. Maybe you come away by learning something and can identify an investment opportunity.
This article is intended/marketed crap from the get go. There is no one there that knows a thing about what they are talking about. There is no technical merit.
There is a reason there is a 1%. The remaining 99% don't want to spend the effort getting a good education. They are simply looking to lay blame. They want their neo-parents to look after them.
Look at the immigrants who make something of themselves. They hustle. The only hustle in this article is to get you to visit another blog.
You got me.
What's a coffee row senator?
Thank you for the heads up, (serious).
But you must admit there's a little bit of the "do what I say, don't do what I do" with sites like this , which probably has to do with their commercial nature.
And this changes the equation how?
There's a message, and then there's a messenger.
It's a finite world and our fantasy of infinite growth is rapidly heading toward a collision with reality.
Los Angeles Times May 21, 2014
"U.S. officials cut estimate of recoverable Monterey Shale oil by 96%"
http://www.latimes.com/business/la-fi-oil-20140521-story.html
"The Monterey Shale formation contains about two-thirds of the nation's shale oil reserves."
This was a one day story in the MSM
I'm sure that it's an exception. </sarc>
Pretty sure that the cornucopians will claim that this is due to clowns and or govt (or do I repeat myself?).