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Shale Oil: Expensive, Over-Hyped, & Short-Lived
Submitted by Adam Taggart via Peak Prosperity blog,
If you've watch the previous video chapter on Peak Cheap Oil, you may be wondering how any of that could be still be true given all the positive recent stories about shale oil and shale gas , many of which have proclaimed that “Peak Oil is dead”.
The mainstream press has faithfully repeated every press and PR statement made by the shale producers. And if you simply followed the headlines, you might even believe this about the US:
- It is soon going to be energy independent,
- Its oil production will surpass even Saudi Arabia putting it in the number one spot,and
- The US will even be exporting oil again like the days of old.
The only problem with this story is that it is misleading in some very important ways. And entirely false in others.
Here are there are five main things to know about the shale plays.
- They deplete very quickly. The typical shale, or tight rock, well production declines by 80% to 90% within three years.
- They are expensive. All oil and gas coming form them is several times more expensive than what we got from conventional oil plays.
- They are environmentally damaging because the fracking fluid is highly toxic and much of it escapes during the blowback process and sometimes water wells are contaminated.
- Because each well has low flow and depletes quickly, massive numbers of wells must be drilled creating significant infrastructure damage to roads and bridges. Currently no state or municipal authorities are capturing anything close to the total cost of the infrastructure damage from the shale operators which means taxpayers are gong to be left paying those bills.
- Not all shale plays are created equal – some are vastly superior to others. And even within a given play there are sweet spots and dry holes which can only be determined by punching a well in and seeing what comes out. Some call this the ‘mapping by braille’ approach.
When we put all of these together it adds up to a very expensive set of plays that will only last for a very short while.
To the extent that mainstream press has been conveying the message that peak oil is dead and that our energy concerns have been laid to rest is the extent to which they have been misleading us.
In many ways, the increased crude output from shale plays has bought us some time. We can either use the temporary boost in energy supplies, expensive though they are, to build towards a future when these too eventually run out, or we can use them as an excuse to carry on with business as usual.
If we do choose business as usual as our operating strategy - I use that word very loosely – then we will just march straight into the shale oil peak around the year 2020 and be very disappointed with ourselves and our utterly inappropriate transportation infrastructure.
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We're exceptional. Nothing else matters.
shaking foot to get poo off shoe
But, but, but,.......Obummer said my lifestyle would't change :(
But, but, but,.......Obummer said my lifestyle would't change
My answer: It will... and very soon.
The word (conventional crude) oil production, minus US:
Peaked in 2011 at about 70 Million Barrels per Day (MBpD).
2014: 68 Million Barrels per Day (MBpD). Note: Part of this new production wasn’t just new fields, but also ‘Enhance Oil Recovery’ (EOR) methods.
So, the world oil (standard) rate of decline of 5% was delayed.
Now, what will happen when 3.5 MBpD (5%) of oil starts to decline, annually?
Where will you find 3.5 MBpD? Just to keep even.
http://peakoilbarrel.com/wp-content/uploads/2014/11/World-Less-US-N-O-Less-US.png
Shale oil is a stop gap, a reflection that most of the cheap oil has already been produced or found.
Oh Canadaaaaaaaaaa...settle down honkies.
oh, fine
this article is clearly just another propaganda piece for liquid salt thorium reactors
can't we all just agree that natural gas, coal, oil, and uranium are what we want?
not to neglect wind
hugs,
the photovoltaic society of the orient
you could say the same about gold...price still going down...for now
How, when there's no wage to buy it?
"Now, what will happen when 3.5 MBpD (5%) of oil starts to decline, annually?"
1. Deflationary depression, caused by energy shortfall meeting debt overhang.
2. War, caused by nations wanting to maintain their "growth" but now at the direct expense of other nations. Oh wait, this has been going on since 1991.
Where will you find 3.5 MBpD?
no need to 'find' it we already have it. Libya. 40B proven reserves. 20 years+ @4mbpd
Exceptionally stupid. How otherwise would you characterize a nation that once had over 20000 tonnes of gold, the world's undisputed reserve currency, the respect of the world but instead decided to blow it in attempting to install a new world order and the enrichment of a select few?
nation that once stole over 20000 tonnes of gold
"Exceptionally stupid. How otherwise would you characterize a nation..."
Rothschild banksters, Zionist and Israeli manipulation and control, treasonous puppets, and sleeping sheeple that let it happen.
I'm awake, and waking others. Help me wake more.
An American, not US subject.
"Good morning, welcome to the police-state. Your guillotine is over there."
“Nothing in the world is more dangerous than sincere ignorance and conscientious stupidity” -- Martin Luther King, Jr.
Good morning
kchrisc
You wrote: I'm awake, and waking others. Help me wake more… welcome to the police-state. Your guillotine is over there."
Anyway, I just woke up and sorry, I am going to have to wake you.
The Industrial Age (capitalism) already started its collapse. Central banks (financialization) are what are holding this faith (craziness) together from fall apart.
Our free ride (cheap energy) into the twenty-first century is exhausting. And, there are NO substitutes.
So, as long the people still have faith (such as go to school, go to work, make plans for the future, and so on); and, as long as the government can (with the private sector help) minimize the blow to (unemployed, elderly, food-stamp, and so on) the one’s left behind, we will be OK.
Kchrisc, the Emperor (US) has no clothes. Its Satellite States (Great Britain, Germany, Israel, and Japan) should be renamed Zimbabwe 1, 2, 3, and 4.
The King next door (Russia), that NO one ever seems to conquer, now possesses its Mithridates. So, watch out!
Then, for the Emperor most formidable enemy (China), let me use Georges, a Zero Hedge commentator:
“Debates are meaningless. Back and forth is just a distraction.
The house of cards depends on everyone participating in the same crime.
Debt reduction is a symptom, not a cure. Reducing the dole creates panic attacks and hallucination.
Greece is in the shakes and chills; China in a special form of global burglary, the trade war that everyone fears.
The U. S. is the longest running Ponzi scheme, in the world. All investors are discovering that they were cheated.
The mess that Nixon wriggle out of in 1972, is coming back to haunt us. The Federal Reserve didn't promise to make good on it.
U. S. taxpayers, you did. So get ready” -- Georges, at Zero Hedge
Why are the first ten comments to any given ZH post rooted in the egotistical expression of wit than anything remotely substantial. Tweet your drivel @zerohedge or stick to Facebook. Stop wasting everyone's time.
"egotistical expression"
@Inexcye Solm GFY!
How's that for expression?
@Inexcye Solm
I do want to express myself. And I don't need 15 pieces of flair to do it.
BTW, 4 days ago you posted the following comment right up near the top.
"Does the robot work for free?"
That is not exactly Ludwig von Mises, buddy. I suggest you just relax and enjoy the show.
Just his premature exclaimation, his wife said something similar.
Eat me raw, balls and all!
Inexcye Solm=
Deep sleeper plant.
Indeed!
TWATS:
Tweet your twits to FEDRES@Tylerdurden.Fedres.USGOV.planted/schill/paid.com.
Wit is more important than the "substantial" subjects du jour.
Drill Drill Drill!!
- Larry Cocaine Kudlow
Inexcye Solm=
Deep sleeper plant.
Indeed!
TWATS:
Tweet your twits to FEDRES@Tylerdurden.Fedres.USGOV.planted/schill/paid.com.
I think we should just start drilling for oil on asteroids out in the vast depths of outerspace.
https://www.youtube.com/watch?v=qPkn656Utco
Delightful, abiogenic petroleum. Cue up, sukkahs!
Peak Propserity... instant 1 star rating, those guys are clowns who don't understand how energy markets work...
Post turtle, there has not been an informed, current, data-driven article on the Hedge for a few years now regarding the shale developments. Shame about that. Approaching Cramer-like status in this arena.
Don't buy this crap....there are 5 pay zone in the Permian right now, and they've only tapped #1, and a bit of #2. Neptune's in Pisces and oil & gas will found every-fucking-where on the planet, by damn near everybody who has half a brain and won't jack around the drillers. Argentina's sitting on Vaca Muerta where Repsol sold their geo-research showing >600 billion ("B") barrels of oil and >1500 trillion cf ("T") of natgas, but it's political maze to figure out those fuckheads. Ditto Venezuela; and nobody's saying zippo about Namibia & Timor.
Yeah, ok. That explains the tar sands in the vastness of Canada. Good choice.
No, he's making an important point. I talk regularly with geologists in Canada who point to very large deposits surveyed but unexploited at depth. Local politicians with elite connections work fervently to prevent drilling in some regions but not others. Why? And why are the contrived values of Agenda 21 applied so selectively? The essential thesis of Peak Oil is sound, and we certainly see depletion of individual fields and pools on a regular basis, but the overall timing of the cumulative Hubbert curve seems almost entirely manipulated and weaponized as another instrument of social control.
Your statement about "tar sands in the vastness of Canada" seems odd. They're only a day's drive from Calgary. Oilsands are a postage stamp on the map of Canada. If you ever get a chance, take the bus tour. It's only a couple hours long, and helps to dispel myths, for all but the most indoctrinated.
Water will cost more than oil pretty soon
Sooner than you think in California:
State officials allowed oil and gas companies to pump nearly three billion gallons of waste water into underground aquifers that could have been used for drinking water or irrigation.
Those aquifers are supposed to be off-limits to that kind of activity, protected by the EPA.
“It’s inexcusable,” said Hollin Kretzmann, at the Center for Biological Diversity in San Francisco. “At (a) time when California is experiencing one of the worst droughts in history, we’re allowing oil companies to contaminate what could otherwise be very useful ground water resources for irrigation and for drinking. It’s possible these aquifers are now contaminated irreparably.”
http://www.nbcbayarea.com/investigations/Waste-Water-from-Oil-Fracking-I...
Not around the Great Lakes
Might depend on who winds up owning those lakes.
Better hang on to them .
Some serious trouble in the Middle-east coming .
Major religious trouble brewing in Ethiopia-MiddleEast .
Think "stealing the Ka'aaba"
All currencies affected .
Raiders of the-not-so-lost Ark . This happened 14 Nov 2014 , two days ago .
http://worldnewsdailyreport.com/ethiopia-ark-of-covenant-reported-stolen...
Somebody is stirring it in a major way .
This theft is going to infuriate Christians , Jews , Islam , North Africa , Saudi's , etc
The fall-out is only just starting .
See
http://andreswhy.blogspot.com/2014/01/fall-of-aksum.html
This was attempted once before.
Luckily, Indiana Jones foiled the plot.
And put it safely back where it belongs. In the land of MYTH!
world news daily....
Sold at grocery store checkouts
Every new president is always shown shaking hands with the one and very same gray alien... but then again, they all look alike
MARTIAN POLES MELTING IS CAUSED BY HUMAN GLOBAL WARMING
http://worldnewsdailyreport.com/nasa-martian-polar-ice-caps-melting-resu...
fucking retards
Hey c'mon now... There will always be a special place in my heart for 'Bat Boy'...
I stole it. I'm going to hide it in the same place I keep jesus' underwear.
Shale or tight oil contributes nearly 3 million B/D to current US production and is projected to contribute 5 million BPD by 2016 then stabilising at this level around 2020 in the base scenario and going to 12 million BPD in 2030 making US autosufficient at 18 million BPD total production, in the optimistic case.
Along with NGL and eventuel biofuel it should then hit 20 million BPD of liquid production making it even export oriented. Thats the rosy story of the Oil lobby.
Now, given the fleet of drilling wells this will require-- as the depletion rates of these wells means at best individual well depletion time is 5 years-- we should have more rigs drilling wells than cars driving in American gruyere land. Anybody want to live in permanent earthquake land sitting on the dock of the bay where the oils wells belch their fracked oil like squirrels popping their heads out on a golf course?
American exceptionalism at its best. (I didn't bother to see the video).
Americans are exceptionally credulous, I'll give us that.
And whose 'reference scenario' is that? Yours?
Because it sure ain't the EIA's. http://www.eia.gov/forecasts/aeo/section_issues.cfm#tight_oil
The reference scenario they have shows oil production peaking in ~2020 and then dribbling down thereafter.
This is probably still optimistic (given the recent oil price collapse) but let's give us all the benefot of that doubt, shall we?
This still means the shale miracle tops out in 2020 and then we're right back where we started...competing with the world for what can be exported....this is why the APEC conference was such a major geopolitical realignment.
And Brisbane just confirmed it. It's "us" against "them."
But seriously, what's the plan, US? Is it pretend we're number one until 2020 and then we get cranky-serious about everything? Okay. But that's not a strategy and it's not even a plan, unless ostriches have plans when they stick their heads in the ground.
Well, your third paragraph sounds a lot like JHK. Applause.
Here's a North Dakota Department of Mineral Resources presentation of the Bakken performance, updated in June of this year. Page 41 should be VERY interesting to those who claim shale oil is a viable method of energy production.
Link doesn't work for me. I had to view it through Google's cache:
https://www.google.com/search?q=ActivityUpdate2014-06-11NCSLBismarck.pdf...
(use the small down arrow/triangle thing to the right of the URL under the search result link).
http://webcache.googleusercontent.com/search?q=cache:sKOoItxjzCAJ:https:...
Regards,
Cooter
EDIT: Cached version is crap - images are missing. If you have another linke, I would appreciate it. Thanks.
Fracking is just another short term solution just like low interest rates and quantitative easing were.
Yeah, fracturing reservoir rock only goes back to the end of the Civil War and hydraulic fracturing only goes back to the late 1940s. It's just a flash in the pan!
Printing money is pretty old, too. AKA debasing ccoin and currency
I think you boys need to stop trying to compare useful and productive petroleum engineering technology based on real science (see rock mechanics and reservoir engineering) to financial industry flim flam bullshit enabled by government corruption. Apples and oranges, dude!
I don't get it. With the price of crude oil plummeting, how can expensive shale oil be competitive?
Maybe the frackers could be subsidized?
They are subsidized in the sense that artificially low interest rates have made easy money readily available. The drillers are currently funded, so they will continue to drill, even at a loss, until the money runs out. Just another example of capital being misallocated.
North Dakota pays a ten dollar a barrel penalty because there is no cheap takeaway capacity. That says to me they've been handicapped since day one and haven't had the problems all the "majors" saddled with massive State obligations are. Those obligations have compelled more production in the name of social order. Yes, in that sense there is very much a threat to the shale boom. Falling prices is not the bogey. Plus if you start refining locally then you don't have to pay the transportation penalty. It's not like there is a shortage of feedstock.
Either way win/win for the U.S. consumer. Be nice if the Senate would repeal the corn as fuel law too. Had enough of the ethanol boom too.
"corn as fuel" will never be repealed because there are no other fuel oxygenates as cheap, convenient, and environmentally viable as ethanol
you want to chew the air in Los Angeles like they do in Beijing? then by all means repeal "corn as fuel"
Who gives a fuck with changing worthless paper dollars for real vital assets like oil, water, land or PMs even if they cost a paper fortune now ? Tomorrow, if you save some .. you'll have in your hands something anyone would kill for....
It probably isn't unless the government is either assisting on the side or it's hoping that Russia will crack sooner rather than later.
It isn't
This same argument was made about Prudoe Bay. Yes, the US shale oil resource will (in aggregate) deplete. For oil, it looks like it's 2 more years of incremental aggregate US onshore shale oil production growth, and perhaps a 4-6% annaul aggregate oil production decline thereafter.
Shale extraction technology and techniques will continue to improve, bending the cost curve down.
Yes, shale oil is more expensive than sinking a single well into a pocket of 100 million gallons of light sweet crude. But what makes shale oil viable is that there are 100 million potential well sites across the globe - each capable of producing at least some oil.
Environmentally, any critics need to go to Western North Dakota and Canada - there is nothing there. There hasn't ever been and there won't be after the shale oil boom. And if you want to fight for the environment, go to China and hold up a 'Cleaner Air' sign - at least until your lungs give out!
And if you want to fight for the environment, go to China and hold up a 'Cleaner Air' sign - at least until your lungs give out!
Think of the Walmarts, you calous clod!
Hey oil stooge! Are you saying those areas have not been polluted? Texas? Oklahoma? Plenty of dead, polluted former oil patches.
You want to see a man-made superfund site that the government IN KALIFORNIA refuses to do anything about? Behold the Salton Sea. I'm shocked, SHOCKED that it hasn't become enviro-freak mecca, to which every good carbon-credit purchaser makes a pilgrimmage.
You're just as responsible for using petroleum products then bitching about it.
There are degrees of complicity. With an Asian username I am actually somewhat surprised by your black and white thinking.
Sounds like the US stock market. Or US real estate except that it is hyper-expensive, hyper-hyped in places like NY City. It must be American Exceptionalism. Or because we have a Nobel Prize Winning president. Or plain old corruption and fraud in the land of the free.
Solyndra, was expensive, the good news is the tax payers are slowly recuperating,, on to the next cash for clunkers move..
Shale oil is speculative..
New technology made shale oil recovery possible. And now not one word about future advancements that could recover not just the current 20% of what's down there, but much more.
I don't buy this crap either.
Man has always overcome environmental limits and technological challenges in the past, and will therefore continue to do so in the future.
I think that's simple logic.
Your original thesis if valid, is no gaurantee of future perfomance....thats simple logic.
Sheesh. Jlee....with that kind of logic I REALLY have a right to be pissed about my missing flying car, thorium reactors, fusion drives and dilithium crystals.
BTW.....why aren't we on the moon? For that matter why aren't we landing by now on the planets orbiting Alpha Centauri?
Drilling oil is hardly rocket science sir.
Then how come it takes Calculus, High Level Geology, Supercomputers, Satellites, High End Metallurgy, Materials Sciences, Geography, Chemistry (for fracking, refining, etc,), Transportation Sciences, which itself needs just about everything i just previously mentioned,.....and more.....
just....to....get....the....magic....elixir....out of the ground in the amounts needed to fuel society today....much less the growth needed for the future societies on the rise and Ponzi Financing?
Yeah....your right....it's hardly rocket science. It's WAY more difficult.
Thanks for clarifying your enormous ignorance to everyone here.
No, it's not that difficult. You need a Phd with NASA, not even a High School diploma here. It's easily repeatable tech. Drill anywhere in the Bakken or most shale oil locations and you have zero dry holes. All you need is money and able bodied men.
I've studied this. Perhaps you haven't ?
Depletion rates are can be explained very simply. Each zone is plugged, once that zone is pumped dry, then you need work over rigs and/or coil tubers to get the next section ready. (cut the plugs, do the flowback ect) There is a large back log of wells in the Bakken that need work over/swab/and or coil work to be done on them. With a shortage of talent and equipment this takes time. 8 to 12% of the formation is tapped depending on whose numbers you believe. Less then 200 drill rigs in the Bakken and not all drill rigs are equal, some take longer then others, have talent issues ect. Some of the areas are very difficult to get a rig into, have you even seen what it takes to set up a drill rig? Now, think about moving all that equipment and gear into an area with no roads (have to be built) and in areas that look like the Badlands. These areas have much higher well head price break even points. The media and those who sit in their moms basement use only the break even price points from these areas. I only ask one question to guys like this, Who is John Galt.
I get it. We need oil and gas. I like driving. Eating. A warm house.
But this just looks like spending a while lot of resources, ( fuel, cash, water, water, water, infrastructure, etc. ) , to pump out resources, to use to find more resources, to pump out more resources.
In other words, a circle jerk. Must be. With a few key players skimming along the way.
That's what this looks like to me.
Worry not.
As Spastica sagely observed, a program of generous Federal subsidies will make exploitation of even the most marginal resources economic.
Because you read articles like this and think you know something when you don't. Here ya go
Here is a conventional well drilled in the Permian Basin to 3000 feet in 1993 which had an IP of 28 bbl/day and 40 mcf/day. In it's 21 yr life time it has produced 39,683 bbl oil and 31,752 mcf gas. It cost $500k to $750k to drill according to numbers I could dig up about per foot drilling costs back then. How long did it take to pay back the initial investment given a$15/bbl avg price of oil during the first 10 years of it's life? Has it been profitable in all these years? Probably not until just recently.
Link to Reynaud Lease 33743 in Reeves County Texas
http://tinyurl.com/l8hqxwz
Here is a recent shale well drilled about .5 miles northeast of this one in the adjacent section and completed in Oct 2013 to a depth of 9500 feet with a 4000 foot lateral at a cost of around $7-9m. Through August of 2014 it has produced 66089 bbl oil and 991,707 mcf gas. At an average of $85/bbl oil and $5/mcf gas because this is liquids rich gas and that is about what the average well is getting for it's gas content the well has grossed about $10.5m so far. Now assume a 25% royalty cost and it's at the low end of break even cost. It's current run rate is around 4kbbl/mo and 70kmcf/mo producing a revenue of approximately $600-700k per month. That is a 10% per month return on a completely paid in investment.
Link to CAMP STATE 56-T2-8 Lease 273044 in Reeves County Texas
http://tinyurl.com/q9n9p6o
This is the difference between the old wells that shale haters seem to love and the new frac jobs where the speculative money is going. Which one would you rather invest in????
OBTW, this Petrohawk well isn't even a spectacular well by current standards, it's just OK.
Map of the two wells from RRC
http://i62.tinypic.com/xo33v7.png
And they are so good at this, all the holes produce like this, eh?
Oh, they don't?
So how many holes, at $7-9 million each, absorbed into the equation, does it take to start impacting that 10% per month.
And environmental costs, long and short term are NOT being absorbed by the players.
Whaddya think, your dealing with an idiot here?
I'll let the peanut gallery decide.
Did you read my comment? This isn't a spectacular well, it's just OK. What environmental costs are you referring to? These wells are in West Texas, west of the pecos. They are in a very old oil field and the only thing that grows out there is scrub mesquite and cactus. If I knew how to embed pictures or the editor allowed it I could make the post better.
The nearest town is Orla
https://c1.staticflickr.com/5/4077/4737997738_518ff463c2.jpg
In case you didn't notice, the frac well has produced as much oil in 10 months as two conventional wells would have in 20 years. The gas produced by this frac well exceeds what 30 conventional wells would have produced in 20 years. In short, the energy output of these wells is phenomenal and as I said, many are much better than this one. I just chose it becase it's so close to the frac well and I have been to both of them. I own the section where the stripper is.
Here is one by Cimarex over next to another section I own and it's got better oil production but not as good on the gas. Total of 140,000 barrels of oil and 820,000 mcf gas in 11 months of production.
http://tinyurl.com/osr98h9
Ummm, no. The plugs are set only to isolate different sections in order to direct the fracing. If they try and frac the entire zone all at once, the sand follows the easiest route, and all ends up in the same place. They use the plugs to divide the payzone into manageable sections.
So the process goes like this - Perforate, frac, set a plug, perforate the next section, frac, set a plug, etc. Once the fracers are all done, and the last zone is fraced, a workover or coil rig then drills out ALL the plugs. Then it goes on production.
different companies have different methods, You are correct for earlier frac methods.
There are slight variations between operators sure. None of them produce one section of the zone at a time. Ever. Trust me. Doing so would probably triple the cost of the completion.
If I am wrong, name a company who is completing wells the way you describe.
Dbl post
Your absolutely right, and I know first hand as well...
Thanks ndoilguy for bringing some education to this thread. I was on the Eagle Ford before heading to another country. I'm amazed at the comments about shale plays from folks who know nothing. I also used to read many comments about Aubrey McClendon. Lots of critics. Aubrey demonstrated what trickle down economics is supposed to look like. The guys at the top put $ in and 90 days later it's in the pocket of a welder in Carizo Springs. The hardware store gets some and the barber, as well as the guy who repairs the tie rod ends on the truck. So what if he's not perfect. He did more for the economy than all the worthless federal politicians combned.
what about all the underwater CHK stock holders, how does that "trickle down"?
Lesson 1: Dont lever up over 30x unless you either (a) have the secret .gov handshake or (b) you are a central bank.
Lesson 2: Dont invest in an industry that becomes the sacrificial pawn in the game of global domination.
Lesson 3: Never fight a land war in Asia.
I'd LOVE to see the Europeans build expensive terminals for shell gas then realise they have been had and end up without any shell oil within 5 years period.
How to become a MILLIONAIRE in the shale oil business !!!!!
Step one: Get two million dollars.
Step two: You should have this figured out by now.
I know Step 3 is: "Profit!"
Run?
No. Wait a mo'... Let me think here...
IPO!
Wherever it is produced cheaply, how about we simply buy it off them, and stick to our knitting?
Venezuela is an oil producer so fucked up it has to import petrol.
This proves that it doesn't matter who extracts the oil - you can get by fine as long as you haven't cranked up the socialism too much.
It's rather logical to pump chemicals in rock formations to extract oil when there's enough Saudi-easy for the next 200++ years.
They are running out. And we are running out of options bitchez.
What a brilliant man this Chris Martenson is. Explains everything like we are 5 year olds.
You can read about it in any book about oil.
Regardless of how he is presenting the material it just does not change the facts, does it?
He is presenting this material to a wide audience. Some may not be as involved in Oil Plays as others.
But instead of attacking his argument you side step the issues and attack his presentation?
Nice tactic which does not fare well here.
His facts are false which would make the author a liar or stupid or how about a stupid liar.
Ever ponder the fact that the fracking "boom" is a very fitting analogy for what amerika has become and where it has come to be on the timeline of its existence under the auspices of the last 3 administrations, including the present one?
1. Hype, half-truths and bald-faced lies
2. Shallow, shortsighted scam with no strategic vision
3. Sliding down the slippery slope to a total loss of reserve (independent) wealth, but partying in complete denial all the while
4. Running almost exclusively on other people's money and cynically and criminally lying to their faces when giving an account and asking for more
We have a saying in Alaska fishing "Spawn til you die."
I guess in fracking its "Frack til WE die."
Why do you call it a "play"? That is really fucking annoying.
"Play" is an Oil and Gas term just like "rig" or "Pad" ... what is annoying about it?
what is annoying about it?
Good question. It sounds really gay. Like when a realtor says "it's a great space" or "it has curb appeal". All gay. Just say it's a nice house or it looks good. Play is equally gay. End rant.
Not a whole lot of flaming wild catters out there.
KingTut, LMFAO!
They wouldn't be flaming unless they have a "blowout" and then they would be using their flame retardant gear, all suggestive references fully intended! The term "play" probably originated before 1920 to describe a geological trend with similar physical and rock properties.
The word, "play", is a Gambler's Term.
For instance when the odds are in your advantage then it is a good time to PLAY the game.
However if the odds are in favor of the House...like the Stawk Market...then it is time for the losers to play the game and time for you to walk away.
Since all of this "investment" is speculative gambling, without any REAL UNDERLYING PRODUCTION, then it is just playing a game...with serious stakes...but it is still a play. It is like a Slot Machine which pays out less than you put into it. There is a LOSS rather than any REAL GAIN.
Oilmen are gamblers by nature. Vast fortunes were made and lost at the card table.
Understood?
They been saying we will run out of oil since 1880....
Before we were even driving cars!!!!!!!!!!
The end of oil will be when something cheaper and better comes along..
Someday it will but it really don't matter to us because with current technology we got enough for 100 years or more at current and projected increases in ussage and that is all I really need...
Somebody will figure it out.....
Oh yea and the world will undoubtedly end on Monday...
They been saying that since before christ....
The stone age did not end because they ran out of stones............
Peak Prosperity usually has really good stuff, but there is a strong negative bias to it. They assume, like most evironemntal philosophies that humanity can't adapt to anything, and we'll just sit there and let the world end for some trivial reason. People adapt.
Second, they feel a self-loathing about being human. They see nature as being without flaws, so they are ashamed of any imperfection in human creations. Since everything to do with humans is imperfect, that doesn't leave a lot. This is the "Original Sin" of evironmental religion.
Shale gas and oil has been very helpful in buying us time. Will we use the time wisely? Probably not. Will it turn us into Saudi America? Of course not. But that was just stupid hype in the first place. Shale plays are expensive, but craig martinson himself has shown that once we are past peak oil/gas we should expect exponential rises in costs. That's what we're seeing: lots of very expensive wells to producejust signficant amounts of energy.
As for the evironmental damage, when practiced by responsible oil companies (horror, could there really be such a thing?!?), the risks are managable. Ever drive on a two lane road? That's an acceptable level of risk, and so is responible fracking.
Alternative source of energy are not even close to economic yet, and a precipitous switch to them now would create a depression, starvation and wars. I can deal with fracking.
KingTut,
Pull off the wrappings and stay awhile. It seems you might possess something in extremely short supply around these parts: opinion based on first-hand knowledge, rather than “internet research feeding moonbat confirmation bias”. Opinions are still just that---opinions---but to have them based on knowledge could be an elixir to a site gone stale if not outright rancid.
All the best,
Howard Carter
it would pay to think like a third world nation with respect to our nature resources here. george soros wants america to pump oil and sell sell sell on the world market. it would pay to ask yourself why.
you can rationalize the building of the pipeline all you want, and its crazy they are transporting in around on trains by rail. the whole situation is just another example of the TAIL wagging the DOG.
america will be receiving the shit end of the stick either way.
either way the fascists will give us european gas prices, just like they are giving us european socialism, gay marriage, etc.
just like they have two sets of financial books
they also have two sets of "morality" books
one set they abide by, the other they force upon the people at the end of an amralite
Having heard some of the campainging for mayor positions in ND this spring i beleive it. The towns are all horribly in debt due to the shaele "boom", borrowing to build infrastructure that they will still be paying for when everyone is gone.
That is a different sin, municipal deficit spending. . .
Oil is not scarce.
This guy is very idealic. I sentence him to a lifetime without hydrocarbons.
Well you would think we would of used up all the dinosaur bones by now.
I don't disagree with the article, but I think that there is an even bigger and more strategic play here that is not being addressed:
Why are we busy extracting the last bit of oil at home, when there's oil to be had elsewhere in the world? Strategically speaking, the last country with Precious Fossil Fuels, WINS!
BTW, as much as I was/am skeptical of another blogger's (Jim Willie's) claims that "the Chinese own the Fed", I have to wonder what amazing favors the Chinese are getting from the US and the Saudis with all the cheap Fossil Fuels we're seeing. ON top of that, while the US is bombing the shit out of all kinds of places and providing for plenty of distraction, they are quietly buying up key RE and Resources all over the planet.
Here's an "outside the box" example: While the Environmentalists and the MSM are busy poo-pooing "the evils of coal" and dissing its use in the US, the US is busy sending it to China via West Coast ports. For those who like math and to do their homework, they will also realize that (a) the BTU output of a ton of coal is much higher than from any other fossil fuel, and (b) the BTU per Dollar is higher than any other fossil fuel. IOW: We are bad-mouthing the hi-grade BTUs (Coal!), just so we can price-dump it to China.
Hey, doesn't that sound just like the PM story: Gold is bad, so let's subsidize its export to China. All of a sudden I see the Game of Shadows and Deception being played on a far different scale and with different players than I believed.
China don't like bombs and 100 butcher with knives every week or two on their soil...
The Chinese own 12% of the FED system based on what Andy Gause the monitary historian / author has said form his study of the matter.
Jim Willie? Old Lightbulb Head? The guy who claims to sit down even today for a bowl of clam chowder with 97-year old JFK?
I hate to be judgmental, but I'm not sure Willie is a credible source on anything. The guy has called more bottoms in gold than bottoms on Ipanema Beach on a hot Sunday afternoon.
As for the Chinese and resources, in an increasingly nationalistic, if not outright tribal world, they might find that exploiting that to which they possess signed contracts in faraway lands isn't quite as easy as they thought. Ethic minorities ended one of their resource grabs in the Far East by blowing up a couple of carpetbagging Chinese engineers. The Chicom response was to provide arms to the ruling junta, including poison artillery shells, to try to get the ethnic's minds right. Is that a sustainable strategy? Doubtful.
Now that is a funny ad hominem attack if true. Link to that JFK reference?
You send the reader on a Red Herring chase to detract from the points brought up in KirkNGC1701's post
You failed to address the fact that we do villianize Gold, are indeed suppressing Gold Prices, and this helps the Chinese buy the Gold.
You failed to address the Kirk's assertion (Need link) that we villianize Coal, are also supressing Coal Prices, and that this is also helping the Chinese buy BTU's..
In fact you failed to address any of KirkNGC1701's points...but instead used a ad hominem attack on Jim Willie as a Red Herring.
Why is that?
Whom are you working for? Is Kirk too close to the truth?
Si, Why are we busy extracting the last bit of oil at home?
I think this is what economists say. Sounds true, but they are dirty bastards!!
We extract the last bit of oil at home because it is profitable. Albeit when the tax regime allows it.
Strategically speaking, the last country with the biggest guns WINS. Even if the other country has all the oil. Guns overrule ownership.
The Chinese own Fed PAPER. Totally meaningless. Try calling Fed paper. There is more for sale too!!!
It isn't just the Chinese. Germany is single handedly keep all the East Coast coal mines open.
Us Americans, on the whole, are sheep.
Single malt and a cigar (been smoking Cuban exclusively, lately) is good.
Take care of YOURSELVES my friends.
"...the last country with Precious Fossil Fuels, WINS!"
These corps. have no interest in patriotism, U.S. superiority, or even it's survival. It is just a venue.
Didnt this same story appear in Zerohedge a couple weeks ago? Or almost the same? It is still without merit. Reminds me of the global warming crowd, they keep pushing their non-sense whether we want to swallow it or not.
Ok. An anti-fracking screed posing in financial disguise. Yawn.
The Marcellus is booming, the Utica is booming, and the Trenton is waiting just one level deeper. Frack on!
Peak misinformation.
Man, that video makes fracking look like absoulte shit. No wonder Peter Schiff invested heavily in it.
Infastructure damage due to drilling wells? What are they drilling them in the middle of the highway? I can see moving heavy trucks takes a toll on roads, but so much that the municipalities can't recover? Come on.
Fracking companies are actually rebuilding highways in Eastern Ohio once the wells are producing. Highways are much improved as a result.
liberals should frack themselves
I like Chris Martenson, but I don't agree with some of his views and this subject is one of them.
First of all, he fails to let anyone know he is part of the following institute http://www.postcarbon.org
Furthermore, the charts Chris referrences throughout this video are from the person above him on this page : David Hughes. http://www.postcarbon.org/fellows/
In addition, there is a company that cleans water from Shale Drilling and the water can be recycled and used again and again. The Companies Name is "Origin Oil."
Origin Oil is a small company, but their technology works, only time will tell if more drillers will use it.
And you work for Origen Oil? If not then whom do you work for? (There is a whole lot of trolling tonight and it just seems to be too professional. Personal attacks, Red Herrings, man I have seen it all...tonight.)
There is nothing immoral with working for an organization that believes that there will be a world without cheap petroleum products. In fact it is rather evidential since overall petroleum product prices GENERALLY, LONG TERM, have been increasing for as long as I have been alive.
Not all of those increases are due to currency inflation...
And I have been alive for 55 years.
Supplies and World Production have been sloughing, known reserves are depleting, and discovery of new reserves have been declining in number as well as volume.
Is it not duplicitous to attempt to demonize someone for exposing that he works for an organization without revealing that you are working for another?
How do you sleep at night knowing that you are DISHONEST?
Why I will bet that you cannot even trust that your wife is not sleeping around with someone else as you expect her to be as duplicitous as yourself.
Of all of the PR plays that can be proferred here on ZH...
And in the spirit of full disclosure I am not employed by anyone.
"Only about 4 percent of U.S. shale oil production needs prices above $80 for drillers to break even, the International Energy Agency said today in its monthly oil market report. Producers are getting more oil per dollar spent drilling, driving costs down as much as $30 a barrel since 2012, Morgan Stanley (MS) analyst Adam Longson said in a report yesterday."
http://www.bloomberg.com/news/2014-10-14/u-s-shale-oil-output-growing-ev...
"The unconventional sector in the U.S. has already gone through two distinct cycles and is now transitioning into its third phase," said Robert Clarke, head of unconventional upstream research. "The first chapter was built around a large group of highly productive shale gas assets and was defined largely by production growth. The second wave was defined by a smaller grouping of high-margin tight oil plays.”
Today, producers are shifting to the third phase, which Wood Mackenzie in a new report dubs "Unconventional 3.0." The report, issued on Wednesday, focuses on brownfield exploration, as operators reassess once marginal assets previously considered to be insufficiently permeable for commercial drilling.
“In this current phase, the most modern aspects of the two techniques that define unconventional projects -- long-lateral horizontal drilling and isolated multi-stage hydraulic fracturing -- are being used to exploit all types of rock volumes in mature basins,” Clarke said.
The brownfield exploration "signals a shift in the industry’s thinking about what constitutes a successful unconventional play." Wood Mackenzie researchers found that "3.0" projects have the combined potential to produce more than 1 million boe/d by the end of 2020.
During the recent second quarter conference calls, several producers highlighted their recompletion results. Encana Corp., for instance, reported that it's recovering 1-2 MMcf/d in the Haynesville Shale at a recompletion cost of about $1 million per well. There's not much of a market today for natural gas, but with new wells costing about $12 million each, recompletions offer a lifeline, said COO Mike McAllister.
"In the Haynesville, we have implemented a refrack program with excellent results on our first two wells completed to date," he told analysts during a July conference call. "Initial production rates from both wells are 100% higher than expectations.
"We are planning to refrack five more wells in the Haynesville in the third quarter, and our teams are evaluating hundreds of wells for refrack potential" also in the Denver-Julesburg Basin, and the Montney and Eagle Ford shales.
I've had a bad feeling this whole thing is more about poisoning all the ground water in the US more than it is about making a quick buck
How many Superfund sites are still left in the US to be cleaned up?
Marcellus shale in PA is going to play out just like coal extraction did a century ago which still is a massive issue across the PA coal region & well water. Leave behind a huge mess that creates issues with local groundwater as the cement casings fails over next half-century and the toxic crap that we still have no idea what it contains inevitably leaches to some degree into the local water cycle.
But the guys at the top made a lot of money.
Besides, None of them(money makers) actually lived there....
So, fuck the little people, I got mine.
Pretty much although some of the money guys might be affected depending upon how the upper tribuaries that feed that Delaware River are affected by this.
Hre are the effects of coal on PA:
"As reported by the Department of Environmental Protection, there are roughly 5,100 abandoned coal mines in Pennsylvania, $700 million has been spent on reclamation projects since 1980, the state has over two billion tons of waste coal, and mining has created more than 180,000 acres of abandoned mine lands.
Those abandoned mines have resulted in acid mine drainage which has contaminated more than 3,000 miles of streams and associated groundwaters in Pennsylvania and “is the most extensive water-pollution problem affecting the four major river basins in Pennsylvania.”
Other goody has been what they have been dumping into abandoned coal mines since Ridge was gov too in PA and have continued in earnest since then under 'reclamation projects.' Lots and lots of coal ash and other fun stuff including a lot of human biowaste that the City of Philadelphia can't sell off.
Shale Oil: Expensive, Over-Hyped, & Short-Lived
No Shit Dick Tracy.
We Told you...
Complete propaganda BS....shale oil is HUGE for economy and helping USD crush other currencies and PM....you motherfuckers are pseudo intellectual crack smoking pipeheads... go buy some metal that is going down in flames LOFL
When the last bit of oil is pumped and sold and the water toxic to life the corporations will disappear.
with the owners in another country where water is plentiful and not much oil.
Why these repeated and unending stories of paper plays ? Are the preys still so thick skulled that they still not getting it ?
Yes. Stupidity is in abundance. That is why that it lacks any price. Nobody desires stupidity...well...other than the stupid.
Now intellect and free thought...Now that is what intelligent people are willing to pay for. There is a scarcity of that.
Shale plays are about the gas. You are already seeing the LNG retail network being built out. Waste management and other commercial vehicles are switching.You also have the Alaskan north slope where they have been injecting the gas back into the ground for decades. We are just at the beginning of this.
The way oil is dropping, they'll soon PAY you at the gas pump to get rid of the shit....
Fracking might be over-hype, but at least there are some real and tangible benefits
In the world of hype and bridges to nowhere, nothing holds a candle to the ballyhooed pipeline that Reps and frightened Dems are pushing
Like it or not, efforts need to go towards clean sustainable energy, not sqeezing every drop of a dirty, finite carbon.
According to ZH, Oil guys are stupid.
That's why they live large in Texas.
Does anyone actually go to a "shale" drill site and work there to really find out what is happening?
Something I don't understand: A "shale" well is punched into the ground, then massive liquid is injected into the the hole to "fracture" the rock. Somehow, this massive pressured liquid costs 10 times more then the hole itself. OK...
LUDICROUS!!!
The last person left with the most firepower gets everything.
What kind of la la existence do you people live in?
How many examples of human nature through the ages do you need?
Oh!! Wait!!
You think we're CIVILIZED.
Or, even WORSE, you think we should be civilized.
The guy with the firepower is counting on it.
PS Happy 239th birthday!
Same shit different day with the shale hating luddites who continue to post outright WRONG information. The flow from frac wells is HIGH, not low. The decline in output is fairly steep but they still produce way more than conventional wells do.
Here is a conventional well drilled in the Permian Basin to 3000 feet in 1993 which had an IP of 28 bbl/day and 40 mcf/day. In it's 21 yr life time it has produced 39,683 bbl oil and 31,752 mcf gas. It cost $500k to $750k to drill according to numbers I could dig up about per foot drilling costs back then. How long did it take to pay back the initial investment given a$15/bbl avg price of oil during the first 10 years of it's life? Has it been profitable in all these years? Probably not until just recently.
Link to Reynaud Lease 33743 in Reeves County Texas
http://tinyurl.com/l8hqxwz
Here is a recent shale well drilled about .5 miles northeast of this one in the adjacent section and completed in Oct 2013 to a depth of 9500 feet with a 4000 foot lateral at a cost of around $7-9m. Through August of 2014 it has produced 66089 bbl oil and 991,707 mcf gas. At an average of $85/bbl oil and $5/mcf gas because this is liquids rich gas and that is about what the average well is getting for it's gas content the well has grossed about $10.5m so far. Now assume a 25% royalty cost and it's at the low end of break even cost. It's current run rate is around 4kbbl/mo and 70kmcf/mo producing a revenue of approximately $600-700k per month. That is a 10% per month return on a completely paid in investment.
Link to CAMP STATE 56-T2-8 Lease 273044 in Reeves County Texas
http://tinyurl.com/q9n9p6o
This is the difference between the old wells that shale haters seem to love and the new frac jobs where the speculative money is going. Which one would you rather invest in????
OBTW, this Petrohawk well isn't even a spectacular well by current standards, it's just OK. Furthermore, it's still producing in a day more than the conventional well produces in a month.