A Look At OPEC Plus US States January Production Numbers

News Bulletin: Caught this on The Motley Fool:

Is Chesapeake’s Reduced Oil Production Growth Forecast Really That Bad?
But the company recently said that its crude oil production growth will slow dramatically this year — an announcement that clearly disappointed investors, judging by the immediate negative impact on Chesapeake’s share price. But is the guidance really that big of a deal?

I couldn’t find anything else about this story. Chesapeake doesn’t have anything in the Bakken but they are big in Eagle Ford. They drilled eight Bakken wells and they were all duds so they pulled out. But is this something that is happening to other Eagle Ford producers? 

The notion persist that OPEC has millions of barrels per day of spare capacity and could increase production if only they desired to do so. Many, in fact most people, really believe that all 12 OPEC nations are operating as a cartel and that perhaps all OPEC nations could increase production if they got the word. I think that idea is absurd and only the truly naive and those who know virtually nothing about the history and ability of OPEC could possibly believe such nonsense. And OPEC has done nothing to squash that idea.

OPEC Upstream Spare Capacity
Spare OPEC crude oil capacity is set to stabilize at around 8 mb/d over the medium-term, rising from an average level of around 4 mb/d in 2011. 

2011 was the year of the Libyan Revolution. At the beginning of that year three countries, Saudi Arabia, Kuwait and the UAE, combined, did have about 1.6 mb/d of spare capacity. The other eight OPEC countries had none. And by January 2012 all 12 OPEC were producing flat out, in my opinion anyway.
However not everyone believe that OPEC has that much spare capacity.

US oil boom may cushion any Venezuelan supply shock CNBC
“A geo-political risk premium in crude oil prices related to Venezuela is likely non-existent at present,” said UBS commodity strategists Giovanni Staunovo and Dominic Schnider in an email to CNBC on Saturday. “This could change at any time considering OPEC’s spare capacity is between 2.5 and 3.0 million barrels a day and Venezuela produced 2.5 million barrels a day in January. A loss of a large share of this capacity would not pass crude oil prices unnoticed.”

Commodities Now
Using IEA figures for 2013, OECD Europe imported 3.05 Mb/d of crude oil from Russia, or 36% of their net crude oil imports. When refined products, NGLs, and other feedstocks are included, total net oil imports rose to 4.33 Mb/d, or 44%, of OECD Europe’s net oil imports. These volumes far exceed Saudi/OPEC spare capacity of less than 2 Mb/d.

I found many statements on the web talking about how the markets get jittery when spare capacity gets too low and when it gets high they settle down. My question is: <b>How do they know?</b> So let me show you some production charts and see what you think.

EDIT: To those who believe Saudi has spare capacity I would just like to point out that Sadad Al Husseini, a former executive at Saudi Aramco, disagrees with you.
“This is strictly, totally business,” said Sadad Al Husseini, a former executive at Saudi Aramco, the state oil company.
Saudi production is flat out. Where you send it is a matter of where you make the best profit.”


The above eight OPEC countries are clearly in decline. the two vertical lines mark the actual cut in production by OPEC responding to the price collapse in late 2008. One year later all eight nations were producing flat out again. The slanted line shows the actual decline in production for these eight OPEC countries. The end of the line marks the “approximate” spot where their production would be except for the Iran sanctions and the Libyan political problems.

One of those eight, Shell Vice President says that Nigeria, is is steep decline.
Nigeria’s Crude Oil Production Decline Rates Pegged at 20 Per Cent

The Vice President of Shell Upstream International, Mr. Markus Droll has said that decline rates in crude oil production within Nigeria’s hydrocarbon industry can be as high as 15 to 20 per cent.

Droll also said that replacing such natural production decline rates in the industry requires more funds than is currently available and that the peculiar high cost operational environment of Nigeria has further compounded the situation.

Iraq, Kuwait, UAE

Here are the other OPEC countries with the exception of Saudi Arabia. Iraq has advertised the fact that they want to produce 12 mb/d but they are a long way from that number. But there is no question that they are producing every barrel possible.

Kuwait and the UAW did cut production after the collapse of 2008. And unlike the other eight, they both, along with Saudi Arabia kept those cuts through 2010. Then when the Libyan revolution hit in 2011 they all began to ramp up production as much and as fast as they could. And by 2012 every OPEC nation was again producing flat out.

That leave Saudi Arabia:

Saudi Arabia

After the price collapse of 2008 Saudi cut production by about 1.5 mb/d and did not resume full production until the Libyan Revolution and production collapse of 2011.

All Saudi fields are in decline except Shaybah, Khurais and Manifa. Saudi brought Shaybah on line in 1998, Khurais in 2009 and Manifa in 2013. Manifa is still ramping up but is now close to maximum production. These three fields are the only thing preventing Saudi from showing a steep decline. But Manifa was the last field Saudi has left. They are now looking to slow the decline in Ghawar with CO2 injection. They have been able to find no new fields in onshore or in the Persian Gulf so they are now surveying the Red sea, looking for under water that is two kilometers deep and under 7,000 feet of salt.

The EIA’s Petroleum Supply Monthly is just out with US and individual states production numbers through January 2014.


US Production has increased by 18% per year for the last 28 months due almost entirely by LTO production in Texas and North Dakota.

Last months the EIA had Texas increasing every month, for the last 9 months, by exactly 50 kb/d. This months Texas data has been slightly downgraded. They now have Texas production increasing by exactly 48 kb/d for the last 10 months. They are still guessing but just guessing a little lower.


Montana peaked back in 2006 and reached a secondary peak in 2013. December was a bad month for Montana but it clearly headed downhill before then.


As you can see from this chart Montana is pretty much a non player in the shale game now. They contribute 75 kb/d but will not contribute to any increase from here on out.

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207 Responses to A Look At OPEC Plus US States January Production Numbers

  1. Nony says:

    The 2008 drop by SA (and Kuwait and UAE) was clearly market manipulation. So, at least as of very recently they have been active and effective in manipulating price. I don’t think about OPEC “cushioning shocks”. I think they’re pretty happy to make money on shortfalls. The more likely thing we see is further cutbacks to constrain the market.

    • Nony, you simply don’t seem to understand. OPEC can, and have, several times in the past, cut production. What they cannot do is increase production when they are producing flat out, like right now. I have been following OPEC production for about 12 years now. I think I know what each nation can produce. They have all peaked. Saudi Arabia, has had the luxury of having old, formally mothballed fields that they could bring on line. But now they have none. Saudi will never produce 10,000,000 barrels per day ever again.

      • Nony says:

        OK, I get that’s what point you’re making. I don’t know if they have spare capacity (IOW you’re right). But they’ve shown in the past that they will step on the brake to keep prices high…so it’s possible they might have some slack still, no?

        • Old farmer mac says:

          They probably have a little extra capacity that can be brought on line for a few weeks or months but I believe Ron is right. The ability to up production temporarily is not really considered true spare capacity.

          Export land has eaten any capacity most of the members may have had along with depletion which like rust never sleeps.

          Most people just don’t seem to get it. We have been cherry picking the best spots for over a century and increasing consumption at a tremendous rate for over a century now.

          The easy stuff is gone and there is no evidence that OPEC countries have drilled more wells than they have needed to sell all the oil they wanted to sell.

          EVEN IF they still had some large undeveloped fields they could not produce them for a good long while.

          I sometimes manage to get depletion and a growing rate of consumption across to country folks with the CORN CRIB MODEL -hat tip to JEFF here for cribbing some of his glory-

          The corn crib model says that if I fill a crib up with corn expecting to need it next year (in case of drought etc) and a couple of rats get into it –

          Well two rats make a dozen very quickly indeed and half of them are females and in couple of months you can have around a hundred baby rats. Under ideal conditions such as a nice safe crib full of corn the population can go straight up like a rocket after a few months.

          EVERY SINGLE RAT eats as much as it wants- until suddenly one day there is a fight for the last few kernels. Even a very large crib can be reduced to rat droppings in well under a year.

          Then they starve and start moving out and looking for more corn. The problem is that there just isn’t a lot to be found.

          Even with the wholesale price of oil up about five times in a little over a decade the bulk of the evidence indicates that except for the modest percentage skimmed of by the top rats- such as the Saudi royal family,etc- all the Opec countries are basically living paycheck to paycheck. (The Emirates excepted.)

          If they had more capacity given the huge profit margins they enjoy on their legacy fields they would be producing more if they could.

          Of course these observations are not the sort of proofs that hold up in court.

        • Watcher says:

          General comment relevant — KSA has an SPR. About 12 million barrels. Not all crude. Some refined products.

          It’s underground.

          It can be drawn on and corrupt the concept of spare capacity.

          • Watcher says:

            Interesting. They have additional storage on Okinawa (6 million barrels) and just did a deal for another 1 million. That’s one hell of a lot of SPR.

            Forget Saudi production numbers. They will never be reliable.

          • Saudi has storage tanks everywhere. They don’t bury them underground. That would be far too expensive. There are no underground salt mines in Saudi. I would think their storage tanks would hold a lot more than 12 million barrels. After all, that’s only about 2 days export volume.

            One thing you must understand about Saudi. They would not think they would owe anyone any explanation concerning what they ship or don’t ship. If they were called on to increase exports during an emergency, and did not, they wouldn’t tell you why, they would just not say anything.

            • Watcher says:

              Well, no. An SPR is not about export volume. There is no citizen imperative for that in an emergency, but I somewhat suspect you are right about there being much more.

              KSA didn’t report to the Wiki. Russia did. They “plan” storage of only 14.6 million barrels. When you have it already stored underground, you don’t need much. But if you want to report a number on one particular day or week, you can draw on it and report any number you want. You probably only need to draw an extra 400K bpd for a month to get Platts to see it. You probably know the specifics on that.

              In contrast, a net burner needs a lot more. The EU has a regulation requiring members to hold 90 days consumption. The Czechs have 20 million barrels. Germany 250 million. Interesting, the UK keeps their secret.

      • SRSrocco says:


        Great job on the charts. I agree with you that Saudi Arabia will probably not be able to produce 10 mbd again. By the way, I put this updated U.S. Dry Shale gas chart together from data by the EIA. We can clearly see the Haynesville has declined in a serious fashion.

        Also, the Barnett peaked and is in decline. It also looks like the Fayetteville & Woodford are peaking currently.

        As I stated in the graph, the Marcellus has the exact same production profile as the Haynesville, except it’s much larger. Chances are the Marcellus will peak in the same fashion as the Haynesville.


        • Euan Mearns says:

          USA gas independence – looking for export markets

          I have a new post on US gas production where I take a rather different view. US nat gas production has been on a plateau for two years since additional gas has nowhere to go. Gas rig count continues to fall. And so you need to be cautious how you interpret these peaks in Steve’s beautiful chart. They have simply stopped drilling the poorer gas plays. LNG exports will make US gas prices rise – which they must do for the industry to survive. And at some point rigs will get pulled back to the gas plays away from Eagle Ford and Bakken.


          • Jeffrey J. Brown says:

            Two important things have changed regarding US natural gas production since about 2005: (1) Production has increased, which even at a constant decline rate from existing production, means a higher annual volume of production lost from declining wells and (2) The decline rate from existing wells has almost certainly dramatically increased, as a higher percentage of US natural gas production comes from high decline rate tight/shale plays.

            If we assume about a 12%/year decline rate from existing production in 2005 (when dry processed gas production was 50 BCF/day), the industry had to replace about 6 BCF/day per year, in order to offset declines from existing production.

            If we assume about a 24%/year decline rate from existing production, from a production level of 66 BCF/day currently (the Citi estimate referenced below), the industry has to replace about 16 BCF/day per year, in order to offset declines from existing production.

            It’s interesting to look at some regional declines in US oil and gas production, e.g., marketed Louisiana natural gas production (the EIA doesn’t have dry processed data by state).
            According to the EIA, the observed simple percentage decline in Louisiana’s annual natural gas production from 2012 to 2013 was 20%. This would be the net change in production, after new wells were added. The gross decline rate (from existing wells in 2012) would be even higher. This puts a recent Citi Research estimate in perspective.
            Citi estimates that the gross underlying decline rate for overall US natural gas production is about 24%/year. This would be the simple percentage change in annual production if no new sources of gas were put on line in the US. As noted above, in round numbers, this requires the US to add about 16 BCF/day of new gas production every year, just to maintain about 66 BCF/day of dry processed natural gas production. To put 16 BCF/day in perspective, dry processed natural gas production from all of Texas was probably at about 18 BCF/day in 2013.
            Based on the Citi report, the US would have to replace 100% of current natural gas production in about four years, just to maintain a dry processed gas production rate of 66 BCF/day (24 TCF/year) for four years.

            Or, based on the Citi report, the US would have to put on line the productive equivalent of the 2013 natural gas production from the Marcellus Play–every six months–just to maintain current production.

            Or, based on the Citi report, the US has to replace the productive equivalent of all of the 2012 dry natural gas production from the Middle East, in a little over three years (3.3 years), in order to maintain a dry production rate of 24 TCF/year. Over a 10 year period, we would need to put on line three times the 2012 production rate from the Middle East.

            Or, based on the Citi report, in the next four years, the US has to replace the combined productive equivalent of the 2012 dry natural production from Canada, Norway, UK, Iran, Qatar and Indonesia, just to maintain a dry natural gas production rate of about 24 TCF/year.

            • Euan Mearns says:

              I hear what you are saying Jeffrey but there are currently just 326 rigs out of a fleet of 2000 dedicated to gas plays at present.


              Sabine Pass is real, and one has to assume that the guys building and paying for this have done some homework.

              • Jeffrey J. Brown says:

                My point is that estimated volumetric decline from existing production is vastly higher now, than in 2005 (as noted above about 16 BCF/day per year now, versus perhaps 6 BCF/day in 2005). For every BCF/day that we had to replace in 2005 (based on above assumptions), the industry has to replace 2.7 BCF/day per year now.

                You really think that the US can put on line the productive equivalent of the gas production from the entire Middle East in a little over three years, or three times the productive equivalent of the entire Middle East in 10 years?

                • Nony says:

                  Yeah, we can produce it. Doomers have been wrong, wrong, wrong on the shale gas. Look at Simmons from 2003 or follow the link to a 2006 TOD article that claimed US gas production of 2010 would be half that of 2006. Worm done turned the other way. Be a truthseeker/facer and admit it.


                  • Old farmer mac says:

                    Haven’t the happy days guys been just as wrong on oil prices?

                    I think they are up about four or five times since then.
                    A lot of cornucopian types thought they would actually be done rather than up.

                    Let’s wait a bit and see how long it will be until the TOD folks are off by a factor of five in their estimates of dates.

              • BAU says:

                Hey anyone know what % of US natgas is produced from rigs dedicated to NGL’s and LTO (and thus not tallied in the gas rigs?)? Is it a lot or just a little?

                • No rigs are dedicated to NGL’s. NGL’s are a product of natural gas rigs from natural gas wells. Your question should be: What percentage of natural gas is associated gas and therefore produced from oil wells? And what percentage is produced from pure gas wells?

                  I have no idea but in Texas, for the last several years, it has been averaging about 12%.

                  • Watcher says:

                    I’d phrase it differently.

                    What % rigs are assigned to areas where there is no NGL potential in the gas field? Answer: 0

                    Or better, to what extent does liquids rich potential define where a gas rig drills? Answer: 99%

                • Nony says:

                  I thought I saw 6% somewhere for , but can’t find the link now.

                • Nony says:

                  Here is a partial answer. I guess someone with Drilling Info database might be able to construct the analysis, but I haven’t seen it. I’d estimate half of the gas rigs are doing wet gas, just because Marcellus is one of the few profitable places to drill a dry gas well and even there, a lot is going to wet.


                • Dennis Coyne says:

                  Hi BAU,

                  As Ron points out, the natural gas that comes from oil wells is called associated gas (it is associated with oil production) and it is counted by the EIA and RRC along with the natural gas from the “gas wells” which produce some liquids (which is called condensate). More liquids get produced at a natural gas plant in the form of NGL
                  (or natural gas plant liquids) when the raw natural gas (minus the lease condensates removed in the field) is processed into dry natural gas by removing ethane(C2), propane(C3), and butane(C4), what Ron appropriately calls “bottled gas”.

                  I got the impression that you believe that the associated gas was not accounted for and that is not correct.

                  • More liquids get produced at a natural gas plant in the form of NGL.

                    I would have to argue with you on that point Dennis. NGLs are not “produced” at the gas plant, they are merely “separated” from methane there. But if one really wants to nitpick, as I sometimes do, oil is not produced by an oilfield or an oil company either, it is extracted. 😉

                    Associated gas is calling casinghead gas by the Texas RRC.

            • Nony says:

              The low storage is irrelevant and temporary. We had a cold winter. There’s no systemic impact given the futures market remains 4.50.

              All the gas “decline” concerns are irrelevant. There’s nowhere for extra gas to go, so there’s a share battle of fields. Some win, some lose. (same with Canada.) We are producing more total gas with way less rigs. And the reserve/resource calculations are high. And the futures price is low. We’re NOT running out.

              • Watcher says:

                How can there be extra gas if storage is falling?

                • Nony says:

                  temporary effect from bad winter.

                • Watcher says:

                  So I just went to the EIA for total nat gas consumption. They have it to December in billion cubic feet.
                  Nov 2008 1868 Dec 2008 2399
                  Nov 2009 1775 Dec 2009 2490
                  Nov 2010 1973 Dec 2010 2714
                  Nov 2011 2031 Dec 2011 2541
                  Nov 2012 2167 Dec 2012 2507
                  Nov 2013 2304 Dec 2013 2911

                  So it looks like a 6.7% increase of Dec 2013 consumption over Dec 2010 (though 2011 and 2012 were down, so was GDP muscle in 2011 particularly), and of course there has been 4 yrs of population gain and some alleged GDP gain since 2010 — and yet still only a 6.7% in this winter. Maybe all the cold of this winter was in January and the January number will log 50% growth over 2010.

                  Nov is a much more smooth gaining month, presumably also due to population and GDP. But it does seem to be cold each winter. For more people.

                  • Watcher says:

                    Ooops, Dec 2010 to Dec 2013 is 3 yrs, not 4.

                    So 6.7 % gain over 3 years. About 2%/yr. Aligns nicely with GDP (and I guess no population gain) and apparently nothing special about the winter.

                  • Nony says:

                    Boy you cherry picked the heck out of that. Try the whole winter and do last year versus this one.

          • Nony says:

            I read the piece and agree but can’t reply at your site:

            1. Estimates are that the supply curve is fairly flat (we’ll see, but that that’s the analysis…small price rises here, and there will always be the lower transport cost). So it won’t exactly be Japan dropping to half and US doubling. Probably also will be some price moves by other suppliers (Qatar, Russia) that have had captive markets. So, you gain from competition, not just from the supply.

            2. The other thing is that the capacity to supply (the LNG terminals and compressors) create a capacity that can go to different markets. Even if it goes to Asia, that still tends to affect Russia. Also, if Putin decides to turn off the flow to Europe, then prices will rise there…and export capacity could be diverted there. So, just the existence of the capacity sitting there has an impact on Putin’s actions and the top end of what prices he can charge.

          • SRSrocco says:


            Actually, I have to consider what you are saying here. I gather if the drilling rabbits switched from liquid plays to natgas, there might be another nice pop in production for a while to make the Corporate Elite happy for a few more years selling higher priced gas elsewhere.

            On the other hand, I have to also think about the huge decline rates that Jeff Brown mentions as well as the ramifications when the U.S. Petro Dollar dies and we head into a third world status.

            Either way… I would imagine we would be stupid enough to actually continue BAU as it pertains to getting every drop of liquefied carbon out of the ground and into the atmosphere so we can really dial up on the thermostat to a VENUS or MERCURY setting.


          • Woody says:


            The gas industry in the US will survive with or without LNG exports. Write offs and liquidations happen, the assets get bought by someone else and life goes on.

            Higher gas prices will be a negative for the US as a whole although it may benefit you in Europe by helping to keep a lid on your LNG import costs.

            In the end, LNG exports will just drive more industry to countries like Russia or Iran with large gas supplies or China that doesn’t mind using gasified coal for feedstock.

            On the positive side, higher gas and electricity costs will make renewables more economical. On the negative side, it will make coal more competitive so hard to say how that works out.

            Be careful what you wish for, all it takes is a political shift to get the US to use its enormous pile of coal and, I believe, Europe is down wind.

        • Euan Mearns says:

          Ron, On your Iraq chart do you know if the significant recent rise in production is from Iraq or Iraqi Kurdistan that just began exporting oil directly through Turkey in contravention of all agreements.

          Regarding spare capacity, each OPEC country claims a little and if you add it all up you get a lot. At present I think only SA has significant spare capacity, but we never know exactly how much. The other significant spare capacity was in Libya – which we have to assume will come back on one day. SA were building new heavy oil refineries – do you know how that is going?

          OPEC crude oil production capacity

          • Jeffrey J. Brown says:

            Some recent production, net exports* and ECI data (ECI is ratio of production to consumption) for the OPEC 12 countries.

            *EIA, total petroleum liquids + other liquids, million barrels per day. P = Production, C = Consumption. NE = Net Exports. ECI Ratio = Ratio of production to consumption


            P: 28.9
            C: 5.7
            NE: 23.2
            ECI: 5.1


            P: 34.8
            C: 6.5
            NE: 28.3
            ECI: 5.4


            P: 36.3
            C: 8.3
            NE: 28.0
            ECI: 4.3

            Based on 2005 to 2012 rate of decline in the OPEC 12 ECI ratio, estimated post-2005 OPEC 12 CNE (Cumulative Net Exports) are about 260 Gb. CNE for 2006 to 2012 inclusive were about 70 GB, suggesting that estimated post-2005 OPEC 12 CNE were about 27% depleted in seven years.

            Note that using the initial seven year (1995 to 2002) rate of decline in the Six Country ECI ratio to estimate post-1995 CNE was too optimistic for the Six Country Case History, which were the six the major net oil exporters, excluding China, that hit or approached zero net exports from 1980 to 2010. Based on the seven year (1995 to 2002) rate of decline in the Six Country ECI Ratio, estimated post-1995 CNE were 9.0 Gb. Actual post-1995 CNE were 7.3 Gb.

          • Euan, the information the IEA puts out on OPEC spare capacity is suspect at best. How do they know when none of the OPEC nations publishes their production capacity?

            Spare Capacity Theory: the assumption among western bankers, policy makers, economists, and stock markets that OPEC producers can lift oil production at will, and, export all of that spare production to world consumers.

            As to Iraq’s big jump in February, I think it was mostly from the removal of bottlenecks:
            Iraq returns as world’s fastest-growing oil exporter
            With many export bottlenecks now cleared at the southern Basra terminals – from which almost all of Iraq’s crude is shipped – Baghdad is expected to keep up, or even exceed, the rapid pace of oil sales reached in February – at 2.8 million barrels per day (bpd), a 500,000 bpd rise on the previous month.

            • Jeffrey J. Brown says:

              Also, why the large increase in OPEC production from 2002 to 2005, as annual Brent crude oil prices doubled from $25 in 2002 to $55 in 2005, but flat crude oil production and a small increase in total petroleum liquids production from 2005 to 2012, as annual Brent crude oil prices doubled again, from $55 in 2005 to $112 in 2012?

              • marmico says:

                why the large increase in OPEC production from 2002 to 2005,

                Because you “cherry pick” data. OPEC production was the same in 2000 and 2004.

                • Jeffrey J. Brown says:

                  As usual, a nonsensical response.

                  Of course, the point is the production and net export response to a doubling in annual Brent prices from 2002 to 2005, versus the production and net export response to a doubling in annual crude oil prices from 2005 to 2012.

                  • marmico says:

                    Are you trying to tell us that a 4 mb/d decline in OPEC production from 2000 to 2002 and then a 5 mb/d increase from 2002 to 2005 doesn’t make you a cherry picker by using the 2002 minima? Typical gibberish.

                  • Marmico, you haven’t a frigging clue as to what you are talking about. Jeffery is showing the OPEC response to a doubling of prices from 2002 to 2005 versus their response to another doubling in price from 2005 to 2012.

                    Good god man, get a clue!

          • Watcher says:

            Kurds have not done a deal with Baghdad yet. They promise a few hundred K/day if they can get their price.

            The recent bump was out of Basra.

        • Nony says:

          It’s a share battle with nowhere for gas to go. That’s what you see going on with US versus Canada, shale versus conventional, Marcellus versus Haynesville. There’s still undrilled productive spots in the Haynesville. Just not at 4.50.

          • Watcher says:

            Why didn’t it go into storage?

            • Nony says:

              You drill gas wells to sell to customers, not to stick on the shelf.

              • Watcher says:

                Then why is there ever storage?

                • Nony says:

                  Because there is a market in the winter that is larger than in the summer. Gas is made for a price signal, man. If there is a value for more gas in storage, more will go there. You can’t extrapolate from an abnormally cold (or warm winter) the overall supply/demand.

                  Look…the futures price for this summer OR for next winter is ~4.50. People are NOT anticipating any difficulties satisfying the market. If gas were in short supply, the futures price would be higher. Look at oil…it’s 100/bbl.

                  Have you looked at production/rig? They dropped the rig count and raised the production! And that’s not with a bunch of old capacity and low declines…that’s in high decline, Red Queen fields. Those Marcellus wells are MONSTERS of the IP. And pad drilled…they are getting faster and faster. Just wait for some of the gathering to be developed and they will really rock the house. The gas is there…we just need an outlet, need more market.

                  P.s. I probably should take DC’s advice and just not engage with you.

                  • Watcher says:

                    As best I know, fracking takes longer than drilling in the marcellus and thus rig count is not very definitive. We’ll have to find the similar “wells awaiting fracking” quotes from those state sources, as exist in ND.

                    As shown above, the winter wasn’t all that abnormal. And if the price of gas is low, that would seem to be a good time to buy it for storage. Doesn’t seem to be happening. Who owns the storage btw.

                    Don’t know who DC is. Can’t be important or wouldn’t be spending time on blogs.

                  • Nony says:

                    The wells that get drilled get completed. Rig count tells the story. You don’t need to furrow your brow and look for fracking stats.

        • Nony says:

          TOD and ASPO look pretty dumb in retrospect. Check out this comment and then the whole thread:


          Note the anemic predictions of shale (“unconventional”) gas. And I’m actually fine with someone being wrong if they face up to it. But when they don’t and just keep repeating more and more predictions without facing what made them wrong before, without trying to calibrate their biases…blech.

          • SRSrocco says:


            I have a good story that you might enjoy, seeing that you are in rare form today sporting that Peak Oil Gadfly hat.

            Several years ago I was sitting in an Airport bar waiting for my plane, sipping on my favorite drink… cranberry juice, tonic water and lime. Sitting next to me is this Jet-Set Hedge Fund Manager Suck-up drinking a beer, watching the news on the bar television.

            Ironically, the subject matter in the news was on global warming. I looked at him and said, “Something else about that global warming.. aye?” He turned to me as replied, “I don’t believe any of that nonsense… and if it did turn out to be true, I hope things don’t get too crazy for the next 20-30 years until I’m dead.”

            I took a sip of my drink and said, “Hey by the way, do you have any kids?” He shot back with a quick happy reply, “Do I…. you should see how cute my kids are.”… as he quickly took out his wallet to show me their pictures.

            As I looked at his cute kids, I said to myself, “That is exactly the kind of Arrogant, Self-Centered Selfish piece of Garbage response that typifies what is wrong with this world today.

            It seems as if the Sharp-Dressed Suit’s knee-jerk reaction was only worried about what took place during his watch on this planet.

            He kind of reminds me of you… which I why I thought you would get a good kick of it.


        • Heinrich Leopold says:

          Very interesting chart. To my opinion this supports the view, that if we know the shape of the left side of the curve, we can predict the right side. This seems to be a natural law, which has something to do with the internal structure of a trend. There is no such a thing like an eternal plateau. Despite growth of around 7,5 bcf/d Marcellus has to beat its own legacy rate which doubled over the last half year from 2 to 4 bcf/d. As the legacy rate is double the growth rate, new growth will be erased by declining production by September 2014. In addition Marcellus has to beat declining production in the Golf of Mexico (down from 4 to 3 bcf/d and also much lower production from Texas- down 3 bfc/d y/y.

          So strictly mathematically US natural gas production will be staying flat over the next half year and then decline strongly. As storage has a deficit of over 1000 bcf, the catch up over the summer will not occur – even if the summer is mild. If the market realizes that the storage goes into the new heating season with a record deficit we will be seeing a price spike by September.

          • There is no natural law that says the left side of a production curve must look like the left side. If you look at the production curve of any field already seriously depleted, the right side of the curve will not look like the left in any of them.

            For individual fields. the ramping up side is always far steeper than the decline side. But for all the worlds fields combined the ramping up was very slow. But there is no law that says the decline curve must look similar. Politics affects both sides of the curve. I am predicting a shark fin shaped curve for the downside.

            • Heinrich Leopold says:

              Referring to the above US gas chart Haynesville had a steep rise and thus – it looks also a steep fall. Barnett on the other side had a slow rise, consequently a long plateau and a slow fall. So Marcellus should have also a steep fall. If you look at the dramatic rise of legacy rates of Marcellus it certainly supports this notion. Of course there is a certain error range, depending on how much money is available for drilling, geology, interest rates…., yet in principle there is a certain invisible hand which drives these movements. Nature works based on waves, because each trend creates immediately a counter trend. So a debt bubble also works on this principle, the same as a high tech bubble or swarm of locusts. Each movement has a fingerprint characteristic and it is difficult to put a common valid formula behind it and use it for all kind of movements. However as the US natural gas market depends only on a few variables (stable imports, interest rates also stable, stable future prices…) in my view it is predictable to see much higher prices until the fall. Of course when prices are much higher, drilling will go into an even higher gear and will reduce prices by next year again. However the price shock will be very likely quite substantial.

          • Nony says:

            It’s not geology holding gas back, but access to market. The geology and production has been analyzed by USGS and by several independent consultancies. If you ignore the shale gale or poo-poo it, you’re being a bitter-end peaker, who doesn’t listen to the facts on the ground, doesn’t learn from failed prophecies. If you want to kvetch about oil or oil price, fine. But gas? The Marcellus has huge amounts.

            • Woody says:


              Just curious, what do you define as huge amounts of gas?

              I don’t remember the exact numbers but I seem to remember that after initially projecting very large amounts, 100s of TCF, of recoverable gas in the Marcellus that the USGS revised their numbers significantly lower to about 1/4 of the original estimate?

  2. HS says:

    I’m a longtime lurker of this site and I must say I love it. One question that I have is: Once a country peaks, why is it assumed they produce flat out? Wouldn’t a smarter strategy be to curtail production in advance of the peak, to preserve capacity for when the price is higher?

    • Of course it would. But when has any country done what would have been smarter in the long run instead of taking the most profit in the short run…. never of course.

      Were we a rational society, a virtue of which we have rarely
      been accused, we would husband our oil and gas resources.

      – M. King Hubbert

    • Watcher says:

      I thought you were going to say something different. “Wouldn’t a smarter strategy be to curtail production in advance of the peak . . . to preserve oil for future citizens?”

      Too much interest in price, here. If you have an oil field that has played out and is shut down, you can open it again. If the government subsidizes it you can even pretend you’re getting production at a profit. In fact, this is going to happen. Globally. As scarcity asserts itself governments will pump the oil and maybe even bust through old peaks. The workers may not even be paid beyond room and board, and if they try to leave they’ll be shot.

      That’s what desperation does. Price doesn’t have to mean anything at all. If you need it, you get it. If the price somehow is an impediment, you make the price be something different — essentially by decree or by Fed maneuver.

      • Watcher says:

        Oh and btw, I do not think countries will try to preserve oil for future citizens. They may use that as an excuse for failing to hit production targets (Iraq has tried this over the past few years), but when scarcity is desperate, the last thing you want to have is lots of oil under your ground.

        If you do, you’ll be invaded.

  3. Nony says:

    Hubbert didn’t believe in the free market and was into some weird 1930s political stuff (“Technocracy”) according to his Wiki bio.

    • What in the hell has that do do with the subject under discussion? Is that the best you can do, an ad hominem attack on Hubbert?

      • Nony says:

        It’s a total segue. Not saying it’s related to your point. Just got interested from your quote. I thought you were OK with some general discussion as long as it was all related to peak oil broadly defined.

        IOW, “yes”. 😉

        • Nony says:

          Actually it does have pertinence. Yeah, my first thinking was he was into some goofy 30s stuff, but who wasn’t. But actually the relevant thing about Hubbert is if we should have active “rational” husbanding of resources (i.e. government constraints) or just allow the free market to allocate it via Hotelling theory. When you read the Wiki stuff, you find he was into some strange energy accounting and non free market stuff. Even ties back to how his peaker papers neglected to analyze demand evolution, cost curves, price, etc.

        • No, an ad hominem attack on Hubbert is not related to peak oil no matter how broadly you define peak oil. Please, on this blog, never attack the man, only the subject. You show your smallness by personal attacks rather than addressing the subject. I am really disappointed in your reply.

  4. Nony says:

    Montana not pulling its weight. Just brave ND and TX fighting the good fight.

  5. Nony says:

    I just looked up and Colorado just set a record for oil.


    OK, UT, NM and WY are all up as well. Kinda small potatoes but at least they are helping since MT got lazy.

  6. Old farmer mac says:

    This link has some dead serious commentary by the head of the Italian oil company Eni.

    It’s a ” must read”.


    • Watcher says:

      That’s an excellent link.

    • Nony says:

      It’s very likely that LNG volumes will be low, will go to China, or will not significantly reduce price or will be met in price by the Russians. however, the key thing is the capacity will exist. And if Putin decides to turn off the flow or raise the price or whatever, then NG will find an attractive market in Europe and the capability will be there to supply it. So it’s really about creating more of a world market and options and such.

      • Watcher says:

        Did you read the interview?

        No one can invest the billions into an LNG terminal if it lands gas at $9 (at best, behold the 1% loss per day in LNG transport) and their competitor can land it at $6. And prevailing price is $11 because of middlemen add ons and taxes.

        Russia can wait for billions to be spent and then destroy the terminal owner. In fact, were I Russia, I would send the owner’s board notification of this about 1/3 of the way through the expenditure. Let the board decide if they want to flush another 2/3 of the cost down the toilet.

        Ask for US gov’t subsidy? Of Europe? Think that will get people re-elected?

        • Nony says:

          Duh…they’ll send it to Taiwan for 15 instead. But now that the capability exists…what happens if Putin turns the gas off to the EU? Price rises…and the US gas is diverted. It’s not that we ship it regularly but that the capability exists. I already explained this and you didn’t get it.

          • Old farmer mac says:

            Military theory is more relevant at this point than economic theory.

            One of my (barely) possible ancestors was once asked how he won so many battles and he replied that he ” got there th fustest with th mostest.”

            (I am not claiming him but merely pointing out that he was in the right place at the right time to have dallied with a lot of women who were among my ancestors without a doubt.)

            The Russians are there first with the most.

            And there is simply nothing whatsoever that can be done about that.

            We are so used to playing cop to the world that we just aren’t able to realize that times have changed.

            We still have the worlds biggest and baddest armed forces but that is doing us about the same amount of good as a convict’s ball and chain in the race for economic dominance.

            War is a game a lot like checkers or chess in that the winner usually sacrifices some men and resources in order to put his opponent in a position for the kill.

            Russia is not importing anything essential to her survival in the short term and there is nothing essential she cannot produce in the longer term for herself.

            But she can destroy Europe and severely damage the US and every body else in about the same amount of time as it took Hitler, or less, without ever sending a troop outside her borders.

            All she has to do is shut off the gas and oil.

            • Nony says:

              It’s about playing the long game. Less Presidential talk, less sanctions, more actions. They have an effect over time. Putin is a facts on the ground kind of guy. It’s not worth trying to confront him if we aren’t going to follow through. And not worth provoking Armegeddon. The way to deal with him is squeeze him gradually.

              • ziphius says:

                He’ll just squeeze back a little harder.

                • Dave Ranning says:

                  And when you can take up to 10 million barrels of oil a day off the market, and deny the EU NG, it is a pretty tight squeeze.

                  • Watcher says:

                    The ENI guy was like a baseball bat in the face.

                    Sure, you can sanction Russia from some stuff. But we have to have their oil and gas every day. In contrast, the stuff we send them they can take a year off using.

                    The Administration has picked the wrong horse, and the GOP is not going to let that sailboat separate from them for fear of there being an unexpected breeze out in that direction. They are counting on mid term gains and they aren’t going to risk losing them by taking a “pro Russia” stance.

            • Philip Backus says:

              Mac, Maybe the third WW will be fought with “hoarded energy” rather than energy burned in death dealing machinery though much in the way of slower death will occur due to economic disruption. Indirect rather than direct, economic rather than military conquest. I think that Einstein’s analysis may still well be correct….the next one will will be fought primitively.

              • Old farmer mac says:

                I agree. Right now if Germany wanted to invade Russia again they would have to go on the world market and buy up enough fuel to get there.

                Russia could persuade more countries to back sanctions on Germany than Germany could convince to back sanctions on Russia.

                There aren’t any countries whose economies depend on imported Mercedes and Porsches but there are a lots that depend on imported oil and gas.

                We aren’t going all the way back to sticks and stones for the NEXT BIG ONE but the one after that?

                Maybe so.

                • Watcher says:

                  You fight wars now by interdicting oil. The last thing you want to do is kill the enemy. You want him to consume his SPR and killing people slows that down.

                  Once it’s consumed, then you disarm them. Then you kill them.

          • Watcher says:

            What pays salaries if you don’t ship regularly?

  7. Preston says:

    Wow, imagine the headlines if the US starts outproducing Saudi Arabia…. Want to bet it’s all “happy days are here again” even if both the US and Saudi Arabia are in decline when it happens. It might even happen this year if Saudi Arabia keeps falling, what do you think? Any chance of that happening?

    • Anonymous says:

      Remember that the US counts corn ethanol and process gain as US ‘all liuquids’ production. The corn ethanol is largely ng based fertiliser, some of that imported from Canada. The process gain is entirely energy free increase in volume when oil is refined. Even the process gain from refining imported Saudi oil is counted as US production.

    • Nony says:

      What matters is world supply and demand. Plus even if we pass the Saudis, it will be temporary. They have more reserves and resources. But it will still rock, just for the general PR factor.

  8. Jeffrey J. Brown says:

    An edited version of a recent missive on crude oil production versus crude + condensate production.

    Has Global Crude Oil Production Already Peaked?

    Ron Patterson pulled together some annual OPEC 12 production data for me. In regard to Crude + Condensate (C+C) production data, note that condensate production is a byproduct of natural gas production. The OPEC countries track crude only production (not C+C).

    If we round off to the nearest one mbpd (assuming that we have two significant figures of semi-accurate data, especially when comparing different data bases) and use complete annual data (through 2012), OPEC 12 crude only production was 31 mbpd in 2005 and in 2012 (no increase in seven years), while EIA OPEC 12 C+C production was 32 mbpd in 2005 and 33 mbpd in 2012 (3.1% higher than 2005). If we take the data sets at face value, this would seem to imply that condensate production from the OPEC 12 increased by about one mbpd from 2005 to 2012.

    Global C+C was 74 mbpd in 2005 and 76 mbpd in 2012 (2.7% higher than 2005). If we assume that the OPEC 12 countries are a reasonable representative sampling of global production (and of course we have a lot of condensate production in the US), in my opinion it’s a reasonable inference that we have not seen a material increase in global crude oil production (generally defined as 45 or lower API gravity) since 2005. Of course, we need crude oil to refine petroleum based distillates (although distillates can be synthesized using a gas to liquids process).

    Note that OPEC accounted for 43% of global C+C production in 2012.

    Again taking the above OPEC/EIA data at face value, If the other producing countries, accounting for 57% of global production, had no increase in condensate production–not likely since that number includes the US–the implied increase in global crude oil production would only be one mbpd.

    I think a more likely scenario is that the other 57% accounted for at least another one mbpd increase in condensate production, and actual global crude oil production–the stuff that Jed Clampitt* found–was probably flat to down from 2005 to 2012.

    Incidentally, if we look at the Texas RRC data versus the EIA data, it appears that the implied increase in Texas condensate production from 2005 to 2012 was about 0.2 mbpd. So, OPEC + Texas, accounting for 46% of global C+C production, would account for about 1.2 mbpd of increased condensate production, which alone would account for about 60% of the 2 mbpd increase in C+C production from 2005 to 2012.

    So, based on the foregoing, in my opinion it’s a reasonable conclusion that virtually 100% of the increase in global liquids production since 2005 has been condensate, NGL’s and biofuels. In other words, in my opinion virtually 100% of the increase in global liquids production since 2005 has been from byproducts of natural gas production and from biofuels.

    Note that the EIA shows that global dry (processed) gas production increased by 22% from 2005 to 2012, while Global C+C production increased by 2.7%. And as noted above, OPEC showed no increase in crude oil production from 2005 to 2012 (rounding off to two significant figures).

    I wonder what happened to global condensate production as global gas production increased by 22% from 2005 to 2012?

    *Beverly Hillbillies, “Black gold, Texas tea”

    • Jeffrey J. Brown says:

      Some more data follow. I don’t think it’s an unreasonable expectation that global condensate production increased at about the same rate as the rate of increase in global NGL’s and at about the same rate as the rate of increase in global gas production:

      2005 to 2012 Global Data (EIA):

      C+C: 73.6 mbpd to 75.5 mbpd (+0.4%/year rate of change)

      NGL’s: 7.6 mbpd to 9.1 mbpd (+2.6%/year rate of change)

      Dry Processed Gas: 270 BCF/day to 328 BCF/day (+2.8%/year rate of change)

      Condensate: ?

      A recent article about Qatar’s plans for condensate production follows. Qatar accounted for 4.6% of global dry gas production in 2012 (EIA).

      Qatar the World Largest Condensate Producer by 2015

      Qatar (Doha) – Qatar ”will be established” as the world’s largest condensate producer by the year 2015, Qatar’s Minister of Energy and Industry Dr. Mohammed Bin Saleh Al Sada said here Monday.

      Addressing the gathering after inaugurating the two-day 15th Annual Condensate and Naphtha Forum here, Dr. Al Sada said, “Qatar’s condensate production will reach 780,000 bpd by 2015 and establish Qatar as the world’s largest condensate producers and will build one of the world’s largest condensate refinery.”

  9. Old farmer mac says:


    I think you can only see a few things a month on Barrons without hitting a paywall but this link is free.

    It is well worth a read as a study in cornucopian thinking and propag– er, excuse me, public relations.

    It is possible (just barely in this layman’s opinion) that there may be some near miraculous breakthroughs in the cost of extracting unconventional oil and gas and that therefore the prices they are talking about are theoretically possible on that basis.

    But as a practical matter these breakthroughs have not been made and they may never come to pass.Further more there is hardly even a hint about the current decline rates of the legacy fields that produce the vast majority of the world oil supply and hardly even a hint as to how long it would take to scale up the industry to get out enough of this unconventional oil and gas to offset that constant decline.

    I am personally perfectly willing to bet my last can of beans that oil prices will be up instead of down in either five or ten years unless the world economy has a heart attack.

    The one thing in the article that really stands up to some serious scrutiny in my estimation is the part on the possibility that natural gas may be the future fuel of the trucking industry at least for a good long while – however long it takes for gas prices to approach oil prices in energy content.

    I have no real idea if natural gas will stay cheap enough to use it for automobile fuel as opposed to oil or electric propulsion or a combination -I think the future of the auto is the plug in hybrid and after that the pure electric a decade or two down the road.

    NG fueling infrastructure is expensive and mostly non existent. The electrical grid goes virtually everywhere. A ”goes everywhere” natural gas grid does not exist and probably never will.And adding on a charging station capable of charging a car overnight is a trivial expense in comparison to a natural gas fueling setup that can be used to fuel up a car at home.

    But the trucking industry can easily afford to convert itself over to natural gas because a big truck uses hundreds of dollars worth of diesel a day instead of forty dollars worth a week like a car.There is room on the trucks for the fuel tanks and while building dual fuel engines is expensive they are as awesome bargain if the gas is handy – assuming you run them all day most days. The refueling will take a while but drivers have to eat anyway.

    It will take only a few giant natural gas stations along the major highways to make the conversion process feasible. A large portion of trucks can get by on one fill up a day and can make it by that one station because they never go more than a couple of hundred miles from home base.

    I can see natural gas trucking taking off exponentially anytime now on a strictly dollars and cents basis.

    What I can’t see is the oil and gas industry scaling up fast enough to get at all that supposedly affordable unconventional oil and gas fast enough to drive the price of oil and gas down much if at all – barring really serious economic troubles -and in that case the money to scale up unconventional oil and gas will dry up anyway.

    • Doug Leighton says:

      Ron or Jeff,

      Is Mexico a factor in the US Natural Gas market? I’ve never heard this mentioned, one way or the other, which I assume means it isn’t?

      Also, I found Mac’s “must read” link re the Eni interview very informative and recommend anyone who missed it shouldn’t. With Mac’s permission (assumed, little yellow face) I’ve repeated it below.



      • Watcher says:

        Best link in weeks, maybe months.

        There is no superior chessplayer at work. There is a superior hand of cards. It’s unbeatable.

        And the solution is not to drive up the price of the American consumer for something he has to have. A more American solution is to reduce the number of consumers elsewhere.

    • Watcher says:

      “I am personally perfectly willing to bet my last can of beans that oil prices will be up instead of down in either five or ten years unless the world economy has a heart attack.”

      Pricing it in cans of beans is more meaningful. The Fed prints $65 billion/month. They can print any amount they want when global central bank cooperation prevents currency displacement.

      Ask Japan. They are DESPERATE to get 130 yen to a dollar, but that means Toyotas price at $6500 vs GM at $25,000. The Fed won’t allow that so 102 is what we have.

      They taught me allllllllll about price at Wharton, but I see that world has gone.

    • Neil Carey says:

      Probably Natural gas will replace diesel and also possibly petrol for transport in the near future, but it seems that there could be a climate downside.
      A paper, discussing the effects on climate of methane leakage,”Methane Leakage from North American Natural Gas Systems,” published in the Feb. 14 issue of the journal Science, states:
      Perhaps surprisingly though, the analysis finds that powering trucks and buses with natural gas instead of diesel fuel probably makes the globe warmer, because diesel engines are relatively clean. For natural gas to beat diesel, the gas industry would have to be less leaky than the EPA’s current estimate, which the new analysis also finds quite improbable.
      “Fueling trucks and buses with natural gas may help local air quality and reduce oil imports, but it is not likely to reduce greenhouse gas emissions. Even running passenger cars on natural gas instead of gasoline is probably on the borderline in terms of climate,” Brandt said.

      A synopsis of the paper can be found at http://news.stanford.edu/news/2014/february/methane-leaky-gas-021314.html

      • Doug Leighton says:


        The Science article should be digested by anyone purporting Nature Gas; it’s a time bomb in disguise. I brought Ron’s attention to it (different publication) a few weeks back. Probably got lost in the noise.


        • Doug, sorry but I just don’t post much about global warming. I am sure it is really bad and man made. But as I have said I am a data hog and post charts and data on crude oil.

          That being said I have very strong opinions on the subject. I do not believe we will do anything to even slow the CO2 dumping in the atmosphere and certainly we will do nothing to slow the methane from the many sources. China and India will not stop building coal fired power plants.

          People do not hear arguments of impending disaster and act. They wait until the disaster arrives and react. It is just human nature and we cannot change human nature.

          We are but observers to this tragedy.

          • Doug Leighton says:


            It is gentlemanly of you to respond to my remark on the Science article but not necessary. Even though in my mind you can’t separate Peak Oil from Global Warming that’s just an opinion. Bottom line: your Blog, your Rules.


            • Doug, if you will read my reply again I think you will find nothing where I claim there is no connection between peak oil and global warming. I would think there certainly is since peak oil will lead to a lot more coal use.

              And I think you completely missed my point. My point was that we will do nothing to stop global warming. We will do nothing to mitigate the effects of peak oil either.

              Doug, I have been around a long time. And during most of my life I have been a student of human nature. So when I wrote these words above: People do not hear arguments of impending disaster and act. They wait until the disaster arrives and react. It is just human nature and we cannot change human nature, I was speaking of something I think I know a little about. At any rate, those words are the point I was trying to make.

              Please continue to post on Global Warming, Peak Oil and any other related subject. That is what this blog is all about. That is seeing and discussing the events at the end of the world as we know it. And you may even try to prevent such a disaster if you please. But you may as well be trying to hold back the tide for all effect your efforts will have.

              Again, we are but observers of this tragedy. But when you are watching the end of the world as we know it, it’s just damn hard to take your eyes off it.

              • Doug Leighton says:


                I think it would be hard to find anything we don’t agree on. But, some of us actually attempt to conform to the tone-point-rational (however you define it) of your Blog and not get carried with ill-informed-off topic issues; it’s not always easy. There will always be those who simply want to hear the sound of their own voices or preach their own agenda and all I’m doing is trying to do not be one of them. Sometimes I feel a bit of humor needs to be injected and react accordingly. In any case you are amazingly tolerant as a host and we appreciate it.


            • Heinrich Leopold says:

              There is also no scientific link between fossil fuels and global warming. At just 38 ppm CO2 – although it has higher heating capacity than air – cannot contribute to global warming. The concentration is simply too low. Nevertheless there is a danger that increased use of fossil fuels breaks the recycling cycle of CO2 into oxygen. Fossil fuels consume nearly all oxygen of the atmosphere per year. Luckily all of the oxygen is recovered by nature by assimilation and oxygen concentration remains stable albeit at slow declining trend. If the assimilation process does not work efficiently anymore and the concentration of CO2 rises to a concentration it really can act as a greenhouse gas, life is already gone on this planet. So we will never experience CO2 as greenhouse gas.

              • There is also no scientific link between fossil fuels and global warming.

                About 99.9% of all scientists on earth say there is. Whom should I believe, you or them?

                • Heinrich Leopold says:

                  The facts are 100% on my side. The point here is politics. There has been for a long time the common believe that earth is in the center of the universe, albeit Kopernikus, Kepler and many other scientists knew already better. At the university of Padua scientists suspected already long before Galileo that the earth is not in the center of the world. Unfortunately we have not many scientists at institutions, yet a lot of politicians in scientific clothes. The story of `CO2 contributes to global warming` gives a lot of funding for unnecessary studies. It is a shame how corrupt science is.

                  • It is a shame how corrupt science is.

                    Yeah, that’s what all the creationists say.

                    When science trashes your favorite dogma then you just say they are corrupt.

      • TechGuy says:

        “Probably Natural gas will replace diesel and also possibly petrol for transport in the near future, but it seems that there could be a climate downside.”

        Unlikely because Nat Gas Production is fully utilized for domestic heating/hot water, electricity via gas-turbines. The price of Nat Gas will rise into the double digits soon as the remaining low cost sources deplete.

        That said methane outgasing from the Permafrost will probably be a bigger source or methane emissions than from Oil/Gas Production and transport. There are billions of acres of permafrost that have trapped methane.


        • Nony says:

          can we capture it to burn?

          • TechGuy says:

            “can we capture it to burn?”
            Not economically. Each square cm will only release a small amount as it trapped in decaying biomass. but since there are billions of acres of permafrost it adds up to a very large amount.

  10. If you don’t have a 90 percent efficient natural gas fired residential furnace in your home, you are wasting natural gas worse than the Bakken wells flare it off.

    A 90 plus percent efficient home heating system is very economical these days and has a cost of 1/2 of electricity consumption for the same result. Heating a home with electricity is at par with fuel oil, is a safer, quiet heat source and no need to buy fuel oil for an obsolete heating system. Oil-fueled furnaces are a thing of the past. Might as well use electricity, it competes with fuel oil used for furnaces to heat your home. Coal would be better to use to heat your home rather than fuel oil.

    I am a firm believer in solar to produce electricity, the source is right there, no need for miles of transmission lines.

    Wind energy proponents have to be able to concoct a new system of harnessing wind energy to produce electricity. The current technology used for wind towers to produce electricity is a complete waste of resources and capital. Might as well use the money to drill for more oil. The world is a better place without wind towers polluting the environment with its eyesore structures that reduce property values by half or more.

    Wind power can maybe be used in the future. As it is now, it has the most egregious environmental impact. Nothing can possibly be worse. It is failure nonpareil.

    Oil is far superior as an energy source than wind will ever be.


    • Doug Leighton says:


      I have a question w.r.t. your (negative) comments about wind energy. Are you referring to small domestic systems, giant structures such as you see beside the North Sea, or all of them? I played around with a windmill system, just for the hell of it, a few years back which was a total failure: not enough wind, high inverter/battery cost and short useful life of deep cycle batteries. Of course, as I mentioned to Mac in an earlier comment, I’m a total amateur and this was about six years ago. More than six years. Perhaps things have changed somewhat?


      • Watcher says:

        Things have indeed changed. Bugs are larger. When they smash themselves and make a coating on the airfoil the Bernoulli equations are disrupted and smooth laminar flow stops happening.

        So then you commission (pay for) a little pickup truck with a big soapy water tank and a high power compressor to drive out to the windmills a couple of times per month, stop the blades spinning, and blast the smashed bugs off.

        Science triumphs.

        • Doug Leighton says:


          Well maybe my old windmill will reduce the number of mosquitoes around here in the summer, the big ones anyway. It certainly didn’t reduce my hydro bill. (little yellow face).


          • Watcher says:

            Gates malaria project looked at it all carefully and decided that killing off all mosquitoes might actually be possible, but unwise. They seem to be important as a food source.

    • Old farmer mac says:

      I don’t know what prices you are using for delivered tax paid natural gas and delivered tax paid electricity but everybody I know of has opted for a heat pump rather than a propane fired gas furnace over the last few years.

      But we don’t have residential gas lines in my area and I don’t know what people pay for utility delivered gas. Propane was cheaper than electricity ten years ago. Not since.

      You are dead wrong about the cost of wind electricity insofar as modern wind farms are concerned.

      The upfront cost is huge but the fact that they run fuel free for at least twenty years makes up for that with plenty of room left over.

      Furthermore wind power already is already putting significant downward pressure on the price of coal and natural gas and the savings from this effect will also be repeated year after year.

      I don’t suppose you have ever seen a mountain top coal mine site or have heard about the mercury released into the air by burning coal by the tens of millions of tons.

      I won’t even bother to mention coal and climate disruption except to say that since you seem to believe wind is an environmental disaster you are probably on a coal company payroll after one fashion or another.

      Being a professionally trained ag guy I know a very great deal about the impacts of all sorts of industrial activity on the land and wild life. There is nothing a farmer does that does not tie into environmental questions.

      I live very near coal country.

      The environmental devastation is enough to make a strong man cry.

      Working in the mines also put a number of my relatives in early graves.

      Air pollution created by burning coal is responsible for killing many thousands of people every year well ahead of their time. Ask any medical professional.

      Wind farms aren’t pretty in my estimation but they are utterly beautiful in comparison to a coal mine.

      We just had about forty miles of river badly polluted within an easy drive of my home by the failure of a coal ash storage dam.

      You can read all about it by searching coal ash and Duke power.

      • Coal mining devastation?

        Merely lack of political will power trumped and corrupted by corporate greed. Money talks.

        Canada is a very poor steward of land mined for coal and receives an ‘F’ in environmental responsibility. I know what I see and it is not a favorable assessment. Any part of Appalachia that is ecologically damaged is due to political shenanigans and irresponsible governance which allows corporate influence to impact a region negatively, nothing else. Crimes against humanity and a lack of compassion for your fellow man are the culprits. You can name the perpetrators, not a tough job.

        Chernobyl and Fukushima aren’t stellar examples of human ingenuity. Miserable failures is more like it. Humanity has a lot to learn.

        • Old farmer mac says:

          ”Merely lack of political will power trumped and corrupted by corporate greed. Money talks.”

          While this is undoubtedly true it is equally true that the coal mines are operated under long established rule of law and that people want cheap energy and the public has not supported changing these laws to the extent that burning coal will ever be environmentally harmless- and they never will.

          It is a far more effective use of scarce cleanup and preservation dollars to convert to wind and solar to the extent we can manage it.

          And anybody who represents himself as an environmental advocate on the basis of wild life by supporting coal and knocking wind is either as ignorant a s a fence post or a troll for the coal industry.

    • Patrick R says:

      What a curious idea; the sight of a wind turbine more unpleasant than that of a fried biosphere? Almost as curious as choosing this one example of modernity and declaring it uglier than the rest. Really? Are wind farms uglier than oil fields, than huge freeways, than oil refineries?

      Personally I find them beautiful, kinetic sculptures expressing the interplay of the topography and the atmosphere, and we have many in my country: A great addition to the countryside. Now I know some don’t agree with this, but they always build ‘wind farms viewing’ spots and these are always visited so I don’t think I’m alone.


      Additionally homes are advertised with ‘views of windfarm’, must be real aesthetic value there too.


      Furthermore we know they work brilliantly, balancing our hydro resource, adding resilience and reducing FF dependancy, and they work financially as there are no subsidies for these here. Oh and they generate at night, and of course the land below them is still in productive use.

      Anyway then there is the third curiousity: clearly your aesthetic view, as is mine, is subjective, so really it’s not much of an argument regarding our energy future is it…..

      • You just don’t live near them, now do you?

      • Doug Leighton says:

        Hi Patrick,

        You made me think of all those gorgeous oil refineries in Marghera-Mestra behind Venice: handsome geometric pipes, billowing clouds. You have to wear thick rubber there of course; no stiletto heels. The poisoned soil wouldn’t really be all that bad if those Sicilian chaps didn’t keep sneaking in and dumping the really bad stuff! Even then, the ankle deep sludge has a rather lovely sheen — in the right light!

        I don’t think anyone really believes all the anti windmill stuff; we were just trying to flush you out.


        • Damaged productive land for agriculture is from illegally dumped salt water from Bakken wells and the land won’t produce any crops for years to come. No sheen, just dead soil.

          Reclaimed land from mined coal will produce crops because it isn’t damaged to the extent that it is no longer useable.

          Pick your poison.

        • Patrick R says:

          Ha! Yes Doug; I also love sculptural industrial forms of all kinds too…. But, you know; ‘Hansome is as handsome does’ as the saying goes, so while snaking stacked flyovers make for sinuous and impressive forms, I can’t be having the whole auto-highway complex and the fume belching anomie it forces on place and people…. So of course such places always photograph so much better than they are to experience. I can recommend Alan Berger’s book ‘Drosscape’ on the matter. Lovely aerial photographs of leftover industrial and transport badlands of the continental US of A.

      • Wiegand says:

        Really, there is nothing redeeming about wind turbines and wind energy. Absolutely nothing at all since the turbines are well-known prolific killers. The wildlife habitat in and around your community is vital to local and migratory species. If you do not know, turbines WILL slaughter the bird species that you cherish most.

        Unlike other forms of energy production, the mortality footprint from wind farms is unique in that it extends thousands of miles from each turbine. The public has never heard a word about this from developers, wildlife agencies, sell-out conservation groups, or anti-oil nuts.

        I am a wildlife biologist and an expert on wind turbine mortality. It is very obvious to me that endangered bats, whooping cranes, condors, golden eagles, bald eagles or any other species mean very little to the wind industry. Otherwise they would not be asking for and getting kill (take) permits for endangered species, they would not have to use gag orders to silence lease holders and employees (witnesses), and they would also not have to rig studies to cover up mortality and cumulative impacts. This is exactly what has been going on for several decades.

        Across the United States official bird and bat kill estimates have been derived from studies rigged to hide mortality. The real numbers are at least 10 times the amount being reported and sometimes it is far more. Altamont Pass has reported less than a hundred dead bats in 30 years of service but thousands have been killed there. This industry is set up to hide mortality and the latest “incidental take” or “kill permits” for a few endangered bats could end up being 5000. A single permit for an eagle or whooping crane could easily end up with being dozens being killed.

        I can not stress this enough to people. From what I have seen from looking at wind industry mortality studies, this industry and our wildlife agencies are so corrupt (at the topmost levels) they might as well all be selling used cars with their odometers turned back at least 90% because this is how bad it really is.

        A generation ago these were the people we incarcerated and ran out of our neighborhoods. Now these same people are hell-bent on sacrificing people, land, wildlife, treasure, democracy and economic future on the altar of a false global warming god, brought to you courtesy of the United Nations, the UN’s Intergovernmental Panel on Climate Change (IPCC), the UN’s Agenda 21, the UN’s International Council for Local Environmental Initiatives (ICLEI), propagandists like carbon trader algore and name-caller David Suzuki, and many other dishonest, even disgraced-but-still-influential players in the “green” and environmental movement – Climategate scientists, lobbyists, politicians, NGOs, charities, and not-for-profit organizations.

        Now these same people have been put on a path of massive industrial blight and extinction of species. This man-made disaster will be the wind turbine legacy we hand our children.


        ~ Jim Wiegand, Wildlife Biologist, Expert in Wind Turbine Bird & Bat Mortality

        • Doug Leighton says:


          Jesus man, that’s downright depressing. Sometimes I think ignorance is the greater (greatest possible) blessing. Based on what you’re saying I suppose those massive offshore jobs you see off Holland are wildlife destructive as well. What the hell is green then? Anything? I’m sure it’s not any form of carbon based fuel which leaves solar and how can solar provide the world with significant power within any reasonable timeframe? Thanks for your (disheartening) input anyway.


          • Joel Caris says:

            Green is dramatically scaling back our lives, using far less energy and resources. At this point, that’s really what I think it boils down to. I don’t have much faith in renewable energy replacing even a small fraction of BAU and we’re near the top of the downward slide in fossil fuels. A few centuries from now, we’ll be mostly back to living on the annual budget provided by sun, water and air flow, human and animal labor. In other words, the historical norm, though the details will be time-specific, as they always are.

            (Kind of jumping in the conversation here. Been lurking awhile. Love the information provided here. Came awhile back via The Archdruid Report, which probably helps explain my above-stated perspective. Thanks to everyone for the quality conversation here, with particular thanks to Ron for hosting.)

          • Watcher says:

            I was going to pat that guy on the back and thank him for preserving those birds and animals, because we’ll have to kill them all to eat in a few years — but I don’t think he had that in mind.

            • DaShui says:

              Why eat birds when there are all these delicious 200 pound primates everywhere?

            • Doug Leighton says:


              I was going to say: What in Hell are you talking about? This is something my wife is always asking when I try to educate her on some subtle matter or other but it’s a comment that seems to lack respect. So couching remarks with cynicism makes it easier to slip a view in under the wire. But when I’m trying to be cynical people take me seriously and have to be reminded with those little round yellow faces; which is fine if you can remember to insert them. Oh well.


        • Patrick R says:

          Oh that’s just spectacular bullshit: windows kill more birds than turbines- let’s ban glass now. What a crock… Funny but you gave yourself away with the agenda 21 nonsense…. really need to tame down the hysteria to peddle this crazy bile more successfully.

          • I don’t know about you, but I have never seen a vulture slam its body into sheet of glass and I doubt I ever will. A grouse or a pheasant, yes.

            The bird population of North America is estimated at 20 billion. Plenty of birds out there and any ‘collateral damage’ from wind towers is an acceptable number.

            Humans can handle the problem.

            yeah, right.

            You can’t ignore the problem to make it go away.

            • Patrick R says:

              Hilariously cheery-picked outrage; how many thousands of American humans are killed by vehicles every year, let alone animals on a level way beyond the odd budgie finding a turbine? Yet this guy seems to find the time and resources to fight this alleged scourge.

              Koch Bros petty cash PR fund gotta go somewhere I guess…

              • Watcher says:

                A vehicle death is much more glorious.

                And there’d be an insurance policy to fund the funeral.

          • Anonymous says:


            Isn’t that an ad hominem attack?

        • Old farmer mac says:

          There is a real Jim Wiegand and if his identity has been hijacked by who ever posted this above I offer my profoundest apologies.

          I qoute:

          ”A generation ago these were the people we incarcerated and ran out of our neighborhoods. Now these same people are hell-bent on sacrificing people, land, wildlife, treasure, democracy and economic future on the altar of a false global warming god, brought to you courtesy of the United Nations, the UN’s Intergovernmental Panel on Climate Change (IPCC), the UN’s Agenda 21, the UN’s International Council for Local Environmental Initiatives (ICLEI), propagandists like carbon trader algore and name-caller David Suzuki, and many other dishonest, even disgraced-but-still-influential players in the “green” and environmental movement – Climategate scientists, lobbyists, politicians, NGOs, charities, and not-for-profit organizations.

          Now these same people have been put on a path of massive industrial blight and extinction of species. This man-made disaster will be the wind turbine legacy we hand our children.


          ~ Jim Wiegand, Wildlife Biologist, Expert in Wind Turbine Bird & Bat Mortality”

          The last time I ran across anybody this deluded he was standing on a street corner telling everybody they would be burning in Hell within a week, thumping his Bible, wild eyed and drooling and ready to attack any two girls holding hands.

          If this is for real I am going to make a point of posting it here and there and every where I can find ” Jim Wiegand, Wildlife Biologist, Expert in Wind Turbine Bird & Bat Mortality” on the internet.

          There are people who are dumb enough to fall for such foolishness but I don’t know of more than a couple who show up in this forum occasionally.

          • Doug Leighton says:


            “but I don’t know of more than a couple who show up in this forum occasionally.” And, thank the gods for that. I suppose it’s a price one pays for the open forum Ron allows us.


          • Anonymous says:

            Great post!

            The best post was Ron’s!

        • Jim Wiegand Biologist says:

          The above comment is from an imposter. This person has taken my actual comments and twisted them. They have also taken my name in an attempt to smear me.

          This was a move completely expected on my part and I will see more of this. I am already being blocked from commenting on several sites that heavily promote wind energy, false rumors have been spread, my comments are being deleted from articles, stories have deleted from the web, and important information I have referred to in articles has being stripped from the internet.

          Everyone interested in wind energy should look at this site and this comment to understand the dark side of wind energy. The statement is as fraudulent as all the recent wind industry mortality studies.
          Maybe it was this recent comment that stirred the pot. It is a comment that leaves no room anywhere for the industry to lie and it will haunt them forever……………………………….. Here is an interesting statistic for those that have the mistaken belief that wind is green and clean.
          I now have several thousand carcass distance records from turbine blade strikes. These records are from the years 1990 – 2010 and none were taken from industry studies conducted with grossly undersized search areas. Search areas for these studies ranged from 50-105 meters from towers. The wind turbines ranged in size from 65 kW up to 1.5 MW

          From these carcass records it can be seen that most carcasses upon impact are launched beyond a turbines blade tip length. In fact this number is about 60% -70% depending on the study and this does not take into consideration that search areas some of these records came from were too small for the size of turbine being studied. Several of the studies even mention this.

          The average carcass distance from turbine towers recorded in these studies ranges from about 1 1/2 – 3 times the blade length of these turbines. Many of these turbines were only about 100 feet tall when including blades of about 8.5 meters in length. Hundreds of the other turbines I analyzed were 300-400 feet at the tip of the rotor sweep.

          The average carcass distance reported by Stantec from Wolfe island and the wind projects Northeastern US, is about the same distance that was reported from the smallest 65-100 kw turbines I looked at. But there are huge differences between small turbines and the turbines studied by Stantec. The turbines they searched in the Stantec studies reach 250-350 feet higher into the sky, the blades reach out 50 meters or more, and their blade tip speeds are much faster.

          All of these factors equal greater impact force, more drift from the higher altitudes, and impact points much further out from towers. In one case the blade tip impact points were much 47 meters further away from turbine towers. Add in the equation that some of these the turbines were located on ridge lines and the carcasses thrown towards the downward slopes will to drift even further.

          Everyone of these Stantec’s mortality studies, defy the Laws of Motion and Gravity because industry’s own data proves that any carcass hit by a turbine has better than 50/50 or a 1 out of 2 chance of this carcass landing at a distance beyond a turbines blade length.

          For the hundreds of carcasses reported in the Stantec studies, only a handful have been reported past the turbine blade length; the odds of this reported carcass distribution to have actually occurred around all these huge turbines is so high that it can not be calculated. In other words the numbers are impossible. It is time for people to take note and to start asking the hard questions.

          Anyway you want to look at it, all these Stantec studies are worthless because their reported carcass distribution is not what really happened around these turbines. All their reported carcasses came from search areas that were many times too small. As a result none of their studies account for or even acknowledge the many thousands of carcasses that landed beyond their tiny little search areas

          The studies conducted by West Inc for Maryland/s Criterion Wind project are no better.

          Both the House and Senate should pass laws preventing the rigging of mortality studies at all wind farms.

          • Anonymous says:

            Tell us Jim

            What is your position on man made global warming?

            What do you think about the eventual depletion of fossil fuels and the consequences thereof?

            How long do you think we can continue to burn coal and natural gas in the face of depletion and growing population ?

            How long will be be able to PAY FOR the coal and gas even if it is available at some price?

            If we don’t go to wind power what real world alternatives do you envision taking the place of coal and natural gas to generate electricity on the scale necessary to maintain civilization and order ?

            Do you really believe in nuclear power and think we can get nukes permitted and built on the level necessary to take the place of coal and natural gas?

            IF so -given the current political climate- how long do you think it will take to see a new nuke actually producing juice in this country or western Europe?

            We take this sort of thing very seriously indeed in this forum although the primary focus is on oil production and the implications of peak oil- most of us here believe that peak oil is pretty close to reality today and some of us think it is already in the rear view mirror.

            The implications of peak oil are such that bird kill by wind turbines is a trivial part of the equation.

            Some of us are actually quite concerned with all the birds actually being captured in nets or shot and eaten by people who are hungry.

            Wind turbines may actually wipe out a few species altogether if they have very limited ranges but it they are not a threat to the existence of raptors in general because the range of nearly all (maybe all ) raptor species extends into many areas where there are no wind farms and none will ever be built due to a lack of sufficient wind.

            I do not mean to come across as trivializing your concerns but they really are trivial within the context of energy supplies and the lack of the same.

            There are literally thousands of acres of land within a days drive of my home being clear cut and the wood hauled hundreds of miles to the coast and shipped across the Atlantic ocean and burnt to generate electricity.

            Local landowners- within twenty miles- are beginning to clear cut for timber and then have all the tree laps – every scrap of wood, every sapling – hauled to local power plants to be burnt.

            The land will be planted back in plantation pine or kept cleared for pasture and crops.

            So far the price offered is not enough to get many loggers interested. It is a little to far to the nearest power plant that buys wood chips.For now.

            But if the price of coal and natural gas goes up by another fifty percent- I expect to see the forests around here disappear into the maw of the electrical industry over the next few decades.

            How many birds do you think are going the be lost as a consequence ?

            • Jim Wiegand - Wildlife Biologist says:

              My position on the wind industry is that the propeller style wind turbine should have been put in the dumpster back in the late 1970’s when the first golden eagle carcasses started showing up under these turbines. From that point only bird safe wind turbines should have been considered but instead the big lie was created.

              My position on scientific research is that it has been so corrupted that it is nearly impossible for the average person to know what to believe. This is one of the reasons I speak out.

              My position on politics is that America is rapidly rotting away from corruption, the lack of accountability, and the theft of tax dollars.

              My position on our Government is that they will say anything to suit a current agenda or policy dictated by business. True science and our future are secondary.

              My position on the media is that it is primarily controlled by business interests and not by the truth or substance.

              My position on our justice system is that our founding fathers did not intend for the vote of millions to be ultimately decided in a chamber by a group of hand-picked judges.

              My position on the world’s logging and forestry practices is that this runaway disaster is one of the primary reasons for climate change.

              My position on the future is that nothing will ever be solved with out first solving the corruption of men.

          • Removed double comment below.

            Jim, you are welcome to post here and your comments are on topic. But please do not post the exact same comment twice.

  11. Unintended consequences:


    I have priced wind power systems and would never consider installing anything to do with wind generating electricity. To pump water, yes.

  12. Calhoun says:

    More new oil from Iraq: Lukoil begins output from giant Iraq oil field

    BASRA: Russia’s Lukoil began commercial production from one of the world’s largest
    untapped oil fields in Iraq on Saturday, as the country raises output to record levels.
    Production from the giant West Qurna-2 is eventually expected to reach 1.2 million barrels per day (bpd), from an initial 120,000 bpd.

    That revival, now into its fifth year, prompted Iraq to set an export target of 3.4 million bpd for 2014, including 400,000 bpd from the Kurdistan region, implying output of 4 million bpd, including oil used domestically.

    4 mbpd would be an impressive milestone. Of course, that’s far from the goals being put forward a few years ago, but still impressive. Can they go much higher than that? Or is West Qurna-2 Iraq’s Manifa?

  13. I just posted a news bulletin at the very top of this post. I thought it was that important. Chesapeake Energy just announced that their crude oil production growth will slow dramatically this year. Check it out. Chesapeake does not have any Bakken Wells but are very big in Eagle Ford. Is this a trend? What do you think?

    Is Chesapeake’s Reduced Oil Production Growth Forecast Really That Bad?

    But the company recently said that its crude oil production growth will slow dramatically this year — an announcement that clearly disappointed investors, judging by the immediate negative impact on Chesapeake’s share price. But is the guidance really that big of a deal?

    Over the past few years, Chesapeake has made commendable progress in becoming a more liquids-focused producer, ramping up activity in liquids-rich plays such as the Eagle Ford and Utica shale and curtailing drilling in less economical gas plays such as the Haynesville and Barnett shales. Largely as a result of this shift, the company delivered 32% year-over-year growth in oil production in 2013.

    They have been concentrating on oil, less on gas. And now their oil production is in the toilet. Well, their growth is in the toilet. And when it is shale, the end of growth is the beginning of decline.

    • Watcher says:

      “Explanation” is they sold assets so fewer wells will flow. That’s embraced by the writer almost in a non company context because of the very grab you did. They don’t want the sale to suggest damage to the abundance narrative.

      Of course, if they sold acreage it’s because they couldn’t make money on it — and no not to raise cash to service debt. If it was big profit acreage, you find a bank to finance a bridge loan with it as collateral and fund the debt service that way.

      So good call, Ron. This means something.

    • ziphius says:

      I found the discussion of their return on NGLs very interesting – $ 31.76 revenue on $ 19.35 unit cost. As a crude approximation of EROI, 31.75/19.35 = 1.64 seems quite low.

      • Watcher says:

        Worse than that. It won’t have admin overhead in it, nor debt service.

        • ziphius says:

          And, the debt service is currently in a ZIRP + QE environment.

          • Watcher says:

            Hmmm I would have to go back and look, and I probably will, but my recall is Chesapeake ran up their development costs pre ZIRP. So they are leaking interest, if that’s so.

            • ziphius says:

              I wonder what the EROI for their NGLs as delivered to a customer in say, Europe would be?

    • Calhoun says:

      Chesapeake is just one company and with all their divestitures the picture is a bit muddled. However, there is no way to spin this as good news especially in light of this gem from my favorite source of stupid, Forbes:

      Increased Oil Production Lifts Chesapeake Energy Profit And Outlook

      Asset sales from the Mississippi Lime, northern Eagle Ford Shale and Haynesville Shale, as well as the sale of Permian Basin assets, caused Chesapeake’s natural gas production to tick down 2% year-over-year to 4 billion cubic feet per day. Oil production, however, more than made up for this decrease: third quarter oil production clocked in at 120,000 barrels per day, a 23% year-over-year increase. Due to these strong results, Chesapeake announced that it is raising its full-year oil outlook.

      I’ve said it before, 2014 will be a most interesting year.

    • Nony says:

      Cheseapeake got killed by going long on natural gas. There problems since are more evidence of the shale glut than of any kind of ‘running out of oil or gas’. They could go under and it would just be some high flier that overindulged and got killed by low commodity price (natural gas).

      Now they try to get into oil, late. Doesn’t show anything…other than they are too late. CLR and EOG first movers are doing fine and the Bakken is rockin’ and Eagle Ford is fine too (condensate/RRC post got taken apart by DC).

      • Coolreit says:

        “CLR and EOG first movers are doing fine and the Bakken is rockin’ and Eagle Ford is fine too ”

        EOG and CLR got the sweet spots.

        Bakken oil production has not grown in 4 months:

        September 2013 934,566
        October 2013 946,030
        November 2013 977,609
        December 2013 926,687
        January 2013 933,133

        Ditto for Texas:

        MARCH 58,961,949
        APRIL 57,227,732
        MAY 60,261,915
        JUNE 59,193,144
        JULY 61,913,050
        AUGUST 62,033,864
        SEPT 60,259,410
        OCTOBER 61,199,628
        NOVEMBER 58,090,560

        8 months of no growth in Texas.

        Is that what you mean by doing just fine?

        • Just for clarity your Bakken, or North Dakota data appears to be barrels per day while your texas data appears to be barrels per month.

        • Nony says:

          Bakken had a cold winter. It will kick butt in the spring/summer. There’s 650 wells waiting for completion. When that gets caught up, will be a lot of first month production driving numbers up. You can buy me a beer after we break the 1MM mark.

          Texas stats are notoriously late from RRC. You’re better off using the linear EIA extrapolation. 😉

          • Coolreit says:

            I thought Ron made it clear that Texas RRC revisions are de minimus.

            Now how do you explain Texas oil production numbers show flatlining oil production for 8 months and now Ron points out that CHK oil production will be flat or declining?

            • Well there will be some revisions but the closest months will be revised the most. The earlier months will be revised very little.

              And I just quoted what the article said about Chesapeake. They said growth would be slowing dramatically.

              • Nony says:

                Dennis blew that out of the water. He had even posted the analysis before your RRC/IEA post.

    • Coolreit says:

      Ron: This was a nice catch on CHK.

      Kudo’s for an excellent post on OPEC oil production.

      Kudo’s to Jim Wiegand for exposing the truth about wind energy.

      Thank you!

  14. Philip Backus says:

    With all the comments tonight about alternatives I thought I would pass this on. I get to talk to many folks both young and old about such as my wife holds workshops where she teaches cob building and most folks are interested in powering the homes they intend to build with solar. Many truly think that through grid tie solar we will in a few years both live as we do now AND also support a plug in car fleet with little restriction on distance. The knowledge base about both the fragility of the grid and the lack of cheap liquid fuel alternatives seems to lie just North of delusion and just South of fantasy. Some however are well versed and realistic about our energy dilemma and the economics surrounding it. Wish I had a dollar for every time I’ve heard about thorium reactors….as though it were something new.

    • Watcher says:

      Cynicism is a good thing.

      The last event those green folks want to see unfold is success. Success kills fundraising. Loudness begets fundraising.

      And so the solar constant will always have the wrong units (the one I usually see is 1000 watts per square foot (it’s per square meter)) and it won’t take 745 watts to equal 1 horsepower — or if it does it will be something like “well, you didn’t need that entire horsepower anyway.”

      • Old farmer mac says:

        Unfortunately Watcher is right about success killing fund raising.

        The biggest failure of the environmental organizations may well be bureaucratic capture. The people in them are more interested in their paychecks as a rule than in the goals of the organization.

        But this applies to all organizations.

  15. In the words of Upton Sinclair:

    It is difficult to get a man to understand something when his salary depends on his not understanding it.

    I thought this was an ad hominem free zone.

  16. What’s really behind the Chesapeake story, link up top. I found this that Gail posted a few weeks ago and it became obvious.

    Beginning of the End? Oil Companies Cut Back on Spending

    Steve Kopits recently gave a presentation explaining our current predicament: the cost of oil extraction has been rising rapidly (10.9% per year) but oil prices have been flat. Major oil companies are finding their profits squeezed, and have recently announced plans to sell off part of their assets in order to have funds to pay their dividends. Such an approach is likely to lead to an eventual drop in oil production. I have talked about similar points previously (here and here), but Kopits adds some additional perspectives which he has given me permission to share with my readers. I encourage readers to watch the original hour-long presentation at Columbia University, if they have the time.

    If you haven’t watched the Kopits video then by all means you must watch it. I have watched it twice and plan to watch it again. It is that good. It explains what is really happening in the oil patch today and what effect it is happening on the economy. And, of course, it explains why Chesapeake sold off its assets.

    • Jeffrey J. Brown says:

      Steven Kopits estimated that cumulative global upstream capital costs were $3.5 Trillion in the seven year period from 2005 to 2012, and as noted up the thread, it seems likely that we have not seen a material post-2005 increase in actual global crude* oil production since 2005.

      *45 or lower API gravity (per RBN Energy definition)

      An RBN Energy article on condensate:

      Neither Fish nor Fowl – Condensates Muscle in on NGL and Crude Markets (February, 2012)

      • From your link:

        Crude oil production in the Eagle Ford has ramped up from less than 50 Mb/d two years ago to almost 400 Mb/d today, and the growth shows no sign of slowing down. In most reports and statistics, all of this volume shows up as crude oil. But it’s not. Between 60%-70% of this production is condensate – a hydrocarbon classification that is somewhere between crude oil and natural gas liquids.

        And to think, a few people thought Eagle Ford contained no higher percentage of condensate than the the rest of Texas. 😉

        • Jeffrey J. Brown says:

          Here’s an RBN Energy article from a year ago, with an interesting chart, from EOG:


          One could argue that we are seeing a massive con job–trying to persuade us that the increased volume of global liquids* produced as a byproduct of still increasing global natural gas production, plus increasing biofuels production, means that good old fashioned crude oil, “Black gold, Texas tea,” has not peaked.

          *Condensate + NGL’s

        • Dennis Coyne says:

          Hi Ron note the date of the article. According to RRC data the % of Texas C+C is currently about 18% and in the past it has been as high as 90 %.

          The RRC could be wrong, or RBN Energy could be wrong, but a Feb 2012 article is probably using data from Dec 2011 or earlier. Chart below is based on RRC Condensate and C+C data, it is the % of condensate divided by C+C.

          • Watcher says:

            Where’s the chart of the IHS survey?

            • Dennis Coyne says:

              Hi Watcher,

              I don’t have access to the IHS survey.

              The article says in several places the oil companies may be “economical with the truth”, this includes EOG, which is claiming that they produce mostly oil and all the other companies do not. We can choose to believe the EIA investor presentation (which is not subject to SEC rules), but the “IHS data” presented by EOG may be distorted to make EOG look good.

              You are welcome to produce a chart of the data presented at an investor presentation. The RRC data may be flawed as well, but the number in my chart are the RRC numbers for oil (aka crude) and condensate for the Eagle Ford Shale. The RRC data may not be very timely, but I trust it much more than an investor presentation.

              If you have access to the actual IHS data (as opposed to EOG’s take on that report), I would be very interested in seeing a chart of that data.

              On a final note, the RBN piece takes cumulative data and asserts that this must be representative of the overall condensate/crude ratio. This is only true if this ratio has not changed over time. The RRC data suggests the condensate/crude split has changed quite a bit over time.

              Oil production for Eagle Ford

              Condensate Production for Eagle Ford

              For 2013 condensate/C+C=22%
              for 2012 condensate/C+C=28%

              • Watcher says:

                The most important sentence of the article. Condensate finds its way into the crude stream. As has already been somewhat proven in ND with the railcar loading shutdown event. In fact, given Eagleford doesn’t use trucks to anywhere near the magnitude ND does, it certainly seems separate condensate pipes to each well is unlikely.

                Presentation was a quarterly earnings conference call. Those are attended generally only by analysts already following a company. It’s not a pitch to investors in the room.

                • Dennis Coyne says:


                  You don’t think they try a sales pitch on analysts?
                  There is a big difference between what you see at these quarterly earnings presentations and what you see in the quarterly reports filed with the SEC.
                  You can believe what you wish.

                  • Watcher says:

                    Well, true, but I don’t do believe. I do disbelieve.

                    Do you really think they manufactured the IHS survey results? And IHS never spoke up? Seriously? Who would authorize such a lawsuit risk? What level of Vice President would do that?

          • Jeffrey J. Brown says:

            Dennis, what do you show for the increase in Texas condensate production from 2005 to 2012?

            • Dennis Coyne says:

              Hi Jeffrey,

              My Chart above is for the Eagle Ford shale only and the percentage of condensate to crude plus condensate (C+C) in the Eagle Ford Shale.

              The numbers in Ron’s chart for the RRC would be the same as what I would get from the RRC for statewide C+C.

              In table form (annual numbers):

              Date	 Oil (BBL)    Casingheadd (MCF)	 GW Gas (MCF)	Condensate (BBL)
              2005	 348,965,567	 641,869,120	 5,376,440,751	 43,636,988
              2006	 347,410,805	 644,719,161	 5,695,801,405	 45,071,419
              2007	 342,961,771	 657,153,873	 6,263,221,014	 48,299,429
              2008	 353,513,488	 676,168,873	 7,073,342,192	 52,465,700
              2009	 349,757,512	 696,254,779	 6,910,488,816	 49,464,927
              2010	 369,765,698	 760,075,941	 6,735,620,884	 56,806,478
              2011	 447,965,587	 927,461,424	 6,949,219,099	 79,828,542
              2012	 602,778,038	 1,251,773,515	 6,842,949,093	 108,766,191
              2013	 722,854,735	 1,528,066,136	 6,362,889,036	 122,069,248
              • Dennis Coyne says:

                Hi Ron,

                The pre function only works for editors and administrators. I only could do the table by being logged in as an admin.

              • Dennis Coyne says:

                Statewide TX cond/C+C=15% in 2012 and 12% in 2009 (before the Eagle Ford really got going).

                I think the 2013 RRC data should be ignored because it is incomplete, but if the percentage remains unchanged (may or may not be true) as new data comes in,
                2013 TX cond/C+C=14%
                2005 TX cond/C+C=11%

            • Dennis Coyne says:

              Hi Jeff,

              If your point is that the % of condensate in total TX C+C output has increased since 2005, I agree. According to RRC data it has increased from 11% to 15%. My point is that the suggestion that 60 to 70% of Eagle Ford output is condensate (where condensate is defined as API more than 45) is in my view an overstatement.

              Perhaps you disagree.

              • Jeffrey J. Brown says:

                I primarily referenced the RBN Energy article from 2012 to help with condensate definitions and to provide an estimate for condensate as a percentage of total global C+C.

  17. Do I benefit monetarily from wind?

    Do I benefit monetarily from coal?

    Do I benefit monetarily from oil?

    Since I have investments in utilities that use wind power, then yes. Since I have investments in a utility that uses coal to generate electricity, yes. Since I have investments in oil, yes.

    Do I benefit from solar? Not monetarily, but without it, there is zero benefit.

    Solar is the only heat source that is really needed. Provides light too, without it, we would all be in the dark.

    Lots of fire and brimstone from Mr. Weigand, but it is difficult not to succumb to emotions when you witness cognitive dissonance like there is in the wind industry.

    Hypocrisy and double standards are bau, not matter what interest involved, but it is readily apparent with wind power. It is definitely predatory and bird losses provide the proof in spades.


    Here is what is going to happen and nothing is going to be able to stop it:

    Coal will continue to be hauled by the BNSF and the Union Pacific, and it is not going to stop anytime soon.

    The economics just will not let anything else happen. Maybe to some, much to their chagrin, but, and the end of the day, coal will be used to generate electricity.

    King Coal is going to call the shots.

    • Woody says:

      Not sure if it will be coal trains as much as in situ gasification that will be the base load power provider in the future.

      Even if we can get to completely renewable energy someday, we still need to bridge the multi decade gap to get there and natural gas doesn’t seem abundant enough to do that on it own.

    • Anonymous says:

      Well I certainly agree with RW about the world continuing to burn coal.

      I am convinced it will result in our frying ourselves and most of the biosphere as well.

      But I am curious as to how he comes to the conclusion that solar is the only heat source that is really needed.

      THAT is quite a claim.

      • What kind of lamebrained fool would say such a dern fool thing such as the sun is the only heat needed? I could be wrong and very possibly am, happens all of the time.

        The sun is the primary energy source; one can conclude, deduce, that any energy sources that exist on earth are derived from the sun. Can’t really undo it. Am I wrong?

        It is a stretch, I know.

        • aws. says:

          Solar is, and always has been, our base load energy supply. It’s only in the past couple of centuries that we’ve discovered how to use and then dizzily squander the supply of stored-solar, as fossil fuel, energy.

          Solar will return to being by far the largest proportion of our energy supply that it has historically been. Most folks won’t be prepared for it.

        • TechGuy says:

          “The sun is the primary energy source; one can conclude, deduce, that any energy sources that exist on earth are derived from the sun. Can’t really undo it. Am I wrong?”

          Nuclear energy has been a big energy source to convert biomass into fossil fuels. Its the radioactive decay of heavy elements that heats the interior of the Earth. This energy source cooked the precursors to Oil and nat Gas. without the Earth’s interior heat there probably would not be much oil and nat gas. This may be true of Coal, since it also required heat to form. Of course, all of the heavy elements where created in a star (Supernova) but not our sun. Geothermal Power plants also provide some power to the grid that is not derived from the Sun. There is also Nuclear Power Plants.

  18. brian says:

    Ex govt adviser: “global market shock” from “oil crash” could hit in 2015


    • Old farmer mac says:

      You beat me to it by about a minute. This link is the best one I have seen in a while in terms of being loaded up with good data and being well written. It is a ”must read”.

  19. FunnelFan says:

    “Montana is pretty much a non player in the shale game now. They contribute 75 kb/d but will not contribute to any increase from here on out.”

    Whoa, that’s an incredibly bold statement provided without any evidence. Do you have any evidence to support it? Activity is picking up in Montana, CAPEX is increasing, and there’s many parts of Eastern and central Montana that need exploration or are known to contain lots of oil. Point is look for MT to someday be a big player in America’s miraculous 21st Century oil revolution.

    • Well I am in the habit of making bold statements when the evidence is overwhelming. The Surge in the Bakken began in early of 2011. Since April 2011the North Dakota Bakken is up 586,478 barrels per day. Since that same date The Montana Bakken is up 11,000 barrels per day. The Bakken is up 53 times that of Montana. Or to put it another way 98.2 percent of all increase in the Bakken has been in North Dakota while 1.8 percent of the increase has been in Montana.

      The Montana Bakken has always been a non player in the Bakken, so what makes you think they will become one now?

      And I must add that since April 2013 the North Dakota Bakken is up 144,488 barrels per day while the Montana Bakken is down 6,000 barrels per day since last April. Meaning that Montana is somewhat of a player in Bakken oil production, they are a drag, pulling the rest of the Bakken down to a slightly lower level. But only slightly of course, because that’s all they are capable of. 😉

      The fringes of the Bakken, in North Dakota is in decline. Only the four major counties with sweet spots are showing any increase. All the Montana Bakken is in the fringes.

      Nuff said.

      • Watcher says:

        Well, China is taking over the proppant market, mostly because kaolin is common there. They have been jacking up price too, so CAPEX celebration is going to China, not necessarily well count. There are a zillion efforts to find replacement, but all of them run into the $8 million well reality that if you use it and they don’t work, you’re out $8 million.

        So China has managed to maneuver itself inexorably as the primary proppant source, with Russia behind them, followed by India. This of course means an oil price increase jacks up proppant shipping costs.

      • FunnelFan says:

        Your original claim implied MT production was never going to increase from present levels, ever. You also speak as if Bakken is all there is to oil production in MT, but the reality is there are more than a dozen (maybe more like 15) known oil formations in Montana. Google the Montana Stratigraphic column. Any of those formations could contain a whole lot of oil and make MT a huge oil producer in the future. Just because production is slow now just means the drillers haven’t figured out the right technology to use yet and prices haven’t been high enough to be economic.

        But as long as the oil companies know the oil is there and again Capitalism prevails you can be sure many smart enterprises and entrepreneurs will do all they can to get the oil out of the ground. Take this article about the Heath formation.


        Hopefully someday the drillers will finally “crack the code” and the glorious energy-based prosperity being enjoyed all over the plains will spread into more parts of MT.

        • Watcher says:

          Maybe some particularly impressive technology advance can produce oil from rocks that do not contain any.

        • Your original claim implied MT production was never going to increase from present levels, ever.

          Look, please don’t lie. I never made such a claim and you know it. I said Montana reached a secondary peak. That does not even come close to saying MT production will never increase from present levels. Production goes up and down and Montana might increase production in February as they did in January. But the trend appears clearly to be down. But they might make a third peak but I seriously doubt it.

          The chart I posted is the EIA’s data for all Montana not just the Montana portion of the Bakken. But if much of that was from outside the Bakken then the Montana portion of the Bakken is in far worse shape than I thought it was.

          But as long as the oil companies know the oil is there and again Capitalism prevails you can be sure many smart enterprises and entrepreneurs will do all they can to get the oil out of the ground.

          Thanks, I needed a good laugh today.

          • FunnelFan says:

            The last two sentences of this blog post

            “As you can see from this chart Montana is pretty much a non player in the shale game now. They contribute 75 kb/d but will not contribute to any increase from here on out.”

            I honestly thought what you were saying in the bolded statement is that there is no chance of MT oil production increasing in the future (in any of the formations there, you didn’t specify you were only taking into account the Bakken). If that wasn’t the claim you were trying to make, then I apologize for my earlier comment.

            • No, that’s what I said but obviously I meant any real increase. Any puny amount they may gain will not contribute to any real increase and I think that is quite obvious.

          • Lurker says:

            The Montana portion of the Bakken and Three Forks has contributed, in the most recent couple of years, to roughly 60% of Montana’s total monthly oil production. In January, for example, the Bakken-Three Forks wells in Montana produced about 45 Mbpd. Virtually all of the wells are in Richland County, which is also home to the Elm Coulee Field, one of the key Bakken discoveries of the last decade or so.

            Just thought I’d throw that out there in case you were curious. Informative blog, btw. 🙂

      • Nony says:

        The Montanans are not doing enough lately! 🙁 But Colorado, UT, WY, OK all have increasing production. Colorado actually just set a new record. So that peaker (can’t remember which…Kopits? Berman?) that likes to show all the different states and how ND is the only one with recent peaks…needs to add another state. Oh…and TX is a monster…it’s looking more and more like it might break the 3.5 record in a year or two. That Blanchard fellow will need to eat his crow (real scientists face the data even when they expected the experiment to give different results).

    • There is one county in Montana that is named Petroleum County.

      Not hard to figure how it got its name.

      • Old farmer mac says:

        Hi Ronald

        I apologize for my unfortunate choice of words earlier.

        Sometimes it is hard for me to understand just where you are coming from.

        I agree with a lot of what you say but I have a very hard time dealing with people who seem to be– as I see things—- on the fossil fuel kool aid in respect to renewables.

        If you honestly believe wind power is a waste of time and money and resources you are entitled to your opinion.

        Wind is not a magic bullet but it is one of our best hopes for avoiding an economic collapse and environmental disaster that will make the Book of Revelations sound lie a stroll in the park as I see things; and so far as I can determine just about all the leading environmentalists are of a similar opinion.

        A remark about the sun being the only energy source we need would make plenty of sense with a smiley face or sarcasm tag but just coming out of the blue——it is not so clear.

        Comments of that sort need a little more context provided such as the time scale you have in mind.

        Solar energy is indeed all we will need over the very long term but in terms of my life and yours or the next week or decade —not a prayer.

        • I am here to learn, not to offend anyone.

          My lying eyes tell me not to believe in peak oil, but the reality tells a different story.

          Not hard to convince me that peak oil is a reality, but I don’t have to be a believer. I know, that makes no sense either.

          The numbers, the charts, the graphs, all of the data to support peak oil are dots on the telescope, not the moons of Jupiter.

          It is heresy and the culprits doing the ciphering are heretics.

          The demand is for those heretics to recant or all will face appropriate punishment. har

          Either they reject peak oil madness and accept the pope’s edicts or they will be dealt with accordingly.

          There is no reason to use facts and figures to support a figment of someone’s imagination that has no basis in reality.

          This idea of the earth circling the sun must be nipped in the bud.

          The earth is flat.

          Oil will last forever.

          All fixed now.

          All a comedy of errors, peak oil.

          Move along, nothing to see.

      • aws. says:

        There’s a Petrolia in Ontario. It don’t produce oil anymore.

        There are lots of rivers called Salmon River… but there hasn’t been salmon in them for a long time.

        We have had a knack for naming things after the once plentiful resources that existed there. Once were done exploiting that resource we never get around to giving the place a more appropriate name.

        • Patrick R says:

          A lot of Whale Bays in NZ, cos that’s where they slaughtered them…. Why not a town called Frac City, be a fun quiz quiz question in a few years….

  20. Pingback: Getting There … | Economic Undertow

  21. With regard to wind power, the assertion that it is exploiting mankind, imposing its will, has merit.

    The argument can be made that is has a negative impact more than drilling for oil and all oil’s environmental damage.

    The wind turbines standing out there in the wind blown plains are future Easter Island statues. Their days are numbered. In the end, their presence will be abhorred.

    The environmental destruction will be analogous to coal strip mines never being reclaimed.

    It is a boondoggle not yet realized. It is Peak Wind, simply because humans reject them now. Strip mines are not a tourist attraction. Wind farms are not a beautiful thing when what existed before was what was desired most. The spoiled landscapes will take their toll too; will be the muck, not the verdant hills.

    A giant squirrel cage with an armature to churn out electricity might be a better plan and a properly designed structure to let the eye accept what is there.

    In my mind, Tesla would have pursued wind power to generate electricity had he thought it to be worthwhile.

    Looks like he didn’t to me.

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