Bakken Sweet Spots are Petering Out

The Bakken, as well as other shale oil areas, is not one homogeneous area where equal amounts of can be found. David Hughes in DRILLING DEEPER puts it this way, though here he is talking about gas wells, the same applies to oil wells:

All shale gas plays invariably have “core” areas or “sweet spots”, where individual well production is highest and hence the economics are best. Sweet spots are targeted and drilled off early in a play’s lifecycle, leaving lesser quality rock to be drilled as the play matures (requiring higher gas prices to be economic); thus the number of wells required to offset field decline inevitably increases with time.

However the Bakken, at least through the September North Dakota Industrial Commission  production report, has given no real indication that the Bakken is even close to peaking. But a closer look at the data makes me believe that is all about to change.

The NDIC issues a Daily Activity Report where they list permits issued as well as wells completed and wells released from the tight hole confidential list. These reports usually, but not always, also give the number of barrels of oil per day and barrels of water per day for the first 24 hours of production.  I have gone through every day, back to November 1st, 2013 and collected the data on every well listed that gives production numbers and copied that data to Excel. In that one year and three weeks I have gathered the data form every one of the 2,171 wells that give production numbers. Sorting these wells by well number, which is the original permit number, gives some startling results.

ND 200 Well Avg

To smooth the chart I created a 200 well average of barrels per day per well. The first point on the chart is therefore the average to the 200th well, #23890 and the last point is the 200 well average to the 2171st well, #28971. As you can see there has been a continuous, though erratic, decline in first 24 hour production as the well numbers increase.

ND Prod per 1000

Breaking this down according to well numbers we see production peaked with the 2400s and have steady decline since. Every group of well numbers do not contain the same number of wells.

Well Numbers BOPD       Number of Wells in Sample
18s – 22s              1,235                81
23000s                1,362               134
24000s                 1,497               285
25000s                 1,320              676
26000s                 1,198              591
27000s                 1,016              361
28000s                   841                40

ND Barrels per Well

The above chart is monthly first 24 hour production per well and first 24 hour percent water per well of all wells that the NDIC listed production numbers. The November 2014 numbers are only through November 21st.

Note: The first 24 hours of production is far from being the average first years production. And though all wells are different I am relatively sure there is an average conversion rate but I have no idea what it is. I would guess it is somewhere between one quarter to one third of the first 24 hours of production. But if anyone has any idea what the average conversion factor is, if one exists, please email me at DarwinianOne at, or post it in the comments section of this post.

North Dakota issues drilling permits in sequential order. But those permits are not drilled in sequence. Drillers will often sit on a permit for two to three years, renewing then as the law requires.

A list of all active drilling rigs, the well number they are working on and the date they started can be found at the NDIC’s Current Active Drilling Rig List They are listed according to their API number but the list can be copied and pasted into Excel and sorted according to your wishes.

Well List

Of the 191 rigs working, 39 or 20% are working well numbers below 28000. 76 or 40% of rigs are working well numbers in the 28000s. And 76 or 40% are working well numbers in the 29000s. Permit #28000 was issued on March 26. 2014. So 80% of all rigs are working on recently issued permits.

As of November 21st, the highest well number completed was #28971. The highest number well currently being drilled is #29908. The highest permit number issued is #30076.

Will enhanced oil recovery keep the Bakken going into the future. A simple one word answer is “no”, as this article explains.

Enhanced oil recovery techniques limited in shale

Energy companies currently leave about 95 percent of the crude in the ground at today’s unconventional oil wells, but they face major technological challenges in boosting recovery rates, a Schlumberger scientist said Tuesday…

“Our entire spectrum of secondary recovery methods don’t work,” Kleinberg said, in a sobering talk at the Energy Information Administration’s annual summit in the nation’s capital.

Water flooding — where water can be swept from separate injection and producer wells — isn’t an option because the tight oil formations are too dense to permit those water flows.

And while carbon dioxide can be used to pressure up a conventional oil well, there’s currently a limit on the amount of that gas that is available to pump underground. “The oil industry would like to have more CO2, which is a great way to get more oil out of the ground, but there are limits on affordable, accessible supplies of CO2,” Kleinberg said, quipping: “The oil industry lives in a CO2 constrained world; it is only the oil industry that thinks there is not enough carbon dioxide.”

In conclusion, first 24 hour production per well, when measured by well number, has dropped by 40 percent since peaking in the 24000s. This, to me anyway, clearly indicates that the sweet spots are playing out and companies are now drilling on less productive acreage. I now believe that North Dakota production will peak no later than 2015 with a high probability that 2014 will prove to be the peak year.

Note: I send an email notice when I publish a new post. If you would like to receive that notice then email me at DarwinianOne at


This entry was posted in Uncategorized and tagged , , , , . Bookmark the permalink.

424 Responses to Bakken Sweet Spots are Petering Out

  1. Keyser Soze says:

    Disturbing graphics… nothing that those should come as any surprise.

    This is not going to end well, when it does.

    • DougT says:

      Not end well? This play produces well over 1 MMBOPD, and will ultimately recover 4 – 80 BBO, from rocks that were previously considered tombstone a few short years ago. Great for the U.S. and the world at large. By my way of thinking, it is a fantastic result no matter how it ultimately ends.

      • Boomer II says:

        It has bought some time, but that time won’t necessarily be used well.

        We had a great wake up call during the Carter years. We could have had a comfortable transition period, developing options for a time when the oil runs out. But each oil find has led people to believe long-term planning was unnecessary.

        But then again, a significant number of Americans think Jesus is coming back and the worse it gets, the more the signs point to him coming soon. So long-term planning doesn’t exist for some folks.

        • Boomer II says:

          Also, I wish we had asked, decades ago, this question:

          “Oil will run out. How can we use less of it?”

          If we had, we might have extended the oil age for a much longer time. Then we could look at alternative energy as an extender rather than a primary energy source.

          • Coast Watcher says:

            When I recall the opportunities we missed in the 1970s and early ’80s, I just shake my head in disbelief. We had the incentive, the public support, even the beginnings of green technology. U.S. oil consumption declined through 1982, then began climbing again as oil prices dropped and the SUV era began. If we had continued the trend … well, we didn’t, did we. It would have required a more enlightened leadership that Reagan offered.

    • LeeK says:

      Interesting posts. I was born and raised in the middle of the Bakken and wanted to make a few comments about the Bakken sweet spots petering out. I will use a number of Hess wells that refute this thought. All the following wells are in the same 1280 acre spacing and the point of my post is to show what changes in technology in the oil industry and especially in shale areas can do for production. Hess Well number 18873 was put into production in 2/2010 and has produced 110,000 barrels of oil in 46 month. Wells 23374 and 23375 have been producing since 9/2012 and have produced 123,000 and 101,000 barrels respectively in 22 months. Wells 27294, 27295 and 27296 have produced 23,600 barrels in 22 DAYS, 37,900 barrels in 55 DAYS and 24,000 barrels in 28 DAYS respectively. All three started producing last month. As the producing companies come across new technology, the percentage of oil that can be captured will continue to grow. The Bakken will be a super viable field for many years to come.

      • Boomer II says:

        Hess Well number 18873 was put into production in 2/2010 and has produced 110,000 barrels of oil in 46 month. Wells 23374 and 23375 have been producing since 9/2012 and have produced 123,000 and 101,000 barrels respectively in 22 months. Wells 27294, 27295 and 27296 have produced 23,600 barrels in 22 DAYS, 37,900 barrels in 55 DAYS and 24,000 barrels in 28 DAYS respectively.

        Getting more oil out in the beginning doesn’t mean there will more cumulative oil, right? Getting the most possible oil upfront probably means more ability to pay off loans faster, but to what extent does it make the entire operation more lucrative?

        • LeeK says:

          It does in fact make the entire operation more lucrative. Older wells had initial production rates of about 1/3 of what the newest wells are producing initially. Production rates fall at about the same rate for both older and newer wells. After 2-3 years of production, many of the older wells were producing about 30 BPD while the newer wells are producing about 100 BPD. Also the multipad wells are now the norm. 6-7 years ago, 1280 acre spacings were seeing 1-2 wells. Now the norm is 8-9 wells per 1280 acre spacing. January dockets at NDIC are seeing approval requests from EOG for up to 60 wells on 1 @ 1280 acres spacing.

  2. DrTskoul says:

    Nice detective work!!!!

  3. Dennis Coyne says:

    Hi Ron,

    As you suggest in your post, the permit numbers do not correspond with when the well starts producing, a chart with wells grouped by the month they started producing would be more interesting in my view.

    So far, by looking at the first few months of production there is little evidence that the average Bakken/Three Forks well is decreasing as dramatically as you show in your chart (about 1500 to 1000 or a 33% drop.) Perhaps we will see this soon.

    • Watcher says:

      One would think permit numbers are assigned at time of permitting, not at time of production.

      FreddyW’s comment/post/graphs for the September Bakken report about 3 Ronposts ago did show 2014’s wells with a higher IP (no wait, a higher 1st month production, not the same thing) than 2013’s wells, but falling under 2013’s well output at the 6-months-into-production point. That suggests a difference in 1st month production vs IP. Odd.

      Here’s FreddyW’s graph: just a few days ago.

      Don’t know how I missed it, but the Directors Cut has pointing page has an entry at the top above 2014 Permitting. It’s about oil conditioning. Worth a read. There is a LOT of obfuscation going on. Recall there was an issue about vapor pressure in the oil and how it was helping to blow up railcars. Then all of a sudden as Congress held hearings on the matter early this year, Marathon’s oil assay website changed the numbers of the Bakken assay from 2013 values to make the vapor pressure (volatility) numbers look benign. So as best I recall the hearings adjourned with no mandate for any change to rail cars or anything else.

      Well, NoDak seems to think that air brushed assay isn’t important and something should be done. The Oil Conditioning regulation is laid out and comments were to be in by COB yesterday. They are specifically to address vapor pressure. Worth reading.

      • One would think permit numbers are assigned at time of permitting, not at time of production.

        They are assigned at the time of permitting. Whatever gave you the idea that they were not? They are assigned at the time the driller request them and that number stays with that spot on the ground forever whether there is ever a well drilled there or not. The driller may immediately start to drill on that permit or he may sit on it for years before drilling. Or he may just cancel it.

        • Watcher says:

          “the permit numbers do not correspond with when the well starts producing”

          Somewhat, that, from Dennis.

          • He is correct, and they also do not correspond to when the drilling started. That was part of the point of my post.

            All the sweet spots were permitted first. And the drillers drilled the sweet spots as their time permitted, one well after the other. Now they are sitting on no more sweet spot permits, or damn few anyway, so they must now start drilling on the borders of the sweet spots. And the production drops off as they move further and further away from the sweet spots.

            That’s what I hoped my post would imply.

            • Watcher says:

              Well, that’s the logical sequence of thought.

              But have we heard any indication that sweet spots can be identified pre drilling for those formations? I’m remembering our conversation about imaging pores but not what’s in them.

              I’d guess when one doesn’t really know for sure a spot is oil content sweet, one drills the lowest cost spot first. That would be sweet in a different way, perhaps. Low cost sweet. I seem to recall a LOT of density around the water reservoir.

              • Watcher says:

                Oh, let’s be precise here. I have no doubt you found what you found. IPs falling. That doesn’t correspond with FreddyW’s recent graph, but absolutely IP is not the same as first month production and your data does not have to agree with his graph.

                Overall, the confluence of data we’re seeing recently does look ominous. His graph showing 2014 output under 2013 output at 6 months out, and your IP falling, and we also have the recent water cut data looking poor . . . we may be seeing geology arrive on the scene regardless of price.

            • Ilambiquated says:

              Very clever.

      • Watcher says:

        Pasting from that new reg, this is interesting:

        “The working draft order further requires operators to condition crude oil to a Reid Vapor Pressure of no more than 13.7 pounds per square inch and prohibits the blending of light hydrocarbons back into oil supplies prior to shipment.”

        Why did they feel it necessary to include that last portion? Is that actually done? Companies take something out for measurement . . . and then put it back in???? haha

        • Without a link, which you did not post, I have no idea what new reg you are talking about. But…

          Light hydrocarbons make the shipment more volatile, more explosive and that’s why it is prohibited.

        • sunnnv says:

          Thanks for that pointer, Watcher.

          “I’m shocked … to find gambling going on …”

          What I’m shocked about is that the DMR finds a RVP (Reid Vapor Pressure) of 13.7 psi (atmosphere sea level is 14.7 psi) “safe” to transport “crude” with,
          but the EPA RVP for summer gasoline is 9 psi at most, and as low as 7 psi in “non-attainment” areas that have bad ozone problems.
          In other words – Bakken crude is more volatile than gasoline!

          I note North Dakota mean altitude is 1,900 feet.
          2000 feet altitude is 13.7 psia (pounds per square inch absolute).

          Hmmm …

          So there must be a lot of butane left (or added back!) in it (butane RVP 52 psi).
          If you have to take it out (i.e. can’t sell it at crude oil prices), and can’t pipeline it away to a NGL plant (sell at butane price – i.e. half), you’d have to flare it – ouch, paying to get rid of it.

          Is this pressure to up the quality of Bakken crude (–> higher price)
          and/or stop flaring )make the NGL stream big enough to be more worthwhile?
          To make it safer to transport (no bad press about fiery exploding tank cars)?

          FYI, Robert Rapier on butane and gasoline (2013).

          • Watcher says:

            Good find. I did wonder about the sheer number selected, but was too amused by the requirement that vapor pressure not be re-elevated AFTER the measurement to bother looking it up. How weird that this had to be said.

            And so, to the surprise of no one, a regulation is to be imposed that will burden the industry not at all.

  4. Part of a post I received from a North Dakota resident, commenting on my post where I stated that Bakken water, that comes up with the oil, is just injected in special disposal wells drilled for that purpose. Bold mine:

    From: tfark45

    Hello, I live here in North Dakota, yes that is what they do with the water here in the Bakken, they haul it down the street and pump it into what is called the Dakota Sand Formation. I remember reading somewhere that CO2 and water injection only drives the oil back into the rock. These SWD salt water disposals (frac flow back disposals) are everywhere.

    I went back and tried to relate that story about how water injection only runs the well, found this page.
    You get one window when fracking the first time. I have challenged people for the past several years to find me one well that has been fracked more then once. Still haven’t got one.

    I was born and raised here in North Dakota and had left the state in 2004 and came back here in 2010. I like so many people never gave any thought about oil. Until I came back here. And I got tired of Halliburton employees always saying to me, “You guys are the next Saudi Arabia”. In 2013 I asked myself what does that mean. Will I know now. Bunch of crap. I started keeping production numbers in 2013 and built a small website, it has now gotten quite big. If their is anything you would like to know directly about what I see in western ND, please ask me, I travel in the western part of the state several times a week, I live in Minot.

    There is something really really wrong as of late. Numbers tell so much. The hype is still going strong here in the state. When one explains to people the cost and the debt and the decline rates, most of them actually listen and realize something is wrong.

    But with the money flowing into mineral rights owners, they turn a blind eye to the pollution and poison of fracking.

    The pollution levels are mind boggling, its like the sky is on fire. You can smell and taste it when you go outside, especially at night. North Dakotan s by nature are quite naive to what they are told by politicians. Ill include the link for my fracking page and you can get a better idea of how they frack here in ND. Thank you, Donovan.

  5. Jon Kutz says:

    Excellent post Ron! Thank you very much for all the work you do in gathering this information and putting together these posts. I appreciate it very much!

  6. Old farmer mac says:

    My personal opinion is that the numbers Ron has posted this time are definitive handwriting on the wall as far as the Bakken is concerned.

    I just can’t see any way oil prices can stay down very long unless the world economy in figurative terms goes from having the flu to developing a bad case of pneumonia.

    One thing that seriously pisses me off is pundits saying the price of oil is determined by news from China or any other such claims. The future price may go up or down on that sort of news but the actual price is determined by two things- existing contracts that were mostly probably signed months or years ago between suppliers and buyers and the spot price which is what somebody is actually willing to pay for a shipload within the NEXT FEW DAYS OR WEEKS.

    I strongly suspect most of the oil being delivered by any really big oil company is being delivered at a price that is somewhat higher than todays quoted prices.Conversely if the price does stay down for a while most of what is delivered once it starts back up will probably be delivered for less than the prices we see quoted every day.The little guys may be selling at the going spot price but I expect a whole lot of them have hedged their sales to whatever extent they could and thus may be getting somewhat more – for now – than the quoted prices.

    Hopefully somebody who is an oil trader or seller will have something to say about this comment which may be way wide of the mark.

    Six months or a year from now can’t possibly have much to do with spot prices today unless the buyer is planning on putting a hell of a lot of oil into storage.

    • Watcher says:

      “I just can’t see any way oil prices can stay down very long unless the world economy in figurative terms goes from having the flu to developing a bad case of pneumonia.”

      China is the source of big GDP growth and despite their claimed 7% numbers, the PBoC cut rates yesterday. The US will not be logging 7% this year, or next year, or the year after.

      There is so much lying going on everywhere that the process of finding the data point that *leaked* out becomes perpetual and usually not satisfying. And so . . . they cut rates, maybe because they do in fact have pneumonia.

      • Brian Rose says:

        Let’s not forget that 7% or even 6% growth in 2014 China is vastly higher LINEARLY than even 12% growth in 2005 China.

        In 2005 China’s GDP was a bit less than $2 trillion.

        In 2014 China’s GDP over $9 trillion.

        6% growth in 2014 is equal to $540 billion; this is equal to 27% growth in China in 2005.

        This is why Albert Bartlett says people are innumerate. That 6% growth, much less 7%, is massively higher on a linear scale. So, yeah, China’s growth rate is slowing, but it’s total increase in demand for resources is higher than it’s ever been.

        That’s a broad strokes picture. On a microeconomic level we need to parse out which sector that growth is coming from. The huge glut in construction in China means their demand for cement, copper, steel, and many other materials is likely down, but this only means that growth in some other sector of the economy is increasing demand in huge numbers to reach that “27% growth in 2005 China” number.

        That growth is in the consumer sector. A lot of that growth since we’re simply talking GDP may simply be increases in service sector jobs, and not raw material demand. However, when increases in GDP come from expanding employment and/or wages, this equates to a rapidly increasing total purchasing power of that society.

        In other words China’s current GDP growth has transitioned from being composed of increases in raw material demand from construction to increases in per capita purchasing power from service sector job growth. This lessens China’s CURRENT growth in materials demand, but sets up for a vast and more diverse rise in resource consumption once the new purchasing power in Chinese citizens pockets is spent.

        China is in a consolidation process of transitioning from growth in industrial resources to growth in consumer resources. Their increases in demand for copper, cement, steel, etc may permanently slow, but this will be more than made up for in demand for plastics, circuitry, furniture, cosmetics, fabrics, animal products (food, clothes), and numerous other commodities.

        Long story short, China’s linear growth is far higher than it ever has been. 7% growth today is equal to 31% growth in 2005. That insane growth is a growth in purchasing power (potential consumption), rather than growth in demand for building material commodities. This creates a lag effect where commodity demand in China is currently consolidating, but will soon rise rapidly. That rapid rise in commodity demand will be far more diverse, effecting a wider pool of resources than had previously been effected.

        This should put negative pressure on that historic run of copper prices and other construction commodities, but is setting up for a broad rise in all other commodities. ESPECIALLY, if the world were to experience a bad year for global food commodity harvests.

        • Anonymous says:

          That’s legit. 7% of 5 Trillion is less than 7% of 10 Trillion.

          This is my fave site to watch consumption:

          Select China in the dropdown and there is their 45 degree black line that is going to be 11 mbpd this year. And more. And more. And more.

          • Brian Rose says:

            Thank you for that link. Very streamlined, intuitive, and informative interactive chart!

            I highly recommend everyone here to visit that link.

            Really does a great job revealing the unfolding decline in global exports of oil. For any given group of countries 1 of 2 things has happened:

            1. Oil consumption is down resulting in lower imports.

            2. Oil production is rising, but not as fast as internal consumption, so the headline figure, PRODUCTION, is up, but the only thing that matters, EXPORTS, is declining.

            Somehow every economist the world over seems to miss what is happening. Years of declining exports forced importing countries to continually lower imports because you can’t import what doesn’t exist. This is the root cause of slow growth and recession since 2007.

            Unfortunately, economists are trained to think the world works in a completely opposite fashion. They believe slow growth is causing lower imports, which, because the imports therefore “aren’t needed” causes lower exports.

            The difference in paradigm is this:

            An Economists view begins with the axiom that humans cause economic cycles through policy. They look at the data, and then invent reasons to match economic changes to human actions.

            Those with a background in the physical sciences look at growth in resource and energy availability, and predict economic trends from there. It’s important to note that labor is a resource and for the last 150 years the only resource to experience scarcity was specific labor roles; much like an organism that has the food and nutrition it needs, but has too little of a specific enzyme – growth will slow as the lack of that enzyme (labor) is the rate limiting step.

            As a result, economists have a limited view because for 150 years economic cycles unfolded when growth was too fast to keep up with labor creation, resulting in inflating wages. Since labor was the primary cost of any business wage inflation would create broad inflation. Raising interest rates would allow labor to catch up, lowering wage inflation, and thus lowering broader inflation measurements. Once labor supply caught up to labor demand (as indicated by lower inflation) interest rates would be lowered, and the “business cycle” begins anew.

            People with a scientific view do not negate this fact; they embrace it. For the last 150 years labor the demand/supply curve WAS generally the cause of inflation. This narrow lens had economists scratching their heads in the 1970s and early 80s when there was inflation AND slow growth at the same time. In their minds inflation is only and always a result of strong growth in wages because labor is the only resource that can ever be scarce.

            Turned out that there are numerous resource inputs needed to maintain and grow an economy. Since labor is produced WITHIN the economy (like an enzyme is produced within an organism), it is the ideal resource to run low on because it is the only resource you’re actually in control of. If an economy or organism runs low on any EXTERNALLY received input the consequences are very different and very harmful as they cannot be produced.

            If an organism runs low on a fatty acid it can produce by itself it simply diverts some of its resources from other functions to produce it. This slows the rate of reaction for other processes, but is of no real consequence.

            If an organism runs low on an essential fatty acid, which means it cannot produce it (like omega-3 or omega-6 in humans), then the process must simply shut down. This can be anywhere from a mere inconvenience to extremely harmful or even deadly to the overall organism depending on how essential that process is to maintaining the essential functions of the organism. However, and this is key, millions of INDIVIDUAL cells will be significantly harmed, even though the organism as a whole goes on unfettered.

            Run out of essential fatty acids, and you’ll survive seemingly unfazed, but your immune system will be partially compromised, which makes you more susceptible to various diseases. This is equivalent to an economy temporarily running out of wood. The economy will not breakdown (die) because wood isn’t essential to an economies life support (just as running out of omega-3s will not stop your heart or breathing), but the sectors that rely on wood as an input will stop, and this will effect all processes (industries) downstream from that “metabolic pathway” of the economy. Just like running out of omega-3s this will not destroy the whole economy, but WILL significantly damage individuals who rely on those processes.

            If an economy or organism runs out of energy inputs it is a worst case scenario. All processes occurring in the universe, including inside an economy or organism, happen by tapping the energy released as entropy increases in a system.

            All organisms have evolved ways of temporarily handling an “energy crisis” by having storage vacuoles, and modifying metabolic processes (such as when your body begins catabolizing amino acids for energy, which is highly, highly inefficient, and is thus a last resort by your metabolism, but is nonetheless better than dying).

            As far as I can see, the economy of industrial civilization has minimal metabolic pathways for accomodating an energy crisis. Where a mammal has (1) its glycogen reserves, then (2) 6 weeks of fat reserves, and THEN (3) ketogenesis through amino acid catabolism, our global economy has (1) transient storage like Cushing, Oklahoma, (2) strategic reserves amounting to, ironically, 6 weeks of reserves (4.1 billion in global reserves at 92 mbpd consumption), and (3) vastly less efficient sources like of energy like other liquid fuels, bicycles, or shuttering oil power plants to put coal plants at max capacity.

            In this way we oddly enough have a very similar coping system to that of an organism when adjusting to energy crisis. The primary difference is this – our coming energy crisis will be more like a plant slowly running out of sunlight than an animal just waiting for its next meal. As oil peaks and we dip into our reserves to maintain our economic system there will be no “next meal” waiting.

            • Nick G says:

              Our economy has a lot of reserves in the form of enormously inefficient conversion of energy. In the US, about 9M bpd are used for personal transportation: that could be cut in half overnight by increasing the average number of people per car from about 1.2 to 2.4. Further, the average MPG is only about 22, when there are vehicles available that range from 30 all the way to 2o0MPG.

              Beyond that, of course, there are EVs that use other energy sources. Wind is cheap and scalable. Solar is affordable, and is available in quantities on the order of 1,000 as large as fossil fuels.

              • Brian Rose says:

                Nick G,

                I didn’t want to make my comment too long (it was already quite lengthy!), so I didn’t delve into the other half of how an organism handles resource scarcity.

                You are 100% correct; not only does an organism or economy dip into reserves of other substitutable resources, but it also, simultaneously, shuts off non-essential processes to conserve whatever energy is left.

                I was really, really hoping to get into this because it is the other half of the equation, so thank you for your critic!

                In our economy the way to conserve resources is to shut down R&D because R&D is where excess capital goes. This is why the 2005 Hirsch Report concluded that a 10-20 year lead is needed in developing and bringing online alternative energy sources.

                Elon Musk is, by a large margin, my self-motivation for how a single person can make a difference. In a multi-cellular organism no single cell can make a true difference. In this sense, our economy is more like a Portuguese Man-Of-War, a multicellular organism where every cell is an individual, instead of a single being. Portugese Man-Of-Wars are, of course, a very ancient relic of the transition from single celled to multi-celled organisms, but that’s an entirely divergent subject matter…

                The point being, if the next few years are used effectively we will make a manageable transition without collapse. In 2008 Tesla was bankrupt, SpaceX was bankrupt, even GM and Chrysler were bankrupt. If production decline had set in then we would have used the remaining daily production to try to maintain current systems (our current metabolic rate). All ancillary processes were shutting down to prevent the collapse of our economies essential systems. Like a Portugese Man-Of-War, we very well could have chose our individual benefits over saving the whole organism.

                TARP didn’t pass the first time; that day the Dow set the all-time record point drop. I have strong opposition to our current system that rewards bankers millions of dollars and prevents prosecution when they engage in activities that are intentionally and provably harmful, but I would not want to live in the world that would have existed had TARP not passed the second time around.

                We were hours from economic collapse, the equivalent of organism death. Money is the economic equivalent of ATP; if the financial system had collapsed, and it was provably hours away from freezing, then the heart of our collective organism would have stopped beating.

                In 2008 we were truly that close to collapse; hours away. Now matter how pessimistic the future turns out I will forever be embarrassingly happy. I thought the year 2014 would be… I honestly can’t put words to it. Bleak, depressing, grim, terrifying, you name it, no words would have done justice to how absolutely abysmal I thought it would turn out as 2008 unfolded… yet here we are.

                I am well fed; my income is higher than any previous year, yet I put less CO2 in the atmosphere than ever before as I use that wealth to optimize a food forest, switch to an electric vehicle, buy more energy efficient appliances, and install solar panels.

                Just as you were saying, wealth does not have to equal higher oil consumption. In fact, wealth, when appropriated correctly, can mean LESS oil consumption.

                There will be another energy crisis. Those who suffer the most will be those most dependent on oil as a means to living. Unfortunately, many of those who suffer will be those who never had the income or education to enforce a personal transition.

                It is not entirely unlikely that this inequality could lead to social breakdown, which is generally not as bad as financial breakdown, as finances still exist to keep the system running as it undergoes a phase change.

                No matter the end result of what awaits us I am a Cornucopian compared to what I was just 3 years ago. This is due to changes in my personal preparedness as well as knowledge about where we stand in using our current energy source to build the infrastructure for our future energy source. Given a severe crisis in oil supplies I know I can permanently weather it, and I have a fragile and growing confidence that our economy can weather it.

                Not that my opinion is of any value, especially more so than anyone else’s, I believe that we will face a difficult and jagged transition from oil to alternatives that is met with success. However, this will align us with a much more difficult problem after we’ve transitioned to renewable energy – growth itself, which is, by definition, impossible with or without oil.

                I believe 2016-2018 will bring about a new energy crisis, which will mark a new economic crisis, but we will likely make it through (barring rash moves, like if TARP had not passed in 2008). I also believe that growth is more axiomatic than oil to our civilization, and in combination with a changing climate it is likely that a more profound and unsolvable crisis will unfold in the 2030s… but that’s a long time off, so lets focus on our current limb deep energy crisis, and not our future organ deep growth crisis.

                • Nick G says:

                  the way to conserve resources is to shut down R&D because R&D is where excess capital goes.

                  That’s possible, but I’d say it’s not likely. For instance, it’s not what happened during the Great Depression: investment continued at high levels.

                  The simple way for resources to be freed up from less important uses is for prices to rise: people automatically stop using oil for less valuable things.

                  Of course, it would be far better to plan ahead and tax oil heavily to accelerate the transition. And, I agree, some people will be hurt by the transition, especially people driving SUVs and pickups who don’t have ready cash to switch to a hybrid or EV when the crunch comes. They could switch easily with foresight, but TPTB don’t want that…

                  • Ilambiquated says:

                    it would be far better to plan ahead and tax oil heavily to accelerate the transition.

                    A lot of places have already done just that.

                • jabberwocky says:

                  “Elon Musk is, by a large margin, my self-motivation”

                  I see Musk as more likely a manifestation the disease of our system, rather than as a leader towards our better future. I am impressed that many people, much wiser and more intelligent than I, admire, almost idolize him, but he just seems like a dream weaver and a con man. I will be happily surprised if any of his great plans profit society, not just himself.

                  • Ilambiquated says:

                    Elon Musk’s big idea is to apply Silicon Valley business methods to non-IT businesses. It is a very popular idea among the more egg-headed venture capitalists.

                    So for example the whole battery / electric car / solar panel idea is about building an “ecosystem”, something every software platform vendor tries to do. Each of these ideas is pretty risky by themselves, but each feeds the other two, so together they have a chance of making it.

                    If all three succeed it would be a major shift in modern technology. Not sure what your attack is based on (other that your apparent personal animosity).

                  • Boomer II says:

                    Musk strikes me as someone who has a big ego. But I hope Tesla and his batteries win the day. Or, at least I hope transportation and energy technology evolve, and if he helps that along, so be it. Better him than no one.

            • Ilambiquated says:

              Modern civilization is not the same beast as it was even 50 years ago, let alone 150. That is where you “organism” analogy fails.

              • Brian Rose says:

                I agree it is not a perfect analogy. Any analogy falls apart when scrutinized thoroughly because it is just that, an analogy.

                I also agree that our economy is an economy that works the way that economies work, and not an organism that works the way organisms work. But that strictly literal evaluation doesn’t tell us much does it!

                Our economy is an island of low entropy energy, and an organism is identical at this rudimentary level. To maintain a low entropy system processes are developed, which require resources and energy, to find, capture, and integrate low entropy energy from outside our “island of low entropy”. At this fundamental level organisms and an economy are identical.

                It is above this level that different strategies evolve, but those strategies always come down to this basic dilemma of thermodynamics. A plant might look like it’s doing something completely different than an animal, but really they’re doing the exact same thing albeit with different strategies. I would say the same our economy compared to an organism, it’s just that there are 1 million rays that all lead to the same Sun.

                Basically just reflecting the old adage that there’s nothing new under the Sun and we could become more stable and resilient if we emulated some of the processes organisms have evolved to maximize their fitness.

        • Fred Magyar says:

          I absolutely do not for a moment believe that the Chinese economy is currently growing at anywhere near 7%!

          Especially If we remember what the late Dr. Bartlett tells us about growth. If you divide 70 by 7 you get a doubling of the economy in a decade.

          Doesn’t anyone understand the exponential function?! Rhetorical question in honor of Al Bartlett. Remember the grain of rice on the first square of the chess board? The progression if you recall is: 1,2,,8,16.32.64,128,256… What that means is if the Chinese economy is growing at 7% per year, after 10 years the Chinese economy will have doubled!

          Substitute any commodity, product or service of your choice in the text of the graphic below! IT AIN”T HAPPENING!

          • Watcher says:

            It’s growth by decree, like most economic parameters since 2008 when central planning became ascendant.

            • Fred Magyar says:

              It’s growth by decree

              Apparently the Chinese need to learn a lesson from Ole King Canute…

              Cnut set his throne by the sea shore and commanded the incoming tide to halt and not wet his feet and robes. Yet “continuing to rise as usual [the tide] dashed over his feet and legs without respect to his royal person. Then the king leapt backwards, saying: ‘Let all men know how empty and worthless is the power of kings, for there is none worthy of the name, but He whom heaven, earth, and sea obey by eternal laws.’

              Back then they still deified the laws of physics. Today some of us no longer believe in omnipotent rulers of the universe but the laws of nature continue to be just as immutable as they were then.

              Growth by ‘Decree’ is just as stupid!

              • Ilambiquated says:

                I spend a lot of time arguing you don’t need increased resource consumption for growth.

                But in the case of China the main driver of growth right now is their newfound ability to import cheap resources from around the world.

        • Nick G says:

          A rise from $2T to 9T in 9 years (350% increase) would be a growth rate of 18% per year. OTOH, 9% per year would give a total increase of 117%.

          Perhaps one of those figures was adjusted for purchasing power, and one was not?

          • Brian Rose says:

            Hmmm that is odd.

            China growth when measured in U.S. Dollars averaged about 23% during that decade while its growth measured in renminbi averaged ~13%, and it’s real growth %, since those are nominal, was around 9%. Then there’s measuring it based on PPP growth…

            I was just hoping to demonstrate with real numbers the extreme difference between 7% growth in modern China compared to even 20% growth in China just 10 years ago.

            Using the nominal dollarized number is almost assuredly NOT the most accurate reflection of genuine purchasing power and commodity demand. Thank you for pointing that out.

  7. Mike says:

    Thank you, Ron; clearly a lot of time was spent on this study.

    I am aware of a new consciousness in the S. Texas shale play regarding choke management during flow back procedures. There was even a seminar in San Antonio about that very thing recently; the theory of restricting flow back rates has to do with preservation of gas to oil ratios and ultimate EUR. Reported 24 hour flow back rates in North Dakota, which I assume is also initial production (IP) rates (?), would be related directly to flow back practices anywhere in a tight oil play. So my first reaction to this data is that what we are seeing is operators restricting flow back rates intentionally as they have gotten further down the learning curve.

    But that theory gets tossed in Graph 3 where percentage of produced water is brought into the picture. Within the first few days of the wells life the water to oil ratio would, in my opinion, be pretty stable; if anything WOR would be going down, not up, as the well unloaded more and more frac water and cleaned up. Restricting flow back rates thru choke management would not cause water cuts to go up, I don’t think. Increased WOR is a function of something going on in the shale itself. That something is probably not too good.


    • Watcher says:

      Mike, what you’ve just said would support Ron’s underlying thesis of loss of sweet spots. Water is filling pores in the rock more frequently than oil in the areas now being fracked.

      Shrug. If geology has arrived on the scene, they will get all the speaking parts and price won’t matter much. You can’t create oil in pores with more money.

      • Doug Leighton says:

        “Water is filling pores in the rock more frequently than oil in the areas now being fracked.”

        That sentence doesn’t make any sense to me. How can water fill pores in the “tight” rock more frequently? Unless you mean the inherent ratio of water to oil is higher away from sweet spots. Remember that LTO host rock is virtually impermeable before being fracked, hence the phrase Light Tight Oil.

        • Mike says:

          Doug, like you I might have a host of explanations for water in conventional reservoirs; in shale, I don’t know. Its not, as you imply, bottom connate water. It would make sense to me the gazillions of nanopores per square inch of dense shale, besides hydrocarbons, also contains interstitial water. And, there is of course, oceans of water getting pumped into this stuff during the frac procedure; when wells are getting drilled on 40 acre spacing sooner or later there will be communication between them. Where is the water coming from and what is it’s nature? I don’t know.

          • Watcher says:

            “Where is the water coming from and what is it’s nature?”

            That would be

            The idea would be the rock is porous whether there were tiny organisms in that spot to be cut off from oxygen and cooked or not. If not, the pore is still there, and water will be in that pore. Or hell, maybe theory is pores are half filled with oil and half water, as opposed to areas of oil pores and water pores separate, but connected by permeability — fracked or natural. But one way or another, more water flows than oil, because the pores contain it more so than oil.

            ORRRR, as has been suggested, water from rock underneath the formation flows thru the fracs into the pores from pressure differential, and then up the pipe to the surface.

            Frack water totals are 5 millionish gallons or 119,000 barrels. Wow, I never looked at that before. That’s half the damn EUR of the Bakken wells? Frack water is going to flow for the lifetime of the well at 50% cuts?

            Wow, does this mean the water doesn’t really have to come from the Western Inland Sea or any natural source? It’s just coming up because it was put down there? This would mean water cut will not be the death procedure. If this is true, it would run out.

            • Doug Leighton says:

              Watcher, I’m not sure how but you may be onto something re your water comments. But first reread Mike’s comments above. Idly, I mentioned this stuff to my wife, who of course knows naught about oil wells, and she said: Knowing absolutely nothing about oil wells, but looking for a trend I’d go with water cut because its a ratio and not as dependent on flow rates or measurements or disruptions or definitions. Her thinking (and Mike’s/Ron’s) seems to be similar probably for analogous reasons.

              • Watcher says:

                Nod. Grabbing water from the adjacent frack, would be the theory then. The guar gum makes it more viscous to carry the proppant so if there is intra well interference, would we see it in water before oil? Does the thick water go to the end of the fracks and leave the proppant behind?

                Don’t know, but my eyes did pop open at the barrel total for frack water. That’s fully 1/2 the total multi year oil EUR. It isn’t going to be a “the frack water comes up first in a week or two and then other water”. That frack water can flow as long as the well is alive.

            • Mike says:

              With respect to Mr. Hughes, an indication of interference from down spacing could, however, be found thru increasing water to oil ratios reported during initial production rates.

            • Mike says:

              Thanks for the Wikipedia lesson; that is what interstitial water is; its water that is bound at deposition. The extent to which dense shale is artificially fractured is believed to be a 300 ft. radius around the lateral; water is not migrating up induced fractures from below. As I said, there is a lot of water being shoved into the Bakken during frac’ing; the question I posed was relative to increasing water cuts during initial 24 hour test periods. Holler if you can find that answer on Wikipedia.

              • Watcher says:

                “there is a lot of water being shoved into the Bakken during frac’ing; the question I posed was relative to increasing water cuts during initial 24 hour test periods. Holler if you can find that answer on Wikipedia.”

                You were suggesting frack water weeks ago and I don’t think any of us were signed on because the amount didn’t seem to support a 10 year flow, but 119,000 barrels is a LOT of water and it WOULD support a 10 year flow.

                We really, at this point, don’t need another source of water. 119,000 barrels (and it can be more with some of the megafracks that have been described) would last a very long time.

                Not too clear why it would vary. Should be evenly distributed along the horizontal where it carried the proppant. But if it does, I’ll bet this is a surprise to the engineers. There would not seem to be a reason why frack water would come up at different rates.

                • Watcher says:

                  Correction/clarification, the 5 million is not all initial frack. It is also the periodic flush down to wash out salt encrustation.

                  • Mike says:

                    I think water being produced is more than simply frac water and that is what I can’t get my head around. If it is only frac water, and has nothing to do with bound water in shale nanopores, then an increase in water cut the first 24 hrs. of production over time, in sweet spots, definitely has something to do with interference between wells, IMO.

                    I am unaware of salt intrusion into a wellbore, I have never heard of that before (subsalt stuff offshore, maybe); it must be something unique to the Bakken. There is no such thing in the EF that I am aware of.

                    For the record, a fairly typical 25 stage frac in a shale well actually requires about 135,000 BW, or more.

                    I think this research was interesting; I think some people, not you, Watcher, offsite are misinterpreting this work to be it is some kind of effort in tying IP’s into EUR’s. I cannot speak for Ron but I did not take it that way. It was a legitimate attempt at determining productivity in sweet spots.

                    Finally, I don’t see how they can put anymore stinking wells in some of those areas in North Dakota; if you drive thru it, or fly over it, it will knock your socks off.

    • Mike, Rockman over on said basically the same thing, it’s all in choke management. But one thing I cannot figure out is why the drillers would choke back more on wells as their well number increased? They would have to choke more on the 25000 wells than they did on the 24000s. And more on the 26000s than the 25000s. And more on the 27000s and still more on the 28000s.

      Why would the choke opening get progressively smaller as the well number increased?

      Okay, you said the choke could not cause the water cut to go up so you now agree with me. But I don’t think Rockman is convinced.

      Incidentally Rockman said the reason he does not post over here is that he works 60 to 70 hours a week and has time for only one blog.

      • Mike says:

        Ron, I think that initial potential rates, or fist 24 hour rates, are being brought down intentionally thru choke management during the flow back and subsequent well testing procedures and that’s simply part of the learning curve. I hate to use the term “reservoir” when describing dense shale but for lack of a better word choke management is reservoir management. One of the answers to your question is that these guys are just getting smarter as they believe restricting flow rates from the get go would improve well performance.

        In sweet spots where well densities are very high and getting higher, in my opinion the potential for communication, or interference between wells becomes even greater and restricting flow rates even more important, that might be another answer. Its all about preserving gas to oil ratios, which is reservoir management.

        There could be all kinds of other extenuating circumstances whereby operators are intentionally restricting flow; new flaring rules, for instance. Or bottlenecks in transporting liquids to market, lack of storage, rail cars, etc.. I think, however, its simply an attempt at reservoir preservation.

        The WOR’s are what interest me. From a practical standpoint, if at some point in the flow back the well stabilizes at 35% WOR on a 32/64ths choke it seems logical to me if you adjust that choke size down to a 24/64ths choke, for reservoir management reasons, the WOR will stay the same, not go up. Ultimately WOR will go up as depletion occurs, but its interesting it appears to be happening so soon after the well is born.

        60-70 hours a week is a slow week for me. I am not an shale engineer; for the sake of knowledge I would like to understand the dynamics of produced water in shale production. I just don’t have the time. Its early, it will all become self evident in time, I guess, but it is curious to me how and why WOR appears to be going up. Water is ultimately going to effect economics, EUR, longevity, URR, all kinds of stuff.

        Thank you again.


        • Thanks Mike, but I still don’t understand why chokes would be closed gradually as they worked their way up through their permits. Unless, as you say, they are going through a learning curve.

          And what happened in September when production jumped 52.5 thousand barrels per day? And that on fewer new wells? Did they decide to open all chokes in September?

          I think what is going on here does not lend itself to simple definitions. Something far more complex is going on and I don’t know what it is. But we should have our answer early next year.

          • Mike says:

            Ron, I do believe that choke management is now become a science and operators are still learning about that. I cannot rule out the possibility, however, that initial rates are going down in dense sweet spots…because of depletion dynamics.

            As a matter of interest, a production engineer working in the Bakken would know the answers to lots of questions we all have. But one, they don’t adhere to the concept of peak production and don’t likely stalk peak oil blogs to contribute; and two, I do not think they would want us to know lots of the details anyway. “It’s revolutionary folks, you don’t need to know how, just trust us…and by the way, keep buying stock.”

            And the big jump in September’s production? Oil prices were high the first part of the month and were off the cliff by the end of the month; maybe it just was a fire sale, I don’t know.

            I am sorry I don’t have more answers. I have learned after 50 years of being in the oil business that often there are no definitive answers for lots of things, above or below ground, just educated guesses. Everybody has a theory, but that’s all they are. As you suggest, time always sort it out.


            • Yeah, I agree. But we will have our answer by the time the first couple of months of 2015 data comes in. It is going to be very interesting no matter which way it goes.

      • Ilambiquated says:

        Exactly. The choke thing works when the horizontal axis is time, but not when it is permit number. Unless the two are more or less the same.

    • Nick G says:

      Here’s a simple hypothesis:

      Let’s say operators are choking back flow rates on the first day.

      Let’s also say that after completion there’s going to be a fair amount of water in the hole. The oil will have to push out water for a few hours before oil starts appearing in large amounts. That suggests that the water to oil ratio will fall quickly in the first few hours and days.

      If you reduce flow rates, then you prolong the number of hours of high water production.

      Presto: lower production, higher water:oil ratio in the first 24 hours.

  8. Ovi says:

    Excellent and insightful piece of work Ron.

  9. Chris says:

    Nice plot. From the graph showing 24h production over time, one can see a big decrease (to be confirmed) in November. It might be that they managed to mix high production (24000s) with lower production wells up to November. Production in the next few months will be very indicative.
    Interestingly, a high decrease of production could be mistakenly attributed to oil prices instead of production decrease in new wells. Of course if they multiply the number of wells they could maintain the global level of production in the next few months, but where the cash will be coming from?

  10. Frugal says:

    A superb post! So the key parameter missing is how the first 24 hours of production relates to the first month or first year of production. If the relationship is linear, then future ND production could be estimated with a fair degree of confidence.

    In some ways I think well number is more important than well production start date. The lower the well number, the more important the oil extraction companies regarded that well. They will always try to get their hands on the best wells first.

  11. Dennis Coyne says:

    Hi Ron,

    I guess I would question if they are running out of sweet spots at present. There could be a lot of permit numbers assigned in the sweet spots and waiting to be drilled. I have no doubt that the sweet spots will run out of room, your study does not suggest to me that this has occurred.

    I checked median 3 month cumulative output by month for the period from Jan 2013 to April 2014, the value fluctuates, but there is no trend through April (or it is slightly increasing). I show 3 month cumulative median output and a 3 month centered moving average of 3 month cumulative median output.

    • Frugal says:

      The relationship between the first 24 hours of production and well number is obviously a leading indicator of future well productivity. It’s bound to show up in the monthly production numbers at some point.

    • I guess I would question if they are running out of sweet spots at present.

      Dennis, it is not that they are running out of sweet spots, there are only about four of them, three in North Dakota and one in Montana. It is that most of these few sweet spots have been drilled up. Now they must drill outside these sweet spots where the shale is less productive.

      The below graph is courtesy of David Hughes. It is a screen grab and a little fuzzy. I was unable to locate the original.

      • Dennis Coyne says:

        Hi Ron,

        I phrased that badly. I question whether drilling locations in the sweet spots have run out. There is no doubt that there are fewer locations now than in early 2013, but the implication of your post is that all locations have been used up and now production is substantially lower because new drilling is occurring primarily outside of the sweet spots.

        Actual production data based on cumulative average and median 3 month well output from Jan 2013 to July 2014 (well start dates Jan 2013 to April 2014) shows no downward trend.

    • Dennis Coyne says:

      Another chart with 2013 well profiles from Jan to Dec and average, no trend is evident. Well profile falls below average Feb to May then rises in summer then falls back to average, essentially random fluctuation.

      • Watcher says:

        Something is amiss, this chart is in direct contrast with the one that follows below it.

        • Watcher, Dennis’ chart is a cumulative production chart.

          • Watcher says:

            If the average production over 6 months is falling slightly and includes early 2014, it should have appeared in the late 2013 cumulative totals, yes?

            • Watcher says:

              Uh oh, I may not have resolved the two yellows. One is brownish. That higher yellow may not be the December item

              • Watcher says:

                Well, hell, that lower (and shorter) yellow/brown is also in contrast with next chart. It’s not lower than others. Something is still not right.

                • Dennis Coyne says:

                  Hi Watcher,

                  The Dec 2013 line covers output from Dec2013 to May 2014. My guess is that David Hughes last two months start dates are Jan and Feb 2014. Without those two points his curve would not have dipped that much, also his curve is a smoothed fit which probably projects forward in time by a few months.

  12. From David Hughes along with the graph below.

    I don’t use 24 hour IPs as they are unreliable given that it is such a short time period and many things can affect them other than well quality (although companies do use them in investor presentations usually along with longer periods). That said they should on average give some indication. The shortest period I used in Drilling Deeper (DD) was for the maps which is highest one-month production rates. Also there is some discussion in the post that permit numbers may not correspond to chronological order of actual first production.

    I plotted six month average IPs for the Bakken in DD (see fig from DD reproduced below) using all wells drilled that had a least six months of production and fitted a trend line which is dropping recently after rising. I also plotted average first year production by year at the county level which is how I developed the parameters for sweet spots vs the rest in looking at future production as discussed in DD.

    Also Ron I believe the statement you quoted for shale gas from DD in your post is also reproduced for tight oil in the tight oil part of Drilling Deeper.

    For the Drilling Deeper projections I modelled a gradual decline from current average first year production rates to the production rates observed outside of sweet spots (the bulk of the play) and expected them to start dropping soon. But to err on the conservative side I gave them and extra year (2014) of growth allowing for all the reputed downspacing going on in sweet spots (likely I was too conservative here but I knew that industry would try to pick the analysis apart and didn’t want to give them a foothold – the picture is bleak enough as it is).

    We’ll see…average well quality should start dropping soon although it depends on who is drilling and where their land is and the success and lack of interference in down-spacing pilots. Even if there is significant interference from downspacing it is unlikely to show up in 24 hour IPs – interference will show up after longer periods – 12 months+.



    • Watcher says:

      That looks like a small but distinct decline in 2014, which would support Ron’s offering.

      • Sam Taylor says:


        The error bars either side of that trendline are going to be something like +/- 50 either way. I would very much doubt if the dip at the end would prove to be statistically significant.

        That’s my only bugbear with a lot of these charts, no error bars! Without them it’s impossible to know whether a change in trend is significant or just noise.

        • Anonymous says:

          Maybe, but then the error would have to be the same, in the same direction, 4-5 months in a row.

          • Sam Taylor says:

            True, but that’s not to say it would be a statistically significant deviation from the trend yet.

    • Dennis Coyne says:

      Hi all,

      The chart below shows the trend in cumulative output at 3, 6, 9, and 12 months for wells which started producing between Jan 2013 and April 2014. Not really much of a trend, but any linear trend is increasing.

    • Dennis Coyne says:

      Hi all,

      I attempted to reproduce David Hughes’ chart. I was unable to create a smooth trend line, but a 301 well centered moving average is shown in red along with a black dashed linear trend. There was a bump up in the summer of 2013, but since mid-2011 output has been flat for the 6 month cumulative.

  13. Ronald Walter says:

    The estimated oil reservoir in the Bakken formation is between 500 and 900 billion barrels, and most of it is where the depocenter is located right about where Tioga is then headed down south to McKenzie County.

    A three percent extraction of the total in the reservoir is 15 billion barrels, tops out at 45 billion. At a rate of one billion barrels every three years, one million barrels per day, it will take 45 years at a minimum to retrieve those 15 billion barrels. If it is 45 billion barrels, it will take 135 years to make it happen. 15,000 wells with a 300,000 barrel 25 year production is how much? 4,500,000,000 barrels of oil. Still has upwards of 495,500,000,000 barrels to go. A sweet spot to have. Ain’t an oil company on the face of the earth that is much willing to let it go.

    A one percent extraction is 5 billion to 9 billion barrels of oil produced in a 45 to 135 year time period. That makes it only between 495 to 890 billion barrels to go. With improved drilling techniques, extraction could become a higher percentage, ten percent extraction translates to 50 billion barrels of oil, maybe even 90 billion.

    You just never know what is going to happen. Too difficult to determine what will actually happen, hence the wild speculation.

    If everybody in the US buys electric cars, the Chinese will have more gasoline available for consumption. Electricity will give birth to a gas war in China. The price of gas will be at fire sale prices in Beijing. The Chinese can have all of that Bakken crude, nobody else will want it. Who wants gas when all you have to do is use electricity to charge the battery? Why bother with gas? It’s a thing of the past, a covered wagon, days gone by.

    Can’t the State of North Dakota wait for oil prices to bottom out, the subsequent bottoming of stock prices of oil companies with a financial stake in Bakken oil development, buy a percentage of those equities with the oil tax revenues provided by those oil company taxed revenues and acquire them for a song and a dance, i.e. end up owning those bankrupt companies and rake in a handsome booty, all of the oil left in place, that would be 97 plus percent of it and leave the oil companies holding the bag? A state-owned oil company like Statoil is a real possibility. It would look like they are left holding the bag, down the rabbit hole, but in reality, the state owns the oil. Forget about decline rates and depletion, no room for such nonsense, the oil is what matters. The necessary obfuscation and subterfuge to subvert the reality, that is to lie to everybody, once again, would be understood and no explanation required.

    The oil companies can eat crow and dine on humble pie. Be good for them.

  14. FreddyW says:

    Here is a graph showing average production and water cut monthly 1 month after completion. I reverted the y-axis with water cut so that a correlation with production would be easier to spot. I can´t detect any decrease in production. A slight increase over time if anything. The last data point was completed in August though, so a bit older than Ron´s data. Water cut increases over time, but does not seem to affect production for some reason.

    It would have been interesting to see a graph with 24 h IP with the month they started production on the x-axis.

    • FreddyW says:

      Here is the graph for Mountrail. Not much is happening with production. Water cut started to increase by end of 2013 and then even more second half of 2014. So something has happend there. But it does not seem to affect production that much. Maybe production started to decrease a bit second half of 2014 or its just normal variation.

      • Watcher says:

        Per a conversation upthread, it’s very possible the water source is just the frack water. The totals for fracking are so large that they could flow for the life of the well. This would mean watercut does not define what it defines for conventional wells and may not tell us much.

        5 million gallons is 119,000 barrels. That’s about half EUR. And some wells are using more than 5. Note this is combination of initial frack and occasional flush out of salt encrustation.

        • mbnewtrain says:

          Where did you get the number of 5 million gallons of frac water required, as my sources/business contacts that are suppliers to Bakken drillers say 1.5 million gallons per well? I do agree that the water cut may be mostly from frac water and not water that is captive to the formation prior to drilling.

          • Watcher says:


            On a tablet and can’t extract quotes easily. NoDak does appear to be saltier than most and this flush process is only there.

            The total is up to 8.8 million gallons over well life time. This gets my attention in another aspect in that we may not know how measurements are taken. If a given month’s oil and water flow is measured and reported on the 30th of the month (or whenever) there would be a risk that maintenance flush out was done the day before, or some measurement artifact like that.

            • Mike says:

              Interesting, thank you. If this “flushing” thing is going on across the whole trend then oil to water ratios are not going to tell us much about anything.

            • Ilambiquated says:

              I agree that trying to find trends based on short time frames is risky.

        • FreddyW says:

          About water cut. I have attached a graph I showed some time ago in another post. You can see that the water cut starts high, then decreases until it hits the lowest point after about 3-4 month and then increases again. My interpretation is that it takes 3-4 month to clean up most of the fracking water. Then it increases slowly again because formation water finds its way to the well. Note that water cut seems to depend more on where the well was drilled than for how long it has been producing. I suppose its because of the extremely low permeability.

          • Watcher says:

            Well, maybe. The frack water is a few million gallons, but then you pour more in every month for maintenance. It will sum to 8.8 million gallons over the life of the well. But maybe that initial spike and decline is what you say.

            Do the numbers add up? Call it 2 million gallons / 42 = 47,619 barrels.

            These things flow only about 650 bpd for month 1 (average of the days of that steep declining month). 650 X 30 = 19,500 barrels total.

            50% water cut means the same water total that month. There would still be 28,000 barrels of initial frack water left to come out, and then you pour more water in. (maybe when flow rate is high you don’t add more, maybe adding more starts after flow rate gets lower and salt encrustation is able to form, I don’t know)

            I’d say no, the initial decline in cut can’t be frack water depletion because it all hasn’t come up. There is still plenty down there and you add more to it.

          • Isn’t it interesting how the water cut increases every year, with the exception of 2013. But in 2014 the trend picked right back up. At 6 months in 2009 it was at 24%, now in 2014 at six months it is at 44%. I think that tells us a lot right there.

            • Watcher says:

              But it sort of goes to the question Mike poses . . . where the hell is the water coming from? That’s impermeable rock outside the frack radius. Water can’t flow from elsewhere. Other than up.

              We do pour it down the well often. A constant available water total with a decreasing oil total . . . I guess would increase the cut.

              • Watcher says:

                I read that Natl Geog article a few inches up the page about a year ago, but there are paras in it that are suddenly eyebrow raising now that weren’t then. Specifically:

                “In North Dakota, Suggs said that the future price and availability of fresh water may well determine how long wells remain economical to operate. “If water becomes too expensive, that might potentially decrease the life of the well,” he said.”

                That goes right to the heart of EUR. Those 6% bond holder candidates are expecting a year total of flow that may not happen. Come year 4 or so, there may not be cash flow to pay interest. This magnifies things at $75.

              • FreddyW says:

                I read the salty wells article. Interesting, but

                “each of North Dakota’s wells is daily drinking down an average of more than 600 gallons (2,300 liters) in maintenance water”

                That´s 2300/151=15,2 barrels per day. It adds up to huge amount over its lifetime. But the wells can flow alot more than that per day.

                Also the rock is not impermeable. Middle Bakken has a permeability of 0,04 MD. It´s not much but I suppose thats why the drill horizontal well and frack. To get as much contact area as possible.

          • Mike says:

            Freddy, that would make sense to me from an operational standpoint, the well unloads frac water and gradually OWR increases and even stabilizes over time. Then formation water (interstitial water that exists in each nanopore of the shale matrix, along with hydrocarbons), begins to move more freely and OWR decreases. This is pretty common in conventional reservoir performance; it is usually associated with depletion. I want to understand water saturations and capillary pressure better in this shale stuff; why, I don’t know, as it as nothing to do with feeding my family. But I am determined.

            Shale is not homogenous, it has different clay contents, brittleness and associated carbonate content; over a mile length of lateral the quality of the shale must change radically. Each section (stage) that is stimulated in the lateral is not the same. One stage will definitely have different induced permeability factors (from the frac) than another and have different pressure differentials than another stage down the line. The lateral does not drain uniformly.

            Stay with me on this, Freddy. Your water data is very helpful. Maybe we can figure some of it out.


            • Watcher says:

              “Shale is not homogenous, it has different clay contents, brittleness and associated carbonate content; over a mile length of lateral the quality of the shale must change radically.
              . . .
              The lateral does not drain uniformly.”

              That’s a big deal.

              CLR and EOG have the money to instrument their wells and they can see what is happening along the length, but the small fry probably just wing it.

              It would be useful to know if oil flow comes first from near the vertical bore and then later from farther along the lateral, but we may not even know if that is true. The whole length may be flowing at once and mixing together.

              Hmmm, but that would not make sense, flush wise. The flushing that takes place is (I guess) just cleaning salt from the vertical pipe and maybe some short distance horizontally . . . or hell, we don’t even know that. Maybe it dissolves salt along the whole length.

            • FreddyW says:

              Thank you Mike. I´m glad I can be of any help.

    • FreddyW says:

      Oh there was a graph showing 24 h IP with month on the x-axis. I missed that for some reason. Interesting, so production decreases alot in November.

    • FreddyW says:

      I have one theory why production stays the same while water cut is increasing. If there are areas with different combinations of pressure and water cut and first more wells are drilled with low water cut and moderate pressure. If that then shifts so that more and more wells instead are drilled in areas with moderate water cut and high pressure, it is possible that it evens out so that the production stays the same but water cut increases. If that is the case I would expect that next step sometime in the future would be to drill in areas with moderate water cut and moderate pressure. Water cut would in that case stay the same but production will start to decrease.

      • FreddyW says:

        Or maybe more likely that next step is low water cut and low pressure. Both water cut and production will decrease in that case.

  15. Ilambiquated says:

    It would also be very interesting to see the permits mapped geographically. The idea would be to color code the permit numbers from say black to white and then put a dot on the map of the corresponding color on the map. Then you could see things like whether the peak around permit 26700 was because one sweet spot was permitted relatively late.

    • Wes453 says:

      I can work on doing that right now for all permitted, and drilled, wells. Output will be in the form of a Google Earth file.

      • Wes453 says:

        Download that file and load in Google Earth. All wells drilled since September 2013 are mapped and grouped according to permit number. To see which color corresponds to which grouping of wells, the best thing to do would probably be to use the sidebar (which should show up automatically, but can otherwise be turned on under tools->sidebar) to toggle the visibility of the groups. There is also a layer, by default invisible, showing the wells that have been permitted, but have not yet been drilled. You can turn this layer on and off through the sidebar as well.

        • Ilambiquated says:

          Wow, nicely done. Unfortunately I can’t see any geographical pattern around the late peak in Ron’s chart.

  16. Pingback: Bakken Sweet Spots are Petering Out | Damn the Matrix

  17. David Hughes has posted me a better link of the Bakken. It is from Drilling Deeper and gives a look at the full analysis and projections for the Bakken and other plays.

  18. Old farmer mac says:

    Off topic for the moment but relevant none the less.

    Whatever the Russians want that they can’t supply easily for themselves they can get from the Chinese.

    And while the Chinese are undoubtedly capable of designing and manufacturing their own cutting edge weapons doing so is expensive and time consuming and the Russians have some very good stuff to sell …..

    History ain’t over.

    WE have for sure passed peak oil per capita world wide and we have probably passed peak oil per capita in the US and most of the richer western countries.

    The economic question now may be whether world wide production declines slowly enough that we can adapt to ever less oil from one year to the next without suffering a hard crash.

    I am not a number cruncher but I will hazard a guess that everything else held equal we could in the US adapt to one percent less oil per year in total without too much trouble for a few years. We are making progress on efficiency and conservation of energy – not enough to be sure but enough to encourage me to think we need not suffer an immediate crash as the result of stagnant or slightly smaller oil supplies.

    But whether we could still have a growing economy even with this slow a decline (one percent) is another question altogether.

    It is counterintuitive but we better be praying for a few muggers bricks upside our collective heads.

    Other wise we are surely going to experience a very deep and long lasting depression before too many more years pass as the result of peak oil.This depression could easily metastasize into a more or less permanent economic collapse.

  19. Andy Hamilton says:

    Shale ain’t so easy down China way:

    ”Drilling costs in the U.S. are as low as $3 million a well, according to Neil Beveridge, a Hong Kong-based analyst at Sanford C. Bernstein & Co. The cost for PetroChina and Sinopec are as much as four times that, according to company data.

    In one case, it took 89 days to drill a well in Sinopec’s Fuling blocks, versus an 18-day average in the Bakken region of North Dakota, according to Bloomberg Intelligence Energy Analyst Grace Lee. Fuling is considered China’s best shale gas discovery. ”

    • Of course you can drill a well in the US for $3 million. But you cannot drill one two miles deep, turn horizontal and go another two miles, then add 30 frack stages for 3 million. That will cost you between 7.5 and 10 million.

      • Old farmer mac says:

        beyond that the typical Chinese skilled tradesman has purchasing power about equivalent to a burger flipper working part time in the US. Time is not so important in a place such as China – not for now and not for so long as wages are still low.

        The more relevant question is how much actual material and machinery China has tied up in drilling a well. They probably have a long way to go in catching up to our newer drilling rigs in terms of speed given that they are late comers but if the oil turns out to be there for them then there is no reason to think they will not catch up pretty fast.

        They don’t have to invent our latest technology. They can either buy it outright or build copies from drawings which they no doubt had in their hands within a day or two of the time the corporate builder of the newest rig had drawings ready for the actual manufacturing process..

        I have never even seen a oil rig but I would bet my farm you can buy ninety percent of the component parts right out of industrial catalogs all standardized so that one manufacturers pipe screws to anothers valve which bolts right up to a thirds pump which bolts right to a fourths electric motor.

        And taking excellent pictures of machinery that is sitting right out in the open and that is hauled all over the place on trucks and trains does not require much in the line of spy craft.

        Of course the very easiest thing to do is to send the best and brightest of the young folks over here to learn all we know and teach at our best universities. This is not the fastest way to catch up but in the end it virtually guarantees success.

        I remember redneck friends about twenty years ago admitting that the Japanese could make good cheap small cars but insisting that for some obscure reason (clear to them but a mystery to me) that they could not build nice cars.Some of those same rednecks are now driving Infinitis and Lexus’s.

        It won’t take the Chinese twenty years to catch up. Four or five years will be ample when it comes to something as critical as oil production.

        • Doug Leighton says:

          Plus, China has been active in offshore drilling for over 30 years and is currently developing the Chunxiao gas field (jointly with Japan) where the Kaixuan-1 drill platform carried out drilling operations last month despite challenges thrown up by typhoons and working to a depth of 5,200 meters (17,000 feet).

        • Doug Leighton says:

          “Four or five years will be ample………..” Perhaps less that that.

          “Start-of-the-art American fracking technology is coming to China’s vast shale deposits as a result of a joint venture between FTS International and Sinopec announced on Tuesday. FTSI, formerly known as Frac Tech, was one of the first providers more than a decade ago of hydraulic fracturing equipment and services in the Texas Barnett shale, the first shale basin to be developed in the United States. Since then, the company has grown into the largest supplier of well completion services in U.S. shale formations, including pressure pumping, wireline logging and water management. “SinoFTS will serve both Sinopec and other exploration and production companies throughout China.”

        • Longtimber says:

          There is a lot of know how and art, learned the hard and expensive way, must be lot o nuances required for positive results. Often such is left out of documentation for obvious reasons. I’ve seen Asian firms miss critical details for decades. The combo of US Oil patch co’s , infrastructure, property rights, roughnecks/wildcatters is unique. Often stars don’t align, like forgetting how to make concrete for centuries or the Delta III which never lifted any payloads after the successful Delta II.

        • Anonymous says:


          A lot of our rigs in the Permian Basin were manufactured in China.

          I wouldn’t under estimate the Chinese technical or manufacturing abililities. The Chinese May to climb the learning curve some but they have been very busy in the Permian Basin, Eagle Ford and East Texas over the last 5 years or so as “Non-Operator Participants in many joint ventures.

          • Longtimber says:

            I guess the question who knows the recipe for each geo formation and are the MF’s. Master Frackers. The Service Co’s or the Independents? You bet the Chinese will make equipment for the right price, makes it economical. The scale and time frame of deployment must mean that gear must be sources from all corners of the planet. (?)

          • Old farmer mac says:

            I see from the replies that China is even closer to catching up than I guessed.It looks like their biggest drawback from what you guys have to say is going to be a lack of hands on experience -which can only be acquired of course by putting their hands on the machinery and their money down the holes.

            There is little doubt in my mind that they envision something for themselves along the lines of the IIRC the name of it the old ” Greater East Asia Coprosperity Sphere ” that was the dream of the Japanese during the thirties and for so long as they were winning WWII.

            China will probably succeed in this endeavor given her size and muscle and the fact that she is pretty much immune to any other country waging conventional warfare against her from here on out at least in her own backyard.

            There are articles aplenty these days about Chinese efforts to build up an ultra modern military establishment of a formidable size. It need not be built up in the very near future size wise of course so long as they master the cutting edge technology involved. Given the amount of scientific and engineering manpower they can throw at the job there is no good reason they can’t master it.

            • Ilambiquated says:

              I suspect The Chinese leadership, if they are in an imperial mood, are more interested in worldwide hegemony than conquering East Asia.

              It must be glaringly obvious to them how blind the West is to the vast wealth of Central Asia, South America and Africa. If they want more land, I guess they will push East into Central Asia.

              About military buildup, Sunzi said the greatest victory is not fighting a hundred battles and winning them all — it’s winning without a fighting. Mao was a huge fan of Sunzi, and used his teachings to take China more or less single handedly. The Communists haven’t forgotten.

              President Xi’s favorite project is the New Silk Road, as nicely illustrated by the Washington Post. They are also building rail links to the Indian Ocean East and West of India, through Myanmar and Pakistan.

        • Ilambiquated says:

          Harley-Davidson fans will still tell you the Japanese don’t know how to build motorcycles.

          I have a lot of experience with Taiwanese computer companies. In the late eighties, they started shifting from simple assembly upstream to making more complex parts — first manufacturing the boards, then designing them, then manufacturing the components to make supply chains shorter.

          A lot of Americans scoffed in those days. But the Taiwanese hired lot of (cheap) engineers. They got their money directly from industry profits, not from commercial bankers telling them to hit the numbers next quarter. They bought local because that’s who they knew. By the mid 90s they owned the PC motherboard industry and were still moving upstream.

          They gutted the American computer industry. I used to laugh when Dell would get rewards as the best American manufacturer — Lucky Goldstar built and operated Dell’s Austin factory to assemble Taiwanese and Korean components. Total assembly time six minutes, no Dell employees on site. Might as well flip burgers. The factory existed to install high value components (CPUs, memory, hard drives) flown in from Asia JIT into cheap components shipped in from Asia.

          The key to succeeding in modern industry is a community of smart people in a huddle of local companies.

          German SME manufacturers are the same. A lot of those guys have their factories in the village their great-granddad grew up in. They wouldn’t dream of moving 50 miles down the road, and prefer speaking the local dialect. They spend a lot of money attracting and training young people, and are happy to pay local taxes to keep their village beautiful.

          There isn’t any industry in the world that can’t be figured out by enough people with the right incentives.

          • Old farmer mac says:

            I totally agree. Harleys are pretty good machines if you have one of the newer ones but I know a lot of people who ride and used to ride myself and the general opinion of all the ones know is that if you want a trouble free motorcycle that will last until you either love it as a family member or hate the thought of looking at it then you want a Jap bike.

            Now as to the Chinese expanding into Central and South America- I think it is likely that we will probably throw some serious roadblocks in their way before too much longer.

            They are already putting their own roadblocks in place in their own backyard. Hopefully the oceans between us will be enough to keep us from coming into hot contact and setting off WWIII.

            Only redneck American fools and over educated panty clad ivory tower pc intellectual types take people and countries such as China and the Chinese lightly.

  20. Andy Hamilton says:

    Drilling slow down:

    Seasonal? Might start to get interesting if US total production declines again next week.

    For the last 2 years (2012 and 2013) US total oil production has climbed significantly all through November until the end of December.

    • mbnewtrain says:

      I just returned from North Dakota a week ago. Guy I worked with at an company that supplies some of drillers and support companies has a friend that lives in Williston, but sometimes works in Fargo (where I work on assignment). Williston guy said oil cos. don’t have help wanted advertisements out anymore, and the number of trucks bringing supplies to Bakken has fallen off a lot. The locals in Bakken formation area are definitely not seeing population growth or increased business activity. Many there are worried that this is the start of the boom to bust cycle.

      • Watcher says:

        In a world where redefinitions and obfuscation is the order of the day, anecdotal evidence is very important. If the trucks aren’t rolling, oil won’t be flowing.

        He who panics and runs first, panics best.

  21. Peter Strachan says:

    I understand that over the past 24 months, operators in both the EFS and Bakken areas have begun to restrict initial production from shale wells in an attempt to improve EURs. Earlier wells were just let flow at maximum rates but the though now is to restrict flows with a smaller choke so that permeability created by fraccing will be protected, resulting in more oil that would otherwise be the case.

    Does anyone think that this operating feature might be having an impact in 24 hour IPs?

    • Watcher says:

      I’ll offer up a Wall Street requirement. Total flow may be required to sell bonds as the price falls. The bond holder candidate wants to know not only that there will be money to service his 6% junk bond in year 1 but also in year 7. That could explain it — as well as the concept of leaving it in the ground for a more favorable price.

      Now THAT has potential as an answer to why choke now?

      • Watcher says:

        And there is ALWAYS the possibility of a KSA deal. We’ll throttle back if you do, elevate price, and we survive and you make more money.

        If I was KSA I’d tell them . . . “don’t bother, if we keep the price here, you’ll be throttling back enormously soon and we don’t have to do a thing. Have a nice day.”

      • Peter Strachan says:

        I don’t think that the Machiavellian/market driven thing works Watcher.
        The oil industry is interested in maximizing NPV per well. If the estimated ultimate recovery (EUR) can be improved from say 500K bbls to 650K bbls per well by taking lower production over the first 90-120 days, then that is what will happen. Once a decline curve can be established with confidence, after say 180 days, comparison with wells that were allowed to blast away at maximum flow rate can be made and estimates of EUR will be seen.
        This is a once off step change and chokes are not being incrementally tightened, though some experimentation will be undertaken. There is always a trade off between trying to maximise EUR and achieve a reasonable payback of initial drilling costs in under say 24 months. I think that declining IPs could be quite misleading because of well management techniques that are being tried, but in any case, it is all part of the bigger peak oil picture, no matter if it is geology, engineering of finance, they all have a part to play in the end result.

  22. Phil says:

    I like your graph of average 1st 24 hr production per 1000 well no. which I agree makes it look like the drillers had picked the sweet spots by the permit no 24000’s. Perhaps as well as calculating and graphing the average of each 1000 well range, you could use the excel percentile function and calculate the 90th, 75th, 5oth, 25th, and 10th percentile of each 1000 well range and plot these on one graph. The spread of these lines could help show just how variable the production is from each range.

    • Ilambiquated says:

      Or just look at the spread between the average and the median.

      • Dennis Coyne says:

        Sorry the x-axis was scaled poorly on the previous chart. Same chart with x-axis done correctly.

        • Ilambiquated says:


          Not to complain BUT 🙂

          1. I was looking for the spread per se, not both curves.

          2. The X axis is time instead of permit number.

      • Phil says:

        No not really. By looking at the 90th percentile (i.e 90 % of wells produce at least x amount of oil in the first 24 hrs) we can make another comparison of wells that have permit numbers in the 24000’s, checking if relatively poorly producing wells in the 24000’s are still better than the wells in the other ranges, giving more evidence the 24000’s were aimed at sweet spots. Also looking at the 10th percentile, we can compare the best few wells in the 24000’s with the best few wells in the other ranges, and see if the production from the best few wells is also decreasing.

        • Yes, this is what the average well produced and it does not disagree largely with my data. What is not measured here is production by well number.

          Production by well number was the entire point of my post. If you have the data in Excel then sort by well number and give us the results.

          And incidently, 30,000 barrels in three months (91.25 days) works out to be 329 barrels per day. That is a whole lot less than they were getting back in 2012. All the blogs I read from back then tells me the me mean was 400 barrels per day.

          • Dennis Coyne says:

            Hi Ron,

            Here is a chart with cumulative 2 month output vs well ID # with linear regression (black line) and 80% confidence interval (red dashed lines),
            Only well ID #s (permit #s) from 25000 to 27650 included, too few wells in sample from well ID 27650 to 28500 (only 80 wells out of 850 permit numbers). For this set of wells (1522 wells) the 2 month cumulative mean output is 20000 barrels, median is 18000 barrels and the standard deviation is 13000 barrels.

            • Dennis Coyne says:

              Hi all,

              It occurs to me that Enno Peters has pointed out that more wells are being drilled in the Three Forks lately and this decline may reflect the higher percentage of Three Forks wells, which have a 20% lower EUR than the middle Bakken wells.

              If the 20 % lower EUR estimate is correct we may see the overall Bakken/Three Forks 2 month cumulative drop from 20 kb to 16 kb and then stabilize there until drilling locations in the Three Forks sweet spots get fully drilled.

              • Phil says:

                Does your spreadsheet data with well ID number allow you to filter out the three forks wells? If it does, make the chart again and see what happens to the decline.

                • Dennis Coyne says:

                  I did this below.

                  Part of the reason for the apparent decline is that there was a local maximum around 25000.

                  So starting at well 25000 is a bit like looking at world temperature trends by starting at 1998.

                  By starting at well 22000 (middle of the 2008 to 2014 range of well ID #s) the decline is eliminated.

                  Chart below with 101 well centered moving average (red line) and linear trend (black dashed line).

                • Dennis Coyne says:

                  See comments at link below (when I said below in comment above I was referring to the comments liked below which breaks out middle bakken and three forks wells). The Three Forks wells are indeed 20% lower than midlle Bakken wells and are being drilled at roughly twice the rate after well 22000 relative to before (increase from 20% to 40%).


          • Dennis Coyne says:

            Hi Ron,

            The 400 barrels per day (up to 500 b/d) was the average first month of output in 2012, as I am sure you are aware month 2 and month 3 are both substantially lower that the first month (if we assume the first month has 30 days of output). Or you were reading blogs with bad information.

            The best resource on this is Rune Likvern, though he usually gives 12 month output of around 84 kb (or 230 b/d average annual output for the first year), also Hughes has a type curve in Drill Baby Drill on page 82 (link below).


            The average for the first 3 months is roughly 350 b/d (eyeballing from the chart) and that was based on the previous 66 months of data (the report was published in Feb 2013 ) so from 2007 to 2013. My chart is based on wells which started producing in Jan 2013, and the data fluctuates up and down.

  23. Pingback: Anonymous

  24. Ronald Walter says:

    If you go to google maps, search for highway 85, North Dakota, Watford City, Alexander, go to satellite imagery, zoom in, you can see the wells and the layout. Then ‘fly’ all around the place and you’ll see plenty of oil wells. Probably 2013 imaging, so there are another 1200 wells out there now, or something like that.

    Each of the red dots on the image is along a mile line, more than not.

  25. I will shortly be updating The Oil ConunDrum to include a new section on Bakken shale oil depletion. This is essentially diffusion-limited flow which I have described elsewhere in the book, but the data that we have now is pretty convincing to what is happening.

  26. Tim E. says:

    Totally off topic- but relevant to a question I posted many Moons ago to Ron.

    Purely for thinking and speculation in the category of who are we and why do we exist, going back to my theory that we are a short lived species built to serve others who have now left us, for now, largely to our own means, and that we are a product of genetic engineering – something which we are now beginning to do.

    Astronomers Find Quasars Are “Aligned” Across Billions Of Light-Years

    I quote some of the article below, but not all. So go to the above link to read more.

    Quasars separated by billions of light-years are lined up in a mysterious way. Astronomers looking at nearly 100 quasars have discovered that the central black holes of these ultra-bright, faraway galaxies have rotational axes that are aligned with each other. These alignments are the largest known in the universe.

    Quasars are some of the brightest things known, and at the center of these super luminous nuclei of galaxies are very active supermassive black holes. The black hole is surrounded by a spinning disc of extremely hot material, which gets spewed out in long jets all along the quasar’s axis of rotation.

    Using the European Southern Observatory’s Very Large Telescope in Chile, a team led by Damien Hutsemékers from the University of Liège in Belgium studied 93 quasars known to form huge groupings. We’re seeing them now at a time when the universe was only about a third of its current age. “The first odd thing we noticed was that some of the quasars’ rotation axes were aligned with each other—despite the fact that these quasars are separated by billions of light-years,” Hutsemékers says in a news release.

    So the team wanted to find out if the rotation axes were linked at that time—and not just to each other, but also to the structure of the universe on large scales. When looking at the distribution of galaxies on scales of billions of light-years, astronomers have found that galaxies aren’t evenly distributed: They form a web of filaments and clump around huge galaxy-scarce voids. This arrangement of material is known as the large-scale structure.

    The team could not see the rotation axes or the jets of the quasars directly. Instead they measured the polarization of the light from each quasar and found a significantly polarized signal for 19 of them. The direction of this polarization helps to deduce the angle of the disc and the direction of the spin axis of the quasar.

    Which brings into mind Bruce DePalma’s Spinning Ball Experiment– which defies current conventional explanations.

    See also: Spinning Ball Experiment and Bruce DePalma

    It does not change the current situation which Humans face on Planet Earth in regards to energy – but it does indicate that there is more to the Universe than is acknowledged in Mainstream Science – and that Life in the Universe may be more common than Humans are led to believe.

    Which brings me back to:


    Something different to think about on a gloomy Sunday.

    • Tim E. says:

      In the three-decades following Bruce DePalma’s ex-communication from the orthodox priesthood of science, he demonstrated three essential truths: 1 Gravitation and Inertia are not equivalent. Contrary to Einstein’s assumption, rotation alters both gravitation and inertia, making them both variable under its influence. 2 There exists a generally unrecognized ‘mass field’ of polarized inertia around a real rotating object. This field affects the properties of matter, energy and living systems exposed to it. 3 A rotating magnetized gyroscope (homopolar generator) does not conform to the Law of Conservation of Energy. After a lifetime of resistance to these emerging new energy concepts in the United States, DePalma finally sought a more favorable climate for his experimental and theoretical pursuits. He found support and acceptance in New Zealand, ultimately becoming a permanent resident. During the last five-years of his life, DePalma would build three separate prototypes with the assistance of New Zealand and Australian investors. The second unit was calorimetrically tested by University of Auckland faculty and shown to produce 1.25 watts for every 1-watt of input power. The question of where the one-piece Faraday Disc (N-machine/Space Power Generator) derives its energy remains unanswered by mainstream science. Since there is no relative motion between magnet and conductor, it is believed that only space itself can be the medium from which its power is precipitated. Indeed, the Free Energy paradigm rests on the reality of space as a dynamic medium, wherein all potentials are isotropically (uniformly) distributed. When rotation is coupled (superposed) with a magnetic field, the combined effect is a potent distortion of space sufficient to cause electrons to ‘pop’ into existence within an N-machine’s conductors. Quantum Theory now admits that particles are being created and destroyed all the time, moving in and out of existence at random. This is referred to as Zero Point Energy fluctuations, and is now accepted to be a viable explanation for what we observe in several Free Energy technologies

  27. Tim E. says:

    And then as crazy as it gets – from Lockheed’s Skunk Works:

    Compact Fusion – Closer Than You Think.

    It’s no secret that our Skunk Works® team often finds itself on the cutting edge of technology. As they work to develop a source of infinite energy, our engineers are looking to the biggest natural fusion reactor for inspiration – the sun. By containing the power of the sun in a small magnetic bottle, we are on the fast track to developing nuclear fusion reactors to serve the world’s ever-growing energy needs.

    • Tim E. says:

      Check it out –

      The Farnsworth Fusor.

      Reality – OR not?

      • Tim E. says:

        Which brings me back to Dr. Paul Laviolette

        Really? The Om is the “sound” of cosmic creation that occurs throughout the universe. In the context of the ancient physics of subquantum kinetics, it is the minute energy impulse imparted when each etheron pops into existence in its new etheron state in the course of its endless journey through ether states.

        And the B-2 Bomber:


        Many Moons ago – I was stationed at Peterson AFB and worked at NORAD CMC – and saw a SR-71 come in on an emergency landing. I was surprised at it’s small and compact size – and that of the Pilot. It was all developed at the Lockheed Skunk Works.

        So is compact fusion – ala Back to The Future here and now?

    • Dave Ranning says:

      Hasn’t this been the basic model from the 50’s on?
      It has been more challenging than expected.
      I would not hold my breath.

      • Old farmer mac says:

        Fusion as a workable power generation technology is not going to happen for a very long time if ever. The reasons why are simple enough.

        The number of problems that remain to be solved between the current ” here” and the ”there ” of an actual existing fusion power plant feeding into the grid must number well into the thousands. Some of them are going to prove to be extraordinarily tough nuts.

        Think about this. Right now the the biggest and most complicated single machine in the world may well be the experimental apparatus which is not yet capable of producing any net energy which might be honestly viewed as at about the same level as building a campfire.The fusion people are still at the rock banging stage and have not yet even managed to build a serious fire.

        From the fire to the power plant is going to be a hundred times as hard. How the hell are they going to get all that heat out of a core consisting of magnetic fields for instance and into turbines?

        There are still whole classes of materials that will have to be INVENTED. After that they will have to be tested and experimental work done to learn how to fashion the necessary parts out of them–

        This is not going to be the usual story of incremental improvements in a given industry making it possible for the final product to get better and cheaper.

        Think of the computer industry having to have bootstrapped itself directly from electromechanical switches and vacuum tubes to todays best chips without the intermediary research and development and building of the chip plants and the writing of all the programming paying for itself out of revenues generated as the industry progressed.

        All the money and all the manpower in the world could never have made the jump from ENIAC to a smartphone in one giant leap.

        • Tim E. says:

          Guess you are the Man With the Plan!

          Tell me Ol’ Farmer Mac! What you know!

          Or ain’t it so!

          So – Lockheed Martin in making this stuff up.

          Please – present your scientific knowledge – so I know better.

          Or is this part of a Conspiracy Theory? Lockheed Martin is making this up?

          I walked through the blast doors at NCMC every day for 3 years – and they always seemed tangible to me.

          Compact Fusion

          Tell me just what you know that makes you so much smarter.

          • Old farmer mac says:

            I have read about dozens , nay hundreds I suppose ,of hot tech breakthroughs that were supposedly right around the corner that have never come to pass.

            On the subject of fusion power I spent a substantial amount of time a couple of years back reading up on the difficulties.I don’t have my old computer handy with links and articles copied but you can bet I found plenty of stuff that was produced by very serious scientists and engineers who are not on payrolls associated with salaries and bennies and possibly stock prices – and fusion power plants.

            I have been posting here and at the old TOD site when it was up for years. Hardly anybody ever takes me for an idiot- but I am afraid I cannot say the same in your favor.

            I actually have a real degree from a real university with a heavy concentration in the physical and biological sciences.VA Tech , back during the Viet Nam era. Finally graduated in 72.Been taking the occasional course or two just about every year ever since and have enough credits to get a couple more degrees but not in the right combinations. A couple of times I went back full time but for one reason or another dropped out again. Life happens.

            So- having worked around-actually inside- nuclear plants quite a bit as part of my career as a rolling stone and having friends who are engineers I am at least somewhat qualified to have an opinion on such matters.

            Somebody says the NIF has actually achieved a campfire that burned for a few milliseconds- or was it seconds- but only at the expense of billions of dollars and with the input of hundreds of top flight engineers and scientists. Using a facility as impressive as a fully equipped nuclear aircraft carrier when all is said and done.

            It is a hell of a long way from a fusion fire that lasted a few seconds that has been made to happen only after such gargantuan efforts to a working power plant. About as far as from an oxcart to real honest to sky daddy interstellar spaceship that could take us to the stars and back.

            I am not saying fusion power is an IMPOSSIBILITY. I am saying that the ODDS of it happening as a practical method of generating electricity during our lifetimes are ASTRONOMICALLY HIGH AGAINST IT .

            The race is not always to the strong nor the contest to the swift but that is the way to bet.

            If somebody had drawings of a fusion plant that could actually be constructed with existing materials and technologies ( PLEASE NOTE THAT THE MATERIALS AND TECHNOLOGIES DO NOT CURRENTLY EXIST EITHER AT ALL OR NOT AT THE NECESSARY SCALE) it would take a decade or two to get it permitted and probably a couple of decades to actually build it considering that a conventional nuke takes five to ten years.

            Incidentally I am all for research into just about any topic at all involving the physical and biological sciences because while any given technology may never be invented or if invented actually put to use but rather because any research is apt to fill in a few more blank spots in the grand tapestry of knowledge.

            Lots of useful information comes to light thru luck and accident. Research into fusion power is not apt to result in practical fusion power within the next few decades but it may result in SOMETHING well worth while.

            Practical high temperature superconductors maybe. New materials strong and flexible enough to make the best current armor plate alloys look like soft copper. Ceramics that are useful in building combustion engines that can run at extremely high temperatures thus enabling a huge increase in fuel efficiency. Ways to manufacture new useful chemical compounds that might turn out to be extremely valuable as medicines or catalysts. Things not even imagined yet.

            • John B says:

              There was a BBC Horizon documentary a few years ago, where some scientists posted their predictions at the end of the film.


            • Ilambiquated says:

              I think fusion might actually happen, but the solution is not materials science. It’s improved computational ability so someone can figure out how the plasma physics works.

              That’s what NIF is actually about, BTW. It is designed to tweak the hundreds of parameters of current plasma physics to create a theory that actually works and can be crunched by a very big computer.

              So you’re right that all current and imagined designs are no hopers, but there may be some solution lurking out there we can’t calculate yet.

              • Old farmer mac says:

                I will not deny that there just MIGHT be a solution in terms of plasma physics.

                But we have every reason to believe that if it exists then it involves temperatures and pressures orders of magnitudes greater than any current day machine designs and materials properties can withstand.

                Focusing the necessary energy on a fuel pellet suspended inside a machine as big a battleship and lighting it off for a second is simply not in any way comparable to building a power plant that is capable of holding the fuel in place on a continuing basis and harvesting the resulting heat.

                My semi well informed guess is that nothing used in the current facility that is located near the ignition point would even physically survive an ongoing reaction capable of releasing enough heat to produce useful power outputs.

                And if you put in big thick old pipes full of water to absorb the heat- then how are you going to focus the laser beams and all that sort of thing

                I will gladly bet my farm against a bottle of good whiskey that there will be no working fusion power plant in existence making power feeding it into the grid within the next twenty years.

                Basically nothing that we know about CAN EXIST at fusion temperatures and pressures except plasmas.

                Making machinery out of plasmas is going to be about as hard as making a house out of the wind.A thousand times, a million times harder. The wind at least does not incinerate or vaporize every thing in the neighborhood in a microsecond.

                JUST creating a plasma big enough and long lasting enough to study it -study it- not manipulate it in a potentially useful fashion- is an outrageously expensive proposition.

              • Caelan MacIntyre says:

                “More complex societies are more costly to maintain than simpler ones, requiring greater support levels per capita. As societies increase in complexity, more networks are created among individuals, more hierarchical controls are created to regulate these networks, more information is processed, there is more centralization of information flow, there is increasing need to support specialists not directly involved in resource production, and the like. All of this complexity is dependent upon energy flow at a scale vastly greater than that characterizing small groups of self sufficient foragers or agriculturalists. The result is that as a society evolves toward greater complexity, the support costs levied on each individual will also rise, so that the population as a whole must allocate increasing portions of its energy budget to maintaining organizational institutions. This is an immutable fact of societal evolution, and is not mitigated by type of energy source. ~ J. Tainter

                Tainter is just…irrelevant. ~ Nick G

                • Nick G says:

                  Yep, he is. I’ll say it again:

                  Tainter’s analysis is based on agricultural societies. We have no real practical limit on available energy. Look at solar: 100,000 terawatts of continous power, 24/7.

                  • Caelan MacIntyre says:

                    ‘100, 000 terawatts of continuous power’ is practically meaningless’ without context.
                    What is our society if not largely agricultural– vastly so, even, given the fossil-fuel inputs and current population size?

                    “Participatory democracy postulates low-energy technology. Only participatory democracy creates the conditions for rational technology.

                    What is generally overlooked is that equity and energy can grow concurrently only to a point. Below a threshold of per capita wattage, motors improve the conditions for social progress. Above this threshold, energy grows at the expense of equity. Further energy affluence then means decreased distribution of control over that

                    The widespread belief that clean and abundant energy is the panacea for social ills is due to a political fallacy, according to which equity and energy consumption can be indefinitely correlated, at least under some ideal political conditions. Laboring under this illusion, we tend to discount any social limit on the growth of energy consumption. But if ecologists are right to assert that nonmetabolic power pollutes, it is in fact just as inevitable that, beyond a certain threshold, mechanical power corrupts.” ~ Ivan Illich

                    “Ivan Illich’s ‘Energy & Equity’ shows how large-scale energy systems entail inequality, unfreedom, and loss of human [and other species’] dignity.” ~ Neil Comley

                    That writ, I am unsure even about large-scale anything, such as wind-/PV-farms, perhaps even as well as large-scale manufacturing systems of those kinds of things.

                    As for the issue of ‘powering down smoothly’, time will tell, but time is getting very limited for actions in that regard. (Pure democracy will help.)

                  • Nick G says:

                    ‘100, 000 terawatts of continuous power’ is practically meaningless’ without context.

                    True. The context is that human society uses perhaps 1 terawatt of biomass, and roughly 10 TW of fossil fuels. So, agriculture is a small percentage of the “power” that humans generate or use, and the available solar power is vastly larger.

                    “Participatory democracy postulates low-energy technology. Only participatory democracy creates the conditions for rational technology.

                    I’d say you’re greatly overestimating the importance of energy: the only way that it dictates democracy or social organization is to make it easier. Easier communication, better transportation, better health, contraception that frees women from death in childbirth or a life of slavery in the home.

                    The widespread belief that clean and abundant energy is the panacea for social ills

                    Again, I’d say that’s overestimating the importance of energy. Better energy can solve problems like energy poverty and CO2 emissions. It won’t solve our political problems.

                    if ecologists are right to assert that nonmetabolic power pollutes

                    They’re not. Just because Fossil Fuels are dirty doesn’t mean all energy sources are.

                    beyond a certain threshold, mechanical power corrupts.” ~ Ivan Illich

                    Power doesn’t corrupt. It’s powerlessness that corrupts.

                  • Sam Taylor says:


                    For goodness sake, at least read one book on the principles of systems science. It’s the size of the tap not the size of the tank!

                    It doesn’t matter how many terawatts of solar energy hit the planet, what matters is how many we can practically harvest and at what EROI.

                    After years of research and many millions of dollars thrown at the problem, solar is barely even a bit player in the global energy mix. Oil and coal required a fraction of the expense and effort to develop viable engines and change the world significantly.

                    Before you badmouth tainter, you should at least read “Drilling Down”. You might learn something.

                  • Nick G says:


                    I’ve been working with (and reading about) systems analysis, dynamics, LTG, energy, etc., for a long time.

                    First, a little perspective is helpful: almost all of our energy comes from solar. The Earth’s envelope would be several hundred degrees below zero if not for solar insolation: human HVAC only modifies temperatures around that baseline very slightly.

                    Similarly, we get 98% of our lighting from the sun: human “lighting” is a tiny firecracker next to that.

                    Finally, solar applications like PV are no longer small: wind and solar now dominate new power generation in some areas, including the US (1st quarter 2014 new generation in the US was about 90% wind & solar).

                    Did you see the NYT article below? Wind and solar are competitive with FF, even without adjusting for pollution.

                    Finally, windpower has higher EROEI than any fossil fuel, and solar’s is more than high enough.

                    The primary obstacle to a fast and affordable replacement of fossil fuels by renewables is resistance from entrenched interests who will lose their investments.

                  • Boomer II says:

                    In the past, people could debate whether or not it made economic sense to replace fossil fuels with alternative energy options (including wind and solar). Of course, since the cost of fossil fuels hasn’t include pollution damage, health effects, and so on, we’ve never really compared options based on true costs.

                    But global warming changes a lot. Economics aside, continued use of fossil fuels may have disasterous consequences for the planet. So it is a bit like saying, “It’s cheaper to do this one option, but if it kills us, then it really isn’t an option.”

                    Economics needs to acknowledge that some options have to be taken off the table because of safety or other reasons. I suppose you can assign a number by factoring in the cost of loss of life, loss of crops, and so on, but if you don’t have a way to apply those directly to the cost of the fuels (thereby making them too expensive for anyone to afford), then you have to fall back on laws which prevent the use of dangerous items.

                  • Caelan MacIntyre says:

                    “I’d say… [Ivan Illich is]… greatly overestimating the importance of energy… Tainter is just… irrelevant… I disagree with Heinberg about depleting resources, and with Graeber about the value of managers… ~ Nick G

                    Looks like a pattern.

                  • Nick G says:

                    Yes, indeed – when people don’t make sense, I think it’s helpful to say so.

                  • Caelan MacIntyre says:

                    “I wouldn’t rely on Nicole Foss (aka Stoneleigh) – she makes very unrealistic basic assumptions about energy. Her theories don’t seem to allow good predictions.” ~ Nick G

                  • Nick G says:

                    Yes, thanks for quoting that. Nicole is another good example of someone who’s theories are guided by unrealistic assumptions about energy.

                  • Caelan MacIntyre says:

                    “Yes, indeed – when people don’t make sense, I think it’s helpful to say so.” ~ Nick G

                    With the exception being Nick G?

                  • Nick G says:

                    Well, you’ve made it quite clear that you disagree with me. But, that’s beside the point: I don’t present myself as an authority to be quoted.

                    I make logical arguments, and when appropriate I provide numbers and sources. If the argument doesn’t make sense, I expect people to object, and then I can elaborate or provide more evidence.

                    Really, I think it’s rare that an “authority” is helpful – we all need to actually understand the ideas, and go to the source/primary data to understand what’s going on.

                    I do make an exception for Climatology. I haven’t tried to go through every one of the arguments about temperature measurements – it seems sufficiently clear to me that the enormous number of people involved are doing good science.

                  • Caelan MacIntyre says:

                    Technology is a double-edge sword, Nick, it exists within contexts.
                    We ignore them and their implications at our peril. And peril, and ignorance, is what we have.
                    Climate change is only one such peril.

                  • Sam Taylor says:

                    “I make logical arguments”
                    “We have no real practical limit on available energy. ”

                    I rest my case.

                  • Nick G says:

                    Sure – there’s certainly potential for other long-lag-time problems. But, I haven’t seen anything nearly as bad.

                    I can’t see a good argument for avoiding the possibility of such threats by going back to 75% infant mortality.

                    And, of course, if we’re wise enough to voluntarily forego a high-energy lifestyle, why wouldn’t we be wise enough to live in a healthy & democratic way even with high energy? And, vice-versa, if we’re not?

                  • Nick G says:

                    “I make logical arguments” “We have no real practical limit on available energy. ” I rest my case.

                    And your case is??

                    The fact is that solar power is 100,000TW, and human extrasomatic energy production is about 10-20TW. That’s “no real practical limit”.

                    Just because your intuition has been shaped by reading people who say “the party’s over” because fossil fuels are limited, doesn’t make it so. Even if there are lots of other people online who are willing to agree with it.

                    Of course, out in the mainstream of engineering, geology, economics and astrophysics, the general consensus (outside the oil industry) is that we’re not facing peak energy. So, that’s why the old saying: “extraordinary claims require extraordinary evidence” applies here. Peak Energy is an extraordinary (and unrealistic) claim.

                • Nick G says:


                  I agree.

                  I actually think that a combination of Pigovian taxes and regulation is best.

                  For instance, I would slap a stiff tax on liquid fuels (rebated to make it non-regressive and prevent slowing down the economy), and combine it with sharply higher CAFE MPG regs.

        • John B says:

          I believe the NIF apparatus did produce a net energy gain last year:

  28. Old farmer mac says:

    I am afraid we are going to get hooked on this sort of thing and that it is not going to end well at all.When the public is offered a choice between forests and ecosystems and shortages of electricity on the one hand and reliable reasonably cheap electricity and no forests and no ecosystems on the other you don’t even have to be a born cynic to figure out what is going to happen- eventually.But I suppose I will have been personally recycled by then.

    • Aws. says:

      The forests around the Canadian city I grew up in were denuded 150 years ago to heat the city. The city is a whole lot bigger now.

      • Ilambiquated says:

        We also have technology to allow houses to keep warm in winter with almost no heating — even in Canada.

        • Old farmer mac says:

          DEAD ON.

          The technologies of energy conservation are already cheaper by a factor of two or three considering the useful life of a house or almost any substantial building than the alternative of just pouring more money into buying fuel year after year.

          My guess is that conservation and efficiency measures will continue to be make more economic sense than renewable energy for a long time when building NEW.

          But the problem is that retrofitting old infrastructure is MUCH MUCH costly than just building right in the first place.

          And like it or not we are going to be depending on our current housing stock etc for most of the next century.

          • Nick G says:

            Building it right in the first place is cheaper than retrofitting, but retrofitting is still cheaper than just burning fuel.

            Air-based heat pumps are mighty cost effective, and work in most of Canada.

      • Anonymous says:

        Even the Adirondacks – larger than the 7 smallest US states – adjacent to which Ft. Drum sits, were essentially denuded in the 1800’s to feed the growing demand for timber, pulp & tanning bark (hemlocks were often just dropped, stripped & left to rot). When this culture turns its eye toward a resource – any resource – its appetite always trumps the ‘supply’. And of course, I should put ‘resource’ in quotes as well, because a healthy mature forest has value quite beyond dollars, we just don’t much see or hold it worth much in this culture.

    • Boomer II says:

      I am afraid we are going to get hooked on this sort of thing and that it is not going to end well at all.

      I get your point, but it this particular instance it appears they are just burning waste wood and tires. Now perhaps it would be better to turn the wood into compost, but burning waste wood to create electricity seems a reasonable use for it.

    • Ilambiquated says:

      Burning biomass isn’t really the solution to the problem, but there certainly is a lot of biomass that could be burnt without causing any environmental problems.

      For example I think that America should follow the EU in banning the dumping of flammable or biodegradable materials. It’s madness for a place like NYC to import gas and export household trash for dumping at the same time.

      • Old farmer mac says:

        I burn wood myself and I am not opposed at all to burning waste wood or SOME wood sustainably harvested assuming it is not shipped too far.

        But clear cutting and taking every thing but the stumps out of the ground is a sure fire recipe for impoverishing the soil over a period of time and then the yield of wood will fall off a cliff.

        There ain’t no free lunch in agriculture or commercial forestry which is really just a branch of agriculture in general.

        The problem is that most people are pathetically ignorant of the realities of biofuel production on the scale that will be demanded by the business as usual lifestyle. Somebody who needs gasoline to get to work and fuel to heat his house is going to make the short term choice that allows him to live and keep his kids warm and fed in the short term and to hell with the long term.

        He will make that choice- most of the time- even if he is a biology teacher and knows the real score.

        I would not be surprised – if I expected to live another forty years -to hear that New England has been deforested again and that the wooded swampy river bottoms all thru the south have been converted to cornfields so as to have enough moonshine to gas up the family grocery getter.

  29. Tim E. says:

    So here we go – the AGW (solar system warming denying crowd) suddenly hates Science becuase it doesn’t back up their pre-conceived notions.

    Bruce De Palma’s experiments are junk science.

    Lockheed Martin is lying and part of a Conspiracy Theory concerning “Free Energy”.

    Astronomers just can’t be trusted…. because their findings collide with your pre-conceived notions….

    Watcher knows it all! Thank God.

    • Astronomers just can’t be trusted…. because their findings collide with your pre-conceived notions….

      Tim, the quasar thing has absolutely nothing to do with fusion or global warming. Don’t quote astronomers about quasars and pretend they back up your notions about fusion or that only the sun is responsible for global warming. They don’t.

      • Tim E. says:

        How about an ORDERED UNIVERSE – One that is designed to a higher plan.

        Lockheed Martin is not a NOBODY! And they have something to say.

        It’s not my “notions” abut fusion. It’s Lockheed Martin’s.

        Bruce De Palma was a highly educated scientist – not some dumb local yokel.

        To discount the facts and truth about the Universe is a disservice! We are not unique in the Universe.

        • Hey, that is exactly what I am talking about. Astronomers have not claimed anything about an ordered universe designed by a higher plan? You just made that shit up. And astronomers have not backed up anybody’s fusion plans.

          Bruce De Palma was a complete nut, not even half a scientist. Anyone who believes in free energy is a complete nut.

          • Doug Leighton says:

            Apparently DePalma’s primary contribution to science is the “discovery” that inertia is not a property of mass. Now this seems rather odd since inertia is actually defined in terms of mass. Further, DePalma claimed that “it” (inertia) also produces a corresponding reduction of inertial forces at the center of the rotating object. Apparently, since neither classical mechanics, nor quantum mechanics, nor general relativity predict or account for this phenomena (which doesn’t exist) they’re all rendered obsolete. Now we are introduced to an “ordered universe designed by a higher plan” Unmitigated bull shit. Perhaps its time to block/delete/erase this lunatic who champions Bruce DePalma.

            • Watcher says:

              Didn’t Brian DePalma make zombie movies?

            • He won’t be back.

              • Old farmer mac says:

                Thank you Ron. I ought to know better than to respond to idiots and trolls but there is something about them that makes me want to engage in a verbal sparring match with them. Trading insults is fun when you are pretty sure you are winning if anybody is listening. My redneck male culture coming out I guess.

                • Yeah, mine does too. I used to spend hours arguing, on line, with creationists. I finally figured out that they do not believe in the tenets of science and therefore it was just like I was arguing with a rock. So I quit.

                  Someone posted a sign a few days ago with a picture of a woman holding up a sign reading: “I don’t believe in the basic tenets of science and I vote.” That was just too good. I saw another picture of a demonstration in England and a woman was holding a sign reading: “We don’t want DNA in our tomatoes.”

                  Why do we so love to see some people making absolute fools of themselves? Is that a fault or an asset?

                  • Watcher says:

                    This blog has substantially elevated itself to some measure of what one might call oil analysis rigor. Be it academic or not, there’s nothing to be gained by allowing compromise of that rigor.

      • Tim E. says:

        They don’t.

        I Disagree.

        They do.

        Your Evolutionary Theory calls for a disordered Universe and Chaos.

        Mine doesn’t.

        • They don’t.

          I Disagree.

          They do.

          Those three sentences make no sense whatsoever. Who knows what the hell you are talking about?

          Your evolutionary theory means you are a complete nut. Biological evolution is a proven fact, not a theory. And it makes no comment on whether the universe is ordered or not.

  30. Pingback: 2014.11.23 diversion | Brain Noise

  31. Watcher says:

    ZH has just laid out some OPEC positions pre this week’s mtg.

    Iran, Iraq and Libya (whoever the govt is there) have all said they will not be reducing production at all.

    Coupled with a breakdown in the Iran nuclear talks, and Iran stating that they do not expect any reduction in export to China, there would not appear to be anything looming on the supply/demand aspect of things.

    Preliminary dollar trading in Sydney is flat. The breakdown of the Iran talks has not generated any sort of crisis premium in crude pricing so far.

    • Tim E. says:

      Lockheed Martin.

      Answer the Question.

      Tell us what you know -Little man.

      • Watcher says:

        A bit of quality out of Deutsche Bank.

        Lower oil prices and cash to US consumers will be offset by the dollar strength and its impact on multinational company earnings. The US consumer buys would be offset by loss of foreign buys. Poor Procter and Gamble.

        So they estimate a net negative impact on S&P earnings, led by, of course, Exxon and Chevron. That’s solid thinking. The oil price decline doesn’t help economically, as long as the dollar is up and product sold overseas decreases dollar revs.

        And THAT presumably correlates to an absence of GDP growth improvement. Wow, we get nothing from lower oil price, and wait til shale shuts down.

        Hard to see how even a GOP Congress won’t sign onto subsidies.

      • Old farmer mac says:

        You Mr Tim T. sure do get off on calling folks names as if they were janitors and you are the head of the project.

        But the only qualifications you mention so far on your part are that you have had a position that allowed you to be at or near the places some high tech military stuff is used.

        Tell ya what.

        Lots of monkeys have been into space.

        I have not.

        But hardly anybody would argue that the monkey knows as much about rockets as an average eighth grader who has read few pages about space travel in his eighth grade textbooks.

        My dog enjoys a ride in my old truck. Think he knows very much about how it works?

        And incidentally he seems to believe just about anything I tell him.No matter how outrageous it is he just keeps on wagging his tail.

  32. From memory, which may be faulty, the only part of the Bakken which was above hydrostatic pressure was the Pearshall Field. In the eastern part of that field, the source rock is above the oil window. The oil there migrated sideways and up into the structure.

    Only in coarse-grained reservoirs with big pore spaces does oil float directly on water. In most reservoirs there is a transition zone between fully water-saturated and the maximum oil saturation, say 75%. The finer grained the rock, the wider the transition zone. It can be tens of metres thick. In the case of the Bakken, the whole thing may be transition zone. There have been changes in fraccing methodology over the last couple of years that would have masked the trend from the geology – more frac stages, 50% (?) more sand per well and slick water instead of gel. Fraccing now uses 10% of US sand production. Has anyone run a tracer in the frac fluid?

    • Watcher says:

      I think all we know about it is it comes from that lake/reservoir you can see on the maps, and guar gum comes in from India — and sand is the norm now, even though it gets less oil than ceramic — which became too pricey.

      The maintenance water reqmt is there to smack the out years and I’ve heard nothing about it being thickened to gel. Pure fresh water to dissolve salt, so the gel is frack water only.

      I kind of don’t think these guys ever really cared about the out years. They were going to overcome everything with more drilling.

      • Watcher says:

        Just had a thought of near zero value.

        The maintenance flush water . . . it comes up salty and contaminated. It is just like production water. It has to pay for space down the disposal well. Throughout the life of the well.

        Jesus, these wells are expensive, in the out years too.

    • Old farmer mac says:

      I am not predicting that a scenario such as the one I am going to outline here will come to pass, but if it were to happen….

      Suppose we were to institute a policy of building as much wind and solar power with public support aka subsidies in places and ONLY in places with really good wind and solar resources.

      We could then sell the power cheaply generated to local folks in those areas- for instance wind and sun in Texas where there is demand enough for the output of both- solar in Arizona where the sun is excellent but the wind is not so good. Phoenix is a good sized city and the state base people enough to use up humongous amounts of solar electricity.

      And charge market prices for the renewable juice giving part of it to the conventional generating industry to pay for maintaining adequate conventional backup capacity.

      The areas getting the very cheap renewables could be charged the going rate for conventional power to repay the subsidy at a realistic rate in years and interest.

      That money could be returned to the treasury to be used to speed up things on the energy conservation front in places with poor renewables potential.

      The folks in northern Virginia don’t have a top flight sun or wind resource but they could still benefit substantially by spending any available money on upgrading every thing that consumes energy from traffic lights to jail house furnaces to water and sewer systems.

      This would be complicated to administer but a hell of a lot better than subsidizing a solar farm in a place with little sun or a wind farm in a place with little wind which happens often under the current system.

      The country as a whole could save a substantial amount of money while also cleaning up the environment and improving our energy security situation and employment situation at the same time.

    • Mike Durrigan says:


      How will solar cells produce power when it is dark?

      How will wind turbines produce power when the wind is not blowing?

      How are you going to manufacture a wind turbine that isn’t a malicious bird chopper? Or a solar panel that isn’t a turtle fryer?

      You don’t need an advanced degree in science or engineering to know that such things are never going to be possible.

      Most countries which make use of “renewable” sources of power have to supplement with fossil fuels or nuclear power. That is inescapable. Countries going “all in” on this renewable energy charade are also going bankrupt on it since the financials will never be favorable. Look at the disaster that is occurring in Germany due to a misguided attempt to go “green” with solar & wind. Hundreds of thousands of people getting their electricity turned off because they can’t pay the significantly increased bills. It’s insane, and something that WILL be blocked should the United States ever try to follow in Germany’s ridiculous “green” footsteps.


      • Boomer II says:

        If you use solar and wind, you can reduce your need for fossil fuels. The places that can go all renewable will, but the places that can’t will use them in combination with other energy sources.

        What solar does allow is for people to go off-grid. They use solar and batteries and get by fine. Yes, they are living in smaller homes and not powering big appliances. And they are very happy with those choices.

        As for wind and birds, some people say that pet cats kill far more birds than turbines.

        In terms of frying turtles, I suppose we could choose to kill off their habitats with global warming. Pick your poison.

        • Nick G says:

          Wind and solar are much more widely distributed than Fossil Fuels, so a transition away from FF would mean far fewer countries were forced to import their energy.

          Off-grid living can work, but it’s far cheaper for the grid to provide backup and balancing between diverse sources of supply.

          And, yes, you’re right – wind turbines kill far fewer birds than cats, buildings, etc. There’s a reason why bird-oriented organizations like the Audobon Society are strongly in favor of both wind and solar: FF pollution is far, far worse for birds.

      • wimbi says:

        Power when wind not blowing, Simple

        Dig a big hole below the wind farm, or better yet, find one already there. Fill it with water, and put a shallow pond on top. When wind blows, pump air into the hole, the water comes up to the pond.

        When the wind not blowing, take the nice cool constant pressure air up out of the hole and run it thru any kind of cheap heater, like a solar panel. Take that hot air and run it thru a gas turbine turning an alternator- we do that all the time.

        So, electricity when no wind. Any time.

        Next problem?

        Turtle frying? Don’t understand. I have lots of panels and lots of turtles, they like the nice shade under the panels. Never saw one fried, except by me.

        • Old farmer mac says:

          Hi Wimbi

          I reckon you parboil your turtle first? They do tend to come out pretty chewy otherwise..LOL

          Running a slow cooker with a pv setup might be the best way to tenderize a turtle but times are hard around my place and I haven’t yet exhausted my other energy savings options which can be implemented cheaper than pv.

          My next project is going to be a big 48 inch permanently mounted solar cooker made out of the rounded end of a big propane tank. I forget the word but it will have a manual tracking mechanism that will compensate for both seasonal and time of day changes in the incoming sun and four inches of fiberglass covered over with riveted strips of galvanized steel roofing. Gonna set her in concrete on a post make out of schedule 40 six inch pipe near the kitchen door.

          The only thing holding me up now is finding a piece of the right sort of tempered glass for the cover. Unless some vandal busts the glass this sucker ought to still be in service cooking pots of beans and turtles a thousand years from now. A little grease cooked out of unsalted meat is all it will need once in a while to keep the rust off.

          Forty eight inches might be overkill but that was the size of the scrapped tank I got my paws on and and that size of cooker will still giter done on an overcast winter day.

          Total cash will be under two hundred bucks or so plus what ever that piece of glass costs me. It is looking as if I might have to buy it new.

          • wimbi says:

            Real good, cheap, easy to make point focus. Thing like an ox cart wheel rim. One face covered with aluminized mylar, other side covered by any cheap method.

            Pull a slight under-pressure between the two covers, the mylar bulges in, making a good point focus. Burns thru a sheet of plywood in no time.

        • Boomer II says:

          Dig a big hole below the wind farm, or better yet, find one already there. Fill it with water, and put a shallow pond on top. When wind blows, pump air into the hole, the water comes up to the pond.

          I didn’t point that out, but thanks for doing so. There are ways to store energy other than batteries. For example, you can pump water into a tower when you have wind, and then use falling water to power turbines when the wind isn’t pumping. You can create hydrogen and then use that to power fuel cells.

          Having energy at one time and saving it for another can be done and is done. The problem of “when the wind doesn’t blow” is an correctable problem. And of course, there are fancier plans, like having everyone using electric vehicles. They charge when the wind blows, they return energy when the wind doesn’t blow.

          • Nick G says:

            EV batteries are nice because they’re paid for already – balancing wind & solar is a bonus. They work well for short-term (diurnal) variation. So does hydro.

            H2 will work for seasonal storage from surplus power. H2 can be stored very cheaply underground and burned in cheap ICE generators, and the conversion inefficiency doesn’t matter because you’re using cheap surplus power, generated by overbuilt wind power (overbuilding is a cheap way to reduce periods of low wind power).

        • HVACman says:

          Pumped hydro energy storage is do-able and has been done, but is not a trivial matter. It takes a lot of water pumped way up high to store much energy. One kilowatt-hour of energy is about 2.7 million foot-pounds of energy. If your upper tank is 100′ above your lower tank, that would be about 3,250 gallons of water. For even a single-family residence, an elevated tank system is not going to store enough energy to be a viable option.

          For even the smallest community, you’re talking about two many-acre-ft lake-sized reservoirs, both draining/filling, that can be built close to each other, and be several hundred vertical feet apart.

          PG&E’s Helms pumped storage project was originally built to help balance PG&E’s power output by taking surplus nighttime power from their Diablo Canyon nuclear power plant and use it the next day as appropriate for cyclical peak loads. It recently was tied to some of the wind-farm output at the Tehachapi wind complex.

          • wimbi says:

            Hole in ground can be very deep. Surface pond cheap.

            Anyhow, I was talking about a bit more. Compressed air used to replace compressor in gas turbine, so all turbine work goes to alternator.

            Power out a multiple of input pump required.

            Uses fuel, but need not. Heat easy to store overnight.

      • Old farmer mac says:

        Have you ever thought far enough ahead to consider the absolute certainty of fossil fuel supplies growing ever more expensive as time passes?

        FYI just one large dump truck load of coal delivered to a regular customer in Galax Va near where I live now costs over two thousand bucks.TWO THOUSAND BUCKS.

        And the mines are not that far away.

        The English empire and the Industrial Revolution came to pass on the back of the English coal industry. Coal in England is pretty much done for. GONE. ALL USED UP for practical purposes.Oil in Alaska is pretty much done for. Coal in the mountains near my home will be pretty much done for in another decade or so- and not because of environmental regulations so much as because all the good quality coal close enough to the surface to mine it is going to be GONE .

        But the wind will still be blowing across the tops of the mountains that don’t get flattened by the miners.

        I drive an old compact car whenever I can rather than my much more comfortable and much safer four by four truck for just one reason- to stretch my fuel dollars as far as I can.

        Wind alone is saving us from spending roughly four percent MORE each year in the US for coal and gas to generate electricity.Multiply that by twenty five for a typical lifetime for a pv panel or turbine and it sort of adds up – not to millions and not to hundreds of millions. Not even just to billions.

        Think hundreds of billions and you will be in the ballpark.The savings will grow exponentially as wind and solar power costs are already locked in on existing construction.

        There is no reason at all to believe that gas and coal will stay cheap. Just ordinary money inflation alone will probably double the price of them over the next couple of decades.Increasing demand and the shrinking number of good spots to dig and drill will probably result in a couple more doublings of the price within twenty years.

        • Mike says:

          Most of what you say I agree with. But there are some factual errors: “Coal in England is pretty much done for. GONE. ALL USED UP for practical purposes”. Not true. Plenty of coal still around over here, some of it easily mined; but it is cheaper to get the stuff from Poland or S Africa or wherever. And successive governments have favoured the switch to hydrocarbons, whether oil or gas (i.e. natural gas) because it was cheaper coming from the North Sea than from deep pit mines. Maggie Thatcher in particular wanted to free the power industry from deoendence on coal and the union dominated coal miners.

          Also – there never has been an “English” Empire. There is no such island as England. England is part of an island that includes Wales and Scotland as well as England. The island is called Britain. You would not describe all people born in the USA as Texans. Texas is part of the US, and England is part of Britain. The empire was the British Empire. Much of the coal that powered the industrial revolution in this island came from Scotland and Wales, not England. Many of the ships built when Brittannia ruled the waves were built in Scotland, not England. The founder of the US Navy, John Paul Jones, was a Scot. James Watt, perfector of the steam engines that used coal and drove the mill wheels and railway locomotives, was not an Englishman. The two prime ministers previous to Cameron (i.e.Blair and Brown) were not Englishmen. Other prime ministers – Harold Macmillan was not English, nor Lloyd George. nor Ramsay Macdonald ………………Sorry to be so tedious and picky, but there are 8 million of us Scots and Welsh and we get really really really pissed off to be thought of as “English”.

          • Dennis Coyne says:

            Hi Mike,

            There are some that think coal is not so plentiful, such as David Rutledge of Caltech and Steve Mohr

            Mohr’s best guess is a little higher than that of Rutledge, but his modelling suggests that coal will peak by 2018 and all fossil fuels by 2020, an optimistic scenario (higher estimates for fossil fuel resources) might peak as late as 2030 ( but the optimistic estimates seem somewhat far fetched, they are the highest peer reviewed estimates that Mohr could find in 2009.)

            • Nick G says:

              Dennis, two thoughts:

              1) The optimistic estimate is the earlier one. Climate Change is far riskier than Peak Coal.

              2) Rutledge isn’t looking at how much coal there is, he’s just looking at actual production. Sadly, there’s a lot of coal that’s considered just a little too costly or sulfurous that’s still easily available, should people want to burn it.

              • Dennis Coyne says:

                Hi Nick,

                Rutledge also looks at regions where coal production has peaked and using his method the eventual URR would have been predicted quite well from production data, it is hard to predict the peak year, but his estimates of URR may be pretty good, though I think Mohr’s estimate is better. I agree on the meaning of optimistic. Usually this implies more, but more fossil fuels is not likely to be a good thing.

                • Nick G says:

                  Rutledge is using an analytical technique that is similar to Hubberts linearization. Unfortunately, both techniques have a common flaw: they don’t include price as a factor.

                  That’s why Hubbards prediction about US Peak Oil is right now being falsified. Same thing will happen to predictions of peak cooal, if demand for coal continues strong.

                  Unlike oil, the amount of coal available at the next price point is much much larger. Places like the Illinois coal basin, Western Canada, Australia, and Alaska, have astounding amounts of coal.

                • Nick G says:

                  The point is, we can’t rely on geological limits to phase out coal for us. We’re going to have to do it deliberately.

                  • Dennis Coyne says:

                    You should check out Steve Mohr’s PhD thesis, he explicitly includes price in his coal model and his University is in a Coal region of Australia, so he had access to people familiar with the industry.

                    In his best guess scenario (case 2 in his analysis), coal peaks before natural gas and all fossil fuels peak before 2030 even in a “pessimistic” (high fossil fuel URR) scenario.


                    I agree that Rutledge’s estimates may be too “optimistic” (low).

                  • Nick G says:

                    Dennis, there are two main problems with this kind of analysis.

                    First, They don’t include price as an important factor. As best I can tell, that’s the case for Mohr’s analysis as well. For instance, the US has roughly 200B tons of coal in the Illinois basin, which are currently not being used because they’re slightly more expensive. If other sources of coal were to increase in price, this resource would become competitive.

                    Second, they use historical production curves. These are misleading. For instance, the Illinois basin’s production is now falling.

                    Third, they use resource and reserve estimates that were not designed for this purpose. For example, US reserves resource estimates do not include anything significant for Alaska, because production costs would be significantly higher there. On the other hand preliminary estimates by geologists in Alaska suggest there are somewhere between 200 billion and 5 trillion tons of coal in Alaska. These would become competitive, if coal prices were to rise substantially.

                    There are other areas, which are similarly underestimated, like Western Canada and the UK, Australia, etc.

                  • Dennis Coyne says:

                    I believe that Mohr’s analysis considers both supply and demand. Coal resources are very large, economically recoverable reserves, not so much. Read the thesis, it is much different than you imagine.

                  • Nick G says:

                    I’ve been following his work for years.

                    “Economically recoverable” is the key phrase. That doesn’t mean “positive EROEI”, it means competitive with other sources.

                    Let’s consider another energy source: Green River “shale oil” (kerogen). It’s a miserable source of liquid fuel, but it would burn just fine (it’s similar to wood). There’s probably a trillion tons of it.

                    The IPCC is correct: there’s way too much hydrocarbon in the ground, and geology won’t save us. We have to make choices…

                  • Nick G says:

                    Wait a minute.

                    I’ve been looking at this from the point of view of peak coal causing the end of the world as we know it.

                    But, the reality is, that coal does have effective price competition from wind and solar power. That might create the price environment that would validate Mohr’s assumptions.

                    So, maybe the IPCC is wrong after all!

          • wimbi says:

            Right on, Mike. My grandparents were born in Stirling, Like stirling engine.

            Beam me up, too, Scotty.

      • Ilambiquated says:

        Those are all just Republican talking points. Maybe you should come up with an opinion of your own. The first step is to inform yourself on the topic at hand.

        About your claim that hundreds of thousands of German households are without electricity (the only part of your post worth replying to), I can assure you that it is a lie. Also the reason electricity is so expensive here is that it is heavily taxed, like gas.

      • notanoilman says:

        Would you mind explaining how solar panels can fry turtles. I have been puzzling on this and have not come up with an answer.


    • thrig says:

      We shall call this BAU light, a side-order of solar with maybe 30% renewables (when and where viable) and then the 70% from somewhere else, doubtless the fossil fuels and nukes that everyone is planning on burning out for at least the next few decades. Or, what, we bicycle them solar panels down to clipper ships that sail—yeah, no. Can’t maintain the roads on sunshine alone. Carbon is King, as the graphs by Rune plainly point out, growing faster than renewables since 1990. Or, what, Google shuts down their data centers when the sun don’t shine? (Handwaving about some new transmission system or storage tech of unknown viability here.) That sort of thing would be covered in their disaster recovery plans, not daily ops, so addicted to low price reliable energy they are. Hence, Google engineers anticipate increased fossil fuel use even with the side-order of solar. Meanwhile, residents of one town are not much amused when Microsoft fires up those big diesel backup generators. I think they maybe got a job or two out of that deal? Then there’s the somehow often neglected matter of all that necessary strip mining and whatnot to collect those 100,000 gabajigawatts of easy solar—hence, BAU—though thank goodness that’s over in somewhere-else-land, and the waste from such would certainly not be getting into the food chain. Well, not our food chain. Much. (Vigorous handwaving over how to maybe clean those superfund sites, more handwaving over the matter of diminishing returns, various capital expenses and fiscal stability, the general biosphere shellacking—”multiple cascading ecological failures”—the Sixth Extinction event, etc.) And now, back to BAU: the noise coming off I-5 is a delight. Such growth! Good thing those flying carsMuskmobiles are coming to save the day, what, eh?

      • Nick G says:

        Nah. Carbon’s not king, and renewables can handle it all.

        Fossil fuels are expensive, dirty and risky. We should kick the habit ASAP.

  33. Old farmer mac says:

    This post at Energy Matters is well worth reading.

    • Watcher says:

      Ah yes, the Olympic peak. Been a while since I heard that.

      People retreat to their sanctuary of normalcy, where economics have laws that actually mean something.

      They don’t have to. There is no actual physical law that says they have to.

    • Marcus says:

      The problem with the oil supply demand model over at Energy matters is that is does not explain why copper, gold, silver & iron ore etc all went down at the same time as oil. There is only one thing that does, the strength of the dollar.

      • Watcher says:

        Funny how that works.

        Not to mention the magnitude of the dollar move being so large, and sudden, and so curiously synced.

        The world is not what it was. It all ended in 2008. Things won’t make sense anymore, but there will always be someone to explain the special factors that cause minor dichotomies like reports of six years of ongoing US recovery . . . but every once in a while during those six years we seem to need to print another trillion dollars.

      • Euan Mearns says:

        I’m listening and thinking.

  34. Longtimber says:

    “The fall in prices comes at a time when Opec’s domination of the world oil market is being challenged seriously for the first time in more than 30 years by the unexpected and sudden resurgence of the US as a major producer. By 2020, Citigroup estimates that America will be pumping more than 14m barrels per day (bpd) of oil and petroleum liquids, giving it the capacity to export almost 5m bpd, which will transform the energy markets.” “We are now entering a new era in world oil and we will have lower prices for some time to come,” says Daniel Yergin
    now I want my MTV in my F150. even more money from nothing, chicks are free.

    • Patrick R says:

      So in 2020 ‘America’ (does he mean the U.S.?) will be producing 14m bpd and exporting 5m. So consumption will only be 9m?! Half what it is now? Citigroup and Yergin actually make money saying this stuff? Wow well EVs sure are going to suddenly spike; replace most of the fleet. A fleet that’s just had a big renewal….? Or will it be an amazingly fast roll out of metro systems, light rail, and electric buses that does it? Everyone going to walk away from suburbia somehow…?

      It’s a damn good idea for the U.S. to quit wasting so many barrels of liquid fuels but I can’t see that happening without either crazy high prices or unavailability, or probably both. But not through ‘lower prices for some time to come’…..

      • Old farmer mac says:

        Hi Patrick,

        I have read some of Yergin’s work and it is obvious he is a long long way from being a fool.

        And there is no question he is possessed of vast amounts of information that comes his way as the owner and manager of a big consulting operation- one of the biggest ones around.

        So- I guess there are good reasons to think he might have a pretty good idea what will happen in the short term.

        But we used to price oil in ” yergins” back in TOD times.It got up to around three yergins before TOD shut down.Three times what he said it would be in his long range forecasts…

        Even if I were to believe he has good crystal ball- which I don’t- He is still in my opinion one of the biggest mouth pieces for business as usual and people of that sort say ( or REFRAIN from saying as appropriate) whatever they think is going to further the interests of their industry.

        Ya don’t expect Hillary to make any speeches at the Republican National Convention next time around do ya?

        Having said this much I do expect electric cars and other energy saving technologies to scale up MUCH faster than most people think possible.We are getting close to passing some hard dollars and cents tipping points in the wind solar and battery industry in long term dollar costs.

        My guess is for what it is worth that the cost of manufacturing an acceptably sized and acceptably durable ev battery will fall by fifty percent within five years and that every ev and plug in hybrid that can be gotten out of factory doors will sell as fast as it hits the dealer lot.

        It is not just the technology. It’s public perceptions.

        I have had a neighbor visit who rants and raves about not being able to see worth a damn under CFL lights and that them other new fangled fifty dollar bulbs them there feds are gonna force on us- without ever realizing he is sitting under LED lights.

        I buy an led now and give it to each and every person who makes me a minor gift of some sort such as bringing by a homemade cake or a bowl of dried string beans- a delicacy that cannot be bought at any price to the best of my knowledge.

        Within five years all my Scots Irish neighbors who ” would skin a flea for the grease in it” will be using these ”fifty dollar ” bulbs and buying them for two or three dollars each.Maybe sooner.

        I hang around young people at the nearby community college as often as I can manage it in order to see for myself where the culture is headed and of this I am sure:

        Someday soon the best looking alpha girl is going to show up in a Tesla and the young woman who teaches the freshman and sophomore business administration classes is going to show up in a Leaf or a Volt.

        That is all it is going to take to mark the general acceptance of electric vehicles into the mainstream, the transition from early adapter fan to every day product.

        • Patrick R says:

          Hi OFM

          Agree, and I think there are signs that all the Vs; PV, EVs, and AVs (autonomous vehicles), will conform to Bill Gates’ observation that: ‘with new technology we tend to overstate the short term impact and understate the long term one’.

          There is evidence for greater oil demand elasticity through changes in living patterns and the electrification of work and greater ICE engine efficiency, and a greater decoupling of economic output from oil consumption, compared to 20thC norms, but there’s a hell of a way to go… If only the U.S. was using 9mbpd with current economic output!

          And of course Yergin is not stupid but is clearly far too close to the Big Oil machine, in fact is indistinguishable from it, to take any utterance from him as anything other than marketing.

    • Jeffrey J. Brown says:

      The next shock?
      (March, 1999)

      Consumers everywhere will rejoice at the prospect of cheap, plentiful oil for the foreseeable future.

      Policymakers who remember the pain of responding to oil shocks in 1973 and in 1979-80 will also be pleased. But the oilmen’s musings will not be popular with their fellows. For if oil prices remain around $10, every oil firm will have to slash its exploration budget. Few investments outside the Middle East will any longer make sense.

      Cheap oil will also mean that most oil-producing countries, many of them run by benighted governments that are already flirting with financial collapse, are likely to see their economies deteriorate further. And it might also encourage more emissions of carbon dioxide at just the moment when the world is trying to do something about global warming.

      Yet here is a thought: $10 might actually be too optimistic. We may be heading for $5. To see why, consider chart 1.Thanks to new technology and productivity gains, you might expect the price of oil, like that of most other commodities, to fall slowly over the years. Judging by the oil market in the pre-OPEC era, a “normal” market price might now be in the $5-10 range. Factor in the current slow growth of the world economy and the normal price drops to the bottom of that range.

  35. Ronald Walter says:

    Forget about the Bakken for right now.

    Slightly off topic, to address the confusion regarding alien intelligent life making feeble feckless attempts to communicate with humans on earth using pulsating light from distant pulsars, quasars. Nobody is going to believe such nonsense, it makes no sense whatsoever.

    Here’s how it all happens:

    The quasar pulses are really buy and sell signals from God to Goldman Sachs, that’s how they can do God’s work. God doing God’s work is not enough. Goldman Sachs can do God’s work too. God’s prayers were answered, He needed some relief of doing God’s work, it goes on for an eternity, it gets tiresome. Heaven sent signals directly to Goldman Sachs were the answer to God’s prayers. God needs a break, some rest, now and then too, He has had only one day of rest since He created the heavens and the earth, and God knows God needs more rest than that. God instructed Goldman Sachs on how to do God’s work with pulses from quasars in deep space. Nobody ever really knew until now. Most of all, making money isn’t really God’s bag, so He gave the thankless, worthless work to Goldman Sachs. God can’t be bothered with such profligate frivolity. There is much more important work to do for God, God only knows how it is.

    Now you know.

    All of the talk of aliens sending those signals is all horseshit.

    Back to oil, the peak, and how it can’t be avoided.

  36. toolpush says:

    Truth or Dare?

    “Reports on Monday suggested Russia could cut its oil production by about 300,000 barrels a day in an attempt to support the oil price.”

    • Anon says:

      Dare. Russia is not the marginal producer and has no impact on the North American market (glut driver) and very little on Japan (recession). If anything, their domestic demand might be falling by a good chunk of that with how messed up their economy is.

      OPEC is the one who has to cut.

      • Doug Leighton says:

        Perhaps I’m wrong but I thought a marginal producer was one who makes a small amount of a product with high costs (and little or no profit). If so, Russia wouldn’t be marginal as it produces a lot. And you’re saying OPEC is the one who has to cut. Why? Should OPEC cut to protect America (or the world) and from what: low oil prices, high gas prices? Perhaps America’s LTO crowd are marginal producers and they should cut? I’m not saying you’re wrong, just that I don’t understand your logic. But then I’ve never understood anything about economics.

        • A marginal producer would be the producer who has the highest production cost. It has nothing to do with how much oil that producer produces. Though I would bet that Russia does not have the highest production costs. Shale oil producers would be the perfect example of a marginal producer. Their costs per barrel are among the highest in the industry.

          Calls for $100-a-Barrel Oil Show Many Betting on Rebound

          Marginal Costs

          Marginal production costs — the price level needed to make enough new projects profitable to meet future demand — are responsible for the resilience of later-year Brent prices, according to BNP Paribas.

          “The back-end remains anchored while the front comes off,” Harry Tchilinguirian, BNP Paribas’s London-based head of commodity markets strategy, said by phone on Oct. 20. “The back-end stands around the marginal cost of production and there is no indication why that marginal cost would change.”

          Companies have ventured farther and drilled deeper to satisfy rising demand over the past decade, increasing the marginal cost of a barrel to $107 last year from $30 in 2001, according to Bernstein, a consulting firm that studies the financing of individual oil fields globally.

          • Mike says:

            Ron, you and Mac are correct of course, a marginal oil producer is one that produces a barrel of oil that is marginally profitable. Its an old term, as old as the oilfield itself. All producers, integrated or independent, nationalized or not, are in some ways marginal producers. Every shale oil company in the US is a marginal producer.

            Thank you for trying, as hard as it is, to keep people straight around here. You have a lot more patience than I do.


            • Ilambiquated says:

              If shale can survive at $80 then they weren’t marginal producers six months ago when the price was $115.

              Marginal costs are costs minus interest on capital. These costs determine market prices.

              Profitability is beside the point. Cash flow (if not politics) is what keeps producers in the market.

              Check my discussion of the “renewable ratchet” below. It is an example of how the cash flow considerations of unprofitable producers can control market price.

              In oil terms, if I drill a well expecting a profit at $100 a barrel, and the price falls to $80, I may still keep pumping, as long as my marginal costs are below $80. I may be losing money because I can’t pay the interest on the well but still have an incentive to sell at the lower price.

              BNP is a bit muddled here because they are confusing the marginal cost of adding new capacity with the marginal cost of delivering additional oil. This is understandable in the oil industry, where adding and reducing capacity is more complex and expensive than the example I give below with the “renewable ratchet”, where you can cut output of a coal fired power plant by putting less coal in the hopper.

              However, the assumption that prices will rebound in the short term because the industry would not be profitable otherwise is faulty.

              • Marginal costs are costs minus interest on capital.

                Well I think not. What it costs a small driller to produce a barrel of oil would include the drillers operating expenses plus what it cost him to borrow the money.

                These costs determine market prices.

                Well again, I think not. What it cost the driller to produce a barrel of oil has little to nothing to do with the market price. The market price is determined by supply and demand. Of course the small driller is part of the supply but such a tiny part that he has very little effect on market price.

                Profitability is beside the point. Cash flow (if not politics) is what keeps producers in the market.Check my discussion of the “renewable ratchet” below. It is an example of how the cash flow considerations of unprofitable producers can control market price.

                No, I have no need to check your discussion below because of one serious error in your statement. Unprofitable producers have no control over market price. Of course if they go out of business that may cause the price to rise slightly but I seriously doubt that the market would notice one small producer going out of business.

                If unprofitable producers could control market price they would do it. WTI would go to $100 tomorrow. But they can’t and it won’t.

                Oil is a fungible commodity. The price is set by the supply and demand of the entire world. Small producers in the shale oil price have little control over anything except the spin on the brochures hawking their stock.

                • Ilambiquated says:


                  “Marginal costs” and “the costs of marginal producers” are not the same thing. It’s an unfortunate pun. That is sort of the point to my remarks.

                  I probably shouldn’t have used the word “control”. In a market model, no individual controls supply, demand or price. But notice I use the plural, “producers”. The point is they do not stop bidding when they start losing money. They stop bidding when their individual deals go cash flow negative, which is a very different thing. So these costs “influence” if not “control” the price. That is, assuming the market clears, other producers will have to compete with bids set on that basis. In theory prices are not determined by “supply and demand”, but on a set of bids which “clear” in aggregate to a set price.

                  About marginal price: Let’s say I invest in a knife making factory. I buy some machines to stamp and sharpen the blades and attach the wooden handles. To make 1000 knives I need to buy materials (the plastic for the handles, the steel for the blades) and pay for operating costs like labor and electricity. To sell at a profit, I have to cover those costs and the interest I am paying the bank for building the factory.

                  The reason I want to sell as many knives as possible is that the payments I make to the bank are independent of the number of knives I produce. So the more I sell, the lower my capital costs per knife. Looked at from the other side, the cost of producing an additional knife (my marginal cost) is independent of my capital costs.

                  However, I will have an incentive to keep producing knives as long as the price stays above my marginal cost, even if I am losing money on the interest payments plus marginal costs. Each transaction is cash flow positive, even if my P&L (where I also track my capital costs) show each transaction as a money loser.

                  As I pointed out in my other post, this distinction gets murky in the oil business, where you can’t just switch production on and off at near-zero cost.

                  As a side note, none of the standard financial planning software used in the oil industry is unable to deal with that murkiness. Capital planning is kept separate.

                  I once worked on a project with an oil company where we introduced financial planning software designed for automobile components suppliers. The software could deal with entire assembly lines being built to order for individual customers. It combined financial planning and project planning, allowing the to-date value of unfinished projects to show up on the balance sheet. That was extremely valuable to an oil company with a large budget for upgrading existing oil fields. Try that with Halliburton software!

                  • In theory prices are not determined by “supply and demand”, but on a set of bids which “clear” in aggregate to a set price.

                    Prices are determined by supply and demand both in theory and in fact.

                    The idea that the world price of oil is set by a bunch of small producers “bidding” is quaint, to say the least.

              • Dennis Coyne says:

                Hi Ilambiquated,

                I am not exactly sure how you are defining “short term”, but to be clear, I would call that 1 to 2 years for adding new capacity to produce oil (possibly shorter for LTO, but longer for offshore deepwater).

                If prices remain at $75/b, supply will decrease as very little new capacity is added and existing wells decline in output. Wouldn’t you expect oil prices to rise under such a scenario?

                If you mean, by short term, 1 to 2 months, then oil prices may not react over that short a time frame, but I think if prices remain at $75/b we will see a decline in LTO output (because the drilling rate will be cut in half) within 3 to 6 months.

                • Ilambiquated says:


                  Yes, because the output falls so quickly production would decrease quickly as well. That’s the “murkiness” I was talking to Ron about — it is even stronger in the LTO business than elsewhere.

                  I’m pretty far out in left field on what I expect really. I don’t think the current price fall is driven by LTO output.

                  Also despite this theoretical discussion I think that the gap between the real cost of pumping oil and the price consumers would be willing to pay in a pinch is so big that prices between say $60 and $130 are mostly driven by “speculation” — like the stock market really.

                  • Dennis Coyne says:


                    On speculation in the oil futures market:

                    these forces can operate on a month to month basis (short term), but the long term oil price will be driven by market supply and demand for oil.

                    Slow economic growth has caused a shift of the oil demand curve to the left, driving down real oil prices. If we assume the oil supply curve has not shifted, oil producers will respond over the short term by investing less in new wells due to reduced profits, they will move along the supply curve to lower output at lower prices.

                    The lower oil prices can have the effect of increasing economic growth rates (consumers spend less on oil, but spend more on other stuff, increasing domestic aggregate demand.) The economic growth shifts the oil demand curve to the right and oil prices rise.

                  • Dennis Coyne says:

                    Hi Ilambiquated,

                    Above you said something about at higher prices of $115/b the LTO producers were not marginal producers. The idea of marginal cost is best understood at the firm level.

                    So at a higher oil price, more of the available drilling locations will be potentially profitable. A firm will use its available capital for those wells that it thinks will be most profitable. Often the actual output is lower than the expected output and some of the individual wells will be at the margin of profitability even when oil prices are $115/b. There is always this variability in the oil business and I imagine firms focus on the average output and average cost of this month’s wells. As long as their average well is profitable, month in and month out, the oil company will stay in business.

                    There is also variability from firm to firm and there may be some companies whose average wells are barely profitable at $115/b, at $75/b these companies will go out of business rather quickly (if they exist).

        • Watcher says:

          Many moons ago I was taught that “marginal” means “next”. The next dollar. The next this or that.

          No one’s next item is any more important that some other source for that next item.

          • Old farmer mac says:

            Just about every word in English seems to have at least a couple of definitions.

            It has been posted before here by others but nevertheless I will post the economics definition of marginal production.

            It is that part of the total production of a good or service which happens to be marketed by more than one company or individual that has the lowest profit margin. Basically means that if the price of that good or service falls the producer goes from making a small profit to suffering at least a small loss.

            The costs of production are at least somewhat different for just about every company out there no matter what product is under consideration.

            My neighbors cannot grow potatoes as economically as producers in Maine and Idaho so we have to get a higher price for ours or grow them as an expensive hobby.

            But in recent times shipping costs have gone up to the extent that it costs well over two bucks to haul potatoes here from Idaho and with that two dollars not being a problem for us local guys we can now make a few bucks raising potatoes.

            I have some good bottomland that makes it possible to grow potatoes profitably for ten bucks a bushel.

            My neighbor who owns the adjacent hillside needs at least fifteen bucks a bushel.If potatoes go to fifteen bucks he may start raising potatoes.If he does he will be the local marginal producer.

            There are people near by with land even better than mine not to mention superior potato growing skills who can grow potatoes for eight dollars profitably.If potatoes fall to eight bucks I am long gone and they become the local marginal producer. If potatoes in Idaho fall below six dollars then those guys are in trouble because with a two dollar shipping costs the price of potatoes locally will fall below eight bucks.

            Whoever is just getting by at current prices is a marginal producer. Nothing complicated about it.

            • Watcher says:


              The marginal dollar most clearly appears in tax laws. You have income up to the “bracket” threshold. The marginal (next) dollar will have a higher tax rate than your average tax rate because it will be taxed at the bracket about to be entered.

              The marginal dollar will always be taxed higher than your overall/average tax rate. So the next dollar of income you earn is worth less than the previous dollars earned, because you won’t keep as much of it.

              • Ilambiquated says:

                Than you for parrotting the Republican party line to claim tax cuts to the rich are the only real tax cuts.

                • Watcher says:

                  You do realize the first bracket of US income tax transition takes place at $9075? That’s the transition from 10% to 15%.

                  The 9076th dollar, that marginal dollar, is worth less than the 9075th dollar because 5 fewer pennies are kept. Even in the Philippines annual income of $9076 is not called rich.

                  • Ilambiquated says:

                    Yeah, it should be smooth curve. More important, rich people should be paying a lot more.

            • Ilambiquated says:

              The marginal cost of a product, on the other hand, are the costs too a producer to produce of additional unit of a product. It means the producer’s material costs and operating costs, but ignores interest on investments.

              Marginal costs are important because producers stop producing when prices fall below marginal costs, but will continue to produce even at a loss as long as prices are above their marginal costs (and they don’t go bankrupt).

              That’s what BNP Paribas was on about.

  37. Longtimber says:

    Article in the NY Times on LTO production interface with Local’s way of life. “But over the past year and some, the dynamic seemed to be shifting.”

  38. tfark45 says:

    Good Day Everyone, I was just going to post the two stories the NY Times has put out over the weekend.
    A friend of mine sent me the link during the night. They convey what I see and what is happening here in ND. I couldn’t have written it any better, the stories stir emotion as to what is happening here. On a personal level they stir some real emotion. The pages are interactive with streaming video, excellent work and my personal thanks to the NY Times for putting it all together.
    I have linked them to my site
    NY Times & Bakken

    The Downside Of The Boom – Part 1.
    North Dakota Took On The Oversight Of A Multibillion Dollar Oil Industry
    With A Regulatory System Built On Trust, Warnings & Second Chances

    Where Oil & Poltics Mix – Part 2.
    After An Unusual Land Deal, A Giant Spill And A Tanker Train Explosion
    Anxiety Began To Ripple Across The North Dakota Prairie

    Ron, Thank You and all of you, and have a safe day.

    • wimbi says:

      Ironic that ND has some of the best wind sites in the US. Wind does not go bust.

      • Ilambiquated says:

        Wind producers might go bust, but the wind energy will keep getting produced, because the marginal cost of wind is zero.

        This is what I call the “renewable ratchet”. Imagine an artificial world where there are two possible electricity generation methods, one renewable and one fuel based. Both require initial plant investment, presumably lower for the fuel based energy source, or it would never be used.

        Demand is growing and capital equipment gets old, so there is constant building of new power plants. If fuel prices are high, renewable plants get built. If fuel prices are low, fuel burners get built.

        But there is a difference between the two power plants: High fuel prices offer an incentive to switch to renewables, idling existing fuel plants, but low fuel prices do not offer any incentive to switch away from renewables, as long as the renewable plants are in place.

        The reason is that the marginal costs of renewables is zero, so the renewable producers have an incentive to meet any non-negative price even if they are losing money. They’ll take what they can get. Fuel based producers, on the other hand, mothball their plants if the price falls belong their marginal costs — the fuel price in this simple model.

        The “ratchet” I was talking about works like this: Once renewables establish themselves, they can’t be rooted out, whether they make money or not. So every time fuel prices climb, they ratchet up a notch.

  39. Ronald Walter says:

    December production for the Bakken will be just under 1.2 million barrels per day.

    It’s all sunshine, lollipops, and rainbows.

  40. Watcher says:

    BNSF carloading report for Petroleum lists Nov 15 week as the first week with a decline vs 2013’s equivalent week, going back through September. All other weeks since Sept show a rise in Petroleum shipments until Nov 15.

      • Marcus says:

        So November 2014 is likely the peak for the Bakken Ron’s predictions looking on the money.

        • Watcher says:

          One sample isn’t much, but $75 maybe is compelling.

        • I am not calling November but I do think a 2015 peak is very likely. At any rate I am calling 2015 will as the peak of world C+C production regardless of what happens in the Bakken or Eagle Ford.

          • Watcher says:

            The geology peak would be much more profound than price derived peaks, without question.

            I suspect it’s going to be hard to delineate.

          • John B says:

            2015 should be an interesting year.

            Hirsch has predicted that “world oil production” would begin to decline “by” 2015. So I guess that would be sometime in the next 36 days?


          • Dennis Coyne says:

            Hi Ron,

            If prices remain at $75/b there may be a short term C+C peak in 2015, but if oil prices rise back to $100/b (2014$), it might be a couple of years later (2017 at the latest) a lot depends on oil prices and how the World economy reacts to higher oil prices. I think a bumpy C+C plateau from 2015 to 2017 with slow decline(1 to 2% annually) until the World economy goes in the tank, probably by 2020. It could turn out that decline begins in 2015, if so decline would be slower. The longer a plateau is maintained, the steeper decline will be once it begins. So it would be better if you are correct about 2015 because any mitigation that is possible can get started sooner.

        • Wes453 says:

          Don’t try to read too much into these rail carload reports. Along with the Bakken, BNSF also hauls crude out of nearly a dozen facilities in the Powder River and Niobrara of Colorado and Wyoming as well as a few other facilities in the Eagle Ford and Permian. BNSF also hauls an increasing amount of oil loaded at facilities in the Prairie Provinces of Canada. Oil from all of these different origins goes into the “petroleum” carload line in the weekly report. Plus, I believe carloads of ethanol fuel ready for market are also included in the “petroleum” counts. I once asked somebody I know who works at the BNSF headquarters in Texas about that and he thought this was the case, but wasn’t certain.

          Anyway, rather than looking at the petroleum carloads to get an idea of future production, we might want to instead look at the “sand/gravel” carload counts. Like petroleum, this has been a quickly increasing category of traffic for BNSF, thanks to the wells in the LTO plays eating up a lot of sand, much of which is brought in rail. If there ends up being a sustained slump in the amount of sand hauled on the rails (and not just the normal seasonal slump seen around late December and early January), that could signify a future cutback in the number of wells drilled.

          • Anonymous says:

            Good data.

            • Watcher says:

              OTOH the megafracks may start eating more sand to get not much more oil. Though no one will endure such a cost increase at $75,
              which is down anohter 15 pennies in Singapore right now.

  41. Dennis Coyne says:

    The chart that flows is for the Middle Bakken only (no three forks wells) for well ID # from 17000 to 27500, with 101 well centered moving average (red) and linear trend (black dashed line). Slightly rising trend from 2008 to 2014 with significant statistical variation.

    • Dennis Coyne says:

      That should have been chart below.

      A second chart of Three Forks only, mean 2 month cumulative is 20% lower than middle bakken well and over early period (well 17000 to well 22000) about 23% of wells were Three Forks wells and from well 22000 to well 27500 about 40% of wells were Three Forks wells. This may account for some of the declining output from the average Bakken/Three Forks well. The Bakken/Three Forks average well should approach the level of the average Three Forks well as more of the drilling is directed at the Three Forks as the Middle Bakken sweet spots become fully drilled. Chart below with 101 well centered moving average and linear trendline.

      • Enno says:

        Thanks Dennis.
        I would also be hesitant to call a peak based on 1st day production numbers, and would prefer to judge it based on a 6-12 month cumulative production period at a minimum. There is just too much noise in the data.

        Furthermore, would it not be logical to expect a (temporary) increase in the average well performance now prices have dropped markedly? As an operator I would avoid drilling at the fringes if I still had that option available, and probably continue drilling my best spots.

        • Dennis Coyne says:

          Hi Enno,

          I would think that the lower prices might have that affect unless the sweet spots have been fully drilled.

          I am in full agreement that 6 months would be better than the two or three months that I have used. I was trying to tease out any near term decline, but agree that with such noisy data it is easy to see a trend that may not be significant.

          Your idea on the increasing percentage of Three Forks wells is an excellent one and might be the reason for any apparent decline we see in the future.

          Thanks again for sharing the North Dakota data, it is invaluable.

  42. aws. says:

    High rainfall region facing ‘worst season in nearly 50 years’ as emergency drought loans announced for Victoria

    By Danielle Grindlay, ABC Rural, Australia

    Typically known as the high rainfall region of Australia, grain and livestock producers would be the last you’d expect to see lining up for emergency assistance.

    But Mr Fitzgerald is in his mid-70s and says this is the worst season he’s seen in nearly 50 years.

    “We’ve got two harvesters and this is the first time that I can remember that we haven’t got any [work],” he said.

    “The farmers I usually work with, and for, have had to cut their crops for hay.”

    And they’re the lucky ones. Many won’t even get hay from failed crops.

    “North of Coleraine, hay-wise, some of the contractors have virtually done nothing, down to a quarter of what they usually do.

    “I know ourselves, we’ve done very little hay.

    “We were lucky that we had a fair bit last year and some left over to carry on with.”

    Mr Fitzgerald booked cattle in to Naracoorte abattoir at the start of October but says he’s unlikely to get in until late December.

    “They’re at full capacity and there’s a backlog of six weeks to two months,” he said.

  43. wimbi says:

    Summary of skim of all above in the wee hours.

    Fusion is doomed not because of hard physics problems, but because wind and solar are bound to get cheaper than anything, everywhere, soon.

    Right, once you have bought solar/wind, the energy is there for you to get for near nothing, so you will. When the sun shines here, I tell my wife to use as much electricity as she has any desire to do, and she is in the process of thinking up good things to do with it at those times. Heat/cool storage is an obvious one.

    I have spent tons of time over the years thinking up new/old tech that does not use any modern whiz-bang materials or electronics. There’s a huge pile of them. Anybody can do it. They don’t only because of the idiotic economic system we have now puts the wrong price on everything, unrelated to true cost and true value.

    Electric cars are set to boom. Reason is real basic- they cost less. People are starting to notice.

    My grand uncle did his doctor’s rounds in an electric car–in 1910.

    OF COURSE, all this good clean energy won’t save humanity from itself. Humanity is refusing to be saved by anything– good. Next try might be better, could hardly be worse ( voice of biosphere speaking here).

    Next try starts right here, when st hits fan local hill folk junk geniuses will not go down with all the others, because they have never been up with all the others, and they will have megatons of junk to start over with.

  44. Ronald Walter says:

    After the bovine excrement hits the fan, there’ll be hundreds of thousands of wind turbines to salvage.

    Probably not was expected of them, but that’s probably what is going to happen.

    At three million dollars for a wind turbine, wind turbines are an expensive solution for alternative energy power generation, nobody really wants them in their backyard, so you have to slough off the bad on those who are unaware of what really happens.

    In addition to generating electricity, thanks to a ff power plant, they are really good for plucking raptors from the sky, they can’t be beat.

    Go to youtube and there are videos of buzzards being hit by a wind turbine blade. The buzzard is knocked senseless, loses wing control, gravity takes over and the buzzard falls from the sky, hits the ground, loses consciousness and dies.

    All because of one wind turbine.

    The buzzard could have lived another day, but the wind turbine got in the way. Crocodile tears from the wind industry, it is just too bad for the buzzard.

    Forget wind turbines in the present state of the technology, they’re a boondoggle. A white elephant.

    It is better to drill for oil at 9 million dollars per well than it is to stand 3 wind turbines that operate for an hour and a half every 5 days. A complete waste of resources, the investment does not compute, harms the environment for all species.

    They are a failure and humanity suffers because of them.

    Get rid of them and good riddance.

    • Doug Leighton says:

      Ronald, surprisingly, to me anyway, the Dutch agree with you. I was in Holland last year and almost everyone I met seemed to detest the presence, and very existence, of turbines; the opposite of what I expected. Holland gets about 4% of its energy from renewable energy (highly subsidized), meaning wind power, I suppose. So, although everyone loves old windmills they’ve fallen out of love with turbines, big time. Of course the Netherlands have a lot of natural gas meaning they can be picky, for awhile anyway!

    • Dennis Coyne says:

      Hi Ronald,

      At some point soon (by 2030 at the latest) fossil fuels will peak and begin to decline, no doubt there is a lot of waste of energy and higher fossil fuel prices will make us use energy more efficiently.

      If we do not use wind, because we are concerned about raptors and other birds, or solar because we don’t want to bother the turtles (and rattlesnakes), we either use nuclear or we use less energy.

      I think we should use wind, solar, geothermal, and nuclear, and install more combined heat and power where waste heat from power plants is used for heating buildings and/or water.

      We should also become more energy efficient and try to enable better access to birth control and empower women so that population peaks and begins to decline by 2050 (UN low fertility scenario).

      • Boomer II says:

        I think we should use wind, solar, geothermal, and nuclear, and install more combined heat and power where waste heat from power plants is used for heating buildings and/or water.

        I agree. People can debate whether or not like like solar or wind, but if we need those, we will likely use them.

      • Synapsid says:


        Yew makin’ light about rattlesnakes, Boy? Some on us got a likin’ ’bout rattelsnakes.

        (They taste like chicken, a little on the greasy side sometimes.)

        • Dennis Coyne says:

          Nothing against rattlesnakes, just thinking of desert critters.

          Never tasted them actually.

          I think we should try to move away from fossil fuels before they peak and use whatever options will work with the least environmental destruction.

          Those that think we should just power down are unrealistic. Possibly the best for the environment, but so would reducing population to 500 million worldwide, not sure how that is accomplished quickly in a way that is pleasant.

          • Synapsid says:


            I’m fond of desert tortoises myself. One wandered into the yard when I was in 5th grade, in southern Nevada, and helped me cut the grass. Dichondra (sp.?) grows really well in the desert if you keep watering it (they did) and I was this little kid behind a big push mower, and it was hard to push the mower through the stuff. The tortoise liked the dichondra and would eat straight ahead, so I’d pick him (I thought of it as him) up every once in a while and set him somewhere else, pointing in a different direction, and he’d chew away. He broke up the lawn enough that I could get a running start and push the mower through, and eventually earn my 50 cents for the Saturday matinee.

    • wimbi says:

      So there we have it, ladies and gentlemen- a beautiful example of the quality of the logic of the anti-solar people.

      • Doug Leighton says:

        With respect, I’ve yet to see much “quality of the logic” coming from the pro-solar people.

        • Old farmer mac says:

          HEY GUYS,

          I could be entirely wrong of course but remember that while I pretend to no expertise in oil beyond what you can learn junior college geology classes and what I learn on sites such as this one I do claim some serious arm chair level expertise in the art and history of creative writing and politics.

          Ronald is our court jester and comic and you should never take anything he posts very seriously. His posts are a combination of sarcasm, humor, political satire, fact, fancy and whatever psychoactive substances he happens to be enjoying at any particular minute.(Incidentally I used to have long hair and a peace symbol on a chain around my neck and know a little something about psychoactive substances which were freely available and cheap back in the sixties.)

          So – in my humble opinion you are badly mistaken if you take Ronald seriously at any given minute.

          Sarcasm and humor do not come across well in such a forum as this one but I read Ronald’s 10:01 comment as sarcasm.

          The beauty of it is that a whole hell of a lot of people do think seriously after the fashion of this comment.It takes that ugly little element of truth in such compositions to make them useful.

          I can find a drunk redneck who is utterly and absolutely ignorant of the physical sciences and geological and ecological realities in almost any bar who will say about the same stuff. And he will THINK he is being humorous. If his audience is the expected one consisting of his buddies they WILL THINK HE IS FUNNY.

          The reason they hate people like the ones that hang out in forums such as this one is that our message scares the hell out of them and so they hate our guts. They also associate our message with left wing politics which pisses them off of course even more.

          Such a person will contradict himself with every breath without realizing it and still think he is witty.

          I am NOT saying Ronald is contradicting himself but rather that he is writing and posting ” in character”. His character varies from comment to comment just as playwright uses different characters in a play.

          The COURT JESTER makes fun of everybody and lampoons everybody. That is the core of his job description.

          Ronald seems to have a good handle on this sort of thing from an artistic pov.

          What he actually BELIEVES is hard to say.

          But my guess is that he believes in peak oil and consequent tough times and most other things that scientifically literate people believe in.

          • Nick G says:

            I think the right word is “irony”: the humorous art of saying one thing and meaning the opposite.

            Irony is very hard to understand in writing, and without a clear context that tells you what the author is doing.

          • Ronald Walter says:

            I believe I have written here on this forum that the Bakken would not be developed if it were not for peak oil.

            What happens after that is anybody’s guess.

            You darn right I am being sarcastic. Oil isn’t going to save us, it is leading us on a road to hell paved with good intentions. The same goes for wind, it ain’t worth the powder to blow it to hell. Until something different comes along, say sayonara.

            Solar is older than the hills and is the source of every resource and sources of energy.

            Solar’s future is much brighter than wind’s.

            Wind to pump water is a different story altogether.

            Like I say, the wind blows at 40 mph at ground level, build a squirrel cage no more than twenty feet high and you’ll capture that wind speed and the armature is going to turn with the wind blowing strong and the power generated will be immense. It will be in the same principal as hydro power turning turbines with water at hydroelectric dams.

            These wind turbines with giant propellers are complete bullshit and needs to come to a screeching halt because they will in the end do just that.

            The handwriting is on the wall for the oil age and the handwriting is on the wall for wind turbines. They’re at the dumping stage now.

            • Nick G says:


              There’s been a lot of research on squirrel cages (aka Horizontal Axis Wind Turbines). They don’t work as well as vertical axis wind turbines, which is why they haven’t been widely used.

              • clifman says:

                Methinks you’ve flipped your axes…

                • Nick G says:

                  Dang, you’re right. Boy, that’s what relying on memory of acronyms will do to you.

                  A quick google couldn’t find a good answer to why VAWTs didn’t succeed.

        • Nick G says:


          What’s your primary concern about solar? Did you see Jeffrey’s good NYT article?

          • Doug Leighton says:

            I don’t have a quarrel with solar per se, in fact, I have a small system of my own: deep cycle marine batteries, inverter and all (something to play with really). Even had a small wind setup for awhile. It’s just that I don’t see any options currently available, or on the immediate horizon, as a panacea.

            • Boomer II says:

              It’s just that I don’t see any options currently available, or on the immediate horizon, as a panacea.

              I don’t think in terms of panaceas. I think in terms of alternatives when fossil fuel use isn’t as widespread for various reasons.

              The serious doomers think we’ll just die off. But I don’t think humans will give up without a fight. If that means using whatever is available, than I think that’s what people will do.

              People say, “I don’t like this.” “I don’t like that.” “This won’t work.” “That won’t work.”

              But I think, “Do you plan to shoot down everything in advance?”

              • Doug Leighton says:

                How is not seeing something as a panacea shooting down everything in advance? I don’t recall shooting anything down — except perhaps cornucopian presumptions.

                • Boomer II says:

                  How is not seeing something as a panacea shooting down everything in advance? I don’t recall shooting anything down — except perhaps cornucopian presumptions.

                  I wasn’t specifically addressing you. It was more an observation about comments in various peak oil discussions. If one expects oil to run out, if one assumes fossil fuels are warming the globe, then is the plan just to give up as soon as we stop using them?

                  The alternative energy folks may seen too optimistic, but if you only have a handful of options ahead of you, then you do what you can with them until you get other options.

                  I guess I view alternative energy ideas as the best we can do until we come up with something better. I certainly don’t expect them to allow business as usual. But there is a lot of business as usual I’d like to see disappear anyway.

                • Boomer II says:

                  I suppose my reaction to hearing there are no alternatives to fossil fuels would be similar to hearing that a ship has no life rafts because the alternatives are so puny in comparison to the ship that it is hardly worth trying to save anyone.

                  I think it is wise to think about plans B, C. D, etc. even if they aren’t as good as plan A.

                  So when I hear about the reasons alternative technology won’t work, I think, “In comparison to what? Death?”

                  I mean, it would be fine to keep on using fossil fuels if they don’t run out and if they don’t contribute to global warming. But if one or the other is the case, and you greatly cut back on using them, then what? Are wind and solar too inefficient or too expensive to use even if there are no alternatives? You’re going to rule out wind and/or solar because they won’t power the current world, even if it turns out they will work well enough for a much more scaled down world?

                  I think it is fine to offer alternatives to solar and wind, but what are they? Oil till it’s gone? Coal till the world gets too warm? Nuclear (I’m open to it)? Tidal waves?

                  I’m frustrated with people who say what won’t work but don’t say what will work. Some people expect extinction. Some people expect to see Jesus. And other suggestions?

                  • Boomer II says:

                    To take this even further, we could be saying, “We’re all going to die anyway, so why bother to do anything to keep ourselves alive?”

                    People know the outcome of their lives (death). But that doesn’t stop them from trying to live their lives while they can.

                    Fusion is something that we don’t have yet, so it is unrealistic to think of it as a solution. But wind and solar do exist and are working. And if we get to the point where we don’t have other alternatives, then presumably they will be looking pretty good compared to nothing.

            • Nick G says:

              Well, let me put it this way: as far as I see, wind and solar are affordable, scalable, and sufficiently high EROEI.

              Why can’t they replace fossil fuels and provide essentially the same power?

    • sunnnv says:

      [wind turbines] “operate an hour and a half every 5 days”

      1.5 hours / (5 days*24 hours/day) = 1.25 % capacity factor.

      hmmm – certainly not at Danish offshore wind farms:
      The 23 year old wind farm is only 23.3% lifetime capacity factor (LCF),
      but the 1.5 year old is at 50.4% LCF.

      Ummm, not onshore either.
      None of the 109 sites in the NREL database are below about 18%, the average about 38%.

    • Ilambiquated says:

      By “buzzard” I presume you mean vulture. It’s a common mistake for Americans who don’t know anything about ornithology. And a sort of shibboleth…

      Nice imagery of “plucking raptors from the sky”. I’ve heard other Republicans calling the “eagle grinders”. It’s one of those competitions you get into, like thinking of new nicknames for Obama. The shifting locus of your attack on wind energy suggests you aren’t really interested in bird conservation –it’s just a stick to beat competitors with.

      When I was growing up the Audubon Christmas count, the Eastern Breeding Bird Census, and HMANA hawk count (my father was a founding member) and a host of other field taxonomy and census taking events were built into my yearly calendar. Because my father was a well known local ornithologist, I’ve seen many bird kills.

      Any large structure will cause bird kills. The most common large kills are on power lines and radio towers. Loud bangs at night can cause huge kills of songbirds gathering to migrate. Building towers that do not provide perches for birds is probably the best way to prevent kills.

      The important ornithological organizations in America all support wind energy.

      • Techsan says:

        The turkey vultures in Austin have adapted quite well to modern life. They nest on high-voltage power line towers and hang out next to the freeways, eating roadkill. There seem to be plenty of them, despite lots of wind power in Texas.

  45. Dennis Coyne says:

    A couple more Bakken Charts focusing on well ID #s between 21000 and 27600. These wells started producing between Oct 2011 and July 2014, all wells have at least 2 months of output data.

    The red line is the 201 well centered moving average (this was a 101 well centered avg. in my previous charts.)
    The Black dashed line is the linear trend over well ID# 21000 to 27600, the equation and R squared is in the upper right corner. Output is the 2 month cumulative output on vertical axis and the Well ID# (permit #) is on the horizontal axis. The decline (if there is any) is much less than indicated by the 24 hour initial production (IP) data.

    The chart for Bakken/Three Forks wells is below, blue dotted lines are the raw data gathered by Enno Peters from the NDIC. There are 4570 wells in the dataset.

    • Dennis Coyne says:

      The following chart is similar to above, the only difference is that only middle Bakken wells are used, no Three Forks wells are included. There is a slightly increasing trend over the period with a small decrease below trend after well ID # 26000, it is not clear that this is significant, it may simply be statistical noise.

    • Dennis Coyne says:

      In the middle Bakken chart, the dataset is 2586 wells. The following chart is for Three Forks only wells
      and includes 1604 wells, note that some wells are not identified as middle Bakken or Three Forks, but are only labelled “Bakken” and might be from either formation, these wells are included in the Bakken/Three Forks chart but not in either of the other two charts. There are 380 of these wells which are not identified as to their specific formation. Three Forks Chart below suggests a slight decline in Three Forks wells over the 2012 to mid 2014 period of about 1% per year, but this also may just be noise in the data.

      Overall there is either no trend or decline so far has been very slow.

      • Watcher says:

        So the theory is Ron’s IP reduction observation is due to increased TF drilling, that yields lower IPs and always has, vs pure Middle Bakken drilling in which reduced IP would mean something, but has not taken place?

        • Watcher says:

          To some extent this could be consistent with a “sweet spot” rationale. No reason to drill in the TF unless you ran out of MB places to drill, at least within your lease holdings.

        • Dennis Coyne says:

          Hi Watcher,

          I think the 24 hour IP is not very useful for determining what is going on.

          The IP data suggests a decline 0f 50% in Bakken/Three Forks output, that does not seem to be happening based on 1 month charts by FreddyW and 2 month charts that I have produced.

          Also I produced a chart similar to David Hughes except with a 301 well centered moving average, rather than the smooth line in his chart, the apparent dip at the end of Hughes chart may be a smoothing artifact, no dip at the end of the 301 well average.

          Link to comment below:

          • Mike says:

            IP’s are intentionally being brought down because of a direct correlation between GOR and EUR; these shale guys are simply getting smarter about pressure maintenance during flow backs. It was good data; big PR splashes are apparently becoming less important that long term well performance. That’s good to know. The news to focus on for everyone needing to predict exactly what is going to happen in the Bakken 109 days from now, at 2:30 in the afternoon, besides WTI and DAR, is H2O.

            (DAR stands for debt to asset ratio; hey, I just made that up, I like it!)


            • Watcher says:

              The only issue I would have with the choke theory is the debt is 88% shortish term. CLR’s 30 yr paper was 12% of total. When you have debt to pay back in the relatively short term, I don’t think you can choke and still have the cash to meet redemption requirements.

              Also the big boys might have the measurements to correctly choke, but do the small fry? And as you mentioned recently the entire length of the lateral will be different rock. How can you really know that choking X% now is favorable when different rock starts flowing later?

              Lotsa things we don’t know. I have rather a solid feeling it’s all going to be rendered moot by that WTI parameter you just noted, that’s now under 74.

              • Mike says:

                The shale community knows all, even the little boys; choke management is a big deal, you can even go to school on it.

                They are (were) able to service debt; its about booking reserves and DAR; to stay on the money teat, and the drilling hamster wheel, you gotta keep booking those reserves.


                • shallow sand says:

                  I read that EOG claims it can still make an after tax return of 10% on the majority of its PUD locations in Eagle Ford, Bakken and Permian at WTI of $40. I think they have superior locations to other companies, but doesn’t this seem dubious? In Bakken the price differential would put wellhead price under $30. Seems like the spin is not going to stop. I guess sustained lower price will give us the answer.

                  • Watcher says:

                    The answer will be national economic ruin or government subsidy.

                    Or government decree of higher oil price.

                    The lesson of the Euro/Greek crisis is governments will do ANYTHING and adhere to NO principles if systemic ruin is threatened.

                    Expect that with shale. But slowly. So slowly that the intervention will be visible.

                  • Mike says:

                    Howdy, Shallow, I think that I understand the meaning of what you have just posted, but for the benefit of others would you please confirm: The world famous EOG, driller of thousands upon thousands of shale wells, gas and oil, claims it can still make an after tax (internal rate of return) of 10% for all of its remaining shale oil locations, even at 40 dollar WTI oil prices.

                    Please correct me if I wrong, Shallow; I take that to mean that if EOG drills a shale well for $7,500,000 dollars, all it can hope to recover from the total production of that well, at 40.00 per barrel, is $ 8,250,000 and no cents (sense). And based on EOG’s EUR type curve, balls to the wall, hyperbolic decline curve analysis, it might take EOG a full 25 years to realize that 10% rate of return on capital investment. Is that the way you interpret that statement?

                    Because that is the way I interpret that statement and it is astounding, to say the least. Who wants to spend 7.5 million dollars to earn 0.4% ARR? I suspect investor confidence will soar.

                    Rune Likvern is correct, they (EOG) would be better off putting that 7.5 million dollars under the mattress and calling it a day.

                    Really, there is not a whole more to talk about regarding the topic of shale oil, is there? If that is what they think they can earn at 40 dollar oil, what are they earning at a 80 dollar oil? I can pick up aluminum cans in a bar ditch and make more money than those guys can.


                  • Watcher says:

                    Mike pretty much has it, but there are some politics in this.

                    Lawrence Kudlow (CNBC) has been quoting $40 as breakeven for weeks.

                    “These are small guys. They are innovative and entrepreneurs. This is yankee know-how!! LOWER OIL PRICES ARE UNIVERSALLY AND UNQUESTIONABLY FAVORABLE FOR AMERICA, and don’t you forget it.”

                    You have to realize a huge number of people have taken a position that, and indeed the general bullish narrative for the bright US future, derives from shale and ENERGY INDEPENDENCE. If anyone or anything threatens that, you’re looking at a lot of investors pulling their money from advisors proven wrong. No one wants to ever be proven wrong.

                    Government subsidy discussion will enter the radar screen soon.

  46. Watcher says:

    As of this moment, oil smacked down to $74.31. This amid the rev 1 of Q3 GDP printing at 3.9%, which was up from rev 0. Q3 ended Oct 31 and this ain’t suggestive of a US demand drop.

    KSA, Russia, Venezuela and Mexico had a conference call on their Samsung phones and agreed that they fail to agree to cut production.

  47. Ronald Walter says:

    RIG, Transocean, is at 25.55 usd today, down from a 52 week high of 51 and change, half.

    Halliburton has lost over six dollars per share lately, losing another dollar today. USO, the oil etf is near the 52 week low.

    Utilities are a different story, they have more stability, the demand remains constant to increased amounts. They’re busting out, utilities, while oil stocks are taking somewhat of a hit.

    They’re too unpredictable and fickle, those oil equities. Utility stocks trump oil stocks any day.

    If you look at the price of gold, the yen places a value on an ounce of gold at 141,162 yen as of today. The highest I saw the price of gold about a year ago was 144,000 yen. The yen stays even when it comes to gold very little movement.

    Don’t pay any attention to the dollar index, the man behind the curtain, it is all smoke and refractive indices.

    All engine noise, oil is the tiger in the tank.

    • Watcher says:

      Just as an FYI, utilities are bond surrogates. How moves rates determines how utility price move.

  48. Old farmer mac says:

    While I enjoy RW’s comments immensely and occasionally agree with what I think he MIGHT be getting at I am of the opinion that he is at the very least way ahead of himself in predicting an early demise of the giant wind turbine.

    I expect that there will be a lot of them built for a good long time to come for at least three very basic reasons.

    First off a lot of places have an excellent wind resource that don’t have such a good sun resource and will want to own their own locally situated generating infrastructure.

    Second building transmission lines that reach from places with good sun to a lot of places without that good sun but with millions of juice hungry consumers may cost more than pv can save in relation to wind – long distance power lines are expensive as hell and unpopular with the locals where they pass thru.

    Third it is going to be a good long while yet before the intermittency and storage problem is solved in an affordable way and so wind is going to be needed to help balance the loads when the sun is keeping bankers hours during the winter and taking lots of sick days due to cloud cover.

    Having said this much I do strongly suspect that pv is going to prove to be considerably cheaper in the long run than wind except maybe places with very poor sun and much better wind.

    Beyond that I think that we will eventually necessarily accept the building of lots of new long distance power lines to transmit both wind and sun power as a matter of plain old necessity.

    The millions of people in cities and burbs short of juice will insist on the lines being built and the hundreds of thousands located along the rights of way will just have to get used to looking at the power lines passing through their communities.If they are smart they will read the handwriting on the wall and insist on local branch lines being constructed to partially supply their own needs rather than settle for one time eminent domain payments.

    Now I have never seen any serious speculation about the possibility of running power lines from some places with REALLY powerful and steady winds to population centers but it might be possible at some point in time to construct such lines if the technology advances sufficiently.

    There are places in the high Arctic unless I am mistaken where there are some pretty consistent and very powerful winds- winds so powerful that the tower heights and blade spans could be reduced by a half and still get full output from the generator as compared to the sites typically selected today..

    I am not an engineer but I will hazard a wild ass guess that towers half as high and blade spans reduced by half would reduce the costs of a wind turbine by three quarters or more.

    So maybe we will see some installed in places where wind speeds are commonly thirty forty or more mph.Eventually. Not soon. Maybe never.

    But then if did turn out to be cheap enough to build wind farms in such places maybe electricity sucking industries could be relocated there- industries such as aluminum smelting or the manufacture of ammonia which is currently manufactured from methane but can be and at one time was manufactured from scratch- or maybe hydrogen could be had this way- along with a stream of pure oxygen of course- which would be damned handy in upping the efficiency of a gas or coal burning power plant if piped to it.

    My guess is that long distance very high voltage transmission lines are going to be built all over the place if Old Man Business As Usual lasts long enough.Having them will be less expensive than NOT having them in my estimation.

    It’s not just wind and solar power that can be sent a thousand miles with hvdc. People who are afraid of nukes may be glad to get juice from one if it is far enough away at some future time. Getting one permitted out in say North Dakota would probably be easier than fifty miles outside Chicago.

    North Dakota might fight it like hell but the feds run the country and might just go ahead and override the state at some future time depending on how tough times get to be.

    • Longtimber says:

      Wind has made some serious strides in last 24 months in terms of Reliability, simplification, materials, blade design, Reduction per kWh. Expiration of the PTC tax credit was a main factor. If the gov is going to kickstart or choose a technology . Paying for production “PTC” is the correct incentive. The heart of the GE 2.5mw units are fabbed here in Pensacola in the old Westinghouse PWR reactor building. Many figured that the jobs would be gone with the PTC, but orders are backlogged for years. North American units have normalized to world standards 690 to 1000 volts. That alone cut tons of copper from each unit. Size matters, turbines are not scalable. production is a factor square of blade radius and cube of wind speed, hence typically owned by IOU’s unless you are in Denmark. Forget mills under 100kW unless you are on a boat or remote cabin on a ridge. While lots of talk about renewables, PV is the only “Locally owned and deployed DG” -Distributed Gen. A single standard 280/330W PV panel can power the needs for modern life, Fans, Communications, Freezer, etc. Power Storage?, 18650’s are amazing, only issue is Elon has every one spoken for before they are made. Warren Buffet’s BYD Company has a patent where 18650’s are internal to the PV Frame. Neat package, you have a Table with a plug that is brilliant at night. The Next energy revolution is spreading from the users up.

      • Old farmer mac says:

        ”Size matters, turbines are not scalable. production is a factor square of blade radius and cube of wind speed, hence typically owned by IOU’s unless you are in Denmark.”

        This makes little sense to me.

        Wind turbines are certainly scalable over a broad range of outputs as evidenced by the variety of sizes in use.

        I do agree than small wind turbines are uneconomic and that really small ones are basically a waste of time and money in almost all cases.Good for cabins on ridge tops is a pretty good summation.

        The square of blade radius and cube of wind speed is understandable but you have totally lost me with your talk of iou’s and Denmark.

        WHAT are you getting at?

        The cube of wind speed is THE factor that EVENTUALLY gets turbines put places that the wind blows HARD. The high wind speeds will allow MUCH reduced blade spans and shorter towers output held equal.

        I think batteries will eventually be pretty cheap compared to present day prices but probably not cheap enough to displace wind as part of the load balancing equation-at least not anytime soon.

        As you pointed out the supply is limited and pretty much spoken for years ahead assuming Tesla and other electric car manufacturers continue to roll.

        My guess is that peak oil is very real and very near term and that oil will be up sharply again within a year or two at the outside and probably sooner assuming Old Man Business As Usual manages to stay out of the nursing home.

        IF I am right battery electric vehicle sales are going to go up FAST over the next few years.Tens of millions of people in this country alone are going to be favorably disposed towards buying a Leaf or Volt or other plug in or pure electric the first time gas jumps a dollar past the previous high of about four bucks.

        If gasoline supplies come up really short and rationing becomes necessary the Volt and Leaf factories will be running twenty four seven.

        There is only one way that gasoline can stay cheap and in reliable plentiful supply. That is if the world stays peaceful and stays in bed with the economic flu.

        And even then not for very long in historical terms.Rust and depletion never sleep.

        Shit always happens. The only question is when rather than if.History ain’t over.

    • sunnnv says:

      Thanks for that link OFM.

      Reading down, one finds why there’s a lot of anti-cleanenergy noise these days.

      “Exelon operates nuclear generating plants that have seen power prices fall and profitability crimped as a result of competition from wind turbines.”
      Like in Germany, wholesale power prices have fallen due to renewables.

      I do think you’re in the wrong ballpark on reducing costs by shrinking tower and rotor.
      Rotor costs are 15% of project costs, tower costs are 16% of project costs, per this NREL doc:

      37% of project costs is the drivetrain – which is the same for same power.
      Total turbine is 68% of project costs.

      The IEA has a wind energy in cold climates project:

      One has to watch out for icing in certain locations, as well as low temps.
      Super high winds, as you say, in some locations.
      So perhaps some added cost (minor) for blade heating, etc.

      • Old farmer mac says:

        I didn’t realize the drivetrain is such a large part of the total cost. But with wind speeds increasing power cubically a wind turbine really should work just fine in a strong wind with even less that half the blade length since swept area varies as the square.

        Shortening the blades and towers will have a substantial positive impact on the costs of manufacture transport and erection of wind farm infrastructure.

        Hopefully an engineer will chime in on this point.

        With the blades being so much shorter the turbine can probably run at at least double or triple the rpm using the same basic materials and construction techniques.

        And being shorter they can more easily stand being feathered in extremely high winds.

        So- maybe wind turbines can be made economically to START generating at the speeds that the big ones now QUIT due to excessive loads on the blades.

        I am in over my head here of course and just speculating.

        Thanks for the link.

        • Old farmer mac says:

          I just gave that link a quick once over. The one bit of info that seems most relevant to me is not there unless I missed it. The research cited only deals with wind speeds up to about the same speeds as are used in existing designs.

          I have never been to the polar areas but I read a lot and have read on many occasions about very high winds that blow just about constantly.

          You would not need a very high tower or much blade span to generate a lot of juice in a sixty to eighty mph wind.

          In the end it will not be economic to build in such environments and also construct the very long transmission lines that would be needed.

          But it is interesting to think outside the box occasionally.

          There may be some places near large numbers of people that have very high and very consistent winds. If so wind farms might be built at these spots.

    • Ilambiquated says:

      The real payday will come for wind when (or if) they get offshore cheap enough.
      The pic (if I can manage to make it visible) shows why: Some of the best locations for wind are just off the coast of some of the biggest population centers.

      • Ilambiquated says:

        Can’t find a good map, but if offshore wind gets cheap Europe will get all its energy from the North Sea.

  49. Old farmer mac says:

    A reminder that history isn’t over.

    Our own media is so involved in navel gazing that you just about have to go to foreign media to really learn anything about what is going on next door.

    And the situation in Sand Country is even worse than it is in Mexico.

    It is not just the forty kids which are only one of many tips of many icebergs. Its forty that have disappeared or been left dead on the streets over and over and over in dozens of places for years now.

    The wars going on inside Mexico don’t even have anything to do with religions as a general rule.

    Something is almost for sure going to seriously disrupt oil supplies in the not too distant future.

  50. Cave Bio says:

    Hello everyone,

    Very cool study. It is on solar energy so, feel free to ignore it.

    Blu-ray disc can be used to improve solar cell performance


    • sunnnv says:

      Cave Bio – I read the abstract on Blu-ray disks… – fortunately, they have some images to decipher what these guys are up to.
      They’re texturing polymer solar cells, and suggest it could be used for other materials.

      They’re ignorant.

      Polymer solar cells are the only solar technology direct nano-imprint texturing is applicable to.
      It’s the only technology where the absorber can be laid down as a low temperature melt or curable liquid.
      Polymer solar cells have essentially no market share in the now 40+ GW world wide market this year.
      They have pathetic lifetimes and sorry efficiencies.
      They are what Old Farmer Mac talked about – a breathless breakthrough that never sees much use.

      In the meantime, crystalline silicon technology is taking back market share from thin films, and has more than 90% market share.
      It’s textured by cheap wet-etch processes, that often works in conjunction with the saw damage etch after the wafers are sawed.
      Optically not perfect, particularly for the random acid etch used for multi crystalline wafers,
      but cheap.
      But I guarantee next big solar conference I go to, some grad student will have a poster on nano texturing of solar cells, including silicon. Will never make it into production.
      A major loss mechanism is surface recombination.
      More surface area = more loss due to charge carriers (elections and holes) recombining before they can be extracted usefully from the solar cell.
      The existing texture works well enough, particularly in combination with AntiReflective Coatings on the cell and ARC glass is getting more popular too.

  51. Ronald Walter says:

    All of the physics, engineering, layouts don’t mean a thing if wind power can’t be tolerated. Loss of sleep is one effect of wind turbines have on people, flicker from the blades and the low frequency noise cause health problems.

    It is a problem, one that cannot be solved, abandoned homes, loss of property value, buyers have no interest in moving to an area that has wind turbines. Humans suffer, they can’t live near wind turbines, they cause unbearable health problems.

    But it is better to ignore those problems, refer to people who live near wind turbines who complain of the effects on their general well-being and health as kooks, crackpots, they don’t know what they are talking about, etc.

    Money does do the talking, wind turbines negatively impact humans who live near them. They move away from them and don’t buy land near them.

    Wind turbines are a failure, a boondoggle.

    Upton Sinclair said it all. “It is difficult for a man to understand something, when his salary depends upon his not understanding it.”

    • DrTskoul says:

      Is noise from wind turbines worse than traffic noise where the majority of the population lives ( big cities ). You must be kidding!!!

      • Mike says:

        People with lofty ideas about the role wind energy might play in electricity generation are, I find, usually city folks with no idea whatsoever what it like to see these massive, things on your land, swooshing away. They are a blight on western landscapes, they make horrible noise indeed, occasionally sling their blades off into pastures, they require roads to each one of them and all and all the footprint for a windmill is worse than an oil well, in my opinion. No wildlife will live under them and they are forever chopping up birds. Most of the time they just sit there doing nothing, I assume with the grid maxed out, mostly because to be placed in windy areas they are out in the middle of no where. They are 150 foot monuments to ugliness and until then can figure out how to mount one on a pickup, they do nothing to replace the need for oil in transportation schemes. Wind generation sounds good when you don’t have to see, or live with the damn things…take a drive thru West Texas, it will make break your heart.


        • Doug Leighton says:

          Yes, and the Dutch agree with you. They don’t want them in their back yard and maintenance costs on offshore turbines are enormous.

          • Doug Leighton says:

            Of course the Netherlands have major Natural Gas reserves: Decisions are easier when you have choices, sometimes.

        • Old farmer mac says:

          Take a drive thru West Virginia near my home and you will really understand the meaning of a broken heart.

          I live near the Blue Ridge Parkway. Back when I was a kid I could see the horizon a hundred miles away almost any day from up on the mountain top behind our farm. For most of my adult life however I could not see that horizon except in dead winter during cold spells due to air pollution blowing in from hundreds of miles away out towards Ohio.A BIG SHOT of Canadian air would clear the skies for a few days.

          This pollution situation has gotten somewhat better with the EPA forcing some clean up regs on the coal fired power industry but I still can’t see the horizon on many many days.

          You are obviously an intelligent guy and thus understand that oil and coal and gas are not permanent solutions to our energy problems.

          Incidentally I do support the expansion of nuclear power since I am more afraid of global warming and the consequences of a lack of clean electricity than I am of nuclear accidents.

          (EVENTUALLY there will be a catastrophic nuclear accident that kills a million people all more or less at once and more or less in one spot. That accident will be on the front page forever. IN The MEANTIME air pollution and other ecosystem damages resulting from burning fossil fuels are killing millions of people every MONTH – but the victims are scattered in time and place and thus the media just ignores it.)

          How long do YOU think it will be until we can no longer afford to buy oil to run our business as usual economy?

          Oil is already the biggest single expense of airlines and the biggest expense of independent truckers.

          I can’t afford to heat our old house with oil anymore although I do still use it as emergency back up fuel. So I take my creaky old bones to the woods quite often with a chainsaw.

          It costs me more for diesel to run my backhoe than it cost me to buy and maintain it otherwise on a daily basis over the life of the machine- about a hundred to a hundred ten dollars a day at current prices just for fuel and lubricants. That adds up in a hurry.

          Now I have more faith than most peak oilers that the market will enable us to manage after some fashion. I expect for instance that in ten years there will be a lot of micro cars on the road that get well over fifty mpg for instance and that battery powered cars will become very popular much sooner than most people think possible.

          If we don’t transition to wind and solar power what are we going to do?

          Rust and depletion never sleep.

          • Old farmer mac says:

            Ps That distant horizon is another line of mountaintops and I guessed at the distance. It might be less. If so it means the air is even dirtier.

          • Mike says:

            Wind is a small step to fossil fuel replacement, particularly coal that primarily is a source for electricity generation. Coal is a blight on mother earth, particularly whacking the entire tops of mountains off, I understand. My opinion is simply that it unrealistic of city folks to think of wind generation as being this beautiful, environmentally sensitive, flowery means of taking advantage of free wind to the benefit of mankind. Windmills are pretty damn obtrusive.

            I suppose it is safe to say everything related to energy has its costs and often those costs are higher to some than they are to others.

            • Old farmer mac says:

              I believe we are on the same page !

              Now not to beat a dead horse to death but I personally believe that even the folks who live near the wind farms are in the long haul a lot better off with them than without.

              The more renewable power we have the less likely we are to wind up fighting WWIII over coal mines and oil fields.

              There is a slight possibility that we will eventually enjoy a peaceful sustainable beautiful world – but it is a very slight chance indeed. LOL

              Neither you nor I will live long enough to see it.

              I am looking for info detailing how much less coal and gas any particular electric utility is using as the result of feeding wind and solar power into the local grid.

              If anybody knows where I can find this info I offer them my sincere thanks in advance.

            • Dennis Coyne says:

              Hi Mike,

              Aren’t there already a lot of oil wells in West Texas? Are they nicer to look at? The people that own the land in West Texas where the wind mills stand, are they from the big city? Would a big coal fired power plant be preferable to Wind Mills?

          • Boomer II says:

            If we don’t transition to wind and solar power what are we going to do?

            We should have been planning our transition away from fossil fuels long before we ever faced the need to do so. If alternative energy technology isn’t adequate, it might have to do with the idea that people have assumed fossil fuels would be here forever and always be the primary energy sources.

            I’ve known since the Carter days that we’d face a time when oil was getting more expensive and harder to get. I figured we’d either plan in a logical, long-term manner, or we’d wait until we hit crisis mode and do what we needed to do in a very big hurry and with lots of pain.

            Those who bitch about alternative energy, but don’t offer workable options, might have to join the severe doomers. It all falls apart. Or Jesus comes back.

        • Boomer II says:

          I’ll repeat my stance.

          We’ve got to keep wind power as an option until we have or use other options.

          If oil is diminishing and if global warming prevents massive use of coal, then we’ve got to look at non-polluting, relatively plentiful energy sources. I suspect we’ll be using a combination of things: wind, solar, hydropower, nuclear, geothermal, etc. Wind may be noisy, ugly, and relatively inefficient compared to other energy sources, but it doesn’t contribute to global warming the way fossil fuels do, so it will be part of the mix of energy sources in the future. What people “want” to do and what people “must” do may be two different things.

          • Mike says:

            Nobody is bitchin’ about anything other than the fact that thousands of 150 foot windmills littering the county side has a hell of a visual, ecological impact, same as just about anything related to satisfying our energy needs. I am speculating, of course, but the sacrifice people “must” make for the good of others I’ll bet does not have much to do with your neck of the woods.

            We hear that a lot down here in Texas from people back east and out west who want cheap energy, just not the eye sores that go along with it.

            • Nick G says:

              I hear from farmers, over and over, that they *love* wind turbines when they get income from them.

              If the neighbors are very close, and they don’t get income, they’re less enthusiastic.

              But *overall*, farm country is very, very excited about wind power.

        • Techsan says:

          I have driven through Roscoe, Texas, which has one of the world’s largest wind farms. I pulled off the road to listen and see how much noise they made. I could not hear a wind turbine 100 meters away: road noise from cars a kilometer away drowned out whatever noise the wind turbines made.

          I grew up in West Texas, and I think the wind turbines are pretty.

          As my mother used to say, “In Amarillo, unless you consider the sky to be scenery, there isn’t any.”

  52. Dennis Coyne says:

    Last chart on Bakken trend (really).

    The David Hughes chart that I tried to reproduce is a bit noisy with all data points and the 2008 to 2009 period only has 900 of 7000 wells so I created a chart with the 301 well centered moving average and monthly averages for the 6 month cumulative output (which David Hughes believes is the best measure).
    The wells started producing between Jan 2010 and March 2014 and there are 6100 wells in the data set and in the earlier period there were fewer wells per month (about 70) vs the later period (roughly 170 wells/month). Two linear trend lines are shown the steeper line is based on the 301 well moving average and the flatter line is based on monthly averages, in both cases over the 2010 to 2014 period the trend is up.

    The smooth trendline (possibly based on double or triple exponential smoothing it is not clear) in David Hughes chart may or may not be reliable, often the ends of such lines are guesses.

    Eventually the trend will be down, it is not clear that we have reached that point at this point in time.

  53. Doug Leighton says:

    Oil price: OPEC members split over output cuts

    “Saudi Arabia has indicated it will not push for output cuts to help push up oil prices, as Opec oil producers prepare for their meeting on Thursday. The oil market will “stabilise itself eventually”, said Saudi Oil Minister Ali al-Naimi.”

    • Doug Leighton says:

      Russia says ‘no’

      The responses from Saudi Arabia and UAE come a day after non-Opec member Russia, which produces an estimated 11% of global oil, said it would not co-operate with any production cut.

      • Old farmer mac says:

        Apparently the Russians believe they can weather the low prices at least for now and are very concerned about maintaining their reputation as reliable suppliers- so long as they are paid of course.

        The Russian government and the Russian people are obviously pretty tough.Low oil prices are going to mean economic austerity for the Russian consumer no doubt but austerity and economic collapse and failure are different things.

        My crystal ball is all clouds when I turn it to that part of the world.

        But my guess is that the Russians can hang on and probably have the WILLPOWER to hang on for a good while yet- possibly for a year or two or even longer maybe.It depends on how strong a grasp on power Putin and his buddies have and how skillfully they can manipulate public opinion and sentiments inside Russia.

        Russians are not going to starve or freeze on account of low oil prices but they will have to get along without new western consumer goods.

        BUT ”the hell you say”says my COUSIN KLEM. ” WE been gittin along without western consumer goods for years now. Jis trot on down ter Walmart an try to find sumpin that ain’t made in CHINER.Ah guess them commies can git by on Chinese stuff as easy as we kin.”

        He pretends to be dumber and more uncivilized than he really is.

        I suppose he has a good point about the Chinese supplying the Russians with whatever they want except maybe new German cars and tropical fruits and winter veggies.

        And between the two countries I expect they can manage to barter oil for consumer and manufactured goods without needing very many American dollars at all. Maybe none at all but some dollars will no doubt be handy. Somebody might want some English made suits or American whiskey.

        • Doug Leighton says:

          “Somebody might want some English made suits or American whiskey.”Obviously you meant to say Scotch rather than American whisky which isn’t fit to drink. 😉

          • Old farmer mac says:

            To each his own.
            I have a whole bunch of Scots in my family tree along with the Irish who make up the remainder. I don’t really like either traditional Irish or Scotch – but we have our own local variations here that might er um um ah be referred to as ” craft ” whiskeys and brandies.

            We think our branch water which emerges out from under the Blue Ridges which are among the worlds oldest mountains plus our own expertise and our locally sourced ingredients make the difference.

            I think you would enjoy them.

            They are not much like what you would have sampled in typical American bars.

            If your work ever brings you into this part of the world you are welcome to visit. 😉

            As a matter of fact just about any regular here is welcome to visit if ever in this area.

            • Doug Leighton says:

              And here I thought all you guy drank was high proof moonshine made from corn mash distilled using old truck radiators. 😉

              • Doug Leighton says:

                But from what you say maybe I could talk the wife into a trip to see those Blue Ridge Mountains and a visit to Old Farmer Mac: Never been anywhere near Vermont.

            • clifman says:

              May take you up on that offer to visit one day, OFM. I live just a few miles from the northern end of the BRP. And while I have lived in Vermont, I do believe I presently live in Virginia… 🙂

            • Caelan MacIntyre says:

              Vermont seems like one of the states that might be most likely among the first to break with the union when it happens.

              I’m drinking some milk-brewed green tea with a dollop of home-made custard and spike of (alas, store-bought) vodka here in the public library just after attending the library’s weekly knitting meetup group downstairs. Think of a green tea vodka eggnog without the nutmeg/spices.
              There’s a librarian from Ukraine here and she was knitting with us. I love her accent.

              I just read that Woody Harrelson (of acting fame) knits and is a self-described anarchist. We all are, but some just don’t realize it.
              It’s good to get/have some ‘craft’; in part to take back one’s self-/family-/community-empowerment.
              Article quote:
              ” ‘You know how hard it is to be in Austin, Texas, in July and not be exposed to perpetual AC?’ It seems like everywhere he looks, somebody is running a leaf blower, ‘chasing around one fucking leaf for five minutes … only to have the neighbor’s gardener blow it back into their yard the next day.’ “

      • Anon says:

        A Russian cut doesn’t make sense. Their export flow is not causing the glut. Cutting would just cost them even more money.

        This glut is all the nexus between US LTO and the Persian Gulf producers. Most of the Gulf markets besides the US are economically sick and the US is importing less and less.

  54. Watcher says:

    Cloudy crystal balls.

    And so, economic headwinds looming (economic headwinds are consumption negative and pushes the price of oil down and the date of shale industry death closer).

    1) Let’s start with outright production uptick — the Iraqis just agreed with the Kurds on a production/export uptick out of Kirkuk to the Turkey pipeline/port. Should be, oh, 300K bpd, which don’t look much like an OPEC cutback to me.

    2) Greece. Greece. Greece. They just announced (the party in power) that they will not accept a long term bailout extension. This is about March elections. The rival party leads in the polls and its platform is to default on the troika (IMF, EU, ECB) debt they’ve run up, errrr, been forced to borrow to fund operations in the wake of the private bond semi default the EU orchestrated. This is going to cause EU upheaval upcoming of 2011 proportions. It’s not GDP positive, nor EU oil consumption positive.

    3) The GOP is going to start putting a noose on the Fed. This may prevent or scale back any upcoming QE 4.0 that might be necessary/desired/whimsically tried. This won’t be GDP or US oil consumption positive.

    4) The PBoC just cut rates. They had to have a reason for doing so. If China is slowing, so will their consumption increase (that black line will go from 45 degrees upward to 44 degrees).

    5) Sales of electric and hybrid cars, of course, are in sharp decline for 2014, but unless there is a US GDP uptick, this should not increase consumption. More likely it holds steady or rises slightly as this year’s trend towards bigger cars continues.

    Net . . . if you think supply and demand post 2008 still decide things, there isn’t much on the horizon to take oil prices back up within the time frame that should wipe out a subsidy-less shale industry.

    • Watcher says:

      We do have some bad US economic data out this morning. It has bumped up the Euro and GBP. Worth about 11 pennies up to WTI.

    • Ilambiquated says:

      Not sure why anyone cares about Greece. It’s like worrying about Mississippi.

      “Oh, the economy of Mississippi isn’t doing too well this quarter! The Mississippi government’s making more dumb decisions! The dollar’s going to crash!”

      I don’t think so.

  55. Ronald Walter says:

    Let’s start adding up the amount of concrete used to build the foundation for all of those wind turbines. Concrete is one of the more flagrant contributors to carbon emissions.

    Then let’s visit the amount of energy used to manufacture wind turbines and the amount of carbon emissions from that process, if we can for a minute or two.

    Who cares? It makes no difference, it is business as usual in the wind energy sector, even if it’s about the dumbest approach to solving the energy crises that plague mankind, why should it matter to anyone? As long as it pays, who cares if it causes great harm to the ecosystems around the earthy wearthy?

    We need to solve the energy problems, come hell or high water, doesn’t make one bit of difference if the ecological damage can’t be remedied, we have to develop wind power at all costs because it pays the most.

    It’s good bidness and bidness is good.

    Follow the money.

    Big Wind is not too big to fail.

  56. Longtimber says:

    The MOB gets to the Fla PSC.

    In a much anticipated hearing today, the Florida Public Service Commission slashed energy efficiency goals for Duke Energy, TECO, Gulf Energy & Florida Power & Light on a 3-2 vote.
    “Collectively, the four investor-owned utilities were requesting a cut of more than 90 percent from energy efficiency requirements set in place by the PSC back in 2009. The rollbacks approved today range from an 87-99 percent reduction in customer energy savings, according to the Southern Alliance for Clean Energy (SACE), which called the reductions “stunning.”

    PSC staffer Tom Ballinger told board members that the primary reasons why the utilities have been losing money over the past few years is that there has been less growth in energy consumption, attributing the lack of energy usage to the economy or just that people are saving more electricity on their own accord. “We’re making great strides as a nation,” he said of such reductions in consumption. He also said that as the cost of fuel drops, so does generation, which he said had dropped more than 50 percent since 2009. “It’s not that conservation isn’t out there. It’s just not so cost effective,” he said.”
    Who are they trying to kid? – You think all consumers are just idiots:

    As said here earlier :
    Demand Side Management (aka Demand Response) is far cheaper for utilities than building new generation capacity – but that doesn’t make money for utility investors.

    No one was honest enough to admit that leveling of consumption GROWTH is due to most have better things to do with their hard earned dollars or simply can not AFFORD to be wasting away in Stupidville. As things are wired, without growth, the IOU’s are much like the Banksters, RIP.

    Floridians are going to in for nasty shock as Nat Gas prices Normalizes.

    • Boomer II says:

      I follow renewable energy economics somewhat, but not very, very closely. I know it has been suggested that utilities either adjust to renewables, or they eventually lose out.

      Does it not make sense for Duke to begin a leasing program where they install solar on homes and then charge the homeowners the same price for electrical that they are currently paying?

      Is it better to leave these lease arrangements to outside operators rather than the utilities doing it themselves? I know that in some areas, to protect the utilities, politicians are trying to stop leasing of solar altogether. I suppose that if consumers who have leased solar start paying significantly less for electricity than those getting it from utilities, those not benefitting from this savings will start lobbying for it.

      I keep hoping we reach a tipping point where the money/politics follows renewables rather than fossil fuels. I also keep hoping that China moves so quickly into this area that we develop an arms race and American politicians panic and say we are falling behind in technology and must do more.

    • Ilambiquated says:

      Yeah, and the prices for wind keep falling.

  57. Anon says:

    Flash – OPEC Gulf States agree NO CUT.

  58. FreddyW says:

    I did a deep dive into my data and looked at individual wells for some month end of 2013, beginning of 2014 and the month 7-9 in 2014 to try to find out why the water cut increased alot those last 3 month and production decreased a bit. See this post for the graph
    Very time consuming but I really wanted to know what was going on. There does not seem to be one easy explanation though. There never seem to be for shale oil. But I did find a few different reasons.

    1) There has been almost no activity in Mountrail for Oasis before summer 2014 for the month I looked into. But starting month 7 in 2014 alot of wells started to come online. Oasis has wells in the northern part of Mountrail, mainly in Alger, but also in Cottonwood and Enget Lake. A few of them are ok, but most of them has very high water cut and low oil production. This affects mainly month 9 2014 but also month 7 2014 and month 8 a little.

    2) Hess drills alot well in Robinson Lake in the western part of Mountrail. New wells almost every month. They have perfomed quite ok. But starting month 7 2014 the water cut suddenly increased alot from 10-35% to 40-80%. Oil production is about the same or maybe a bit lower. It´s hard to tell when the data is so noisy. They have, as I said, been drilling in that area alot. So it´s a mystery to me whats going on there. This affects all 3 month.

    3) In month 8 and 9 2014 Hess puts some wells in Manitou in western Mountrail online. Wells in that area was has not been put online for the other months I looked into. Those wells have a water cut around 50% (+-25%). Oil production is usually not that good either.

    There seem to be 2 main reasons why oil production went up month 9 compared to 7 and 8 even though Oasis had a lot of wells.
    1) Whiting had a really good month in Sanish. Water cut was about the same as usual but oil production was up quite a bit. Especially one of the wells which flowed 1300 bopd and 1200 barrels of water per day (one month after completion).
    2) Marathon put wells in the Reunion Bay in south western Mountrail online. They don´t seem to work in that area very often. But they produce rather good and water cut is 30-40%.

    There may of course be other reasons also which I did not detect.

    • Dennis Coyne says:

      Hi FreddyW,


      Can you look into the average number of days of production for the first month for new wells in the Bakken/Three Forks for August and September. One possible explanation for the Sept vs Aug difference is August may have had a low avg number of producing days for new wells compared with September.

      • FreddyW says:

        Ok sure, here you have for 2014:

        1/2014 16
        2/2014 13
        3/2014 17
        4/2014 16
        5/2014 17
        6/2014 16
        7/2014 17
        8/2014 14
        9/2014 16

        This is for completion month.

    • Boomer II says:

      More than mankind is willing to do.

      At some point mankind will be willing to do it, if it’s very survival depends on it.

      However, there may be a point at which it is too late to alter the course of global warming.

      But, then, everything will play out and some will die and some will survive. Unless the Earth is turned into mostly a dead zone, something will emerge from global warming.

      I advocate doing something because I feel it is better than doing nothing. If the net result is collapse, so be it. But waiting for it, rather than trying to stop it or slow it down, strikes me as giving up too soon.

    • The Wet One says:

      Actually, as I read that article, more than mankind CAN do. Google set a pretty high goal. Per the article:

      “Google’s boldest energy move was an effort known as RE<C, which aimed to develop renewable energy sources that would generate electricity more cheaply than coal-fired power plants do."

      What the engineers working on the problem found is as follows:

      "So our best-case scenario, which was based on our most optimistic forecasts for renewable energy, would still result in severe climate change, with all its dire consequences: shifting climatic zones, freshwater shortages, eroding coasts, and ocean acidification, among others. Our reckoning showed that reversing the trend would require both radical technological advances in cheap zero-carbon energy, as well as a method of extracting CO2 from the atmosphere and sequestering the carbon."

      Which led to this conclusion:

      "Those calculations cast our work at Google’s RE<C program in a sobering new light. Suppose for a moment that it had achieved the most extraordinary success possible, and that we had found cheap renewable energy technologies that could gradually replace all the world’s coal plants—a situation roughly equivalent to the energy innovation study’s best-case scenario. Even if that dream had come to pass, it still wouldn’t have solved climate change. This realization was frankly shocking: Not only had RE<C failed to reach its goal of creating energy cheaper than coal, but that goal had not been ambitious enough to reverse climate change."

      Holy shit!

      That's just how f**ked we are.

      If this is really how things are, there is no averting Climate Change. It will happen. It's only a question of degree. Since, in the best possible case scenario (the one Google failed at), it will take at best years, and more realistically decades to change things, to the best conceived of scenario and that still won't avert Climate Change, we're done for.

      There is literally no way out of the trap. We're already off the cliff and falling and apparently, even the guys at Google didn't even know that.

      Ah well. Civilization had a good run while it lasted. Sic transit gloria mundi. All things pass.

      I wonder what the slide down will be like? That's really the only question at this point.

      BTW Nick G, I'd like to hear what you have to say about this article. You're the optimistic one in these parts. According to this article, everything you propose is not enough to avoid serious climate change. Your response would be appreciated.

      I do enjoy getting disturbing news from here. It keeps my soul in terror and my mind unsettled. Thanks Peak Oil Barrel. You make my life complete.


      I should take up eating, drinking and being merry. It seems that tomorrow (one of them anyways) we're all going to die.

      • Boomer II says:

        I should take up eating, drinking and being merry. It seems that tomorrow (one of them anyways) we’re all going to die.

        I’m assuming we’re not ALL going to die. Somewhere on my computer I have a risk assignment for global warming. Which areas will be affected and to what degree.

        Presumably the oceans will rise and coastal cities will be flooded.

        There will be changes in weather patterns.

        A lot of species will find their current habitats altered too much to survive.

        And so on.

        Peak oil will change economics on its own and I wish we’d plan for it accordingly.

        I’d like to think the world will cut the coal use even everyone decides we’re headed for severe trouble with global warming. (I suppose we could try to limit the sunlight we receive by putting a ton of soot into the sky, but global pollution at that level would likely kill off more stuff than warming.)

        I think there are a multitude of reasons to alter our energy consumption even if it isn’t drastic enough to stop global warming.

        I’m not so optimistic that everything will be alright, but I do believe at least some humans will survive and we should do our best to give them the best opportunity to survive.

      • Ilambiquated says:

        Just another dumb failed project by Google engineers cut loose without any marketing support. The internet is littered with them.

      • Caelan MacIntyre says:

        LOL (laced with bitterness)

        …Well, I am drinking in a public library, so WTF… Feel free to share with us your particular methods in that regard.
        Earlier in the day, as I was at home making my take-out, listening to Nature Bats Last’s podcast– Ray McGovern was the guest…
        I will probably have their somewhat wacky-but-tolerable/admirable opening theme tune stuck in my head all day… Although I just love how Guy’s matter-of-fact lecture tone mixes with the music, like the vodka in the tea-nog…

  59. Boomer II says:

    Here’s an example of how consumption patterns can change. And as oil prices go up, that’s an extra reason to look to trains over planes.

  60. ezrydermike says:

    meant to post this here

    some info on water usage

  61. Pingback: Piekolie nieuwsupdate: week 48 | Stichting Peakoil Nederland

  62. JamesD says:

    The %water cut tells the story. It is going up. This is because they are increasing the number of frac stages, so there is a lot more water during flowback. That’s a good thing. First 24 hours is flowback, where you get a lot of water. Once that is over water cut is between 10-20%. Your data is screwed up.

    • First 24 hours is flowback, where you get a lot of water. Once that is over water cut is between 10-20%. Your data is screwed up.

      It’s not my data, it is North Dakota’s data. They are the ones that collected it and published it. And you are not even close. Check the chart below.

      Then explain this:
      27749 MOUNTRAIL CO., 602 BOPD, 0 BWPD BAKKEN
      27750 MOUNTRAIL CO., 467 BOPD, 0 BWPD BAKKEN
      27751 MOUNTRAIL CO., 799 BOPD, 0 BWPD BAKKEN

      Zero barrels of water per day during the first 24 hours.

  63. JamesD says:

    The idea of “sweet spot” shows that you are stuck on the vertical well paradigm. If you can space horizontal bores 500 ft apart (or less), then sweet spot is a less important concept.

  64. Obviously you don’t know shit about the Bakken or any other shale plays. It’s all about sweet spots. In all shale plays it’s all about sweet spots. It is only in shale plays where sweet spots are important, not in conventional fields where the oil migrates. Oil does not migrate in shale, that’s why sweet spots are all important.

    A Look at the US Shale Industry with David Hughes

    In every shale play I’ve looked at there are always sweet spots. Those inevitably get drilled first. So as the sweet spots are drilled off, drilling has to move into lower quality parts of the reservoir. Therefore you need an ever-escalating number of wells drilled just to offset field decline. So if the Bakken were to hit a million barrels/day of production, which it probably will, it will then likely need about 2000 wells drilled per year just to offset decline.

    • Mike says:

      Good grief.

      Ron, I would just ignore this dribble. I think that we have been able to determine that sweet spots are directly related to a number of different parameters including oil saturations and high GOR, over pressured areas. I am convinced water cuts are going up in sweet spots because of pressure depletion. Bigger fracs with more stages might mask that; its a good excuse but not the real deal. I think there will be some good stuff coming out soon regarding this issue.

      To follow this guys logic, in the absence of sweet spots every stinking shale well in N.D. would be good. It would be just like one big ocean of oil and all you had to do was drop your dauber in it. Ask Oxy if that this true; they can’t give their flank stuff away at the moment.


      • Thanks mike, it is obvious that this clutz doesn’t have a clue as to what he is talking about. I find such nuts as this rather amusing. They talk like they are experts but are really nothing more than dumb asses.

Comments are closed.