Bakken, A Tale of Two Counties

North Dakota publishes their Historical Barrels of Oil Production by County which gives county by county production back to 1951. The data here does not include confidential wells but they publish the last couple of months production data that does include confidential wells here: Oil and Gas Production Report. Looking over this data I found something very strange. In October Bakken production was down by 1,598 barrels per day and all North Dakota was down by 5,4054 barrels per day.

All data is in barrels per day with the last data point October 2014.

McKenzieMcKenzie County was up 19,609 barrels per day or 4.88 percent. In October McKenzie was up even more than it was in September when the Bakken was up 52.5 thousand barrels per day.


Mountrail Countywas down 18,728 barrels per day or 6.42 percent. There is  more on this story below.


Dunn County was down 3,527 barrels per day or 1.83 percent.

WilliamsWilliams County was down 4,593 barrels per day or 2.79 percent.


Divide County was up 2,597 barrels per day or 6.36 Percent.

Rest of North Dakota

The rest of North Dakota was up 589 barrels per day or .62 percent.

Bakken Counties

All four major producing counties along with Divide County and the est of North Dakota, zero based so you can get a better idea of the contribution from each county.

But the real story here is Mountrail County. Normally we would expect such a drop, 6.42 percent, if there were no new wells at all. But I collected data from 30 completed wells in Mountrail County in October and Enno Peters’ data listed 31 completed wells in October. And neither of these two lists include confidential wells or even all the non-confidential wells. Some of the non-confidential wells  listed did not give production numbers and were therefore not listed in the data base. So somewhere between 35 and 45 wells were completed in Mountrail county in October and production there still fell 6.42 percent.

But there was a noticeable difference in the quality of the wells that came on line in October.

October Data

Measuring actual first month’s barrels, McKenzie not only had over twice as many wells but the average production from McKenzie’s wells were over 36 percent better than the average of Mountrail’s wells. Also this is further confirmation that the 1st 24 hour production from a well is a valid indicator of future production from that well.

The take away from all this is that McKenzie County is still very productive and will likely continue to increase in production. However the Mountrail County is over drilled and likely to go into decline, if it has not already. Drilling is very likely to be curtailed in Mountrail and other counties. The decline in these other counties will very likely be much greater than any increase in McKenzie county. After all if production fell 6.4% with 35 or so new wells, imagine what it might be if that number of new wells dropped by 50% or more.

What is happening to US Production? The weekly production reports are not worth a bucket of warm spit since they are just wild ass guesses and we will have to wait until Dec 30th for the Petroleum Supply Monthly, we may be able to get some indication by looking at the weekly import data.

Total Net Imports

Imports jumped in last weeks report to their highest point since August of 2013. Does this mean that US production is dropping?

On another subject: The EIA’s International Energy Statistics just came out with world oil production data for September 2014. World oil production in September was up over 1 million barrels per day. This was not a surprise as the IEA had, over a month ago, informed us of as much. We had discussed this increase before here as one of the reasons for the price crash. A declining world economy was the other reason. Anyway my next post, in about three days, will be on World oil production with data from this report.

In other news: Russia to slash oil output starting next year

Russia may cut its oil output due to low global oil prices and the lack of investment into the country’s energy industry, Deputy Prime Minister Arkady Dvorkovich said Thursday.

Given the pessimistic scenario, Russia’s oil output could shrink by 10 percent in the next two or three years, which will not produce serious effects on global oil markets, Dvorkovich told Russia’s TV channel Rossiya 24.

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.

310 Responses to Bakken, A Tale of Two Counties

  1. Jeffrey J. Brown says:

    I’ve frequently mentioned the decline in Louisiana’s marketed natural gas production as being a prime example of what can happen when operators cut back on overall drilling and presumably focus on the “Sweet spots” in tight/shale plays, e.g., the Haynesville Shale Play in Louisiana. Louisiana’s annual gas production fell by 20% from 2012 to 2013. Their monthly production fell by almost 40% from September, 2011 to September, 2014.

    In regard to the 2012 to 2013 20% decline in annual production, note that this is the observed net decline in production. The gross legacy decline, from producing wells in 2012, would be even higher.

  2. Euan Mearns says:

    That’s an interesting story from Russia. 10.7 million bpd production in 2013 and the prospect of losing 10% of that with no impact on global markets? We may see similar capacity wastage among several OPEC members.

    Oil Drum readers may recall this charming comic strip from 5 years ago:

    The Slow Crash – by John Kinhart

    • I suspect non OPEC will be hurt more. Some nations have marginal producing fields where drilling and we’ll work over and repair has to be stopped right away. I’m thinking of USA, Canada, Colombia, Argentina, Brazil, Congo, Gabon, Egypt, UK, Norway, Azerbaijan, Kazahstan, India, Indonesia, Australia, China, and of course Russia. The opec nations where the impact should be hardest are Nigeria and the economic wreck known as Former Venezuela, which is facing billions in expiring bond issues it must default, and billions in unpaid debt to key service companies like Halliburton and Schlumberger.

      I can see the focus on the USA “shale” industry but production is about to drop in other regions as well. I bet oil prices will be at $80 within 18 months.

      • Jeffrey J. Brown says:

        A previous comment on the impact on net cash flow of a 50% decline in wellhead revenue:

        As I have periodically noted, given flat to increasing oil consumption in a net oil exporting country, and given an ongoing production decline, the resulting net export decline rate will exceed the production decline rate and the net export decline rate will accelerate with time. We actually see something similar for the net cash flow from producing properties, given a decline in wellhead revenue.

        Let’s arbitrarily assume that we have five properties, each generating a net cash flow of One Million Dollars per month, after direct Lease Operating Expenses (LOE), and not counting General & Administrative (G&A) costs. Let’s assume that LOE percentages range from 10% to 50%, so the gross cash flow would vary for each property, but the net cash flow, after LOE, would be the same.

        Let’s then assume that gross cash flow at the wellhead drops by 50% for all five properties, and let’s then look at the resulting decline in net cash flow for each property.

        Again, we are assuming that the initial condition is that each property generates a net million dollar per month.

        LOE = 50% of Gross, and gross declines by 50%, net declines by 100% (goes to zero)
        LOE = 40% of Gross, and gross declines by 50%, net declines by 83%
        LOE = 30% of Gross, and gross declines by 50%, net declines by 71%
        LOE = 20% of Gross, and gross declines by 50%, net declines by 63%
        LOE = 10% of Gross, and gross declines by 50%, net declines by 56%

        And as noted above, this does not count G&A costs.

        • Old farmer mac says:

          Jeff B’s numbers outlining profits given that expenses are not going to change very much at all force me to conclude that some high cost legacy production will be shut in as soon as the operators can manage doing so in a business like manner.

          I shut down our orchard because my variable costs exceeded my income with the capital investment just left sitting.I am gradually converting the land to timber and pasture both of which require very little cash and labor input in comparison to orchards.

          I actually know just ONE oil man in the whole world on a personal basis -other than my cyber buddies – a guy who built a retirement home nearby who owns a dozen or so inherited stripper wells in Oklahoma. He told me some time back they were basically not worth the bother of owning them until prices got high enough back in the early nineties but that ever since he has been getting banking a thousand bucks a day unless he decides to buy a new toy..He has more toys than anybody else I ever met by a long shot and says there is nothing else he wants.

          I haven’t seen him in the last few months and he probably is still making a few bucks- but if his costs are greater than his revenue he will just turn off the pumps until the price goes up again.

          Now the question is this:

          How many such guys as this one are out there ? A little fella with a dozen stripper wells counts not at all as an individual on the grand scale but there must be thousands like him and probably hundreds of small companies producing a few thousand barrels a day of high variable cost oil.

          There must be a bunch of larger companies producing tens of thousands of barrels of high variable cost oil.

          How long will it take for them to shut down if shutting down is cheaper than producing at a loss?

          From my reading it seems that some of these folks could pull the plug almost any day but that most of them have contractual obligations of one sort or another that will keep them producing for a few months at least.

          I have not come across any data indicating that it will take more than a few months to shut in existing legacy production and the only reason mentioned so far to maintain production at a cash loss would be to retain lease rights in hope of the price going up again soon.

          IF anybody knows a lot about this I am eager to hear what you have to say.

          • Old Farmer Mac, your logic seems reasonable. But there are some exceptions:

            A. Offshore platform which goes to negative cash flow. The platform abandonment costs are so high the owner(s) decide to keep producing while cutting expenses as much as possible.

            B. Wells and fields which must be produced to keep pipelines in good shape. In these cases producers approach government authorities to seek tax cuts.

            c. High tax environment producers can approach the government to get tax cuts.

            D. Wells producing with high water cut. If producing from thick zones they are at risk of producing 100% water after being shut in. This means the operator tries to keep them open even if they generate a slight loss.

            E. Areas where shut in may cause labor problems from union labor. These areas require careful negotiations to avoid violence.

            • Old farmer mac says:

              Thanks Fernando ,

              I asked for info from somebody with expertise and all your answers make sense.

              There are many situations in business where the owner or management finds it better to run at A LOSS than to shut the doors and suffer a GREATER LOSS.

              The classic textbook example is that of the restaurant that is losing money but that would lose more by closing since the rent that would still have to be paid exceeds the current losses.

              Your answer is very helpful in understanding the factors influencing the decisions make on a well by well or field by field basis but it still leaves me WONDERING-

              Taking these things into account -HOW MUCH production is going to be shut in over the next few months to a year due to the current low price?

              I am guessing that as little as a couple of million barrels a day taken off the market would soon result in the price going back up to eighty bucks or even a hundred.

              This is a GUESS of course and nothing more.

              Of course that big an increase in the price would result in some of the shut in production being put back on line as soon as possible.

              • Doug Leighton says:

                Mac, investment in oil that is only viable at high prices will (quickly) fade and drive down surplus production. This includes shale production, whose profitability has been knocked for a loop: There wil be damage to higher cost production world wide. Failing some unforeseen event (not unlikely), price will then follow a rising trend only to stabilize near $80. But, come on man, you know this as well as anyone here (more so than most), so why the question? Have you got a joker up your sleeve Mac?

              • Farmer Mac, that question requires a ton of analysis. We have very pricey information services which strive to deliver worldwide information. But that needs to be supplemented by filling in the gaps. Some of it requires people in country, some requires signing data confidentiality agreements, and this takes months. In the end a lot of it becomes a moving target. Just going by intuition I think demand and supply will get closer very fast and we should see $80 per barrel by early 2016.

                • Euan Mearns says:

                  Fernando, in an earlier comment you said $80, 18 months from now and I’d agree with that. And Mac, as I see things 1 Mbpd relative movement in supply / demand equates to $30 movement in price.

                  • Old farmer mac says:

                    Thanks guys,

                    I do understand the basics that influence price and demand of course but what I am trying to do is get some people who have actual experience in the OIL business to post their estimates ( rough and early to be sure) as to what they think the price will be a few months to a year down the road.

                    I am convinced that oil is will be up quite a bit within a year.How high I have no real idea.

                    Now as to the joker- I am a poor man in terms of cash and but I anticipate spending at least a couple of thousand bucks filling up everything on the place that doesn’t leak with off road diesel on a bet that doing so is going to be hell of a lot better option than taking the one percent the bank pays these days.

                    I know where I can get a super deal on some MORE storage tanks used but in great shape that are cheap enough that I can afford to buy them on a bet that diesel will be at least a dollar a year from now.

                    I can trade the diesel for loader and dozer work next year and get it at a substantial discount if this bet works.A thousand dollars worth of diesel for a thousand dollars worth of work.

                    Four thousand bucks is just about the weekly rate for a fair-sized dozer locally these days.

                    This sort of thing illustrates the way men behave. The contractor raised his rates two or three times as diesel went up but he won’t lower them now.

                    OTOH there is no doubt in my mind that he will take four thousand dollars worth of diesel at the going price to get an weeks work next year. That is enough to run him for three weeks or so.

              • Anonymous says:


                I believe about 700kbpd comes from stripper wells in the states. One would imagine a fair chunk of that might be looking uneconomic right now.

            • notanoilman says:

              Fernando, I and probably a few other non-oil people, would appreciate a little background on what happens to shut in wells and why that is a bad idea. It would seem, to me, that closing wells and opening them later would be a response to a dip in prices but that does not seem to be the case. A little help please.


              • Naom, not all wells suffer when shut in. But wells producing from a thick and heterogeneous zone, which make say 50 to 60 % (or higher) water cut have a tendency to produce 100 % water if left shut in for a long period of time.

                These thick zones can have high permeability sections which produce 100 % water…the oil comes from lower permeability zones in which the oil hasn’t been swept.

                When a well is produced it’s usually pumped, this drops the pressure at the well. When it’s shut in the pressure builds up faster in the high permeability watered out zones. The oil bearing zones build up pressure slower. This causes a pressure differential within the wellbore. And thus the watered out zone starts injecting water into the zone bearing oil.

                After a few months pressures stabilize, but the well can self inject a lot of water. When it’s produced it has to clean out the water where it was injected. But this can take a lot of time, and a lot of pumping.

                My guess is this problem isn’t as significant in fractured ultra low permeability “shales”, but it can be a real pain in a Permian basin carbonate. And I get the sense that many well operators don’t understand what goes on. These phenomena are hard to generalize.

                On the other hand a horizontal well producing low water cut ought to repressure nicely. I guess they will start experimenting to see what happens.

                • toolpush says:


                  I hope Watcher is tuned in today, as he has been wanting an explanation on these shut in wells for a long time.
                  It is great that someone with the technical back ground has finally come along and given a clear and concise explanation.
                  The original question arose with the Libyan wells being shut in. It sounds like they would target wells where production would be affected due to shut in. Old high perm wells that must be currently drawing in water.
                  Would you agree?

                  • shallow sand says:

                    Fernando. I believe there are also problems shutting in water flood and CO2 flood projects, which make up a good percentage of world wide production. You are more qualified than I am to explain this.

                  • Shallow sand, the problem is the same. A producing oil well doesn’t “know” where the water comes from. The CO2 floods are usually designed to inject co2 and water in alternating slugs. The CO2 reduces oil viscosity and swells it, but the water keeps on pushing it, and this means the producing wells just see a slightly less viscous oil, natural gas loaded with CO2 and lower ph water. But the problems are similar, I suppose. I never worked in a field undergoing a co2 flood, but I helped run some models many years ago. Computer models don’t handle this topic very well.

                • notanoilman says:

                  Thanks, very helpful. Also thanks to MBP.


              • MBP (ManBearPig) says:

                The biggest problem I have with shutting in a well simply because of price is corrosion. If you have a stagnant fluid level in the wellbore it creates major corrosion issues. If we have to shut wells in we usually try to pickle them immediately to help fight the corrosion. CO2 is an extremely corrosive fluid, and it will eat at all of the casing and rods that it can. If you shut in a well for an extended period of time expect some issues when you start it back up. If you have to shut a well in for any extended period of time, its better to just temporarily abandon the well and save your downhole equipment.

                • Watcher says:

                  Overall I was looking for permanence. What mechanism can do irreparable harm to a field? Not just a well. If a well is damaged and the oil is still there, redrill.

                  I’m looking at things like Canterell’s reputation, where some sort of overdrive pushed oil deeper (and thus hotter) and it became natgas.

                  • shallow sand says:

                    Always have to keep economics in mind. Better to operate field at a loss for a few months than plug out the field and re drill it.

                    Many times the one who drills the well loses money, but an operator later on will make a good return on the same well.

                  • I don’t think Cantarell had such an “over drive”. Also, oil doesnt turn to gas that fast.

                    Regarding the question about permanent damage from shutting in a reservoir, I can visualize it in a conventional, water drive gas reservoir. But in many cases the problem hits an individual well, and it can’t be re drilled. It’s hard to generalize. And the horizontal fractured wells could behave in an unusual fashion. I wouldn’t shut one in but I could consider reducing rates in an experiment to see if it changes water cut and gas to oil ratio.

    • Миша says:

      Pessimistically script

  3. Westexasfanclub says:

    “World oil production in September was up over 1 million barrels per day”

    As this increase probably can’t be maintained at current prices, this is ever more going to seem like the definite peak.

    After all a rather unimportant observation, just a little point on the undulating timeline of the world’s production plateau, but nonetheless worth being commented and observed.

    • I don’t agree. Production should drop a bit, this should lead to higher prices, which will lead to more production. Eventually the price needed to satisfy demand gets so high we see replacements take up the slack. The light oil from tight rocks is an unconventional response to higher prices and the industry’s inability to find lower cost sources. But eventually the tight oil reservoirs will require $150 to 200 dollars per barrel. And I suspect at that point we will see nuclear energy and plain demand reduction start taking over.

      • Westexasfanclub says:

        I expect depletion of conventional sources to go on and that fracking is done in quite mature areas – even EIA predicts the peak of fracking in 2016. So if 2015 is below 2014 due to low oil prices, it will be very hard to exceed the production peak of 2014 in 2016.

        But time will tell. Anyway, I repeat, I suppose that the undulating plateau won’t change a lot in the next years, given a stable economy.

        By the way: I experienced a lot in discussions with people who don’t have notion of peak oil, that they think the peak is like closing a spigot. A production plateau and its consequences is much easier accepted and has in fact almost the same negative results as peak oil.

        • I’m an engineer with almost 40 years in the business, I must have ran into several dozen oil company managers who didn’t grasp the concept that wells decline, that production requires reserves, that a lot of the infilling we do is partial rate acceleration and part for real, that water fingers through viscous oil, and that taking cores in carbonate exploration wells helps avoid building platforms with excessive production kit.

      • Anon says:

        It’s not feasible to replace oil with nukes. At least, not smoothy. The lead times for nukes and widespread electric cars are both way too long relative to how fast oil can drop.

        • Nick G says:

          Nukes take a while to start, but after that long lead time they can ramp up quickly, as they did in France.

          More importantly, solar is replacing oil around the globe, in places like Japan, Hawaii, Chile, and replacing diesel generation everywhere.

          EVs can be ramped up pretty quickly: including hybrids they’re around 4% of US sales; most manufacturers (excepting Tesla) have substantial unused capacity and could double production very quickly; and after that initial start they could double roughly every 2 years after that. That’s pretty fast.

          • sam taylor says:

            Total hybrid and electric drive market share looks to have decreased from 2013 to 2014, sales are going to be down on last year too.

            • Nick G says:


              But the conversation was about what’s *possible* when oil depletes, not what we’re choosing to do at the moment.

              As long as we heavily subsidize oil prices (think oil wars and climate change), things won’t change fast.

              • Which oil wars? I’m also curious as to how we can put a price on “climate change” and call it an oil subsidy.

                • Nick G says:

                  Oil wars: first and second gulf wars, and the now winding down Afghan war.

                  Climate change: if it’s not charged to the consumer, free CO2 emissions are a subsidy.

                  • Ronald Walter says:

                    All of the resources on the planet should begin to charge humans for the use and extraction of said resources. All of the coal and oil, the wood and timber, all of the biomes on the planet, all metals extracted from the earth’s surface, the sun’s energy, the wind’s power, wave action, trade winds, gulf streams, the moon’s gravitational forces, etc. should bill every human on earth for providing the means for survival.

                    All of the crops used to sustain human nutritional demands should all band together and bill humans for their physical presence on the planet. Humans would owe all of the food groups quadrillions of dollars. Humans think they can have those things for free, but in reality, they owe Mother Nature big time, all of the time.

                    The humans on earth would be broke in a heartbeat if Mother Nature demanded payment in bucks, pounds, marks, yen, yuan, rubles, you name it, bitcoin, even.

                    Mother Nature will make us all pay and paybacks are a bitch but she never asks for one thin dime, yet when it is time to pay, nobody can. And that’s when she takes matters into her own hands and all of the money accumulated since the dawn of mankind is unable to satisfy the debt.

                    Just a bunch of nattering nabobs of negativism is all we are anymore. Never grateful, always critical, no matter what it is, grabbing all she has to offer and never thanking her for her bounty and steadfastness.

                    What buffoons we all are. Heartless cads never willing to give an inch and yet all too soon to judge and condemn.

                    What have we wrought?

                    And we think we are in control.

                    Enough sarcasm to balance the smarmy nonsense?

                  • I never felt the 2003 invasion of Iraq had much to do with oil. I thought it was the Israelis pushing USA foreign policy. As for Afghanistan, I thought it was about catching Osama. Unfortunately Bush #2 lost focus. He was a goofy dude.

                  • Nick G says:

                    No question, those were factors.

                    Still, Gulf war I was *all* about oil, and the rest wouldn’t have happened otherwise.

                    Perhaps more importantly, oil has driven US ME foreign policy since WWII. We invaded Iran in 1954 (which created all of our current problems with Iran), we sponsored Saddam Hussein, etc., etc.

                    Out dependence on oil has been very expensive.

                  • Boomer II says:

                    Still, Gulf war I was *all* about oil, and the rest wouldn’t have happened otherwise.

                    If it weren’t for oil, I assume we would have stayed out of most Middle East issues (and as a result, we also wouldn’t have become targets of Muslim terrorists).

                    We haven’t gotten involved in a lot what has happened in Africa, even though abuses there have often been worse that what has happened in the Middle East.

                  • U.S. involment in the Middle East is mostly an Israel driven effort. If Israel didn’t exist the USA wouldn’t care less about Saddam versus Godzillah. But I realize Ameticans tend to ignore the way Israel drives its foreign policy.

                  • Boomer II says:

                    We have long supported Israel financially, but in the past we didn’t go fight its enemies. If this were primarily about Israel, I believe we’d give continue to give them money, but not send troops there for them.

                  • Nick G says:

                    No question Israel is a factor. Some of the Jewish neocons were clearly interested in protecting Israel.

                    On the other hand: some of the arrow of causality is reversed here. What do I mean? I mean that Israel exists in part because there’s oil in the M.E.

                    Israel exists only because of the UK’s involvement after WWI, including Balfour, the Mandate, and the partition of Palestine.

                    After Churchill converted the Navy to oil in 1910, the UK was *very* aware of the existence of oil in the M.E. – in fact, it was aware that it had staked it’s Navy (and therefore the continued existence of the Empire) on ME (Iranian) oil.

                    So, the UK (and the US after that) saw Israel (in part) as a colonial outpost for the projection of European influence.

                    Were the Zionists after oil? No, no one is suggesting that. But, they had no chance of creating a new Israel without the British, and they couldn’t exist without the continued sponsorship of the US (as we saw clearly in 1973, when Israel would have been overwhelmed without US intervention). And the US was *acutely* aware of oil in the ME, and (in part) saw Israel as an “unsinkable aircraft carrier” in the ME.

                    Things are always complex in the ME, but oil has been central to it’s politics for at least 100 years.

                  • Nick G says:

                    Here’s BusinessWeek’s take on it:

                • Old farmer mac says:

                  I am only an armchair historian but it is obvious enough to any real student of history that all major wars from WWI inclusive to the present have been in large part resource wars and that oil has figured prominently in all the ones that have involved Western European countries and the US to any substantial extent. The Korean and Vietnam wars can be considered exceptions to the oil issue but in the end both were fought over control of territory – the land under the feet of the locals.

                  The old USSR used to be one of the two biggest dogs and hung onto every acre possible after WWII. The Chinese are up and coming big dog and for now exercising a soft commercial and economic imperialism largely copied from the USA model.But the lips can be pulled back and the gloves removed at any time to go bare knuckles and tooth and claw. We Yankees are rather reluctant to go that path if it can be avoided but …. all really serious threats to our access to oil have resulted in our going to war.

                  China is a nation that has so for not displayed much appetite for territorial expansion- but otoh the Chinese have not until recently been rich and powerful enough to give this possibility much in the way of serious consideration.

                  Chinese thinking is apt to change along with Chinese power.For now they will pursue soft imperialism yankee style. How much longer they will do so is anybody’s guess.

                  It is well known that the people in control are stoking the fires of revenge and imperialism by emphasizing the history of the Japanese invasion and occupation during WWII.This does not bode well in terms of their possible long term thinking for the Japanese. Next time the Chinese are going to be holding nearly all the trump cards except for the Japanese reliance on our Yankee nuclear umbrella.

                  A generation to a cultural Chinaman is about the same as a month to gasoline addled yankee and probably about the same as a year to a laid back Spaniard.

                  Japan has zero chance of defending herself against China ten or twenty years from now barring a miracle of some sort in favor of the Japanese.

                  There will be plenty of resource wars and oil is the KEY resource.The Chinese are hoping to take all they can find in nearby waters.

            • John B says:

              For battery electric cars, the numbers have been doubling every year for several years. Planned production for 2015 will double that number again.


              Also, Honda plans to bring it’s Hydrogen car to market alongside Toyota.


              Japan is developing Hydrogen Fuel Cells for powering, and heating buildings as well.


                • Nick G says:

                  Hydrogen for passenger transportation is kind of like nuclear power: it would work if needed, but it’s probably not optimal, or competitive.

              • High costs remain a barrier for fuel cells. And we have to figure out a method to transport hydrogen from galactic space down to earth.

                • And we have to figure out a method to transport hydrogen from galactic space down to earth.

                  I do hope that was sarcasm.

                  • huckleberry finn says:

                    You mention 35-45 wells being drilled. Do we have historical data on this county?
                    For example if a year back 40 wells caused a month on month increase in production, then it would validate the thesis that the sweet spots are done.

                  • Yep. I didn’t want to get into a discussion about hydrogen generation.

                  • Huck, everyone seems to miss the point here. My point was entirely about the decline rate of existing wells. Such a decline rate would be about what we would expect if no new wells were brought on line. But with that many new wells being brought on line then the decline rate of existing wells much be much higher.

                  • Huckleberry Finn says:

                    Hi Ron,
                    I do get your point completely. And it is scary that we are getting such a decline in spite of wells being drilled.
                    The point I was trying to make is on the parallel front that obviously one year back in December 2013, production DID NOT decline. Was that with the same number of wells? If so we have two problems to worry about instead of one.

                  • Huck, one year back from this report would be October 2013 but I don’t have well data from then. However I am sure there were a lot of well completions in Mountrail County that month.

                  • Huckleberry Finn says:

                    Thanks Ron.

          • Old farmer mac says:

            I am a big believer in bev ‘s but I don’t think capacity can be ramped up based on auto manufacturer’s plant capacity in short order. IF all the manufacturer’s were to try to build them at capacity there probably would be a big battery supply crunch..

            Building a WHOLE LOT more ev’s will likely have to wait on battery supply.

            Nevertheless I expect sales to grow fast as the consumer comes to accept the technology and battery prices come down.

            The fact of the matter Imo is that only a few people would be buying Volt’ s and Leaf ‘s even if they were a thousand bucks cheaper than the equivalent car with the ice. The consumer is still scared the car will not last and that it won’t have any resale value.

            Beyond that dealers in most places don’t have any in stock. You have to actually go out of your way to buy one, they do not actively try to sell them.

            But in a few more years the good looking young alpha woman in management is going to buy the first one seen in the company parking lot and after that sales will take off in a hurry.

            People will buy a five hundred dollar phone on a whim and buy them with cash or credit cards.

            But twenty to thirty grand and up is not a whim or impulse purchase to very many people.

            Range is NOT imo what is killing sales since there are SO MANY people with two or three cars who could easily use a Leaf for the vast majority of their daily driving.

            Most people are just not going to buy an electric until after they see friends and coworkers driving one.We are a copycat species and there just aren’t enough cats out there to copy yet.

            The average redneck repugican wouldn’t drive a Leaf for free due to fear of being accused of being a panty wearing tree hugger. But that will change with the coming of ten dollar rationed gasoline.

            I don’t know how long that will be but it isn’t going to be anything like as long as the two thousand years we have been waiting for Jesus.

            I don’t know about the rest of you hypocrites and sinners but I am a true blue baptized into the faith believer in the CHURCH OF PEAK OIL and if old age doesn’t get me first I have no doubt I will live to see ten dollar gas.

            Nevertheless I also live the typical Baptist way and sin as hard as I can afford to from Monday till Saturday night and pray for forgiveness every Sunday. I will NEVER give up my four by four truck so long as I am able to drive it.Getting somebody to the hospital on a bad winter day trumps ten dollar gas by a mile.

            • I have paid as much as $8 per gallon when the euro was at 1.40. But my diesel gets about 35 miles per gallon, and it has something like a 450 mile range.

              • Old farmer mac says:

                My old truck gets from five or six in hard going up to about thirteen on a good road at a steady 55.

                Even with gas at ten bucks that would still give me a MUCH lower operating cost per mile than calling a cab.I can get to town and back on less than three gallons. A cab is forty bucks just to GET to town plus wait time plus another forty back and a cabbie probably will not be willing to come out for me if the roads are bad.

                People who talk as if cabs and mass transit are cheaper options that cars seldom take into account how much cabs actually cost if you go more than a mile or two in one very often.

                There is virtually no depreciation involved in driving an old pickup truck worth only a thousand bucks. ONE that has been well maintained it will need very little spent on it on an average annual basis to keep it on the road a few thousand miles a year. I spent four hundred last year for new tires which will last four years and that was the biggest item in the LAST four years except the annual insurance premium.

                With 200k on the odometer it will probably need a new engine within another 50k. But that is ten years down the road.

                • I think most of this discussion applies to urban bubbas driving six passenger large cab F350s to commute from suburbia to a downtown office parking lot. I used to hate the way they took up two parking places. And to top it off they were usually tiny guys and gals from accounting who went to work wearing Gucci loafers.

              • Nick G says:

                Europeans use 18% as much fuel per person.

                Freight is where Europe wastes fuel.

                • Europeans have nicer public transportation. I have a tram station right by the front door of our building complex, comes every 30 minutes, takes about 24 minutes to downtown. Plus we have a 260 to 300 kmph high speed train to Madrid, and public buses. It’s nicer.

            • Nick G says:

              There is substantial unused battery production capacity at the moment. For instance, the Chevy volt has enough capacity to produce 60,000 vehicles per day, twice the current production. So, production could be doubled overnight, and after that it would take roughly 2 years per doubling.

              • huckleberry finn says:

                We have enough lithium for 3 doublings and then we get into trouble unless price of lithium goes through the solar roof.

                • Nick G says:

                  Do you have a link/source for that?

                  Lithium is a pretty common element…

                  • Here


                    It looks like lithium supplies would be very tight, and most of the known resources are in Bolivia, ruled by a fairly nutty character who claimed eating chicken led to homosexuality.

                  • Huckleberry Finn says:

                    Fernando’s response below is probably the most succinct correct response to your question.
                    I would like to add that even if all those optimistic about Lithium, and there are many people who are, are correct, the lead time for new Lithium mines are at a minimum 5 years. So we might run into issues with how quickly we ramp up.
                    Also look at neodymium and dysprosium, both of which could be other limiting factors.

                  • Nick G says:

                    That student project assumes almost all lithium will come from existing mines in S. America. The lithium supply for the Tesla Gigafactory is coming from a nearby mine in Nevada…


                  • Nick, my advice to Americans is to remember they live on planet earth and not on planet USA. If lithium reserves are somewhat tight and it looks like we (homo sapiens) will need to use some thing else then whatever mr musk does to build his rich kid toy cars is fairly inconsequential.

                  • Nick G says:

                    I’m puzzled by that comment – it’s as if you haven’t read the arguments and thought about them carefully at all.

                    The point of the reference to the Nevada mine, is that the student Stanford survey relied on very basic US GS information. Part of that information was the idea that South American mines were the world’s primary source of lithium. This is unrealistic. The existence of a very large Nevada mine is a data point that helps to show that.

          • Caelan MacIntyre says:

            I think I would speak for many by saying that Nick should be ignored in this forum as he is basically a competitive sociopath whose main reason for being here is to feed his compulsion to win arguments. He lacks any emotional intelligence and does not understand when to drop a pointless argument, insisting on the last word even when it adds nothing but irritation to the conversation. This is a pity because he obviously has some knowledge on energy issues but confuses his own interpretation with holy gospel, taking a fundamentalist approach he feels compelled to constantly defend rather than re-examine. The only way to treat Nick is not engage in his childish arguments and choose more civil interlocutors who can at least acknowledge both the costs and benefits involved in any hypothesis.
            I would bet money that Nick will not be able to refrain from interjecting here, but I won’t be responding to him.” ~ Termoil

            “No one wll be able to afford an EV during a depression, so it’s a moot point. By the time the depression is ending, the grid infrastructure will have degraded significantly from lack of investment and lack of maintenance. Grids are one of the most complex manifestations of our hyper-complex society, and therefore one of the most vulnerable…

            I have a reputation for patience, but I have little patience with people who persistently miscontrue what I have written and misrepresent my position.” ~ Stoneleigh

            “I believe wind turbines pay back their overall energy investment in 3-4 months, for a E-ROI of about 80:1. Can’t beat that.” ~ Nick

            “Wind has a net energy about 50:1” ~ Nick G

            “Well, we seem to be having trouble communicating, so let’s break this down into smalls steps.
            1st, do you agree that wind’s EROEI is around the 19:1 shown above?” ~ Nick G

            • Huckleberry Finn says:

              Anyone telling those two idiots at TAE to shut up gets +1trillion in my book.

              • Caelan MacIntyre says:

                It’s The Matrix, Huck. We don’t belong here.

                • Huckleberry Finn says:

                  I am glad Mrs Stoneleigh is not here. She is about the stupidest blogger to receive such a wide audience.
                  I posted on that garbage site as to why when world total assets are about 6X total debt would be have a depression, but I did not get an answer.

                • Huckleberry Finn says:

                  Thanks for that link Caelan. I have never laughed so hard. I thought she was idiot before I read this stuff and now I just feel sorry for her.

                  “Just wait a couple of years and see where we’re going. The ‘great recession’ was merely the opening act of a huge ponzi finance collapse. We’re going to see worse than the Great Depression of the 1930s. Excuse me while I laugh about the idea of us having a better understanding of economies today. Governments are if anything even more clueless than they used to be. They labour under the mechanistic monetarist model that completely fails to describe reality.

                  We cannot ramp alternatives fast enough. We have maybe 2 years, if we are lucky. And most alternatives have a very low EROEI. Nuclear has it’s own huge pitfalls. I used to be a nuclear safety researcher at Oxford. Nuclear power and social upheaval are not compatible.”

                  So couple of years would be September 2012? And after more than 2X that time no depression except for those people reading her nonsense. Nick and many others poked some very good holes in her stupidity but she used esoteric hand waving to cover it up.

                  • Caelan MacIntyre says:

                    You don’t think anything of Fukushima or that we are already in some kind of depression?

        • I was thinking over a 50 to 100 year period. The Israelis are going to have to drop their opposition to Iranian nuclear plants. Unless we find a sensible technology to convert solar energy AND store it, we will see Congo, Iran, and Nicaragua building nukes and stockpiling uranium fuel. It’s going to be an interesting future, I suppose we will all grow two heads.

          • sam taylor says:

            I have doubts about exactly how much uranium production could be ramped up by. I doubt enough to cover when half global electricity demand, let alone when you start to dump a share of transport costs into electricity too. As we move to lower and lower grades or uranium ore eroi starts to suffer as well. Anything below around 0.01% likely isn’t energetically viable. Seawater extraction at any significant rate is a complete pipe dream.

            Thorium and breeders are at least a generation away from making any significant contributions too, alas, and the fuel cycle still isn’t closed.

            • We just have to figure out how to use yranium more efficiently, build plutonium breeders and learn to handle radioactivity. This leaves the door open for the 76 nuclear plants the Iranians will need.

              Otherwise we can draw lots to see who gets to dive in a volcano.

              • Old farmer mac says:

                Professionally trained farmers are in a sense real engineers who work at the intersection of biology, business, and engineering in the usual sense of the word.

                You can take this to the bank.

                We are already deep into biological overshoot and there is only a very slight chance in my estimation that we are not going to suffer a major die off on a world wide basis within a hundred years given that the accelerating depletion of one time gift of nature resources such as oil, natural gas, fossil water, and numerous other critical resources.

                It is probably IS possible to perfect such technologies as breeder reactors and solar energy storage but it is imo VERY unlikely that these technologies can be invented, tested, scaled up, permitted,financed and then actually BUILT in sufficient quantity soon enough to save our most of us from economic and environmental collapse.

                This is not to say that all countries are looking at economic collapse however.

                Given that we are a global species in geographic terms we consist of many distinct populations in biological terms and some populations – such as the ones in the US , Canada, etc have a hogs share of resources and power enough to seize more if it becomes essential to do so.

                Furthermore just about every nation state will come to realize that it’s survival depends on going all out in a war time sense at some point.

                If this realization sinks in soon enough a country such as the US will weather the storm by going on a war time economic footing and implementing draconian conservation and efficiency measures as well as going flat out on deploying renewable energy infrastructure.

                There is nothing at all IN PRINCIPLE to stop a country such as the US from building out enough wind and solar capacity and enough HVDC grid etc etc to enable us to SURVIVE using very little oil and gas on a daily basis.

                There are literally dozens of ways we can get by with substantially less of everything we use these days and the resulting saved manpower . energy, and materials can be thrown into building out the renewables and recycling industries once we realize collectively that a collective decision to do so is our only real hope.

                This realization awaits a series of Pearl Harbor sized bricks upside our collective head.There can be no doubt the bricks will arrive fast and furious at some point.

                Speaking as realist I must say that I am praying they come soon enough to wake us up in time but not so fast as to cripple us to the point we can’t respond effectively.

                • Nick G says:


                  We don’t really need “solar energy storage”.

                  Most people’s energy is likely to come through the grid, and a large grid has a lot of resources for balancing supply with demand: overbuilding, supply diversity, geographic balancing, demand side management, etc.

                  After all of those are exhausted, there is a very affordable backup solution: using surplus power (during periods of excess supply, created by overbuilding) to create H2 (or more complex compounds, like methane or ammonia) stored underground. The Germans call it Wind-Gas.

                  All of this is existing tech – nothing needs to be invented.

                  • John B says:

                    I think there is going to have to be some battery storage when rooftop PV reaches high levels of penetration. The problem arises when a cloud passes overhead and suddenly drops the output by 50%. This is already happening in places like Maui County. Batteries work well for smoothing solar PV output.

                    Interestingly, electric car batteries are the perfect candidate for providing solar storage.


                  • Nick G says:

                    Investing in central battery storage is kind’ve the old-fashioned, utility capital-intensive model.

                    A better approach is demand side management: when the clouds hit air-conditioning demand will drop just as quickly: the utility can send a price signal and air conditioners can be cut in precisely the areas affected by the shadow.

                    In the same way, electric vehicle charging could be modulated as needed. A complete EV fleet would represent about 20% of overall grid demand. That’s 20% of demand that could be eliminated very quickly, or modulated up to 40 or 60%.

                  • John B says:

                    Not necessarily “central” storage, but storage in each building with an array.


                    One of the biggest complaints I here from grid-tied solar owners, is that their panels are useless in a power outage. With battery backup, they will still have power. Batteries also smooth out the intermittent power production.

                    You may even see some battery backup mandate in the future.

                  • Nick, solar power will remain a very impractical technology until they solve the storage issue. Most of what you wrote is a very nice pipe dream.

                  • Nick G says:

                    Fernando, you need to become more familiar with how grids are managed. The stuff I’m talking about are basic standard time tested techniques for matching supply and demand.

                  • Nick G says:

                    I suppose I should clarify that demand side management is widely used, and is an old time-tested technique, and yet is still under utilized because it doesn’t maximize utility profits.

                  • Nick G says:

                    In fact, Exelon is even as we speak is suing to be relieved of the requirement to use demand-side management, precisely because it’s hurting their revenue and profits.

                    Utilities generally are allowed to earn profit based on a regulated standard return on investment: if they’re not allowed to maximize capital investment, they can’t maximize profit.

                    Demand side management tends to produce electricity consumption, and a lemonade the need for capital investment: obviously these two things are anathema to utilities being regulated in the traditional way.

                    California is a leader in innovative regulation, and alternatives to the standard ROI model are one of the things they’ve been working on, successfully.

                  • Nick G says:

                    That should be “…*reduce* electricity consumption, and *eliminate* the need for capital investment…”


                  • Nick, I have supervised an engineering department which included a really sharp electrical engineer team leader. Our area had over 30 large generators, some were interconnected in grids, and we studied how to optimize our overall grid almost continuously (we had to deliver electricity to oil wells which used 300 hp submersible pumps, the treating plants, and also had connections to the national grid). What I find when I read papers and articles about this subject is that many who write about it ignore the ugly tiny details, and don’t know we also have to cover for human operator mistakes, weird transients, storms, and things like that. I hope this helps you understand where I’m coming from.

                  • Nick G says:

                    Well, I appreciate that you have some experience in the area. I also don’t envy the job of independent system operators and utility managers who have to match supply and demand.

                    But…it’s a tempting but ultimately misleading approach to scale up experience with a micro grid to a national (or regional) grid. I’ve been following the professional discussions of ISOs for quite some time: they know the challenges involved, and there has been an evolving diversity of opinion, and it’s becoming pretty clear that it is possible to manage a grid with a much larger penetration of wind and solar.

                    Germany is planning on 80% in 30 years: I believe German engineers.

                  • So have I , Nick. I happen to know more about this subject than you give me credit. I happen to disagree with most of what you write about the subject, but that’s just my professional opinion. On the other hand, I could be wrong. But i have to see something beyond bragging and cartoons.

                  • Nick G says:

                    Well, here’s a few sources:

                    Here’s the UK:


                    Study uses 60% limit for wind and solar, based on a study for the much smaller Irish grid.

                    The study assumes that solar (and perhaps wind) cannot be curtailed, and says explicitly that if it can that the 60% level is no longer a limit.

                    Excerpt from the abstract:

                    “Our model evaluated over 28 billion combinations of renewables and storage, each tested over 35,040 h (four years) of load and weather data. We find that the least cost solutions yield seemingly-excessive generation capacity—at times, almost three times the electricity needed to meet electrical load. This is because diverse renewable generation and the excess capacity together meet electric load with less storage, lowering total system cost. At 2030 technology costs and with excess electricity displacing natural gas, we find that the electric system can be powered 90%–99.9% of hours entirely on renewable electricity, at costs comparable to today’s—but only if we optimize the mix of generation and storage technologies.”

                    And from the conclusion:

                    “At 2008 technology costs, 30% of hours is the lowest-cost mix we evaluated. At expected 2030 technology costs, the cost minimum is 90% of hours met entirely by renewables. And 99.9% of hours, while not the cost-minimum, is lower in cost than today’s total cost of electricity.”


                    “We find that 90% of hours are covered most cost-effectively by a system that generates from renewables 180% the electrical energy needed by load, and 99.9% of hours are covered by generating almost 290% of need. Only 9e72 h of storage were required to cover 99.9% of hours of load over four years. So much excess generation of renewables is a new idea, but it is not problematic or inefficient, any more than it is problematic to build a thermal power plant requiring fuel input at 250% of the electrical output, as we do today.”
                    Do those two help? There are many more from reputable sources, if you need them…

          • Schinzy says:

            I think heat pumped electrical storage will be a game changer. Within 5 years there will be do it yourself models on the Internet. Flywheels have improved a lot as well. See Energy Storage.

            • Old farmer mac says:

              Personally I believe that within forty years or so we could economically convert just about all residential and a whole lot of other buildings to use wind and solar power for heat to the extent that it is available and thus take an enormous bite out of natural gas demand leaving the gas for other uses such as fueling large trucks and manufacturing fertilizers.

              The actual amount of work and materials needed to construct a NEW house in a good spot with built in thermal storage is quite modest.

              I can dig a pit big enough to hold forty tons of crushed stone available locally for five hundred bucks delivered with my backhoe in a couple of hours.Such as pit full of stone if the ground is nice and dry would need only minimal insulation and some heating elements embedded and some embedded duct work and a relatively small fan to store enough heat to keep a new well insulated house satisfactorily heated for at least a week depending on how hot much juice is available to heat the stone.

              I have no real idea what the wiring and duct work would cost but the pit could be dug, lined with masonry, insulated, and filled with stone for well under four grand locally today plus the electrical and duct work. Heating elements are dirt cheap and very durable.Duct work strong and durable enough would be another matter with the pit in the crawl space.

              With lots of wind power seeking a market and the financing available this would be viable scheme today.

              • Shuffling Along says:

                If the so-called conservative folks in my old stomping grounds in North Dakota were truly conservative, they would use their temporary Baaken windfall to finance projects such as these. even more efficient would be to build these thermal storage pits in neighborhoods in their towns to implement district heating schemes.

                They could build scads of windmills on their bountiful farmland to bathe Themselves in electricity.

                Believe it or not, they could build solar thermal plants to charge their thermal storage pits for their long winters…even though the winter days are short and the sun is low, the summer days are way long and the sun shines hot….that bounty could be captured and stored…especially if they got off their butts and started building passivehauses…duplexes, triplexes, quadplexes, and apartment blocks would be even more efficient.

                ND could build out savvy long-term energy schemes, which, combined with their rich soils, reasonably plentiful water, and low population, could lead to their living in a model sustainable region.

                Alas, as nice as the locals are, they just do not have that kind of foresight. They are highly susceptible to the Fox Noise hypnosis causing them to distrust any communal action for anything remotely ‘green’ as ‘communist’,’socialist just plain un-American.

                I am being hard on them…I lived among them, and they could set themselves up in good stead for the future…but they will live day-to-day and blow their one-time opportunity to dig in for the long haul.

                Thirty years from now when they are struggling to keep from freezing they will have only themselves to blame.

                • Nick G says:

                  FWIW, North Dakota leads the states in per capita generation from wind, and got 16% of it’s kWhs from wind in 2013.


                • Ronald Walter says:

                  North Dakota has a plethora of socialist programs.

                  Workers Compensation? Born in North Dakota.

                  The Progressive Party has its roots in North Dakota.

                  The Non-Partisans, led to the formation of the Non-Partisan League, named thus by socialists in North Dakota for those who sympathized with the socialist platform but were not members of the socialist party. The Republicans joined with the NPL in the beginning, The Republican-NPL, but differences forced the NPL to join the Democrats in North Dakota.

                  Hardly the conservative state that most think it is.

                  • Ronald Walter says:

                    Adding to the political turmoil and the general excitement was the fact that Minot was the state headquarters of the Socialist Party, and the years
                    1912-1016 were the years of greatest activity in North Dakota. Henry Martinson came to Minot as organizer for the Party and attributed the Socialist
                    Movement in the city to the influx of Scandinavians and Germans, who had witnessed mid socialism in their native countries. Mr. Martinson died in
                    late 1981 at the good age of 97. In the Minot membership a spirit developed between the left and right wings of the Party that would lead to its
                    demise and the emergence of the Non-Partisan League in 1916. The outbreak of World War I (to which the Socialists were opposed) gave the final
                    shove to the decline of the Party’s strength of 1912-1916.
                    The Socialist Party’s official newspaper, The Iconoclast, was published at Minot with Henry Teigan as editor. The Minot chapter in 1914 obtained a
                    lease on a meeting hall located above a bank; they also had a Socialist Park called officially Dorman Park in honor of Dewey Dorman, on whose land
                    it was situated, on the banks of the Mouse River. The year 1914 may well have been the high-water mark of the Socialist Party in Minot, including a
                    visit from Eugene V. Debs, the national leader.


                  • Boomer II says:

                    All those global warming denier trolls who jump in here to post about communist conspiracies over look the fact that farm coops have long been a part of rural America.

                    When the conservatives talk about communism, I think they might as well say Satan. Communism is a rather outdated and imprecise reference to “evil.”

              • wimbi says:

                People, take a look at this not new at all widget



                Look at the date, and the performance, and keep in mind that it is an old prototype and could be made to eat any stuff that will burn.

                Why not it as a PV backup, so it, a small battery, and PV could easily make a house like mine totally grid free, for good and all.

                Why not?

                • toolpush says:


                  Exactly what I want. I have a get away place in the bush, 400 ac of tree, which keep falling down or dropping branched, giving me an endless source of free timber. I have off grid solar, but use ICE as a back. I would love to be able to turn my excess wood into electricity.
                  So the big question is where do you get it and how much. Over the years I have seen a few promises, but apart from the Whisper jet, at $11,000, I have not seen anything practical on the market.
                  I am in Australia, so the 50hz 240w of this South African unit would be ideal.
                  PS. the $11k is a bit rich I feel?

                  • wimbi says:

                    Well, that’s two of us, and who knows how many more. So, as I say, some entrepreneur ought to jump at the chance and go for a commercial product.

                    Sunpower, the originator, is now strictly into aero-space stuff- very expensive, very high tech. they started off in the right direction, but all the $ were elsewhere, with the usual results.

                    I think the world is ready for biowatt, so, somebody, somewhere, go for it.

                    Meanwhile, back in the workshop, I and my little team are banging away at a super low tech thing that does the same, takes wood and anything burnable and turns it into electricity, so far, burner works great, all we gotta do is make the engine.

                • So where doi get this “biomass”? Use a chainsaw at the park?

                  • wimbi says:

                    Don’t need it, this burner runs hot, no organic molecule can stick together at that temp, so, plastics, any kind, work great.

                    After all, plastics are just solidified petroleum.

                    Get the fuel out of the garbage can. Anything that burns.

                    Now, quick, wimbi, scuttle back under yer rock, fast!

                  • I’ll get to it. Here in Europe plastics are made from fossil fuels, so I need a burning permit from the condominium, anther from city hall, a third from provincial enviromental authorities, and finally one from Brussels. I think I should get it if I claim an offset carbon credit by planting 300 bushes per year in north east Nigeria.

                  • toolpush says:


                    I don’t believe anybody is saying this type wood to electricity is a city thing, certainly not in my case. I have timbers that falls down, needs to be moved, so much better to use it to replace another energy source, and chainsaw is a fantastic energy multiplier. The amount of heat that comes from cutting wood with just 1 litre petrol is incredible. It is finding a convenient and efficient way of turning this heat into electricity it the trick.
                    Steam doesn’t cut it, too many problems with pressure boilers.
                    ICE with wood gasifier, can work but fiddly. Some systems on the market, but wood need preparation I believe, chips or pellets.
                    Sterling heat engine certainly has potential, waiting for product to be marketed.
                    Do you have a solution?

                  • Tool push, I don’t have a solution. But I don’t think about these problems as something I have to solve for me. I tend to think of solutions for 2.6 billion chinese and Indians, 600 million Africans, and 500 million Europeans who tend to, in general, keep their heads in the clouds.

      • Old farmer mac says:

        Demand destruction is in my estimation over simplified in most conversations. Those of us who believe demand destruction can keep the price of oil below some certain level (- let us say for example one hundred fifty constant 2014 dollars a barrel which is a number I just pulled out of a hat ) are probably right in that a very great deal of demand is based on uses that are non economic and will melt away due to consumers not being able to afford that price level. The people driving oversized pickups to work are just about priced out of the market already at four dollars unless they have pretty good jobs.Virtually every one I know who used to drive a full size pickup to a sweatshop job is nowadays driving a compact car – if he still has a job.

        Air travel will obviously take a huge hit when prices go as high as one fifty considering that fuel supposedly was half the cost of a ticket at a hundred bucks a barrel.

        So the argument is probably correct – no doubt correct – that demand destruction in many economic sectors will hold down the price of oil.

        BUT at SOME point as production falls off the economic utility of the marginal barrel will be so high that the price can go into the stratosphere.

        It really does not matter if oil goes to two hundred or even three hundred dollars a barrel to me as a farmer.Farmers will have no trouble selling what they produce and recovering the cost of producing it . If there is any one commodity that is absolutely as important as oil it is food. Food will sell so long as ANYTHING sells.

        Twenty dollar a gallon diesel is a bargain compared to a horse or mule.

        These thoughts lead me to believe that the upper limit on oil prices will be determined by discretionary demand destruction for the near to medium term but that in the long term oil could go to almost any price at all- except that at some point synthetic oil or other synthetic fuel will displace oil. Nobody seems to know how much a coals to liquid plant would cost but such rough estimates as I have run across indicate that with coal at current prices coal to liquids would work at less than two hundred a barrel and maybe as low as one fifty a barrel.

        I don’t know if such estimates are realistic or not.

        What I do know is that there are plenty of uses of oil that will support a price of well over two hundred bucks in constant money for quite a lot of oil .

        So I suppose that unless alternative energy technologies enable us to manufacture vehicle fuel for less that oil WILL eventually sell for two hundred or more per barrel.
        This price level is probably a couple of decades away though given that people who can afford oil today will have to give it up in ever increasing numbers. Even the constantly growing population probably will not generate demand enough to support such a high price until depletion brings it about.

        Depletion after all never sleeps.

        And farmers and cops and ambulances and trucking companies and electric utilities (for their service trucks, not to burn it to generate power ) will pay any price whatsoever for oil up until the day the economy simply ceases to function if things go all the way to hell in a hand basket.

        IMO oil will hit two hundred in constant dollars within ten to twenty years.

        • wimbi says:

          In ten years solar will be so cheap that nobody will want stuff dug out of hard rock- way too much work.

          Not to mention that little penalty of life in prison for killing the future with carbon.

          With cheap solar electricity, there’s lots of ways to get a liquid fuel easier than that- if you even want to do it at all, instead of just use the electricity — ten different ways i can think of off top of head — to run a vehicle.

          • Dale DeVarga says:

            I thank you for welcoming me to your blog, I am Dale DeVarga from the Heritage Foundation. I just wanted to mention your comment is further proof that only true communists support the so-called “clean” energy. Real Americans drive large trucks, don’t care about what anyone else thinks of us, and definitely will not tolerate attempts from the globalists inside and outside the country to tell us what kind of energy to use. I’m all for coal oil and natural gas, not some hippy duppy wind or solar crap. Besides killing endangered birds and desert tortoises left and right they both require big government subsidies and loan guarantees, aka a leftist’s idea of how power generation should work. In the meantime cheap fossil fuels combined with the free enterprise entrepreneurial spirit found nowhere else in the world but the USA is the greatest anti poverty program humanity has ever known.

            • Boomer II says:

              Is this satire?

              • Is this satire?

                Well this should give you a hint:

                from the Heritage Foundation.

                If that statement is true then it’s not satire. That is typical right wing Republican rhetoric.

                • Boomer II says:

                  Oh, I saw the Heritage Foundation. I meant is it really from someone from the Heritage Foundation? It is so filled with cliches that it could have come from the Onion or Andy Borowitz doing a satire of the Heritage Foundation.

                • John B says:

                  Not all Republicans are against Solar Energy:


                  “While liberals tend to be concerned about climate change and the environment, conservative supporters of solar power cite decentralization, self-reliance, technological innovation, and the free market. Debbie Dooley, national coordinator of the Tea Party Patriots, said last year that said she liked solar because it is “a free market issue that gives consumers more choice.”

                  • Boomer II says:

                    Yes, self-reliance is an important aspect of sustainability. The far left and the far right have more in common than many realize and I wish they would join forces on the ideas they both support.

                  • Old farmer mac says:

                    North Carolina is one of the leading states in terms of solar power adoption at the commercial level.

                    I suppose most of the regulars here know that NC is as red as hot charcoal.

                  • Nick G says:

                    Heck, Texas loves wind power.

                    None of that silly “wind turbines are ugly” in Texas.

                  • wimbi says:

                    I was hoping my deliberately provocative remark would bring forward discussion of the important question, Is it true that solar will be the dominant energy source in the near future?

                    I say yes, a certainty- and sooner than anyone here would think.

                  • Nick G says:

                    Yeah, PV seems to be really breaking out, especially at the retail, electric consumer side.

                    Suddenly the safe, conservative utility investment is risky. And, if they try to sabotage solar by moving to increase base costs and decrease per-kWh pricing, they risk driving people off the grid entirely – hence the discussion of batteries combined with PV.

            • Boomer II says:

              This illustration seems to fit the sentiment.


    • Kam says:

      I think that September production was not up by 1 mbpd. Canada’s output is suspicious. Next month they will downgrade it. IEA says that Canada’s output (all liquids) in September was 6% higher than in September 2013, but EIA says that it was 13% higher.

  4. Andy Hamilton says:

    A crucial little snippet in an otherwise inane article:

    ”Crude imports by Japan, the world’s fourth-biggest oil buyer, dropped 17.3 percent in November from a year earlier to 14.68 million kilolitres (3.08 million bpd), government data showed on Thursday”.

    That would be Japanese demand down by close to 500,000bpd year on year? A combination of re-entering recession mid-year and starting to switch their nukes back on.

    That would account for perhaps half the ‘ supply surplus’ that has roiled the markets methinks……..

    • Watcher says:

      Price had already declined by Nov so if that consumption decline mattered, price would have risen then.

      • Andy Hamilton says:

        I am beginning to think you just blurt out anything to try to be annoying. Think about it for one minute. Japanese demand didn’t just drop off a cliff in November. If I could be bothered I would pull up the Japanese demand data for July, August, September etc. It would show (for example), July demand down 10% yoy, August down 9% yoy, September down 12% yoy etc. The November figure is just a one month snap shot that shows Japanese demand is considerably lower than it was.

        It is what it is. The Japanese are using approx 500,000bpd less than they were.

        Sure we all know you ‘the rise in the US$ is solely to blame’ meme. Get over yourself – things can be multifactorial.

        • Watcher says:

          Why would you quote yoy data for events in July that are relative to June of the same year? We are only interested in events July to November, wrt to May – Oct.

          It doesn’t matter if they use 500K less in Nov 2014 than Nov 2013. It would matter if they used less in June vs May. And July vs June. The yoy reduction could have focused in March.

          World consumption is higher than in mid 2008 but the price is lower. Timeframes are everything.

        • notanoilman says:

          Have you taken into account the rise in Japanese LNG imports? Maybe there is a change in overall usage that is involved.


    • tony37 says:

      on I found the following about Japan:
      “In early 2014 some 92 mostly very old oil-burning generation plants were running to full capacity, and these will be the first to shut down, due both to age and cost of running with imported oil.”
      so this might have a lot to do with it

      • huckleberry Finn says:

        Japan was using about 250,000 barrels of oil per day according to EIA for additional electricity generation after Fukushima. Some was decreased in 2013 and some again in 2014. About 40% is still being used. The total decrease in 2014 I estimate to be about 50,000 barrels per day vs 2013 levels.

  5. Thirunagar says:

    Just a survey.

    How much BPD oil do you guys think ND will produce as of Oct 15 Helms report? That is one year from now. Make your own guesses on oil price and their impact on production but give us one number you believe will be closest to the actual number.

    I will start with 1 million Bpd – flattish to slightly negative from where we are today.

    • What fraction of today’s production is declining at 30 to 70 % per year?

      • Doug Leighton says:

        “What fraction of today’s production is declining at 30 to 70 % per year?” What does that sentence (question) mean? Fraction of today’s production???? And, who said anything about anything declining 30 to 70%/year?

        • The Bakken producers have hyperbolic decline rates. Thus the wells with less than one year on line are declining at 30 to 70 % per year. Older wells produce with lower decline rates. But I thought it would be interesting to point out to the readers why production from the existing wells declines so fast, and why, if the number of new wells is reduced due to low oil prices, the total North Dakota production rate will stop growing and then decline.

          • From the article:

            “Last week, Petrobras said it will scale back spending to avoid having to issue debt next year. It cannot issue new debt until it releases third-quarter earnings, which were delayed after auditor PriceWaterhouseCoopers refused to certify them owing to the corruption scandal.”

          • Doug Leighton says:

            Fair enough, I suppose, context wasn’t obvious. But then I’m pretty jet lagged at the moment.

          • The reason they decline so fast is because the flow can be characterized as a diffusional process. Diffusional processes are endemic in all sorts of natural physical phenomena and a the flow through a fractured mosaic of fissures is no exception. All diffusional processes are characterized by a fats transient followed by a slower response fat-tail. The fat-tail is modified by an Ornstein-Uhlenbeck process if there is a reversion to the mean in the random walk. This effectively models a process that will more quickly reach an asymptotic level and thus faster diminishing returns.

            The heuristics that the reservoir engineers apply to model this is approximated by a hyperbolic decline. That is not close to being precisely the same as a diffusional process but that is probably OK because reservoir engineers are not treating any of this as an exact science.

            • Doug Leighton says:

              “approximated by a hyperbolic decline” Thanks, I’m pleased someone pointed the approximated part out.

              • Hyperbolic is close enough. What I strive for is simplicity when helping people visualize well behavior. This comes from decades trying to simplify well, reservoir, field, and regional performance descriptions to company managers, government officials, and young engineers who bogged down when facing too much data.

                • I go for the science. That’s why people like you, Fernando, have no business dealing with climate science. Approximations don’t work there. Now you know why you always get crushed when you try to engage in your anti-AGW rhetoric at blogs such as Rabbet Run.

            • It’s not diffusion, but if it helps you visualize it that way then more power to you.

              • Watcher says:

                Bakken oil production in Oct 2015 will be 704,233 bpd.

                • Are you assuming the pipe dope is applied to the box or to the pin?

                  • toolpush says:

                    Now, Now, Ferando,

                    You know the drill pipe is doped in the box, and when the completion hand is looking the tubing is doped on the pin.

                  • Mike says:

                    Unless running a screen assembly, or when the toolpusher is catching a nap, then don’t use any dope.

                  • Are you running sand screens nowadays? I thought all those sands were depleted. You know, the first time they left me alone to supervise a completion it was a sand control job using that newfangled highly viscosified slurry packs. The service company types had never mixed a thick blend, the pumps filled with sand, and overall it was a huge mess. The field foreman told my boss to punish me, so they kept me eating mosquitoes in a Louisiana swamp for a while.

              • SW says:

                If not diffusion, how would you characterize the transport mechanism?

                • For oil movement in little itty bitty pores and cracks in a rock? Pressure differential moves the stuff. I don’t want to get nerdy, but when Webby brings up the word diffusion the readers probably start thinking of Fick’s law and this may get them to compare fluid flow through a rock to sugar dissolving in their coffee. The best way to put it is pressure. If we allow the reservoir pressure to drop the pressure out there pushes fluids to the well, and if we inject water the water pushes the fluids. But although the equations are similar it’s not sugar in coffee.

                  • SW says:

                    From a modeling perspective wouldn’t the porosity generated by the ‘itty bitty cracks’ be analogous to the diffusion constant with the pressure differential acting as the driving force instead of a concentration gradient? What alternative mathematical modeling technique would you suggest?

                  • The problem, Fernando, is that your pressure can just as easily force the liquid deeper, and thus even further away from being collected.

                    You don’t seem to understand that the mathematics of diffusion is that of modeling a random walk. The particles in a 3D random walk can go in any direction, some may be preferentially driven in one direction, but you are not considering all the material that takes circuitous routes.
                    The material that takes such a route will take longer to get where it is going and can also become trapped for long periods of time. This all goes into describing the diffusional flow process.

                  • None. But the itty bitty cracks are anisotropic, heterogeneous, and there’s more to it than cracks. If you want to think of it using classic Darcy flow equations that’s fine. But the “hyperbolic” behavior is due to much more than transient flows.

                  • The problem with you Fernando is that you wouldn’t be able to derive a hyperbolic flow model if your life depended on it. It’s basically a heuristic that someone came up with that matches the empirical observations. In contrast, deriving a diffusive flow will produce a hyperbolic model directly.

                    So it seems to me that I actually understand what is happening below the surface whereas you are simply guessing.

                  • Mike says:

                    Mr. Leanme, I assure you sand control is very much alive and kicking in an array of clastic reservoirs in the Gulf Coast basin, on and offshore. I cut my teeth on open hole gravel packs, slurry and frac packs, screens, prepacked screens, screens below open hole packers; you name it, I’ve pissed money away on it and still going strong. If it were not for water, and sand, I would likely still look my age and living on a warm beach somewhere.

                    I would not embarrass myself arguing fluid flow dynamics with an engineer or a mathematician. What I would like to say, however, is that I have full hole cored many, many types of different reservoirs, clastics to carbonates, and I have yet to find a rock anywhere that I consider homogeneous and subject to predictable fluid flow. I won’t even bother explaining that; you understand exactly what I am talking about. Diffusional flow, as I understand, is not possible thru any rock. Modeling aside, to understand the nature of a sediment one must understand the environment and manner in which it was deposited over geological time. There is no better example of understanding the inconsistency in rock composition than to frac a horizontal lateral; one stage will treat at entirely different rates and sand concentrations than the next stage 400 feet away. I might be able to get 400,000 pounds of sand in one stage but only 200,000 in the next and not a 5 gallon bucket of sand in another. I do not understand how diffusional flow can apply in un-tinkered rock, certainly not thru frac stimulated micro fractures.

                    That’s my DARO.


                  • Diffusion is a mathematical construct that deals with modeling the random walk of a mobile material.

                    There are many physical phenomena that are described as diffusion which don’t necessarily follow the classic “Brownian motion” sense of diffusion. Vertical eddy diffusion of oceanic waters is one such example. The random walk of eddys of turbulent flow in the vertical direction is one of the chief mechanisms in transferring heat from the ocean’s surface. This is not Brownian motion at all but a random walk of turbulent flow. That is still diffusion, but on a more macro scale.

                    So what happens in a fractured material is that fluid can take all manner of routes within the 3-dimensional space until it arrives at a destination. That is considered a random walk and why the mathematics of diffusion works well to describe it.

                    It is not that hard a concept to understand once you see how often it is used to describe all types of earth sciences phenomena, and beyond that in every discipline that applies statistical physics.

                  • Webby, in this world stuff rolls downhill. Think about it.

                  • ” Fernando Leanme says:
                    December 28, 2014 at 8:42 am

                    Webby, in this world stuff rolls downhill. Think about it.

                    Yes, and so when a spatial volume is hydraulically fractured, a significant fraction of the liquid material will get pushed deeper.

                    Modeling a random walk is as simple as flipping a coin and moving the material in one direction or the other depending on whether it land heads or tails. So as the material moves far enough away from the source, it will take that much longer for the material to walk back to its original starting point.

                    That is basically the explanation for the sharp transient and fat-tail characteristic of a diffusional process. A hyperbolic profile is a fat-tail distribution as well. To understand this is to gain a deeper appreciation for what is happening underground after a violent and barely controllable event of fracturing.

                    You oil-industry-jocks guys act like you have more control over the process than you think. Mother nature is the one that is defining how it plays out, and it surely does not have an orderly process in mind. The result is a diffusional process.

                    Did you ever get taught statistical mechanics in school, like those of us that had a solid physics curriculum?

              • Doug Leighton says:

                This is correct Fernando. I guess if one really wants to be all-academic about it, fluid dynamics is up to the task of describing molecular motion within pore spaces. The big problem with diffusion (tendency of materials to spread out evenly) is the definition is treated differently in the context of different disciplines (i.e., radiation, physics, chemistry, meteorology, biology, sociology, economics, finance, migration). Applying your Fick’s First Law or the Nernst–Planck equation, if you want to get really snobby, is plain silly and your explanation is more than adequate.

              • It certainly is diffusion. There is no charge on the liquid and so the flow is essentially a random walk in any direction that there are fissures. Or, to put it another way, it is the most diffusional process of any reservoir flow yet observed.

                • But the rocks aren’t the same in every direction, and change in space and time. I wouldn’t think of it as sugar in coffee. It’s more complex, and this is why it’s impossible to model it. Which explains why it’s useful to crunch well data to develop empirical “rules”. Think of it as if it were a climate model, it’s impossible to do it using a theoretical framework because we don’t know what’s really going on with the climate. What’s different is that we got lots of wells, and only one planet.

                  • What a load of crock. What I do with a dispersive diffusion model is take a maximum entropy range of diffusion coefficients and thus create a mix of flow rates that captures a valid cross-section of a large sample of varying wells. This is what produces the inverse power-law (i.e. hyperbolic) transient.

                    To understand what is happening in the physical world is very useful to counter the BS, like this stuff that Fernando spews:

                    “Think of it as if it were a climate model, it’s impossible to do it using a theoretical framework because we don’t know what’s really going on with the climate. “

                    Own up to it, you just don’t understand the mathematical modeling techniques that can capture natural phenomena.

            • Dennis Coyne says:

              Hi Paul,

              When I have tried to use your O-U Diffusive Model, the fit to the first 24 months of data was not very good and a hyperbolic model seemed to approximate the data more closely over the first 24 to 36 months. Beyond that your model may work well, I usually revert to exponential decline (as an approximation) from about year 6 or 7 to keep things simple.

              I like your model because the physics makes sense to me.

              I wonder if we could think of the first 2 to 3 years as more of a pressure driven regime and as the pressure depletes then your diffusive model may describe the well dynamics more closely.

              Just thinking out loud, if this makes sense, then a hybrid hyperbolic/OU Diffusion model may approximate the LTO wells fairly closely.

              • SW says:

                I am clearly out of my depth here. I am a solid state guy not a fluid dynamics person. To make matters worse, I am an experimentalists and for my entire career I have had a somewhat strained although ultimately fruitful relationship with theorists and modelers in particular. But at this late stage of my career I remain skeptical of the current state of the art of modeling complex non-linear systems. I am decidedly not a climate change skeptic. I believe in Maxwell’s equations and I think that is all you need to believe in anthropogenic climate change. I am however skeptical of our ability to predict the consequences of adding more energy to this complex dynamical system. It is the uncertainty that scares the hell out of me.

                This is not nearly as complex a problem as climate yet you do have an issue trying to model what is essentially a diffusive phenomena when you have no real knowledge regarding the mapping of D. Now WEB, you may have some technique that you are comfortable with that you believe allows you to finesse this lack of knowledge. But it is my experience that under these circumstances, no matter how confident a modeler may be the final arbiter is the data. If the data doesn’t fit the model, then the model needs to be changed or it needs to be recognized that it is deficient in some way. In the end models are only as good as their predictive power and agreement with the data.

                • Like SW, I cut my teeth in semiconductors. I was both an experimentalist and a theorist, spending half my time in the lab and the other half trying to come up with models describing what we discovered.

                  Like I said before, the hyperbolic decline model is simply a heuristic which covers a lot of territory. It features a decline exponent referred to as b, and b can be any value. Used as a heuristic, b is adjusted until it fits the data best. For Bakken wells, what has been found is that a value of b equal to 1.4 seems to work very well. See this article by James Mason in the Oil&Gas Journal:

                  Mason shows a best fit with a value of b equal to 1.4.

                  Now it just so happens that 1.4 is very close to the square root of 2, which is the exponent that is used in the dispersive diffusion model. In this case, there is very little to distinguish a hyperbolic decline model with an exponent of 1.4 and a first-principles diffusion model.

                  Since physics always beats heuristics when it comes to models, the diffusion model wins until someone can come up with a better model.

                  • a few years ago I met a guy who worked at Los Alamos, was trying to use computational fluid dynamics to predict oil well performance. You remind me of that guy.

                  • ” Fernando Leanme says:
                    December 28, 2014 at 8:49 am

                    a few years ago I met a guy who worked at Los Alamos, was trying to use computational fluid dynamics to predict oil well performance. You remind me of that guy.

                    Fernando, you remind me of the kind of guy who claims authority in another discipline (in your case climate science), but then gets all upset when someone else enters his own private space. It’s apparently a situation of role reversal and sour grapes that you are not able to handle. #ControlFreak

              • Dennis, most of us end up using the same trick you use: a simple hyperbolic fit for a few years, spliced to exponential decline thereafter.

                I should add that we have automated the curve fits on a well by well basis. I also find the “system intelligence” needs a human eyeball. This means we have to put up the graphs, the derived match, and make sure it didn’t go haywire.

                But don’t ever try harmonics. They are a waste of time.

                • Mike says:

                  Dennis, when I hear big words I like I try and write them down in my tally book so I can use them later in learned company. I can’t find any right now and should stay out of this discussion. But my experience is that pressure differential becomes even more important in fluid flow thru rock as the well gets older. On rod lift, for instance, fluid conductivity to the well bore is all about pressure drop at perforations.

                  If you guys are trying to justify long swooping hyperbolic decline curves thur diffusional flow theories, I can’t get it. I’m trying, but it ain’t happening. I have never bought into “type” curves in this LTO stuff anyway. My experience in tight sandstones with nil permeability is there was never any long swooping hyperbolic decline, it does indeed go exponential (Leanme), then Mother Nature does Her thing and decline often end up linear and the party is over. There is just too many things going on down there in the dark that prevent modeling fluid flow. I hope I live long enough to see what the EUR’s on these stinking shale wells actually are. It won’t be like they say, betcha.

                  My respects to Paul, who functions at a much higher level than this ‘ol roughneck.


                  • Doug Leighton says:

                    “There is just too many things going on down there in the dark that prevent modeling fluid flow. ”

                    EXACTLY And you get the grand prize Mike. Nice to see that at least someone sees beyond all the Bull Shit.

                  • Mike, do you have a lease with really high viscosity oil in a loose sand? I got a trick you may want to try.

                  • Mike says:

                    Mr. Leanme, 1.2 cp, I think, at 100 degrees…in 1000 md sand. I like tricks.


                  • Watcher says:

                    otoh if you instrument a well and take excellent measurements, then what’s going on down there isn’t in the dark anymore.

                    And you don’t need to model it. Just report the measurements.

                    It can be like an antfarm. Look at what’s happening.

                  • Won’t work on something like that. Is it water drive in South Texas? The water is briny?

                  • Mike says:

                    Watcher, you are a very smart fella but you don’t know your ass from conductor pipe about the oil business other than what you read on the internet. We were talking about flow dynamics in very complex rock composition; if you have some “instrumentation package” that can be lowered down a rope that accurately measures oil and water and gas flow into a wellbore in such as well that we can predict the decline of a well, please share it with this dumb ‘ol roughneck. Clearly, at 54 dollar oil, I need as much help as I can get.

                    Otherwise, in spite of what you read, 2 miles down and 2 miles out, it is very dark and very hard to see. Occasionally ca-ca happens downhole that does not have an explanation. Anybody who says they think they always have the answers for unexplainable downhole “events” has not been in the oil business very long or because he/she can put some initials behind his/her name simply likes to think of themselves as vastly superior to Mother Nature. Raspberries. I have drilled and completed hundreds of wells, with my own stinking money, and lots of times I have been totally stumped. Baffled. When I get to heaven the first place I am going is the Geology Department. The 2nd stop will probably be the Female Department to see what was up with that, but that’s another story.

                    Do they make ant farm models?

                    Your buddy,

                  • Dennis Coyne says:

                    Hi Mike,

                    I don’t use the OU- diffusion model, but it makes sense to me from a physical perspective.

                    When a well goes on rod lift, that is because the natural pressure does not lift the oil, at that point the flow of oil to the well is a diffusive process. The pressure you are referring to is the pressure created by the pumps to get the oil to the surface, the diffusion is what drives the oil from the rock to the well bore.

                    When I have attempted to use Paul Pukite’s OU diffusion model to model the Bakken, the first 24 months or so of data do not match the model as closely as a hyperbolic model, with a b=1.3 to 1.4.

                    After 24 to 36 months the OU model works quite well.

                    I suggest that over the first 2 to 3 years, the output is primarily pressure driven (natural reservoir pressure) and as the natural pressure depletes the wells can be approximated by a diffusive process.

                    The simple trick of switching from hyperbolic to exponential decline when the annual decline rate gets to 10% or so, can work, but seems quite arbitrary and seems to have no physical basis. Finding a curve that matches the data, without any theory for why that curve should fit is not good science.

                • Fernando Leanme says:
                  December 28, 2014 at 8:56 am

                  Dennis, most of us end up using the same trick you use: a simple hyperbolic fit for a few years, spliced to exponential decline thereafter.

                  I guess to petroleum engineers, this is considered a “trick”, but to those of us that understand physics and how to model the natural world, what you are describing, Fernando, is the Ornstein-Uhlenbeck randow-walk process.

                  This is essentially a simple random-walk process that has a long-term reversion to the mean characteristic. It effectively prevents random-walk excursions that extend to far from the point of origin.

                  The modelled result of the O-U process is that the initial transient has the hyperbolic decline followed by a fat-tail, but then the long-term fat-tail is essentially suppressed by an exponential decline.

                  This illustrates how the laws of diminishing returns apply to Bakken wells in contrast to a pure hyperbolic decline, where the returns can continue indefinitely via the fat-tail.

                  • It’s not that simple, Webby. Draw a line. That’s your horizontal well. If the operator knows what he’s doing, the well gets fractured. Draw 25 lines somewhat perpendicular to the first line. That’s the fractures. Draw a line to the area between the lines representing the fracture planes, put an arrowhead on it and a label, “really crappy rock”. That’s what sits between the hydraulic fractures. When the well is opened up, that crappy rock sweats a bit, and the pressure drops. This pressure drop then moves away from the fault plane. But the fluids and the rock away from the fracture don’t get it. For a while anyway. The initial process is hyperbolic for more than one reason. The fact that the pressure signal moves real slow is one. But the heterogeneous nature of the rock, the fractures, the fact that the sand in the fractures doesn’t get evenly spread like peanut butter on a slice of bread, and the fact that the well is 10000 ft long lead to zillions of individual pressure signals. And pressure is king. This means your theoretical solutions fall apart. Depending on your objective, you can pick out the tool you want.

                    For what the audience here wants, the use of curve fits is optimum. They are on the right path, and you are pushing it in an impractical direction.

                  • Nobody is buying what you are selling, Ferny.

                    You are trying to push a hand-wavy just-so narrative that has zero relevance as a mathematical model.

                    What a dispersive diffusive model does is capture the transient very effectively, to the point of matching the hyperbolic decline exponent that people have been using to fit the data heuristically.

                    So if you can stop waving your hands and provide a model that beats the dispersive diffusion model for Bakken, I might consider you worth listening to. As it is, no cigar.

              • Sam Taylor says:


                I was re-reading your post on convolutionally modelling output declines from earlier this year. Did you happen to try generating a model where the # of wells drilled declined rapidly over a short period of time, to say 50% of the original value, as appears likely over the next 12 months or so? I’d be interested to see what response a fairly rapid dropoff produces.

                Actually I might try downloading a copy of scilab and playing around in that, since if I remember correctly getting convolution to work in excel is an absolute pig.

                • As I have said many times, if Excel only had a convolution function built in to its math toolbox, everyone could do this modeling very easily.

                  As it is, only Dennis and a few others seem to understand how to apply convolution to project oil production from a large set of wells.

                  • Sam Taylor says:

                    I used to have access to many useful tool which made convolving time series relatively easily, back when I was doing my Msc. Now I work in seismic processing and, ironically, things are a bit harder. Lots of irritating formatting is required.

                    Still I think that there’s a free matlab knockoff (Scilab) , which if I recall can do the job pretty easily and is windows compatible to boot. Quite why it’s not included in excel is beyond me. Such a powerful tool.

                    BTW I’m currently working my way through the oil conundrum. My math is probably inadequate to understand everything in there these days, but well done it’s a hell of a read. I only wish I had a study book to go with it.

                • Dennis Coyne says:

                  Hi Sam,

                  The model below has the wells added drop to about 110 per month from about 200, then with oil prices as shown on the right axis, the wells added falls further.

                • Dennis Coyne says:

                  wrong chart sorry

    • Verwimp says:

      The Season Effect Model I built for Bakken almost one year ago, and which has been quite accurate ever since, says oct 15=1,123,982 barrels per day.
      One year from now is a very long time, especially in volatile price environments like oil in particular and… planet earth in general. 🙂
      I expect the current price drop to be short living, so for Bakken it might not mean much more than a severe winter. We may see a lot of bankruptcies, but the assets (acreage and licences) may be sold to the stronger companies. So this price drop may just turn out to be the trigger of a ‘classic’ consolidation wave. In that case nothing really happens on the ground.

      • shallow sand says:

        Trying to make sense of CLR 2015 estimates. Part of problem is don’t have much info on SCOOP and appears they are going to focus more effort there. Other problem would be my math skills, which greatly pale in comparison to almost everyone else who posts.

        $2.7 billion / 188 net wells is $14.734 million per well, yet they estimate well costs will drop 15%, which based on recent report of $10 million per well, should instead drop to $8.5 million per well. So new wells drill and completes for 2015 would be around $1.6 billion. What is remaining $1.1 billion for? If frac cost $5 million do they have over 200 wells waiting on frac, drilled in 14 but fracked in 2015? I am surely not doing the math right or missing something.

        Also, how do we get 16-20% production growth with such a big cut? Assume 100,000 boe x 188 / 365 = 51,506 boepd. End of third quarter boepd 182,335. Assume 18% growth year over year would take you to 215,155 boepd end of q3 2015. That is an increase of 32,820 boepd. Are wells drilled 2014 and prior only going to decline 18,686 boepd? 18,686/182,335= 10.25%.

        What have I messed up on here?

        • clueless says:

          Shallow Sand. – New lease acquisition costs. Seismic costs, etc. (geological & geophysical expense). Delay rentals, if any. Routine property, plant & Equipment – cars, trucks, office equipment, office leasehold improvement expenses, maybe new company aircraft; gas gathering lines; any new field offices that they construct/purchase/lease. Actually, a complete possible list would be numerous pages.

          • Mike says:

            Everything shale productive in ND, at 100 dollar oil or 50 dollar oil, is now HBP; no delayed rentals, no 3D shoots or modeling, none of that stuff anymore, in my opinion. Besides, most of anything that can be shoved into intangible drilling deductions and is going to get written off the year it is spent. Infrastructure; things like gas systems and the ever increasing importance of salt water disposal systems gets pro rated per well per month in some little piss ant incremental lift cost allocation on the weekly press release.

            But clueless brings up a very good point. Ernst & Young publishes every year an administrative overhead charge schedule, per depth of well, that might be charged to nonop WI by an operator. That is not the true cost of overhead. Not by a long shot. Take the biggest of the best: they might have 400 employees in OKC dispersing royalty income and doing JOA work, paying the bills, buying stuff, whatever. Flying a G5 from Houston to Bismark costs as much as most people make in a year. Giving press releases about big EUR’s, trying to convince Washington to allow exporting, hiring people to post on peak oil blogs to spread the propaganda…the unspoken costs of shale oil development would blow your socks off, IMO. Google CHK’s corporate headquarters in OKC; its 25 acres big and has more people working in it than the town I grew up in.

            These guys have been at this shale stuff for 7-8 years now. It is a phenomenal story of American know-how. They have created over a million good paying jobs and made mineral owners wealthy beyond words. Truly.

            But the shale oil industry has not made a stinkin’ nickel of profit yet. Not one penny. If we were in the level of debt those guys are, with their revenue cut in half the past 3 months, we would be looking to take long walks off short piers into shark infested waters. Or sky dive off tall buildings with table clothes. We’d be looking to jam potatoes in the tailpipes of our pickup’s.

            Thank ye’, Lord, for not being in the shale oil biz right now. You are most merciful. Amen.


            • shallow sand says:

              Looked at CLR website. $180 million for land. $147 million for other. The rest is for drilling. Not wanting to pick on them at all. They just get a lot of business media attention. Just trying to figure all this out for my own investment purposes. Not shale though. Still cannot figure out how its works and therefore not going to invest there.

            • Nick G says:

              We know that even profitable wells crest cash flow problems: at least 70% of the investment is in the first 6 months, and only about 20% of the return.

              If you plow all of your return back into investment, you’ll never have positive cash flow. But, you’re building quite a lot of future profit.

              If, and only if, you’re fully hedged!

              So, are they??

              • Nick G says:

                Create, not crest…

                • Mike says:

                  The average estimated ultimate recovery from a Bakken well appears to be 320,ooo BOE, plus, minus. Up until September of 2014 it was requiring approximately 165,000 BOE to pay out that well; the same well at current oil prices now requires approximately 300,000 BOE to payout. I’ll leave it up to you, Nick, to decide if in the long run a shale company can make money. Corporate overhead allocations in evaluating the economics of developing tight oil resources is an often overlooked part of the equation. It should not be.

                  By the way, the ability to deduct certain drilling expenses in the same year they occur is not a subsidy. Other expenses associated with drilling and completing oil and gas wells is depreciated out over a certain time frame, exactly the same way any business investing in itself is entitled in America; it is different. The oil business receives NO checks from the US government, it is not subsidized. Depletion allowance is a small deduction from taxable income each year that some oil companies can take. That minor tax break is an incentive to drill expensive, risky oil and gas wells, not a subsidy. The domestic oil industry, with severance, sales, property, franchise, state and federal income taxes is one of the most heavily taxed industries in the country.

                  Without IDC and depletion allowances the shale industry would never have gotten off the tarmac and we would all be enjoying 5 dollar gasoline prices right now. It seems to me these tax breaks indeed act as incentives to provide what the country desperately needs. I don’t see a lot of windmills on jet airplanes nor do I see a lot of pickups in Texas dragging long extension cords. We need the oil.


                  • Mike says:

                    (no) different

                  • Nick G says:

                    That’s an interesting conversation.

                    On the one hand, the US Oil & Gas industry does indeed get a lot of subsidies that don’t involve cutting a check, including free road infrastructure, free Middle East/Homeland military & security, free SPR, and free CO2/particulate/NOX/etc emissions.

                    OTOH, I’ve heard that the industry is heavily taxed – don’t forget that taxes are closely analogous to corporate overhead.

                    I’d be curious to see a nice summary of those taxes, and a comparison to other comparable industries. Robert Rapier used to compare O&G to grocery stores, but they’re not comparable, due to the relatively small value-added in the grocery industry.

                  • Nick G says:

                    We need the oil.

                    On the one hand…no. We don’t. We have better and cheaper alternatives, including Texans getting to office work in sedans rather than pickups, and electrifying the pickups.

                    OTOH, everything should pay it’s overhead cost, and in turn they’ll consume more responsibly. Europeans pay 2-3x as much, and they use 18% as much fuel.

                  • Nick G says:

                    To return to the main question:

                    I was addressing the question of oil company viability. Cash flow isn’t necessarily a problem, if the well is profitable in the long run, and the output is fully hedged.

                    Of course, that doesn’t address the question of what the oil company is going to do when it longer has any more profitable wells in which to invest.

                  • Nick G says:

                    Oh, to address the question of pickups dragging extension cords:

                    The straightforward solution is a partial electrification: a hybrid plug-in, a.k.a. extended range EV. That reduces fuel consumption 80 to 90%.

                  • Mike says:

                    Nick, my first paragraph I believe addressed the question of profitability, not cash flow, and in the long run shale oil is not profitable; I assumed we were talking about shale oil as that is the only thing people can talk about these days.

                    I addressed another comment you made about oil “subsidies” previously. You may call them what you wish, you are not going to get them changed, anyway, whatever they are. Most of the shale oil industry is now paying for public road repairs, over and above the hundreds of millions of dollars it pays each year to local counties by way of ad valorem taxes. The domestic oil industry does not need protection in the ME, nor from the government here in the US (save the occasional environmentalist wanting to sit in a pipeline for weeks at a time in protest of something), the SPR is the government’s idea, not the oil industry’s, and I don’t think all those frac trucks wound out at 1500 HP puts anymore stuff into the air, for free, than folks in California do stuck on the 405 in a traffic jam. We didn’t make the stuff, we just get it out of the ground.

                    I take it you’ve never been to West Texas and if you don’t need the oil, goodonya.

                    I am all for conservation, BTW. Its the only hope we got. But I don’t like to be BS’d about that anymore than I do energy independence.

                  • Nick G says:

                    If I recall correctly, the general estimate is for an EUR of about 300k bpd. At $100, that’s a gross of 30 million. You estimate that wouldn’t be profitable?

                    As far as indirect subsidies ago, maybe we’ll never properly internalize them, but we should call a spade a spade.

                    I’m not suggesting that anyone thinks that Al Qaeda is coming to West Texas to destroy oil infrastructure. But, we’ve had three oil wars in the Middle East over the last 25 years, that of cost trillions of dollars. If the US and the OECD were not dependent on oil imports, that would not have happened. Therefore those costs are chargeable to oil consumers.

                    The SPR is paid for by the government. In other countries strategic stocks are paid for by the industry. Further, after the SPR was created private oil stocks reduced proportionately.

                    Finally, I certainly have no objection to the oil industry producing oil. But, I object to the industry creating the impression that oil is essential, or that it should be subsidized or protected from competition.

                  • Nick G says:

                    Ok, strike the “bpd” and raise the EUR a bit (I was walking & talking, always dangerous). What percent is your corporate overhead allocation?

                  • Dennis Coyne says:

                    Hi Mike,

                    The average Bakken well is 320 kbo and roughly 400 kboe. I tend to ignore the extra 80 kboe which is natural gas and NGL and relatively low value compared to crude plus condensate.

                    I think the way you are doing the calculations this makes no difference unless you are reducing the average well to 256 kbo (about 80% of BOE is oil and the rest is natural gas and NGL).

                  • Mike says:

                    Mr. Leanme, if you mean this fall, well, everything kind of went south this fall because of crude oil prices. Other than this year, I don’t know of any slow downs of drilling wells in the fall. I was on one Christmas Eve. Most of the time it actually speeds up in the fall, not slows down. I don’t even know if those boys in ND slow down drilling in the fall or winter, I think it may be frac’ing that slows down. The oil business is still the oil business; I don’t think we stack rigs because of weather or because hands would rather watch football all winter.

                  • Mike says:

                    Its close enough, Dennis. Its all just estimates anyway. I do not consider wells like that to be profitable by any definition of the word.


                  • Mike says:

                    Nick, that is 300KBO estimated UR for a stinking shale well. At 55 dollar gross oil prices it takes about 300KBO to pay a 9-10M dollar well out, after lots of costs. So there is not much left after payout to profit from.

                    The “cost” of wars over oil has nothing to do with the false notion of subsidies to a domestic industry; sorry I don’t get that. Its not the oil industry’s obligation to store crude oil for the future, we are in the business of selling the nasty stuff as fast we get it out of the ground. There has never been “private” storage of oil in the US unless that would be above ground facilities in Cushing and that place is overflowing right now with oil, as is Houston and any other place it can be piled up.

                    Oil seems essential to me and I don’t see much of anything out there at the moment that threatens it. Sorry. I don’t lobby for it, or hawk it on the street, I just produce it and somebody is always willing to buy it. Which at the moment ain’t for very damn much.

                    Good luck, mate.


                  • Nick G says:

                    The “cost” of wars over oil has nothing to do with the false notion of subsidies to a domestic industry

                    Well, try to kick the notion of “subsidies to a domestic industry”. It’s really a question of subsidies to *consumers*, including major consumers like the military. I know, there’s a paradox in the idea that the military is being used in part to protect it’s own supply, but if you think about it, it’s not really a paradox at all – it’s the way they think.

                    So, if the US and other OECD nations (especially the UK) had never become dependent on oil imports, we would have saved trillions on oil wars. And, if we kick the oil habit quickly enough, we may prevent future (expensive) wars.

                    Its not the oil industry’s obligation to store crude oil for the future, we are in the business of selling the nasty stuff as fast we get it out of the ground. There has never been “private” storage of oil in the US unless that would be above ground facilities in Cushing and that place is overflowing right now with oil, as is Houston and any other place it can be piled up.

                    This is actually a much smaller cost than pollution or military, but it seems worth trying to tie up. In fact, the domestic oil industry has a great deal more storage than Cushing, and a pro rate amount that private storage was replaced by the SPR: if the government has a strategic reserve, you don’t need to have as much in storage behind your refinery.

                    Oil seems essential to me and I don’t see much of anything out there at the moment that threatens it.

                    Yes, that’s the classic oil & gas industry perspective, that we see in places like this blog. “drill, baby, drill” is seen as the only solution. In fact, there are cheaper and better alternatives here right now.

                    Sorry. I don’t lobby for it

                    You don’t mean to, but that’s the result of presenting the “oil is essential” perspective.

              • If I had a lot of money I would get land and take my time, drill wells to start production in the spring and summer of 2016.

                Mike, why is it that so many of you stop drilling in the fall? Aren’t day rates lower by year end?

            • Watcher says:

              You’d be looking to write letters to congressmen.

    • Ronald Walter says:

      8700 wells, add another 600 that need to be fracked in a year, 9300 by the end of 2015 maybe more.

      The decline in a third of them will possibly be 70 percent. 1200 barrels each month.

      3100×1200=3,720,000 barrels per month

      3100×2800=8,680,000 barrels per month, a thirty percent decline rate in a second set of 3100 wells.

      3100×4000=12,400,000 barrels per month, full monthly production in the last third set of wells.

      24,800,000 barrels per month for 9300 Bakken/Three Forks wells.

      885 thousand barrels per day.

      Daily production will continue, can’t just let it sit there.

  6. clueless says:

    Bloomberg article stated that Saudi Arabia is budgeting an $80 average oil price in 2015. How do you get there? Some interesting possibilities (assuming they mean Brent). The following is some quarter by quarter possibilities:
    $60, 70, 80, 110
    $60, 75, 85, 100
    $60, 75, 90, 95
    If they end up being right ($80 average for the year), it appears to be pretty aggressive, unless the first quarter is closer to $70.

  7. toolpush says:


    “But the real story here is Mountrail County. Normally we would expect such a drop, 6.42 percent, if there were no new wells at all. ”

    Is it possible that Mountrail is natural gas takeaway restricted, and wells had to be choked to lower gas output as the regulation came into force? Your new recruit last night DOB502 alluded to the sweet spot counties running in gas disposal issues.

    “3. Also, the shift in drilling to “remote” locations was in part due to NDIC restrictions on flaring of natural gas. Wells in the remote locations (being newer) were given the standard holiday from flaring restrictions, whereas old wells in the sweetspots had to be ” throttled” back in some cases.” DOB502

    • Is it possible that Mountrail is natural gas takeaway restricted, and wells had to be choked to lower gas output as the regulation came into force?

      Historically more wells have been drilled in Mountrail County than McKenzie County. More of the old conventional wells are in Mountrail County than anywhere else. I would expect that the first gas pipelines were laid in Mountrail county. So no, I do not believe that choking due to gas flaring regulations has anything to do with it.

      But that still begs the question. They did have wells that produced oil. Some oil is more than none. A 6.24 percent decline, in one single month, is what we would expect if they had no new wells added in October. A drop of that extent even with thirty something wells added is alarming. What on earth would the decline have been had no wells been added?

      • notanoilman says:

        Mountrail has had drops before, what are the differences this time? Maybe we need to see the figures for the next couple of months before reaching conclusions.


        • toolpush says:


          I agree with you that Mountrail, should be a mature area in terms of gas handling, but I just came across this little bit of data.

          Mountrail, only has 220 mmcfpd capacity
          while McKenzie has 615 mmcfpd capacity.

          I am not sure, what to make of it, but those are the numbers?

          • Gas has to be dehydrated, compressed, and possibly fed to a gas plant for NGL recovery. In some cases the gas infrastructure lags, or gets bottlenecked if GOR increases beyond the predicted behavior. I have blown GOR predictions by 30 % in large developments using “sophisticated” reservoir models. So it’s easy to see gas handling bottlenecks.

          • According to that chart Williams has 460 mmcfpd and Dunn has none. Williams with all that capacity was down 2.79% and Dunn with no processing capacity was down only 1.83%.

            I would bet that a lot of pipelines cross county lines. Gas may have something to do with it but not the availability of gas processing withing each county.

            • Possibly. I guess we could get a full system facilities map, put it in a model, match to real data and stop guessing. Does anybody do that service for a state agency? Or do they wait for things to happen?

  8. St. Roy says:

    All you readers:

    Can anyone calculate the number of barrels of energy going into oil fracking or mining and subtract those from the number of barrels coming out? I suspect it’s negative. Don’t we need to start talking BTUs or joules rather than barrels to really understand this business?

    • Nick G says:

      Liquid fuel is a bit scarce right now, not energy in general.

      So, the important thing is Liquid Fuel return on Liquid Fuel invested.

    • huckleberry Finn says:

      I am not sure how you can even fathom that tight oil EROEI is remotely negative. If it was then total oil consumption in the US would have increased at a faster pace than LTO production. Even if it was another energy source then you are suggesting that the US is using 4-5 million barrels of additional energy a day in some form. You can run the KWH conversion and compare against electricity usage from 2009 (adjusting for GDP growth) and you will find that your suspicion is incorrect.

      • sam taylor says:

        I saw a post from Charles hall on euans blog where he said that fracked erois are around that of conventional oil (i assume this puts it in the 15-20 range). They have the data but no funding to publish at the moment apparently.

        • Old farmer mac says:

          I have no doubt the ereoi in tight oil is positive and high enough that it is not a serious problem.

          But given all the mining and hauling of sand by the trainload etc that goes into tight oil production , plus the relatively low lifetime production of any given well, it does not seem likely to me that the ereoi is comparable to that of conventional oil – not other dry land conventional oil anyway.

          Beyond that I have been seeing numbers for a long time that indicate the eroei on oil across the board is not much better than ten to one these days.How good such numbers are is beyond my ability to even guess.

          • It depends on how much water is pumped to make the oil hit the surface. I suspect some well’s are gas to liquids mini plants. They use electricity generated by gas turbines and use it to lift oil and water, heat the mess to separate the two using more gas, then pump the water using pumps powered by electricity (generated with gas). The overall balance is marginal but the gas is cheap and oil was selling at $100. This applies to those marginal wells making 98 % water, I think.

          • Watcher says:

            As has been so for . . . forever . . . EROEI calculation can be whatever you want. If you extend it to the heat required to make the steel on the truck hauling the oil, and the soles of the shoes of the truck driver, you can get negative EROEIs. Hell, a few years ago when Chinese ceramic proppant was more popular in NoDak, I saw a guy wanting to apply all the fuel driving that ship to the equation.

            It’s a discussion that cannot reach a conclusion.

            • Watcher, in real life it sort of does. We have several reasons. For example the EU has some sort of requirement for companies to estimate emssions. So, a while back I worked for an european company and we did all sorts of gyrations to deliver data to the enviro department (they fill out the forms). I’ve worked on heavy oil projects, and we do keep a close eye on the balance between the natural gas we consume and the syncrude we deliver. Remember I was limiting my comment strictly to the incoming energy versus outgoing oil. I wasn’t commenting on the initial investment, just on the operating phase. When a project is mature it gets to the point where oil production is rather low, so the business does have a very fine balance.

      • BW Hill says:

        huckleberry Finn says:

        I am not sure how you can even fathom that tight oil EROEI is remotely negative.

        The only way to get energy out of a hydrocarbon is to use it in a combustion process (outside a fuel cell). At least a third of LTO (having an API >50) is not used in the production of fuels. It is a feedstock material.

        Pentane (C5H12) the largest component of condensate production is used primarily for the production of polystyrene, and you don’t get much energy out of plastic pipe unless you burn your house down.

        Conventional crude (API 30-45) now has a ERoEI of 9.3:1 at the well head. It is capable of delivering about 23,400 BTU/ gallon to the end consumer from its original energy content of 140,000 BTU/gal. That is, after the energy needed to extract, process and distribution it are subtracted. If a third of that petroleum never reached the end consumer as fuel it would not be an energy source, it would be an energy sink.

        The energy content of a hydrocarbon is proportional to its API. The lighter the crude the lower its energy content.

        LTO has a low energy content to begin with, and the extraction energy required is much higher for these low production, high decline rate, and very long, deep wells. As a non energy source LTO can not compete with crude that has higher energy delivery capabilities. That is the primary reason why shale is now a dying industry in the face of low production energy, lower cost sources.

  9. B says:

    Low prices, new regulations make 2015 a critical year for [North Dakota] oil

    [Excerpt from article]
    Rules adopted by the North Dakota Industrial Commission in 2014 will continue to resonate in 2015.

    Gas capture goals adopted in July will require operators to reduce the percentage of natural gas flared from oil wells to 23 percent by Jan. 1 and to 15 percent by 2016.

    Statewide, operators already met the first goal of 26 percent by Oct. 1, beating it by 4 percentage points.

    But eight individual operators didn’t meet the gas capture goal, and several postponed completion work on wells to achieve the goal, Department of Mineral Resources Director Lynn Helms said.

    North Dakota Petroleum Council President Ron Ness said substantial amounts of gas are being “held hostage” in negotiations over pipeline easements. He estimated well over one-third of the flared gas is the result of three or four easement hang-ups on private, tribal and federal lands.

    “Those few bottlenecks are holding up a substantial amount of connections,” he said….

    North Dakota light sweet crude oil has dropped below $40 a barrel.

    And while some barrels are hedged, “by and large, we’re probably taking $60 less a barrel than we were six months ago,” Ness said.

    As a result, companies will deploy less capital and idle drilling rigs or move them from fringe areas to higher-producing areas, he said.

    If low prices continue into February and March, “We’re going to see substantial reduction in exploration activity,” he said.

    Helms said falling oil prices, oil conditioning and flaring reduction were factors in North Dakota’s drilling rig count dropping by 10 to 183 as of Dec. 12. He expects a 40- to 50-rig reduction by mid-2015 because of soft oil prices.
    [End of excerpt]

    • This deal with pipelines right of way was so vexing in a case I had in South America I had a drlling pad built next to a property line, drilled directional wells under the hardball land owner, and made a deal with local government to lay a pipeline on the shoulder of a country road. After that, landowners became much friendlier in negotiations to get land leased for pads and pipelines. However, as far as I can see it’s always a money issue, unless there’s family arguments over what to do with the money.

      • Anon says:

        If opposition is tribal/environmental in nature, one can be talking an awful lot of money.

        • I suppose. But it’s their land. As for enviromental opposition, I never faced them. Many years ago I read a novel about Americans using submarines to steal oil from Soviet waters. That was funny.

  10. Pete Mason says:

    So EIA total net crude and petrolium products imports are up 2.2 mbd over the eight weeks to 19 Dec 2014, the highest eight week rise since May 2006. Net crude alone is up 1.2 mbd, one of the largest increases of recent years. You would have thought that would mean quite a pressure on world oil prices. But there are large swings, so I guess the main thing is whether the import growth is sustained.

    • Ovi says:

      Note that the current futures WTI prices are in contango. I think the big majors are just importing as much oil as they can at these low prices, figuring that the price for WTI will be higher in a few months. Note that in most of the previous years, the storage numbers drop near the end of the year to reduce taxes. December and in particular this past week was a big and unexpected exception with almost 15M extra barrels in storage.

  11. Longtimber says:

    So About That ‘Nat Gas Revolution’…..
    ” I always chuckle when I see articles or pundits talking about how “wonderful” fracking is, and how “profitable” it will be.”

  12. Shuffling Along says:

    Will lower prices at the pump slow, stop, or reverse the trend in the U.S. of driving less?

    A few tidbits from the article:

    “The EIA estimates that, in the very short run, Americans’ demand for gasoline is fairly inelastic. The price of gas would have to fall 25 to 50 percent for US driving to rise by just 1 percent. (That is, the elasticity is -0.02 to -0.04.) ”

    “…when gas prices rise, Americans keep driving in the short term — though they do often go out and buy smaller, more fuel-efficient cars. By the same token, when prices fall, driving habits don’t change immediately. People just have extra money in their pockets all of the sudden. (Spending on gasoline makes up around 5 percent of US household budgets.) Either way, it takes a really big swing in prices to change driving habits in the short term.”

    Maybe folks are taking that ‘found money’ and spending it on bigger, better TVs or tablets or smart phones or video games etc…

  13. pete mason says:

    Good points Ovi, I was wondering if there were issues like that.

  14. Shuffling Along says:

    A related older article which has been updated:

    A collection of papers (PDFs) on transportation trends (global):

    An article about PO from 2013…still a good read:

    Some other stuff from a while ago:

    I’ll say it again…the amount of oil is finite…and is being reduced every day without fail, and the easier-to-produce oil (that oil which requires the least energy to produce) has been and continues to be produced preferentially. These (and other) facts, and time, are not on our side. No later than 2030, perhaps as early as ~ 2020, the party will have ended, and the facts of reality will have sunk in to even the most optimistic peoples’ noggins. What is being done to prepare for that time? Not as much as should be done. Some day the good folks of North Dakota will wish the had that methane back which was flared off during the relatively short-term Baaken boomlet. Even accounting for global warming, North Dakota winters will still be plenty cold.

    • I sure wish the cornucopians would remember oil companies aren’t discussing oil separately like we used to do. Nowadays it’s the convenient “liquids” or the brazen “boe”, which innocent folk with press credentials tend to think is oil.

  15. sam taylor says:

    Another interesting piece by kopits:

    Reading between the lines I do wonder if he thinks we’ll peak soon.

  16. Verwimp says:

    My niece (9 yo), should give a speech to the class. She chose the topic “On the origin of the earth and pollution.” Her father, my brother, said, “Just ask uncle Verwimp.” How can I help my niece?

    • Doug Leighton says:

      “How can I help my niece?” That’s simple, give her a link to Ron’s Blog. My niece is a 20-something Petroleum Engineer who works on North Sea oil platforms. She’s always giving my wife and I a rough time so you can expect similar treatment soon; so be extra nice to her. Then perhaps you could suggest the origin of the earth was dust pollution surrounding the sun a long long long time ago, or maybe not. Good luck.

      • Old farmer mac says:

        This is a pretty heavy duty place for a nine year old. A few kids in that age bracket can handle this sort of stuff.

        But only a VERY few.

        • dave ranning says:

          it might be safer to stick to jesus and the sky daddy.

          myth and story are the basis of human reality

          • SRSrocco says:


            Are you saying Jesus grand-pappy was an ape?


            • Doug Leighton says:

              No, he definitely wasn’t an Ape; more likely a Chimp – or if you want to be technical, a Pre-Chimp! You’re going to have to give Apes a break here.

            • I would like to make a formal complaint about associating humans with apes in this blog. You’ll never see APES fighting over crap at Walmart on BLACK FRIDAY.

              GrandPappys Ape

        • Doug Leighton says:

          Come on Mac, the Ron’s Blog part was a joke, the orbital dust pollution part not. I’m starting to worry about you or is it joker in your sleeve stuff again? I’ve known some very bright 9 year olds (two daughters) and we found honesty is best policy. One became a musician (classical piano), the other “does” quantum physics at a university (research).

          • Old farmer mac says:

            Sorry !

            I generally recognize jokes and sarcasm but this one caught me half asleep and now I am somewhat ashamed thinking about a nine year old girl seeing some of the cuss words I have used here.

            OTOH sheltering her from a few cuss words is not going to help her deal with the real world later on.Cussing is a useful skill at times and a woman who expects to tell men what to do should be familiar with it. Things get pretty hot once in a while in the reality kitchen and she MAY want to do some cussing and will hear some cussing if she goes into anything profession really matters as an adult.

            If she is interested by all means her parents should encourage her to go wherever her intellect leads her.

            It is a pet theory of mine that the best possible method to teach critical thinking is (first step )to expose young kids to data , ideas , theories, etc , believed to be rock solid by experts in various fields once the kid is old enough to comprehend the arguments made – and accept them.

            Second step- expose the kid to contradictory ideas theories data etc sincerely presented by experts in other fields. This will also be believable and acceptable to a youngster because youngsters still have plasticity of the mind and can change it.

            Being able to hold contradictory thoughts in mind silmantaneously is a marvelously useful skill.

            When kids grow up they will probably CONTINUE to believe whatever they come to believe FIRST and seldom ever change their mind about any given issue UNLESS they have had this experience early on.

            I myself got a good measure of it due to being a voracious reader as a child and thus reading various books that presented diametrically different explanations for the same phenomena – such as the Bible KJ version and the encyclopedia my near illiterate parents bought for me.

            When I got to college I was soon listening to lectures by professors in one department – such as economics- that were entirely contradictory in content to the lectures in other departments- such as biology.

            This experience more or less completed my training in critical thinking and I have had a hard time ever since just thinking about any given issue without mentally debating the evidence pro and con.

            A kid eager to learn should be encouraged but not pushed HARD.I have seen some very bright kids turned off to school due to being pushed too hard by their parents.

            This happens far oftener than one might think.

            I have never PERSONALLY met any of the kids forced to spend ALL their time becoming musical or mathematical prodigies or pro athletes but it is well known that such kids are prone to a lot of emotional and developmental problems .

            Most public schools in this country these days are little better than a joke on average but there are usually a few good teachers to be found in a few classrooms in just about every school. The key is to get the kid in the right classrooms.

            But if you want a truly well educated kid- most of that kid’s education is necessarily going to be acquired outside the classroom- meaning at home.

            These are professional opinions of a former professionally licensed teacher and worth at least as much as I have charged for them. 😉

            These opinions apply to US schools.I understand that the schools in other well developed countries are generally superior to ours.

          • SRSrocco says:


            Happy Holidays. By the way. .. I spoke to God recently and he told me to tell you… he gets a kick at your sense of humor.

            He also wanted me to tell everyone here that he’s happy with the progress on PEAK OIL. However he thinks the EIA is completely FOS


            • Doug Leighton says:

              Thanks Steve, Same and Best for the New Year to you. How often to you talk to God?

              • SRSrocco says:


                I am on the FRIENDS & FAMILY PLAN. I get about 10 free minutes a month. When Gods on ROAMING charges… I try to keep it down to a few questions and wishes.

                Foe example… it cost me 20 bucks to ask God to make Larry Kudlow screw up a few of his forecasts on his CNBC network show.


                • Old farmer mac says:

                  You can get a wholesale unlimited rate if you join a Baptist church.

                  My own lifetime free account only cost me getting dunked for a minute and after that I got and excellent free meal plus some tight hugs from some very pretty girls who joined up previously.

                  AND on the Baptist plan you can cuss all week and start over with a clean slate every week.

                  • Farmer Mac,

                    Happy Holidays to you too. By tge way…God asked me to ask you…. When did you start CAPITALIZING sone of your words in your comments? He thinks its nifty.


                  • Doug Leighton says:

                    “plus some tight hugs from some very pretty girls who joined up previously” So we have at least one honest man here. I knew there had to be a reason for going to church. 🙂

    • Ver wimp, the earth originated from a cloud of dust, dirt, planetesimals and comets. Just ball it up, put people on it and have them put out garbage. It’s fairly simple.

  17. 12345 says:

    Shameless two part OT question of stray curiosity here.
    1.) Wondering about effectiveness of enhanced oil recovery techniques in the bakken?
    2.) Assuming some effectiveness would it be plausible that the massive and cheap lignite fields in the dakotas would be used as feedstock (CO2, methane, steam) if the situation got desperate enough?

    • Interesting question. The rocks are incredibly tight (low permeability), fractured, and hold very little oil per unit volume of rock. I suppose they could try a CO2 huff and puff in the light oils? But the price would have to be sky high. It sure looks uphill.

    • ManBearPig says:

      There have been some coreflood studies done with promising(?) results, but I am not sure of any active EOR projects in the Bakken. If you have access to SPE papers, here is one:

      The issue I have with CO2 flow in tight reservoirs is that the flow path is hard to predict. Since the Bakken is a naturally fractured reservoir, the CO2 would more then likely follow the natural fractures and you would probably simply be cycling CO2. Huff-n-puff might work, but I am not sure the contact area of CO2 in a unconventional reservoir. The one advantage the Bakken has for CO2 flooding over other reservoirs, like the Eagle Ford, is that it is a carbonate with decent porosity so it is possible that you could get good slug sizes. But I’m not sure you could WAG the wells, which it the method of CO2 flooding I like the most.

      As far as sources for CO2, I have no idea. The CO2 for the fields I work comes from domes in New Mexico and Colorado (Bravo and McElmo) and I think there is a coal gassification plant in NoDak that is the source for CO2 EOR projects in Canada, so maybe that would be the source? Denbury, probably the foremost company on CO2 EOR, has this image that I found:

      • Doug Leighton says:

        Interesting, thanks for your input. I would have assumed fracking was already the EOR and left it at that. Lots left to learn!

      • Man, if they use 10 thousand foot fracked wells…come on, try to model a sweep process in your head in real life, the number of flow control devices, and what happens if you do connect super fracked producer to super fracked injectors. And check your spacings.

        I assumed they would have to use existing wells. On the other hand if they have little connectivity between wells, and the stuff they produce is plumbed to the wellbores maybe a bit of CO2 would energize a little teensy bit more oil.

  18. Chris says:

    “What is happening to US Production?”
    US Production seems to be on a plateau since 3 weeks. Is this enough to draw any conclusion?

    The better question is “what is happening to US oil importation?”
    SPR increased by 7 million barrels last week (1 million per day) and import (without SPR) increased by nearly 1.2 million barrels per day on the week ending 12/19/2014. The total demand was up 2.2 million bpd from US only!
    Is this a way to support oil prices? Are people just trying to benefit from low oil prices? Is demand really increasing so fast?

  19. Jeffrey J. Brown says:

    Low Oil Prices for “Years to Come”

    A reporter on a local Dallas/Fort Worth TV station had the following comments about the decline in oil prices, attributing it to three factors: (1) Saudi Arabia is “flooding” the market with oil; (2) Surging US production and (3) More efficient vehicles in the US. The reporter then noted that these factors should continue to interact to produce low oil prices for “Years to come.”

    • SRSrocco says:


      I totally disagree with the reporter. Now. … if he replaced the word “YEARS” with “DECADES”…. then it would make complete sense.


      • Steve, Saudi did not flood the market with oil, they are producing less than they produced three years ago and have not increased production at all. And they most certainly will not “continue” to flood the market for years to come, let alone decades to come.

        And more efficient US vehicles had very little effect on world oil prices.

        • SRSrocco says:


          Happy New Year. Forgive me… I forgot to include my sarcastic smiley face. 🙂 in that previous comment.


    • Dallas/Fort Worth reporters are from Boston. They don’t know anything about oil.

  20. Old farmer mac says:

    I am frustrated by not being able to find it again but there is recent research or at least opinion published by the EIA to the effect that demand for gasoline in the very short term is so inelastic that even a huge price drop such as has come about recently will increase demand only by one percent or so for gasoline.

    It should be emphasized that this is applies to the VERY short term only.

    This makes sense because most people using gasoline are too busy to just start using a lot more of it on short notice no matter the price.It obviously takes a while for people to change their habits and make such choices as to rent or buy the more desirable place farther from the job or trade in the four banger for the higher performance v6 model.

    Construction has not picked up enough to account for a lot of extra demand over the last few months and it is well past harvest season. Farmers are probably stockpiling all they can but only the big boys have a lot of storage capacity and they don’t usually have whole lot considering how much they use. This is because it is easy to pick up the phone and get two or three thousand gallons delivered on a few hours or at most a few days notice and ordering more than a truckload at a time does not result in any additional price discount.It just ties up money.

    People who heat with oil are probably filling up sooner rather than waiting for their tanks to get close to empty. We still use oil at our house for back up heat and instead of waiting for the truck to show up unannounced sometime next summer I will call for a delivery as soon as I have used enough to need the minimum order sometime in the late part of the winter.

    Taken all around it is hard to escape the conclusion that a hell of a lot of oil is going into storage on the assumption that the price is going to be going up sharply within the next few months to a year.

    My personal business acquaintances that use off road diesel are stockpiling to the limits of their storage tanks and their bank accounts but this generally means only a few hundred gallons up to a thousand gallons or so.

    Ethanol laced gasoline is not well suited to storage and hardly anybody I know of is storing more than a couple of barrels which is enough to last a few weeks to a couple of months on a small farm.Most of us little guys are still driving gasoline fueled pickups and always will be imo so long as diesel is substantially more expensive than gasoline.It is generally impossible to justify a diesel pickup on a dollars and cents basis.

    And the long standing unquestioned wisdom of buying a larger diesel truck is questionable these days. Late model trucks with computer controlled gasoline engines cost a hell of a lot less than diesel models and given the relative cost of fuel these days often make better sense.The only real advantage to a diesel is the greater economy per GALLON of fuel. That advantage has pretty well been wiped out by the relative reversal in fuel prices plus electronic fuel injection on gasoline engines.

    All the talk you hear about the pulling power of diesels is pure cowboy bullshit. Every truck has a transmission and you just gear it up or down until the engine is running in its sweet spot and that is that except for the all hat no cows sort of driver.A horsepower is a horsepower. Most of this misunderstanding has probably arisen over the years due to car and pickup truck engines being advertised as having the horsepower they are capable of at test to destruction speeds for a minute or two whereas industrial engines are advertised as having the horsepower they can reliably continuously produce at normal operating speeds. The difference can be as much as a factor of three.

    It is true that you can’t buy a new eighteen wheeler with a gasoline engine- but that is because the manufacturers have not yet adjusted to the paradigm busting flip in the price of fuel. You cannot easily buy a big truck ready to run on natural gas either.If you want one you will likely have to order it well in advance from a specialty manufacturer.

    The diesel engine’s legendary reputation for durability is not based on any inherent property of diesel operation but on the fact that diesels in heavy equipment are constructed of the very best materials and to the highest practical standards of workmanship and design so as to LAST and give TROUBLE FREE service on the job.

    Gasoline engines can be and nowadays are built to last just about as well- if they are real truck engines of the sort that come installed in larger trucks.Just about all the gasoline engines installed in pickup trucks share numerous components with automobile engines and are not really designed to last any longer than a car engine- which is typically worn out at two to three hundred fifty thousand miles and in need of overhaul. The ones that don’t last that long usually aren’t worn out- they just suffer expensive break downs that cost more to fix than the car is worth by the time it is twelve or fifteen years old and getting shabby.

    • Anon says:

      When one considers what gasoline is used for, it is obvious why it is so inelastic. People live where they live with the cars that they have. Living in stupider places than are already practiced (suburbs are already built out to the max) would require years and major effort. Buying an inefficient car would require those being available as new cars – almost never the case.

      People might use toys and trips more, but these are trivial compared to commuting and running errands to the mall.

    • Boomer II says:

      I am frustrated by not being able to find it again but there is recent research or at least opinion published by the EIA to the effect that demand for gasoline in the very short term is so inelastic that even a huge price drop such as has come about recently will increase demand only by one percent or so for gasoline.

      The key concept here is price elasticity — how much the demand for gasoline changes in response to changes in price. The EIA estimates that, in the very short run, Americans’ demand for gasoline is fairly inelastic. The price of gas would have to fall 25 to 50 percent for US driving to rise by just 1 percent. (That is, the elasticity is -0.02 to -0.04.)

      • Boomer II says:

        My above post may not have been clear. Here is the info you wanted to find.

        The key concept here is price elasticity — how much the demand for gasoline changes in response to changes in price. The EIA estimates that, in the very short run, Americans’ demand for gasoline is fairly inelastic. The price of gas would have to fall 25 to 50 percent for US driving to rise by just 1 percent. (That is, the elasticity is -0.02 to -0.04.)

  21. Ronald Walter says:

    A tractor trailer has an engine that will pull 20 ton of gravel, maybe make a thirty mile round trip down the gravel road and back to the pit for more gravel to gravel the roads, and the truck maybe has a mileage of five miles to the gallon. Just another hard day on the planet to make it all go one more day. Gotta keep pumping the oil, no matter where it is, it is going to be there.

    A 1300 horsepower hauler for coal at the power plant coal mine hauls coal for a minimal expense even it uses a gallon per half mile.

    Cheap cost to haul 180 tons of coal from the mine to the coal-fired turbines generating electricity.

    The new coal haulers of the next generation machines will be 2100 horsepower and haul 280 tons.

    Expect more, not less, coal used in the future and with greater efficiency.

    Given a choice between coal and electricity, the choice will always be electricity.

    Given a choice between oil and electricity, the end consumer will always choose electricity.

    You have to have both coal and oil to have electricity, they are the go to energy sources that can provide the amounts needed to provide the capacity to satisfy the demand.

    The BNSF says so too, they’re hauling 44,000 carloads of coal each week. I’ll bet the Union Pacific would agree.

    Given a choice between coal and PV, the choice will always be coal.

    Given a choice between wind power and coal, the choice will always be coal.

    Given a choice between oil and PV, the choice will always be oil.

    Given a choice between oil and wind power, oil will be the first choice and not much consideration for wind power, if any at all.

    The numbers alone prove it beyond all doubt. Tons of oil and coal out there being burned constantly night and day, it just has to be. Can’t get to the action if you ain’t got no traction.

    259 thousand wind turbines churning four hours every other day won’t do the job, all money frittered out the window. Wind power is not conservation of resources, it is a waste of resources, from beginning to end, the sooner it all stops the better. There is a better way. Autos replaced horse-drawn wagons and something will replace wind turbines, which cannot arrive too soon.

    • SW says:

      Nonsense. But if it makes you feel better about what you do…

      • Old farmer mac says:

        Ronald is our resident court jester.

        You can read him like listening to the news on a tv show such as Saturday Night Live, if you care to do so for entertainment.Sometimes you can read his comments as sarcasm or over the top exaggeration for effect in which case they MIGHT make sense.

        You actually have to work at it pretty hard to APPEAR to be as mixed up as he ACTS.

      • Ronald Walter says:

        Hey, it’s hard work coming up the nonsense that makes sense.

        Hydro? How can it be done without oil and coal?

        Nuclear? How can it be done without oil and coal?

        PV? Same question. Wind? Same question?

        The coal and the oil are THE energy sources and resources available to make it ALL happen.

        Nuclear will probably require more coal and oil just by the fact that the nuclear waste must be managed for centuries if not eons, you’ll need workers that require housing and transportation just to upkeep nuclear waste, an entire new system incorporated into the economics, it can’t be helped. You’re stuck with managing nuclear until hell freezes over. It will require coal and oil. Jevons’ paradox gone wild.

        Finite fossil fuels fuel the entire system undeniably so, when they begin to wane, the amount of technological know how should take us to more solar and a wind power system other than wind turbines.

        All tolled, the fossil fuel requirements will not go away and increase until it all fails or the renewables replace oil and coal as primary energy sources and meet the needs.

        Right now, that can’t be done, hence coal and oil rule.

        Mature Hydrocarbon systems have low amounts of natural gas, immature systems have plenty of natural gas. Natural gas is really nano oil, oil yet to have 6 plus hydrocarbons. It’s oil. Seeps up and into the Gulf of Mexico sea floor and escapes into the sea waters. Natural gas seeps up to the earth’s surface, infuses into ground water and at times can be lit and burned off. Forty or more years ago now, I had a job on the rails as a gandy dancer and was on the road working like a dog. I was so thirsty one early morning, I had to have a drink of water. I was in a town that had a drinking fountain on the main street, I didn’t have any other water source, so I went to the fountain and sated the thirst I had. It was like drinking natural gas, there was so much natural gas in the artesian water sourced to a fountain, it was no help to take that drink of water.

        Where was I? Oh, yeah, coal and oil can’t go away but they will go away, it’s a Catch 22.

        • Ronald Walter says:


          It’s hard work coming up with the nonsense that makes sense.

          I read the word ‘with’ even if it isn’t there, a form of dyslexia or total CRS disease.

    • Boomer II says:

      You have to have both coal and oil to have electricity, they are the go to energy sources that can provide the amounts needed to provide the capacity to satisfy the demand.

      While your posts might be in jest, I’ll point out that the economics of natural gas is making both coal and nuclear-fired plants less attractive.

      • Doug Leighton says:

        “I’ll point out that the economics of natural gas is making both coal and nuclear-fired plants less attractive.” I came VERY close to saying exactly the same thing. Great minds….

      • Sure, but we will be running out of natural gas as well. I support wind power turbines connected to gas turbines as a partial solution to all these conflicting demands. Maybe we can somehow push renewables to deliver 20 to 30 % of electricity demand. Then we just create a real estate tax based on surface area and everybody will move to a small condo. Something like that.

        • SW says:

          Seems like in the long haul it is better used for heating than electricity generation. When it is gone what is the replacement heating fuel? I don’t understand that. What is the plan? There are lots of alternatives for electricity generation but what are the alternatives for heating? My parents tell me about the transition from coal to natural gas heating in the midwest as though it was some kind of a miracle. Imagine having to go back in the major cities fifty or seventy five years from now. What a nightmare.

          • Boomer II says:

            Seems like in the long haul it is better used for heating than electricity generation.

            Seems like houses can be built needing virtually no heating fuels. A combination of solar and good insulation. Or heat pumps if one wants to do that.

            • Not around here. The sun just doesn’t shine enough hours. I have a friend one floor down who decided he would use the heat from surrounding apartments, put in really expensive triple pane windows on the sides of the apartment facing out from the building, paneled the outer walls, and all he manages is about 19 to 20 C. I explained to him the people around him keep their apartments on thermostat, probably at 21 to 22 degrees, so he doesn’t have enough temperature gradient to transfer heat from the other guys to his apartment.

              I got the feeling many of you think about this as a local issue, have houses on a lot, things like that. On the other hand I try to think like a chinaman living in Harbin, in a 50 square meter apartment.

              • Boomer II says:

                Zero energy design homes are being built in areas that are very cold and not necessarily with a lot of sun. If you have sufficient insulation, the heat from occupants’ bodies should provide enough warmth.

              • Nick G says:

                That’s weird. My townhouse has very good windows, but only standard insulation in the front & back walls, and I don’t have to turn on the heat until it gets down to about 1-2C.

                The PassivHaus concept originated in Germany, and is certainly intended to deal with climates in Spain.

                • Maybe it’s the wind. We are down to about 4 to 5 degrees C on most nights. And I found out he has an empty apartment underneath. The floor is part parquet and part marble. So he’s losing heat through the marble floor to an apartment that’s probably at 10 degrees. I guess that’s a bit more than a house on the ground.

                  • Nick G says:

                    Well, first floor is on grade and is mostly stone so we have substantial loss there.

                    He might want to check his exterior for simple air leaks. I just bought a very handy and affordable gadget called FLIR One. It’s an iPhone attachment that scans infrared – very handy for energy audits.

  22. Old farmer mac says:

    One of the very few countries displaying collective sense enough to understand the reality of peak oil is Norway.

    They are keeping the pedal down on renewables and investing their oil income while it is still incoming.

    I really wonder what economists who have actually studied some geology and physics think oil might be selling for in a decade – or two decades- and how LITTLE might be for sale on international markets.

    • Doug Leighton says:

      “One of the very few countries displaying collective sense enough to understand the reality of peak oil is Norway.” This is true but…….,,,.. Norway has the luxuries of: A homogeneous society, small population, good (excellent) education system, renewable energy (hydro) and a Nordic work ethic. Norwegians do think of oil as a savings account for their grandchildren and manage it well but “built in” advantages make the country almost unique. Argentina could be in the same place as Norway but, of course, they screwed it up. It’s hard to find places that don’t have (almost) insurmountable problems. You seem to think the US may fit in the chosen few. You may be right on this Mac. On the other hand, how is it possible for the world’s biggest economy to have 50 million living on food stamps (or whatever you guys call them)?

      • Shuffling Along says:


        “…how is it possible for the world’s biggest economy to have 50 million living on food stamps (or whatever you guys call them)?”

        Qualifying U.S. residents citizens used to be afforded ‘Food Stamps’, which were coupons. Now (for a number of years now) the program is the ‘Supplemental Nutrition Assistance Program’ (SNAP). Most people are uninformed and/or intellectually lazy so most people refer to SNAP as ‘Food Stamps’ to this day. That is what ‘we people call them’.

        No one ‘lives on Food Stamps.’ The amount is enough for a basic nutritious diet consisting of home-cooked staples, and not much more….or they can be used to buy a certain amount of authorized non-nutritious crappola. SNAP certainly doe not pay the rent/mortgage, or utilities, nor buy clothes or pay for transportation expenses or anything else. no one ‘lives on Food Stamps.’

        My Mother divorced my always in debt, never let her see the checkbook, abusive, philandering father and struck out on her own with me and my brother. While she worked a slave minimum wage job as a dental assistant to an asshole dentist who verbally abused his female staff, she raised us in simple dignity with the help of public assistance provided by Section 8 housing, Food Stamps, and Aid to families with Dependent Children…no alimony or child care assistance from Dad. No drugs, cigs, alcohol, or lottery tickets in our lives, thank you. We were clothed respectably from discount stores and second-hand shops, and had a happy childhood. Mom, me, and my Bro all transitioned off of any and all public assistance after 5-6 years…all have for decades after that held decent to very-well-paying jobs, with a couple of us earning retirements and salting away money in savings and the Marketa/IRAs etc. I have earned higher education degrees, served my country admirably, made plenty of money, paid plenty of taxes, and have been generous in charitable donations.

        I will be the first to agree that many people who have been or are on public assistance have less admirable stories…but know that not everyone who is on assistance stays on this for life (or even a long time), and not everyone is a ‘scumbag’. Sorry for the screed…

        Anyhoo, to address your question: You already addressed part of the answer when you listed Norway’s strengths: The U.S. has too many people for the number of descent jobs available, especially since automation and outsourcing/globalization and the pursuit of the almighty buck for profit (offshore-held, in many cases) and stock price increases has had its effect on the job market. The World’s largest economy cares about wealth accumulation for the few, not the welfare of the masses.

        We also don’t care about engaging in any societal long-term planning…witness the fact that some Republicans in North by-God Dakota are beating the drum to disperse the $2+ Billion in oil fund money held by the state by eliminating the income tax, corporate tax, property tax, sales tax, etc. and maybe even issuing the residents a check a la Alaska. No interest in any long-term sustainability investments. An interesting shame, since most of the ND residents (not counting the recent ultimately temp residents who are out-of-state oil boom followers) are Nordic/Danish stock, and profess to hold the old country values. Mark my words, without wise investment of the oil fund for long-term gain, once the oil boom peters out ND will lose most the 200,000+ oil boom chaser immigrants…and will resume bleeding out their young people who will emigrate. And…without the wisdom of using some of their money to resettle people out of the Red River and Souris River flood plains, there will assuredly be future tragic floods for the people of Grand Forks, Fargo, and Minot..those flood plains should be revamped as ‘Greenways’ and the people and businesses resettled to higher ground.

        I guess the logical Nordic ways are morphed into something else when the stock lives several generations in a different society.

        • dave ranning says:

          we should give SNAP to all citizens.
          it would win win move.

          • Shuffling Along says:

            I am not sure if you are serious or joshing…

            I will answer as if serious:

            That is not my first inclination…

            Striving to create more jobs is a goal.

            Perhaps everyone could have SNAP if everyone receives comprehensive family planning education as well. SNAP limited to one or two adults plus up to two children?

            My parents had two children.

            My wife and I had two children.

            Two children or fewer is the key.

            Even if that could be accomplished 9 months from tomorrow, the demographic momentum would take a ways to work itself through.

            Downshifting consumption would also be key to humanity ‘making it’.

            Oh, and praying to the FSM that LM perfects ‘Mr. Fusion’.

        • Ronald Walter says:

          An old Norwegian farmer from NW North Dakota recalled the reason why his parents left Norway, “it was either that or starve.”

          A homestead in North Dakota was the gift of life itself for them, the choice was easy, get on the boat, float to America and never look back.

          It’s a cruel world out there.

          The Supplemental Nutrition Assistance Program is corporate welfare for A&P, Giant Foods, Safeway, Walmart, etc. Any profits are really government subsidies, the taxpayer foots the bill.

          Might as well have a nutritional assistance program instead of discarding it and then people dumpster dive for the unsold food products, whether they are fresh produce or packaged foods, it is definitely better for the consumer to have those products and produce before they are dumped. SNAP can work, if not abused.

      • Old farmer mac says:

        Shuffling has had enough to say about our social woes for the moment. I will add only that I fully recognize that Norway is taken all the way around a better place to live in many many ways than the US.

        The average Norwegian is better off than I am myself in terms of health care and disposable income.

        But national survival is not about social equality and fair play. Survival at the nation state level is much more about being favorably situated geographically, being big enough, having possession of ENOUGH and DIVERSE enough natural resources in relation to population, being POWERFUL enough to win wars offensive or defensive, and this sort of thing.

        No other country in the world is so well situated by these and similar measures as the US to pull thru the coming bottleneck.

        Unless somebody nukes us back to the stone age we yankees have a pretty decent shot at surviving the next fifty years to a century more or less whole. Things will no doubt in my mind be tough and austere but I see no need to think any significant number of my countrymen will NECESSARILY die of starvation or exposure.

        It is an ALMOST foregone conclusion that when things get really bad we will go on a wartime footing with a managed economy- which means we have a very good shot at pulling thru by means of welfare, conservation, efficiency and all around initiative.

        This would mean doing things the way they were done between 1940 and 1945. If we make that sort of effort over a long period we can change our ways sufficiently to get by just fine on a very small fraction of the non renewable resources we use today.

        That reduction in use would then result in our having a good long period of time to figure out how to get by entirely on a sustainable basis.

        When the fecal matter is once well and truly in the fan Norwegians will not be cashing any dividend checks coming from the US as the result of any investments that country has make here.

        The dollars the Chinese and the Sand Country princes and princesses have stashed by the hundreds of millions in foreign banks will not buy them so much as an entry visa and a plane ticket.Neither of these goodies will be available to anybody the government doesn’t want based on his personal resume. Medical doctors and engineers will have a shot at getting in. Truck drivers won’t.

        I am not a gold nut but gold nuts understand that paper obligations mean nothing when tshtf. A US hundred dollar bill is nothing more than a check that must be accepted when presented by anybody with goods to sell that accepts US dollars. Checks bounce when the people who write them go broke. Hundred dollar bills will bounce when UNCLE SAM is close enough to broke he decides to renege on his debts.

        Debt repudiation will come by Uncle simply refusing to make foreign held dollar debts good. Internal repudiation will come via inflating the currency to the point that the dollars used to pay these debts are severely depreciated.

        Now a double eagle or a maple leaf is a different matter. Gold coins NEVER bounce.

        Overshoot in human terms local or national is already a brutal affair as anybody can attest who watches the news. We just don’t usually think of starvation due to drought or the outbreak of ebola in Africa as being the result of overshoot but these troubles are EXPECTED consequences of low level overshoot on a local level.Starvation and fatal contagious diseases bring local populations back in line with local carrying capacity.

        We just ordinarily reserve the term overshoot for use when the population over a wide area is in short term danger rather than just the population in a locality.

        In the broadest terms virtually all of the fighting going on in the Middle East is attributable in biological terms to competition resulting from overshoot. The people there are already far far too numerous to coexist peacefully on the available resources and are in a to- the- death competition for the very ground under their feet. One faction or another will eventually prevail TEMPORARILY at the expense of rival factions being severely diminished or literally wiped out.

        Given that we are dispersed all over the planet( with many local populations in possession of different resources in different combinations and quantities) collapse and die off due to overshoot will come about piecemeal in various places at various times.

        If we are lucky overshoot will not result in CBN WWIII mucking up the overall planetary biosphere to the extent we ALL perish.

        • Sam Taylor says:


          Gold is of no more intrinsic value to a starving man than a piece of paper. Ultimately it only has the value that humans, bar some industrial uses, comes from the fact that it’s shiny, and we like shiny things. The real assets are things that you’re lucky enough to have plenty of. Land, water, food, tools and skills.

          The Norwegians look to be playing the long game relatively intelligently, though I question what their soverign wealth fund will be worth in half a century when the north sea runs dry.

          • Old farmer mac says:

            If the shit hits the fan during my time you can be assured that I will not be accepting very many hundred dollar bills in exchange for a portion of my hoard of seed or fertilizer or diesel fuel or buckshot or dried beans and corn.

            I would be inclined to sell off some of my irreplaceable expendable treasure however for gold coins on the bet that I could spend the gold for other things I would need just as bad or worse than what I sold for gold.

            My dentist might for instance have a well stocked larder and armory but be perfectly willing to work for gold – which used along with some locally produced opium or moonshine as a pain killer would allow him to repair a lot of cavities.

            Some people imo will always be willing to accept gold in lieu of paper money or gold only. Such people would include any body anxious to leave the neighborhood and afraid paper money might no longer be accepted wherever they wind up.

            A LOT of people might consider a nice shiny diesel tractor useless without fuel-but a guy like me might just have a few hundred gallons stashed and MY tractor might break down with no parts available to fix it.So- offer me that tractor for a couple of gold coins- I would pay rather than just steal it later.

      • John B says:

        Because you have a lot of people abusing the system:

  23. Jeffrey J. Brown says:

    Initial Depletion Rates for Median Bakken and Eagle Ford Wells?

    For median Bakken and Eagle Ford wells (median in terms of EUR), how much do you guys estimate that the median wells in the two plays will produce in the first two years, as a percentage of EUR, for C+C?

    • Mike says:

      Mr. Brown, my response references EF only; as a result of observations in the field, feed store talk with gaugers, buddies in the shale biz, peaks at, and my royalty checks, 70-75%. Over half of estimated UR occurs within 12 months.


  24. Rita says:

    These are the plans of the EU on how to change the transport sector in response to peak oil:

    • That’s a typical European Union paper. They are incredibly good at filling endless amounts of pages with really high quality bureaucratese. I love the way it’s presented in 22 languages.

  25. Caelan MacIntyre says:

    Insofar as some people hereon and elsewhere advocate technical BAU-style ‘solutions’ or ‘responses’ in an apparent bid to slow collapse/decline, paradoxically, if underlying sociopolitical issues are left unaddressed, such as with regard to BAU’s crony-capitalist hierarchical undemocratic structures, it is this very neglect and/or ignorance of the latter and misplaced focus on the former that, paradoxically, may prove to be what enhances or accelerates decline/collapse.

    It is important to bear in mind, too, that, historically, civilizational collapses/declines didn’t happen because of fossil-fuel depletion. So, this time around the issues behind collapse/decline would seem more multifaceted and complex, relatively large-scale and global, and therefore, far more threatening. I mean, if we could collapse previous and relatively-small-scale, low-tech/organic civilizations with relatively-pristine and intact surroundings, and without fossil fuels, imagine what we can do now. Where some have a seemingly hard time grasping the exponential function, they may also have a hard time grasping the kinds of scale that goes into our form of global civilization, such as with regard to industrial processes like mining and manufacture or governance. For 7+ billion people, many of whom, despite climate change, still seem to want the ‘Western lifestyle’.

    I also imagine our historical counterparts had similar arguments and discussions, only to have things unravel anyway. It’s not like we’ve fundamentally changed.

    So I suppose one implication of this is that all people, such as myself, who hope for ‘collapse/decline’ sooner rather than later, for reasonable reasons, may have to do is to sit back and let ‘BAU’, via perhaps in part, wind, nuclear & solar-power, corrupt/illegitimate governance/authority, EV’s, jobs/wage-slavery, nuclear power and the general status-quo, keep shooting itself and hope each shot is as effective as possible.

    This might be somewhat along the lines of what Nicole Foss alludes to in her response-essay to David Holmgren’s essay, ‘Collapse on Demand’.

    To want the world to shift from the amount of internal combustion engine vehicles currently on the road (how many?) to electric vehicles (what happens to the ICE’s?) and from relatively-mobile oil-based energy to nuclear and other stationary forms seems questionable, perhaps insane.

    But this is an insane culture, which perhaps favors insane solutions and responses– the two feeding off each other in a downward spiral.

    Lastly, there’s the issue of lock-in, such that ‘The road to ruin is paved with good intentions.’ seems apt. ‘Lock-in’ seems, in appearance as mere text on a screen, benign, but it is another very important concept. I think about it sometimes when I read some of the ostensibly-cavalier regard for, say, the advocation of nuclear power in a world with depleting fossil fuels, climate change dynamics, and increasingly unstable governance and restive populace; industrial agriculture, and genetically modified organisms; and even EV’s and their immense infrastructures and resources needed in the contexts of the environment and 7+ billion people.

    Humans didn’t evolve with a survival, leisure or comfort-driven need to split the atom for energy or rush to their glorified obsessive-compulsive disorder bullshit jobs in their EV’s almost every day at 8. They evolved with a need to have a healthy, viable, living planet, ecosystem and community. This is basic stuff, but some ostensible adults still don’t seem to get it and, alas, probably never will. Some of them would seem to think that driving to a corporate job in an EV and paying taxes to some kind of distant centralized authority that doesn’t really care is the epitome of existence. No, it is far more like the manuscript for a dystopian science fiction film:

    My Planet, Screwed by Aliens In Human Form

    • I agree, the first thing we need to do is end the crony capitalism we see in China, Russia, Vietnam, Africa and Latin America, as well as educate the people so they don’t fall for populist autocrats like the venezuelan Chavez. Stronger economies will deal with the increasing scarcity much more efficiently. Plus we have to remember it’s always better to be a little bit free rather than a raggedy enslaved peasant living in a communist nightmare.

    • Old farmer mac says:

      It is certainly true that most problems are the consequences of the solutions adopted to deal with other problems and that problems reproduce exponentially.

      I am not a technocopian who believes technology is going to save us all. As a species we are have succeeded all too well which is what every species does it circumstances favor it. Overshoot and an inevitable dieback or even extinction are the necessary and ordinary consequences and may be regarded as laws of nature for all practical purposes except for a few pertinent facts.

      Humans are by orders of magnitude more adaptable than any other ” higher ” species and this has allowed us to spread all over the globe into so many different environments that our actual extinction from disease or starvation etc is VERY unlikely.

      But WE ARE COLLECTIVELY living on borrowed time and a fast depleting one time gift of non renewable natural resources and these resources are ( in the sober opinion of anybody who understands the score and the game) NOT going to last long enough for technology to save the majority of us.

      I am willing to believe that if business as usual lasts long enough that fusion power MIGHT eventually be a practical reality. Solar power absolutely imo has the POTENTIAL to shoulder the load currently carried by fossil fuels. Like them or not GM crops have the potential to solve or greatly mitigate some of the worst problems associated with industrial agriculture such as soil erosion , fertilizer and pesticide runoff, substantially reduced need for fertilizers and pesticides , substantially reduced need for fuel on the farm . There is an excellent possibility that GE will eventually provide us with energy crops that yield as much total biomass as a hybrid cornfield but with the protein carb and fat balance shifted heavily in favor of fats- and fats ARE perfectly acceptable substitutes for crude oil.Cheap birth control has the well demonstrated potential to solve our population problem – given time enough.

      There really isn’t any fundamental reason we can’t shift from ice cars to electric cars- except for ONE.

      TIME. If I have repeated this once I have repeated it a couple of dozen times here already. The techno ambulance is going to run out of gas short of the hospital.It would take a minimum of several decades to build up the stock of ev’s and several decades to build out solar power adequate to give up fossil fuels even if we were to go at it on a war time footing. The chance of that happening of course is just about a big fat zero.

      But SOME societies probably CAN POTENTIALLY pull thru the coming bottleneck without reverting to a middle ages sort of economy after suffering thru the consequences of die off.

      A few – such as the USA – MAY come to understand what is happening and when a modern nation state – Hobb’s Leviathan – goes into survival mode it is capable of a mind boggling response.

      The US went from being bent on isolation in 1939 to having upwards of ten million men in military uniform with half of them fighting over seas in less than five years time.

      Of course the basic domestic resource package – farmland ‘oil in the ground’ iron ore’ aluminum ore’ etc was still more than ample in those not yet forgotten days.I am privileged myself to know a few veterans who are still with us.

      If we were to put our collective minds and will to it TODAY we could be building out the renewable energy industries at a simply mind boggling pace. We could be building new houses that are near net zero energy very easily. We could quit selling trucks for personal transport in ninety days and mandate that the new car fleet averages be forty mpg NEXT YEAR.

      And the magical thing about it all is that all it would take to make it happen is that the gods of chance smile on us and smack us upside the our collective head with a series of Pearl Harbor bricks on a regular basis – long enough and often enough- to awaken the nation states survival instinct.

      Will the bricks come often enough and fast enough and SOON ENOUGH? There is no doubt in my mind that they are coming. Maybe they will come so suddenly and so fast as to cripple us beyond any hope. Maybe they will come too late and we will have exhausted our fossil fuel resource gift to the point that building out renewables is no longer possible.

      Personally I believe that the time has already passed that renewables could be built up to the point of saving the vast bulk of our world wide population.

      But if we were to REALLY put our hearts and minds to it we could have a renewables based North American economy easily enough. It probably would not be possible to go ENTIRELY to renewables within the easily foreseeable future but we have ample reserves of fossil fuel to last for centuries if we were to cut our usage ninety percent or more once the build out was mostly finished.

      Life would be different for sure. Few cars and very small ones. Very little air travel. Lots of buses and street cars and bicycles. Lots less people almost for sure. Led lights the minimum standard. Thermostats at sixty in the winter and eighty in the summer or just fans.

      But there would be food in the supermarkets and the water and sewer would continue to work.In most places at least. The grid would stay up but not to the far tip ends of the lines with only one customer per mile. There might be a green light in your kitchen that indicates it is ok to turn on your water heater and washing machine and a recording meter to document WHEN you are using major appliances. Your new refrigerator would have a couple of cubic feet of sub zero ice storage built in and need to run only an hour any time of the day and only a day out of any given four or five. There would still be cops on the street although there might be a decade or longer period where the cops are in military uniform in a lot of places.

      Don’t get caught in Egypt or England or any country utterly addicted to imported food and energy and dependent on exports to pay for imports.German companies are not going to sell very many high end cars to foreign customers when the shit hits the fan but maybe they will be far enough along on renewables to make it when the Russians decide some day to just shut off their exports for any of a dozen reasons.

      Leviathan will not go peaceably into the night. Leviathan is newly evolved life form with the survival instinct of the ant or bee colony buttressed by the brain of the naked ape. Leviathan is the new reality and has been the new reality for the last few centuries.

      IF I were a praying man I would be praying for my loving and merciful God to start throwing some of the many bricks He sends flying on a regular basis at places like Somalia our way instead.

      We NEED a killer heat wave and a KILLER drought – both big enough to FORCE the evacuation of a substantial chunk of territory. We NEED an oil crisis- just not one severe enough for us to occupy Sand Country the way the Nazis or the Soviets managed an occupation.We NEED a killer contagious disease that can be controlled only by quarantine.

      Baptists know that God works His miracles in strange ways and maybe he will save his favorite children by chastising us in this manner so as to force us to use the brains he gave us. 😉

  26. tfark45 says:

    In ND – A Story Of Oil – Corruption & Death
    Where Oil – Poison Water – Corruption & Bodies Surface

  27. tfark45 says:

    If Building Permits Are A Indication Of Boom Or Bust, Things Don’t Look So Good
    Hud Updated to November 2014, Williston was very proud all year updating permits and
    suddenly stopped in October. They do not report monthly to Hud.
    Lets all have a safe and contentious New Year. Thank You.
    Bakken Crude ended the year at $36.94 offered by Plains and $35.00 offered by Flint Hills

  28. toolpush says:

    County………………BPD …….. % production… #Rigs…% rigs
    Dunn……………….182988…….16…………………. 27……..16
    McKenzie ……… 378584…….34………………….60 ……..36
    Williams ………..160808……..14………………..37……….22
    Divide…………… 41163……….4…………………. 5………….3

    So Dunn has 16% production 16% rigs, even
    McKenzie has 34% production and 36% rigs about even
    Mountrail has 23% production and 18% rigs, most likely to see a decline in production if rig count does not go up.
    Williams has 14% production and 22% rig, poor area and rig count will drop, or will see increase in production.
    Divide, doesn’t count

    No promises on how this will format, but it was worth a try?

Comments are closed.