Are Mountrail’s Sweet Spots Past Their Prime?

This is a Guest Post by Rune Likvern   Fractional Flow

This post is an update on total Light Tight Oil (LTO) extraction from Bakken in North Dakota based upon actual data as of October 2014 from North Dakota Industrial Commission (NDIC). It further presents a statistical analysis on developments of well productivity with a detailed look at developments in Parshall, Reunion Bay and Sanish.

  • There were general improvements in LTO well productivity in Bakken during 2013.
  • Present trends in LTO well productivity for Mountrail’s sweet spots (Alger, Parshall, Reunion Bay, Sanish and Van Hook) suggests these are past their prime.
  • Figure 29 in this post show development in well productivity for Alger and Van Hook and figures 06, 08 and 10 for Parshall, Reunion Bay and Sanish. A common feature for Parshall, Reunion Bay, Sanish, and Van Hook is that these reached new highs in well productivity for wells started in 2013.
    Alger has been in general decline since 2011.
  • LTO extraction in recent years may be viewed as a source for global swing production for oil.

Rune 1NOTE: Actual data used for this analysis are all from North Dakota Industrial Commission (NDIC). Data are incomplete for around 2% of the wells.

For wells on confidential list, data on runs were used as proxies for extraction.

Production data for Bakken, North Dakota: Monthly Production Report Index

Formation data from: Bakken Horizontal Wells By Producing Zone

The important messages from this analysis are the trends in well productivity.

This post is an update and expansion of my post “Will the Bakken “Red Queen” Have to Run Faster?” from the summer of 2013 and may be read as a continuation of my post “Will the Bakken Red Queen Outrun Growth in Water Cut?”.

Rune 2a

Rune 3

The chart shows the rapid decline in LTO extraction by vintage.What is the month over month legacy decline in total LTO extraction?

The month over month total decline for LTO extraction wobbles around due to seasonal effects, differences in productivity of the wells started in any month, variations to when in the calendar month the wells were started and number of days of the month.

Measurements from actual data showed that the smoothed month over month legacy decline varied between 5 – 6%.

From figure 03 it may be observed that the legacy decline rate slows with time.

How many net producing wells needs to be added to sustain the LTO extraction level from October 2014?

In October 2014 total LTO extraction from the Middle Bakken and Three Forks formations in North Dakota was 1.12 Mb/d.

The “average” well, so far in 2014, had a first month flow of 486 b/d.

This works out to a need of net monthly additions of  115 – 135 producing wells to sustain the October 2014 extraction level.

Mountrail

LTO extraction from Bakken in North Dakota really took off in Mountrail, which as of Janaury 2010 had around 60% of total LTO extraction.Rune 4

In Mountrail the growth in LTO extraction in the second half of 2013 coincided with the improvements in well productivities re also figures 06, 08 and 10.

Rune 5

The data show that the best wells came early, those started in 2008. Then follows 2013 (refer also figures 06, 08 and 10).

So far “average” 2014 wells in Mountrail have been poorer than those started in 2013.

Parshall

The wells in Parshall are very good LTO producers.

Rune 6

Parshall covers an estimated area of 300 square miles (1 square mile = 640 acres) and had 340 reported flowing wells as of October 2014.

Rune 7

Sanish

Rune 8

So far it appears the best wells in Sanish was brought to flow during the first half of 2010. In Sanish wells with less than 6 months reported flow have totals close to those with more than 6 months flow started in 2014. The well productivity appears to have flattened.

Rune 9

Reunion Bay

Rune 10

For Reunion Bay there was a gradual improvement in well productivity starting in the second half of 2010. As of recently this productivity has remained fairly stable.

The Analysis/Study

The correlation analysis includes around 3,600 wells started in 2010, 2011 and 2012.

Rune 16

Distribution of LTO Wells by Vintage

Initial Production (IP), 30, 60 days flows is short term and early indicators that give away some information about a well’s productive potential, but shows poor correlations with long term well productivity developments.

The focus on short term performances should be considered with some reservations.

Our societies depend on long term predictable flows of oil and its affordability. Short term fluctuations may obscure worrisome underlying trends that easily become drowned out by noise, thus obscuring THE SIGNAL.

Rune 11

Rune 12

The distribution of wells productivity begs the question about how much this is influenced by the oil price, well design and geology. Improvements in well design have so far resulted in improvements in well productivity, but as demonstrated in this post water cut has increased, suggesting more recent LTO extraction comes from formations with lower oil saturation.

Correlation analysis, how the length of the time series improves accuracy

The correlation analysis includes around 3,600 wells started in 2010, 2011 and 2012 and that had 24 months or more of reported flow.

Rune 13

The linear fits show that wells started in 2012 were poorer than in previous years.

Rune 14

Rune 15

Figures 13, 14 and 15 shows that correlation improves with the length of the LTO extraction time series thus improving the predictability of the wells’ productivities.

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289 Responses to Are Mountrail’s Sweet Spots Past Their Prime?

  1. Rune, you have a massive amount of data analyzed, the work is excellent, and this should give you the ability to project production, including production from wells starting in 2015 and 2016.

    The only way I can see to improve the predictive ability would be to study water production tendencies. I worked in fields with about 800 producing wells and we mapped water trends in several ways.

    A friend of mine came up with a really nifty way to plot data in map form using excel. At that time we were working with a company which wanted to save money on production data bases, so they didn’t have the typical package oil companies buy.

    So, what we did was download the well x and y coordinates into excel. Then we added a value (for example water cut average in the first 12 months) and plotted bubble maps. We did all sorts of data visualizations this way, and some of it really helped.

    • Rune Likvern says:

      Fernando, thanks!
      Some time back (August 14) Enno Peters in a guest post here on POB presented a method showing development in LTO productivity (based on actual well data and their location) over time for Bakken ND and certainly it should be possible to conduct similar studies for both water cut and Gas Oil Ratio.
      Link to Post with Enno’s work

      http://peakoilbarrel.com/enno-peters-post/

      • That’s a really good set of contoured maps. Does the state data show the well location in x and y coordinates? Or does it have to be converted to the old township/range system?

  2. FreddyW says:

    Thank you Rune for an interesting post. I am also glad that you provided the correlation between 6 month cumulative production and 2 years cumulative production. I think it supports my assumption that you can roughly estimate ultimate recovery based on 6 month production.

    I checked this page
    https://www.dmr.nd.gov/OaGIMS/viewer.htm
    to see if there has been any movements of rigs to better producing areas. But it doesn´t look like there has been any major movements to me. It will be interesting to see if the companies can increase average production the coming months. Because they must surely loose alot of money for each well (on average) if they can´t.

    • Yes, the correlation between cumulative times is definitely related to the physics of the flow. That’s really why these hyperbolic/diffiusive formulations that Dennis Coyne and I have worked with can project later flow so well.

      We tend to think that the engineer is controlling what comes out of these wells, but in reality it is nature that determines the rates and time-series profile after the initial fracture occurs.

      • Old farmer mac says:

        Hi WHT and Dennis,

        I have not been able to make much out of your theory since most of it is over my tired old head. I last studied math close to half a century ago and even if I could remember it I might not have gotten enough of it and statistics to truly understand it anyway.

        But I will stick my two cents worth in anyway for the benefit of us lesser souls who can”t quite follow your model- which incidentally is not available in simplified textbook style to my knowledge.

        If it can be simplified to the point that a well educated layman can follow it – then it would be great if somebody would post a simplified online version of it with examples textbook fashion.

        You say” We tend to think that the engineer is controlling what comes out of these wells, but in reality it is nature that determines the rates and time-series profile after the initial fracture occurs.”

        Would it be more accurate to say that nature sets limits on the rates and time series profile after the initial fracture and that engineers can manipulate the flow to a significant extent within these limits?

        This is the sort of point that is often overlooked in a discussion between pros who all know the answer and thus just don’t bring it up.

        Laymen don’t usually know the answers to such questions.

        Thanks!

        • Dennis Coyne says:

          Hi Old Farmer Mac,

          In general, I think you are correct that there are limits based on physics, geology, and technology (along with other factors such as prices, taxes, interest rates, regulations, and lots of stuff I don’t know about), especially in conventional reservoirs. I think that in LTO plays the engineers are still learning the best way to do things and there is less of the designed decline rates that Fernando speaks of and things are more dependent on physics and geology for LTO plays than for conventional oil reservoirs.

          Also see my comment below, for an attempt at a fairly concise non-mathematical explanation of my model (which is actually a copy of Rune Likvern’s model, with any mistakes that are mine and not Rune’s). No convolution or convoluted reasoning are needed.


      • Would it be more accurate to say that nature sets limits on the rates and time series profile after the initial fracture and that engineers can manipulate the flow to a significant extent within these limits?

        No, that is not what the profiles show.

        As a challenge to the laymen question, let me turn the tables. I really don’t read much of what you have to say because I would rather not follow these “just-so” narratives that seem to proliferate. A just-so story is a type of explanation of a phenomena that seems to make plausible sense because it triggers certain intuitive associations. Yet seeming plausible doesn’t cut it — there needs to be more substantiation than that.

        Working out the science along with math and statistics is the only way around this predicament because some objective standards are needed to make sense of what is happening.

        Take a look at this post by Dennis in which he does an excellent job of explaining the mathematical principle of convolution:
        http://peakoilbarrel.com/oil-field-models-decline-rates-convolution/

        I don’t think it can be made any more fundamental than this. At some point one can’t blame the teacher any longer, and the student has to lift a finger and get engaged in the details of the math.

        • coffeeguyzz says:

          Mr. Web! Mr. Web! Imma proud, card-carrying ‘layman/student’ who is always willing to lift a finger or three in an ongoing effort to glean whatever intellectual crumbs that may fall from the table of my ‘betters’.
          I also greatly appreciate the heart, soul, and wisdom so often revealed in OFM’s posts, especially so as I have yet to find that stuff in Excel spreadsheets anywhere.
          With your vast (seemingly) self acknowledged expertise in all things math and science oriented, perhaps you can enlighten me and save me TONS of time and explain the growing view that long-term (5 years or so) pressure drawdown is suspected of prompting subtle shifts in the matrix and potentially allowing refrac’ing older wells in a much more expeditious fashion.
          Some months back, Mr. Web, you acidly commented on my unfamiliarity with the minutiae of CO2 EOR, and you were correct. The fact that you seemed unaware of the field testing in the Elm Coulee, in the ND Bakken by Whiting, the dual HuffnPuff/field injection test EOG did in the EF, the vast amount of EOR research being done by the EERC folk up at the University of North Dakota, prompted me at that time of your comment to respectfully refrain from drawing your attention to these – and many, many more related, substantive issues.
          This student is presently lifting a cyber finger in your direction, sir.

          • Oil production AFAICT is a story told by numbers. Numbers are the stuff of math and science, not of qualitative arguments. In other words, you can’t get numbers from words alone.

            That is my point. Try not to read too much into it. It just explains why I don’t read verbiage that is in the category of “TL;DR”.

            • Old farmer mac says:

              Enjoy your obsession.

              If the rest of us were concerned solely with the basics of the peak oil story we would have spent a few hours boning up on it years ago and forgotten the subject except for taking it into account in managing our affairs.

              Being a generalist with a good grasp of the nature of reality I don’t really give a flying xxxx about the fine grained details of the oil story because the end is already baked in.

              In the end you are going to come to the same conclusions that everybody else has already except a few idiot economists- that oil depletes, that the Earth is a finite body, and that we are going to have to change our ways.

              Economists will simply keep changing the definition of oil until they die of old age so as to avoid admitting oil has peaked or soon will peak.

              I know enough physics, math, chemistry, geology, and biology to discuss these things in a meaningful way. Beyond that I have spent more than a few thousand hours acquainting myself with what is known about how we naked apes behave and why.

              Story and narrative control human behavior to a far greater extent that hard science ever has or ever will.

              ” Just so” is the very heart and soul of effective communication.

              Physics and math tell us what is possible at the limits.

              Story and narrative are precisely the things that enable us to understand what has happened and what will happen or might happen within the limits set by physical realities.

              Nuanced understanding of the political and economic possibilities grows out of detailed discussion of these possibilities.

              The really interesting question is what we will do and what will happen to us as we run out of natural resources.

            • Check out http://forum.azimuthproject.org for discussions of physics and math.

        • Old farmer mac says:

          Thanks.

          Now it is often said that English is a common language that separates two nations and given words really do often mean different things to different people from different backgrounds.

          At first glance it would seem to me that you are saying that an engineer cannot influence the flow of oil by adding various chemicals to his fracking mixture or that the flow of oil out of source rock cannot be influenced by injecting co2 or water for instance.

          So we are not communicating on the same wave length since these things are obviously done on a regular basis. Hard nosed bean counters would put a stop to them if they didn’t work.

          I seldom speculate on the actual physical process of getting oil out of the ground and I try hard to keep my speculations involving above ground factors well within the realm of the ”known to be possible” but also to vary them so as to add to our collective insights into what might come to pass in the foreseeable future.

          I might occasionally indulge in a flight of fantasy but as a general rule I don’t just make ”intuitively plausible” comments.

          I base my comments on plenty of well known history and well accepted science.

          I don’t generally resort to arguments based on authority but if you have any doubts about my speculations describing potential actual future events and or conditions I will be glad to provide you with back up opinions from professors of biology etc at highly respected universities.

          I don’t recall that you have actually posted your own qualifications here.

          Mine are not impressive but then on the other hand my conclusions are not original with me in any substantial sense.I am merely repeating what others have said before me in my own words with some color commentary thrown in.

          I went back and looked at Dennis’s article and can follow the math and graphs in it with some moderate head scratching ( after forty five plus years of not needing the math ) so your model is not so complicated as it seems from just reading your occasional comment about it.

          This is assuming that Dennis RELIED on your model as the BASIS of his article rather than just as a tool along with many other tools.

          Now with a hat tip to the both of you for having done a hell of a lot of hard work that has obviously consumed a WHOLE lot of time and energy – it seems to me that this is basically the same sort of results that any bunch of bright young MBA’s with programming and statistical skills who bothered to really research the easily available production data ( easily and quickly found here and on lots of government websites etc ) would come up with.

          I am confident that this is original work on you guys part – excellent original work no doubt.

          But I have yet to understand what it is about it – if anything – that it is going to change our conclusions in respect to peak oil.

          My own knowledge of such fields as statistics and programming is badly limited but adequate to understand that while an engineer or mathematician can construct a machine or a model and predict its performance quite well – assuming his assumptions hold- there are almost always some overlooked and unforeseeable variables involved and that even the best machine or model will be misused and occasionally abused.

          I use my screwdrivers for crowbars occasionally . 😉

          I strongly suspect that lots of people working for large investors and government agencies such as the NSA ( in secret in that case ) and multinational oil companies have in fact done similar work and come up with similar conclusions – of course such people don’t ordinarily show their work to anybody except their employers.

          You guys deserve a big thank you for sharing work for free that would have netted you hundreds of thousands or even millions of dollars if you had been able to sell it to some corporate chieftain.

          But you would do well to remember that the guy who supposedly figures out new stuff that changes the ball game is forgotten in a few years except maybe one time in ten thousand .

          Maybe you will be remembered as a researcher who revolutionized the oil business after some fashion.

          Your oil conundrum on the other hand may never rate more than a foot note in the history of the energy industry.

          I am hoping my comments are good enough future students of the history of oil will get a laugh out of some of them on nights when they are burning the figurative midnight oil.

          They might even gain a little insight into the nature of the naked ape as it behaves in crowds from other comments I have made.

          Having said this much I personally gave up teaching because it is as you point out impossible to explain even moderately complicated subjects to people who are no more than barely literate.

          • If I may clarify, the flow of fluids from the reservoir is controlled by humans AND nature. We humans control what we do, and the rocks and fluids react to it.

            An analogy would be that we are like mule train transporters. We can decide what kind of mule, the number of mules, the size of carts, the loads, and lay out the route. But we can’t alter mule behavior to make them behave like horses, reduce gravity or make the mule drivers behave like geniuses.

            This is why I wrote earlier that we do design the decline rates. And of course we can control the oilfield to alter well and overall reservoir behavior. Whether we choose to do it is a matter of choice. Don’t get hung up too much on the really low permeability seen in the Bakken or Esgle Ford. Most reservoir rocks are much nicer, and this allows the wells to share the same pressure environment.

            What we use to drive hydrocarbons out of the ground is basically changes in fluid saturations and pressure. And we can control those to some extent.

            • Fernando, The data differs with what you are saying. That is not surprising because you are only talking in qualitative terms.

              The frackers are setting a bomb off underground and acting like they know where the damage will occur. That’s the analogy.

              • Webby, I’m pontificating about reservoirs in general. Those very low quality Bakken reservoirs are a small part of world reserves. However, the same basic principles apply.

                Why would you think in terms of “bombs” and “damage”? Fracturing is more like a deep soothing masage applied to squeeze the oil and gas out of the rocks.

                • Fernando, I apply the physics and math of stochastic processes to a chart such Rune’s Figure 5. We are talking about Bakken because the post is on Bakken.

                  With most of the uncertainty in what happens during the first month, the time series profile is a dead-ringer for a dispersive diffusion profile. That is a purely physical phenomenon.

                • Dennis Coyne says:

                  Hi Fernando,

                  I understand that the decline profiles are engineered to some degree based on technology, geology and economics (with a little politics thrown in for good measure). When Paul (WHT) talks about dispersive diffusion, it is in reference to LTO. I would think that once the natural pressure drive is depleted, that the flow of oil to the well is governed more by a diffusive process (a random walk kind of phenomenon with reversion to the mean) than by pressure. Using a hyperbolic/exponential probably is close enough, but there may be a tendency to overestimate the tail.

                  Most of us do not have access to the data necessary to model world output on a well by well basis, I think Paul’s oil shock model is a great way to approximate what future World output might be. What do you think about USGS URR estimates for conventional and extra heavy oil which are about 3000 Gb for conventional (1750 Gb remaining) and 1000 Gb for extra heavy from Canada and Venezuela at roughly 50/50 split?

                  • Dennis, it’s always driven by pressure. What you call the natural pressure drive is what we call depletion drive. Fluid withdrawal by the well and artificial fractures cause pressure drops. The pressure drop causes fluid expansion, which helps sustain pressure. Eventually the pressure drops below the bubble point and the gas evolves. A gas phase has much higher compressibility. But it also gas much lower viscosity. This is the reason why the gas oil ratio is something we watch. As it increases we lose energy. If you look at the Bakken gamma ray curves you will see it’s not really a shale. It’s just a really tight rock.

                  • Fernando, You seem to miss the step that pressure also has the capacity to force the liquid away from the collection region as well as toward it. Or the fact that it could take a circuitous route. These processes have the tendency to follow a random walk profile, i.e. diffusion.

                    Also very presumptuous of you to think that a massive hydraulic fracture event is something that humans have that much control over. Heck, they can’t even prevent the setting off of nearby earthquakes, LOL !

          • Dennis Coyne says:

            Hi Old Farmer Mac,

            I am far less sophisticated in my mathematical capabilities than Paul Pukite (aka WebHubteelescope) who I believe has a PhD in Engineering (possibly Mechanical, though I am not sure), his current website is Context Earth and his focus lately has been on climate change rather than peak oil.

            I find your comments very enlightening by the way.

            It is really pretty easy to understand my “model” for the Bakken, which is based more on the work of Rune Likvern than Paul Pukite. I actually presented the idea of convolution so that I could attempt to explain the Oil Shock model.

            Unfortunately many people who are highly intelligent really are turned off by mathematics and think that any idea which cannot be presented in words alone is not worth pursuing.

            I tried to present the Bakken and Eagle ford models using very simple mathematics and if you cannot understand it, I did a poor job of presenting it. Paul actually pointed out that the name “convolution” immediately connotes something that is hard to understand and a different name would probably aid in understanding. Generally if people think something is “convoluted”, that it is probably not worth bothering with.

            So forget convolution, in fact I did not even realize my Bakken model used convolution until Paul pointed it out to me in his final post at the Oil Drum.

            The model just uses NDIC data to construct an average well by taking the average monthly output for all wells which started producing over a range of dates say Jan 2010 to June 2014. Then we look at how many new wells started producing each month from Jan 2010 to June 2014.

            Then as an approximation I assume that all wells are average wells and just do an accounting exercise using a spreadsheet.

            For example lets say we have data for 4 years of monthly output for the average well, we can fit a hyperbolic (a function of the form 1/x raised to some power n) to the data to estimate output beyond 48 months using a least squares fitting routine in a spreadsheet (sum of the squares of the residual error is minimized).

            This constructed hyperbolic is used to represent the average well output over 240 months.

            Then we look at how many new wells were added each month from Jan 2010 to Nov 2014. Now if we assume all wells are average wells we just need to multiply the number of new wells in Jan 2010 by the first month output for a single well to find the output for Jan 2010 from wells which started producing that month.

            I use the same “average well” from March 2008 to March 2014, prior to that I use an average well with lower productivity to estimate output from wells which started producing before March 2008. The model uses data from Jan 2005 to the present (only about 200 wells were producing oil in the North Dakota Bakken/Three Forks in Dec 2004 and over half those wells were more than 10 years old at the time).

            When I first tried this in Oct 2012, I was amazed that it worked as well as it did see
            http://oilpeakclimate.blogspot.com/2012/10/using-dispersive-diffusion-model-for.html

            At the time I was using data gleaned from Rune Likvern’s research.
            Interestingly this initial model was pretty close on its guess for output in late 2014 at about 1100 kb/d, though this could have simply been a lucky guess, to be honest it looked too high to me at the time as it implied a doubling in output in just two years. It looked suspiciously “cornucopian”. See chart below.

            • Dennis Coyne says:

              I just realized that the model in the old chart was using a dispersive diffusion model developed by Paul Pukite. Eventually I switched to using a hyperbolic well profile as it seem to match the first 24 months of data more closely, see the following

              http://oilpeakclimate.blogspot.com/2012/12/update-on-bakken-model-using-hyperbolic.html

              The model presented in that post (Dec 2012) had slightly lower output in Nov 2014 (about 1020 kb/d). Part of this difference was an assumption the average well productivity would start decreasing by 0.5% per year starting in Jan 2013, this assumption was incorrect and well productivity remained relatively stable fro 2012 to 2014 with an increase in well productivity towards the 2nd half of 2014. So my Dec 2012 was predicting a a gradual decrease in new well productivity which reached 11% by Jan 2015. That was a poor guess, from there I started making more conservative estimates of the average well profile based on a misinterpretation of the April 2013 USGS update on Bakken resources.

              http://oilpeakclimate.blogspot.com/2013/09/update-to-north-dakota-bakken-three.html

              I got back on track with the post at the link above, but was still underestimating the USGS mean TRR estimate, because I did not have proven reserve data through the end of 2012 at the time. The mean USGS estimate for the North Dakota Bakken/Three Forks is about 9.8 Gb. I try to make my scenarios roughly match this estimate. Chart below shows my current model based on NDIC data through Nov 2014. No guesses about the future are included, this is just the average well profile based on NDIC data and the number of wells added each month also based on NDIC data.

                • Dennis Coyne says:

                  Thanks Fernando,

                  For such a simple model it matches the data pretty well, in 2014 it looks like the average well profile must have been changing, even increasing the average well profile by 1% each month from March to November 2014, was not enough to get the model to match actual output data.

                  Clearly there is no average fixed well profile in practice, but this simple assumption works ok from March 2008 to Feb 2014.

    • Rune Likvern says:

      Freddy, thanks!
      You have posted/shared some impressive work here on POB.

      It will be interesting to see if the companies can increase average production the coming months.
      I agree. One thought that I have why drill/complete a gusher (good well) while prices are depressed?
      As LTO extraction is heavily front end loaded, the first year or two of production has a considerable bearing on the profitability for the well

      • notanoilman says:

        If they have heavy contract commitments, may it be better to target those better spots to get better payoff of their costs?

        NAOM

      • FreddyW says:

        Thanks!

        Good point. I suppose no matter what they do, it will be bad. They may hope this is just temporary and just continue as usual. It could be. I think the oil price should start to go upwards again by the second half of this year. If production drops faster than IEA anticipates, then we may even see a quick recovery of the price.

        • FreddyW says:

          Actually IEA expects supply to grow this year. From the OMR:
          “The oil selloff has cut expectations of 2015 non-OPEC supply growth by 350 kb/d since last month, to 950 kb/d”
          So there is room for downward revisions.

          • Dennis Coyne says:

            Hi FreddyW,

            Based on EIA data NGL output has increased by about 900 kb/d from 2010 to the 12 months ending Sept 2014 (12 month averages), generally this is more related to increased natural gas output (NGL is a by product). Over the past 12 months NGL output has increased by 270 kb/d. If the IEA is assuming NGL will rise by 300 kb/d next year, that would leave about a 650 kb/d increase in C+C output (assuming biofuels and refinery gains are unchanged).

            I definitely agree that a 650 kb/d increase will be difficult unless oil prices rise. The EIA expects average US C+C output (12 month average) to rise from 8.7 mb/d to 9.3 mb/d from 2014 to 2015 or by 600 kb/d, so this is in line with the IEA forecast (if we assume most of the rise in output will come from the US and that Canadian increases can offset declines elsewhere). The scenario seems a little to rosy to me, I think we might maintain C+C output if oil prices rise, but I doubt the World will increase C+C output by more than 250 kb/d and a 250 kb/d decrease is also reasonable. Basically flat output is my guess (especially if we focus on 12 month averages and ignore small changes like 200 kb/d or less).

        • FreddyW says:

          However, the oil price started to drop about the same time as US QE stopped. Right now it seems they even out. So perhaps right now the economy can´t support an oil price as high as it was before.

  3. Philip Backus says:

    Rune, Thanks for a great post that obviously required a lot of work. I find figure 03 shows just where we would be, had drilling not continued at any given time. I think it would be a good visual aid for those who have difficulty understanding the concept in abstract of rapid depletion and the need for constant drilling.

    • Rune Likvern says:

      Thanks for the recognition.
      That was exactly the point of figure 03 (the transparencies of the colors shows production by month).

      Note that as of October 2014, approximately 50% of the production came from wells started in 2014.
      To me this illustrates how challenging LTO is to sustain an extraction level.
      Then throw in the price sensitivity for LTO extraction.

  4. Watcher says:

    “Parshall covers an estimated area of 300 square miles (1 square mile = 640 acres) and had 340 reported flowing wells as of October 2014.”

    More than 1 well per square mile. 640 X 300 = 192000 acres.

    A 30 stage well should drain 5280 feet X about 2000 ft sideways from the horizontal (1000 ft each side) = 10.5 million square feet or 240 acres.

    192000 / 240 = 800 That sweetspot is over 1/3 drilled, that’s of drilled and flowing. Maybe some were drilled and failed.

    • coffeeguyzz says:

      Watcher, there is virtually no company in the Bakken, Niobrara, EF currently attempting fracs with lateral communication extending out 1,000′. The current model is the one touted by Whiting and others where an intensive ‘rubblization’ occurs optimally no farther than 300/500′ horizontally from the wellbore. In addition to far more effective communicstion / conductivity with the formation, additional wells can be, are being drilled in close proximity to one another. The Parshall has the highly productive Three Forks formation below the Bakken and these ‘benches’ are still in the early stages of being developed.

      • shallow sand says:

        Coffee. Thanks for the info you provide about the shale plays.

        It appears that rig counts will continue to drop until the price rebounds.

        Do you think that when the price rebounds the shale drillers will start up again at break neck speed, or do you think they will take a more measured approach?

        It appears there is a tremendous amount of oil and gas in these areas, but in retrospect it may have been developed too rapidly. Like a version of the East Texas oil field over 80 years ago.

        It seems to me oil at $80 or so WTI would provide a very good return in many areas. Any possibility TX and ND step in and try to regulate things a little bit? It would seem especially in Bakken and EFS, pacing things could help get the governments caught up with roads and other necessary projects. That would seem to also help the drillers get debt to more manageable levels.

        • Do you think that when the price rebounds the shale drillers will start up again at break neck speed, or do you think they will take a more measured approach?

          It won’t really be up to them, the drillers, it will be up to their creditors. If a lot of them go bust then they won’t be around to keep drilling. Also if junk bond interest rates stay high, they will not be able to get financing.

          A lot depends on how long the price stays low. And I do expect a rebound if the price does go back up but it will never again be the boom times we saw during the last three years.

          • TechGuy says:

            Ron Wrote:

            “It won’t really be up to them, the drillers, it will be up to their creditors… And I do expect a rebound if the price does go back up but it will never again be the boom times we saw during the last three years.”

            I second that. The boom is over. It will take at least a generation for another boom (bubble) to replace it. By Then, global Oil production will too far deep and the global economy will be too depressed. At best the semi-completed wells will be finished when prices rebound, but its very unlikely there will be any significant number of new wells be drilled in Bakken in the future. Texas is also iffy on further new LTO drilling.

            Its likely global Oil production will start tanking soon, Cap Ex for Oil (and perhaps Ngas) will likely collapse this year, which will have a dramatic impact to future production in a few years. The Cap Ex spent today, usually takes 1 to 5 years to bring to market. Global debt problem are being to become a huge problem and there global stability is collapsing, which will prevent Cap Ex from rising to stabilize production.

            The Middle east is now engrossed in War, and the collapse of oil prices is going to lead to much more instability as the regional gov’ts dependent on high oil prices can’t meet their obligations to maintain their economies. Perhaps if Oil prices quickly rebound in the next 60 days the day of reckoning can be postponed be a couple of years.

            China continues to beat war drums and is now has the second largest miltary budget, and is building MIRV (Multiple target Ballistic Nuclear missiles) obviously to deter the US for whatever China plans to do in the future. As its debt/credit driven economy begins to fail, Chinese leaders will likely turn to external affairs in order to avoid internal civil disobedience (unemployed workers). Either China will be directed towards external military engagements, or it will be plunged into a civil war, as it unsustainable economy begins to collapse. Perhaps China and delay its economic crisis another year or two.

            The US (NATO) and Russia are locked on the Ukraine conflict as both sides continue to build up troops in eastern Europe. The Proxy war slugfest in the Ukraine as resumed last week, and this week Russia cut NatGas Supplies to Europe this week. The Ukraine is struggling and had to scram (emergency shutdown) one of nuclear reactors last week. Risks for a second Chernobyl are rising as the gov’t pressures mount to keep reactors running without sufficient maintenance budgets. Humanity probably has never been closer to WW3, probably since the blockade of Cuba during the Cuban missile crisis.

            • coffeeguyzz says:

              Tech guy, don’t softpeddle things. Tell us what you REALLY feel.

            • If CAPEX can be reduced (I think 20 % is achievable) AND oil prices rebound to $80 per barrel (Likely in the future) AND transportation costs are reduced (?) then….

              What’s the ability to make a 10 % return on investment IF all of this happens?

              • TechGuy says:

                a lot of “if”. Even if prices rebound, most companies and investors will be reluctant to jump back in. I believe most will be cautious and delay. Some will want long term pricing contracts, which will be difficult to obtain as those contracts just got crushed. Who is going to back long term pricing contracts now?

                Without constant investment, production will decline and so will the global economy. Demand for $120 bbl oil will remain weak and so will Cap Ex. Most of the newer big projects (ie Arctic, deep water, etc) need $120 bbl to be economical.

                I also think we are running out of road on infill drilling in many places (Alaska North Slope comes to mind). I think infill drilling had has a significant role in postponing declines. Its not just about problems with LTO.

                My guess is that from now on. Oil prices will become very volatile with large frequent price swings every couple of years. This will prevent expansion of Cap Ex. Consider that most of the oil majors had already begun to cut cap ex (back in Q3 2013), when the price of Oil was near $100. Why would they increase Cap Ex if the prices rebounds to $80?

                • If I see $80 per dollar, transport cost lower than $10 per barrel, and I estimate costs to be $100 million for a fully equipped 14 well pad, I can convince quite a few companies to proceed and invest, using a 10 % IRR after all taxes. Not all oil companies use financing, and they are more realistic when it comes to hurdle rates.

                • TechGuy says:

                  Fernando Wrote:
                  “If I see $80 per dollar, transport cost lower than $10 per barrel, and I estimate costs to be $100 million for a fully equipped 14 well pad”

                  Yes, there will be wells drilled in the future! I am sure there are many economical sites that can be drilled. However, the Majority of oil that needs to be drilled will be much more expensive. Off the table will be large deep-water, LTO, and other expensive projects. Conventional Oil Production peaked in 2005 and it was the unconventional drilling that prevent global production from declining.

                  That said I am not sure Oil prices will stabilize at $80. I think from now on prices will swing between ~ $120 and $55. As long as Oil make dips below $80 or what ever prices you deem is necessary for economic drilling, its not going to happen. I think demand destruction is going to take the lead, and intensify future prices swings.

                  • I wouldn’t back off a large deep water project thats viable at $80 per barrel. But I wouldn’t put my money on Gulf of Mexico pre Miocene.

            • nNgass says:

              “…. and this week Russia cut NatGas Supplies to Europe this week. “. No, they did not. It was reported by ZH and copied by some newspapers without fact checking . ZH, by mistake described an event in 2008/09 where the Ukraine diverted (stole) NG and Russia cut the flow through the Ukraine.

              • TechGuy says:

                http://atlanticsentinel.com/2015/01/russias-gazprom-says-will-end-gas-transits-through-ukraine/

                January 15, 2015:
                “Russia’s energy monopoly Gazprom announced on Wednesday it would stop transiting natural gas through Ukraine and urged its European customers to link up with a future pipeline to be built in Turkey or lose access to supplies.”

                http://www.bloomberg.com/news/2015-01-14/russia-to-shift-ukraine-gas-transit-to-turkey-as-eu-cries-foul.html
                Jan 14, 2015:
                Russia plans to shift all its natural gas flows crossing Ukraine to a route via Turkey, a surprise move that the European Union’s energy chief said would hurt its reputation as a supplier.

                Are telling me Bloomberg copy and pasted this article from ZH?

                • Given european warmongering we see in the media, the Russians are responding rather mildly. I realize these opinions are formed based on our background and information flows. But for what it’s worth what I see is USA and EU aggressive behavior, and this was quite evident since the Clinton administration began to betray informal handshake agreements the U S had set with Russia.

                  Thus a Russian response to outside attacks is to be expected.

                • AlexS says:

                  Russia plans to build a new pipeline to Turkey and divert its gas flows to Europe from the pipelines crossing Ukraine to this new pipeline.
                  So this are plans for a distant future. Current supplies to Europe were not cut.

                  • I live in Europe, and I think russian pipelines to China are a much more worrying idea. I studied this topic when I worked in Russia, and they are definitely competitive.

                  • AlexS says:

                    Europe is trying to diversify its sources of energy supply. Russia is trying to diversify the customer base for its energy supplies, as well as transportation routes.

                  • Yes, i read European countries are buying ground up trees and coal from the U.S.

                • nNgass says:

                  TechGuy you are talking about events that are many years into the future. The ZH article said that last week Gasprom actually cut the gas flow to Europe by 60%. How can this be true since there would have been an outcry all over Europe? But there was none and the major newspapers did not even report on the ZH article.

                  • Gas sales arent impacted at this time. I believe they are reassigning reserves to the chinese market. In these large scale contracts the seller commits to deliver a reserve volume, and the buyer commits to a take-or-pay quarterly rate, with flow rate and price adjustment formulas. I believe (but I’m not sure), the Russians are shifting reserve commitments to China and withdrawing future commitments to the EU. This is a reasonable position given EU hostility. I see the EU playing a really stupid game to cage Russia. This isn’t the right site to discuss these politics, but let’s just say I see a pretty aggressive move by usa neocons to restart the same engine they used for their stupid Iraq invasion.

        • coffeeguyzz says:

          Hey, Shallow. As you may recall, I hesitate to speculate regarding the financial aspect of the shales as there are many aspects that can and do come into play. Operations have always been my forte.
          Having said that, the price obtained for the product obviously is crucial, as is the cost of production.
          Hamm has just been quoted as saying his near billion barrels of oil will stay in the ground rather than be sold for 30 bucks per.
          The high volume early production from new wells will be poorly realized if marketed at these low prices.
          The E&P guys will probably do what they have just done … hunker down turtle-like till the storm passes. Despite extensive analysis, there should be NO doubt that hydrocarbon production will resume in the shales when it is deemed profitable. If the company’s name is no longer ‘Goodrich’ or ‘Sandridge’ but rather EOG or Shallow sand Inc., so be it. This so-called “Good Sweating” (pressuring new, upstart oil producers) dates back as far as J.D. Rockefeller.
          One tangential, little recognized aspect of this squeeze is the efficiencies that will be/ are being implemented. As ol’ Nietzsche said regarding adversity, “That which doesn’t destroy me only makes me stronger”.
          Mid-summer should offer more clarity price-wise, ss. When you and I can head today to the supermarket, look at a gallon of cheap, bottled water selling for 99¢, throw 42 of ’em in our cart, head out the door and realize we just paid more the a barrel of Bak crude, something’ ain’t right.
          Hang in there, ss.
          (Quick aside … my admiration of the accomplishments, the out n out ballsiness of a lot of these shale guys in NO way minimizes my awareness of, and empathy for those who are especially adversely impacted by this stuff … hard working guys in conventional fields in south Texas, guys working on offshore rigs, guys such as yourself scratching out a living that have been severely affected. Disruptive processes disrupt, and this shale stuff is one mighty huge disruptor.)

          • Anonymous says:

            The 1000 feet is always confusing when quoted, but it comes from a CLR investor briefing and it is a slide that has appeared in multiple quarters.

            Now it’s always possible the 1000 (1200 as I recall) was the sum of 600 on both sides because I think I have quoted that misremembered a couple of times, but regardless, there were 1000 foot experiments performed — and the phrasing is not “communication” — it is “cannibalizing” — oil from adjacent wells.

            As for vertical to TF, the distances should tap downwards as well as horizontal and note that wells quoted as targetting TF depths specifically have underperformed the more shallow wells. If your portfolio is leaning on TF output to save the day, your odds aren’t good.

            • coffeeguyzz says:

              Hey, Anonymous, thanks for the input, but I’m not sure I completely follow. There have been several slides and graphic presentations from Continental and others showing the placement of multi-well laterals from the same pad. Can’t check this moment, but I think the Rollefstad pad had 600′ distance between laterals in at least 2 or 3 benches. (I do recall that the pad’s cumulative 24 hr IP was over 24k boe).
              The term ‘communication’ seems to be the most commonly used description when there is any observed interaction between wells, or even between individual stages in one well being frac’d, including proppant exchange and pressure interference.
              While I certainly do not wish to sound like some authoritative source in these matters (I’m not), the cannabilization is centered as much on the pressure drawdown/interference as much as the actual oil transfer.
              As far as the TF not being as bountiful as the Bak’s middle bench, some of us ‘glass is half full’ guys may simply view the MB as being especially productive. 😉

          • Old farmer mac says:

            Yogi sez predictin ‘ is hard. Truer words were never said.

            But some things can be predicted with great certainty in general terms and two such things are the eventual depletion of all current conventional oil production -within a few decades at most -and continued improvement in the efficiency with which we use oil.

            Somebody up above says ”its very unlikely there will be any significant number of new wells be drilled in Bakken in the future. Texas is also iffy on further new LTO drilling.”

            This may prove to be true under certain scenarios such as the world economy crashing so hard that nobody would be able to buy expensive oil.

            But there will be no more CHEAP oil. A few producers may still have some that can be cheaply gotten out of the ground but they won’t have to sell it cheap.

            My guess is that the economy world wide will remain healthy enough to continue to consume all the oil that can be produced at less than astronomical costs for the next ten or twenty years.The current glut won’t last.

            There will be plenty of people who CAN afford gasoline and diesel fuel made from one fifty or two hundred buck crude because they are going to be using less of it in generating a dollar of income and also because they are going to be using less than half as much when just burning it in the family grocery getter.

            There is no doubt in my mind that barring the economy going to hell in a hand basket within the next few years there will be new hundred mpg ice powered cars on the road in countries that don’t outlaw them by means of well intended but foolish safety regulations.

            A death trap car is still safer than the safest scooter and I have seen no indication that scooters are going to be outlawed.

            Such a car could be marketed today. All it would take is building it very low and narrow single seat or two seat fore and aft with mostly lightweight materials and a very small engine no frills and a forty mph top speed- the same speed some but not all fifty cc scooters can attain – scooters which are street legal just about every where.

            Nobody would buy such a new car today but later on …. lots of people who are more or less compelled to drive will be glad to buy one rather than walk away from the mcmansion. If their enclosed go cart is a hybrid it may get the equivalent of two hundred mpg depending on the way the mileage is computed. A plug in that is regularly plugged in can sometimes be driven for weeks at a time using no gasoline at all if the driver sticks close to home.

            Even very poor people will be able to afford a little bit of expensive oil as their lives improve a little at a time until the baked in crash eventually arrives. Tens of millions of people still farming by hand will be able to buy a little bit – a few gallons each even at a pretty high price to run a few cooperatively owned pieces of equipment- and hundreds of millions more will be able to buy a gallon or two a week to feed a motor scooter that enables them to get to work.

            Personally I have come to believe that so long as oil production does not decline TOO fast shark fin fashion that the economy in a country such as the US can adapt thru substitution and improved efficiency – adapt at least well enough to prevent a catastrophic near to mid term crash at least.

            Coal to liquids will probably come on fast enough – in a slow decline scenario – to put an effective cap on oil prices at less than two hundred bucks current day money.

            Of course what COULD happen and what will happen are two almost entirely different propositions.

            Overshoot is going to get most of us but maybe not all of us.

            If I were a parent in Venezuela knowing what I know now I would figure out a way to make sure my kids learn ENGLISH.Quietly.

  5. JJHMAN says:

    I did a very crude calculation of the cash return of a well that started out at 500 bbl/day and depleted at 5%/month in a $50/bbl environment. It looks to me like the well would return about $7.25 million in the first year. If I guess correctly that is order-of-magnitude what a well completion costs. So from a forward looking standpoint that would be a very risky bet for an investor, thereby reducing the amount of money available for future wells.

    However from a cash flow basis there would be plenty of incentive to keep pumping from existing wells.
    Has anyone done a more detailed analysis of how this combination of low price and decline is likely to affect the future output?

    • Rune Likvern says:

      JJHMAN,
      Is the $50/bbl WTI or net back for the well owner/company?

    • shallow sand says:

      JJHMAN. I don’t follow how you get that high of a $ return in year one.

      $7,250,000/$50 = 145,000 net barrels.

      145,000/.80 Net revenue interest = 181,250 gross barrels.

      181,250/365 = 496.58 gross barrels of oil per day average for the year.

      Also, there would possibly be gas sales if not flared.

      Plains posted price for Williston Light Sweet is $32.44, so likely best price operators receiving today is $36-38 per bbl.

      Need to deduct severance and extraction taxes, operating expenses and general and administrative taxes.

      A well producing 181,250 barrels of oil in year one appears to be a little over two times the average, which seems to be about 85,000 barrels in year one.

      I think for a well that produces 85,000 gross barrels of oil in years one, a range of $1,400,000-$1,800,000 EBITDA is realistic assuming a 20% royalty burden and $38 oil price. I think part of extraction tax goes away in February possibly due to a price trigger being hit, so that would help.

      The current oil price in the Bakken, or for that matter, anywhere, is challenging.

    • mbnewtrain says:

      Oil is usually sold as a “delivered” product. This means producers get a price that is market, less transportation. In the Bakken almost 75% of the oil, and all increased production for the last two years goes by rail at a cost of $10 to $18 per barrel.
      So, net to Bakken producers is usually around $31 to $39 per barrel, nowhere near current $49 WTI price.

  6. Frugal says:

    However from a cash flow basis there would be plenty of incentive to keep pumping from existing wells.

    I think this applies almost to all oil wells, tight oil or not. Once the sunk costs have been spent getting a well flowing, why would anybody give up the cash flow unless it was insufficient to service debt. The only exception I can think of is deep water where operating costs are astronomical.

    • Why would a deep water well be an exception?

      • Why would a deep water well be an exception?

        The answer: operating costs are astronomical.

        • Sure, but are operating costs for the typical deep water field higher than $35 per barrel?

          • I don’t think anyone is talking about the “typical” field, or more correctly the typical production platform. But they are very expensive to operate and the decline rate of deep water wells is very steep. So sooner or later every platform reaches the point where it is no longer economical to operate even though a considerable amount oil is still being produced.

            After Katrina there was about 35,000 bpd of production that was never restarted after being shutdown for the Hurricane. Of course that was the combined production from several platforms. It would have cost more to repair them and then operate the platforms than the oil would be worth. Their production was already in steep decline when they were shut down for the hurricane.

            • Yes. It’s just that in not convinced that deep water is an exception. All operating wells will continue to produce as long as the oil price and production justify it.

              Once a well goes down and needs to be repaired the ball game changes. For example, if a deep water well sands up the repair may not be scheduled until 2017. If a high water cut well in Colombia loses the esp it may not be repaired.

            • Watcher says:

              Don’t know it to be true, but I’ll offer this up. It’s pretty common lots of places.

              Specifically, “code” and grandfathering. Things go down and need repair. It’s not legal to repair the failure to old “code” requirements. It must be “brought up to code”, and if the equipment was long term grandfathered (permitted to operate out of modern code reqmts) it can be a LOT of upgrades required.

              • That doesn’t usually apply to wells (not that I know of). What we found in many cases when a pump went down was that well equipment could be pulled, the pump refurbished, the cable cleaned, and we could get a better cash flow recycling the equipment. This was more applicable when oil prices went down or if the government started increasing taxes. In some large fields we estimate well costs assuming we recycle old equipment.

    • shallow sand says:

      On a per barrel basis the operating costs in deep water better not be astronomical, as the finding and developmental cost are astronomical.

      • All things are relative. Operating cost are not astronomical when compared to developmental cost but they are astronomical when compared to the cost of operating a land based well.

        • Doug Leighton says:

          Oilfields Estimated Production
          Costs ($ 2008)

          Mideast/N.Africa oilfields 6 – 28
          Other conventional oilfields 6 – 39
          CO2 enhanced oil recovery 30 – 80
          Deep/ultra-deep-water oilfields 32 – 65
          Enhanced oil recovery 32 – 82
          Arctic oilfields 32 – 100
          Heavy oil/bitumen 32 – 68
          Oil shales 52 – 113
          Gas to liquids 38 – 113
          Coal to liquids 60 – 113

          Source: International Energy Agency World Energy Outlook 2008

          • Doug Leighton says:

            My niece said she presumes deep/ultra-deep-water oilfields operating to be double land based costs (as a general rule) and to be $30/bbl without any other information.

          • Wow, then the deep water OPEX could be at $40 per barrel easy.

            Thanks for the table. However in Latin America the Direct Field Operating cost can be as low as $5 per barrel. On the other hand some range as high as $70 per barrel (due to high water cut and remote location).

          • clueless says:

            Remember, it is not over until the fat lady sings.
            At current prices, I think that she has started to sing. Keep your gas tanks full because it will not take the market all that long to figure it out.

          • BW Hill says:

            Doug Leighton says: Oilfields Estimated Production Costs ($ 2008)

            That is 2008 data. Since then production costs have increased by about 35%. At $50.00 oil a lot of those fields have already been priced out of the market. By the time prices have recovered to the $60 range (late 2016) a lot of those fields will be gone. Discussing shale is like taking a history lesson; it is about something that was, and will never be again.

            • shallow sand says:

              The cost of finding the oil is mixed up quite often with the cost of producing the oil. I am not an industry professional so please correct anything in error.

              Since the Bakken is usually the subject, from what I have read, in general terms:

              A. Acreage initially cost in the low hundreds of dollars per acre. Later, this cost went to $20,000 per acre or more. Most drilling units appear to be two sections, or 1,280 acres. I have seen units that have one or two wells, up to some presentations that show plans for up to 30 or more wells in a 1,280 acre drilling unit.

              B. Drilling and completing a Bakken well, with a 10,000′ lateral appears to cost anywhere from $6 to $12 million dollars.

              C. Lifting costs, being the costs to produce the oil, appear to range from $2-$20 per barrel, with most falling in the $5-$10 per barrel range. These costs do not include general and administrative expenses, which appear to range from $1-$5 per barrel, nor severance taxes, which are 11.5% of oil sold, but may be less due to certain exemptions/WTI average prices. Finally, this generally does not include maintenance CAPEX, such as down hole pump repair/replacement, etc.

              Therefore, it appears to me that the costs drilling new wells in the Bakken are generally more than what can produce a suitable return (or any return) on the investment at the present wellhead price of under $40 per bbl.

              On the other hand, for wells in production, the price is still high enough to produce net income on almost all in the Bakken.

              These terms are mixed together often in media reports, as are many reports which mix up all of the above costs with the price of oil exporters need to balance their budgets.

              • coffeeguyzz says:

                Nailed it pretty much 100%, ss. CBR (Crude By Rail) adds bout $8/$15/bbl (Tesoro has a chart somewhere depending on destination). More is headin’ out Cali way as Alaska is goin’ dry.

                • Synapsid says:

                  coffeeg,

                  Washington State has been receiving Bakken crude for, I guess, a couple of years now. I haven’t looked at a map but I expect it moves by train to the Columbia, barge down the river and then train up through the Puget Lowland.

                • Synapsid says:

                  coffeeg,

                  Looked at a map; it’s rail all the way. It comes into the state through Spokane.

                • robert wilson says:

                  Is it likely that there will be attempts to explore and develop ANWR before Alaska goes completely dry? Will economic oil be found? Was KIC-1 a dry hole?

                  • coffeeguyzz says:

                    Robert w, I don’t follow Alaska closely, but I think it’s widely recognized that there is still a Kardashian-size asston of oil still up there. Guess politics and economics will largely guide future operations.

                  • Doug Leighton says:

                    Hi Robert,

                    I follow Alaska closely having worked there as a geophysicist/geologist and I have friends still active in Alaskan. The thing to remember is Prudhoe Bay was a supergiant (now entering old age): All the satellite fields are trivial by comparison. So the North Slope is slowly approaching death. ANWR may extend life but, in any case, it would be intravenous feeding: No significant change in the diagnosis.

                • shallow sand says:

                  Does anyone have information on what type of down hole chemical treatment is used on these wells? How corrosive is the produced water?

                  Also, would be interesting to see OPEX for flowing wells v those on pump.

                  What is the power source for those 640,000 lb. Pump jacks? Do they run on produced gas? Electricity?

                  I read somewhere to pull a well in Bakken for a pump change is around $80,000.

                  Also wonder if over time as the wells produce lower volume if they will have to be shut down in the winter in the Bakken.

                  To me it would be interesting to go out there and take a tour, when it warms up, of course. I wonder if anyone offer’s informative tours out there?

                  • shallow sand says:

                    I googled it and yes, there are tours of the Bakken offered. Now I have to convince my wife of our summer vacation destination! Ha!

        • shallow sand says:

          I agree with you, that is why they must make spectacular finds in deep water. In the tens or hundreds of thousands of barrels per day. I think BP blowout in Gulf of Mexico released about 3 million barrels of oil.

          • Tens of thousands of barrels per day is reasonable. Hundreds of thousands of barrels per day from a field in the Gulf of Mexico is highly unlikely. There’s a practical limit to the size of the facility. And the wells have to produce at extremely high rates. If fully optimized they tend to be designed for peaks around 100 kbd tops.

            I tend to think they overshoot the initial rates, which leads to very fast declines. It’s not the smart way to do it.

      • Exactly. An outfit I worked for had wells drilled into deep and high pressure sands in Venezuela. The reservoirs were very touchy and I can’t visualize developing and producing them profitably in 6000 ft water depth at less than $100 per barrel. The amount of oil we found could be quite large, but porosity tended to be poor in the deeper zones.

        • mbnewtrain says:

          What about viscosity and gravity of the oil? Venezuela is importing high API oil to mix with their thicker low API stuff and this adds a cost. Venezuela’s Orinoco basin is largely a very thick oil not much different than tar sands oil , but at a depth of 5000 ft plus. Can’t see how much of this would ever be profitable, but then the Chinese may see a way to get it.

        • mbnewtrain, there are several medium to light oil trends to the North of the giant extra heavy oil deposit in the Orinoco Heavy Oil belt.

          The main area is called the Furrial trend, which is found below a very thick shale and can have commercial production down to around 18 thousand feet. These oils are found with significant amounts of gas and reservoir pressures can exceed 10 thousand psi. They also contain small amounts of asphaltines.

          The reason why venezuela is importing light crude is the dwindling production from the medium and light crude fields. PDVSA just lacks the technical capacity to manage the fields, and the deep trend has been producing about 25 to 35 years. This causes production decline caused by their poor practices. Meanwhile they try to sustain production by drilling the 8 degree API oil. And this requires diluent to make the ~18 degree API export blend.

  7. Dennis Coyne says:

    Hi Rune,

    Great work as always, I always learn a lot from your posts and appreciate you sharing your knowledge.

    • Ovi says:

      Using the decline rate data for an average Bakken well provided by D Hughes, an Arps hyper was fitted. The theoretical production ratios associated with the time spans used by R. Likvern in this post were then estimated. These were then compared with the linear correlations for the Bakken production areas shown.

      The results are shown below. The correlation is very good, with the largest discrepancy being the 3 mth vs 24 mth. The 12 month and 6 month vs 24 month comparisons are almost perfect.

      It’s a credit to D Hughes’ and R Likvern’s work that the comparisons correlate so well.

    • Rune Likvern says:

      Hi Dennis and thanks.

      I think everyone learns from each other through a process that enhances the understandings.

    • The flows are pure physics. Nice that we can demystify this whole process and show the professional reservoir engineers that they really don’t have the keys to the kingdom on how all this plays out.

      • Dennis Coyne says:

        Hi Paul,

        I have learned a great deal from the work that both Rune Likvern and you have done.

        I still have much to learn, and find the information provided by Fernando Leanme, Mike, ManBearPig, Doug Leighton, Shallowsands, Ron Patterson, Jean Laherrerer, and others very helpful in improving my understanding.

        • Dennis Coyne says:

          Darn. Misspelled Jean Laherrere, my apologies.

          • shallow sand says:

            Dennis, I also appreciate all of those who post such detailed and useful information, and definitely include you in that group.

            I wish we had more information on the economics in conjunction with the production information that is provided concerning the LTO plays. I take the production information and then use cost figures from public company reports, but I am lacking in ability in this area.

            It seems we read varying accounts of productivity in the Bakken, and you and others take the data and set the record straight.

            We also read varying accounts of the economics. I suppose hard numbers are tougher to come by in that area. I think it is interesting how the financial numbers keep changing. I am convinced drilling and completing wells now is not only unprofitable, it is not very smart, given the large rate up front. There are so many factors to consider, however.

            Keep up the good work.

  8. Joe Clarkson says:

    Rune and others have done a great deal of good work analyzing well productivity in the Bakken. I hate to suggest more work, but I think it is necessary.

    Over the course of LTO development in the Bakken the structure of wells has changed somewhat. Earlier wells tended to have shorter laterals. Some wells that have laterals under surface water have especially long laterals. I think the to get the best picture of productivity, all data should be normalized to a per foot of lateral basis, rather than to an individual well basis. Of course very early vertical wells should be analyzed (if at all) on a per foot of oil stratum contact basis. Length of well lateral also bears highly on the cost of drilling and completion, so cost of production will depend on lateral length also. Surely your databases already contain the lateral length data. It should be not too difficult to look at changes in production on the per foot basis I suggest.

    The volumetric effect of the fracking pressures used by Bakken producers are likely to be proprietary and not publicly available, otherwise I would suggest normalizing on a volumetric basis. After all, the ultimate amount of the Bakken resource is defined by the overall volume of the oil bearing strata times the oil removed by each bit of volume contacted by wells. How much of that volume is developed by each well would give the clearest picture, but production per foot of well lateral would be a close second.

    • Rune Likvern says:

      What you point out is correct. I for one would like to dig deeper into the data for length of laterals, number of fracking stages, costs etc. to get an even more detailed understanding of other metrics for productivity.
      If possible find a metric for productivity on a volumetric basis, per foot (or 1,000 foot) of lateral.

      This could give away more detailed information about oil saturation sorted by area and formation which to me is an important metric to trend. A good indicator here is developments to the water cut.
      From the data used productivity changes may be tracked, and it would be very helpful if these also were compared to changes in well design.

      • coffeeguyzz says:

        Mr. Likvern, the info you mentioned is available via the North Dakota DMR with either a basic subscription ($50/yr) or premium subscription ($250/yr).
        A possible cautionary note to you folks viewing the water cuts to get a ‘glimpse’ of the status of these horizontal wells … The Dec. 2014 issue of American Oil & Gas Reporter (aogr.com) contains an extremely informative – albeit ‘wonky’ – article describing the results of a comprehensive testing/evaluation of several variables in the fracturing of Bakken wells. This is in an attempt to figger out just what the heck is going’ on down there.
        As per water intrusion, they (WPX) discovered the vertical fracs extended upwards 300′ to 600′. The targeted payzone, meanwhile, was 30′ and 50′ thick. By manipulating induced pressure and flow rates, the vertical fracs will more probably/effectively stay in zone and thus greatly reduce the amount of unwanted produced water.
        A significant follow on to minimally vertical fracs is the enabling of ‘downspacing’ in a vertical as well as the horizontal plane.
        Thicker formations such as the Niobrara, Marcellus, and formations in the Permian will all employ this approach. The so-called ‘high-low’ placement of wellbores is already underway in the Eagle Ford utilizing this approach.

        • mbnewtrain says:

          I would like to know how they can effect fracture length in the vertical plane different from the horizontal plane, except that tensile strength of the strata above may be different than the oil bearing shale below (cracks will tend to go up to areas of lessor pressure). Fractures will go farther in solids with lower elasticity and lower tensile strength solids than those with higher values. Does the oil bearing shale have that much less elasticity and less strength than the surrounding rock or non oil bearing shale?

          • coffeeguyzz says:

            mbnewtrain, Beats me how these guys do it. If you get to check out that aogr article and give us your ‘take’ on it, I would be much obliged. As far as I can tell, (I’ve re-read the article several times now), the down hole pressure is monitored along with micro seismic readings, and when a pressure/distance of fluid and or proppant is noted, frac volume and pressure is altered /changed to halt the too-far vertical fissure from continuing.
            This is a half-ass layman’s description of how it seems to be done. Whatever the particulars, they ARE significantly effecting vertical as well as horizontal fracs.

          • The “oil bearing shale” isn’t really shale. The trick is to find “shales” with a high carbonate and silt content. The less shaly the more rigid, and this allows the rocks to fracture and for the fracture to stay “open”.

            The easiest way to eyeball a candidate rock is to look at its gamma ray log (this measures the rocks natural radioactivity). I will look up a bakken log I can link and you will get a sense for how the rock properties change.

            • I guess these curves are too complicated. Focus on the curve on the left. A shift to the left means low radioactivity and low shale content. Notice how the Middle Bakken and Three Forks are shifted way to the left. IN THIS WELL the two zones have low shale content. I could have picked a different well, with a more radioactive (shalier) Middle Bakken and Three Forks. Also look at the curve labeled porosity. As you will see the overlying zone (above the upper Bakken shale) has really low porosity. These properties change horizontally, this means we could see a gradual shift to a shalier Bakken, the Lodgepole can have better properties, etc. I think this could help you understand why the induced fractures extend more horizontally or get sealed in the vertical direction. Or why some wells make a lot of water. And remember wells are like people, these property logs are like photographs, and they change as we look at different wells.

    • Dennis Coyne says:

      Hi Joe,

      Good idea. If you have access to the lateral length od each well in the Bakken, I would love to see it.

      I do not have access to such data, though perhaps Rune has access to more data than I have.

      The best we can do is to look at how the well productivity has changed over time, I think the lateral length and number of frack stages has increased over time, but there has not been much change in well productivity. A small increase to about 2011 and then random jumps up and down from year to year.

      • Joe Clarkson says:

        The basic subscription to North Dakota oil and gas information ($50 per year) is supposed to contain the following-

        “Basic Subscription: The GIS map server, a complete index of all wells permitted in North Dakota in a Microsoft Excel spreadsheet saved with Zip compression. The scout ticket data contains basic well information, log tops, completion data, initial production tests, cumulative production and injection volumes, drill stem test recoveries. The well files are scanned into Adobe PDF documents that include all forms, letters, geological reports, drill stem test reports, core analysis reports, and other miscellaneous information. All well files are available, except for confidential wells or confidential information.”

        One would think that lateral length information would be included with this information. Perhaps someone who has already subscribed would know.

        For $175 per year one can get the Premium Service which includes well logs, which surely would have dimensional information.

        I thought that these services were where you analysts were getting your information. Please correct me if I am wrong.

        • Joe Clarkson says:

          Just noticed that coffeeguzz posted the same information about subscriptions as in my comment in his reply to Rune.

  9. Stevek says:

    Are Saudis hoping that if price too low new wells will be really cut back, and existing wells will decline quickly ? This will lead huge loss in world oil supply. but how long will it take for price of oil to spike ?

    • TechGuy says:

      Steve K Wrote:
      “Are Saudis hoping that if price too low new wells will be really cut back, and existing wells will decline quickly ? This will lead huge loss in world oil supply. but how long will it take for price of oil to spike ?”

      FWIW: I doubt KSA is targeting US drilling. If I was a betting man, I would put my tokens on an attempt to Bankrupt Iran. Iran has been trying to tip the balance of power in the ME to its favor and had tried to take over Iraq via supporting Iraqi Shite and Iraqi Politicians. Iran is already having tough economic problems and the failing oil prices are not helping.

      That said, KSA is not dumping Oil on the market to force prices lower. Its just not cutting production. Prices are tumbling because global demand is falling as the global economy is falling back into recession again. As Ron stated a few weeks ago, KSA may just be sick of being the first to cut production in order to stabilize prices.

    • Jeffrey J. Brown says:

      As we have discussed, excluding the US and Canada, global crude + condensate (C+C) production fell from 2005 to 2013, as annual Brent crude oil prices averaged $110 for 2011 to 2013 inclusive.

      Since the global industry was only able to show an aggregate increase in production because of tight/shale plays and tar sands plays in the US and Canada, and if those plays now have severe viability issues at current oil prices, and since non-US and non-Canada production fell even as oil prices doubled from $55 in 2005 to the $110 range for 2011 to 2013, how is the industry going to be able to even maintain current global production?

      In any case, a key difference between the 1985 to 1986 price decline and the 2013 to 2014 price decline is that the Saudis boosted their net exports by almost 50% from 1985 to 1986 (from 2.9 mbpd in 1985 to 4.3 mbpd in 1986), although the 1985 net export rate was low because of voluntary production cutbacks, in response to declining oil prices. In contrast, 2014 was almost certainly the ninth year in a row that Saudi net exports were below their 2005 annual rate of 9.1 mbpd (total petroleum liquids + other liquids).

      • Jeffrey J. Brown says:

        Re: A Reuters column that has been posted previously:

        COLUMN-Breakeven and shut-in prices for oil wells: Kemp

        http://www.reuters.com/article/2015/01/13/oil-shale-prices-kemp-idUSL6N0US2GE20150113

        Output from existing fields around the world would decline around 9 percent per year in the absence of new drilling or other capital expenditure to increase recovery, according to the International Energy Agency’s World Energy Outlook 2013.

        The IEA’s average 9 percent decline rate was calculated by analysing output from more than 1,600 conventional oilfields around the globe. Shale wells, however, exhibit much faster decline rates.

        At a 9%/year gross decline rate from existing wells, in order to maintain current production, we would have to replace the productive equivalent of every currently producing oil well in the world over the next 11 years.

        Of course, existing production would be down to 37% of the current level in 11 years (at 9%/year), but if we stipulate a steady state production rate, we would be declining against the current production level, not against a declining production level.

        • Paulo says:

          Mr. Brown

          re: “we would be declining against the current production level, not against a declining production level.”

          Is this the argement for a seneca cliff decline rate when PO starts to be felt in the not too distant future?

          • Jeffrey J. Brown says:

            I was mainly pointing out that if we stipulate flat production, we have to replace the productive equivalent of every currently producing oil well in the world, from Texas to Saudi Arabia to Russia, over the next 11 years, given the IEA’s estimate of a 9%/year decline rate from existing production.

            Usually, someone points out that at a 9%/year decline rate, production would not drop by 100% in 11 years, which is true, but the question I am asking is how much new oil do we need to maintain flat production at a given decline rate from existing wells.

  10. al hall says:

    ,,,My Sir///I am a very please`d [Glory Man] to be able to read these explanation,,,about all of them oils wells===In the Mountrail county areas\\\I am also a very pleas`d,,,@ joyous -Glory Man],,,Sitting on them high @ holy =BEMA THRONA=,,,Up there in they sky\\\I am come to this place call by a name call ,Peak Oil Barrel, while last night,,,trying to research more about they oil in that Bakken Regions.//While I am get an access to this computers===At these facility they court order mind doctors…Have a mine to place me in;;;Here in DES MOINES IOWA…you see [I am old man,,,cant` walk very far],,,But I am have a =Grandson= who`s is work hard in they [Bakken Regions] of north dakota since 2012\\\And he`s is been transfer around all they rigs of the county such as Mountrail,,,Deep into they area @ region,,,where he say the oil is the best===AND HIM @ HIS CREW IS ABLE TO GET THE OIL OUT WITH A 10X MORE EFFICIENT BECAUSE HE SAY THEY HAVE SO MUCH MORE OIL IN THE MOUNTRAIL COUNTY THEN THE OTHERS,,,I am not sure what to believe out of him [My Grandson]…No more—@ anyway he`s is work for they Hess oil company on the HP 295 rigs,,,Now\\\In the williams County-=,While he`s is try to live out they days in they ‘man camp” in the city call by a name call Tioga,1 Samuel 5-6—I am a try [Man],,,My [SIR]…Try not to worry alot about him,,,In all this dangerous profession,,,But I am a unable not to place them sick @ sad feeling aside\\\Specially since he`s is tell me three month ago…That`s he is witness =IN THEY FLESH= a friend,,,on his rig===Get a finger rip right off“`On they account of the heavy @ dangerous machinery that`s is place way up there\\\When them wells are a get drilled -I HAVE SEEN PHOTOS OF THEY WORK\\\THen he`s is tell me that many of the young men are getting kill…for they reasons///of no safety @ sometimes even turn`d away,,,From even try too make the place,,,Safe\\\ON ACCOUNT OF THEY OIL COMPANYS WANT TO SAVE SOME BUCKS BY HAVE NO SAFETY\\\Plus he`s is tell story,,,of many of the men\\\Turn deep @ shameful into the drugs @ booze===so that they can keep up all the work,,,But then they is not going to wear they =SEAT BELTS,,,and they next thing they know…IT`s is come to a deadly car crash on they busy @ dangerous roads===It`s is[BAD] life…what`s has been made out of they many =SOULS= in them Bakken region\\\Judges 7;20.I am a try to tell my grandson,,,to come home here\\\Back to IOWA,,,But he`s is tell me over @ over again\\\That`s there is [no] thing to worry about grandpa,,,I am make the `big bucks` up here===AND I AM NOW A RICH @ WEALTHY MAN AT THEY AGE OF 26 BECAUSE OF THEM ECONOMIC MIRACLE IN THEY BAKKEN OIL FIELDS\\\He`s is simple not want to listen to me,,,I am say that this oil is not last forever\\\And `he`s is not going to have job,,,for 100 years\\\They way his boss say to him===Plus it`s is so dangerous,,,to risk all they live @ limb everyday…On them machinery—But he`s is just never listen to me\\\Now I can be thankful from this internets community,,,to have some of they information…About how they wells in the mountrail county./..are not longer so good///I will send my grandson this information I am read here today,,,AND WILL see what`s he is said about {it}\\\I am a appreciate man,,,To see if he`s is going to wake up to they reality,,,And return to his home @ family here in Iowa\\\2 timothy 1,1=6///I am want to said a prayer,,,to all of they fine sirs—In this place for share the good information===About they Bakken OILS”’I am appreciate this place I found on they internet,,,and I am hope to read more here\\\PLUS I HOPE I AM A WELCOME MAN HERE===WISH EVERY`BODY AN GOOD EVENING///God bless—-

    • Joe Clarkson says:

      Wow. If this is not some computer generated gibberish based on keywords in text, someone put a whole lot of effort into this comment. Or, perhaps it’s just evidence of the power of modern pharmacology.

      • Fred Magyar says:

        “If this is not some computer generated gibberish based on keywords in text”

        I’m betting that any computer that can generate text like this based only on keywords picked up here at POB can also pass the Turing Test!

        HAL? Is that you? Open the bay doors HAL! …Sorry bout that, AL, no disrespect intended and welcome to POB looking forward to reading more of your posts in the future and wishing you, your family and your grandson well!

        Cheers!

    • Rick Wentzel says:

      Feel for you, Al, rigs can really be dangerous places. I guess all you can really do is tell your grandson to stay safe and, this time of year, warm as well. Have a good Sunday! Rick.

    • Jonathan Madden says:

      Al,

      James Joyce has got nothing on you. Sure your middle name is not Ulysses?

    • Ronald Walter says:

      Living life is a dangerous business no matter where you are. I have lost count on how many times I could have lost my life, but that gets old in a hurry. Almost got swallowed by a bin of grain with about eight thousand bushels in it, it would have taken a while to fish me out. Instead, I was scared half to death, quit what I was doing, went to town and drank beer. There is no beer in heaven. That’s the way life is, you work, play, have close brushes with death. The Green Ripper has to wait another day.

      Purdy much state-of-the-art oil drilling taking place and the rig count, although it has decreased, is not falling steeply, yet. 157 are still counted as of Friday.

      https://www.dmr.nd.gov/oilgas/riglist.asp

      The numbers needed to drill aren’t going to change much regardless of the price of oil, if they can be reduced by twenty percent during a period of low prices, it may be more economical to drill while oil prices are depressed. Hence, the rig count remains at a higher level, economics prevail. A ten million dollar well might only cost eight million, if it means more oil to sell at a future higher price, the savings will come in handy later on. It has become a waiting game.

      IMO, oil companies go the extra mile to prevent damages to the environment, but accidents happen, people make mistakes, and then a tank farm catches fire south of Williston.

      The rigs being used aren’t using bailing wire and duct tape to make them go, they’re your 2014 model, led lights, even.

  11. Andy Hamilton says:

    Reality is starting to hit home>
    http://www.bloomberg.com/news/2015-01-16/drillers-idle-55-oil-rigs-pushing-six-week-drop-to-209.html

    “Prices are being forced toward levels that would force outright shut-ins in high-cost areas, mainly in Canada and the U.S.,” Societe Generale SA (GLE) analysts including Mark Keenan, its head of commodities research for Asia in Singapore, said in a research note Jan. 14.

    Meanwhile, projects are being canceled and budgets cut around the globe. Royal Dutch Shell Plc (RDSA) called off a $6.5 billion project in Qatar. Contract drillers Helmerich & Payne Inc. (HP) and Pioneer Energy Services Corp. (PES) lost U.S. rig contracts. Mexican oil service companies cut more than 10,000 people. Suncor Energy Inc. (SU) fired workers in Canada.

  12. Andy Hamilton says:

    Reality hits home (part deux):
    http://www.dallasnews.com/business/energy/20150115-texas-oil-boom-heading-for-bust-in-a-hurry.ece

    “It’s going to be devastating. For all practical purposes we lowered the barrier to entry so low that every Tom, Dick and Harry could go out and rent a rig,” said Fadel Gheit, a managing director with the investment firm Oppenheimer & Co. “The longer prices stay down, the more companies are throwing in the towel. We will see a lot more pain before we get any gain.”

    About 300,000 people work in the Texas oil and gas industry, 50 percent more than did four years ago, according to federal labor statistics. They came from all over to work in an industry where even the unskilled can earn close to six-figure salaries.

    Hiring has now come to a virtual halt as companies weigh the risks of laying off employees they invested heavily in training, said Tobias Read, CEO of the Houston recruiting firm Swift Worldwide Resources. “It’s gone from frenzy to freeze,” he said. “Next is reduction.”

    In the Eagle Ford, everyone is on edge waiting for layoffs to begin. Mike King, who runs a workers’ camp in Carrizo Springs, south of San Antonio, said Thursday that he was still above 75 percent capacity but was worried it wouldn’t stay that way for long.

    • Watcher says:

      A lot of people are making bets.

      There is an interesting mindset, born of being somewhat young. Something like: The last 3 years were normal. Not the early 2000s. Surely something will be done by someone to fix this.

      And we know what that means.

  13. Ronald Walter says:

    Lightning strike density and oil field location correlation, Mountrail County:

    http://www.searchanddiscovery.com/documents/2013/41184nelson/ndx_nelson.pdf

    Nesson anticline research:

    http://sdsearch.datapages.com/data/search.do?selectedGroups=46&fullDoc=nesson+anticline&Search.x=33&Search.y=16&Search=Search

    Mountrail County’s western edge is more or less in line with the Nesson Anticline with most if not all of the county east of the anticline. Not as much oil as there is west of the Nesson Anticline.

    http://www.searchanddiscovery.com/documents/2012/10413theloy/ndx_theloy.pdf

    “However, often older wells outperform younger wells despite technological advancements, suggesting that geological factors have a far larger impact on production than the completion design.”

    http://www.searchanddiscovery.com/documents/2012/10413theloy/ndx_theloy.pdf

  14. Old farmer mac says:

    This is way off topic but important enough that we all should take a look at it and pass the link along.
    https://www.youtube.com/watch?v=4wDrKxcvsKM&feature=em-subs_digest

    THERE IS A SIGNIFICANT POSSIBILITY THE DATA IN THIS LINK COULD MEAN SOME ADDITIONAL YEARS OF GOOD HEALTH.

    THE HEALTH AND MEDICAL ESTABLISHMENT ARE AT LEAST A DECADE BEHIND IN GETTING THE WORD OUT ON SOME CRITICALLY IMPORTANT NEW FINDINGS. THIS IS ONE OF THEM.

    THE ODDS are actually pretty high your personal physician is not up to speed on the now indisputable fact that most of his or her patients are D deficient.It ain’t just rickets folks.

    VIRTUALLY all of us who are living modern lifestyles are actually D deficient even though we are following established dietary guidelines unless we get substantial sun. And since we are generally covered up except for our faces and hands especially during the winter and don’t spend much time outside- hardly anybody in the temperate zones gets enough sun.

    • robert wilson says:

      Avoid fat soluble Vitamin D overdose. My impression locally is that some physicians are overdoing the Vitamin D craze Robert Wilson MD http://scienceblogs.com/pharyngula/2010/04/29/quack-gets-dose-of-his-own-med/

      • Jeffrey J. Brown says:

        From your link:

        In April 2010, Null sued the manufacturer of Gary Null’s Ultimate Power Meal. The complaint alleged:

        The product was produced with 1,000 times as much vitamin D as it should have*. By consuming two servings a day, Null consumed 60 million IU during the month he used the product.

        60 million IU of Vitamin D in 30 days would be equivalent to 200,000 IU per day. Most Vitamin D researchers seem to be comfortable with the current NIH recommendation of a maximum tolerable dose of about 4,500 IU, which would be 2% of what this guy accidentally ingested.

        If one consumed 50 times the recommended daily amount of water, I’m pretty sure you would be dead. So in my opinion, this article has no relevance whatsoever to Vitamin D research, and it seems to be more symptomatic of the medical establishment’s general hostility to Vitamin D research.

        *200 IU per day, with two servings

        • robert wilson says:

          I claim no current expertise. Under most circumstances vitamin supplementation was controversial when I was at Baylor Medical College during the early 50’s. There were of course serious deficiencies on occasion. Why are British sailors called Limeys? Supplementation was controversial when I was practicing during the later half of the 20th Century. It remains controversial. Unlike my wife I did save money by not purchasing expensive vitamin supplements. As a healthy 84 year old male I am now saving taxpayers money by not frequenting physicians for expensive vitamin D testing. http://www.huffingtonpost.com/a-marc-gillinov-md/personal-health_b_4449324.html

        • clueless says:

          Since we are in this topic already, I will comment. Researchers in Norway and the US (M. D. Anderson Hospital in Houston) have done studies that showed than not getting enough sunshine causes many more diseases than “sun” caused skin cancer (many skin cancers are not the result of too much sunshine, and even if they are, they are usually among the most treatable). Further, studies have shown that vitamin D supplements are not nearly as effective as the sun for getting your needed vitamin D.

          Not politically correct thinking. But, when TV came along, if you were out in the sun, you were not watching the commercials. So, a huge incentive to scare people out of the sun. My thought – If sun kills us, why did God make it? And, if we are the most highly evolved creatures, how did that happen not living underground? [Note, I am not here recommending sunburns, etc.]

          • Boomer II says:

            About 10 years ago my doctor suggested I take more vitamin D because of research about its benefits. I started doing it, and found it’s great as a mood booster, too, even though it hasn’t been pitched for that. And that makes sense. I grew up outdoors, pre-sunblock. I’ve always like bright environments. But when we were warned about too much sun, I stayed in more often or wore sunblockers.

            So for me, I probably need to either be in the sun a lot or take megadoses of vitamin D for general good mood therapy.

          • Old farmer mac says:

            Well Clueless you seem to have selected your handle using your sense of humor . I hardly ever read a comment involving health issues that shows so much insight into little recognized facts.

            I bet your mouth tended to get you in trouble in class just as my own did. See my comment below.

            Any body interested in knowing about the classic case of a new technology or an improvement on an old one being utterly steamrollered by vested interests and conventional ( non ) thinking will enjoy researching the DVORAK keyboard.

            It is so far ahead of qwerty that comparing the two is like comparing a sleek new Mercedes to a Model T.

            I was never really able to master qwerty touch typing on my own but when I discovered Dvorak I was able to learn touch typing in a month in an hour a day.I can type pretty fast now without many errors at all whereas before I could hardly type at all.

            Just about every Mac and pc desktop out there is preloaded with a Dvorak keyboard option in the control panel or system preferences and it takes only two keystrokes to switch between them if different people need the same computer.

            If anybody is using a computer that does not have it built in then it can be downloaded free.

            The only disadvantage of Dvorak is that some programs won’t work right using it so you have to switch back to qwerty sometimes.

            Switching is as easy for most people as getting out of a car with an automatic and in one with a stick shift- assuming prior competence in driving both kinds of cars. You can do it without a conscious thought after a few times.

              • Old farmer mac says:

                from the mdanderson link

                A large four-year trial involving 1,179 postmenopausal women found vitamin D plus calcium supplementation significantly reduced the all-cancer risk. However, conflicting research such as the Third National Health and Nutrition Examination Survey found no association between vitamin D and cancer mortality with the exception of colorectal cancer. It reported a 72% lower risk of colorectal cancer death for those participants in the study with higher vitamin D blood levels, as compared to those with lower blood levels.

          • wimbi says:

            My understanding is that when humans wandered into the gloom around post-glacial baltic, etc, they quickly got real pale so as to get enough of the scant sunlight, quite unlike their african homeland where there had been plenty of sun and being black had lots of advantages.

            Then, later, when those same palefaces went to places that weren’t so gloomy, they paid for it.

            Damn those peace corps people who 30 yrs ago put my pale red-headed daughter at a high altitude right smack on the equator!

            I keep warning her to keep looking at herself real close.

            • Old farmer mac says:

              Hey Wimbi,

              Given that you have pale face red head offspring we may have more in common than just a belief in possible positive change. I am not a red head myself but red heads and milky skin are very common in my family.

              Your understanding of skin color is the standard biology text book explanation and there is no reason at all to doubt it is correct although a few pc type guys and gals occasionally get a few miles out of disputing it.

        • Ronald Walter says:

          “60 million IU of Vitamin D in 30 days would be equivalent to 200,000 IU per day.”

          60,000,000/30=2,000,000

          • Jeffrey J. Brown says:

            Thanks,

            I entered the wrong number on my calculator.

            So, in round numbers this guy took in one day, what most Vitamin D researchers recommend that one should take in a whole year.

            • robert wilson says:

              Thanks for the dosage information. I had not studied this for years. I drink a pint or so of fortified fat free milk daily and have sugar free fortified cereal once or twice daily. My wife brings home canned salmon frequently which I like. Years ago she went through a temporary fish oil phase. She gives me vitamin pills when the mood strikes. These include tiny under the tongue pills to be absorbed directly into the blood stream thus avoiding transit through the liver. And of course there is lots of sunshine in Southern CA.
              –The article that I posted from the Cleveland Clinic physician mentioned kidney stones as a possible complication of high dose Vitamin D. I recall giving a report on the milk-alkali syndrome more than 50 years ago. (I don’t claim to be up-to-date). Fat soluble vitamins were mentioned as a possible contributing factor. I recall that individuals with pre existing renal or parathyroid disease were more vulnerable to complications. I understand that massive amounts of water soluble vitamins can be taken with no problem worse than expensive urine.
              –Should I send off for the $100 vitamin D test. I hate to bother my doctor when I am well.

    • Allan H says:

      Thanks OFM for the great video seminar on Vitamin D. It satisfies my criteria for actual data to be presented along with conclusions. I have personally been taking 2000 IU three times a week. Will up my dose now with this new info. I get plenty of sun in the warm weather but even though I am outside a lot in the cold weather, it’s tough to expose skin this time of year!

      My personal recommendation is super-concentrated garlic extracts and some Omega -3’s. I generally don’t take vitamins since I eat a very broad based fruit and veggie diet.

      • Old farmer mac says:

        You are more than welcome .

        I have no more expertise than any well educated layman might have plus some help from my ag background and a half finished nursing degree. Farm researchers are often busy figuring out if supplements of any kind in any quantity can be profitably fed to livestock and pro farmers generally know some basic nutritional science.I got about twelve semester hours in the subject back in the dark ages.If I had went into animal science I would have gotten three times that.

        The thing to remember is that even a layman who pays attention to the news often knows things unknown to the vast majority of scientists even in their own field as little as a few months ago.

        A lifetime spent observing the behavior of various in and out groups of people has utterly convinced me that nobody ever wants to admit he has been wrong about any important point and that professional organizations are much much more reluctant to admit errors than individuals.

        A glance at a few recent textbooks will reveal that the authors stick very closely to established guidelines- which are most assuredly the result of out of date committee work.

        I had a classic experience myself back in my undergrad days involving the theory of continental drift when the theory was first gaining widespread acceptance. Not knowing any better I presumed to lecture a professional geologist that any idiot would have known that drift is real if he had ever examined a few maps detailing the distributions of types of soils and stone and plants etc where the plates had supposedly once been joined.

        It turns out that geologists back in those days seem to have been unacquainted with probability theory.

        I needed one more math course and probability theory looked interesting so I took it. Being a backwoods undergrad who had not yet learned wisdom and respect I tended to call anybody an idiot who had not taken any particular course I had on my own transcript.At least I was NEVER afraid to think for myself. 😉

        The odds that any two coastlines ( that were formerly joined but drifted apart) would match up by accident given the many fine grained variations of the geology are literally astronomical against it being a coincidence.

        So – the choice for me was easy – accept a hard data coincidence with the odds being a trillion to one against it or just conclude those coastlines were in FACT once joined together and that if stiff necked old geologists were smart enough they would one day figure out how it happened that they moved apart. .

        Or else that they would die and get out of the way of youngsters who WOULD figure it out.

        MY mouth has kept me in trouble all my days.

        • The match isn’t always at the coast line. Quite often it’s a bit farther offshore. But you are right, the rocks do match up, and there’s no easy way for some animals and plants to make the ocean journey. Imagine a frog which can only live in fresh water making that crossing?

          • Old farmer mac says:

            Yes – erosion and uplift and the rise and fall of sea levels play a big role in camouflaging the match up. But geologists knew about these things back then.

            So did mathematicians who considered it a trivial exercise. I can’t remember now exactly where I first heard about the match up and probability theory but it very well might have been in the first five minutes of the class- the five minutes when the instructor makes sure you know what the course is about and why it might be useful and so forth.We had a big engineering school as well as a big ag college but there were only one or two sections of this class offered for over ten thousand kids.

            Probably less than one kid in five hundred ever took it. But it might be that it was the single most useful course I ever took .

            It is very hard to feed a line of bullshit to a person who knows some science and history as well as probability theory.

            This one course has enabled me to understand that the odds of solving all the problems associated with fusion power for instance within the next few years are just about astronomically against.

            It is not only that there are so many of them but also that some of them cannot even be addressed until others are solved and that some problems that are THOUGHT to be solved will require new solutions when other unanticipated problems render the proposed solution unworkable.

            Then new materials with exotic properties will not only have to be INVENTED in some cases.Ways to manufacture them will have to be perfected. BIG difference between a sample and a truck load.Then ways to MANUFACTURE these materials into the components will have to be developed. Then a prototype reactor will have to be built. At any step anywhere along the way the engineers may have to backtrack for months or years or find themselves stymied by just one intractable problem.

            Then after a prototype reactor finally runs – successfully- for a while- a full sized working reactor can be at last SERIOUSLY PROPOSED. Just deciding where it will be built and who will pay for it and who will build it and whether a permit for construction will be issued is apt to take anywhere from a year or two under wartime management to ten or fifteen years under more normal circumstances.

            When you start multiplying all the various probabilities together with a time element attached to the estimate of each one the product approaches zero pretty quick.

            It is for all intents and purposes a mathematical certainty that none of us in this forum today will ever turn on a light in his house lit up by a fusion power plant.

            Beyond the straight up technical problems there are the political problems involved in maintaining funding for the next forty or fifty years in the face of some tough times coming.

            Our resident holier than thou mathematician might comment on this but he has said he doesn’t read my comments – too long to wordy not to his taste.

            There is an old saying in the sciences to the effect that teachers in schools speak only to students, that instructors in the sciences speak only to other professionals in their own field, that engineers speak only TO physicists, that physicists speak only TO mathematicians. All along the way everybody speaks DOWN to everybody he can.

            The punch line is that mathematicians ordinarily speak ONLY to GOD and will occasionally – if it cannot be avoided – speak to physicists.Everybody else is presumed to be too stupid to bother.

            But we don’t need a pro math guy to understand balancing a check book – or a simple probability problem.

            MR FUSION barring a SERIES of near miracle breakthroughs is not going to ride to our rescue within the next forty or fifty years.

    • Nick G says:

      Good thought.

      I take 5,000 units daily, and it’s just enough to keep me in the ideal range.

      From the research I’ve seen, most people are badly deficient. One study (good quality, prospective randomized & controlled) found that the most common forms of cancer were reduced by 70%.

      • robert wilson says:

        Nick G: The commonest cancers are Prostate, Lung, Breast and Colon. Do you really believe that Vitamin D will reduce the incidence of these 70%?

        • Old farmer mac says:

          If D monitoring and supplementation were to reduce the incidence of these cancers by just seven percent it would be great news.

          • Old farmer mac says:

            Correlation is does not necessarily imply causation but it nevertheless should be investigated.

            This study says the risk of breast cancer was found correlate by a factor of three with low D levels.

            There are certainly plenty of studies out there that indicate that D levels are too low in most people and that satisfactory high levels are associated with better health outcomes.

            http://www.vitamindwiki.com/3X+increased+chance+of+Breast+Cancer+if+recent+vitamin+D+levels+were+low+–+Jan+2013

            • robert wilson says:

              This Skeptical Medicine site discusses previous Vitamin C and E data, among other things. I once met Linus Pauling at a Veitnam antiwar rally, held at the Unitarian Church in Santa Barbara. He was charming. My wife believed his Vitamin C claims. Later, as an experiment, I took her high dose C pills daily for several months, then caught a cold. Her waterproof hypothesis was that I must have taken the wrong dosage. https://sites.google.com/site/skepticalmedicine/medical-practices-unsupported-by-science

              • islandboy says:

                Hi Robert, I don’t know if you are the same regular who used to post at TOD that is a MD. but, I am sorry that IMO most trained medical professionals have been brainwashed into believing that antibiotics and other inovations from the pharmacuetical industry have created the moderm medical miracle and that there coould not possibly be any chance that nutrition/supplements could succesfully treat or cure many conditions that ail us even in the presence of modern advanced medicine.

                My personal expeerience involves my parents particularly my late father who some years ago was diagnosed with a condition call pernicious anemia after a car accident in which he claimed was caused because he had no sensation in his legs. If you are a MD you will know that this condition is a vitamin B12 deficiency caused by an inability of the digestive system to absorb adequate amounts of the vitamin from food. The symptoms are anemia like since the deficiency causes poor red blood cell formation and impaired nervous system function (hence the loss of sensation in my dad’s legs). The treatment involved regular injections of injectable vitamin B12 and after a while we began to be able to tell when anther shot was due as he would get forgetfull and start falling asleep at the dining table. It is primarily his experience that has led me to wonder how many other conditions might actually be caused by lack of certain critical nutrients.

                Another more recent experience is a close aquaintance who suffers from schizophrenia. Since I am into “orthomolecular medicine” I looked up some ideas of a Canadian psychiatrist Abram Hoffer who developed a regime of treating his patients primarily with substantial doses Niacin (B3) and vitamin C. I urged my friend to try it instead of the antipsychotic risperidone that had been prescribed, which made them feel constantlly tired and sleepy as if thet had just finshed a double shift of hard, mentally and physically taxing work. They seemed to be doing ok untill they fell into an extremely stressfull situation which involved a relocation and loss of income. Their nutritionn suffered and they ended up in hospital after having a relapse. If this condition could be treated according to Dr. Hoffers guidelines it would be very sad that many people with schizophrenia have been rendered praticlaly useless by heavy use of antipsychotics and sedatives.

                If I had my way, alll aspiring and practising physicians would have as required reading:
                “The Healing Factor: Vitamin C Against Disease” by Irwin Stone
                The writings of Fredrick Klenner M.D.
                The writings of Dr. Robert F. Cathcart III M.D.
                “Ascorbate: The Science of Vitamin C” by Hilary Roberts and Steve Hickey
                “The Vitamin D Solution” by Dr. Michael Holick

                These guys actually have scientific suggestions as to why they think their ideas have merit and in the case of Hollik, he has academic research to back him up.

                Since the vast majority of Physicians are not aware of the ideas in the above books/writings or are in fact hostile to them, I have largely lost faith in modern medicine. I will take my megadoses of C and D and supplement with whatever else I might find useful. If it kills me so be it but, right now I feel absolutely fine!

                Incedentally I think this is not OT since, I don’t see how the Medical Industrial Complex (Health Care, Insurance, Pharmaceuticals) is going to fare any better than anything else when TSHTF post peak so, alternative/nutritional/herbal medicine may have to step up to the plate!

                Alan from the islands

                • Boomer II says:

                  I’m sort of in the middle when it comes to supplements versus organized medicine.

                  I don’t necessarily believe one is better than the other, but I’ll do supplements whenever I read that something might be useful. I tend to fall out of any supplement routine because I’m not really into taking pills.

                  The one item I do continue to take daily, because I have noticed a difference in how I feel, is Vitamin D. Having read that 5000 units is safe, I usually take at least that much each day. Sometimes more.

                  I also find that chewable vitamin C and Emergen-C packets kill sore throat pain and help when I am feeling run down or on the verge of a cold. I’ve also found that dried cranberry pills seem to head off urinary tract infections.

                  So if a supplement won’t harm me and I notice results, I keep doing them.

                  I also sometimes get into an aspirin a day routine. But usually I fall out of the habit.

                  • robert wilson says:

                    Boomer II – Medicine may not be so well organized. The power of the AMA evaporated decades ago. Today relatively few physicians are active in that organization. The specialists and the generalists battle each other for turf. They battle the hospitals administrators, the insurance companies, the pharmaceutical industry and especially the government bureaucracies. This is discussed with more detail than one might desire in Steven Brill’s new book “America’s Bitter Pill.
                    Nor do I believe that there is medicine vs supplements. Supplements are in common use. For example pediatricians give supplements to infants.
                    –I have tasted Gummy Bear vitamins. Better than candy.
                    –I have never had a urinary tract infection. Thus have not experimented with dried cranberry pills or urinary antibiotics.
                    –Did you mean an aspirin a day or baby (lo-dose) aspirin? I am not currently taking daily aspirin. The hemorrhage vs clot trade-off is interesting

                  • Boomer II says:

                    Medicine may not be so well organized.

                    I don’t see what that has to do with my comment.

                    I don’t discount all medical treatments. Some people who take lots of supplements do.

                    I’m just saying that I evaluate both traditional medicine and nutrition based on what I read. If the nutritional concepts make sense to me and won’t do me any harm, I’ll try them out. Generally I won’t keep them up unless I notice an effect.

                    If I have medical problem that I feel can be helped by seeing a doctor, I will go and I will take what is prescribed.

                  • robert wilson says:

                    Boomer – I was responding to a post that began “I’m sort of in the middle when it comes to supplements versus organized medicine.”

                  • Boomer II says:

                    What I was saying was that I’m open to what both have to offer. I read a lot of the health food and supplement articles, which tend to discount traditional medicine. I also read a lot of the medical studies that make it to general news publications.

                    In general I believe lifestyle choices are a better first solution than medication, but for some illnesses and conditions, medical intervention is necessary. However, I also see that in some cases, newer medical treatments aren’t better than old ones, and seem to have been developed to further some industry’s bottom line. Problems that aren’t really problems sometimes get labeled as medical problems in order to sell something.

                    I’m the sort of person who will continue to wear eyeglasses rather than to contemplate Lazik surgery. I will change my diet before agreeing to high blood pressure drugs. And so on. I am conservative in my own health care and will likely opt for the least invasive treatment that appears to work. On the other hand, I wouldn’t refuse treatment for a serious condition on the assumption that “natural” is always better.

                  • robert wilson says:

                    Boomer said: “In general I believe lifestyle choices are a better first solution than medication, but for some illnesses and conditions, medical intervention is necessary.”

                    I agree. I am a medical care minimalist. I drink water, eat fair amounts of fruits and vegetables, try to avoid sugar and excessive alcohol, refuse prostate biopsies and most other interventions, eat Fiber One cereal with skim milk, try with moderate success to avoid obesity and belong to two gyms which I use in moderation. I quit smoking decades ago. I have had cataract surgery and a knee replacement in recent years, both successful. I do take Flomax for BPH and sotalol to prevent a recurrence of A-Fib. I do not intend to have heroic end of life medications. The odds are that I will live past 90.

                  • Boomer II says:

                    I think one of the problems when considering options is that the costs of testing certain products and treatments are usually so high that if there is no financial incentive, it doesn’t get done.

                    Therefore, new drugs may be tested far more rigorously than non-patentable products. I take a lot of claims for nutritional supplements with a big grain of salt, but as I said earlier, I’ve found that big daily doses of Vitamin D, and the use of Vitamin C and dried cranberries when I feel like I am coming down with a sore throat or a urinary infection, respectively, seem to work for me, so I keep doing those. Do I think I am holding off cancer with any of that? Not really, but they seem to work for what I take them for.

                    As for aspirin and ibuprofen, I usually take those for pain. Periodically I read about how one or the other seems to have some long-term health benefits, so I start taking one a day again, but usually fizzle out, until another article comes out touting their benefits.

                • robert wilson says:

                  Alan: Yes, I had more than 1,000 posts on TOD regarding energy and other resources as well as any possible relevance to future medical care. Have published elsewhere on these matters in the past. To me your “…brainwashed…” and “…could not possibly be any chance…”statements are preposterous. I learned about the diagnosis and Rx of PA and other deficiency diseases in medical school. My family doctor gave my mother frequent IV vitamin injections during the 70’s. She described a burning high. I don’t recall ever personally encountering an obstetrician or plastic surgeon who did not use antibiotics. I have occasionally taken vitamins. The best local cardiologist stressed antioxidants. I have occasionally met physicians who expressed uncertainty about whether or not vitamin supplements were necessary for healthy individuals who ate a balanced diet. I stress the word uncertainty. I did psychiatric rotations during the early years of antipsychotic medication but am not familiar with the current drugs. I did attend a series of Olli college lectures for seniors given by a psychologist He did not seem to think that anything worked consistently. I have not read the books that you mentioned but will have a look. I am currently reading “America’s Bitter Pill” by Steven Brill. The mark-up of oral and IV antibiotics given in hospitals is obscene.

                  • islandboy says:

                    My apologies if my post came of as a personall attack on you but, looking back through the posts I noticed this statement from you: “The commonest cancers are Prostate, Lung, Breast and Colon. Do you really believe that Vitamin D will reduce the incidence of these 70%?” Now, I never had much interest in the mathematics of statistics and probability but, I think the actual conclusion of the study was that people with high levels of vitamin D had a 70% reduced risk of getting various types of cancers than the control group. I am not sure that one should infer from that conclusion “that Vitamin D will reduce the incidence of these 70%”. Not being a student of statistics or medicine, I don’t know how to calculate the reduction of incedence of a condition that would arise from a “70% reduced risk” of the having the condition but my gut tells me it wouldn’t be 70%.

                    As far as my statements being preposterous is concerned, one would have to have lived my life and experienced all that I have to fully understand why I might make those statements. One particular story that suugests why
                    I might form my opinions is that of New Zealand native Alan Smith that he tells himself in the following youtube video:

                    https://www.youtube.com/watch?v=0SUz88hkPIs

                    Smith himself starts speaking at about seventeen and a half minutes in after about twelve and a half minutes of introduction. There’s also part 1 of 9 of a related video featuring Thomas Levy M.D. at:

                    https://www.youtube.com/watch?v=d9Sa02XnteA

                    I’ve just watched up to part 5 of 9 of Levy’s peresentation to a group in New Zealand called “The Vitamin C Can Cure Coalition”. At 9min. 30sec. in he begins to explain how the “group think” I allude to in my statements originates and starts his conclusions at about 12min. 20sec. in. I do not think a better supporting argument for my ststements exists and this guy is a MD. who also has a law degree!

                    Here’s to keeping open minds!

                    Alan from the islands

                  • islandboy says:

                    Sorry Robert. Just looked back at the thread and saw where it was Nick G that introduced the idea 70% reduction in incedence as opposed to a 70% reduced risk.

                    Another video highlighting the inexplicable refusal of the medical establishment to accept that high dosage IV vitamin C specifically might be a usefull medical treatment citing a lack of scientific studies. The interviewer in this video asks about the funding of studies and does a good job of making Principal Advisor to the New Zealand Health Ministry and Senior Intensive Care Specialist, David Gallaher look pretty disingenuous.

                    [youtube http://www.youtube.com/watch?v=z7O_Wrvbqn0&w=560&h=315%5D

                    Watching this one was deeply painful for me. My mother died twelve years and three months ago from what the autopsy report described as total orgaan failure. She was in her third day of recuperating after a hysterectomy and went from recovering to dead in less than 24 hours. Maybe IV vitamin C could have given my mother a few more years with us. Maybe she would have outlived my Dad and still have been with us today had IV vitamin C been a routine medical procedure. How many more people are going to do that might have been saved if not for the attitude of some (most?) of the medical profession.

                    Alan from the islands

                • robert wilson says:

                  Alan – I quote “Incedentally I think this is not OT since, I don’t see how the Medical Industrial Complex (Health Care, Insurance, Pharmaceuticals) is going to fare any better than anything else when TSHTF post peak…”
                  I agree. Health care is now about 17% of the GNP. The medical industrial complex is the largest industry in cities as diverse as Ojai, CA and Baltimore, MD.
                  I am a proponent of scientific ( or to use the current vogue term – evidence based medicine). Of course science evolves with new evidence and new technologies.

                  • islandboy says:

                    I guess we agree on more things than it might first appear.

                    Incedentally, I have personal experience of seeing high dose IV vitamin C administered, when it was tried as a last ditch effort to save my kid sister when she was dying from cancer. She received increasing amounts every day for 21 days in London, England (where she lived), culminating a few days where she received in 75 grams over a two hour period. Absolutely harmless! It did not change the ultimate outcome as she died about three weeks after the last treatment.

                    The 21 day protocol is a UK thing. The material I had been reading about the way it was being dione in the US, indicated that infusions were done every other day until the patient got better or died. I would have preffered the US style protocol but, we were lucky to find a doctor who would venture to try IV vtamin C at all. That was the second time in my life I regretted not having pursued medicine as a career.

                    Alan from the islands

        • Nick G says:

          I couldn’t find that study again, but here’s a meta-analysis of prospective studies that found a reduction of about 33% for colon cancer:

          “We included prospective studies that reported relative risk (RR) estimates with 95% CIs for the association between vitamin D intake or blood 25(OH)D levels and the risk of colorectal, colon, or rectal cancer. Approximately 1,000,000 participants from several countries were included in this analysis.

          Results …The pooled RRs of colorectal cancer for the highest versus lowest categories of vitamin D intake and blood 25(OH)D levels were 0.88 (95% CI, 0.80 to 0.96) and 0.67 (95% CI, 0.54 to 0.80), respectively. …A 10 ng/mL increment in blood 25(OH)D level conferred an RR of 0.74 (95% CI, 0.63 to 0.89). ”

          http://jco.ascopubs.org/content/29/28/3775.abstract

          • robert wilson says:

            All my Mac bringes up is the title of the article from China.This is a far cry from 70% of all common cancers. You may not have noticed the more recent article I cited from the Cleveland Clinic physician, which evaluated hundreds of studies.

            • Nick G says:

              Yeah, I’m frustrated I can’t find the original study – it was a reasonably large, controlled study. My memory is that it was interventional.

              I did look at the Cleveland Clinic column, but the abstract of the article he linked to didn’t support his description: I found “Supplementation in elderly people (mainly women) with 20 μg vitamin D per day seemed to slightly reduce all-cause mortality.” That’s not what we’ve seen elsewhere, but it also doesn’t say “don’t take vitamin D”.

              Here’s the full abstract of the article I just referenced:

              Purpose: To conduct a systematic review of prospective studies assessing the association of vitamin D intake or blood levels of 25-hydroxyvitamin D [25(OH)D] with the risk of colorectal cancer using meta-analysis.

              Methods: Relevant studies were identified by a search of MEDLINE and EMBASE databases before October 2010 with no restrictions. We included prospective studies that reported relative risk (RR) estimates with 95% CIs for the association between vitamin D intake or blood 25(OH)D levels and the risk of colorectal, colon, or rectal cancer. Approximately 1,000,000 participants from several countries were included in this analysis.

              Results: Nine studies on vitamin D intake and nine studies on blood 25(OH)D levels were included in the meta-analysis. The pooled RRs of colorectal cancer for the highest versus lowest categories of vitamin D intake and blood 25(OH)D levels were 0.88 (95% CI, 0.80 to 0.96) and 0.67 (95% CI, 0.54 to 0.80), respectively. There was no heterogeneity among studies of vitamin D intake (P = .19) or among studies of blood 25(OH)D levels (P = .96). A 10 ng/mL increment in blood 25(OH)D level conferred an RR of 0.74 (95% CI, 0.63 to 0.89).

              Conclusion: Vitamin D intake and blood 25(OH)D levels were inversely associated with the risk of colorectal cancer in this meta-analysis.

              • coffeeguyzz says:

                FWIW …
                35 years ago I was diagnosed with stage IV melanoma.
                The growth, a chunk of my leg, and the lymph nodes in my groin were all surgically removed.
                A few years ago, a suspiciously familiar growth appeared near my temple/hairline. I did nothing until it started to enlarge in area and thickness about 18 months ago.
                Started checking natural/holistic remedies for cancer online and came across ‘baking soda works against cancer’. WTF??
                Sounded crazy, but apparently an Italian doctor in recent years as well anecdotal folk medicine attributed the high alkalinity induced by ingesting baking soda (along with syrup to target the voracious, rapidly growing c-cells) effectively fries the little bastards.
                Long story short, after 8/9 months of haphazard ingestion produced significant but not 100% satisfactory results, I scrupulously took two teaspoonfuls in a day, and after a couple of weeks, growth completely gone.
                Strong caveat, I never got formal diagnosis, but I have no doubt it was the big C.

  15. clueless says:

    I have a friend who is a computer network engineer who works at the headquarters of Linn Energy (I think that it is the largest energy MLP). They had meetings last week with all of the corporate workers. Told them that they had no planned layoffs, no planned salary cuts, no hiring freeze and that they were still hiring for open positions. Of course in the last year their stock has already lost 75% of its value, so maybe they are not the most astute managers.

    • Synapsid says:

      clueless,

      GSO Capital, the investment arm of Blackstone (big private-equity firm), has made $500 million available to Linn Energy, for drilling oil wells. That might be related to lack of layoffs and such.

  16. Old farmer mac says:

    I have read about corporate meetings of this sort that have been followed by axe massacres within a few days.

    It is not so easy to get away with such tactics in recent times how ever since there are laws involving announcing layoffs if the company is big enough.

    I guess this gives insiders with info and stock etc a few days to make use of it or to look for jobs themselves while still employed or something…

    Maybe management is convinced there is a turnaround in the offing .

    • Boomer II says:

      I have read about corporate meetings of this sort that have been followed by axe massacres within a few days.

      I’ve heard about companies doing this, but rather than providing insiders a little time to make a trade, the reason I’ve heard is that if this is a public company, they want to make the layoff announcements public at the same time they tell employees, so that there ISN’T any insider trading.

      Another reason I have heard given is so that employees don’t panic. If they are given a heads up in advance, the good ones might jump ship and the bad ones might sabotage the company. So, the thinking goes, you tell people they are being laid off the day they are being laid off and then you don’t give them a chance to go back into the company.

      • That’s old style layoff psychology. Nowadays quite a few companies tell people and have flexible departure timing. It seems to work to treat people better.

        • Old farmer mac says:

          That enlightened sort of layoff procedure hasn’t made it to my neighborhood yet.

          But a few good employees who will not be retained sometimes get a heads up that it is time to quietly consider any other openings they happen to know about.

        • I have used it. In our case we had a supplemental package, and that helped. Many employees don’t realize it, but those of us who have had to layoff people get free shrink visits before and after so we can deal with it. It’s sort of like you are in a war and you come out ok but guys you knew die. On the other hand, I had a boss who seemed to enjoy it. I think some people in management are controlled psychopaths.

  17. Old farmer mac says:

    http://www.wsj.com/articles/oil-prices-to-play-into-bp-fine-1421610065

    It appears that BP has deep enough pockets to pay the fines that will be levied- just how big they will be is yet to be determined by the judge.

    What this means to the overall oil market is unclear to me but it will probably have the effect of damping down enthusiasm for drilling in American and European waters.

    Somebody who actually works in the industry will probably know something about what would be done about a spill in Asian or African waters.

    Given the nature of South and Central American politics I doubt if ANYBODY ( LOL ? ) has a clear understanding of what would happen in the event of a major spill in those waters.

    • Fred Magyar says:

      Hey OFM,

      I can’t speak to the political situation in Central America or the South American Countries on the west coast of the continent but I can tell you without a shadow of a doubt that any oil spill off the coast of Brazil would be dealt with very severely with heavy fines applied as well as prison sentences for those found responsible.

      Here’s a link to current Brazilian law dealing with this kind of event:
      http://www.loc.gov/law/help/oil-spill-liability/brazil.php

      “We’re sorry for the massive disruption it’s caused their lives. There’s no one who wants this over more than I do. I would like my life back.” —BP CEO Tony Hayward

      I’m pretty sure he would have done time behind bars had the BP spill occurred in Brazilian waters.

      • Old farmer mac says:

        Hi Fred ,

        I thought about putting in Brazil with question marks as to their political situation. I know some sorts of laws there have been honored mostly in the breach not too many years back.

        It is good to hear than the country is stable enough and prosperous enough now to enforce oil pollution laws at least.

        What is the situation with the indigenous people and their ancestral lands these days?

        • Fred Magyar says:

          What is the situation with the indigenous people and their ancestral lands these days?

          While things are far from perfect, FUNAI, does a pretty decent job.

          • Fred Magyar says:

            http://www.survivalfrance.org/about/funai

            FUNAI, the National Indian Foundation, is the Brazilian government body that establishes and carries out policies relating to indigenous peoples.

            FUNAI is responsible for mapping out and protecting lands traditionally inhabited and used by these communities.

            It is charged with preventing invasions of indigenous territories by outsiders.

  18. Watcher says:

    Asia preliminaries — who don’t close for MLK holiday.

    Oil down about a dime, $48.35ish.

    Dollar flat. US 10 yr up a bit, so yield down about 1 bp.

  19. Old farmer mac says:

    http://www.bloomberg.com/news/2015-01-18/opec-s-future-seen-in-mining-slump-as-oil-price-pummeled.html

    This article says oil producers will continue to jack up production in the face of declining prices to maintain revenues.

    This sounds reasonable in the case of a very few exporters who probably have the capacity to increase production and exports but I don’t think many countries are able to do this.

    Ron our fine host thinks just about every body is producing at capacity and I tend to agree with him.

    What do the rest of you guys think?

    The author also quotes somebody that says it is very expensive to shutter a mine and then restart it.I have worked a little around open pit mines that produce architectural granite and gravel and sand and I have seen a coal strip mine.

    It might be very expensive to close and reopen a mine of this sort but if so other for reasons involving dealing with laid off employees and keeping up payments on idled equipment and that sort of thing I don’t see the problem.

    Paying the recurring bills such as taxes on a closed mine might be hard.Dealing with a price crash if the company stock crashes on the news of a shut down might be tough.

    Putting a crew back to work -I just don’t see that as being a really big deal in terms of money.

    Miners are a figurative nickel apiece in a slow economy and the equipment would still be there when the decision is made to resume production.We hear a lot about the difficulties of replacing employees but other than professionals with extremely specialized skills I just don’t see replacing help as being a big deal.

    • Boomer II says:

      I see the article as an indication that demand is down, not just in oil, but coal and iron.

      As I have said before, as much as I don’t like increasing income inequality in the world, if you keep wages low for most people, they don’t have money to spend, and consumption slows down. Whatever tricks a government does to increase the money supply or to reduce interest won’t stimulate the economy if the money only goes to a very small group of people.

      And as we speculate about doomsday scenarios, I see a continuation of what we have now: a very small group of very wealthy people who are pretty much insulated from the problems of the world. Their self-interest is not tied into what happens to most of the world’s population.

      • wimbi says:

        Aha! But their self-interest is tied to that big pile of money they have. But, alas, it ain’t quite as big as the one their buddy down the street has.

        So, take some of that pile and put it where it can GROW. Where would that be? That bunch at POB has put down in sickening detail why it is NOT in fracking, or drilling holes in the arctic.

        Where else? So the energy nerds keep saying that solar/wind is trending down, down in cost and getting more and more the better buy., while the stuff coming up from the soda straws cost is getting higher and higher with no end in sight as the straws keep getting deeper and longer and sideways thru harder rock.

        So maybe solar might grow my pile a bit, eh?

        And, oh by the way, those nerds also say solar is good for the planet–hm, maybe we can use that as a come-on somehow.

        • Boomer II says:

          Yes, I think the more tech focused money is more supportive of alternative energy than fossil fuel money or finance money.

          And I do expect that when tech money fully asserts itself into US politics, there will be a tipping point toward laws that favor alternative energy technology and away from fossil fuel laws.

          However, the income inequality part probably isn’t going to go away until there are more and better ways to spread the wealth around.

          • wimbi says:

            Yep, but solar is one of the ways to spread the wealth around for the simple reason that it already is spread around. So if the heartless capitalist puts his chips on solar, he is automatically, tho thoughtlessly, spreading the wealth around.

            Not, of course, anywhere near what was demanded by every sage thru the ages who ever said anything about it.

            I like Maimonides’ definition of the highest form of charity- to give the poor that which enables them to no longer need any charity.

            I think solar can do that- at least in the energy side of things.

            • Boomer II says:

              I’m all for solar. And I think the more of it we get, the better off the world will be.

              But we’ve still got people who prefer to support policies that enrich the few at the expense of the many. I’m frustrated with politics and policy in the US, but again, my consolation is that with recession comes diminished demand, which slows fossil fuel and resource consumption.

            • Jef says:

              So called “renewable energy has as much chance of thriving as $100 oil and for many of the same reasons.

              • Boomer II says:

                So called “renewable energy has as much chance of thriving as $100 oil and for many of the same reasons.

                It’s not a matter of IF when it comes to both expensive oil and solar, it is a matter of when.

                Oil becomes scarcer and therefore more expensive.
                Solar is needed where it is impractical or perhaps too expensive for other options. So it is used.

              • Boomer II says:

                So called “renewable energy has as much chance of thriving as $100 oil and for many of the same reasons.

                It’s not a matter of IF for both expensive oil and solar, it is a matter of when.

                As oil becomes scarcer, it will become more expensive.
                In areas where solar is either the cheapest option or the most practical option, or both, it will be used.

              • Thirunagar says:

                It is thriving.

                Italian PV generates 7.5% of country’s electricity in 2014

                http://www.pv-magazine.com/news/details/beitrag/italian-pv-generates-75-of-countrys-electricity-in-2014_100017812/#ixzz3PMWy10Ts

                I can’t find one country where the share of solar in the energy mix fell.

                • It’s getting a lot of subsidies and the Chinese are dumping (they built too much manufacturing capacity). Solar power can fit as a counterpart to hydro in rich countries, but the subsidies can be quite painful.

                  • Nick G says:

                    What’s the subsidy in Italy right now for new capacity?

                  • Boomer II says:

                    It’s getting a lot of subsidies and the Chinese are dumping (they built too much manufacturing capacity).

                    Do you think that those of us who support solar mind? If they want to keep the price artificially low and it allows more people and countries to install them, that’s great for buyers.

                  • Thirunagar says:

                    Ok then.. try to put a spin on this!

                    Dubai Shatters Solar Price Records Worldwide — Lowest Ever!

                    Well, the exact number is 5.98 cents/kWh, and the venue for this magic is Dubai. Without any “government support.”

                    And I don’t understand how chinese dumping is relevant.

                  • Nick G says:

                    Low solar prices, caused by Chinese dumping, would be relevant if it were accurate.

                    But, it’s not: Chinese PV prices are only slighly lower than those from other countries.

    • shallow sand says:

      Iraq could be the wildcard that could keep oil low for a long time. The appear to have the largest untapped cheap reserves in the world. Have seen studies that they could rival KSA if they could get a peaceful enough situation to get the world’s majors in there for several uninterrupted years. Oil really climbed after USA invaded, was not long thereafter we went through the 40s, 50s and 60s on WTI.

      • wimbi says:

        Maybe, but given the facts on the ground, which of the world’s majors is gonna put serious money on some years of peace and stability in that snake pit?

        And besides, after that, what?

        Here I am tempted to use one of the expressions I despise most- “politically impossible”. Iraq- pretty close to it.

  20. watcher says:

    Gail on ZH this evening talking about hysteresis without using the word.

    I think she has the finance impact wrong. People naturally believe too much in The System when there is already a mountain of examples from 2008 that the system can be dismissed the moment one needs to.

    Her point is that interest rates define when production can restart, and she apparently expects them to rise. I think she wisely doesn’t assert that rise would be in response to growth, but rather in response to default risk given a recent rash of bankruptcy.

    Don’t think so. Not unless “an interest rate rise” is postulated as a big step function. I doubt frackers would refuse to take 12% money. They might refuse to take 25% money, but “an interest rate rise” usually means a few %. That ain’t gonna assert hysteresis. Gotta be much steeper to affect behavior.

    • Once the oil price rises to the “right point”, if CAPEX and OPEX don’t rise at the same pace (I propose they won’t), then the “marginal” prospects will be targeted. This won’t influence companies with financial strength, as long as their bonds are rated to pay less than (my guess) 10 % interest.

      I don’t know about “Frackers”, but a responsible corporation wouldn’t risk taking the money at 12 % knowing it has to return a higher return to make the effort worthwhile. Achieving more than 12 % return in a risky marginal play gets dicey.

  21. shallow sand says:

    Up thread I asked some questions about OPEX and maintenance CAPEX in the Bakken. It did not draw a response. I understand the focus now is on rig counts, IP, decline curves and completion techniques. I appreciate all of the information many have provided and all of the countless hours many have donated in addressing these issues concerning LTO.

    As we go forward with LTO, I think there needs to be more analysis as to whether wells in these plays can pay for themselves and their long term impact on US and world wide production levels.

    I got to thinking about this while getting stuff together for the CPA. I will point out one of our shallow stripper wells as an example.

    This well was drilled and completed in 1976. In 2014 after royalties, we sold 223 barrels of oil from this well. Our OPEX for the year was $2,266.46. $10.16 per bbl. Not bad at all. However, in 2014 the well required a down hole pump change, which in total cost $2,423.36 for the rig, down hole pump repair and replacement of three rods. So our well, in reality cost $4,689.82 or $21.03 per bbl to operate. Still pretty good, and I wish all of them were in that ballpark. The down hole work, I am fairly certain, would not be included in LOE or OPEX by public companies, but instead would be considered a capital expense and depreciated/amortized.

    The second point to illustrate would be the effects of hauling produced water on profitability. The fact that all water in the EFS and Bakken is truck hauled is big deal in my opinion.

    In my example well, it shares a salt water disposal well with three other producing wells near it. The water, after separation, goes into a water tank, like the LTO wells. However, instead of being truck hauled, water goes from the water tank to a pump, which then pumps the water down the disposal well. This cost is included in the figures above. Our well produced 1,845 barrels of water last year. The cost to truck haul that water would be $3,525.00. Therefore, without our nearby disposal well, the cost to operate this well goes up to $36.84 per bbl. That may be a little high, as there should be a corresponding deduction for the well’s share of utilities, etc to run the disposal pump.

    The third thing which I have contended all along, is these wells just aren’t that great when one factors in their cost. I have posted before the Bakken wells appear to cost very close to 100 times what one of our shallow striper wells costs to drill and complete. The well in my example has produced 12,236 barrels of oil in 38 1/2 years gross. The gross production this year was 279 barrels. It will probably make in that ball park for many more years, which is a rate of .76 barrels per day. The IP was reported as 12 bbl. If you multiply these figures times 100, you get a well with cumulative production of 1,223,600 bbl of oil, that after 38 1/2 years is still producing 76 barrels per day and had an IP of 1,200 barrels.

    It appears the average Bakken EUR barrels of oil is around 325,000 barrels of oil, or 26.6% of my example. Further, it appears after 6 years the typical Bakken well will be producing under 50 barrels of oil per day.

    Dennis in the last thread posted a graph which plotted Bakken production in 2025 and beyond and estimated about 200,000 barrels of oil per day from the roughly 9,000 Bakken wells drilled and completed through 12/31/14. This is just 22.22 barrels of oil per day per well. Those wells will need oil well over $100 per barrel to be worth operating IMO. Scaling back to my level, those would be wells making just .22 barrels per day. Let’s use my example well and assume I haul the produced water. I have just sold 64 barrels after royalties. I have spent $8,214.36 to produce the oil or at a cost of $128.35 per barrel.

    I hope I am not boring all too much with my examples. I agree many will find them tedious. It is easy to get lost in the hype of 2,000 IP, etc., because we are used to vertical wells which cost several times less. Looking ahead, the shale companies will need to pay their debt out of the net income these wells produce. Without much higher oil prices than present, I do not think many will be able to. They may not be able to do so even with $100 oil.

    I readily admit that due to their size, the LTO oil plays have been a game changer. However, they will not work in the current oil price environment

    • scrub puller says:

      Yair . . . SHALLOW SAND. I really like your posts and straight forward examples as to how things happen in the real world.

      When all is said and done none of the analysis, graphs and charts posted on this and other Peak Oil sites are going to make the slightest difference to anything . . . I have been watching the ups and downs playing out for close on twenty years and there are very few examples of where the “experts” get it right.

      I do find it entertaining and come here to read practical posts from yourself OFM, WIMBI and a few others.

      Cheers.

    • Shallow Sand, your post are appreciated on this site. Your knowledge of maintenance cost is invaluable. We can all draw charts of past production but charts of future production is only guesswork. I think your estimate of future shale oil production, based on actual knowledge of costs and expectations provide a far better estimate than anything our charts could make.

    • A pump replacement is considered OPEX. The best way to decide is by considering if the work you do allowed you to increase proved reserves above what you already booked.

      I should clarify I’m used to working in large areas in which we owned a lot of wells, and I’ve been working outside the USA for the most part of my career. But I think the same thing applies almost everywhere. I’m not 100 % sure about small company bookeeping. From a tax standpoint, the more you can book as OPEX the better. It also allows us to achieve a much better return on average capital employed, and that’s a key metric for the average bean counter.

      • shallow sand says:

        Fernando. I agree and we do expense everything we can, and our CPA says we can expense down hole repairs. I assumed that maybe public companies do not based upon my experience in looking at some leases a public company had for sale near our area.

        The marketing flyer of this public company listed OPEX at a $ per barrel that was very attractive. However, after signing a C/A and reviewing all the numbers, we found they were depreciating/amortizing many things we would normally expense. Thus the true OPEX was more than double.

        Given what appear to be exaggerations of EUR put out by public companies in LTO plays, I think it will also be important to drill down on their reported OPEX (LOE) to see what expenses are or are not included.

        If anyone can shed more light on OPEX in Bakken or EFS, please do so. I know drilling is more exciting, but operations is where the $$* made.

        Need to get back to work. In closing, I would hate to be in the position the LTO guys are in. If I scale them again to us it would be like us being faced with owing millions of dollars, having current production that will be half by the end of the year, and to maintain that production, having to borrow even more money to drill wells that will not payout at $48 WTI. I know the shares of these companies are down, but they really should be down a lot more if oil is going to hover between $50-60 the next few years as some claim.

        • Dennis Coyne says:

          Hi Shallow Sands,

          The EUR of the average Bakken well is about 360 kb and in 2014 the well profile for the early months seems to have increased, if we assume these increases are proportional to the EUR, then EUR has increased to about 390 kb (the assumption may be bogus).

          When I model the Bakken I assume about 20% of well output in barrels of oil equivalent(boe) is natural gas and NGL so for a 360 kb well there will be 450 kboe. This has been estimated to be about $3/b of natural gas sales(net) for every barrel of oil produced and I assume this revenue is used to offset operating costs. OPEX =$4/b, royalties and taxes 26.5% of wellhead revenue, other costs (interest, overhead, etc.)=$4/b, transport costs=$12/b, well cost=$8 million, and real annual discount rate is 7% (assuming 3% inflation this is a 10% nominal rate). Oil prices are at the refinery gate and all prices and costs are done in constant 2014$. There has been some speculation that new well EUR(estimated ultimate recovery) will increase so assumed EUR will increase by 1% each month from Dec 2014 to Feb 2015, reaching 401 kb. I have redone my flat output scenario leaving the number of wells added the same, but changing the rate that real oil prices rise so that 130 new wells per month can be added profitably with the above assumptions. Chart below.

          • nNgass says:

            With all the talk here and elsewhere that shale oil is in decline, and considering the low oil price and subsequent reduction in drilling and exploration around the world, how can the oil price in above graph be estimated about $70 in 2020?

            • Dennis Coyne says:

              Hi nNgass,

              I am doing pretty simple models here, basically I assumed about 40,000 wells will be drilled based on an old paper by James Mason, and 130 wells per month keeps output relatively flat so if we just assume 130 wells per month will be drilled we get to 40000 wells in mid 2034. Using the economic assumptions and assuming prices remain at about $50/b (2015$) until Aug 2015 and then increase exponentially, I simply found and exponential rate of increase that would allow wells to be profitable in 2034.
              This worked out to roughly a 7% annual increase in real oil prices.

              I think your complaint is that prices are too low in 2020, for the Bakken/Three Forks with the given assumptions, oil would be profitable to produce at these price levels, if prices are higher, it will be more profitable. I have no model for World supply and demand for oil, the EIA does, but it provides many different price scenarios, you can pick any you wish, nobody knows what future prices will be. These prices are just a simple example of oil prices that will result in the oil in the Bakken/Three Forks of North Dakota being profitable to produce with the given assumptions.

              • Dennis Coyne says:

                Chart with the EIA’s Annual Energy Outlook Oil Price scenarios reference, low, and high and the Bakken Oil Price Scenario all in 2014$. The Bakken Scenario makes the simple assumption that real oil prices rise 7.13% per year from 2015 to 2034. In reality prices are likely to rise at some unknown rate to above the AEO low price scenario and will likely be below the high price scenario. Clearly the future path of real oil prices is unknown within these limits and can stray outside these limits as it has done since Nov 2014. I agree that oil prices will probably rise quickly to $70/b, probably by Late 2016, which implies a 40% rise in oil prices for a year. To get from $70/b in 2016 to $185 in 2034 would suggest a 5.4% annual rise in real oil prices.

            • Dennis Coyne says:

              Interestingly, there will also be those who say that oil cannot go above $150/b (or possibly less) in 2015$, in that case there would be fewer wells drilled, maybe 37000 wells and drilling would stop in 2032 rather than 2034. The model would look the same up to 2032, just ignore beyond that point, if you think $180/b in 2015$ in 2034 is too high.

        • Shallow, it depends on company management. Believe it or not, I met a company president who didn’t know how this worked. I was consulting for them to help them improve their operations, when I interviewed their head accountant the guy told me they were trying to book as much as possible to CAPEX, because this kept their cost per barrel down. So I gave their upper management a brief review of the effect, which in their case meant they paid more taxes up front and also had a lousy return on capital employed. Based on what I have seen, you are right. Some companies are really stupid, and some have wise guy management trying to inflate short term financials. Check over the super majors and you will see one which stands out in one direction, and another which does exactly the opposite.

    • Shallow, I remember planning a “waterflood pilot” to get rid of produced water using existing wells. But if you try it you got to keep the water bacteria free or you will sour the reservoir. Keeping the water free of bacteria is a real hassle. What is it like for you?

      • shallow sand says:

        We treat most of our produced water before injecting/disposing of it. Not all, but most. In my example we aren’t, which helps the OPEX.

        • It sure does help the OPEX. But you have residual oil in that water. And if you keep it in an open tank it will get bacteria. I know because I have done the same thing. The water you pump will be filtered at the sand face, and you get an oil saturation right around the well. If you have bacteria, oil, and a small amount of sulfur in the system you will get a really nice infection. So the water disposal well gets black water. I’ve gone nuts trying to fix this because our water disposal wells took a lot of water. I suppose if you are using a non oil bearing disposal zone you are fine.

  22. Ronald Walter says:

    You do not need to use supplements in the form of vitamins, a waste of time and money. Food will do the job, especially Chinese food, won ton soup, for instance. Pure medicine, Chinese food.

    The biochemistry of the Kreb’s cycle is all taken care of by eating food.

    Isaac Newton became a student of math because he did not understand math after enrolling in a textbook course. You can thank your calculus he didn’t give up and stop trying to do math, it would have been a great loss to mankind had Newton stopped figuring because he just couldn’t get it right off the bat. From dumb to smart takes time, nobody knew what gravity was until Newton spelled it out.

    Then that apple falls on his head, Isaac carts it over to William Tell to sink an arrow into the arrogant Austrian prince that Bill refused to acknowledge as royalty anywhere in Switzerland.

    Isaac calculated the exact coordinates of the arrow’s flight that struck the apple he brought with him which was placed just above Bill’s son’s head. And, as the story goes, Bill shoots the arrow and strikes the apple above his son’s head on dead center. Had William missed the mark, the second arrow in the quiver was for the Austrian prince who was out of his element. Newton was there for a reason. True story.

    All because he studied math.

    Works for just about everything, planning, advancement of knowledge, the whole nine yards.

    Comes in handy for finding oil too.

    Be kind to your web-footed friends; may the Bird of Paradise fly up your nose.

  23. Longtimber says:

    http://www.zerohedge.com/news/2015-01-18/gail-tverberg-beginning-end-oil-production
    If Gail is right, Perhaps a use for Offshore Platforms when Elon gets this right. A “RUD” has lower financial consequences than a Deep water blowout. 🙂
    http://www.zerohedge.com/news/2015-01-17/caught-tape-elon-musks-spacex-rockets-rapid-unscheduled-disassembly-event

    • Old farmer mac says:

      Everything Gail says makes sense – assuming her assumptions hold. In this case it seems sad but true that most or all of them will probably hold.

      But I for one am not convinced the world economy cannot adapt to oil at a hundred dollars or more per barrel within a relatively short time span, maybe as little as five or six years.

      This would mean some wrenching changes in some parts of the economy for sure.

      But to some extent the losses in one sector are gains in another and while I do not believe a few people in smoke filled private clubs and jets run the entire world I do believe that large governments and central banks can STEER the economy to some extent.

      The ” easy money” that has in the past been directed at easy mortgages for instance could be redirected in part towards easy loans on very energy efficient cars – and ONLY such cars. More of it could be spent on energy efficiency programs that involve refurbishing both public and privately owned buildings for energy efficiency and more yet towards building out renewable energy infrastructure.

      It is true that this would leave a lot of carpenters and real estate agents unhappy but in the end it would generate about as much economic activity keeping about as many people employed.

      And while I am not nearly so cynical as Watcher about such things- there is no doubt in my mind that governments WILL find ways to pay subsidies to keep oil flowing for as long as it is cheaper to pay the subsidy than it is to do without subsidized oil.

      If in the end this means firing all the people at the federal dept of education and all the state people in jobs such as administering state parks it will be done.

      Getting by without band and arts and foreign language teachers and parks and a few social workers etc will be easier than getting along without oil to keep the ESSENTIAl wheels turning.We can get by without paying farmers not to farm and without subsidizing any new sports stadiums.

      We can get by without using even a quarter of the fuel we do now just flying around for the fun of it.

      So – maybe we can weather the problems associated with getting oil production back up TEMPORARILY at least when / if the economy starts to revive.

      Austerity is not even a tenth as bad as outright collapse.

      A very very deep long lasting depression is no doubt baked in.

      But some countries at least can weather peak oil as such with a little luck- with most of the luck being already in place for a country such as the US. We can manage it if we have the additional luck to have good management and anticipate the crisis to at least some extent.

      People WILL buy mini cars and electrics when bigger cars with ice engines are taxed or regulated out of the market.People will quit flying on vacations and business trips when aviation fuel is properly taxed – as highway fuel WILL be more highly taxed later on.

      Paying the people who work in resorts and for airlines who lose their jobs will be hard. But it won’t be a hundredth as hard as not having food and water for everybody.Doing so does not involve producing more food than we do now. The issue is forcing other people who still have incomes to pay for that food.

      We will go on a wartime footing when we have to.

      Hopefully we will go on it early enough that doing so will save our collective asses- at least here in the US and Canada and a few more countries that are well situated in terms of geography and so forth.

      We can afford coal to liquids gasoline if we burn it in cars that go twice as far per gallon.

      We will probably have to give up potato chips but potatoes will still most likely be plentiful given the difference in energy content as delivered to the consumer.

      These hopeful scenarios depend on things not going to hell in a hand basket TOO FAST of course.

      Building a coal to liquid plant under wartime conditions could probably be accomplished in three years instead of ten.

      • Dennis Coyne says:

        Hi Old Farmer Mac,

        Even without taxes or other government intervention, as fuel depletes and if prices are set by the market, then oil prices will rise. Airline flights and big SUVs and pickup trucks will be out of reach for the average consumer and the smart auto companies will switch to more fuel efficient vehicles and EV’s. Now the government could get involved by building out light rail, rail, and other public transport and possibly imposing congestion fees for large urban areas, you buy a pass to enable you to enter a city by car (I think the do this in London and perhaps elsewhere in Europe).

        The problem with overdoing the government intervention is that is often inefficient, so it should be reserved for externalities where the market does not give optimal outcomes, as much as possible. There are situations where it can be helpful to compensate for past government intervention which has given some sectors an advantage, either by taxing those sectors (oil and gas) or by subsidizing competing sectors such as wind and solar to level the playing field.

        The other time that government intervention makes sense is in the face of a great depression where government projects to get people back to work makes sense in the face of high unemployment rates. Maybe rail, light rail, HVDC transmission and other needed infrastructure will be built by the new WPA.

        • Old farmer mac says:

          Hi Dennis,

          I agree totally or almost totally with both your reasoning and your hopes for USEFUL and reasonably efficient government intervention when it is needed and the market mechanism isn’t working well or at all.

          I would vote with you if we were both congressmen on a committee without a second thought.

          • Dennis Coyne says:

            Awesome, Old Farmer Mac for congress! I would vote for you, except I think we live in different states.

  24. Watcher says:

    Futures trading. Oil down and sub $48.

  25. Ronald Walter says:

    http://www.bloomberg.com/energy/

    Price of oil in yen is at 38030 yen per tonne, down 490 yen.

    38000/117.5 yen to a buck, that’s 323 dollars per metric ton, or at 7.3 barrels per tonne, the price of oil in Japan is at 44.30 usd when all of the math is done.

    Now at 37,990 yen for a tonne of oil on sale in Japan.

  26. Boomer II says:

    I assume this is a big factor in limiting consumption of oil and resources. As the price oil goes up, non-essential use becomes unaffordable for most of the world’s people.

    The richest 1 percent are likely to control more than half of the globe’s total wealth by next year, the charity Oxfam reported in a study released on Monday.

    http://www.nytimes.com/2015/01/19/business/richest-1-percent-likely-to-control-half-of-global-wealth-by-2016-study-finds.html?partner=rss&emc=rss

    • Boomer II says:

      I was mulling over these numbers last night and it occurred to me that you could have a decline scenario based on these. So you have half the world’s wealth held by 1% of the world’s people. Granted, a lot of this wealth is on paper only, but if that 1% survives and much of that poorer 99% doesn’t, then the 1% have concentrated resources to enable them to survive at the expense of nearly everyone else.

      And I think that is what we will see play out.

  27. Philip Backus says:

    Just read over on ZH of an apparently successful coup in Yenen by a Shia nilitia group called Houthis. Tanks in streets. Oil higher? Oil lower? Here we go again…so sad.

    • Toolpush says:

      http://www.usatoday.com/story/news/world/2015/01/19/battle-yemen-presidential-palace/21982443/

      Shaky truce in Yemen holding after coup attempt

      After a day of clashes that a Yemeni minister described as a coup attempt, government troops and Shiite rebels honored a shaky truce Monday in the capital of Sanaa, with little hope it would end a long-simmering conflict.

      Sound like a “menage a trois” in Yemen, Sunni govt, Shia rebels, and Al-Qaeda as the unwanted third quest.
      The Middle east is such a snake pit, I am not sure if anybody can fully understand what is going on each of the countries.

    • Ilambiquated says:

      The Houthis are more a tribe than a religious group. I know they are a shabab (youth) group, and they have religious ideas, but still it’s more a tribe that has its own cult than the more typical Islamist thing.

  28. Jeffrey J. Brown says:

    No surprises here:

    Russia Confronts Stagnant Oil Output After Crude Price Slump

    http://www.bloomberg.com/news/2015-01-19/russia-confronts-stagnant-oil-production-after-crude-price-slump.html

    Russia’s record crude oil output last year is likely to prove a high-water mark as economic sanctions and lower prices erode investment in developing deposits needed to replace aging Soviet-era fields.

    The world’s largest oil producer will probably see total output flat, at best, over the next two to three years, according to analysts and forecasters including OAO Gazprombank. Others, such as the Organization of Petroleum Exporting countries, predict a decline.

  29. ezrydermike says:

    comment test

  30. ezrydermike says:

    OFM said “Yogi sez predictin ‘ is hard” Only if you’re trying to predict the future.

    Seems like even the EIA isn’t forecasting their predictions! or something…

    “Forecasts or projections or whatever you want to call them are inherently political. They are made with an eye to pleasing whoever pays for them, in this case, the U.S. Congress.”

    http://resourceinsights.blogspot.com/2015/01/us-department-of-energy-our-forecasts.html

  31. Old farmer mac says:

    Solar power may be getting cheaper faster than most of us suspect.

    http://www.scientificamerican.com/article/india-builds-solar-plants-atop-canals-to-save-on-land-water/

    In cases where it can be used effectively as it is produced it is probably about as cheap as either coal or natural gas already if the utility has to pay high prices for fuel either imported or shipped long distances by rail.

    One such use is for irrigation which is not very time sensitive so long as it gets done. Running pumps around the clock is cheaper in capex but running them when juice to run them is available without spending precious foreign exchange money to buy fuel is a better deal.

    Fuel costs are nowadays more important that capital costs in a lot of cases. A dump truck run forty hours a week will typically use six hundred to eight dollars worth of diesel at three bucks. In three years or four years the fuel bill can equal the cost of the truck which will have a ten year service life with some serious maintenance even in constant service. After that it will last another ten or even twenty years in the hands of an owner who uses it only intermittently and can make most of his own repairs.

    It is not unusual for a brand new commercial truck to run three years day in and day out without a single breakdown. With diesel at four bucks it will cost as much to put fuel in it as it does to buy it within four years.

    Given that oil depletes whereas iron can be recycled it seems pretty obvious to me that as time passes fuel costs are going to be an ever greater consideration in comparison to capex.

    Keeping the money and the jobs at home is going to be a no brainer in places with a good solar resource before too much longer.

    • Scientific American has a tendency to publish articles which fail to stand up under closer scrutiny. I noticed their quality dropped a lot in recent years. And this seems to be a trend with the Nature Publishing products in general. Something happened. It’s like what we saw with CNN, in the early days it was a bit brainier. And gradually it dumbed down. Same with the History Channel. Hell, everything nowadays seems to be written for a lower IQ and less educated population. Are we Homo Sapiens growing dumber?

      • Fred Magyar says:

        I agree Fernando, I gave up my SciAm subscription years ago for the very reasons you cite. However I don’t think we as a species have been getting dumber, I think it’s that our Institutions and our Media have been hijacked by special interests. We live in a darker and more authoritarian world courtesy of the a small group of people who control the ever more of the resources of our planet.

        • Fred Magyar says:

          Having said that I still occasionally enjoy following adventures such as this one:

          SOLAR IMPULSE
          @solarimpulse

          LIVE unveiling of the route for the First #RTW Solar Flight: begins 05:30 GMT (in 6 hours!) solarimpulse.com/en/our-adventu…

    • Ilambiquated says:

      More important than the price in general is the fact that solar thrives in niches other forms of energy can’t reach. Rural irrigation is one example. Another is recharging mobile phone batteries and providing lighting in rural Africa and India. These projects don’t involve much energy but they are extremely valuable to the recipients and can’t really be solved any other way.

      • Boomer II says:

        Yes. Small scale solar is perfect for isolated places that need electricity, but can’t get it from a centralized system, or where it is expensive to haul in fossil fuels to power generators.

  32. aws. says:

    Robyn Allan reminds us why bitumen ain’t what your Daddy would have called oil.

    Industry Minister Moore makes stuff up to threaten British Columbians

    He threatened a Lac Megantic disaster if we don’t accept Kinder Morgan’s Trans Mountain pipeline expansion.

    Robyn Allan, Vancouver Observer, Jan 6th, 2015

    Oil sands bitumen is dense like tar or wet cement. It requires imported condensate as diluent to move it through a pipeline. If more bitumen were upgraded in Alberta instead of transported as diluted bitumen for upgrading in other countries we would have plenty of pipeline space.

    Barrel for barrel, diluted bitumen requires twice as much pipeline capacity as upgraded bitumen. You need dedicated condensate import pipelines, like Enbridge’s Southern Lights and Kinder Morgan’s Cochin, to bring condensate in, and then you need 30% of the heavy oil pipeline export capacity to re-export condensate as diluent in bitumen. What’s more, diluted bitumen moves 20% slower than light or synthetic crude oil.

    • Well, the guy is right. I’ve seen very detailed economic studies on this topic. The best location to install a heavy oil upgrading unit is at the refinery. This encourages heavy oil transport as a diluted blend, and the blend is kept as heavy and viscous as possible.

      I looked at projects producing 400 thousand barrels per day, and the optimum solution seemed to be to make syncrude in an upgrader located near the coast, ship nafta back to the field to dilute the 8 degree API crude so it could be pipelined to the coast.

      If BC is worried about oil spills they should just specify the biodegradability of the crude to be shipped. If they tighten the standard it will lead to upgrader construction and preparation of a really nice hydrogenated syncrude. And if they get really tough they can get diesel out of the heavy crude. But that type of process costs about $15 to $20 billion for a 200,000 b/d plant.

  33. Boomer II says:

    On one of the other posts, I explained why farmers and ranchers in Nebraska are fighting the KXL pipeline going across their property.

    They don’t believe the oil industry can run a pipeline that won’t spill oil.

    Stuff like this just confirms to them that spills happen all to regularly.

    http://abcnews.go.com/US/wireStory/pipeline-breach-spills-oil-yellowstone-river-28314339

    • The XL pipeline opposition is financed by the venezuelans. They import an identical blend into usa gulf coast ports using tankers carrying 500 thousand barrel loads. The key for them is to avoid competition, because both Canada and venezuela plan to produce this extra heavy in large quantities.

      But I suppose the usa based enviromentalists tend to be leftists. What I call watermelons. This focuses them in one direction, and they avoid looking at those oil tankers full of goo coming in from elsewhere. This isn’t reallly about farmers, it’s about a very well financed watermelon campaign.

      • FrY10cK says:

        Watermelon or not, don’t you think they’re right in opposing transport of TSO diluted with benzene across the bread basket of America?

        • Who told you it was diluted with benzene? The most likely diluents would be condensate and hydrogenated Coker nafta, or light hydrocarbons pipelined on purpose.

          I’ve read quite a few watermelon publications, and I can assure most of the material I read is full of mistakes.

          Interestingly, I always get the SAME reaction. The watermelons ignore the fact that IDENTICAL blends are brought in by tanker in half million barrel loads. If the venezuelan government was a right wing dictatorship I’m sure there would be all sorts of websites, demonstrations, protests, you name it. But that oil is being shipped by a dictatorship run by a left wing mafia. Thus we hear nothing about it.

          • Boomer II says:

            Interestingly, I always get the SAME reaction. The watermelons ignore the fact that IDENTICAL blends are brought in by tanker in half million barrel loads. If the venezuelan government was a right wing dictatorship I’m sure there would be all sorts of websites, demonstrations, protests, you name it. But that oil is being shipped by a dictatorship run by a left wing mafia. Thus we hear nothing about it.

            You keep missing the point. People in Canada and in Nebraska whose land the pipelines are to go on don’t want it there. And they don’t want it on their land because the oil industry has a lousy record when it comes to spills.

      • Boomer II says:

        I don’t know anything about Venezuelans, but I do know the court challenges are being led by farmers and ranchers who don’t want it going across their land. Move the pipeline somewhere else and they won’t challenge it.

  34. aws. says:

    Could Global Tide Be Starting To Turn Against Fossil Fuels?

    From an oil chill in the financial world to the recent U.S.-China agreement on climate change, recent developments are raising a question that might once have been considered unthinkable: Could this be the beginning of a long, steady decline for the oil and coal industries?

    by fred pearce, Yale Environment 360

    • Jeremy Lucero says:

      Shows how idiots often advocate for idiotic policies. It seems the know-notin’ progressives and liberals of the US fail to realize almost all solar firms are deep in debt, bankrupt, the gov’t has wasted over $100 billion for a measly 1% power throughout the year. The libs dream country to emulate is Germany because of how much debt that country gone into to promote “renewable” energy schemes. Nobody’s told the libs over on this side of the Atlantic though that hundreds of thousands of hardworking people in Germany have had their electricity shut off because they can’t pay the far, far, far higher costs needed to support all the new “green” electrical generation. If they even get a steady supply of electricity at all, that is. The German government has had to admit that going “green” can’t replace all the power lost by shutting down nuclear plants, and so the country has had to turn more and more to its lignite reserves.

      The reality is, coal and oil are far more abundant and safe than whatever junk we’re putting in solar panels. “Fossil fuels” will last centuries, and anthropogenic climate change is pure fantasy, so there’s no reason not to stick with what’s tried & tested. Of course, we also have nuclear, and that is a good option, but too many of the NIMBYs won’t allow it.

      • Boomer II says:

        The reality is, coal and oil are far more abundant and safe than whatever junk we’re putting in solar panels.

        You really think you’re going to make a case in this forum that oil is abundant?

        • Regex Wald says:

          My guess is the “trigger words” in aws.’s comment were “oil,” “coal,” and “climate change.”

          Uh oh, now I used all three in a single comment.

          • Boomer II says:

            Yes, I expect the people or the machines monitoring the Internet look for any place where GW or climate is mentioned and jump to comment. It’s their crusade to post the opposing view everywhere.

            However, they will be kept busy because the GW articles just keep on coming.

            Of course, we still have people opposing the teaching of evolution in schools. Some folks will hang on to their cause until their very end.

      • Caelan MacIntyre says:

        As has been said countless times already, ‘we’ may yet, as a collective species, use/burn through everything anyway– electricity generators, coal, gas, oil, bitumen– and that nothing really matters.

        Just an eventual weird layer in the geological record of a long dead species.

        Real democracy? What’s that? Give us fake democracy. Let’s vote on that. And vote with our money.

        Species habitat and soil loss, etc., is pure fantasy too.

        “The destruction of the natural world is not the result of global capitalism, industrialisation, ‘Western civilisation’ or any flaw in human institutions. It is a consequence of the evolutionary success of an exceptionally rapacious primate. Throughout all of history and prehistory, human advance has coincided with ecological devastation.” ~ John Gray, by way of Overshoot Loop

      • John B2 says:

        Lol, this guy is like a bad parody!

        At a time when shale companies are going bust and when many couldn’t generate positive cash flow at $100 / barrel…

        Seriously though, I’m not from the US but have noticed that almost all shills that post right-wing rhetoric on websites always include buzz works like ‘progressives’, ‘liberals’ and then proceed to deny the science of climate change. Does this tactic actually work on convince common folk in your country?

        • Boomer II says:

          They also claim that “communists” are behind “climate change” to take our stuff away from us.

          Yes, there are people who believe them. They tend to watch Fox News.

          What makes no sense to me is that they post here. I don’t think regular readers here are gullible enough to fall for what they post. We can’t be their target audience.

        • Old farmer mac says:

          Unfortuntately ” this tactic” works to some extent. Used in combination with other such tactics it enables ” business as usual ” republican politicians to win a lot of elections.

          The sad truth of the matter is that most Americans are actually scientifically illiterate in any meaningful sense of the term and are easily misled on environmental issues.

          There are various sorts of sciences which are lab testable such as physics chemistry and biology.

          There are others which depend more on observation – including a science of communication and a science of psychology.

          These other sciences are not as well established being newer and having less funding and fewer researchers as well as offering fewer immediate opportunities for exploitation.

          But they are real sciences sure enough just the same.

          One of the most important findings emerging from these sciences is that as a whole humans think and communicate in terms of story or narrative and make decisions on the same basis much more than we do on the basis of cold hard facts and logic.

          Hence ” just so ” stories are as important – in terms of human behavior and human possibilities and failures – as the laws of physics or the facts of geology.

          We are experiencing a culture war in this country between our left and right wings. There is a lot to be loved and hated from my own point of view about both right and left wing politics in this country and I do not wish to promote or denigrate either wing.

          But the facts are that left wingers in this country happen to be better educated ON AVERAGE and that our left wing is – compared to our right wing- composed of environmental saints and angels.

          Now stick with me there are several more layers to this onion that have to be peeled back to see the whole picture.

          Tough environmental legislation necessarily puts a hurt on old line industries- and our old line industries are the only ones that pay decent wages to poorly educated workers. So this sort of people hate environmentalists guts. Hence they are predisposed to vote right wing.

          Beyond this most working class people in this country have deeply held values involving such issues as firearms, abortions, gay marriage etc that FURTHER predispose them to hate left wingers guts since they believe in guns and babies being born rather than aborted etc.

          Big business owners who own old line industries such as coal also own newspapers and magazines in many cases etc – and they also donate very heavily to politicians who will cooperate with them.

          Combine all these factors- and you get people like Lucero who posted above.

          We all think and behave in terms of us and them – insiders and outsiders.We all think in terms of narrative or story. We all make most or all decisions based on narrative or story as a general thing.

          To make a long story short people like Lucero hate environmentalists guts for two basic reasons. They are enemies because they are part of the OTHER political camp. They are enemies because they threaten the livelihood of people like Lucero.

          And so far as explaining the facts involved in fossil fuel depletion and global warming and that sort of thing to such a person- well now……

          Having spent a lifetime around such people it is in my estimation impossible to explain anything to them-just as it is essentially impossible to explain that abortion is actually MURDER to a Christian woman such as my now deceased mother.

          Liberals are all for diversity of belief so long as they get their way. They want their way in respect to abortion. We have a hundred million people who believe abortion is murder. Maybe more. The liberals hate their guts and call them religious nut cases who want to control women’s reproductive rights. The conservatives just call them murderers.

          There is not much hope of our right wing embracing sound environmental policy because in the mind of our right wingers such policy is a liberal plot to control THEIR lives and jobs.

          We all believe what we want to believe. It is as simple as that. Facts have little or nothing – most of the time -to do with our beliefs when it comes to culture and politics.This applies equally to both the right and the left.

          Our left wing is for instance absolutely dead set against any meaningful reform of our school system since meaningful reform would threaten the power of the existing educational establishment which in terms of monopoly power makes all our capitalists put together look like kids selling cookies to raise money for the girl scouts.I suppose that I need not mention that the teachers are joined at the hip to the democratic party here in this country.

          • Boomer II says:

            My concern is that when challenges come up (and I expect that they will), rather than working toward solutions, these same people are going to look for someone to blame.

            If oil gets more scarce and more expensive, blame environmentalists. In their narrative, the oil is there, but laws are keeping it the country from getting it.

            Or, for the time being, they believe that no matter what goes wrong in the country, it must be Obama’s fault.

            And once he is out of office, and even if the Republicans totally control government, those on the right will say that the country isn’t conservative enough. They won’t ever see themselves as part of the problem. It’s always someone else’s fault. And if we could just eliminate those people in some fashion, everything would work right. And God would be happy, too.

            • Watcher says:

              On the other hand they would not have won those seats if it was clear that the Democrats had brought happiness to the voters. So it doesn’t really matter who gets blamed for what.

              Reality is failure is what has taken place. If you didn’t think you could achieve success, then don’t take the job. If you thought you could and you did not, then you failed and deserve blame.

              And just received that blame, rightfully.

              • Watcher says:

                Note btw that if the GOP takes all three branches, and fails, then they will refuse to take blame, which is rather a lot like

                “Or, for the time being, they believe that no matter what goes wrong in the country, it must be Obama’s fault. ”

                implying you think it’s not Obama’s fault.

                No one ever takes blame. It’s always unexpected this or that.

                BTW lost elections are never blamed on policy. It’s always “we had bad messengers” or “the other side lied non stop and we could not get the truth of our side through to the voter”. The Kerry Bush election was amusing in that regard in that before there were any debates, it was always presumed that Bush’s bad diction would be smashed in terms of communication by the eloquent John Kerry.

                Then he lost anyway and despite the presumptions of just 2 months prior, the “bad messenger” card was played again.

                • Boomer II says:

                  implying you think it’s not Obama’s fault.

                  I think that when he advocates an idea that conservatives have supported in the past, they decide they are against it because he is now promoting it.

                  Obama is an old school moderate Republican.

              • Boomer II says:

                On the other hand they would not have won those seats if it was clear that the Democrats had brought happiness to the voters. So it doesn’t really matter who gets blamed for what.

                I didn’t mean they would blame the Democrats. I meant they would blame blacks, immigrants, gays, and so on. They attribute their problems to others, not themselves.

                There was a guy running for governor in Colorado who thought bike riding was a Communist plot.

                I think we will get more cultural, and therefore political, polarization because life won’t look the same in the future as in the past and instead of saying that wealth and resource distributions are changing, at least some people will lash out at what looks different to them. They will look for an enemy rather than a change in nature, a change in economics, or something else like that.

            • Old farmer mac says:

              It is absolutely true that when things go wrong the right wing is going to blame the left wing. Actual facts will have little to do with what various factions believe at future times.

              As oil depletes and becomes more expensive ( long term) the ignorant right winger will utterly close his mind to any possibility that the reason gasoline is expensive other than the preconceived notion that it is environmentalists – and thus democrats – fault.

              The liberal element has likewise closed its mind to the possibility the reason our schools are so bad just might be the -state run monopoly we have in education.

              Nobody who has any insight into human nature should expect more than very small percentage of the people to think and behave rationally .

              Even Ivy League professors tend to hold numerous irrational beliefs.

              I know numerous welfare recipients – nearly all of them white folks and some of them close enough kin to me that I hate to admit it.

              The liberal model- the social workers model – is that you put people on welfare when they are down and out and then help them get on their feet again.

              The actuality is that the redneck model involves manipulating the system in order to get that check- permanently if at all possible. I know a couple of dozen people personally who in the words of their envious neighbors got that disability check or that food stamp allotment or custody of grandkids and a welfare check for each kid. They take the money and continue to work.

              ONE NEIGHBOR no more than a five minute ride away gave up custody of his kids to his retired Dad- who continues to work a cash business and collects bennies for the grandkids. His son – the grand kids daddy – is generally on the premises.

              The social workers either don’t give a damn- they just play along and collect their own paycheck.If somebody brings up such abuses to them they say the recipients are technically within the rules. They generally are except for the cash jobs.

              Reality is this. In a place where you can just barely manage on the wages you may be able to get on a low skilled job you are actually better off on our welfare system as often as not even without cheating.So the goal for the typical recipient is to get on it and stay on it and cheat forever.This is perfectly rational behavior on the part of the recipient who understands correctly that this is going to provide him with his highest achievable standard of living.

              It is utterly impossible to explain this to a typical American liberal.

              The typical well educated and well off young liberal woman I run into these days is absolutely certain she is a second class citizen in this country where she can do damn near anything including drive, vote, sleep with anybody she pleases (except young boys eager to oblige her – but not legally due to absurd definitions of rape contrived by feminists mostly ) and become a surgeon or a senator or maybe even the president- while silmantaneously being so pc about Muslim and other repressive societies it makes me want to puke.

              But having finally achieved a certain level of wisdom my self this irrational behavior no longer surprises me.

              • Dennis Coyne says:

                Hi Old Farmer Mac,

                As far as welfare reform, you are correct that the system can be abused. It is probably impossible to create rules in such a way as to eliminate this abuse. One fairly simple solution would be to pay a bonus to social workers who report such abuse by paying them 30% of the money saved by eliminating these cases of abuse. Those caught abusing the system either pay back money stolen from the system or forfeit any future collection of any government assistance, with the possible exception of Medicare and whatever the minimum payment is from Social Security.

                Your definition of the average liberal woman is very different from my own, I would use radical feminist in place of “liberal” in your description for the pc woman.

                It has a nice effect I suppose, but it is a little like saying that all conservatives are like Rush Limbaugh, which I think is incorrect. Though things have been moving pretty far to the right these days and perhaps Rush is considered a RINO (Republican in Name only.) I don’t really listen to Rush so maybe he’s a liberal now.

              • Dennis Coyne says:

                Hi Old Farmer Mac,

                Hmm. Is there a state monopoly on education where you live? In my state private schools are actually allowed.

                If school choice becomes the norm, it will end public education, and perhaps that would be a good thing. My guess is that the general education level of the population would not change much. Those parents who care about the education of their children will see to it that their children will be educated. Those exceptional children whose parents don’t really care about education, but have the desire to learn, probably have a better shot with the current system of getting a decent education.

                Without any public education system, many children may not go to school at all and it would only be the very exceptional individual who might be able to teach themselves by reading books, with little outside help.

                This would be a waste in my view. To a large degree people can segregate themselves in to communities where education is not a priority and property taxes are low (and schools will tend to be worse) and other high property tax communities where the public school system will be better. Often the low property tax communities might even be wealthy communities where most people send there kids to private schools, with maybe some (less wealthy families) who send their kids to the poorly funded public school.

                A state monopoly on education does not exist in the US to my knowledge.

              • Boomer II says:

                The actuality is that the redneck model involves manipulating the system in order to get that check- permanently if at all possible. I know a couple of dozen people personally who in the words of their envious neighbors got that disability check or that food stamp allotment or custody of grandkids and a welfare check for each kid. They take the money and continue to work.

                Liberals do know this. What they can’t figure out is why people who are getting their government handout are then voting for people who want to take that handout away.

                Giving everyone a government check is actually an acceptable approach. It’s a minimum income concept that even some conservatives have advocated. Everyone gets a basic check, and then you eliminate a lot of other programs.

          • Dennis Coyne says:

            Hi Old Farmer Mac,

            Just out of curiosity, would you say the majority of people where you live think that abortion is murder? Same question on gay marriage not being allowed.

            Now here’s a weird one, no restrictions of any kind on any weapon, that is no background checks, fully automatic weapons, tanks, whatever the government can have as a weapon, the citizens should be allowed to own without restriction so they can protect themselves from the government, would that be the general consensus where you live?

            • robert wilson says:

              I recall someone posting a comment that generated flak during an abortion argument on Prodigy about 15 years ago. “Overpopulation is Murder”

          • FrY10cK says:

            Reading life-long educator, historian of pedagogy, and one-time Republican, Diane Ravitch might disabuse you of those notions about the vast wealth and power wielded by public school teachers.

            As for teacher’s unions, they have been under relentless assault like all labor since the Reagan-era. In the U.S. of 2014, we have center-right political party and a far right political party when it comes to anything important like economic or foreign policy.

            LGBT issues in the media may give you the illusion of a “left” in the U.S. but that’s all it is, a media illusion.

            Sheesh.

    • The U.S. China agreement on climate change is meaningless. Obama is grandstanding, he lacks authority to make binding agreements, and the chinese don’t plan on being held to any commitments

      • Ilambiquated says:

        Your guess is as good as mine, but I suspect the Chinese are dead serious about reducing pollution, including carbon dioxide output. Time will tell.

  35. Allan H says:

    Does anyone know what is going on with Colorado oil production. From 2013 on there have been wild swings in production, up to 17% in just 1 month. Here is the EIA chart

    • Boomer II says:

      Given the drop in oil prices and the fact that a lot of communities don’t want fracking, I’d expect that new drilling will slow down considerably.

      I don’t know the numbers in Colorado, but I know the debate has been going on for awhile now. Colorado would be wise to remember its boom-and-bust history.

      The Washington Post just did a series on fracking on Pennsylvania.

      http://www.washingtonpost.com/news/storyline/wp/2015/01/15/the-boom-proof-economy-how-to-handle-a-fracking-bust/

      But with gas prices so low — and other forms of energy, especially oil, becoming much less expensive — the future of communities who bet their future on fracking is uncertain. They are at risk of falling into what researchers have called the “resource curse,” where local economies over invest in a cash cow, only to sacrifice industries that might provide more sustainable growth over the long term, like tourism or manufacturing. ….

      Tioga County has some of the answers. But they learned them the hard way. In the spring, researchers from the Pennsylvania Budget and Police Center did a case study on the county, and found that the positives and negatives of drilling activity basically came out in the wash.

      • Allan H says:

        Pennsylvania has a long history of mining and drilling on a vast scale. There is little they won’t do to make that quick buck. Beautiful state that has been run through the mill in many places. Starting to look like an old prostitute without her make-up. I bring my own water when I go touring out there.

      • Gas prices will go back up. Eventually they will be $10 per MMBTU.

        • Boomer II says:

          Yes, they will go back up. But the lull right now gives Colorado more time to decide on drilling regulations. And it gives the state more time to see how fracking plays out elsewhere. If other locations follow the traditional boom-and-bust pattern, Colorado may decide it doesn’t need the disruptions. The fracking that is there and has been proposed is butting heads with agriculture, housing developments, and tourism.

  36. Caelan MacIntyre says:

    I feel apocalyptic today.

    “There were trees, birds, lakes and clouds…”

    • Fred Magyar says:

      There are days when I too feel quite apocalyptic myself.

      Especially when I read comments like The reality is, coal and oil are far more abundant and safe than whatever junk we’re putting in solar panels. To be clear, I am quite aware that solar is not a panacea . I guess ignorance is bliss.

      I took many pictures of birds and flowers while in Brazil recently… In certain places I saw lakes that were almost gone and visited places where the clouds had been absent for a long time… It is not very difficult to imagine a time in the not too distant future when those birds and flowers might be gone as well.

  37. Caelan MacIntyre says:

    A ‘rosy scenario’ is not an occupant driving their EV, bumper-to-bumper with other (un)economic zombies, to a wage-slave position in a crony-capitalist plutarchy system, such that many of us have.
    It is not a grid-tied taxed/controlled electrical supply. It is not an industrial agricultural system or industrial-corporate farms that torture food-animals.
    It is not a coercive state.
    It is not some kind of maintenance of BAU.

    Some ‘rosy scenarios’ may be among the worst of all possible– their very antitheses.

  38. Caelan MacIntyre says:

    “We live on a planet with finite resources, however scarcity is relative to the way we manage those resources. ‘Scarcity’ as a condition is artificial in the 21st century. Scarcity is artificial in the sense that it literally has to be enforced by a socioeconomic system of structural and behavioral violence. To quote the sociologist Philip Slater ‘Inequality, originally a consequence of scarcity, is now a means of creating artificial scarcities.’…

    In our current economic system known as capitalism, the necessities of life are commodified. However if food/water/shelter/energy can be commodified, humans can be commodified. Capitalism is the buying and selling of people forced into contracts due to economic conditions of artificial scarcity. The state serves as the enforcer class of the economic warfare inherent in capitalism (protecting the upper classes from the lower classes)…

    Capitalism is an authoritarian economic system, based on private property rights (property based on the threat of violence as well as money rather than needs or use), the private ownership of the means of production, economic competition, and a network of top down organizations that people are forced into in order to survive…” ~ Philip Richlin, The Socioeconomic Guardians of Scarcity

    • Allan H says:

      All governments are authoritarian and depend upon property rights as well as taxes. Once government starts to resemble a parasite it’s time for the worm treatment.

      Some Edward Abbey quotes.
      Society is like a stew. If you don’t stir it up every once in a while then a layer of scum floats to the top.

      A patriot must always be ready to defend his country against his government.

      The tragedy of modern war is that the young men die fighting each other – instead of their real enemies back home in the capitals.

      • Dennis Coyne says:

        So far attempts at something better have not really improved things much. I think the Western European capitalist system (pre-Euro) is the best we are likely to do. The system will need to adjust in the face of depleting fossil fuels, and modern birth control methods and empowerment of women will need to spread more evenly throughout the world so that the total fertility ratio will fall to 1.5 Worldwide. It will be difficult and maybe impossible to make the transition to something sustainable.

        • Allan H says:

          The system has become entrenched to support a financial/ industrial complex rather than the overall good of the people. That is a failing of the system design. It’s design generally promotes sociopathy and short-sighted self interest. If the current system was to apply for a warranty, it would only qualify for a short one.
          The major reasons that the American experiment worked was it took place in a semi-isolated, very resource rich, temperate climate region. A very important part of the success was related to a unity of states under one government from ocean to ocean. If the US had fragmented the world story would be dramatically different. However, the success is based on an unsustainable model. To all appearances the system is run to maintain the financial and industrial powers, not so much to provide for the overall good of the people (unless you allow that to be defined by the financial/industrial powers).

          We are lucky in that remnants of the original intent of government still are alive, though in a much more muted fashion. In other words, it’s certainly not all bad, but the major direction is poor.

  39. Dennis Coyne says:

    North Dakota Active Rigs 1/20/2015 8:30AM EST -163 rigs, 153 in big 5 counties (includes Divide)
    Chart below.

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