OPEC Update also Moscow Confirms Russian Oil Production in Decline

OPEC has just published their latest Monthly Oil Market Report with the June production numbers. All data is in thousand barrels per day and is Crude Only.OPEC 12

All revisions in the May data were minor. The June OPEC Crude Only production was down 80,000 bp/d from May.


The big story in June was the invasion or Iraq. It has has only minor effect on production. Iraqi production was down 169,000 bp/d in June.

Saudi Arabia

OPEC’s largest produce and the World’s largest exporter, Saudi Arabia, increased Crude production by 48,000 bp/d in June. There has been very little change in Saudi production in the last nine months.

All other OPEC producers had very little change from May to June. Charts of all 12 OPEC nations can be found on the OPEC Charts page.

The big story this month comes from Russia.

JODI RussiaThe JODI data, through April 2014, shows Russia peaked in December at 10,127,000 bp/d and down only 50 kb/d since then. But the worst is yet to come.

Moscow has confirmed Russia is in decline!

From Tass: Russia expects decline of oil export revenue in 2016

MOSCOW, July 07. /ITAR-TASS/. Russian finance ministry predicts a 156.4 billion roubles ($4.5 billion) decline in 2016 oil export revenue from the earlier figure stipulated in the federal budget law for 2014 and the planned period 2015 and 2016, says the Ministry’s draft federal budget for 2015-2017.

 The decrease is due to the expected fall in oil production to 193.4 million tonnes from 206.4 million tonnes.

In 2015, the budget will receive 78.9 billion roubles less than expected earlier, as export will contract to 195.4 million tonnes from 202.6 million tonnes.

Those production numbers make no sense and are an obvious error. Russian production, for the last 12 months, July through June has averaged around 1,440,000 tons per day. That comes to about 530 million tons per year. The numbers could be export numbers, I am not sure. Or, they could be production numbers from Rosneft because that is almost exactly what they are producing. Rosneft is Russia’s largest producer and is 75% owned by the state.

It looks like both Jodi and the EIA, to convert tons to barrels, are using a number very close to 7 barrels per ton. The usual multiplier of 7.3 gives a number about 450,000 barrels per day higher than they are reporting.

MOSCOW, July 7 (UPI) —An anticipated drop in oil production by 2016 is expected to hurt the Russian economy, the Russian Finance Ministry said Monday.

The ministry said Monday it expects a $4.5 billion decline in oil export revenue because of an anticipated 6.3 percent drop in oil production from 2014 figures.

The ministry said the federal budget next year will receive about $2.2 billion less than expected because of a contraction in exports.

report on the Russian economy from the World Bank in March said real gross domestic product growth in 2013 was 1.3 percent, compared with 3.4 percent in 2012. There’s a “confidence crisis” emerging within the Russian economy, the bank warned.

“In the past, the lack of comprehensive structural reforms was masked by a growth model based on large investment projects, continued increases in public wages, and transfers — all fueled by sizable oil revenues,” it said.

Russian energy exports last year accounted for more than 10 percent of GDP.

Russian C+C Exports

Unfortunately the EIA Russian export data only goes through 2010. However that is enough to show us what is happening. While Russian production kept rising Russian Exports kept falling. Notice that the left axis is exactly half the scale as the left axis. In 2010 Russia exported almost exactly half their production. And while production kept rising until peaking in 2013-2014, it is a good bet that exports kept falling. And we know, from the horses mouth, that they will fall considerably in the next two years. This is the Jeffrey Brown’s Export Land Model in action.

Russia Daily

Russia reports daily oil production from their Central Dispatching Department.They report 5 days a week but I get six days by how much they gain or dropped on Monday. So the 25 day average is about one month. The huge spike down in July is not likely anything permanent. They do that from time to time. But this is the largest spike I have ever seen.

The above chart is for 2014 only. They dropped slightly every month except June. There was a very slight uptick in June but it looks like July will be a big down month. I am counting seven barrels per ton and get about the same figures as the EIA and JODI.  However that may not be the exact multiplier I should be using.

Fossil industry is the subprime danger of this cycle

The epicentre of irrational behaviour across global markets has moved to the fossil fuel complex of oil, gas and coal. This is where investors have been throwing the most good money after bad.

Fossil Fuel Investment

The cumulative blitz on exploration and production over the past six years has been $5.4 trillion, yet little has come of it. Output from conventional fields peaked in 2005. Not a single large project has come on stream at a break-even cost below $80 a barrel for almost three years.

“What is shocking is that upstream costs in the oil industry have risen threefold since 2000 but output is up just 14pc,” said Mark Lewis, from Kepler Cheuvreux. The damage has been masked so far as big oil companies draw down on their cheap legacy reserves.

“They are having too look for oil in the deepwater fields off Africa and Brazil, or in the Arctic, where it is much more difficult. The marginal cost for many shale plays is now $85 to $90 a barrel.”

Comments from a Landman

This past week I have been communicating with a Landman, now an independent but worked for several years for a major oil company. He has asked to remain anonymous and also not to name the major oil company he worked for. So I will just call him “Landman” and his company “Big Oil”. Apparently most of his career has been spent working the Permian Basin. Also, Landman’s comments seem to confirm what is conveyed in the above article. That is that there is a lot of irrational behavior going on in the oil patch.

I became interested in peak oil while I was trying to understand what happened to my natural gas business. I never saw the shale gas train coming and it hit me right between the eyes.  Then I started reading everything that Art Berman published and that led me to the Oil Drum which led me to your blog.

The last 5 years have been pretty dismal in the gas business and I don’t play with borrowed money.

Peak oil became apparent to me when I started to grasp the ramifications  of the proved reserve reports by the industry in their SEC 10k filings. Ultimately proved reserves pay all the bills in the oil patch.
I worked 18 years for Big Oil.  Booked Reserve replacement was a very rigorous, conservative and disciplined process. Significant new field discoveries (100 MM BBL elephants) happened about 10 years apart in North America. I am only aware of 2 during my career and both were natural gas.
 As a general rule, Big Oil replaced it’s produced reserves every year.  But reserve replacements happened mostly because the reservoir engineers used field extensions, step out wells, and behind pipe pay zones to replace the produced reserves.
It was the legacy fields in the Permian Basin that financed Big Oil’s international, Alaskan and OCS exploration efforts. That could only happen with a strong balance sheet.
Every 35 year career geologist and engineer that I know and work with in the Permian Basin knows that the 90% of the horizontal wells completed today are not economic.  But these wells are not dry holes either and industry is very good at parsing their press releases.
A good seat of the pants criteria for evaluating an unconventional resource play is to ask where and how many good vertical wells have been drilled in the play over the years.
 If you can’t find historical, economic wells with solid cumulative production, then technology is not likely to save your ass.
And another post:
I want to clarify that the 2 100 mm bbl discoveries I mentioned were in the Onshore Lower 48. Big Oil also found smaller discoveries in the Lowe 48 that helped the reserve replacement. Big Oil also found many larger discoveries in the OCS ( Outer Continental Shelf and Deep Water).

When I started, Big Oil Upstream was divided into an Exploration Department and Production Department.

The Land Department was part of the Exploration Department but provided land services to the production department as needed. Each had their own budgets for drilling wells. If exploration made a discovery, it had to prove to the production department that it was commercial. That was done by drilling additional confirmation wells maybe shooting more seismic, and log and core analysis of the reservoir rock.
It the discovery was commercial,the asset was transferred to the Production department for development.
If the production department was not convinced the discovery was commercial it would not accept the asset. Non commercial assets might be retained if no additional costs were incurred but more frequently farmed out to smaller independents.
The arguments could be fiercely contested since management bonuses depended on the outcome.
 Most years Big Oil replaced just a few % more than it produced.   But if the reservoir engineers were too liberal in their interpretations, then next year could be a real SOB for reserve replacement. So I think they they always kept a little in their back pockets for the lean years. That is just my opinion for what it’s worth.
Big Oil also had major legacy assets in other areas of the lower 48 that helped pay the bills in the frontier and international areas.
Note: I currently send out an email notice to many people notifying them whenever I have a new post. If you would like to be added to, or removed from, that list please post me at DarwinianOne at Gmail.com.
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210 Responses to OPEC Update also Moscow Confirms Russian Oil Production in Decline

  1. clifman says:

    Russia turns over. Huge news. Big ol’ bear with an arrow in its belly – and the arrow points nowhere but down…

  2. Toolpush says:


    The sudden drops in the Russian production figures could be one of two reasons, 1/ Unplanned shut downs, which could happen any where, such as a pipeline or producing field, and can happen anytime.Or 2. Planned maintenance, this is more likely to involve the offshore fields where vital maintenance maybe require in part of the plant, that will shut down the whole operation, so they take the opportunity to do it all at once. As ice is still in the water until May off Sakhalin then the shut downs there occur from July through to September.
    They now have Arctic Sea production now so they will probably have a shorter potential season for their maintenance. What ever the cause, the long term trend doesn’t look well for them at all.

    • Yes, I stated that it is likely nothing permanent, these shutdowns happen from time to time. Yet I have never seen one that took 250,000 barrels off line almost overnight. However the decline was mostly from one company, Gazprom, Russia’s huge state owned natural gas company. That tells me they will likely recover soon.

      • Watcher says:

        If they reduced output 1 mbpd (about 10%) and that offset probably years to come of any US shale gains, they should be able to see a 10% price increase (at least) and come out ahead in doing harm to their enemies.

  3. Calhoun says:

    Slightly off topic, but totally newsworthy:

    Crumbling Roads in Oil Fields Slowing U.S. Energy Boom

    The road to U.S. energy security is often unpaved.

    In southern Texas and North Dakota, where shale drilling has propelled U.S. oil production to the highest level in 28 years, thousands of 18-wheel trucks are rumbling to wells on roads designed decades ago for farmers to bring crops to markets. Road closures have slowed output, with diverted traffic increasing accidents, as Texas seeks $1 billion to maintain roads in the oil belt.

  4. Calhoun says:

    Ron, isn’t KSA supposed to bring on another level of Manifa in the near future? If so, what do you think that will do to their overall production?

    • Manifa is supposed to be at full production sometime this year. They may be there now, but if not they are very close. But they seem to be getting desperate, going for deep water reserves in the Red Sea. I think what they will find there is mostly gas however. What the article below does not tell is that there is a very deep salt layer beneath the Red Sea.

      Saudi Aramco finds oil and gas in Red Sea

      According to Saudi Aramco’s annual report, a deepwater oil field Al-Haryd and a gas field in the Shaur structure were found in 2013. The company also executed its first deepwater drill stem test at Duba-1 in the northern Red Sea at a depth of 648m, in 2013.

      The shallow water offshore Manifa field in eastern Saudi Arabia began production in April 2013, three months ahead of schedule, with oil output reaching 500,000 bpd by July.(2013) Reports stated that Manifa will have the capacity to produce 900,000 bpd of heavy crude and deliver feedstock to the industrial towns of Jubail and Yanbu by the end of 2014.

      • Watcher says:

        There was a guy here posting a month or two ago who seemed to know something of the state of the art for 3D seismic, and he said salt’s distortion had been dealt with by new computer processing. Very expensive, but you can see through salt now.

      • Frugal says:

        Test results at Saudi Aramco’s Red Sea deepwater well indicated tight reservoirs for potential future development, which could lead to additional deepwater rigs.

        Tight oil in deep water? What a combination! And are these fields also under 2-km of salt.

        And not a word about how much oil there is this new-found fields. Can’t be that much or they would have announced some exaggerated numbers by now.

  5. Old farmer mac says:

    ”field extensions, step out wells, and behind pipe pay zones”

    I bet I am am not the only reader who is wondering just what is meant by these terms. Hopefully somebody with more knowledge of actual oil field work will explain them for us. Landman would be the ideal candidate of course.

    I take it that nobody who comments here on a regular basis is quite ready to commit to predicting a permanent peak in Russian oil production just yet but that most of us who follow peak oil closely are of the opinion that Russia will peak within the next few years and certainly within a decade.

    • Jeffrey J. Brown says:

      Let’s assume that you have a four mile long multipay structural trap oil field. Based on seismic and subsurface mapping, and based on production data, you believe that the field has not been fully developed to the north. So, you drill a one mile stepout well to the north, on favorable data, which confirms that the field extends at least one mile to the north. You would then drill additional wells around the stepout well and between the stepout well and the existing production to the south.

      Or in the alternative, you could drill a direct offset to the existing field, on the north side of the field, as a field extension, and continue to develop the field to the north until you find the northern limit.

      Now, given a multipay scenario, which typically occurs on structural traps, generally you can produce the pay zones sequentially until they are depleted (usually starting with the deeper zones) and then go up the hole, or you can drill separate wellbores. There have been some efforts at multiple completions within one wellbore, but this really works best when you have an oil pay and a gas pay; it tends not to work very well for two or more oil pays.

    • Jeffrey J. Brown says:

      As I noted in the prior article, Russian net oil exports hit 7.2 mbpd in 2007 (total petroleum liquids + other liquids, EIA) and have so far ranged between 6.9 and 7.2 mbpd for 2008 to 2013 inclusive.

      Based on the 2007 to 2013 rate of decline in the ECI Ratio (ratio of production to consumption), I estimate that they shipped about 22% of their post-2007 CNE (Cumulative Net Exports) in only six years.

    • Jeffrey J. Brown says:

      Based on the 2007 to 2012 rate of decline in the Russian ECI Ratio, I estimated that post-2013 Russian CNE (Cumulative Net Exports) were about 54 Gb.

      If Russian production were to fall by only 1%/year from 2013 to 2023 and if consumption continued to increase at the 2007 to 2013 rate, it would imply that 2023 production would be down to 9. 5 mbpd (total petroleum liquids + other liquids) and that consumption would be up to 4.6 mbpd, putting net exports at 4.9 mbpd, with an ECI ratio of 2.2.

      Based on this scenario, and based the implied rate of decline in the Russian ECI ratio (3.2 in 2013 to 2.2 in 2023), estimated post-2013 Russian CNE would decline to about 33 Gb, versus the previous estimate of about 54 Gb.

      • Jeffrey J. Brown says:

        Note that the 2007 to 2013 rate of decline in the Russian ECI Ratio (from 3.7 to 3.2) would put the 2023 ECI Ratio at about 2.5.

  6. danko says:

    Dont worry about Mother Russia

    • RalphW says:

      I don’t read Russian and I can’t put an image into google translate. I am guessing this is a list of field developments but it is not clear what the vertical axis is, or what the colours or size of circles represents. As always, peak happens when the depletion rate from existing wells exceeds the rate of new oil drilling coming on line. By itself, this diagram does not answer that question.

      • Calhoun says:

        Oddly, the names are anglicized, not in Cyrillic. But the text at the top is.

      • RalphW says:

        Googling, they are indeed a list of fields, with size of circle proportional to BOE reserves.
        However, they are a mixture of oil, condensate and NG fields. I guess colour might reflect geology.

        This looks like typical oil company PR.

      • danko says:

        Right, it is list of field developments. Vertical axis is production on the peak (in millions tons), size of circles presents reserve volume, colours – i dont know, maybe it is a company.

    • danko says:

      Oil from new fields, left axis in millions tons

      • Anon says:

        That chart massively disagrees with the official government statement. What’s the provenance?

        • danko says:

          I can only guess – maybe some projects moved to the right

          • Anon says:

            Maybe its just tracking new projects? That would explain why the left metric has nothing to do with what Russia’s current total production is.

            Most of Russia’s production is the old, dying, massively infilled Soviet fields in West Siberia. The chart is only showing stuff that is new/ascending, with the “base” coming online in 2001 and peaking in 2009. Sure looks like it is only a partial chart.

          • Dennis Coyne says:

            Hi danko,

            That second chart is very interesting.

            If we assume the numbers for the “new” fields from 2001 to 2013 are correct and we convert EIA C+C data from barrels to tons we can divide Russian production into “old fields and new fields” from 2001 to 2013 if we assume your chart is C+C output in metric tons.

            The decline rate from “old fields” from 2007(431 Mt) to 2013(404 Mt) is only about 1% per year on average over those 6 years.

            If we assume this decline rate for old fields continues out to 2020, then Russia may remain on a plateau out to 2020. Chart below (Russia new is estimated from danko’s chart and Russia old is Russia total (EIA data) minus Russia new.

            • The decline rate from “old fields” from 2007(431 Mt) to 2013(404 Mt) is only about 1% per year on average over those 6 years.

              If we assume this decline rate for old fields continues out to 2020, then Russia may remain on a plateau out to 2020.

              Not a snowballs chance in hell of that happening. This is an old article but it shows what was happening five years ago:

              Alex Burgansky: Russian Oil and Gas Industry Surprises Analysts

              There are plenty of projects in Russia, both, new projects and existing brownfield projects. Russia is a very mature producer. If you exclude all the drilling activity taking place every year, then Russian organic decline in production is close to 19%. To compensate for that organic decline, Russia drills somewhere between 5,000 and 6,000 wells every year.

              They had an organic decline of 19% per year! But they were creaming their old fields with 5,000 to 6,000 infill horizontal wells per year. That was five years ago. But let us continue with that article:

              Therefore, next year there will be a lot fewer fields coming on stream; in the absence of new incentives to put more money to work to grow Russian oil production, it will naturally start declining, with organic decline rates of around 19% and growing.

              They managed, with those 5 to 6 thousand infill wells per year, to hold the decline rate at almost 1%. But now those chickens are coming home to roost. And you think that these old fields will hold their 1% decline rate.

              Give me a break!

              Oh, one more point, the Russian Finance Minister says their production will decline 6.3% by 2016. Do you think that perhaps he doesn’t know what he is talking about? Surely he is not just bragging. If he were bragging he might say 1% instead of 6.3%.

              • Dennis Coyne says:

                Hi Ron,

                It is possible that they will not continue to decline at 1%, you of course have that magic crystal ball that tells you exactly how much the future decline rate will be. I only have past data which shows a 1% decline rate due to the in field drilling.

                Do you expect that the in fill drilling will be discontinued for some reason?

                Let’s assume it continues and that the “old field decline rate gradually increases from 1% to 4.5% between 2013 and 2020. In that case Russian output would decline gradually, chart below:

                • you of course have that magic crystal ball that tells you exactly how much the future decline rate will be.

                  No, I have no crystal ball, all I have is common sense that tells me that when you cream a field, pulling the oil right off the top, in order to keep production up, that it must end some time.

                  Do you expect that the in fill drilling will be discontinued for some reason?

                  It’s infill, one word. And well no, perhaps it can continue forever. There is absolutely no reason it should ever stop. They can just keep drilling and drilling and drilling and…. Perhaps I was wrong, perhaps it will never end.

                  After all, is there any logical reason that they cannot continue to pull oil right from the top of the reservoir… forever?

                  • Dennis Coyne says:

                    You are of course correct, they will not continue forever. I imagine they will stop tomorrow and the decline rate will immediately go to 19%, perhaps even higher, how about 50%, not high enough?

                  • Dennis Coyne says:

                    Hi Ron,

                    You are fond of saying “I never said that.”

                    Can you point out where I said that the infill drilling will continue forever?

                    My question was do you expect that the infill drilling will cease soon, as in next month or by years end?

                    Also note that US lower 48 production declined by about 3%/year from 1970 to 1980 and by 2.3%/year from 1980 to 1990.

                  • Dennis, you know very well I was being sarcastic when I said “forever”. Nothing lasts forever. But you were not being sarcastic when you said “but think your estimate of 6 to 7% is too high at least in the near term,”

                    You were implying that I actually wrote that. But far more important, everyone who read that would believe that I wrote that just because you said I did.

                    I will try to never be sarcastic with you again. You might just use that… again… to imply that I made some very specific comment which I never made.

                  • Dennis Coyne says:

                    To be clear Ron is correct that he never said decline rate would be 6 or 7 %. He said the new fields would increase at 125 kb/d each year and that the old fields would decline by 4 or 5 times that rate. What decline rate is implied?

                    125 kb/d times 4 is 600 kb/d and 125 kb/d times 5 is 725 kb/d, Russian output is about 10,000 kb/d.

                    The implied decline rate for the old oil is 6 to 7%.

              • Dennis Coyne says:

                Yes Ron the Russian finance minister has said 6.3% decline. which is about 3.2 % over that 2 year period.

                Is it possible that a government official might get something wrong?

                We will see.

                • Of course not. The Russian official could be wrong. The infill drilling could keep the decline rate at 1% forever.

                  Government officials are traditionally way, way, too optimistic. Like the EIA, they are almost always way too optimistic.

                  And you think this time the government official is too pessimistic. Wow! That’s a new one.

                • Anon says:

                  No NOC or government official has ever been noted as unduly pessimistic.

                  If the Russian government of all people is willing to admit on record that they have a problem, they have a BIG problem.

              • Dennis Coyne says:

                Another article predicting a drop in Russian output from 2009:

                “… an executive at a major oil-field services company.
                Exploration activity is sliding and operators will struggle to keep production levels up, said the executive, who asked not to be named.”

                An oil services company executive should surely get this right, no?

                • Dennis the fact that, in 2009, oil company executive expected Russia to go into decline, but it did not, makes it far more likely, not less likely, that they will now go into decline.

                  That was the entire point of my post
                  The Blibbit Principle.

                  It is simply beyond me that people cannot understand that if a person predicted that 500 pounds straw would break the camel’s back and it did not, that this means that 600 pounds will not, or that 700 pounds will not. Because they were wrong about 500 pounds makes it far more likely that they will be right about 600 pounds breaking the camel’s back, not less likely.

                  • Anon says:

                    And there’s no mystery why Russia has held up as long as they have. You can see the well spam on satellite.

                    I also suspect that the Russian data could be partially falsified. Some have estimated they spill as much as 30 million barrels per year and their producers are all in bed with the government who is on an extreme nationalism kick and has “rising internal consumption” to talk about.

                    Would Russia cover up problems with one of their two big geopolitical calling cards as long as they possibly could? What do you think?

                  • Dennis Coyne says:

                    Hmm, let’s see. Perhaps the finance minister is worried about the budget and wants higher taxes on oil companies, the justification for higher tax rates is falling revenue due to expected future decline in oil output.

                    Another reason for being pessimistic about oil output is to scare the Europeans so that they will not impose sanctions.

                    With a little imagination one could come up with many reasons why the Russian finance ministry might get things wrong.

                    Also if we think of 2016 as the end of 2016 and look at decline since the end of 2013 we would have 6.3% decline over 3 years which is about 2.1% per year, over 2.5 years it would be 2.6% per year.

                    So what level does your common sense tell you that the decline rate will be? I agree it will be more than 1%, but think your estimate of 6 to 7% is too high at least in the near term, it might get to that level by 2020, I am not sure how long it will take, but common sense suggests it will not happen overnight.

                  • Dennis Coyne says:

                    Hi Ron,

                    I think it just shows that predicting future oil production is a tricky business.

                    We can predict that oil output will decline at some point in the future and we will be correct. I agree that Russian output will decline in the future, there have been a number of cases where output declined and then rose. When the average 12 month Russian C+C output is 4% below the maximum 12 month average C+C level, I will be convinced that Russia is in decline.

                    Time always answers these questions.

                  • I agree it will be more than 1%, but think your estimate of 6 to 7% is too high at least in the near term,

                    Sorry, I cannot find the comment where I estimated a 6 to 7% decline. I searched on “percent” and could not find it. Then I searched on “%” and still could not find it. But I am an old man and forget things. Perhaps it was in a post from a few weeks back. Help me out here will you?

                  • Dennis Coyne says:

                    Hi Ron,

                    See my comment below your do the math comment

      • Do the Math!

        That is oil from new fields and it is supposed to be sitting at just over 100 million tons per year today and is scheduled to hit just under 140 million tons in 2020. That is around 39 million additional tons by 2020 or an increase of about 750,000 barrels per day over the next six years. (After converting tons per year to barrels per day.) That works out to be about 125,000 additional barrels per day per year of new oil.

        Old oil will decline at four or five times that rate. You should be deeply worried about Mother Russia.

        • Jeffrey J. Brown says:


          If we all collectively agree to ignore declines from existing production, everything looks a lot better, and after all, this does seem to be the conventional wisdom.

        • Dennis Coyne says:

          Hi Ron,

          You asked where did I say the decline rate is 6% or 7%?

          I did the math!

          You said,

          “Old oil will decline at four or five times that rate.” That rate was about 5.7 million tons per year (rate that new oil will be added over 2013 to 2020, 39 Mt/7 years.) So 5.7 times 4 is 23 Mt divided by 400 Mt of old field production or 6% and 5.7 times 5 is 28.5 Mt/400 Mt=7%.

          So I translated your statement in quotes above into decline rates. Perhaps I misunderstood.

          • You have got to be kidding!

            Having said that, I would not be surprised if the decline rate, by 2020, would be that great.

            • Watcher says:

              Putin said within the past couple of years that given $25B in “investment” (aka drilling money), Russia could hold production through 2020.

              I’m sure he didn’t do his own calculations. The best minds he could draw on told him that and they likely didn’t lie. My recall is his specifics were carefully worded. He was fed those lines. He didn’t mold them for propaganda.

              • Anon says:

                In Russia, it being technical information composed by government and propaganda is not mutually exclusive. Even more so than most of OPEC, their exact oil production is a political weapon.

            • Dennis Coyne says:

              Hi Ron,
              Did you misspeak when you said,

              “That works out to be about 125,000 additional barrels per day per year of new oil.

              Old oil will decline at four or five times that rate.”

              The math is really pretty simple when one asks, what decline rate is he talking about in the quotation above?

              I wondered because you did not seem to think a 1% decline rate would continue until 2020 (or forever).

              So 125kb/d is the increase from new oil, old oil would have a 4 or 5 times larger decline. I get a decline of 600 kb/d or 725 kb/d and 2013 Russian output was about 10,000 kb/d. Was I mistaken that this would be 6 or 7%? I also interpreted this as the average rate of decline that you would expect over the 2013 to 2020 period rather than that this might be the decline rate in 2020.

              Would you care to clarify what you meant?

  7. Jeremy Leggett comments, on another list, on the article I posted up top.

    A momentous article appeared in the Telegraph Fossil industry is the subprime danger of this cycle yesterday. In brief, if you missed it: fossil-fuels are the new sub-prime, heading for mass stranding, billions of dollars will be wasted; meanwhile a solar revolution rushes up on us under the radar, standard-bearer of a transformative green industrial revolution that can no longer be avoided. Written by international business editor, Ambrose Evans-Pritchard, it comes from the Conservative party’s newspaper of choice. The Prime Minister, The Chancellor, and many of their advisors will no doubt have registered it. It sits very uncomfortably with their vision of a UK fracking its way to prosperity, and much else about the energy incumbency’s current set of narratives.

    My latest blog, on The Elders website, offers some thinking congruent with all this. It positions SolarAid’s breakthrough in solar-lighting-versus-kerosene as an example of a bite-sized first step to replacing other entire categories of fossil-fuel use, a process that can realistically be accelerated in these days of investors beginning to wake up to the potential risk of wasting capital expenditure in an expanding carbon bubble. It offers me hope that once-almost-inconceivable transformative change is possible, for social good. I hope you too.

    BR, J

    • Jeffrey J. Brown says:

      Some fascinating stats in the following reuters article (there is least one typo, regarding discoveries in the Sixties):


      The number of new oilfield developments is set to drop below 50 per year in 2014 and 2015, compared with an average of 75 per year over the past decade, according to Nicholas Green, analyst at London-based Bernstein Research.

      “This represents the lowest level of activity since 1999, lower even than the oil price crash of 2008-09,” he said.

      The declining rate of finds is now discouraging investment in certain areas, with drilling in the North Sea set to decline the most over the next two years. Southeast Asia is likely to be the only region to see increased activity, according to Green.

      The complexity of “frontier exploration” such as the Arctic and the pre-salt deep waters of Brazil and West Africa has cut returns on investments.

      Some hope the answer to poor exploration results can be found in increased recovery rates from mature conventional fields.

      Discussion on article at peakoil.com, with a couple of my comments:


    • Old farmer mac says:

      I have been following Evans Pritchart just about forever- since White Water days when he was doing a better job of covering American politics than any of our established American papers.

      He is not always right about the future but he is a man to be taken seriously when it comes to sniffing out bad news.There are not many equal to him in this respect.

      Now as to a coming solar boom- I doubt his crystal ball is any better than anybody else’s but those of us who are seriously following peak oil know he is in the ten ring in respect to oil company investments and balance sheets.

      Of course he is nowadays way up the corporate ladder and doesn’t have to sniff out hidden stories any more. He now has the clout to mention the unmentionable in polite circles.Peak oil would be right down his alley these days- a big enough story to get his attention.

      The Telegraph has tons of highly conservative readers. I have been argueing that peak oil is gradually making it’s way back into the mainstream media and this is proof of it.

      Unfortunately I can’t get access to the Telegraph free online any more and I can’t afford pay but so many subscription fees.

      But you can still get occasional articles such as this one thru a link.

    • Watcher says:

      Someone should inform this dood that when the time comes you don’t get any extra calories for swaggering forth with elegant prose. The only transformative change he’ll see is five feet thickness of maggots in the cities chowing down on corpses.

      • Old farmer mac says:

        OH MY Watcher,

        You seem to be the worst pessimist around today.

        Do you really expect civilization to collapse within your own lifespan?

        Pritchart is an old man probably in his early seventies I would guess.

        I am a pessimist myself but not so pessimistic as all that.

        • Tom Fugate says:

          Everyone wants to know if the great collapse and die-off is going to come on their watch. That’s why I follow this blog, I want to know if the horrors are going to come while I am still alive (I have no doubt they are coming). I am 55.

          • Allan H says:

            You guys are missing the whole point. Don’t worry about civilization collapsing. Think of the upsides.
            We should all be looking forward to the time when coal fired steam locomotives come back.

            Plenty of jobs for everyone, since a lot of those machines will be gone. Get your back in shape and get ready with that sledge hammer, shovel and ice saw.

            All those really cool mail-order catalogs instead of annoying internet ads that everyone ignores. Good in the privy too.

            Horses and buggies will be back, you can be a driver and your drunken bro-in-law can clean up after them. Barn help needed.

            Local entertainment and circuses will thrive.

            No one will be able to build nuclear missiles, nukes or anything high tech. Weapons will only reach a short distance.

            Wooden ships and iron men! Sailing the ocean blue.

            Wall Street will be gone.

            No more TV commercials. No more TV!

            No more texting, people will have to write letters and postcards again. People will have to talk to each other and best of all that annoying cell phone will cease to exist. Kids won’t live by the cell phone, iphone or ipod. (Saw a couple today in a restaurant, sat down at the table and both bowed their heads. Not to pray but to access their phones. They never talked to each other or even looked at each other.)

            With the decreased population, there will be a lot of cheap housing available. Just need a water supply.

            No more malls.

            Things will be a lot quieter. No more leaf blowers for one.

            I am sure the list can go on, always a silver lining.

            • Patrick says:

              Yeah right, things will be a lot quieter. Especially with 435 unattended nuclear power plants and no electricity to cool spent fuel pools. Alan Weisman, The World Without Us, Chapter 15, Hot Legacy, page 213: (…) nuclear plants, several with multiple reactors, would briefly run on autopilot until, one by one, they overheated.
              As refueling schedules are usually staggered so that some reactors generate while others are down, possibly half would burn, and the rest would melt. Either way, the spilling of radioactivity into the air, and into nearby bodies of water, would be formidable, and it would last, in the case of enriched uranium, into geologic time.
              A lot quieter indeed…

            • Allan, just one small problem with your theory. With no fossil fuel for fertilizer, or tractors, or for irrigation, or for refrigeration, or for pesticides, or for transporting food, there will be enough food for about one tenth the current population.

              But perhaps you are right. Things will be a lot better… after the die-off.

              • Allan H says:

                Ron, it’s not a theory, it was humor. Trying to bring some lightness to this sad discussion. Apparently I missed.

                You actually thought that was serious? Read again please.

                Patrick, everybody knows about the nuclear waste problem. The simple solution is to spread them further apart, then the materials cannot thermally reinforce each other. It’s a tremendous lack of governmental oversight and the refusal of the public to react to this danger, but easily fixed.

                • TechGuy says:

                  Allan H Wrote:
                  “The simple solution is to spread them further apart, then the materials cannot thermally reinforce each other.”

                  Not exactly. A start would be to set up long term waste storage and start hauling the spent fuel rods out. Also I would feel more comfortable if the started storing the majority of spent fuel rods in dry caskets instead of the spent fuel pool. At least in dry caskets the spent fuel is no in danger of catching fire.

                  ” It’s a tremendous lack of governmental oversight and the refusal of the public to react to this danger, but easily fixed.”

                  The Public doesn’t understand the risks. Most of the people in the Nuclear power industry are not even aware. The gov’t consists of a bunch of baboons (and I am insulting the intelligence of baboons because baboons are smarter than politicians and gov’t bureaucrats)

                  Who here doesn’t believe a major resource war isn’t on the horizon? (ie future Nuclear warfare)

            • Perk Earl says:

              “(Saw a couple today in a restaurant, sat down at the table and both bowed their heads. Not to pray but to access their phones. They never talked to each other or even looked at each other.)”

              I fail to understand why people allow themselves to be taken over by tech toys. I was at a dinner with 8 people and most of them started doing that same bit and I said should we get the food to go? They all understood and put away their toys and we actually engaged in a very interesting conversation. I’m really starting to feel like a relic.

              • TechGuy says:

                Perk Ear Wrote:
                “I fail to understand why people allow themselves to be taken over by tech toys. I was at a dinner with 8 people and most of them started doing that same bit and I said should we get the food to go?”

                I can top that. Ever see people crossing the street with their eyeballs glued to their smartphone? I once even see some one start to walk directly into moving traffic, ignoring that the light had changed green. Luckily, the driver wasn’t also glued to a smartphone and stopped in time.

                The worst part is driving as I have to frequently take action to avoid collisions because of people using a cellphone. They drive worse than drunk drivers.

          • robert wilson says:

            Tom do you still post at alasbabylon? If so, where is Jay Hanson?

        • Ahhh Mac, if you only knew.

          Seriously, I have no idea how things will play out. But I have been a student of human nature all my life. And I’ll bet Watcher’s outlook is a lot closer to the truth than yours.

          Did you read my page, “Of Fossil Fuels and Human Destiny”? I’ll bet you did and I’ll bet you didn’t believe a damn word of it.

          • Old farmer mac says:

            I have read it and it is a great essay. I agree with most of it. Humanity as a species is going to eventually suffer a very hard crash as the result of the depletion of one time gifts of nature including fossil fuels – no doubt about it.

            But I do not believe either you or I will likely live to see this crash unfold in all its grisly horrible effects.

            Now if we extend the time frame out to fifty years or more …….. people by then are going to be in a hell of a fix in most parts of the world.

            And while I fully recognize that when it comes the crash may be world wide and involve hot war between many countries large and small there is no reason in my opinion to assume that all parts of the world will suffer a devastating economic and ecological collapse at the same time or within any foreseeable time frame for that matter.

            People in countries without energy, mineral, and agricultural resources are going to be in a hell of a fix starting yesterday in places like Egypt for instance.

            The population there already exceeds the carry ing capacity of the land and they have nothing of great value to export to pay for imported food and energy and other necessities.

            The UK is in a similar fix except that that country does have a number of industries that manufacture high tech stuff for export. But if their markets fail, or the Koreans undercut their prices……..

            Now on the other hand there is absolutely nothing ESSENTIAL to a modern industrial civilization that does not exist or can be manufactured or substituted in adequate quantity in the Americas and especially in the US and Canada to maintain ” business as usual ” for the easily foreseeable future.

            We sure as hell are not going to continue to burn close to twenty million barrels of oil a day forever but neither are we going to starve due to lack of farm land or fuel to farm.We can gradually break most of our energy hog ways and learn to live more modestly.

            Adam Smith’s Invisible Hand is not on the end of Superman’s arm but given time it can work miracles or at least near miracles.I use half as much firewood now as I did as a young man living in the same old farm house and hardly any heating oil at all.The difference is insulation and new windows and vinyl siding with insulation underneath of course. My current pickup truck gets twice the mileage of the sixties vintages we used to drive.The next one will do even better.

            IF the average middle class family were to choose to do so it could live in a net zero energy house by giving up one or two new cars and investing that money in a better house or upgrading their existing house.

            We can eat chicken instead of beef with less than half the agricultural inputs per pound of meat and if we can’t afford chicken we can eat beans and rice.

            We have plenty of coal and we are not going to run slam out of either oil or natural gas or wood or fresh water or anything else anytime soon.

            Once the truth about resource depletion finally becomes obvious to the public then we will finally act together in a collective fashion and do some things to save our sorry butts.Some of the things we will do include closing the borders and building new nukes and some coal to liquids plants and tightening up building codes and taxing the 6000 pound personal vehicle into scrap metal yards.

            In other words we are eventually going to go on a wartime footing and give saving our civilization the old school try.

            We may not succeed but there is no really good reason so far as I can see to assume we are going to fail globally.

            Humanity is one species but in practical terms we exist as separate groups in different parts of the world that compete with each other.

            Nobody is going to invade North America for the next fifty years at least.We might get drawn into a nuclear and biological WWIII and perish as a result but we can draw in our horns and watch most of the rest of the world collapse while we just draw our belts up really tight around our much reduced bellies.

            Business as usual is a dead man walking. But people can learn to walk again in the literal sense.

            I used to believe the whole world is going to hell in a hand basket but I don’t any longer.It MIGHT still do so of course but there is an excellent possibility that some parts of it will be ok for the foreseeable future.

            Of course a runaway greenhouse could finish us off.WWIII could finish us off. A deliberately engineered communicable disease could finish us off.

            But peak fossil fuel is not going to be the end of civilization because fossil fuels are not evenly distributed and people all over the world are not equally able to put their hands on them.

            A country such as the US is safe from military aggression. Venezuela is not. If we get into a bad enough bind we might find it necessary to export a little democracy down that way doncha see?

            Countries such as Italy can be swamped with refugees that can get there on leaky small boats. Not many leaky small boats are going to make it across either the Atlantic or the Pacific.

            And once the feces is really in the fan any that do will be sunk out of hand when they enter our territorial waters.

            We are going to play a very hard game of hardball once our survival depends on our doing so.

            Some of us have a good shot at not only surviving but of actually continuing to live reasonably well by historical standards.

            ASSUMING OUR LUCK HOLDS of course.

            • Dennis Coyne says:

              Well said as usual OFM.

            • TechGuy says:

              “We sure as hell are not going to continue to burn close to twenty million barrels of oil a day forever but neither are we going to starve due to lack of farm land or fuel to farm.”

              No fuel, no crops. No way is America going to feed ~320 million using Oxen plowed fields, no Petro chemicals (Fertializer, Pesticides, etc), and no ground water to irrigate fields (as many wells are 200+ feet deep)

              Also consider the average age of US farmer is now 60 years! There got to be a bunch in their 80’s still farming! Americans don’t want to farm anymore, and its not possible for Joe six pack to just pick up farming the next day.


              “Countries such as Italy can be swamped with refugees that can get there on leaky small boat”

              Or like the US that is now getting flooded from South America. No boat required. It wouldn’t surprise me to discover that Mexico and other South American countries are shipping their prisoner into the US to get rid of them like Cuba did in the 1980’s

              “But I do not believe either you or I will likely live to see this crash unfold in all its grisly horrible effects.”

              I won’t bet the farm on that assumption. At some point we will breach the tipping point and it will all fall apart in short order. It could happen tomorrow or in the next ten years. Its like predicting an earthquake. Stress builds up over the length of the fault but is nearly impossible to pinpoint when the fault will finally slip, but when it does it will snap with unimaginable devastation.

        • Watcher says:

          The transformative change guy wasn’t Pritchard.

        • Caelan MacIntyre says:

          Global industrial civilization already seems to be well into the beginning stages of its (fractal) decline and collapse, what with (pockets here and there of) increasing social unrest/insecurity, wars, unemployment and financial/market/political instability/irregularity, and decreasing ecological viability, and so on.
          If we agree, then perhaps the question is more, ‘Do you expect civilization’s decline/collapse to finally level off to or near some kind of equilibrium within (some of) our lifetimes?’.

          • No. It will take perhaps 100 years for things to level off and some kind of civil order to be restored in most countries. Or that is my best guess. It will be impossible for something so traumatic to return to peace and order in a short time.

            • Old farmer mac says:

              In most places a police state will arise and order will be restored in a decade or two at most. It won’t be nice but the only people apt to murder or rob you will be wearing the official uniform.

              • Dennis Coyne says:

                Hi OFM,

                During the Great Depression police states arrived in many places (Germany and Italy come to mind), but in others the police state was relatively limited (though Japanese Americans would disagree).

                I assume that you believe that the coming crisis will be much worse than the Great Depression or that the US, UK, Canada, Australia, etc. were effectively police states during the Great Depression or perhaps both.

                • Old farmer mac says:

                  I have no idea why you might think I think the US ,UK, Canada, Australia, etc were police states during the thirties. They most definitely were not although various parts of Ireland got to a condition approaching a police state at times over the last hundred plus years.

                  Now as to how bad I think things will get in the future:

                  Countries that are already poor and already dependent on imported fuel and food and other imports which have nothing of consequence to export are going to sink to the utter depths of hell but just when I cannot say. I do believe things are going to be mad max within half a century and probably sooner in such countries.

                  Countries such as the United States are going to suffer a depression both deeper and longer lasting than anything that has ever happened before. As Ron and others have often pointed out people are going to be thrown out of work by the millions and tens of millions at some point because of peak oil and other peaking irreplaceable natural resources.

                  Now as to whether economic conditions will get so bad that we descend into a police state in the USA or Canada or Australia or the UK or other rich western countries –I believe there is a very real possibility of this happening.

                  But note I said possibility. I am not predicting an American police state arising within the foreseeable future.

                  Martial law is a very real possibility and if things get really bad- if all the retirees in Detroit decide to riot for instance because of pension cuts- martial law would be necessary to restore order.

                  If our leaders do a reasonably good job of managing our affairs when peak oil and other peak resources hit us hard we will come thru greatly impoverished and a skinny nation again.

                  If they don’t do a good job the country will be ungovernable and history indicates that countries do not remain without governments very long. The usual sort of government that grows in the wreckage of a collapsed society is a police state government unless aid and control is imposed by an external power.

                  In the cases of countries such as the US , the UK, and Australia there probably will not be an external power capable of imposing order.

                  Germany would almost for sure relapsed into a police state right after WWII if the Allies had not occupied the Western portion. Of course the old Soviets were a full-fledged police state in and of themselves and East Germany existed as a (relatively mild ) police state all thru the cold war era. Countries that were a part of the old USSR previous to WWII were much more harshly governed than East Germany.

                  Whether we descend into police state status is going to be mostly a matter of luck in this country.

                  Things are certainly going to get to be very very bad by current standards.Divorce lawyers living high on the hog are going to be looking for work washing dishes and car salesmen are going to be applying for work as garbage sorters and street sweepers..

                  The tourism industry is going to be almost entirely wiped out. So will be the new housing and new shopping mall and new highway construction industries.

                  But since all the people in these fields and many others are going to be living on welfare and make work govt jobs anyway we are going to have ample manpower to get things done that need doing at very low costs.

                  These things will include constructing bike lanes and subways and installing heat pumps and triple glazed windows and sorting the garbage ( which will be diminished to a minor fraction of its current volume) for any reusable materials such as metal and glass and paper.

                  With defacto almost free labor it will be feasible to mulch and compost almost everything organic and put a lot of people to work growing veggies.

                  Lots of jobs or businesses that disappeared decades ago will come back such as a local bakery serving people who live within walking and biking distance and local breweries because transportation costs will kill the big guys that dominate these industries these days.

                  It was historically cheaper to buy bread in most of Western Europe a hundred years ago or two hundred years ago than to bake your own because the local baker could bake many loaves at once – whereas the individual house wife had to heat up her oven for just a loaf or two.The cost of fuel meant she could buy cheaper than she could bake herself.

                  People are going to double and triple up to save on rent and on utilities and transportation as well.Landlords who own stores and houses are going to go broke in a big hurry because the market for what they sell is going to shrink dramatically.

                  The health care industry will be almost entirely socialized and medical professionals won’t be much better paid than ordinary trades people.

                  The sale of new cars will fall by ninety percent or more.

                  I don’t personally expect to live long enough to know either way about a police state here.

                  • Dennis Coyne says:

                    Hi OFM,

                    You had mentioned the police state idea in many places and I got the incorrect impression that this was the most likely scenario in most places.

                    In some comments you have seemed cautiously optimistic about solar, wind, and energy efficiency making a big difference as oil prices rise, so it was not clear that you expected things to be much worse than the Great Depression.

                    Due to these two mistaken impression of your views on my part, I was not sure if possibly you thought government rationing and other steps taken during WW2 by Allied governments constituted a “police state” as there are many different views of what constitutes a police state.

                    I agree that most countries on the Allied side (the Soviet Union being a notable exception) during WW2 were not police states.

                    I do not share your confidence that things will be much worse than the Great Depression in the future, fossil fuels will not decrease as fast as many envision and as prices of fossil fuels increase, other types of energy such as wind and solar will become competitive, if these are not sufficient then nuclear will be used to fill the gap.

                    Recycled sewage could solve the nitrogen problem, pipe the sewage to fertilizer factories and transform it to a form usable by farmers.

                    This may not be the most likely scenario, but I think it is a possibility.

            • TechGuy says:

              Ron Wrote:
              “No. It will take perhaps 100 years for things to level off and some kind of civil order to be restored in most countries. Or that is my best guess. It will be impossible for something so traumatic to return to peace and order in a short time.”

              In previous collapses its taken several hundred years. In the case of Rome it took about 1000 years and only half of Rome collapsed (the Byzantine empire continued after Europe collapsed into the dark ages).

              Presuming that somehow, the Spent fuel pools don’t wipe out humans, It difficult to see how a quick recover can happen. Much of our labor force is extremely specialized and lack the capacity to design and switch production to non-fossil systems. Take away electricity for instance, and 99% of our infrastructure becomes useless. No electricity, no fuel (electricity is used to pump fuel into gas tanks). No computers, no well pumps, no manufacturing. The entire economy comes to a complete standstill.

              Perhaps society could put itself on a fast track, if their was sufficient number of people that were self-reliant and and the skills needed to retool infrastructure in a post-collapse era. As I see it, very few people pursue this path and probably most are either middle-aged or seniors. Anyone that tries to openly pursue self-reliance is quickly made as an outcast by society. Society makes an effort to discourage self-reliance and critical thinking related long term crisises.

              The younger generations are complete oblivious to collapse. The younger generations have also been trained\educated with an extremely narrow scope as careers all have become ultra-specialized, especially in STEM. This narrow scope makes them ill prepared to adapt to a sudden and radical change in the economy. What they’ve learned will be absolutely useless.

              The Majority of the population is completely clueless when it comes to science and technology. Most people have lots of advanced technology but don’t have the first clue on how it works.

              • In previous collapses its taken several hundred years. In the case of Rome it took about 1000 years and only half of Rome collapsed (the Byzantine empire continued after Europe collapsed into the dark ages).

                No previous collapse of any civilization or culture can be even remotely compared to this one. We have totally different economies, totally different cultures, totally different transportation systems, totally different agricultural systems, totally different population levels and totally different everything.

                All previous civilizations have had basically agrarian economies. Even the partial collapse during the Great Depression, the US and the rest of the world lived in an agrarian world. We no longer have an agrarian economy in any major country in the world.

                In an agrarian world people could still live off the land. During the Great Depression the percentage of farm population actually increased as people moved back to the farm. That is no longer possible.

                The coming collapse will likely be much faster than any collapse in the past. Recovery time? I doubt it will happen very fast but it is impossible to use the recovery time of past collapses as any type of guide.

                • TechGuy says:

                  Yup, I’m not disagreeing you there. I was merely adding fuel to your fire.

                  “Even the partial collapse during the Great Depression”

                  I would not classify the Great depression as a partial collapse. The Cities still access to food and energy . The trains kept running and there was never a break down of the infrastructure. It just stopped growing. At the time of the Great Depression about 43% of the population lived on rural farms. Today is less than 2%.

            • Cae says:

              It might be nice to come across, by chance in a remote woods nearby, the lost dedicated Earth-human-modeling Micromonolith-NeurOrganix-Holograph computing platform of an extraterrestrial intelligence species whose advanced technology, alone, has been around for longer than our entire existence.
              So then, it would be activated, with Interprelang autocalibrated to ‘English’, and the question entered… (processing…)
              Answer: 42
              (I assume Earth-years)

  8. The Wet One says:

    What does “100 MM BBL elephants” mean? I get that elephants means large, and I’m pretty sure BBL means barrels (although that doesn’t make sense in the case of gas, isn’t that measured in cu. ft.?) but 100 MM? Is that 100 million? I’m confused.

    • Jeffrey J. Brown says:

      100 million barrel equivalent (boe), using a 6 MMBTU (million BTU) to one barrel of crude oil equivalency. In terms of current cash flow, it takes about 25 MMBTU of gas to equate to the cash flow from one barrel of crude oil (in the US).

    • sunnnv says:

      It is confusing, since in many fields, “M” is the Systeme International abbreviation for “mega” (1,000,000).

      “M” is (also) the Roman Numeral for “thousand” (1,000).

      But in long practice in the oil industry (and in financials), “MM” means “thousand thousand” ie. 1 million (1,000,000),
      instead of 2 thousand.
      So Mcf means “thousand cubic feet”, MMbbl means “million barrels”, …

      It is tradition….
      I prefer when people spell things out.

      • sunnnv, I agree. MM doesn’t mean million anywhere except in the natural gas industry. MM in Roman Numerals means two thousand, not one million. K means kilo, or one thousand. M should mean mega or one million. Why cannot people be simple instead of giving us MM to mean thousand-thousand. That is just down in the dirt silly.
        Kilo means thousand, Mega means million. Simple right? But get silly and use the roman numeral for thousand but not like the Romans used it. Use it as a multiplier instead of an adder. Geeezus!

        • toolpush says:

          Don’t worry Ron, things in the oil patch are always a little different. Heavy weight drill pipe is spelt, HEVY WATE drill pipe. I think some of the old boys were just a little slow when it came to the 3 R’s. They were much better with their hands then with them dare numbers.

          • Watcher says:

            It doesn’t benefit the guy walking behind a plow to have a high IQ.

            And since the guy with the high IQ was off thinking deep important thoughts when his plow shift arrived, he didn’t do his stint walking behind that plow, and he doesn’t deserve food.

            BTW, it will be the end of women’s rights, too. Muscle will re-establish its place of importance in society and that will be that for women.

  9. Mason Inman says:

    The link to Russia’s Central Dispatching Department seems to be broken.

    When I go to their site (http://www.cdu.ru/en) and register, it seems I still can’t get the data. It seems to be wanting me to make a request to purchase the information.

    Ron: How did you get them to show daily production numbers?

    • Mason, the link is fixed now but it is the same site you went to. And that is the daily oil in thousands of tons. Yesterday they produced 1401.7 thousand tons. At 7 barrels per ton that comes to 9,811,900 barrels per day. I tried using 7.3 but that came out about 430,000 barrels per day higher than JODI or the EIA was reporting. I guess most of their oil is pretty heavy.

      Also, if you add up all the oil company numbers it will come 1311 thousand tons, not 1401.7. That is because the small companies are not listed but their barrels, or tons, are added.

      They only post the totals for the previous day. I check them every day and and enter that number into my spreadsheet. That’s how I can plot their daily production.

      • Mason Inman says:

        I’m still stuck on finding the data on the Russian site. When I go to this page: http://www.cdu.ru/en/catalog/operative_data/section.php?SECTION_ID=117

        … it shows samples of various tables you can get, apparently by buying them, but I can’t get it to show any data for free.

        If you’re willing to explain, Ron, I’m curious what page you found the data on, and if there was anything complicated involved, what you did to get it. I’ve worked with a lot of complicated websites for oil and gas data, but this one has me stumped.

        • Mason, that is not the link you posted earlier. Go to the first link you posted, this one: http://www.riatec.ru/en/

          That link will give you the data I posted earlier. It is not complicated, you do not need to click on anything, the data is right there. You don’t need to register or anything. And I fixed my link up top. It works now. But yours works also, the first one you posted, not the second one.

  10. Jeju-islander says:

    Here’s some interesting forward thinking by the EIA.

    EIA: – As light-duty vehicle fuel economy continues to increase because of more stringent future greenhouse gas emission and Corporate Average Fuel Economy (CAFE) standards through model year 2025, standard gasoline vehicles are expected to achieve compliance fuel economy levels of around 50 mpg for passenger cars and around 40 mpg for light-duty trucks. Diminishing returns to improved fuel economy make standard gasoline vehicles a highly fuel-efficient competitor relative to other vehicle fuel types such as diesels, hybrids, and plug-in vehicles, especially given the relatively higher vehicle prices projected for these other vehicle types.

    So how many people here believe that the oil price will remain at $3.50 for the next decade.

    • Old farmer mac says:

      Even simple math can be full of surprises can’t it?

      This is a great chart.

      My money is on the price of gasoline at retail being up by at least a dollar in constant money in another decade and from couple of bucks more to two double or triple (getting close to ten bucks a gallon in the worst case) in nominal money.

      Rust and depletion never sleep. I can’t remember who said it right this minute but the title of the book was Twilight in the Desert.Matt Simmons?

      And inflation only catnaps.

    • Watcher says:

      As oil’s scarcity manifests itself in weaker economic activity, the car industry will get waivers for anything that will cost them money and push those CAFE reqmts out to 2050.

      • Old farmer mac says:

        Just like the waivers the tobacco industry got from high taxes and advertising restrictions?

      • toolpush says:


        From what I see in the US, you have run out stock of second hand cars. The prices people are paying for 10 year old 100,000 miles cars, is not far off new car prices. New cars sales will have to increase just to replace what is falling apart.
        Of course cheap long term money is also driving the price of these worn out old vehicles.

    • toolpush says:

      So the idea is to get all those people getting 12-15 mpg into vehicles that get 50-60 mpg and then you be talking. Of course everyone has that heavy load they need to carry once a year. Do as OFM says, drive the fuel economy car for the 99% of the time you don’t don’t need a carry a heavy load. And hire a truck when you NEED one. My daughter is currently in the States driving a car and getting 50 mpg, and it is not hybrid. Maybe a little smaller than what most Americans think they need to drive, but it is available right now, you don’t need to wait for the CAFE standards to increase.

      This looks like another excuse to continue to drive inefficient cars as I won’t be gaining as on the next increment of fuel savings.

      You just need to increase the fuel tax, and let the market sort it out. People will then see what they need to do to save on fuel, and they will not be able to hide behind pretty little graphs.

      • Watcher says:

        Western state senators will never allow it. People drive farther there.

        • Anon says:

          The rural areas that don’t have major agricultural pricing power are going to be slaughtered by this. Bunch of people on fixed incomes and near-minimum wage driving old and oversized cars long distances.

          At least poor areas in cities don’t need much car. Farmers can pass on costs because people must eat. But most people in rural America aren’t directly involved in agriculture anymore because its all mechanized.

          What’s going to happen in most of these places is a fast economic collapse and migration out at all costs.

        • Toolpush says:

          The funny things is, when I was in Britain driving a 1.9 diesel and paying the astronomical British price of fuel, I was paying less per mile than if I was in rhe States driving the average new American car paying US prices. So higher price, better efficiency can be cheaper than cheap fuel and stones of steel.

      • BoxedL says:

        Trying to force everyone onto mass or public transportation, or into crummy little dangerous cars, by making gasoline unaffordable through taxes and fees is in itself, incredibly un-American. If you like heavy-handed and oppressive social engineering so much, move to Norway. The U.S. needs to get back on track as a economic powerhouse and a producer, not just a consumer. That takes cheap energy and fuel. Taxing our plentiful energy reserves to death will only turn the U.S. into another “me too” country. We might was well join the sissies in E.U. then.

        • Aws. says:

          Phew… Problem solved!

        • Toolpush says:


          I think you summed it all up when you said “incredibly un-American”. i don’t really like giving advice, as I feel people should be able to make their own decisions with access to all the information, but the concept of being “un-American” being an excuse to continue to consume the quantities fuel that the American currently use is an act of denial . To me a car is a means of transport, it appears from my experience and comments like this the car in the US is still thought of more as a status symbol and an extension of peoples manhood, than just transport. Until people can get their head around that fact we are destined for a result, and it ain’t good.

          Another point you made which is one of those so called justifications for bigger vehicles, about small cars being unsafe. When your alternative buying a 10 plus year old car, potentially weaken by rust or previous accidents, maybe one air bag and who knows about the condition of brakes and other running gear, compared to a new 5 star safety car, I know which is the safest, and it ain’t the old one.
          There is an amazing conflict in the US, people harp on about safety being so important yet people regularly do not wear seat belts and want to argue they are unsafe, just because they them inconvenient to wear. The safety argument I find are designed around excuses to try to morally justify their manhood status symbols of large cars.

          If people feel their egos are most important in life, then I feel like the Texans did in the seventies, “Let them freeze in the dark”.

          • Watcher says:

            That last part is the amusing part of looking at country imports and exports.

            I have zero doubt that the day Dallas is short of something and that something is being shipped from Houston to NYC, that shipment ain’t going.

            Don’t plan on enforcing it with the military, either. The dirty little secret of the US military is its members are not evenly distributed by geography. The south, Texas and intermountain west are the majority of troops — though there is a small bias there in that military folks quickly change their state of residency to TX or FL as soon as they get assigned there, in order to have zero state income tax on their checks.

        • Anon says:


          Im not sure you understand the implications of all this. Most people have little, no, or negative disposable income. If fuel prices skyrocket, the 2 big car (usually SUV or unnecessary pickup these days) open road lifestyle is DEAD, and fast. Too expensive.

          • Old farmer mac says:

            It seems very likely that BoxedL is does not believe we are going to be running short of cheap oil anytime soon.This is the first time I remember seeing him commenting at this site.Maybe he will stick around and change his mind about the availability of cheap oil in the future.

            Anon is right. The typical consumer is downsizing his transportation stable at a noticeable rate. I hardly know anybody anymore who drives who doesn’t own a compact car or truck if he has two or more vehicles.

            Not many of us make enough money anymore to ignore the price of gasoline.

            But the ones who do still measure status and manhood by the size of their car or truck.

            I hardly know anybody who just goes out and rides for pleasure anymore. That used to be a favorite pastime in this part of the country.

            IF it weren’t for the dramatic improvements in fuel efficiency of late model pickup trucks the sale of them would have crashed by now.

            Anybody who wonders about the price of oil in the near future should give some though to the enormous expense Ford has gone to to lighten up and streamline the latest model Ford pickup and to develop a more fuel efficient engine.This sort of tech was only available in high class, low volume, very expensive cars just four or five years ago.

    • Allan H says:

      Great graph. Going from an SUV that might get 15 to 17 mpg up to a econo-car at 30 to 35 would be a significant savings of over $1500 per year. Might even pay for the initial car cost eventually. Or you can buy that battery backup system and insulation for the house.

      The really big advantage for high mpg occurs when fuel gets scarce. Not only will the price per gallon zoom but rationing will occur. High mpg mitigates both of those situations. Of course it will be a different world by then and people will start ride-sharing and consolidating trips, making cars one of the more efficient modes of land transport.

      • Watcher says:

        Econo cars are deathtraps. A bigger car is an advantage in a collision.

        • Dave Ranning says:

          ” A bigger car is an advantage in a collision.”

          I used to place this bumper sticker on “bigger cars”:

          “I’m changing the weather–
          Ask me how.”

        • toolpush says:


          I see so many people justify big cars on safety grounds, yet they also seem to the same people most likely not to wear a seat belt. Which to indicates safety was not the main reason for buying a big car, it was more to do with stroking their egos.

          • Watcher says:

            Don’t matter. Small cars won’t be bought. Done.

            • Watcher says:

              You can also make a demographic case for all this.

              An 80 yr old in a deathtrap won’t survive a fender bender. He might in a big car.

              And old folks have the money.

              • toolpush says:

                It doesn’t matter that much what an 80 year drives, as by that time of life, they are usually slowing down and not doing too many miles, now the just retired 65+ year old is a different matter as they have a habit of wanting to see the world they missed while they were working all those long hours. Over here, we call them the Grey Nomads.

        • Lloyd says:

          Econo cars are deathtraps. A bigger car is an advantage in a collision.

          I like to ride in a 50,000 pound electric vehicle- green and incredibly safe.
          I don’t have to wear a seatbelt, and can text to my heart’s content (well, if I was one to text at all.)

          It is, of course, a Toronto streetcar.

          And if you look at the stats, public transit is far safer than private cars.

          Those who try to justify their choice of a large vehicle on grounds of safety are making judgements that really relate to convenience- and to not caring if they squish somebody else like a bug. If you’re in an SUV, make a traffic violation, and kill someone in an econobox who was obeying the law, you can’t take it back.

          And it’s not fair.


          • Watcher says:

            Don’t matter. Deathtraps won’t be bought.

            • toolpush says:


              I see you have drunk the cool aid of the American car manufacturers. They loved selling cars by the acre and feeding into peoples dreams, but when it all boils down to it a car is a means of transport but it get treated as a status symbol. When the truck base SUVs became all the rage, they had a very high centre of gravity and would roll over in in blink of an eye, people kept buying them because they related big = safe. It is not always the case, but the American car manufacturers have conditioned the population that big = safe, as it is the only marketing tool they have to defend against competition from around the world.

              If people were interested in safety, then you need to look as what causes accidents, and it is usually YOU. I mean the driver, better driver education would be the first step, but alcohol is also a big one and of course the enforcement of wearing seat belts are much productive areas to address, but the mantra of big is safe makes the masses feel good even if it doesn’t save their life.

              30,000 people die on American roads each year, and that is not from driving small cars. It is mostly because the drivers of those vehicles screwed up.

              • Old farmer mac says:

                I don’t know about national statistics but in Virginia and North Carolina driving under the influence is considered a major violation and violators are treated to substantial fines and loss of driving privileges for a year plus mandatory ASAP first offense.

                Second offense- fuggaget about driving for a long time and enjoy your probable stay at the gray bar hotel.

                I know tons of drunks but only one or two that still have drivers licenses who are willing to take a chance on getting caught.

                I have told both of them that their days driving are numbered but of course they aren’t going to listen.

                It seems that just about the most career enhancing move a traffic cop can make in this area is to bust a few drunk drivers. Better than capturing a bank robber for the career!!!

                A careful driver in a newish compact car is in far less danger of getting seriously hurt or killed than a careless driver in a large car.

                All cars are dramatically safer these days than back in the days of the traditional American tank on tires.

                It ain’t the accident that kills ya. It’s the sudden stop. And since all newer cars have crush zones and air bags and interiors relatively free of hard sharp surfaces these days the sudden stop has mostly been eliminated.

                In old cars the stop was almost instantaneous if you hit a large tree or bridge abutment etc. With crush zones the stop occurs over a distance of three feet or more. The difference is like falling from fifty feet on concrete compared to falling the same distance on a deep pile of soft cotton or a foam mattress three feet thick.

                • toolpush says:

                  Thanks Mac,

                  You are hard a man to argue against as I usually agree with what you say. My comment on alcohol was prompted from what I saw in Louisiana. Now I know people will say they do things differently down there, but the last time I looked on a map, it is not just a state of the USA, but it is even in the 48 that most people count.
                  Anyway, I did find two things unique,
                  1/ The single chilled cans of beer in brown paper bags in buckets at the door of truck stops? Must be intended for the thirsty passenger. Yeah right!
                  2/ The drive thru Daiquiri shops. I know it had a lid on it so it wasn’t meant to be drunk in the car, but I drank mine anyway. Well my wife was driving, and it was my lucky day. It was 2 for 1, so if one didn’t put you over the second one will, lol. You got to love the South.

            • Dave Ranning says:

              It is a matter of social class.
              Where I live in Northern California, the lower/middle class drive large vehicles.
              In my Marin political scene, I would be looked down upon for driving a SUV or F150.
              And Marin is the wealthiest county in California.
              Driving a large vehicle is equate3d with low IQ and consiousness.

              • toolpush says:


                From what I see from my relatives in Southern Wisconsin, large cars are relative cheap, smaller cars are more expensive, so the price of fuel effect is working its way through the system. The problem I see during the naughties , which is the age of the cheaper cars on the second market, not many small cars were sold, therefore low supply, high demand equals high price. It will take a while before the new more fuel efficient cars work there way through the market place and decrease the price of these older second hand cars. If fact the car manufactures are only just bring new cars to the market 6 years after crunch with 30% improved fuel consumption from last years models, so it has taken a long time to turn their research around to concentrate on efficiency, rather where they can fit those extra cup holders, which seemed to be the major selling point not long ago.

                My niece is an interesting study. She wants to drive/buy a F-150. She has the option in the house to drive a Chevy Blazer, and is her preferred drive in the household. She drives the VW Jetta, because she can’t afford the fuel for the Blazer. It comes down to needs and wants. She WANTS a big flashy truck, because it is fashionable. She NEEDS transport, she drive a Jetta because she can afford it and it covers her needs.

                • Dave Ranning says:

                  The F150 would be a social liability in my world.
                  I do use large vehicles for utility purposes, as I live on 20 acres (there are 8 vehicles on the property, including a F250), but I would never drive them around town, or for traveling.
                  If I was in the Central Valley, a big pickup would be cool, but I couldn’t live in the Central Valley of CA.

                  • toolpush says:


                    California does seem a bit different than the rest of the country. I have a nephew in LA. He traded his Audi 8, yes he has money he is a lawyer, for a Prius several years ago. I am not sure if he wanted to be seen as Mr Clean & Green or if it was access to the HOV lane that made up his mind.
                    But some how I don’t think a Prius would be looked upon the same in the Mid-west or down south as it is in California.

            • toolpush says:



              It doesn’t look like your big cars are saving many people

              Road deaths per 100,000
              Australia 5.2
              UK 3.5
              USA 11.6
              Canada 6

              It looks like they are killing more people than they are supposedly saving. In fact the USA looks like a 3rd world country when it comes to deaths on the road. There must be something different on the American roads than the other first world countries.

              So is the drivers? or the vehicles?

              • Fuser says:

                Could also be average speed, road conditions, and miles driven.

                • RalphW says:

                  To some extent the imagined danger of small cars is down to simple physics. A head-on between an SUV and a sub-compact is going to decelerate the sub-compact far more than the SUV because the momentum of the two vehicles is exchanged like a Newton’s cradle. However, head-on collisions are actually rare and driving into a tree, the deceleration of both vehicles are the same. Better design often makes the sub-compact the safer car in many accidents. The high percentage of SUVs in the US makes sub-compacts less safe than the same car in Europe, where they represent the most common vehicle on the road, where they don’t face 3 ton projectiles.

                  • Toolpush says:


                    Thanks for some reasonable feed back. It always amazes me when I have this conversation with Americans, the blind faith they have in, big is safe, small is a “death machine”, but when you look at he numbers many more people die in the US on the roads, per population, per miles driven and per vehicles owned. So somewhere there has to be problem with the American thinking. Our friend Booked L , really did some things up with his “Un American” comment, but even here on a Peak oil site, many people are still clinging to the old mantras. What hope it there to convince Joe six pack that the car companies have sold him down the river.

                    One simple way of decreasing the US road toll by one percent. Get people to go with traffic on freeways rather than against it?

                    “In the United States, about 350 people are killed each year in accidents caused by drivers headed in the wrong direction on the highway”

                    Surely driver education is better than trying to drive around in Sherman tanks to avoid idiots that can’t tell up from down.

                    Another point about Europe, though I don’t have any hard numbers. Though Europe has an expensive rail system, it is a passenger system. The US is a freight system. So Europe tends to transport more things by road and thus would have actually more heavy trucks on its roads. Now a head on accidents between a 40t truck and I don’t care what size car usually has the same result.

                • Toolpush says:


                  If you look at the Wiki page I linked you will find on all metrics, miles driven, deaths per population and deaths per vehicle, the US rates at the bottom of the first world countries.
                  As I keep on asking, is it the driver or the machine. From the numbers it is much easier to make the argument that the big American SUV or pickup truck, which is half the US Light duty vehicle market is a death machine.
                  The question is do these vehicles just kill innocent by standers, or are the occupants of these death machines, just to use some emotive language, are also being killed?

            • toolpush says:


              Here a graphic of road deaths,


              The USA really stands out as being the only first world country not in the top quadrant.

              As I said before, is the drivers or the machines they drive?

              • Watcher says:

                Sorry, moved past this thread subset and lost the only link I was gonna post — which was what models are selling most.

                It’s not the small cars, and that’s all that matters.

                • toolpush says:


                  All you have done here, is to use a whole lot of emotive terms to show your biases against small cars, but I think our drive by friend Boxed L said what you really mean, ie small cars are “Un-American” as your yearly road death rate shows, they certainly are not safer. The question is how much longer can the people that populate the USA, afford & continue to be “American” as we know it today?

                  • Watcher says:

                    Pretty much as long as 0% subprime loans are handed out. 17 million cars will sell in the US this year.

                    They won’t be tiny.

                  • Toolpush says:


                    You disappoint me, you started with you emotive language against small cars, and now you are changing to, it does’t matter people won’t buy them. When they can’t afford fuel for anything thing else they will have to sallow their pride and drive more efficient cars of live in a four wheel house.

                    But why don’t you just be honest and like Booked L, and just call it “Un American” because it the only argument that stands up. But as I asked before how long can the population of the US continue their American way of life.
                    I suppose if you listen to Dick Chaney, that is not negotiable. We will have to see for how long?

                    PS I find it amazing, Ron and company discuss how society is most likely to collapse due to lack of oil, yet it appears most American won’t even consider driving a smaller car, and that is on a Peak oil site. From the way this conversation has gone I am a lot concerned about the future than I was than before it started.

                  • Cae says:

                    “From the way this conversation has gone I am a lot concerned about the future than I was than before it started.” ~ Toolpush

                    It is possible that we, as a species, may essentially already be dead…
                    Like being in the trajectory of a fired bullet after the point where the gun firing is noticed, but there is insufficient time to move out of its way.

                  • toolpush says:


                    You could be correct, we don’t seem to planning to stop until we hit the wall, and then we will stop, like a bug on a windscreen?

                • Dennis Coyne says:

                  Hi Toolpush,

                  Watcher is not representative of most Americans.

                  Part of th problem is that fuel prices are too low in the US relative to the rest of the developed world.

                  I have three hybrids in my house, two Priuses and a camry. Not too worried about my manhood.

                  • Dennis Coyne says:

                    Also of top 9 selling models in 2014 in the US, about 800,000 were Ford, Chevy and Dodge pickup trucks (3 of top 4) but the other 6 were cars from Toyota, Honda and Ford with YTD 2014 sales of 1 million, 3 of these cars were small (corolla, civic and fusion) the other 3 were midsize (camry, accord and fusion).

                  • toolpush says:


                    I am sorry to say from my observation Watcher is much more representive of the American population than yourself, much to your credit. What mostly surprised me, on peak oil site of all things, OFM was the only one that said anything positive about smaller cars. People huffed and puffed but no one offered any information where smaller cars were more dangerous than large cars/trucks.
                    I will make a sweeping statement here, with a few exceptions like yourself, Americans want to drive big cars/trucks. They make up any arguement they like to justify there choise, and they are not limited by facts. Those that want to drive big cars, but don’t have the resourses only drive smaller cars when there is no other options available to them, and taking of 7 years loans for a car with a 3 year life expectancy is not currently seen as an obsticial. I wish them well, but I also see it as a potential next subprime mess.
                    I have enjoyed this little debate, but the lack of participants has been as telling as what has been said.

                    I think that wind screen is getting closer by the minute.

    • Jeffrey J. Brown says:

      An interesting coincidence: The net increase per year in global human population is about 80 million or so per year. The gross increase in global automobile sales is also about 80 million per year (net increase, after vehicles are scrapped, would be lower).

      In any case, in round numbers the global sum of net new people + new automobile sales is about three million–per week.

  11. robert wilson says:

    The latest from Michael C Lynch on the price of oil. The first sentence in the last paragraph is interesting. I first encountered Michael (aka mclynch) on the USENET during the 90’s. http://www.forbes.com/sites/michaellynch/2014/07/08/would-bursting-asset-bubbles-affect-oil-prices/

    • Steve in CO says:

      From that same article:

      “The long-term price of oil is roughly $30 a barrel, so we are more than three times the “trend”. ”

      Talk about your head-slapping cognitive dissonance…

      • Anon says:

        How much of our current oil production could even operate at this morons $30? Not Canada, not fracking, I don’t think any of Russia or Brazil…

        Yeah, he’s intelligent. No use for free market types who can’t do supply & demand.

  12. Ronald Walter says:

    A John Deere combine to harvest small grains has a fuel tank capacity of 327 gallons.

    A grain truck that has a grain box of 550 bushels will probably have two saddle tanks with 50 gallons in each one.

    A tractor with four wheel drive is going to have fuel tank that holds some 300 gallons.

    Caterpillar is not going to build a twenty gallon fuel tank for a D10.

    A Boeing jet is not going to have a 100 gallon capacity fuel tank for jet fuel, more like 57 thousand gallons is much closer. Check with Boeing on how much it actually is.

    An Ocean going ship will have a fairly large fuel tank in the hull.

    A train engine is going to need more than 50 gallons in the fuel tank.

    It is easy to see how it has become necessary to have 75 million barrels of oil each and every day. It is a Catch 22 now.

    Oil is purdy doggone important for humans and its absence will be noticed immediately. Driving a small car that can get 50 mpg is not going to solve the oil dilemma. It is a major predicament. There is plenty to worry about, but it won’t matter one bit if the fan is plastered with the odiferous excrement.

    The goal is obvious. Force farmers and all industries to use 90 percent less crude oil products and the problem is solved. The militaries of the world would have to stop filling armored tanks with fuel until they can get at least 10 mpg. har

    Voila, nothing at all to worry about.

    The folks up in northern Siberia will probably survive. Laplanders in northern Europe will probably survive. Indigenous peoples making a home in the Amazon will probably survive. The people living in Whitehorse in the Yukon probably have nothing to worry about except for how to manage to dig in. A real possibility that they will survive even after a nuclear meltdown and even a nuclear holocaust, should it happen. People down in the southern Pacific have a fairly good chance at surviving.

    A mass exodus to Patagonia to find a livable environment could take place.

    Anything along the eastern seaboard in the US probably won’t do too good. The same for China’s seaboard on down to SE Asia.

    Scary stuff.

    • Dennis Coyne says:

      Hi Ronald,

      The EIA has data on petroleum consumption, the most recent year with full data is 2010.

      If we deduct LPG and “other products” from the world total 2010 petroleum consumption we get about 63 million b/d and 22 million b/d was gasoline consumption or about 35% of total minus other products and LPG(liquid petroleum gas).

      As prices of oil rise less will be used for personal transport and more will be used for mining, farming, ships, etc. Much of the diesel used in long haul trucking will be switched to freight trains and freight trains can be electrified. Oil output will not decline to zero overnight, it will become more expensive and it will be used more efficiently.

      Once peak oil becomes obvious to everyone except Michael Lynch, fuel taxes will be imposed, maybe people will also realize that natural gas and coal will peak as well and a general carbon tax will be imposed, then let the market sort out what solutions are best.

      • toolpush says:


        I realize electrifying the railways seems a very logical step, but I doubt the US railways will be doing it soon, all their effort to get off oil at the moment is to go to Nat gas and they do not seem to mention electrification, except for high speed passenger transport.
        My main reason I do not believe they like electrification for freight is, they have gone all out on double stacking containers. To fit these double staked containers under high voltage electric wires would make the wires very high, all bridges and tunnels would need to be raised/lowered even further than what they are currently doing now, just to fit the double stacked containers, let a loan another 6 to 10 feet for the overhead cables. Before anyone says anything, 3rd rail electric is only for commuter metro trains and the tracks are fully fenced off. Hard to do on the plains and the Rockies.

        • Dennis Coyne says:

          Hi Toolpush,

          That is an excellent point and you may be correct. At some point the price of oil and natural gas might become high enough that it will be cheaper to use electric trains and forget about the double stacking. There are a lot of bridges etc that need to be raised to enable double stacking throughout the rail system, natural gas will not remain at the present price level for very long (3 to 5 years at most in my opinion), so the move to natural gas for freight trains may not make sense.

          Electrifying may make more sense economically in the long term.

          I may be wrong and maybe diesel and natural gas will be used for freight, the fuel economy is still much better than trucks for long haul freight(roughly 3 times the fuel efficiency in ton-miles per gallon of fuel).

          As fuel prices increase more freight will move to rail and, if prices rise enough maybe some freight rail lines will be electrified.

          • TechGuy says:

            DC Wrote:
            “Electrifying may make more sense economically in the long term. I may be wrong and maybe diesel and natural gas will be used for freight, the fuel economy is still much better than trucks for long haul freight(roughly 3 times the fuel efficiency in ton-miles per gallon of fuel).”

            The issue I see is that a lot of rail was removed between the 1950s and the 1990’s. Before any effort can be made to displace Truck freight with rail is all that rail has to be re-installed. This may be difficult be cause a lot of land was reused (Freeways, Strip malls, etc).

            As I see it, there is no money and time for a realistic mitigation program.

    • toolpush says:


      There is not much wastage with large horsepower machinery, as the fuel cost has been so high for so long and equipment has been bought on equipment capability and performance rather than fashion, but there is a big push towards Natural gas displacing diesel, whether it is only 50% displaced, 90% or even 100%, it will all go towards lowering the use of oil.
      Here is a good web sight showing where things are going,
      The move to Nat gas is being driven by cost as well as pollution controls, and this even includes shipping, where it seems the largest and earliest moves are taking place.

      • Patrick R says:

        Agree with Dennis, although the US rail freight network is unlikely to be electrified. The scale is too big. But remember shifting goods by rail is already way more energy efficient than by road, rail will both continue to economise, yes switching to gas, and increasingly carrying loads for shorter distances as road freight becomes more costly.

        Furthermore we will simply not be moving so much stuff around, or so far, the globalisation of everything is only really cost possible while the energy costs of freight are relatively trivial. As oil re-prices and movement costs rise more local manufacture becomes cost competitive. Especially for electric powered manufacture.

        We are transitioning, but from liquid fuels to all other sources, not from fossil to renewable, yet. Furthermore this transition is going to generate a lot work and economic activity. It has begun, however slowly, and will accelerate, the next oil price signal is the necessary next big step. The counteractive forces of BAU need another good shove to get them off their perch.

        • Old farmer mac says:

          Natural gas either liquiefied or compressed is a natural fit for railroads since trains are confined to tracks and have almost unlimited space for hauling fuel by simply adding a tank car if needed.

          A train must necessarily stop at only a few locations where there are switchyards and the fueling infrastructure is not going to be a problem the way it is with trucks.If there are no pipelines in the neighborhood…well adding a couple of ng tank cars as needed to incoming trains will solve the delivery problem nicely.The railroad might even develop a profitable sideline selling gas in places where it is not otherwise readily available to local businesses near the switchyard.

          We are burning natural gas any way to make electricity. Burning it in a locomotive in place of diesel to generate electricity to drive the locomotive is going to be pretty close to as efficient as burning it in a power plant perhaps hundreds of miles away and sending the juice over the grid.( Modern locomotives are almost all diesel electric except for pure electric locomotives which are not very common in the US.)

          I can see some routes not being electrified due to double stacking containers. But is double stacking going to be practiced every where?

          I don’t see too many interstate bridges being rebuilt to allow double stacked trains to pass under them for instance – at least not in the short term.

          Furthermore a train could be in effect dual fueled by having a conventional diesel electric locomotive designed to pick up juice from overhead lines thereby allowing the engineer to shut off the diesel for substantial stretches perhaps even hundreds of miles at a time. He could fire up his diesel only as necessary when running on non electrified tracks.

        • TechGuy says:

          “We are transitioning, but from liquid fuels to all other sources, not from fossil to renewable, yet. Furthermore this transition is going to generate a lot work and economic activity. ”

          Unlikely. The rising costs of energy as well as aging populations (promised gigantic entitlements) is going to prevent any changes. The Boomers are the biggest block of voters and they aren’t going to give up there entitlements. The Only politicians that will get elected are the ones that promise the most handouts.

  13. BW Hill says:

    Ron said:

    “I guess most of their oil is pretty heavy.”

    7 barrels per metric ton is an API of 25.9. 80% of Russia’s exports is their Ural blend, which has an API of about 32. So there is something obviously amiss with a 7 barrel per MT conversion. If Russian crude did, on average, have an API of 26 that would leave a very large amount of extra heavy that isn’t accounted for?

    I’ve worked on Russian production numbers in the past. They always turn out to be a quagmire of figures. The Russians seem to take the saying: “good enough for government work” to the extreme. It is quite possible that the EIA and Jodi are using 7 barrel/MT because they have always used 7 barrels/MT. It was the best they could get out of the Russians.

    I think that the EIA has done a spectacular job over the years, but the kind of discrepancy that shows up above pops up in an awful lot of places. During the Cold War the EIA obviously couldn’t take the Russian numbers at face value, so they reverted to a model. They followed that model religiously between 1960 and 2000. Today the situation is as bad, or worse. There are too many places for the industry to be “liberal with the truth”. For that reason (and not that reason alone) it is quit likely that the depletion status of the world’s petroleum reserve is much worse than most image.


  14. Watcher says:


    “ISIS are making nearly $1million a day selling off crude oil from conquered refineries to Kurdish businessmen.

    The jihadists, who now call themselves the Islamic State’s caliphate, are smuggling the resources from Iraqi oilfields into Turkey and Iran where they offer it up for $25 (£15) a barrel, making a huge profit.

    The lucrative trade was revealed as the Iraqi government were accused of killing 255 Sunni prisoners as revenge for the ISIS advance, which has seen them take large swathes of the country.

    . . .

    Human Rights Watch (HRW) brought to light reports of Iraqi armed guards breaking prisoners’ arms and legs and shooting them in the head, as well as tossing grenades into cells with inmates inside.

    It was claimed that eight of the victims were boys who were less than 18 years old.

    The attacks were thought to be revenge by the Iraqi forces after ISIS took huge swathes of the country in the face of startlingly little resistance.”

  15. Patrick R says:

    Platts reports IEA saying ‘market well supplied’ through 2015:


    Interesting that IEA no longer relying on ‘call on OPEC’, leaning instead on US LTO.

    As Ron says; when the US peaks….

  16. Old farmer mac says:

    Maybe the utilities are losing a little of their iron grip on monopoly sale of electricity.


    This is a coalition of very large and very powerful companies that undoubtedly have a few politicians of their very own in vest pockets. I would not be surprised to hear about some giant outfit such as Walmart buying up a stake in a small utility some place as a strategy to break the back of resistance to incorporating more renewable energy.

    The supreme court of Iowa just recently ruled in favor of solar installers having the right to sell directly to the owners of buildings where they install rooftop systems rather than to the utility and the utility then selling to the owner or tenant of the building.

    • Patrick R says:

      Good find. That’s how change happens, the old seemingly unassailable ways and partnerships suddenly don’t work so well any more. BAU will eat itself; bits of that monolith are already peeling off.

  17. HS says:

    For various reasons, there are many who believe that we are in the opening phase of a third global war, in which Russia will be a primary participant. Thus, when interpreting Russian data and news, it may be wise to heed the adage, “The first casualty of war is truth.”

    • Watcher says:

      No one’s media is ever going to have a speech by political leaders announcing that their policy has failed and people are going to die by the millions because of it.

    • Old farmer mac says:

      War among countries is as natural as a fight among song birds for territory.

      I can’t see any hope of avoiding hot resource wars over the next half century other than MAD and a huge helping of extraordinarily good luck.Small hot wars are absolutely inevitable.

      But maybe we will be lucky enough to avoid hot war between major powers. Some minor powers are certainly going to be over run by more powerful countries and there is every reason to believe the bullies will get away with it in a lot of cases.

      When the feces is well and truly into the fan we are not going to fight China over Vietnam being annexed.

      China is not going to fight us if we decide to export democracy to Venezuela and embargo the oil there from leaving the Americas in general or going any where except to the USA with a little bit allowed for friendly countries.

      Nobody at all is going to invade Mother Russia so long as the country survives as a nuclear power.

      Major power armies on the ground fighting other major power armies are headed for obsolescence.The offensive capabilities in the hands of the defenders are fast outrunning the ability to project force on the ground or water over long distances.

      It is not going to be possible to defend against a barrage of missiles when attempting a large scale amphibious landing for instance.It might take fifty missiles to get thru to a big transport but fifty missiles will be a penny on the dollar compared to the transport and the resources it is hauling.

      All of western Europe together couldn’t get together enough diesel fuel to fight a long term conventional war such as WWII.But in another twenty years most countries will have long range arms such as very powerful cruise missiles that will be able wipe out a major industrial facility with just a handful of hits.A few more countries will be nuclear powers.ONE nuke will wipe out just about anything a couple of miles in diameter and not many key infrastructure installations are even that big.

      And insofar as terrorists and guerrilla fighters in a place like Afghanistan are concerned- when other countries leave them alone they will cease to be a problem.Guerilla fighters don’t have ocean going transport. Lol

      • Byron Walter says:

        It’s too bad that we will not likely see (or elect) any politicians that are willing to sell the need to reshape the way we do business and live. It would take a focused effort from 95% of the entire country (I’m referring to the US) to prepare for the spin-down from the 150 year oil bender that we have been on. The hangover will be epic.

        Right not we have all the stuff we need to start making those changes. We got a stay of execution from tight oil but we are apparently just going to piss it away.

        The TASS report about future Russian production is chilling. Russia is the big dog when it comes to oil production. However if the decline rates are in the 3% range (we shall see), Iraq has the potential to make it up… or should I say ISIS? All I know is that if ISIS Oil gets listed on the NY stock exchange, I’m going long.

        • Old farmer mac says:

          It appears that barring miraculous luck peak oil is going to bite most of the backside off of business as usual over the next few years.

          It is not just Russian legacy production that is in decline . It’s world legacy production and there does not appear to be a snowballs chance in hell that tight oil or tar sands etc can be ramped up fast enough to prevent a sharp decline in available oil- even if the tight oil is actually there in enough places in sufficient quantity.

          I am old and conservative but I have made up my mind to buy a 50 cc Honda scooter that will last a long long time and will get about a hundred mpg.If I had the money I would buy a Volt or Leaf.

          • Dennis Coyne says:

            Hi OFM,

            How fast an oil decline rate do you expect? After 1970 the US lower 48 declined at around 2 to 3% per year. I would expect World output will follow a similar decline rate.

            • That’s probably about right for the geographical decline rate. The wild card is politics and political conflict. That could increase the decline rate by several percent. Once a particular country starts to encounter hard times, for whatever reason, you will see widespread conflict like you are seeing right now in Libya and Syria.

              • Dennis Coyne says:

                Yes I agree the geological decline rate will be affected by politics. These potential conflicts will lower the worldwide depletion rate, just as the Iran Iraq war caused a sharp fall in depletion rates in the 1980s.

                We will see a dip in output (and an increase in decline rates), but when the dust settles there will be more oil reserves available than if decline rates has not increased due to war.

                The war could also damage existing reserves so not all reserves which are not depleted will necessarily remain available for production.

                War is always a potential problem and it is difficult to predict the extent and damage of future wars.

                So far the major powers have attempted to maintain stability in the middle east, this may not last for more than a decade or two.

        • Watcher says:

          A 3% decline on 10.5 mbpd is 315K bpd. Iraq might make that up each year?

          Maybe. 3.2 to 5 is 1.8 over what, 6 years to 2020? Close.

          Population grows about 1.1%/yr on 7.1 Billion.

          US consumption according to this

          is 18.5 mbpd / 320m people = 0.057 bpd per person

          KSA 2.9 mbpd with 29 million people = 0.01 bpd/person

          China 10.3 mbpd and 1.36 billion people = 0.008 bpd/person
          China MUST ramp up consumption to have a chance at American quality of lifestyle for its people. That’s a X5. They MUST have 50 million bpd and the sooner the better, for their people.

          India 3.6 mbpd and 1.28 billion people = 0.003 bpd/person
          India MUST ramp up consumption to have a chance at American quality of lifestyle for its people. That’s a X16 on that 3.6 mbpd or 57.6 mbpd, RIGHT NOW, or they are telling old people to die without ever having an improved life.

          For those two countries alone, that’s 107 – 14 (current consumption) = 93 mbpd MORE oil that MUST exist for them to have a fair share and just as fast as they possibly can make it happen. If that means taking oil from someone else, then that should be done and only those who can defend their consumption get to consume it.

          • Watcher says:

            Error above, the saudis are at 0.1 bpd. Even more than the USA. So that’s the target for everyone. Not the US 0.05 number. The Saudi’s 0.1 number. No reason they should be able to burn that and others must burn less.

            So ramp up all the other numbers accordingly.

            • Watcher says:

              And I buried the lead. With population growing, all those numbers require even more increase to reach KSA or USA levels.

          • Dennis Coyne says:

            Hi Watcher,

            If population follows the UN low fertility scenario then population peaks in 2049 and falls to 2010 levels before 2100.

            Also oil use per capita will continue to decrease in more developed countries while it increases in less developed countries.

            Prices will rise and oil will be used more efficiently and in those places that it is most useful.

            • Yes of course, that all looks like good times forever. All we need to do is delay peak oil, or at least any serious decline rate, until well into the second half of this century…

              No, on second thought, that would not work. We would need to delay any serious decline rate until 2100. By that time all of us will be dead, even the young whipper snappers among us. So we have nothing to worry about.

              Let the good times roll.

              • Dennis Coyne says:

                Hi Ron,

                Yes that was exactly what I was implying, very good reading comprehension.

                • Dennis Coyne says:

                  Just in case my sarcasm was not clear.

                  Suggesting that population may peak and decline if it follows the UN’s low fertility scenario (which matches data from 1955 to 2010 best in my opinion) does not imply that the good times will roll. For some it seems there is only black and white, I see the possibility of shades of gray.

                  Oil and other fossil fuels will decline, and things will be difficult. Clearly some think that anything except a total collapse is equivalent to “the good times rolling”, I see things differently.

                  In Jared Diamond’s Collapse some civilizations collapsed and others did not, the point was that the choices that societies make can affect the outcome. I agree with Diamond.

                  • Of course Diamond was right. He is talking about history. Clearly some nations did collapse while others did not. That is not just Diamond, any historian could have told you that. Only a fool would disagree with recorded history.

                    But today, unlike previous historical times, we live in a global society. Some countries are almost totally dependent on imports of fuel and food. Others are only partially dependent. But all are dependent to a very great extent on world trade.

                    The next collapse will be global, not “some countries” collapsing while others do not.

                  • Dennis Coyne says:

                    Hi Ron,

                    Things can change, again not black and white.

                    I disagree that either things will remain as they are or the world economy will collapse.

                    I do not expect to convince you. The economies of many nations will become more self sufficient, there will be less global trade, but you do you think there will be none?

                  • Dennis, you do not need to convince me of something neither of us know. But that would be a trick if you did.

                    You have your opinion of the most likely way things will play out and I have mine. But for both of us it is just a wild ass guess.I just see your idea as really Pollyannaish.

                    I think I will do a post on collapse in a week or two. There is a lot of data coming out in the next 10 days or so but after that there will be a dead zone where I will put something up on my best guess of how things will play out, and why.

                    I will have a post later today on the EIA’s Drilling Productivity Report.

                  • Dennis Coyne says:

                    Definition of Pollyannaish from the Urban Dictionary:

                    “Belittling and often insulting term for being absurdly optimistic and good-hearted, believing in a good world where everything works out for the best all tht time. Often in combination with being God-fearing and perceiving oneself standing on a higher moral ground than others.”

                    Gee thanks Ron, I won’t offer my opinion on your viewpoint as I think it is bad form to insult the host.

                    I really think you can do a little better than name calling.

                  • Cae says:

                    Hi Dennis,
                    Did Ron mention your idea as opposed to you?
                    I think people can have questionable ideas without necessarily losing any respect.

                  • Dennis, describing one’s outlook is not the same thing as calling one a name.


                  • Dennis Coyne says:

                    I guess I usually assume that if I say to someone, “Your ideas are stupid.”

                    That it is implied that the person is stupid, but I guess that most people are less polite than me.

                  • Oh Goddammit, Pollyannaish just means you have an overly optimistic attitude.

                    And you do.

                • Watcher says:

                  So carefully worded. No possibility permitted to interpret it as:

                  Chevron has decided what’s there is so little that it isn’t worth their effort.

            • Watcher says:

              “Also oil use per capita will continue to decrease in more developed countries while it increases in less developed countries.”

              Like India. 50 million bpd added within a year or so. If it doesn’t come out of the ground, they should take it from Pakistan and Bangladesh and anyone else they can take it from.

              To not do so is vicious abuse of their own people.

              • Watcher says:

                Maybe that’s too extreme. Let’s grant the scenario of reduced per capita consumption in developed countries, and increase in less developed.

                With KSA the upside yardstick at 0.1 bpd/person, let’s cut their lifestyle in half with an axe and take them down to 0.05. That will be the new target for everyone.

                I think that means India must increase X15 instead of X16 and right NOW. As fast as they can or their elderly are being abused by anyone consuming oil they must have. I think that is about 52 additional million bpd they MUST burn, in a reduced per capita consumption world.

                China similarly reduces their upside requirement from 50 million bpd to 40 million bpd. That is a radical cut in required ramp up to acknowledge reduced per capita consumption.

                They have bigger guns. They should be able to take all of Japan’s, all of SE Asia’s, all of Korea’s, all of Australia’s and still be looking for more. If they don’t do this, they are abusing their elderly with less lifestyle than 1/2 a Saudi resident’s.

                • Patrick R says:

                  Watcher as ever just linear thinking to more consumption on last centuries model, then baroque all exploding doom. Yawn.

                  Here’s what is much more likely: No group will ever consume oil like the Saudis, no group, especially not the populous developing nations will consume oil like the US. The US will continue to not even consume like the US.

                  The US, and those other wasters Canada, Australia, NZ, will increasingly shift toward European levels, as Europeans consume even less. India and China will ring that those last 100s of millions into development with electricity not liquid fuels.

                  Still you seem to to like your war fantasies, is this an American thing?

                  • Watcher says:

                    As you may have missed, I reduced it to 1/2 the Saudis. So no group has to consume like the Saudis. They might want to be lesser humans than Saudis and consume only half.

                    As for the European levels, Germany is at 0.03 bpd/person, France is at 0.027, England at 0.025. Take the middle number of 0.027.

                    Unless there is some racial reason for wanting to deny China the European level of lifestyle, they will have to rise X4 as fast as possible by 40 million bpd and India must ramp X9 by 35 million bpd.

                    A total of about 75 million bpd increase that must occur NOW, unless you enjoy seeing elderly Indians and Chinese suffer in order for the Europeans continue their ways.

                  • Dennis Coyne says:

                    Hi Watcher,

                    Is there some reason that European consumption of petroleum cannot be reduced further? There is only so much oil, it will be rationed by price as it always has. If less developed nations need the oil more they will have to outbid more developed countries driving up prices and probably depressing economic activity.

                  • Watcher says:

                    Well of course the Europeans and everyone else can reduce consumption!

                    But it makes no sense to imagine these bizarre contortions of non human behavior to make that happen. How can all that make any sense at all?

                    It is so much easier to mow down millions. It is the OBVIOUS path. There doesn’t even have to be a war. War can always be avoided.

                    All you need to have is one side surrender.

                  • Cae says:

                    “Well of course the Europeans and everyone else can reduce consumption!

                    But it makes no sense to imagine these bizarre contortions of non human behavior to make that happen.” ~ Watcher

                    Have you read Overshoot Loop?

                    I await Ron’s article post on collapse and its comments.

                • Old farmer mac says:

                  The Japanese are going to go back to wearing pants and give up on panties in another decade at the most. They have no choice in this matter given the geophysical and political realities they are faced with.

                  I look for a nuclear armed Japan within my lifetime.I don’t know just how far the US is going to be willing to go to confront China when she goes to hard ball aggression but I doubt we will be able to stop her. We certainly aren’t going to be able to put the troops on the ground to do so and I doubt whoever is in charge in DC will use the nuclear option.

                  • Patrick R says:

                    Watcher it’s not your argument that’s bung, but your assumptions. European society may look like hell on earth to you, but I’m picking North Americans will find a way to adjust to that. In other words it’s your clumsy and literal tracking of oil consumption with ‘civilisation’ that’s wrong now. And, will become even more inaccurate over this century.

                  • Cae says:

                    Patrick R,
                    Roughly 2008 seems to have been arguably some kind of first, at least noticeable, ‘global stairstep down’, and since then, what have we had sociogeopolitically? Quite a bit.
                    We’ll see how the next stairstep down pans out, which may be within the next year or two, maybe even before 2014 is out.
                    Many stages have already been set.

          • The Wet One says:

            I’m glad I’m on another continent with a decent supply of oil locally.

            Of course, I’m next to the American behemoth, so there’s that. But we’ll happily sell them as much oil as we can (note we can, not necessarily how much the Americans want).

            Things are going to get interesting.

            • Lloyd says:

              No- we will give them as much as they want at whatever price they’re willing to pay, even if it means starving our children– because it beats becoming the next Iraq.


          • Byron Walter says:

            Watcher says…
            ” …A 3% decline on 10.5 mbpd is 315K bpd. Iraq might make that up each year?… ”

            There is a good chance of that happening if the Sunni & Shia resolve their 1400 year squabble. I also think that we could have done more to stabilize Iraq if we were just willing to make a 1000 year commitment.

            Since there are those amongst us that feel these are low probability events, we will just have to hope that the world can produce some more Bakkens. As for NA LTO, my uninformed opinion is that it might buy us two or three more years of higher than expected oil production.

            I’m guessing that in a few years we will be more appreciative of dirty Canadian oil. A year or two ago I was watching an interview with one of the very few folks that live near the proposed Northern Gateway pipeline route. Not unsurprisingly he was against the pipeline. In the background was a small structure that was supposedly his home. And in the frame was a fuel oil tank 🙂

    • B says:

      Whiting to Unseat Bakken King Hamm With Kodiak Purchase

      Whiting Petroleum Corp.’s $3.8 billion purchase of Kodiak Oil & Gas Corp. will create the dominant crude-oil producer in the richest U.S. shale region as energy explorers seek access to future drilling opportunities.

      Kodiak stockholders will receive 0.177 of a Whiting share for each Kodiak share they own, which is the equivalent of $13.90 based on the acquirer’s July 11 price, the Denver-based companies said in a statement yesterday. Including $2.2 billion in debt, the total transaction is valued at about $6 billion.

      The agreement will vault Whiting ahead of Oklahoma billionaire Harold Hamm’s Continental Resources Inc. as the premier oil supplier in the Bakken shale formation in the northern Great Plains. Whiting is buying a company that more than doubled production last year while Whiting’s own output growth slowed as costs to bring new wells online surged.

      Competition for Bakken assets is fierce because the geologic formation beneath North Dakota and Montana is the most prolific U.S. shale region, on a barrels-per-well basis, according to data compiled by Bloomberg. Because most drilling rights on privately owned land in the area have already been snapped up by corporations, explorers can only expand through acquisitions.

      New wells drilled in the Bakken pump an average of 510 barrels of oil a day, compared to 479 barrels for wells in the Eagle Ford shale in south Texas and almost four times as much as Permian Basin wells in west Texas and New Mexico, according to data compiled by Bloomberg.

      The relatively high crude output means explorers may recoup their drilling costs and begin booking profits from Bakken wells faster than those in other formations.

      The Kodiak purchase will give Whiting drilling rights across 855,000 net acres, surpassing Exxon Mobil Corp. as the second-biggest leaseholder in the area, according to data compiled by Bloomberg.

      • Watcher says:

        “New wells drilled in the Bakken pump an average of 510 barrels of oil a day, compared to 479 barrels for wells in the Eagle Ford shale in south Texas and almost four times as much as Permian Basin wells in west Texas and New Mexico, according to data compiled by Bloomberg.”

        Pretty important numbers. It would be nice to know where they came from.

        The hypers show up here quoting numbers north of 1000 from investor presentations, and those are clearly cherry picked, but it would be nice to get these broader averages, if that’s what they are (and from whom).

        Starting to look like the uber big majors divesting themselves of those acres of dirt were the leading edge of thinking, not the incompetent.

    • Regex Wald says:

      BTW of the ND Bakken wells completed in 2013, Whiting completed about 100 more than Kodiak, but the average Kodiak well has outperformed the average Whiting well by over 20% to date. But both companies completed pretty ordinary wells overall.

      If you want to speculate on further M&A action in the Bakken, there have been rumors that Occidental (OXY) might be interested in selling its acreage (a lot of it seems mediocre) and my personal thoughts have long been that Oasis would end up bankrupt or acquired by the end of the decade. Hess reorganizing all their wells under “Hess Bakken Investments” also caused speculation that they might sell some off in the future.

      • Watcher says:

        Can’t understand table.

        • Regex Wald says:

          Cum. Oil is the cumulative amount of oil produced to the end of May 2014 (latest date in NDIC database) per well completed in 2013. So Kodiak for example completed 96 net wells in 2013 with the average well producing 83,887.9 barrels of oil to the end of May.

          Here’s a better table

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