US Crude Storage, Production and Other Peak Oil News

There has been a dearth of oil production data lately so I have been scratching to find something to post. So I have gathered this and that in hopes of making it interesting.

US stocks had the first uptick in nine weeks, gaining 990 kb. (See the slight uptick in the blue line.) But they still stand at their lowest point in 21 months.

Stocks

Incidentally the EIA’s Weekly Petroleum Status Report had US crude oil production down last week. Their estimate of production went from 8,159 kb/d to 8,052 kb/d. That was the first decline in nine weeks. Of course that is really just a guess by the EIA.

Based on the weekly US production data I have charted US production through Januay 2014. The data through November 2013 is from the EIA’s Monthly Energy Review. The data for December and January is from the Weekly Petroleum Status Report, link above. That data is through January 17th. I have estimated the rest of the month.

United States1

US production was up almost exactly 1 million barrels per day in 2013. That is true if you measure December 2012 to December 2013 or if you measure average for the year 2012 to the average for 2013. I am betting it will not be up that much this year.

And incidentally the EIA’s AEO 2014 had US C+C average production at 7,755,767 in 2013. But according to the latest EIA numbers that will be about 280,000 bp/d too high. So already they are a bit high on their estimate. However the EIA does acknowledge a slowdown in 2014. AEO 2014 has the average US production up by 1,239,693 bp/d in 2013 but up by only 806,393 bp/d in 2014 to 8,562,159 bp/d.

However there are different departments of the EIA. AEO 2014 has US  2012 C+C average production about 27,000 bp/d higher than the Monthly Energy Review has it.

I don’t track natural gas with a spreadsheet but I do follow it. This week’s draw was slightly less than the this week last year but we are still well below the five year average and below any point, for this week, in the last five years.  We were down 105 BCF this week and the natural gas storage level now stands at 2,423 BCF.  AmericanOilMan.com

Gas Storage

The following came to me from Canada courtesy of Ovi Colavincenzo. It is entirely behind a pay wall but I have posted enough of it below that I think you will get the general idea. The article gives the opinion of Scott Saxberg, CEO of Crescent Point Energy Corp who says the numbers don’t add up.

From the Globe and Mail: Can the Bakken fuel America? Don’t bet on it.

The IEA has the United States poised to become the world’s top oil producer in 2015. In fact, it predicts, America could be self-sufficient in the next two decades. To some, though, it’s not an open-and-shut case…

He said the state cannot sustain annual growth rates in the 40 per cent range, which it has averaged since 2008. There just isn’t enough industry-related equipment, or even housing and other social necessities, to support a major increase in the manpower that would be needed.

“They have to add a significant number of rigs to continue the pace of growth that they’re on today, and it’s physically impossible,” Mr. Saxberg said in an interview.

There are other factors. At least some of the North Dakota drilling boom was driven by a land-tenure system that required investment within two years to hang on to acreage, he said. That phase is ending.

I didn’t know about that “two year investment” thing. I wonder what effect that phase ending will have on Bakken production. Anyway I am predicting that US production will hit peak about a year earlier than the EIA predicts. Also they are prediction a four year plateau. I think it will be two years at the most. But then that is just my wild ass guess.

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83 Responses to US Crude Storage, Production and Other Peak Oil News

  1. Dennis Coyne says:

    Hi Ron,

    I think your guess is a good one. I think the peak could be a little later than 2015 but it will make little difference because I see a similar profile, a plateau of sorts from 2015 to 2017. I think the peak could happen at any point between 2015 an 2017 (and think it will not be a material difference, if it is symmetric about 2016 the difference would likely be less than 200 kb from June 2015 output and whatever peak output is), by Dec 2017 the Bakken will be in rapid decline. See Chart for one possible scenario ( an optimistic one, Ron’s guess is likely more realistic).

    Dennis

  2. Calhoun says:

    the more forecasts I read, the stronger the consensus is that world production will be in decline in the later part of this decade and steep decline by the early part of the next decade. We, as a society, truly are sleep walking into the impending disaster. For the past few years I’ve felt as if suspended animation. Something’s gotta give.

    • SRSrocco says:

      Calhoun,

      I agree, however I believe there are much worse fish to fry now. I used to be in the camp that if there was climate change… the impacts would be felt a century or so from today. Now, I think were are already in rapid climate change or CLIMATE CHAOS.

      The rapid heating of the Arctic has changed the mechanics of the Jet Stream. That is why we are experiencing huge temperature anomalies. Either very warm in the West and very cold in the EAST. Basically, the Jet Stream is fracturing, slowing down and developing huge waves.

      When Arctic temperatures were very cold in the past the heat from the Tropics would rise towards the Arctic and then be forced to go to the east. The Jet Stream moved quite quickly. Now that the Arctic is heating 4-6 times the average of the planet, it has impacted the Jet Stream substantially.

      Climate forecasters believe the continued heating of the Arctic will create severe anomalies in the Jet Stream going forward which will destroy the ability for farmers to grow food in local areas as much hotter & longer droughts on top of huge torrential downpours that dump 6-12 months of rain in a few days.

      We are already seeing evidence of this:

      U.S. Cattle Herd Is At A 61 Year Low And Organic Food Shortages Are Being Reported All Over America

      If the extreme drought in the western half of the country keeps going, the food supply problems that we are experiencing right now are only going to be the tip of the iceberg. As you will see below, the size of the U.S. cattle herd has dropped to a 61 year low, and organic food shortages are being reported all over the nation. Surprisingly cold weather and increasing demand for organic food have both been a factor, but the biggest threat to the U.S. food supply is the extraordinary drought which has had a relentless grip on the western half of the country. If you check out the U.S. Drought Monitor, you can see that drought conditions currently stretch from California all the way to the heart of Texas. In fact, the worst drought in the history of the state of California is happening right now. And considering the fact that the rest of the nation is extremely dependent on produce grown in California and cattle raised in the western half of the U.S., this should be of great concern to all of us.
      ———-

      I thought for a long time that Peak Oil would be the Death of modern civilization… I now believe rapid climate change will take first place.

      steve

  3. Old farmer mac says:

    Here’s a link to an article discussing the possibility that American railroads might switch from diesel to natural gas as locomotive fuel.

    http://www.csmonitor.com/Environment/2014/0123/Why-trains-may-switch-to-natural-gas-instead-of-diesel

    I gather that the rr managements think that ng will stay enough cheaper than diesel for a long enough time to make the switch look like a good bet.

    One thing seems certain; there won’t be any problem finding space for the ng tanks on a train.Hooking up another car is no problem at all.

    • Dennis Coyne says:

      Switching to electric trains might be a better idea, eventually diesel and natural gas will become very expensive, probably sooner than most realize.

      DC

      • aws. says:

        I agree with Dennis, all energy in the the Post Carbon economy will be delivered as electricity. Trains are relatively easy to electrify as transportation infrastructure goes.

        • Just curious, what do you think the “Post Carbon Economy” will look like?

          That would be a great subject for a long discussion, The Post Carbon Economy. Population, lifestyle, medical care, welfare or lifestyle, life expectancy and so on?

          • Watcher says:

            Exactly. Post Carbon economy will be relentless descent with a global population of about 1 billion people, most of whom are employed walking behind a plow.

            I’m much intrigued by this lack of diesel in shale oil. Particularly from the perspective of the trucks carrying it.

            • I think I was mistaken about the diesel in shale oil. Turns out there is quite a bit of diesel in the Bakken shale oil. I am not sure how much yet as I am still researching it.

              • Watcher says:

                There is in Bakken. The only hard data I’ve seen is that it is a something like 40% of what is in Nigeria’s oil.

                The Eagleford apparently is 0%. It’s from a thread of about a week ago. RBEnergy blog?

                • Watcher says:

                  Tried to look for it using Search on this site. That thing doesn’t work. It found a total of 2 hits for the word diesel. June and August.

              • Found this. It compares Eagle Ford crude with Louisiana Light Sweet Crude. It appears that Eagle Ford does contain diesel but about 20% less than LLS.
                On the other hand Eagle Ford crude contains over 50% more naphtha than does LLS. That is a lot more naphtha. Naphtha is the very light stuff. Apparently, looking at this chart, they are calling pentane light naphtha and everything between that and kerosene heavy naphtha. That would include octane or gasoline.
                The Eagle Ford Marker: Rationale and methodology
                 photo EagleFordVLLS_zps1080a653.png

                • Watcher says:

                  Good data. I wonder where the Nigeria data came from.

                • Watcher says:

                  I just went through that .pdf in a big more detail. There is some chance the Eagleford sample was cherry picked.

                  Lots of text about variable oil quality. The “marker” oil was API 47 (that’s really high) for the table above, I think.

                  There is also text suggesting that EF flow near condensate geology rises in API rating even higher. So the issue would seem to be that averaging the whole EF may not give that marker API. It is probably higher, and we’ve been hearing a lot of commentary from various places that “Eagleford produces mostly condensate”. Hmm, and I think most of that commentary is from that RBEnergy source.

                  I did just scan through some Eagleford forum posts. These seem to be land owners asking lease questions, and a LOT of talk there is about getting paid only for NGLs and how “the price of oil is never what we get.”

          • aws. says:

            Radical Emissions Reduction Conference – Videos Now Online

            Video recordings of talks given at the Radical Emissions Reduction Conference (10-11 December 2013) are now available for viewing online.

            Many presentations at the conference discussing the point… “What might it look like?”

            This one had a couple of good laughs (10 min. long) : )

            ‘Low carbon fun: lifestyles in a low emissions society’

            Either way we’re headed for a Post Carbon economy. It would be a heck of a lot better to plan for and invest in the transition. Now if only we were a lit more prudent and forward looking.

      • Toolpush says:

        Dennis,

        I know everyone says electric trains are the way to go, and having travelled on many trains across Europe and Asia they have many advantages. The only problem I have is America is a little differant than the rest of the world. The US basically had no electric overhead wires and this allowed the brillant idea of double stacking 20/40ft containers by deepwell rail cars. This works great in alot of areas, but a lot of old tunnels and bridge were not high enough, so now a lot of money is being spent to increase clearances to allow for double stacking.
        I saw one referance where 21ft was the height required. From what i have seen in my travels in the US, your trucks seem to have about a 8ft height limit. Certainly the orginal sea containers were 8’x8’x20′ or 40′. These days on the high seas the 9’6″ x 8’x20′ or 40′ is the more common size except for the reefers.
        8+8=16′ plus 1′ for track clearance = 17″, will fit in 21′ tunnel
        9.5 +9.5 +1=20″, will just fit in 21′ tunnel
        My question is where do they fit 3′ to 5′ clearance for the high voltage electric cable.
        I did have this conversation with Alan of the big Eazy, and he didn’t realise about 9.5′ containers & China and India were building some electric rail for double stacking, but completely new track, therefore bridges were built at the required height. But my point is now that the US has gone down the road of double stacking containers, the idea of electricfing the old rail system has been come significantly more expensive.

        • I guess too, if much of that electricity is to be generated from natural gas, you might as well burn it directly to power trains. It is going to take a long time to scale renewables to such a proportion of generation that there would be a carbon benefit. In fact by electrifying rail in the US you might end up burning more coal!, as well as needing to invest in a huge roll out of track infrastructure… How straight forward is loco conversion? Or are we talking whole new units?

          • toolpush says:

            The basic difference between a diesel loco and an electric loco is the electric loco pulls its electricity from the wires, a diesel loco pulls its electricity from the alternator attached to the diesel engine. They both use the same electric motors to drive the train. In the good old days they used DC traction motors, but these days most people are using AC, with variable frequency drives.

            So an electric loco can actually fit in more drive motors in the loco, as they do not need to lug around a big diesel engine and fuel. The oil field uses the same traction motors as the train do for drilling. we have also changed over to AC

            • Errr, the differences between electric and ICE trains are no mystery; I was asking about the conversion between Diesel and Natural Gas….

              • Answer to my own question in this gung-ho rail article from Forbes: http://www.forbes.com/sites/joannmuller/2014/01/22/americas-second-rail-boom/

                Also describes the extraordinary scale of the US rail system which is why electrification is an unrealistic expectation. Sure new passenger routes should be electric, but LNG looks much more like the next development in rail propulsion in North America.

                Also the rail boom will clearly take a hit with the Shale decline of the Shale boom.

                • Dennis Coyne says:

                  Hi Patrick,

                  In the short term you may be correct, the equipment has a pretty long life so I am looking long term, where natural gas goes to 2 or three times more expensive than today as the resource depletes. Under those circumstances the rail will be converted to electric because it will make economic sense. The sooner we start this conversion, the fewer resources are wasted building diesel and lng powered locomotives that will quickly become too expensive to operate. Do I think this will be cheap and easy? No I do not. Is it the best long term solution to transporting goods? I think the answer is yes, though my guess is that people will only realize that I am correct 20 years from now. Removing all subsidies from fossil fuels and renewables(including tax breaks and government support of roads, parking lots, etc) , and taxing externalities (pollution including carbon dioxide and particulates, mercury, sulfur dioxide, and nitrogen oxides in the air) properly would allow the market to decide what solution works best.

                  DC

                • KC says:

                  In New York, the subways run from power lines mounted on the ground, about eight inches next to the tracks. No need for overhead transmission. The utility lines on the ground are covered by a shield to keep people etc from accidental contact. I believe the electric line is called “the third rail”.

                • toolpush says:

                  KC

                  Third rail systems are only used in metro systems where the tracks and third rail can be fenced from the public, also they are all quite low voltage, from memory about 600V DC and therefore high amperage.
                  While the older overhead systems were around 1500v DC and the newer ones are up to 25KV AC. At these voltages you need clearance, therefore they could never run along the ground, along with my point of clearance in tunnels and under bridges.

        • Mike says:

          Question from a total ignoramus on this: is there a safety risk having overhead electic lines producing sparks, and the trains powered from those electric lines being made up of tankers loaded with highly flammable hydrocarbons?

          • toolpush says:

            Dennis,

            As rail is by far the most fuel efficient mode of transport, rail companies should be looking forward to the price of oil/energy going up. The higher it goes the great advantage they over road transport. If Nat Gas remains cheap then the economic forces will push both rail and road to convert to Nat Gas, but once again rail will have an even greater advantage as they will have far few engines to convert or new purchase, than road. The rail tenders that will be used will give the LNG trains much further range than the diesel equivalent locos, while the road CNG/LNG conversions give a lower vehicle range.

            Now if both oil and nat gas become too expensive, you say convert to electric, but what will the driving force be. The competition, road transport can’t convert to electric. I don’t think I have heard of a practical long distance truck running on batteries, and over head wires in a road situation apart from a few very controlled trial have not been deemed practical.

            So as the price of ff goes higher the rail companies are already increasing their advantage over their main competitor. The only place where I see the market place placing leverage on the rail companies to invest in overhead electric wires is if one rail company broke ranks and electrified and this would only effect another rail company if the two companies were competing for the same market on different tracks. The way I saw the US rail system was each company generally had their market area and rail system in general competed against road transport.

            Therefore unless it was very easy and super advantageous to electrify the rail system, the competitive force will not exist for rapid change. I think a few people will disagree with this, but that is how i see the economics side playing out.

            • aws. says:

              FWIW, Each operator has it’s own network and may choose to electrify their rail network depending on the economic situation. Smaller networks or trunk lines may see an advantage to electrify.

              With rail, I think that it is really only the locomotive that is impacted by the switch, the cars are the cars and they regularly get switched from one operators network to another network. Which means that it goes from being pulled by one operators locomotive to being pulled by the next operator as the car makes it’s way across the continent to it’s destination.

            • aws. says:

              One thing to keep in mind and reinforce… is that there will be a lot fewer cars on the rails in a Post Carbon economy as all the resources needed (frack sand for example) to extract FFs and the bulk transport of FF will no longer be on the rails.

              That said the goods that are now shipped by truck will get pushed back on to the rails. But I don’t think the volume of that traffic compares to the volume of coal and other FF traffic on the rails.

            • Dennis Coyne says:

              Hi Toolpush,

              I believe the competition would be other railroads. For example lets say I want to transport goods from LA to New York City, if there is more than one set of tracks that can be used to get the goods from A to B then as a customer I will choose the cheaper alternative, if by switching their lines to electric, company X can offer cheaper transport than company Y, they may do so to take away business from Y. In addition, if the rails gain monopoly pricing power in certain regions then they will be regulated and as fossil fuel prices rise they may see their profit margins squeezed due to limits on price increases due to regulation. Under those conditions they may choose to switch to electric.

              Another thing to consider is that under common law the railroads were there first and so have the right of way, in the case of bridges, it would be the state (who in most cases owns the road) that should be responsible for rebuilding bridges to suit the train’s clearance needs. The tunnels would be the railroad’s responsibility. All of that would need to be worked out in the courts. Whether any of this happens depends in large measure on the relative price of diesel and natural gas to electricity. My guess is that at some point natural gas and/or diesel will become much more expensive than electricity for powering trains, likely by 2030 maybe 2040 under very optimistic scenarios. At that point the transition will begin as most businesses don’t look more than 3 months into the future (or so it seems.)

              DC

              • Hi Dennis, I hope it happens, I hope there are good financial incentives for rail cos in North America to electrify their systems but there are big barriers. They will need to convert whole routes at once and invest in new electric locos. Incrementalism can still only happen at scale. Also that electricity has to come from somewhere and even though renewables are growing fast in the US any big Diesel or gas supply driven price hikes are going to hit electricity supply too, until alternative sources get a bigger market share. Perhaps northern lines in hydro state will be first?

                Reading the Forbes article above it is clear that rail already enjoys a fuel cost advantage over road, and that rail fuel efficiency is already improving strongly. It seems more likely that this will be the near term change, newer more efficient locos and running patterns [also mentioned in the article], then purchase of LNG locos and tenders and refuelling infrastructure. Forbes says that Union Pacific alone is the second biggest US fuel customer behind the Navy! 1.2 billion of your big US gallons.

                After the war Europe changed from steam to electricity and the US to Diesel, each reflecting the available energy source. The poor British, as ever were, and are, torn between the logic of the European example and the glamour of the American one, and sort of did both. Of course North Sea oil came along and it looked like the Euro-phobes were right. Oh dear…. Perhaps they could go back to steam [sarc.]

                • “Now GE is focused on fuel, rolling out a new line of locomotives that can operate on liquefied natural gas and reap up to 50% savings over diesel (of which the freight-rail industry uses 3.5 billion gallons a year). That’s critical, since rival over-the-road heavy truck fleets are shifting to cheaper natural gas, too. BNSF and Canadian National are already testing converted natural gas trains around North America.”

                  Forbes, link above

        • Dennis Coyne says:

          Hi Toolpush,

          I think you have researched his more than I have. My point was not that it would be easy, but that as oil and natural gas become scarce and expensive that electic rail will begin to make more sense. It may be that double stacking will not be able to be done or that container sizes will need to change.

          At some point natural gas will be too expensive to provide the bulk of electricity generation, hopefully we will move to wind, solar, geothermal, hydro and nuclear rather than just to coal. Unfortunately carbon taxes in the US are unlikely until we get to 4 C of warming around 2100. Even then there will be many who say carbon dioxide has nothing to do with it because the earth was that warm between 10 and 15 million years ago, its all just natural variation.

          See http://www.physics.rutgers.edu/ugrad/140/lectures/lecture_4.pdf

          for a brief history of temperature during the earth’s history. Note that during the Eocene the temperature was around 12 C above 1750 AD temperature levels (around 50 million years ago) possibly due to methane hydrate release from the ocean floor. See chart below for a picture of temperature and note that for the last 11 million years the temperature has been less than 3 C above 1750 AD temperature levels.

          DC

        • Old farmer mac says:

          The clearance height of most newer bridges in the US is 14 feet so that a truck that is 13feet 6 inches high which is the national standard height limit can pass safely under the bridge.

          Older bridges are often lower but they are usually clearly marked and not too many truckers hit bridges since doing so is usually a career terminating event.

  4. aws. says:

    The ‘Petroleum Party’ in full cry about Neil Young: what are they afraid of? Not what Northwestern Alberta doctors fear

    by David Climenhaga, Alberta Diary, on January 22, 2014

    Here in Alberta, the Petroleum Party dominates everything – the federal government, the provincial government, the government benches in the Legislature, the opposition benches in the same place, the media and, it turns out, parts of the medical profession as well.

    — snip —

    Still, it was shocking to read in the local press that physicians in northwest Alberta’s Peace River region are not only afraid to speak out about the impact on humans and the environment of oil and gas activity there, but that some of them have refused to treat patients who thought their health problems might be related to petroleum industry emissions. According to Edmonton Journal reporter Sheila Pratt, one medical lab even refused to process a patient’s medical tests!

    In the case of the doctors and of the lab, presumably, they were afraid that their investigations might reveal the petroleum industry was the cause of someone’s health problems. Doing that, they knew, could cause big problems – both for patients in a region economically dependent on petroleum development and for any professional who dares to challenge the orthodoxies of approved politics and science in Alberta.

  5. aws. says:

    Some doctors refused to treat emission-area residents: report

    Public hearings set to start into Peace River area emissions

    By Sheila Pratt, Edmonton Journal, January 19, 2014

    Sears, with a PhD in chemical engineering and a specialty in health and environment, said in her interviews she found physician care was refused when a resident suggested a connection between their symptoms and oil and gas emissions.

    “Communications with public health officials and medical professionals revealed a universal recognition that petrochemical emissions affect health; however, this was countered by a marked reluctance to speak out,” wrote Sears.

    The reluctance stems from fear of consequences, lack of data about exposure levels, and lack of knowledge on the part of doctors on how to deal with exposures to petrochemical emissions, she wrote.

    “Physicians are quite frankly afraid to diagnose health conditions linked to the oil and gas industry,” wrote Sears, adding she heard several times about the case of Dr. John O’Connor who was threatened with losing his licence after raising an alarm about cancer rates in Fort Chipewyan.

    Both experts concluded that vapours released into the air from heated bitumen could well be connected to health problems of families.

    Petro-state?

  6. aws. says:

    Record Grain Crop Stuck on Prairie as Railways Tap Oil

    By Jen Skerritt, Bloomberg, Jan 23, 2014 11:41 AM ET

    ising shipments of crude oil by train are tying up railway resources in Canada, leaving as much as 3 million tons of grain stuck on the Prairie after a record wheat and canola harvest.

    Grain shipments to export terminals are two months behind due to a shortfall of rail cars, said Keith Bruch, vice president of operations for Paterson GlobalFoods Inc., a 106-year-old Winnipeg, Manitoba-based company with more than 30 grain elevators. Canadian National Railway Co. (CNR) and Canadian Pacific Railway Ltd. are hauling more oil while engines and crews are needed elsewhere to move grain, he said.

    “It’s looking more and more that grain is becoming second choice to oil,” Bruch said in a Jan. 17 interview at his office in Winnipeg. “The railways make decisions on where they put their power and crews to maximize revenue.”

    When you have to transport diluent (C5+) to Northern Alberta to dilute bitumen with 28% diluent to ship it out by pipeline, or 17% diluent to ship it out by rail (p.20 Carbon Tracker report), and most of that diluent is being shipped by rail from among other places the Bakken then you are adding considerably more traffic to the rail network just to transport bitumen out of Alberta; by rail or pipeline.

    Last week’s TWIP pointed out that the coming reversal of Kinder Morgan’s Cochin pipeline to carry light condensate north to Alberta highlights the demand in Alberta for diluent. The reversal means that HGLs will no longer be flowing into the mid-west from Alberta WCSB on that pipeline. That would exacerbate the propane supply problem next winter.

    The Cochin reversal may relieve some of the Bakken BCO traffic on the rails, but bitumen production from the tar sands will rise to negate that relief.

    The Tar Sands are sucking in resources, and ship out so little additional energy for all the effort. The demand for resources has the knock on effect of making it difficult for home-owners to get propane for heat and for farmers to ship their grains to market.

    This is what a world of low EROI fossil fuel production looks like.

    • Calhoun says:

      And propane is also used to dry out grain for storage.

      Example: 50,000 bushels dried from 23% to 17% moisture could be calculated as: 50,000 x 6% moisture x 0.02 = 6000 gallons propane

      Link

  7. aws. says:

    EIA : This week in Petroleum

    Released: January 23, 2014

    The average residential propane price increased by 10 cents per gallon last week to over $2.96 per gallon, 68 cents per gallon higher than the same period last year. This is the largest single week increase since the start of the heating season in October. Wholesale propane prices rose almost 41 cents per gallon to $2.11 per gallon as of January 20, 2014.

  8. Calhoun says:

    Rising Costs Hit Balance Sheets of Major Oil Companies

    The latest news may be indicative of a new phase for major international oil companies. Shell is not alone in investing huge sums to develop complex oil fields in far flung places around the globe. As easy-to-get oil declines, Shell and other oil companies are forced to search for oil in places that present geological and engineering difficulties –and thus present significantly higher costs.

    Reality bites.

  9. Euan Mearns says:

    European gas security

    The loss of 14 bcm/y Dutch gas production adds to Europe’s energy supply / energy security woes. Pending decline of Norwegian gas production will make the energy security situation worse.

     photo Euan_zpsaa58fae3.png

  10. Euan Mearns says:

    Ron, I tried to post a chart (tried before) but it hasn’t appeared?

    • Euan, I don’t know why it did not appear but I uploaded it to Photobucket and posted it for you.
      I got the link from your post.

      • Euan Mearns says:

        Thanks Ron, your html is a bit different to that I used so next time I’ll try using your html and see if that works. My charts are all uploaded to WordPress and so that shouldn’t be a problem.

        • Right, I use WordPress for everything in the original post but for the comments I use Photobucket. With Photobucket I can put the chart anywhere I want to in the comment and put as many in one comment as I wish. WordPress only allows one chart or picture per comment and it always goes at the bottom, with no text after that.

          Also with Photobucket I can insert a chart into someone else’s comment. WordPress does not allow me to do that. That is the “edit” function has no “choose file” box.

        • Dennis Coyne says:

          Hi Euan,

          If you are not an editor or administrator at peak oil barrel you should use the add in for charts. You just browse your hard drive for your chart location and put it in the box below the post comment where it says “select an image for your comment” no html is required. I tried it with this comment to make sure it works. The html that Ron used will only work if you are an editor. Ron and a few others can edit their comments and put multiple images in a comment and put the image anywhere in the comment that they wish.

          Dennis

          • Euan Mearns says:

            Dennis, thanks, one of these quirks of different WordPress themes. Here goes for some sobering data for Karen…

          • Dennis Coyne says:

            Euan,

            I am happy to help. Glad to see that the chart thing works for you, its a little limited, but its the best we can do for now. If anyone knows about a good search addin for word press I would be happy to try it. As Watcher pointed out what we have now is useless, but I could not find a search add in that worked any better.

            DC

            • Euan Mearns says:

              Dennis, what WP Theme are you using? I am using “2010”. Chose that based on other sites I looked at, for example Gail uses this. I think i can post as many charts in a comment as I want to using the same HTML as on TOD. I just checked the search option that seemed to work fine. One option you may have is to migrate Peakoilbarrel to a new Theme. I think it is supposed to be quite straight forward. The other option is to try the WP forum, and ask for advice there.

              • Current Theme
                Brunelleschi Version: 1.6.5

                I have installed Twenty Ten but have not activated it. Do you think that would be a better theme?

                If you post charts via Photobucket you can insert as many charts as you like and can post text between and after the charts. I use Photobucket exclusively when posting charts in comments.

                • Dennis Coyne says:

                  Ron that only works for admins and editors.

                  Euan, I think if I tried to post a chart on your blog it would not work, you can do it because you are an administrator of your own blog. I am pretty sure the theme does not matter, but I will try posting a chart a energy matters as a check.

                  DC

                • Euan Mearns says:

                  I see Dennis had trouble posting a chart on Energy Matters. It’s not something I’ve thought about before. Did a quick check and couldn’t see other posters posting charts 🙁 Some commenters post links to charts. It seems a pretty useless limitation for WordPress to have.

                  And so in answer to Ron, it appears that 2010 is no good either.

                • Aws. says:

                  TOD was something special that way.

  11. Karen Allen says:

    I am somewhat amazed to watch natural gas prices soar these last few weeks and yet no mention of it seems to made in the media. The prices must necessarily be passed onto the consumer, but if consumers aren’t aware natural gas has become 40% more expensive until they get their bill, they have no way of conserving or substituting other energy sources for heat/hot water supply until after the cold wave has nearly passed.

    It appears to me that the whole energy complex is interrelated, and as the price of one component increases they are all likely to spiral up. (The price of coal is dependent on the price of diesel since for some states the shipment of coal represents half its cost; oil refineries have increasingly powered themselves off natural gas and purchased electricity rather than burning their own products; ethanol is dependent on the price of natural gas for fertilizer and the price of diesel to ship the ethanol, etc.) Adding to that the falling BTU content of the fossil fuels available to us per volume, and things get even uglier. By deluding people as to the future likely sources of energy we have enormous widespread malinvestment when we could be using our time and money right now to prepare in a somewhat intelligent and useful fashion. (All new construction would have heat pumps; coal-burning power plants would gradually be replaced by solar and wind and, possibly to a limited extent, biomass; electrification of passenger and freight rail lines would be accelerated; states without wind resources near those that do would invest in high voltage transmission lines; fertilizer manufacturers would investigate obtaining hydrogen from electrolysis of water rather than natural gas, etc.) At least we could stop building coal-fired power plants and stop building more roads that will be useless and impossible to afford to maintain in a few short years. The window for action grows shorter and shorter, and yet we do so little. And this doesn’t even factor in our stupidity and wanton irresponsibility in dealing with climate change.

    Of course I know everyone reading this already knows all this. (Sigh.) Sometimes the level of purposeful cognitive dissonance in our society is almost impossible to bear without comment, and my friends and family are sick of hearing me yip about it.

    • Andy Hamilton says:

      I have also been fascinated by the rocketing US natural gas price (up nearly 10% on the day as we speak). I am pretty sure we were told that fracking had rendered US gas ‘almost too cheap to meter’ to borrow a phrase from a different age and a different energy source. Now I know there is a cold blow in the US in the moment, and I also know that a ton of rigs that were on the gasfields are now redirected at tight oil, but I will sure take a few moments to have fun with those here in NZ who told me that natural gas prices were a one way bet in the US due to the wonders of fracking.

    • Euan Mearns says:

      Karen, if you check out Figure 5 in “What is the real cost of shale gas” you’ll see that the drilling fleet abandoned drilling shale gas 5 years in favour of drilling shale oil. Gas production has kept growing due to a large backlog of wells drilled, waiting to be fracked and connected to a pipeline. And there has been some stonking wells in the Marcellus. But when you stop drilling shale, some time it will stop producing. And I hear its been rather cold.

      You may also want to check out Figure 1 of that post that compares US with global nat gas prices.

      What is the real cost of shale gas?
      Marcellus shale gas Bradford Co Pennsylvania: production history and declines
      Shale gas myths and reality – part 1

    • Euan Mearns says:

      Karen, now that I have learned how to post charts on Ron’s blog here is the shale drilling stats for the USA – I’m sure that Ron and Dennis will be keeping you posted on this, but if you don’t drill shale all the time, production falls and prices go up….

      • Karen Allen says:

        Yes, I love the Red Queen metaphor (having to run faster to stay in place) as applied to shale drilling. A truly-inspired literary reference. I think we’re going to find that fracking is not very healthy for people who live in proximity to it, and that leaks in the methane supply delivery system in general do almost as much damage to the climate as coal. So I would guess not only do we (the US) need to move away from coal over the next decade but also away from natural gas over the next two. It’s one heck of a predicament.

        • Jeffrey J. Brown says:

          In regard to US natural gas production, I frequently reference a Citi Research report from about a year ago which put the decline rate for existing US natural gas production at about 24%/year (all sources–dry gas, wet gas, associated gas). This would be the decline in production from 2013 to 2014 if no new sources of gas production were put on line in 2014.

          In any case, a 24%/year (simple percentage) decline rate from existing wellbores suggests that the US oil and gas industry would have to replace 100% of current natural gas production in about four years, just to maintain current production for four years.

    • Karen Allen says:

      I decided to yip about natural gas to my family and friends after all.

      “Natural Gas Prices Are Soaring. Here’s What You Can Do.”

      http://karenlynnallen.blogspot.com/2014/01/natural-gas-prices-are-soaring-heres.html

  12. KC says:

    Hi Karen

    I have to agree with your sentiment. It ALMOST feels like defeat, that no one seems to or cares to listen, despite the very obvious signs. But I don’t give up; instead, I just keep doing my thing, preparing myself, my home, my friends and family who might be receptive, and try not to bother, not to waste my time, with the rest who won’t.

    Right now I have several projects in the fire. One if them is a rocket stove, one that might be portable, that I can use in my fireplace as a rocket mass heater, or that I can put it outside on the deck for cool nights. Another is to buy or build a couple of tyvek tipis and tents, also having their own portable ammo can rocket stoves. And another is to buy a two-wheeled diesel tractor with a PTO to drive a wood chipper, snow blower, tiller, and a 5kw generator. And pretty darn soon I might also sell my car; it’ll be mostly worthless anyway against the high cost of fuel.

    • Karen Allen says:

      We’ve done lots of projects too. I kind of made it a hobby for a while to reduce our energy usage/carbon footprint.

      http://karenlynnallen.blogspot.com/2013/02/one-familys-energy-evolution-how-we.html

      I recently got a rocket stove as well (!) but with the strange weather we’ve been having in San Francisco (endless sun! no rain! not even any fog!) most days the air quality is bad enough we’re not allowed to burn anything. (Of course does anyone actually enforce this? Not that I can tell.)

      My husband and I bike and walk a lot. We still have one car but drive it less than 4000 miles per year.

    • KC says:

      Hi everybody – Karen, on her blog has a convincing article on her blog suggesting that many cities will be “car-free” by 2018. Hard to imagine. But, I live in New York, and seeing the direction the city is going with dedicated bike lanes and building out new subways and regional train lines, it seems plausible. The last few months I’ve thought about selling my car, the “second” car of our household here. Maybe I will act on the sale sooner than I previously intended. I could put ghT money toward a diesel walk-behind tractor and implements – snow plow, chipper, tiller, 5kw generator, etc.

  13. SRSrocco says:

    I think what is going to happen in the GOLD & SILVER markets in 2014 will surprise many.

    JP MORGAN Has Largest One-Day Withdrawal of Gold From Its Vaults… EVER

    http://www.zerohedge.com/news/2014-01-24/jpmorgans-gold-vault-has-biggest-one-day-withdrawal-ever#comment-4364214

    JP Morgan had 321,500 oz of Gold removed from its vault today. This was 22% of its total inventory…in one day. JP Morgan had 1,459,027 oz of gold in its vaults before the large withdrawal… and now is down to 1,137,537.

    February is a huge Delivery month for the Comex in which JP Morgan is one of the 5 depositories. There are only 88,532 oz in the total Registered category in all 5 depositories. Chances are becoming greater each passing month that we will see a Default at the Comex for physical Gold delivery.

    Americans who thought Gold was a forgotten barbarous relic may soon be reacquainted with the shiny yellow metal.

    steve

  14. BAU says:

    I learned of the Energy Export Databrowser from the Oil Drum; I find it very interesting to browse the data on countries making headlines. Some have very revealing graphs 🙂 It alows me to gauge the amount of “they are screwed” -ness a bit better 😉

    Like poor Peso Argentine!

    Not super detailed but great to click around in!

    • Mike says:

      All the more reasoon got Argentina to re-grab the Malvinas/Falklands wheree there are supposedly immense resources/reserves of deepwater oil. The Brits have no navy left to speak of to defend the faraway islands.

    • aws. says:

      Argentina Seen Extending World’s Biggest Currency Decline

      By Charlie Devereux and Katia Porzecanski, Bloomberg, Jan 24, 2014 8:02 AM ET

      This is what happens to a country when it has to import more and more oil that is priced in U.S. dollars.

  15. aws. says:

    With respect to diesel yield of Bakken LTO…

    Processing shale oils in FCC: Challenges and opportunities

    09.01.2013 Grace Catalysts Technologies

    From this chart Bakken Diesel yield is comparable with WTI but 9% less than Louisiana Light Sweet.

  16. aws. says:

    NOAA – Global Analysis – Annual 2013

    The year 2013 ties with 2003 as the fourth warmest year globally since records began in 1880. The annual global combined land and ocean surface temperature was 0.62°C (1.12°F) above the 20th century average of 13.9°C (57.0°F). This marks the 37th consecutive year (since 1976) that the yearly global temperature was above average. Currently, the warmest year on record is 2010, which was 0.66°C (1.19°F) above average. Including 2013, 9 of the 10 warmest years in the 134-year period of record have occurred in the 21st century. Only one year during the 20th century—1998—was warmer than 2013.

  17. aws. says:

    1.5 Million Fracking Jobs? Is Legalized Marijuana Affecting the NYT

    Dean Baker, Beat The Press, Thursday, 23 January 2014 06:28

    That’s what readers must be asking after seeing this piece discussing the prospects for fracking in Australia. The piece tell readers:

    “Whereas about 1.5 million fracking jobs have taken place in the United States, only 2,500 have occurred in Australia, according to the Victoria report.”

    It’s not clear where the NYT got the 1.5 million jobs figure, but it’s a safe bet that it is not from the Bureau of Labor Statistics (BLS). The December, 2013 jobs figure for oil and gas extraction 48,400 higher than the December 2007 number, before the impact of both fracking and the recession. The figure for mining and support activities is up by 98,400. If we assume that this is all due to fracking then the total increase in employment is 146,800, less than one-tenth of the NYT’s number.

    • Watcher says:

      That’s a very good find. And this stuff has become 20X worse since Lehman.

      The desperation of a society in descent knows no bounds, and this has nothing to do with politics.

  18. aws. says:

    LEAF Range vs. Temperature, After Two [Ottawa] Winters

    Ricardo Borba, canadianleaf.wordpress.com

    Last winter, I decided to make an experiment to test my hypothesis that cabin heating, not outside temperature, is the main factor affecting range in the winter. As the temperature dropped in January, I decided to take one for the team and drive with minimal cabin heating as much as possible, relying mostly on the heated seats, heated steering wheel and a good winter jacket. I also pre-heated the car before each trip, trying to simulate what I would normally do on a long trip. Pre-heating the car means charging for 20 to 30 mins before each trip and also pre-heating the cabin for at least 15 minutes while still plugged in. This procedure heats up the coolant used by the heating system, using grid power instead of battery power.

    — snip —

    By comparing the two charts side-by-side, you can clearly see that I was able to consistently get at least 100 Km of an estimated range and bring the trend line to a flat line, regardless of the outside temperature.

    These results confirmed my expectations but I still find it quite impressive. It is as if the battery didn’t care about the outside temperature as long as its own internal temperature was fine. The fact that you’re either charging or driving the car maintains a flow of electrons in and out of the battery which is enough to generate enough heat to keep the battery chemistry warm. The real challenge is how to keep yourself warm, and any passengers you might have.

    His driving stats…

    Odometer: 45,510 Km
    Total electricity cost: $712
    Average cost: $1.57 per 100 Km

    • aws. says:

      My Prius’ mileage drops quite a bit the more I crank up the heater… the colder it is outside.

      • clifman says:

        Every car’s mileage drops in colder temps – due to pushing more dense air out of the way (among other factors). But that’s the big one. V. little or nothing to do with cranking up the heat, which only directs waste heat from the engine to the cabin. Now, that said, in a Prius the engine shuts off when not in use, but will run to keep the cat. converter and itself warmed up to operating temp. So using more heat in the cabin may contribute to making the engine run more during these otherwise shut-off periods. But the big culprit in lower winter MPG is the cold, dense air that must be pushed out of the way. That the Leaf seems unaffected by this is puzzling, and I’d be interested to hear others chime in on that matter…

      • Watcher says:

        Bingo.

        “I decided to take one for the team and drive with minimal cabin heating as much as possible”

        This renders the test meaningless. It’s like all the guys celebrating “I am off the grid!!!” and that works right up til they announce that they live in Flagstaff, AZ or Hawaii.

        Spend some time looking at kilowatt hours baseboard electric heat requires to heat a house (or cool it). After you do you’ll be done with the off the grid silliness for 98% of the US.

        • Old farmer mac says:

          Spend some time looking at kilowatt hours baseboard electric heat requires to heat a house (or cool it). After you do you’ll be done with the off the grid silliness for 98% of the US.

          Methinks the lady doth protest overmuch.

          I live on the lower slopes of the Blue Ridge in Va just north of the NC line and it gets pretty hot here in the summer time-it gets to 100 occasionally due to our microclimate and into the nineties quite often.

          I haven’t yet put in solar power because there are still better ways for me to invest the necessary money and panel prices and so forth are still falling fast.
          Grid juice is dirt cheap and extremely reliable here and I do have ample emergency generators in the event we might get hit by a hurricane that might reach this far inland and knock out the lines.

          But the pv panels are on the long term to do list.

          I can cool our old farmhouse just fine with a six thousand watt system by letting it overcool the house while the sun is still high when I eventually get my system. I know because I have experimented already by turning off the existing ac early.

          A system capable of running a heat pump would not be practical here but lots of people in SC and GA could “over heat” their house a little during the afternoon and get by just fine most of the time on the output of a solar powered heat pump-if their house is properly insulated.

          Most renewables advocates are not advocating going grid free but rather cutting substantially back on their use of grid juice.

  19. Did anyone else catch this?

    What happens when the shale oil boom ends?

    BP said in its report the United States should overtake Saudi Arabia this year in terms of oil production. By Riyadh’s own account, that comes as something of a relief as it addresses changes to its own market dynamics brought on by an increase in regional energy demand. For OPEC as a whole, its share in the oil market declines for much of the decade but recovers by 2020 as U.S. oil production slows down. BP’s report suggests U.S. oil production, meanwhile, falls by 75 percent through 2035.

    Decline in U.S. shale production, and the inability of other countries to replicate the success, is not so much validation of peak oil theory as much as it is a return to the status quo, where Middle East and North African producers dominate the market.

    Never mind, I checked out their link and they misquoted BP. They quoted “production” but the word should have been “imports”:
    BP Energy Outlook 2035 Shows Global Energy Demand Growth Slowing, Despite Increases Driven by Emerging Economies

    Growth in the supply of oil and other liquids (including biofuels) to 2035 is expected to come mainly from the Americas and Middle East. More than half of the growth will come from non-OPEC sources, with rising production from US tight oil, Canadian oil sands, Brazilian deepwater and biofuels more than offsetting mature declines elsewhere. Increasing production from new tight oil resources is expected to result in the US overtaking Saudi Arabia to become the world’s largest producer of liquids in 2014. US oil imports are expected to fall nearly 75% between 2012 and 2035.

    • clifman says:

      If in fact US imports fall by 75% to 2035, it is of course unlikely to be for reasons of increasing domestic production, but rather for reasons of declining global ANE, as WT tends to mention from time to time…

      The difference in the effect between imports that fell b/c they weren’t needed, and imports that fell b/c they weren’t available at any price would of course be rather stark.

  20. aws. says:

    Explosion and fire rock natural gas pipeline in southern Manitoba

    ST. PIERRE-JOLYS, Man. — The Canadian Press – Published Saturday, Jan. 25 2014, 9:19 AM EST

  21. Old farmer mac says:

    http://www.nytimes.com/2014/01/25/business/us-oil-production-keeps-rising-beyond-the-forecasts.html?_r=0

    As is usually the case there are a lot of useful to know facts in this NYT article which make it well worth reading.

    And as is unfortunately usually the case there is essentially zero coverage of the flip side of the oil supply coin.

    Reading the MSM these days reminds me of reading the work of the dissidents who managed to escape the old USSR.

    They combed thru the state controlled papers to get the real news by paying intense attention to what was not mentioned.

  22. coffeeguyzz says:

    Good evening, Mr. Patterson. Your comments about not knowing about that “two year investment thing” and wondering how that phase ending might affect Bakken production prompted me to give a brief response.
    When exploration companies think there may be hydrocarbons available to recover, they need to purchase the mineral rights from the mineral rights owner (not always the same as the property owner). Generally, they have a window of time, two/three years, to produce oil/gas or lose their drilling rights. Recognizing value and moving quickly can be critical. In the case of the Eagle Ford, for example, the then-unrecognized ‘sweet spots’ were leased for $300/acre in 2009. Today they are valued at over $20,000.acre. A commonly used drill space may be 640 square acres.
    A few weeks ago, Harold Hamm said in an interview “The land grab is over” in reference to his company -Continental Resources – now having near 100% of their leased land Held By Production (HBP). The importance of this aspect in these shale plays cannot be overestimated and yet I have always been puzzled by seeing no reference to this in so many of the analysis/writings on LTO.
    To give some inkling, perhaps, in how this may affect current and future production, please note that last week Continental received permits to drill an additional 13 wells on a space where one well has been drilled and producing for the past few years (which makes it a very old well technique-wise with all the newly recognized components in well completion/stimulation). Most of the new wells will be spaced with laterals as close as 700 feet apart. They will be cemented to the toe, zip-fracced with as many as 50 stages, contain bigger, much more numerous multi-cluster perforations that enables significantly more oil to flow into the wellbore.
    Companies are starting to re-enter earlier wells to apply these procedures and reports are emerging of 50% higher flow than the original IPs, along with significantly flatter decline curves.
    Apparently, the much-anticipated ‘downspacing/production’ phase has just begun and may play a role in
    Goldman Sachs report of September 2013 predicting output from the Bakken at 2 million barrels/day by 2022. We shall see.

    • Coffeeguyzz, thanks a million for the comment. I am not quite as optimistic as Goldman Sachs.

      But you gave us some great info, thanks again.

Comments are closed.