Texas RRC February Production

The Texas Railroad Commission has released its  incomplete production data for February.  The RRC also estimates final production but that data has not been posted yet.

All Texas RRC data is through February. The EIA data is through January.

Texas C+C

It looks like, after the final Texas data comes in, that February crude oil will be above January production but still below December production. It is my best guess that Texas production will be down about 80,000 barrels per day in January and up about 50,000 bpd in February or about 30,000 bpd below December production.

Texas Crude Only

I always post the last six months data just so we can get some idea of the general trend. You can see the general trend is up until January when it took a huge hit and only partially recovered in February.

Texas Condensate

Texas condensate likely peaked back in April 2014 but it will be close. December condensate production could, after all the data comes in, could be a bit higher.

Texas Total Gas

Texas gas production is in MCF. Texas total gas has been going up and down for about six years now. I have no idea how much natural gas Texas could produce if gas prices were higher. But it looks like, at current prices, Texas natural gas production peaked back in August.

Texas Gas Well Gas

Texas gas well gas inched up slightly in February after that huge decline in January. So February numbers will still be well below the December production numbers.

Texas Associated Gas

Texas associated gas production in February was well above their January production numbers. Associated gas accounts for about one fourth of total Texas gas production.

Survey shows Texans confused over Railroad Commission, favor name change

Given the choice, the majority of Texans would trust the Texas Energy Commission to ensure safe and responsible oil and gas drilling, according to a survey conducted by Dallas-based Breitling Energy.

There’s just one problem: That agency does not exist, at lease not by that name. Not yet.

It’s the Texas Railroad Commission that actually regulates oil and gas in Texas…

“The RRC has nothing to do with trains! Did you know that? If not, you aren’t alone,” Sitton wrote. “There’s a woefully inadequate level of understanding regarding what the RRC does.”

The below article has likely been discussed before in the comments section but if so I missed it.

How Long Can the U.S. Oil Boom Last?

The long-term problem for oil frackers isn’t just low prices. It’s low reserves…

The basis for these forecasts are estimates of shale oil reserves. A 2013 Energy Department report on technically recoverable shale oil—the amount that’s recoverable without regard to cost—puts U.S. potential at 58 billion barrels. That’s equivalent to a little more than eight years of U.S. consumption at the current rate of almost 19 million barrels a day.

The Energy Department’s estimate of “proved reserves” of shale oil—those that can be recovered economically today—is only about ten billion barrels. That’s about a sixth of technically recoverable reserves, and less than a year and a half’s worth of current consumption. Proved reserves include all currently known U.S. oil shale resources-North Dakota Bakken, Texas Eagle Ford, Colorado and Nebraska Niobrara, Texas Barnett, and others.

Economically recoverable shale oil reserves, at $55 a barrel, are a lot less than 10 billion barrels. In fact if all expenses are included, lease costs to taxes and interest payments, the break even point is likely a lot more than $55 a barrel.

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340 Responses to Texas RRC February Production

  1. Guy Minton, CPA says:

    I think the Jury is still out on whether it is an increase or decrease from February. Yes, thirty one days vs 28 days, but the condensate is way under January.

    • I think you meant the jury is still out on whether it is an increase or decrease from January. But I don’t think it is. No, the condensate is not way under January. You are looking at the data wrong. Look at where January condensate was reported last month when January was the last month reported. It was 334,847 barrels per day. This month February is the latest moth reported. The latest month came in at 336,221 barrels per day or 1,374 bpd above what the latest month was last month.

      That’s why I post six months data. The data is incomplete but if you look at the trend of the latest month, up or down form the latest month the month before, you can get a general idea of which way things are heading. Looking at it that way February was a better month than January.

      • Javier says:

        Yes, I can get an idea by joining the last point in each curve and then moving the resulting imaginary curve up until it overlaps the general curve. January production should be more or less at the level of september production. February shows a recovery. Middle point between both looks like a slight decline of about 25,000 bpd/month from december peak. It will be very interesting to follow this trend in the coming months. Thanks, Ron.

      • Kam says:

        Maybe someone should email the Texas RRC how the production data should be reported? Maybe give the Noth Dakota example? Biggest oil producing state doesn’t provide accurate numbers how much it’s produced for two years – it’s a joke.

      • Guy Minton, CPA says:

        My bad. I will offer a hedged projection of oil prices for the next three months, which I originally dedicated to all the dead lemmings, as a peace offering.. The prices, I predicted back in January, however, I have added some hedging to the price structure. Ahem! The price of oil will be closer to $60 a barrel the end of April, than Citicorp’s prediction of $20 a barrel. The price of oil will be closer to $70 a barrel the end of May, than Goldman Sucks prediction of $30 a barrel. The price of oil will be, percentage wise, closer to $80 at the end of June, than Texas actual production is to EIA prediction of Texas production in May. Take it to the bank.

  2. Watcher says:

    The basis for these forecasts are estimates of shale oil reserves. A 2013 Energy Department report on technically recoverable shale oil—the amount that’s recoverable without regard to cost—puts U.S. potential at 58 billion barrels. That’s equivalent to a little more than eight years of U.S. consumption at the current rate of almost 19 million barrels a day.

    Technically recoverable, economically recoverable, there needs to be a third category.

    In dire circumstances, economically recoverable doesn’t matter. You just print the money required. So ignore that category.

    But technically recoverable likely does not address the issue of burning 6 barrels to fuel the drill and the fracking pump to recover 1 barrel. The geologists just care about the porosity and . . . perhaps not even permeability. If one pore holding a barrel is 1000 feet from the next pore of 1 barrel, one presumes they count that as 2 barrels of reserves, even though two separate wells will have to be prepared to get just 1 barrel each.

    So there is a true reserves total somewhere between technically recoverable — which matters in desperate times — and economically recoverable — which won’t matter in desperate times.

    Wait that’s badly phrased. Clearly some issue of permeability is involved or technically recoverable would be the same as OOIP. One wonders what defines technically recoverable in terms of EREOI.

    • In dire circumstances, economically recoverable doesn’t matter. You just print the money required. So ignore that category.

      I think you are badly mistaken on that count. The government might print money to provide oil, at a loss, for the military, but not for the general public.

      When oil production starts to decline prices will go up to bring supply and demand into balance. But when it really gets expensive it will start to adversely affect the the economy. If this condition last long enough, and prices keep rising, it will crash the economy. Printing money will not solve this problem!

      • old farmer mac says:

        ”Printing money will not solve this problem!”

        I totally agree but subsidizing oil would probably result in putting off the day of reckoning.

        Getting drunk puts off the aches and pains associated with old age until you sober up.

        Ya gotta sober up eventually – or die drunk.

        • Han Neumann says:

          “I totally agree but subsidizing oil would probably result in putting off the day of reckoning.”

          That’s what is happening now, so you can leave out the word ‘probably’ in your sentence.

      • DuaneX says:

        >>but not for the general public

        It’s not as direct as that. The government won’t say they are printing money to buy oil. But nonetheless it can and will do so in a variety of ways. If extraordinary measures can be taken on behalf of the housing and auto industries, it isn’t hard to imagine similar steps on behalf of oil. And bailing out the financial industry affects them all.

        In times of turmoil, we’ve already seen tax rebates rushed through and checks mailed out across the land. Is that to buy food or fuel? It doesn’t really matter. Ditto the ARRA and helping out state and local budgets.

        But also consider the secondary effects of managing interest rates, credit ratings, backing for MBS purchases and what type are accepted. I don’t know we’ll ever see something as clear cut as, Fed now targeting securitized Bakken bonds, but the flow on effect of providing all that liquidity surely already has influenced the volume of dollars and ease with which they were available.

        I agree none of this is a solution.

      • Boltzmann Brain II says:

        Printing a trillion dollars won’t solve the problem..yeah prossibly.

        A trillion dollars of capital for CTL/GTL/KTL, whatever…will unquestionably help…

        It may not solve the problem…but it will help!

        The US government can print a trillion dollars with almost NO inflation penalty.

        The LAWS OF THERMODYNAMICS prevent a free lunch. But the USA is in much better shape than most countries for a FREE LUNCH.

        Woot Woot!

        • Glen Calvin McMillian says:

          I do not believe Uncle can print a trillion with no inflation ” penalty”. In this sort of situation there is no good phrase to describe the general case of how things work out. Some people talk about effects being lost in the noise which is ok when the effect is small. Others say as I have often” If you don’t get it, just think how bad it would have been otherwise!”

          When Uncle has printed the last few trillions there has actually been very little OBSERVED increases in prices. The reason for this is that the overall economic environment is in a DEFLATIONARY state or condition with huge swaths of the world economy suffering from the economic flu and some segments worse than the flu.

          The inflation that would have resulted from printing these recent trillions under the conditions that have prevailed for most of the last fifty years or more has manifested itself in OFFSETTING DEFLATION that would otherwise be MUCH more obvious.

          There should be a shorthand phrase that everybody knows to describe this general observation other than ” lost in the noise ” or ” Just think how it would have been otherwise” but I haven’t run across it.

          Betcha the Germans have a word for it but it would take a month to memorize the spelling of it , lol.

          • Boltzmann Brain II says:

            If inflation is defined as an increase in the total supply of money and credit in the system then a trillion dollars is a tiny percentage of usa money supply. This would be trivial compared to a liquid fuels crisis.

            The laws of thermodynamics mean that u cant print your way to long term prosperity as there is no free lunch.

            The laws of mathematics show that u can’t go into debt forever without the bill eventually showing up. Someone on either side of the balance sheet eventually gets screwed.

            The choice between liquid fuels and toilet paper that costs 2 percent more ain’t no choice at all.

            Pay very close attention to military activity at this very moment in time if u want to observe a great leading indicator.

    • Jeffrey J. Brown says:

      In any case, in regard to the National Geographic article, “How Long Can the U.S. Oil Boom Last?” following is an excerpt:

      In contrast, the proved reserves from just three Middle East nations—Saudi Arabia, Kuwait, and the United Arab Emirates—total more than 460 billion barrels. That’s 46 times U.S. shale oil reserves, and more than 12 times the total U.S. oil reserves.

      Obviously, I think that it’s a mistake to take Middle East stated reserve estimates at face value, but more importantly what counts, as I have once or twice opined, is the volume of net exportable oil.

      Based on the 2005 to 2013 rate of decline in the (2005) Top 33 net exporters’ ECI Ratio (ratio of production to consumption), and rounding off to the nearest 100 billion barrels (Gb), I estimate that post-2005 Global CNE (Cumulative Net Exports*) are on the order of 500 Gb, with about 143 Gb having been consumed from 2006 to 2014 inclusive, putting estimated post-2005 Global CNE at about 30% depleted, through 2014.

      *Total petroleum liquids + other liquids, EIA data, (2005) Top 33 net exporters

      • old farmer mac says:

        Hi Jeff,

        Ron has posted his own estimates of these countries reserves often but I can’t remember the specifics. I am thinking his estimates are around half what they claim they have.

        Whose numbers did you or do you use for reserves when you do run your net export model?

        • Mac, I prepared a webpage to discuss Venezuela’s reserves. It’s in my blog, look on the right side, I think it’s
          underneath the blog roll.

        • Jeffrey J. Brown says:

          I focus on estimates for CNE (Cumulative Net Exports). For example, for the Six Country Case History*, if you extrapolate their 1995 to 2002 rate of decline in their combined ECI Ratio (Ratio of production to consumption), they would have approached zero net exports about 20 years after 1995. Annual net exports at peak were 1.0 Gb/year (in 1995).

          So, based on the 1995 t0 2002 rate of decline in their ECI Ratio, Estimated post-1995 CNE were:

          1.0 GB/year X 20 years X 0.5 (area under a triangle), less 1.0 Gb (net exports at peak in 1995) = 9.0 Gb

          Actual post-1995 CNE were 7.3 Gb

          *Major net exporters, excluding China, that hit or approached zero net exports from 1980 to 2010

          • Paulo says:

            And US has 0% net exportable oil, which always seems to be missed in the media. Or, we could state it as -40%, give or take a few shale booms.

        • Ron has posted his own estimates of these countries reserves often but I can’t remember the specifics. I am thinking his estimates are around half what they claim they have.

          No, my estimate, and also the estimate of a whole lot of other people, is that they have about one third of the reserves they claim to have.

          • Dennis Coyne says:

            Jean Laherrere’s estimate is best, and is roughly half of the EIA estimate in 2010. The EIA estimate excludes Venezuela’s Orinoco belt reserves of 40 Gb and is about 910 Gb of OPEC reserves. Jean Laherrere’s estimate for year end 2010 is about 480 Gb for OPEC 2P C+C less extra heavy.

            If we use BP’s numbers for 2010 and deduct 220 Gb of Orinoco belt reserves from the OPEC total we get 943 Gb of C+C less extra heavy OPEC reserves, again Jean Laherrere’s estimate is roughly half the BP estimate. The 1 for every three estimate must come from using all OPEC reserves (including extra heavy oil) of roughly 1200 Gb in 2013 and then rounding current reasonable estimates of about 440 Gb down to 400 Gb and we would have the 1 barrel for every three estimate.

            The difference between 400 Gb and 440 Gb (my estimate based on my understanding of Jean Laherrere’s outstanding research) in 2013 is insignificant.

      • Dennis Coyne says:

        Hi Jeffrey,

        Jean Laherrere estimates OPEC C+C less extra heavy 2P reserves at about 480 Gb in 2010, roughly 40 Gb were produced from Jan 2011 to Dec 2014, so if there has been no discovery or reserve growth since 2010, OPEC reserves would be about 440 Gb at the end of 2014 (excluding extra heavy oil in the Orinoco belt).

        See figure 33 on page 22 at link below:

        http://aspofrance.viabloga.com/files/JL_2013_oilgasprodforecasts.pdf

        Jean Laherrere’s estimates are the best that I have seen.

        • Dennis, I prepared a rough sketch of Venezuela’s oil reserves under four scenarios. I think this gives you a hint of how price and politics dependent the issue can be. I mentioned the nuclear plants because we really do consider them, but they are just symbols of the inputs required to produce and upgrade the extra heavy oil.

          http://21stcenturysocialcritic.blogspot.com.es/p/venezuelas-oil-reserves.html

          I wish to repeat this is highly conceptual. I used public figures but I did lean on my previous work.

          • Dennis Coyne says:

            Hi Fernando,

            For your $160/b scenario, if oil prices gradually rose by 10% per year for 5 years, 5%/year for the next 5 years and the 2% per year until reaching $160/b, would that be enough to develop the 200 Gb of extra heavy resources? Scenario below. Nice work.

            • Dennis, i’m not sure. The $160 per barrel scenario has a 7+ Mmbopd plateau. That’s a huge production build, and to get there we need a pretty detailed project plan. To make the plan we need assurance the oil price will be there.

              That rate requires roughly 24 upgraders, costing $360 billion. The upgraders will need hydrogen supply (6 plants). Hydrogen will require natural gas (full development of the offhore and onshore fields). The electric power can be supplied by hydro from Guri, but there’s a need to offset that, so I suppose they will need three nuclear power plants.

              So if you tell me the oil price goes up slowly to reach $100 in 2014 by 2025, the BIG project can’t take off.

              Please note I have a professional difference of opinion with other planners. I have reached the conclusion that a development intended to recover more than 6 % of original oil has to be designed to start injecting ASAP. This is critical because it keeps water from encroaching. Also the well designs for cold and hot flow are different.

              If I have to use your curve production won’t build, and some really good reservoirs will be ruined for EOR. This is already happening. Bottom line. That 200 billion barrel scenario is extreme. I did it on purpose to see the outer limits. The no regime change case is the inner limit. You can run a full Monte Carlo inside those boundaries.

              I don’t know what’s going to happen with the politics. But many outcomes drive recovery to the lower values.

              • Dennis Coyne says:

                Hi Fernando,

                So no, that wouldn’t work. Could you specify the oil price scenario you are thinking of? An alternative below (10%/year rise in prices until $160/b). This also assumes regime change within 5 years (or sooner).

                • Dennis Coyne says:

                  Hi Fernando,

                  Could the bitumen extracted, be burned in a power plant to provide the energy for producing the steam?
                  It might be cheaper than a nuclear power plant. I would think the solar resource would be pretty good in Venezuela, is there a good wind resource?
                  Those combined with hydro backup, might also be cheaper than nuclear power.

                  • Dennis, the obvious (cheap) solution is to upgrade the crude to make (roughly) about 15 % of the inlet volume into petcoke. The remaining 85 % “swells”due to the hydrogenation of the broken molecules. The amount of “upgrader gain” is a function of the process.

                    The coke can be used to make steam. But the emissions are pretty bad. So the alternative is to feed the coke (or a vacuum distillation unit bottoms) into a gasifier. The gasifier yields high pressure CO2. And the CO2 can be injected for EOR in medium gravity fields located to the north.

                    There are dozens of schemes. But the delay in implementing a rational plan is killing the reservoir.

                  • Dennis, they tried it but it just didn’t work out.

                    Orimulsion

                    Raw bitumen has an extremely high viscosity and specific gravity between 8 to 10 API gravity, at ambient temperatures and is unsuitable for direct use in conventional power stations. Orimulsion is made by mixing the bitumen with about 30% fresh water and a small amount of surfactant. The result behaves similarly to fuel oil.

                    But alas: Venezuela ceases orimulsion production

                    The Energy and Petroleum Ministry officially announced that Venezuela is terminating production of orimulsion currently used to fuel powerhouses in several nations worldwide.

                    Venezuela made such a move after a comprehensive survey on the product found that orimulsion is not a suitable use of Venezuelan extra-heavy crude oil.

                  • Ron, Orimulsion was designed to allow transport to overseas markets (Japan, Italy, etc). The water emulsion dropped the viscosity to allow pumping it.

                    The extra heavy has a lot of asphalt, so it’s fairly easy to design a process to burn the heavy molecules within an upgrader complex. This only requires moving the material up to say 1 km. if the material is coke it can be transported by rail, or by barge.

                    I’ve worked on quite a few design options for schemes to produce up to 1.2 million BOPD new build (on top of the roughly 700,000 BOPD existing capacity). Such a development puts a huge strain on the natural gas infrastructure, and requires offshore gas field developments.

                    As the design oil rate increases it becomes evident the optimum solution is to burn coke. But if the design rate is really high I think they run into environmental problems.

                    This is the reason why I included a gasifier option in studies I have performed.

                    I recall reading a paper by an Exxon engineer who claimed it was simpler to gasify (I think he wanted to use 50 % of the produced stream), make synfuels and take the excess heat beyond the plant limits.

                  • toolpush says:

                    The way I remembered the story, Orimulsion was developed as a work around of OPECs quotas. The claim was Orimulsion was not oil, and therefore not subject to quota.
                    Once Vz oil production dropped below their quota, then the Heavy oil in Orimulsion, could attract more money by calling it oil, by upgrading, dilution etc. So Orimulsion production was slowed and contracts cancelled.

                  • Toolpush, there was a little more to it. In 1999, when the Chávez regime took over, they named Dr. Bernard Mommer to be deputy oil minister. Dr Mommer was convinced the oil should be marketed as is, wrote a pretty good paper about it.

                    Mommer is a Marxist economist, so he pushed to have the oil block assigned to make Orimulsion to the Chinese.

                    At the same time they saw pushback due to the contamination caused by burning the stuff.

                    So it was a mixture of reasons. If you check Venezuela’s production history you will see it had OPEC restrictions until the 2002 oil workers’ strike. But by then the Chinese were exporting the crude in diluted form to China.

    • Watcher, where do you get those numbers? Like the 6 barrels?

      • Watcher says:

        metaphorical.

        I think folks are responding to this comment in a context of something rather a lot less than dire circumstances. They are envisioning some “stresses”. Not dire circumstance. To put a definition on it, lets say when there are crowds in parking lots waiting for MREs to be handed out from trucks, and the reason for that was food didn’t get to the grocery stores, then THAT is dire circumstance. If you have universities feeding faculty, then you haven’t reached dire levels yet.

        If oil gets scarce, it doesn’t do so in globally uniform way. Then those on the short end of that distribution must and morally should take violent action for their own people. The magnitude of upheaval becomes extreme (aka dire) in all sorts of ways.

        When you have to have it, you print the money to get it. Again, people, have a look at how Hitler financed his military buildup. That was printed money, printed outside monitored channels. There was no other way for him to “boom his economy” to an extent that could support that military build up, and in an invisible way.

        When circumstances are dire, when cities can’t get food, there won’t be much concern about money at any level at all.

        • clueless says:

          Watcher says “Then those on the short end of that distribution must and morally should take violent action for their own people.” Does Watcher even read what he/she writes? Who are “their own people?” I did not know that “people” possessed people, such that someone could say that “these are my people,” and I must take violent action for them. Sounds like something that ISIS would say. And, if you can select people and claim that “these are my people” does that preclude any of those people (i.e., people that belong to you) from claiming others and saying that “these are my people.” WTF

          • old farmer mac says:

            Hi Clueless,

            I am not taking sides with Watcher but he does have a point- sort of .

            When the shit hits the fan people will form up into new groups for various purposes , getting oil being one of them. When this happens people in general will decide very quickly who is an ”us ” or group member or a ” them” – an outsider.

            Most of these groups will be patterned after existing groups , as for instance nationalities. Or religions. Or professions. Or membership in various existing organizations.

            Defining who is an insider and an outsider might not be easy to do on the basis of clear cut rules but it will happen spontaneously.

            Remember the uptight folks who get upset about pornography?

            They do not need or want a clear cut definition of porn.

            THEY KNOW IT WHEN THEY SEE IT.

            Group members will know each other, fight for each other , and gladly throw the rest of the world under the bus.

            Being a southern flavor yankee myself I doubt my ingroup will suffer any serious grief from a shortage of oil anytime soon.

            Now health care for instance brings into the question another set of groups. The best cared for large group of people- taken AS a group- in the USA are without a doubt in my mind is the set composed of full time federal employees.

            Taken as a group they would see the rest of us in hell before they would see their medical bennies cut a little in order to pay for let us say food for starving children.

            Hey folks it IS a Darwinian world.

            When the shit hits the fan Uncle Sam will revert to exporting a little democracy again and the next time he will be apt to stick around and make sure the oil flows OUR way.

            Of course this will not be a permanent solution but it will probably work – if necessary – longer than I expect to be around myself.

            • clueless says:

              OFM
              What does “it IS a Darwinian world” mean? Do not say “survival of the fittest.” Ron ridiculed me for saying that is what Darwin thought. And, pornography?? What is running through your mind today? But, spot on about federal employees. Even Roosevelt told his advisors that it would be insane to let government workers unionize. I think (but, I am not sure) that they can thank Republican Nixon for that right.

              • What does “it IS a Darwinian world” mean? Do not say “survival of the fittest.” Ron ridiculed me for saying that is what Darwin thought.

                Clueless, sorry that you got the wrong impression from my post. Darwin did indeed say that “survival of the fittest” was even a better term than “natural selection” was to describe the process. He did use that phrase in later editions of “On The Origin of Species”. My point was he did not coin that phrase, Herbert Spencer had that honor.

                But I really did get upset at your post and was you suggesting that what was happening now, concerning species extinction, has been happening for billions of years. Well I am sure you know better than that now. Or at least I hope you do.

                Mammals are going extinct at least 100 times faster than in the past and other species are going extinct thousands of times faster than they were before we came on the scene.

                Yes, it is we, Homo sapiens are the ones driving them into extinction. Such an extinct rate has never happened before. Even during the five other great extinctions likely happened a lot slower. The KT extinction took place over almost a million years. We are currently destroying species at a far greater rate than that.

                • BC says:

                  It’s not utterly inconceivable that, at the current trends of population, ecological food print, resource depletion per capita, and the like, the “fittest” will be the top 0.001-1% (???) who succeed in collecting all the chips in order to be able to afford to create a “Manna”- and “Elysium”-like future for themselves at the expense of everyone else.

                  In the retrospective perspective of the self-selecting remnant ~10% of human apes who survive the impending Catton-like bottleneck in the coming decades, they might indeed perceive themselves as perfectly worthy of being the fittest survivors and reproducers.

                  What the prospective remnants ancestors today do to the rest of us to achieve their and their descendants’ position as fittest is what concerns me in the meantime.

                  Therefore, if one accepts that “natural selection” or “survival of the fittest” is the operative force at work, then would arguably be remiss in not identifying and them emulating the traits, values, objectives, expectations, and behaviors that are more likely to render one “fitter” or the “fittest”.

                  What are those traits? Clearly in much of the West, and certainly the English-speaking world, it is sociopathy, hyper-competitiveness, deceit, parasitism, a dearth of empathy, and a self-selected winner-take-all world view and self-identity in order to compete successfully to be a “winner”.

                  Therefore, one can argue that “evolution” in our overpopulated, hyper-competitive, hyper-financialized, complex, high-tech, high-entropy world is self-selecting for the sociopathic, rentier-financier “winners” on Wall St. and in The City, DC, Westminster, Frankfurt, Brussels, and the CEO corner office suites.

                  If so, one can infer how the “winners” will likely deal with us “losers” during the bottleneck.

                  • BC says:

                    http://futuristicnews.com/dr-peter-h-diamandis-intelligent-self-directed-evolution/

                    Intelligent Self-directed Evolution Drives Mankind’s Metamorphosis into an Immortal Planetary Meta-intelligence
                    We are extraordinarily fortunate to be alive on this planet during a period of unprecedented, exponentially accelerating, self-directed evolutionary change. We humans have begun to incorporate technology inside ourselves. Humans themselves are becoming an information technology. Over the last decades mankind has suddenly started changing from a loose collection of 7 billion individuals to a new kind of perpetually morphing non-physical social tissue woven from densely interconnected arrays of mobile person-nodes.

                    In this process we—humanity—are becoming a new organism: a meta-intelligence. As a species, as this new organism, we are becoming conscious on an unprecedented new level, in a new cosmic-scale realm.
                    As we are going through the metamorphosis process of becoming this new meta-intelligence organism, we are going from evolution by natural selection—Darwinism—to evolution by intelligent direction. We are starting to direct the evolution of our biology and of our minds ourselves. Before long, this will result in our minds becoming independent from their original biological substrate—the biological human brain—the evolution speed of which has become far too slow to keep up with our exponentially increasing pace of innovation and invention. As we begin to liberate our thoughts, our memes, our consciousness from the biological constraints that we presently have, this will allow us to evolve far faster and ever faster.

                    I suspect that the “we” Diamandis refers to is the aforementioned top 0.001-1%, not the collective “we” bottom 99% “losers” and bystanders to accelerating “self-directed, intelligent evolution” of the “fittest” top 0.001-1%.

                  • He starts off: There is no problem on this planet that cannot be solved. Period. Bar none.

                    That is the biggest crock of shit I have ever come across in my entire life. Period. Bar none!

              • old farmer mac says:

                I do not want to get into a fine grained discussion of survival of the fittest and all that sort of thing – the details are important but not in this context.

                The toughest meanest luckiest best situated smartest best organized groups of people are going to survive in greater numbers than other groups that are less tough less mean less lucky less smart less organized.

                Now as far people ”recognizing pornography when they see it” which used to be a popular standard in uptight communities such as my own—- I might have come up with a better analogy.

                Preacher sez”we know porn when we see it ”and Playboy and the SI swimsuit issue are porn by his standards and the standards of his church members.

                What I meant was that in times of stress and distress people form alliances pretty quick once they start down that path. You can recognize a potential political ally or enemy in a flash in most cases. No formal rule book needed.

                Various groups will recognize that they share a common interest in the coming battle with some other groups and tend to merge with those other groups into a new larger group.

                You can recognize who your friends and enemies are going to be without a precise set of rules being needed to decide who is who. You will know as soon as you see them if they are friend or foe.

                To make a fairly large scale example California farmers form the core of their own large group dedicated to hanging onto the water used to irrigate their farms. Other groups that will naturally take one look around and join up with the big farmers are the farm machinery dealerships, the car dealers selling pickups to the farmers, real estate agents in farming communities, all the small business people in the communities where the farming is done, the farm hands themselves , etc. If a county is primarily agricultural then the entire county government can be counted on to be on board.

                This large agricultural conglomerate group will exclude city slickers on the assumption that their only reason for trying to join would be to slick the farming coalition out of the water. It will exclude organizations devoted to minority rights because such organizations are not good for rich farmers who employ lots of low paid minority labor. You know the enemy on sight. You know your friends on sight.

                As far as your reference to Nixon and unionized government employees goes , I don’t get it.

                • Dave P says:

                  What happens when stress is applied to multicultural societies? Do you see people of different ethnic backgrounds banding together for the common good, or do you think it is more natural for people to band with and look after people with a similar look / cultural background?

                  • Fred Magyar says:

                    Very Interesting the question. I suspect the answer is not what you might expect.

                    Studies done with very young infants suggest native fluency in the infant’s mother tongue, trumps race when it comes to who the infant is willing to engage with. Now who would have thunk that…

                    The Great Debate: XENOPHOBIA – Why do we fear others?
                    http://goo.gl/BdKA1j

                    We know quite a bit about ourselves thanks to science! That knowledge is available to most of us here. What never ceases to amaze me is how few people are aware of that simple fact.

                  • TechGuy says:

                    Dave wrote: “What happens when stress is applied to multicultural societies? Do you see people of different ethnic backgrounds banding together for the common good,”

                    Ethnic cleansing and Genocide is common in history when there is a ruleset change or economic collapse in a region. Niall Ferguson (Harvard History Professor) wrote a book about it. below is a video series based upon his book:

                    https://www. youtube.com/watch?v=q5AbQF1jJ_A
                    I put a space in the url to avoid wordpress from auto embedding the video

                    WW1 and WW2 have severe ethnic cleansing overtones, but its not limited to just modern times. History is full of ethic cleasing going back to the beginning. Its not just a Western issue, but also applies to the East.

                    We can see the ME moving toward ethnic cleansing as factions battle for control and murder outsiders. I fear Europe is primed for major ethnic cleansing. There seems to be a lot of contention in the EU with Muslim immigrants which may turn ugly when the EU economy starts to collapse. Its likely what is happing in the Middle East will spill into Europe eventually. We already see very chaotic riots in France, Spain, Greece, Italy, and even Germany (over the ECB building opening about a week ago). Most of the EU has double digit youth unemployment, and they will begin rebelling as the economy deteriorates.

                    In my opinion, Central bank money printing as temporarily stabilize the global economy. ZIRP (Zero Interest Rate Policy) has pretty much run its course, and now central banks are turning to NIRP (Negative Interest Rate Policy) once NIRP has run its course I don’t see how they can kick the can any further. I also don’t expect NIRP to last as long as ZIRP.

                  • Glen Calvin McMillian says:

                    If the stress is great enough dissimilar ethnic groups will find ways to work together. After the stress is relieved they will most likely go back to their mostly separate ways.

                    If the kids grow up together any two groups can morph into one over a few generations. I am not sure how long this takes but I have observed it happening to a huge extent in just one generation when schools were integrated in the South where I live. This is not to say the process of integration cured racism here but it is not even a tenth what it was when I grew up. When the rest of the old farts are gone the process will be MOSTLY completed.

                    I don’t live very far from GREENSBORO.

                    I cannot even remember the last time I saw an obviously racist encounter in a store or on a job site. The only really pressing racism problem left is the cop problem. Paradoxically the cops who are supposed to protect us all are just about the worst racists left in terms of large well organized groups. Driving while black is several times as likely to get you pulled over as driving while white.

                    Outfits such as the KKK barely even EXIST these days.

                    There was a KKK rally very near my home some years ago that has been publicized to the ends of the Earth over and over, creating the impression this neighborhood is a hot bed of racism.

                    I never even heard of it until seeing it mentioned on the net and nobody I know locally ever heard it happened except a couple of people who remembered it being mentioned in the local paper long after the fact.

                    This community was selected for this rally PRECISELY because it could happen here on an isolated farm without anybody even realizing it.

                    You can drive around here for months on end without seeing a stars and bars flag. I have seen only one in the last year.

                • clueless says:

                  OFM wrote – “The best cared for large group of people- taken AS a group- in the USA are without a doubt in my mind is the set composed of full time federal employees. Taken as a group they would see the rest of us in hell before they would see their medical bennies cut a little in order to pay for let us say food for starving children. ”

                  Clueless then wrote – “spot on about federal employees. Even Roosevelt told his advisors that it would be insane to let government workers unionize. I think (but, I am not sure) that they can thank Republican Nixon for that right.”

                  OFM then wrote – “As far as your reference to Nixon and unionized government employees goes , I don’t get it.”

                  Now clueless writes – I do not get OFM’s “I don’t get it.”
                  As always, I remain clueless.

          • Watcher says:

            Well, for example, if they elect you, you probably swear an oath to perform your duties in a manner designed to benefit them.

            That would not include letting them starve.

    • Rita says:

      Oil extraction will also be hampered by higer EROEI energy sources’ availability. Walking, animal power, mechanical hand power, relocalising will have higher EROEI than oil based infrastructure in increasing areas of the world the higher the cost (and price) of oil gets.

  3. Dean says:

    Hi everyone. My usual presentation will have many more corrected data and plots this month: therefore take beer and pop corn and relax! 🙂 So, let’s start with the classical brief description of the basic methodology:

    Using the latest RRC data up to T and the previous data up to T-1, I computed the amount of corrections that each month should undergo to be close to the real data. In doing this, I consider only the last 24 months (older months have only negligible corrections): what I did was to sum for each month the corrections which took place in the previous “h” months, where I put h=24 for computational simplicity.
    For example, the correction for the last month (which is one subject to the highest degree of corrections over time) were equal to 678741 bbl/day (only oil , no condensate).
    By doing this for all the past 24 months, I reconstructed the supposed “real” Texas oil production data. The result is the figure attached to this comment

    • Dean says:

      here is condensate:

      • Dean says:

        here is natural gas

        • Dean says:

          and finally my C+C vs the latest EIA C+C

          • Dean says:

            Some comments: in February, the correction factors seem to show (seasonal) much higher values. For example, the correction factor for the latest month was 678741 b/d, when the average correction factor for the latest month is around 500000 b/d. This evidence, together with the initial back-testing evidence reported below, make me say that my corrected value for February 2015 which is 3,558,351 b/d should be probably 100,000-200,000 lower. My latest corrected data are reported below:

            Sep 2014 3355155
            Oct 2014 3394238
            Nov 2014 3478418
            Dec 2014 3531689
            Jan 2015 3436997
            Feb 2015 3558351

            • Watcher says:

              Dean, this is the first departure from what might be called “smooth” in your corrected curve. Does this make sense?

              • Dean says:

                I have noticed that (January and) February data tend to provide very high correction factors, which probably resulted in overestimated numbers (I suppose for some seasonality in data reporting). The best solution in this case would be to employ seasonal corrections factors: that is a set of factors for January data, another set for February data, and so on. Unfortunately, my collection of vintage data start in January 2014, so that I am not able to create seasonal correction factors right now. In May, I will write to the Texas RRC and ask them whether thy can send me all their vintage data, so that I can work and build a seasonal model. Let’s hope for the best.

                For now I suggest you look at my corrected data using the average factors reported below, which is the best solution given the data currently available. In any case, February 2015 did indeed showed a rebound in oil production data close to December data.

                • It’s the Xmas vacation hangover factor.

                  • Watcher says:

                    That’s partly my point, and it’s hard to see how vintage seasonal data is going to be meaningful for just the few years fracking has been going on.

                    You would see seasonality in the conventional fields, but shale is such a new ballgame that it’s not likely 5 years or so of Januarys will mean much — especially with such a big price change from Jan 2015 vs 2014.

                    But conventional is not insignificant so seasonality won’t be meaningless. It just won’t teach much about shale, which will be the most sensitive to price.

                  • Dean says:

                    There is both seasonality and a structural break in the underlying model structure due to the shale arrival. This is easily visible if we consider, for example, a simple auto-regressive model with seasonal intercepts and breaks estimated with North Dakota and Texas oil production data from January 2000 up to September 2014. Below the estimates for North Dakota:

                  • Dean says:

                    ..and here Texas

                  • Dean says:

                    specification tests (not reported) do not highlight any particular misspecification apart from some weak heteroskedasticity

                  • Dean says:

                    here is the fit of the previous models for the log-returns of North Dakota oil production data

                  • Dean says:

                    …and the fit for the log returns of Texas oil production data

        • Guy Minton, CPA says:

          http://www.rrc.state.tx.us/oil-gas/research-and-statistics/production-data/texas-monthly-oil-gas-production/

          This is the link of the actual Texas production, which is updated per month for each month. Because it is a big state with lots of wells, oil companies, and various fields, it takes about four months for most of the production to be posted. This entity (currently called the RRC), is not much interested in estimating stuff, they are absolutely concerned with actual, because that is what they derive their income from, They do use an estimate of monthly contained in the monthly report “RRC Production Statistics and Allowables”, which if you compare over a year’s period of time is pretty close to the actual numbers eventually posted to the site above, but only if you go back six months. Or, Texas needs to build up a research team to go after all of those companies that have under reported the oil by the massive amount that you, and the EIA are coming up with.

  4. ChiefEngineer says:

    For those of you who fix sate on the monthly or amount of Texas current production peak are missing the big picture. It has become clear over the last 6 months that record world demand is no longer bumping up against limited production. The Saudis talking about market share should have caught your attention. The near term future of oil prices is now a different game.

    After a decade of tight oil supply and costly gasoline, the economics of substitution and efficiency are preparing us for the future. Two hundred mile range EV’s are around the corner with cheap solar panels on rooftops to power them. Spare oil production capacity sitting in America waiting for a bump up in oil price.

    The world has a lot bigger problems than limited energy supply. We have enough to cook ourselves.

    • Marcus says:

      ChiefEngineer,

      I have a question. Obviously there is a divergent range of opinion on peakoil, but for someone like yourself who believes its not really that big a deal and can be easily solved by say “Two hundred mile range EV’s are around the corner with cheap solar panels on rooftops to power them” why do you frequent this or any other peakoil site? I mean I am fairly convinced that the earth is not flat so I feel no need to post on the flat earth society web site (http://www.theflatearthsociety.org/cms/). In fact I would have no interest in peakoil at all if I were not convinced of the magnitude of the problem. Of course this question could apply to a couple of other posters really I’m just curious.

      • ChiefEngineer says:

        “Early industrial societies used whale oil widely in oil lamps and to make soap and margarine. With the commercial development of substitutes such as kerosene and vegetable oils, the use of whale oils declined considerably in the 20th century. With most countries having banned whaling, the sale and use of whale oil as of 2015 has practically ceased.”

        http://en.wikipedia.org/wiki/Whale_oil

        • Marcus says:

          ChiefEngineer
          Ok you have demonstrated again that you think peakoil is a non issue. There was a substitution for whale oil so there will be a substitution for crude oil I gather is your argument, but you still haven’t answered my question. Why do you care about peakoil or try to convince anyone else as to your point of view if you don’t think its a problem? Why not take up another hobby as we all transition to a solar powered utopia? There are people who obsess about the earth being destroyed by asteroids I personally think it is a non issue hence I don’t post on their forums. Really what is your motivation? I’m simply fascinated.

          • ChiefEngineer says:

            Marcus, I never said “peak oil is a non issue”

            I believe the following will help you understand the answer to your question.

            “Splitting (also called black and white thinking or all-or-nothing thinking) is the failure in a person’s thinking to bring together both positive and negative qualities of the self and others into a cohesive, realistic whole. It is a common defence mechanism used by many people. The individual tends to think in extremes (i.e., an individual’s actions and motivations are all good or all bad with no middle ground.)

            The concept of splitting was developed by Ronald Fairbairn in his formulation of object relations theory; it begins as the inability of the infant to combine the fulfilling aspects of the parents (the good object) and their unresponsive aspects (the unsatisfying object) into the same individuals, but sees the good and bad as separate. In psychoanalytic theory this functions as a defence mechanism.

            Splitting creates instability in relationships because one person can be viewed as either personified virtue or personified vice at different times, depending on whether he or she gratifies the subject’s needs or frustrates them. This along with similar oscillations in the experience and appraisal of the self lead to chaotic and unstable relationship patterns, identity diffusion, and mood swings. The therapeutic process can be greatly impeded by these oscillations, because the therapist too can become seen as all good or all bad. To attempt to overcome the negative effects on treatment outcome, constant interpretations by the therapist are needed.

            Splitting contributes to unstable relationships and intense emotional experiences. Splitting is not uncommon during adolescence, but is regarded as transient. Splitting has been noted especially with persons diagnosed with borderline personality disorder. Treatment strategies have been developed for individuals and groups based on dialectical behavior therapy, and for couples. There are also self-help books on related topics such as mindfulness and emotional regulation that have been helpful for individuals who struggle with the consequences of splitting.”

            http://en.wikipedia.org/wiki/Splitting_(psychology)

            • Marcus says:

              ChiefEngineer
              I’m not really sure what you are trying to highlight by linking to a symptom of a personality disorder. Sorry, but every comment I have seen you post here suggests that you do indeed think that peakoil is a non issue and can be easily solved in some fashion or the other. However perhaps I’m doing you an injustice please be so good as to direct me to a previous post of yours that suggests otherwise.

            • Watcher says:

              Have you sat down and extrapolated, as an engineer, what 745 watts per horsepower means?

              • Marcus says:

                I mean don’t get me wrong here it’s not like I don’t often encounter sceptics. On a regular basis I talk to people in banking mainly Goldman & JPM as well as hedge fund people. None of them needless to say are paid up government shills, but they are the most cornucopian people you could ever hope to meet and they would not spend five minutes posting on a peak oil web site. Why? Because they don’t care. Why don’t they care? Simply because they don’t think it is or ever will be an issue. So I was simply curious why anyone of that opinion would ever act differently.

                • old farmer mac says:

                  Marcus ,

                  Do you believe the people at the top – I mean the folks who OWN big chunks of big banks and RUN big banks think peak oil will never be an issue?

                  I don’t have any trouble believing the run of the mill lower and mid level people are incapable of critical thinking.

                  • Marcus says:

                    Hi old farmer mac,
                    Well I’ve never meet anyone one that far up the food chain nor am I ever likely to so obviously this is pure conjecture on my part. At the top I think they are very worried, but not about oil supply they are looking at the vast quantity of debt that has been built up in the global economy, the most since the end of WWII even more they are looking at the trillions in derivatives swirling around the global casino, the oscillations in shadow banking etc. Even amongst those who are fully peakoil aware It seems many believe that the economy will be first to collapse long before shortages appear Gail Tverberg for example appears to echo those very thoughts in her latest blog post http://ourfiniteworld.com/2015/04/15/putting-the-real-story-of-energy-and-the-economy-together/. Having said that I’m pretty sure that those who hold high positions in both Government and the military in multiple countries are very concerned directly about peakoil which is precisely why we will never hear about it in the MSM.

                • Patrick R says:

                  I am no doomer, ie I don’t agree that civilisation will fall with the inevitable and proximate decline in oil supply. But I hang out here because the counterfactual is always more instructive that an echo chamber. Also because it is the best source of facts. The opinion, like this one, can easily be skipped. Change is coming, are the only options the world exactly as it is now or doom? Far far too binary. And we know it won’t remain the same; it never does. I’m win the Chief, but the details are unwritten and fascinating to mull over. This site is great for watching the inevitable end of the 20thC paradigm, which is well underway.

                  • Dave P says:

                    I wish I could have a more optimistic view like yourself. Unfortunately there’s too many problems coming our way that trouble me like:
                    – Climate change.
                    – Resource depletion.
                    – Ecosystem destruction.
                    – Top-soil loss.
                    – Ocean acidification.
                    – Increasing pollution / industrial toxins.
                    – Ocean fish collapse.
                    – Extinction of mammals.
                    – Deforestation.
                    – Growing human population.
                    – Increasing calls for war etc.

                    Perhaps I am too pessimistic? If we were actually doing anything to prevent / mitigate the above list then perhaps I could join you on the sunny-side! I just can’t see our current system ending well (or without a fight).

                  • Nick G says:

                    Dave P,

                    You and ChiefEngineer are in rough agreement. Here’s what he said: “The world has a lot bigger problems than limited energy supply. We have enough to cook ourselves.”

                    Clearly, he’s talking about Climate Change, which was top of your list.

                • TechGuy says:

                  Marcus wrote:
                  ” but they are the most cornucopian people you could ever hope to meet and they would not spend five minutes posting on a peak oil web site. Why? Because they don’t care. Why don’t they care? Simply because they don’t think it is or ever will be an issue.”

                  As Upton sinclair wrote:
                  “It is difficult to get a man to understand something when his salary depends upon his not understanding it.”

                  Bankers depend on a growth economy to stay employed. For them to accept peak oil and a permanent economic decline would result in them no longer having a job, a purpose, or a suitable skill.

                  Most people continue to believe there is a solution is because they cannot accept that there entire life\career is based upon a house of cards. Many have children and cannot accept that their future is imperil. Its far easier to just bury your head in the sand and ignore the problem. For at the moment they can still afford $5 lattes, air travel, and all of the other modern luxuries available. Unless they are falling off a cliff, they will continue to believe everything is fine.

                  Ever notice that continue people pile into bubbles (Dot-com bubble, housing bubble) and never realize it until the crash is 3 months underway?

                  There is also the older generations that acknowledge Oil depletion is a huge problem, but the expect that the problems will begin after the die and don’t have worry about.

                  • Cracker says:

                    Marcus and TechGuy

                    The next to last financial adviser my employer allowed in to “help” us save for retirement quit his job 4 months after I introduced him to peak oil and asked for his advice on dealing with it. I decided not to tell his successor.

                    Jim

          • Caelan MacIntyre says:

            Good question, Marcus.

    • Kam says:

      Dropping coal production is also caused only by pollution right?

    • clueless says:

      Keep posting Chief. I read not so much as to find like minded people, but rather to see what others say, even if I conclude that it is misguided. I am motivated by money – I do not want to die broke. And, I have been most successful when I determine that most are misguided, which presents an opportunity. Obviously, I am not on the right side all of the time – just enough to stay ahead so far. If everyone in the world thinks that Secretariat will win, and he does, no one makes any money. The track takes 15% and every bettor loses.

    • Caelan MacIntyre says:

      Do you share the same workplace as Nick G?

  5. Dean says:

    As you know, I have started collecting vintage data from the Texas RRC since January 2014 for oil and natural gas and since April 2014 for condensate. Given that I have now 1 year (or more) of vintage data I can start using the average correcting factors over all vintage data-sets for month T up to month T-23. Moreover, I can start building 95% confidence intervals around the corrected data using the variability in my past vintage data.

    So, here it is my corrected data for oil using the average correcting factors:

    • Dean says:

      here it is my corrected data for condensate using the average correcting factors:

      • Dean says:

        here it is my corrected data for oil+condensate (C+C) using the average correcting factors:

        • Dean says:

          and finally my corrected data for natural gas using the average correcting factors:

        • Dennis Coyne says:

          Hi Dean,

          Thank you for your excellent work!

          The Chart for Oil + Condensate is the most interesting chart in my view, in the future you might include the EIA estimate as a dashed line for comparison.

          • Dean says:

            Thanks for the suggestion. Find below my average corrected C+C vs EIA C+C

            • Dennis Coyne says:

              Thanks Dean,

              The EIA estimate looks pretty good until the most recent 6 months or so. Could you give me the data for the “CORRECTED” line from Sept through Feb?

              • Dean says:

                Here they are:

                Sep 2014 3265363
                Oct 2014 3294576
                Nov 2014 3351721
                Dec 2014 3382036
                Jan 2015 3259908
                Feb 2015 3364216

    • Dennis Coyne says:

      Hi Dean,

      Using your data from Sept 2014 to Feb 2015 (your best estimate) for Texas C+C and EIA estimates fro Jan 2011 to August 2014, along with RRC C+C data over the 2011 to 2015 period for both Eagle Ford and all Texas, I estimated Eagle Ford C+C output.

      This was done by using the RRC data to find the % of Eagle Ford output relative to all Texas output.
      Then it was assumed that these percentages would represent fairly well the percentage of total Texas output from the Eagle Ford when using the better EIA estimates, and your better estimates from sept through Feb. Chart below with Eagle Ford C+C estimate in kb/d.

  6. Dean says:

    Given that the correcting factors are stationary (I checked it using panel unit root tests), my corrected data using average correcting factors are to be preferred. Anyway, in the future I will post both of them. Interestingly, as you see, natural gas data show much higher variability than oil data.

  7. Dean says:

    Finally, in a past post, there was a discussion between Ron and Dennis about the “goodness-of-fit” of the final estimates provided by Texas RRC and EIA estimates.

    Similarly to what done by Ron, I will post below my estimated oil (only) production up to February 2014 [which I computed with the data published by Texas RRC in April 2014] , together with the latest Texas RRC data published yesterday up to February 2014 (I report data only up to February 2014, since major corrections to RRC data can take place only up to 1 year from the initial release, while minor corrections up to 2 years):

    • Dean says:

      As you see, my corrected oil data seem to slightly overestimate the (not-far-from-being-final) RRC oil data, up to 200,000 b/d for the latest month [in this case February 2014].

      I report below my estimated natural gas production up to February 2014 [which I computed with the data published by Texas RRC in April 2014] , together with the latest Texas RRC data published yesterday up to February 2014:

      • Dean says:

        In case of natural gas, my estimates seem to work pretty good, except for the last month, which (usually) suffers from extremely high volatility in reporting.

        As for condensate (and the possibility to compare my C+C with the EIA C+C), I will do that in 2-month time, since my first corrected condensate data was April 2014.

        • Dean says:

          Finally, I want to say that this is an ongoing project, performed in real time: if this method will prove to be stable and fairly robust, it is my intention to write an academic paper about it (it is my job 🙂 ). If you are an oil&gas researcher, journalist, producer, etc, and you are potentially interested in writing a joint paper, please let me know it!

          • shallow sand says:

            Dean. Appreciate your work and can see you spend a lot of time analyzing Texas production.

            Do you have access to subscription information like IHS Energy or Drilling Info? I believe those sites have crude sales information. Do you compare those databases sales information or use it in your analysis?

            I look at that information when deciding on what to offer for existing production. I find it is accurate and within a month or two of being up to date.

            • Dean says:

              No, unfortunately my university does not have a subscription to those data providers. However, if I got it correctly (I am sorry if wrong) , those two providers offer exact (that is final) data only for limited plays, or a sample of them, but not for the final total Texas oil&gas production, whose data (from RRC) take 1 or 2 year to stabilize. I am interested in the development of a robust nowcasting methodology, more than the data per se (since I am an academic, not a trader 🙂 )

              • shallow sand says:

                Dean. It may be that those providers do not have all information. However, I have looked at production for sale in the following states and was always able to find the sales information on a lease by lease basis:

                OK
                KS
                TX
                CO
                WY

                I was able to verify the data was correct through other sources. I have not found IHS Energy to have faulty data. We have a plan that does not incur charges until used, so some months we pay $0. There is also information for each well, that I have also found is very accurate also.

                I believe IHS Energy purchases this information from the crude oil purchasers.

                I do not know if IHS Energy compiles each state’s data and provides that to subscribers. I don’t think that is in the plan we have, but I will try to look. Also, it may be that there are companies which do not provide IHS Energy the data.

                I am a proponent of requiring the crude purchasers to submit their monthly purchases to the EIA. I believe this would be a very efficient way to determine US production. However, there may be faults with this proposal that I have not thought of or am unaware of.

                It seems strange to me that there can be a debate about the direction of US crude supply several months after the fact, given technology in 2015. As the crude purchasers have very automated data collection procedures, and because they are already required to report data to other governmental entities, it doesn’t seem like my idea is unworkable.

                I don’t trade crude oil, but if I did, I would be at a disadvantage to all the big banks and hedge funds, whom I assume are able to purchase such data. That the public data reporting system is inaccurate gives me the impression that crude oil trading is rigged against small investors in favor of the big banks, hedge funds and foreign country sovereign wealth funds.

                Kind of like a real life Trading Places.

                • Dean says:

                  I have the same impression as well

                • clueless says:

                  If data is “rigged” against small investors, that is the easiest way to make money. For example, let’s assume that you think that the spreads on NFL games are “rigged.” Then bet against the rigged spreads. I talked to this guy once and he said he spent a year coming up with a system to bet NFL games. Finally, he placed 10 bets and lost them all. I told him that he had found a perfect system. Just bet on the teams that his system said should lose to win.

                  • shallow sand says:

                    Explain how I can use the fact that others have production data before me to my advantage?

                    Actually, I admit I am being sour grapes. I’ll love those big traders when they run oil up again.

                  • clueless says:

                    A lot of people knew that the mortgage boom was going to go bust before the big banks did – and they had all of the data. They originated the loans. It is easier to be nimble and opportunistic on your own, than it is for a huge bureaucracy. There are a lot of individual floor traders who make money trading, and they really do not invest in research.

    • Dennis Coyne says:

      Hi Dean,

      On your Oil only chart above, it is not clear if you are using the “corrected” estimate using average correction factors over the past 12 months or the current month’s correction factors, which you have stated seem to be an overestimate. A more interesting chart would be your “best guess” vs RRC data.

      That may be what you presented, but this is not clear to me.

      • Dean says:

        Hi Dennis,

        those reported above for the back-testing up to February 2014 are the simple corrected data, built without using the average corrected factors. I reported those because using the average corrected factors with data published in April 2014 would create a problem of “looking-ahead-bias”, that is using information which was not yet available at that time. I can make a try, but statistically it is not sound. In the case I will receive the full vintage package from RRC (I will write to them in May), I will definitely compare the corrected data with the average factors available at the time of publication.

  8. Daniel says:

    seems like something went seriously wrong in previous months reporting, with this months data indicating a much smoother slowdown in production than indications from last months data. Does anybody have an explanation for this?

    • Kam says:

      Explanation for this is that Texas RRC reporting sucks. They should send some scouts to ND, and learn.

      • Mike says:

        Kam, since you are the one doing all the mouthin’ off, I think it should be you that contacts the Railroad Commission of Texas. Here is the Chairman’s email address:

        Christi.Craddick@rrc.state.tx.us

        I might suggest you explain to Chairman Craddick who you are and why you think Texas is a “joke” with regards to production reporting. We are generally polite down here, especially to women, I would mind your manners and refrain from using the word, “joke,” but that is entirely up to you. It would be helpful to tell her where you are from. If you are from New Jersey, she will want to know. She will want to know if you are in the oil business and know anything whatsoever about it.

        If you think the way Texas reports its oil production is a “joke,” you might explain to her why accurate, real time production data is so important to you. For instance, if its about not knowing how to trade oil futures without the inside scoop on Texas, she will want to know that. If not knowing exact Texas oil production for several months down the road is a matter of national security, she will definitely want to know that. If the ONLY reason you need to know how many barrels Texas produces, immediately, is because you participate in a peak oil blog and you need to know exactly when to plant the flag on the summit of Peak Oil, she will want to know that too.

        Ms. Craddick is a busy woman; try to be brief. Texas has more oil and natural gas wells that any other state in the country X 5. Since all oil and natural gas regulatory agencies around the world modeled themselves after the Texas Railroad Commission I would leave out the references that Texas should go to North Dakota for advise. She might take offense to that, as Chairman of the Railroad Commission of Texas. But, that’s up to you. You’ll be emailing her so anything goes, uh?

        If you get a response from Chairman Craddick it might go something like this, I suspect: “relax, Kam, oil prices are half of what they were, the shale business was marginally profitable before oil prices went down, now its not, production is going down in Texas and everywhere else, oil is finite resource, what difference does a couple of months make one way or another? Next question?”

        Good luck.

        Mike

        • Guy Minton, CPA says:

          LOL. Actually, I did contact Christi Craddick’s email to try to define why the EIA data and Texas estimates were about 500k barrels a day different. While she did not reply directly, I did receive some responses by an appointee. Try it, they are nice people. In response to how EIA comes up with their numbers, they simply said it is their estimates, and that I must contact them. I tried sending a request to the designated individual in charge of that, and received no reply. However, I am sure that is because my internet is not connected to areas outside of Earth.

    • shallow sand says:

      Marmico posted data from a company called Genscape which showed significant production loss in the Permian Basin in January. This may be why January has the noticeable dip. This may require EIA to revise their January data downward.

      • shallow sand says:

        Due to cold weather in PB 1/15.

      • MBP says:

        As I’ve said before, January was particularly bad in the Permian. There were power lines down all over the basin, and that directly impacts production. We lost a field for the entire month of January and the first week of February because of downed power lines. On top of that, wells are shut in for cold weather anyway. It wouldn’t surprise me if part of the reason for a decrease in production in January was weather related.

        • Dennis Coyne says:

          Hi MBP,

          How have things been since then, do you expect big decreases or do you think output may be roughly flat in the Permian Basin, over the March to April time frame?

          • MBP says:

            Dennis,

            I have no idea honestly. I don’t deal much with the unconventional side of things, I’m usually trying to fight decline in waterfloods and CO2 floods. Obviously things have slowed down here, there was another round of layoffs on Friday for a few companies, so I would imagine continuing to increase production will become difficult. Midland ISD has lost something like 400 or 500 kids so far this year from parents moving, which is a lot for its size. I would imagine a lot of families are staying to let their kids finish the school year and will leave this summer if things haven’t improved.

            • Dennis Coyne says:

              MBP,

              Sorry to hear it. I hope for you, Mike, Shallow Sands, and Toolpush (and any others I have missed) that oil prices continue to rise, but not so much that they crash the economy.

              • Caelan MacIntyre says:

                This uneconomy needs to crash, and sooner rather than later.
                And people need to be empowered to do things about it beyond forking over yet more centralized controlled crony-capitalist plutarchy fiat currency for items that that same dystem greenwash-vomits out.

                “David’s argument is essentially that radical, but achievable, behaviour change from dependent consumers to responsible self-reliant producers (by some relatively small minority of the global middle class) has a chance of stopping the juggernaut of consumer capitalism from driving the world over the climate change cliff. It maybe a slim chance, but a better bet than current herculean efforts to get the elites to pull the right policy levers; whether by sweet promises of green tech profits or alternatively threats from mass movements shouting for less consumption.” ~ ‘Crash on Demand: Welcome to the Brown Tech Future’, by David Holmgren

                Dennis, with regard to your question under a previous article with regard to if I have a car, well no. I have not had a car since my teen years, and even then, had it for only about a year and a half and hardly drove it after its engine blew. 😀

                Unlike some people, who don’t practice what they preach.

                I boot, bike, blade, and bus it, baby.

                • anonymous today says:

                  “This uneconomy needs to crash, and sooner rather than later.”

                  I personally have to question the mental stability of someone who would wish so much pain on so many. I can understand someone wanting to fix problems in the economic system, but to wish others back towards the stone age I find disturbing.

                  Caelan, you come across more like a jealous loser than a concerned human.

                  • Caelan MacIntyre says:

                    Apparently, the longer this unethical uneconomy lasts in its current state, the more pain there will be.
                    Speaking of questions of mental stability, your virgin-level comment’s ad homs not only amount to trolling and fly in the face of Ron Patterson’s specific requests not to use them– not that you necessarily give a shit about that either– but, along with cowering behind your unrecognized moniker, you don’t help make your case, which really sounds little more than a pathetic/juvenile personal drive-by vendetta anyway. (Is that John B?)
                    So I question whether you really care as you proclaim to about others. My suspicion is you don’t.

                    And it is not just me who is advocating a crash of the uneconomy, which makes everyone lose. (Not that you care either about the link to David Holmgren.)

                    By the way, loser is spelled with one o. I can handle ad homs, though, and you may notice that, regardless, I still don’t use them.

                    My advice: If you want to stick around, stick to the issue/message, never mind the messenger.

                    (This fine message crafted on-the-fly with the Patterson Press™ Comment Editor. Got second thoughts? Press it with the Patterson!)

              • MBP says:

                Nothing to be sorry about. This has happened before, and it will happen again. Thus is the oil patch.

              • shallow sand says:

                Dennis. If we could get to $75 WTI I think most conventional producers would be good. We have surprised ourselves in being able to cut some here and there. Probably got a little loose with $90-100 WTI.

                Can’t do much to fight decline at $50 WTI though. And not going to borrow to do it.

    • Daniel, nothing went wrong. That is just the nature of the oil business, sometimes you get a very good month and sometimes you get a bad one. There is no rule that, in a time of declining production, the decline must be smooth. There is nothing surprising about what is happening in Texas with oil production.

  9. shallow sand says:

    An example of what I propose is KS. Kansas has a very good state site, which is based on sales reports from crude purchasers.

    The only problem I have with it is timeliness. It currently just has through 12/14.

  10. islandboy says:

    I now present for your Sunday evening reading pleasure:

    The $5 Billion Race to Build a Better Battery

    It starts:

    Professor Donald Sadoway remembers chuckling at an e-mail in August 2009 from a woman claiming to represent Bill Gates. The world’s richest man had taken Sadoway’s Introduction to Solid State Chemistry online, the message explained. Gates wondered if he could meet the guy teaching the popular MIT course the next time the billionaire was in the Boston area, Bloomberg Markets magazine will report in its May issue. “I thought it was a student prank,” says Sadoway, who’s spent more than a decade melting metals in search of a cheap, long-life battery that might wean the world off dirty energy. He’d almost forgotten the note when Gates’s assistant wrote again to plead for a response.

    A month later, Gates and Sadoway were swapping ideas on curbing climate change in the chemist’s second-story office on the Massachusetts Institute of Technology campus.

    and concludes:

    Phil Giudice, the CEO who’s running Sadoway’s Ambri, says new batteries emerging with the help of big backers will finally enable renewables to compete with fossil fuels. “Khosla, Gates, Musk, and the Pritzkers are all excited about changing the world in a better way, and they’re swinging for the fences,” Giudice says. “We’re getting closer every day.”

    I trust that Ron does not find this irrelevant to the discussions here because, I know he does not share my belief that the world may be entering a period of a race between “The Clean Disruption” of the energy and transportation businesses and oil depletion. The question in my mind is, will the clean disruption, already under-way, happen fast enough to mask the decline in world crude oil production? (already under-way?)

    I bring this up because, when I first became aware of Peak Oil, back in late 2007, early 2008, the first modern series production car, powered by lithium ion batteries, the Roadster by Tesla Motors, was not yet on sale and I was worried that the planned successor to that car would never see the light of day, once Peak Oil related recession took hold. Well here we are seven plus years later and Tesla recently reported that they sold just over 10,000 units of the successor to the Roadster in the first quarter of 2015 and according to a Wikipedia entry on Electric car use by country, as of December 2014, more than 712,000 highway-capable plug-in electric passenger cars and utility vans have been sold worldwide. My island home is home to the largest wind farm in the Caribbean with ground-breaking for an expansion to that wind farm scheduled for this month. At the beginning of 2008 Just over 9GW of solar PV had been deployed world wide and now seven years later, that total is up to over 177GW with projections for that to climb to over 230 GW by the end of this year. That is remarkable growth in that almost 95% of the solar PV deployed in the world, has been installed in the last seven years!

    Earlier this year I bought a little battery operated chain saw and within the next few months I hope to finally get around installing the PV system I am putting together on the old homestead. It is a damn sight easier using the chain saw than using an axe or machete to cut down trees that were killed in a bush fire during a series of fires brought on by a very dry period last year(my fire was started by a complete idiot, clearing the the verge of the roadway adjoining my property on behalf of the local government). I really didn’t think life was going to be as “normal” as this in 2015 and maybe if we can squeak by for a few more years, the Oil Age will not end because of shortages of oil but because of the clean disruption. I’m aware of the overshoot problem but the idea of mass starvation, riots and wars is just truly awful and anything that will help soften the crash is not all bad in my view.

    Alan from the islands

    • Watcher says:

      Earlier this year I bought a little battery operated chain saw

      cc to horsepower is always a tricky conversion but a division by 30 will get you in the ballpark.

      Here’s a small chain saw.

      http://www.homedepot.com/p/Blue-Max-2-In-1-20-in-and-14-in-45cc-Gas-Chainsaw-Combo-with-Blow-Molded-Case-8902/202555248?N=5yc1vZbxa8Z1z0zy8m#specifications

      45 cc divided by 30 –> 1.5 horsepower for $150

      That’s 745 watts X 1.5 = 1117.5 watts

      Now this is damn near the only battery powered chainsaw HD carries:

      http://www.homedepot.com/p/Greenworks-10-in-20-Volt-Cordless-Electric-Chainsaw-Battery-Not-Included-20602/202281143?N=5yc1vZbxa8Z1z0zy82 $70

      No amperage quoted. But at 1117.5 watts and 20 volts, the amps have to be 59. I’ll leave you to look it up, but such batteries for chainsaws are usually 2 ampere hours. That’s 2/59 = 0.03 hours life.

      If your battery lasts longer than that, then you ain’t drawing 59 amps. That means you ain’t getting 1.5 horsepower and you’re taking a longer time to cut wood.

      • islandboy says:

        Watcher, I didn’t name the saw I bought because I didn’t want to be seen as advertising for the particular brand. It’s a European professional grade brand and they are quite capable of paying for their own advertising. They only sell through a franchised dealer network and although you can order online, the tool has to be picked up from your local dealer. The dealer in my country does not carry that model so I had to buy mine on a trip to the US.

        The saw has a 14 inch bar and weighs 11 lbs. with the battery. I just looked at the battery and it is a 36V 177Wh battery that is shared by that manufacturers entire line of electrical power tools. The maximum run time is 35 minutes and with the high speed charger the recharge time is 30 minutes to 100% and 25 minutes to 80%.

        My plan is to get the lawn mower, another battery and the high speed charger since the clerk at the dealer in Miami that sold me the unit, ordered the wrong charger and I didn’t realize until I was back home. With the high speed charger, I can run the machines for half an hour and then switch batteries and put the dead battery on a high speed charge so that by the time the fresh one is dead the first one is charged so I can just switch batteries again and keep on working. Right now with one battery and the medium speed charger I cut for half an hour and then take a one hour charging break before doing another round of cutting. Slow going but, I’m not in any particular hurry and as I said, it certainly beats working with an axe or machete and isn’t this new way of doing things part of adapting to the reality of Peak Oil? The best thing is, I’m not using any gasoline and as soon as the solar PV is installed, I won’t be using any electricity from the grid either!

        Alan from the islands

        • Fred Magyar says:

          Slow going but, I’m not in any particular hurry and as I said, it certainly beats working with an axe or machete and isn’t this new way of doing things part of adapting to the reality of Peak Oil?

          Yep and I’m going to venture a guess that it is also quieter >;-)
          There’s a guy in my neighborhood who likes to run an ICE powered leaf blower on Sunday mornings, one of these days I’ll be on the evening news…

          • islandboy says:

            Yeah, super quiet. A lady who lives across the road from the property and feeds the dogs for me when I’m not there, told me she head a tree fall but didn’t hear the saw cutting it! The dealer in Miami told me that the battery tools are being bought by people who work in jurisdictions that don’t allow the use of noisy power tools.

            As for the noisy guy, maybe you could interest him in one of these! If he complains about the price, give Barro II Hardware, near MIA a call and find out about those jurisdictions that have noise restrictions. See if you can get your neighbourhood added to the list.

            Alan

            • Watcher says:

              Leaf blowers are loud because of the air, not the engine. A weaker engine won’t blow as hard.

              I just looked at the battery and it is a 36V 177Wh battery that is shared by that manufacturers entire line of electrical power tools. The maximum run time is 35 minutes

              177 Wh at 36V is about 5 Ampere Hours.

              Draining that in 1/2 hour is drawing 10 amps. 10 amps at 36V is 360 Watts. That’s less than 1/2 a horsepower. Might want to look at if that 35 mins is at full RPMs. Probably not, which makes the comparison even more poor.

              So you can do 1/3 the work of that $150 proper chainsaw above and you can be a tad sure that its gas tank will last rather a lot longer than 35 mins.

              Not in a hurry? Not relevant. It either compares favorably or it doesn’t. “You don’t need that” is never a valid argument in a comparison.

              And as soon as that weak engine fails (weak ones fail faster than stronger ones, which don’t struggle) and you have to get a new one, you’ll be shipping it with diesel.

              • islandboy says:

                Hey, I bought my tool fully aware of it’s limitations and the fact that it cost significantly more than a gasoline powered unit with similar (better?) capabilities. I bought it because I believe that long before I have to buy a new battery, much less the saw itself, I will either not be able to obtain gasoline or if I can. it will be prohibitively expensive. Don’t you get it?

                “And as soon as that weak engine fails (weak ones fail faster than stronger ones, which don’t struggle)” did I say professional grade brand? It is actually a German brand and the unit is engineered to be repairable. It is obvious just from looking at how it was put together. Germans are not known for building cheap, non repairable, throw away crap like your average budget brand unit sold at Walmart and other big box stores.

                In addition to which, being electric, it will be one more thing I can run with the power from my solar PV set up.

                Alan

                • SW says:

                  I use that suite of electric power tools for my lawn with the exception of the mower. But the hedge clipper, weed whacker etc are first rate and as we all know electric motors are more durable and easier to service than ICEs. It is a good move as long as they don’t orphan the battery system.

            • Ulenspiegel says:

              It’s a Stihl chainsaw I assume, I have the 160 C myself. For work in a larger garden really nice, and I also plan to get the battery lawn mower when my briggs and stratton dies.

        • Sam Taylor says:

          Or you could just stop wasting energy on appliances which are incredibly inefficient and learn to use a scythe, which when used properly can beat the crap out of a mower:

          http://digg.com/video/scythe-demolishes-weed-whacker-in-grass-cutting-competition

          Plus it has the benefit of being kind of a fun form of excercise and a great deal quieter than a mower, so you’re not causing noise pollution. Think outside the box a little.

          • Paulo says:

            Lets put this in perspective. I have a large Stihl. I can cut up 5 cords of wood which is approx a years supply of heat for us (home, shops, studio) no back-up power used whatsoever, for maybe $20.00 worth of fuel. That is using Canadian highly taxed gas at $1.20/litre. It is so little I don’t even keep track. It is portable and allows me to buck up scrap logging culls 4′ in diameter. It is the most absolutely efficient and useful use of energy in the world as far as I’m concerned. I have bucked up approx 40 cords of wood since I bought the saw new, and have used up less then half of my chain which costs approx $30.00 to replace. Or, I could replace it with one made of chunks abandoned by the saw shop.

            I live by my DeWalt cordless construction tools, but ICE does have its place in the world. Sorry.

            I built a splitter that is made out of scrap steel and new hydraulics. It lifts the 400lbs + hemlock, fir, and yellow cedar rounds up onto the splitting bed and slices through knots with 50 ton pressure. It allows me to utilize scrap culls which would otherwise be thrown away because they cannot be used for lumber or split by hand. (It is impossible to split the highly corrugated butt ends by hand with a maul and wedge). I power the splitter with a 20hp Honda which was scrapped. The motor is from the 1990s, and I picked it up new for $0.

            My point is that FF used jucdiciously and with purpose, (not for Sunday drives or ski boats, quads, etc) is a wonderful wonderful gift and has made our lives pleasant in many ways. I submit it isn’t this use of FF use that needs to be replaced as in electric saws or clippers, it is the ‘zoom zoom zoom’ Wall Street advertising programs that ‘convinces’ chumps to spend their lives buying wasteful and needless shit in order to feel some self-worth.

            I don’t believe we will see any change until drought induced mass migration occurs in US, or a few more Katrina-like hurricanes remind us there are better/safer places and lifestyles to live. One SUV will use more fuel in its lifetime than all the saws and splitters will use in my Valley until the end of consumer civilization.

            regards

          • islandboy says:

            Sam, I have seen videos of competitions involving the use of scythes to cut grass and the competitions do look like fun. I have never actually seen a real life scythe since the cutting implement of choice in the Caribbean is the machete. When the job involves cutting grass, weeds shrubs and saplings covering acres it ceases to be fun. The farm hand I employ on my property has seen the chainsaw at work, how quickly and effortlessly it slices through anything less than about five inches in diameter. He no longer wants to cut anything he can’t go through with a couple swings of the machete, if he has a choice. I guess he does not share the view that this particular chainsaw is “incredibly inefficient”.

            As for the weed whacker, they were invented to cut grass in situations where it was impossible to use mowers but, have ended up being used for general purpose mowing even in situations where mowers of one kind or another would do fine. Case in point is the use of whackers to maintain highway verges in my neck of the woods. The thing is, outside of wealthy countries, the workman has to choose his tools wisely since he cannot afford to just buy them all. As a result the whacker has become the grass cutting power tool of choice, being able to work in the widest set of circumstances but, they really cannot hold a candle to a twenty inch or larger mower where applicable. As for the huge mowers hitched to the back of tractors and using the PTO to turn the blade/s, nothing can cover a large area more quickly.

            In my case the homestead is surrounded by a considerable area of grass which ideally should be mowed every two to three weeks. It can be done in less than half a day with a mower so, I’ll take a pass on the scythe since, I’m not getting any younger. Choosing to go with battery power rather than gasoline power IS thinking outside the box. You should have seen the look I got when I asked the local dealer if they had any battery operated chainsaws!

            As for thinking outside the box, if I don’t tone down my pro EV rhetoric around people in my neck of the woods, someone is going to have me committed to the insane asylum! Nobody around me anticipates any problems with liquid fuels, apart from the annoyance of high prices, no one!

            Alan from the islands

            • Glen Calvin McMillian says:

              I spent many long days using a scythe as a youth. We raised apples in a mountain side orchard and had to keep the grass and weeds trimmed with a scythe on over fifty percent of the orchard. The rest we cut mow with a tractor and a rear mount and or side mount mower.

              Sometimes it can be quicker than a so called weed eater or string trimmer. I still use one of the five or six on the place to trim out a few spots occasionally.

              A young tough guy can mow an acre a day with a scythe but this is an undertaking comparable to running a marathon and finishing in say three and a half hours. The average guy who works in an office couldn’t stand this pace for even five minutes.

              Nowadays I use a XXXXX weed eater , a big one which cost quite a bit, but it runs very quietly and has never given me a moments trouble. It would take a very powerful man , very skilled with the scythe , to keep up with this tool for more than an hour.

              Good battery powered hand tools are priceless if you use them often. The thing that pisses me off about them is that the batteries are not standardized. A new tool kit can be bought for only a little more than replacement batteries. You are stuck paying an inflated price for batteries because there is zero competition in selling them.

              I have not tried any of them yet but there are people who run internet businesses that disassemble batteries and install new cells and send them back in a few days, shipping included, for less than half the price of new ones. If they are using good quality cells this is a super bargain.

    • Fred Magyar says:

      Hey I didn’t see your post and posted the same same story GRIN!

    • Caelan MacIntyre says:

      The Kurzweils, Musks, and Gates’ of the world seem among the last people, along with the rest of the corporate/government elite, we will want to look to for effective responses to our predicaments as a species.

      And yet here some of us are ostensibly suggesting precisely that.

      • Glen Calvin McMillian says:

        These folks have kids and grandkids too.

        Lots of rich people have endowed universities, hospitals, and libraries over the years.

        My personal opinion is that people such as Gates and Musk understand that a safe prosperous or at least dignified existence for the masses of people is in their own best interests.

        It wouldn’t matter if you were as rich as Musk and you wanted to get around the country freely and easily , going just about anywhere anytime – if there were hardly any good roads. Good roads would be few and far between except for the fact than most of us have cars.

        Even folks as rich as Musk and Gates couldn’t fly very easily to very many places if it weren’t for the fact that airports exist – because there are enough people prosperous enough to fly to make airports feasible.

        A good farmer feeds his animals well as this is the most economic way to run his farm. Maybe Musk and Gates are smart enough understand this sort of thing. I tend to think they are.

        Maybe Musk and Gates look at me as if I were a mule or a tractor. LOL

        If so they seem to understand that a mule must be fed and sheltered to get any work out of it.

        • Caelan MacIntyre says:

          Glen Calvin McMillian,

          No man is an island.
          So let’s stop pretending that Gates and company and their products and riches and charitable foundations, etc., exist in isolation and without the help of many others– many with dubious workplace democracy/conditions or relative compensation for their trouble. Who also have grandchildren.
          Multiply-ironically, the collapse of this basket-case/charity-case/pyramid-scheme-of-a-culture that allowed them the means to create charitable foundations may (to be charitable) render efforts behind them all for nought.

        • TechGuy says:

          Gates Foundation is close to a modern era Don Quixote, Setting out on grand intentions to helping society, but instead causing problems.

          http://www.economist.com/node/10729975

          The Gates malaria vaccine project has been an epic failure in Africa, but has made GSK a very profitable company.

          The Gates foundantion is also responsible for the “Common Core” system which has dumbed down public schools even further.

          http://www.washingtonpost.com/politics/how-bill-gates-pulled-off-the-swift-common-core-revolution/2014/06/07/a830e32e-ec34-11e3-9f5c-9075d5508f0a_story.html

  11. old farmer mac says:

    Hello Islandboy,

    It’s easy to be a doomer if you hang with doomers, just as easy to be a technocopian if you hang out with them. Been there, done that, got both t shirts.

    My personal opinion now is that a transition to a renewables powered long term sustainable industrial civilization is certainly technically possible, based on my own understanding plus relying on the opinions of physicists , economists, etc who are smarter than I am.

    But being an armchair historian I also see that there are a million things that can go wrong to prevent the transition from happening.

    The real question then is will the renewables industries grow big enough and strong enough to shoulder the load before fossil fuels run so short as to prevent the transition?

    So – It’s a race between the Mighty Mighty Market and the Invincible Invisible Hand in one corner and depletion and overshoot in the other. Given time the Market and the Hand can work miracles.

    But depletion and overshoot have the knock out power to kick the Market and the Hand right out of the arena in the early rounds.

    If fossil fuels were to peak and then decline very gradually for a long long time , the Market and the Hand would almost for sure save us.

    But with depletion accelerating ……Population growing ……. Climate acting up……

    We are sailing into a hell of a storm.

    A few countries might manage the transition.If they do the new business as usual will be based on very low per capita energy consumption .

    Most countries are not going to make it in my opinion. Don’t get caught in Egypt , or any country that depends heavily on imported energy and food.

    I am convinced personally that the Germans as a nation realize they must either succeed in going renewable or fade away as a rich powerful country and that this is why they are investing so heavily in renewables.

    • Fred Magyar says:

      Who knows maybe Bill Gates will end up applying for German citizenship >;-)

      The $5 Billion Race to Build a Better Battery
      http://goo.gl/KnqdVn

      Disclaimer: I do not think for a micro second that renewables can maintain BAU and anyone who understands physics, chemistry and biology knows that continued growth as we have known it for the last two or so centuries can not and will not continue. Having said that I certainly think that investing in renewable energy technology at least in next decade or so is a pretty safe bet at this point! Fossil fuels not so much, maybe jet fuel for a while longer. Now petrochemicals for purposes other than fuel should also do fine for a long time to come.

      I’m also going to go out on a limb and suggest that centralized electricity generation which is then distributed through the grid is going to face some very stiff competition in the form of smart networked microgrids. I’m seeing a lot of furry little mammals scurrying about in between the feet of those giant dinosaurs. Some of them will get stomped on and crushed but a few of them will flourish especially if the environment that supports those dinosaurs suddenly changes and they get hit by a couple of asteroids or black swans.

      My money is on the little mammals!

      • old farmer mac says:

        Just to make my opinion clear-I do not think renewables are ever going to support a society that looks a whole lot like our current rich western societies – at least not within the easily foreseeable future. That might change a century or more down the road.Maybe.

        If some countries do manage the transition the new bau will be very low energy per capita- tiny cars, not many of them, super efficient houses and appliances, very few if any throwaway goods , jobs and housing close together etc etc etc. Local entertainment, local food, local everything to the max. Very little long distance travel except by train or boat.

        There will be a LOT less people after the transition. Maybe eighty or ninety percent less.

        The societies that succeed, if any, will do so by exercising extreme discipline in husbanding the dregs of the fossil fuels etc. Some countries will go to war to seize other countries remaining resources.

        No country – Germany possibly excepted – is anywhere near up to speed. The shit is going to hit the fan in a big way.

        The USA , Canada and a few other places might pull thru in more or less recognizable form.

      • TechGuy says:

        Unfortunately the tech they are using will be failure. All current electro-chemistry for battery involves a reaction on the battery anode that leads to its disintegration and failure of the battery after a number of recharging cycles. For a Battery solution for renewable storage they have to switch to a completely different tech. No matter how different metals they try it, will still have the same problems. The more complex they make the battery the more expensive it will become. To solve the renewable storage problem they need batteries with a near unlimited recharging cycles and that also cheap.

        For the most part the recharging problem has been ignored and the focus for the past 15 to 20 years has been on higher energy density, driven by the market needs for light weight and energy dense batteries for portable electronics (cell phones, laptops, etc).

        Fuel cells were a new approach to the problem, but they have some fatal problems, such as degration of the ion membrane, and the high cost of catalytic metals needed to make the cell efficient.

        For a useble battery tech, they would have to develop something new, perhaps in the direction of material phase change or some type of electro-chemistry that does not use a reaction involving the electrodes. Until this is investigated, there is no chance for a viable renewable storage solution. Today the best solution is pumped hydro.

        • Boomer II says:

          I guess we’ll see how this plays out soon enough. I think we will learn something whether it is a success or a failure.

          Tesla Motors to Unveil Home and Utility Batteries April 30 – Bloomberg Business

        • Nick G says:

          You’re confusing two or three very different things.

          Electric Vehicles work just fine with current batteries – the batteries last long enough. That’s pretty much all that’s needed to deal with Peak Oil – we “just” need to deploy them ASAP.

          Renewable energy sources are needed primarily to deal with Climate Change, not PO. Daily variance of RE is a very different problem, for which there are many partial solutions – batteries are just one, and not the biggest. Still current battery tech is useful here.

          Seasonal variance makes no sense for batteries, no matter how cheap they are. They’ll always be too expensive for use a few times per year. Here, the sensible solution is something like the solution Germany is deploying: using cheap surplus renewable power to create synthetic H2 or methane, which can be stored very, very cheaply just as they are now: underground.

    • islandboy says:

      Hey Mac, The Germans had Hermann Scheer and say what you will about him, he had a very good grasp of the dilemma the world faces. He knew about Peak Oil, he was not a climate change denier and he certainly believed that renewables hold vast potential to power the world. One of the things I found ironic about him is that as a socialist, some of his ideas on energy autonomy should (and in fact do) resonate among true right wing conservatives, particularly the idea of freedom to invest in your own means of harvesting energy, even at a small scale. He envisioned the Clean Disruption as described by Tony Seba, ten years before Seba did and rightly predicted that a FUD (fear, uncertainty, doubt) campaign will be waged against renewables by the entrenched electric power sector. As renewable penetration increases in the US, watch for the campaign to start in earnest there.

      Fact is, when I had just become aware of Peak Oil, the transition in the power sector had barely begun and in the automobile sector there were zero series production EVs available. In seven years the transition in the power sector seems close to a tipping point and over 700,000 EVs have been sold. If old man BAU can limp along for another few years, who knows what will happen? I didn’t expect him to be still standing, the stubborn SOB.

      Alan from the islands

    • Han Neumann says:

      “I am convinced personally that the Germans as a nation realize they must either succeed in going renewable or fade away as a rich powerful country and that this is why they are investing so heavily in renewables.”

      Germany is not an island. For staying rich they depend on ‘the world economy’ hanging on.

      • Thomas says:

        Especially considering that Germany’s economic success is to a large extent based on BMW, Daimler, VW/Audi etc.

        • Glen Calvin McMillian says:

          Hi Han and Thomas,

          No country is an economic island and Germany is currently dependent on exports to maintain the country’s prosperity.

          Now IF they succeed in making the renewables transition, they will have enhanced their competitive position ENORMOUSLY. Any country that doesn’t have to pay for imported energy – or that is able to sell energy – has a huge advantage in inter national trade.

          And later on they will probably be leading exporters of other classes of goods if the auto business goes belly up.

          No business model lasts forever. I expect that the Germans will do very well in comparison to most people. But they aren’t as well endowed with resources as the USA, Canada, Brazil , Russia etc so I don’t think their chances are quite as good as ours – meaning the USA when I say ours.

          They can live pretty well just making stuff for themselves if they have to – if they can free themselves of the necessity of having to import energy. Most of the materials used in a modern economy can be recycled and they do not have a population problem.They really wouldn’t have to import a whole lot to get by ok if they are energy self sufficient.

    • The Germans invest in renewables because Merkel had to make a governing pact with the Green Party. They build coal plants to replace the nuclear plants Merkel pledged to close. Germany isn’t really suited for solar power, they are installing a lot of wind which they shed to neighboring countries to avoid overloads.

      These renewables would work much better if they had a $20 billion USD high voltage connection between Germany and the Iberian peninsula, equipped with $10 billion USD worth of battery storage to handle the surges. But the only thing we have is a project to spend a little over $1 billion to improve the interconect between Spain and France.

      • islandboy says:

        “The Germans invest in renewables because Merkel had to make a governing pact with the Green Party. “

        Sorry Fernando, in this case your knowledge of the oil industry is way better than your knowledge of the history of renewables in Germany. The move to renewables in Germany started long before Merkel rose to power. The late Hermann Scheer who wrote at least three books on the subject of renewables was very instrumental in passing the legislation in 2000, that really got the ball rolling. One really has to read his books or watch interviews with him to get a better sense of the thinking behind renewables in Germany. There have been polls which suggest that there is broad based support for the transition among the German citizenry. Among the utilities and the elite (probably large shareholders in utility stocks), not so much.

        “Germany isn’t really suited for solar power,”

        While that might be true, especially during the winter, they don’t seem to be doing too badly since, according to today’s top post at renewables international.net , they set a new record for electricity production last Wednesday, see:Germany’s new solar record: 25 or 27 GW?. Interestingly enough, that record may have fallen today (Monday, April 20,2015) since, when I popped over to Performance of Photovoltaics (PV) in Germany, I noticed that production today peaked at 28.4 GW, higher than the 27.5 peak shown for last Wednesday by selecting last Wednesday, using the calendar icon at the right side of the widget at the bottom of the page! According to that web page, solar PV was producing 18.7GW of power in Germany at the time I was writing this post.

        edit: They MUST be displacing the use of a $#!tload of FF with all that solar power and wind isn’t even factored in, in the above numbers!.

        Alan from the islands

      • Strummer says:

        “The Germans invest in renewables because Merkel had to make a governing pact with the Green Party. They build coal plants to replace the nuclear plants Merkel pledged to close.”

        This is so wrong on both counts. The Energiewende started long before Merkel ever dreamed of being chancellor, and the plans for new clean and efficient replacement coal plants (as in, replacing old coal plants with new ones) started long before Fukushima.

      • Islanboy, I used the present tense. I wouldn’t be bragging about what you know when it comes to EU politics if you are sitting in Jamaica. Everybody around here knows Merkel is saddled with the need to please the Greens. And anybody with a lick of common sense knows Germany isn’t suited for solar power.

        You know, for me it’s fairly simple to get a sense for what goes on. I watch the news. The weather on TV shows the full Europe map. I live in a condo complex full of people from all over, and we happen to be mostly educated. I’m subscribed to The Economist Europe edition, when I go get my haircut a lot of conversation revolves around what Germany will do to deal with the European economy, and so on and so forth.

        So today, my friend, Germany has a stupid environmental policy driven to please a radical minority. Sort of similar to what the USA does when it sends aid to Israel, doesn’t have diplomatic relations with Cuba, or when it subsidized tobacco farmers. You know, normal Homo sapiens behavior.

        Tell you what. This weekend I have four Dutch visitors who want to go to the beach. I’ll sit down with them and quiz them to see what they think. They ain’t German but the Dutch are pretty deep into German politics.

        • Fred Magyar says:

          You know, for me it’s fairly simple to get a sense for what goes on. I watch the news. The weather on TV shows the full Europe map. I live in a condo complex full of people from all over, and we happen to be mostly educated. I’m subscribed to The Economist Europe edition, when I go get my haircut a lot of conversation revolves around what Germany will do to deal with the European economy, and so on and so forth.

          Personally I prefer facts! BTW I travel to Germany and have a brother and sister who are married to Germans have both raised families there and have lived there for over 35 years. So I get to talk to real Germans some of whom are quite educated and are even solar engineers. To say Solar doesn’t work in Germany borders on the ridiculous! And To say Germans have a stupid environmental policy driven to please a radical minority. Is nothing more than your personal opinion.

          I’ve included a link to a PDF file from the Fraunhofer Institute below.
          Titled Recent Facts about Photovoltaics in Germany

          With a staff of above 1300, Fraunhofer ISE is the largest solar energy research institute in Europe. The work at the Institute ranges from the investigation of scientific and technological fundamentals for solar energy applications, through the development of production technology and prototypes, to the construction of demonstration systems.

          The Institute plans, advises and provides know-how and technical facilities and services.

          http://goo.gl/K3HCCo

          Edit: It seems to me that the Germans have figured out that peak oil is real and they want to move away from the fossil fuel and nuclear paradigm. Compared to most other countries in the world they are ahead of the curve.

          • So show me an article showing solar makes economic sense and I’ll show you a paper written by somebody getting cash to peddle solar.

            I know solar doesn’t make any sense for Germany simply by looking at the data. Spain is much more viable for solar and it doesn’t really make economic sense in Spain. And that’s guaranteed.

            • Boomer II says:

              So show me an article showing solar makes economic sense and I’ll show you a paper written by somebody getting cash to peddle solar.

              Here’s a scenario where solar makes economic sense.

              Electrifying the Poor: Highly Economic Off-Grid PV Systems in Ethiopia – A Basis for Sustainable Rural Development – 00b4953365ce6a7f85000000.pdf

              • Caelan MacIntyre says:

                This reminds me, for some reason, of giving some backwoods natives, TV. They like it because it is all gadgety and new, but it doesn’t really do anything for them fundamentally, and becomes just many cuts more in their death of a thousand cuts as the advertisements and assorted propaganda and promoted ways of life take hold and further cut into their cultures and ways of life, while increasing a dependence on the new forms.

                Besides, most who know a little about uneconomics, know about how capitalism ethically-dubiously leverages differences of scale, economics, ways-of-life and costs of living. You know– sweatshop-manufacture a Nike shoe for pennies overseas and then ship it back into a high-cost of living region and turn it around and sell it for ~ $150? There are all kinds of difference-games like that. House-flipping, anyone?

                Not too long ago, I watched a documentary on these kinds of destructive effects on, if recalled, a simple village in the Himalayas.

                How do you spell contempt and repugnance? ‘Crony-capitalism plutarchy’, that’s how.

                Hey, kids. It really is about ethics. First and foremost. Rather than as a kludge after the fact.

                • Boomer II says:

                  That strikes me as like giving some backwoods natives, TV. They like it because it is all gadgety and inexperiences, but it doesn’t really do anything for them fundamentally, and becomes just many cuts more in their death of a thousand cuts as the advertisements and assorted propaganda and promoted ways of life take hold and further cut into their cultures and ways of life, while increasing a dependence on the new forms.

                  Yes, I get what you are saying.

                  I’m not sure how the transition will go from where the world is now to where you envision it, but if you can make it happen, more power to you.

                  Environmentally I am sure the world would be a better place since there is more to global life than humans. But getting humans to work together as a group has always had its challenges.

                  What I wonder is how you keep people working within the group without resorting to telling them about outside threats or telling them you will exclude and shun them if they not cooperate.

                  So I want to know more about the group dynamics of what you want to see.

                • Fred Magyar says:

                  This reminds me, for some reason, of giving some backwoods natives, TV. They like it because it is all gadgety and new, but it doesn’t really do anything for them

                  Yeah, you could certainly say the same about many things, case in point, smart phones, however it is just a device that lets you access information and communicate with other people. It’s neither good nor bad in and of itself.

                  • Boomer II says:

                    Yeah, you could certainly say the same about many things, case in point, smart phones, however it is just a device that lets you access information and communicate with other people. It’s neither good nor bad in and of itself.

                    Are there techno-anarchists who like cellphones and the Internet because they are faster ways to reach and organize people for whatever revolutions they might advocate?

                  • Caelan MacIntyre says:

                    I caught something some time ago how this is not necessarily the case; that our technologies have ’embedded’ or ‘implied’ uses and that they are not necessarily neutral. The example used was the gun. And I am reminded of the expression, ‘With a hammer, everything looks like a nail.’.

                    If there can be such a thing as a ‘techno-anarchist’, then one criteria might be that cellphones are manufactured, etc., within anarchist contexts.

                    Boomer II, you can find relevant group dynamics in the permaculture, Transition Town and rewilding movements, for examples.

                  • Boomer II says:

                    As I mentioned before, I am curious about your visions of the social model for your future society.

                    Let me toss this out. Let’s say you want to get the masses to overthrow their governments. Now, communication tools offer an advantage over those who don’t have them.

                    Would you encourage your tribe or followers or whatever you want to call them to abandon modern technology now, or after they free themselves from governments?

                    You are using an electronic device and communicating on the Internet. How does that fit into your visions of communities without electricity?

                    I am curious how you see everything evolving the way you’d like it to evolve.

                  • Fred Magyar says:

                    Hey Boomer.

                    You might be interested in this guy’s work:
                    http://mitpress.mit.edu/books/how-things-shape-mind

                    Arguing that the understanding of human cognition is essentially interlocked with the study of the technical mediations that constitute the central nodes of a materially extended and distributed human mind, Malafouris offers a series of archaeological and anthropological case studies—from Stone Age tools to the modern potter’s wheel—to test his theory. How do things shape the mind? Considering the implications of the seemingly uniquely human predisposition to reconfigure our bodies and our senses by using tools and material culture, Malafouris adds a fresh perspective on a foundational issue in the study of human cognition.

                    If his thesis holds water then I’d really like to understand the implications of how our culture and the ubiquitous use of communication devices such as computers, smart phones and internet access is rewiring our brains.

                    Imagine for a moment a blind man who has been using a white stick to feel his way around for most of his life suddenly having that stick removed from him… Now think how most of us would react if we suddenly lost access to many of our communications devices.

                  • Boomer II says:

                    I’ll check it out.

                    I remember some 20 years ago a computer researcher I knew was saying that he thought computer games and the like were changing the way kids think. Not in a bad way. Just that now they were processing info differently.

                    I think a lot of people now process info in sound bites. Kind of a gestalt. They look at lots of bits of info and perhaps find patterns. It might help them pick up changes quickly, while at the same time discouraging in-depth thinking. They are multi-tasking.

                    Of course, we also have people finding value in mindfulness and meditation as a break from the amount of info they process everyday.

            • Boomer II says:

              Here’s another article about how it is cheaper to use solar panels than to extend the grid.

              Solar Power Makes Electricity More Accessible On Navajo Reservation | KUNC

              This solar panel unit cost about $17,000, less than half as much as it costs to extend the electrical grid a mile. Thompson pays the power company $75 a month to maintain and service the unit.

              … Until recently, Thompson stored his food in an ice chest or hung it from the eaves of his roof so it wouldn’t spoil. Now he has a refrigerator. He opens the freezer to show off where he stores his food. It’s filled with meat.

            • Old farmer mac says:

              Fernando ,

              I get it when you talk about economic sense. Being a farmer I encounter the same thing you are encountering here in this forum every time I go near a site devoted to sustainability and agriculture.

              The people hanging out at such sites are full of schemes to solve the problems associated with industrial agriculture -full up to their noses which are barely high enough to breathe while they are standing on their tiptoes in their own bullshit.

              They understand the problem. The problem is that agriculture as we industrial farmers practice it-as I practice it MYSELF – is not sustainable over the long term.

              But I sure as hell can’t grow apples the way my great grandfather did. Nobody will buy that sort of apple these days. NOBODY at all except the occasional customer who will take a couple of bushels for home canning or horse treats. I need to grow at least twenty thousand bushels to compete. ( or did . retired now. )

              Localizing food production to any meaningful extent using organic techniques for a place such as New York City is simply totally out of the question using current day technology. Moving the people out of NYC to non existent housing to work on farms after the fashion of Chinese commies is totally out of the question. Only a maniac or an idiot would even waste time bullshitting the possibility.

              Nevertheless the current system of producing food is NOT going to last forever, barring miracles on the renewables front. I know that. I admit it. I say it often. The problem of sustainable farming most likely DOES NOT HAVE A SOLUTION given the current day realities of population and politics.

              The people here in this forum- although they are MANIACALLY focused on fossil fuel depletion – are NOT idiots and not maniacs. They are mostly capable of some critical thinking – not every last one but most of us here can think critically to some extent.

              The people in this forum ARE focused on the fossil fuel depletion and associated climate issue to such a fierce extent that most of them are unable to see or unwilling to talk about the economic realities involved in trying to go renewable in day to day business terms, in terms of day to day AFFORDABILITY.

              The solution to fossil fuel depletion according to the consensus HERE is that the issue must be forced by subsidizing renewables to whatever extent is necessary as long as necessary.

              Now I have taken it on myself to speak for the rest of the forum but nobody else seems to be willing to put it into so many words in black and white on the screen.

              It is not good public relations, it is not staying on message , it is not advancing the renewables agenda to honestly talk about the PRICE of renewables in a forum such as this one EXCEPT to encourage each other and any new visitors with a constant drumbeat chorus about how cheap they are already and HOW CHEAP THEY GONNA GET.

              (Hey guys we are all just nekkid apes under our clothes and this is the way nekkid apes act. To expect us to act differently would be as irrational as we are. Students of zen make what they can of the previous sentence.)

              No regular commenter in this forum -you included – denies that within the easily foreseeable future we are going to be running very very short of fossil fuels. Hardly any body with a working brain seems to think fossil fuels are plentiful enough to last more than one or maybe two more generations before the depletion shit hits the fan hard and fast.

              The forum members as a whole are talking about the long term when they are talking about renewables. You are focusing on the short term. You might as well be speaking different languages.

              If you were to insert a line or two once in a while in your comments to the effect that you recognize that we are in fact collectively and EVENTUALLY going to HAVE to depend on renewables or nukes or some as yet undiscovered new energy technology – or ELSE give up industrial civilization —–

              If you were to put that couple of lines in once in a while then the rest of the nekkid apes would be forced to admit you know what you are talking about. Mostly.

              Although I am just another one of the crowd of nekkid apes myself I can see both sides of the question having worked very hard at training myself to be as objective as possible.

              Because I DO see both sides I keep reminding people to not get caught in Egypt.

              People such as our most gracious host Ron have thought thru the sustainability math and rightfully concluded that the house of cards business as usual economy based on fast depleting fossil fuels MUST and WILL INEVITABLY collapse.

              I differ with them only in that I think there is substantial hope for a few countries to pull thru the next century or so more or less whole since they are FAR more favorably situated than the rest of the world. Within that century the sustainability problem can be addressed with a combination of changing lifestyles ,falling population and changing technologies.Maybe.

              I believe there is some hope that eventually the typical redneck will routinely spend as much money on making his house and home energy efficient as he does now on a new hot rod car or super sized four by four pickup truck.

              As far as most of the world is concerned ….I think about what is going to happen in most of the world as little as possible. Apocalyptic movies and novels are one thing. Apocalyptic reality is something else altogether.

              Now while I am getting in my long rant for the day I want to ask one more time if anybody has any info on just HOW much extra natural gas is necessarily burnt to keep hot spinning reserve on line to backup wind and solar power.

              A country such as Spain that can avoid the purchase of imported gas coal and oil by depending on local solar and wind power can afford to pay a premium for that power. Keeping money and jobs at home is important.

              Beyond that on a world wide basis the growth of renewables is cutting into the sale of fossil fuels in a substantial way already and will cut into these sales more and more in the future. This has the effect of depressing the price of fossil fuels. Calculating the effect is above my pay grade but it must be substantial and in fairness must be considered when calculating the true cost of renewable energy.

              • Renewables do cut fossil fuel prices. That’s very evident. The big issue is renewables’ ability to replace say 50 % of the current fossil fuel rate at a viable cost.

            • Nick G says:

              Well, if you don’t care about pollution, or having domestic power sources, or preparing for the depletion of fossil fuels………

              then yes, wind and solar make no sense!

        • islandboy says:

          Sorry if I offended you but, I am not bragging about any knowledge of EU Politics. I am interested in solar PV and intend to make a career out of it. I have been interested in Germany ever since they have been making the news with the spectacular growth of their PV market, so much so that my interest in the German renewables scene borders on an obsession. I am fascinated by the fact that anybody in political power in a the worlds most industrialised nation could posit the idea of his nation going 100% renewable! Regardless of whether it can really work or not, the fact that those thoughts exist, as documented in Scheer’s book “The Energy Imperative: 100 Percent Renewable Now”, is remarkable.

          I get most of my news and opinion about the Energiewnede from renewablesinternational.net but I also read articles in Der Spiegel to get a view of what those who are opposed think. I have listened extensively to interviews with Hermann Scheer and read excerpts from his books. When I go to the Intersolar trade show in San Francisco, I make it a point to visit the German Pavilion and chat with people from government agencies that are there. I have a cousin who works at th USAF base at Ramstien and have been to visit him and chatted with him and his friends (if they speak English) about what they think about renewables. I have also tried to pick the brains of Germans living in Jamaica and have even briefly spoken with the German ambassador on the subject. In addition, using the internet, you can find out a lot about a country without ever going there. While I consider myself pretty informed about the renewable energy scene in Germany I don’t really want to brag about it.

          By the way the SMA web page that estimates Performance of Photovoltaics (PV) in Germany in real time, is today reporting another day with peak output above 28GW (28.3), over two thirds of installed capacity.

        • ezrydermike says:

          Your secret source of critical information about world issues is a barbershop?!?!?
          LOL!

          • Caelan MacIntyre says:

            LOL It’s probably just as good as anywhere else these daze.

          • It’s not “secret”. 80 % of what I know about Germany comes from talking to Germans. The rest comes from papers, magazines, and a couple of Venezuelans who fled to Germany. Everybody I know thinks Merkel is trying to defuse the commie threat by stealing some populist ideas from the center left and pushing a green agenda. She’s also trying alliances with the greens at the local and state level.

      • Ulenspiegel says:

        fernando,

        why are you spilling such nonsense.

        Merkel has no coalition with the Greens, the last federal government with green participation was Schröders’s. The Greens are a non-factor when it comes to federal policy, the driving forces in are SPD and CDU. BTW many investments take place because REs are the cheapest solution.

        And the best storage is of course in Austria, Switzerland and Skandinavia, no discussion here.

        Try to understand that PV will only contribute 15-25% of the generated electricity. The main contributions are of course on-shore and off-shore wind, while not as good as in the USA they are more than sufficient to provide most of the 800 TWh that are needed in a 100% RE scenario.

        No new coal power plants are in the pipeline, the few we see until 2016 wre planned around 2005 and are in some cases already stranded assets.

        • Actually. Merkel’s party has coalitions with the greens at the local level. Also, Barbara Hendricks, the leftist SPD enviromental minister, has green credentials. My German friends tell me they know the SPD puts demands on Merkel, and she flirts with the Greens to show the SPD that she has options. I happen to be quoting a German neighbor who is originally from Hamburg. He laughed at your comment and said you didn’t know half of what goes on.

      • Here’s a link to a post by “planning engineer” at Judy’s

        http://judithcurry.com/2015/04/21/what-should-renewables-pay-for-grid-service/

        A quote:

        “There is a lot of public debate around the rates utilities charge solar customers, but very little of it shows an awareness of the embedded technical and philosophical issues.This posting will seek to provide a general context to help sort out issues in that ongoing debate. It will focus on transmission for simplicity’s sake, but the concepts can be extended to generation as well.”

        And

        “We need to move the public debate so that it is not just about the level of subsidy utilities should provide to solar. The subsidy model nearly guarantees that if the system transitions to high levels of local renewables there will be a major death spiral collapse as the traditional customer base erodes and the subsidized population increases. While some envision utilities as highly profitable entities with deep pockets that can well afford massive subsidies, in fact, the subsidies come from the ratepayers. Whether utilities pay for their system through money collected from their traditional customers or backup customers, their profits are in the hands of their public service commissions. Unlike the utilities, which will make money if they work with their regulators, ratepayers will be materially impacted by the cost sharing model selected. Indirect taxes placed upon electric utility ratepayers are terribly regressive and in the area of rooftop solar they result in significant wealth transfers from the less affluent to the more affluent.”

        • Boomer II says:

          What it means is that the grid system, as it is currently operated, doesn’t work well with new technology concepts. Yes, the grid system probably will end up in a death spiral if the concept isn’t adapted to newer technology. And you’ve got a number of tech entrepreneurs who won’t miss the current grid system when it is gone.

          You’ve got an old system which wasn’t designed for distributed power generation. There are a number of people/companies interested in DG and they are actively creating ways to decentralize power and reduce or eliminate the need for a grid.

          The complaints from utilities that they are in bind opens the door for other companies to find solutions that the utilities aren’t pursuing.

          • What it means is that utility commissions will have to get smarter and stop laying off subsidies on the common folk. That’s what happened here, and this is the reason why the little solar panel industry investors are going broke.

            • Boomer II says:

              Yes, the utilities do have to become smarter. That’s the issue. If they don’t, they’re likely to see more defections.

              The Silicon Valley folks see any complaints that working with the grid can’t be done as an opportunity for them to find new solutions. As with many innovations, innovative companies often start by capturing markets too small for the big guys to bother with. Once the innovators gain experience, market share, and volume, they then take over and the old companies are pushed aside.

            • Nick G says:

              Nah.

              This is a problem of bad accounting, and bad regulatory models. The source you’re quoting is just advocating for the status quo of fossil fuels.

              Solar is cleaner, domestic, and non-depleting. If the cost of pollution, supply risk, and trade deficits isn’t figured in, then your accounting is terrible.

              To the extent that the current regulatory model isn’t adapted to distributed power, then it needs to be adapted, that’s all. Power sources need to be paid for firm supply (which will help FF), customers need to pay for grid services (which will also help FF), and FF needs to be taxed to properly account for pollution, war, etc.

              Really, if FF were taxed properly, there would be no need for solar subsidies, and we wouldn’t have the problem of people leaving the grid. But, the FF industry creating paralysis by fighting change. So, we’re left with partial solutions, like subsidies for renewables.

              This kind of temporary solution isn’t good for anybody.

        • Fred Magyar says:

          Sooner or later customers will just leave the grid as costs for off grid systems continue to come down and battery storage technology continues to improve.

          Example from Hawaii back in 2013. Since then costs have come down and many more people have decided to defect from the grid. Centralized monopoly’s have their days numbered if they don’t change their business model.
          http://www.greenbiz.com/blog/2014/03/10/distributed-defectors-when-customers-leave-grid

          Rise of the distributed defectors

          Customers impatient to wait for Hawaiian Electric Company to complete its study are left with a difficult decision: abandon their solar PV plans and continue paying expensive retail prices for grid electricity, or defect from the grid entirely.

          The latter is exactly what happened in the case of a Maui Builders and Maui Solar Energy Systems residential client. “We were going to install a grid backup system, this way we could size the battery bank in a more optimistic fashion,” Maui Builders and Maui Solar president John Bews explained, “but the local utility balked.” So Bews and his crew took the entire house off the grid.

          Such a customer grid defection increasingly could become a possibility, and not just in Hawaii where conditions are ripe, but in other geographies throughout the United States, from Los Angeles, Calif., to Westchester County, N.Y., as the levelized cost of energy for solar-plus-battery systems reaches or undercuts economic parity with grid-sourced electricity at comparable reliability.

          • Boomer II says:

            Yes, that is exactly what will happen. Big companies are leaving the grid. Individuals are leaving the grid.

            If the only people left who are using the grid are the poor, then we can reverse the pattern and either subsidize the grid for them, or subsidize their switch to off-grid energy, too.

            The grid is proving to be outdated technology. There’s no reason to keep it going indefinitely when other energy generation technologies develop that are better and/or cheaper.

            It’s a bit like computers replacing older systems. Yes, there is a period of transition when computer companies and users continue to accommodate legacy systems. But once a tipping point is reached, the computer companies no longer provide support for older technology and applications.

      • TechGuy says:

        “These renewables would work much better if they had a $20 billion USD high voltage connection between Germany and the Iberian peninsula, equipped with $10 billion USD worth of battery storage to handle the surges. But the only thing we have is a project to spend a little over $1 billion to improve the interconect between Spain and France.”

        Pumped water storage in Barvaria would be a better solution. Since battery Tech still sucks. FWIW: Germany will never make a full transition to renewables. Even if Germany some how manage to covert its Power grid to 100% renewable (impossible) it still would need to import fossil fuels for transportation, building heating systems and for industrial processes (petro-chemical, cement, asphalt, metal ore smelting, etc).

        That said, German and the rest of europe are now facing deep monetary, political and an aging workforce that nears retirement. Sooner or later these problems are going to collapse the German economy.

        • I was thinking of something German watermelons will accept. The key is to get something that works. Here in Spain most hydro is used to back up solar and wind. But I don’t hear them discussing new pumped power projects.

  12. old farmer mac says:

    ”US oil production may not actually begin to fall in earnest until the middle of 2016.”

    This is from Euan Mearns blog today. His personal opinion.

  13. Han Neumann says:

    “Economically recoverable shale oil reserves, at $55 a barrel, are a lot less than 10 billion barrels. In fact if all expenses are included, lease costs to taxes and interest payments, the break even point is likely a lot more than $55 a barrel.”

    Ron, I found this:

    “The breakeven price is especially important in the United States, because the unconventional wells that have fueled our domestic oil boom deplete quickly, meaning that companies need to keep drilling new ones to keep production up.”
    Morgan Stanley commodity research estimates accounting breakeven price is $ 65/ barrel for N-America shale oil.

    • Schlumberger says it’s around $75 a barrel. I will have a chart on this in my next post, likely Wednesday.

      • Han Neumann says:

        I wanted to copy/past a chart but it didn’t work. My info is from a very interesting article on slate.com named:

        “Oil Fell Below $60 a Barrel Today. So Which Countries Are in Trouble?”

  14. Boomer II says:

    I just saw this. I think solar may change some political dynamics pretty soon.

    Solar Power Battle Puts Hawaii at Forefront of Worldwide Changes – NYTimes.com

    For those who can afford it, said James Whitcomb, chief executive of Haleakala Solar, which he started in 1977, the answer may lie in a more radical solution: Avoid the utility and its grid altogether.

    Customers are increasingly asking about the batteries that he often puts in along with the solar panels, allowing them to store the power they generate during the day for use at night. It is more expensive, but it breaks consumer reliance on the utility’s network of power lines.

    I’ve been saying this for awhile. If the complaint against renewables is that they mess up the grid, the solution, for some consumers and companies, is to avoid the grid.

    And if people are thinking in terms of batteries, they may decide that they might as well get an EV and use that as one of their batteries.

    • toolpush says:

      Hawaii, seems a much more likely place for solar to work than than some of the more northerly latitudes that are chosen. Hawaii has the advantage of direct overhead sun twice a year an very high cost fossil fuel cost. Also EVs due to limited range requirements and high FF cost should make this an ideal early test ground for them. These arguments would also go with Island Boy in the Caribbean as well.

      Edit: Wouldn’t pumped storage work in Hawaii? Or are the volcanic based mountains, too unstable for large scale water storage?

      • Caelan MacIntyre says:

        Many, worldwide, may slowly leave the cities for the surrounding countrysides and small towns to be close to the soil. You know– food? This is one of the most important things that silver-bullet solar panel and electric talking points and talking heads rarely address.

        I suggested this on TOD some time ago that it is more effective (energy, time, etc.) to ship the people to the food rather than vice-versa. If you are at the food source and most of the other materials, such as for clothes and home-building, then you don’t need a car, job or government.

        • Glen Calvin McMillian says:

          Caelan I no doubt stick my foot in my mouth occasionally by making totally ridiculous remarks about the oil industry since I know only as much about it as I have learned READING about it. Never been around an oil well ya see.

          Now as it happens I have been around farms – lots of them, and although I have never traveled the world I have very substantial professional background in agriculture , including about six or sever years of university level courses full time.

          The time is long past when we can put the people where the food is. THIS SIMPLY CANNOT HAPPEN IN THE WORLD WE LIVE IN TODAY.

          Why?

          Because there are several times as many of us as can live in places where we could grow our own food successfully.

          You just haven’t got a clue.

          It is barely possible to live on fruits and veggies but getting enough calories and protein this way means living like an Asian peasant.

          I suggest if you want to understand high intensity high population density relatively low tech ( but VERY SOPHISTICATED ) agriculture in an overpopulated world that you read ”Farmers of Forty Centuries”.

          By working like hell day in day out year in year out the people chronicled in this book managed to grow just about enough to eat with the caloric staple being rice.

          Now we depend on grains shipped from far away for calories and proteins if we are eating down the ladder and avoiding meat, fish , dairy etc.

          You can’t raise rice or veggies or soybeans in let us say Nebraska or Iowa the way they used to grow these things – still grow them- intensively by hand labor some places with semitropical or near semitropical climates on river deltas or flood plains.

          It gets pretty damned cold and stays that way for months every winter in Nebraska and Iowa.

          Moving a few million people from let us say New York City to Iowa is utterly out of the question. No housing. No water no sewer no educational infrastructure to amount to anything compared to the scale of the job. A climate well suited to growing grain but not well suited at all to subsistence farming.. Would it be possible to grow veggies there? Sure- but the season is relatively short. What would your newly minted subsistence farmer be doing from October to March?

          I live in a place MUCH better suited to growing a large variety of foods but if I want a ” fresh ” tomato between mid October and about the Fourth of July I have to buy one shipped in from further south – maybe all the way from Mexico or California.

          We are in a hell of a fix – You certainly have that right. What we are going to do about it is highly questionable.

          But one thing we aren’t going to do is move hundreds of millions of people from the cities back out to the country side, except possibly at the muzzle of a gun after shooting some every day in every city to get the point across. The average person who lives in town these days would RIOT at the mere SUGGESTION of having to move to a farm..

          If and when they decide to move of their own violation because there IS NO FOOD in the city just about all migrating the city dwellers will starve on the side of whatever road they take .

          Robbing farmers won”t work. There isn’t enough food on my place at any time to feed more than maybe half a dozen people for a month on short rations , except at harvest which for me is late summer to mid autumn. You would starve pretty quick eating nothing but apples and peaches. We used to grow lots of veggies, beans, etc but nowadays I have cut WAY back on gardening and buy most of what we use from a supermarket except in season I get local produce from a farm market. It opens in June and closes at the end of October.

          There wouldn’t be that much food here except for the fact that I take the possibility of collapse seriously. OLD MAN BAU might have a heart attack or a stroke any day.Food in the pantry and in the barn is just as good as money in the bank so there is no downside to keeping a lot of non perishable food on hand if you have plenty of safe dry storage.

          You would die of malnutrition pretty quick if you were to take over a mid western farm with a ten thousand bushels of corn on hand. Except for whatever the farmer has in his personal pantry there is most likely nothing else on his thousand acres that is fit for humans to eat.He might have a neighbor with lots of cows – but the closest cow might be fifty or a hundred miles away.

          I take it you WANT to see things fall apart.

          It is good to be careful about what you wish for because you might get it.

          • Caelan MacIntyre says:

            It’s about relocalization. Uncommon sense. Peak Oil 101. Growing food more locally, using somewhat different ways to do agriculture, such as food forest/vertical gardens, perennials, no-till and other forms of holistic practices which include animals, humanure, and that also help regenerate the soil. You can’t really do much of this, at least easily or effectively, in urban contexts.

            Apparently ‘we’ have been, among too many other things, doing agriculture ‘wrong’ for 7000 years, despite all those with ages of experience and university education running around. Funny that. Time to start learning to do it better, and fast.

            Permaculture’s a good bet.

      • Fred Magyar says:

        First of all I see plenty of roofs and walls in that photo. But the real question is why do you keep setting up this strawman, which is that proponents of solar suggest that solar is a panacea for everyone everywhere. No one is saying that.

        • You see plenty of roofs in buildings full of people. Solutions intended for rich Americans aren’t that useful.

          Look, I’m working on a project with a couple of local high school boys to build solar powered robots, able to self navigate a maze. We are discussing a gadget to shoot down flies with a laser. One of them built a sensor to take your pulse bouncing sound signals off the jugular. They purchase the parts at the local electronics shop, or order from China direct. And none of this has anything to do with a large scale solution for the teeming millions who can’t even afford toilet paper.

          • Boomer II says:

            And none of this has anything to do with a large scale solution for the teeming millions who can’t even afford toilet paper.

            You keep bringing up this up. But other people have pointed out that there as there are serious disruptions in the world economy, not everyone will survive. You seem to fault solar because it won’t keep everyone in the world alive. But what energy solution will?

            Solar is working for some. It will continue to work for some.

            You seem to be so anti-solar that you can’t acknowledge that it is working in some areas and is expanding in some areas because it is the best solution in those areas.

            Of course, your arguments aren’t going to stop solar from expanding in places where there is no grid to begin with or where people value solar enough to get off the grid.

            • Caelan MacIntyre says:

              Boomer II, like much industrialism, so-called renewable energy depends of course on many other kinds of ‘grids’; the grids of the complex layers of BAU, which involves wage-slavery; taxes; coercion/violence; land-use; issues behind use-of-technology, like why use it, is it needed, and why and how; local community and native issues; democracy and ethical issues; pollution; C02/climate change; resources like oil and other minerals; shipping/distribution; replacement/support; maintenance and disposal, and so on.

              Too many discussions of ‘technology’ seem to presuppose that it comes from nowhere and at the end of its lifespan, disappears into thin air.

              • Boomer II says:

                I support anyone who can get by without any sort of modern or polluting energy sources. Creating an entirely electric-free existence is fine with me. And the beauty of going electric-free is that people can do it now by changing their lifestyles.

                But I am still interested in whatever solar activities there are. For one, it puts a crimp into the traditional fossil fuel political power blocs. Now, I am not so naive as to think that a Silicon Valley power bloc won’t also be self-surviving, but some of their politics will be preferable to me than some of what has been advocated by those on the extreme right.

              • Boomer II says:

                It’s activities like this that become truly disruptive. Someone comes along and sees an opportunity in an underserved market. Then it grows into something that eventually challenges the bigger, more traditional companies.

                That’s one reason tech companies are moving into solar. They can use new technologies, like LED lights, to reach people who have little traditional power.

                As the article points out: Solar electricity “to power a fan, a couple of light bulbs, and a radio for five hours a day [is] a baseline that someone from a rich country would not recognize as access at all,” said a Breakthrough Institute report last year.

          • Fred Magyar says:

            Fernando, I am well aware that most of the world is not the US and I have seen probably more than my share of extreme poverty.

            Actually it is in areas where there is such poverty that a little bit of solar PV is most beneficial. let me give you an example of what I experienced in Brazil with telephones. When I was a kid in Sao Paulo a telefone land line cost equivalent of $3,ooo US cash up front. A business line much more so telephones were only for the elite. In rural areas it was completely out of the question because getting telephones depended on bringing copper wires out over hundreds of miles at exorbitant cost. Then in the late 1980’s and into the 1990 cell phone technology started to become cheap and ubiquitous. Today even the poor in Brazil can afford smart phones with internet access.

            I see small scale solar PV spreading into rural areas of the third world where today there is no electricity at all.

            As for your project it sounds really awesome, congratulations!

      • Ron Short says:

        I googled “energía solar alicante” and it looks like the solar business is booming.

        If you’re in Alicante on the 28th you can get some investment advice here –

        http://www.rankia.com/blog/opiniones/2723649-energia-solar-solucion-para-diversificar-cartera-alicante-28-abril

          • Fred Magyar says:

            I wonder how many people who bet their money on shale in the Baken are going to go broke as well. BTW most new business fail that’s just the nature of cutting edge entrepreneurial ventures. You obviously just want to find every and and bit of bad news about solar that you can. Of course if someone provides you with information that goes against your ingrained beliefs you refuse to accept it. There are plenty of examples out there of success stories too!

            • Boomer II says:

              In the greater scheme of things, it won’t matter what Fernando thinks about solar. Coal, gas, and oil represent old money and the new tech money isn’t interested in propping up those industries.

              • Fred Magyar says:

                Coal, gas, and oil represent old money and the new tech money isn’t interested in propping up those industries.

                It also represents the foundation of a dying culture. I have know idea if alternatives such as wind or solar will be the basis of a new viable civilization but I’m willing to bet a considerable sum that oil as we use it today is not going to continue to support any future civilization either. So new tech money isn’t going to continue to throw good money after bad.

              • wimbi says:

                From resilience site today
                “The race for renewable energy has passed a turning point. The world is now adding more capacity for renewable power each year than coal, natural gas, and oil combined. And there’s no going back. The shift occurred in 2013, when the world added 143 gigawatts of renewable electricity capacity, compared with 141 gigawatts in new plants that burn fossil fuels, according to an analysis presented at the Bloomberg New Energy Finance annual summit in New York. (4/154)”

                Has anybody here noticed that? Does it tell anything relevant to the future of ff”s?

                People here spend an inordinate amount of effort on comments about micro wiggles in oil price and availability, and pay zip attention to the rates of change of what is gonna make that all totally irrelevant in the immediate future.

                • Fred Magyar says:

                  People here spend an inordinate amount of effort on comments about micro wiggles in oil price and availability, and pay zip attention to the rates of change of what is gonna make that all totally irrelevant in the immediate future.

                  Well, not all of us. I was watching the batteries being charged on the Solar Impulse 2 during it’s flight from Chongqing to Nanjing yesterday. Imagine your tank being filled while you are flying. Change is definitely in the air >;-)

                  BTW, Happy Earth day! Google’s theme for the day asks: Which animal are you? I’m going to say, Hopefully not an extinct one…

                  • wimbi says:

                    Fred. That one not aimed at you, obviously.

                    Solar Impulse impressive indeed. I used to fly light aircraft and remember getting my head whacked thru the canopy by thermals, so how does Impulse survive with all that flimsy wing? Slow and thoughtful, I suppose.

                    Had a wonderful birthday with a small bunch of high achieving very young entrepreneurs . Told them my immediate task to dump all my experiences, libraries and pocket book on them asap, and wanted the best ideas on how to do it.

                    The responses were astounding, and too clever to be believed- almost.

                    Certainly very far from the nasty and infinitely greedy stereotype so often portrayed here as today’s everyman.

                  • Fred Magyar says:

                    Great to hear Wimbi! Wish you and your young friends the best. I have a son probably about their age and a bunch of nieces and nephews of similar age so I get to hang out with some smart young people myself. These kids know that the oil age is over and that we are in uncharted territory.

  15. shallow sand says:

    Last post I made some comments about my opinion that the Bakken and EFS lifting expenses would increase per bbl as production from the wells declines.

    One of the expenses is hauling produced water. Given companies are already spending a ton per well, why does it appear they are not drilling a vertical salt water disposal well near each tank battery and disposing of produced water on the lease?

    I don’t know anything about how deep the good SWD zones are in Bakken or EFS. However, I assume a SWD could be drilled and completed on every unit for a few hundred grand. Would beat truck hauling water over time. Maybe they will go back in and do that later??

    • Shallow, that’s an excellent question. When I was engaged in this type of problem we usually found it was better to use multiwell pads, connect them to a two header manifold (test and production). If the wells justified it we put a test setup at the pad. Otherwise we used flow lines to interconnect a bunch of wells (the optimum number is around 30), and centralize testing and gas separation and dehydration.

      This solution seems to work pretty good for large fields with closely spaced wells which will eventually become borderline producers. The whole development is planned to give these wells a smooth ride into a 20 to 30 year life. Do you want me to sketch what I found was a pretty decent alternative?

      • shallow sand says:

        Fernando, any technical information you wish to share is appreciated.

        It appears to me that the companies that have a large acreage block do try to locate the well pads close together. Therefore I can see how SWD could be made efficient.

        Of course I know nothing about the depth of SWD wells in these plays, nor the pressure required, nor the rate.

        However, I have been thinking about the long term prospects for these wells. It seems to me that if they can hang in these for a long time at 25-60 barrels of oil per day and lifting can be kept low, they may work with higher oil prices.

        We have a formation at about 2700 feet and another at about 3900 feet that seem to follow what these wells are like. Those wells have a high IP, they decline fast, but then level off at 1/2 to 2 bbl per day, with minimal water production. The wells also produce enough gas to run the pumping units on gas motors.

        These wells are profitable, despite the low production volumes, because there is practically no OPEX. Most are only pumped a few days per month, and at a low number of strokes per minute, so there is never much in the way of down hole failure.

        We have some shallower wells that are not in a flood that are similar. We use electric because gas produced is minimal. Again, we use timers on these wells, they don’t make much fluid, but about straight oil. These wells of ours have very low costs, if that was all we had, I would not be too worried about oil prices.
        The best one we have makes almost 3 barrels of oil and one barrel of water per day. It pumps about 8 hours on, 16 off. Use about $60 of electricity per month and about one drum of chemical per year.

        If these Bakken and EFS wells end up like what I have described, they could be very profitable in the long run. I know Mike is skeptical and I do defer to him, 20,000′ well bores scare me. I do think there is much that is unknown.

        I just hope these companies try to develop these reserves in a more measured way, rather than another drilling frenzy if we get a price rebound. For some reason, I doubt they will.

  16. Caelan MacIntyre says:

    How to be Trapped: An Interview with David Korowicz

    “…if fossil fuel prices rose significantly, the villagers would be forced to cut agricultural inputs, production would fall significantly and the burden of debt-to-income would rise. If on top of this, changes in climate started affecting their ‘perfect’ apple trees, they would have nothing to fall back upon, as the inefficient but resilient biodiversity of seed and soil and motley apple trees would have been lost.

    If growth was a smooth and positive progression, the reversal could be a relatively abrupt multi-system failure that would leave people much worse off than before the project started. Further, once one embarked upon such a path it would become increasingly difficult to step off. What it gave me was a clear demonstration of how to be trapped. But if this was the narrative for a relatively simple society, what did it mean for the far more complex society that I came from, how trapped were we? Increasing connectivity and global integration has by-and-large been very good for human welfare and risk reduction, but it looked like the balance of risk was turning…

    It also became clear that if one wanted to understand the evolution, stability and especially the collapse of complex societies then academic economics had very limited explanatory power and critically, was structurally blind to such basic transformations as complexity growth and catastrophic transitions.

    Furthermore to undertake such risk management decisions one needs to understand or intuit the nature of contemporary dependency – what could be lost and how fast it could all happen especially if things go awry – and very few members of the public, politicians and policymakers really do. Or to put it more directly, if you want to do radical surgery on the monetary system, what’s your food security planning like? This is particularly acute for anybody trying to do deal with large-scale systemic risk – whatever is done, there are far greater downside risks than upside ones… There’s a vast difference between promoting a solution from the side-lines and risk managing an intrinsically uncertain and dangerous process where one might be held accountable for a catastrophe. Even if we were to ‘solve’ our financial and monetary problems, we’d walk straight into oil and food crises which are systemically de-stabilizing.

    Our predicament and the tragedy of attempting change is: given time and resource constraints and the reality that we depend upon a de-localized networked system without central control, how do we change the system while ensuring we do not collapse its essential functions. Decreasing global resilience and the increasing complexity, interdependence, tight coupling and the speed of the processes we depend upon make this a fundamentally uncertain, dauntingly complex and very dangerous set of challenges. So we dig in because we can’t dig out. We grasp for growth, we buy time and kick the can, and with each step become more vulnerable.

    So the idea that growth is a good or bad idea is a bit beside the point- we’re not going to get it for much longer, nor is there much we can do about it…

    Steady-state from where we are now is, according to many ecological indicators, way in overshoot. So if there were to be something like a sustainable steady-state economy it would be in terms of resource consumption far below where we are now. Far, far below. And how do we get there?” ~ David Korowicz

    • Sam Taylor says:

      I just finished reading Ronald Wright’s excellent book A Short History of Progress. Similar in vein to Tainters Collapse book, but with a wider scope, and slightly more forward looking. He details many of the same problems, but labels them “progress traps”. For example, a small city built on fertile ground near a river is a sensible idea. But as the city grows, and paves over more farmland, farmers are displaced to less productive land on the outskirts, and gradually population outstrips the ability to produce food.

      You can find the outline of the book in a series of 15 minute long lectures on youtube, but it’s really worth a read.

  17. Ronald Walter says:

    Must be easy to buy a gallon of gas in Uncertain, Texas. Plenty of Oil in Texas, no shortage at this time. Might as well count it and release all of the data accumulated through the use of numbers.

    The numbers are usually more correct than abysmally incorrect.

    If all the numbers are grossly wrong, nobody will use them. Won’t do any good, it’ll all be wrong.

    I doubt that the RRC is out to fool people, they just more or less tell it like it is, the time frame doesn’t matter, the numbers do.

    This year, the gas consumption is going to be reduced substantially. Am going to try to have some kind of solar fueled electricity generation within the next two years.

    Seems to be taking hold purdy darn fast. Must produce enough energy worth having at a much lower cost, reduces oil consumption, which is a must. Solar has to have more advantages than disadvantages.

    Maybe the manufacturing is fossil fuel based, but solar power is a definite plus. The waiting is over, the technology is there, and I have to see the sun. If I can’t see the sun during the summer months, too much cloud cover, I move. Am not going to live there, the sun doesn’t shine enough.

    Besides, I hate fuel oil to fire a furnace, coal is better.

    With oil, less is more.

  18. Jeffrey J. Brown says:

    Two different views on Greece leaving the Euro, following a default:

    FT: Greek default necessary but Grexit is not
    Defaulting on the IMF and ECB is the only route to short-term relief but nobody has ever done it

    http://www.ft.com/intl/cms/s/0/88ba8e50-e517-11e4-a02d-00144feab7de.html

    Telegraph: A Greek default must go the whole way and leave the euro
    Greece can only become competitive if it leaves the euro and lets its currency depreciate sharply, says Roger Bootle

    http://www.telegraph.co.uk/finance/comment/11548349/A-Greek-default-must-go-the-whole-way-and-leave-the-euro.html

    • Sam Taylor says:

      One of two things has to happen in Europe in the long run. Either the Euro will at some point disintegrate and every member state will go back to having its own free floating currency, or the countries will join into a United States of Europe, with one central government and central bank, so that wealth can be internally redistributed more easily (similar to how California generates a surplus which goes to help Louisiana). Currently the Euro is completely unworkable, and will only lead to more currency crises long term.

      Given the cultural and political divisions within Europe, I don’t know how likely a USE really is.

      • Dennis Coyne says:

        Hi Sam,

        I agree, but I am not a European. I also think true European Union (a “Unites States of Europe”) is not very likely so just going back to every country having its own currency and free floating exchange rates is the most likely outcome. I doubt that many nations will be wiling to give up their sovereignty. It is pretty surprising that European nations were willing to give up control of their monetary and fiscal policy, so I could be wrong.

    • Watcher says:

      300+ billion owed. No longer is any of it private. The debt is to the EU, ECB and IMF.

      There is no bankruptcy court for countries. A “default” doesn’t really mean anything, other than interest is still accruing but not being paid. The debt holders do not have to agree to the default. They can confiscate Greek assets any time those assets leave the country.

      Note that could be private Greek assets too, telling the owner to go to his government for recompense.

      The ECB would cut off the Greek banks from a Euro supply. Greece would have to create its own currency for day to day operations. This may or may not be a disaster. Domestically, not too big a deal. If they are running a “primary surplus”, they will pay salaries and pensions to govt employees.

      But it all comes down, as always, to buying oil. Someone (Russia) will have to provide oil in return for Greek currency that likely will not exchange favorably. Other compensation would be specified as the correct price, and will be quite precedent setting.

      • Caelan MacIntyre says:

        It’s the governments’ debts, not the peoples’ haha.

        ^^ Put that on a t-shirt this summer. ^^

        “People are getting tired of covering elite’s bad bets.” ~ cytochrome C

    • The Greek government shouldn’t be allowed any slack. The best solution is to let them default and start printing drachmas to pay for their populist measures. There should also be plans to drive them out of the European Union. Europe can’t afford to allow the Marxist populist disease to spread.

      • Watcher says:

        OTOH this is all about numbers created with zero effort. How does that work if there are images of Greeks starving in the street because the debt (those numbers on a screen created at the ECB) wasn’t expunged?

        And of course, if they declare default with nothing horrible happening to life, then the Spanish anti EU party will send videographers to Athens and Greek beaches showing happy Greeks splashing in the sea, and win their election in September, and default on their debt too.

        Does Socialism vs Capitalism really matter that much when the measured parameter is whimsically created on a computer screen? This isn’t the world we grew up in.

        • cytochrome C says:

          Yea, the Greece of the 50’s and 60’s.
          Good food, great beaches, and except for the brutal rightwing military regime in the 60’s, a mellow, cool place to hang.

      • cytochrome C says:

        Varoufakis is someone not to taken lightly.
        I’ve been following his career for years, and he has a understanding of economics beyond the Neoclassical model that has parasitized out current culture.
        Unfortunately, the people he is negotiating with have not advanced.

        • Watcher says:

          The people he is negotiating with loaned their countries’ money to the Greeks. To expunge it is to resign immediately, rather than wait for the election that would remove them. And beyond that, if they were to expunge it, Spain and Italy would demand the same.

          That has nothing to do with ideology. That’s just math.

          • SW says:

            The Greeks invented democracy and it is the Greek people who will decide what form of government they will have. It no one else’s god damn business.

          • cytochrome C says:

            They made some bad bets.
            They are not going to get paid, unless other governments cover those bad bets.
            The Greeks can’t pay them back.
            People are getting tired of covering elite’s bad bets.

            • Caelan MacIntyre says:

              “However, no one can debate that Greece’s private lenders in general, and German and French banks in particular, benefited from these bailouts. According to the Jubilee Debt Campaign, 92% of €240 billion Greece has received since the May 2010 bailout went to Greek and European financial institutions…

              Varoufakis appears right when he claimed that it was the banks that got bailed out, not Greece and that Greece got deformed, not reformed!” ~ Naked Capitalism

      • TechGuy says:

        “e Greek government shouldn’t be allowed any slack. The best solution is to let them default and start printing drachmas to pay for their populist measures. ”

        This is what the EU doesn’t want. The dirty secret is that if Greeks defaults the EU banking system also defaults as the EU banks (mostly Germany and France) loaned more than $200 Billion to Greece. The whole Trokia system is a scam to back-door bailout the EU banks. The money the EU gov’ts loan to Greece is to keep the EU banks solvent. Now if Greece defaults ether the EU gov’ts have to directly bailout their banks, but that will undermine the EURO and piss off all of the EU voters too.

        In the case of Greek fraud, it takes two to tangle. The very man that runs the ECB was the same person that as a Goldman sacks exec helped greece cook its books.

    • Jeffrey J. Brown says:

      An article for Watcher:

      Greece bailout: Europe turns up pressure as cash runs out
      http://www.independent.co.uk/news/business/news/greece-bailout-europe-turns-up-pressure-as-cash-runs-out-10193996.html

      More pressure has been heaped upon Athens, as reports suggested the European Central Bank is looking at placing greater restrictions on the use of its emergency lending facilities by Greece’s domestic banks.

      Greek banks have tapped around €74bn (£53bn) in emergency liquidity assistance from the ECB to replace the deposits that nervous domestic savers have pulled out of the financial system in recent months. Without that lifeline, the country’s banks would rapidly collapse.

      Greek financial stocks duly sold off heavily after the report emerged that the ECB is considering increasing the interest rate – or “haircut” – on their ELA borrowing, with the banking index shedding 5.5 per cent. . . .

      There have been signs that Greece is preparing for the possibility of life outside the single currency. Earlier this month its Prime Minister, Alexis Tsipras, made a trip to Moscow to meet Vladimir Putin. He followed that up with talks with Alexey Miller, the head of the Russian oil giant Gazprom, over investment in Greece.

  19. Dean says:

    Jodi US crude data for Feb2015 are out:
    Dec2014 9,320
    Jan2015 9,185
    Feb2015 9,289

    http://www.jodidb.org/TableViewer/tableView.aspx?ReportId=2411

    • Dean says:

      Interestingly the difference between US crude production between Feb2015 and Jan2015 (=104 kb/d) is exactly equal to the difference I have between Feb2015 and Jan2015 for Texas “corrected” crude data 🙂 (using average factors)

    • AlexS says:

      The numbers for December and January are the same as in the EIA monthly statistics.
      The February number is close to the average of preliminary weekly numbers by the EIA:

      Feb 06, 2015 – 9226
      Feb 13, 2015 – 9280
      Feb 20, 2015 – 9285
      Feb 27, 2015 -9324
      —————————
      Average – 9 279

      If weekly preliminary numbers for March are correct, the monthly average for March should be close to 9400

  20. AlexS says:

    I still cannot understand how the EIA calculates oil production numbers for key tight oil plays in its Drilling Productivity Report (DPR).

    I have compared the most recent DPR data with the latest data for Bakken from the North Dakota industrial commission (NDIC) for the period starting in January 2014. DPR numbers for Bakken have been higher than the NDIC numbers by between 90 and 98 thousand barrels per day from January 2014 to September 2014 and about the same in 2013 (not in the table below). I have not checked the most recent numbers for Montana Bakken (which includes Elm Coulee and Elm Coulee North-East fields), but in 2013 its monthly averages were between 43 and 50 kbd (the annual average was 47 kbd). That means that the numbers in the Drilling Productivity Report include some production from conventional fields (about 40-50 kbd). The EIA says that its DPR numbers are actually not for the Bakken, or Eagle Ford, but for “the Bakken region”, “Eagle Ford region”, etc. As I assume, this implicitly confirms that the DPR numbers include not just LTO, but also some conventional volumes.

    It was O.K. as long as the differential between the EIA DPR and NDIC numbers remained in the same range, but it started to increase from October 2014 and reached 202 kbd in February 2015. Given that the NDIC data seems very reliable, and that there was no increase in the Montana part of the Bakken LTO production, I come to conclusion that DPR numbers for the Bakken were significantly overstated from October 2014 to February 2015. According to the DPR, the EIA now expects Bakken oil production to start declining in May. But as we know, ND Bakken output declined in January and February and I think it actually continued to decline in March and April.

    I have also found same inconsistencies when I compared the most recent DPR data with the latest EIA oil production statistics for North Dakota and Montana (http://www.eia.gov/dnav/pet/pet_crd_crpdn_adc_mbblpd_m.htm), which include both conventional oil and Bakken LTO for the two states. From January to September 2014, the EIA monthly combined numbers for ND and MT were about 47-57 kbd higher than the DPR numbers for the Bakken. I guess these barrels represent conventional production not included in the DPR statistics. As you can see, this differential started to decline in October 2014. And in February, the DPR data for the Bakken alone is higher than the EIA monthly combined numbers for North Dakota and Montana, which is clearly nonsense.

    This again confirms that the DPR Bakken numbers for the past few months look increasingly unreliable. I can only guess how far from reality are the numbers for other shale plays.

    • AlexS says:

      The table should be named “Crude and condensate production in the Bakken area – data and estimates from 3 different sources (kb/d)”

    • Alex, I have been following this Drilling Productivity Report predilection ever since the first DPR was published a year or so ago. It is very clear what they are doing. They do use the NDIC and Montana data, with some adjustment, for all data up to about six months back from the current date. But for all months following that point in time, September 2014 in your example, they just make a wild ass guess.

      So it is no mystery what they are doing. The mystery is why are they doing this? They do have the correct data, up through January anyway, but why they do not use this data is a complete mystery to me. And when they are off, as they are seriously off in this case, beginning in January, they amply their error by projecting their projection estimates two months into the future.

      However they always correct their data. Next month they will have the correct data through October. And the next month through November and so on. This means they will have some very serious revisions to make when they get to January and February. But they will just quietly change their numbers without telling you they are revisions.

      • AlexS says:

        I totally agree with you, Ron

        It seems that the DPR is prepared by a separate team within the EIA

        Interestingly, the latest DPR numbers (projections) are widely cited in mass-media (and sometimes by oil industry experts) as a reliable source of information.

      • Glen Calvin McMillian says:

        They are doing it because they are mindless bureaucrats doing what they are told to do.This is not to say the individuals involved are stupid but rather than they are obliged to check their brains like a pocket knife when you enter a courthouse these days. Get ‘ em back at quitting time.

        If you ever have time read Edward Abbeys book titled ” A Fools Progress ” or something close. There is a detailed description of his experiences as a social worker in it, which is Three Stooges funny . Too bad it is dead on it terms of the way such systems work.

        Suffice it to say that everything that might have worked was forbidden and everything that could not possibly work was mandatory.

  21. SAWDUST says:

    The algorithms are buying oil. Seen an article on Zero Hedge that said oil had just drop back below 55.00 It did drop but only to 56.40 and algo’s step in and bought.

    If you look to the left of the middle horizontal line i drew there is a small amount of technical resistance that once price clears 66.00-67.00 is a give me.

    • BC says:

      Sawdust, the $57-$58 area is the EW projection for an a-b-c, so a pullback to $48-$50 might be required before a further rally to $64-$67.

      But that assumes that the current move is not just an oversold, short-covering rally before a retest of the low or further monthly cyclical support just below $40.

      Also, I have a potential price exhaustion and reversal pattern resolving in the next couple of days with support/stop at ~$52/$50, i.e., at the typical EW retracement level for the move to date.

      The decelerating growth for the US, Japanese, and Chinese economies (30-35% of world GDP) does not yet support a larger rally for oil hereafter. But who cares about fundamentals, eh? 🙂

      • SAWDUST says:

        BC,

        I think we will get some consolidation for a day or two or so of the breakout above 54.50 Not sure we will make it back below 55.00 before a move to the mid 60’s I think it will mainly be a sideways move. before we resume higher.

        We got some interesting dollar movement. AUD, EUR both gaped higher to open the week (china’s cut RRR) both printed a Bearish Engulfing candlesticks. I don’t particularly like where the Euro is because it’s in the middle of a consolidation pattern. All dollar based pairs showed signs that the dollar bull rally is not over yet. Dollar has at least one more run to the top side.

        Check out the head and shoulders thats lying on top of NZD/JPY . Left shoulder and head are textbook perfect. It takes a special set of circumstances to make that pair head south. Carry trade unwind perhaps in the near future? Maybe Greek exit is being priced in here? I took a short position over in NZD/USD cause it will lead the way and make it’s move first and for shits and giggles. Normally i try to stay away from shorting these pairs as it is expensive to roll. $200 a day to roll for me.

        I don’t use EW that often some people swear by it. I’ve had some success using it mainly on longer timeline charts.

  22. Once again, the actual numbers of global production remain a total mystery

    • clueless says:

      A “total mystery plus or minus 2%.” If you knew the “exact” number, what would you do differently? What would the world do differently? I would do nothing differently. It is like listening to music and asking what the decibel level is – 100? 98? 102? If you knew exactly, what would that change?

  23. dmg555 says:

    WASHINGTON — 4/20/15 USA Today:

    The aircraft carrier USS Theodore Roosevelt has moved off the coast of Yemen to prepare to intercept potential shipments of Iranian weapons to the rebels fighting the U.S.-backed government of Yemen, Pentagon officials said Monday.

    Col. Steve Warren, a Pentagon spokesman, said the carrier and ships supporting her had been in the Persian Gulf. They moved to the waters near Yemen because of increased instability there, he said.

    The Roosevelt is also tracking a convoy of Iranian ships headed to the Gulf of Aden, said two Defense officials speaking on condition of anonymity because they were not authorized to speak publicly about the Iranian vessels. The Iranians have been supporting Houthi rebels in Yemen.

    • Interesting. So the USA is about to botch things again. The houthis are Shiites, this puts them at odds with the Saudis, who are the base population for Sunni radicals. Meanwhile eastern Yemen is controlled by Al Qaeda militants, and the USA is going to intercede for a small Sunni rump regime which is likely to look the other way if the Sunni radicals want to blow up a USA ship. The only thing we are missing is Eritrean mercenaries and Europeans trying to distribute medicines.

  24. toolpush says:

    Platts/Bentek, predictions March Bakken/Eagle Ford oil production, for what it is worth.

    http://www.noodls.com/viewNoodl/27865454/platts/shale-oil-production-in-bakken-eagle-ford-rose-1-in-march
    Shale Oil Production in Bakken, Eagle Ford Rose 1% in March: Platts’ Bentek Energy

    Oil production from key shale formations in North Dakota and Texas increased by 17,000 barrels per day (b/d), or 1%, in March versus February, according to Bentek Energy, an analytics and forecasting unit of Platts, a leading global provider of energy, petrochemicals, metals and agriculture information.

    • I wonder what happened elsewhere? I would expect production south of the Mexican border to be down say 200,000 BOPD.

      • toolpush says:

        Fernando,

        The international market maybe slower to react than the US market, due longer contracts and more involved projects, but the international rigs are definitely slowing down as well. I don’t believe too many oil companies are drilling many long term wells these days. A lot of the work has been on old fields doing re-drills, recompletions and other infill techniques. With out these add on wells being drilled international oil production will surely quickly follow. With the rider that the international rigs will also be slower to make a come back.

        As for Mexico, if KMZ goes and stay in the downward spiral that Cantrell did, then Mexico will be in one hell of a bind. Deep water development, the great white hope, will arrive way too to late.

        • coffeeguyzz says:

          Push, thanks for the link.
          The numbers surprise me, but Bentek has an outstanding reputation for thoroughness as well as accuracy.
          Guess we’ll see.

  25. Glen Calvin McMillian says:

    ALGERIA might be the place for an ambitious young guy in the oil and gas industry.

    http://oilprice.com/Energy/Crude-Oil/What-Is-Preventing-An-Algerian-Energy-Boom.html

  26. shallow sand says:

    While we are on TX production. What has the oil price crash done with regard to non-horizontal primary, secondary and tertiary recovery projects?

    I noticed LGCY, who have a decent sized amount of production in the Permian Basin, cut their distribution, something they did not have to do in 2008-2009. Is this a sign things are worse in conventional Permian than in 2008-2009 crash, or is this just a company specific issue?

    When looked at whiting PV10, noticed North Ward Estes contributed almost 20% of company wide PV10 even though less than 10% of current production. Did they decide not to sell that? 9,500 bbl per day at 2600′-3000′ with more room to develop would seem like something they would want to hold onto long term.

    Maybe if it is still on the market we can put our $$ together and have MBP operate it! LOL! I’m sure you need another headache MBP!!

    • MBP says:

      Oh NWE. Funny field, failed CO2 flood though. Actually have seen a lot of the data on the NWE b/c it was a failed CO2 flood and it gave some good lessons learned to people who work CO2 floods. I did see on Google when I was looking to see if Whiting still had it that there was a Whiting presentation on potential to CO2 flood the field, so they clearly have ignored what happened in the past.

      Even before the crash, most attention in the Permian was on unconventional production. So if you had $10 million, instead of putting it in to a few infill wells to slow decline in a conventional field it would go into a single horizontal that would increase production. I suppose it was all about shareholder appeasement. I will say that conventional wells are in a much better place currently than unconventional wells. We simply reinject out water, no need to haul it to SWD wells. But price is still low, so there is not incentive to do a lot of work outside of workovers. This price does hurt stripper wells, and I’m sure a lot of those will get shut-in or plugged. The once advantage now is we can actually get attention from some of the frac companies. During the boom if I came to them with a 20-50k job for a conventional well they wouldn’t give me a call back, but now they are begging for business.

      • shallow sand says:

        Thanks for the info MBP. The only thing I know about NWE is what I read put out by Whiting.

        Given that it makes up almost 20% of Whitings PV10, what does that say to you about the value of Whiting’s unconventional reserves?

        So it’s just at water flood, no CO2?

        I think I remember reading an analyst stating that Whiting could get $300 million for NWE, during the time it was looking to sell all or a part of its assets. Given that was 18% of Pv10, all categories, I thought was noteworthy. Proptionally that would value all company reserves under $2 billion, which would be 1/3 of long term debt.

        It must be faulty info, they did a secondary share issuance and issued more debt on those reserves recently.

        • MBP says:

          Clearly the reserves of the conventional field hold some standing, but the model of most operators as of late has been to add production via unconventional wells for shareholder appeasement. Short term growth of production has been more important than long term reserves grow, at least to the investors. In reading further it looks like they might have started another CO2 flood in 2007, which is crazy to me. I have read the reports from the first CO2 flood that was done back in the 90’s and they had CO2 breakthrough in less than a month in a lot of wells (I think it was a Texaco field at the time but I don’t remember). No way is that economic. Unless they managed to change things drastically I don’t see how it is currently an economic flood for Whiting.

  27. toolpush says:

    The first shale player to report, I believe. Also picking up a bit cash as well.

    Halcon Resources Announces Preliminary First Quarter 2015 Production Results and Provides Additional Updates – See more at: http://www.noodls.com/viewNoodl/27873764/halc243n-resources-corporation/halcon-resources-announces-preliminary-first-quarter-2015-pr#sthash.NFSj0DOz.dpuf

    Halcon Resources Announces Offering of Senior Secured Notes< – See more at: http://www.noodls.com/viewNoodl/27873770/halc243n-resources-corporation/halcon-resources-announces-offering-of-senior-secured-notes#sthash.fbol06gO.dpuf

    • Watcher says:

      First item mentioned is “intent” to fix their loan problem. You would run away from any other industry’s company issuing this quarterly.

  28. dmg555 says:

    Art Berman’s new article “Saudi Arabia’s Oil-Price War Is With Stupid Money”, posted at The Petroleum Truth Report on April 19, 2015, fails to take into account the Saudi government’s own price requirements for a balanced budget. Unless I am wrong, Saudi Arabia’s breakeven budgetary price per barrel is close to $100, so by Berman’s logic, the Saudi’s too are spending money they don’t, in the long run, have. The Saudi’s only temporary ability to withstand a low oil price, is based on their ability to fund the difference between the current price and their break even budgetary price by drawing upon their large savings of US dollars.

    • Watcher says:

      Fiscal breakeven is a meaningless concept.

      If you don’t have Saudi Aramco revenue coming in to pay for government spending, you spend less.

      Or you borrow (from other people or from, gasp, your own central bank).

      Or you tap a few billion a year from your 750 Billion dollar sovereign wealth fund that would, with modest annual returns (1% on 750B is 7.5 billion), last rather a long time.

    • Caelan MacIntyre says:

      The classic rock-and-a-hard-place.

    • clueless says:

      dmg555 – “their large savings of US dollars.” They got them fair and square, just like I have my US$ and probably you also have your US$. Remember, the $ is an IOU. They send us oil and we send them a printed piece of paper that says IOU. Japan sends us cars, and we send them a piece of paper that says IOU. China sends us ship loads of goods, and we send them a piece of paper that says IOU. Sell me your house and I will give you a piece of paper that says IOU. Would your wife be happy with that??

      • Fred Magyar says:

        Sell me your house and I will give you a piece of paper that says IOU. Would your wife be happy with that??

        Well, she might exchange that paper IOU for a nice diamond and gold necklace with matching bracelet and earrings, leaving the jeweler with the IOU. Of course sooner or later someone is going to get stuck with a worthless piece of paper.

  29. BC says:

    @Ron: “That is the biggest crock of shit I have ever come across in my entire life. Period. Bar none!”

    😀 I thought that might be “stimulating” to you, Ron. 😀

  30. The Wet One says:

    I’m going to post this here, because, eh, people here might actually read it, unlike other places I might post it:

    http://www.vox.com/2014/3/28/5550604/what-is-mass-extinction

    Highlights of the article:

    “Ezra Klein: I want to ask the same question here from 2 different directions. First direction is, I think, in some ways the sort of selfish human direction. People sometimes ask “Who cares?” Who cares if there are fewer kinds of snails or fewer kinds of bats? What are we getting as a race out of having all these different kinds of animals in the tropics?

    Elizabeth Kolbert: I get asked that question all the time. I sort of have two answers for it. One is, we’re talking about life on this planet. It took tens of millions of years to evolve to this point, and it’s unraveling very, very quickly. If you don’t care about that, I’m just not sure what you would care about.

    But if you still don’t care, I would say that at these moments of mass extinction, it seems that the rules of the survival game change. Once very dominant groups, for example, the dinosaurs — the dinosaurs were not doing anything wrong, there was nothing wrong with the dinosaurs — and they were gone, 100 percent of them were gone. We don’t know exactly why, why they were particularly vulnerable, but they’re gone. When you’re changing the rules of the survival game, as we are, then you don’t know where that game is going to end up.”

    This answers the other fellow the other day who basically thought, “Who cares if all the other animals die, as long as we have our cows, pigs, chickens and other domestic animals that have human utility?” The problem with mass extinction events is that there is no guarantee that humans will survive the event. Since we’re the cause of the extinction event, that should give us pause. But it won’t.

    The other takeaway from the article was this:

    “What history shows us is that [sic] you, Ezra Klein, should not see even one species going extinct in the course of your lifetime.”

    The noteworthy thing about this is that I’ve lost count of how many species have gone extinct in my life. I heard of two more not yet confirmed extinctions just last week (a species of dolphin of which there are just 5 members left so essentially extinct and the white rhino, where there’s one male left out of a population of 5 or some such, and that male is old and decrepit, so again essentially extinct).

    I should have never heard of a single extinction event in my entire life.

    It’s that bad.

    But whatever. Life goes on, until it doesn’t. Like as not, a new rich world of various lifeforms will arise from the wasteland left by humans in 10 million or so years just like it did after every other mass extinction. The sun ain’t dying that soon.

    Still, the stupidity of humankind is just staggering isn’t it? Just utterly staggering.

    Ah well. It is what it is. So it goes.

    • TWO, thanks for posting this link. It should be very interesting to a lot of people even though most of us should know this mass extinction, the sixth great mass extinction, is already happening.

      I believe only a very few people fully realize what is really happening to the earth right now. I believe perhaps less than .1 percent of the people on earth fully realize what kind of destruction is actually going on. Oh, I know perhaps 10 percent know some kind of destruction is going on but only one in a thousand have any hint of just how serious it really is. Most people think that a hundred years from now everything will be pretty much as it is today except that technology will give us a lot more things and even a better life.

      • BC says:

        https://hbr.org/2012/01/runaway-capitalism

        http://www.theguardian.com/environment/gallery/2014/feb/27/agbogbloshie-worlds-largest-e-waste-dump-in-pictures

        http://www.theguardian.com/global-development-professionals-network/gallery/2015/apr/01/over-population-over-consumption-in-pictures

        (Un)economic “growth” and runaway human population growth has turned the planet into a global waste dump. We are collectively pi$$ing and sh@tting in our nest and with fewer, if any, places left to migrate when the stench and filth becomes intolerable and we are consuming one another (and the remaining non-human species).

        What is an individual, family, and community to do about the suicidal mass destruction?

        • Boomer II says:

          What is an individual, family, and community to do about the suicidal mass destruction?

          I suppose you try to consume less even if those around you are not.

          And you vote for politicians who will implement no-growth and environmentally friendly policies.

          You do what you can, even if it doesn’t change the world. One way or another the world WILL change anyway. It’s more a matter of what you can do, if anything, to make those changes less damaging and more sustainable.

          • BC says:

            Boomer II, I hear ya, but I also hear Jevons paradox, the rebound effect, the sounds of a majority of 7 billion human apes enjoying f$&king, and the groans and shrieks of the lust for human ape flesh of the imminent zombie apocalypse.

            After all, in the beginning AND the end, each of us REALLY IS stardust, food for worms and bacteria (our ancestors, biochemical digestive regulators, and beneficiaries and recyclers of our reproduction and waste), and therefore fertilizer for photosynthesizing lifeforms and successive higher-order (???), higher-entropy, higher-BS human ape life.

            Cremation and sprinkling our stardust on the Good Earth only emphasizes the fact a little sooner than otherwise, which is only acquiescing to the organic and thermodynamic efficiency of our “true purpose” WRT the Earth’s ecosystem’s needs to sustain its sustainable stasis condition.

            So, within the circle of life, so to speak, “no-thing” is happening, i.e., in Zen terms.

            Then again, perhaps I need a workout and a couple beers as a reward to clear my head. 🙂

          • clifman says:

            “I suppose you try to consume less even if those around you are not.

            And you vote for politicians who will implement no-growth”

            Concur with #1, but where the f does one find the latter for whom to vote? Certainly not in this ‘growth-at-all-costs’ culture.

            • Boomer II says:

              Concur with #1, but where the f does one find the latter for whom to vote? Certainly not in this ‘growth-at-all-costs’ culture.

              True, but I will still vote and choose the lessor of two evils if that is all I have.

              Many Democrats on the national scene are moderates at best, but I think some of the right-wing Republicans say such outrageous things I am surprised anyone takes them seriously.

              And it matters who we have as president because of the Supreme Court nominations.

              For the most part, I think people have more control at the local level and you can find people to support there. I live in a very liberal, environmentally conscious community. And while national politics may go to hell, our local discussions are thoughtful and involve lots of local participation. We discuss growth, the environment, energy policy, and so on. We can create our own living environment even if we don’t have influence at the national level.

      • clueless says:

        As you know, I am not in the less than .1%.

    • Caelan MacIntyre says:

      My ‘Tribe Of Pangaea- First Member’ moniker on The Oil Drum was just about this.
      Pangaea was aroundabout the time of the Permian–Triassic extinction event.

      Essentially, we are all members of the Tribe Of Pangaea in the global face of our current predicaments and the extinctions. Can we ‘divine‘ the impending bottleneck? If so, it might mean governments and borders coming down and the world becoming ‘one’ again.

      One manifestation of this ideal of refusing geopolitical borders in favour of older or no borders can be seen in Hogan’s repeated references to the idea of Pangaea, the theorized ‘original’ landmass that eventually broke apart into the continents… Through their reconnection with Native understandings of space and their successful creation of an effective coalition, Hogan’s characters claim citizenship as Native subjects who have a different but valid knowledge of the world and can forge the political power to help shape that world.” ~ Dreaming of Pangaea: Decolonizing Strategies in Linda Hogan’s Solar Storms

      • BC says:

        Caelan, assuming I live another 20-30 years (???), I will not be surprised to see a doubling down by the rentier Power Elite and their bankster oligarchs and technocratic elites on hierarchy and centralization of resources, production, upward flows to the top 0.001-1%, allocation, distribution, and political power that succeeds for the top 0.001-1%, leaving the rest of us to adapt (?) to economic, financial, social, and political disintegration, decentralization, racial/ethnic/religious tribalism, communitarianism, Bushido-like monasticism/asceticism, “voluntary austerity”, and a kind of virtual, Techno-Progressive, if you will, mystical, Spinozan-like Naturalism, Ecosophy, Deep Ecology, etc.

        Yes, let’s do this. 🙂

        • Boomer II says:

          I will not be surprised to see a doubling down by the rentier Power Elite and their bankster oligarchs and technocratic elites on hierarchy and centralization of resources, production, upward flows to the top 0.001-1%, allocation, distribution, and political power that succeeds for the top 0.001-1%, leaving the rest of us to adapt (?) to economic, financial, social, and political disintegration, decentralization, racial/ethnic/religious tribalism, communitarianism, Bushido-like monasticism/asceticism, “voluntary austerity”, and a kind of virtual, Techno-Progressive, if you will, mystical, Spinozan-like Naturalism, Ecosophy, Deep Ecology, etc.

          It’s already happening. Wealth has been concentrated in very few hands.

          But politically you see the conservative voters handing even more power to the 0.001-1%. Who are the conservative voters going after with their hatred, their economic policies, and their wars? Not the wealthy, but the poor, the elderly, etc. That’s why I don’t see any grassroots revolutions toppling the wealthy anytime soon.

          And in the countries where there are violent clashes, it’s one religious or racial group going after another. Again, the very wealthy have done a pretty good job of convincing lots of people that they aren’t the problem.

          Now, the advantage of this is that these clashes reduce populations and also, if all the wealth is concentrated in a few hands, consumption by the masses goes down. They don’t have the money to buy anything unless someone lends them the money. And if the wealthy decide they don’t want to be lenders anymore, then the system becomes more along the lines of self-sufficiency and barter. People don’t get to buy what they can’t afford.

          It’s not fair, but it may turn out to be environmentally efficient.

          • BC says:

            Yes, Boomer II, you state the obvious, which is highly instructive. Thanks.

            R-evolutions historically virtually NEVER arise from the slaves, serfs, and peasants among the bottom 90%+ but from the next ~5-9% “buffer caste” below the top 0.1-1% who fear loss of their socioeconomic standard of material consumption, well-being, and socioeconomic status. Once the passions, desires, and needs of the bottom 90% can no longer be enslaved, contained, and restrained, the next ~9% fear for their status, lose faith in the values of, and the ability of, the top 0.1-1% to protect their interests and safety, at which point they r-evolve (revolt) against the top 0.1-1% elites.

            The West and near east has been here many times before with the predictable consequences.

            Whom do “Conservatives” fear? Why should they not?

            https://www.youtube.com/watch?v=RAzzv6Ks9nc

            http://en.wikipedia.org/wiki/Young_Thug

            And why would those in the position to do so NOT pit “those who should be feared” against those precariously socioeconomically and ethnically positioned and “with the most to lose” from the myriad threats to the “American Way of Life”?

            But who is ACTUALLY behind the subtle, and not-so-subtle, race baiting, “class warfare”, Islamophobia, exceptionalist-American, “Christian-Zionist”, I_r_el-first mass-media messaging?

            Understand that, and be fully enlightened. 🙂

            Foxy Noise has the formula down to a precise science.

            Whether one has the courage and means to resist or r-evolve, that is the choice of each of us . . ., or not.

        • Caelan MacIntyre says:

          A mishmash of responses sounds about right. What do you think yours and/or those who you know might manifest as?

  31. Watcher says:

    http://finance.yahoo.com/news/wrong-help-iran-not-us-153852209.html

    Harold Hamm edging towards a bailout request.

    And carefully phrasing things to try to turn high API into a virtue.

    Oh, and :

    Producers have idled a thousand rigs in the past four months, due partly to the refinery issue, but largely because of oversupply in the face of the collapse in oil prices, Hamm said. “We have 105,000 people out of work in this industry.”

    “From three primary plays in the U.S., we’ll see production down about 700,000 a barrels day in a year,” he predicted, which should help boost prices.

    • Watcher says:

      See, the thing is he says US refineries are designed for “heavy oil”.

      I sort of thought they were designed for Gulf coast oil, or Nigerian oil, or Saudi Arabian oil, that has a proper API and proper middle distillate content.

      As opposed to the thin liquid he wants to call “oil”, not to mention there may be not much of a market for it.

      • toolpush says:

        Watcher,

        The Gulf coast refineries are designed for Mexican, Vz and Brasilian heavy oil. Saudi went halves in a 600k refinery for their heavy oil as well. They also have had an eye out for the Canadian heavy oil making its way to the gulf coast. The light and supper light is so new, the refineries have not had time to adapt.
        Here are the last two days from RBN, showing how they are trying to get more light shale oil to refineries that can handle it, and how more condensate is making its way onto ships for export.
        I wonder how much “light shale oil” will now be re-classified as condensate to allow export?

        https://rbnenergy.com/what-condition-my-condensate-was-in-growing-exports-seek-new-buyers

        https://rbnenergy.com/my-head-s-in-mississippi-new-pipelines-to-ship-crude-east-across-the-gulf-coast

        • Watcher says:

          There is rather more talk of the variability and solids in shale oil vs conventional and damage it can do to refinery equipment, than a focus on heavy oils. Clearly the refineries on the Gulf Coast would be designed for GOM oil, which isn’t Venezuelan levels of heavy.

          Though the Nigeria mention was probably wrong. Bonny Light has been displaced.

        • Synapsid says:

          Thanks for these links, toolpush. Sandy Fielden and his merry men are a great resource.

  32. Boomer II says:

    Here. This is likely the future of energy politics in the US. Right many politicians are still promoting business as usual when it comes to energy. But there is serious money in Silicon Valley looking at alternatives.

    Apple’s US operations are now 100% powered by renewable energy

    Apple – Environment – Renewable Resources: Since 2012, all our data centers have been powered by 100 percent renewable energy sources.

  33. Ilambiquated says:

    Meanwhile electricity prices are going negative in West Texas.

    http://www.argusmedia.com/News/Article?id=1025896

    • Fred Magyar says:

      Offer a prize to anyone who can come up with ways to put all that excess energy to good use, for crimminy’s sake! Maybe offer it to artists who do things like weld giant metal sculptures or artisans who work with furnaces to melt glass. Start a new renaissance or something!

      • Ilambiquated says:

        Desalination sounds like a plan. Melting scrap metal also seems like a good idea. There’s no rush. Also freezing blocks of ice for air conditioning.

    • toolpush says:

      An interesting quote from the article,

      Pre-CREZ negative pricing resulted from transmission congestion and was generally limited to ERCOT’s west price zone where a majority of the state’s wind farms operate. Factoring in federal tax credits and state renewable energy certificates, wind farms could make money even when power prices were negative.

      Sounds like Tesla, who make their profits out of selling environmental credits, rather than selling cars.

      • Watcher says:

        What profit?

      • Fred Magyar says:

        Yep!

      • Fred Magyar says:

        Tesla makes it’s profits by selling environmental credits? Really? Do you have a link?
        And just curious what you think, assuming you are right, is that more or less ethical than the financial arms of the big four automakers who make their money through charging exorbitant interest rates when they offer 60 to 72 month purchase plans to
        the consumers who can least afford it? We live in a pretty F’d up world, don’t we? Though it will be interesting to see how things shake out.

      • Nick G says:

        But what’s wrong with making money from credits??

        Fossil Fuels are very expensive, due to hidden pollution costs. Credits to windpower just partially correct for this very bad accounting problem.

        Same thing for Tesla. Plus, it’s a startup, so it’s investing it’s cashflow into the business, rather than generating profit. That’s normal and healthy. If only more companies did that. We’d be far better off.

  34. learner2 says:

    http://seekingalpha.com/article/3081856-opec-russia-u-s-shales-a-global-battle-for-oil-market-share#comment-51738736

    If I read this article, seems like an oil cornucopia out there. Saudis, Russians, Iraqis etc all can ramp up production at will, at low cost to boot. The problems it talks about are ever increasing production. What gives?

    • Jeffrey J. Brown says:

      One possible flaw in the Cornucopian argument is that combined net exports of oil from the (2005) Top 33 net exporters, what I call Global Net Exports (GNE*), have been below the 2005 rate for eight, and almost certainly nine, straight years (through 2013/2014), inclusive of net exports from Saudi Arabia, Russia and Iraq.

      As noted up the thread, I estimate that the supply of post-2005 Global CNE (Cumulative Net Exports) have already been depleted by about 30%, through 2014:

      http://peakoilbarrel.com/texas-rrc-february-production/comment-page-1/#comment-512975

      *Total petroleum liquids + other liquids, EIA

  35. learner2 says:

    Sure I agree. But that didn’t prevent the price from plummeting. How can we argue against the premise there ie. Saudi increased production by 700kbd ? If they see any depletion, theyr’e not letting on. I don’t believe in the market share idea, but they certainly seem to be ready for a period of low prices by upping volumes.

    • Jeffrey J. Brown says:

      Re: “If they see any depletion, theyr’e not letting on.”

      Although it’s a controversial position in some quarters, most folks tend to think that depletion begins with the first barrel produced, and the higher the production rate, the higher the rate of depletion.

    • Jeffrey J. Brown says:

      In any case, you have hit upon the two issues that I have repeatedly raised, to-wit, production versus CNE (Cumulative Net Exports) depletion. Up the thread, I posted my chart showing the slight (2%) post-1995 increase in the Six County Case History production, from 1995 to 1999, as they shipped 54% of post-1995 CNE in the four year period from 1996 to 1999 inclusive:

      http://peakoilbarrel.com/texas-rrc-february-production/comment-page-1/#comment-513004

    • Jeffrey J. Brown says:

      Following is a similar normalized chart for Saudi Arabia. Note that since this chart was prepared, the EIA has upwardly revised* their 2005 production number for Saudi Arabia (total petroleum liquids + other liquids), so the EIA shows that 2013 and 2014 Saudi production was only about 2% higher than 2005, i.e., basically flat and within the margin of error, while CNE depletion marches on.

      I estimate that through 2013 Saudi Arabia has already shipped about 40% of their post-2005 CNE. By definition, it’s not whether the remaining supply of post-2005 CNE has declined, it’s only a question of by what percentage.

      *Revised Saudi net exports for 2013 would be 8.7 mbpd, versus 9.5 mbpd in 2005, so 2013 net exports would be down to 92% of the 2005 value. For 2014, Saudi net exports (at least based on current numbers) were probably down about one mbpd from 2005, down to about 8.5 mbpd. Incidentally, to the extent that the Saudis have recently increased production, it may have been primarily to meet higher domestic seasonal demand in the second and third quarters of the year.

      • scsnospam says:

        Thanks. I have followed your comments from TOD days, so familiar with the logic. Its just that I’m trying to figure out the reason why Saudi raised their production volume, and what that means short to medium term.

        • Jeffrey J. Brown says:

          As noted above, to the extent that the Saudis have recently reportedly increased production, it may have been primarily to meet higher domestic seasonal demand in the second and third quarters of the year and/or to possibly rebuild depleted inventories.

  36. shallow sand says:

    Looks like ND rig count is stabilizing. XTO has 13 of 91, are they completing them or just drilling them?

    Interesting that Chevron does not seem to be drilling unconventional oil wells in the US. I have also noticed OXY doesn’t seem to be drilling those either. Or are they in the Permian, and I’m just missing that information?

    Anyway, after 8+ years, seems like the big boys are still of varying opinions on the” North American oil renaissance”.

    • toolpush says:

      Shallow,

      It seems like the shale players think their business is worth a lot more than big oil does. I wonder if the disagreement is between the geologists, or the accountants?

    • coffeeguyzz says:

      Hey, shallow, just saw your comment and do not have time this moment to discuss, but if you do some checking you might be surprised how the majors are involved in US shales, they just don’t want to burned (again?).
      Chevron is bout the tenth biggest producer in Marcellus with 700,000 acres (they bought Atlas).
      XTO not only is completing wells, they just applied for permits for 650 new Bakken wells.
      Oxy has been trying to get out of ND in the worst way, but no one is offering them acceptable (to them) terms. They are focused on the Permian with – I believe – one of the biggest EOR operations down there.
      Shell got a lot of ink when they bailed a year or so back, but they paid such high prices for marginal acreage from a number of eager-to-sell little guys. Boo hoo. Almost no one hears how Shell has been feverishly, quietly, been leasing tens of thousands of acres in the Tioga county area of Pennsylvania after two successful wells targeting the Utica formation. Those wells, BTW, have seemed to expand the prospective Utica several hundreds of miles eastwards from its heretofore most active areas.
      The majors are most definitely interested, but don’t want to pay ‘Scalper’s prices to enter the dance.

      • shallow sand says:

        I guess I should have bern specific re Chevron and OXY. You are correct re Chevron and gas in the East. OXY has drilled in both Bakken and EFS, but doesn’t seem to be enamoref with either.

        What I was thinking about, besides that those two have been very minor or not players in Bakken and EFS is that they each have a huge amount of HBP acreage in the Permian, yet I can’t find that they are drilling horizontal wells there.

      • MBP says:

        Chevron has a large acreage hold in the Permian – outside of the stuff from Texico/Gulf/Getty/the others they have bought in the past they bough all of Chesapeake’s New Mexico Acreage which was a couple hundred thousand acres – most of which is in Bone Springs area. Oxy has a large hold in the Slaughter field, which is a >1.2 BBO to date CO2 flood in Cochran and Hockley counties in the Permian Basin. Outside of that they have a couple of other CO2 floods as well. They use something like 1.8 BCF of CO2 a day in the Permian.

    • shallow sand says:

      Make that 88.

  37. Ronald Walter says:

    According to the gospel of Richard Heinberg, hasn’t the exploration for new conventional fields been a failure, zero gains, and has not the development in unconventional sources, shale, been the only increases in production?

    It appears as though the shale energy revolution is lifting the barge, conventional oil is sinking it.

    imperiled future

  38. Watcher says:

    KSA budget numbers

    2014 Revenue $279 Billion (in USD terms)
    2014 Expenditures $293 Billion
    Deficit $14 Billion

    They appear to have their own definitional stuff going on (very much as the US does) in that they report a decline in national debt for 2014 from 2013’s $16 Billion to 2014’s $12 Billion. That’s a debt level 1.6% of GDP (contrasted with the US 100+% of GDP).

    Pretty cool how you can run a deficit but decrease national debt (they may have tapped their Sovereign Wealth Fund of 750 Billion to reduce debt and did not call that revenue). Sort of like the US ran an alleged surplus in the late 1990s, but national debt kept increasing those years.

    Projected KSA 2015 budget is

    Revs of $191 Billion (10 mbpd X 365 = 3.65 billion barrels . . . 191 / 3.65 = $52)
    Expenditures of $230 Billion (contrast with 2014’s $293 Billion, fiscal conservatives!)
    Expected deficit of $39 Billion (vs 2014’s $14 Billion).

    Analysts say this budget is based on $60+ oil. That calc above says $52. Analysts must presume lower oil output than 10 mbpd. Gotta presume they make at least SOME money from other revenue sources.

    Regardless, $39 billion deficit . . . 750 Billion Sovereign Wealth Fund . . . maybe they choose to borrow half the $39B (who wouldn’t at 0% interest?) so 20ish Billion comes from the 750 which let’s say earns 2%/yr.

    Looks like they earn $15B on the SWF in returns and will withdraw $20B. Net loss $5B on the SWF. Looks like 100+ years of life.

    If you take all $39B from the SWF, net with the $15 B SWF earnings, that’s 750 / 25 = 25ish years, not 30 cuz the $15 B declines as the SWF does.

    Don’t think fiscal breakeven is going to be influencing anything KSA does.

    • Watcher says:

      BTW, the Yemen campaign and influence on the KSA budget:

      In afterburner an F-15 will burn a lot of fuel. About 5.7 barrels per minute. Most flying on combat sortie is not done in AB. So call it about 35 barrels/hour.

      They are (guessing) flying 5 ship sorties for 3 hrs per day. Looks like 16,000 barrels/month. Given that they are the infinite source of supply, this would appear to be nothing.

      Gotta pay personnel regardless of what they do during the day so salary costs are nothing. Maybe combat pay but that’s a small % of salary.

      This is the same issue of computing Iraqi war costs. A lot of expenditures were necessary anyway. About the only thing you pay for is fuel and bombs. They don’t add up to much vs salary. Ditto health care. Only the wound delta is a valid computation. No idea what the Saudis provide, and haven’t heard of any casualties they’ve sustained anyway.

      Bottom line, as it were, money isn’t going to affect decisions in the campaign.

  39. The Wet One says:

    Just throwing this link out there:

    http://www.bloomberg.com/news/articles/2015-04-22/big-oil-s-latest-fear-a-price-shock-after-spending-cuts

    A bit of warning about what’s coming (which we all knew here) from Big Oil. Nice of them to add the last throwaway line (as if that’ s of little or no importance at all).

  40. Watcher says:

    http://www.ibtimes.co.uk/libya-one-million-migrants-ready-reach-europe-says-eu-border-chief-1490831

    Libya’s oil disaster has now generated 1 million people on the beaches waiting to board boats headed for Italy.

    “In 2014, more than 173,000 asylum-seekers were rescued in the Mediterranean after they set off from African shores on overcrowded, run-down boats in a bit to reach the Italian coast. At least 3,500 others died at sea.”

    Goodly number terrorists.

    • We are giving them Spanish lessons, teaching Mexico/USA border survival skills, and sending them to Mexico.

    • Ilambiquated says:

      Those refugees aren’t Libyans. They are just getting in through Libya because of the political mess there.

  41. Cracker says:

    Interesting notes from CERAWeek. I found it particularly noteworthy that banks are flush with cash and ready to lend once oil prices rebound.

    http://finance.yahoo.com/news/oil-gas-power-prices-big-160130956.html

    Jim

  42. AlexS says:

    .U.S. oil rig count is down 31
    oil rig count in the 3 main tight oil basin is down 27

  43. AlexS says:

    Several articles on drilled but uncompleted wells
    U.S. Shale Fracklog Triples as Drillers Keep Oil From Market
    http://www.bloomberg.com/news/articles/2015-04-23/u-s-shale-fracklog-triples-as-drillers-keep-oil-out-of-market-i8u004xl

    Oil at $65 Seen Freeing 500,000 Barrels From Shale Fracklog
    http://www.bloomberg.com/news/articles/2015-04-24/oil-at-65-seen-freeing-half-million-barrels-from-shale-fracklog

    Baker Hughes: 20% of US Well Completions Deferred
    WED, APR 22, 2015
    http://www.energyintel.com/pages/eig_article.aspx?DocId=883849
    Baker Hughes said that on top of the downturn in drilling, US producers are also postponing completions on about 20% of the wells they do drill until market conditions improve

    Producers Defer Completions Until Conditions Improve
    THU, APR 16, 2015
    http://www.energyintel.com/pages/eig_article.aspx?DocId=883145

    “Deferring completions and receiving the improved pricing in the forward curve not only saves capital this year, but would pay back the well investment slightly faster,” wrote Genscape’s managing director of supply-side analytics, Randall Collum.
    Although companies have certainly scaled back their drilling operations to save money — nearly half of the drilling rigs in the US have been laid down since September 2014 (OD Apr.13’15) — cutting back on drilling and canceling rig contracts can be just as costly as continuing to drill.
    However, Genscape points out that completion costs represent roughly 70% of average total well costs, providing a strong incentive for producers to hold off on completing the wells they do drill, particularly given forecasts that well costs could drop by as much as 30% this year (OD Jan.19’15).
    Large US oil producers such as Apache, EOG Resources and SM Energy are doing just that, with plans to defer completions on roughly as many wells in 2015 as they completed in previous years (see table).
    Deferring completions could also hasten the recovery of US oil prices by slowing US oil production growth and the surge in supply that has dampened oil prices.
    Genscape estimates that planned deferrals from Apache, EOG, SM Energy, Chesapeake, Anadarko, and Cabot Oil & Gas alone could equate to 373,000 barrels of oil per day.
    Some analysts have also pointed out that if there is a sudden rush to complete deferred wells, as opposed to doing the work more gradually, it could have a dampening effect on prices.

    Planned Deferral of Completions in 2015

  44. AlexS says:

    IHS: Eagle Ford completions pending

    HOUSTON, Apr. 13
    04/13/2015
    By Paula Dittrick
    http://www.ogj.com/articles/2015/04/ihs-eagle-ford-completions-pending.html

    US oil producers operating in the Eagle Ford shale in South Texas built an inventory of nearly 1,400 drilled but uncompleted (DUC) wells, said an analysis from IHS, which noted that the most promising of these wells belong to a few operators.
    The IHS Energy Analysis of Drilled, but Uncompleted Wells in the Eagle Ford Shale indicates DUCs can be converted to producing assets for 65% of the cost of a new drill, significantly lowering the economics when evaluated against remaining costs.
    Nearly 40% of the 1,400 DUCs are considered to have break-even costs below $30/bbl and belong to a few operators, including BHP Billiton, Chesapeake Energy Corp., Anadarko Petroleum Corp., EOG Resources Inc., ConocoPhillips, and Pioneer Natural Resources Co. Meanwhile, 33 other operators account for the rest of the Eagle Ford DUCs.
    “In this low oil-price environment, operators in the Eagle Ford and other US shale plays are focused on optimizing the value of their assets and managing their costs, and these drilled but uncompleted wells enable them to do that more effectively for several reasons,” said Raoul LeBlanc, senior director of research at IHS Energy, and the lead author of the DUC analysis.
    “First, the drilling costs of these wells were already incurred by operators prior to 2015, and the completion costs—which comprise the majority of well costs—can be negotiated at a cheaper rate since completion crews are now both available and available at cheaper rates,” LeBlanc said. “Second, if completion costs are fairly consistent in the play, then it stands to reason that wells with higher production will yield better returns on capital.”
    The DUC inventory is driven by the drilling sector outpacing the completion industry, the IHS analysis noted. As the rate of new wells drilled in the play falls, completion crews will be able to convert more wells to alleviate the DUC backlog.
    The DUC inventory is comprised of wells with varying production expectations. Given differences among companies, the pace of DUC conversions will vary by operator.
    “The more desirable DUC wells are located in the northeast core sub-region of the Eagle Ford shale play, so operators such as EOG Resources, BHP Billiton, and ConocoPhillips have significant financial flexibility and greater options,” said Robert Fryklund, chief upstream strategist at IHS Energy and a co-author of the DUC analysis.
    He also noted that some operators who complete lower-productivity DUCs in the Eagle Ford west area might delay completions until oil prices rebound, Fryklund said.
    He believes the Eagle Ford DUC wedge production alone could generate an additional 180,000 b/d of oil in the second half, which would be 14% of the play’s production of 1.25 million b/d/year.
    “This further supports our IHS view that oil price fundamentals will face headwinds despite the collapsing rig count, and that a material price increase could lead to a supply response in late 2015 and 2016,” Fryklund said.

  45. AlexS says:

    Inventory of uncompleted wells offers opportunities for some operators: IHS

    4/10/2015
    http://www.worldoil.com/news/2015/4/10/inventory-of-uncompleted-wells-offers-opportunities-for-some-operators-ihs

    HOUSTON — Faced with continued market uncertainty due to falling oil prices in late 2014, U.S. oil producers operating in shale plays, such as the Eagle Ford in south Texas, have built a large inventory of nearly 1,400 drilled but uncompleted wells (DUC) that are now driving the investment focus for many operators. The most promising of these wells belong to just a handful of operators in the play, giving them a likely advantage, according to new analysis from IHS.
    The IHS Energy Analysis of Drilled, but Uncompleted Wells in the Eagle Ford Shale indicates DUCs can be converted to producing assets for approximately 65% of the cost of a new drill, significantly lowering the economics when evaluated against remaining costs.
    When considering the productivity of the Eagle Ford DUC inventory, nearly 40% of the 1,400 DUCs are considered to have attractive economics (break-even costs below $30/bbl) and belong to a handful of operators, IHS said.
    Those operators include BHP Billiton, Chesapeake, Anadarko Petroleum, EOG Resources, ConocoPhillips and Pioneer Resources. Thirty-three other operators account for the remainder.
    “In this low oil-price environment, operators in the Eagle Ford and other U.S. shale plays are focused on optimizing the value of their assets and managing their costs, and these drilled, but uncompleted wells enable them to do that more effectively for several reasons,” said Raoul LeBlanc, senior director of research at IHS Energy, and the lead author of the DUC analysis.
    “First, the drilling costs of these wells were already incurred by operators prior to 2015, and the completion costs—which comprise the majority of well costs—can be negotiated at a cheaper rate since completion crews are now both available and available at cheaper rates. Second, if completion costs are fairly consistent in the play, then it stands to reason that wells with higher production will yield better returns on capital.”
    The DUC inventory is driven by the drilling sector outpacing the completion industry, the IHS analysis noted. As the rate of new wells drilled in the play falls, completion crews will be able to convert more wells to alleviate the DUC backlog.
    Due to the shortened lead time of converting these drilled but uncompleted wells, and the lower incremental costs of generating production from a DUC well, operators are likely to be incentivized to work through DUC well inventories, IHS said.
    Said LeBlanc, “Using a proprietary IHS ‘neighbor’ algorithm, which takes into account certain performance metrics of nearby wells, IHS found that the DUC inventory quality closely aligns with historical operator performance, so these companies have performed well in the past. However, in terms of future performance in the Eagle Ford, IHS estimates that BHP, ConocoPhillips and Pioneer Resources have higher-quality DUC wells than their current producing well portfolios, providing them the greatest available options going forward of any operators in the play.”
    To estimate the implication of these wells on 2015 production rates, IHS ran different conversion scenarios to assess the outcomes of bringing onstream 50, 100 and 150 DUC wells every month. Considering the need for a steady-state inventory of approximately 300 DUC’s at all times, the study found that roughly 1,100 DUC wells studied should be available for conversion. If the low-case conversion rate of 50 wells per month is achieved, IHS estimates that the DUC wedge (incremental) production would be 123,000 bopd at the end of a year, while a high-case conversion rate of 150 would result in a DUC wedge production of 269,000 bopd after 12 months.
    “The more desirable DUC wells are located in the Northeast core sub-region of the Eagle Ford shale play, so operators such as EOG Resources, BHP Billiton and ConocoPhillips have significant financial flexibility and greater options,” said Robert Fryklund, chief upstream strategist at IHS Energy and a co-author of the DUC analysis. “On the other hand,” Fryklund said, “operators who complete lower-productivity DUCs in the Eagle Ford west area may be challenged during the low-price environment and a few may delay completions until oil prices rebound. The operators in the play with these DUCs will follow different strategies depending on their financial strengths, asset portfolios, degrees of hedging and their stakeholder demands in this low oil-price environment.”
    How DUC inventories are reduced (if they are), will make operator strategies more transparent, IHS said, and most operators, particularly those with deep reductions in capital budgets and ambitious growth targets, will seek to liquidate DUCs in 2015 to deliver on production volumes. A minority, the report noted, will make the decision to manage DUC conversion to shape growth in response to prices and costs
    “The volumes of these DUCs that are converted are meaningful because our IHS analysis indicates that the Eagle Ford DUC wedge production alone could generate an additional 180,000 bopd in the second half of 2015,” Fryklund said. “That additional potential production represents approximately 14% of the play’s annual production of 1.25 MMbopd. This further supports our IHS view that oil price fundamentals will face headwinds despite the collapsing rig count, and that a material price increase could lead to a supply response in late 2015 and 2016.”

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