The Texas Rail Road Commission has released its latest stats with production numbers through January. There is always a delay in these numbers and that is why you see the production graph lines seem to droop toward the recent months. Because of this I post six months data so the data can be compared in order to gain a better insight into which way production is heading.
All Texas oil and gas data is through January. The Oil data is in barrels per day and the gas data is in MCF.
Texas condensate will likely show a small gain when the data is finally in. Either way it will not be enough to make much difference in the final C+C January production.
I believe Texas crude only will be down in January. This shows a huge decline from the December incomplete data. The EIA data is through December only.
That is a huge difference between the December and January incomplete data, a decline of 166,000 barrels per day. Of course that will very likely tighten up when, over the coming few months but there just should not be that kind of difference. Obviously there was a huge increase in December production but I think Texas January production will be a huge shock to the EIA as well as the investing crowd.
It looks like Texas associated gas also took a huge hit in January. This makes sense. If crude oil production was down then the gas that comes up with the oil should be down also. The raw data was down 433,628 MCF from the December raw numbers.
Texas gas well gas was down a huge amount also. The raw numbers were down 650,182 MCF from the December raw numbers.
Texas total gas, raw data, was down 1,082,810 MCF from the raw data in December.
Obviously all this data is incomplete. But relatively the same percentage of companies were reporting their data for January as were for December. Therefore the raw numbers should give some indication of which way production is headed. At any rate shale oil production did not “continue to surge upward” as the EIA and IEA originally reported. They just had to make a huge mistake in their calculations.
I expect total US C+C production to be down in January. I won’t say how much but I believe the numbers will not be positive.
This chart was published on Art Berman’s Blog, which is the best blog on the net dealing with shale oil and gas. The data however is from the EIA. Where JODI has US production down 34,000 bpd in January, the EIA has US production up 60,000 bpd in January.
This is one of Art Berman’s charts also. I find it interesting in that it tells us how much oil comes from horizontal wells and how much comes from other wells. I worked the percentages out. For the Permian it’s 55% horizontal, Eagle ford is 99.7% horizontal and the Bakken is 99.8% horizontal or wells. The rest comes from vertical wells.
A couple of new sites you might want to check out. There is very little current data that comes out of Eagle Ford but occasionally this site has some interesting news: Eagle Ford Fix. And this one is most definitely worth the effort though it is updated only once a month. But it gives you a very good idea of which way rigs and production are trending: Drilling Info Index.
The Drilling Info Index gives the amount of “New Oil” that comes on line in the US each month. This is (apparently) before legacy decline. Anyhow here are their numbers and I have calculated the rate of increase or decline for each month. Their archives only goes back months 6 months and they get a different percentage change than I do. The fourth column is the number of barrels per day change according to the EIA’s Petroleum Supply Monthly. The “New Oil” below is in thousand barrels per day.
The Petroleum Supply Monthly is, by far, the EIA’s most accurate production survey. It comes out a couple of days before the end of the month. The next issue will be out March 30th with the January production numbers.
The Baker Hughes Rig Count is out.
Texas again took the biggest hit, down 36 rigs in one week. Williston is at 99. This does not count the rigs that are in the process of moving in and rigging up. Canada was down another 80 rigs. This is the season for rigs to drop in Canada but nevertheless they are down 249 rigs from the same point last year.
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Note: If you would like to receive an email notice when I publish a new post, then email me at DarwinianOne@gmail.com
So Mr. Patterson do you think Dec/2014 may have been the US peak for C+C in the 21st century?
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 418498 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:
here is the corrected data for condensate,
here is the corrected data for natural gas,
and finally my corrected C+C vs the EIA data (in kb/d).
A couple of comments: my corrected data show a fall of 200 kb/d for January. Considering a usual range of error of +/- 50/100 kb/d, also in the best case the Texas production should be down around 100 kb/d . At this point, I am very curious to see which data the EIA will publish for Texas on March, 30, 2015: whether the (now extremely clear) linear trend model used in the past or a more realistic estimate.
I think that Ron does a great job in giving us data. I also think that your “corrected” graphs are very helpful. Thanks to both of you!
Thank you!
Hard to tell if your smackage started in November. Thereabouts. But it’s clearly down significantly, during which time there has been the supposed storage build.
Imagine that.
Oooh, and Jeffrey, found this gem yesterday:
Now THIS is cool, and points the way to war:
http://www.dieselforum.org/diesel-at-work/
Click the delightful “delivering for America” link and we get:
Diesel — 100% of Freight Locomotives, 90% of Heavy Duty Trucks, 90% of Cargo Handling equipment (the gizmos that take containers off ships — which were . . .), you guessed it 100% of ships/barges were fueled by diesel.
Here’s a quote from 2010, when API was hyping the growth narrative:
“We’ve been watching the diesel demand numbers, which have been very strong,” John Felmy, chief economist with the Washington-based API, said in a telephone interview. “There’s a strong correlation between diesel consumption and economic growth. This is clearly a good sign for the economy.”
This is a pretty big deal. We have generally equated economic growth to oil consumption growth, but this drills down to a higher correlation — diesel.
The US cannot escape diesel, which makes imports guaranteed, given our relentless API number advance domestically.
And from the same source:
Diesel Electric Hybrid Vehicles
“Diesel hybrid technology has blossomed over the last several years to become one of the most advanced heavy-duty vehicle technologies available today. These vehicles combine the latest advances in hybrid vehicle technology with the inherent efficiency and reduced emissions of modern clean diesel technology to produce dramatic reductions in both emissions and fuel consumption while offering superior vehicle performance and the benefit of using existing fueling infrastructures…Fed-Ex did much to propel the commercialization of this technology when it announced in 2000 that it would convert its entire fleet of mediumweight pickup/delivery trucks into diesel hybrids. It has since chosen to work with Eaton Corporation in pursuit of this goal, beginning with an initial pilot fleet of 20 hybrid delivery trucks and growing into the largest fleet of commercial hybrid trucks in North America. Truck performance to date has been exceptional, meeting expectations of a 96 percent reduction in PM, a 65 percent reduction in NOx, and increased fuel efficiency of 57 percent.”
http://www.dieselforum.org/files/dmfile/DieselElectricHybridVehicles.pdf
Excellent job.
Thanks!
This is great. I have another question. Latest month totals are not very accurate. How accurate are the latest month’s deltas?
If you compare the Jan 2014 report on output for Jan 2014 to the Feb 2014 report on the Feb 2014 output, what is the difference to the “final” delta for the same two months? Is the difference systematic for all months?
The delta between corrected and not corrected data depend on “how old” the month is to be corrected. It is highest for the latest month, for example +500 kb/d for oil only, and smallest for the t-24 month (around -20 kb/d for oil only), which is the last month I consider for correction, given that older months are subject to changes of very small magnitude.
Hi Dean,
Is it possible for you to post the “corrected” data from July 2014 to Dec 2014 for Texas Crude plus Condensate? I am interested in the numbers in Kb/d for those 6 months, thanks.
Hi Dennis,
here they are:
Jul 2014 3186
Aug 2014 3237
Sep 2014 3230
Oct 2014 3241
Nov 2014 3300
Dec 2014 3331
Jan 2015 3162
Thank you Dean.
Superb work. This is exactly what I wanted to do.
The december production data produced a month ago was abnormaly high and was corrected by a much smaller correction in the latest up-date. This was due to a much highrer number of completions carried out in december for the purpose, I suppose, to get 2014 figures looking better for many operators or to satisfy fiscal or lease constraints.
This was quantified by a wonderful post from zzsdxv on Investor Village BRY board which I recommend very much:
http://www.investorvillage.com/smbd.asp?mb=4288&mn=173391&pt=msg&mid=14782567
Msg 173391 by zzsdxv
He gathered some numbers on well completions Regarding North Dakota / Bakken highlighted below. According to his post, completed completions in North Dakota were:
September 193
October 134
November 48
December 173
January 47
Why the figures of december is so high and the figures for january and november so low is not too clear.
But it fits the kind of data we observe for RRC production figures. So what is true for North Dakota may be true for Texas and the whole of USA. If so, we have to be a bit prudent in the interpretation of the december figures.
That precaution put aside, I thank you very much for your work and I am convinced that the oil production in the US has already started and will only accelerate from now on.
“Prices for Eagle Ford Shale oil have ranged between $46.22 per barrel and $57.76 per barrel since the beginning of 2015, with an average price of $57.76.” From the Eagle Ford Fix
They need a proof-reader: The average cannot equal the highest price in the range.
Perhaps oil prices in the Eagle Ford are like children in Lake Wobegon (where all children are above average).
Thanks Ron for another month of RRC stats. And to you, Dean, for the adjustments. It’s great to have these up to date analyses.
I agree. Cannot get enough of this blog, although I am trying very hard to limit time and posting. I find it has best analysis of FACTS on production, and does not mix ESTIMATES with ACTUAL PRODUCTION DATA, as opposed to all others.
Texas reporting lag is frustrating. Had a thought. If lag is attributable to sole proprietor types being slow, maybe it would be worthwhile to graph some of the Texas major shale players like EOG, Apache, Pioneer, Burlington, Marathon, Devon, BHP, etc. Assume they report timely. Maybe would provide some clues? Or maybe they are slow too?
I looked at EOG for example. Looks like they had a big drop in 1/15. Assume all timely, or is that a faulty assumption? Maybe evidence they have stopped well completion in EFS as they have discussed?
Think I may be onto something. The first EFS driller is 1776 Energy Partners (not one hundred percent sure on name, but begins with 1776). They have not reported yet for January. However, I have not found an EFS that appears to report partially, i.e. some leases have January and others have no report. Just looked at a few. I suppose its possible to send in partial reports, but would think big public companies would not do that?
Shallow: Back about the time of the Barnett Boom some Texas operators found a little trick to do with production to delay their coming out on the appropriate month area etc. Little mistakes on their report forms like putting wrong county, misspelling lease etc. would throw the production into a limbo situation. It would then take some time for RRC to get back into correct category. This may still be going on today though I cannot believe the RRC haven’t stopped them.
Doodlebugger. What would be the benefit of that? Are there penalties for late or inaccurate filing?
I looked at a few smaller EFS operators this evening. Looked to me like they either had all production reported for each lease or had none. Small sample, I will admit, and may not take into account new leases that maybe company has not reported yet.
Would seem odd that companies the size of EFS operators would make inaccurate reports. Everyone can make a mistake, but I don’t think there is anything complicated about keeping track of oil production and sales and reporting it properly.
I have always wondered why US does not have a unified reporting system. If drilling info and IHS Global can maintain this, why can’t US government. It would seem US government should be able to do better, and be CLEAR when it is only making an ESTIMATE.
Given what is on the line, one would think US Gov’t would develop a good system. Instead, it looks like they have just stopped keeping track of things. Some info has not been updated since 2009. Wonder why?
On another note, have you heard the song Doodlebug Pete? Listened to it a lot when I was a kid and always think of it when see your handle.
Hi Shallowsand,
Every piece of data is an estimate, some estimates are closer to the truth than others, forecasts of future months clearly are not estimates. The weekly estimates by the EIA may be surveys of large producers that are used to produce an estimate of output. The EIA has to do something similar for Texas, because in the past the RRC data was incomplete for the most recent months.
Hopefully Texas can get to the point where North Dakota is as far as data reporting on output at some point in the future. North Dakota’s data from the NDIC is excellent, for Texas we have to wait 18 to 24 months for all the data to trickle in or use Dean’s excellent estimates.
Shallow,
Good to see you are still in the land of the living.
Last month Mike indicated that the RCC had changed to a fully electronic system, therefore you would assume that a higher percentage of reports would be in the first reported month? How has this been working out for you?
I see below Doodlebugger, highlights a potential dirty trick to avoid early reporting. Can this be correct?
Toolpush. I can’t stay away I guess. Am trying to limit things as I know a lot of people who do not take care of business because they can’t stay off the net. We don’t have TX production, so can’t comment on new system. We are in Mid Continent. Would like to be more specific but I’m kind of like Mike in that with it being the net and all, probably should keep it a little vague
No problems Shallow,
With all the noise those Texans make about producing oil, they make it sound as though they are the only ones doing it. I had assumed you also down that way.
My utmost apologies to your sir. smiles.
No offense taken. Did have a non-op WI in some part timers in TX that we bought on a lark. Made almost no water and ran on produced gas, pumper worked cheap. But we didn’t look close enough at the operating agreement, and operator jacked up supervision so we got rid of. Go figure! LOL!
Just joking, been down there some and I found people to be nice, especially those out in the sticks.
I know it was going on and would keep an operators # off the reports coming out for a few months or be hidden in another county. I would pull up a stripper county in the center of the state and sort by production rate to find a 2000 bb/d well from Eagleford thrown into it. I hope electronic records has changed this and have been astounded that the RRC didn’t put some teeth into enforcement.
I first noticed when trying to follow new wells coming out in the Barnett shale. Knowing they were producing starting in a known month, you could,with the 3 month lag at the time, expect when their production month would come out. Some were several months late and after looking at their reporting you could find the “innocent” mistakes that put them in limbo. I don’t believe it was only the little operators doing this.
Some may not realize why there is a delay at all. I believe it is mostly due to gas production or associated gas production due to the charts. This may go all digital at some time, but presently there are still analog charts that must be sent off at the end of your production month to be analyzed and volumes interpreted. After couple of weeks the operator gets his volumes back to report. He would send in his paper reports that would result in the numbers coming out in the third month after production. With no paper the direct reports are now coming out the second month.
Thanks!
OK, so oil production in the US is down, oil inventories are up, and price is still low. That has to mean that oil demand is down, but we don’t see a crisis in economic data. What is happening?
Consider imports as well.
Hey Kam!
Guess who showed up? And he is debating Dennis! Priceless.
http://peakoilbarrel.com/opec-crude-plus-more-on-eia-estimates/comment-page-1/#comment-505585
http://peakoilbarrel.com/opec-crude-plus-more-on-eia-estimates/comment-page-1/#comment-505578
http://peakoilbarrel.com/opec-crude-plus-more-on-eia-estimates/comment-page-1/#comment-505769
I think Ron should host this debate at the top of the page!
Is he the one who said every barrel of oil produced takes $219 out of the economy?
More efficient use of oil.
More alternatives replacing oil consumption.
You’re talking about record sells of SUVs in China?
Hey Kam!
Did you see my post to you? What do you think?
Hey Futilitist 🙂
I think that the price which world economy can pay for oil will go gradually down, but the ETP model isn’t necessarily correct. For example governments can ban bigger cars from the roads, and that will increase our efficiency of oil use.
But so far the governments didn’t do that, so maybe they are too stupid, and believe in economics wisdom?
The movement that the price of oil made when the “triangle of doom” touched is very appealing: http://www.economic-undertow.com/wp-content/uploads/2015/01/Triangle-of-Doom-010115-1024×689.png
I also track coal extraction rate around the world. It’s the second most important source of energy, and it’s dropping now.
Anyway, it’s a very interesting time, and by the summer we should know much more.
(I’m not a native english speaker, so my english order could be imperfect)
“For example governments can ban bigger cars from the roads, and that will increase our efficiency of oil use.”
Governments can’t do that. If they did do that, it would cause extreme economic damage, so it really wouldn’t help. I am afraid the ETP model is correct. Sorry.
Did you check out Dennis’ debate with bwHill? Or my debate with Dennis?
US light vehicle (cars, SUVs, pickups) fuel efficiency has doubled in the last 40 years.
http://en.wikipedia.org/wiki/Corporate_Average_Fuel_Economy
Gee, that is good news! 🙂
Yes, it is.
Actually, most of that increase took place in a much shorter period – car fuel efficiency stagnated for most of the last 25 years, due to resistance from car and oil companies.
The point: government can indeed mandate increases in fuel efficiency.
And, oil dependency can be reduced and eliminated.
I would attribute some of the improvement to Honda and other manufacturers building better engines.
I agree.
The important point: The ratio of energy consumption to economic activity can be changed by design changes, pushed by public policy changes.
Public policy determines fossil fuel consumption, not the laws of thermodynamics.
Jay Hanson suggested that the ultimate solution would be deprivation and dieoff. Has anyone encountered Jay recently? I saw some posts that indicated he was studying the history of cannibalism. http://www.theoildrum.com/node/1624
The problem with Hanson, Catton, Heinberg, Kunstler, etc.? They don’t understand the physics and engineering of wind and solar, and haven’t taken them seriously. They’ve just assumed that they aren’t adequate. Look through their writings and you don’t find an accurate, detailed analysis anywhere.
The Late William Catton’s concern was overshoot of the human population, not how much wind or solar it would take to keep BAU going. We are destroying the earth and all other life except human life with our vast numbers that just keep growing.
Wind and solar will not help that situation one whit. Catton and all those other people you rattled off realize that simple fact. That is the problem Nick. Is that really very hard to understand?
Oil is prominently featured on the cover of Catton’s latest book “Bottleneck”, so I presume PO is central.
Here’s what George Mobus said, on TOD:
“Catton renames a subset of Homo sapiens as a ‘quasi-species’, Homo colossus, those being the people in developed countries who consume massive amounts of fossil fuels to motivate and control machines that do orders of magnitude more work than a human can do with muscle power alone. To achieve this we are combusting carbon to produce CO2 and returning fossil carbon deposits to the atmosphere and oceans after sequestration for millions of years. And it is the rapidity with which this is happening which leads Catton, and others, to conclude that it is infeasible to put the brakes on for this train. That is, you can try to brake, but you won’t stop in time to avoid a crash. ”
http://www.theoildrum.com/node/5954 .
Nick, I have read them both. Overshoot and Bottleneck are all about Homo colossus and the Age of Exuberance. That is the overshoot of the human species because of the finding and development of fossil fuels. Yes it about peak oil but also about peak people and die-off.
If solar and wind were to replace fossil fuel it would only make the problem worse. That is it would make the destruction of the natural world even worse.
But, why did Catton think we were in overshoot, specifically?
As best I can tell, it’s because he thought civilization/humanity had become dependent on fossil fuels, and that their peaking and exhaustion would leave civilization/humanity without the energy needed to function.
I know you feel that the destruction of the earth’s various ecological systems will destroy the foundation for human life. But, what did Catton think was the primary cause of overshoot??
Nick, are you serious? Catton, and everyone else in the world who understands overshoot knows the reason. It is so damn obvious.
I don’t remember him saying what the cause of overshoot was but it goes without saying. He knew just like I know and anyone else who knows a damn thing about biology knows. We are in overshoot because a surplus of food, made possible by fossil fuel and the industrial revolution enabled us to multiply our numbers until we were deep in overshoot.
Every species on earth lives to the very limit of their existence. Humans are no different. When we are able to multiply our numbers… we do. And we did.
We live in a time of plenty.
If there is ever a time of plenty this very fact will automatically lead to an increase in population until the natural state of starvation and misery is restored.
Richard Dawkins: River Out of Eden
We are in overshoot because a surplus of food, made possible by fossil fuel
Ok, that’s what I said: he thought civilization/humanity had become dependent on fossil fuels, and that their peaking and exhaustion would leave civilization/humanity without the energy needed to function.
Are we agreed that’s what he thought?
“Did you check out Dennis’ debate with bwHill? Or my debate with Dennis?”
Yes I did, and I remember the most that you insulted Dennis 🙂 . I usually don’t read his comments, but about the ETP model he touches some important essentials, like the one that oil is not the only source of energy for our economy, and about efficiency. As I said before, it is very interesting if the price of oil will go up this year. If not – we are screwed.
While we still have electricity, we can listen to progressive house! 😀 : https://www.youtube.com/watch?v=t-0D-qfgnwk
“As I said before, it is very interesting if the price of oil will go up this year. If not – we are screwed.”
The ETP model confirms we are screwed. Thank you so much for bringing it to my attention.
“Yes I did, and I remember the most that you insulted Dennis”
That is too bad. You should have noticed how accurate I was.
I was trying to draw attention to the debate to make sure the readers had a good sense of just how far off base Dennis was, and also to provide a much needed dose of humor and justifiable sarcasm to a very frustrating situation. It worked. Really well.
Sometimes you have to make a fuss to get to the truth, break a few eggheads, so to speak.
Methinks everyone protests *WAY* too much about manners. Over stressing manners inhibits both humor and the search for the truth. It helps foster Groupthink.
Hi Futilitist,
Have you noticed that only BW Hill and you think that the ETP model is valid?
This does not make it incorrect of course.
Several people with an excellent understanding of physics do not agree with you about this model.
This includes me, Fernando, Kam, Fred, Ron, Techsan, and perhaps others.
Insults will do little to prove your case, they tend to undermine your arguments.
🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂
Thanks, Miss manners.
I don’t know how to explain this to you since you are so far gone, but none of you have even come close to refuting the Etp model.
Please don’t take this as an insult, but it is impossible to have any discussion with you that would not end this way. That is because you are perpetrating a fraud. You are making nothing but deceptive, ridiculous arguments. You are a merchant of doubt. I mean that literally.
See, this is the problem. You don’t seem to notice or care how moronic and deceptive you look to readers. No one is buying it. I am not being rude. I am just stating the facts as I see them. Then you make some prissy claim to be hurt. And try to lobby people to the idea that I am the problem. You are impossible.
But every time this happens, you are the one losing credibility, not me. So, keep up the good work, Dennis. Thank you for helping me to prove to myself and any rational, sane reader, if there are any, that the Etp model is valid. Keep up the good work. 😉
You are not even doing the math right when you count your fellow
deniersdoubters of the Etp model.Fred doesn’t think the model is invalid, he doesn’t care one way or the other. Kam thinks it might be a good model, but he holds out hope 🙂 . I couldn’t care less what the Great Fernando thinks. I don’t know what Techsan thinks. Ron hasn’t actually addressed it at all, though I have asked him many times to do so. And you already know what I think of your ridiculous opinion.
I am still waiting to hear from Jeffrey and Rune. And Ron.
🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂
Fred doesn’t think the model is invalid, he doesn’t care one way or the other.
To be clear, what I said was that I wasn’t very impressed with what I had read at the link you provided especially with regards the references to the second law. I also agree with Dennis that oil is not the only form of energy input…
I also said I wasn’t going to dish out the 69 bucks to further investigate those claims.
But yes, I did say I couldn’t care one way or another about one more model predicting the precise date I should move into my PV powered bunker.
Reason being, I’m kinda beyond that.
Cheers!
Hi Futilitist,
Now that was a great example of logic and reason.
Sure, blame the victim. There is no other possible response to you, Dennis. You are force of nature. You figure if you claim victory enough, people might start to believe you. Dream on. 😉
I may be venturing into tin foil hat territory, but I can’t help but wonder if US refiners are continuing to buy very light crude and condensate that they really don’t need because they don’t want producers to be able to say there is not sufficient domestic demand for all of the light end stuff produced in the US, thus opening the door to eliminating the ban on exporting crude.
In any case, outside of petrochemicals and for use as a diluent in tar sands operations, I wonder how much additional global demand there might be for the light stuff.
Jeffrey, I think there’s potential demand. But we won’t find out unless the usa government allows oil exports.
Remember the USD is now very high and petroleum exports will be expensive
27/1/2015
40% of US petroleum exports didn’t grow since 2011
http://crudeoilpeak.info/40-of-us-petroleum-product-exports-didnt-grow-since-2011
Matt, an overseas refinery needs oil. They have customers. The customers demand products. The refinery planning departament has a computer program to guide their purchases, which uses the expected price for the products as well as the crudes on offer. The program lays out alternative input crudes they can buy, as well as the optimum price.
The American light oil stream will be fed into the program and it will estimate the volume and price differential the refinery should offer. The international oil market is in USD. Thus the light crude stream will find a niche at a price. The US producer will compete with others just like everybody else.
What you describe is the tendency for oil prices to drop as the USD strengthens. But that effect is already seen in the Brent quote. If you want to see the price differential you would have to find a competitor, for example the Algerian condensate. But I’m not sure it’s marketed unblended.
Hi Jeffrey,
I would like to get your opinion about this physics based model of oil depletion:
http://www.thehillsgroup.org/index.html
Thanks.
That’s not a physics based model. It’s a broad verbal description of Mother Nature and economics with a fairly irrelevant insertion of “Second Law of Thermodynamics” to make it sound highbrow.
“Oil extraction costs are increasing, and will continue to increase until oil is no longer competitive with other sources or demand is reduced because efficiency measures are more attractive”
The extraction cost includes energy. We consider those when we decide how to build and operate a field. Some oil fields use wind power to run the pumps because it’s a better option.
Hi Fernando.
“That’s not a physics based model.”
Yes, it actually is.
You are either lying or you do not understand physics. Or perhaps both.
Futilitist, you continue to speak to people as if they were your worst enemy. Try to be a little kinder. I do not believe for one minute that Fernando is deliberately lying. You know that too. So your language serves only to infuriate. Please stop doing that. I simply don’t allow people to do that on this blog.
Okay?
Ron,
This is your site. I will, of course, do everything I can to respect the rules of the house. I will try to tone it down.
Having said that…
Fernando’s response to my question infuriated me. I wanted to express that. His aloof non-answer amounted to a hand wave dismissal, similar to the way the Korowicz paper has been treated. It was a meaningless statement standing in for an actual argument. It was not just an insult to me, it was an insult to the truth. I just want the readers to know that. I hope that you understand where I am coming from.
Dennis Coynes’ outrageous arguments against the ETP model eventually, after much admirable patience, finally elicited this response from the model’s creator:
The data presented by the World Bank, and the EIA is hardly subjective! It resulted from measured, counted, and computed quantities. Attempting to make completely absurd subjective statements to disprove objective data results in absurd subjective statements: QED. Your conclusions include so many embedded falsies that a child would see their illogical nature.
You made comments about the source presented above, obviously, without having read it. Each of your comments was specifically addressed in that source. Your rebuttals appear to result form either a weak, deranged mind, or someone with an agenda. An agenda directed, perhaps, toward obfuscation.
This seems like a pretty harsh thing to say, unless Dennis was *WAY* out of line. I agreed with bwHill, and said that arguing with Dennis was like entering the Twilight Zone.
I think Dennis made some very poor arguments against the ETP model. Do you think that Dennis raised any valid objections to bwHill’s ETP model? If so, what?
Thehillgroup is producing impressive graphs. They often use words like “entropy” and “second law of thermodynamics” trying to impress people. However, by closer inspection I believe the graphs are just based on fitting news releases, and extrapolation of historical data.
I have developed decision models for NATO technical panels based on the entropy principle and this is why I get so upset by people throwing in words without understanding the principle.
How else can shortofoil on Sun, 26th Oct 2014 8:10 am, a member of thehillgroup, predict the following nonsense:
”We hate to inform these analysts but the price of oil is falling toward $0.00/barrel. That will occur sometime in the 2030-2035 time frame. This is happening because the world’s petroleum supply is depleting, and we are now using the last 25% of the total reserve that is worth extracting. The price of petroleum can not exceed the value of the energy it supplies. The energy it supplies is declining as the energy to produce it is increasing.”
In a mere 15 years the life will come to a standstill and billions of people will die. The remaining ones will be thrown back into the stone age. Fasten your seat belt for a rocky ride.
“The price of petroleum can not exceed the value of the energy it supplies.” Yes it can if the product is extremely valuable such a medicine that needs only a few drops of oil and hence it does not matter of the cost is $1000 per barrel. Clearly, this medicine cannot be produced by input of electricity from solar or wind.
nNgass,
“I have developed decision models for NATO technical panels based on the entropy principle and this is why I get so upset by people throwing in words without understanding the principle.”
1) Really?
2) Are you a physicist?
3) Decisions are not entropy based.
4) The energy/economy system fully obeys the laws of thermodynamics. How could it be otherwise?
“Yes it can if the product is extremely valuable such a medicine that needs only a few drops of oil and hence it does not matter of the cost is $1000 per barrel. Clearly, this medicine cannot be produced by input of electricity from solar or wind.”
Now you are talking medicine. The subject was thermodynamics.
That Hill group article was to thermodynamics like squeezing a sponge is to geomechanics.
I think your brain is like a sponge. Full of holes.
Say something substantive.
—EDIT—
“That’s not a physics based model. It’s a broad verbal description of Mother Nature and economics with a fairly irrelevant insertion of “Second Law of Thermodynamics” to make it sound highbrow.”
This seems like a simple psychological projection showing a strong anti-intellectual core belief. People project when they are stressed. It shows a kind of fear, produced by cognitive dissonance.
Yet Fernando self identifies as a snotty, arrogant intellectual. So, perhaps there is something more to this.
Perhaps it shows an understanding of how psychological projection can be used as a subtle tool, as a possible appeal to anti-intellectual types who might read this. This has much darker implications, since this approach is reminiscent of sophisticated propaganda techniques, and that is not what we do here, is it?. 😉
Anyway, just my friendly, jocular, quick take on it. And as always IMHO only (though well supported by all the relevant research literature in psychology).
—EDIT—
Welcome back, bwHill.
Fernando Leanme said:
“That’s not a physics based model. It’s a broad verbal description of Mother Nature and economics with a fairly irrelevant insertion of “Second Law of Thermodynamics” to make it sound highbrow.”
The Etp Model is the result of the numerical solution of the “Entropy rate balance equation for control volumes> as applied to petroleum production. That is about as fundamentally Second Law as one can get. That is carefully explained at the site. It would nice if people would investigate, before they pontificate!
If by any chance the reader is unfamiliar with “Entropy rate balance equation for control volumes> there are literally hundreds of excellent text books on the subject. You can find them under “Engineering Thermodynamics”. I would highly recommend Moran and Shapiro, ISBN 0-471-89576-8.
http://www.thehillsgroup.org
Hi BWHill,
It is not clear that entropy can be applied, to the entire oil industry, what is your control volume, the planet? What is the physical justification for separating oil from all other energy sources? If we are going to talk about thermodynamics for the entire economic system, then all forms of energy need to be included.
As far as I understand, oil is not the only energy input into the oil extraction and refining process. Entropy will of course increase over time for any non-reversible process. But if the analysis ignores coal, natural gas, biofuels, wind, solar, geothermal, hydro, and nuclear power when talking about the entire economy, then the analysis does not stand up to scrutiny.
Hi Dennis,
“As far as I understand, oil is not the only energy input into the oil extraction and refining process. Entropy will of course increase over time for any non-reversible process. But if the analysis ignores coal, natural gas, biofuels, wind, solar, geothermal, hydro, and nuclear power when talking about the entire economy, then the analysis does not stand up to scrutiny“.
IMHO, it is your objection that does not stand up to scrutiny. 😉
The obvious answer to your objection is that the model clearly predicts a rapid decline in both net energy and GDP. Coal, natural gas, biofuels, wind, solar, geothermal, hydro, and nuclear power, all put together, clearly cannot make up the shortfall in the timeframe predicted by the model.
Next?
One of the main problems with Hills’ theory, is that he is basing it in on data from Colin Campbell.
Campbell has consistently underestimated URR, and has predicted various Peak Oil dates for some 20 years.
E.g.
In 1989 Campbell claimed that there would be a shortage towards the late 1990s. In 1990 he claimed that 1998 would represent a “depletion midpoint.”
http://en.wikipedia.org/wiki/Colin_Campbell_(geologist)
So what you have with Hill is just another boilerplate failed Peak Oil prediction, that will never materialize.
John B.
Your comment is completely false. No data from Colin Campbell was used in the creation of the Etp model.
Nice try.
What a cheap, dirty trick. Ron should remove your ridiculous comment. This is supposed to be a serious discussion. Do you even know what that means? Shame on you.
Does this graph not say data from Cambell ?
http://www.thehillsgroup.org/depletion2_005.htm
2.2 Trillion URR?
That’s not a US Government number. The USGS estimate is 4 trillion, excluding tight oil.
You claim that the world is going to end in 15 years, and my comments are ridiculous?
My bad. What you actually said 3 YEARS AGO was:
I know it is rather an extreme position to take here, but I really do believe we are no more than a few weeks or months away from the onset of a very serious economic crisis, quite possibly leading directly to a rapid, wide spread, systemic collapse.
Yes John,
Your comments are ridiculous.
Graph# 4
Cumulative Production Family vs Time
Data from: EIA, and Cambell-Laherrère
Best fit to 1960 – 1999 EIA data
Best fit: 2285.65 Gb, Nine (9) logistic equations
1900 = year zero (0)
To generate values the ETP model requires the rate of crude mass flow. Crude’s mass flow rate is derived by matching a logistic curve to the EIA’s 1960 – 1999 data set. 1999 is used because it was before there was large scale production of Canadian bitumen. Bitumen might have effected the energy/ $barrel relationship derived. Support for the hypothesis that conventional crude production has been a distribution described by a logistic curve is discussed in several places throughout the study.
You don’t even understand what bwHill is saying. You just looked through the graphs and noticed Cambell’s name! Great argument. Did you notice the other name next to his? It’s Jean Laherrère.
And don’t forget the the EIA. Their data set is actually used in the model. It is also used by anyone who studies oil depletion.
“You claim that the world is going to end in 15 years, and my comments are ridiculous?”
I get that you are surprised, but that is not an argument. It is Ad Ignorantium (also known as: appeal to ignorance, absence of evidence, argument from personal astonishment, argument from Incredulity).
“My bad. What you actually said 3 YEARS AGO was:”
Another cheap, disinegnuous, dirty trick. That’s two in a row! You are a jerk. I have no idea where you got that comment from because I have only been here for a couple of months.
I was once wrong about something. So what? Sue me. Everybody’s wrong sometimes, and you are wrong all the time.
And it doesn’t even mater. There has been a lot of new information since then. Back then I was guessing. Now I have a physical model. Now I know.
——-
Ron,
Please make John B stop this shit. It really does not reflect well on your site. Thank you.
No, I think you’re the one who is surprised that the World didn’t end 3 years ago as you had predicted.
You’re also surprised that data from Colin Campbell was used in this absurd bwHill nonsense theory, after you just said it wasn’t.
You are right about 1 thing – I don’t understand bwHill’s “attempt” at logic, because he doesn’t make any sense!
And since we’ve devolved to name calling, I’ve got one for you – NUTS!
Another cheap, disinegnuous, dirty trick. That’s two in a row! You are a jerk. I have no idea where you got that comment from because I have only been here for a couple of months.
I was once wrong about something. So what? Sue me. Everybody’s wrong sometimes, and you are wrong all the time.
And it doesn’t even mater. There has been a lot of new information since then. Back then I was guessing. Now I have a physical model. Now I know.
You have no idea where the comment was from, but you know that you said it, and you were wrong.
But now you’re right – that’s too funny.
Please seek psychiatric help immediately.
“You are right about 1 thing – I don’t understand bwHill’s “attempt” at logic, because he doesn’t make any sense!”
~John B
This began as a serious discussion, John. Then you joined it.
Please stop your rude and disruptive behavior. Thank you.
John B, it doesn’t really matter if it uses Colin Campbell or the Tibetan Academy of Petroleum Engineers.
The fundamental problem with the approach is the claim itself. If this guy thinks he can predict what’s going to happen using thermodynamics he is way out beyond the looking glass.
I noticed a tendency to focus way too much in usa conditions and circumstances. But most of what’s going to happen is going to be dictated by human behavior elsewhere. And that’s got very little to do with entropy. Irreversible entropy changes is simply what puts lint in your belly button.
Bullshit Fernando.
You have yet to actually address precisely why you think the model is invalid. That means say something about the model itself and stop making pompous declarations. Your personal opinion means nothing.
What is wrong with the Etp model?
Futi, the one page link is the only description I’ve read.
It includes statements I don’t like. But that’s a commercial product. I would offer to review it for a fee, but I’m retired.
I just asked if you could find a legitimate way to refute the Etp model. You failed. Miserably.
It was a fair question. You are generally pretty glib and free with your opinions around here. Now you want a fee. It figures.
I don’t see why anyone would actually pay you for your
lameexpert opinion, Fernando. 😉Futilitist,
There’s not much to refute without more details of how the Etp model is derived and the actual data used to support it (peer review and all that). At first glance, it looks like the exergy calculation may not have properly accounted for the heat and entropy of combustion; the gas expansion of the products is an important component of the calculation and actually brings the theoretical max exergy above the heat of combustion (thus, surprisingly, more work than heat, but this is the theoretical max and in reality heat exchangers have fewer irreversibilities than engines since Carnot limits the efficiency but there is no max temperature for the max exergy – (Th-Tc)/Th goes to 1 as Th goes to infinity). Without the derivation, the Etp model can neither be confirmed nor denied, and you should not expect anyone to blindly accept its divine truth like you have.
Bottom line, get permission to write up a blog post on your own site that provides enough info for real scrutiny or please stop being such a nuisance.
Ps: I appreciate the author attempting to bring a bit more scientific rigor to EROEI analyses and would like to know what he’s actually proven, if anything. Hopefully you’re successful in getting permission to make public the results.
Hi Futilitist,
The prediction of rapid decline is because the model assumes that the economy operates on the basis of the net energy of oil only. That is an unproven assumption.
The extraction and processing of oil (the petroleum processing system in the ETP model) has many types of energy input, not only crude oil. Natural gas, coal, wind, and solar can all be used as energy inputs.
The net energy of the entire economic system must be positive, but for any single energy source (such as liquid fuel due to its convenience) this is not required.
The analysis will only be valid if applied to all forms of energy in the economy as the control volume is essentially the entire planet so all energy and entropy in the system has to be accounted for, oil cannot be singled out or the model will be incoherent.
The value of any good, whether it is a barrel of oil or a pound of beef is not determined by measuring the energy expended in the production of that product.
The maximum affordability of oil is whatever price level causes a recession, for the US Hamilton estimated about 4% of income can be spent on oil before a recession results.
I did a more basic analysis for the World, looking at expenditures on crude plus condensate (in 2014$) vs World Real GDP (2014$). In 2008, the oil expenditure was 3.3% of total World GDP and in 2011 the World hit this level again with no recession.
If we assume the rate of real GDP growth falls from 3.3% to 0% over the 2015 to 2030 period and that oil expenditures cannot rise to more than 3.3% of GDP (for the world) without causing a recession, the chart below gives the maximum oil price from 2015 to 2030 which will not cause a recession if oil production follows the scenario shown (left axis for output in Gb/year and right axis for real oil price in 2014$).
Good analysis. And at that price range we will use straight wind power for beam pumps and nuclear power to make steam. No need to use electric generators if you are boiling water.
Hi Fernando,
Your probably kidding, but note that as long as the oil price remains less than that, then high oil prices may not cause a recession, so after 2015 those are maximum prices for a barrel of crude in 2014$. The actual price is determined by supply and demand in the oil market, as always.
Dennis, sometimes I’m limited in what I can discuss. But I can confirm a large European oil company has performed a study to build a very large steam generation plant using a nuclear reactor.
I can also confirm the use of a wind turbine to power a well on beam pump is quite feasible. Beam pumps have a tendency to be over designed, this causes the fluid level in the well annulus to drop too low, and the pump pounds fluid, which in turn puts the rods in compression and leads to fatigue. To get around it the wells are pumped on an intermittent basis.
Because wind is intermittent, hooking up a wind turbine to the field grid is a natural. It’s a pretty good idea for Patagonia, Wyoming, and places like that.
Dennis,
“The maximum affordability of oil is whatever price level causes a recession, for the US Hamilton estimated about 4% of income can be spent on oil before a recession results.
I did a more basic analysis for the World, looking at expenditures on crude plus condensate (in 2014$) vs World Real GDP (2014$). In 2008, the oil expenditure was 3.3% of total World GDP and in 2011 the World hit this level again with no recession.”
1) Many things besides the oil price can cause a recession. Why do you assume that the oil price that will cause a recession is static over time? What about the economic effects of falling ERoEI and depletion? In your model the price is not constrained by anything.
2) Hamilton’s 4% estimation is just an estimation. How was it derived? Why don’t you go ahead and use this 4% assumption instead of substituting your own simplistic 3.3% assumption for the world? Why not choose a higher number than 4% instead of a lower one? According to the IMF, in 2014 World GDP growth was 3.8%, while US GDP growth was only 2.7%. If you had assumed 4% or greater, would your
fantasy forecastresult seem even more unrealistic? How much more?3) An oil expenditure of 3.3% of total World GDP in 2008 produced a recession in 2009. An oil expenditure of 3.3% of total World GDP in 2011 produced no recession. How do you account for that discrepancy? Isn’t your 3.3% number really just arbitrary?
All in all, this 3.3% of total World GDP thing of yours is a pretty shaky assumption to load into into your model. But, of course, that doesn’t stop you:
“If we assume the rate of real GDP growth falls from 3.3% to 0% over the 2015 to 2030 period and that oil expenditures cannot rise to more than 3.3% of GDP (for the world) without causing a recession, the chart below gives the maximum oil price from 2015 to 2030 which will not cause a recession if oil production follows the scenario shown (left axis for output in Gb/year and right axis for real oil price in 2014$).”
Now your shaky assumption has become gigantic. In fact, your assumption here is so large that it wraps around and becomes completely circular.
Nothing in your model constrains any of your assumptions but you and your ever hopeful imagination. You are not producing results with your model. You are assuming the result first.
You are simply assuming that all your assumptions are correct and making a pretty graph of what your assumptions would look like if they could actually happen. That is a total waste of time. Garbage in garbage out.
Your model does not account at all for entropy.
The Etp model is a physical model, based on the laws of thermodynamics, that doesn’t assume all the things you need to. The Etp model derives the things you need to assume up front, in other words, it actually produces useable results.
I would say you need to go back to the drawing board, Dennis, but I am afraid that all you have is a drawing board for producing pretty graphs.
Hi Futilitist,
The data suggests there is a relationship between GDP and oil consumption and there is economic theory to back it up. Hamilton did a sophisticated analysis for the US which suggested about 4% of GDP could be spent on oil before a recession would result.
My admittedly much less sophisticated analysis assumes that a similar such relationship applies to the World, but that the result may not be 4% but some higher or lower number. The data suggests approximately 3.3%, why is there a difference between 2008 and 2011, I would suggest the absence of a severe financial crisis in 2011 may be the best explanation.
The physics cannot be applied to oil only and must be applied to the enrire economic system and all forms of energy used by it. Whether the net energy of oil is positive makes little difference as long as the net energy of all energy sources used in the economic system as a whole are positive.
Neither oil consumers or producers know or care if the gallon of oil they have purchased is net energy positive. The price of oil is not determined by physics alone, it is determined by the interaction of the production function in the oil industry (oil supply curve), consumer preferences (oil demand curve), and the overall level of economic income (World GDP).
Hi Futilitist,
The price of oil is not determined by physics, it is determined by economics. A physics analysis must account for all energy and entropy in the system, the ETP model considers oil in isolation, there is no physical reason to do this as it does not match reality in the petroleum processing system where many different types of energy are used as inputs.
You are correct that 3.3% is arbitrary, but based on a rudimentary analysis of World real oil prices (using BP oil price data and Bureau of Labor Statistics cpi data), oil output (C+C data from the EIA)), GDP data from the IMF (real GDP purchasing power parity in constant 2014 $), and population data from the UN (medium fertility scenario), I determined that the maximum oil spending(for barrels of C+C) to GDP ratio over the 1990 to 2014 period was about 3.3%(in 2008 and 2011).
As I said, the price is the maximum that will not lead to a recession caused by high oil prices, clearly recessions can result for other reasons such as a housing bubble or a stock bubble and those cannot be predicted (nor can oil prices).
The average oil spending % of GDP from 2005 to 2014, excluding the recession year (2009) was 2.8% of GDP, in 2010 to 2013 the average was 3%. If oil spending per unit of GDP (%) starts at 3% and falls gradually to 2.7% in 2030, then the oil price which might prevent a recession caused by high oil prices would be as shown in the chart below.
I also include Real GDP growth, Real GDP/cap growth, and oil spending per unit of GDP on left axis (all in % terms).
Circular argument. You cannot use the prediction of the model in a valid argument for why the underlying model is correct.
try some logical reasoning.
Dennis,
“Circular argument. You cannot use the prediction of the model in a valid argument for why the underlying model is correct.
try some logical reasoning.”
Try some logical posting. I have no idea what statement is even being referred to here. Be a little clearer please.
I hope you are not referring to anything like this:
The ETP derived Cost Curve is constructed from the ETP model, and has mapped the price of petroleum since 1960 with a correlation coefficient of 0.965. It is the most accurate pricing model that has ever been developed.
~bwHill
If you are saying that statement is invalid, then you are wrong. That is how a good predictive model is validated. bwHill created a model, based on physics (not imagination) that actually predicted something very accurately. You have never accomplished anything remotely like that.
And please stop answering with more examples of your shock model simplified. You can’t refute a real model by constantly referring to your own fake one. You are not talking about how the Etp model was made by showing a bunch of meaningless graphs you made in a graphic design program. It looks like spaghetti and it has nothing to do with any kind of proper review of the Etp model. Thanks.
Hi Futilitist,
That is a curve fit to the oil price, with the claim that it demonstrates that the model is correct, the claim is false.
I was talking about this comment:
The obvious answer to your objection is that the model clearly predicts a rapid decline in both net energy and GDP. Coal, natural gas, biofuels, wind, solar, geothermal, hydro, and nuclear power, all put together, clearly cannot make up the shortfall in the timeframe predicted by the model.
Next?
To which I replied,
Circular argument. You cannot use the prediction of the model in a valid argument for why the underlying model is correct.
try some logical reasoning.
I should have added that the fact that coal and other energy sources are ignored is the reason that it appears that net energy is a problem. The net energy of the entire economic system is all that matters.
The ETP model has to account for all entropy in the energy producing system of the economy, coal, oil, natural gas, wind, solar, nuclear, and biofuels.
It only comes up with the rapid decline because it mistakenly analyzes the petroleum processing system in isolation, but it does not exist in isolation because there are energy inputs from energy sources besides oil.
Clearly you refuse to recognize this basic flaw with the model and the maximum affordability curve is clearly wrong and before the end of 2015 it will be clear that oil prices are not continuing to lower levels as predicted by the ETP model, but will be moving higher as oil supply decreases.
We are seeing a lag in the adjustment of the oil market to a new behavior by OPEC where they are no longer reacting to excess supply by cutting output, it will take some time for the LTO producers to adjust to this new reality.
“That is a curve fit to the oil price, with the claim that it demonstrates that the model is correct, the claim is false.”
Your statement above is 100% false. A lie. This has been pointed out before. The Etp model is the result of 8 years and thousands of man hours of work. The Etp model is a physics based model that managed to predict the price of oil since 1960 with near perfect accuracy. This was then checked against the oil price history to validate the model. The Etp model is not an example of simplistic curve fitting.
But it is no surprise that you think that the Etp model is just a simple price curve fit. That seems to be the only thing you can comprehend since curve fitting is your specialty, and your shock model simplified actually is nothing but curve fitting.
Nice try, again.
Now that we have circled back around to one of your original stupid, false, and misleading arguments yet again, it is time for this ridiculous debate to come to an end. You have not come anywhere close to refuting the Etp model.
It is now official.
The Etp model has been validated. It certainly hasn’t been invalidated in any way by anyone on this site. I would invite the readers to review this debate, in it’s entirety, to confirm that this is true.
I would like to thank everyone who participated in this important debate.
—Futilitist
The Oil Shock Model is essentially a production accounting model that applies mean-value flow rates and ME variance. Please take a look at what Dennis has done with variations of the shock model to characterize Bakken production. He is tracking it like a shadow wolf.
There is a world of difference in characterizing flow versus trying to predict the price. The latter has elements of economic game theory, which many regard as largely intractable. The close relationship between supply and demand is essentially as far as I will go — but please knock yourself out if you want to go beyond this point.
“There is a world of difference in characterizing flow versus trying to predict the price. The latter has elements of economic game theory, which many regard as largely intractable.”
And it has been largely intractable. Until now.
The ETP derived Cost Curve is constructed from the ETP model, and has mapped the price of petroleum since 1960 with a correlation coefficient of 0.965. It is the most accurate pricing model that has ever been developed.
~bwHill
Hi Futilitist,
You have not validated anything.
The ETP model fails to account for the energy and entropy of all components of the petroleum processing system and thus predicts a fall in oil output and oil price because there is not enough net energy in a barrel of petroleum (or the marginal barrel which is the most costly to produce).
As long as the net energy of the entire economic system is positive, there is no physical reason that it cannot continue to function. No product’s value is based on its energy content. This is basic economics. The physics of net energy can only be applied sensibly to the entire economic system, not to individual products or industries within the economic system.
Time will tell if the model’s predictions are correct. Chart below.
Hi Dennis.
You have not invalidated the Etp model.
“No product’s value is based on its energy content. This is basic economics.”
Oil’s value is based on it’s energy content. That is just basic physics.
If oil prices weren’t based on the value of the energy content of oil, the Etp model could not have accurately predicted the price of oil like it did.
The Etp price curve is derived from the Etp model, which is based on the second law of thermodynamics. The Etp price curve was generated without inputing any oil prices at all. The model was then validated against actual historic oil prices to check for accuracy. The model is extremely accurate.
The Etp model is not a curve fit. If you try to say or imply the Etp model is just some sort of curve fit again, you are lying. I will ask Ron to moderate your comments. Thank you.
The ETP derived Cost Curve is constructed from the ETP model, and has mapped the price of petroleum since 1960 with a correlation coefficient of 0.965. It is the most accurate pricing model that has ever been developed.
~bwHill
Dennis, please stop answering this thread. The debate has already moved from here to the current page. bwHill is there to answer your questions.
I am a fan of The Fourth Law of Thermodynamics as postulated by Nicholas Georgescu-Roegen http://robertvienneau.blogspot.com/2009/11/nicholas-georgescu-roegen.html
Georgescu-Roegen’s policy conclusions focused on converting societies to ones in which their economies were sustainable, with a concomitant smaller population in what are now considered advanced countries.
I have to give him some credit for that. He seems to be among the very few economists who have understood that no economic system will endure unless it is embedded in a functioning stable ecosystem.
Ecosystem Thermodynamics, Aiko Huckauf
Storage of Exergy
The ripening of ecosystems increases their ability to
consume incoming solar exergy. This tendency has
been formulated as the tentative Fourth Law of
Thermodynamics:
If a system receives a throughflow of exergy,
it will utilise this exergy to move away from
thermodynamic equilibrium. If there is more
than one pathway of movement, that one is
likely to be chosen which yields most stored
exergy (and creates the longest distance from
equilibrium).
An industrial civilization based on fossil fuels is not a sustainable system in the long run, it has to crash! All economies are subsidiaries of Ecosystems Inc.There are very few examples of stable ecosystems on this planet that are not solar powered, maybe we should think about that >;-)
https://www.youtube.com/watch?v=hM1x4RljmnE#t=33
My interest in Georgescu-Roegen relates to his concept of material entropy.
http://www-rohan.sdsu.edu/~rbutler/envir5.htm
On a somewhat related note here is last nights 60 Minutes segment on rare earths. Unfortunately the title is misleading. http://www.cbsnews.com/news/rare-earth-elements-not-so-rare-after-all/
My interest in Georgescu-Roegen relates to his concept of material entropy.
While material entropy is indeed an important concept…
Ecosystem Thermodynamics
Exergy vs. Entropy
Exergy and entropy are closely related:
* The exergy in the universe is constantly
decreasing, the entropy increasing.
* Exergy is not negative entropy, but another
description of the system.
* The exergy concept is useful to describe
ecosystems and other systems far from
equilibrium (for which entropy is not defined).
Since our ecosystems and our economies are not the whole universe and we are really concerned with the relatively small time scales of centuries or at the most a few millenia within which our civilizations rise and fall, the concept of energy flows and more specifically the concept of exergy is perhaps more useful and somewhat easier to grasp at least IMHO >;-)
Ecosystem Thermodynamics
An Illustration connecting Energy, Exergy, and Entropy
The toothpaste tube (energy) is used by squeezing out
the paste (exergy). When all paste (exergy) is used up,
the tube (energy) is still there, but its usefulness
(quality) has diminished. In the picture, the depression
in the tube (entropy) increases as the amount of paste
diminishes—but the depression is not a negative paste
as one cannot use it to unbrush one’s teeth.
Seems that when I edited the comment the illustration disappeared so here it is again…
Hi Fred,
The concept of exergy seems interesting, the question becomes where do we find good exergy data?
It is difficult enough just finding decent energy data.
Hi Dennis.
I think I have a solution:
If you were to model the thermodynamic life cycle of oil production, you could generate all the exergy data by running the model.
Yeast in a Vat Meet Schrödinger’s Cat
The entire human economic system results from the instinct to seek maximum reproductive capability through the maximum use of available resources. We maximized the reproductive utility of the resource we call oil.
Heisenberg’s uncertainty principle gave us Schrödinger’s cat.
We like to think there is some way for humanity to steer it’s own destiny. We all have a need to believe we are in control. In the great experiment we call life, we tend to feature ourselves as Schrödinger, but unfortunately, in the big picture, we are really Schrödinger’s cat.
Schrödinger’s cat can do a lot of uncertain things within the box. But the one thing Schrödinger’s cat cannot do is climb out of the box. Just as yeast cannot climb out of the vat.
So this finally answers this long standing, open question that has kept hope alive for so long, for some.
Humans are not smarter than yeast.
I am fascinated by how the EIA data seems to have missed such an important inflexion point (I am also thinking of the data from the Bakken a few days ago). What are they doing? The data from ‘on the ground’ clearly shows production is no longer increasing yet every week they are coming out with these ever growing estimates of US production (which seem designed to fit projections that they made 6 months ago). The longer they leave it to incorporate reality in their data sets the more embarrassing this is going to get surely? Are we suddenly going to get a massive drop in one weeks data? The oil markets seem to be working off this flawed data so its pretty darned important……
If you want to understand, read this:
http://www.thehillsgroup.org/index.html
An analysis of the Weekly EIA report for the week ending March 13.
To get some insight into the inventory builds in the recent EIA weekly reports, I check to see how refinery inputs, production and imports balance the weekly change in inventory.
The calcs are shown below for the last two Wednesday’s. The EIA adjustment factor is used to account/balance all of the errors in all of the other numbers to make the barrels per day numbers balance with the weekly inventory change. Note the adjustment can be either positive or negative.
From what I can figure out, I think the EIA assumes the weekly inventory numbers are accurate. I am not sure if this is a reasonable assumption. Are the tank levels measured electronically or by dip stick? I think that the net imports may correct.
Comparing last week’s numbers to this week, there is a 703 kb/d increase in imports. Why and Who? Is it the refiners who are storing oil now because it is so inexpensive and taking advantage of the contango in the futures market. Could it be Saudi Arabia through their joint Motiva refinery stuffing crude into their storage tanks in the US. Nice way to pressure WTI.
This week the EIA reported another big increase in US production, even though they knew that they are out by a mile on their January Bakken numbers. I guess they have to find a way to balance the numbers. Today it looks like Texas is also down.
Note that the EIA adjustment factor for this week has gone up by 111 kb/d. This just means that they are more uncertain of their numbers. So the EIA has to add this adjustment so that all of the numbers make the daily flows of oil (b/d) X 7 equal the weekly change in inventory.
Consider what has to happen to the other numbers if the adjustment had to be zero. Difficult to believe that the production or imports could be higher. If refinery inputs were lowered, then product supplied would not balance.
I am beginning to think that maybe the inventory numbers may be wrong. Who will go and check them? If the inventory were lower then the production could be lowered.
Any additional insight would be appreciated.
March 6 March 13
Production Line 1: 9,366 9419. +53
Net Imports Line 4: 6,315 7018. 703
Adjustment Line 13: 263 374. 111
Total. 15,944 16,811
Refinery input Line 14: 15,300 15,436
Inventory Diff (b/d) 644 1,375
Inv Difference x 7 = 4,508 9,625
The inventory increase for the last two weeks of 4.5 M and 9.6 M matches the numbers in the last line.
Those graphs make me think of the skeletal hands of ‘DEATH’!
Cheers!
Fred
Hey Fred,
Check this out:
http://www.thehillsgroup.org/index.html
I’d like to read your opinion. Thanks.
Hey Futilitist,
I followed the link and read the content. Not much new or surprising to me.
Most people seem to think that the last stage of the Kubler Ross process is ‘Acceptance’
End of story!
I think there is another step which is moving on and that is a personal and private journey…
Perhaps Paul Chefurka’s take might shed some light on the process.
http://www.paulchefurka.ca/
I myself am seeking out activities and people who make me happy!
Even a cancer patient who is aware that he or she is terminal cannot dwell full time on their coming demise without at least trying to enjoy some of the time they have left.
Cheers!
Fred
Futilitist,
I composed a reply after following the link but the internet seems to have swallowed it.
It had to do with moving beyond the acceptance stage of the Kubler Ross stages.
Basically just finding your own path to happiness…
I had included a link to Paul Chefurka’s site
http://www.paulchefurka.ca/
Cheers,
Fred
Futilitist,
I have tried to reply but my replies keep disappearing…
I think those of us who have gone through the five stages of the Kubler Ross process all the way to acceptance need to find a way to move on even beyond that.
I think Paula Chefurka has something to say about that.
http://www.paulchefurka.ca/
Cheers!
Hi Fred.
I’m not sure what you are suggesting. I am the change I want to see in this world already. That is why I posted this. This entire site is in deep denial. I want to help.
No one gets to skip to step 5.
I want to know what you think of the model.
Hey there Futilitist,
With regards the model.
This is one of those rare times that I’m going to agree with Fernando, I’m not particularly impressed with the model especially the references to the second law. Personally I think the likes of Aiko Huckauf and Tom Murphy have a better grasp of thermodynamics and the consequences of resource depletion but I digress.
Having said that I do think the point is completely moot!
To really explain why I think so would take more than a few dissertations in fields ranging from Neurology, Neuro Archeaology, Anthropology, Psychology, Evolution, Systems Thinking, Ecology, etc.. etc.. I could certainly cite scientific articles and weave a tapestry of connections for you. Though in our world of quick fixes and instant gratification I hardly imagine that most people would have the necessary attention span, the patience or the inclination to even try to follow. Perhaps a reading of E.O Wilson’s book Consilience might serve as the loom for the weaving of such a tapestry.
This entire site is in deep denial.
If you are referring to ‘Peak Oil’ I highly doubt it, I myself probably spent almost 7 years on the old TOD site and I’m pretty sure that the vast majority of the readers of this site agree that we are either past or at peak oil now.
If you mean that people are in denial that peak oil will cause or has already set in motion the collapse of industrial society, well I guess then we would have to nail down what collapse actually means. I’m pretty sure it means very different things to different people. Personally I experienced a financial collapse of major proportions between 2005 and 2008, I’m still here and life has gone on. I have already embarked on a paradigm change in my own life and I’m pretty sure others have also done so or will do so in the near future. I’m done with the simplistic black and white ideological world views from those who are still stuck trying to find solutions for that which can’t be fixed. Admittedly I do express my annoyance upon occasion, I’m only human.
No one gets to skip to step 5.
Well most people aren’t even at stage 1 so to discuss whether we can skip step 5 really is a bit premature. I don’t have a lot of hope that the majority will even survive to stage 5 let alone understand that there is existence beyond that.
I am the change I want to see in this world already. That is why I posted this.
Well that’s great!
The reason I posted the link to Chefurka’s site is because I think he gets at a fundamental level, the fact that it is pretty much pointless to even try to change people or the world!
Awareness that the predicament encompasses all aspects of life. This includes everything we do, how we do it, our relationships with each other, as well as our treatment of the rest of the biosphere and the physical planet. With this realization, the floodgates open, and no problem is exempt from consideration or acceptance. The very concept of a “Solution” is seen through, and cast aside as a waste of effort.
Therefore my own point, that I am past acceptance and am now trying to surround myself with people and activities that make me happy!
I won’t specifically say what those activities are or who those people are but I am involved with protecting some small parts of nature and a few business ventures that may or may not pay off. I’m also trying to spend more time with close friends and family.
As far as shouting from the mountain tops that everyone around me is in Denial of reality, well I guess I’m occasionally guilty of doing that too and I often find I can’t resist holding my tongue when I come across a comment from certain individuals who tell me they know better than everyone else what the problems are and what we need to do to fix them…
I’m not sure what you are suggesting.
I’m not suggesting anything >;-)
Cheers!
Fred
P.S. Special thanks to my eco ninja warrior mentor
Whose tack is to act alone, anonomously behind the scenes setting small avalanches in motion where necessary. Never taking credit for saving the whole village from the big avalanche that would certainly wipe them off the mountain.
There I offer one last thread in study of the complex tapestry we have woven…
Self-organized criticality
From Wikipedia, the free encyclopedia
In physics, self-organized criticality (SOC) is a property of (classes of) dynamical systems that have a critical point as an attractor. Their macroscopic behaviour thus displays the spatial and/or temporal scale-invariance characteristic of the critical point of a phase transition, but without the need to tune control parameters to precise values.
The concept was put forward by Per Bak, Chao Tang and Kurt Wiesenfeld (“BTW”) in a paper[1] published in 1987 in Physical Review Letters, and is considered to be one of the mechanisms by which complexity [2] arises in nature. Its concepts have been enthusiastically applied across fields as diverse as geophysics, physical cosmology, evolutionary biology and ecology, bio-inspired computing and optimization (mathematics), economics, quantum gravity, sociology, solar physics, plasma physics, neurobiology [3][4][5][6][7][8][9][10][11][12] [13] [14] [15] and others.
SOC is typically observed in slowly driven non-equilibrium systems with extended degrees of freedom and a high level of nonlinearity. Many individual examples have been identified since BTW’s original paper, but to date there is no known set of general characteristics that guarantee a system will display SOC.
Source Wikipedia
OMG! I must be channeling OFM BIG GRIN!
“OMG! I must be channeling OFM BIG GRIN!”
Don’t be so hard on yourself, there, Fred. 😉
“This is one of those rare times that I’m going to agree with Fernando, I’m not particularly impressed with the model especially the references to the second law. Personally I think the likes of Aiko Huckauf and Tom Murphy have a better grasp of thermodynamics and the consequences of resource depletion but I digress.”
Can you understand why your statement above is totally meaningless? Fernando’s objection is simply not a valid one, and I have no idea what Aiko Huckauf and Tom Murphy think about the model.
Any valid refutal must actually include some reference to the model itself and the methodology used in it’s creation, otherwise it is just an empty statement. Your statement, above, is a meaningless, empty statement that paraphrases a meaningless, empty statement. The rest is a vague argument from authority.
“Having said that I do think the point is completely moot!”
Determining the validity of a physical model of oil depletion that seems to have excellent predictive capabilities is not a moot point. Obviously, it is the whole point of my question! Getting a straight answer is like pulling teeth.
So, to summarize, you have no idea whether the model is valid or not, but you really don’t care one way or the other.
I am tempted to discuss your misapplication of the Kubler Ross stages of grief, but that point is completely moot.
But I can’t resist, so here is the Reader’s Digest version: One cannot begin a grieving process for a loss that one has yet to experience. You can’t pre-grieve. And if you don’t fully understand the nature of the dilemma you are about to confront, you can’t even play your pre-grieving game very well. By now you have probably guessed that I think your style of pre-grieving is just another form of denial. Sorry.
Basically, you have the cart before the horse, Fred. First comes intellectual understanding, next comes emotional acceptance.
You can only pretend to accept that which you do not yet fully comprehend.
And I did read Consilience and I reference it regularly in my posts. But if you choose to answer this comment, my preference would be that you stick to the original question concerning the validity of the ETP model. At least for now. Thanks.
Technically a lot of people who have learned about peak oil have suffered the loss of their world view, so a loss has actually occurred for many.
Consider myself for example, who had gone through life with the view that ever-increasing prosperity and technology was a given for humanity. Stupid right!?
Now, when I learned about Peak Oil and it’s implications this completely destroyed my whole view of the world and how it functioned. I certainly went through grief for this loss, anger at our inactivity at not attempting to mitigate it, bargaining about how we can solve it, and more recently have just accepted the inevitability of it all.
Sure, I’m not starving in the street now, and if TSHTF I’m sure I will not be emotionless about it, but the loss of my whole worldview was a massive loss to me. I suspect many people on here have had to deal with this.
Don’t understate the significance of this loss.
“Don’t understate the significance of this loss.”
I don’t.
But those are loses that have already happened. I am talking about loses that have yet to happen but are seen as inevitable. Future losses that never stop. Till death. That is the definition of futility.
People have a very hard time accepting futility.
The Kubler Ross process is good therapy for a single loss, not a continuous stream of losses. That is why I don’t do Kubler Ross. I do Futilitism.
That is true, however at least those of us who have gone through the loss I mentioned are not going to be surprised when things increasingly turn to custard. At least this is something I’ve already accepted.
In fact, we may even be able to try and push for some potential changes when crisis becomes clear to all. Sure, at that point collapse is baked in but perhaps we can force local change that may improve our own individual regional outcomes.
I hate to think what impact peak oil could have on those who are still on-board the optimism / technocopia train. However, I think given the current economic climate around the world more people are intuitively sensing that something isn’t right. Do I think this will translate into meaningful change? Probably not, until the writing is on the wall of course.
For me, I like to shift my thinking to a universal plain. In the end we are just marginally intelligent apes on a rock, hurtling through space, in a universe we don’t and will never understand. Whatever happens on this rock is largely irrelevant when you look at this scale. Boom and bust, we are part of nature after-all!
(Or perhaps Nick G is correct and we will all drive off into the sunset in our EVs :-P)
Yeah, I think it’s unlikely PO will do us in. Climate change is a much harder problem, but the solutions are pretty much the same.
Oil (and other fossil fuels in general) is risky, expensive and dirty. We should kick our dependence on it ASAP.
Right?
Dave, you are among a very tiny minority of people who are able to change their world view. A person’s world view describes who they are. People have a tremendous investment in their world view and most simply cannot afford to lose that.
Most of us who were able to change our world view never had a very strong world view to start with. That is we were never so indoctrinated in our view of the world that it could not be changed. Our world view was never set in cement like the vast majority of people once they reach adulthood.
We are among the very lucky who were never so indoctrinated with a bullshit world view that it could not be removed with a little logic and reason.
I am presenting logic and reason.
And so is bwHill, by the way. I have to assume you have seen his posts, yet you never even ask him a question about his model, which, frankly, seems a little incurious to me.
bwHill can explain the ETP model better than I can. If you have doubts about the model, you should ask him about them so that these doubts can be addressed, for all to fairly evaluate.
It doesn’t make sense not to realistically talk about such an important possible breakthrough in oil depletion forecasting on a site dedicated to talking about oil depletion forecasting. What gives?
Ron, you do wonderful work presenting the data, I just want to say thank you for doing that.
I was fortunate enough to have the right personality and study the right subjects (science). Growing up in a largely secular society probably helped as well. Not everyone fits this profile in wider society though. I strongly suspect most of the posters here are of similar character.
That said, it still wasn’t easy having your world view destroyed. It took me a few years to get my head around the enormity of it all. It was only after I became aware of how important energy was to everything, and how dependent we are on fossil fuels that I put two and two together (this was a life-changing revelation I suppose). For most people this is an invisible part of life which they don’t notice or stop to think about. Everyone knows fossil fuels are finite but just assume that this will be a problem in a hundred years time, not one they should care about. In my society (like the US) energy is a given, the car is a birth-right, we burn fossil fuels without giving a thought to the consequences or the enviable outcomes.
Most people see a helicopter flying past, a truck hauling food, a digger building foundations, i.e. anything doing work, and they think ‘wow isn’t that (machine) amazing’. Me, I think to myself ‘yes, those machines are impressive, but not as much as the fuel that’s powering them’.
To most people however the machine is the thing that gets things done, they rarely (seemingly never) think about the energy that’s allowing the work to happen.
Learning about PO makes someone look at society completely differently, and I see just how remarkable fossil fuels have been.
Keep up your good work!
Dave P,
“Learning about PO makes someone look at society completely differently…”
If you really want to look at things differently take a look at this:
http://www.thehillsgroup.org/depletion2_022.htm
The grieving has just begin.
@Futilitist
I acknowledge the Hillsgroup’s projections, just like I acknowledge Dennis’s, WHT, Colin Campbell, Laherrere etc…
I’ve seen many projections, most have been inaccurate. Forecasting is difficult, otherwise we’d all be rich. Why put too weight on this particular prediction given this has been the case to date? I’m not saying there is necessarily no validity in their projection, I am just past the point of where I buy into every projection as gospel. This is one of the reasons real time data (like this site) is so useful – no BS, just data / figures on what’s actually happening.
Regardless, what do you want people to say? Collapse is coming? We are screwed? I see you posting links frequently over the page, what reaction do you want from people?
In my own view this projections doesn’t change much. I accept peak oil is likely to be in the near-term future. I accept we are well past per capita peak energy. Much like Fred, I don’t think dwelling on dates or pouring over Hubbert curves is productive (it is fun though – which is why I am here). If anything everybody should be taking lead from folk like wimbi and getting on with trying to come up with workable solutions.
Will it save the world? No, but that’s not the point is it!
Dave P,
“I’ve seen many projections, most have been inaccurate. Forecasting is difficult, otherwise we’d all be rich. Why put too weight on this particular prediction given this has been the case to date?”
Because this is the first time anyone has built a physical model. And it is remarkably accurate.
The ETP derived Cost Curve is constructed from the ETP model, and has mapped the price of petroleum since 1960 with a correlation coefficient of 0.965. It is the most accurate pricing model that has ever been developed.
Scattered around the globe are 48,000 oil fields that supply the world’s need for petroleum. Each field has its own unique set of characteristics – and there is considerable diversity between them. Arriving at an estimate for the remaining extractable reserve is usually attempted by adding together the quantity of petroleum believed to be present in each field. It is the number of fields, and their distinctive compositions that make an accurate determination for the depletion status of the world’s petroleum reserve a challenge.
When a field is discovered the quantity of petroleum that might be available for extraction is usually estimated by applying a very complex set of equations (the Buckley-Leverett equation, and its extrapolations). These equations require a number of initial values that are often based on the judgment of an experienced reservoir engineer. One result of this procedure is the phenomena known as reserve growth. As time progresses it is sometimes discovered that more crude oil can be extracted from a field than was originally predicted. Of course, the reservoir did not grow, it took 5.3 to 570 million years for it to form! Reserve growth occurs because there was an error in the original estimate.
When thousands of fields are evaluated, each with its own margin of error, the result is a range of values that can vary by 50% or more. To further complicate the issue nature rarely, if ever, makes any of her creations exactly the same. Petroleum is a complex mixture of hydrocarbons, coming from a world wide distribution of fields. Eleven million tons of it are extracted daily. Yet, each barrel is assumed to be exactly like every other barrel of the 72 million produced that day. Obviously, this is an inadequate evaluation method for a commodity that is essential for the continuation of modern society. There are a number of methods employed by science, and engineering to help solve intractable problems. The most widely used, and dependable of these methods are those that are based on fundamental physical laws. The best method to use can often be identified by first isolating the specific characteristics of the problem. Petroleum has a very unique, and specific characteristic; it is the world’s primary energy provider.
Energy is a fundamental physical property, and for more than a century its application has been investigated by science and engineering. A vast amount of literature has been dedicated to what has been discovered, and the procedures for the application of those discoveries. To determine the status of the world’s petroleum reserve “Depletion: A determination for the world’s petroleum reserve” analyzes the system’s energy state. This method has several advantages over the quantity measurement approach.
The methodology employed by the study is termed “exergy” analysis. Exergy in the vernacular of the science of thermodynamics means: “the maximum amount of work that can be extracted from a system”. The system under study is a unit of petroleum. The maximum amount of work that can be extracted from a unit of petroleum is calculated using the physical properties of the crude oil in question, and equations that have been derived from studies of the First and Second Law. These values are then used in the construction of a mathematical model that can predict the status of the world’s petroleum reserve with a much smaller margin of error than can be provided by the quantity approach.
The smaller error results from a much more compact model than what is produced by the quantity approach. To be implemented, the quantity approach requires the evaluation of thousands of values; usually many of them are not precisely known. The energy approach (the ETP model,Total Production Energy) requires only three. The model is derived from the fundamental physical properties of petroleum, First and Second Law statements, and the cumulative production history of petroleum. To generate values the model requires the mass of crude removed over a period of time, the mass of water removed, and the temperature of the reservoir. Although somewhat complex from a mathematical perspective, it employs only one value of which we are not very certain; that is, petroleum’s production history. Petroleum production is a process. The process includes the extraction, processing (refining), and distribution of crude oil and its products. Each step of the process requires an input of energy to be completed. As time progresses the needed energy input increases. This occurs because of entropy production (a Second Law mandate) in the process. When the needed energy input exceeds the exergy of the petroleum, the petroleum can no longer act as an energy source. It has lost it primary value as a commodity. This is denoted as “the dead state”; the point when no additional work can be extracted from the system (a unit of petroleum).
Entropy production results in an increase in the irreversibilities of a system. Irreversibilities are a measure of the energy cost of the processes of a system. The ETP model is a summation of the irreversibilities present in the petroleum production system over a period of time. Subtracting the irreversibilities in the system at a point in time from its exergy gives the amount of energy available to be used by the non-energy goods producing sector of the economy. The model does this on a specific (per unit) bases. The unit employed is the US gallon.
To be of value a model must be predictive. To have confidence in its ability to predict future events with an acceptable level of certainty, it must also be capable of reproducing past events with a reasonable level of accuracy. This implies, of course, that the past events being reproduced are known with reasonable accuracy. There are few past events which have occurred in the history of petroleum production that can be stated with certainty. The one catagory for which we are almost 100% certain is its price history. The price of crude oil varies daily, even by the hour, but when viewed from an energy perspective its longer term value closely follows a well defined mathematical function. That mathematical function is derived from the ETP model. The price of petroleum is driven by its cost of production, and its cost of production is controlled by the energy required to produce it. This simple relationship gives a means to map the past, and future of petroleum prices. Mapped to past pricing the relationship gives an almost perfect fit. Because the model is based on First and Second Law premises future projections can be expected to perform as well as those that were applied to the past.
The ETP model is derived from a Second Law statement, which means that it is, also, a Second Law statement. Because the model is based on First and Second Law premises, and because we have reason to have confidence in petroleum’s price history, petroleum’s cumulative production history can also be determined with a level of confidence similar to that which exists for its price. The model is reliant on one variable, petroleum’s cumulative production history, and this can be verified from its price history. The strength of the ETP model depends on two factors, its bases in First and Second premises, and the confidence that can be attributed to petroluem’s price history.
Optimistic estimates place the world’s total petroleum reserve at 4,300 billion barrels. Of that quantity the ETP model predicts that it will be possible to extract 1,760.5 billion barrels. This constitutes 40.9% of the total reserve. This is in agreement with assessments that have been made by several noted petro-gelogists. The principal difference between the use of an energy approach, and conventional methods is that the energy approach provides for the development of a reliable predictor for petroleum’s future pricing. The model shows that petroleum’s ability to supply the energy needed to sustain its own production process is declining. This is experienced by the consumer as increasing price. The model demonstrates why the two events are synchronized. The ETP model adds an important, and needed element toward a deeper understanding of the depletion status of our most essential extractive commodity.
~bwHill
Dude, this is the Holy Grail of oil depletion models. The rosetta stone of our destiny as a species. It provides the ultimate answer to all the open questions argued here endlessly for so many years to no useful end. But you just want data, facts and figures. You are too busy to bother with the big picture. You can’t see the forest for the trees.
It seems like you just don’t want to know the truth. IMHO.
“Dude, this is the Holy Grail of oil depletion models. The rosetta stone of our destiny as a species. It provides the ultimate answer to all the open questions argued here endlessly for so many years to no useful end”
That may be the case, time will verify this for us.
“You are too busy to bother with the big picture. You can’t see the forest for the trees.”
What’s the big picture? That oil will peak and will deplete? That this will force massive changes on society? That there’s a chance we could ‘collapse’? I get all of this. What is the metaphorical forest you speak of?
“It seems like you just don’t want to know the truth. IMHO.”
Thanks for your opinion but I disagree. I’d love to know when oil will peak. I’d love to know what will happen to society when this occurs! I think most of us would, I just don’t think that anything is ‘written in stone’.
If their modeling proves to be correct, awesome! Good on them for accurate forecasting, I will tip my hat to them if that is the case! But how does this change my approach to life? I still think we have to embrace our inner wimbi and get on with things.
The model tells you that you had better hurry the hell up with whatever you are doing or not doing. It is fight or flight time.
That is very useful information.
You should take the model seriously now. If you wait to confirm the model, you will be dead first.
Collapse isn’t something that may happen, or will happen at some unknown future date. It is happening right now. Very different.
Don’t procrastinate. Carpe Diem.
Good luck.
Determining the validity of a physical model of oil depletion that seems to have excellent predictive capabilities is not a moot point. Obviously, it is the whole point of my question! Getting a straight answer is like pulling teeth.
So, to summarize, you have no idea whether the model is valid or not, but you really don’t care one way or the other.
Good point and I’m not spending $69.00 to find out especially when there are plenty of people who have provided much of their analysis pro bono, Jean Laherrère and WHT are but two regulars on this site alone that come to mind.
I really don’t need the consultants at the Hills Group, with or without a valid model to convince me that Peak Oil is happening right about now. I’ve been following this discussion for well over a decade. As for the consequences of Peak Oil I’m already living them. I’m actually a bit ahead of the curve >;-)
**Depletion: a determination for the world’s petroleum reserve is an engineering report and requires a level of mathematical acuity which may make it unsuitable for some readers
All righty then!
Fred,
bwHill came here himself to explain his model and Dennis chased him away. Not cool.
I will buy the report and share what I find with you.
And I will ask Jean Laherrère and WHT for their evaluation when the chance presents itself.
I would love someone to convince me the model is somehow wrong. Seriously. I can see why you want to disbelieve what it has to tell us.
I would love someone to convince me the model is somehow wrong. Seriously. I can see why you want to disbelieve what it has to tell us.
No you are completely misunderstanding what I am saying! I’m not saying the model is wrong and I certainly don’t disbelieve that oil is a finite resource let alone the consequences of that reality. I have been convinced of peak oil since about 2005 when I was trouble shooting seismographic data files that big oil companies were sending to the software company where I worked at the time. This is 2015 I don’t need to be convinced of anything I’m beyond worrying about models and what they have to say.
So in that sense you are right I couldn’t care less about a specific model. I very clearly see the elephant in the room I don’t need one more spotlight on it!
I’m not buying it, Fred.
If this model is correct, which it obviously is, then it is basically the rosetta stone of oil depletion modeling! The you-ree-kah moment we’ve all been waiting for.
This site is supposedly dedicated to understanding oil depletion. Day after day, going back years (through the days of TOD), the arguments about ‘solutions’ to peak oil are endlessly, repetitively, and uselessly hashed out. It is like ritualized debate that intentionally avoids knowing the whole truth.
The ETP model, if it really is what it appears to be, would end that debate forever.
Yet no one seems to want to know anything about it. It encroaches on people’s psychological comfort zones. People think that if they can just stay in the world of imagination, the apocalypse will go away, or at least be held at bay forever. That is superstition, not science.
You say you don’t need further convincing, but neither do I. Yet I am very attracted to this model because it explains so much, so completely. It is a truly exquisite model, and that is something to be excited about if you really care about oil depletion and science generally.
I’ll buy the bloody report if it will make you shut up.
But how is it that every third post is a tortured defense of said report, and you haven’t even read it yet?
DuaneX
I took a lot of physics before I switched to life sciences. From the description given, I understand the model, and how it was created. It intuitively makes sense to me. I came up with my own simple version of the concept before I was even introduced to the model by Kam:
Kam says:
MARCH 14, 2015 AT 3:51 PM
I assume you are familiar with the ETP model?
http://www.thehillsgroup.org/depletion2_022.htm
REPLY
Kam thought what I was saying about falling oil prices from here on sounded like the Etp model. Other people had also come to the same conclusion as I did independently, especially after June 2014.
The model explains the current price of oil and, in fact, predicted it far ahead of time. No one else did that.
Did you read through any of the links? bwHill describes how the model was created. And did you check out my debate with Dennis on the last page? Or Dennis trying so desperately to refute the creator of the Etp model, bwHill? He will probably answer any serious question you might ask right here on this very page.
http://peakoilbarrel.com/texas-rrc-report-and-other-news/comment-page-1/#comment-506067
The question is whether it is worthwhile to spend $39 on a 57 page report?
The issue is that no one can criticize how the model is derived and what the model provides unless someone actually reads the Hills Group report.
That is what was confusing to me at first. I didn’t see enough information describing the model for me to make a valid criticism. But now that we know it costs $39 (Fred says $69), I guess someone may have to bite the bullet.
Perhaps someone here might already have a copy?!?
In any case, I didn’t have any trouble at all understanding the methodology used in the creation of the Etp model from the material bwHill provided on this site. And he seems to pop in from time to time to answer any questions people might have. I’m pretty sure he would be glad to do the same for you, if you are interested.
A minor point: The use of the Buckley-Leverett equation isn’t required to estimate reserves.
I know this is a bit too techie for a general audience, but we have found cases where Buckley-Leverett breaks down. I saw the first such breakdown documented in a Canadian field by a very bright Chinese PhD student at Stanford. However, he was following up on previous research carried out by others.
Fernando is trying to sound all techie about fractional flow equations that are used by oil field engineers to estimate yields. I don’t really think that the Buckley-Leverett equations actually break down as Fernando suggests. But this has nothing to do with the Etp model.
The Etp model does not use the Buckley-Leverett equations at all!
I just wanted to point this out for folks, just in case anyone thinks that Fernando’s super techie comment actually means anything, or raises any doubt about the Etp model.
Fernando has still not made a substantive objection, let alone a refutation of the Etp model. And no one else here has either.
If something is so hard for people to dispute, that they must resort to the grotesque obfuscation and stonewalling tactics seen on display on this site, there is a very good chance that thing is true.
The ferocity of denial is directly proportional to the fear of a truth, and the nature of that truth can be found through a process of triangulating denial to determine it’s trajectory (a vector), and simply inverting it. Another way to express this relationship mathematically is to say that a lie is 180° from the truth.
~Orwell’s Law
This is a quote from Hill’s website:
Optimistic estimates place the world’s total petroleum reserve at 4,300 billion barrels. Of that quantity the ETP model predicts that it will be possible to extract 1,760.5 billion barrels. This constitutes 40.9% of the total reserve.
As I had tried to explain to you before, the model fails because he is simply underestimating oil in place, and URR. That’s why L.G. Leeks, Hubbert, Campbell, etc. estimates have also failed. That is the reason why President Carter made a fool of himself by saying that the world was going to run out of oil by the end of the 1980’s.
The actual estimates from USGS for oil in place is 12 trillion barrels, with 4.5 trillion URR. That’s about 3 times higher than what bsHill has estimated.
THE ETP MODEL HAS BEEN REFUTED
John,
You are wrong. Again.
The model doesn’t need to consider URR from other estimates. Those are just estimates. Rather than relying on unreliable estimates, the Etp model derives URR accurately from the laws of thermodynamics applied to oil’s production life cycle.
The part you do not understand is that the amount of oil that will be recovered is not dependent on the size of the ‘recoverable’ reserve. The amount of oil that will be recovered is completely dependent on the oil that has already been produced, since it is this oil that provides the energy to produce more oil. Get it?
What about the Solar Panels I see on offshore oil rigs? What about the Gas that’s used in Tar Sands production? What about refineries that run on Nuclear power? As others have pointed out, it’s not only oil that provides energy to extract and process oil.
Also, the Etp URR estimates are no where near USGS estimates. One of them has to be wrong.
Also, if the 1.7 trillion Etp number was correct, we would have been seeing major declines in production for the past 30 years, as we passed the half way point of URR (Hubbert theory). As we have already used more than 1 trillion barrels of the URR.
There is no way that we would be maintaining, and increasing production if there were only 500 billion barrels left to recover. Production would have fallen long ago if that were the case. Get it?
John,
“What about the Solar Panels I see on offshore oil rigs?”
Last I checked, solar panels are still reliant on oil for their manufacture. While using solar panels may seem helpful depending on the situation, thermodynamically speaking, these do not really raise the overall efficiency of the system.
“What about the Gas that’s used in Tar Sands production?”
What about it?
“What about refineries that run on Nuclear power?”
Where?
“As others have pointed out, it’s not only oil that provides energy to extract and process oil.”
One way or another, the entire cost of oil production must be born by the end user of the oil. Adding other energy sources that require oil to manufacture, adds no extra net energy to the system overall, in fact just the opposite. Energy tends to be lost instead of gained. That is because of the first law of thermodynamics.
“Also, the Etp URR estimates are no where near USGS estimates. One of them has to be wrong.”
The Etp model is right, and the USGS is wrong.
The USGS makes URR estimates.
The Etp model does not make URR estimates. It derives the resultant URR from a physical model of the entire life cycle of oil production, which accounts for all the costs and the declining benefit of oil to the economy over time due to entropy. Thus, it correctly models how oil and the economy interact to produce it’s highly accurate (though perhaps quite surprising) results.
“Also, if the 1.7 trillion Etp number was correct, we would have been seeing major declines in production for the past 30 years, as we passed the half way point of URR (Hubbert theory). As we have already used more than 1 trillion barrels of the URR.”
The Hubbert curve does not account for declining ERoEI. Entropy is built in to the Etp model. And URR is largely irrelevant.
The oil price curve is what is most important. That is what determines future production. Please look back through the links to understand what the Etp model shows and why. Quit focusing on URR. It has no bearing on what is about to happen.
“There is no way that we would be maintaining, and increasing production if there were only 500 billion barrels left to recover. Production would have fallen long ago if that were the case. Get it?”
That is simply not true. It is just your false assumption based on an understanding that fails to account for entropy and the critical dependence of oil production on oil affordability.
The current price of oil is below the total cost of oil production. The economy is weak. Production costs keep rising and oil affordability keeps falling. Oil producers are pumping flat out to avoid default and bankruptcy. The market remains well supplied with oil, so the price fails to rise sufficiently. This is a positive feedback loop. How could we ever afford $100+/barrel oil again? From here on out, there is no way for the energy content of oil to create enough economy to pay the total cost of oil’s own continuing production.
That is our situation going forward and everyone seems very confused and upset. But the Etp model accurately predicted this counterintuitive outcome before it even happened. That is a very good model.
Futi, the comment about B-L breaking down was intended for the folk in the oil industry.
Your long post in bold face mentioned Buckley Leverett. It happened to be wrong, so I corrected it. That’s all.
“Futi, the comment about B-L breaking down was intended for the folk in the oil industry.
Your long post in bold face mentioned Buckley Leverett. It happened to be wrong, so I corrected it. That’s all.”
Ferni,
I don’t think the quote from bwHill was incorrect, but that doesn’t matter at all. He was describing inferior methods used to forecast oil depletion. The Etp model does not use these inferior methods. That was bwhill’s point.
It seemed like your post was trying to suggest to the casual reader that you were raising a valid objection to the Etp model, which of course, you weren’t.
And despite John B’s *WAY* overconfident, premature declaration, the Etp model still has yet to be refuted. People should notice that.
Alright Futilitist, let me ask you this:
If in 15 years, the oil has not run out, and the economy has not collapsed, would you still believe in the ETP Model?
Brilliant.
But I can’t resist, so here is the Reader’s Digest version: One cannot begin a grieving process for a loss that one has yet to experience. You can’t pre-grieve. And if you don’t fully understand the nature of the dilemma you are about to confront, you can’t even play your pre-grieving game very well. By now you have probably guessed that I think your style of pre-grieving is just another form of denial. Sorry.
Ok, I’ve thought about that a bit and I have to say I disagree!
I think it is certainly possible to intellectually understand and emotionally grieve for a loss that hasn’t yet quite happened. Just imagine being aware that a loved one has a terminal disease like cancer or even worse Alzheimer’s.
I really don’t think that is pre-grieving because the loss is real. Just because it is happening in slow motion before your eyes doesn’t mean you are necessarily in denial of what is happening or its ultimate consequence.
Since you don’t know me you certainly don’t have any way to assess whether or not I’m in denial about anything or where I might be on my personal journey through life.
Fred,
“We should euthanize people with terminal cancer and Alzheimer’s”
1) Disagree Strongly
2) Disagree Mostly
3) Disagree Somewhat
4) Agree Somewhat
5) Agree Mostly
6) Agree Strongly
Futilitist, have you stopped beating your significant other?! Yes or No?
While I might euthanize a pet I would never consider euthanizing a human being.
Having said that I think we should respect the wishes of individuals that have explicitly expressed a desire to end their lives if those wishes have been not been obtained through coercion and they have been expressed while those expressing them were or are in full possession of their mental faculties. This would apply to DNR requests and to requests for assisted suicide by those who are mentally competent but unable to physically end their own lives due to being severely incapacitated.
I would also have no problem ending any and all forms of life support to someone who was already brain dead.
Fred, I agree completely with you here. Of course it is possible to grieve for a loved one who has a terminal illness. I know, I grieved for my son for five years before he died. He knew he was dying and his mother and dad did also. He had Aids. He got it before they knew there was any such disease. He died in 1994 at the age of 30. He called it the gay plague.
And I think your comment deserves an answer from Futilitist, not the kind of bullshit answer he gave you. To answer a post where your argument got shot down in flames, with a silly question, pretending you didn’t get shot down at all, is the a very silly debating technique.
Thanks Ron and even at this late date I’m still sorry for your loss!
Ron,
I am also sorry for your loss. Aids is a terrible disease, and no human being ever should have to suffer like that.
.
.
.
.
.
“And I think your comment deserves an answer from Futilitist, not the kind of bullshit answer he gave you. To answer a post where your argument got shot down in flames, with a silly question, pretending you didn’t get shot down at all, is the a very silly debating technique.”
This is a side debate. Thus my flip, but explicitly not bullshit, answer. I certainly don’t think that Fred’s comment shot my argument down in flames! I told Fred before that I was not interested in discussing this well worn meme at this time. It distracts from the real debate over the Etp model of oil depletion. We can cover feelings later.
First the intellectual, then the emotional. Not the other way around.
Speaking of which, what are your objections to the Etp model?
Please direct them to bwHill while he is still here. Thank you.
Condolences, Ron.
Losing people to death feels like holes or empty spaces that suddenly appear in my life.
Futilitist,
Don’t know why I cant seem reply to this comment… this is the third time I’m trying.
I think we need to move beyond the acceptance stage of the Kubler Ross process
Check out Paul Chefurka
http://www.paulchefurka.ca/
Cheers!
Fred:
” I have been convinced of peak oil since about 2005 when I was trouble shooting seismographic data files that big oil companies were sending to the software company where I worked at the time.”
Just curious Fred, was it the fact that you saw majors pursuing smaller and harder to reach objectives that convinced you as to Peak?
Hey Doodlebugger,
There were a lot of factors at play and that was certainly a part of it. I had to sign non disclosure agreements every time I opened a file so even today I can’t reveal specifics. Our software also did GIS and mapping and was used both by the majors and also many independent Landmen. They would sometimes come and pay me a visit at the office and talk shop. I learned quite a bit from them. I also had to go to trade shows in Houston and got to have a few drinks with petroleum engineers and geologists and they’d tell me things that made me start to wonder if all might not be quite as rosy as the media and official talking heads were saying. Then as time passed I started to find out more by researching and reading on my own and later by spending time on sites such as TOD. Obviously the lights didn’t just go on back in 2005 that was just the beginning of a long learning process.
Cheers!
Thanks Fred:
I appreciate all the knowledge you share.
“Those graphs make me think of the skeletal hands of ‘DEATH’!” ~ Fred Magyar
It looks like a skeletal claw trying to get back what it is losing.
I agree!
Clearly.
Hey Caelan.
Message cooption? Sidling up? Two great minds think alike? Power of subliminal messaging? Plagiary? Groupthink?
It’s cosmic coincidence. ^u^
I have the best explanation of all.
Mimetic Desire
http://en.wikipedia.org/wiki/René_Girard
“René Noël Théophile Girard (/ʒiˈrɑrd/; French: [ʒiʁaʁ]; born December 25, 1923) is a French-born American historian, literary critic, and philosopher of social science whose work belongs to the tradition of anthropological philosophy. Girard is the author of nearly thirty books (see below), with his writings spanning many academic domains. Although the reception of his work is different in each of these areas, there is a growing body of secondary literature on his work and his influence on disciplines such as literary criticism, critical theory, anthropology, theology, psychology, mythology, sociology, economics, cultural studies, and philosophy.
Girard’s fundamental ideas, which he has developed throughout his career and provide the foundation for his thinking, are that desire is mimetic (all of our desires are borrowed from other people), that all conflict originates in mimetic desire (mimetic rivalry), that the scapegoat mechanism is the origin of sacrifice and the foundation of human culture, and religion was necessary in human evolution to control the violence that can come from mimetic rivalry, and that the Bible reveals these ideas and denounces the scapegoat mechanism.”
And here is a free ranging discussion involving the concept of mimetic desire. There is a considerable amount of information in this link that I know many here would find absolutely fascinating. This is a thread I created on thescienceforum.com exploring the evolution of religion (and you will also get a rare glimpse of an early stage of the evolution of Futilitist):
http://www.thescienceforum.com/personal-theories-alternative-ideas/31088-scientific-theory-evolution-religion-print.html
“I don’t believe there is a gene that promotes religion.
But you are definitely on to something important. There is a “psychological placebo affect” that most people are unaware of. Here is a theory I proposed for the origin and evolution of religion. It is a part of a larger construct in social theory I call the “Dark Thesis”:
1. Sin produces Guilt.
2. Guilt produces Religion.
3. Religion brings absolution from Sin.
Lather, Rinse, Repeat.
Religion is an expression of man, the tool maker. And religion has proven to be a highly effective tool, much more important to our species than the wheel. It functions to help us feel that we have dealt with something important, so that we can actually avoid dealing with it, and just carry on as before. It simply validates behaviors that are distasteful, yet unavoidable to all social animals. It helps us relieve the extreme cognitive dissonance necessarily produced by everyday life.
The reason that we must work so hard to rationalize sin is that, in order for our species to develop complex socialization in the first place, we had to have an individual sense of basic fairness to drive reciprocal relationships. That individual sense of fairplay is what neuroscientists and social psychologists call the “moral instinct”. Check out this cool article by Seven Pinker:
http://www.nytimes.com/2008/01/13/magazine/13Psychology-t.html?pagewanted=all&_r=0
We are all born with a basic moral instinct. But what we call “morality” is a very different thing, separate and distinct from the “moral instinct”. Morality grows out of the moral instinct, but it is really just another social tool, with a very specific function. Here is how I like to say it:
Morality makes indignation righteous. Righteous indignation justifies violence. Thus morality simply creates a prophylactic pre-absolution from sin. And that brings us back to the Scapegoat Mechanism, and all of our inescapable participation in it, and collective guilt because of it. It is the “original” sin in my model.
—
In order to be a good theory, the Dark Thesis has to explain the origin of the Moral Instinct as well. It does just that, with this key mimetic insight:
If the moral instinct is the root of morality, what is the root of the moral instinct? The elegantly simple answer is fear. Properly speaking, mimetic fear. The roughing up of something that looks like me, produces the real and justifiable fear that it could be me next time around.
The strength of our moral instinct determines what kind of society humans can structure. This is the “Goldy Locks and the porage” principle in evolution:
1. Eewww. This moral instinct is too sweet (i.e. sees bad treatment of brothers and sisters as a bad thing). Another group will evolve a moral instinct that is less moral to take advantage. Though the overly sweet (more moral than Jesus) first group is my personal favorite of the three, they will, nonetheless, die out, along with their goody two shoes attitude.
2. Yuck. This moral instinct is too sour (i.e. sees bad treatment of brothers and sisters as a personal benefit). This disgusting animal will not develop a civilization. The society would self destruct each time the complexity could not rise. If it could avoid self destruction and reach a high enough state of complexity, depending on resources, it could become fascistic enough to resemble a bee hive or an ant hill, with the individual completely subsumed by the group.
3. Mmmmm. This moral instinct is just right (i.e. invents religion to white wash and justify violence). This is the perfect balance that has made the human species so successful that we have bled the planet of it’s resources and set in motion our own near term extinction. Yipeee.
The human species lost it’s innocence with the invention of religion. But it bestowed the benefits of increased complexity that lead to the rise of civilization itself.
The Scapegoat Mechanism is the chief means of social control of the individual by the group. It operates all around us all the time. But our brains are actually wired not to notice!
—
Here is another way to look at it:
1. Mimetic desire drives all animal bahavior.
2. Through Mimetics, a Moral Instinct begins to develop, as animals become more complex in their socialization.
3. The Scapegoat Mechanism, which evolves to help maintain social stability, develops side by side with the Moral Instinct.
4. The Moral Instinct produces a sense of Basic Unfairness, especially with respect to group on individual violence (Scapegoating).
5. The sense of Basic Unfairness produces fear and outrage in animals that form complex social groups (primates).
6. Outrage produces social instability.
7. Religion evolves to enforce social stability and overide the moral instinct when necessary.
A self justification rationalization loop that leads to:
8. Humans are able, through religion, to evolve ever higher levels of complexity leading to the advent of civilization.
—Futilitist”
I am just as interested in our rise as I am in our fall.
Just some stuff to think about. Enjoy (or not)
You’ve mentioned mimetics more than once, and your mention of it keeps reminding me to look at a website that I bookmarked for that reason some months ago. So I might check it all out, thanks for sharing.
Hi Caelan,
You may be one of very few the people here who could understand mimetic theory. And this link contains but one small chapter in the middle of one of the many adventures of Futilitist. This one was formative in the evolution of my online persona. I wasn’t born this way. I was formed by my experiences. What does that say about the internet?
(Also of note, “John Galt” is a moderator on two supposedly competing ‘science’ websites. He also posts regularly on a third site, which also has some moderators and administrators from the other two sites, etc. A web.
Another interesting aspect of the story is that this was not my first run in with “John Galt”, but I didn’t know that at the time! I found out later that he was also using another screen name at another site where we had a previous conflict. That screen name was “Ophiolite”.
It took me a while to untangle it all, but in the end I figured it out from linguistic cues (posting style). And one more thing I was able to figure out: John Galt/Ophiolite suffers from Alzheimer’s! I diagnosed him from his posts. I announced my diagnosis on sciforums.com, causing much fuss and bother, but in the end John Galt/Ophiolite admitted that he had recently been officially diagnosed with Alzheimer’s disease.)
Very intriguing…
But you know, we weren’t born with the natural ability to communicate like this, like how we do it online, and it is imagined that everyone suffers from it in a myriad of different ways. ‘u^
I think it’s just a very bad flatland copy of the tribal campfire or village meetinghouse, and I hope it goes away along with collapse… I mean, what would be the point of meeting people in your little village, online?
“…and it is imagined that everyone suffers from it in a myriad of different ways.”
Yes.
The online ‘village’ is clearly a fraud. So why do you do it every day for so many years? It seems like you would have naturally rejected this bullshit long ago. What have you gotten out of it? What was the point?
Excellent question, and there are a few answers (maybe a sequel in another comment), but the main one is that there seem very few, if any, real classic towns or villages left, probably around the world.
Not in the idyllic butcher-baker-candlestick-maker sense.
Many are merely ghost towns with people barely living in them, many having had their classic downtowns gutted and bent toward a pedestrian-hostile sextuple-wide roadway, along which lie, in-between vast tracts of paved asphalt and loud, smog-belching, pseudo-living-rooms-on-wheels, the soulless, get-in-give-us-your-money-and-get-the-hell-out-or-we’ll-call-the-cops overscaled-boxes of the ‘consumer’ wastelands– the festering sludges of the crony-capitalist plutarchy metastasis.
The kinds of places the Nick G’s of the world– often seen floating in a smog of manipulated statistics that no one, including themselves, agree on– seem to expect the rest of us to continue dragging our sorry, owned-and-taxed asses to in their lite incarnations of BAU’s manufactured ideals, augmented by EV’s, PV’s and wage-slave CV’s.
“It’s much the same at every place you go…
The malls that form the edges of the world…” ~ Russia, by Severed Heads
But, Caelan, if you were to permanently log off, and go live in a ghost town with people barely living in it, you would at least be interacting with actual (as opposed to virtual) human beings. Your presence might make things a little less ghostly for the homies. And this would certainly provide a much more fulfilling existence for you than hanging out online, rehashing ten year old arguments that never end.
Maybe you are living in a ghost town and maintaining an online presence/persona at the same time. That’s pretty cool, I guess, but I would think that the online experience would tend to detract from the real one. And if you are prepping for the apocalypse, you are gonna need every minute you have left to prepare and learn necessary skills.
It seems like these are all things you could get behind, and you often recommend this path to others.
And you have to admit that there are a lot of friendlier, happier places than this to hang out online.
So, with all that in mind, back to my original questions about hanging out here:
So why do you do it every day for so many years? What have you gotten out of it? What was the point?
Good day, Futilitist,
I am just about done writing a proposal for an online article that will also function as a kind of manifesto for Permaea.
I had thought of proposing to ‘crowdsource’ the proofread/composition over at the Permaculture Research Institute of Australia’s online community, but it’s about done already anyway.
I’ve done the small town thing and will likely get back to it, but possibly in a different context and setting. I also still keep in touch– yes online– with someone of an ecovillage that I got involved with previously, and which I may go back to, depending on how things go. They want to ramp things up.
In short, I have many pots on the boil, and am in the process now of just taking it easy and figuring out how to best approach things. Admittedly, I have been beginning to feel like a deer in the headlights too often for my comfort.
Permaea’s manifesto addresses the net from 2 angles, incidentally, namely, that it leverage the global reach of the net, and that it, at the same time, create an actual network based on sailboats for when/if the virtual one goes down for good.
Permaea’s concept is actually inspired by the net, by wireless mesh and peer-to-peer networks and stuff like that. So, while we might do best to eventually get off the internet, while it is here, we might as well attempt to leverage it for the care of people and planet and with the future in mind.
How about you? What’s up, what’s on your plate? Feel like sailing?
Hi Caelan.
The whole Permaea thing sounds intriguing.
These days I am very busy putting the finishing touches on a big writing project that I have been at for quite some time. It feels very fulfilling to finally complete such a long term endeavor.
And I may go sailing this weekend with a old friend of mine, if the weather is nice. 🙂
No Caelan,
That is not mimetic desire. That site is about what they call mimetics which is about memes, which are also important. But mimetic desire is far more fundamental and important to our evolutionary psychology.
I am talking specifically about Rene Girard’s mimetic desire. The name thing causes some confussion, but they definitely shouldn’t be mixed up.
Memetic desire forms the foundation of imitation science.
http://en.wikipedia.org/wiki/Imitation
“Imitation (from Latin imitatio, “a copying, imitation”[1]) is an advanced behavior whereby an individual observes and replicates another’s behavior. Imitation is also a form of social learning that leads to the “development of traditions, and ultimately our culture. It allows for the transfer of information (behaviours, customs, etc.) between individuals and down generations without the need for genetic inheritance.”[2] The word imitation can be applied in many contexts, ranging from animal training to international politics.
In the mid-20th century, social scientists began to study how and why people imitate ideas. Everett Rogers pioneered innovation diffusion studies, identifying factors in adoption and profiles of adopters of ideas.
Research has been conducted to locate where in the brain specific parts and neurological systems are activated when humans imitate behaviors and actions of others, discovering a mirror neuron system. This neuron system allows a person to observe and then recreate the actions of others. Mirror neurons are premotor and parietal cells in the macaque brain that fire when the animal performs a goal directed action and when it sees others performing the same action.”[15] Evidence suggests that the mirror neuron system also allows people to comprehend and understand the intentions and emotions of others.[citation needed] Problems of the mirror neuron system may be correlated with the social inadequacies of autism. There have been many studies done showing that children with autism, compared with typically developing children, demonstrate reduced activity in the frontal mirror neuron system area when observing or imitating facial emotional expressions. Of course, the higher the severity of the disease, the lower the activity in the mirror neuron system is.”
http://en.wikipedia.org/wiki/Mirroring_(psychology)
“Mirroring is the behaviour in which one person subconsciously imitates the gesture, speech pattern, or attitude of another. Mirroring often occurs in social situations, particularly in the company of close friends or family. The concept often affects other individual’s notions about the individual that is exhibiting mirroring behaviors, which can lead to the individual building rapport with others.
Mirroring is the subconscious replication of another person’s nonverbal signals.[1] This concept takes place in everyday interactions, and often goes unnoticed by both the person enacting the mirroring behaviors as well as the individual who is being mirrored. The activation of mirror neurons takes place within the individual who begins to mirror another’s movements, and allows them a greater connection and understanding with the individual who they are mirroring, as well as allowing the individual who is being mirrored to feel a stronger connection with the other individual. Mirroring is distinct from imitation under the premise that while imitation is a conscious and overt effort to copy another person, mirroring is often covert and goes unnoticed within the situation.
The display of mirroring often begins as early as infancy, as babies begin to mimic individuals around them and establish connections with particular body movements.[2] The ability to mimic another person’s actions allows the infant to establish a sense of empathy and thus begin to understand another person’s emotions. The infant continues to establish connections with other individual’s emotions and subsequently mirror their movements.
Mirroring can establish rapport with the individual who is being mirrored, as the similarities in nonverbal gestures allow the individual to feel more connected with the person exhibiting the mirrored behavior.[3] As the two individuals in the situation display similar nonverbal gestures, they may believe that they share similar attitudes and ideas as well. Mirror neurons react to and cause these movements, allowing the individuals to feel a greater sense of engagement and belonging within the situation.”
Some bites to ponder there, Futilitist. When reading it, I thought about how religion seems like a morality power-grab/monopoly. The state is a religion.
Here’s some apparent animal lab evidence to support your mention of the issue of fairness. It is interesting that the speaker links it with Occupy Wall Street.
The really interesting thing is how the group reacts to an outsider bringing them controversial new information.
There is a pattern.
Attachment to despair?
I don’t think Fred is attached to despair. He claims the opposite.
Good on him!
“There are days when I too feel quite apocalyptic myself.” ~ Fred Magyar
LOL! True that, but most days I’m still pretty cheerful. Despair uses up a lot of energy which I’d rather use for other things.
I figured as much and feel about the same as well. We’ll have plenty of time to feel apocalyptic when the time comes.
Now THIS is cool, and points the way to war:
http://www.dieselforum.org/diesel-at-work/
Click the delightful “delivering for America” link and we get:
Diesel — 100% of Freight Locomotives, 90% of Heavy Duty Trucks, 90% of Cargo Handling equipment (the gizmos that take containers off ships — which were . . .), you guessed it 100% of ships/barges were fueled by diesel.
Here’s a quote from 2010, when API was hyping the growth narrative:
“We’ve been watching the diesel demand numbers, which have been very strong,” John Felmy, chief economist with the Washington-based API, said in a telephone interview. “There’s a strong correlation between diesel consumption and economic growth. This is clearly a good sign for the economy.”
This is a pretty big deal. We have generally equated economic growth to oil consumption growth, but this drills down to a higher correlation — diesel.
The US cannot escape diesel, which makes imports guaranteed, given our relentless API number advance domestically.
Hi, excuse my ignorance, but I thought, from what I have read here, that the oil from fracking was like sweet oil. Has API number been increasing in US production? So is it then no good to produce diesel?
“sweet” or “sour” refer to how much sulfur is in the oil, which is irrelevant to making diesel or not.
API gravity is how “heavy” or “light” the oil is.
http://en.wikipedia.org/wiki/API_gravity
“heavy” oil (lower API gravity) means larger molecules/longer chain hydrocarbons.
“light” oil (higher API gravity) means smaller/shorter.
The “light tight oil” from the Bakken and EagleFord and some from the Permian Basin is lighter than the traditional crude oils, so the answer to your first question is “yes”.
You can see that in the chart from the June 6, 2014 “Today in Energy”:
http://www.eia.gov/todayinenergy/detail.cfm?id=16591
“… Roughly 96% of the 1.8-million-barrel per day (bbl/d) growth in production from 2011 to 2013 consisted of light sweet grades with API gravity of 40 or above and sulfur content of 0.3% or less. …”
Diesel fuel is made from somewhat longer/heavier molecules than gasoline.
http://en.wikipedia.org/wiki/Diesel_fuel#Petroleum_diesel
Lighter crude oil may be so light that to make a lot of diesel out of it, one would have to take a lot of the light stuff and make the average molecular weight larger. That is expensive.
In this short paper on “Refinery Economics” from Natural Resources Canada,
they have the chart of:
Comparison of Refinery Yields by Crude Type
https://www.nrcan.gc.ca/energy/crude-petroleum/4561
One can see that lighter than API 27, distillate (what becomes diesel) drops off rapidly. At API 42, only 10% or so is distillate. So that answer to your second question is “yes, lighter oil is less good if your object is to make diesel”.
A refining tutorial you may find interesting:
http://www.theicct.org/sites/default/files/publications/ICCT05_Refining_Tutorial_FINAL_R1.pdf
sunnnv,
I would just like to clarify on the points you made about heavier crudes and higher diesel yield.
You quote “lighter than API 27, distillate (what becomes diesel) drops off rapidly.”
27 API is quite a heavy oil, and the amount of diesel yield is very dependent on the refinery process that is available, as is illustrated in your link.
https://www.nrcan.gc.ca/energy/crude-petroleum/4561
Figure 4 below demonstrates that using the same crude input (heavy crude with a 27 API) yields a very different range of petroleum products depending on the refining units and processes used.
Usually crudes in the mid 30s API such as the Libyan oil gives the highest diesel yield from a simple topping refinery, where as complex refineries can squeeze high diesel yields out of cheaper heavy oils at the cost of higher CAPEX.
Thanks a lot sunnnv for your excellent explanation.
Now THIS is cool:
http://www.dieselforum.org/diesel-at-work/
Click the delightful “delivering for America” link and we get:
Diesel — 100% of Freight Locomotives, 90% of Heavy Duty Trucks, 90% of Cargo Handling equipment (the gizmos that take containers off ships — which were . . .), you guessed it 100% of ships/barges were fueled by diesel.
Here’s a quote from 2010, when API was hyping the growth narrative:
“We’ve been watching the diesel demand numbers, which have been very strong,” John Felmy, chief economist with the Washington-based API, said in a telephone interview. “There’s a strong correlation between diesel consumption and economic growth. This is clearly a good sign for the economy.”
This is a pretty big deal. We have generally equated economic growth to oil consumption growth, but this drills down to a higher correlation — diesel.
The US cannot escape diesel, which makes imports guaranteed, given our relentless API number advance domestically.
Ron I’m having posts rejected. Don’t know if this will show.
Thank you Ron for all the great work you do.
You are so kind in your commentary about the EIA’s reported oil production. Their lies are becoming so blatant, one would think they would be ashamed. Up until this week’s inventory report, they have continued to report growing US oil production, DESPITE the fact that North Dakota and now Texas oil production both declined in January.
What makes you think they are lying? Maybe they are actually confused.
Not many people understand what is going on. This explains what is really happening:
http://www.thehillsgroup.org/index.html
Ascertain is spelled with an ‘c’, not an ‘s’.
Thanks for the spelling lesson.
I have extended Art Berman’s above blue graph to 2016, showing Alaska and GOM crude production separately plus oil price assumptions which would be needed to underpin it. I have also added the EIA’s estimate of all liquids supply globally
18/3/2015
US enters undulating crude oil production plateau in 2015
http://crudeoilpeak.info/?p=6973
All data in this article are from the March 10th 2015 Short Term Energy Outlook http://www.eia.gov/forecasts/steo/
In 2014, China’s Jiangsu Province consumed 501 TWH or electricity. Jiangsu’s electricity consumption exceeded France and approached the German level.
Jiangsu’s population is about 80 million, less than 6 percent of China’s total population (imagining 17 “Germanies” in term of electricity use if all Chinese have the same per capita electricity use as Jiangsu)
Jiangsu Province is to the North of and surrounds the northern and western sides of Shanghai. Its capital city is Nanjing, the old Nationalist government capital
I’m being filtered out as spam.
Nevermind, fixed.
Jeffrey, heads up:
Now THIS is cool, and points the way to war:
http://www.dieselforum.org/diesel-at-work/
Click the delightful “delivering for America” link and we get:
Diesel — 100% of Freight Locomotives, 90% of Heavy Duty Trucks, 90% of Cargo Handling equipment (the gizmos that take containers off ships — which were . . .), you guessed it 100% of ships/barges were fueled by diesel.
Here’s a quote from 2010, when API was hyping the growth narrative:
“We’ve been watching the diesel demand numbers, which have been very strong,” John Felmy, chief economist with the Washington-based API, said in a telephone interview. “There’s a strong correlation between diesel consumption and economic growth. This is clearly a good sign for the economy.”
This is a pretty big deal. We have generally equated economic growth to oil consumption growth, but this drills down to a higher correlation — diesel.
The US cannot escape diesel, which makes imports guaranteed, given our relentless API number advance domestically.
I’m being filtered out as spam. Hmmm.
I’ve been trying to reply to Futilitist up thread but my comment keeps disappearing
is it because of this link http://www.paulchefurka.ca/
Jeffrey,
http://www.dieselforum.xxorg/diesel-at-work/ I added the xx in front of org — maybe that’s the spam filter trigger.
Click the delightful “delivering for America” link and we get:
Diesel — 100% of Freight Locomotives, 90% of Heavy Duty Trucks, 90% of Cargo Handling equipment (the gizmos that take containers off ships — which were . . .), you guessed it 100% of ships/barges were fueled by diesel.
Here’s a quote from 2010, when API was hyping the growth narrative:
“We’ve been watching the diesel demand numbers, which have been very strong,” John Felmy, chief economist with the Washington-based API, said in a telephone interview. “There’s a strong correlation between diesel consumption and economic growth. This is clearly a good sign for the economy.”
This is a pretty big deal. We have generally equated economic growth to oil consumption growth, but this drills down to a higher correlation — diesel.
The US cannot escape diesel, which makes imports guaranteed, given our relentless API number advance domestically.
No problem, just inject the light stuff with a first pilot shot of diesel, like is done all the time with propane.
Diesel has minimum 10% more joules / liter vs gasoline. Numbers vary, minimum of 10% better, probably more.
Diesel 20 Carbon, 14 Hydrogen
Gasoline 18 Carbon, 13 Hydrogen,
Propane looks like 40% less joules/liter vs Diesel. Propane 12 Carbon, 11 Hydrogen
Watcher, that is just not correct. All hydrocarbons have 2 hydrogen atoms for every carbon atom plus 2 more. Methane has 1 carbon and 4 hydrogen atoms. Ethane 2 carbon and 6 hydrogen. Propane 3 carbon and 8 hydrogen atoms. Gasoline, which is mostly octane, has 8 carbon 18 hydrogen atoms. Wiki says gasoline contains contains anywhere between 4 and 12 carbon atoms. But the more octane it has the less your car will knock.
Diesel which Wiki says contains anywhere from 8 to 21 carbon atoms, but I think 16 is ideal. But a hydrocarbon molecule which has 16 carbon atoms would have 34 hydrogen atoms. That is twice 16 plus 2. It always works that way, twice the carbon atoms plus two gives you the number of hydrogen atoms.
Formula only works for alkanes, not alkenes or alkynes.
To nitpick a tiny bit – straight-chain and branched alkanes are CnH2n+2,
but alkenes and aromatics have variable numbers of double or shared bonds, and cyclic alkanes are CnH2n.
But, yes – Watcher’s numbers were wrong for typical diesel and gasoline,
which are typically mostly alkanes – any compound of his given formulae would be so aromatic and have so many joined rings it would likely be solid on even the hottest days.
http://en.wikipedia.org/wiki/Alkane
http://en.wikipedia.org/wiki/Alkene
http://en.wikipedia.org/wiki/Aromatic_hydrocarbon
Pure hexadecane (C16H34 – aka cetane) has a melting point of 18.1 C (64.6 F), so would’t be very useful diesel in most places, thus the mixture of much lighter stuff.
Going back to get the source:
I hope. It was a briefing chart, chose it because there was contrast of density re per unit mass vs per unit volume.
Found it. Sandia briefing. Excellent chance I misinterpreted it. The focus was relative energy density, not atom counts so I jumped on this chart ( slides 9 and 10 I think duplicates ) and concluded the numbers were atom count without another thought. Maybe that’s the energy density contributed by Carbon v Hydrogen. dunno
Here’s link:
http://www1.eere.energy.gov/hydrogenandfuelcells/pdfs/bulk_hydrogen_stor_pres_sandia.pdf
The generalized point was diesel isn’t in big power applications by accident.
Watcher,
There is a bit of work going on with burning lighter fractions of oil in compression ignition engines. Gasoline, with pilot diesel injection, straight Naptha, and Delphi is working on straight Gasoline injection. These are all a few years out, but all of them could lower the use of diesel if they are proved successful and taken up by engine users.
Natural gas (methane) and propane can also be used in a compression ignition engine, with a diesel pilot injection. Westport a Canadian company, is the leader in this field.
http://www.greencarcongress.com/2014/05/20140502-kalghatgi.html
But the energy density difference will remain.
Though your point is . . . if diesel is scarce first, change is compelled. Hard to see how the entire ship, plane and truck fleet can change before diesel scarcity becomes also gasoline scarcity.
Watcher,
The idea of using other fuels as replacements/extenders, do not and can not totally displace diesel, as diesel and gasoline is produced from the same raw material. The gasoline/diesel idea is a means of balancing the production of diesel to gasoline/propane/methane.
It will be the scarcity and therefore the price, of each of the components that will determine the quantities used. As an an example, coastal shipping, with the assistance of stricter air quality requirements, have a big push at the moment to LNG/diesel engines, due to the high cost/lack of availability low sulfur diesel that is now required to be used.
Toolpush:
“There is a bit of work going on with burning lighter fractions of oil in compression ignition engines. Gasoline, with pilot diesel injection, straight Naptha, and Delphi is working on straight Gasoline injection. These are all a few years out, but all of them could lower the use of diesel if they are proved successful and taken up by engine users.”
Will work at significant power reduction and higher fuel consumption. Diesel engines are optimized for Diesel fuel. FWIW: not a good idea to use compressed fuels as substitute since, Trucks typically use a lot of fuel. Using Propane will turn trucks in to large mobile bombs. Diesel doesn’t explode on impact or if the tank gets ruptured. It usually just ends up creating a mess.
Its very unlikely that the majority of hydrocarbons from LTO are suitable for diesel engines anyway, and Its very likely that the cost of NatGas will rise significantly. The consumption of NatGas is already high and substituting diesel would shift the demand balance out of wack. In additional I believe to retrofit an existing Diesel truck to use compressed gas (LPG) isn’t cheap.
The more likely outcome if diesel bearing crude depletion is much higher shipping costs for everything, and spells the end for Commerical airlines (jetFuel is essentially Diesel).
Techguy,
Propane has been used in road transport in many countries for many years, even in the US. Most people argue Compressed natural gas is more dangerous than liquid propane, yet the US seems quite happy with CNG trucks at the moment. The safety argument can always be thrown in, but if the economic drive is there, the correct safety controls will also be put in place to make it work.
As for range, Saddle Creek is currently getting 600 miles and plans for 700 miles out of their new trucks. I realize this is a spark ignition engine, so compression ignition will only improve these numbers.
http://www.truckinginfo.com/news/story/2013/07/saddle-creek-teams-with-freightliner-trucks-to-develop-cng-tractor-with-advanced-aerodynamics.aspx
According to DelBovo, his Freightliner M2 112 CNG tractors have achieved more than 600 miles per fill. He expects his new Cascadia CNG tractors to achieve at least 700 miles per fill.
The point of the LTO oil is not suitable for diesel engines, is the whole point of the investigation to make lighter fractions to work in a compression ignition engine. Two of the studies mentioned were for gasoline/diesel and Naptha, to be used in compression ignition. Both products readily available form LTO.
Your point about the price of Nat gas going up, is your opinion. A lot of people with the money are betting otherwise. I am sitting on the fence as an outside observer. But if you are correct and Nat gas price goes up faster than diesel, then obviously not much nat gas will get used. But I feel the power generation market would be the first to be priced out of the market rather than a diesel replacement.
But once again my point is there are many diesel extenders available, and if the price is right, they can and will be used.
As for aircraft, the saviour they have is efficiency improvements. If the price of Jet A1 gets too extreme, then I can see turbo-props coming back, but it will be one of the last surviving markets for diesel type fuels as there are few alternatives.
Ah – yes, misinterpretation.
MJ == Mega Joule
A Joule is 1 watt for one second, or 1 amp at 1 volt for one second, or 0.000948 British Thermal Units = the energy to raise a pound of liquid water 0.000948 degrees F = not a lot of power, thus Mega (millions).
slides 9 & 10 ( not quite the same, almost) show the energy density per liter of liquid fuel, split up into the parts contributed by carbon and hydrogen. Easy to see why liquid hydrocarbons power transport, high energy density and easy to pump and store.
Yes, the larger the hydrocarbon molecule, the more energy dense – the intermolecular space is pretty much the same at a given temperature, and it is bigger than the space between atoms when they’re bonded. So diesel is more energy dense than gasoline. For long linear-ish molecules, you also have more hydrogen bonding, packing them a tiny bit tighter (also partly the reason for higher boiling point).
Ah, the hydrogen guys – hydrogen has poor energy density by volume, so hydrogen proponents get rather fond of touting it’s amazing energy density by mass.
http://en.wikipedia.org/wiki/Energy_density
And then there are the horrible round trip efficiencies vis-a-vis batteries.
Not sure where you got your numbers but the bulk of gasoline is C4 to C12. Diesel is an average C12, ranging from C10 to C15.
Propane is C3H8.
Diesel engine must give an additional 20% eff over a Octane ICE in addition to the fuel. No air pumping throttle body loss as well as higher compression. Little fuel consumption at idle, favored in Europe instead of hybrid complexity. You just don’t get advantage of regen.
Look up the difference between the diesel and otto engine (process)!
I am throwing this news report on Bakken and Eagle Ford production and pricing to the sharks. Have at it.
http://www.prnewswire.com/news-releases/shale-oil-production-in-bakken-eagle-ford-flat-in-february-platts-bentek-energy-300052803.html
From your link:
“While rig count numbers in both basins have been deteriorating steadily since November 2014, production has not followed suit and remains relatively flat,” Bernardo said. “Producers in the Eagle Ford and Bakken are still incentivized to maintain their production levels thanks to sufficient economic returns in those plays, which currently average around 20%. Producers are countering the decline in rig count with a drive for efficiency gains in drilling and completion techniques and an increased focus on their more productive acreage.”
Where do they get this crap? All we get anywhere is that the falling rig counts make no difference. They have made up the difference in rig efficiency and concentrating on sweet spots. And people are really buying this crap.
I think they are selling the residue from methane producing garbage dumps.
Allan,
An interestion definition of oil in the link article.
The Platts Eagle Ford Marker reflects the value of a,b> median 47-API Eagle Ford crude barrel, based on the crude’s product yields and Platts product price assessments, adjusted for U.S. Gulf Coast logistic
So a median of 47 API, is now called crude?
And silly me thought 45 API was the divide. And if the 47 in only the median, what is the upper range, they consider crude?
Now for Jeffery Brown’s graph to demonstrate the significance of the that number.
Ron and I had an extensive discussion about that Eagle Ford Platts Marker. That was updated in 2012 and is the same item we were examining. Another curiosity is their table of distillate yield. High in diesel and kerosene.
My vague recall, and I probably have to go through the Marker again to confirm this, but the table did not come from API 47 oil. They changed . . . process? . . . to get the diesel yield. The text is strewn with talk of “extrapolation” and an array of assays from API 40 through 60.
It is not a sampling of oil and examination of yield %s.
Watcher, it’s possible to process condensate to achieve a desired specific gravity. The field or raw condensate is fed into a stabilizer, which separates the light ends. It’s possible to design the vessel to deliver more light ends at the top of the vessel, and to deliver a specified stabilized marketable condensate.
The trick is simply to have the right vessel size and temperature differential between the vessel’s top and bottom trays.
I don’t know how all these condensates are handled in Texas, but I suspect it’s done in a diverse set of conditions. And some of them could be very unsanitary (meaning they could have what one could consider very damaging emissions).
Bottom line, the refinery can take a condensate, stabilize it, make it suitable to be fed into a blend, or it can even feed it straight into the distillation unit (although that sure sounds a bit crazy). The light ends will be removed, some will be recycled to make gasoline, others will be so,d as LPG, or sent to a chemical plant to make your polyester outfits and plastic bottles.
Toolpush
Above 45 is called condensate, unless you cheat and call it oil.
Here is an article called “Don’t let your crude grow up to be condensate”, about API creep in the Eagle Ford.
https://rbnenergy.com/dont-let-your-crude-oil-grow-up-to-be-condensate
If this keeps up, methane will be condensate and ethane will be oil 🙂
Sometimes we find reservoirs with an oil gravity above 45 degrees API, they aren’t common. Here’s an example:
http://www.finderexp.com/portfolios/wa-435-p-wa-436-p-wa-437-p-and-wa-438-p-bedout-sub-basin/
I have seen condensates lower than 45 degrees API. They are found in very high temperature and pressure environments (say 12000 psi and 300 degrees F). And I’ve seen these extra light oils as well. I got the feeling they must be what’s left when a gigantic gas condensate source escapes into a cooler lower pressure environment.
Large trigger ‘likely’ to hit
[Excerpt from article]
[North Dakota] officials expect oil production to slide in April as low oil prices and declining rig counts begin to take their toll.
Production from new wells is expected to rise, but a quick decline in legacy wells outweighs the overall gain, according to a new projection report by the U.S. Energy Information Administration. State officials anticipate the downward trend to continue through May.
“We expect June to be a really big month,” said Lynn Helms, director of the state Department of Mineral Resources, predicting a 75,000-100,000 barrel per day jump.
The inventory of uncompleted wells rose to 825 in January, a sign that producers are preparing for the state’s “large trigger” to switch on in June, which would mark five consecutive months of benchmark West Texas Intermediate (WTI) at Cushing Oklahoma below $52.59. If it does trigger, North Dakota will waive the 6.5 percent oil extraction tax, per a 1987 law.
In his director’s cut last month, Helms said the December numbers suggested the large trigger was likely not to go into effect, but changed his tune after a 3 percent production downturn in January coupled with a market glut.
The reason he cited was supply in Cushing, which could reach full capacity by May. With no other facility to ship oil to for storage, the WTI index will be further affected.
“It went from unlikely to very likely,” Helms said. “If we keep filling it at the current rate, we’re full around the first of May—and that’s WTI.”…
A sudden rush of inventory would flood the market more, but the potential breathing room could be a sign of life for the patient.
[End of excerpt]
6.5% is, at current prices, $3 or so. Is he seriously suggesting that producers are all thinking about flooding the market ( probably knocking more than $3 off the oil price in the process) for an extra 3 bucks a barrel? I really hope they’re not that stupid.
Bingo. Seriously, 6% of (45 – 16 ) is $1.74.
Helms indicated another reason to be that there is a deadline to complete a well per State regulation… I am not sure about the details but it looks that many of those drilled wells waiting to be fracked will need to be fracked before June per some laws or regulations?
Additional details from Platts:
“Helms said he doesn’t expect production to tumble dramatically, even as prices continue to fall, and even though he expects the statewide rig count to “bottom out” at about 100 rigs. Production, he said, will likely remain between 1.1 million b/d to 1.2 million b/d over the next few months.
But Bakken production could suddenly skyrocket, by nearly 10%, or an additional 75,000 b/d, to 100,000 b/d in June, Helms said. This means that despite low prices and production curtailments throughout much of North America, oil production in North Dakota could actually shatter a new record this summer.
This is mainly due to a backlog of between 800 to 1,000 uncompleted wells statewide, about 125 of which need to be completed by the end of June in order to comply with state requirements to complete drilling within a year.
At the same time, operators may wait until June, when a major oil tax incentive known as the “large trigger” is expected to go into effect. The large trigger, which is aimed at boosting Bakken production at times of low crude prices, enters into force when the WTI crude price averages below $55.09/b for five consecutive months.
If that incentive is triggered, which Ryan Rauschenberger, North Dakota’s tax commissioner, said he expects will happen, the majority of wells will be exempt from a 6.5% oil extraction tax for as long as two years.
With that tax break in effect and hundreds more wells running up against one-year state deadlines, production in North Dakota could continue to surge even beyond the summer.
“We’re going to ride these waves of production increases, “ Helms said.”
Source: http://blogs.platts.com/2015/03/20/tax-time-bakken-oil-summer/
Ron,
Have you seen this:
http://www.thehillsgroup.org/index.html
It is a more complete explanation. bwHill wrote the model and he is debating Dennis back on the “OPEC Crude plus More on EIA Estimates” comments section.
http://peakoilbarrel.com/opec-crude-plus-more-on-eia-estimates/comment-page-1/#comment-505585
http://peakoilbarrel.com/opec-crude-plus-more-on-eia-estimates/comment-page-1/#comment-505578
http://peakoilbarrel.com/opec-crude-plus-more-on-eia-estimates/comment-page-1/#comment-505769
This is a very important debate. Perhaps it could happen more visibly? Maybe feature the debate as a main post, or something. Or possibly a guest post by bwHill. I’ll bet he would go out of his way to help people understand his model. What do you think?
Hi Ron.
Have you seen my post above? It has been up for awhile.
Hey Ron,
Would you mind please responding to my post above when you get a chance? Thank you.
🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂 🙁 🙂
FWIIW
(and sorry if posted earlier)
”A global oversupply of oil is set to rise as China pauses in the build-up of its strategic reserves and Asian refineries slow crude imports ahead of the spring maintenance season, putting more downward pressure on prices.”
http://www.reuters.com/article/2015/03/18/us-asia-oil-markets-idUSKBN0ME0TQ20150318
”U.S. oil producers are issuing new shares of stock at the fastest pace in more than a decade, looking to investors for a cash lifeline to pay down debt and keep drilling as crude prices continue to sink. ”
http://www.bloomberg.com/news/articles/2015-03-20/shale-producers-have-found-another-lifeline-shareholders
”As the price of oil continues to fall, the U.S. shale oil industry is showing remarkable resilience. Output is at a 30-year high and stockpiles are the largest since tracking started in 2004. Speculators who push down the price of crude see this as evidence of a glut, but it could actually signal desperation on the part of over-leveraged producers.
It seems counterintuitive: Why would shale operators want to oversupply the market and make their product even cheaper? Two analytical papers out this month suggest it’s because otherwise they couldn’t service their debts.“
http://www.bloombergview.com/articles/2015-03-18/why-shale-producers-still-pump-and-pray-
Rune,
I assume you’ve read the his quarterly report? The section on oil and debt was fascinating. It really is a very unique dynamic at the moment, possibly unprecedented.
Sam,
I take it you refer to the recent BIS (Bank for International Settlements, often referred to as the central bank of the central banks) quarterly report, and it is a big YES!
Satyajit Das piece Reverse Oil Shock: Part 3 – Feeding Financial Instability
http://www.economonitor.com/blog/2015/03/reverse-oil-shock-part-3-feeding-financial-instability/
is worth the read as the piece takes on how low oil prices threatens the inflation goals of the central banks.
What I found interesting is that BIS now gives this a lot of attention both to how fast oil companies grew their debts in recent years, but also the focus on the dynamics which lasting low oil prices may set in motion.
I cannot remember last time oil companies had such a leverage while oil prices declined as they now did.
To me, the recent years has been a lot of trying to understand the connections between total global debt levels, credit expansion, the shape of the bond/treasury interest (yield) curve, which is about to go flat for all maturities, and the oil price.
The logical outcome from this for the near future developments would likely astonish most people.
Question is how do most people perceive the new normal?
Perhaps the expression “may we live in interesting times” is about to become………interesting.
Yes I’ve just finished reading all three parts of that article. Very good stuff. Is was indeed referring to the bis but my phone chose to correct it to his instead.
I certainly don’t see how we have a hope of getting through the next two or three years without some very unique and unexpected developments, as all these things begin to interact.
To me, the recent years has been a lot of trying to understand the connections between total global debt levels, credit expansion, the shape of the bond/treasury interest (yield) curve, which is about to go flat for all maturities, and the oil price.
The logical outcome from this for the near future developments would likely astonish most people.
Question is how do most people perceive the new normal?
You understand.
There is no experience that can show us anything or teach us anything, beyond one critical truth.
None of this is correct/proper/normal/rational. Macro economic data used to align, at least largely. Now it doesn’t. Now there are massive and glaring contradictions.
We are faced with reporters who can’t possibly understand it all and their jobs depend on them filing copy, so they go through their process of calling people for quotes and paraphrasing the conclusions they get on the phone, and the people they call are not going to say anything extreme. They try to phrase things modestly, because they think there is some value in the 15 minutes of fame they are about to have and want to be called again some day.
The extreme folks who ARE willing to say extreme things will get paraphrased into being wrong. Someone can say some macro economic something is very weak and terrifying, but when equities go up this is interpreted as proof that the guy was wrong.
This is not the world we grew up in. There doesn’t have to be any explanation. Efforts we might make to assimilate it all can be useless if at the core of the matter is a decision by Central Banks to just try to hold the system together, and they may change their minds about how to do that now and then.
It is largely whimsy. Only oil is immune to their glue and tape. And only oil scarcity is responsible for the problems.
Anything could happen… multi positive feedback loops amplifies economic chaos.. Employment, Storage, etc
” in fairly short order, US on-land storage capacity will be exhausted meaning each incremental barrel will have to be dumped directly onto the market, a scenario which is clearly not conducive to supporting prices.”
http://www.zerohedge.com/news/2015-03-20/desperate-shale-companies-issue-stock-stay-afloat
Who are they getting to buy these oil stocks? Is this a matter of luring in “dumb money?”
Weird, all those repeats eventually appeared. The message was “your message has been marked as spam, if this should not be so contact the admin”. New to me.
The anti-spam system made you a spammer! :p
A truly classic demonstration of “the law of unintended consequences.”
I marked them as “not spam” and that’s why they reappeared. I was hoping that doing that would prevent future posts of yours from being marked as spam.
http://oilprice.com/newsletters/free/opintel20032015
Do we remember that picture? I think Mike thought the pad itself was $8 million to prepare.
http://peakoilbarrel.com/world-oil-production-september-numbers/comment-page-1/#comment-477760
I don’t they will be creating any more of these type pads in the near future. Though I am sure all available slots will be used, if it is in one of those sweetest of sweet spots.
Test to see if I can post
Been trying to reply to Futilitist up thread but my comment keeps disappearing…
I’m trying to include a link to Paul Chefurka’s site
http://www.paulchefurka.ca/
Been trying to reply to Futilitist up thread but my comment keeps disappearing…
I’m trying to include a link to Paul Chefurka’s site
It marks the URL as spam? Is there a problem with his site?
I have no idea what is happening. Had 4 comments awaiting approval, don’t know why, and some of Fred’s comments were marked as spam. I checked them “not span”. That fixed them but I don’t know if it will happen again. But I will keep working on it until I get it fixed…. tomorrow.
Buggy system.
There has been a large drop in the Gulf of Mexico rig count. It dropped 11 from 46 to 35. A 25% drop in one week. It had been holding up fairly well.
These rigs will create a lot more oil production than your standard shale drilling well, and though the offshore wells may not have as steep a decline curve as the shale plays, the deep water wells, certainly still have steep decline curves compare to conventional oil wells as Ron has demonstrated in the past.
I would assume most of the exploration rigs had already stopped work, and most of the remainder were working on development wells. Development wells with subsea completion that are tied back to a pre-installed platform/FPSO are relatively quickly brought on line. So this sudden drop in offshore rigs could start to effect the GOM production during the summer, and will put further pressure on the rosy EIA estimates of GOM production.
Toolpush. I noticed that too. Number never seemed to change much, until this week.
If I had a well pumping oil in Texas, I’d hold back on some of the production if I’m only receiving 40 dollars for each barrel, sell just enough to break even, save the rest for when the price increases. It’ll be money in the bank, in fact borrow money on unsold inventory (oil in the ground, pre-drilled storage).
Wait until after the collapse and we’re all in Collaptopia, then offer it for sale.
Total proved reserves at 1687.3 thousand million barrels, the 2012 estimate. It is an increase of 640 thousand million barrels from the 1993 estimate.
BP 2014 Statistical Review
640 000 000 000 barrels of oil proved, the extra amount, allows for a lot more debt to be issued.
If all of those barrels of oil are at the tail end in years of the production, a value of 150 usd per barrel can be applied to then determine what it is worth. Might even be 200 dollars for a barrel of oil in 2040.
150 x 640 000 000 000 = 96 000 000 000 000
That would be 96 trillion american pesos, maybe even more. It is money in the bank right now. Pretend it is in the money market fund and let the withdrawals begin.
Might as well use that money now and extricate the world from the pickle the entire world is in, Mother Nature won’t mind to give back some 40 years in advance. Take the money now, might as well.
Use it to develop more renewables to be there to save the day when the time comes, they’ll be needed because there is an oil shortage in the worst way.
The bank account has the money there and available now, ninety-six trillion bucks.
Won’t do any good not to use some of it now to make a better world for the future.
Here’s an interesting study on renewables in Great Britain
http://www.cps.org.uk/publications/reports/central-planning-with-market-features-how-renewable-subsidies-destroyed-the-uk-electricity-market/
Here’s an article discussing electricity prices in the USA. What this article fails to mention is that gas prices will rise as we deplete gas reserves. Therefore I don’t think it tells the full story
http://dailycaller.com/2015/01/14/pay-the-man-electricity-rates-soar-to-record-levels-as-obama-shutters-coal-plants/
And, a few weeks ago I mentioned tax cuts as a potential change used to keep the oil industry functioning. This was based on my own experience, which told me that both government and industry would work together to sustain employment in most countries:
http://www.theguardian.com/environment/2015/mar/19/coalition-branded-climate-change-deniers-over-north-sea-oil-boost#comment-49246358
Not that they don’t have some points, but the CPS are one of your standard libertarian markets solve everything think tanks, so the results of this study were a foregone conclusion from that perspective.
I’ve been expecting tax cuts in the north sea for a while now. Steve Kopits actually predicted tax breaks would be the ‘last arrow in the quiver’ in his excellent talk from last year. Though at $50 I doubt the current cuts are enough to save the north sea.
I expect they’ll hang on for dear life, wait for oil prices to go back up. Those platforms cost so much to abandon its very feasible to keep crews flying offshore to do maintenance and keep a little oil flowing.
When we were setting those platforms we used too high a PV to select platform concepts. I was very young and nobody listened to me (since I’m just an engineer), but using a high PV for optimization analysis is retarded.
I learned to lose my respect for business schools after I saw the way it was being done. And many of them keep doing it even today. You would think by now they would know better. So now they operate those fields at a loss and they keep installing concepts they will hate 30 years from now.
I like the way the first article tries to pretend that central planning is something new in the electricity market. The rest of the reports verbiage is equally ignorable.
However, this is is interesting:
Highly subsidised wind and solar capacity flooding the market with near random amounts of zero marginal cost electricity wrecks the economics of conventional power stations.
The problem is not the subsidy. The problem is the low price. Currently there are subsidies. But the price for renewables keeps falling. There is no doubt about that. So subsidies or not, the economics of conventional power stations is headed for a fall. Whining that it’s not fair won’t change that.
Your second link is to Michael Bastasch, who sees client denialism as a stick to bash Obama with. Nothing he says about energy or climate can be taken seriously at all. It isn’t even meant to be accurate, it’s meant to provide Two Minutes of Hate to the Republican base. Like them, he’s stuck in the Republican’s 2000 presidential campaign, and still finds time to attack Al Gore.
Red the first link. The problem is the battery. There’s no way to keep the electricity flowing 24/7. Your arguments sond to me like “let them eat cake, the price will come down some day”.
Ref the second link, here’s my closing remark about it
“Therefore I don’t think it tells the full story”
If you visit my blog you may notice I read plenty of strange people with unusual opinions, including a Jewish guy who attacks the Israeli Government, a den of warmists like Eli’s, Lew Rockwell, and Watts. Reading what people think even if, at first, it sounds dissonant is very useful.
I consider the Guardian’s environment pages a propaganda rag, but I read it. Sonetimes it’s useful, sometimes I get material I can parody. Like the stupid post about the global warming diet.
Red the first link. The problem is the battery. There’s no way to keep the electricity flowing 24/7.
RED?!
LOL! I think your Freudian slip is showing there, Fernando…
But I think the real problem is that you and a lot of very smart people are stuck in a paradigm where you seem to think electricity needs to flow 24/7 for everyone everywhere and you can’t even imagine anything different.
I know you think this is a toy:
http://info.solarimpulse.com/en/multimedia/blog#.VQ2Sd47F_94
But there are actually some very very smart people on their team and even a few, dare I say it, genius level engineers there who are helping get out the message that we all need to rethink how we are using and managing our energy resources.
Ok, Think of this for a moment, a pilot in a tiny cockpit flying non stop without any fossil fuel, for five days across the Pacific ocean in a non pressurized cabin at very high altitude, temperatures ranging from plus 30 to minus 40 Celsius, sleeping only three hours per day in 20 minute intervals. Certainly ain’t your typical first class transoceanic flight…
However, I do think it is a perfect metaphor for how different a post peak oil alternative energy based world might be from your BAU oil based comfy current existence. It isn’t BAU and no one who really understand what it entails expects it to be easy! So to talk about batteries and 24/7 energy flows not being good enough to continue supporting BAU is kinda like beating a dead horse, it ain’t gonna get up and you ain’t gonna ride it again.
Since BAU is already dead, (Peak Oil says so) you might want to start looking at the alternatives (pun intended) and learning how to live with them.
In Brazil we have a saying that roughly translated is this:
He who does not have a dog hunts with his cat…
Happy hunting >;-)
Cheers!
Fred, the solar plane is a very nice toy plane. But you are still missing your battery.
Here, I found you something you can read:
http://energy.gov/oe/services/technology-development/energy-storage
Fernando, look I really do get the fact that you can’t power our civilization with batteries. I’ve actually built my own PV powered generators with batteries and inverters.
Guess what, they do keep my beer cold after hurricanes and power my lights radio and basic communications devices while my neighbors are stuck in insane traffic trying to get gasoline for their generators at service stations that have no power to pump gas…
The point is in those circumstances none of us has air conditioning but at least I have my cold beer, a few LEDs and a working cellphone thanks to alternative energy. Once they all run out of gas then I feel safe to venture forth on my bicycle and survey the damage.
I also clearly understand that what I have described is a local event and a far cry from global collapse but it too is a sort of metaphor for the paradigm changes I keep talking about.
Cheers!
Of course it has batteries, or would not be able to fly at night.
http://info.solarimpulse.com/en/our-adventure/solar-impulse-2/#.VQ3yq-l0yM8
Stop following Ned Ludd.
I will be impressed when a plane flies across the country on fuel made directly from CO2 removed from the atmosphere.
I would not worry too much about fossil fuels going away. Nanotechnology and catalytic chemistry will soon be mining the carbon from the atmosphere and turning it into liquid fuels. All of it will be solar powered.
Allan, CO2 is spent carbon based fuel. It takes as much, or more, energy to “un-spend” that fuel. You cannot separate the carbon from the oxygen with catalytic chemistry or nanotechnology without using more energy than you would get back when you burned, again, that carbon based fuel.
There is no magic in science. There is no catalyst that can separate carbon from oxygen in CO2 or hydrogen from oxygen in H2O. It cannot be done without the investment of as much or more energy than you get when when you burn it…. again.
I worry a lot about the availability of fossil fuels declining, and you should also.
Of course. That’s why synthetic fuel will be a bit more expensive.
But that’s not a big deal; the total volume of liquid fuel consumption will be much lower.
“There is no catalyst that can separate carbon from oxygen in CO2 or hydrogen from oxygen in H2O. ”
Actually there are quite a number of catalysts that can separate CO2. The most efficient and interesting ones are the N-heterocyclic carbenes which operate at quite low temperatures.
http://phys.org/news159098987.html
Another method of producing fuels from CO2 is photocatalytic reduction.
http://phys.org/news/2014-12-efficient-catalytic-photocatalytic-reduction-co2.html
As far as energy goes, there is a huge abundance of energy available, it just seems that now we need liquids for flight, so liquids will be produced. I am not worried about the loss of petroleum products, what worries me more is the greed and idiocy that will get in the way of change.
A device has been built that makes fuel out of CO2:
http://phys.org/news178203219.html
However, it remains to be seen if such devices are cost effective, or scalable.
It’s not really necessary.
There’s existing, proven tech for synthesizing fuel: electrolytic hydrogen (using electricity from any source) combined with CO2 scrubbed from air or seawater. It would cost $5-10 per gallon, which any European will tell you is affordable- if you don’t use large volumes.
Solar powered synthetic fuel is fashionable research, and it would be nice…but it’s not necessary.
The most effective way to make liquid fuel from CO2 is to use what we call the “sugar cane plantation technology” or SCPT. It uses biochemistry to pump electrons using photons.
Yeah, ethanol works, though it does produce some side effects when it’s scaled up. It would be nice to limit our demand on agriculture for fuel.
Electrolysis using surplus wind power seems like the best bet to me. A very simple way to mitigate the intermittency of wind power is to over build it a bit – that will produce periods of cheap surplus power that will likely cover more than 50% of the calendar. That cheap surplus power can be used for things like the production of synthetic liquid fuel.
Hunts with his cat. Pretty funny! In no time he finds that the cat is getting bite sized mice and birds, and very rarely a rabbit or rat. Not very good ROI.
So he eats the cat and goes for the deer. This turns out to be mighty easy to do, at least for me, since I have my single shot stuck out the shop window, sighted in on a target in the middle of a deer path about 60 meters away.
The deer wander by, and as often as not, stand in front of the bullseye sniffing curiously. Pop, and the deer vanishes instantly and venison appears.
That’s half a years meat right there. On second thought, don’t bother to eat the cat.
So how come I’m so rich in easy living and the rest of the world isn’t?
Simple, there’s one kilometer between me and next neighbor, and we all four of us can’t eat deer fast enough to do anything to their overpopulation.
That’s not fair. How can we help the others? Well, for once Fernando (I think) said the right thing.
Soap operas. Absolutely addicting, depicting local situations with local actors. Scenes all conveying the same subtile message- few kids mean wealth. Smart sympathetic characters have few.
Long ago my good business buddy in India told me that “Dallas” had a far more powerful effect than any other attempt at population limitations. He said that many brought up the same puzzle- how come so much bed-hopping and no kids?
They then went and found out.
So, put your money on opera. Ashoka is one.
Red the first link.
~Fernando Leanme
That is funny on so many levels.
I am glad Fred caught this. You missed one Ronald. 🙂
‘The didactic assaults the fortress of my mind, but the story goes through the back of my heart’
I did not miss it at all, I read it and saw the error, but then it is ‘I lead’, ‘I led’, ‘I read’, ‘I red’.
A forgivable error, there is no forgiveness for misspelling ‘ascertain’.
No reading!
There is an excuse for ignorance, but not for stupidity.
“There is an excuse for ignorance, but not for stupidity.”
I agree.
When the production tax credit increases the base rate for electric service, fossil fuels must directly subsidize wind and solar, ergo, pay their way. It is a cost to the rate payer, nobody else, the government acts as a collection agency, the rate payer is on the hook. Nothing else will work, the money must come from somewhere, the subsidy, and it is not the gov, it is the consumer.
It is a direct cost for the average joe and the energy produced is a direct result from fossil fuels, the energy generated from them, renewables are not exempt from fossil fuels providing the energy, fossil fuels are the primary producers, not renewable energies.
In all fairness, a ‘thank you’ is owed to fossil fuels and the energy they can produce, renewables should show some more appreciation, some humbleness. There is no need to ridicule, berate and belittle fossil fuels.
Beer time!
Indeed! Think of the impact on fossil fuel’s self-esteem.
Nothing else will work, the money must come from somewhere,
A carbon tax would be nice. That would help pay for the cost of all the damage that fossil fuels do.
And, of course, if you tax fossil fuels properly, you don’t need to subsidize renewables. People will see directly how expensive FF is, and switch.
fossil fuels are the primary producers, not renewable energies.
And fossil fuels should very humbly thank the sun that they even exist at all, they’re nothing but a momentary flash in the pan! Primary producers? Ha!
——————
Yikes! I get a feeling that the path and horizon for renewable energy & EV buildout is about to accelerate much too fast and become much too non-linear and chaotic for the renewable energy & EV buildout to keep up with, and manage, respectively.
——————
As cash flow flattens, major energy companies increase debt, sell assets.
There are alternatives. I have seen internal company analyses, and they tend to make several parallel moves.
1. Cut operating costs. They can get extremely hard nosed negotiating with suppliers.
2. Stop share repurchases. This exposes them to a lower earnings per share trend, but if times are tough it doesn’t make sense to repurchase.
3. Seek tax relief (outside the U.S. it’s done all the time).
4. Cut the CAPEX budget. This is done by cutting the unit cost as well as cutting the units.
5. Farm out acreage if there are commitments to drill they can’t escape.
6, Sell marginal properties (but that’s a dumb move when prices are on a short term negative swing)
7. Borrow. This is really bad news if it drops the bond rating. I was taught the bond rating was sacred.
But I was raised in a very traditional outfit. I didn’t really have the power to make those decisions, but they wanted us to deliver real projects on time, and to move fast when they snapped their fingers and asked for budget cuts.
I used those lessons as a consultant, and I found most company managers seem to grasp the concepts. What drove them nuts was the fact that there’s no magic pill. Sometimes they hire consultants expecting we can find a magic cure.
The only thing I usually found was a tendency to be very short term focused and the corollary tendency to book items as CAPEX when they could be booked as OPEX.
The way things are nowadays the only quick way out for a company in debt is to sell something. Either sell shares, or sell properties, and learn the damn lesson. We got too many super smart 45 year old company managers who forget there’s a ton of people trying to make a living on the lower floors and out in the field, they need to learn to drive slower.
“the corollary tendency to book items as CAPEX when they could be booked as OPEX. ”
Many investors rely on EBITDA [Earnings Before Interest Taxes Depreciation and Amortization] (Warren Buffett says that they are nuts). OPEX reduces EBITDA, but CAPEX does not since it is capitalized and then depreciated.
Clueless, some companies are run properly, some are run to catch mullets and drive up bonuses. A few years ago I showed a joint venture CEO how the switch to OPEX dropped his taxes in real life, and he looked at me as if I were crazy. He was mostly focused on keeping the JV showing “good” results. But he never got it. That company ended in the garbage can.
On the other hand keep an eye on exxon and watch how they do it. And look at their return on capital employed. Those guys have a very long term vision.
“The only thing I found was a tendency to be very short term focused and the corollary tendency to book items as CAPEX when they could be booked as OPEX”
I found this very enlightening. For those who don’t remember how Worldcom collapsed, this behavior was the fraud that brought them down. It wouldn’t surprise me if shale companies have been engaged in this behavior. They love to highlight operating cash flow while ignoring cash flow from investing activities while all the cash is going out the door in investing activities. Things with the shale companies might be even worse than I thought.
I suspect this too. As I discussed with Fernando awhile back, we have looked at production for sale that a public company had on the market. The summary stated OPEX of $xx. We thought that seemed very low. Of course, when we got all the numbers, we found they were throwing a lot of things into CAPEX that should have been considered OPEX.
I wonder about CLR in this regard. Their OPEX runs about half of whiting, Oasis, etc. On a per boe basis.
Shallow.
Is that the invisible hand of accountancy at work?
I am certainly no accountant, but with very high rate of depletion, and the disproportional percentage of cash flow in the first 12 months, surely drilling and completion costs of the well could nearly be considered OPEX. The ability of any cash flow from a five year old well to pay the CAPEX over the depriation period, is yet to be proved.
Toolpush. I’m not saying drilling and completing a well should be considered OPEX. An example would be capitalizing all the cost of repairing a down hole failure. Or capitalizing the cost of repairing an injection pump. Or electrical repairs, lease road repairs, etc.
I’m no expert on the accounting side, but I try to use a bright line rule. Everything to drill, complete and put the well on production should be in CAPEX. Likewise, anything done down the line to enhance production, such as re-frack, acidize, should be CAPEX. Finally, replacement of surface equipment, such as a tank, injection pump, should be CAPEX.
On the other hand, repair work performed just to keep the well going should be OPEX in my opinion. Examples would be pulling a well to repair a down hole pump, replace worn tubing, repair of an injection pump, repair of a lease road, repair of a pumping unit, replacing a worn above ground fitting, repairing an electrical break, floats in a water tank, replacing belts or stuffing box rubbers.
Those in my view should all be OPEX, they are all things necessary to just keep the well in production, they are not intended to increase production. However, I have seen companies put many of these items in CAPEX, at least for purposes of making OPEX look lower than it really is.
I think in the US the Internal Revenue Code allows companies to elect whether they expense or capitalize some items. The accountants could probably cite the code sections, or correct me if I am wrong.
The effect, of course of throwing more into CAPEX is to decrease the per barrel OPEX reported, and to increase earnings in the up front years as the CAPEX is depreciated over time.
I think clueless noted that a lot of investors look at EBITDA. In the case of oil producers, especially shale, this is a mistake. CAPEX is ongoing at a high rate. It is not like a factory, that is built, but then may have substantially the same output for 40 years.
The big shale companies have all shown high per share earnings the last three years, even though their cash flow has been negative. I think that is also true for most of the majors upstream operations.
This is why the focus on debt and cash flow is so much more important than earnings or EBITDA. The industry as a whole, at least the US upstream and Canadian upstream, were cash flow negative despite high recent prices. How they react, given a more than 50% price drop will be interesting. Much will be dependent upon how much more credit is extended.
Rune was hitting on this re Bakken over two years ago. That Bakken producers remained cash flow negative year after year should have been shouted from the roof tops. Yet even now, it is ignored.
Just like my constant PV10 harping. PV10, or 9 or 7 or whatever number one wants to plug in, is an important tool, both for valuation purposes and for making credit decisions. If banks ignore this in making borrowing base determinations, look for the wheel to keep spinning. If they follow their lending rules, credit to drill new shale wells should come to a halt.
Toolpush, in summary, your point is well taken. The shale business collapses if CAPEX does not continue. If they do not drill a well for two years, production will be decline in the neighborhood of 60% range.
So say I am Shale R Us to borrow a fictional name I have seen here. Right now boepd is 200,000 and long term debt is $6 billion. I stop drilling. I can maybe pay a billion down on that long term debt in two years, but at end of 2016 I will be down to 80,000 boepd and still have $5 billion of long term debt. The alternative is to borrow another $2 billion and grow production a little or at least keep it flat. For some strange reason, Wall Street will reward the latter over the former.
I have plugged the current crude and natural gas prices in for some of these companies. Yes, hedges may help in 2015 some, but absent that it is ugly.
I do not see how they survive if the current NYMEX strip remains for a couple years. However, I cannot see how prices can stay this low given that production must surely fall. Will be interesting to watch. Wish I just had a box seat, instead of standing at the hot corner.
Thanks Shallow,
My comment was a little tongue in cheek, but i was just pointing out the way Shales-r-us are consuming wells, then the case could be made for them to be treated differently to traditional oil production. But I do realize this would never happen.
Certainly when the penny drops, it is going to drop hard.
Shallow, my guess is that tax authorities and auditors look the other way. They know that booking OPEX as CAPEX increases tax revenue. The only watchdogs who may worry are the SEC and prospective buyers.
I was taught to push as much as possible to OPEX, but the company had a very long term focus, and touted the return on capital employed. Later I had to deal with JVs and saw how other companies booked their expenses, so I learned there was indeed a lot of choice.
I’m not sure about the acid jobs, because I haven’t worked at the field level in the USA in many years. But I think you can book an acid frac and all sorts of well activity as an operating expense. That’s going to increase your cash flow right away. You just have to be very clear and lay out choices for your stockholders. But times are tough and getting cash flow should be top priority (I think?).
Fernando. I agree with you about an acid job or even a re-frack, they can be treated either way. Most of the acid jobs we do are for injection wells, so in that instance I would put in OPEX.
Further I agree the IRS usually will not object to the method that results in higher tax receipts in the current year.
Have you considered a jet pump nipple and a sliding sleeve to allow you to reverse the injectors? I’ve always had a huge hassle with injectors, and I wanted to try it. The question is whether you can bring the fluid up on the casing side without covering the annulus above the packer with a bunch of garbage.
The 127 “Majors” are what % of this picture?
Unsure, but the graph is supposed to be an accompaniment to my comment above it.
The author or someone related seems to pop in here sometimes, so you can always ask them here or directly contact them.
And oh, the masses of self-centered, self-indulgent greedy rich buggers will start screaming to high heaven when they can’t have their not so hard earned luxuries at beck and call. That will do more to change things faster than all the environmentalists, green action groups and political activists in the world ever could manage. Massive change will occur when petro-fuels become limited to the rich. All stops will be pulled and finally fossil fuels will go off to geological slumber land where they belong.
The RRC of Texas gives data on the number of wells added each month in the Eagle Ford (in a video on the right) see
http://www.rrc.state.tx.us/oil-gas/major-oil-gas-formations/eagle-ford-shale/
There were 240 new oil wells in Dec and 192 new oil wells in Jan and 128 new oil wells in Feb 2015 in the Eagle Ford. Below is a rough scenario with new wells added at 165 per month from 2016 to 2029. New well EUR (estimated ultimate recovery) decreases at 8% per year starting in Sept 2016 with a gradual increase in the rate of decrease beginning 12 months earlier. Clearly the future number of wells added and the beginning date of any new well EUR decrease and the ultimate rate of decrease in new well EUR are unknown. Scenario is intended to be illustrative of one possible future.
Dennis, as you drop the per well recovery (in barrels), assuming the wells are economic (which they have to be because they are being drilled), there will be more prospects. This increases the drilling pace.
I’m not sure about what a bunch of crazy independents would do in Texas. In my case I would be looking at a steady production rate to keep my GAS handling facilities working at near capacity. I’m assuming gas prices will be up. Another strategy would be to move into the shallower oil window eagle ford. It may be possible to drill cheaper wells, or really long wells to make up for the lousy reservoir fluid issue.
Hi Fernando,
The model is not very sophisticated, that is clear. I used a constant number of wells after Jan 2016 in order to keep things simple.
If I understand you correctly, you would expect the number of wells drilled would increase in an attempt to keep output relatively flat, do I have that right?
I have assumed that the URR is around 8 to 8.5 Gb, so if new well EUR is decreasing because the sweet spots have been fully drilled, a higher drilling rate (more new wells per month) would lead to a faster decrease in new well EUR.
As an example, if 165 new wells per month results in an 8% annual rate of decrease in new well EUR, then 330 new wells per month would be expected to double the annual rate of decrease of new well EUR. No doubt this oversimplifies too much, but I don’t have your level of knowledge about oil production (not even in the ball park). The model is very rudimentary.
I see. It’s just that the a Eagle F has an oil leg. And if you drop the individual well reserves this implies the wells are economic. And if oil prices are that high then the EF oil leg kicks in.
I think you can state its the Eagle Ford gas condensate reservoir. This way it sets a fence and your numbers are fine (if indeed such a low reserve well can be drilled).
A nice data source is the weekly loading report of the american railroads. Petroleum and petroleum products transport volume last week is below the respective week of 2014 and 2013 !
https://www.aar.org/data-center/rail-traffic-data
What is the difference from the data reported by BNSF:
http://www.bnsf.com/about-bnsf/financial-information/weekly-carload-reports/
Thanks
I have read several comments on here about how CO2 is great for plants so they will just grow even better with higher emissions. BS!
“The amount of carbon that the Amazon rainforest is absorbing from the atmosphere and storing each year has fallen by around a third in the last decade, says a new 30-year study by almost 100 researchers.”
http://www.carbonbrief.org/blog/2015/03/amazon-rainforest-is-taking-up-a-third-less-carbon-than-a-decade-ago/
Lucky for us something else is doing the absorbing.
Is it the ocean? Homeostasis will love the pH changes.
According to what I read it’s mostly the ocean and increases in vegetation cover. That ocean ph signal is pretty good evidence. The vegetation cover info is from a NASA satellite data observation report. I also assume CO2 is being removed from seawater as it is turned into rock due to erosion, the eroded material falling into the ocean, and ocean chemistry doing its thing.
Plants breathe CO2, so it should come as no surprise that there is increased plant growth.
And the satellite data proves it.
http://www.worldclimatereport.com/index.php/2011/03/23/global-greening-continues-did-we-cause-it/
World Climate Report is the newsletter of the Greening Earth Society which was formed by the Western Fuels Association.
The Western Fuels Association is a $400 million consortium of coal suppliers and coal-fired utilities, based in Westminster, Colorado. Western Fuels Association supplies coal and transportation services to consumer-owned electric utilities in the Great Plains, Rocky Mountain and Southwest regions.
Newsletter apparently died in 2012. Article reads like hokum, throws in some supposed science then leaps to conclusions that are not supported by the quote from the science.
That “Greening” isn’t even close to keeping up with 100s of millions of acres lost every year to desertification, deforestation, Amazon clearing, Boreal forest die off.
CO2 is one carbon and two oxygen atoms combined. It is absolutely the truth that plants grow better in CO2 rich environments. See the provided reference, please. This can even be determined by how farmers pump CO2 gas into greenhouses to stimulate growth, although the CO2 does not cause the temperature to rise in green houses…as it the sun that warms up the panels and traps the heat, not the CO2. There’s a provided reference there too. So in summary CO2 is not only beneficial to plants, but life itself since all Oxygen on earth comes from the plants that originally took in the CO2. We are far better off with a higher global CO2 concentration since will offer us a useful way to grow more and better crops to feed the world’s increasing population.
My other comments don’t go through.
It is always such a great pleasure to have people with such deep knowledge of botany and plant physiology grace this site. Even more so when they have such a profound insight into complex ecosystems based on what farmers do in greenhouses.
I wonder if you could help a layperson understand in simple terms why the following occurs and how that might have implications to the nutritional qualities of plants that are at the foundation of complex food webs? And how we might expect increased atmospheric concentrations of CO2 to impact the nutritional qualities of plants?
The influence of elevated CO2 concentration ([CO2]) during plant growth on the carbon:nutrient ratios of tissues depends in part on the time and space scales considered. Most evidence relates to individual plants examined over weeks to just a few years. The C:N ratio of live tissues is found to increase, decrease or remain the same under elevated [CO2]. On average it increases by about 15% under a doubled [CO2]. A testable hypothesis is proposed to explain why it increases in some situations and decreases in others. It includes the notion that only in the intermediate range of N-availability will C:N of live tissues increase under elevated [CO2].
Excerpted from:
‘The effects of elevated [CO2] on the C:N and C:P mass ratios of plant tissues’ Plant and Soil
09-2000, Volume 224, Issue 1, pp 1-14
Edit: It just occurred to me that we should be especially careful about increasing CO2 concentrations in the atmosphere if it causes plants to produce more oxygen since exposures, to partial pressures of oxygen above 1.6 bars (160 kPa)—are usually associated with central nervous system oxygen toxicity… That’s a really bad thing! I know, I was a professional deep sea scuba diver!
Yup, Reference This: http://www.co2science.org/data/plant_growth/plantgrowth.php
More CO2 = More plant growth = More crops = More food for our offspring = More satisfaction in life.
Bigger doesn’t necessarily mean more nutritious or healthier and your chart doesn’t address complex ecosystems or food webs.
Though you might like to respond to this study as well, especially the unintended consequences of increased atmospheric CO2 concentration on reducing the lifespan of old growth trees in the Amazon!
http://www.leeds.ac.uk/news/article/3676/amazons_carbon_uptake_declines_as_trees_die_faster
Over recent decades the remaining Amazon forest has acted as a vast ‘carbon sink’ – absorbing more carbon from the atmosphere than it releases – helping to put a brake on the rate of climate change. But this new analysis of forest dynamics shows a huge surge in the rate of trees dying across the Amazon.
Lead author Dr Roel Brienen, from the School of Geography at the University of Leeds, said: “Tree mortality rates have increased by more than a third since the mid-1980s, and this is affecting the Amazon’s capacity to store carbon.”
Initially, an increase in carbon dioxide in the atmosphere – a key ingredient for photosynthesis – led to a growth spurt for the Amazon’s trees, the researchers say. But the extra carbon appears to have had unexpected consequences.
Study co-author Professor Oliver Phillips, also from the University’s School of Geography, said: “With time, the growth stimulation feeds through the system, causing trees to live faster, and so die younger.”
Recent droughts and unusually high temperatures in the Amazon may also be playing a role. Although the study finds that tree mortality increases began well before an intense drought in 2005, it also shows that drought has killed millions of additional trees.
Dr Brienen said: “Regardless of the causes behind the increase in tree mortality, this study shows that predictions of a continuing increase of carbon storage in tropical forests may be too optimistic.
CO2
You know, if you know next to nothing about a subject I’ve always felt it better to shut up, rather than open my mouth and make a fool of myself, but I guess some people feel different.
I pose two questions to you:
What about pathogens?
What about symbiotes?
For pathogens, many weeds have been shown to grow larger and gain increased resilience to pesticides under increased CO2 concentrations. Possibly because they also grow larger, and the pesticides thus end up more dilute.
What about clubroot, which can’t be treated with pesticides, which thrives in warmer climates which range is increasing around the world as temperatures increase?
What about molds, many of which also thrive under increased CO2, and will likely caused increased spoilage of foodstuffs?
What about funal interactions with plant hosts? Ryegrass has a fungal symbiote which produces ergovaline to stop it from being overgrazed. Under conditions of elevated nitrogen and CO2, this parasites gives off much more egrgovaline, which has a detremental effect on cows being grazed on the land. Might even start seeing people getting ergotism again.
What about the fact that a recent study showed that under elevated CO2 levels insects become more active and damage more plant matter?
This is not to mention the detremental effects that increased CO2 seems likely to have on sea life as it acidifies the ocean.
This is the problem with the trite, simplistic and downright dangerous assertion that “oh, don’t worry, CO2 is plant food and we’ll all be fine”. It just ignores too much to make it even close to a strong argument. I mean, as far as we know, agriculture has only happened under holocene-like conditions. We only know it works with the current climate system that we have, and there is jack all evidence to say it’ll work in whatever new climate state we might end up in. The fact that it appeared independently in about 4 places, all around 10,000 years ago, should be a big sign indicating that these current conditions are pretty special, and are maybe close to optimal for growing. Certainly all our agriculture is optimised for how things are right now. Blithely changing the atmospheric chemistry “because CO2 is plant food” is utterly moronic.
Thanks Sam, well said.
I ditto that, well said Sam.
Hey Sam,
This is the problem with the trite, simplistic and downright dangerous assertion that “oh, don’t worry, CO2 is plant food and we’ll all be fine”. It just ignores too much to make it even close to a strong argument
Don’t worry Bro! We have plenty of super genius engineers who will solve everything for us with trite, simplistic and downright dangerous geoengineering! Most of them also claim that CO2 is just plant food since their engineering backgrounds automatically make them experts in all areas, especially in plant physiology and complex ecosystems …
They know for a fact that more CO2 is good for plants because of satellite data from NASA. BTW they are the same people who claim they don’t trust the satellite data from NASA when it comes to increasing global temperature trends, diminishing ice cover, sea level rise, etc…
Hey with experts like that working on geoengineering the climate for the rest of us simplistic ignoramuses, what could possibly go wrong? Don’t worry Sam, just party on dude!
Cheers!
I doubt the truth is as complex here as you’d like it to be. Read the textbooks and understand Planet Earth has spent 80% of it’s 4.5 Billion years with atmospheric concentrations of CO2 at 4000 ppm or greater – an order of magnitude (10X) greater than current levels of CO2 in our atmosphere – and the Planet survived just fine with no need for humans to “fix” things.
To take that a step further on an existential scale – Planet Earth is experiencing a geologically historical low level of CO2 in the atmosphere (400 ppm) – the argument can therefore be made with statistical relevance that there is a greater chance of Planet Earth becoming a frozen and lifeless planet (much like Mars); simply because we are closer to a CO2 deficiency on the planet than we are to an over-abundance of CO2 – a compound that is essential for the survival of all plant-life on Earth. Carbon Dioxide also forms the very basis of the food chain in our Oceans. CO2 is consumed almost exclusively by vast quantities of algae and plankton in our oceans – these micro-organisms feed the small shrimp and krill that sustain the bait fish, who in turn are prey for the larger ocean predators. So without CO2, our Oceans would be dead – our atmosphere would be toxic and the Planet would be lifeless!
Mankind with all of his Industry, Agriculture, Manufacturing and Transportation needs is responsible for approximately 6-7 giga-tons of CO2 emission into the atmosphere per year worldwide. Think about it this way – that is a mere 3% of the 150+ giga-tons that are emitted into the atmosphere each year by natural sources like our oceans, lakes, deltas and swamps, volcanoes, dying vegetation, animals and microbes.
The natural question to then ask is, why is CO2 the source of such angst and hysteria from Academia, our bureaucracies, technocrats and politicians? I think you would agree that there is a clear answer: In today’s world of misinformation, CO2 has become the prime candidate our developed world political policymakers can bring up in order to justify new taxes on Job Creators and Wealth Managers that would ultimately go toward paying for the high level of entitlements that the masses are now dependent on but in reality are unaffordable and unsustainable under the current tax regime. At the same time these same policymakers realize they have a chance to limit the growth potential of developing Nations which are increasingly becoming dependent on carbon-based energy sources to develop and sustain their own economies.
In that case, I suppose under the auspices of the United Nations IPCC, we can expect the hype and ramped-up rhetoric to increase – soon to be augmented by various other taxes in order to sustain the “necessities” that far too many people in the developed world have come to expect. Let’s all agree to remain vigilant.
I think you would agree that there is a clear answer: In today’s world of misinformation, CO2 has become the prime candidate our developed world political policymakers can bring up in order to justify new taxes on Job Creators and Wealth Managers …
That is the biggest crock of shit I have read in a long time. Job creator and wealth managers no less. Yes, this whole climate change thing is just a plot to tax the job creators. What a load of crap.
You talk about the earth being 4.5 billion years old yet the first land plants appeared only 450 million years ago. Land plants have been here for only one tenth the age of the earth and land animals a lot less than that.
Yes during the early history of the earth the CO2 level was much higher. During the Cambrian era, before there was any land life at all, CO2 levels were much higher and the average temperature was 7 degrees C higher. And the sun was a bit cooler then also.
You cannot make any meaningful statement about CO2 levels during Paleozoic times because early life was just evolving and adapting to those times. Plants and animals that evolved in the Cenozoic era not survive if Paleozoic atmospheric temperatures and conditions were to return. And you quoting conditions that existed in pre Cambrian times is just silly. Totally absurd because they have no relation to plants and animals that are alive today.
Job creators… wealth managers… good god, what stupid thing will those climate change deniers come up with next?
It seems there is a concerted effort afoot to spread this CO2 is plant food meme. I’ve been finding all it over the place recently!.
Excerpt from comment on slashdot.org
http://science.slashdot.org/story/15/03/21/2132254/greenpeace-co-founder-declares-himself-a-climate-change-skeptic
… Finally, there is absolutely no doubt that plants are much happier with 400 ppm than they were at 280 or 300 or 320 ppm. Plants grow faster, are healthier, and are more productive at higher CO_2 levels. This is known both from lab work (greenhouses with controlled CO_2) and from observations of crop yields and tree growth rates in the real world. Plants would be happier still with 1000 ppm. Over almost all of the last 600 million years, atmospheric CO_2 has been anywhere from 1000 ppm to 7000 ppm. Levels as low as 300 ppm are extremely rare and yes, probably dangerous to the biosphere.
Happy Happy Plants! No one in their right mind would want sad plants…
Yet we do know that CO2 levels have been much higher for most of Earth’s history. They have been very low since we entered the present glaciation about 5 Mya.
Would you not agree that citizens in the Western World have become dependent on certain “entitlements” and public-sector services (soc. Security, education, roads, bridges, health insurance, food inspectors/etc.) that politicians started promising them the public-sector could reliably maintain when times were good but now that times aren’t so good the countries are having tough times fulfilling and sustaining those promises? Of course the politicians are going to do whatever they can to make sure the masses get what they want – and feel they deserve. And of course the politicians have an incentive to keep the benefits flowing – because the politicians will be fired (lose elections) if they turn the flow off. The current tax regime doesn’t work – if it did we wouldn’t have the problems of paying for the bloated government service state. So other than raising taxes on the most successful among us what other options do the politicians have for raising the needed money to pay for everything the big bloated government provides?
Printing money.
Hi Tony Gonzales,
Homo Sapiens sapiens evolved about 200,000 years ago. With the exception of 1958 to 2014, atmospheric CO2 has been 300 ppm or lower for at least the last 800,000 years. See
http://cdiac.ornl.gov/images/air_bubbles_historical.jpg
If we were dinosaurs, perhaps higher levels of CO2 would be good for us, but we are not, we and the current flora and fauna on the planet are well adapted to atmospheric CO2 between 180 and 300 ppm. For the period between 5000 BC and 1750 AD, atmospheric CO2 was in a narrow range between 270 and 300 ppm.
Have you ever studied any biology?
Dennis, if they can genétically engineer cows to make carrot juice, then they can make ragweed taste like Soylent green.
Soylent Green is people! Why would anyone want to make ragweed taste like that? Yuk!
Actually ragweed is edible as it is and according to at least one courageous individual doesn’t taste half bad:
http://www.eattheweeds.com/ragweed/
The grain is some 47% crude protein and 38% crude fat. That’s an energy powerhouse despite the size. The seed oil is edible and at least one person alive today has eaten a small hand full of seeds. They taste like wheat brand. In excess of 5,000 seeds can be produce per plant. Generally said Ragweed is not an “antique vegetable” as such things are sometime called. But, it might be a lost grain.
Actually in the Holocene we probably had about 320 ppm 7 kya, and clearly significantly higher than that during the Eemian which was warmer by about 2ºC than the Holocene 125 kya.
CO2 is pretty harmless to us. During the winter, in not too well ventilated homes, the CO2 can go up to tens of times atmospheric concentrations easily. During military service I slept in the same room with other 215 guys and I can tell you that felt like the Cretacic. Nobody measured CO2, though.
Now that you bring evolution, we are an African product and one of the few naked mammals. Warmer surely means better to most above 45º latitude, and it also means less energy expenditure in heating. Too bad warming has stopped.
Hi Javier,
The temperature can vary for reasons besides carbon dioxide. Based on ice core data CO2 was below 300 ppm for the past 800,000 years.
http://www.eoearth.org/view/article/169588/
Hi Dennis,
The Genus Homo goes back 10 million years. They obviously survived higher CO2 levels, or we would not be here arguing.
Where did you get 10 millions years? I’m seeing 2.5 million.
The time frame for the evolution of the genus Homo out of the chimpanzee–human last common ancestor is roughly 10 to 2 million years ago, that of H. sapiens out of Homo erectus roughly 1.8 to 0.2 million years ago.
http://en.wikipedia.org/wiki/Homo_sapiens
Hi Dennis,
While no proxy measure of paleo levels of CO2 is satisfactory, ice cores appear to have a large bias to the downside and to reduced variability. There is even important disagreement between ice core CO2 levels. GISP2 ice core CO2 levels, show much higher and variable levels of CO2 than Vostok or EPICA, and are therefore rarely used.
If you want to delve into this issue you can start in these places:
http://www.skepticalscience.com/plant-stomata-co2-levels.htm
http://wattsupwiththat.com/2010/12/26/co2-ice-cores-vs-plant-stomata/
http://www.geocraft.com/WVFossils/stomata.html
Pre-industrial levels of CO2 were most probably not what we are told they were, and if any measure of peak Eemian CO2 levels is below 350 ppm when ∆T was +2ºC at least, that measure is with all probability wrong as it is physically impossible in this world to have had higher temperatures in paleo times (up to 400 My) and less CO2.
Tony G,
The 3% you mention is on top of the amount of CO2 emitted naturally, as you say, but you don’t add that that naturally-emitted CO2 has been, and is, absorbed by natural sinks. The 3% is what is left over and not part of the natural sources/sinks cycles–it is left to build up in interesting ways, and the consequences are what the worry is about.
As to more CO2 (and accompanying rising temperatures), well, plants aren’t the only things that respond with increasing growth. Insects and fungi do too, and are of interest in agriculture. Ask a farmer.
We are not very good at measuring the contributions of CO2 fluxes between reservoirs. I bet you the error is bigger than that 3%. We are only good at measuring changes in atmospheric CO2 levels, but we don’t know where they are coming from. Everything else is an educated guess.
“More CO2 = More plant growth = More crops = More food for our offspring”
California farmers love the additional plant growth from all that extra CO2….
09/26/2014
California harvest much smaller than normal across crops
An estimated 420,000 acres of farmland went unplanted this year, or about 5 percent of the total. Economists at UC Davis say agriculture, which has been a $44 billion-a-year business in California, will suffer revenue losses and higher water costs – a financial hit totaling $2.2 billion this year.
Read more here: http://www.sacbee.com/news/business/article2613416.html#storylink=cpy
Yeah, but look at the bright side – you saved the Delta smelt.
http://westernfarmpress.com/blog/californians-lose-800000-acre-feet-water-305-minnows
That’s what happens when you have the inmates running the looney bin.
“Rising carbon dioxide emissions are set to make the world’s staple food crops less nutritious, according to new scientific research, worsening the serious ill health already suffered by billions of malnourished people.
The surprise consequence of fossil fuel burning is linked directly to the rise in CO2 levels which, unlike some of the predicted impacts of climate change, are undisputed. The field trials of wheat, rice, maize and soybeans showed that higher CO2 levels significantly reduced the levels of the essential nutrients iron and zinc, as well as cutting protein levels.”
http://www.theguardian.com/environment/2014/may/07/climate-change-food-crops-nutrition
If the “CO2-isn’t-a-problem-because-plants-like-it” group believes this, then I hope they are doing everything they can to preserve and expand the rain forests and to preserve and expand green space.
In fact, if they were to aggressively find ways to increase plant life on Earth, I think they would find support from the environmentalists. They wouldn’t necessarily agree on climate issues, but they could work together to end urban sprawl and to end the cutting down of forests.
How are those ducks going to feast on duckweed if CO2 isn’t there to do the job of photosynthesis? They’re not, the poor things will have to go without!
It’s CO2 Wars!
For CO2 to do any good, you’re going to need light, some water, and living plants that have chloroplasts, photosynthesis, without the CO2, it doesn’t work.
CO2 is a must to make the equation work.
It is not the CO2 that is the problem, the problem is where the CO2 originates, how it gets there is the problem.
Another day of burning another ten million tons of coal and another 80 million barrels of oil. Then, after that, of all things, it’s another war, this time on CO2.
Man never ceases at finding ways to wage war on anything. Humans are nuts, bonkers, cuckoo, crazy, cracked, nothing upstairs, completely insane. If it’s a war, mankind is there in a heartbeat.
Without those plants breathing in CO2, we would have been dead a long time ago.
Let’s hope CO2 doesn’t decide to wage a war on mankind. We’re toast if it does.
Not about Texas.
My recent post is an update on Bakken (NDIC data as per January 2015).
http://fractionalflow.com/2015/03/21/is-the-red-queen-outrunning-bakken-lto-extraction/#more-985
Rune, the question in my mind is the recovery per well at a given economic limit (with the limit estimated using a mix of fixed plus variable OPEX). This well reserve (EUR), the number of locations at said EUR, well cost, plus oil price expectations is what drives future drilling.
I know you know. I’m just trying to make sure we list the critical parameters for individual wells.
Fernando,
This may be illustrated with a simplistic and undiscounted example.
Assume the break even is $70/Bbl and the well produces its first one third of its EUR at $50/Bbl, that well would do OK if its remaining two thirds were produced at $80/Bbl.
It is when discounting effects are introduced (no problem to throw the numbers around in a spreadsheet) things gets interesting.
The thing about shale wells are that they require little CAPEX (as opposed to bigger long lead developments) and that normally it takes 3-4 months from spud to flow.
What makes shale wells vulnerable to low prices is that much of the extraction is heavily front end loaded. So a shale well that starts to flow below break even and now including the discount effects will require a much higher price above break even later in its life to become/remain profitable. It is about the geometry of the extraction profile.
Therefore, to reduce risks having a shale well produce most of its EUR while oil prices are higher than break even takes away much of that risk.
Looking at developments in Bakken note that well manufacturing were very high as the price was well above the break even for the “average” well. Wells started between 2009 and 2013 will on “average” do good as a big portion of the EUR was produced at prices comfortably above break even.
Anyone is free to enter into a bet on future developments in the oil price, but ignoring the discount effects may result in some nasty surprises down the road.
There is no way that anyone with certainty can predict the future trajectories of the oil price, everyone enters into a bet about its trajectory, but some trajectories are more likely than others.
Hi Rune,
Excellent post, thanks.
The shale industry is claiming that production will continue increase as well counts fall, presumably as per rig productivity increases. So, presumably the maximum productivity per rig occurs as the rig count approaches zero.
Looks like the Barnett Shale well productivity hit a theoretical maximum last week, as the rig count fell to one (1) active rig, down from 196 in 2008:
http://www.star-telegram.com/news/business/barnett-shale/article15518804.html
Jeffrey,
You haven’t seen nothing yet, just wait till the rig count drops to zero (0). 😉
What do you guys make of this?
http://www.thehillsgroup.org/index.html
The creator of the ETP model is discussing this up the page. Please join in.
http://peakoilbarrel.com/texas-rrc-report-and-other-news/comment-page-1/#comment-506067
Complete nonsense.
You fucking moron!!!oops, whats wrong with this stupid edit button? Please disregard. Sorry.John, I really don’t think you grasp the significance of the Etp model. Perhaps you should think about it some more before you comment on it again. Thank you.
Think about this Futilitist,
3 Trillion conventional –
http://energy.cr.usgs.gov/WEcont/world/woutsum.pdf
9 Trillion unconventional –
http://pubs.usgs.gov/of/2007/1084/
Now, divide 12 Trillion by 30 Billion/yr, and tell me there’s only 15 years of oil left in the world.
Hi John B,
Possiby there might be 3 trillion of conventional including he 1.25 that have already been burned, the 9 trillion is not credible. The USGS estimates about 1 trillion of “continuous” oil which includes tar sands and LTO, but the tar sands take a long time to develop. Most petroleum engineers (like Fernando) expect 500 to 700 Gb from the tar sands in Canada and Venezuela at most.
All of this assumes that the economy continues to function as a peak is reached. It is not the size of the tank (URR) it is the size of the tap (flow rate) that matters.
FTR, the study I posted was from 2007. USGS upgraded the 30 billion barrels of recoverable heavy oil in 2010 to 513 billion.
http://www.usgs.gov/newsroom/article.asp?ID=2386#.VQ89e-l0yM8
With the Tar Sands, that’s 1.5 trillion not including LTO.
EIA estimates for LTO are 335 to 345 billion barrels. Not including Australia, which could have 223 billion barrels.
http://en.wikipedia.org/wiki/Tight_oil
That’s 2 trillion unconventional, and including LTO.
Odell estimates 3 trillion unconventional (p. 47)
http://sites.nationalacademies.org/cs/groups/depssite/documents/webpage/deps_047070.pdf
John B,
Don’t hold your hopes out for Oz having those 223 bbls in the Arck basin, as per you wiki link.
Australia: A private oil company announced that it had discovered tight oil in shale of the Arckaringa Basin, which they estimated at 3.5 to 223 billion barrels
The hype came from a desktop study. Here is the complete report. I find it hard to understand how so much can be built on a report, when not one single well had been drilled into the formation, that was suppose to have contained 80% of the resources.
http://member.afraccess.com/media?id=CMN://2A773548&filename=20131212/LNC_01476229.pdf
They have finally got around to some drilling, and are currently on their 2nd well out of three. The current well is the very first well to drill into the Pre-Permian formation at sufficient depth where the rock has been cooked at the correct temp, and where 80% of the oil is suppose to be.
The 35 day well is currently about 2 months over time, due to hard rock and formation being deeper than expected. So even if the source rock is good the cost to drill the wells is going to be a lot higher than expected.
Here is the latest drilling report.
http://lincenergy.listedcompany.com/newsroom/20150304_171130_TI6_S4EGCJMH3YACOZ4T.1.pdf
Hi John B,
The EIA estimates are very inaccurate and should be ignored.
USGS estimate for continuous (aka unconventional) oil is about 1 trillion barrels, but it takes a lot of time to develop tar sands.
Hi John B,
No you got this one wrong as well.
We have 513 Gb from Orinoco and 650 from natural bitumen for 1160 Gb, but only 530 Gb of bitumen is in Canada and the bitumen elsewhere is unlikely to be recovered.
http://pubs.usgs.gov/fs/fs070-03/fs070-03.html
Also note that technically recoverable resources may require a very high price to be recovered and are very different from economically recoverable resources. Venezuela is a mess and we are unlikely to see a big ramp up in output there.
In Canada, the Canadian Association of Petroleum Producers (CAPP) forecasts about 5 Mb/d of bitumen output by 2030, roughly double 2014 output.
The resource is large, but the output in barrels per day is low.
Hi Dennis,
Try and understand the concept of TIME.
The 1 Trillion estimate was from the year 2000. Venezuela was not upgraded to 513 Billion until 2010. So you have to add the 1 Trillion to the 513 Billion to get a total of 1.5 Trillion unconventional. And this DOES NOT include LTO.
Interestingly, when added to the 3 Trillion conventional estimate, this is very close to Maugeri’s 4.5 – 5 Trillion barrel estimate.
“Think about this Futilitist,
3 Trillion conventional –
9 Trillion unconventional –
Now, divide 12 Trillion by 30 Billion/yr, and tell me there’s only 15 years of oil left in the world.”
Yes, that is a lot of oil in the ground. And that is where it will remain.
Think about this, John. It takes the energy of the oil already produced to lift the remaining oil from the ground. The size of the reservoir and URR are irrelevant. The price of oil is the important thing. When the cost of production rises above the ability of consumers to generate enough economic activity to cover all their living expenses, plus pay for the ongoing cost of current production and investment in future production, the game begins to come to an end. How could it be otherwise?
Once the price of oil drops below the cost of production, as it is now, the economic rules that we have always been accustomed to just don’t function as expected. And the oil industry begins to wind down. There is nothing that can be done to fix this situation. It is simply the result of the physical laws of the universe. Sorry.
And, as I have pointed out to you before, your obsession with URR really serves no purpose in this discussion, since your shock and horror amounts to nothing more than an argument from personal astonishment. It is not a valid argument, and it’s validity is not improved by repeating it over and over. It also shows that you still don’t really understand the physics upon which the Etp model was based.
Hi John B,
Heavy oil is no longer considered unconventional so the heavy oil (only 30 Gb) should be ignored. The 3400 Gb of heavy oil is OOIP and the 5500 Gb of bitumen is also original oil in place (OOIP), of these in place resources the USGS estimates 993 Gb of bitumen is technically recoverable.
So your 9 trillion barrels of unconventional is too high by a factor of 9, it is roughly 1 trillion barrels and most oil guys think only half of that (500 Gb) will be recovered.
Hi Dennis,
I beg to differ. The USGS 2000 assessment had 3 Trillion URR before Venezuela was upgraded to 513 Billion barrels in 2010. So yes, ignore the 30 Billion, because it is now 513 Billion.
And when you say “most oil guys”, I think what you really mean is “most Peak Oil Doomers”.
Clive Mather who actually ran Shell Canada said 2 Trillion barrels for the Tar Sands. So if anything, the USGS URR estimates are too low.
Jeffrey, that’s mostly about the Barnett shale. That’s gas.
Good point. I guess I didn’t realize that when I wrote the following:
Hi Jeffrey,
I wanted to get your opinion on the Etp model.
A thought for the day:
Can Google bring Solar Power to the masses?
http://theweek.com/articles/545077/google-bring-solar-power-masses
I have been using solar power since the 1930’s. On my grandfathers farm we were mostly active during daylight hours. I played tennis and baseball during the daytime, long before anyone heard of night baseball or lighted tennis courts, During the 70’s I owned a solar powered radio. Have also used a solar powered computer. I don’t recall any energy company ever telling me that I couldn’t use solar power
“Why do some nations, such as the United States, become wealthy and powerful, while others remain stuck in poverty? And why do some of those powers, from ancient Rome to the modern Soviet Union, expand and then collapse?
… Countries that have what they call “inclusive” political governments — those extending political and property rights as broadly as possible, while enforcing laws and providing some public infrastructure — experience the greatest growth over the long run. By contrast, Acemoglu and Robinson assert, countries with “extractive” political systems — in which power is wielded by a small elite — either fail to grow broadly or wither away after short bursts of economic expansion.
Elites resist innovation because they have a vested interest in resisting change — and new technologies that create growth can alter the balance of economic or political assets in a country.
“Technological innovation makes human societies prosperous, but also involves the replacement of the old with the new, and the destruction of the economic privileges and political power of certain people,” Acemoglu and Robinson write. Yet when elites temporarily preserve power by preventing innovation, they ultimately impoverish their own states.
… “Most consequential ‘policy mistakes’ are by design,” Acemoglu says. “These leaders are choosing policies that don’t maximize economic prosperity, because their objective is different: to hold onto power or simply enrich themselves.”
http://web.mit.edu/newsoffice/2012/why-nations-fail-0323.html
A case in point: Fox News is doing it’s best to kill the Chevy Volt in it’s cradle with relentless attacks, filled with misinformation and cues to it’s followers that “we” don’t drive EVs.
This despite the fact that Fox News pretends to be patriotic, and the Chevy Volt has a dramatic potential to help the US car industry and reduce US dependence on oil imports.
A wealthy elite is willing to hurt the economy and forego general growth (by preventing a transition away from Fossil Fuels) to preserve it’s privileges.
And I’m waiting for a battery.
24/7 access to power.
http://www.frontline.in/science-and-technology/an-end-to-power-cuts/article6993472.ece
And I’m not. Instead I am making a wood-fired generator that does the same thing- uses stored solar to make juice when PV doesn’t.
Lots more fun than just talk talk talk.
Hi wimbi, I had requested posted pics of your work, even in-progress, etc.. Did you ever get back in that regard? Was there a comment I missed? How are your projects going, or have gone?
I agree, we have to walk the talk too, but a good walk, a direct-democratic one.
Of course I am speaking in general terms, since I imagine you already know that based on what I read.
Sharing is caring as it is said, and it’s nice to share/exchange ideas and inspirations of course, outside of the black-box of the coercive legally-backed land & labor-grabbing money-profit-motive.
Technology will often, maybe ultimately, fail in its lack of true democracy/transparency.
Without pure democracy, industry will continue, far too often, to create the needs to fit the technology, rather than vice-versa– the technology to fit the needs.
(Another fine comment crafted on-the-fly with the Patterson Press™ Comment Editor)
Nope, you didn’t miss anything. So far, no photos.
The reason is that as a school of doitquick and doitover, we have gone thru about 4 generations of junky hardware and, while proving feasibility, don’t want to show what is so sloppy looking it cannot convey any confidence.
I am guessing we will be able to put together a nice looking video in maybe 3 months or so, when we have had enough good weather to be able to work outside again.
We intend to toss it to the world with nothing to stop them from running off with it any which way they want.
You will not be surprised to hear that our early development efforts are not inside-compatible, and the locally pretty fierce winter has crimped our progress quite a lot.
And, I myself still have not yet decided between the several tempting candidates for the engine that goes on the burner. All of them are too attractive, a happy circumstance. And all of them take effort. And only one will get it. Which?
Wimbi, to back up the Spanish solar power kit for 12 hours we need a total of 2 million, three hundred and fifty one thousand trees. This means we need to clear cut 23 km2/day. We can off a forest somewhere in Georgia or South Carolina. But Im not sure the deal will last because those two US states will start installing their solar power plants, and they’ll want to burn the trees for their internal needs.
Fermando. Fergodssake, I don’t work with what’s not in my back yard.
I don’t want to mess with grand schemes about stuff that is in essence impossible to predict- see Ilya Prigogene on global climate change.
When I put sticks into my pyrolyzer, I get fuel gas and charcoal. Every time. I can use it to run thru a generator to keep my house going when PV not up to it. Every time.
The rest of the world gotta take care of itself.
to back up the Spanish solar power kit for 12 hours we need a total of 2 million, three hundred and fifty one thousand trees.
How did you calculate that number?
With my calculator. Duh.
Fernando,
Seriously? Why waste our time with comments like that, and reduce your credibility?
To give a serious answer:
I see from your comment below that you’re thinking of trying to cover long periods of low wind/solar with a battery.
Well, that’s a red herring. No one who’s seriously looked at the economics of energy storage would try to use a battery for that. They’d use a variation on Germany’s “wind-gas”, which has much, much lower capital costs.
there are several very distinct and different markets for storage. It confuses things enormously to mix them together.
There’s the need for extended seasonal storage, when both wind and sun are low for several weeks. That requires very low capital costs to provide a large capacity, but efficiency isn’t very important, as it would only provide 5% or less of the annual kWhs supplied. Hydrogen is perfect for this, either mixed with methane, or stored underground. These are well proven technologies. On the other hand, we may need much less of it than one might think, as other cheaper strategies may solve most of the problem, including Demand Response (aka Demand Side Management), weather forecasting, long distance averaging, V2G, etc, etc.
There’s the need for daily storage, to deal with daily variation. That needs high efficiency, as the percent of power than is cycled through it will be higher. On the other hand, it’s maximum capacity will be much, much lower, so it can accept higher capital costs. Batteries will work well for this, particularly those already sold as part of EVs. Pumped storage is an obvious solution for this, and hydrogen (despite lower efficiency) might work as well. This area will be very dynamic in years to come.
Finally, there’s personal transportation, which needs high energy and power density, and can accept high capital costs. Here batteries will do well, and hydrogen is a non-starter.
The cartoon is all about old industries trying to protect themselves against new competitors.
I can’t help but notice that you’re a retired oil & gas guy, and you keep saying the same unrealistic things about wind and solar being not feasible.
In this case, you keep bringing up batteries, when they are a red herring – expensive, and not a primary solution to renewable intermittency.
So…I guess I need to keep on posting the same information:
“forecasts are helping power companies deal with one of the biggest challenges of wind power: its intermittency. Using small amounts of wind power is no problem for utilities. They are accustomed to dealing with variability—after all, demand for electricity changes from season to season, even from minute to minute. However, a utility that wants to use a lot of wind power needs backup power to protect against a sudden loss of wind. These backup plants, which typically burn fossil fuels, are expensive and dirty. But with more accurate forecasts, utilities can cut the amount of power that needs to be held in reserve, minimizing their role.
Before the forecasts were developed, Xcel Energy, which supplies much of Colorado’s power, ran ads opposing a proposal that it use renewable sources for a modest 10 percent of its power. It mailed flyers to its customers claiming that such a mandate would increase electricity costs by as much as $1.5 billion over 20 years.
But thanks in large part to the improved forecasts, Xcel, one of the country’s largest utilities, has made an about-face.
It has installed more wind power than any other U.S. utility and supports a mandate for utilities to get 30 percent of their energy from renewable sources, saying it can easily handle much more than that.
..forecasts from NCAR are already having a big effect. Last year, on a windy weekend when power demand was low, Xcel set a record: during one hour, 60 percent of its electricity for Colorado was coming from the wind. “That kind of wind penetration would have given dispatchers a heart attack a few years ago,” says Drake Bartlett, who heads renewable-energy integration for Xcel. Back then, he notes, they wouldn’t have known whether they might suddenly lose all that power. “Now we’re taking it in stride,” he says. “And that record is going to fall.””
http://www.technologyreview.com/featuredstory/526541/smart-wind-and-solar-power/
“Nick G commented on Texas RRC Report and Other Peak Oil News.
in response to Fernando Leanme:
And I’m waiting for a battery.
Well, if retired oil & gas people keep saying the same unrealistic things, I guess I need to keep on posting the same information:”
Is that how you managed to post 9,000 + times on TOD?
Today we’ve got Fernando at 35 comments, and me at 12.
Gotta catch up…
“let the market decide”
But you still need a battery. I’m not impressed by the use of selective quotes for one state in the USA, for one day, one circumstance. The problem seems to be the inability to grasp the idea that you do need a battery. As long as you can’t put up a cheaper energy storage device this is all very thinly sliced baloney.
selective quotes for one state in the USA, for one day, one circumstance.
Read the article: the utility is making a general statement, with some specific illustrations.
Again, what do you want the battery to do, specifically?
The battery is needed for the time when the sun doesn’t shine. Battery is short hand for energy storage.
So, be specific:
How much capacity do you think is needed?
What maximum power do you think it needs to put out?
What cost do you think is needed?
What’s the goal: diurnal variance? Seasonal? The whole grid, or just one part, like wind or solar??
Be specific.
It depends. It’s an interesting question. Say you have to do it for Jamaica. In such a case solar exposure is fairly constant, but it can have fairly long periods of cloudy weather. The wind is pretty anemic, and sometimes it’s way too strong. In Jamaica’s case I would say 72 hours may do it. But the general population would get cut sooner, to give hotels, restaurants and hospitals a more extended period with full power. But that’s in Jamaica. The answer would be different for say Japan, or Russia.
Ah – you’re thinking of trying to cover long periods of low wind/solar with a battery.
Well, that’s a red herring. No one who’s seriously looked at the economics of energy storage would try to use a battery for that. They’d use a variation on Germany’s “wind-gas”, which has much, much lower capital costs.
there are several very distinct and different markets for storage. It confuses things enormously to mix them together.
There’s the need for extended seasonal storage, when both wind and sun are low for several weeks. That requires very low capital costs to provide a large capacity, but efficiency isn’t very important, as it would only provide 5% or less of the annual kWhs supplied. Hydrogen is perfect for this, either mixed with methane, or stored underground. These are well proven technologies. On the other hand, we may need much less of it than one might think, as other cheaper strategies may solve most of the problem, including Demand Response (aka Demand Side Management), weather forecasting, long distance averaging, V2G, etc, etc.
There’s the need for daily storage, to deal with daily variation. That needs high efficiency, as the percent of power than is cycled through it will be higher. On the other hand, it’s maximum capacity will be much, much lower, so it can accept higher capital costs. Batteries will work well for this, particularly those already sold as part of EVs. Pumped storage is an obvious solution for this, and hydrogen (despite lower efficiency) might work as well. This area will be very dynamic in years to come.
Finally, there’s personal transportation, which needs high energy and power density, and can accept high capital costs. Here batteries will do well, and hydrogen is a non-starter.
Solar with storage is here now.
http://seekingalpha.com/article/3016736-solarcity-making-storage-the-hot-new-trend-in-solar
And what do you want it for, exactly?
Nick G, can you supply me with two or three links to discussions of the Leaf on Fox – either opinion or news shows? I have been a Megyn Kelly fan since she exposed the Duke Lacrosse Hoax almost a decade ago and I don’t recall her ever mentioning an EV. I find Hannity distasteful thus have no clue as to what he may have said.
It’s the Volt they were going after.
A nice, American made car…
It’s called “The Five” – an opinion show. I think he’s complaining that he didn’t get the full 40 miles on a full charge. I suppose it has a lot to do with how you drive as well.
http://video.foxnews.com/v/1430236461001/eric-bolling-test-drives-chevy-volt/?#sp=show-clips
So he makes this one statement into a claim on the entire network ?? Absurd. Incidentally when I watch TV I generally watch two playback TV’s at once. That makes it easy to skip commercials. Sometimes I watch MSNBC (or CNN) and Fox at the same time. That was especially entertaining back when Keith Olbermann was feuding with Bill O’Reilly. Often I prefer Turner Movie Channel or HBO.
It’s just one example. It was a general pattern. Here’s more info:
“The continued uninformed, childish and unfounded attacks on the Chevrolet Volt have finally riled up staunch conservative and retired automotive guru Bob Lutz, who took a bite out of Bill O’Reilly and the gang of neo-cons dead-set on bashing this range-extended hybrid into oblivion.
In a blog post on Forbes.com, Lutz tried to quell the rumors, innuendo and outright lies of the “rabid, sadly misinformed right” who began piling on this Chevy soon after General Motors Co. announced it would suspend production for five weeks.”
http://www.autoblog.com/2012/03/13/opinion-bob-lutz-returns-fire-on-fox-news-and-other-right-wing/
I have to say, I feel bad when I hear that someone is listening to Fox News. I feel the same way when I see someone smoking- “how can they do that to themselves?? Doesn’t everyone know better in this day and age?”
Nick G. I certainly part company with Fox on many issues. One issue where I part with you and Fox is that I am a committed Neo-malthusian.
My problem with Fox, and sources like it, is that I feel that it’s so unreliable that I have to fact check *everything* I hear on it. If I try watching, I’m caught between filling my head with nonsense, and wasting my time checking things. It’s just not worth it.
Even if things are accurate, they’re selected to create an unrealistic, distressing picture of the world. Again, the effect is filling my head with nonsense (and feeling bad, besides). Not a good idea.
Re: Neo-Malthus -could you expand on that?
Name one barrel of oil that was NOT produced because of an electric car.
Show one ounce of coal that was NOT produced because of a solar panel, windmill or electric car.
Electric cars etc are FF extenders, they are BAU facilitators, extending the burn for as long as possible and they are parasites feeding of infrastructure built and still maintained by FF’s. They had absolutely no chance in the high EROI years of quality fossil fuels. They are feel-good machines for the ignorant and/or industry shills like yourself.
There have indeed been many planned coal fired power plants that have been canceled, their generating power replace with renewables. I have no idea what you’re talking about.
They are feel-good machines for the ignorant and/or industry shills like yourself.
Riiight!
some time later…
You want solar power…we own all the previously mentioned resources as well as others without which solar does not exist.
Solar can be done with many different chemistries, and many different materials: silicon, gallium, cadmium, copper, silver: it’s not dependent on any specific material, and the biggest one, silicon, is pretty abundant.
“…silicon, is pretty abundant.”
and 100% dependent on FF’s.
Why do you think so?
Process heat can easily come from wind & solar electricity. Manufacturing is run on electricity.
The current worldwide mix of power production includes 21% Renewable, and also some Nuclear. I doubt if Solar Panel construction is 100% dependent of fossil fuels.
Yes, that’s one reason Silicon Valley is behind solar. It reduces concentration of ownership and control in the energy industry. And at some point their political money becomes more influential, and the political money tied to fossil fuels becomes less influential.
I had a big surprise this morning. For several years I have been tweeting on twitter, mostly about energy. I frequently post brief notes about oily blogs such as peakoilbarrel and ourfiniteworld, with links. My followers have grown to 70+, not many. Today I received an e-mail noting:
“Bill Gates (@bbillgatess) is now following you on Twitter!”
It is thus possible that Gates is aware of this blog. He and Melinda have previously shown great interest in both energy and population issues.
Are you sure he is the real deal?
Sorry, don’t know how twitter accounts work
Yea @bbillgatess is one of the many Bill Gates imposters. @BillGates is the actual Bill Gates, verified account and such.
Special hello, then, to Bill Gates, imposter. (This is all very exciting)
Might bring new meaning to the Blue Screen of Death.
fake
Yes fake. One reason I fell for it while working too quickly – I have retweeted several posts from the real Bill Gates on LENR, Planned Parenthood, Contraception, Infectious Diseases and Abortion. I can also claim senility.
–Incidentally I was one of the attendees at the 1969 Abortion Conference sponsored by Garrett Hardin in Santa Barbara CA. As I recall, Hardin held the unpopular opinion that abortion was the least dysgenic method of birth control.
Hi Robert,
Well Im not a billonaire, but have been following you on twitter for a while & am most assuradely real.
Well, all I can say is that I hope dn_girl doesn’t prove to be fake. That would crush my spirits.
Caelan as you know, on the net, anything could be fake. I kind of wondered that myself, although I sparred with you on attacking the troops as opposed to the generals.
“In our age there is no such thing as ‘keeping out of politics.’ All issues are political issues, and politics itself is a mass of lies, evasions, folly, hatred and schizophrenia.”
~George Orwell
The end of the oil age is here.
Music is the last frontier.
I am an apeman:
https://www.youtube.com/watch?v=eEep67akIn4
A small glimpse into the future.
https://www.youtube.com/watch?v=RZ3ahBm3dCk
Kurzweil is the ultimate Techno Narcissus.
But he does add to the conversation, no matter how challenged.
We need to keep this open, but not get attached to the outcome.
Minsky, the AI guru. is supposed to be one of the world.s most brilliant men but when it comes to peak oil and BAU he is an ignoramus.
Actually, Minsky has a rather simple solution to Peak Oil –
a world population of 500 million.
Kurzweil’s solution is a little more probable:
http://www.businessinsider.com/kurzweil-says-free-solar-energy-20-years-2014-9
Listening as I type… (to Apeman) (Used to like Kinks’ Paranoia)
As for the other vid; technology, in likelihood, creates more problems than it solves, precisely because we are ape ‘men.
(You will notice the little apostrophe just beside the m. It is inclusive and takes the place of ‘wo’.)
We are rapacious apes.
W need a large resource base to survive.
That is no longer the case.
Question for those more educated in LTO oil financing:
It’s widely known that the Saudis want to crush the shale oil industry in America while also hurting Iran, Russia, ISIS, etc etc. They consider $100 to $125 oil “fair.” And, of course, they have the foreign reserves necessary to fight this thing out for the long haul. And the rest of OPEC doesn’t really have enough sway to say no to them: Venezuela and Libya are in the midst of civil strife, Iran can’t rock the boat, Iraq is pouring money on Shiite militias to do the fighting for them.
Now, the question is this: Say Saudi Arabia succeeds in crushing the shale oil industry. Production peaks soon (if it hasn’t already) and rapidly falls over the next 2 years. The price eventually rises back to $100. What’s stopping the oil majors or any other sort of company who was too late to the party in the run-up to the shale boom from just buying the shale oil companies’ assets and then getting the rigs back up and running?
What percentage of the sweet spots are being drilled currently, and how much, with enough money, could production really be expanded?
Does Saudi Arabia have spare production capacity? Is that really just a myth or what? Because it seems to me like they should be pumping full stop if they really want to crush LTO, so their production numbers should be pretty much what they’re capable of pumping in total.
Suppose everything in your para that starts out “It’s widely known” is wrong. Accept that for the moment, then what happens to the other paras.
Suppose . . . crushing. Suppose it is crushed with Saudi Arabia having no such intent.
Suppose price doesn’t rise to $100. Why would those properties be bought (leased, nobody is selling that dirt, the leases may be for sale)?
How much can production be expanded with enough money? You could get oil out of fields now thought to be completely exhausted if money was no object. Illinois could produce big numbers if you didn’t care what it cost. If you paid $10 million to drill a well that extracts a total of 10 barrels, and do that enough times, you can get huge production. Probably will someday.
And final para . . . the Saudis are pumping pretty much to what they’ve pumped for years. They did nothing different at all over the past year. Oil fell with them changing behavior not at all.
I believe Anonymous is correct. By doing absolutely nothing, the Saudis are trying to crush the US LTO business. After a number of LTO operators have gone bankrupt, other operators will take over but then the sweet spots will be gone and LTO will peak and fall even if prices recover.
The shale oil fields will fail on their own, no help needed. The fields will have minimal output in 10 to 12 years so why would anyone worry much about them. Like most things American, we spend way too much for everything. Keeping the Middle East tamed down has been very expensive. Cars are now glitzmobiles that still only get 15 to 20 percent useful energy out of the fuel. Wasting 80 percent of your energy is not a smart deal. Now we depend on a short-lived expensive to obtain fossil fuel for transport as well as blow 80 percent of it into useless heat.
Sure there are more efficient designs now and some just coming out, they might get some vehicles up to 25% to 30 percent efficient.
Peugeot has just come out with a hydraulic hybrid rated at 80 mpg. http://www.extremetech.com/extreme/146450-peugeot-unveils-hydraulic-air-hybrid-80-mpg-car
Too bad they won’t sell in the US.
I think shale industry will come back after oil hits $90 or even $80 but in a much smaller scale and will grow in much slower pace due to better financial discipline of the shale investors. It will take a while for those getting burned in lending to shale plays to forget the pain. Technology improvement aside, cheap credit was what fueled the explosive growth of shale industry in the past years. With the cheap money gone, shale companies will have less capex and will be more careful in selecting their drilling spots.
Good comment.
Skywalker,
Your comment replaces some high percentage of all the comment about what’s going to happen to the shales and to the oil patch in general that I’ve seen on the Web.
I’d like to see the same kind of shakeout take place in Opec. I’d apply the same logic to the members that can’t keep up there as applies to the oil industry.
Sky… – As with all elements of the real economy there is no longer any room for banking/finance or all its iterations to extract revenue.
I am not saying that capital won’t try, but I am saying that the surplus is no longer there in ANY element of the real economy for extraction other than extraction of the negative sort.
Consumer capitalism is DEAD! What we have now is cannibalistic capitalism. You can not project anything unless you factor in this reality.
PEAK OILERS & GLOBAL WARMING WANNA BE’S,
I thought you all might find this a bit interesting. It’s old news (about 5-6 days). However, it just goes to show that some of the NITWITS are waking up:
Irish Finance Minister Dumps Stocks to Buy Gold
The Minister for Finance in Ireland, Michael Noonan, sold his shares in funds that track European and US stocks and diversified his portfolio including allocating some of his personal wealth into a gold exchange traded fund (ETF) in 2014.
http://srsroccoreport.com/irish-finance-minister-dumps-stocks-to-buy-gold/irish-finance-minister-dumps-stocks-to-buy-gold/
Of course the Irish Finance Minister bought LOUSY PAPER GOLD via the Gold ETF, but what do you expect from the Irish who probably drank one too many GREEN BEERS on St. Paty’s.
steve
And he’s going to put it in a pot and stash it at the end of the rai….
China Electricity Council published the electricity data for January-February 2015. China’s fossil fuels-fired electricity generation declined, but the building of fossil fuels power plants surged.
In January-February 2015, China’s electricity generation increased by 1.9% from the same period last year; hydro electricity generation (12% of total) increase by 12.7% from the same period last year; fossil fuels electricity generation (81% of total) declined by 0.8% from the same period last year; nuclear electricity generation (3% of total) surged by 31% from the same period last year; wind electricity generation (3% of total) surged by 22% from the same period last year.
In January-February 2015, China completed 13.4 GW of new electric power generating capacity, including 1.4 GW of hydro, 7.9 GW of fossil fuels power plants, 1.1 GW of nuclear, 1.0 GW of wind, and 2.1 GW of solar.
As of February 2015, 166 GW of electric power generating capacity was under construction, including 78 GW of fossil fuels generating capacity, 43 GW of hydro, 25 GW of nuclear, and 20 GW of wind. The construction statistics do not cover construction by small businesses or households, such as small-scale solar projects.
By the end of 2014, global utility-scale solar PV generating capacity reached 36 GW. 14 GW of utility-scale solar PV power was installed in 2014.
Utility-scale solar PV is deinfed as solar PV project with a generating capacity greater than 5 MW.
This is based on a Chinese news citing Wiki-Solar.org
According to research from IHS, world solar power will reach 498 GW by 2014.
http://cleantechnica.com/2015/03/20/global-solar-pv-capacity-expected-soar-177-percent/
Hi John, please note the source I cited refers to UTILITY SCALE only
And I checked the link you sent, it actually says IHS expect world solar power to reach 498 GW by “2019”
Sorry about the typo.
PE do you have a breakdown for the different fossil fuels? I was wondering if China may not be reducing coal and increasing natural gas ( to solve the pollution problem).
For the monthly data, they don’t have breakdown of fossil fuel power plants.
However, another source (which I discussed a couple of weeks agao under another thread) says as of December 2014, China had 920 GW fossil fuels power plants, including 830 GW coal-fired power plants and 56 gas-fired power plants.
In 2015, China plans to build 38 GW of coal-fired power, 6 GW of gas-fired power, 14 GW of hydro power, 9 GW of nuclear power, 19 GW of wind power, 10 GW of grid-connected solar power, and 1 GW of biomass power
Like I said, “let the market decide”
I do not understand the ill-informed passion here against solar- “totally dependent on ff’s” and so on.
And also. People seem to totally forget that simple thermal machines, even on very small scale, have proven ability to turn direct concentrated solar to electricity with same or better efficiency as PV. I used to make those things.
Which reminds me, did you ever finish building a solar powered Stirling engine?
https://www.youtube.com/watch?v=QvzhfoXabDY
I like Bill Gross and his thinking is pretty much identical to mine.. Could not make out his stirling layout but here’s a proven one that really works
http://sunpowerinc.com/library/power/
My solar engine was related to these NASA space engines. Engine does not care what source of heat. Solar would be fine. NASA certifies will last decades with no maintenance at all.
Efficiency of course limited to fraction of carnot, function of temp.
Note that these people made complete biomass powered 1kW engine systems about 25 yrs ago.
Totally ignored business opportunity for anyone to pick up. All patents long out of date.
I like Bill Gross and his thinking is pretty much identical to mine.. Could not make out his stirling layout but here’s a proven one that really works
Yeah, this particular presentation wasn’t about the technical aspects of his Stirling engines but he has plenty of experience with building them. could probably find a link or two for that if I looked hard enough.
how about that…..
“a solar eclipse that had the potential to cause all sorts of mayhem turned out to be an engineering challenge akin to the one that utilities deal with every day. Despite the 2.5-hour solar eclipse on Friday and the steep ramp-down and ramp-up of solar power that it caused, electrical grids on the continent managed to deal with the disruption.”
http://www.greentechmedia.com/articles/read/German-and-European-Power-Grids-Civilization-Intact-Following-Solar-Eclips
ezrydermike,
Good to see they had a successful result, I am sure a lot of planning and preparation went into this event, and I am sure they have learnt a lot from this experience and will be studied for future events. I would expect they had most if not all their brown coal plant primed, warmed and spinning, ready for this much anticipated event. As discussed on your link , this scale of ramp up, will become common in the future as the percentage of solar power increases. Alternate measures to spinning up brown coal plants will no doubt will be required, pumped storage, gas fire powered stations and maybe their CO2 to gas to help manage demand.
It will take extra resources to make it work. The question will how much?
Is there any information out there on middle eastern OPEC “spr”? Is that where the extra million barrels per day of cheap import to the US is coming from? This would give the illusion that shale production is still growing despite the dramatic fall in shale rig counts and well completions.
Would not think it would be tough for the GCC states to scrounge up 7-10 million barrels per week for a few months and ship it here to be stored in refinery tanks, many of which they own an interest in, to keep the glut perception intact.
But if that were true, wouldn’t the media have caught on by now? LOL!!
Shallow,
http://www.eia.gov/petroleum/imports/companylevel/
Middle eastern oil imports seems to be on the way down, while it seems like your 51st state has been increasing quite significantly.
Country ………………Dec-14 Nov-14 YTD 2014 Dec 13 YTD 2013
CANADA ……………,3,324 2,916 2,885 ……..2,730 2,579
SAUDI ARABIA…….. 813 …….1,014 1,….159 ………1,519 1,325
MEXICO ……………748 ………884 …….781 ……………..978 850
VENEZUELA ……..680 ………744 …….733 ……………..798 755
IRAQ ……………………282 ………421 ……..364 ……………..332 341
COLOMBIA……………273 ……..410 ……..294 ……………..249 367
ECUADOR …………..255 ………114 …….210 ……………..198 232
KUWAIT……………..197…… …….137 …….309…. 332 326
They must have completed the Keystone rail junction.
Fernando,
That’s quiet humor, yes?
Yes.
But despite the spread, Brent price is low as well, so it’s a world glut.
Thanks for the facts. Just a thought I had, but my thought is inaccurate. I guess Canadian crude is getting over the border without difficulty.
Shallow,
Here area couple of articles that may be of an interest to you. Basically saying, African imports are replacing Bakken oil in the North East, and the Bakken/Canadian oil is preferring the pipelines, when available. As we know all pipelines lead to Cushing, where as rail can delivery to a wide variety of markets.
The recent expansion of the Flanagan South pipeline and the Seaway Twinning, is also directing extra oil south, rather than to either the east or west coast.
http://business.financialpost.com/2015/02/09/oil-by-rail-economics-suffers-amid-narrowing-spreads/?__lsa=3123-b200
http://business.financialpost.com/2015/02/02/u-s-oil-railcar-market-collapses-as-foreign-crude-makes-comeback/?__lsa=c761-3b4d
Germany did well in handling the eclipse. Their technical competence is impressive.
My view is that the claim of cost parity is overstated. The cost of keeping fossil fuel plants online ready to make up for shortfalls, pumped storage, batteries, a beefed up grid and shutting down and starting up aluminum plants should all be added to the cost of PV and wind production.
If Germany is successful in ramping up “renewables” to 80% while maintaining their economic growth it will be the worst for the planet. More people and more consumption will put us further into ecological overshoot.
http://www.greentechmedia.com/articles/read/German-and-European-Power-Grids-Civilization-Intact-Following-Solar-Eclips
Germany did well in handling the eclipse. Their technical competence is impressive.
Yeah, truly amazing, though to be fair they have had plenty of opportunity to practice for such events, those opportunities are also commonly known as NIGHTS >;-)
There is a significant gradual transition to night darkness unlike an eclipse
Or they can just import electricity from France nuclear fleet.
Nuclear power is incompatible with intermittent “renewables” It can not be ramped up and down quickly.
http://energytransition.de/2012/10/flexible-power-production-no-more-baseload/
For all the optimists out there;
For what to do, maybe, depending:
I counted 51 posts by re-futilitist, which, of course, it could be that it just might mean that re-futilitist just might be short of a full deck.
Might have miscounted though, so if I did, never mind.
‘Futilitist is short of a full deck’
1. strongly disagree
2. mostly disagree
3. somewhat disagree
4. disagree
5. agree
6. somewhat agree
7. mostly agree
8. strongly agree
Sincerest form of flattery.
9
9. Futilist finished the deck, stained it, and is now lying in the hammock on the deck drinking a beer.
9
Wow. Three of a kind.
I’m going for a full house.
I would say that I think this would be a better blog with a factor of 10 fewer posts by Futilitist.
And, BTW, what happened to OFM? I hope he is well.
Hey techs an
i think ofm got tired of futilitist
hi denn is
what happened to the capitals and pu nctuation
i think you r on drugs
I’ve been wondering of OFM’s comments have been blocked. It’s happened to me twice. I got back on the first time by using a different email. The second time I didn’t do anything, but tried to post after staying off for several weeks and it worked.
I have had some posts not show up. Not sure why. Perhaps I am doing something wrong at this end??
Robert, none of your posts are in the pending file and none were marked as spam. I have no idea why they did not show up.
After beating his plowshare into a sword and promptly falling on it, Old farmer mac sold the farm and simply retired.
Of course, I might be counting my chickens before they hatch. 😉
I know some people here would like to blame me for the dispute I had with Old farmed mac. But that isn’t fair. I am certainly not the one who was responsible for all der führer on this site. 😉
Read this if you have not laughed today.
Peak Oil Mirage Is Evaporating as U.S Production to Last Generations
http://forexmagnates.com/peak-oil-mirage-is-evaporating-as-u-s-production-to-last-generations/
Highlights:
According to Citi’s “Energy 2020 Out of America” report, U.S. production surpluses are expected to continue for at least two generations, despite declining crude prices. The impact of such a fundamental change to world oil production and consumption will continue to be felt for decades.
There seems to be no end to the amount of oil and gas embedded in the Earth’s crust and no end to humanity’s ingenuity in finding ways to extract it. The whole concept of “peak oil” may well disappear.
Surplus? A US surplus was last seen decades ago.
I believe it (US surplus) was in the 1940’s, maybe 1947 or 1948?, but that information seems difficult to obtain now on the internet, replaced with a bunch of crap references to “US oil production now greater than imports” and other such. I found the net import information fairly easily when I tried just a few years ago. Just 1 more small example of the erosion of reliable public information as this “peak oil dynamic” (concept borrowed from Rockman back on the old TOD) proceeds…
The closest I got was this paper, figure 1 page 5 of the pdf gives net oil imports back to 1950, when net imports were relatively small.
http://fas.org/sgp/crs/misc/R42465.pdf
Hi, I’ve been following the conversation and I’ve been surprised by the relentless rise in EIA weekly production estimate. I made an exercise trying to model the model on weekly basis. There’s of course a few assumptions that one has to make, but still I found the resulting graph interesting so I decided to post it here for you guys to comment.
edit. To clarify, I use drilling productivity report logic/figures, to model weekly production estimates. I expanded the figures to cover whole market by using total horz. rig count (assuming similar average development for rest of production as drilling productivity report shows for major plays).
My assumptions:
-Shale production growth before decline= 120.000 bpd/month
-Horizontal rig count before decline start= 1372 (Baker Hughes)
-Production growth declines to flat= mid april (april flat in total according to EIA)
-Horizontal rig count at flat growth=979 (BH number 2 month prior to mid april as EIA uses in model)
-Production decline follows horz. rig count decline with a 2 months lag
-Not taking conventional production into account. (probably in decline due to huge drop in rigs, but relatively small change so not a big mistake to ignore)
date horz. rigs lagged horz.rigs prod change
11/21/2014 1 372 1 347 120 000
11/26/2014 1 371 1 341 118 043
12/5/2014 1 368 1 353 121 957
12/12/2014 1 367 1 353 121 957
12/19/2014 1 356 1 355 122 609
12/26/2014 1 350 1 353 121 957
1/2/2015 1 336 1 362 124 891
1/9/2015 1 301 1 369 127 174
1/16/2015 1 253 1 372 128 152
1/23/2015 1 229 1 371 127 826
1/30/2015 1 168 1 368 126 848
2/6/2015 1 088 1 367 126 522
2/13/2015 1 025 1 356 122 935
2/20/2015 979 1 350 120 978
2/27/2015 946 1 336 116 413
3/6/2015 895 1 301 105 000
3/13/2015 849 1 253 89 348
3/20/2015 829 1 229 81 522
3/27/2015 1 168 61 630
4/3/2015 1 088 35 543
4/10/2015 1 025 15 000
4/17/2015 979 0
4/24/2015 946 (10 761)
5/1/2015 895 (27 391)
5/8/2015 849 (42 391)
5/15/2015 829 (48 913)
edit. Should say “production change” not “production” in graph. It models the change in production estimate using above assumptions.
Here is an article from Platts on drilled but not fracked wells:
Oil rig count continues slide as debate grows on uncompleted well backlog
The US oil rig count continued to fall this week in response to lower crude prices, although output continues to climb and debate rises on the impact of a backlog of uncompleted wells.
On Friday, 825 oil rigs were working domestically, down 41 from last week and down 784 from October 10, according to the Baker Hughes weekly rig count. The number of rigs in the Bakken Shale of North Dakota and Montana fell to double-digit levels for the first time in at least four years. Just 99 rigs were drilling in the play, down from 104 the week before and the most-recent high of 198 October 3.
Operators have quickly reined in activity there, because of the high cost of wells and transportation to markets from the stranded basin.
Likewise, oil rigs drilling the Permian Basin of West Texas and New Mexico dropped by 20 to 285 this week, down from 562 November 14.
Meanwhile, analysts debated the impact of a current phenomenon known as “fracklogging” on production later this year — the recent backlog of drilled, but uncompleted, industry wells that operators do not want to produce at current low oil prices.
As rig counts continued in free fall, one analyst claimed a “fracklog” exists of over 1,400 wells.
The phenomenon of hoarding wells in the current low-oil-price period “seems real,” FBR analyst Thomas Curran, said in an investor note earlier this week. The investment bank’s exploration and production team did the fracking backlog count, he said, adding that other analysts have calculated even higher numbers.
Curran credited oilfield service consultants Spears & Associates with an estimate of a 2,000 wells fracklogged over the first quarter.
Well backlogs have sparked some concern that holding back completions until oil prices rise would simply cause a production surge in the future, causing crude prices to plunge once again.
The US Energy Information Administration reported this week that US output averaged 9.419 million b/d for the week ending March 13, up 544,000 b/d since the beginning of October, before rig counts began dropping.
Curran and other analysts acknowledged the difficulty of sorting out just how many wells have been deliberately banked and delayed because of low oil prices, and how many constitute a normal backlog of jobs stemming from a lag in the unconventional drilling and completion process.
EOG Resources, Anadarko Petroleum, Continental Resources and Chesapeake Energy are some of the most prominent operators that frankly signaled their intention in recent quarterly conference calls to deliberately build a bank of uncompleted wells that would be brought online when oil prices rise.
For example, EOG sees a backlog of about 350 wells this year and Anadarko sees one of 125 wells. Continental said it had deferred completions in the Bakken by 25% in Q1, while Chesapeake will have about 100 wells in its Eagle Ford Shale inventory.
Several other companies, large and small, gave less-definite numbers but also said they were prepared to bank wells.
On the other hand, investment research firm Bernstein Energy’s Bob Brackett believes the incremental number of strategically uncompleted wells represent “a small portion of the total,” he said.
Brackett’s research concluded that of 22 large E&Ps surveyed that account for 40% of US liquids production, wells listed as “in progress” totaled about 30% of wells typically completed in a year. But that number was only slightly higher — perhaps only 3% collectively — in 2014 than in the prior year.
Brackett also noted that completions account for around 70% of the total cost of a shale well, suggesting that operators would be disciplined even when bringing them online.
“Even though there is an inventory of wells, it is not clear that they would all come online at a moment’s notice as ‘bears’ fear, as they would still cost several million dollars each,” he said.
Source: http://www.platts.com/latest-news/oil/houston/oil-rig-count-continues-slide-as-debate-grows-21180079
Makes sense. My analysis shows its better to wait. It may be a good idea to wait as long as three years, but that depends on each company’s price expectations.
oops. figures hard to read and text escaped without conclusion. Here goes:
Last week production growth should still have been ~80 bpd/month, so about 20 bpd on weekly level. Weekly (modelled) figure should come down by about 5 bpd/week and should be 0 in mid april (as estimated by EIA). Production should be down ~50 bpd/month in mid may.
Of course there are a lot of unknowns in EIA weekly model, but this reasoning uses EIA drilling report logic and the difference with the two is not big yet. Weekly figure growth should still already have started to level of. Very intersting to see if the weekly figure turns down as drilling productivity report estimates.
what the hell is going on in Paris?
http://www.usnews.com/news/world/articles/2015/03/21/paris-hit-by-air-pollution-spike-halves-cars-on-roads
http://eia.gov/petroleum/weekly/crude.cfm
That looks an awful lot like no storage increase for the period June to December when price fell from 105 to 55.
How amusing.
The world is totally enamored with economics because it reduces all human behavior to dollars and sense.
Any and all economic analysis of current conditions falls way short as no one is including energy into the equation.
Many include economic commentary and then energy in the same comment but few if any put them together in the calculation.
The best metaphor is putting the cart before the horse (power). Everyone is focused on the cart and what it carries and ignores the fact that the horse is becoming lame.
Asia shows a price decline floating around $46, few pennies over or under. The dollar is slightly strong vs the smash of last week, which of course defined the oil rise.
Greece will either fold completely tomorrow and goose the Euro a bit, or refuse and smash the Euro, that expects them to fold. A smash would take oil down.
Texas oil production in a snapshot.
A couple of thing, since I have been out of pocket all weekend and just got to this post today:
1) I’m confused why the data for TX RRC production has such a lag time. Where is it from? In the data that I’ve looked at (http://www.rrc.state.tx.us/oil-gas/research-and-statistics/production-data/monthly-crude-oil-production-by-district-and-field/) The January 2015 data is prelim while the December 2014 is listed as final. So the previous month is always listed as final. Is there some difference in these numbers compared to what is used? Maybe its just the final number they will use for this type of report, who knows. I can always track our production the day after from the LACT units (assuming there isn’t an issue with the unit), so its always been odd to me how long it takes to get accurate data from the commission.
2) I think Art overestimates production in the Permian (that was it’s max production in 1974, I think we are still a little shy of that). If the production in the Permian is actually 1.8 mmbopd, and 45% is vertical conventional production (there is vertical unconventional production, but we will ignore it for now) then 810 mbopd is vertical conventional production. Using the data that I have, which I think is pretty accurate, there is a BIG discrepancy between his number and what I have. For conventional production in the Permian, it should be at most 500 mbopd (I have 463), so either >300 mbopd is from vert. unconventional wells (possible?) or there is a data issue with either his or mine. See below:
Hi MBP,
Sometimes people add the condensate output to the crude output so that it matches with the EIA’s C+C number. Did you do that in your chart or is that crude only?