Author: Ron Patterson

Confessions of a Doomer

Ron Patterson 488 Comments

I need to tell you of a very special talent I have. I have the very unusual and rare ability to find, to ferret out if you will, the blatantly obvious. I mean if it is as plain as the nose on your face, I am going to figure it out. What shocks me is that this ability is so rare. What is happening to our earth and our species is so obvious it is mind blowing.

I could give you thousands of forest disappearing, deserts expanding, rivers drying up, water tables dropping, top soil disappearing, species going extinct, ocean fish disappearing, pollution and plastic waste killing sea birds, and on and on and on. But I will start with one example that exemplifies what is happening to the entire world, the Aral Sea.

What has been happening to the world can be exemplified by this short 3 minute video on the Aral Sea: The Aral Sea story.

Aral Sea 1

The Aral Sea was once the fifth largest inland sea in the world. It supported a huge fishing industry. But that was before they dammed its tributaries to irrigate cotton fields.

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BAKKEN – Single Well Economics

Ron Patterson 493 Comments

This is a guest post by Ciaran Nolan

Disclaimer

The opinions and views expressed in this presentation are solely those of the author and not necessarily those of any organisation.

Introduction

This presentation builds upon earlier work carried out by the author in May 2015 on the North Dakota (ND) Bakken / Three Forks Light Tight Oil (LTO) Play – ‘Bakken – the bubble has burst’*. 

North Dakota Industrial Commission (NDIC) production data (up to November 2015) kindly supplied by Enno Peters. Data analysed in Excel and IHS Kingdom.

Production decline curves generated for P10 – P90 type wells, based on8843 wells with 1 year full production (January 2007 – October 2014).

Discounted cash flow (DCF) models were generated by the author for single wells in the ND Bakken / Three Forks Play.

Break even oil prices for Net Present Values with a 10% discount rate (NPV10) determined for P10 – P90 type wells. NPV10 break even oil price map generated. Historical NPV10 generated for average wells for 2008 – 2015. NPV10 breakeven oil price determined for top ten Bakken Producers in 2014, for 2014 wells.

Ciaran 1

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Doubting The Peak in 2015

Ron Patterson 525 Comments

Dennis Coyne, an editor and frequent contributor to this blog, has suggested that we are not at peak oil. He argues that there is likely to be a dip in production starting next year but higher prices will cause things to turn around and we will surpass the 2015 peak by 2019. He commented a few days ago:

If we take some of the larger producers that have been increasing output and compare with the rest of the world(ROW) using EIA data from Jan 2004 to June 2015 (using the trailing 12 month average to focus on the trend) we see ROW decline has been relatively modest (1.4% based on the trailing 12 month output in June 2015). The eight increasing producing countries I have chosen are Brazil, Canada, China, Iran, Iraq, Russia, Saudi Arabia, and US and ROW=World minus the 8 countries just listed.

One possible scenario is that output is flat for the Big 8 in 2016 so that World C+C output falls by 485 kb/d in 2016 (average output for the year compared to the 2015 average). Over the 2009 to Jun 2015 period the Big 8 increased output at about 1300 kb/d per year, if we assume this rate slows to half the previous rate to a 650 kb/d per year increase (1.4%/year), then the peak is surpassed in 4 years in 2019. On a per country basis this would be a little more than a 80 kb/d increase in average annual output for each of these countries, though I doubt it would be divided equally.

So I have taken close look Dennis’s “Big 8” countries as well as “The Rest of the World”, and  looked at their JODI data charts. The last data point is October 2015.

First, the rest of the world.

Dennis's Rest of the World

This is the world less Brazil, Canada, China, Iraq, Iran, Russia, Saudi Arabia and the USA. As a group they peaked in October 2004 and have been in decline ever since. They have declined in times of low oil prices and high oil prices. And barring a miracle they will continue to decline.

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OPEC’s 2015 World Oil Outlook

Ron Patterson 463 Comments

The OPEC 2015 World Oil Outlook came out a few days ago. They basically produce two outlooks, a medium term outlook to 2020 and a long term outlook to 2040. I found their medium term outlook pessimistic in some cases to optimistic in others. But I found their long term outlook to be wildly optimistic… in most cases.

In all cases below I chart crude when it is available and “liquids” only when no other option is available. The data is in million barrels per day.

OPEC Med. Term Outlook

Here is their medium term outlook chart. Notice they expect both OPEC and Non-OPEC crude to decline in 2016 but Non-OPEC crude starts a slow recovery in 2017. They say OPEC crude will not start their recovery until 2019.

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All Roads Lead To Peak Oil

Ron Patterson 545 Comments

I follow the JODI World Oil Database primarily because it is now four months ahead of the EIA international data base. I make some adjustments however. I use the OPEC MOMR “secondary sources” for all OPEC data where JODI also uses the MOMR but uses their “direct communication” data instead. The OPEC portion of the JODI data is “crude only” and will therefore be somewhat less than the EIA reports.

I use the Canadian National Energy Base data for Canada instead of the strange numbers JODI has for Canada. And I use the EIA data for the few small producers that JODI does not report.

With these Changes I think I have composed an excellent World Oil Database from this composite data. And with the October data just released I have composed the below charts. The data is through October and is in thousand barrels per day.

JODI World C+C

World oil production peaked, so far, in July at 76,702,000 barrels per day and in October stood at 76,128,000 bpd or 574,000 bpd below the peak.

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