OPEC Update, February 17, 2023

231 thoughts to “OPEC Update, February 17, 2023”

1. Who knew keeping track of peak oil would be like watching paint dry.

   Who knew?

   1. You must be kidding. The paint dried years ago. You are watching a dry wall. 🤣

   2. .28 years since Colin Campbell called global peak oil in 1990….and that is only to #6 claimed or occurred in the 21st century. It took like 14 years for global peak oil circa 1979 to finally go into the dustbin, Close to half a century between US peaks, 124 years between peaks for Ohio, etc etc.

      1. What sort of a nonsensical comment is that? Can you not see that OPEC production is declining on all those charts that Coyne has provided? That the all-time peak for all liquids is still November, 2018? (Which Coyne studiously avoids mentioning, BTW)

         1. My comment is, as usual, highlighting the number of years that can go by before another peak is reached, in a geographic region where it has been claimed. And then..you know…egg on face results.

            Knowing WHY this happens is critical to understanding the overall problem, and then solving knowing how to account for it. Peak #6 of this century, claimed or occurred, was certainly in 2018. More reasonably, it being #6 of this century…would anyone like to go for a #7? A fair question, but one rarely answered honestly by a true believer. To them…the last peak is THE peak. Repeat ad infinitum. I really need to make up a t-shirt, something like “How many Peak Oils have YOU fallen for?” and then see who comes up to me all irritated at the idea that was so obvious early in the century but not a question the faithful can ever bring themselves to ask, let alone attempt to answer.

            1. Thanks, RGR, for that deep insight. We all know, or should know, that the past tells us exactly what the future holds. There have been peaks in the past and other peaks that surpassed past peaks. Therefore we can conclude that this will be the pattern in the deep future. There will be future peaks that surpass past peaks and further peaks that surpass those peaks.

               What would this blog be without such deep philosophical insight from minds such as yours? 😀 😃 😄 😁 😆 😅 😂🤣

               1. If you don’t understand why older peaks were claimed, and wrong, you won’t ever know whether or not you aren’t pulling the same bone headed move when predicting the next. I asked this question of Dennis on his modeling a year or two ago now, to see how far down the road his thinking on this had gone.

                  Philosophy? Pfft. How about science?

               2. RGR,

                  There only could be some more crude oil peaks in the future if more countries are able to do the same as the U.S. (large scale fracking).

                  Ron pointed out that more than 60 countries are in terminal decline already. They badly need fracking (the climate does NOT).

                  By the way, I remember you as someone writing some strange comments at the former PO site, Theoildrum. Far from scientific comments. Or maybe it was another RGR

               3. To HAN NEUMANN:

                  I hung out at TOD, yes. Shortly after I was challenged to name someone worthy of representing a counter opinion, and did so in the form of a published scientist working for CSIRO who had written on peak oil, that’s when I was banned. I was told it would emit too much CO2, encouraging such an expert from so far away to come to the ASPO conference. Amusingly, after the conference folks happily discussed their trips, via air travel.

                  “Terminal decline” is a tricky term, often claimed as it was in the US and world in the past…and you know what happened next. So anyone who wants to proclaim a terminal decline better be able to prove it using data, and I don’t mean slapping a bell shaped curve on production, or guessing at a URR without the necessary technical information.

                  As far as strange comments, you would have to provide more detail. I certainly got into all sorts of debates back and forth online back then, and one of those strange comments might have been bashing contemporaneous peak oil claims with nothing but Hubbert Linearization, claims of “discovered means produced in 40 years”, random bell shaped curves fit to just about everything, etc etc. Strange back then daring to know these things, but yet more oil ultimately made my point. It took 6 years just to sort through all the chaff, history, science, and piece together how to avoid the obvious pitfalls of the old way, while building the new. By then the entire fad was easing off in light of more oil. Again.

               4. If you don’t understand why older peaks were claimed, and wrong, you won’t ever know whether or not you aren’t pulling the same bone headed move when predicting the next.

                  If you don’t understand why past production profiles is no guide to future production profiles, then there is no hope that you will ever understand one damn thing about the probability of future oil production.

               5. My opinion on this is:

                  There is still enough cheap enough to produce oil – so the final peak oil is more a political product than a geological.

                  It’s more about war / boycotts / billion $ OPM available cheap than about %recoverable oil in places.

                  So it’s absolute hard to predict – the russian war nobody had on screen, and there are a lot of wildcards.

                  Countries with lot’s of recoverable oil to develop, hanging on the political side:
                  Iran
                  Iraq (still too much unrest)
                  Lybia
                  Venezuela
                  Canada (here it’s green politics not increasing production)

                  They have enough reserves to push an addional 10mbpd togesther, or even much more possible (tar sands).

                  So when guessing about the final peak oil, we would need to do much more political discussions – ouch.

                  So I start with fictional scenarios – Venezuela and the US are already talking again. When Maduro would take a big bribe – making his socialistic paradise possible again with US money, All the oil can be developed now. Even possible the tar sands, the socialistic government would be able to keep out the “pesky” enviromentalists.

               6. Eulen , I think you are on the right track . The oil price will be determined less by economics and more by geo-politics starting from 2023 . Scarcity or surplus can be created by sanctions , hold up production , release from SPR , QE or QT . etc . These are factors over which the traders have no control .

               7. I’d argue that QE and QT don’t matter because bank reserves or the amount of bank reserves on FEDs balance sheet doesn’t matter because it’s not money in real economy chasing goods and services.

                  Real liquidity providers. The commercial banks
                  will cut back, way back on lending if there is any shortage of fuel.

               8. HHH , you are correct . I should have used ” Global Liquidity ” . The USD is flowing back to the US and the Yen is flowing back to Japan to square their current account deficit .

               9. To Ron:
                  “If you don’t understand why past production profiles is no guide to future production profiles, then there is no hope that you will ever understand one damn thing about the probability of future oil production”

                  Telling petroleum engineers that reservoirs will suddenly stop following the basic properties of Darcy’s Law is no different than claiming 2+2=5 and expecting people to take you seriously.

                  Perhaps you weren’t referring to the well and field level information engineers apply the basic physical principles and math to, but rather aggregate production profiles? If you want to tell the world that the physics at this level doesn’t work, feel free, but don’t expect scientists and engineers to believe a word you say until you can prove that 2+2=5. I am presuming of course that you aren’t confusing well and reservoir behavior with the geographical aggregation of production data. And please, don’t say “Hubbert Linearization” because then I’ll have to figure out a way to get a giggling emoji to work in this format. I was able to disprove that idea within 48 hours of the first time I bumped into it. Like…back when I didn’t know much else about this topic.

               10. RGR, you are blowing smoke.Darcy’s Law??? That law was formulated by Henry Darcy based on the results of experiments on water flow through sand beds. Of course, we are dealing with the flow of oil through sandstone here, but that has not one damn thing to do with the decline in production of world oil production. But you think you are snowing people with your bullshit. You are not. In the computer business, we used to say “If you can’t dazzle them with brilliance, then dazzle them with bullshit.” It is obvious to everyone here that you are trying to dazzle us with bullshit.

                   And the rest of your post is just more bullshit. We are not dazzled RGR.

                   I have met a lot of bullshitters in my time, but you top them all.

               11. To Ron:
                   “And the rest of your post is just more bullshit. We are not dazzled RGR.”

                   Dazzled? Oh my Ron, this is hobby time in McPeakster land. Things need to be kept basic to match the expected understanding level of average reader. As far as being a bullshitter, well, the difference between me and the average bullshitter is I what knew 17 years ago that you and all the other McPeaksters only figured out recently. You can call me a precognitive bullshitter if you’d like I suppose, that would be more accurate.

               12. Ron-

                   “Reports that say that something hasn’t happened are always interesting to me, because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns—the ones we don’t know we don’t know. And if one looks throughout the history of our country and other free countries, it is the latter category that tend to be the difficult ones.”

                   Former Secretary of Defense Donald Rumsfeld

2. Keeping track of HHH’s prediction of $25 WTI by March’23 has been interesting. My (virtual) options on the March futures contract expired Feb 15th. Here’s the result, -16% (click to enlarge):

   

   1. All the yield curves everywhere are still saying lower interest rates are coming. They don’t tell you exactly when. I look to be early with my call.

      WTI is still in slight contango out until June. Have to read that as there is a demand issue since everyone agrees it’s not an over supply issue.

      1. https://market-ticker.org/akcs-www?post=248111

         If the FED doesn’t get inflation under control. The FED and Congress will be the target of rioting.

         They will save themselves first.

         Interest rates are going up until inflation stops. Perhaps not in a straight line.

         And don’t forget the USA government is literally insolvent or soon will be (Medicare SS Interest Military > Revenue ).

         The government cannot pay the electricity bill for the Capital Building without borrowing money or selling assets.

         And the Treasury to Central Bank bond buying “circle jerk” causes inflation.

         When do people start demanding higher interest on their “Risk Free” losing money to inflation bonds?

         1. The US economy is not the world economy. US politics aren’t really the point.

            The world economy will continue to be deflationary thank to globalization, technical innovation and the steady slog of experience curves. In the past few years there have been massive supply chain disruptions, but there is no particular reason to think they will continue indefinitely, so central banks will have to go back to near zero interest.

            1. “The US economy is not the world economy. US politics aren’t really the point.”

               True.

               But the World relies on the US Navy for commerce and oil by boat.

               If the US government collapses you might have to say goodbye to that.

               The US may decide it doesn’t have the money to police the world for almost no benefit.

               And Europe, and Asia are a mess financially as well.

3. Thank you Dennis, great work. At the bottom of your post you noted OPEC’S estimate for the growth of the Permian at 620kb/d. That is higher than the estimate from Plains, and clearly higher than LTO’s. After reviewing a few of the corporate reports there are still inflationary pressure building into the cost structure of these firms. With the near unprecedented volatility in the underlying commodity prices I tend to agree with LTO, unless we get oil over $80 and keep it there, those prediction are unlikely to happen. If Goldman’s Curry is right sure that could happen.

   ON a more personal note, I read the exchange between Mike S and RGR in the last post. I noted some humility and some meeting of the minds between the two of them. While I have very different views on a host of subjects with Dennis, I should note that my personal communication with him he was kind, generous of his time and polite. It does not mean I agree on much with him and I attempt to use data to support my ideas. To me this is all about ideas.

   Who, on an individual basis is “right” is not important. What is important is that, as a county and as a civilization through honest, respectful and vigorous debate we get as close as we can at being right.

   I have been very upfront with my goals and life experience and have tried to give an honest evaluation of the developments in the oil and gas business. Since the early days of posting here, I was roundly criticized, as were all of us who took a view point against the narrative being pushed on the forum. Many left, many I assume were banned, like myself. NO big deal. But all advancement in human endeavors are achieved by thinking outside of the box, questioning all things that have come before. This should go without saying, but for some reason, this most basic principle is lost on many here. But time has proved my positions right where my arguments at the time could not.

   I alway try to keep the debate on ideas and data, when some wants to arm wrestle me to see who is right, I am always taken back. In my world as an exploration geologist, on the road selling deals and raising money, every idea I ever put to paper was questioned. I love the game, I love having to defend my ideas. I once showed a deal to exxon in the mid 1990’s in Houston, every single one of their representative were more educated than me and more experienced than me. They treated me with respect, ask the appropriate question in an honest dialogue on my presentation. No they did not take the deal, was not big enough for them, but they wanted to see any other deals I came up with, there is the lesson.

   If my issues with Mike S were simply observations, we would have no issues. He advances ideas and causes like no export of US oil that is a position that 1) is way outside the mainstream, 2) would immediately bankrupt the whole industry, 3) upset our trading partners, 4) would lead to innumerable lawsuits from every mineral owner in the state, including the State of Texas itself. From where I sit, it is not serious, practical or legal and it is worth of all the criticism I can muster. It makes no difference what my name is, pick any republican texas politician and they would make the exact same argument.

   1. Texastea,

      You’re welcome.

      My model for the Permian with a conservative oil price scenario ($75/bo for WTI) has average annual Permian tight oil output increasing by about 400 kb/d in 2023 from the average 2022 level. So I tend to agree that the OPEC estimate for Permian tight oil output in 2023 may be too optimistic.

      I also tend to agree that we all tend to throw insults a bit more than is necessary on the internet. It is unfortunate. If I eliminated all comments with insults, we might not have many left. Not enough hours in the day to do that much moderation.

   2. US is a nett crude oil importer.

      The vast volumes of condensates require heavier crudes for blending. What refineries decide to do as they look to the future is the wild card (no one is in control, so to speak). So there’s a potential bottleneck.

      Canada heavy and US condenstates are a good-enough marriage that suits both. So North America can profitably export oil.

      As a non-US observer, I can’t help notice the ‘burn’ of strategic oil reserves, supposedly re-fillable once oil is at about 70 USD. Why release it? To keep the price down before an election. Politics.

      My conclusion there is that politicians in US will do anything at all, change any law, to ensure moderately priced oil for Americans. Even mandate an ‘onshoring oil act’.

      And don’t forget the geopolitical dimension. The Russians sell very little oil to USA, but quite a lot of diesel to Europe. Europe (and US) use an economic blockade such as the world has never seen before, plus a NATO trained and armed Ukraine (possibly the second best army in the world) as a tool to try to destroy Russia. Uh, fine.

      But Russia will not refuse to sell oil to the EU (unless the importer demands a laughable ‘capped’ set price). What it has done, and will do, is sell discount oil to India and China/South East Asia, with it not to be sold third party to ‘capping’ countries. If the trend ‘east’ continues, the EU has to ship in oil from much further afield, adding shipping costs to the price of oil. More expesive in the west, and even in the US, in time.

      So long as there is no recession the price of oil must trend to a higher plateau, but with a clear east-west price differential. Making US oil sales to the EU more profitable.

      Making domestic gas prices more expensive.

      The US government is caught on the horns of a dilemma – unpopular high domestic petrol prices, or, in the longer run, regulate. Regardless of whether it makes sense or not. Well, then the US govt is faced with being the most vile of manifestations – a ‘socialist’ policy. That’s unacceptable to the American voter.

4. OPEC is basically 5 nations. I include I ran because in the unlikely event that sanctions are lifted, they might increase production by perhaps one million barrels per day over a period of one year or so. These five OPEC countries struggled mightily in August, September, and October but fell short of reaching any of their former highs. They have now fallen back to a level I think they can hold, perhaps for a year or two.

   

5. OPEC, less their big 5, is a sorry mess in perpetual decline. They are currently a million and a half barrels per day below the world peak in 2018 and over two and one-half million barrels per day below the OPEC peak in 2016. They will never recover. They are part of over 60 nations that are in decline and will ensure that the 2018 world peak in oil production will never be breached.

   The data in both charts is through January 2023.

   

   1. Ron,

      If we eliminate Venezuela from the other 8 and show the “other 7” OPEC nations from Jan 2014 to Dec 2019, we find there is no decline, but instead a slight increase in output. Venezuela is a failed state which has little tao do with depletion.

      

      1. You are correct, Dennis. If we could only show the years that put our argument in the best light and not show the years that make our argument look like crap, we could perform all kinds of magic with our charts.

         But the last three years actually happened. Yes, they really did. And so did the years previous to 2014. To not show them would be deceptive.

         I prefer to be honest.

         Oh, one more point. Venezuela actually happened also. Their data, as well as their decline, actually happened. Politics is part of the big peak oil picture. It always has been and always will be.

         

         1. Iran is politic-hampered, too – and Iraq a bit, too because of the Shia-Sunnie tectonic break going right through the country.

            OPEC decline at the moment is a pure political thing – this will change at some point, but this is still in the future.

            Some of the core OPEC states are starting green hydrogen / ammonia big now, already in the GW numbers. They have the solar ressources for this, and the money (or at least the credit score, which is equal to money in modern days. Nobody pays back).

            Something going on:
            https://www.swp-berlin.org/en/publication/the-hydrogen-ambitions-of-the-gulf-states

            Perhaps the will decline with these new energy sources somewhat smooth – at Thyssen Krupp orders for eletrolysis modules trippled within a year to a billion $ value. I know that’s just a beginning compared to big oil and gas – but it’s already in the blllion $ region and not dabbling in Univerity laboratory region anymore. And with billion$ projects they can get the expertize to finally realize the double digit billion $ projects that will produce serious energy. Imagin SA having a 1mbpd oil decline, but an 2 mbpd hydrogen / ammonia equivalent gain. They will stay an energy powerhouse then.

            The sun energy they receive on top of Ghawar is much more than the oil they extract.

            1. If you conclude that electrolysis can produce economically viable hydrogen from solar
               [or nuclear or wind]
               then you have opened a wide door to a pathway for civilization beyond abundant fossil fuel.
               Sure, oil and nat gas liquids will still be necessary for the molecular chemistries properties for specialized uses such as the petrochemical industry, but that is a small portion compared to the oil, coal and gas that simple undergoes raw combustion [insert comment-‘how primitive’].

               When you combine the expense and inefficiencies of both hydrolysis, and fuel cell conversion of the hydrogen back to end use electricity, you may end up with a fuel storage/distribution system that is simply too expensive for many uses we have become accustomed to. Perhaps affordable for critical uses, however.
               It will be most interesting to see how the industry evolves.

               If this hydrogen energy storage system does become economically viable at scale, then the geography of energy undergoes a radical realignment, even somewhat further than wind and solar energy geography realignment already has (99% yet untapped).

               1. I’m mostly describing what happening at the moment. Projects are in the GW range at the moment.

                  Remove yourself from storing and efficieny of the conversion – it’s more mining the sun in the right countries. Cells + elecrolysis + cryogen tankers are a complete module, as are drilling rigs + pipelines + handling infrastructure + tankers now.

                  It’s more like developing a conventional oil field. You invest x billion $, and get an installation that fills tankers for export. After 50 years, the oil field is empty – or the cells and converters rocked down. Rebuild from the scratch, only you don’t need to find a new oil field.

                  At the moment the oil is still cheaper, but the first will be forced by green western society by laws. As in everything, economy of scale has to kick in to make it real cheap by going in the double digit GW scale. This still has to prove viable. But all of it isn’t rocket science, more industrial expertice.

                  And this hydrogen is not about electricity – it’s green steel, green fertilizer and concrete. Lot’s of the stuff needed here before thinking about fuel cells. We have hydrogen pipelines here in Germany already, since 80 years for chemical industry. These will be the first customers. The current consumption is 55 TWH / year, all created from nat gas.

                  For example Krupp is building a complete hydrogen steel mill at the moment for additional demand. It will be without any sense to use conventional hydrogen to power it, you can still with coal then.

                  Local electricity from wind, solar + batteries, water, nuclear, geo, bio … is a complete different game.

                  PS: I own some Thyssen stock at the moment because I think they are cheap with all these opportunities. I don’t recommend anyone to buy anything and can’t push billion $ companies anyway.

               2. Good to hear your thoughts on this.

                  Comment- although you indicate that “At the moment the oil is still cheaper, but the first will be forced by green western society by laws.”
                  As a contrary viewpoint I see fossil fuel depletion as the primary ultimate driver of energy system change. The secondary driver is geopolitical instability, and ‘green energy’ policies as being third.
                  Caveat- One could argue strongly that citizen concern over nuclear power safety in a country like Germany, after Chernobyl and Fukushima, is the primary driver of policy for that particular power mechanism.

                  I’ll remind the readers that
                  “Germany’s proven reserves of oil and natural
                  gas are modest and have been dwindling in
                  recent years after decades of production. As of
                  2018, indigenous production met [only] 3.7% of the
                  country’s Crude Oil use, 8% of its Natural Gas
                  use, and 55% of the country’s coal use. Once
                  considered the engine of its economy,
                  Germany’s hard-coal mining industry closed its
                  last active mine on December 2018…. Germany remains however as the world’s largest producer of
                  lignite”

               3. Interesting podcast on the nuclear industry supply change, and Russian supply
                  https://podcasts.apple.com/us/podcast/columbia-energy-exchange/id1081481629?i=1000600971259

               4. @Hickory

                  Germany has big resources of tight gas. But since the film “Gasland” every progressive and even most conservatives think that fracking will make their drinking water explode.

                  So they decided to import the fracked gas from the US to keep their nice green Bullerbü.
                  And use lignite and imported coal to switch off nuclear.

                  Wind energy investing stagnates, too – the price inflation that hit the oil fields in the US that is discussed here hit the wind mills as hard. So no Investor wants to build them with the current prices, only the most desperate ones.

6. Ron,

   Chart below has Jan 2005 to Jan 2023 data for other 7. Average annual decline rate about 175 kb/d over the 18 year period.

   

   1. Ron,

      Sorry to repost a nearly similar chart to yours, I must have been working on mine at the same time as you and I had not refreshed the page before posting my chart (7 minutes after you had posted yours.

7. Ron,

   Honest enough for you?

   

   1. Yes, an honest graph Dennis, but totally irrelevant as to Peak oil. What happened years before the peak is irrelevant. But… it does give us a good look at history. And I am a history buff. So thanks.

      1. Dennis, where did I ever say that ONLY my charts are relevant and honest?

      2. The OPEC peak is a combination of US sanctions on Iran and Venezuela and oversupply in 2018 plus the pandemic that followed. Yes politics happens and politics may change in the future, it is doubtful that sanctions will continue forever and the political situation in Venezuela might change in the future if the population gets tired of a failed socialist experiment and revolts.

         1. Dennis, regardless of the cause, geology, politics, demand, or price. The decline happened, end of story. OPEC is now producing flat out, or very nearly so, and they are producing over 3 million barrels per day less than they did in 2016.

            1. Ron,

               Iran is producing 1200 kb/d less due to sanctions and Venezuela is producing about 1300 kb/d less than when OPEC was at its peak, all of this adds to 2500 kb/d and in October 2022 OPEC output was about 2593 kb/d below its centered 12 month peak in April 2017. This is not a very big decline (93 kb/d over 5.5 years would be about a 17 kb/d annual decline rate.) This has little to do with depletion.

               1. I think your calculations are a bit off, Dennis. My figures show OPEC less Iran and Venezuela to be currently approximately 2 million barrels per day below their 2016 peak and 600 Kb/d below their pre covid average.

                  However, this makes no difference. Iran and Venezuela are still part of the peak oil picture regardless of the reason for their decline.

                  Click on chart below to enlarge.

                  

               2. Ron,

                  I focus on 12 month average output. The peak for OPEC minus Venezuela and Iran was 26620 kb/d in Jan 2019 (centered 2 month average). In January 2023 output was 25633 kb/d, about 987 kb/d lower than the 12 month average peak. Earlier I did a different comparison of OPEC 13 peak of C plus C (12 month average) with October output from EIA data. Note that in recent months OPEC has cut output by 682 kb/d, so the decline is only about 300 kb/d from Jan 2019 without this cut. In addition the OPEC peak was March 2017 (for CTMA) at that time OPEC less Iran and Venezuela was at 26065 kb/d which was 455 kb/d less than the level in September 2022 (recent peak for OPEC 13 output.)

   2. Other 7 from Jan 1973 to October 2022, EIA data.

      

      1. I love that chart, Dennis. Very relevant and honest. It clearly shows that the combined production of these seven nations began to decline around 2010.

      2. We all agree! Right?

         Please post zero-scaled graphs when representing data, as Ron says above, to not do so is deceptive and dishonest. Thank you!

         1. I don’t recall ever saying that. I very seldom post zero-scale graphs. And I don’t think I am being deceptive. Zero-scale graphs have their advantages and disadvantages. The big disadvantage is they mask the magnitude of the change. And that is the very thing I like to emphasize.

            Very long-term graphs are best shown as zero-scale graphs. But very short-term graphs are best shown as non-zero scale graphs.

            1. Not sure why something that is not zero scaled would be dishonest. If you really think so that you should scale both the X axis as well as the Y axis – but where to start time? 4.5bn years ago? The Birth of Christ? Or use some other religious starting date? And why limit yourself on the high value to the high value of the dataseries? Why not use, say 10 billion. Or 100 billion?
               Zero scaling most of the time makes no sense and leads to a graph which does contains data but does not necessarily convey information. Changing scales of data without pointing it out however can be quite misleading.
               Rgds
               WP

               1. WEEKENDPEAK, You replied to my post. I think you meant to reply to GOT2SURF’s post. I agree with you.

                  To avoid confusion, just mouse over his “reply” button, and click it. Or, you could simply state to whom you are talking to.

               2. My bad – post wast directed at Got2Surf.
                  rgds
                  WP

8. Ron,

   The combined average annual decline was about 174 kb/d from 2005 to 2022. The big 5 increased output by about 400 kb/d annually from 2005 to 2019 so it seems likely OPEC will be able to maintain a plateau or perhaps increase output gradually for a few more years.

   1. Perhaps so, they may increase production slightly. But the odds are about the same that they will decrease production slightly. At any rate, they peaked in 2016, two years before the world peaked.

9. From Hickory /Gerry discussion on the last post:
   “unless China, India, Pakistan, and many other countries adhere to a lower carbon footprint by banning the burning of bituminous coal in power plants”

   That would be good, but consider a different perspective
   The per capita CO2 emissions of the US is more than twice that of China, and more than 7 times greater than India. And Pakistan almost 20 times less/person.

   “Its kind of like a massively obese person telling 7 thin people that they need to eat less because combined they eat twice as much as he.
   I have an alternative analogy. It’s like your have 5 people on a life raft 500 miles from shore with limited food.
   Two of the people let’s call them USA and EU seek to limit the amount of food and water to make it to safety back safely. The other 3 let’s call them Russia, china and India. The say no we are going ahead and eating like we want to. The USA and the EU go on a hunger strike. After 4 days, the US and the EU are weak but Russia India and China have never felt better even as their food supply is low. So they Kill EU and start to eat him. The US is now too weak to do anything. When they are done with eating the EU they eat the USA. Now they arrive at shore safe and sound fat and happy.

   But I think that’s the plan all along.

   1. It’s more like junkies going cold turkey than fat people going on a hunger strike. Europe and the US waste vast amounts of energy, and vast amounts of money to feed that habit.

      It’s insane to go on being a net importer of any energy source when there is so much ambient energy that can be harvested at a lower cost.

      This doesn’t mean poor countries don’t need more energy. To continue the drug analogy, pain killers are an important part of medical treatment. But at some point, taking too many becomes a problem.

10. https://www.youtube.com/watch?v=qKVkrWssSQ4

    15 largest oil rigs on the planet.

    This is absolutely amazing feats of engineering.

    But these things are sitting ducks militarily.

    1. The engineering here beggars belief. These massive investments are also testimony to the fact that oil extraction is going to continue until it cannot anymore, emissions be damned.

11. Nuclear is unaffordable . The world’s largest nuclear electricity producer EDF , France .
    ..EDF posted a historic loss of 17.9 billion euros in 2022 and increased its debt to a record 64.5 billion euros. Its revenue grew 70% to 143.5 billion euros, driven by the rise in energy prices, but the group is in the red with a very heavy net loss, compared to a profit of 5.1 billion in 2021.

    Difficult the problem of affordable energy…….

    1. nuclear first japan, now england;

       https://oilprice.com/Alternative-Energy/Nuclear-Power/Nuclear-Power-Will-Play-A-Key-Role-In-The-UKs-Energy-Transition.html

       and looks to be done in the private sector…who would have thought…oh yea me.

       1. “looks to be done in the private sector”

          With all oversight, regulation, social insurance, long-term maintenance+clean-up, monitoring, policing+security, etc done by a competent (read: non-MAGA) government, LOL

          “oh yea me”

          YOU get what WE pay for.

       2. UK is a joke and so is Finland and so is EDF .
          https://www.cityam.com/edf-inflation-drives-hinkley-point-c-nuclear-power-plant-costs-from-26bn-to-33bn/
          https://ieefa.org/articles/european-pressurized-reactors-nuclear-powers-latest-costly-and-delayed-disappointments
          After 13 years behind schedule the EDF plant in Finland launches . My info is they have shutdown again because of technical faults .
          https://www.worldnuclearreport.org/Europe-s-First-EPR-13-Years-Behind-Schedule-Olkiluoto-3-in-Finland-Starts-Up.html
          Nuclear was never feasible without subsidy . I am not even talking about waste disposal .

          1. HIH
             The article below quotes 60 months from initiation to startup at a cost of less than 3 billion USD for a nuclear reactor. A big difference from the sclerotic approach in western democracies.
             In a world of dwindling fossil fuels, reliable continuous electrical power supply will be more expensive than we like whether it is from nuclear or from intermittent sources plus storage.

             https://www.chinadaily.com.cn/a/202209/16/WS6323dc25a310fd2b29e7808f.html

             1. Old Chemist the Chinadaily article says” according to Jiemian.com ” . What is Jiemian.com ? Can’t find it on the web . I give you hard facts ” boots on the ground ” , Here is a page for the abandoned , delayed , cancelled nuclear plants in the USA alone . All due to cost overruns . If you want I can draw up a list of other countries also . I am not anti nuclear but I point out the futility of planning for a nuclear future . Too many sinkholes on the road ,
                https://www.powermag.com/interactive-map-abandoned-nuclear-power-projects/

                1. HIH
                   Major business news purveyor in China.
                   https://en.jiemian.com/

                   The dead nuclear projects in the developed world are justifiably dead and I agree nuclear has no possibility of sustaining BAU, nor do renewables, but in a world south of a billion souls they could provide the basis for continuing a technological civilization provided people were willing to devote a very significant portion of their economy to energy production.
                   Will it happen? Probably not.
                   I am sure you agree that developing countries with decent infrastructure can execute major construction projects much more economically than the developed world.

          2. Olkiluoto 3’s stratup is again delayed. This time emergency valve needed soem repair. The new startup is projected to begin on April 15th. https://yle.fi/a/74-20019142

    2. This historic loss is due to the lack and the delay for the maintenance of the nuclear reactors (covid), which forced to them ot be arrested in the same period. Furthermore, there have been what is called the ten-years inspection wich coincided wiht the delay of maintenance. This resulted in a lack of production, therefore, less turnover with increased expenses of maintenance.To this, you must add the obligation for EDF of selling at low price (Arenh) to energy brokers to maintain an artificial free energy market. So, it has been more difficult for EDF to generate a profit. Anyway, I confirmed you that nuclear energy necessitates a lot of capitals and generates a lot of costly maintenance. That’s the price to pay for producing energy. It is effectively more costly than simply pick up oil and gas in the ground as we had not the obligation to produce this oil and gas.

       1. JFF , copy/paste , but this guy is in France and knows the s***.
          ” The French government sets twice a year what the ‘ energy cost’ may be for consumers. They have determined that the price may go up by up to 15% on 1 February…. and so goes! In summer, a new price agreement is made etc etc. Since EDF is now a fully nationalised company again, some kind of ‘ utility’ balance is sought each time. What can the consultant pay and what does it cost to keep EDF’s nuclear arm afloat….

          That’s tightrope walking on the narrow rope…. too cheap for EDF to function properly and too expensive for the ‘ yellow jacket’….

          This year will be exciting because very soon the financing of the new nuclear fleet plans will have to be put in place. They are making a real attempt at utility pricing by using the French savings to good effect to finance a sloppy 50 billion after all…. “

          1. HIH

             That’s just domestic customers if you want the real story look at commercial rates. Hint it’s why local bakeries are gone and all our glass is now coming from Spain.

             1. Lightsout . I know and I am on top of this . In January 15 companies filed to shutdown plants firing 500 persons PER PLANT in Belgium . Till date the rate of bankruptcy filing in the area of Flanders where I live are up by 55 % . The real epidemic will start in April when the energy subsidies will end . I avoid posting on this because it can be very depressing . EU is filing for bankruptcy . Energy is the economy .
                https://www.brusselstimes.com/345509/empty-spaces-in-city-centres-bankruptcies-in-belgium-set-to-increase-in-2023
                https://www.txtreport.com/business/2023-02-18-the-number-of-bankruptcies-in-the-european-union-has-hit-an-eight-year-high.HJ2TIS06s.html

                1. Thanks for sharing.

                2. Just some EU economic news for those interested . EU central banks are showing losses for 2022 . They told me ” the casino never looses ” . 🙂
                   https://www.swissinfo.ch/eng/bloomberg/euro-area-braces-for-era-of-central-bank-losses-after-qe-binge/48299944

                3. BASF just released it’s annual report . 2600 jobs gone . Read the report . LNG cannot replace pipeline gas for 24/7/365 industries . Just too expensive .
                   https://twitter.com/JavierBlas/status/1629012829163474946

             2. Lightsout , talking about glass bottles . Buy your wine now . 🙂
                https://www.thedrinksbusiness.com/2023/02/glass-bottle-shortage-major-concern-for-french-wine-producers/

    3. Yes nuclear is expensive and takes a long time to deploy.
       Yet over the coming 3 year period the world is on tap to add 302 TWh of nuclear power,
       which is an 11% rise.
       During the same 3 year period [2022-2025]
       Renewables are on tap to add 2,450 TWh new production capacity,
       which is a rise of 29.3%.
       So, the renewables will be adding over 8 fold greater capacity than nuclear, and picking up momentum rapidly.

       During the same period global coal electrical production will be down about 1% and natural gas sourced electric production down about 1%.
       This data and projections are provided by the IEA.
       [see the chart about 1/2 way down- Global electricity generation by source in 2022 and 2025, terawatt hours. Source: Carbon Brief analysis of IEA figures. Chart by Carbon Brief using Highcharts.
       https://www.carbonbrief.org/renewables-will-be-worlds-top-electricity-source-within-three-years-iea-data-reveals/%5D

       Also note that the decisions on national and regional electricity generation are made by a combination of local utility, regional planning agencies, and national government policy, as well as major funding agencies, banks and to some extent private equity entities.
       Not you and I.

       We’ll see.

       1. There will be no nuclear electricity plants in the future . Why ?
          1. The biggest constraint is the steel used in construction of the dome . Only Nippon Steel can make this and only for 2-3 domes per year .
          2. Uranium mining can be done but the processing of this into U 235 is more than 50 % in the ex Soviet Union . So instead of being dependent on gas you are going to be dependent on U 235 from FSU .
          3 . Minimum time required to put up a reactor from ground breaking to launch is at maximum efficiency 12 years , but delays can be another 12 year . Total 20 years ( keeping fingers crossed ) . Yeah , we just run out of road to kick the can down the road .
          Wake up .

          1. Nuclear is certainly the generating tool of the greatest complexity, and therefore the most fragile.
             In the US there has been a 70 year failure to come up with a high-level radioactive waste
             handling and disposal mechanism.
             The military and commercial high-level radioactive waste that hasn’t been lost or disposed of via unintentional dispersal at sites like Rocky Flats or Hanford,
             remains in temporary holding ponds.
             I am highly skeptical of acceleration in the industry, and the human ability to handle the radiation with impeccable technique and diligence.

             1. About the disposal of nuclear waste and I am speaking of the high radioactivity ”wastes” such as the minor actinides and the fission products, there are solutions. The minor actinides can be used as fuel in fast neutron reactor (they become fissionable at high energy) and the fission products (especially the LLFPs, long life fission products) can be transmuted into non-radioactive elements or short lived radioactive elements in a fast neutron reactor with a suitable moderator. I am not responsible of the absurd decision of US authorities to not reprocess the fuel wastes of the American nuclear sector.

             2. No problem–
                In 24,000 years, half the problem will be partially solved.

          2. 1) With fast reactor, the necessity of building pressure domes is no more required. It is a necessity with the use of water as a coolant. With coolants such as sodium, lead or salts, the system can be operated at nearly ambiant pressure and the coolants are not going to evaporate. 2) To build new reactors, new domes have not to be built. Let’s empty the old installations and let’s put a new one inside the dome. Areva is able to empty a dome in 4 years. 3) I have asked to someone involved in nuclear security about the origin of the steel needed for the pressure domes. He has never heard that this kind of steel was only build by Nippon steel. 4) With fast reactors, what you need is Pu 239 and U 238. In france, we have plenty of U 238 (300000 t) and we have enough Pu 239 to start a fast reactor sector.
             5) Part of the French nuclear sector can be fueled with MOX. No need of U 235.

             1. JFF , what is stopping EDF and Areva from implementing the changes and steps that you have pointed out in the posts ? Surely they are aware .
                When I look at new technologies I always apply the principle- “if it is any good why are we not using it”. Carnot on the earlier thread . All that is technically possible may not be economically feasable .

                1. The main problem for nuclear sector in France is the political class. The nuclear sector is under the authority of the government. As pointed by an administrative officer of the CEA, the political class is devoided of the minimum of the scientific and technical knowledges necessary to assess correctly the challenges of nuclear industry. In past, that was the case. Now, it is no more the case. The political leaders are managing nuclear sector on a small scale, primarily guided by the idea to attract the little portion of electorate which is antinuclear or by the liberal obsession with cutting public spending. You must add to that the conservativeness of nuclear sector executives which are still stuttering an umpteenth version of the pressurized water reactor. For example, some are dreaming of replacing the aging pressure vessels in 900 MW reactor. But a power station director, when asked why everything was replaced in a reactor and not the pressure vessel, gave a stupid answer by saying that it was not planned because the pressure vessels are weighing several hundred of tons. Which is an absurd answeer as the pressure vessels are installed by internal cranes which are still in operation to proceed to the replacement of vapor generators (they have the same weight than the pressure vessel). It’s just unjustifiable and it is a blunt decision made several years ago by some narrow-minded EDF executives. Likewise, a few years ago, the CEA executives, despite the progress made in the field on a theoritical level and a practical level, were considering molten salts reactor as a possibilty only in an indefinite future, while, in the same time, Chinese researchers were building a prototype of molten salts reactor and activating it. This has changed as, by a blunt decision due to absurd motivations, French liberal government decided to shut down the project of sodium-cooled reactor ASTRID and to invest absurdly in SMR. The CEA scientists involved in this project were devoided of project and they decided to launch by themselves a program of molten salt reactor (MOSARELA for MOlten SAlt REactor and Life-cycle Assesment) based on the works of the LPSC (Laboratoire de Physique Subatomique et Cosmologie) and they received subsidies (perhaps 50 millions euros) as part of the plan of post-covid economic recovery when their American counterpart (Terrapower) has received 150 millions dollars from the DOE and the Chineses have devoted 1 billion dollars for that.

          3. Barakah construction went smoothly and came in on time and on budget.

             1. Lightsout , Barakh was supposed to start in 2017 and came online in 2022 . Cost of project is supposed to be $ 30 billion . How much did they really spend ? No idea as still ” work in progress ” . However I would still say it is a job ” well done ” .
                https://en.wikipedia.org/wiki/Barakah_nuclear_power_plant#:~:text=Barakah%20was%20chosen%20as%20the%20site,2011%2C%20including%20Korean%20President%20Lee%20Myung-bak.&text=Barakah%20was%20chosen%20as,Korean%20President%20Lee%20Myung-bak.&text=chosen%20as%20the%20site,2011%2C%20including%20Korean%20President

       2. The link no longer works. Anyway, the beneficiaries of renewable (intermittent) energy sources such as solar panels and wind turbines are going to be amazed by the necessity to turn on the nearby gas power plant to compensate the lack of wind or the lack of sun. That’s how it is working in Spain. As a result, renewables are doomed by the projected decrease of gas production after early 2030s. Unless nuclear power is put in place to supplement the intermittency of renewables.

          1. JFF , your post 19/2/2023 at 9.49 am expressing frustrations with the politicians . Well , Is there anything we can do to solve this ? The people get the leader they deserve . See listing .
             1, Biden
             2 , Trudeau
             3, May, Johnson , Truss , Sunak .
             4 . Macron
             5 . Scholtz
             6 , Van der Leyden
             7 . All the leaders in 3 Baltics + P .
             8 , Arden (NZ)
             9. Morrison (AU)
             Then all wonder why the heck we are down the rabbit hole . My sympathies , I am as frustrated as you are .

12. nat gas is the future just sayin….

    https://www.energypolicy.columbia.edu/the-us-gas-balancing-act/

    1. Sorry TTT , NG is not the future . Degrowth is the future .

       1. I don’t know what Degrowth is.
          By Degrowth you mean Contraction, correct?

          1. Degrowth is a movement.

             https://en.wikipedia.org/wiki/Degrowth

             Degrowth emphasizes the need to reduce global consumption and production (social metabolism) and advocates a socially just and ecologically sustainable society with social and environmental well-being replacing GDP as the indicator of prosperity.

             See also: Less is More: How Degrowth Will Save the World
             by Jason Hickel (Author)

          2. The word for that is “euphemism.”

       2. Your energy consumption will in that case be limited to the firewood you can collect in walking distance. Like communism, nuclear energy hasn’t been properly tried yet. It is that or darkness.

          1. https://www.nature.com/articles/d41586-021-02459-w

             Thorium.

             You build a Thorium Reactor with a Coal-to-Liquids facility and you can get the Thorium out of the coal. Electricity and Liquid fuels all in one.

             For those countries with Coal and Thorium would be a big win (not counting climate change)

             Oak Ridge labs (USA) had a working Thorium reactor but it was abandoned because you can’t produce Nuke Bombs with Thorium.

             The Chinese are now trying to build a Thorium reactor and I think India is too.

             1. The chinese prototype is additional aimed at producing a medium sized, fabric produced reactor that is only sampled at the construction site – analog to the giant wind turbines.

                That’s the right way for a big rollout, not this french behemoth that is single constructed at the site. Compare building an italian supercar or a Ford. Imagine building a wind turbine by building it onsite. Nobody could pay this.

                Germany tested with Thorium in the 70s-80s, too. But instead of getting better after the failed prototype, they stopped everything due to the anti atom protests and build coal power plants instead.

                There is much more thorium than uran avialable, and it’s a byproduct of other mining already.
                Granite has an increased thorium content, and there are geological anomalies with increased thorium. For example in Bornholm it is not recommended to stay in old cellars too long due to radiation – Radon from the Thorium decay chain is everywhere in the underground.
                So much more countries will be energy independend with it. Or you can just buy a few tons of thorium, it’s very volume efficient ( 9.5 Gwh / Kg, or round about 7000 barrels of oil energy equivalent per Kilogram).

                Yes, there are many possibilities that work.

                Another thing for energy indipendence: Deep Geothermy will work an many places, too. With the possibility from the shale boom to drill very long wells cheap and fast, many geothermal ressources at 5-10 km depth can be accessed.

             2. Well, everything you said is true grape ape. But you know, Kirk Sorenson really tried to get the thorium thing going again for decades, and he’s still sitting in limbo. I’ve heard of both the Chinese and Indian thorium projects, but as far as I know the commissioning of those reactors is still several years away. So I guess we will see at that time what really becomes of thorium energy production.

13. Here is a thought. Right now they’re a bunch of guys hitting a little white ball around in Los Angeles with thousands watching and in Daytona a bunch of guys are driving around an oval for hours with thousands watching. Both events producing nothing useful for society consuming huge amounts of energy. The PGA and NASCAR, for the common good, should be outlawed immediately.

    1. I believe there is no hope for a wise transition to a simpler less energy using culture. Humans are at their core animals, and the wast majority will seek temporary short term comfort and thrills. Over long term wise decisions.

       Degrowth will happen regardless. Collapse now and avoid the rush å wise man has said.

    2. I disagree…. golf and car racing are very useful for our society because they are our society. Those excesses are symbiotic with the freedom we enjoy in the United States. They represent what free countries can achieve when citizens are left to pursue their own personal creativity and passions.

       Your passion may be sailing and tapping on your keyboard writing on this blog. Mine may be tennis and genealogy. Others golf and car racing. All these different “non survival level” passions reflect our success as a nation and society to provide the incubator for them to occur.

       Plus, how boring would life be without rampant excess?

       1. My comment was meant as a ‘tongue in cheek’ remark. I look forward to watching both. I find the outlawing of gas cooking and heating as outrageous. I wasn’t born yet but try to imagine waking up on February 19,1942 and thinking what the future might be for the world. Nothing lay ahead but an endless war. Humans survived and flourished beyond anything imaginable in 1942. What’s to say today will be anything different.

       2. We need entertainment every so often to escape reality.and perk up our spirits.

          1. Correct, in a free market the public sets the value of the entertainment.

             This statement from Ervin was inaccurate “Both events producing nothing useful for society”. It’s his opinion. Others disagree him with their actions.

    3. Ervin , the problem is that the economic system is designed to work in the environment where ” my waste is your income ” . This will die a natural death as Seideman has commented . Suggested reading ” The Landfill economy ” and ” Bullshit Jobs ” .

    4. Ervin…I don’t think that outlawing optional uses of oil is the right mechanism to preserve more important uses of oil, as you suggested ‘in jest’
       But I would be in favor of heavy use tax on energy that was being used for optional or frivolous uses.
       That is one step before rationing, but still allows somewhat of a market mechanism to determine priorities.

       Of course a country could decide to institute no mechanism of prioritizing the consumption of depleting oil, allowing the residual production to just flow towards those with the most money- as is the status quo now throughout most of the world during this time before oil decline.

       1. “But I would be in favor of heavy use tax on energy that was being used for optional or frivolous uses.”

          Or better yet, solar powered race cars. It could energize progress to a fossil fuel free transportation system.

    5. Those are interesting thoughts, but what about the energy consumed in other non-productive activities such as the production of TV & Hollywood movies? Or things like the super bowl, baseball, airline and cruise ship vacation sectors? The construction of sports stadiums, theaters, and other public venues? Even things like Apple iPad and i-phone devices which consume huge amounts of energy, but are used almost entirely for entertainment and are of no productive value whatsoever? That even goes for things like Facebook, tick tock, Instagram, Twitter and the like. All of those things consume huge amounts of energy, are frankly time wasters/distractions, and are absolutely non-productive entities?

       1. All good points Mike+S.
          If there was to be a heavy use tax on energy that was being used for optional or frivolous uses, in order to help prioritize oil products for critical use,
          then I suggest that all of those activities that you list that require oil products would be on the table.

          This might seem like drastic measures to most people who have become accustomed to great abundance of oil products, but I suggest that this is a transitory condition in the history of humanity.
          I’d rather see a phased in use tax on optional uses of oil rather than strict rationing, although at some point that next step might be necessary.
          We should be using what is left at a much slower pace, as if it was irreplaceable.

14. After about 2 months of China reopening the Baltic Dry Index is at 538. It’s worse now than at any point during the lockdowns. Because the problem isn’t and never was Covid or lockdowns.

    If China isn’t loading up on raw materials. Oil demand will follow suit.

15. You have to guess, as it is the future and all. My guess oil prices will bungee higher with in 6 months. That will quickly cause a new wave of higher inflation across the board (which never really went away), but have no real appreciable impact on oil production because it will not be high enough long enough to do that. The price of oil will slide back down with in months and will hit new lower levels than we have seen recently. Causing the next step down in over all production.

    1. No reason for oil prices to go higher. Global recession is taking place. Japan export numbers were atrocious and this was after China reopening. Down 11% yoy

       1. HHH, you may be right. the only reason I see a possible short term bump is that folks here and in Europe want a narrative so badly that things are great and getting better. By spring we will be draining the SPR and giving out more money to do anything to give that impression. When that does have the positive effect desired; more lower cost oil, we will get the real rebound. Less lower cost oil. But none of my scenario may be necessary… Just go straight to the less lower cost oil as you suggest.

16. North Dakota’s Bakken shale “holding back” U.S. oil production

    (Bloomberg) – North Dakota’s Bakken shale — traditionally one of America’s larger, busier shales — is showing signs of maturation, threatening to hold back U.S. oil production as the world thirsts for more crude.

    Mature wells that are producing more gas than expected are hurting crude output from the Bakken, the Energy Information Administration said in an email on 2/7. The deteriorating performance was the main reason the agency cut its estimate for 2024 U.S. oil output to 12.65 MMbpd from an earlier projection of 12.8 million.

    The weakening oil production outlook comes as Russia’s war in Ukraine, which has disrupted global supplies, grinds toward its first anniversary. At the same time, the International Energy Agency is forecasting higher global oil consumption as China shows signs of a stronger-than-expected economic recovery.

    Even at the lowered estimate for next year, U.S. output would still set a record, surpassing the 12.3 MMbpd produced in 2019.

    1. Interesting that the article doesn’t mention whether they are talking about Bakken as a region, versus formation. If their information came from the DPR (EIA was the reference in the article), which is regional and not formation specific, maybe the EIA doesn’t know why the volumes there seem to have been knee capped since the end of Covid. Increasing GOR isn’t it, but I’ve heard that one before from the EIA folks. Increasing GORs are a given in all US solution gas drive shale oil reservoirs in the US, particularly the Eagle Ford. The Bakken is no worse than any of the others, except the Eagle Ford.

       For the record, all US solution gas drive oil reservoirs are in their mature forms.

       1. Interesting that the article doesn’t mention whether they are talking about Bakken as a region, versus formation.

          North Dakota production is in decline. That decline will keep total US production from increasing as much as many expect.

          Now is this decline coming from the Bakken as a region or as a formation?

          I haven’t a clue as to what the hell you are talking about.

          1. I like knowing the individual moving parts of a system. Comes in handy in knowing why a decline is a decline. As compared to those who, upon seeing a decline, declare yet another peak oil.

             1. Oh, for God’s sake, let us not get ridiculous. No one looks at one little oil patch and declares peak oil. You are just being silly.

                As for peak oil, the US is just a bit player in the grand scheme of things. And the Bakken is just a bit player inside a bit player.

                But… are we talking about a region or a formation? Just what the hell is the difference? Is one declining but not the other? I think you are just blowing smoke. You are trying to show expertise but I see the opposite.

                1. The Bakken is a region according to the DPR. A group of counties listed on the spreadsheet data that they provide. Within that region are some 44K wells. And many, many formations. The Bakken, with it’s various benches, is just one. And comprise perhaps 14K of the 44k wells. The other 30k wells are other formations. One of them is important. The others currently irrelevant.

                   To folks who know anything about geology, the Bakken is a formation in the Williston Basin, and the folks who built the DPR don’t have a clue about anything more than made up geography, And no one in my world for a second would think knowing this is expertise any more than you would think someone adding 2+2 and getting the right answer is a surprise.

                2. And just why did you feel the need to bring peak oil into this debate? You never miss a chance to spout your opinion that peak oil is bullshit. The headline was “North Dakota Bakken shale is ‘holding back’ US oil production”. And this was Bloomberg, people who generally know what the hell they are talking about.

                   But you criticized the article because they didn’t say whether they were talking about a region or a formation, as if this made a critical difference. And then you indicated that this difference had something to do with peak oil.

                   I know you believe all those who believe peak oil in neigh are blooming idiots, but you are a minority of one on this blog. I believe peak oil was in 2018, and Dennis believes it will occur in this decade. Yet you wrote on 02/15/2023 at 10:04 am:

                   “Not only is there enough crude and natural gas to melt the poles, depending on price, there is enough to make sure that peak oil isn’t assured in this half of the 21st century.”

                   That is about the dumbest thing I have read all year.

                3. “Not only is there enough crude and natural gas to melt the poles, depending on price, there is enough to make sure that peak oil isn’t assured in this half of the 21st century.”

                   “That is about the dumbest thing I have read all year.”

                   Which doesn’t negate the validity of the comment, or more importantly the system built to prove it.

       2. “Increasing GORs are a given in all US solution gas drive shale oil reservoirs in the US, particularly the Eagle Ford.”

          This statement implies that higher initial GOR’s in new wells and exponentially increasing GOR from old wells in pressure-depleted cores of shale basins is not a big deal. It IS a big deal. It is a PARTICULARLY big deal in both sub basins of the Permian where late life decline rates are accelerating, EUR’s are declining, and now 1/2 of the revenue stream, or more, from a tight oil well is associated gas related. Please read that last part again and realize that 1/2 of that revenue stream has now been whacked by about 40% because natural gas prices have nose dived.

          “For the record, all US solution gas drive oil reservoirs are in their mature forms.”

          ALL of America’s oil basins are headed for hospice care. They’re plum wore out from making America the greatest economic powerhouse the world has ever seen the past century (Tight oil and gas had LITTLE to do with that, BTW). Keeping American oil and gas IN America use to give us the leg up, the industrial advantage over other countries in the world. Apparently that is no longer the goal. Now its about money, and votes. The theory of AFFORDABLE oil and gas production no longer being able to keep pace with demand is a joke, right? “Peak Oilers” are stoopid and un-American.

          The quote above is designed to minimize GOR concerns and what that does to OIL liquids recovery. It is inaccurate. Solution gas drives are typically associated with very low perm. sandstones or dense shale, or “tight” SRV’s, or when SRV’s communicate with each other. Step away from pressure depleted cores, not very far, and GOR’s go back to being normal.

          What constitutes ALL solution gas drive reservoirs in the US? Tight shale, tight sandstones driven by solution gas, are all over the place. We haven’t even looked at half of them.

          Well-bore storage. A common sense operational phenomena. Shut a tight oil well in for a long period of time and fluid, and gas, move to the pressure sink to fill the previously vacated porosity in the shale “container,” or the SRV. That is why pump off controls were invented. Google…gravity. It’s no miracle of Mother Earth nor is it a possible groundbreaking discovery in technology.

          Who said, where is the link, for this single event occurring in the Bakken to be because of nearby, offsetting gas re-pressurization?

          Phfttttttt.

          1. I am unfamiliar with your claim that someone is repressuring in the Bakken? If so I would be amazed it is the first such effort. New ideas sometimes work out, look how shale oil and gas development turned out.

             Peak oilers can be amusing, no one has ever claimed Colin Campbell and Jean were stoopid. Okay fine, some of the ones who lack any reasonable geoscience experience might be slack jawed and silly, but that is mostly the internet crowd of Happy McDoomsters.

             I have no interest in minimizing GOR concerns, you assign motive where none exists. And you aren’t the only one with a career in drilling, completing and producing oil and gas wells. In my case, it was my first career, and instead of just continuing to do the same thing forever, I took what I had learned and moved on to the next one.

             Is the pressure equalization so unheard of around here that you need to explain it? Do people not KNOW that reservoir pressure will begin to equalize within a given pressure cell if you the outflow is reduced to zero? Why not just say Darcy’s Law, point out the differential pressure component and leave it at that, then the more mathematically oriented can look it up and understand fluid flow in porous media the same as everyone else does.

             Just one question though, you appear sensitive to the idea of GOR changing? A perfectly natural, observable, and predictable effect in these kinds of reservoirs? Are you operating under the assumption that folks who were in the shale oil and gas development business back in the 80’s and 90’s didn’t already know about it AND were modeling it, or just the peak oil noobs? For Pete’s sake, how do you expect anyone to get reasonable project cost estimates if you don’t take known effects like this into account? Expected time frames to water coning? Effects of offsets and injection? That’s just for the easy discrete reservoirs, don’t even get me started on reserve estimates after SPEE instituted the probability metrics for reserves, and then kicked out Monograph #3 to explain how.

    2. Re the Bakken,
       Bruce Oksol posted a fascinating production profile the other day (February 16) of a decade old Zavanna well (# 22044).
       After being offline for a year, it came back online with a quadrupling of oil output and a tenfold increase in natgas production.
       Far more intriguingly, perhaps, is that ~450,000 cubic feet per day of production is being consumed onsite (that is, the difference between gross production, product sold, less flaring is almost a half million cubic feet per day).
       Something big be afoot in NoDak.

       1. What? Something that will actually cause Bakken oil production to increase significantly?

          It looks like the Bakken is going to meander around 1 million BOPD for awhile. 1 million BOPD is very important.

          Right now it looks like the USA is going to be on a plateau. No more million BOPD per year growth. Doesn’t appear we need that anyway, oil prices aren’t high.

          I for one hope we are through with the 2015-2020 oil prices. Although must admit $70-$75 isn’t as good as it used to be, with the service and materials inflation we have experienced since the beginning of 2021.

          Last year was the best year we have had since 2013. Doesn’t look like 2023 is going to be quite so good.

          1. You are correct shallow sand

       2. Continental is attempting to get permitting for a township size (36 sections 23040 acres) gas injection pilot in the springer formation in Grady County Okla. Ron, I think what coffee is referencing is that the operators shut in a set of wells while simultaneously injecting gas in other wells and produce oil in yet another set of wells. So at any given time, one set of wells is completely shut in where BHP builds, some wells will be producing and some will be injection wells. This in fact will show up as a drop in total production, but not necessarily due to depletion. The operators and minerals owners are hoping that less production today will mean greater overall recovery over time.

          Coffee did I get that right?

          I might add Devon alluded to a similar program in their latest CC but gave no details.

          1. TTT,
             Essentially, yes.
             I was not specifically describing any recognized process as much as pointing out WAY anomalous aspects in this Zavanna-owned (a private company) well.
             There is a dearth of published info on EOR which may be understandable as this paradigm-shattering approach will upend many present ‘realities’.
             I would not be surprised if Harold took his company private before a doubling of Continental’s recoverable resources became acknowledged via EOR.

       3. Coffee…are you aware of the number of years that Harold has been trying to get EOR to change the booked reserves on his MT/ND properties? Just as a hint, it has been longer than this website has been in existence.

          The well of which you speak did come back after a year off line, with the increase you mentioned. And within about 30 months was right back to where it started prior to shut in. Except now it is declining far faster than it had been prior to the shutin. Was this temporary oil increase deemed to be something other than the usual flush production after shutting a well in for a long period of time, or was any sort of workover or recompletion done in the intervening year? It should also be mentioned that it’s gas production has increased by an order of magnitude, far above even its initial gas production back in 2012 or so. That isn’t a normal side effect of just flush production, usually while both oil, gas and water will spike, they generally don’t disassociate in their respective ratios. And whereas oil is falling off quickly, gas production has been relatively stable, another anomalous feature in and of itself. So what was done to turn the well into a gas well? GOR>6 happened nearly 2 years ago, within about a year after it came back online. Did someone want this to be a gas well on purpose?

          1. When I look at the monthly reports for ND, I see a few wells with 0, and more listed SI.

             What happens to make a well be deemed SI? Is that something the operator applies for, or does the state do that when a well has reported 0 production for a specific time?

             Is there a specific reason EOG has so many SI wells in Parshall? I have always focused on that field because it was an “elephant” back in the day, the best wells along with Sanish, plus being one with lots of wells.

             The 459 wells averaged just over 20 BOPD in Parshall in 12/2022.

             Is there a shortage of service workers still in ND? I assume when there is a down hole failure, it is a long wait for a workover rig?

             Have electricity prices went up in ND like they have elsewhere. We received our highest electrical bills ever this month. They will go down a little soon, as some leases we are bypassing water to keep plants and batteries from freezing.

             For example, one big lease had a bill of almost $6,600 the period 1/5 – 2/5/2023. Last year that was almost $5,300.

             Seems like several private companies have bought a lot of older Bakken wells over the years. How are they getting along.

             I’m still interested in reading about the operational side of this. I have always thought operating these very deep horizontal wells would be a challenge as they matured. I assume that is still the case.

             Would appreciate seeing some stats as to shut in shale wells in the major oil basins, if anyone has that.

             As someone who is part of a family that operates wells mostly completed either 1905-1911 or 1975-1985, it interests me to see how these horizontal wells fare as time goes by.

             1. Shallow sand,

                Data on the number of shut in wells can be found at post below, this probably is not what you are looking for. As of Dec 2021 about 9869 wells in 4 major tight oil basins were plugged or inactive out of about 90000 total wells completed up to that date in the same basins, so about 89% of completed wells were still producing. Most of these wells were completed after 2009 (about 2700 wells were producing at the end of 2009 in the 4 major basins, Bakken, Eagle Ford, Permian, and Niobrara).

                https://novilabs.com/blog/us-update-through-december-2021/

                1. No, that helps.

                   I tend to focus on the operational side, and in conjunction the longevity side of these wells.

                   Although I’m sure not similar in many ways, these wells remind me of the “deep” wells in our field. 3,900’-4,200’ vertical holes drilled in the 1970’s. Tight formation, likely the source rock for our sandstone wells which are 850’-1,100’ deep and have produced 98+% of the 300 million barrels of oil our 20,000 acre field has produced since 1905.

                   These wells came in very strong, 50-500 BO IP’s. Many had cumulative production of over 50k BO within 1-3 years. But the longevity hasn’t been there. Tend to produce more and more water, along with gas which has to be flared as our field doesn’t have much gas infrastructure. Tend to cost a lot to operate and most now make 1 BOPD or less.

                   A company from out west bought a lot of “deep rights” in our field and drilled two vertical wells to this formation around 2012. Both wells still producing. They were careful on perforating in order to keep the water production to a minimum. One of the wells has over 30k cumulative, the other just around 15k. Probably cost around $300k to drill, complete and equip back then. Vertical holes.

          2. RGR,
             Re the Zavanna well … as I no longer subscribe to the NDIC site, my knowledge of this well’s production history comes from Bruce Oksol’s February 16th posting (themilliondollarway.blogspot.com) spanning only the 2 years ending in January 2020.
             While the ‘routine’ bump in oil/water output may be the result from nearby wells’ fracturing (Bruce calls it the ‘halo effect’ … been going on forever), that huge natgas increase is certainly not normal.
             In fact, if one looks at the gas Produced, Sold, and Flared columns, one finds about 450,000 cfd unaccounted for.
             Where is this gas coming from?
             Where is it going?

             1. Re Continental and EOR …
                Article ftom 6/15/22, oilgasleads.com, Continental wants a short gas supply pipe to do huff ‘n puff on 2 Bakken wells, similar to a 3 well pilot underway in Oklahoma.
                Uplift is expected to run 25%/60% if successful.
                Lottsa below the radar EOR work underway all over.

       4. Is re injecting NG into the well considered use?
          rgds
          WP

          1. WP,
             I do not know the specifics, but I imagine state regulations dictate just how the natgas is categorized as it is a taxable/revenue product.
             This likely also applies to the gas used in gas lift which is becoming routine.
             A few years back, a tiny Canadian company named Granite Oil was running a fascinating EOR operation in the Saskatchewan Viewfield Bakken by re-injecting treated field gas and water to maintain pressure.
             While their recovery rate improved, low oil prices did the company in and they were taken private, I believe.
             They had an arrangement with the government (ultimate owner of the minerals) to re-use the natgas.

17. Ron

    That last statement is incorrect. US production peaked at 13 Mb/d. The updated US chart is in the Non-OPEC post that went up last week. Even by December 2024, US production is less than 13 Mb/d.

    https://peakoilbarrel.com/non-opecs-oil-production-rise-continues-in-october/

    1. You are correct, Ovi. I checked the data and found that for some strange reason, the STEO data differs slightly from the World data.

       

       1. 02/20/2023 at 9:47 am
          Ron

          I checked tab 4atab in the STEO and November 2019 is showing 13 Mb/d.

          

          1. Yes, I know it does, Ovi. That’s exactly what my chart above shows. The STEO data peaks at 13 million barrels per day for the USA. My point was that the EIA’s international data has slightly different data.

             1. Ron

                As usual I got it backwards.

                A few years back, I exchanged emails with the EIA asking why the US world data was different than the PSM. They eventually realized that the link to the PSM was broken. Maybe Dennis should contact his person at the EIA to look into it.

    2. Ovi,

       US average annual C plus C output is forecast to be 12.65 Mb/d in 2024 (latest STEO). The centered 12 month average peak for US C plus C output was 12.565 M/d in October 2019. The 12.3 Mb/d is the annual average output for the 2019 calendar year. In either case the 12 month US peak will be surpassed in 2024, if the STEO estimate is correct. In my view the 12 month average output is far more important than individual monthly output.

       1. Dennis

          I wish the authors would clarify the nature of the number they are using. When one is discussing a peak, I agree they must clarify if is monthly or CTMA.

          1. Ovi,

             In this case I think they meant annual average output, many agencies such as IEA and OPEC often use an annual average number for projections.

18. Turning The Eagle Ford Region Into The Next Water Park For Dummies…

    Who doesn’t like a day at the Water Park with the family? Lots of Waves, Water, and Sunburns.

    Anyhow, soon I’d imagine the folks drilling in the Eagle Ford will begin to realize it may be more profitable to turn it into a Water Park. Why? Well, if we look at the tremendous increase in water production in 2022… they just may consider adding some slides and lemonade.

    According to Novi (Shaleprofile), the drillers decided that it was time to TURN THINGS UP A NOTCH in the Eagle Ford… and by gosh, they certainly did.

    However, what was turned up was a great deal more water production, but less oil.

    The Eagle Ford’s 2019 Oil Wells at the peak second month, produced 637 bd of oil and 797 bd of water. Now compare that with the Eagle Ford’s 2022 wells at the peak second month, produced 604 bd of oil and 1,090 bd of water.

    Looks like the SHYTE’s heading in the wrong direction.

    So, if the companies in the Eagle Ford plan to shove even in more sand and water per well to keep production from really falling, then maybe it may be time to open a WATER PARK.

    steve

    

    1. Steverino,
       You may want to be a little cautious when referencing ‘produced water’, especially when comparing earlier years with the current cohort.
       Back around 2015/2016, operators in the Bakken starting using a new generation of High Viscosity Friction Reducers (HVFRs) that enabled the near elimination of the flowback which routinely occurred immediately after the fracturing was completed.
       The new generation of HVFRs did not leave a ‘skin’ upon the newly fractured rock which inhibited production.
       Thus, the 300,000/500,000 barrels of frac fluid now remains underground and ‘boosts’ significant hydrocarbon production via the artificially enhanced pressure … a topic of keen interest on this board.
       One way of proving/displaying this is simply observing the monthly decline in the ‘produced water’.
       This is opposite the historical increase in actual produced water.

       1. Coffee, normally in discrete reservoirs you see increased water production through time. That isn’t normal behavior with shale wells. WOR remains relatively stable throughout their producing lives. While there are occasional anomalies, they are just that.

    2. Oh look another one from our own little ray of sunshine.
       what I find very interesting in reading your “analysis” with respect to oil and gas, with out exceptions, is that you NEVER ask questions. Now you may be very familiar with water parks, but you take a data point and ALWAYS using it to spin it into world ending negative. That is not thought provoking, it’s silly. Your work is akin to finding out a person lost 5 pounds putting together a chart and declaring they will be dead in a month. Why or how they lost weight never enters into your thinking. interesting.

    3. You know, with the example of old leaking wells in texas, you won’t have any problems to have a ” water park”. As the water injected in the soil to extract the oil is still under pressure, any failing of the well head will provide stinking water spring with an option of increasing collapse of the soil around the emplacement of the well. That’ s not an invention from my part. It is currently occuring at several places in Texas.

19. This will make Mike S heart sing. But it raises the question, if the green energy revolution is so great why are they doing it. Australia was an early (largely failed) adopter. Those damn silly facts again.

    https://oilprice.com/Energy/Energy-General/Australias-Energy-Market-Interventions-Are-Worrying-Its-Trade-Partners.html

    https://www.theguardian.com/australia-news/2022/apr/01/australias-renewables-boom-fading-as-investors-lose-confidence-energy-council-says

    1. If you actually read that second link, you realize that the story is close to opposite of the article title.
       “the industry marked its latest record year for household solar, wind and solar farms, and big batteries. Renewable energy’s share of the electricity supply reached 32.5%, doubling since 2017, the council said in its annual report.”
       “In 2021, clean energy capacity grew by 6.3 gigawatts, or about four times that of AGL’s Liddell coal-fired power plant.”
       “Renewables now generate 1.6 times the electricity used by Australian households, the council said. Last year alone, another 400,000 homes bought solar panels, adding 3.3GW, the fifth year in a row of record new capacity.”
       “Storage also had a “breakthrough year”, with 30 large-scale batteries packing a combined capacity and storage duration of 921 megawatts or 1,169 megawatt-hours under construction at the end of last year.”

       1. yea I did read that but good lord let’s use some common sense here. If it were going to plan, they would not be making that decision. I also read that because of the HUGE US “inflation fighting bill” they would lose the opportunity to become the worlds leading Green Energy powerhouse. That also does not make sense. What does makes sense is they think they are going to need that gas, where before they did not. time will tell what the correct conclusion is.

       2. The second article was also 10 months old. The Morrison party loosing the election and A. Albanese taking office as prime minister in late May 2022. After that renewables have had more winds in the sails. Australia is one of the potential powerhouses for green energy going forward. Green energy, if solar/wind overbuild and energy exports are into the picture, is going to be low EROI. It needs a carbon tax or a long term view of energy politics to really get going.

          As an example of renewable potential; South Australia could with ease get up to a level of renewable electricity on their grid until they got problems with how to solve intermittency. And that is a good problem to have, because there are solutions to be found (short term ones, long terms ones, cheap ones or costly ones).

          1. you seem to have a better grip on what’s going on in Australia than I. Reading just a bit I got the impression that because of the large Inflation fighting bill the US passed, they now must compete
             (read greater demand than supply and therefor higher cost) with the USA. IF I am interpreting that correctly, a course change such as what the article points out makes sense. Again they may also be watching what is happening with China and they do not want to be overly dependent on any one country for parts, material etc. Just my assumptions. Last time I really paid much attention to this issue is when a few large manufactures announced closing and moving because of the intermittency problem but that was a couple of years back.now it looks like that is back on the table. But the issues with Australia are not directly war related, but you have Australia and EU both having difficulties(at best) delivering on the promises of green energy. Some people may look at that as a trend.

             https://www.reuters.com/business/energy/australia-power-crisis-forces-manufacturers-eye-offshore-moves-production-cuts-2022-06-20/

             https://www.afr.com/companies/energy/move-to-renewables-will-force-companies-offshore-brickworks-boss-20221023-p5bs4d

             1. If you learn to look at energy news without the political/cultural lens, you may see the landscape more clearly. A suggestion to consider.

       3. There was a discussion up in thread regarding hydrogen/ammonia exports from the Middle East to the EU. This is also relevant if Australia wants to export green energy.

          It seems like most countries have not given up on the hydrogen economy, but are getting a lot more concrete when it comes to the green ammonia. The link below an easily digestable article on the subject.

          https://e360.yale.edu/features/from-fertilizer-to-fuel-can-green-ammonia-be-a-climate-fix

          Production of ammonia creates an extra step by adding nitrogen from the air and creating ammonia by binding the nitrogen to the hydrogen. Ammonia is much more suitable to work with than hydrogen, with energy density that is pretty high. So all the arguments regarding the hydrogen economy can be transferred to ammonia at the moment. A lot of countries with green energy ambitions are not waiting for further research regarding this, but scaling up for green ammonia now it seems.

20. Global Oil Demand Hit Record High In December

    Global oil demand surged by 1.3 million barrels per day (bpd) to a new record high in December, with total demand at 102% above the pre-Covid levels in December 2019, data from the Joint Organizations Data Initiative (JODI) showed on Monday.

    Rising consumption in Japan, Indonesia, and South Korea drove the growth in global oil demand in the last month of 2022, according to the JODI data shared by the Riyadh-based International Energy Forum (IEF). In Japan, total product demand jumped by 512,000 bpd to a 12-month high.

    1. Is oil demand like “The Field of Dreams?” “If you build it they will come.”

       If we demand it, it will be produced.

       1. Actually it is the other way around-
          What is produced will be consumed…so far at any price.

       2. Short term you can consume what’s stored on top of what’s produced, such as what came out of the SPR. Long term if consumption is going up but production isn’t, consumption will drop. Something is going to give soon. Maybe a sustained world wide recession is coming …

21. Frugal you beat me to it. Given the set of facts in this article:

    https://oilprice.com/Energy/Energy-General/Global-Oil-Demand-Hit-Record-High-In-December.html

    hard to reconcile the current oil price. Outside of a wide and sever economic downturn oils prices look to rise from here.

    1. Texas tea,

       As long as supply is sufficient to meet demand at current prices, the price of oil will not change. Based on OPEC estimates of supply and demand for oil, it does not look like oil prices will change much in 2023. Perhaps in 2024 we may see oil prices rise in the absence of a severe recession in 2023 and 2024.

       1. Current STEO estimates indicate inventory build throughout 2023, tapering off into 2024.

          https://www.eia.gov/outlooks/steo/images/Fig2.png

       2. With respect Dennis if you are going to have dialogue with me you need to kick it up a notch. To wit:

          https://en.macromicro.me/dynamic_chart/season_chart

          Patrick De Haan GasBuddyGuy “!!! A roaring start to the week for gasoline demand… Sunday was up 6.1% from the prior Sunday, or 5.1% above the average of the last four Sundays… Monday was up 2.5% from the prior Monday and was 3.4% above the average of the last four Mondays.”

          The trend in demand continues into the latest week as I believe the lower prices are fueling (did you see what I did there) an increase in demand. I think this is a surprise to the market in general terms as the current price of oil is suggesting more difficult economic times ahead, that is weaker demand. So far that weaker demand is not showing up. Not making a prediction as there are too many variables that can go in any direction, but the fundamentals of the oil market and only the oil market as exist todays suggest higher prices this summer are indeed a high probability. In my opinion.

          1. Texas tea,

             I have been predicting higher oil prices for a long time. The balance of supply and demand, based on estimates from both the EIA in the STEO and OPEC in their most recent MOMR, suggests that the market will be adequately supplied with oil at the current price level for all of 2023.

             From

             https://www.eia.gov/outlooks/steo/data/browser/#/?v=8&f=Q&s=0&start=201801&end=202404&ctype=linechart&maptype=0&linechart=WTIPUUS

             we find the EIA expects oil prices to fall in the future to less than $70/b by 2024Q4.

             

             1. I guess the EIA has never drilled a shale well with the current product prices and current costs. The price and cost volatility make it impossible to make any reasonable prediction. Gas focused Companies are planning to drop Gas rigs like crazy. There is no reason to drill a Haynesville well at these gas prices unless one wants to just burn money. I suspect if oil prices don’t rise from here we will see fairly flat oil production for 2023. Just my observation from the field level.

                1. If memory serves, BH currently has natural gas rigs holding steady, but oil rigs downturning slightly.

             2. “Despite macroeconomic concerns, the International Energy Agency (IEA) expects oil demand to grow to a record 101.9 million barrels per day this year. However, given current production levels, demand will begin to outpace supply in the second half of the year. The IEA sees a deficit of 1.4 million barrels per day in the third quarter and 1.9 million barrels per day in the fourth quarter. That expected shortfall between supplies and demand should drive oil prices higher. ”

                this from Matt DiLallo posted on motley fool, did not post a link as I know I would be accused of promoting something. When the fed signal a pause or when they continue to hike 1/4 point i think oil will begin to move up. hard to front run the fed at this point, again just my opinion, and like LTO said unthread new “net production” is unlikely to come to market at sub $80 with the current inflation pressure continuing unabated.

                1. Texastea,

                   Different organizations have different estimates of the future, perhaps the IEA is correct and OPEC and the EIA are wrong. The most likely outcome is that all three organizations will be incorrect.

       3. Dennis
          https://oilprice.com/Energy/Energy-General/Morgan-Stanley-Boosts-Global-Oil-Demand-Forecast.html

          its getting harder for me to remain humble🖖

    2. I think in the current environment, you are better off flipping a coin to determine where oil prices will head this year.

       1. Iron mike,

          Oil prices have been difficult to predict since 1974, this is not a new phenomenon. I agree any prediction of future oil price is nearly certain to be incorrect, a coin flip would do far better than my guesses in every case in terms of odds.

          1. Dennis,

             Agreed. I guess it’s one of those situations where arguments can be made for both headwinds and tailwinds for oil prices barring any surprise geopolitical strife.

22. Does anyone know at which price point drillers stop drilling or reduce drilling for NG? It is currently trading at $2.07. Must be getting close to recent lows.

    1. We are there Ovi. Haynesville wells are totally uneconomic at these prices. There is a temendous amount of short term deliverability that comes from the Haynesville and there could very easily be a gas shortage next year if the war in Ukraine continues. Current gas price in the Permian is negative. These highly volatile price cycles are so destructive to the world energy picture.

       1. I might add to LTO’s comment outside of any previous contractual drilling or significant hedges I doubt anybody wants to drill a gas well now unless to build a DUC inventory. I might further add that the gas reserves we have here in the US are just so vast, It’s hard for me to see how nat gas gets off the floor until the current buildout of new LNG projects begin to be turned on next year and 2025.

          1. Are you aware of ANY company that has deliberately drilled DUCs, as some sort of hedge, or getting ready for next years capital budget to finish the job, something anomalous like that? I never met a DUC in my life that was a mistake, and am fascinated by the idea that multi-million dollar multi mile long steel reinforced fence post holes are created to just….sit…..while hoping for the worm to turn.

             1. well yea i am, OVV announce last quarter they were building a DUC inventory. We participated in 3 wells that have been inventoried late last summer that are scheduled to be completed this summer, These will be 80% oil wells. As it relates directly to gas wells, no I have no such direct knowledge. But I have some degree of confidence now that the balance sheets of most of the companies have significantly improved, if they have contractual drilling obligation they will choose to wait to complete at these prices unless they are hedged if at all possible. My best guess.

             2. RGR,
                it is really not that uncommon. I attached the OVV presentation discussion. If you think about it, they probably had a favorable drilling contract and wanted to drill as many wells as they could, that is just a guess. I know for a fact during the covid shutdown, many independents drove hard bargains on drill rigs, drilled all their wells and just patiently waited
                for prices to reach a level they needed before they completed them. That is one of the advantages of the play.

                “Umang Choudhary

                Most of my questions have been asked, hopefully, 2 quick ones for you. You talked about lower 4Q oil and condensate production due to lower sales in the quarter. Can you remind us when these wells are coming online? And any thoughts on exit 2022 production and implication for production cadence next year, early next year?

                Brendan McCracken

                Yes, Umang, appreciate the question. So the DUCs that we’re not turning in line this year, they’re going to be spread throughout the front half of next year. And then the question on where does that leave us for exit, we are seeing our fourth quarter TILs come down as a result. So we were almost 70 turn in lines in the third quarter. That’s going to be more in the low 40s in the fourth quarter.”

                https://seekingalpha.com/article/4555499-ovintiv-inc-ovv-q3-2022-earnings-call-transcript

                1. Drilling $5.5 MM HZ laterals only to let them sit, idel, for years is No. 4 on the tight oil industry’s Stupid List.

                   To the rest of the POB community…would you do that with YOUR personal money, with money you have effectively “risked,” for potentially years, at the detriment of your family’s well being? Of course you would not. No private investor owning WI in a well would either. You could sit on your respective share of drilling costs for years without getting a nickel from your investment, your only hope being that prices went up, instead of down. Good luck with THAT.

                   Don’t fall for this dung heap. Only big, fiscally irresponsible corporations can do this stupid shit…using other people’s money.

                   T3, I appreciate your insights here, and the humble, well- spelled way you present them. Thank you. I hope that everyone in California reads your stuff before they move to Texas and knows what they are getting into when they arrive.

                   Maybe they will move to Idaho instead.

             3. We are drilling DUcs this year in the Haynesville.

          2. I don’t believe the gas reserves are that vast at $2.26 gas price per mcf. There is a significant amount of gas at higher prices but most people don’t understand that the majority of gas in a Haynesville gas well is produced in the first 18 months and the play is moving westward into Texas and very near the zero line (no more Haynesville Pay is past the zero line). Reserves and Deliverability are not the same thing.

             1. no disagreement LTO in fact I would say that applies to most if not all horizontal gas plays. I don’t follow the Appalachian. The first year or two is make or break hence my suspicion given a choice operators will defer completion if they can. just an educated guess.

                The first Haynesville well I was I had an interest in was an XTO well in southern Harrison County in 2010. Not sure the damn thing ever paid out. We were pooled by Sabine in a well in 2021 in far north Panola County, tx. F’ing monster well in comparison and has made 6.5 BCF in 21 months. CADDO LAKE (AW) , Lease No.: 290928 , Well No.: 4H .We have several units HPB in that area that I hope to monetize at some point in time. That maybe a ways off in the future. Looks like they broke the code however with respect to drilling and completion. good luck in your endeavors.

                1. LTO S/TTT,
                   Southwestern – one of the big 3 Haynesville operators – just announced 4th Quarter numbers.
                   Cost to D&C an average 9,000 foot lateral Haynesville was $17.5 million.
                   (Appalachian Basin wells were $14 million for 16,000 footers).

                   TTT, re monster wells … howsabout the 8 well Carpenter pad in SWPA?
                   161 Billion cubic feet cumulative with 37 month average online. Currently producing 80 Million cfd.
                   (In `oil` terms, these 8 wells have produced almost 28 million barrels of earl in a little over 3 years.)
                   The ‘best’ part, perhaps, is that this pad sits atop the Utica core and several Upper Devonian formations.

    2. Ovi,
       Natgas at the Eastern Gas South exchange (outside Pittsburgh) hit $1.63 yesterday.

23. Dennis/Ovi –

    Back in April/May of last year we looked at future growth models (world + US).

    Your (Dennis’) models generally assumed low growth (~1%) for next 5-7 years, at which point EVs take a bigger bite out of oil demand.

    If I recall correctly, most (or all) of your growth was coming from US/tight oil scenarios.

    With additional ~9 months of US oil production data, is it possible your models are in need of recalibration?

    I apologize if you have recalibrated and shared your new estimates (I haven’t been following the comments section too closely lately.

    Side note, looks like the SPR has been left alone for past ~6 weeks, but not before it was drained almost 50%, or daily rate of 0.8 MBBpD.

    Check US oil production (weekly) chart below:

    Chart looks flat to me, am I missing something? Are we in some unusual pattern and growth is going to kick back up real soon? Curious what eveyone’s take is…

    Thanks

    

    1. Also worth noting that if we consider only US oil growth over past 12 months (average of 0.3 MBBpD) then that would account for world growth of less than 0.5% (assuming all other countries balance out to net zero change).

       Your estimates are always conservative and tend to underestimate actual growth, is that still the case?

    2. Kangeo

       In the February 10 th Non-OPEC post referenced below you will find the latest projection for US production from the EIA up to December 2024. It looks pretty flat up to October 2024.

       At the end there are two charts that project world production and world production without the US out to December 2024.

       https://peakoilbarrel.com/non-opecs-oil-production-rise-continues-in-october/

24. a daily dose of energy reality:

    https://oilprice.com/Energy/Crude-Oil/Biden-Thinks-Oil-Will-Be-Around-For-A-DecadeItll-Be-Much-Longer.html

    “Independent experts agree that global oil and natural gas demand will increase over the next 30 years. And nearly half of the world’s energy is expected to come from natural gas and oil in 2050. That demand will be met one way or another. ”
    https://www.api.org/news-policy-and-issues/news/2023/01/26/api-ceo-outlines-bipartisan-policies-to-make-move-and-improve-energy

25. Kengeo,

    My most recent estimate as of late January 2023 for World output, URR=2824 Gb, peak in 2028 at 83.9 Mb/d.

    annual average World C plus C output from 2022 to 2035 is (in millions of barrels per day):

    80.0, 81.0, 81.6, 82.7, 83.3, 83.8, 83.9, 83.7, 83.2, 82.3, 81.2, 79.8, 77.7, 75.3

    US tight oil peaks in 2028 for this scenario with average annual output in 2028 at 9.88 Mb/d. Extra heavy oil output (from Canadian oil sands and Venezuela’s Orinoco belt) peaks in 2032 at 4.44 Mb/d. The peak of unconventional oil (also called continuous resources by the USGS) which is the sum of tight oil and extra heavy oil occurs in 2028 at 14.23 Mb/d.

    The extraction rate for the model below is for conventional resources only, unconventional resources are modelled separately. Three models are combined, a conventional oil shock model, a tight oil model and an extra heavy oil model to produce this scenario.

    

    1. Dennis,

       One of the problems i have with that projection is that between now and 2028 chances are there will be a recession albeit a severe one which could kick the peak further out to the right on that model.

       One the other hand if that recession materialises fields that made a loss may not be developed again as banks would be hesitant to hand out money hand over fist.

       Second thing is geopolitical strife which will surely kick off somewhere between now and 2028. Which is a serious headwind for oil supply. There is a chance the world is on a deglobalisation trajectory already.

       As you and I already know its impossible to predict how it will play out. But regardless that simple projection model is logically feasible. But we both know it will probably be wrong as the world we live in is a highly chaotic system.

       1. With those points in mind I look at this model run display as an excellent attempt to project
          potential oil production out to 2070…
          With the full realization of the likelihood that a messy world will result in actual
          significant under-performance.

          Perhaps much more important is the availability of oil/capita at the country level over the next decades.
          I expect the disparity we have seen over the last 50 years
          to be greatly magnified on the down slope.
          Globalization trending towards fragmentation is the scenario that energy shortage is likely accentuate.

       2. Iron Mike,

          Agreed, but note that the model assumes fairly slow growth in 2023, the EIA estimates that World C plus C output was 81.1 Mb/d for 2022Q3 and my scenario has World annual average output of C plus C at 81.0 Mb/d in 2023 (slightly lower than 2022 third quarter average output). In short, I assume a recession in 2023 and recovery in 2024 with World real GDP growth at around 2.5 to 3% from 2024 to 2028.

          I also agree that my assumptions about the future will be incorrect.

          1. Iron Mike,

             Also note that the scenario would be different if I assume there will be a severe World recession between 2023 and 2028. In the past 94 years there have been 3 severe World recessions, the Great Depression, the GFC in 2008 and the pandemic recession in 2020. My guess is that odds are low that there will be a severe recession in the next 5 years (I define a severe recession as World real GDP growth at market exchange rates of less than 1% per year and I expect the recession in 2023 to be mild with growth in World Real GDP at about 1.5 to 2% per year.) If my guess is incorrect the output of World C plus C is likely to be lower than the scenario I have presented. Scenario below assumes a severe recession in 2027 with lower extraction rates for conventional oil in 2026 and 2027, secondary peak in 2029, but 2018 remains the peak in such a scenario. My guess is the odds are less than one in 10 that a scenario this low or lower will occur.

             

    2. Dennis – My point is that the US hasn’t had any real measurable growth for 9 months, so how is it possible that world supply is going to increase by an average of 0.825 MBBpD each year? It seemed far fetched 9 months ago, the data is in and there hasn’t been any growth, what am I missing???

       Also confusing is the URR of 2824, aren’t we well beyond 50% URR? (looks like 50% was in late 2020/early 2021).
       If so, why would you expect the overall trend to continue upward? I’m sure there is a way it could but just seems like it’d be more intuitive/conservative to assume that the previous 2018 peak will not be surpassed. Looking at your chart, what jumps out is that you are contriving for an additional peak 5-6 years in the future. That would equate to 56% of your URR of 2824 Gb (maybe you assume additional discoveries of 350 Gb over next 6 years?).

       These values seem more realistic to me, based on URR of 2824:
       80.0, 80.5, 80.75, 81.0, 80.5, 80.0, 79.0, 78.5, 78.0, 77.0, 76.0, 75.0, 74.0, 73.0

       This results in a smaller secondary peak out in 2025, then steady decline after that…

       Also not clear if an EV revolution is still factored into your charts?

       Appreciate your consideration of my comments and understand that it’s difficult to make a model fit reality…

       1. Kengeo,

          The average annual increase from 2022 to 2028 for my scenario is about 650 kb/d per year for World C plus C, the historical average from 1984 to 2019 was roughly 800 kb/d per year. There will be increases from OPEC big 5, US, Canada, China, Brazil, and Norway. Tight oil output is expected to increase by about 313 kb/d on average each year from 2023 to 2028, extra heavy oil output increases at an average annual rate of 68 kb/d per year. Unconventional oil (tight plus extra heavy oil) increases at an annual rate of 382 kb/d and accounts for 59% of the World increase in C plus C output.

          Note that at year end 2018 cumulative World C plus C output was 1351 Gb which would be about 48% of my assumed URR. The URR I use assumes there will be an EV transition which will reduce future oil demand nd lower prices will result in some of the oil resource not being utilized due to low oil prices after 2035. There is no reason to assume the World will peak at 50% of URR, that is an oversimplification of the standard Hubbert curve.

          The 50% point for conventional oil (URR=2657 Gb) is reached in 2018, but actual conventional peak was 2016. For unconventional oil (URR=166 Gb) the 50% cumulative point for my scenario occurs in 2029, with the peak in 2028. The chart below breaks out unconventional and conventional C plus C output where I define unconventional oil as extra heavy oil with gravity less than 10 degrees and light tight oil output. Conventional oil is all other crude plus condensate output that is not unconventional (as I have defined it.)

          Also note that Laherrere et al in 2022 estimated a World C plus C URR of 3500 Gb, this would imply 50% cumulative at 1750 Gb which for my scenario occurs in 2031/2032.

          Link to paper below (see section 5.1, figure 6)

          https://www.sciencedirect.com/science/article/pii/S2666049022000524

          One more note is that the weekly output estimates by the EIA are not very reliable, the best data for US C plus C output is at link below.

          https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS2&f=M

          

          1. US C plus C output March 2021 to November 2022. Annual rate of increase over that period is about 639 kb/d.

             

26. Energy transition hopium is stronger then ever but I’ve really never understood it other than a need to hope. We’ve known that there is a problem building an economy around a finite system for a long time now at the very least 1972 but since 1995 we’ve consumed as much fossil fuel as all human history preceding 1995. Doesn’t sound like we’re headed in the right direction including last year’s 5% increase.

    The fact remains and will remain that energy consumption is accumulative. No form energy has ever replaced any other form of energy. We consume as much wood, coal, gas, oil, nuclear, wind, solar as we ever have. Actually oil has lead to making the other energy supplies affordable despite depleted quality. This is also true of the mineral industry. Most mines would have been shut in without the intense energy we now use to keep them open.

    Many of us grew up with promises of a nuclear age that would make energy so cheap we wouldn’t even need meters. How has that worked out? Maybe we can ask the folks in the UK. We were told that the greedy oil companies ran out the electric automotive industry. What a myth oil is and always will be the best energy storage system we have ever discovered. A Tesla S battery weighs 1200lbs and has the equivalent storage of two gallons of diesel. Scale that up and see how far you get. A fully loaded Tesla is technically to heavy to use the Brooklyn bridge. Our highways and road systems can’t handle the New Green Deal.

    When Spindletop blew in 1901 it flowed at 100,000bpd for 9 days. That was the equivalent of 7000mw per hour. To replace that energy with a modern wind farm would require an investment of 91billion dollars. Or interestingly 100 frac wells at $10,000,000 or 1billion dollars.

    Let that sink in for just a second.

    It’s not just the total production over time it’s the initial velocity. The velocity is gone it’s far behind us. Just look around. We used to have supersonic passenger flight and a space shuttle program and the fastest maned jet in the world. Where do you have to go to see them now? We all know the answer. Man has not left near earth orbit for 50 years. Is that because he doesn’t want to? Or because he can’t afford to?

    That’s why peak oil is so important because without growth everything else unwinds.

    1. At least the wind farms would deliver this energy for round about 30 years, the fracking wells for 1 month (think you have taken the 1st month flow), after this you need to spend more money and drill new ones, and Spindletop for only 9 days for a historical one time event. Quite a difference, and makes the wind farms look quite cheap when you take only the 1st month… I know we are comparing apples with bananas here.

       Something other : the Zaporizhzhia atomic plant in Ukraine delivers 5400 MW electric, since 1987. Thermal it’s 18000 MW, so more than double your spindletop outbreak(the oil is thermal only, too), not for 9 days but for 30 years until the russians came…

       With energy storage: People still drive gas cars, even when diesel cars have 50% more range.

       1. What I didn’t include with wind is that it only blows 30% of the time so you actually need 21000mw installed and at least that much storage somehow. $500billion? Nuclear is a better choice since it can produce 24/7 but cheaper? The waste has never been dealt with. For that matter the waste from the very first work with plutonium enrichment has never been dealt with.

          https://en.m.wikipedia.org/wiki/Hanford_Site

          With less available energy the costs to remediate will only increase. The only way nuclear pencils out is exactly how it’s been applied ignoring the waste. The same is true of wind and solar. Typical smash and grab economics. Turns out fossil fuels have been the cleanest safest choice. The environment can recover from CO2 but can it recover from all the radioactive waste and heavy metals that are accumulating and being left be hind? Green energy legacy how beautiful. Maybe we should call it Brown.

          1. Well, a wind turbine blade made from polyester resin (biobased availible, but mostly oilbased atm.) glass/flax/carbon fibre and locally some cheap core material such as PET or plywood sure emitts less alfa, beta and gamma stuff for the next hundred/thousand generations to deal with…

    2. I’ve seen fire and I’ve seen rain

       Fifty years ago, JT use to mean great music and someone who turned his life around from his addiction. Now here at POB it just means lack of inspiration.

       Today a Tesla S travels over 300 miles on the equivalent of 2 gallons of diesel on a renewable source of energy. Electric motors are about 3 times more efficient than diesel.

       Just yesterday mornin’, they let me know you were gone
       Suzanne, the plans they made put an end to you
       I walked out this morning and I wrote down this song
       I just can’t remember who to send it to

       I’ve seen fire and I’ve seen rain
       I’ve seen sunny days that I thought would never end
       I’ve seen lonely times when I could not find a friend
       But I always thought that I’d see you again

       Won’t you look down upon me, Jesus?
       You’ve got to help me make a stand
       You’ve just got to see me through another day
       My body’s aching and my time is at hand
       And I won’t make it any other way

       Oh, I’ve seen fire and I’ve seen rain
       I’ve seen sunny days that I thought would never end
       I’ve seen lonely times when I could not find a friend
       But I always thought that I’d see you again

       Been walking my mind to an easy time
       My back turned towards the sun
       Lord knows, when the cold wind blows
       It’ll turn your head around
       Well, there’s hours of time on the telephone line
       To talk about things to come
       Sweet dreams and flying machines in pieces on the ground

       Oh, I’ve seen fire and I’ve seen rain
       I’ve seen sunny days that I thought would never end
       I’ve seen lonely times when I could not find a friend
       But I always thought that I’d see you, baby
       One more time again, now
       Thought I’d see you one more time again
       There’s just a few things coming my way this time around, now
       Thought I’d see you, thought I’d see you, fire and rain, now

       https://www.youtube.com/watch?v=C3uaXCJcRrE

       Modern day version for a laugh and how the world changes

       https://www.youtube.com/watch?v=Un-FO8iXCrA

       If you search for failure, you will find it

    3. JT-
       “Energy transition hopium is stronger then ever but I’ve really never understood it other than a need to hope.”

       Hope for everlasting growth in a finite world is simply fantasy.

       Nonetheless peoples in their sane and sober moments will make some plans and actual adjustments to their conduct as they see limitations brewing. Assuming they have their eyes open.
       For example as oil gets more expensive and scarce people are going to push hard for other ways to get around and move cargo, beyond a mule cart.
       Electrification of transport is what will happen, and making it happen doesn’t rely on hope.
       And gradual replacement of some of the coal electricity by other mechanisms is what will happen/is happening.

       People can hope that replacement mechanisms at scale happen in stride with declines in fossil fuels. But hope won’t achieve any of that. It actually takes mental and physical work.
       I don’t expect most places to achieve the scale of transition required. Starting hard in the 70’s would have helped.

       1. In the 70s / 80s the new enviromental movement canceled nuclear energy and replaced it with coal. Instead of pushing of better security measures.

          So round about 40 years of technolocial development are missing – think of electric cars and wind / solar energy on the technolocial level of the 80s. That’s what nuclear energy is today.

          Only one fun fact – the completely old and obsolete canadian CANDU reactors could burn all atomic waste have now a second time for a lot of energy – with the heavy water moderator it needs much less concentrated Uranium and can burn natural uran. It could remove half of the plutonium garbage in the process.

          1. “In the 70s / 80s the new environmental movement canceled nuclear energy and replaced it with coal….So round about 40 years of technological development are missing”

             Three Mile Island and Chernobyl failures put up the roadblock to nuclear energy…not some ‘environmental movement”.
             And that nuclear ‘technology stagnation’ only pertains to certain countries like the US and Germany.
             Others technologically capable and nuclear oriented countries pushed ahead as best they could- such as Japan, Korea, France, Russia, China

    4. Man has not left near earth orbit because there is nowhere to go.

    5. An article from just today about the big UK nuclear project. It covers some of the issues that must be considered when thinking about walking in this direction
       https://oilprice.com/Alternative-Energy/Nuclear-Power/Costs-Continue-To-Rise-For-Hinkley-Point-Nuclear-Megaproject.html

27. Don’t know if this was posted earlier . DUC ‘s and stuff .
    https://www.artberman.com/2023/02/21/fact-checking-the-duc-meme-mostly-false/

28. https://www.zerohedge.com/geopolitical/china-says-ready-join-forces-russia-defend-national-interests-putin-confirms-xi-visit

    this is something to watch. given the history of the east west conflict post WW11, the data points are aliening of a greater Russian China military and economic alliance going heads up against the NATO et al allies. This looks to me like another potential nail in the coffin for the green energy transitions and well as the offshoring of critical national materials. I think this plays out by the new Alliance displacing the US dollar as the worlds reserve currency, as a starting point. Good help tech investor, TSLA etc. Given the fiscal shape of both the US and EU a hyper-inflationary period is closer than ever.

    1. they are firing the nails out of a nail gun now!

       https://www.zerohedge.com/economics/iraq-drop-dollar-yuan-trade-china

    2. “I think this plays out by the new Alliance displacing the US dollar as the worlds reserve currency”

       LOL!!!!!

       You think people are going to want Roubles/Yuan over US Dollars?

       A reserve currency is a function of math. Nothing else It is not global elites that decide what it is.

       That is it!!!

       The USA has the largest capital markets in the world, and the DOLLAR is stable. That is why people accumulate them AKA holding them in RESERVE.

       If you are a business and you hoard YUAN, u are at the mercy of the Chinese government and could go bankrupt based on their decisions.

       If you are a business and you hold US dollars, you have a chance of surviving a severe currency fluctuation that will bankrupt you!!

       The Russians may demand their oil and resources in GOLD. How can you transact in GOLD overseas??

       Do you want to hold Roubles? Me neither!!

       And it is debatable if being a reserve currency is a good thing. You have to run a constant deficit to maintain it

       1. When the global economy booms it’s because the dollar is being borrowed into existence. Means dollar’s value falls.

          Eurodollar system isn’t creating the dollar’s needed at volumes needed. Which is why there is a dollar shortage outside US. Countries are trying to work around this shortage by using their domestic currencies.

          This is going to end bad. But not bad for US dollar.

          All those who pump the narrative of dollar replacement don’t understand the monetary system and have absolutely no clue what they are talking about.

          Banks aren’t going to change how they do business. Eurodollar is global reserve currency. Not US dollar. Even though they are both US dollars.

          1. “Eurodollar is global reserve currency”

             In my mind, any currency that is held in reserve in another country is a “reserve currency”

             When calling the US Dollar the “Reserve Currency” it just means that is the currency that has been accumulated the most overseas.

             Im still trying to get my head around the whole Eurodollar thing, but you may well be right.

             The only way the Rouble/Yuan could take over as the “Reserve Currency” is if people start demanding more of them, to the point that they are being accumulated more than the US Dollar.

             I don’t see that happening,

             Although Roubles will go up in demand if Russia requires them for their resources.

29. You do realize that global cumulative solar power production capacity will exceed global cumulative coal power capacity by 2030,
    don’t you.
    Call me silly if it pleases you, but that is what the trend is showing.
    30 yrs late in my book, but coming on like the biggest tsunami.
    Roughly 80 percent of the worlds population live in areas it is sunny enough for PV energy to be an economically compelling choice.

    Here is an IEA report on this from Dec 2022
    https://www.iea.org/news/renewable-power-s-growth-is-being-turbocharged-as-countries-seek-to-strengthen-energy-security

    Yes I realize that capacity is different than production, but the trend is clear and the impact is massive.

    

    1. Capacity is meaningless to match Coal which is a 24/7 demand driven generation you need install 300% solar and equivalent storage. The true costs are astronomical and the resources needed are astronomical. If you think electricity is expensive now multiply by a factor of 10. Add to it the technology to replace the inertia of the big turbine generators that prevent VARs that isn’t cheap. Even if you could do it it 25 years you’ll have to do it again. You can’t recycle the stuff so you have to increase mining and running factories that inconveniently run on fossil fuel. Do a little research on how much coal charcoal and wood chips are needed to make the silicon used in solar it’s immense.

       https://www.researchgate.net/profile/Thomas-Troszak/publication/335083312_Why_do_we_burn_coal_and_trees_to_make_solar_panels/links/5dcdea2c4585156b3513710d/Why-do-we-burn-coal-and-trees-to-make-solar-panels.pdf?origin=publication_detail

       Sorry what can’t be done won’t be. It’s all political lies to keep the believers happy. Science is the weakest subject in most schools which is convenient if technology is your god.

       1. JT , this was a knockout blow .
          “Sorry what can’t be done won’t be. It’s all political lies to keep the believers happy. Science is the weakest subject in most schools which is convenient if technology is your god.”

       2. JT
          The US coal capacity factor (CF) is less than 50% over the past 4 years, and was around 60% before fracking derived nat gas became cheap, so no not 24/7/365
          And solar US average capacity factor is 24.7%- roughly 1/2 that of the coal CF as things currently sit.
          For reference the average US capacity factor for
          Nuclear- is 92%- meaning very impressive management of an aging fleet
          Wind- is 36% [big new offshore installations have been pushing 45%]

          Also, utility scale solar is dramatically cheaper (and quicker) to deploy than Nuclear power.
          https://www.lazard.com/media/451881/lazards-levelized-cost-of-energy-version-150-vf.pdf

          To your other point, it would take a very small fraction of fossil fuel consumption to massively build out the solar generating capacity.
          Your arguments reflect a common fallacy…that certain sources of energy must be considered in isolation as if they were going to provide 100% of energy. In reality, most places have a complex mix of complimentary components. Example- coal is used to fuel steel manufacturing that goes to construct- nat gas drill rigs and pipelines, oil refineries, and nuclear reactor components, etc.
          That mixed system of energy supply won’t disappear…just gradually shifting.

          Regions tend to make use of the best resources they have…and that explains the dramatic growth of solar and wind in the various parts of the world that we are now just starting to see the early 2nd inning of.

          It sure beats just watching the fossil deplete.

          1. You make a good point to make any dent in the problem solar has to take on Nat gas as well. And when it’s all done you’ve solved 19% of the energy problems.

             https://ourworldindata.org/grapher/electricity-production-by-source

             2021 solar produced 1000TWH of power
             2021 coal produced 10,000TWH of power

             So how should we do the math on this if we double the installed solar do we have 2000TWH? And how long will it take one year? Or are we hoping coal goes from 50% to 25%? That would only require 500% increase in solar capacity given our present utilization. We’ve reached parody Yahoo!!!

             1. “You make a good point to make any dent in the problem solar has to take on Nat gas as well. ”

                You might look at as ‘taking on”,
                I see it as an effort to keep the energy supply backsliding after peak fossil sunlight
                from being so severe.
                Domestic and widely dispersed energy generation with free fuel
                is a good thing,
                especially when the 30 yr cost of produced electricity in sunny areas comes in as cheap as anything else. About 80% of the worlds population lives where it is sunny enough to meet that criteria.

             2. JT: Then is the right answer according to you to just throw in the towel, burn through all the FFs we have and then turn off the lights? Or should we keep pushing solar/wind/storage?

                I don’t think any rational person thinks that we can reduce FF dependency overnight to zero, but there is almost no choice but to keep grinding away at the issue. Fortunately economics have overall flipped to the benefit of renewables so that helps ( corporate) decision making.

                Rgds WP

                1. Agree,
                   and it would be a historic level of industrial folly to ignore or downplay
                   such a vast reserve of energy that many places of the world have in abundance.
                   Even if it is not as convenient for the current energy system we have enjoyed over the past 100 years.

                   You make do with what you’ve got, and in this case the world is lucky that the perpetual energy collection systems have become affordable, and very widely dispersed so that many regions/communities/people can collect their own without being so dependent on paying energy rent someone else.
                   In fact there can be tens of millions of net energy producers, not just ARAMCO et al

                   I’m not talking miracles or ‘saving the world’,
                   rather just about adapting to the depletion of fossil fuels and enabling a gradual contraction in the human global footprint.
                   Gradual if we are lucky.

30. I am very surprised that commercial inventories are ballooning right after the SPR releases stopped.

    I guess nothing should surprise me.

    1. I noticed this, too.

       US people stopped driving cars and trucks the day they closed the valves?

       There are many possibilites to change (or manipulate) these inventories is importing some more stuff – especially when there is a lot of cheap russian oil and products on the market. Yes, it needs to be bought second or third hand after going through a chinese tank and is a little mixed with gulf oil. The russians sell with a 20-30$ discount at the moment, so lot of possibilites that this stuffs ends in the USA, too.

       Just my 2 cents.

31. The EIA Monthly Energy Review is out. US C+C production was down 288,000 barrels per day in December and recovered less than half that in January.

    I think this is primarily due to weather problems in North Dakota. It is worth noting that these North Dakota weather problems continue into February. It got down to -24 F in Williston last night and is currently at -7 F.

    The last several months of production data are estimates and are subject to change. This is especially true for the last two months.

    

    1. I see NGL’s are at an all-time high.

       1. Natural Gas is trying to bottom. It is helpful that Freeport LNG is getting back in business and winter weather is not hurting either. The price crash more than likely is going to force some to rein in production especially as the cost associated with shale production keeps rising.

          https://blog.pricegroup.com/2023/02/24/give-or-take-the-energy-report-02-24-2023/

       2. Shallow,
          Calendar 2023 and 2024 will see an additional ~700,000 barrels per day of Propane Dehydrogenation plant (PDHs) capacity buildout globally.
          This is in addition to continued ethane steam cracker buildout.
          Expansions in Morgan’s Point and Marcus Hook – coupled with the ongoing construction of large propane and ethane carrying ships – ensures a growing amount of NGL production.

          1. Coffee , 700,000 GLOBALLY . Now divide 700000 / 8000000000 = 0, 0000875 per person . It is called ” Pissing in the pool to make it salty . Keep pissing . 🙂

32. A new acronym TEOCAWKT . Peak cars 2018-19 a per Berndt . Affordability is the issue . Prof Bardi .
    https://www.senecaeffect.com/2023/02/teocawkt-end-of-cars-as-we-know-them.html

    1. from the piece you linked
       ” The good scenario- The transportation system is reorganized around less expensive vehicles. The industry moves to produce a new generation of light and efficient cars inspired by the old VW “Beetle,” but in an electric version that can be recharged by local PV plants. These cars can be made lighter by implementing substantially slower speed limits than the current ones so that they don’t need the current cumbersome safety equipment. In time, these vehicles could evolve into the system known as TAAS (transportation as a service) based on shared ownership and autonomous vehicles, but that’s not strictly necessary. The new vehicles are supposed to give suburbanites sufficient mobility to be able to survive as we gradually adapt to a world where natural resources have become rare and expensive.”

       We’ll see.
       Many people may not like this notion.. but consider the idea that its high time that global auto production goes into decline. We have far overgrown. Vehicles can last a very long time if treated as if they were a very valuable tool.

33. https://www.ft.com/content/d0c25303-7b69-4c7d-9825-aafecb563fd1

    https://oilprice.com/Energy/Crude-Oil/Pioneer-CEO-Sees-100-Oil-By-End-Of-Year.html

34. Not crude oil but refining is the Achilles heel and “Diesel is King ” .
    https://www.reuters.com/markets/commodities/depleted-distillates-threaten-reignite-inflation-kemp-2023-02-23/

35. New posts are up

    https://peakoilbarrel.com/short-term-energy-outlook-february-2023/

    and

    https://peakoilbarrel.com/open-thread-non-petroleum-february-24-2023/

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