Monday, December 13, 2010

U.S. Oil and Gas Reserves Increased Significantly in 2009 and N. Dakota Set Another Oil Record in Oct.

From the summary of the EIA report released last month on U.S. crude oil and natural gas reserves for 2009:

"Domestic proved reserves of oil and natural gas increased significantly in 2009. U.S. natural gas proved reserves increased by 11 percent in 2009 to 284 trillion cubic feet. This is their highest level since 1971, despite an approximate one-third decline in the prices used to assess economic viability for 2009 reserves as compared to the prices used in 2008. U.S. crude oil plus lease condensate proved reserves rose 9 percent to 22.3 billion barrels in 2009, regaining 1.8 billion barrels of the 2.3 billion barrel decline in 2008. These increases demonstrate the possibility of an expanding role for domestic natural gas and crude oil in meeting both current and projected U.S. energy demands."

The onshore Lower 48 States drove the overall increase in proved reserves. Technologies used to increase shale gas production have also boosted oil reserves, especially from the Bakken Formation in North Dakota and Montana. North Dakota recorded especially significant gains, up 83 percent over 2008, and now ranks behind only Texas, Alaska, California, and the Gulf of Mexico in proved reserves."

And here's some related news on oil production in North Dakota for the month of October (see chart above): 

North Dakota pumped another record amount of oil in the month of October, producing more than 10 million barrels in a single month for the third month in a row and beating the previous record set in September by 368,000 barrels (see chart above, data here). Compared to October of last year, North Dakota oil production has increased by 42.6%, and oil production in the Peace Garden State has doubled since July of 2008, just a little more than two years ago.  North Dakota's rich oil fields now produce 6% of America's domestic crude oil production, up from less than 2% in 2006 (data here).  

Partly because of its ongoing oil boom in the Bakken area, North Dakota continues to lead the nation with the lowest unemployment rate at 3.8% in October, almost 6 full percentage points below the nation's average 9.6% October rate. The oil boom has fueled an employment boom for oil workers in North Dakota (data here) - the number of oil-related jobs has grown from fewer than 4,000 at the beginning of 2005 to more than 9,000 in October of this year.

Through October of this year, North Dakota has already produced more oil (91 million barrels) than all of last year (79.7 million barrels), and is on a pace to produce about 112 million barrels in 2010, which would be twice as much as 2008 (63 million barrels) and almost three times as much as 2007 (45 million barrels). 

12 Comments:

At 12/13/2010 9:08 PM, Blogger rufus said...

Yep, the Bakken is increasing at just about the same number of barrels/yr that the North Slope is declining.

Of course, in a year, or two, The Alaska Pipeline will be down below MOL (Minimum Operating Level,) and the last 350,000 to 400,000 barrels/day will be "stranded."

 
At 12/14/2010 12:53 AM, Blogger juandos said...

BP Alaska North Slope Oil Project:Beaufort Sea,Liberty Oil Field

June 28, 2010 at 03:03 pm

 
At 12/14/2010 10:40 AM, Blogger VangelV said...

Once again you are not keeping your eye on the ball. The US production level peaked in 1970 and we are not going back. The reduction of activity in the Gulf means production declines that cannot be offset by drilling off the Middle Backen Shale formation the Eagle Ford Shale formation, or whatever shale area is being hyped next. The shale wells are very expensive to drill, cannot be drilled closely together, and have high depletion rates. That means that production will be limited and that a peak for each formation will be coming within a few years even if there is a massive amount of drilling going on.

As for the reserve increases, they are not all that impressive when one considers the amount of energy that will be needed to develop and extract them or looks at the estimates and assumptions that went into coming up with the numbers.

The EIA is not exactly credible. It has a history of being too optimistic only to reduce its forecasts when it is confronted with reality.

When you first started posting these type of threads the IEA was telling us that global crude production will peak at around 130 mbpd with most of the increase coming from yet to be discovered oil. Depletion was estimated to be around 3%. A few short years later the production estimate is down to under 100 mbpd while the depletion rate is up to 6.7%. We now have seen leaked documents that the US government was pressuring the IEA to be optimistic. Given the fact that the EIA is a US government agency why would we believe its estimates when they cannot be supported by real world data or independent review?

 
At 12/14/2010 11:03 AM, Blogger juandos said...

"Once again you are not keeping your eye on the ball. The US production level peaked in 1970 and we are not going back"...

There's no absolute proof of that vangeIV...

What peaked maybe was the 'easy oil'...

We've had forty years of technological improvements in all phases of the crude extraction process...

In this country politics has been the biggest stumbling block not technology and not the lack of crude...

Debunking the Myth of Peak Oil - Why the Age of Cheap Oil is Far From Over (Part 1)

 
At 12/14/2010 1:38 PM, Blogger Benjamin said...

And we have gas to the moon up our rear ends--enough for hundreds of years, in shale.

Fossil still rules, for better or worse.

Compressed natural gas (CNG) vehicles are commonplace the world over.

I hope we shift our fleets to CNG and PHEVs. That would revivify the US economy like nothing else.

 
At 12/14/2010 3:35 PM, Blogger VangelV said...

There's no absolute proof of that vangeIV...

What peaked maybe was the 'easy oil'...


No. What peaked was the oil production. What does this look like to you?

 
At 12/14/2010 3:38 PM, Blogger VangelV said...

And we have gas to the moon up our rear ends--enough for hundreds of years, in shale.

I would not bet on that yet. What matters is net energy. That means that you have to subtract the energy you used to get the oil and gas out of the shale from the energy in the oil and gas that you pulled out of the shale. Conventional fields used to have a ration of 1:100. Shale would be lucky to be 1:3. You do the math and tell me what that means when you want to replace a barrel of conventional oil with a barrel of shale oil.

 
At 12/14/2010 7:26 PM, Blogger Benjamin said...

VangeIV-

My gloomy friend, natural gas is incredibly abundant in shale, and shale is dispersed globally. Production costs for "unconventional" gas (rapidly becoming conventional) are going down, as the technologies are improved (as only the private sector can do).
ExxonMobil has been hinting it thinks it can produce shal;e gas for what is used to produce "conventional" gas.
And Indonesia has been striking the largest gas wells of all time. Russia seems to have gobs of the stuff, and flares it off from oil fields, as revealed by satellite infra-red photos.
BTW, Qatar is bringing online the largest GTL plant of all time.

What may flummox natural gas production in the short-run is politics, and NIMBYism, but not technology.

The future is bright.

 
At 12/14/2010 11:07 PM, Blogger VangelV said...

My gloomy friend, natural gas is incredibly abundant in shale, and shale is dispersed globally.

Correct. But shale is a poor source of gas because it is not very porous or permeable.

Production costs for "unconventional" gas (rapidly becoming conventional) are going down, as the technologies are improved (as only the private sector can do).

True but costs are still way too high and most wells are not economical. The issue is the rapid depletion; you don't get enough gas out to pay for the well's construction and operation.

ExxonMobil has been hinting it thinks it can produce shal;e gas for what is used to produce "conventional" gas.

Exxon has to say that or it will have to write down a big chunk of its reserves.

And Indonesia has been striking the largest gas wells of all time. Russia seems to have gobs of the stuff, and flares it off from oil fields, as revealed by satellite infra-red photos.

Stranded gas does not do us much good. I know because I own gas in the Mackenzie River Delta that will not hit the market for a decade or more. Gas is only good if you can bring it to market.

BTW, Qatar is bringing online the largest GTL plant of all time.

Yes it is. But you lose about a third of the energy when you liquefy the gas. That is a huge waste. And Qatar better be very careful. One bullet and that gas plant and the emirate will not exist any longer.

What may flummox natural gas production in the short-run is politics, and NIMBYism, but not technology.

In the long run all that matters is economics. And I hate to keep reminding you but most shale gas is still a big loser.

The future is bright.

It certainly is for those of us that own cheap conventional reserves that are easy to develop. But it is not as bright for those that don't understand the economics and buy into the shale hype in some of the lousy areas. Why do you think that so many insiders are selling?

 
At 12/15/2010 12:16 PM, Blogger juandos said...

"No. What peaked was the oil production. What does this look like to you?"...

Unverifiable and extremely questionable information...

 
At 12/15/2010 1:31 PM, Blogger VangelV said...

Unverifiable and extremely questionable information...

Check any source you consider reliable. All of them will tell you that American production peaked in 1970. The facts are what they are, not what you wish them to be. Here is the EIA data. The EIA is very optimistic and tends to be a cheerleader that Mark and the optimists are always citing to support their position. See the peak?

 
At 1/10/2011 12:00 PM, Blogger VangelV said...

This is one of the points that I have been making.

http://tinyurl.com/2dnbufy

Clearly much of the shale gas story was a lot of hype and in the absence of a major price increase for the commodity in a flat cost environment the shale story does not work well.

 

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