Saturday, May 12, 2012

Chart of the Day: Peak What?

World oil production surpassed 75 million barrels per day for the first time ever in December 2011, at 75.45 million barrels, and went even higher in January of this year at 75.58 million barrels, setting a new monthly production record, according to data recently released by the EIA.  The red line in the graph shows the upward linear trend in world oil production from 1973 onward, with daily production increasing by almost 600,000 barrels per day on average every year since 1973.

Thanks to Walter Olson for the inspiration for the post title. 

97 Comments:

At 5/12/2012 10:53 PM, Blogger Methinks said...

Idiocy?

Having learned their lesson the first time, the Club of Rome has predicted we're all going to die in 40 years. Again. Speculators are manipulating the oil market up and the stock market down. Gaia is burning up (unless its freezing to death). Rising oil production is the new peak oil. Spending is the new austerity and China is killing us by selling to us stuff we want for less. Finally, Zeus and I are meeting to plan the world tomorrow.

It's a wonder the species has survived for so damn long!

 
At 5/13/2012 12:59 AM, Blogger Walter Kurtz said...

That's what the futures curve is showing: http://soberlook.com/2012/04/peak-oil-is-nowhere-to-be-found-on.html

 
At 5/13/2012 1:45 AM, Blogger Rufus II said...

You need to take that EIA Data with a large helping of salt, right now. I'm not saying it's political, but . . . .

An ex: The EIA, by "sampling" producers in Tx is listing Texas production at about 1.65 million bbl/day.

The Texas Railroad Commission, arguably the best, and most accurate oil regulator in the world, to which every producer must, under threat of very large fines, and/or imprisonment, report every barrel of oil produced, is reporting Production of 1.05 million bbl/day.

The odds that it is the EIA that is publishing the correct number are between infinitesimal, and absolutely zero.

Now, if the EIA can miss Texas, of all places, by that much what are the chances that they are correct in a truly opaque place such as Saudi Arabia, or Venezuela?

As for your chart, it is skewed by the large drop in the eighties when the whole world quit using oil for electricity generation, causing the price to fall precipitously, and production to tank.

What is interesting about the plateau since 2005 is that it has taken place during a Doubling of Prices.

Wishful thinking is not "economics." It's just "wishful thinking."

 
At 5/13/2012 4:19 AM, OpenID Sprewell said...

Rufus, I've got some wishful thinking for you: we've only been using petroleum as a fuel for 150 years now. If you think we'll still be using it as our main source of fuel in 75 years, let alone in 150, the only one wishing here is you. I have no idea what will replace it- there are many competitors, solar especially somewhere down the line- but the notion that we won't innovate our way to some easier source of energy long before our proven oil reserves are even close to half empty is the only silly idea I hear, and it's coming from the Peak Oil crowd.

 
At 5/13/2012 5:00 AM, Blogger bart said...

A more balanced view, from the same source.


Yearly averages, world oil production

Yearly averages
2005 73,671
2006 73,378
2007 72,906
2008 73,590
2009 72,182
2010 73,896
2011 73,980

The change from 2005 to 2011, is a total increase per year of .06% or 6/100 of a percent. That's a rounding error.

The change from Jan 2011 to Jan 2012 (75,235 to 75,581 bbls) is also basically a rounding error - .04%.


Peak cheap oil continues to be alive & well, and Hubbert's forecast from decades ago of world peak production between 2005 and 2010 or so seems quite accurate and prescient from here.

And the extra production has been via very costly and has used rather extreme methods like ultra deep water drilling, oil from sand and tar, water injection, etc.

The marginal cost of new production remains at over $90/bbl.

Just a simple extrapolation of the price trend since 1968 shows oil at $250/bbl in under 10 years.






Re: Hubbert and the full whale oil cycle:

"Turning attention to the price data, we may note first how expensive whale oil was in comparison with the crude oil that replaced it. Even at its lowest historical prices, in the 1820s, the least expensive type of oil (whale oil) was priced at more than $200 (2003$) a barrel (42 gallons). At its highest price level (1855) Sperm Whale oil sold at more than $35 (2003$) a gallon, namely almost $1500 (2003$) a barrel (!). This tells us something about how difficult it may be to substitute fossil fuels with "biofuels" (bio-ethanol, bio-diesel, or other). Without the support of fertilizers, irrigation, transportation, and agricultural machinery, which all depend on fossil fuels, biofuels would probably cost as much today as whale oil did in the 19th Century. It also shows what an incredible bonanza crude oil has been. When kerosene became first available in the 1860s, a barrel of crude oil sold for some $90 a barrel in to-day's money (data from www.wtrg.com). In the 1870-80s it had already fallen to values in the order of $20 (2003$) a barrel, comparable with modern prices. If hydrogen were to substitute gasoline today at the same price differential, it would have to cost no more than a few cents for the equivalent of a gallon. Needless to say, we aren't getting there any time soon."

http://www.energybulletin.net/node/3338






"First they ignore you, then they laugh at you, then they fight you, then you win."
-- Mahatma Gandhi

 
At 5/13/2012 5:06 AM, Blogger bart said...

"First they ignore you, then they laugh at you, then they fight you, then you win."
-- Mahatma Gandhi

 
At 5/13/2012 8:32 AM, Blogger PeakTrader said...

Since 2005, global oil production hasn't changed much.

When strong global economic growth accelerated in 2006 and 2007, there was an increase in oil prices instead of a significant increase in global oil production.

Over the past few years, if major economies had normal recoveries, instead of deep depressions, oil prices would've likely rose to new highs, while global oil production remained roughly fixed.

 
At 5/13/2012 8:41 AM, Blogger bart said...

OMG, PT & I actually agree...


Chart proof of peak cheap oil:

http://www.nowandfutures.com/images/oil_production_vs_brent.png

 
At 5/13/2012 8:46 AM, Blogger bart said...

And another one, this time using a 12 month moving average for smoothing (on the exact same data). Hubbert missed the 1970s US peak by a year or two, and may have done the same with his 2005-2010 prediction.



http://www.nowandfutures.com/images/oil_production_world.png

 
At 5/13/2012 8:57 AM, Blogger Jon Murphy said...

It seems to me, looking at these charts, that there isn't evidence so much towards "peak oil" or "peak cheap oil" as oil producers responding to price incentives. When oil is high in price (as the 70's and now), production increases. When oil is low in price (such as the 90's), it decreases.

There doesn't seem to be any evidence beyond what traditional economic theory will dictate.

 
At 5/13/2012 9:08 AM, Blogger PeakTrader said...

Jon, oil is a depletable resource.

Higher oil prices, along with slower economic growth, may be preventing or postponing global oil production from declining.

 
At 5/13/2012 9:14 AM, Blogger marmico said...

Peak U.S. Oil Production in 1970, decades before Jon Murphy was born. Peak domestic oil indeed.

And some bloggers think that the ramp up of tight (shale oil) oil will make the U.S. self sufficient. Good grief.

 
At 5/13/2012 9:39 AM, Blogger PeakTrader said...

Anyway, the U.S. macroeconomy is in poor shape.

We not only spent and squandered $5 trillion over the past four years just to maintain our standard of living, at some point, we'll have to reduce the huge budget deficits, i.e. contractionary fiscal policy, which typically leads to recessions.

And "peak oil" will remain a constraint on economic growth.

 
At 5/13/2012 10:28 AM, Blogger VangelV said...

How about that Mark; your level of incomprehension never ceases to amaze.

Look at the levels in 2005. Have you noticed that a trillion of new investment has not managed to move up production since then? What you claim is that high prices are a cure for high prices because they will stimulate new production. But that new production has failed to come about and is just sufficient to keep depletion from driving total production levels lower. That is terrible news for the optimists, who look at the wrong thing as usual.

The real issue that matters is spare capacity. In the pre-peak stages capacity exceeds production levels by a significant amount. This is why the US government created the Texas Railroad Commission and why OPEC modelled itself after the TRC. But once the peak comes you don't need a way to regulate output. That is why the TRC allowed all producers to go all out in 1970 and why OPEC has been going all out for the past few years. World production is near where US production was in 1970. This is why Brent is stubbornly over $100 a barrel and why long term prices are heading higher. Your wishing, hoping, and grasping at straws will not change anything.

By the way, if there is a price collapse, and that is possible, it will come because the economy is contracting again and activity is falling off a cliff. Such an event would not be very good for your predictions about the general economy or for a shale industry that is already unable to self finance operations.

 
At 5/13/2012 11:17 AM, Blogger Pulverized Concepts said...

contractionary fiscal policy, which typically leads to recessions does so because beneficiaries of expansionary fiscal policy are then out of the loop. One of these days the various government entities in the US will be forced to decide between necessities and luxuries. Sewage treatment is probably a necessity. Prosecution and incarceration of marijuana smokers and prostitution customers is a luxury that the state can no longer afford, since it costs upward of $40K a year to keep a stoner in the big house. Unfortunately, that will mean the morons that stand guard in the prisons will be jobless, as will the employees of food purveyors, tattoo ink and so on. Of course there's always the possibility that the extremity will force the state to make use of the jailed labor. Historically slaves haven't been very productive, however.

 
At 5/13/2012 11:29 AM, Blogger Jon Murphy said...

Higher oil prices, along with slower economic growth, may be preventing or postponing global oil production from declining.

Right, which is exactly what economic theory predicts. That's precisely the argument against peak oil.

 
At 5/13/2012 11:50 AM, Blogger Jon Murphy said...

Maybe I am just misunderstanding this peak oil thing, so let me say what I understand and then you guys can tell me where I am wrong or what I am misunderstanding:

Peak oil is when oil production has reached a peak and thus begun to decline.

As production asymptotically approaches 0, the price of oil will rise.

This is my understanding.

The world's supply of oil is scarce. In theory, as the resource gets used there will be less in the world.

We have no seen oil production begin to decline yet (according to a number of data sources, it is at a record high). This in and of itself does not disprove peak oil. All it says is we have not reached that point yet.

But there are a number of question that arise: while oil fields are being depleted, the world is constantly discovering new ones and improving/developing technology to tap into previously untouched reserves. The world's recoverable supply of oil is constantly growing. Why must things peak?

Additionally, what about synthetic oil? It has a number is uses already and surely helps replace the consumed oil.

New technology is constantly being developed that keeps pushing that peak point further and further into the future. Is it possible that we will actually never reach that theoretical peak? A new technology will come along and make oil obsolete. Or a current substitute will fall in price so much to make it a better option. Isn't it possible, nay likely, that the switch from oil to another energy source will come well before he it that peak? This is what we've seen for other resources: farmland, wood, rubber, etc. Why is oil an exception to this?

 
At 5/13/2012 12:13 PM, Blogger Che is dead said...

"That we have even got this far without exhausting the Earth's resources would have astonished the Victorians. In the mid-19th century, the outlook seemed bleak. Among the experts arguing that we were squandering our limited energy supply for short-term prosperity was William Stanley Jevons, Professor of Political Economy at University College London.

In his work of 1865, The Coal Question, the distinguished economist cautioned that we had become wholly dependent on the finite resource of coal. Indeed, some calculations - based on the increasing rate of extraction and the geological analysis of how much coal remained underground - suggested that Britain could run out by 1900.

At this point, Jevons maintained, the economy would literally run out of steam, reducing Britons to a medieval standard of living. The cost of shipping coal from elsewhere in the world would be prohibitive and, in any case, the leading geologists calculated that other countries would quickly exhaust their stocks as well." -- UK Times OnLine

Yeah, yeah, yeah. We've heard this nonsense all before.

The only resource that matters is human ingenuity.

 
At 5/13/2012 12:18 PM, Blogger Benjamin said...

Peak Oil is not be important---as we have reached already Peak demand for conventional crude, if $100 a barrel or more.

There are substitutes for oil. CNG, LPG, methanol, and PHEVs. Even ethanol, though I wish it were not subsidized.

And that word, conservation. Japan and Europe get double the GDP we do per barrel of oil.

The USA is a glutton when it comes to oil. We can use about one-half of what we do, and probably profit in doing so, as imports lessen.

Lots of good news and outlooks in the energy sector.

 
At 5/13/2012 12:19 PM, Blogger Che is dead said...

"New technology is constantly being developed that keeps pushing that peak point further and further into the future. Is it possible that we will actually never reach that theoretical peak? A new technology will come along and make oil obsolete." -- Jon Murphy

It seems so obvious, yet so hard for some people to grasp.

 
At 5/13/2012 12:38 PM, Blogger al fin said...

The charts don't look anything like a Hubbert peak. More like an up and down plateau with no end in sight.

In California the Kern River field sas discovered in 1899. In 1942, after forty-three years of depletion, ‘‘remaining’’ reserves were 54 million barrels. But in the next forty-four years, it produced not 54 but 736 million barrels, and it had another 970 million barrels‘‘remaining’’ in 1986. The field had not changed, but nowledge
had.

from . . .The Age of Oil by L. Maugeri

Attack the facts, skip the ad hominems.

 
At 5/13/2012 1:33 PM, Blogger bart said...

Higher oil prices, along with slower economic growth, may be preventing or postponing global oil production from declining.

Right, which is exactly what economic theory predicts. That's precisely the argument against peak oil.

Higher oil prices do of course slow it, but they only postpone it. We're already in the 'peak cheap oil' state. Oil has roughly 5x'ed in price since 2004 or so, and that's an incontrovertible fact that the deniers never address directly, or blame on speculators, etc.



'Peak cheap oil' means both much higher prices and *not* running out of energy - just running out of 'cheap' oil based energy.

That's what Hubbert stated, much like he stated that a plateau now was likely peak an actual peak.


New technology is constantly being developed that keeps pushing that peak point further and further into the future.

At some point, oil supply will and must reach a peak due to the finite nature of a planet (and per my work with a 1 year moving average, it quite probably has arrived) - but again, that neither means that we've run out of oil nor does it mean that we'll run out of energy.

It simply means that oil will get and is getting substantially more expensive, aka 'peak cheap oil' - the state within which we currently exist.



Are there alternative energies with promise? - of course. But virtually all of them are at least as expensive as oil and usually way more per BTU and have convenience or other issues, and there's substantial uncertainty in virtually all of them too.

The same thing happened with whale oil, as I cited earlier - it got up to about $1,500/bbl inflation adjusted before oil, etc. started to kick in.

Could there be something 'magic' happen like cold fusion in a box - of course. But not taking into account the gigantic and ongoing issues with very much higher prices due to supply issues, inflation, transportation replacements, etc. is just plain putting one's head in the sand (oil sands or not ;-) or being an ostrich.

 
At 5/13/2012 1:34 PM, Blogger bart said...

That's what Hubbert stated, much like he stated that a plateau now was likely peak an actual peak.


Make that:

That's what Hubbert stated, much like he stated that a plateau now was likely before the actual peak.

 
At 5/13/2012 1:37 PM, Blogger bart said...

In California the Kern River field sas discovered in 1899...


The other side are the many gigantic fields like Ghawar or Cantarell that are declining, many very rapidly.

The Kern field experience has been thoroughly trumped.

 
At 5/13/2012 1:41 PM, Blogger bart said...

...we have reached already Peak demand for conventional crude, if $100 a barrel or more.


The EIA stats don't show it.

 
At 5/13/2012 2:42 PM, Blogger al fin said...

The Kern County resurgence was no fluke. On a global scale:

The first estimate of proved crude oil reserves worldwide, made in 1944, was 51 billion barrels. Today, that number is 1.4 trillion barrels, and cumulative production in the last 66 years has been twenty times the original estimate.

Expanding Depletable Resources

Bart: If you don't provide direct resources from Hubbert himself, people will think you're trying to revise history. ;-)

 
At 5/13/2012 2:50 PM, Blogger bart said...

AF: Provide support for your Hubbert assertion about the 100% certainty on his peak formation then. It doesn't exist, but his plateau possibility comments do, although not in his original paper.


Proven crude oil resources haven't changed in about 25 years for Saudi, Kuwait, etc. - either up or down - which makes "proven" resources data suspect at the very least, especially given the Saudi's failure to bring an additional 2 mpd barrels online... as of about 18 months ago, and with no evidence of even vague success.

 
At 5/13/2012 3:51 PM, Blogger al fin said...

Bart: You are verbally squirming a bit, but not providing verifiable documentation. That counts against you in this court, son.

Again, try to avoid the ad hominems, they do not count as evidence.

 
At 5/13/2012 4:08 PM, Blogger bart said...

I see that you're trying the old double reverse. Funny how you twisted my post, when you yourself refused to or just plain didn't provide docs/links on your Hubbert assertion about the peak shape - and then accuse *me* for failure to provide docs?

You lose in ad hominem and red herring and double reverse etc. ville.

Not only that, but most importantly your original point about a Hubbert peak shape is basically a nuance, or even just a semantic issue. The guy actually predicted the peak in the US in the early 70s in the paper in the 50s, and was 100% correct.

That's the real importance. Whether it's a spike or a slow plateau, he also predicted a world peak right around now, and I submit that all the actual evidence I've presented in the way of charts and links prove it - not 100% of course, but well beyond a shadow of doubt.


My actual point is 'peak cheap oil', NOT peak oil too. And again, as we started to approach a supply relative shortage issue in 2004-5, the price tracked with a very high correlation to the shortage issue (per my earlier chart).

And again, the current tech 'solutions' of super deep wells way under the ocean bed, oil from oil sands or tar sands, blowing up oil bearing rocks 1000s of feet deep are not in any way a symptom of a planetary oil surplus.








I see that you made no comment about the various ME countries whose reserves haven't changed - either up or down - in over 25 years either.

 
At 5/13/2012 4:15 PM, Blogger bart said...

By the way AF, you apparently missed my link to the current marginal cost of oil being over $90/bbl - which shows that the "Expanding ‘Depletable’ Resources" link basic point ("What was high-cost yesterday has become lower-cost, undercutting the perennial complaint that “the easy stuff has been found.”") is just plain incorrect, per the facts.

There are many other examples, like gold... and please don't tell me that there are or will be substitutes. My point again is 'peak cheap oil', not that there aren't other energy sources.

 
At 5/13/2012 4:38 PM, Blogger bart said...

And just in case you think I didn't see the point about the Erlichs and "five minerals: chrome, copper, nickel, tin, and tungsten", taking a 10 year period that was right after a record 'hard asset' cycle hugely and badly influenced the outcome - especially since inflation dropped a lot and consistently from 1980-90.


When any period of roughly 50 years or longer is used, those prices are substantially up, even CPI adjusted... and even when using my CPI w/o lies.

 
At 5/13/2012 4:56 PM, Blogger al fin said...

Bart old friend, you made an assertion that Hubbert predicted a prolonged production plateau prior to a subsequent peak and collapse.

I requested that you provide documentation for that assertion.

Somehow, in your mind, you turned by request for documentation into an assertion that Hubbert had never made such a prediction.

But since one cannot prove a negative -- after all, somewhere in Hubbert's correspondence, perhaps accidentally lost or destroyed, might be exactly the prediction which you ascribe to Hubbert. Who knows?

Can you document what you assert? If so, do so. If not, you may want to reconsider what claims you make in public.

You may want to ask people to hold you to a higher standard of proof in argumentation. It would stand you in good stead when you roam outside your normal discussion groups.

 
At 5/13/2012 5:09 PM, Blogger bart said...

Ok, I give up.

You obviously didn't read my last post, and demand documents from me after having not provided what I asked, nor commented on the various facts I cited that shows your other points to be - at the very least - very questionable.


Fabulous covert ad hominems, but worthless to continue since you ignore both facts and sincere requests.


Unsubscribing.

 
At 5/13/2012 6:00 PM, OpenID Sprewell said...

The claim is that peak "cheap" oil has been reached, but the overall trendline for the price of retail gasoline was down for 80 years, till the recent spike back to the high end of the range since 2000. I first need a definition of what "cheap" is, as I don't think those in Europe would call even our current higher US prices "expensive." :) Second, I see big price drops in the coming decades, as demand is about to collapse.

We already have a great "substitute" for oil, it's called telecommuting. I use a screen-sharing app and IM at work, no need to even go over to my co-workers' desks. The fact that we don't already have widespread telecommuting- particularly given how fast last-mile networks are now, I currently pay an introductory $30 price for a cable internet connection that does 20 Mbps down/ 8 Mbps up, a bargain at even the full price of $55/month and capable of supporting high-def video-conferencing- is a testament to the backwardness and just plain stupidity of most business, nothing else. Just as they're being undercut by global competition through offshoring today, they will be undercut by new businesses that fully employ the many advantages of telecommuting in the coming years and demand for oil will go down with the resulting decline of traffic.

 
At 5/13/2012 7:43 PM, Blogger VangelV said...

Peak oil is when oil production has reached a peak and thus begun to decline.

As production asymptotically approaches 0, the price of oil will rise.

This is my understanding.

The world's supply of oil is scarce. In theory, as the resource gets used there will be less in the world.

We have no seen oil production begin to decline yet (according to a number of data sources, it is at a record high). This in and of itself does not disprove peak oil. All it says is we have not reached that point yet.


The data is clear. The production of conventional crude oil is not growing. It stands around 76 mbpd not far from where it was SEVEN years ago even though we have seen more than $1 trillion invested in new production since then. Keep in mind that there is a reporting issue where refinery gains, biodiesel, coal to liquid conversion, NGLs, ethanol, heavy sour crudes, etc., are all lumped together with crude to imply that there is no problem with supply. To understand the problem look at conventional production only.

But there are a number of question that arise: while oil fields are being depleted, the world is constantly discovering new ones and improving/developing technology to tap into previously untouched reserves. The world's recoverable supply of oil is constantly growing. Why must things peak?

First, the new fields are tiny in comparison to the giant fields that were discovered more than half a century ago. They will not produce for decades but must produce for a long enough period to justify the depreciation of the capital costs. That means less production from new fields than from old ones.

Second, smaller fields have greater depletion rates as pressures fall quickly and take production lower. It is not long before the producers begin to use pumps to lift the oil to the surface.

Third, the new technology is not all that new. And it allows us to go after the very hard deposits that take longer to develop and harder to manage. While these new projects are slowly developed depletion takes away around 6% of production from existing fields off the table. To keep production flat you need to find the equivalent of total American production each and every year.

Forth, not all oil is the same. We need gasoline, kerosene, and other finished products, not just crude. When we lose a barrel of light sweet crude with new heavy crude we need more than one barrel just to stay even on final product production. The lower quality oils give us a lot less of the good stuff and a lot more asphalt, bunker oil, etc. That is why we need to stop playing games and start to pay attention to what kind of oil we pull out of the ground.

 
At 5/13/2012 7:51 PM, Blogger VangelV said...

Additionally, what about synthetic oil? It has a number is uses already and surely helps replace the consumed oil.

????

New technology is constantly being developed that keeps pushing that peak point further and further into the future.

The problem is that some of that technology causes problems for fields on the back end. Yes, you can extract the oil from an existing fields faster but that does not help you unless you find more barrels. And since the 1980s we have produced more barrels than we discovered. And what happens to a field once the water flood reaches the horizontal wells?

Is it possible that we will actually never reach that theoretical peak?

No. As I stated above, it looks as if we have already reached a peak for light sweet.

A new technology will come along and make oil obsolete.

This is an entirely different argument. Yes, we could find substitutes. But we need to actually work at that, not waste resources on all kinds of stupid schemes that will not work.

Or a current substitute will fall in price so much to make it a better option. Isn't it possible, nay likely, that the switch from oil to another energy source will come well before he it that peak?

What substitute? How does it even scale up to the size needed let alone accomplish that without prices going up?

This is what we've seen for other resources: farmland, wood, rubber, etc. Why is oil an exception to this?

It may not be. But there is a huge chasm between here and there. Many people will not make it across. And if you choose to close your eyes to the data you may be one of those people.

 
At 5/13/2012 8:12 PM, Blogger VangelV said...

Bart old friend, you made an assertion that Hubbert predicted a prolonged production plateau prior to a subsequent peak and collapse.

He did not say that. He simply pointed out that individual wells begin with a high IP and begin to drop almost immediately. When a field is developed the drop is overcome by new drilling until at one point the new drilling is no longer capable of rising production levels. When you look at the curve you get a bell shape that has a peak. An oil province is a collection of fields. Its production shows a similar trend. Global production is similarly an aggregate of oil provinces and it too will exhibit a similar shape.

Now Hubbert did not really care too much about the new technologies or new ideas because all that would do would be to postpone the peak period for a decade or so. The problem would be that keeping up production artificially high would mean greater depletion of available oil and a harder time on the back end of the curve. Hubbert did not think this likely but he never guessed how stupid modern accountants and CEOs would choose to behave.

The methodology is sound but the problem is the data. As Mat Simmons pointed out, all it would take is about 30 days of number crunching to come up with a pretty good number if all countries provided their actual production data. The fact that they have not have made the guesses very crude, excuse the pun. Using some of the data quite a few of the petroleum geologists gave a 19995-2005 time frame. The later data suggested that some time before 2015 the fact that oil production has peaked could not be hidden.

To find out how many barrels you will produce in a country or field all you do is plot current annual production divided by cumulative production on one axis and cumulative production on the other. For global production it is not a good picture.

 
At 5/13/2012 8:43 PM, Blogger SBVOR said...

Poor little VangelV...

He can't decide whether the world reached peak oil decades ago or if we're just now on the cusp of it.

Either way, he's darn sure married to his peak oil fantasies. He just can't let them go.

 
At 5/13/2012 9:05 PM, Blogger VangelV said...

He can't decide whether the world reached peak oil decades ago or if we're just now on the cusp of it.


The data seems clear. We reached the peak of light sweet production around 2005/2006. No matter what happens from here we are very unlikely to get back to a rising output. Which is why we will see the agencies keep making it as difficult as possible to get good data by category. What this means is that meaningful oil price declines will happen when the economy contracts sharply and the normal moves will be towards higher prices.

 
At 5/13/2012 10:52 PM, Blogger SBVOR said...

The data seems clear. We reached the peak of light sweet production around 2005/2006.

Once again, we see the space alien VangelV demonstrating that he lives in some alternate universe.

In our universe, even the GAO knows VangelV is full of crap:

http://cnsnews.com/news/article/gao-recoverable-oil-colorado-utah-wyoming-about-equal-entire-world-s-proven-oil

Brace yourselves, the next message from outer space will involve some fantasy about how none of these 3 trillion barrels of oil can ever be profitably extracted.

 
At 5/13/2012 10:58 PM, Blogger SBVOR said...

Oh wait...
Now VangelV is qualifying his Peak Oil fantasies to "light sweet production".

Do I care whether he's accurate about "light sweet production"? Not one bit. Sure, not all oil is created equal. But, there's far more than just light sweet crude which can still power the global economy for hundreds of years to come.

See my previous comment and the link associated with it.

 
At 5/14/2012 4:58 AM, Blogger VangelV said...

Once again, we see the space alien VangelV demonstrating that he lives in some alternate universe.

In our universe, even the GAO knows VangelV is full of crap:

http://cnsnews.com/news/article/gao-recoverable-oil-colorado-utah-wyoming-about-equal-entire-world-s-proven-oil


It is not oil. It is kerogen that the USGS is pointing to.

Brace yourselves, the next message from outer space will involve some fantasy about how none of these 3 trillion barrels of oil can ever be profitably extracted.

Correct. There are no profitable projects that can produce more than a few thousand barrels per day and those have some serious practical problems that cannot be overcome. The technology to upgrade the kerogen in shale formations into oil is more than half a century old. The fact that $150 oil was not enough to get companies to invest tells you what you need to know.

Get back to us when there is profitable oil flowing and then we can have a discussion.

 
At 5/14/2012 5:02 AM, Blogger VangelV said...

Oh wait...
Now VangelV is qualifying his Peak Oil fantasies to "light sweet production".

Do I care whether he's accurate about "light sweet production"? Not one bit. Sure, not all oil is created equal. But, there's far more than just light sweet crude which can still power the global economy for hundreds of years to come.

See my previous comment and the link associated with it.


The issue is oil production. You cite charts that include subsidized biodiesel and ethanol production and has added refinery gains and other categories to the total. None of those are creating new barrels and the historical comparison should be maintained. While new categories that did not exist before are legitimate categories that were not accounted for in the past do not count because there is nothing new added to the picture. What matters to us is total barrels of usable crude and the products that those barrels are capable of producing. A barrel of tar that makes a lot of ashphalt but little gasoline is not the same as a barrel of gasoline rich upgraded tar or light sweet.

 
At 5/14/2012 10:02 AM, Blogger juandos said...

"We not only spent and squandered $5 trillion over the past four years just to maintain our standard of living"...

What is 'our standard of living' silliness pt?

It was more like four years of 'wealth redistribution' instead...

 
At 5/14/2012 10:07 AM, Blogger Hydra said...

At a high enough price, you get more production.

Until there is none.

The only uncertainty is when. Even If you think that event horizon is 200 years off, considering the magnitude of the task to be achieved, it might not be too soon to start.

 
At 5/14/2012 10:10 AM, Blogger Hydra said...

It's a wonder the species has survived for so damn long!

==================================

For most of that history, surviving, (and not very well) was all the species was capable of doing.

Now we have reached the point where we are equally capable of surviving, and surviving very well, and also of destroying most of civilization and quite possibly life as we know it.

We can either make a cognizant choice, or we can say, what the heck, everything worked out so far.

 
At 5/14/2012 10:31 AM, Blogger VangelV said...

The only uncertainty is when. Even If you think that event horizon is 200 years off, considering the magnitude of the task to be achieved, it might not be too soon to start.

The when is never because the last oil will simply be too expensive to extract. The peak is also not hard to predict if you have the production data. Plot annual production divided by cumulative production versus cumulative production and see where the line crosses the axis. Read out the total and divide in half. The number will be close enough to get you within a decade and that is good enough.

 
At 5/14/2012 11:12 AM, Blogger bart said...

Thanks for your balanced and fact based perspective Vangel.

That al fin guy really aggravated me with his "posture", and I figured that it would be best to just unsubscribe.




That last post of his where he used "Bart, old friend" really tore it.

1. I don't know him at all.

2. He's not a friend.

3. He basically refused real debate (if he was truly concerned about a Hubbert peak as opposed to a plateau, there are thousands of Google references). I just plain forgot where I read about him granting the plateau possibility - and as I noted, it's not germane to the discussion.

4. Using a term like "Bart, old friend" is an strong indication that he has more than a little training in propaganda methods.



As far as that Erlich comparison on prices going up and a few other things, I received two emails asking me to follow up instead of apparently conceding the points.

If 1970-80 or 2000-10 would have been used, the outcome would have been totally reversed. In other words, it was a biased comparison to use 1980-90.




Bottom line on the overall topic though, 'peak cheap oil' is alive and well - prices have over quadrupled on a barrel since 2005 in the US etc.

 
At 5/14/2012 11:50 AM, Blogger SBVOR said...

Get back to us when there is profitable oil flowing and then we can have a discussion.

“Shale boom turns North Dakota into No. 3 oil producer”

http://www.reuters.com/article/2012/03/08/us-oil-output-bakken-idUSBRE82714V20120308

China is producing shale oil at a cost of $18.46 per barrel. Shell thinks they can produce shale oil at a cost of $30 per barrel. The Rand Corporation estimates shale oil production costs to be "between $70 and $95 per barrel". Even if the cost of producing shale oil is $95 per barrel, shale oil is becoming increasingly economically viable. That explains why there are currently no less than 10 shale oil projects underway in the USA and no less than 24 worldwide.

This train has left the station. Poor old VangelV has been left at the station, sitting on the ash heap of history.

 
At 5/14/2012 12:01 PM, Blogger bart said...

Poor old VangelV has been left at the station, sitting on the ash heap of history.



No points for personal attacks, as usual.

*yawn*

 
At 5/14/2012 12:22 PM, Blogger SBVOR said...

Get back to us when there is profitable oil flowing and then we can have a discussion.

Specifically regarding the kerogen in the Green River Formation, The Rand Corporation estimates:

1) Mining and Surface Retorting is profitable (using 1980s technology) when oil sells at “between $70 and $95 per barrel”.

2) In-Situ Retorting is profitable when oil is priced at the “mid-$20s per barrel”.

http://www.rand.org/pubs/monographs/2005/RAND_MG414.pdf

It will take some time before The Green River Formation produces large quantities of oil. But, the sooner the federal government grants access to the federal land where these vast resources are located, the sooner we’ll be producing that oil:

http://cnsnews.com/news/article/gao-recoverable-oil-colorado-utah-wyoming-about-equal-entire-world-s-proven-oil

 
At 5/14/2012 4:03 PM, Blogger VangelV said...

Bottom line on the overall topic though, 'peak cheap oil' is alive and well - prices have over quadrupled on a barrel since 2005 in the US etc.

I am willing to be convinced. But until I see a supply side solution I will continue to go with what the data is telling us.

 
At 5/14/2012 4:09 PM, Blogger VangelV said...

China is producing shale oil at a cost of $18.46 per barrel.

Actually it isn't. Do you really think that China would limit production to 20K bpd if it could do that?

Shell thinks they can produce shale oil at a cost of $30 per barrel.

No it does not. If it did it would have continued with its well publicised programs instead of quietly cancelling them.

The Rand Corporation estimates shale oil production costs to be "between $70 and $95 per barrel".

So what? Many Wall Street firms estimated that the housing industry could remain strong for another decade. How did that work out.

Stop messing around with words and look at actions. If shale were so great more companies would be using that half century old technology to produce oil from it. But other than a few small projects, mostly for testing and PR purposes there is nothing out there. Would Petrobras management really be betting the company trying to get oil from ultra deep water if it could produce shale oil as you claim?

Even if the cost of producing shale oil is $95 per barrel, shale oil is becoming increasingly economically viable.

But it isn't $95 per barrel. To get much oil you have to scale up those test projects. Anyone who has gone through that in the tar sands knows what that means for costs.

That explains why there are currently no less than 10 shale oil projects underway in the USA and no less than 24 worldwide.

How much oil are they producing per day again? And how many of those are classified as test or research projects? We are talking about technology that has been around for more than half a century. If this stuff made sense why aren't there hundreds of projects producing millions of barrels of oil?

 
At 5/14/2012 4:20 PM, Blogger VangelV said...

"Poor old VangelV has been left at the station, sitting on the ash heap of history."


No points for personal attacks, as usual.


The proper question is what shale gas companies is he invested in? Which one of those 24 projects is producing any oil commercially and how much is it producing?

Our friend takes personal shots because he cannot deal with the argument and cannot get around the logic. Shale technology was developed hundreds of years ago. The type that he is talking about is more than half a century old. Yet, very little oil is actually being produced by those projects almost a decade after oil prices began to take off and hundreds of billions were invested in the sector.

If it made sense why didn't the companies spend a lot of cash to develop projects that produce a meaningful amount of oil? People like our friend try to argue that the actual producers are stupid because they missed something that the academics that he quotes know well. But the academics are empty suits. They know very little about the practical difficulties of upgrading kerogen to oil. Or the total costs involved. They know nothing about the supply chain issues that are responsible for destroying profits in many sectors of the energy industry. And they have trouble understanding the environmental issues that make some production methods, including Shell's big bet a few years ago, unrealistic.

 
At 5/14/2012 4:30 PM, Blogger VangelV said...

Specifically regarding the kerogen in the Green River Formation, The Rand Corporation estimates:

1) Mining and Surface Retorting is profitable (using 1980s technology) when oil sells at “between $70 and $95 per barrel”....


Nonsense. If it were profitable the energy companies would be doing it already. How the hell do you scale up such operations? Where do you put the shale after it is processed? How do you keep the toxic chemicals from entering the water table? And where do you get the water necessary for the processing?

2) In-Situ Retorting is profitable when oil is priced at the “mid-$20s per barrel”.

http://www.rand.org/pubs/monographs/2005/RAND_MG414.pdf...


Tell that to Shell, which ended its big shale experiment after it failed to make the process econmic.

It will take some time before The Green River Formation produces large quantities of oil. But, the sooner the federal government grants access to the federal land where these vast resources are located, the sooner we’ll be producing that oil:

http://cnsnews.com/news/article/gao-recoverable-oil-colorado-utah-wyoming-about-equal-entire-world-s-proven-oil


Where is the production? You have decades old technology, high oil prices but nothing in the way of commercial production. Doesn't that tell you anything?

 
At 5/14/2012 4:30 PM, Blogger SBVOR said...

The proper question is what shale gas companies is he invested in?

Answer -- Precisely ZERO! Next imaginary fallacy?

Look, 10 years ago VangelV and the rest of his Peak Oil Cult would have been spewing the same lies about Shale Gas as they are now spewing about Shale Oil.

It won't happen overnight. And, yes, it might take 10 or even 30 years before Shale Oil becomes a major factor in global oil production. But, it WILL COME! It is inevitable. And, it will produce oil for 100s of years to come.

 
At 5/14/2012 4:33 PM, Blogger VangelV said...

In the next decade you will be able to count kerogen production per thousand barrels per day on your hands. You won't need the digits on your feet cuz their stuck in your big mouth or the other end of your supersized alimentary canal.

What you need is perspective. We are talking about a world production rate of 75 million bpd and you boast about thousands of barrels of oil that costs more to produce than it is worth? Sorry but if the process were economic you would already have seen commercial projects. Keep in mind that the DOE has issued permits but the companies kept stalling. I was actually looking forward to Shell's ICP project because I wanted to look at the data. Shell cancelled it because sanity prevailed.

 
At 5/14/2012 4:36 PM, Blogger VangelV said...

Maybe, that's why you don't see many "potheads" in traffic accidents, because they're getting into spaceships.

Exactly. They are no danger on the roads because they are flying high.

 
At 5/14/2012 4:42 PM, Blogger VangelV said...

Look, 10 years ago VangelV and the rest of his Peak Oil Cult would have been spewing the same lies about Shale Gas as they are now spewing about Shale Oil.

Kerogen is not degraded into methane so I have no idea what you are trying to say. (Unless you are confusing tight oil with shale oil or gas. In that case you would be right. I argued that it would not be very profitable other than in core areas of prolific formations.)

It won't happen overnight. And, yes, it might take 10 or even 30 years before Shale Oil becomes a major factor in global oil production. But, it WILL COME! It is inevitable. And, it will produce oil for 100s of years to come.

Nonsense. The energy needed to mine a rock that has the energy density of a hot potato, transport it to a crusher, heat it up by burning coal to upgrade the kerogen into oil, and dispose of the waste is higher than the energy content of the oil. That is why you don't see any companies producing large amounts of shale oil economically.

This means that the market disagrees with your assessment and supports my argument.

 
At 5/14/2012 4:44 PM, Blogger SBVOR said...

"Tell that to Shell, which ended its big shale experiment after it failed to make the process econmic."

Tell it to Shell yourself. Apparently, they have not yet received your intergalactic wisdom:

"Field results from past research, as evident in the MDP Research Chart, have matched our predictions, giving our engineers confidence in the In situ Conversion Process... We aim to advance the technology systematically to the point at which an application could be made to convert the 160-acre RD&D tracts to commercial leases. A commercial decision would be middle of the next decade and possibly later depending on the sequence and outcome of research activities."

http://www.shell.us/home/content/usa/aboutshell/projects_locations/mahogany/technology/

Again, it will take time, but progress on the extremely cost effective ($30 per barrel) in situ Conversion Process IS being made.

 
At 5/14/2012 4:52 PM, Blogger SBVOR said...

According to the United States Department of Energy:

“First of a kind mining and surface retorting plants may eventually be economic, providing a minimum 15% rate of return, at sustained average world oil prices above $54.00 per barrel.

In-situ processes may be economic at sustained average world oil prices above $35 per barrel.


http://fossil.energy.gov/programs/reserves/npr/Oil_Shale_Economics_Fact_Sheet1.pdf

 
At 5/14/2012 5:09 PM, Blogger SBVOR said...

VangelV,

QUICK! Impart your intergalactic wisdom upon these poor, ignorant, misguided souls!

MarketWatch, April 5, 2012:

"PetroChina Co. PTR -2.74% , China's largest energy producer, is in talks with Royal Dutch Shell PLC RDS.B -1.22% and Hess Corp. HES -2.75% , about forming a joint venture to develop shale oil in the Santanghu Basin"

http://www.marketwatch.com/story/petrochina-shell-hess-discuss-shale-oil-venture-2012-04-05

 
At 5/14/2012 5:15 PM, Blogger SBVOR said...

VangelV,

QUICK! Impart your intergalactic wisdom upon these poor, ignorant, misguided souls!

Here are 19 Oil Shale projects currently underway in the USA!

They need your help! Lacking your intergalactic wisdom, they just don’t understand that they’re throwing their money down the drain!

http://www.oilshaleassoc.org/oil_shale_project.html

 
At 5/14/2012 5:41 PM, Blogger bart said...

I am willing to be convinced. But until I see a supply side solution I will continue to go with what the data is telling us.


Can't substantially disagree, comparatively our differences are quite small compared to earlier times and places.

 
At 5/14/2012 5:46 PM, Blogger bart said...

The proper question is what shale gas companies is he invested in? Which one of those 24 projects is producing any oil commercially and how much is it producing?

Our friend takes personal shots because he cannot deal with the argument and cannot get around the logic.


Indeed - it's a flare lit tip-off when folk go into consistent & serious personal attacks, rather than deal with the facts and data as presented.

It's virtually a 100% admission that they're both terribly uninformed, controlled by emotions and unwilling to even look.

I wish Dr. Perry would get off the "peak oil = idiocy" schtick. He's already on the bandwagon with "peak cheap oil", so I guess I should be a bit thankful.

 
At 5/14/2012 5:52 PM, Blogger bart said...

"Field results from past research, as evident in the MDP Research Chart, have matched our predictions, giving our engineers confidence in the In situ Conversion Process... We aim to advance the technology systematically to the point at which an application could be made to convert the 160-acre RD&D tracts to commercial leases. A commercial decision would be middle of the next decade and possibly later depending on the sequence and outcome of research activities."


Wow, it's such a GREAT project and so economical that they're really big time hurrying on a commercial project - they'll be ready to make a *decision* in 5-10 YEARS, maybe more.

 
At 5/14/2012 5:55 PM, Blogger bart said...

“First of a kind mining and surface retorting plants may eventually be economic, providing a minimum 15% rate of return, at sustained average world oil prices above $54.00 per barrel.

In-situ processes may be economic at sustained average world oil prices above $35 per barrel.”


It appears that it was written around 2003-5.


How many economic and profitable "mining and surface retorting plants" are operating now?

 
At 5/14/2012 5:57 PM, Blogger bart said...

SBVOR: QUICK! Impart your intergalactic wisdom upon these poor, ignorant, misguided souls!


More personal attacks, what a shock. [rolling eyes]

 
At 5/14/2012 6:27 PM, Blogger SBVOR said...

Observation...

1) I repeatedly provide substantiated evidence refuting the lunacy coming from VangelV and his Peak Oil cult.

2) The only retort from the Peak Oil cult is a constant whining about being criticized for their readily verifiable lunacy.

Hey! Momma's Boys!
Cowboy up and address the evidence!
Oh sorry, all you've got is a shit load of utterly unsubstantiated rhetoric. Too bad. You lose!

 
At 5/14/2012 6:33 PM, Blogger bart said...

Keep it up, we are amused.




Peak cheap oil is alive and well, even Dr. Perry knows it.

 
At 5/14/2012 8:02 PM, Blogger VangelV said...

Again, it will take time, but progress on the extremely cost effective ($30 per barrel) in situ Conversion Process IS being made.

I bring your attention to what was actually written. We read, " In situ Conversion Process (ICP) works technically on a small scale - what remains is to prove it can work commercially.

The only thing that Shell managed to do is show that it can isolate an area that is to be heated by using an ice wall on a very small scale and stop groundwater penetration and contamination for a while.

So let us look at the progress. Shell starts the project in 1996. It spends a pile of money but has only managed to show that it can isolate a tiny area. There was no commercial production of oil from this test. Shale has no clue how much a large scale operation will cost and what the extraction costs will be. Actually, it has not yet had the chance to show that the process will not lead to groundwater contamination because it has yet to do a test on a larger area that has natural fractures as are likely to be encountered.

From what I have heard Shell is now more interested in the baking soda than the kerogen. That makes sense because the nahcolite has economic value and the Green River formation has plenty of it. It looks like we are going to have to wait for a decade or two more before you can see the company talk much about commercial production of shale oil. Given the fact that we have to replace the equivalent of Saudi Arabian production every year or two just to stay flat I do not see oil production being helped by the Green River deposits for a quarter century. And then it will only help if the producers are willing to use more energy than is contained in the upgraded kerogen.

You really should do a bit more homework. And learn to read more carefully.

Let me quote the same words that you did. You pulled out the sentence, "A commercial decision would be middle of the next decade and possibly later depending on the sequence and outcome of research activities."

Shell will mine the baking soda. After it extracts what it can from the area, which will take quite some time, it will run a test to see if the process will work in a larger test area that has been mined out. The hope is that the reduced volume would allow further expansion and leak paths that allow the oil to be collected at a lower cost. But we are still talking about a major decision decades after the process began and millions were spent on research. And Shell still has no idea how to scale up the process.

 
At 5/14/2012 8:06 PM, Blogger VangelV said...

“First of a kind mining and surface retorting plants may eventually be economic, providing a minimum 15% rate of return, at sustained average world oil prices above $54.00 per barrel.

In-situ processes may be economic at sustained average world oil prices above $35 per barrel.”


You don't read too well. The important words are MAY. I have heard many things from government agencies. Most of them have underestimated costs and have overestimated outcomes. Until I see real evidence I will remain a skeptic. And as I pointed out before, this type of nonsensical claims have been with us for more than a century. And I am sure they will be around when my grandchildren are talking about energy.

 
At 5/14/2012 8:07 PM, Blogger SBVOR said...

Space Alien VangelV,

You see (and read) only what you want to see and read. Shell IS making progress (as are the 18 other projects documented in my previous comment). But, religious zealots, such as yourself, worshiping at the alter of Peak Oil, will ALWAYS see ONLY what you WANT to see.

 
At 5/14/2012 8:27 PM, Blogger VangelV said...

"PetroChina Co. PTR -2.74% , China's largest energy producer, is in talks with Royal Dutch Shell PLC RDS.B -1.22% and Hess Corp. HES -2.75% , about forming a joint venture to develop shale oil in the Santanghu Basin"

So? If you take the road from Urumqi to Turfan you will pass a wind farm that was built by some Chinese energy company. The last time I passed it, around 14 years ago, the turbines had failed because the desert dust had gotten into them. (Who could have thought that deserts were dusty and that sand storms were not good for turbines and blades?) The investment was written off.

A pal of mine owns a solar outfit. His company actually built the panels that went on the Chinese space station. He is telling me that the losses in the industry are massive. Now if PetroChina were that positive on shale why would it ask for foreign companies to invest capital in the region?

Now if I were a cynical person I would argue that China does not care about profit. If Western companies plow money into Xinjiang they will put pressures on Western governments to stop arming the Islamic radicals that keep causing trouble there. The last time I was there the army was out in force and had shut down several of the places that I wanted to visit because it was not safe to do so. My driver got in a lot of crap because he was foolish enough to ignore a few signs and got on a road that we should not have been on.

I highly recommend the region and have investments in mining companies that are looking to find economic targets. But only a damned fool will risk his own cash.

Of course, if you paid attention, you would have read, "Although the foreign companies will assume all the investment and exploration risk for shale oil, all the companies in the joint venture will invest in developing the shale oil, CNPC said, without elaborating." First, the foreign companies are putting up the cash while the Chinese get the jobs. Second, this may be about tight oil found in shale formation, not upgrading kerogen.

Do you even have a clue about the subject that you are writing about? This is more than just looking up crap on Google and pretending.

 
At 5/14/2012 8:35 PM, Blogger VangelV said...

They need your help! Lacking your intergalactic wisdom, they just don’t understand that they’re throwing their money down the drain!

http://www.oilshaleassoc.org/oil_shale_project.html


You are looking at research projects, not commercial applications. How many barrels do you think that you will get per day out of them? Shell ran its project for a decade and got 1,700 barrels.

Sorry but you are going to have to show actual oil production, not PR postings by companies telling you that by 2020 they will be able to make a decision about a process that has been known for 70 years and a project that has been worked on for more than a decade.

 
At 5/14/2012 8:35 PM, Blogger bart said...

Do you even have a clue about the subject that you are writing about?


V, his own blog cites that he was kicked off another forum - probably for stuff like his continuing "Space Alien" personal attacks, and likely for his poor research (that you've exposed).

The personal attacks, use of CAPS, failures on facts, use of words like worshiping, etc. says a lot. :(

 
At 5/14/2012 8:42 PM, Blogger VangelV said...

Wow, it's such a GREAT project and so economical that they're really big time hurrying on a commercial project - they'll be ready to make a *decision* in 5-10 YEARS, maybe more.

You missed the good part. After years of drilling and months of baking and freezing they got 1,700 barrels of oil. Not bad for the millions spent. Imagine the costs when they try to scale up the process.

 
At 5/14/2012 8:56 PM, Blogger SBVOR said...

Space Alien VangelV,

No shit, Sherlock.

Which part of...

"it might take 10 or even 30 years before Shale Oil becomes a major factor in global oil production. But, it WILL COME! It is inevitable."

Did you (willfully) fail to understand? MORON!

 
At 5/14/2012 9:48 PM, Blogger VangelV said...

It appears that it was written around 2003-5.


How many economic and profitable "mining and surface retorting plants" are operating now?


Shell gave up the idea around 2006. It said that it would mine the bicarbonate first and then look to try the process on a larger scale. Since then there has been very little written by the company about kerogen and it looks as if it is more interested in tight oil. But I am willing to be convinced if someone shows me a true commercial operation that can produce more than a few thousand barrels per day AND make a profit at the same time.

 
At 5/14/2012 9:55 PM, Blogger VangelV said...

1) I repeatedly provide substantiated evidence refuting the lunacy coming from VangelV and his Peak Oil cult.

No. You cite press releases and narratives but cannot show any large scale commercial projects even though shale oil has been produced in small batches for centuries. And at times you seem to confuse tight oil with kerogen in shale formations.

2) The only retort from the Peak Oil cult is a constant whining about being criticized for their readily verifiable lunacy.

There is no cult. There are only geologists who point out that the production curves are showing big trouble ahead even if deep water and shale amount to something more than is being touted right now. The fact that you have not looked at the plots and figured out where we are on the curve is your problem. (Keep in mind that you don't even have a clue which plots to look at in the first place or how the lineralization works. If you did, you would not be posting what you are.)

 
At 5/14/2012 9:57 PM, Blogger VangelV said...

Which part of...

"it might take 10 or even 30 years before Shale Oil becomes a major factor in global oil production. But, it WILL COME! It is inevitable."

Did you (willfully) fail to understand? MORON!


The part where Shell says that it will not make a decision for a long time and will try mining baking soda before it worries about kerogen upgrading. But I guess you missed that part.

 
At 5/14/2012 9:58 PM, Blogger bart said...

You missed the good part. After years of drilling and months of baking and freezing they got 1,700 barrels of oil. Not bad for the millions spent. Imagine the costs when they try to scale up the process.

Yep, I saw it... but even my mildly sarcastic comment about them not even being ready to make a decision in a decade or so went over his head.

I'll probably just mostly ignore him from here on, he's substantially worse than the folk who think that inflation is 3% or so - after incontrovertible contrary facts are presented.



By the way, don't get me wrong - when only "regular" crude oil drilling & well driven extraction methods are taken into account (as existed in the 50s, and what his forecasts were based on), Hubbert was 100% correct and called peak oil virtually perfectly.
What a tour de force!

 
At 5/14/2012 10:02 PM, Blogger bart said...


Shell gave up the idea around 2006. It said that it would mine the bicarbonate first and then look to try the process on a larger scale. Since then there has been very little written by the company about kerogen and it looks as if it is more interested in tight oil. But I am willing to be convinced if someone shows me a true commercial operation that can produce more than a few thousand barrels per day AND make a profit at the same time.



I think they ought to just take the bicarb and offer it to the peak (cheap) oil deniers, to help with their upsets with the facts, etc. ;-)

 
At 5/15/2012 7:34 AM, Blogger VangelV said...

You see (and read) only what you want to see and read. Shell IS making progress (as are the 18 other projects documented in my previous comment). But, religious zealots, such as yourself, worshiping at the alter of Peak Oil, will ALWAYS see ONLY what you WANT to see.

Progress? Men have been getting oil out of shale since the 17th century. At this time there is no meaningful commercial production. All you have are references to test operations, many by equipment sales companies, that will not produce much for another decade. At this rate of progress the world will be able to replace today's UK output by 3507. The trouble is that we need to replace the equivalent of Saudi Arabia's output about ever 18 moths or so.

 
At 5/15/2012 3:03 PM, Blogger SBVOR said...

Space Alien VangelV,

QUICK! Impart your intergalactic wisdom upon these poor, ignorant, misguided souls!

They need your help! Lacking your intergalactic wisdom, they just don’t understand that they’re throwing their money down the drain!

"we anticipate transitioning to the commercial stage as early as 2014, and produce 100,000 barrels per day in 2018."

http://www.amso.net/FAQ.aspx

Please! Convince these fools that they are wasting their money on these 19 USA projects:

http://www.oilshaleassoc.org/oil_shale_project.html

Rome wasn’t built in a day. The Shale Oil revolution will take time. But, it will come!

 
At 5/15/2012 4:12 PM, Blogger VangelV said...

"we anticipate transitioning to the commercial stage as early as 2014, and produce 100,000 barrels per day in 2018."

Anticipate?

You missed the following quote:

We BELIEVE we can produce commercial quantities of shale oil in production costs similar to petroleum from challenging frontier environments (deep offshore, arctic areas, oil sands)."

They BELIEVE. Well, that and $3 will get you a cup of coffee at my local Starbucks. Some of us prefer to look at actual facts. So far there is ZERO production but many promises and no news from the company in more than a year.

IDT is in the telecom business. It knows little about commercial production but has deep pockets and investors like Dick Chaney, Rupert Murdoch and Lord Rothschild. It has tried to sell this concept to Israel and anyone else who is willing to risk capital on shale oil development. I have heard these clowns talk about building nuclear plants so that they can install heating rods in the shale and cook it to turn the kerogen into commercial light sweet. But nukes take decades to permit and build and are quite expensive. And when you look at the investment made in energy generation, drilling, production, and transport you find that the return is negative.

The fact that you are referencing the same old spin and hoping that pronouncements about future production will turn out to be all right shows just how ignorant you are about the technology and history of shale oil production.

 
At 5/15/2012 4:15 PM, Blogger VangelV said...

Please! Convince these fools that they are wasting their money on these 19 USA projects:

http://www.oilshaleassoc.org/oil_shale_project.html

Rome wasn’t built in a day. The Shale Oil revolution will take time. But, it will come!


First, I don't see material commercial production.

Second, the retort technology has been around for more than half a century. That is a long time. How many centuries will it take? How many nukes will you have to build to heat the kerogen? And after you pay for them how much will each barrel cost you?

That is the problem. It always has been the problem. Upgrading kerogen into light sweet requires more energy than the energy contained in the light sweet crude.

 
At 5/15/2012 4:40 PM, Blogger SBVOR said...

Space Alien VangelV,

Blah, Blah, Blah...
Tell it to your fellow "denialist" Peak Oil religious zealots.

 
At 5/15/2012 5:27 PM, Blogger SBVOR said...

"how ignorant you are about the technology and history of shale oil production"

Space Alien VangelV,

Please, my dear enlightened intergalactic being, educate me on the history of in situ retorting (right after you enlighten all those who are wasting their money on what your alien intergalactic species knows to be pure folly):

"we anticipate transitioning to the commercial stage as early as 2014, and produce 100,000 barrels per day in 2018."

http://www.amso.net/FAQ.aspx

Be sure to let me know how your delivered wisdom is received by the leaders of the other 18 USA projects on this list:

http://www.oilshaleassoc.org/oil_shale_project.html

Rome wasn’t built in a day. The Shale Oil revolution will take time. But, it will come!

 
At 5/15/2012 7:50 PM, Blogger VangelV said...

That is it? Repeating promises made by companies and hoping that they are right. Why don't you actually do some research first. The company you cited has been telling potential investors that you need to invest in shale oil because peak oil is real and guarantees profits. Look at some of the Israel presentations that the principles have made and try to understand that you are denying what they are counting on.

 
At 5/15/2012 8:08 PM, Blogger bart said...

The company you cited has been telling potential investors that you need to invest in shale oil because peak oil is real and guarantees profits.


Hoisted on his very own petard.

Pricless.

 
At 5/15/2012 10:41 PM, Blogger SBVOR said...

The company I cited describes Peak Oil ONLY as it relates to the USA.

Peak Oil in the USA is SOLELY created by federal policy. If the federal government would allow access ONLY to ANWR, The Outer Continental Shelf and The Bakken Formation, that ALONE would give us FAR more oil than the proved reserves of Saudi Arabia!

Now, factor in the MODEST, MEDIAN estimate of 800 billion barrels of recoverable oil from the Green River Formation described by The Rand Corporation and we have FAR more oil than the ENTIRE proved reserves of the ENTIRE WORLD -- DIP SHIT!:

http://sbvor.blogspot.com/p/drill-here.html

http://cnsnews.com/news/article/gao-recoverable-oil-colorado-utah-wyoming-about-equal-entire-world-s-proven-oil

 
At 5/15/2012 10:54 PM, Blogger VangelV said...

Peak Oil in the USA is SOLELY created by federal policy. If the federal government would allow access ONLY to ANWR, The Outer Continental Shelf and The Bakken Formation, that ALONE would give us FAR more oil than the proved reserves of Saudi Arabia

Production in the US peaked when Nixon was in office. Carter's deregulation and Reagan's support were not enough to get production anywhere near the peak. Since then you have had 12 years of GOP presidents without production doing anything but fall. While tight oil in shale formations have added a new supply it is not sustainable and not economic. In the absence of continued borrowing the shale companies would have to reduce activity because their operations are not self financing.

 
At 5/15/2012 10:57 PM, Blogger VangelV said...

Now, factor in the MODEST, MEDIAN estimate of 800 billion barrels of recoverable oil from the Green River Formation described by The Rand Corporation and we have FAR more oil than the ENTIRE proved reserves of the ENTIRE WORLD -- DIP SHIT!:..

The technology is more than half a century old but there is no commercial production even though millions have been spent on the formation. That tells me that contrary to the Rand claims the process is not economic. Yours is a faith based position without any evidence of meaningful commercial production. In the real world what matters are actions, not words. And right now the actions are muted as most companies are willing to take massive and expensive risks in tar sands or ultra-deep water exploration than in what you consider a slam dunk.

 
At 5/15/2012 11:27 PM, Blogger SBVOR said...

Space Alien VangelV,

Money talks and bullshit walks. So, take a hike, asshole. This is the sound of money talking...

Please, my dear enlightened intergalactic being, educate all those who are wasting their money on what your alien intergalactic species knows to be pure folly:

"we anticipate transitioning to the commercial stage as early as 2014, and produce 100,000 barrels per day in 2018."

http://www.amso.net/FAQ.aspx

Be sure to let me know how your delivered wisdom is received by the leaders of the other 18 projects on this list:

http://www.oilshaleassoc.org/oil_shale_project.html

Rome wasn’t built in a day. The Shale Oil revolution will take time. But, it will come!

 
At 5/16/2012 7:32 AM, Blogger VangelV said...


"we anticipate transitioning to the commercial stage as early as 2014, and produce 100,000 barrels per day in 2018."


The word is ANTICIPATE. The company hopes to start drilling in 2014. It will then spend millions to heat the rock for the next four years. And after that is done it hopes that its theories work and that it can lift 100,000 bpd out of a reservoir with no pressure. I would love to see the pumps that work effectively at the temperatures that are necessary to upgrade the kerogen. Now the plan may be to just let the oil cool down first or to use some other technique. The problem is that you have no idea what the plan is because the company has made no statements for over a year.

And my point remains. IDT's investors know and believe in the Peak Oil argument. That is what they use to try to get investors for their schemes. Note that Dick Cheney, who is a big investor of IDT, which owns the company you cited is a proponent of Peak Oil. He does not believe that shale will do anything of importance and knows that even if successful the shale companies will remain minor players in a world that requires massive amounts of oil. I suggest that you use Google or whatever search engine you use to provide such poor support for your arguments and look up Cheney and Peak Oil. You might learn something.

 
At 5/16/2012 7:33 AM, Blogger VangelV said...

Rome wasn’t built in a day. The Shale Oil revolution will take time. But, it will come!

Funny but ignorant fools like you have made the same claim during my entire lifetime. Why are you incapable of learning?

 

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