Oil Prices Falling - Still Drill?

Off Topic Politics & World Issues
81

[quote]Journeyman wrote:

The US consumes 19,650,000.00 bbl per day. We have a know reserve of 20.972 billion bbl. This is only 3 YEARS of reserve at our current consumption. Unless we can find a lot more reserves, the chant “Drill, Baby, Drill” should stay in the bedroom.
[/quote]

The reserves you are referring to are not truely an accurate measurement of what is actually out there. Proved reserves are the single most conservative estimate there is, and the one everyone uses. But it is what we know for a fact that we can get.

A good example of how this is faulty is when the estimate jumped by 4 billion barrels because of an increase in technology allowing the big field on the boarder of Canada and the US to be accessed more easily. And as technology improves, that number can jump to a potential 400 billion.

Also these numbers ignore the Bakken oil reserve. 800 billion extractable at current technology at a cost of $20 a barrel. Your numbers ignore this, and many other sources.

82

[quote]Journeyman wrote:
JamFly wrote:
One of the biggest topics of debate is opening up new areas for drilling to achieve energy independence.

There is no serious chance that we can drill our way into energy independence. Look at the estimated reserves International - U.S. Energy Information Administration (EIA).

To look at oil consumption, see http://www.marktaw.com/culture_and_media/politics/GlobalOil.html

The US consumes 19,650,000.00 bbl per day. We have a know reserve of 20.972 billion bbl. This is only 3 YEARS of reserve at our current consumption. Unless we can find a lot more reserves, the chant “Drill, Baby, Drill” should stay in the bedroom.
[/quote]

Posting loosly relavent facts is no substitute for actually using your brain and thinking about the problem a bit.

Will drilling more keep more or less money (doesn’t matter whos money) here?

Will drilling more add or subtract jobs here?

Will drilling more add or subtract to 401k accounts, pension funds, and american share holders’ earnings?

Will drilling more add or subtract to the alternatives research budgets of the oil companies?

Will drilling more add or subtract from the tax base?

Is this really that difficult?

83

What is it with the peak oil dipshits?

84

[quote]rainjack wrote:
What is it with the peak oil dipshits? [/quote]

I don’t know. You made the first mention of peak oil in the thread.

85

[quote]Journeyman wrote:
rainjack wrote:
What is it with the peak oil dipshits?

I don’t know. You made the first mention of peak oil in the thread.

[/quote]

I mentioned the term. You talk the talk.

86

[quote]dhickey wrote:
Posting loosly relavent facts is no substitute for actually using your brain and thinking about the problem a bit.

Will drilling more keep more or less money (doesn’t matter whos money) here?

Will drilling more add or subtract jobs here?

Will drilling more add or subtract to 401k accounts, pension funds, and american share holders’ earnings?

Will drilling more add or subtract to the alternatives research budgets of the oil companies?

Will drilling more add or subtract from the tax base?

Is this really that difficult?
[/quote]

Slow down. I did not say that we should not drill. I just said that the proven reserves, as measured by the DOE, do not represent a solution to our energy needs. That doesn’t mean that it doesn’t make economic sense to drill. I just get irritated when people think that all we need to do is drill and we will have a solution to our energy needs.

The Mage pointed out correctly, that I was using a rather conservative number for the oil reserves. That is a valid criticism of my post. But unless we find reserves that are exploitable at current prices, we are going to see oil prices rise. I would be happy to see that money stay in North Dakota, rather than in Saudi Arabia. But, the current production of the Bakken fields was reported to be 7.4 million barrels in 2007. If we really are consuming, 19 million barrels per day, the Bakken fields supply enough oil for a few hours per year.

As drilling ramps up, this will become a more valuable source. Canada’s oil shales are also a source of vast oil, but the need a lot of energy (and capital) to extract, so this will be more expensive than a modern ‘light sweet crude’. I would rather pay Canadians that Saudis. But no matter who we pay, prices are still going to have to go up before we can access that shale oil.

Finally, nobody has addressed global warming. That could require that we all find ways to reduce burning fossil fuels, or at least that we find ways to counter the effects of the carbon dioxide that is released. There is too much evidence to simply dismiss global warming as a ‘vast left wing conspiracy’, to paraphrase Hillary.

87

[quote]Journeyman wrote:
… There is too much evidence to simply dismiss global warming as a ‘vast left wing conspiracy’, to paraphrase Hillary.

[/quote]

lol

88

[quote]Journeyman wrote:
dhickey wrote:
Posting loosly relavent facts is no substitute for actually using your brain and thinking about the problem a bit.

Will drilling more keep more or less money (doesn’t matter whos money) here?

Will drilling more add or subtract jobs here?

Will drilling more add or subtract to 401k accounts, pension funds, and american share holders’ earnings?

Will drilling more add or subtract to the alternatives research budgets of the oil companies?

Will drilling more add or subtract from the tax base?

Is this really that difficult?

Slow down. I did not say that we should not drill. I just said that the proven reserves, as measured by the DOE, do not represent a solution to our energy needs. That doesn’t mean that it doesn’t make economic sense to drill. I just get irritated when people think that all we need to do is drill and we will have a solution to our energy needs.
[/quote]
Our energy needs are already met. What type of solution are you after, that is isn’t already in place, and why do we need it?

I still don’t see why this matters. We have energy we could sell or use. What else matters? Also, show me a reserve prediction that is accurate. They are always wrong. We always find more.

and they will go up…and we will access these other resourses.

There is no evidense that makes any logical sense. If you find some let me know. CO2 is one of many things that is said to contribute to global warming. Compared to other contributing sources, it is a very small contributor. Man is responsible for a very small portion of CO2 production. So we are small producers of a substance that is a small factor in global warming. Yeah, sounds like an emergency.

If your are worried about CO2 we would be better served figuring out how to stop volcano erruptions. Probably cheaper as well.

I get a little chuckle everytime some mentions man made global warming…I mean climate change. I thought this had already been completely debunked. When’s the last time you saw any serious articles on global warming?

89

The Bakken oil production has increased ~30 fold between 2000 and 2007. (And still climbing.) This is due mostly to “slant” drilling. But this is the fairly normal production, not the shale I was referring to.

The method of in-situ production developed is completely different. The wells actually do not follow a bell curve of production like most wells. They only produce from a small planned out section, and the oil flows at full capacity, then when it drops off, it is practically empty. At that point they simply move the operation over to the next section.

It is a faulty argument to attempt to point out what percentage of our use, or potential use comes from a single source. Simply because we do not use just one source, and there is more then one source available.

That is like saying a single farm is not worth it because it can barely produce enough in a year to feed the world for an hour. But there are millions of farms out there.

There is an estimated 90 billion available off our shores. That is 4,500 days. Then there is the 10 billion available in Alaska. (Using way outdated information.) Now we are up to 5,000 days. Excluding every other source.

Now add in the 800 billion available in the Bakken shale, (estimated recoverable out of the estimated 1.2 trillion barrels there,) and we now have 45,000 days worth of oil. (123 years.)

90

[quote]The Mage wrote:
The Bakken oil production has increased ~30 fold between 2000 and 2007. (And still climbing.) This is due mostly to “slant” drilling. But this is the fairly normal production, not the shale I was referring to.

The method of in-situ production developed is completely different. The wells actually do not follow a bell curve of production like most wells. They only produce from a small planned out section, and the oil flows at full capacity, then when it drops off, it is practically empty. At that point they simply move the operation over to the next section.

It is a faulty argument to attempt to point out what percentage of our use, or potential use comes from a single source. Simply because we do not use just one source, and there is more then one source available.

That is like saying a single farm is not worth it because it can barely produce enough in a year to feed the world for an hour. But there are millions of farms out there.

There is an estimated 90 billion available off our shores. That is 4,500 days. Then there is the 10 billion available in Alaska. (Using way outdated information.) Now we are up to 5,000 days. Excluding every other source.

Now add in the 800 billion available in the Bakken shale, (estimated recoverable out of the estimated 1.2 trillion barrels there,) and we now have 45,000 days worth of oil. (123 years.)[/quote]

stop it. we are only suppose to look at prove oil reserves from the DOE.

All joking aside, great post. Any idiot can do a search and find statistics and facts that fit their argument. Not many people have the attention span to sort through lots of stats and facts to form an educated opinion. quite tragic really.

91

[quote]dhickey wrote:
I get a little chuckle everytime some mentions man made global warming…I mean climate change. I thought this had already been completely debunked. When’s the last time you saw any serious articles on global warming?[/quote]

The last time? I guess that would be this month’s Scientific American’s Special Edition (Water and Energy). There has been a steady stream of articles in Scientific American over the last decade. There hasn’t been any debunking of the science in the past years. Does that count as a serious article?

If that it too lowbrow, there is always the current Nature Reports: Climate Change. ( Nature Climate Change ), but you need to buy the journal or go to a library to see some of the articles.

May I ask when the last time there was a serious article debunking climate change?

92

[quote]The Mage wrote:
The Bakken oil production has increased ~30 fold between 2000 and 2007. (And still climbing.) This is due mostly to “slant” drilling. But this is the fairly normal production, not the shale I was referring to.

The method of in-situ production developed is completely different. The wells actually do not follow a bell curve of production like most wells. They only produce from a small planned out section, and the oil flows at full capacity, then when it drops off, it is practically empty. At that point they simply move the operation over to the next section.

It is a faulty argument to attempt to point out what percentage of our use, or potential use comes from a single source. Simply because we do not use just one source, and there is more then one source available.

That is like saying a single farm is not worth it because it can barely produce enough in a year to feed the world for an hour. But there are millions of farms out there.

There is an estimated 90 billion available off our shores. That is 4,500 days. Then there is the 10 billion available in Alaska. (Using way outdated information.) Now we are up to 5,000 days. Excluding every other source.

Now add in the 800 billion available in the Bakken shale, (estimated recoverable out of the estimated 1.2 trillion barrels there,) and we now have 45,000 days worth of oil. (123 years.)[/quote]

I’m trying to find these estimates. The Bismark Tribune reported much lower numbers at http://bismarcktribune.com/articles/2008/04/29/news/state/154403.txt. They reported, “The federal report found up to 2.6 billion barrels could be recovered in North Dakota, compared with the state’s estimate of 2.1 billion barrels, Murphy said.” I’m a bit disappointed that my old hometowm (Jamestown, Go Jimmies!)

At http://bakkenshale.net/, the author states, “While estimates are all over the place, I think that the Bakken Shale oil field may hold between 3 - 5 billion barrels of recoverable oil”. He did mention that there is also a great deal of natural gas, “Estimates have the Bakken Shale field hold a little less then 2 trillion cubic feet.”

From the state of North Dakota’s Department of Mineral Resources, we find https://www.dmr.nd.gov/ndgs/Bakken/newpostings/07272006_BakkenReserveEstimates.pdf
. This document claims reserves of 200-300 BBbls. The estimates for extractable oil has been estimated to be 18%, 50%, 3% and 10%. This is an impressive amount of oil, but I’m not finding your figure of 800 BBbl extractable oil.

I’m not accustomed to be called ‘too conservative’, but I will certainly agree that the DOE values are conservative. I’m also guessing that it is unusual for The Mage to be on the liberal side of an argument, but here we are. But seriously, I am learning a great deal in the thread. Thanks primarily to The Mage.

93

[quote]The Mage wrote:
The Bakken oil production has increased ~30 fold between 2000 and 2007. (And still climbing.) This is due mostly to “slant” drilling. But this is the fairly normal production, not the shale I was referring to.

The method of in-situ production developed is completely different. The wells actually do not follow a bell curve of production like most wells. They only produce from a small planned out section, and the oil flows at full capacity, then when it drops off, it is practically empty. At that point they simply move the operation over to the next section. [/quote]

Producing wells do not follow a bell curve, they peak as soon as they are brought online and then decline with time, the decline can often be quite dramatic over a very short period time.

Directional drilling allows well trajectories to be planned from a single point and target specific reservoir peaks to maximise the recoverable oil from any given well, so you could have two wells physically right next to each other on the surface which penetrate the reservoir say 50 miles apart subsurface at strategic points to maximise production :o)

94

[quote]Journeyman wrote:

I’m trying to find these estimates. The Bismark Tribune reported much lower numbers at http://bismarcktribune.com/articles/2008/04/29/news/state/154403.txt. They reported, “The federal report found up to 2.6 billion barrels could be recovered in North Dakota, compared with the state’s estimate of 2.1 billion barrels, Murphy said.” I’m a bit disappointed that my old hometowm (Jamestown, Go Jimmies!)

At http://bakkenshale.net/, the author states, “While estimates are all over the place, I think that the Bakken Shale oil field may hold between 3 - 5 billion barrels of recoverable oil”. He did mention that there is also a great deal of natural gas, “Estimates have the Bakken Shale field hold a little less then 2 trillion cubic feet.”

From the state of North Dakota’s Department of Mineral Resources, we find https://www.dmr.nd.gov/ndgs/Bakken/newpostings/07272006_BakkenReserveEstimates.pdf
. This document claims reserves of 200-300 BBbls. The estimates for extractable oil has been estimated to be 18%, 50%, 3% and 10%. This is an impressive amount of oil, but I’m not finding your figure of 800 BBbl extractable oil.

I’m not accustomed to be called ‘too conservative’, but I will certainly agree that the DOE values are conservative. I’m also guessing that it is unusual for The Mage to be on the liberal side of an argument, but here we are. But seriously, I am learning a great deal in the thread. Thanks primarily to The Mage.

[/quote]

Oops, I meant the Green River formation, not the Bakken formation. Sorry about that.

http://geology.com/news/2006/12/colorado-oil-shale-leases-green-river.html

95

“There is a clear desire in Moscow to work toward breaking what it perceives as US dominance of the world economy”

What is interesting about this article is that it shows Russia’s strategic intent to officially align itself with those considered enemies of the US and also their ever gradual alignment with OPEC.

“You cannot separate economics from politics. After all, this is energy, and it obviously has a national security dimension,”

It seems Russia are making a play how will the US cover it?

96

We don’t need to really cover it(unless there’s more campaign bolstering to do). That information is for Russian internal purposes to make it look their government is fending off foes or something… They are dependant on our economy, even not counting the ~$500bil they have put into our companies. US dominance is definitely taking major hits, and will continue to do so, but it has nothing to do with Russia.

97

[quote]Majin wrote:
We don’t need to really cover it(unless there’s more campaign bolstering to do). That information is for Russian internal purposes to make it look their government is fending off foes or something… They are dependant on our economy, even not counting the ~$500bil they have put into our companies. US dominance is definitely taking major hits, and will continue to do so, but it has nothing to do with Russia.[/quote]

I didn’t suggest the US’s current situation was due to/or had something to do with Russian influence, but rather that Russia now see themselves in a position to exploit the US’s current run of poor form.

With the recent events in Georgia it’s apparent that neither side trusts the other and this is clearly a strategic move by the Russians aimed at gaining power and influence while the US’s attentions are held elsewhere.

98

Yeah. When a giant slips, everyone tries to take their shots.

99

[quote]rainjack wrote:
Journeyman wrote:
rainjack wrote:
What is it with the peak oil dipshits?

I don’t know. You made the first mention of peak oil in the thread.

I mentioned the term. You talk the talk. [/quote]

For those economists who have no understanding of anything outside their field I will explain the idea of peak oil. The economic consequences should be evident to some of the economic geniuses who post on this board. I can explain a great deal more detail on the subject if you wish.

Peak oil is a geological concept based upon simple principles that has been supported on numerous instances during the oil era. The two key components of the peak oil theory are the exponential fall in pore pressure in an oil field after drilling and the nature of exploration.

It is well established fact that pore pressure in a single well (and hence production rate) drops after drilling. Recent technological developments have allowed the fall of production in a field to be temporarily slowed. This may be best seen from the North Sea Brent field. However after initiation of new technology use the production curve falls once again. It should also be noted that attempting to produce from a field faster than optimal speed will cause permanent damage.

The other slightly more nebulous fact that dictates access to oil with time is the nature of the exploration business. Basically you get the big ones first. Geologists working in the middle east used to locate 150billion barrel fields using nothing more sophisticated than a pair of boots and some structural interpretation. Now companies spend many millions of dollars in order to locate fields of the 100 million barrel range. They would not do this if they could find bigger fields. The only superfield (bigger than 6billion) found in recent years is off the coast of Brazil. (This field is under 2.5km of sediment and 2 km of water and needs oil prices to stay steadily in the $80 range to break even on extraction; in contrast to early finds which cost in the $5 per barrel range to extract).

The sum of these two effects is to generate a bell shaped oil vs time graph. This is not significantly affected by the economics of supply and demand. (although a slight proviso could be added that more expensive fields may come online when prices rise they simply aren’t enough fields to effect the price- also every time a new field is exploited it will inevitable decline and its effect upon supply will fall).

This curve may be wider or narrower but the basic shape is followed for all fields in existence. It may safely be assumed that the total world field behaves in a similar fashion. Just because half the worlds oil is still in the ground does not mean that supply will stay constant. In fact it means that supply must decrease.

I can’t be arsed to type anymore. Basically you need to stop thinking of oil as a commodity and start thinking of it as a depleting resource. This needs to be handled in a very different economic fashion. No country can ever ‘drill their way to energy independence’.

I hope this helps?

100

[quote]The Mage wrote:
The Bakken oil production has increased ~30 fold between 2000 and 2007. (And still climbing.) This is due mostly to “slant” drilling. But this is the fairly normal production, not the shale I was referring to.

The method of in-situ production developed is completely different. The wells actually do not follow a bell curve of production like most wells. They only produce from a small planned out section, and the oil flows at full capacity, then when it drops off, it is practically empty. At that point they simply move the operation over to the next section.

It is a faulty argument to attempt to point out what percentage of our use, or potential use comes from a single source. Simply because we do not use just one source, and there is more then one source available.

That is like saying a single farm is not worth it because it can barely produce enough in a year to feed the world for an hour. But there are millions of farms out there.

There is an estimated 90 billion available off our shores. That is 4,500 days. Then there is the 10 billion available in Alaska. (Using way outdated information.) Now we are up to 5,000 days. Excluding every other source.

Now add in the 800 billion available in the Bakken shale, (estimated recoverable out of the estimated 1.2 trillion barrels there,) and we now have 45,000 days worth of oil. (123 years.)[/quote]

These calculations are based on a linear model. This is completely invalid for this purpose even as a fist back of the envelope estimate.

BTW my two posts are not to say the US shouldn’t drill as a qualified professional Geologist in the resource industry I welcome more drilling! It just won’t do any good