Peak Cheap Oil Update - Part I: The glass is half empty

[maTTz]

Re: Peak Cheap Oil Update - Part I: The glass is half empty

The Bakken's a decent shale oil play that looks like it's in danger of being overcapitalized.

Recoverable reserves are currently estimated at between 1% and 2% of the oil in place - which is still a hell of a lot of oil*. And no doubt technology will increase that recovery rate over time. The main issue is the same as the shale gas plays. The wells deplete rapidly, so maintaining production becomes like running on a treadmill...the more wells you have, the more new wells you have to drill to keep the production and cashflow from falling. Hence my comment about overcapitalization.

Having said that, the best of the wells in the Bakken, although expensive to drill and complete, pay out in under one year, so for the moment the economics are pretty attractive.

[* The midpoint of that estimate would be about 6 Billion barrels of recoverable oil. By way of comparison, the prolific West Texas Permian Basin, first drilled in 1921, has produced about 11 Billion barrels cumulative to date]

So if we're consuming 85 million barrels of oil per day, and a 10 billion barrel find only gives us another 1 million barrels per day, then does that mean the best we can hope for is a bit over 1% of our oil consumption from this Bakken field? not quite the 10 Saudi Arabia's is it...

[mooncliff]

Re: Peak Cheap Oil Update - Part I: The glass is half empty

I would modify the title slightly to

Part I: The glass is half empty (and what is left is the dregs)

[GRG55]

Re: Peak Cheap Oil Update - Part I: The glass is half empty

I have read that the bakken oil formation in Canada & the US is a huge resource (between 400-500 Billion barrels) of light crude. I have attached some links:
http://www.canada.com/saskatoonstarp...5-17fb0c61cd61
http://www.cbc.ca/money/story/2008/0...on-bakken.html

Did any party at the conference touch on this play?

The Bakken's a decent shale oil play that looks like it's in danger of being overcapitalized.

Recoverable reserves are currently estimated at between 1% and 2% of the oil in place - which is still a hell of a lot of oil*. And no doubt technology will increase that recovery rate over time. The main issue is the same as the shale gas plays. The wells deplete rapidly, so maintaining production becomes like running on a treadmill...the more wells you have, the more new wells you have to drill to keep the production and cashflow from falling. Hence my comment about overcapitalization.

Having said that, the best of the wells in the Bakken, although expensive to drill and complete, pay out in under one year, so for the moment the economics are pretty attractive.

[* The midpoint of that estimate would be about 6 Billion barrels of recoverable oil. By way of comparison, the prolific West Texas Permian Basin, first drilled in 1921, has produced about 11 Billion barrels cumulative to date]

[Chris Coles]

Re: Peak Cheap Oil Update - Part I: The glass is half empty

Thank you Chris for your detailed and enlightening replies. Please keep the community updated with your fascinating project!

I would like to read your book, "The Road Ahead", but I cannot find it on cyberspace. A quick Google-fu search leads to this, but this can't be...right? ;)

Sorry about that Largo, I had shortened the title which reads in full: The Road Ahead from a Grass Roots Perspective. Try this link www.chriscoles.com/page3.html

[LargoWinch]

Re: Peak Cheap Oil Update - Part I: The glass is half empty

those stupid, lazy, drunken canucks... leaving all that free oil laying around...

Payback time. ;)

[LargoWinch]

Re: Peak Cheap Oil Update - Part I: The glass is half empty

Thank you Chris for your detailed and enlightening replies. Please keep the community updated with your fascinating project!

I would like to read your book, "The Road Ahead", but I cannot find it on cyberspace. A quick Google-fu search leads to this, but this can't be...right? ;)

[Chris Coles]

Re: Peak Cheap Oil Update - Part I: The glass is half empty

Many thanks GRG, made my day.

[GRG55]

Re: Peak Cheap Oil Update - Part I: The glass is half empty

those stupid, lazy, drunken canucks... leaving all that free oil laying around...

Bud Light? Not likely. Up here we drink...

http://www.youtube.com/watch?v=0XdLheUC7kA

and...

http://www.youtube.com/watch?v=bDTa1Abw7Lc

[metalman]

Re: Peak Cheap Oil Update - Part I: The glass is half empty

I have read that the bakken oil formation in Canada & the US is a huge resource (between 400-500 Billion barrels) of light crude. I have attached some links:
http://www.canada.com/saskatoonstarp...5-17fb0c61cd61
http://www.cbc.ca/money/story/2008/0...on-bakken.html

Did any party at the conference touch on this play?

those stupid, lazy, drunken canucks... leaving all that free oil laying around...

[metalman]

Re: Peak Cheap Oil Update - Part I: The glass is half empty

in 2 yrs the peak cheap oil cycle will be as obvious as the old asset bubble cycle is today...

[rbarrie]

Re: Peak Cheap Oil Update - Part I: The glass is half empty

I have read that the bakken oil formation in Canada & the US is a huge resource (between 400-500 Billion barrels) of light crude. I have attached some links:
http://www.canada.com/saskatoonstarp...5-17fb0c61cd61
http://www.cbc.ca/money/story/2008/0...on-bakken.html

Did any party at the conference touch on this play?

[Roughneck]

Re: Peak Cheap Oil Update - Part I: The glass is half empty

Chris, the oil in the eastern gulf is in federal waters. Much of the western shale deposits sit on federal lans as well. If we would use these resources and allocate the money for energy research it would buy us some time and give us some money to help solve the problem.

[*T*]

Re: Peak Cheap Oil Update - Part I: The glass is half empty

My plan would be to lease the eastern gulf,coastal california and the western shale deposits to provide funding for research. But I think Chris makes a very valid point.What is needed now is out of the box thinking but sadly the scientific community frowns on people who question the status quo.

Whilst I agree with this sentiment, even solutions where the physics is quite well understood (fusion, solar, wave) are woefully underfunded. Rather than print money to support the banks, why did we not emply all those quants to do real science instead? (which is what most of them wanted to do in the first place).

[*T*]

Re: Peak Cheap Oil Update - Part I: The glass is half empty

Secondly, the problem today with oil production and exploration is more the problem of socialism.

Grapejelly, is there any problem you do not think is caused by too much socialism?

[Verdred]

Re: Peak Cheap Oil Update - Part I: The glass is half empty

I like the discussion that has ensued (grass fed cows and all), but I MORE like the fact that, as far as iTulip is concerned Peak Cheap Oil isn't up for debate; Or to put it differently, the assumption is Peak Cheap Oil until proven otherwise (or technologies are scaled up, what-have-you). If I want discussion of PCO I can go to either ASPO or Oil Drum (though to be honest, it isn't debated much there either because PCO is now so dramatically apparent). The key advantage here is the merging of AN ASSUMPTION OF PCO and the (d)evolving Global Economy. With that, I move on to Part II. Thanks iTulip.