Posted on 10/06/2014 1:30:37 PM PDT by Kaslin
The Wall Street Journal ran an article recently exploring why the Peak Oil Predictions had not come true. Written by Russell Gold, the Journal’s senior energy reporter based in Austin, Texas, who himself released his first book called “The Boom: How Fracking Ignited the American Energy Revolution and Changed the World”, the article was an excellent walk through the ups and downs of the oil industry going back even to the late 1800’s.
For example, did you know that John D. Rockefeller’s partner in Standard Oil, John Archbold, said, “I will drink every gallon (of oil) produced west of the Mississippi”, and so feared the boom was going to bust that he sold some of his stock at a discount?
As Gold points out, the modern Peak Oil theory was the brainchild of M. King Hubbert, a geologist who worked for Shell Oil. Published in 1956, Hubbert predicted that domestic oil production would peak, somewhere in the early to mid 1970’s, then decline, forming a bell curve. Up from the 50’s to the 70’s, then right back down again.
His theory was looking pretty darned good during the Arab oil embargo, as millions of American’s struggled to fuel their lifestyles after OPEC grabbed America by our collective nuts and showed us who was boss. It was also looking pretty spot-on as recently as 2007/2008 when oil prices shot up to nearly $140 a barrel and some forecasters were predicting $200 or beyond.
Then came fracking. A technology invented by Texas oilman George Mitchell (who also was the conceiver and developer of The Woodlands, north of Houston, soon to be home to Exxon Mobil), which totally changed the world’s energy playing field.
Since it became fully commercially viable around 2008, fracking has unleashed oil and gas that was trapped in these ultra-dense shale formations. Resources that everyone knew was there, but trapped in rock so dense that nobody could figure out how to extract it.
Here’s another prediction. This one by Chris Faulkner of Breitling Energy, and co-host of Powering America Radio: That the US will surpass Saudi Arabia in oil production next year, at 9.5 million barrels. You can hear his prediction on the September 29 show here.
But the naysayers are still as vocal as ever. Some say the shale revolution will putz out soon and is only a temporary blip on the otherwise declining scale of dwindling supply. Remember Mr. Archbold? I think he’d have a pretty tough time swallowing the nearly 4 million barrels of oil a day now flowing from the West of the Mississippi.
I wonder if anyone in his family has any old Standard Oil stock certificates framed & hanging on the wall.
Powering America Radio is heard daily on the Wall Street Business Network at 4:00 Eastern and is co-sponsored by Crude Energy, LLC and Breitling Energy Corporation.
It is important to understand that hydraulic fracturing is not drilling. Hdrofrac is done on traditional wells and tight formations like shale.
A fracked well has a very short productive life, often one year or less.
False.
A well in a shale formation with horizontal lateral and multi-stage hydrofrac tends to have a quick drop off. But I have not seen a reference to any being shut down or not economic after one year, unless it was a poor well to begin with.
Typical well in the Bakken for example looks like:
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Source for Graph:
North Dakota Department of Mineral Resources
https://www.dmr.nd.gov/oilgas/presentations/WBPC2011Activity.pdf
They are not shutting down wells that "only" make a $1,000 a day of product. There are plenty of decades-old stripper wells producing less than 10 barrels a day left in production; they make up nearly a quarter of our oil production oustide the shale fields.
Stripper Well Facts
http://nswa.us/custom/showpage.php?id=25
Also, fracking is labor intensive for the entire well life.
Completely false.
I read about it in National Geographic.
” vaguely remember a show narrated by Walter Cronkite in the 70s that claimed that insects would soon take over the world.”
I, for one, welcome our new (you know the rest).
For those who want to see a video showing how horizontal drilling and fracking is done, Northern Gas and Oil has a great one. It’s 6 minutes.
It includes a visual piece on how fresh water aquifers are protected from contamination.
http://www.northernoil.com/drilling-video
What was the average break even for fracking in 2013?
Higher than a un-fracked well?
Why?
Re: Fracking is not drilling.
I'm writing for a general audience, not engineers.
Are you claiming that fracking does not involve pipes and drilling equipment?
Are you claiming that no new wells are sunk with the exclusive intention of fracking from the first day?
Re: Stripper wells
They pump less than 900,000 barrels a day.
That's not a technology that will “Destroy the Myth of Peak Oil.”
And you want me to explain this to a general audience, or else you will assault my comment?
Re: Fracking is labor intensive.
So, when they have to frack down the entire length of a horizontal well, that requires the same amount of labor as an un-fracked well?
Lighten up, Thack.
I'm a money and numbers guy.
I'm trying to explain to a general audience why the USA will NEVER become the next Saudi Arabia, no matter how much hydrocarbon we pull out of the ground.
Don’t know exactly how much the US produces domestic alley now, but we need to ask Thackney for that information....... However I would not be surprised that we are close to the highest levels of domestic production since the late 60’s and the 1980’s .
Thackney correct me if I am wrong but oil production reached it peak domestically in the late 60’s in 1970 and then declined then in the 1980’s it went back up for a short period.
The future looks bright and yes with confidence that domestic oil production will surpass what we have seen in the past and we will see all time highs in domestic oil production.
Thackney I do would make a very optimistic prediction that technology will increase production and make it profitable oil companies to produce it even if the price falls short of what it is now at $90 or below.
Peak oil is a scientific fact, like Global warming and the greatness of Karl rove.
You continue to confuse the terms. You are ignoring that hydrofrac is used on traditional type wells. Writing garbage like that just adds to the confusion.
Hydrofrac is not just used on these expensive shale wells. It is used in traditional wells as well. It has been used on them for decades. About 90% of ALL oil wells will be hydrofrac'd sometime in their lifetime, not just our new shale wells with massive horizontal laterals.
I'm writing for a general audience, not engineers.
You are confusing the general audience with false and misleading information.
Are you claiming that fracking does not involve pipes and drilling equipment?
Hydrofrac'ng is done after the drilling rig has left the well.
So, when they have to frack down the entire length of a horizontal well, that requires the same amount of labor as an un-fracked well?
Previously you spoke of the entire life of the well. There isn't a difference after the completion including hydrofrac is done.
become the next Saudi Arabia
Saudi has started hydrofrac'ng as well.
It isn’t just hydraulic fracturing, that has been around for a while. It is the combination of horizontal drilling, hydraulic fracturing, and unconventional reservoirs which have made this boom happen.—oh, and the vision to try something that ‘can’t be done’.
The libs never get tired of trying to fulfill their psychotic dreams of being the honchos of the world, no matter what.
IMHO
with present technology, at present prices...
Of course, those two conditions are not fixed.
GMTA - exactly my first thoughts upon reading the article. I'm surprised it took 11 posts to get this basic economic and free market truth in the forum.
I would take that well cycle in an heart beat. Saw the first rig start drilling in Nevada last week. Exciting moment.
+1.
They interviewed a couple energy economists concerning the price collapse in WTI.
The average break even in the Bakken field is $58 per barrel, just shy of the $60 number I quoted in my comments.
The average break even for new wells in the Bakken is $78 per barrel, and the new wells are 90% depleted within two years, just one year longer than the number I quoted in my comments.
I went back and re-read all my comments.
The only serious mistakes I see:
(1) I failed to specify shale drilling.
(2) I thought horizontal wells were fracked in segments, then the initial oil surge was pumped out, then they fracked the next segment.
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