tag:blogger.com,1999:blog-8861605.post6221867444391058851..comments2024-03-24T11:01:27.668-04:00Comments on Resource Insights: Oil's average price posts new records and they’re telling us it’s abundant!Kurt Cobbhttp://www.blogger.com/profile/05330759091950742285noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-8861605.post-2375526391708190702013-04-07T09:27:35.542-04:002013-04-07T09:27:35.542-04:00I don't think the general public really has an...<br /> I don't think the general public really has any idea about oil. GP probably has more exposure to global warming news. Most people just go about their lives doing the things they can.<br /><br />I'm sure almost nobody knows about M. King Hubbert and his prediction.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8861605.post-7002010065744680732013-03-13T05:14:48.438-04:002013-03-13T05:14:48.438-04:00Just a quote from Hubbert :
"'I was in N...Just a quote from Hubbert :<br /><br />"'I was in New York in the 30s. I had a box seat at the depression,' Hubbert says. 'I can assure you it was a very educational experience. We shut the country down because of monetary reasons. We had manpower and abundant raw materials. Yet we shut the country down. We're doing the same kind of thing now but with a different material outlook. We are not in the position we were in 1929-30 with regard to the future. Then the physical system was ready to roll. This time it's not. We are in a crisis in the evolution of human socienty. It's unique to both human and geologic history. It has never happened before and it can't possibly happen again. You can only use oil once. You can only use metals once. Soon all the oil is going to be burned and all the metals mined and scattered.' <br /><br />http://www.hubbertpeak.com/hubbert/monetary.htm<br /><br />yvesThttps://www.blogger.com/profile/00225964326142677776noreply@blogger.comtag:blogger.com,1999:blog-8861605.post-55455934349720314242013-03-12T19:15:51.280-04:002013-03-12T19:15:51.280-04:00GT Johne claims that fracking is a recent inventio...GT Johne claims that fracking is a recent invention. In this he is only partially correct for fracking originated in the 1940s and has been used on wells around the world since then. The most recent development in fracking is high volume slickwater hydraulic fracturing and that is a new phenomenon though it is being oversold by its proponents.<br /><br />GT claims that Russia will add 3 trillion barrels to world supply using this technique. But he does not give us a price. Oil in the ground only becomes usable at a certain price and that price is, as he admits, quite high. This begs the question of how much oil people will be able to afford in the long run at escalating prices.<br /><br />Nor does GT give us a source for his claim. If he is talking about total resources, then he should know--he claims to be geological consultant--that only a small fraction of that resource is ever likely to turn into reserves, that is stuff we can get out of the ground at current prices, using known technology from identified fields.<br /><br />He again launches the canard that we are not running out. But I have never claimed that we are running out,only that we may be nearing the highest attainable RATE of production. And, rate is the key metric for the world economy requires continuous infusions of high-quality energy to function. Even the current plateau in oil production has been in part responsible for sluggish economic activity in the past few years as prices have remained high.<br /><br />But GT makes my point. For he does not give me any facts available TODAY to refute my contention that oil supplies are constrained. Instead, he tells me the IN THE FUTURE all will be well because he says it will.<br /><br />Tight oil is exceedingly difficult and expensive to extract. The drillers go after the easy stuff first which is logical. Soon, they will go after the marginal stuff and costs will rise and volumes decline.<br /><br />GT does not mention the decline rate for tight oil wells, about a 40 percent decline in the rate of production EACH YEAR. That is setting up a treadmill that will be hard to overcome as drillers must double their drilling every two and half years or so just to keep production flat. That geometric progression is hardly a recipe for a glut and suggests future constraints on the number of available oil rigs, trained personnel, pipeline infrastructure, and just about everything else one needs to find, extract and deliver oil.<br /><br />Yes, I know IN THE FUTURE we will all see that it works. But we've been hearing that since the early part of the last decade when the new miracle technology was deepwater drilling. This is just the latest round in pronouncements about "miracle" technologies.<br /><br />There is no miracle here, just physics. And physics is going to be a formidable foe for drillers as they move to more and more difficult deposits.Kurt Cobbhttps://www.blogger.com/profile/05330759091950742285noreply@blogger.comtag:blogger.com,1999:blog-8861605.post-35542813893845720142013-03-12T16:58:06.512-04:002013-03-12T16:58:06.512-04:00There has been a recent (last 10 yrs)invention in ...There has been a recent (last 10 yrs)invention in Canada that has enabled the retrieval of vast reserves into 'tight' formations. Multi-stage Frac'ing. This is done in horizontal wells drilled up to 2 km long and frac'ing numerous stages within the formation. Hence the development of the Bakken in SE Saskatchewan and North Dakota and numerous other tight formations throughout various basins in North America. What was impossible to recover previously with former technology has now brought about a renaissance of the oil industry. Recoveries of reserves have escalated significantly and the risk of drilling has been diminished. What you are seeing is a glut of landlocked oil reserves within North America. We who are actively pursuing these reserves are dishing out inflated prices to develop the reserves (that is why consumers are still paying significantly at the gas pump). Comments made casually and are generalizations to the 'abundance' of oil in the future are only predicting what will happen when the technology is utilized in other basins across the world. Russia alone can add another 3 trillion barrels to the world markets just by applying this new frac'ing technology, let alone some of the other significant producing basins such as the middle East. Yes, there is copious amounts of oil, so we aren't running out, far from it. You will see Brent nose dive in price once the new frac'ing technology is applied to their basins.GT Johnehttps://www.blogger.com/profile/04080069071160694422noreply@blogger.comtag:blogger.com,1999:blog-8861605.post-27214371276127789532013-03-11T04:26:31.440-04:002013-03-11T04:26:31.440-04:00Thanks for this, and indded current propaganda is ...Thanks for this, and indded current propaganda is truly amazing.<br /><br />Maybe another piece of information that could wake people up a bit is that the western "big oil" production is decreasing since 2004 :<br />http://petrole.blog.lemonde.fr/2013/02/21/total-production-by-the-five-major-oil-producers-has-fallen-by-a-quarter-since-2004/yvesThttps://www.blogger.com/profile/00225964326142677776noreply@blogger.comtag:blogger.com,1999:blog-8861605.post-87570936819959612642013-03-10T14:14:21.356-04:002013-03-10T14:14:21.356-04:00As an oil and natural gas producer myself I am for...As an oil and natural gas producer myself I am forever defending my industry in the face of an angry public. Angry over offshore accidents that lead to horrific oil spills, angry over enormous quarterly profits that acutally represent less than 8% annual rates of return on capital investments, angry over the rediculous idea that tax incentives to drill wells are actually tax subsidies. Most of all people are always angry, darn right pissed, over the absurd notion that the oil and gas industry manipulates world crude oil prices to artificially prop up gasoline prices. The oil industry, I am often told, is in kahoots with Detroit to keep vehicle mileage low. <br /><br />I can think of only one industry more mistrusted, more loathed than oil and those folks have to take bar exams. <br /><br />But as to this tight oil abundance propaganda, the hype about energy independence and the end of peak oil worries, it is the biggest scam on the American public I have witnessed in my 60 years and I agree with you 110%, Mr. Cobb. The scam is about raising money, about selling stock in public companies, about financing the tight oil drilling treadmill and people wanting to believe we don't need to worry about our energy future have bought it, hook, line and sinker. <br /><br />The same industry who nobody trusts now says we are good to go for future oil supplies, Saudi Arabia move over, and everybody believes them. Bank on it. Lets go buy a bigger SUV, honey. <br /><br />Denial does seem to have its privileges.<br /><br />Mike<br />Texas Anonymousnoreply@blogger.com