Bishop Hill Epic shale
The shale gas boom just keeps getting bigger and bigger, having now reached what Nick Grealy calls a Wow! moment (H/T GWPF).
And surprise, surprise: China! Largest shale reserves in the world, surpassing even the US by far. I've said it before, and I'll say it again. The only way I have been wrong about shale is by underestimating it's impact. But the Chinese figures change everything. World LNG? Toast! Which can't help Australia too much even with 395. Which leads to the other southern hemisphere wonders, although since this site mentioned them both in Q3 2009, it's only the massive scale of the resource that surprises, not the locations:
South Africa 485!
Argentina 774! Repeat that. That is not a mistake. That is technicially recoverable. That is astounding.
For some, however, this kind of good news just can't go unchallenged and I sense that there is a concerted effort to hype up the idea that there might be some important environmental concerns. Take this article in Time magazine for example, or this forthcoming conference.
Meanwhile, Zeke, writing at Lucia's blog, looks at an old chart of hydrocarbon deposits and the proportion used to date - it's hard to get the two figures on the same chart because mankind has used so little. Zeke wonders what it would look like now we have discovered all this shale gas.
Reader Comments (106)
" Vangel, whether is economical or not I am not able to discuss, but the technology for producing shale gas most defintely exists already. Onshore, wihere drilling is cheap, it may be viable. And as the price of hydrocarbons increases so the economics make more sense - true also for oil sands."
Nobody is disputing the fact that the technology is there. The problem comes from natural laws that cannot be overcome with technology. If the energy density of shale is very low, and it is, you can't spend a great deal of energy trying to coax natural gas or oil out of the shale or you soon wind up investing more energy than the energy that you get out of the shale.
As for methane hydrates as a resource, these are bloody dangerous to drill into.
I am quite aware of the issues. I am simply pointing out that given the very high density of methane hydrates it is far more likely that improved technology can have a much bigger effect there. I have seen equipment that can mine the ocean bottom by crushing smokers and bringing up their content to a surface ship. There is no reason why we could not have some kind of mechanism that is able to process hydrates effectively. But even if we could figure out a way it would be a long time before we could get enough methane out of it to make much of a difference. Right now it is better to concentrate on conventional sources, which should still be plentiful because that is what exploration history suggests.
Yes, the anti-SG claim that everyone makes. Without explaining why it is safe to extrapolate from specific geology in the US to all shale deposits everywhere.
I do not think that is what he was assuming. The argument is actually a very simple one. Shale has a very low energy density and porosity/permeability issues that require the use of fracking. The problem is that depletion rates are very rapid because of the natural characteristics of shale. Given the low density there is a big problem with economics because the energy that is needed to be invested is very high relative to the energy than can be extracted. Simply put, there is no margin for error.
The US experience should be very instructive for everyone. The shale players raised a lot of money and drilled quite a bit. The problem was that they could not make any money at the very low natural gas prices for their product. The only way to make the process look good was to make accounting assumptions that are not justified by the real world production data, which is why people like Arthur Berman spoke out against the silly optimism. And anyone who has been paying attention knows that the shale hype has been with us for nearly a century. It has yet to pay off.
BBD: I started writing a blog when I was a minor University administrator and I was giving advice to other faculty on why the university administration did certain things - among other reasons for writing. At that time I created the pseudonym and when Kyle and I created The Oil Drum I continued the practice (he was Prof Goose). When, because of CC issues, I moved on to form Bit Tooth Energy I just carried it over. By now (6 years later) I'm just I suppose doing it out of habit - you can find out who I am with no great bother.
Robin: At Bit Tooth I write on these resources a fair bit, and have just done a quick review of the top oil producers, around the world, and while doing this did note (in the earlier contributory posts) the considerable volumes of NG that are coming to the market more conventionally than through SG. Since that can be delivered (for eg) to the US for around $4/kcf and SG needs a price of around $6-7, it is likely that trade which will, in the short term, make life difficult for those pushing the SG production. There are also pipelines, such as the Rockies Express, that are now bringing Western Gas (where there is a glut) to the Eastern market, and that will also become a player.
It is not that SG won't be more of a player in the future - but there is a technical issue that has to be solved to sustain long-term productivity, and they aren't there yet. Developing SG was not just a 2-step process after horizontal wells came fracturing the wells, and then the introduction of slick-water (because they have to keep the cracks open and they weren't getting the sand far enough back into the fractures) and so it goes. But just as everyone was convinced that cellulosic ethanol was a certain answer (look up Range Fuels) so it is highly premature to expect that SG is the immediate and sole answer to the UK problems.
Like everything else that is going to be needed to solve the energy dilemma of the future, it is just one of the silver BB's, not the silver bullet.
And I haven't read the EIA report in any detail yet, and will no doubt post on it when I do. But in regard to the UK situation - more conventional NG will be a short term answer, but it is foolish IMO to shut down existing power generation before a demonstrated replacement technology is in place and producing (old coal-fired plants have had to be restarted in the FSU on occasion).
Heading Out:
Thanks - an informative answer. (And BBD, it seems he's not another doom merchant as I think you suspected.)
Two comments:
1. I'd be interested to see your views on the EIA report - frankly, I'd be surprised if its assessment didn't take account of the SG problems you've identified.
2. I agree about the foolishness of shutting down existing power generation without proven replacement technology. But that's what the EU has decreed and no major UK political party seems willing to challenge it.
Re Bruce
From one drilling site you can send out horizontal pipes in 3,4 or 5 directions.
Can you re-use the vertical drill hole for this, or does it need drilling again? I've been looking at how horizontal drilling works a little and impressive accuracy. There seems to be a lot of FUD around fraccing though, ie risk of ground water contamination. As I understand it, the wells go much deeper than aquifers, so main risk of contamination is if the section of pipe that goes through any aquifer leaks, which seems rare. Some of the criticisms in Gasland don't seem valid, ie lack of control water quality tests pre-drilling to determine if fraccing was the cause for contamination or not. Then again, environmentalists do seem to have a habit of confusing cause and effect.
Apr 8, 2011 at 1:16 PM | Atomic Hairdryer
yes one hole and from the bottom head every where with the pipe sometime i go wtf wiyh you guy's
Robin Guernier
TOD is doom central.
Heading Out
Thanks for your response - I didn't realise who you were. I treat anyone who claims professional expertise from behind a pseudonym with equal caution.
I will wait with interest for your response to the EIA SG report.
Please note, I did not at any point suggest shutting down any UK baseload with SG as yet an unknown quantity. In fact my general view is that current UK energy policy is hopelessly broken as it is force-marching coal-fired plant into extinction with no thought for security of supply going forward.
I am still extremely puzzled by the growing dichotomy between a few nay-sayers and organisations like the EIA.
BBD:
Maybe (I'm unfamiliar with TOD) - but, on the evidence here, HO is no doomster. And, yes, your view on current UK energy policy seems to be sadly true.
(PS: note spelling of my name. Thanks.)
RG
Oops, sorry about that. Normally very careful with names too, so doubly unfortunate.
Agreed re Heading Out not a doomer - but have a read at TOD and you will see what I mean. Good site though - I spend plenty of time there ;-)
I have written a fair bit about UK energy policy in comments here. For a synopsis, go to Discussion and see my attempt to engage with ZDB on renewables.
I have to say that some very clever people who read and write on this blog have ridiculed gas from shale in the not too distant past ^.^
This is one of the most interesting threads I have read for a little while. Thanks to the Bish for starting it and thanks to all (worriers and enthusiasts alike) for their contributions.
Concerns about shale gas and nuclear must obviously be considered - and separated from the propaganda which is absolutely endemic, especially about the latter. But we shouldn't forget that if coal deep mines were a new thing, the concerns would be even greater (and no, I'm not even thinking about harmless gaseous plant food).
And the concerns must be contrasted with the Government's mindboggling mixture of hubris and insouciance in continuing to promote the spending of £180 Billion on BigWind (at a time of desperate overspending and financial volatility), when it is absolutely clear that the energy density of puffs of air is absolutely useless for anything other than intermittently grinding corn or pumping water.
But of course, both BuffHuhne and Little Eddie Milipede are both weapons grade nitwits.
HEADING OUT
Interested in your comments and in the fact that you are (or have been) a The Oil Drum insider. I have visited TOD on many occasions and can't quite get my head around the fact that some of the threads are obviously written by very clever experts in their field. That being the case, it is strange that they are of the PeakDoom persuasion, as BBD points out. And even stranger that they manage to get clever experts to contribute to an outfit (TOD) which is a "partner" (along with UEA and Geoffrey Houghton) in the ZeroCarbonBritain 2030 hyper-lunacy report.
Could you comment?
But Martin and BBD this discussion about SG is surely academic. According to this, "Solar power ... will satisfy the entire world's need for energy in less than twenty years".
Next problem?
Martin:
Well some of us were rather naive.
In regard to TOD being "Peak Doom" I suppose it depends on your viewpoint. In the post I put up last Sunday, for eg, I listed the top 30 oil producers in the world, with current production relative to 2009. These are referenced numbers, and only 12 increased production (and usually not much) while 18 had declined. Saudi says they won't produce more than 12 mbd, and are at over 10 now, and Russia is about on peak - they say they can hold on 10 for a while. But where are you going to get the steady increase in demand of about 1.5 mbd/year over the next few years? When we started TOD we one of few "voices in the wilderness", now there are increasing numbers of studies that are admitting to the problem (which purely relates to oil at the moment). Those who called us "doomers" (CERA and the ilk) have been shown to be consistently wrong in their forecasts, but still get thousands hanging on their every word. (Sound familiar?) I try (as do most of the contributors) to be factual on what is happening, yes we disagree, but if you do the studies there is not a whole lot of room for doubt.
Now in regard to the climate change bent. When we started the site I hadn't heard of the controversy. One day on a plane I read the book about the MWP and wrote a short post on it (as much to fill space as anything) - wow! Much abuse, little fact, so I got curious. But it turns out that the main site editor at the time (neither Kyle nor I had the time when the site got to the size it had to monitor and do the other chores) and the person who writes Drumbeat are rather strongly oriented to the climate change theories. It seemed better for the overall health of the site that I took my cynicism and posts on what is going on with temperature, elsewhere, rather than tear the structure apart - so I did and created Bit Tooth.
Because of the quality of readership and comments in times of controversy (say the Gulf Oil Spill) I have agreed that TOD can continue to use some of my posts (in their new editorial structure there is a vote on each piece submitted, so not all either get submitted - I don't submit my temperature studies obviously - or approved.) But the posts do draw informed comment, and with about 30 k readers a day it does still allow me to help inform the public about energy, which was why we founded it in the first place. It was agreed that climate change is an almost forbidden topic, but that depends on the POV being expressed.
"It's getting tougher to make the list of the 10 biggest "monster" wells in the Barnett Shale natural gas field in North Texas.
To join that select group, a well's output must average more than 8 million cubic feet of gas per day during its peak month.
Fewer than 1 in 1,000 Barnett wells has attained such a lofty yield for a month, which is enough gas to meet the heating and cooking needs for about 3,300 homes for a year, based on American Gas Association usage data.
While the Barnett Shale underlies more than 20 North Texas counties, the top "sweet spots" are in Tarrant and Johnson counties. All of the 35 biggest wells are in those counties, according to a new report by the Fort Worth-based Powell Barnett Shale Newsletter.
The premier producer, hands down, is the Day Kimball Hill A1 well in Arlington in far southeast Tarrant County, which averaged 12.97 million cubic feet of gas per day in October. It's the only well averaging more than 10 million cubic feet daily, but all of the top 10 wells averaged 8.2 million or more daily, and all of the top 35 averaged more than 6.3 million daily, which is triple what many typical Barnett wells produce."
Read more: http://www.star-telegram.com/2010/03/05/2018940/monster-wells-epitomize-what-the.html#ixzz1J2NjyQEO
Is The Oil Drum a George Soros front organization? I know he has a lot of "green" investment positions that would beneift from Doom and Gloom sites.
Ah, Bruce, Bruce!
Do all of us who question orthodox thinking have to be supported by some deep and sinister conspiracy?
No TOD is not a Soros site. Kyle and I are both faculty (though I just retired) at different Universities. After we had been writing for a bit we were at a meeting (one of the ASPO's as I remember) when a guy came up and said "we made a lot of money from TOD, thanks and can I help with support," I think Kyle followed up on that (since we needed money for the server and to switch to a more responsive network since whenever there was a "big interest" story the site would crash.) So there was this in initial infusion of cash, and then during the oil spill last summer Kyle put a small request for funds at the top of comments and this provided additional cash which is used to help with site logistics. None of us who write for the site are paid anything, though I did get my way paid to the last ASPO - USA (Association for the Study of Peak Oil) conference (by ASPO directly) since I chaired one session and gave two papers, one on the oil spill. (The other was on the mess we are heading into because we don't have enough qualified engineers in the energy technology fields).
Sorry, no scandal, just another one of those irritating blog sites that won't leave well enough alone.
Robin Guenier (sp!)
I'm fairly sure you were being sarcastic re SPV, so this is not intended as a response to your comment, but for general interest.
Kurzweil is (as so often) talking bollocks.
He is apparently unaware that there is an upper physical limit to the conversion efficiency of SPV panels. This is not a theoretical constraint.
http://www.inference.phy.cam.ac.uk/withouthotair/c6/page_39.shtml
And:
http://www.inference.phy.cam.ac.uk/withouthotair/c6/page_47.shtml
The above quotes are from Sustainable Energy - without the hot air by David JC MacKay. MacKay is a Cambridge professor of physics and the Chief Scientific Advisor to the UK Department for Energy and Climate Change (DECC).
He is a true believer when it comes to renewables.
Heading Out
Since you appear to be around, please accept my apologies for being so snappish with you yesterday. It was unwarranted and hasty.
Dominic
I agree that we should treat Heading Out with courtesy. So, BBD, I was glad to see your apology and, Bruce, sorry to see your conspiracy suggestion - HO's gentle rebuke was justified.
But, Martin, I had a look at the ZeroCarbonBritain 2030 report (first time I'd heard of it) - it really is an absurd document. I thought I'd post a few extracts as examples but there were so many I gave up. Here's just one about wind power (by far the most important source of energy in the zcb plan):
So far as i can see that silly statement is the only reference to one of the biggest concerns about wind power - spelled out (inter alia) here.
And you're right, Martin, TOD is a "partner" to ZCB. So I too will be interested in HO's comment.
PS to BBD: yes, my reference to Kurzweil was sarcastic.
Who funds you Heading Out? Are you actually a non-profit? Can I see your contributor list?
Bruce:
I am not sure what you mean by "who funds you?" If you mean how do I put bread on the table, I have a pension and that covers my expenses - if you mean who funds "Bit Tooth Energy" which is my primary site, nobody does.
It is run on blogger (which is free) and has yet to generate enough traffic that I need to be concerned about server size. My only costs are my time and buying the occasional book or 5, which I pay for myself.
I do, as with a number of retired faculty, continue to do a small amount of consulting (emphasis on the word small) in my field of expertise, but it mainly deals with technical issues, such as patent claims etc.
Is it reasonable to reverse the question?
Heading Out , TheOilDrum is published by "Institute for the Study of Energy and Our Future"
http://www.theoildrum.com/special/faq
In 2007, that organization had revenue of $144,000 with 120,000 left over.
106,000 was "Direct Public Support". In 2008 and 2009 you didn't even come close to 100,000 in donations.
I'm just curious who funded your startup.
http://dynamodata.fdncenter.org/990_pdf_archive/261/261233189/261233189_200712_990.pdf
This is interesting.
(Bruce: surely there are more interesting, relevant and important questions for HO than his funding? Such as why on earth is TOD a partner of ZeroCarbonBritain 2030.)
"The US Geological Survey estimates technically recoverable Barnett gas resources of 26 Tcf, and many operators believe that this is too low. My calculations suggest that the Barnett EUR, based on 11,817 horizontal and vertical wells, will be about 8.8 Tcf. "
Now, the Barnett as of 2010 has produced 9tcf and is producing at record levels of 1.9tcf per year.
Art Berman is a permanent Doom and Gloomer.
I think that the passage of time has proved him correct. The shale gas producers lost their shirts on the operations side. Many had to sell off their assets to companies looking to take advantage of SEC reserve requirement rules or to merge with bigger competitors who could make money from other sources. The fact is that you still can't make any money in shale gas because the cost of producing it is higher than the spot price. And rising prices will not be an easy solution because as they go up so will the costs. As usual, shale will be just short of profitability.
Vangel, what you seem to be describing is the Global Warming catch 22 ... if it snows, global warming causes snow, iif doesn't snow, global warming makes it too warm to snow ... if there is drought ... etc etc.
Now you are saying shale drillers can't make any money because the price is too low, but if the price rises they still can't make money because costs will go up ...
Is there anything shale can't do?
Sound like the perfect doom and gloomer.
Now everything I've read suggest most shale wells pay off their costs in the first year and every year after is pure profit. But maybe you have some verifiable facts?
Thanks to HEADING OUT for his response and answering most of my queries (although as Robin Guenier points out, not the partnership with the ZCB hyperlunatics! Still, no desire to rub HO's nose in that mess!)
Yet more useful and interesting contributions from Vangel, Bruce, BBD....
Naturally I've read quite a bit about PeakDoom but certainly I'm not an expert. It seems to me that there is a huge amount of hype and exaggeration on both sides of the argument. And I'm well aware that some of the 'unconventional' fossil fuel reserves (underground coal gassification?) look both technically dodgy and commercially suspect and that the sometimes quoted reserves of coal in the UK (for example) are a tad 'optimistic'.
But it seems very likely that PeakDoom will certainly NOT apply any time soon to Russia and the US and China and almost everywhere whose ruling political elite isn't totally away with the fairies. (So that certainly leaves the UK in very deep ordure.)
And, whilst the antics of BuffHuhne and the Greenies provoke the response that ALL renewables are as laughable as BigWind, in truth there are some renewable technologies that are probably worthwhile (solar at low latitudes? geothermal if you live in the Azores? even wind if you want to pump water intermittently.)
In the meantime, a fraction of BuffHuhne's BigWind and FIT budget could be used to encourage development of Thorium, for example.
But I can see no way out of the UK's predicament until people shiver in the dark. When that happens, even BuffHuhne & Milipede will have to look out of the window and note the assembled peasants approaching, pitchforks and flaming torches in hand.
Bring it on.
Martin:
Like you, I welcome Heading Out’s readiness to engage with issues raised here – from, it seems, a position of useful expertise. But I’m waiting for his response on two matters:
1. (As you note) his view of TOD’s “partnership” with the decidedly weird ZCB 2030; and
2. His views on the EIA’s definition of the shale gas “recovery factor” – does he think it insufficiently cautious? A reminder – here’s what they say:
BTW, prompted by your intervention in the ZDB/BBD discussion (here), I had a look at the Royal Academy of Engineering’s report “Generating the Future”. Interesting – the Executive Summary is replete with evidence that the Academy doesn’t really consider the 80% by 2050 cuts in UK CO2 emissions is achievable. Here’s an example:
(As I suspect the Academy knows) there’s no possibility that challenge will be met or that change implemented - and that's ignoring the foolishness of majoring on Big Wind. I have supplied major engineering systems to government, have worked at a senior level within government and, recently, have observed closely the disastrous attempt to introduce a new NHS IT system. Such large complex systems (and this would be the biggest of all) are always late, rarely achieve what’s promised and consistently cost vastly more than planned. The attempted implementation of this plan can only end in ruin – for the already tottering UK economy and for the British people.
"Now you are saying shale drillers can't make any money because the price is too low, but if the price rises they still can't make money because costs will go up ..."
What I am saying is that the energy costs are imbedded in the production process. You have to invest some energy in to get energy out. In the case of shale gas what we have is a situation where each unit of energy produced takes about a unit of energy of investment. That means that costs will keep rising right along with the energy price and when we add other costs the shale players will always be coming in just short of profitability. Of course, not all shale areas are the same so we will have sweet spots that will be profitable and will act as teasers for speculators who do not do their homework.
Now everything I've read suggest most shale wells pay off their costs in the first year and every year after is pure profit. But maybe you have some verifiable facts?"
How about the conference calls that the shale drillers have? If you listened to the call by Chesapeake you would have found Mr. Shale Gas, Aubrey McClendon talk about converting to a shale oil company because he can't make any money from shale gas.
http://www.glgroup.com/News/Chesapeake-converting-itself-from-shale-gas-to-oil-company.-Good-idea--51383.html
More money has been lost by investors believing hype and overreaching on what was thought to be a sure thing than than by speculators taking risks on long shots. The reason is price. When I invest in a mineral deposit in Haiti or an oil field in Iraq I know that there is a risk of confiscation by the thieves that run the country. But I offset those risks by paying a tiny fraction of what those assets would cost me in a safer political jurisdiction. When a shale gas investor buys into assets in Texas he does not get a huge price discount because of the economic risk. Instead he hopes that the wells that are drilled will find a sweet spot that will produce enough gas to pay for the wells and leave a decent return for him. But reality tells us that the assumptions that those hopes of a profit are based on are not valid. While some wells will be very profitable the average shale well will not produce enough gas to cover all the costs. (Which is why Aubrey is toning down the shale gas hype a bit and getting on the shale liquids bandwagon.
I don't know about you but when I invest my goal is to make money by backing ventures that make sense. The first criteria is that the assets acquired have to be able to produce a profit based on the price paid for them. Shale gas fails that criteria so it cannot be in my portfolio at this time. Perhaps in another decade or two it might make sense. By that time the leases will be much more affordable and investors may be able to get a low enough price that would make sense to take the risks.
"Naturally I've read quite a bit about PeakDoom but certainly I'm not an expert. It seems to me that there is a huge amount of hype and exaggeration on both sides of the argument. And I'm well aware that some of the 'unconventional' fossil fuel reserves (underground coal gassification?) look both technically dodgy and commercially suspect and that the sometimes quoted reserves of coal in the UK (for example) are a tad 'optimistic'."
No hype and exaggeration is required because the real world data support the arguments of the Peak Oil side. The conclusions supporting Peak Oil are based on the Hubbert linearization. You can find this explained very well and simply in Kenneth Deffeyes' books or by looking at the numerous articles written on the topic where the method is applied.
http://www.theoildrum.com/story/2006/1/20/193723/259
Now as someone who is skeptical of everything I do have a problem with some of the Deffeyes work because I would be much more comfortable if the quality of the historical data were much better. But hoping and wishing will not change reality so we will have to do with what we have. And when we apply that to the methodology we get a predicted peak sometime between 2005 and 2014. Clearly we do not have long to wait to find out who is right in this debate. While things would turn out better if the naive optimists were correct, it is unlikely that will be the case.
Vangel: "That means that costs will keep rising right along with the energy price and when we add other costs the shale players will always be coming in just short of profitability."
Wow. Just like CO2. It's magic. It can do anything. It can make costs rise for already drilled wells ...
Ha!
What I see is a form of cult that has an explanation pointing towards doom and gloom no matter what.
Who back The Oil Drum with the 100,000$ startup? Who benefits from such doom and gloom?
And, Martin, it's significant that the 2050 emissions reduction plan considered by the Royal Academy of Engineering depends on the availability of Carbon Capture & Storage and on new nuclear plants. But, as CCS looks increasingly dubious and now nuclear is uncertain (see this), the plan - in any case absurdly optimistic - looks close to collapse.
Ah, Bruce:
Not sure I know where to start!
In regard to the Kimball Hill well that you write about earlier in the discussion - you didn't quote the next part of that story
Let's see. that is a 47% decline in production in 3 months - perhaps you might now understand the concern that some of us have with the hype that is prevalent in those selling the SG solution.In regard to the Zero Carbon study, I don't know the origin of that - but I do know that some of the UK editors of TOD are sought out because they are knowledgeable about decline rates etc, one also (in France) has considerable experience with wind farm operations, and so it may be that this knowledge base was tapped as input to the report.
Just because others share some of your opinions doesn't mean that you agree with them wholeheartedly. There is an ongoing but intermittent debate on TOD about the future of coal, with a number of folk thinking it's use will peak soon. I think that is not the case, and argue the other side, but am I prepared to write the "peer-reviewed paper" to refute the position, as I said before - why bother? The facts will become evident soon enough, and I'm more of an engineer than a scientist, in that I prefer to look at the facts, find an answer, and move on, rather than endlessly debating theories that become increasingly wrong.
I remember going to a climate change meeting that Mike Morano was at in Missouri, and sitting at a table for lunch that was filled with "birthers." Do I support that idiocy, no! But we shared a cynicism that the world is not going to melt by a week come Friday.
And in regard to the TOD start-up funds, I thought I explained where I believe they came from up-thread. I don't remember the names of the folk that Kyle talked to, nor actually until recently was I aware that it was that much. One of the benefits, if no-one gets paid for running a blog, is that costs are not that high. So I could never see why we needed a lot of money (though server costs and maintenance grow beyond the trivial as the site becomes more popular and I had to learn that). But, apart from the agreement not to discuss climate change issues except when they are specific to the discussion on energy, and the fact that, since the start of the year, everyone has to have two other editors approve before a post is put up, (which means I get suggestions on formatting, spelling and the occasional number challenged - such as the current decline in Mexican production for eg) there is no pressure to write to any point of view or topic. Sure if President Obama comes up with a speech there might be a suggestion that someone responds but it is not delegated nor is any particular point of view suggested.
We're just a bunch of folk, scattered around the globe a bit, who share a common interest and who write about it. There is no conspiracy, just, as someone once said "the facts, ma'am, just the facts."
Heading Out:
Thanks for another interesting and informative comment.
But, re that weird ZCB2030 report, although I could understand their using your specific expertise (with a footnote acknowledgement), TOD is prominently listed as a "partner" alongside several catastrophic warming advocacy groups. It doesn't look too good - and would appear to go way beyond not discussing "climate change issues except when they are specific to the discussion on energy".
Heading Out:
"The Day Kimball Hill #A1 cost $2.6 million to drill and complete and will produce natural gas for 50 years. "
At 4$ per 1000 cubic feet, the well made 1.6 million in the first month, 1,000,000 in its 2nd, and 840,000 in its 3rd.
3.4 million in 3 months. Drilling costs paid off in 3 months.
And then 800,000 a month slowly declining for 50 years.
Sounds amazingly profitable to me.
I checked out the Texas Railroad Commision site.
From July 2009 to Dec 2010 that well had produced 2,114,902 MCF = 10 million dollars.
Nice return on your investment so far ... 400%
Heading Out: "And in regard to the TOD start-up funds, I thought I explained where I believe they came from up-thread. I don't remember the names of the folk that Kyle talked to, nor actually until recently was I aware that it was that much. "
So for all you admit to, it could be George Soros or one of his subsidiaries? Or an oil company trying to make oil prices rise thru the spread of doom and gloom?
Bruce:
If you think that the well stopped declining after the 3rd month, I have this Bridge in Brookline that I can get you a really good deal on, and if that isn't exciting then for just a small fee I can get you access to the fortunes of some dispossessed diplomats from Nigeria.
And while I really would like you to think that I move in the circles where I bump into George Soros at a conference, sad to say I do not.
Robin:
Sorry it is conjecture on my part, because I really don't know how it came about - that just seemed a logical way it might have happened.
Heading Out, I looked at the data. From July 2009.
2,129,969 MCF by the end of 2010.
It clearly paid back the investors in the first 3 months.
Why are you so full of Doom and Gloom? Are you clinically depressed?
Then there is Lease Name: WHITE SOUTH, Lease No: 257342, Well No: 1H
1.125 million cubic feet in 6 months.
"And while I really would like you to think that I move in the circles where I bump into George Soros at a conference, sad to say I do not."
Ok. But who fronted your website $100,000 to get going? You had zero donations in 2008, a few thousand in 2009 - and nothing filed for 2010 yet.
Heading Out:
Yes, I understand that. But you can perhaps appreciate that people have doubts about TOD when it is prominently “partnered” to a plan that includes:
• “Reaching out [to] … foster new social norms and … behaviours across society”
• Challenging “extrinsic values in society”
• Ending fossil-fuel power generation
• Ending nuclear power
• Ensuring renewables only (especially wind) are utilised
• Ensuring all private cars are electric
• Ending internal commercial flights
• Eliminating of two thirds of international flights
• Changing ratio of meat to plant protein from 55:45 to 34:66, complying with “optimum dietary health”
And I particularly liked the assertion that the UK has “particular responsibility to take political and practical leadership in the international process of decarbonisation”. Why?? Or is this just a fine example of neo-colonial hubris?
Apr 8, 2011 at 6:39 PM | BBD
"I am still extremely puzzled by the growing dichotomy between a few nay-sayers and organisations like the EIA."
Are the 'nay-sayers' more just pointing out things like how terrible the EIA production forecasts have been over the last decade. This seems to be fairly similar to how temperature forecasts have so bad over the same kind of period and pointed out by a handful of 'nay-sayers'.
Rob B, isn't the problem more to do with regulatory hurdles that deliberately try and prevent US drillers from looking for oil everywhere?
Wehn it comes to Shale gas, it appears there are thousands of websites (including The Oil Drum) desperately trying to put up roadblocks. Its like they were caught unawares and she shale gas has snuck up on them and there is a sense of panic that the plans to destroy the economies of the west may not succeed.
Maybe we owe a debt of gratitude to The Oil Drum for all their doom and gloom about shale gas. It prevented the anti-capitalist greenies from mobilizing soon enough to prevent those huge shale gas and oild deposits from coming to the market.
Are the 'nay-sayers' more just pointing out things like how terrible the EIA production forecasts have been over the last decade. This seems to be fairly similar to how temperature forecasts have so bad over the same kind of period and pointed out by a handful of 'nay-sayers'.
The EIA and IEA are political organizations who will certainly make errors on the side of the governments that they serve. This is why it took so long to get them to change the depletion numbers and to lower the maximum predicted output from very unrealistic estimates by demanding that the predictions were defended with data and logic.
Wehn it comes to Shale gas, it appears there are thousands of websites (including The Oil Drum) desperately trying to put up roadblocks. Its like they were caught unawares and she shale gas has snuck up on them and there is a sense of panic that the plans to destroy the economies of the west may not succeed.
You are talking nonsense. The Oil Drum does not care one way or another about shale gas. It simply tries to analyze all of the data and look at the reality as it should. So far, the analysis on shale has been correct because shale gas has been a destroyer of capital. It seems to me that allocating scarce resources because of hyped up claims about shale will do as much damage to Western economies as misallocating resources on wind, solar or other unworkable schemes.
Maybe we owe a debt of gratitude to The Oil Drum for all their doom and gloom about shale gas. It prevented the anti-capitalist greenies from mobilizing soon enough to prevent those huge shale gas and oild deposits from coming to the market.
I am certainly grateful to The Oil Drum because its information allowed me to invest my capital more effectively. I only wish my rules allowed me to short the hyped up shale players because the returns would have been easier.
Vangel, do you know who gave The Oil Drum 100,000$ in cash to startup the site?
Is this hype?
"Natural gas from shale formations comprised 23 percent of total U.S. production in 2010, according to the U.S. Department of Energy’s Energy Information Administration.
Shale gas output was 4.87 trillion cubic feet in 2010. That's a 57 percent increase from the 3.11 trillion ft3 produced in 2009."
http://www.powergenworldwide.com/index/display/articledisplay/3628779823/articles/powergenworldwide/gas-generation/o-and-m/2011/04/shale-gas-production.html
I think the thing that really annoys the Doom and Gloomers at The Oil Drum is that cheap Shale Gas makes oil sands and oil shale production cheaper.
"CIBC's Andrew Potter estimates that oil sands production will jump from 1.5 million barrels a day in 2010 to five million barrels by 2020."
http://www.technologyreview.com/energy/37319/?mod=chfeatured
Promoting shale gas is what the gang who screwed up the American mortgage market turned to next, I am afraid.
Shale gas is raising my skepto-meter because it just keep getting better and better and no one is seriously talking about depletion rates and other pesky realities of hydrocarbon mineral production.
The redeeming part is that the greens are lying so hard about it and already making fabricated mockumentaries.
But the fundamentals, depletion and actual reserves, makes me nervous.
Vangel,
Are you saying that the IEA and EIA are no more credible than than the IPCC?
The oil drum was the group that claimed the BP fiasco had created an oil volcano that cold kill us all be a sudden release of methane and oil into the Gulf.
If you use them for serious investment advice, I can only hope you are only investing your own money.
IRT decline curves in oil & gas production:
There are many many ways the curves decline.
The doom and gloomers at oil drum and other Soros funded misanthropic fronts think in general that anything bad is completely understood.
That would be wrong.
And since Soros like a bit of oil & gas hisself, I am wondering more about how come the gullible always seem so gullible?
Are you saying that the IEA and EIA are no more credible than than the IPCC?
Not as bad but almost as bad, particularly the EIA.
The oil drum was the group that claimed the BP fiasco had created an oil volcano that cold kill us all be a sudden release of methane and oil into the Gulf.
Some did. Other commentators pointed out that when you looked at the volumes released and the history of the region there would be very little damage. Frankly, I do not care who says what. What I care about is the record and the data. In this case we had the IEA, EIA, and CERA argue for years that Peak Oil would not be a problem because depletion rates were low and ultimate production capacity was high. But as time passed we found that they increased the depletion rates from around 4.5% to 6.7% and the high production rate was reduced from more than 120 million barrels per day to less than 100 million. It seems to me that the production data supports the skeptic position.
If you use them for serious investment advice, I can only hope you are only investing your own money.
I only invest my own money thank you. And who is right certainly matters because if you decide to take a risk on shale gas or oil and stay for the long term you may find that you are underperforming when compared to conventional investments that were available. I don't know about you guys but I am grateful to the IPCC for its deception because it allowed me to purchase coal and heavy oil assets at a very hefty discount to the rest of the market. When the reality eventually sinks in, and it always does, the total returns should be much better than they would have been otherwise. My twelve-year old, who did his own experiments and blames the UHI effect on most of the nonsense we hear from the IPCC, took advantage and invested the bit of cash I gave him in one of the coal companies that he was researching. While he missed the really big gain (18,000%) by picking another coal play he still wound up with around 12,000% and turned a few hundred bucks into enough money to pay for a semester at a very expensive institution. And when I talk about shale he always brings me back to Ellis Wyatt in Atlas Shrugged. At the time that Rand was writing her book shale was the next big thing. More than half a century later it is still in exactly the same position as before. People are free to do what they want with their cash. For my part I will avoid shale and take my chances with the oil and gas opportunities that I like better. This is not to say that I would not invest money in high risk ventures. I have put money into Kurdish fields in Iraq, difficult reservoirs in kleptocracies like Kazakhstan, and even have interests in difficult to develop of-shore fields in Africa and Brazil. Frankly, I prefer those situations to shale because the risk is priced more favourable and the chances of success at this particular point in time are significantly better.
"Promoting shale gas is what the gang who screwed up the American mortgage market turned to next, I am afraid."
My bigger worry is that the promoters are doing things that do not fit what they are saying. If shale gas were as lucrative as Chesapeake says, why is the company repositioning itself away from shale gas?
"If shale gas were as lucrative as Chesapeake says, why is the company repositioning itself away from shale gas?"
Don't you mean, why do really large companies want to buy chunks of Chesepeakes' holdings for really large sums?
"Last October China made its biggest ever oil/gas deal with the United States when its state-owned energy company China National Offshore Oil Corp. (CNOOC) (NYSE ADR: CEO) invested $2.16 billion in Chesapeake Energy to learn about shale gas extraction methods."
"In February, U.S.-based Chesapeake Energy Corp. (NYSE: CHK) sold a 75% stake in the Fayetteville Shale region in Arkansas to Australian mining giant BHP Billiton Ltd. (NYSE ADR: BHP)."
Big companies want in. Chesepeakes cashes in some of its value to focus on the most profitable partsof its business.
No surprise that the big companies want a nice long term supply of shale gas ... its the fuel of choice for the next 100+ years.