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Will US Light Tight Oil Save The World? » Peak Oil BarrelPeak Oil Barrel


Will US Light Tight Oil Save The World? » Peak Oil BarrelPeak Oil Barrel.

There has been plenty of hoopla lately concerning the boom in shale (LTO) oil production. From the New York Times: Surge Seen in U.S. Oil Output, Lowering Gasoline Prices

Domestic oil production will continue to soar for years to come, the Energy Department predicted on Monday, scaling to levels not seen in nearly half a century by 2016.

The annual outlook by the department’s Energy Information Administration was cited by experts as confirmation that the United States was well on its way — far faster than anticipated even a year ago — to achieving virtual energy independence.

What the EIA is actually predicting:  AEO2014 EARLY RELEASE OVERVIEW. The data is C+C.

AEO 2014

The first two points were what was actually produced in 2011 and 2012 and the rest of the blue line is what they are predicting for the future. The orange line is what they predicted last year. The predicted numbers this year are a lot higher but the shape of the curve looks the same. They predict US Crude + Condensate will plateau in 2016, actually peak in 2019 and by 2021 be headed for a permanent decline.

Note the difference between AEO 2013 and AEO 2014. The difference rises to just over 2 mb/d and holds that difference util 2030 when it slowly closes down to 1.37 mb/d in 2040. And everything above about 5 mb/d is all Shale, or Light Tight Oil. They expect LTO to rise to about 4.5 mb/d by 2016, hold that level for almost 5 years and for LTO to still be above 2.5 mb/d by 2040. 

Anyway here is what Saudi Arabia thinks about it all. Saudi will not be affected by shale oil output: report:

“Since we doubt that tight oil production will grow as much as most commentators surmise, and since we believe that tight oil production will keep representing only about 3% of total liquids supply, we do not believe that the growth in oil production from tight rock formations in the US, or from shale formations elsewhere, will materially affect Saudi Arabia’s long-term position in the oil industry,” Jadwa said in a study.

And questions are being raised elsewhere: Shale well depletion raises questions over US oil boom

In October, the government began issuing a monthly report on drilling productivity that charted declines in six major U.S. shale plays. The U.S. Energy Information Administration estimates that it takes seven of every 10 new barrels produced in those areas just to replace lost production.

Of course this article is quoting the EIA and their new Drilling Productivity Report.

Speaking of that report, Steve’s blog, SRSrocco Report, has this headline: Eagle Ford Shale Decline Shoots Up A Stunning 10% in One Month!

What Steve is talking about is this. First from last month’s Drilling Productivity Report:

Eagle Ford Dec

And see the difference from the latest report:

Eagle Ford Jan

But getting back to the statement in the “Fuel Fix” article that it takes seven of every 10 new barrels produced in those areas just to replace lost production. If the EIA is correct in their latest report it takes a bit more than 7 of every 10 barrels just to make up for the declines of old wells. If their figures are correct, in Eagle Ford, it takes almost 7.6 barrels of every 10 barrels from new wells just to make up for the decline in production from old wells. And of course that number increases every month.

If the EIA’s decline rates are anywhere close then the Bakken should reach her peak at about 1.25 mb/d and Eagle Ford at about 1.6 mb/d, or at some point very close to those numbers.

Bottom line, all the hype is just hype. The US will likely never reach 4.5 million barrels per day of shale oil, the peak will not be spread out over five years as the EIA believes, and the decline will be a whole lot steeper than the chart above indicates. Shale oil may delay the peak of world oil production for one year, or two at the most.

While it is true that only the Light Tight Oil is keeping Peak Oil from being an obvious fact, that can only last for a year or two, then the US, along with almost every other nation in the world will be in decline.

The EIA’s International Energy Statistics is about a month late already. International oil production data is a really low priority with the EIA. They are much more concerned with the price of kerosene and other such matters than they are with world crude oil, the lifeblood of every economy in the world. So we will have to do without it until they get around to posting that data, if ever. But in the meantime I have constructed the below chart using mostly JODI data, with some EIA data used for countries that do not report to Jodi. I use it just to show what the world oil supply would look like without US Light Tight Oil. The last data point is October 2013.

Jodi World Less USA

According to JODI, the world less USA peaked in January of 2008 and almost reached that point again in July of 2008. In October of 2013 we are down about 2.25 mb/d from that point. Interesting to note also that the world less USA has dropped some 1.5 mb/d since July. July was the last month the EIA’s International Data Statistics has data for.

Euan Mearns, below, asks that this chart be posted. The last data point is October 2013:

World Les US & Canada

It doesn’t look a lot different from the “World Less USA” chart. Down 2.53 Megabytes a day from the peak of July 2006. Keep in mind this is JODI data which differs somewhat from the EIA data. The EIA however only has updates through July 2013. There has been considerable attrition in production since then.

The following charts are based on data from the EIA’s AEO 2014 Early release.

aeo2014uscc1/
aeo2014uslto/

THIS ENTRY WAS POSTED IN UNCATEGORIZED. BOOKMARK THE PERMALINK.

 


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