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One might argue that statistics nearly two years old don’t tell much of a story, but it’s not the numbers in the following quote which matter so much as it is the underlying context and concerns. Those consideration won’t go away. [Production issues since this article was first published aren’t exactly changing the facts much, either.]

Many TV commentators and opinion leaders highlight the fact US domestic oil production has just eclipsed the Saudi Arabian and Russian behemoths. What the sound bites fail to provide, however, is context. According to the US Energy Information Administration (EIA), the current daily production of crude oil and other liquids, Saudi Arabia produce 11.7 million barrels of oil per day (mbd), Russia 10.4 mbd, and the US at 11.1 mbd. But the gross amount of oil each nation produces isn’t what matters. It’s net oil.
The EIA also reports that Saudi Arabia consumes 2.9 mbd, leaving and estimated 8.6 mbd available for export. Russia consumes 3.3 mbd, leaving 7.2 mbd available for export. The US consumes, however, 18.9 mbd per day, leaving a deficit of 6.6 mbd that has to be met by importing foreign oil. Russia and Saudi Arabia, therefore, remain securely in the global petroleum driver’s seat while the US remains the globe’s most vulnerable. Unfortunately, that’s not the only red warning flag.
An analysis of the US light tight oil (LTO) industry indicates that overall US production, according to the EIA, is expected to peak, possibly as soon as 2017-18, but likely no later than 2020-21, at which time overall US production begins an inexorable decline. This conclusion is based on the results of an in-depth assessment of actual well production data from the major shale plays I (Hughes) conducted (Drilling Deeper is the detailed, 315 page study). The results of this analysis reveal:
– high-quality plays are not ubiquitous – nearly two-thirds of U.S. tight oil production comes from just two plays – the Bakken and Eagle Ford – and most production comes from relatively small “sweet spots” within these plays.
– production declines of wells are 80%-85% in the first 3 years meaning that 40%-45% of production must be replaced each year by more drilling to keep production flat.
– as sweet spots become saturated with wells, drilling must move into lower quality parts of these plays (which have the bulk of remaining drilling locations and average well production of half or less that of sweet spots), hastening the production falloff after peak.
- other plays have not been found that compare to the Bakken and Eagle Ford. [see the links in this cited article]

 

FALSE COMFORT

 

It’s no doubt of great comfort to those unwilling to accept that we’ve got some major energy supply issues on the horizon when they offer up the argument against by claiming that the total estimated resources worldwide [measured in trillions of barrels] have not yet been tapped. What, me worry?

But as the authors above suggested in a similar vein, “context” matters a great deal. As I have taken pains to point out—as have others much more knowledgeable than I am—having the technologies, financing, personnel, and related capabilities to access and extract is a very different story. Given that the “trillions of barrels” story includes a substantial portion of the total here in the United states which has not yet produced any results at all after more than a century [the 100-year kind] of effort, it’s a bit thin on validity. But one must go with what one has, and it’s not nearly enough anymore.

We’ve got time to deal with the transitions needed—a nearly incomprehensible adaptation at that—but not a lot of time. Peak oil will make its presence and impact obvious to most of us over the course of many months and likely several years. We don’t have to panic just yet. That will come if we’ve done nothing but rely on fingers and toes crossed and a lot of “possiblys” and “potentiallys.”

Those should not be our go-to options.

If just making the statement about untapped resource totals were enough, there would be no peak oil concerns. Trillions of barrels of oil would last a long, long time … if it weren’t for reality and those pesky contextual matters. They matter—a lot.

 

NOTE: no post next week; enjoy the holiday weekend!

 

~ My Photo: A Bit Of Coastal Fog – 05.25.16  ©

 

 

We face a choice going forward. There’s a kind of false dichotomy, a false choice that we’re being presented between policies on the left or policies on the right. It’s not left or right, it’s forward or backward. It’s a choice between investing in the future, leaving a better future for the next generation just like parents and grandparents did for us, or ignoring these hard choices and sentencing the next generation to a lower standard of living, to fewer opportunities, and a future that we could do better by. [With apologies for prior incorrect attribution: former] USDOT Deputy Secretary John Porcari

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Peak Oil Matters offers observations and insights about the realities of declining fossil fuel production, and its impact on our future well-being

* I invite you to enjoy my two books [here and here], and to view my other writings at richardturcotte.com