From the Telegraph:
The discovery in central Australia was reported by Linc Energy to the stock exchange and was based on two consultants reports, though it is not yet known how commercially viable it will be to access the oil.
The reports estimated the company’s 16 million acres of land in the Arckaringa Basin in South Australia contain between 133 billion and 233 billion barrels of shale oil trapped in the region’s rocks.
The find was likened to the Bakken and Eagle Ford shale oil projects in the US, which have resulted in massive outflows and have led to predictions that the US could overtake Saudi Arabia as the world’s largest oil producer as soon as this year.
WUWT reader John V. Wright in his Tip and Notes submission writes:
This is a huge problem for PM Gillard. No one lives out there so all the usual garbage about shale oil extraction causing earthquakes and threatening people’s home will not wash. So now she has got to get thinking – how can I put the kibosh on this fantastic energy windfall for Australia without it being completely obvious that I am only interested in squeezing every last ‘green’ tax dollar out of the idiots who voted for me last time?
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She does have a problem, Eh?
“though it is not yet known how commercially viable it will be to access the oil.”
Clearly, this is a resource report, not a reserves report – big, big difference.
This smells of a classic pump & dump stock play. Investors beware …..
Gilliard will be voted out office next November. It will never be her’s to tax. She may not even make it to then because of the AWU scandal
Slightly OT:Got a question about Gilliard-isn’t she up for re-election shortly? But the problem is
prosperity and plenty do not sit well with socialists..
OPEC may soon have an English accent.
It’s no good….it’s peak oil
It’s all about the recovery factor but this is up there with the Saud family holdings.
The world has more oil than anybody ever dreamed. Tell me again why Obama says we’re running out?
Oh dear how will the ‘green’ government ( or even the next one, they have all tried to score points from being on the side of climate alarmists ) manage to spin this one? All those lovely tax dollars will contrast with their public stance. I’m buying popcorn futures.
Extracting shale gas / oil by frakking will frighten the dingos and kangaroos so will not be allowed.
The way the Federal mining tax is calculated in Australia on ‘super profits’, the reasonable start up costs of such a mining venture are so great that the federal tax does not apply due to capital depreciation and is so far delayed.
The states,the Crown, holders of the Constitutional rights over the minerals under the ground, have been putting up mining royalties, a state tax on minerals.This has meant that the Federal government, known in Oz as the Commonwealth,never gets the mining tax because it has to be defrayed against the Crown mining royalties already levied.This has put a big hole in the Federal budget to the benefit of state budgets.
It is interesting as an aside that the biggest miner of gas and coal was all in favour of the carbon tax. The spin was that big business was in favour because it was good for the planet.
The joke was that the miner avoided the tax because it exported the carbon to places like China to be burned, and of course exports were exempted from the tax, hence the support.
You may draw your own conclusions as to the competency of some in politics in Oz.
“The find was likened to the Bakken and Eagle Ford shale oil projects in the US, which have resulted in massive outflows and have led to predictions that the US could overtake Saudi Arabia as the world’s largest oil producer as soon as this year.”
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This is an absurd statement. The U.S. shale production is gas, not oil. The whole post has a problem with reality. There is no “fantastic energy windfall” with oil shale because the prospect of oil shale development is a big unknown.
Jeff L–It’s okay to skip investment for now, but “not viable” becomes “viable” over time. That is what is frustrating “greens” right now. What the US pumps now was not commercially viable twenty years ago. Knowing where the oil is and at least a fair idea of how much is incentive to develop techniques to get to it.
As for the shale being far away from where people live, that never stops greens in the US. They just declare the place “an invaluable wildlife preserve that must be protected for eternity”, slap a federal “do not touch tag” on it, and problem solved. California does this all the time, sometime with a state tag, sometimes a federal. Remember–it’s not how it affects people, it’s how it affects greens.
I don’t believe this is a “pump and dump” but rather a clear case where the journalist hadn’t a clue what he was writing about. A quick visit to Linc Energy’s website spells out precisely what is going on.
They are talking about Prospective Resources as defined by guidelines developed by the SPE and AAPG….basically resources which might someday work out but no guarantees. In the DeGolyer and MacNaughton resource report which is available on their website it clearly specifies what they are talking about:
“The prospective resources estimated herein are those quantities of petroleum that are potentially recoverable from accumulations yet to be discovered.”
and
“A possibility exists that the prospects will not result in successful discoveries and development, in which case there could be no future revenue. There is no certainty that any portion of the prospective resources estimated herein will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the prospective resources evaluated”
It looks like their estimates are based on data collected from two recently drilled wells and it includes all of the rock property information normally gathered in the early stages of shale gas/liquids exploration. Normally this data is compared against currently existing producing shale analogs (eg. on the Linc Energy site they compare to EagleFord shale). This doesn’t always work as has been the case in Poland where early work done suggested immense gas resources based on comparison with North American shales. Further work demonstrated that the shales behaved in a more ductile fashion and hence fracs were not as effective. As a consequence those resources thought to be immense may end up being miniscule.
Anything, any new oil reservoir discovery further negates and undermines the Sunni power base of the Middle East. And not forgetting malign Russian influences – to dictate price and output and also a whole lot of other political meddling in nations afar apart as Ukraine, across Africa, into Algeria and Mali.
Australia’s massive hydrocarbon resources [coal] and now a major new oil basin discovery, is music to the ears of all democracies across the world.
Now, if we could just drop the madness of the green agenda………………….
To: John V. Wright:
This should cause no problem at all for PM Gillard et cie. All the Ecommies have to do is claim irreparable damage to the fragile outback desert ecosystem and they will have legions of doe- eyed followers chanting in the streets.
The memos will be out before sundown.
How is that Peak Oil looking for you?
Obviously, if this turns out as good as it appears it might be, it is a game-changer for Australia. This discovery could satisfy crude oil demands for over 100 years, depending on extraction efficiency and demand.
Expect the government to attempt to stifle further development like Obama did in the US, perhaps by declaring the land a federal desert tortoise habitat or something. EPA in the US is trying to shut down activity by declaring large tracts of the western US a protected Sage Grouse range, even tho Sage Grouse aren’t endangered. Watch out for such a devious move in Australia.
The Bakken and Eagle Ford are shale oil plays. Geologically they are the oil equivalent of the shale gas plays like the Barnett and Marcellus. This is conventional oil that is extracted from shale and other low permeability formations via lateral completions and mult-stage frac jobs.
The Bakken and Eagle Ford are the reason why US oil production has been climbing over the last few years.
Oil shale, like the Green River formation, and oil sands, like Athabasca, are different. These plays comprise solid to tarry kerogen, which has to be mined or unconventionally extracted from the rock.
[youtube=http://www.youtube.com/watch?v=QG1ObrqpPao&feature=player_detailpage]
Frack a dack. The last thing Oz needs is another commodity boom. They already have mining machine operators that make more than the PM because there isn’t enough labor to go around.
Seriously earning their nickname: The lucky country.
The enviro-argument will center on water. There isn’t any. The mine will need some. Hopefully they’ll find some gas in there, too. Without gas, shale oil is a tough nut to crack.
D&M, a well-respected consulting firm, puts the unrisked resource potential at 103 billion barrels of oil equivalent.
Linc Energy’s press release says that the reports indicate that the objective “formations are rich in oil and gas prone kerogen than may form the basis of a new liquids-rich shale play.”
It sounds to me as if they are barely to the point of determining the presence of an active hydrocarbon system in the Arckaringa Basin,
mpainter @ur momisugly 7:05 does not know what he is talking about.
Oil production from North Dakota:
http://mjperry.blogspot.com/2012/09/exponential-growth-north-dakota-oil.html
Is it ALAN Bond who is involved? if so beware investors!!
mpainter says:
January 24, 2013 at 7:05 am
“The find was likened to the Bakken and Eagle Ford shale oil projects in the US, which have resulted in massive outflows and have led to predictions that the US could overtake Saudi Arabia as the world’s largest oil producer as soon as this year.”
===========================
This is an absurd statement. The U.S. shale production is gas, not oil. The whole post has a problem with reality. There is no “fantastic energy windfall” with oil shale because the prospect of oil shale development is a big unknown
===============================
This is not correct. The Bakken formation is an oil formation with some natural gas. Below that formation are at least 2 others being prospected and produced. In Colorado and Wyoming there is the Niobrara oli shale which is in the beginning stages of production and development. these are only a couple that I am personally aware of. The Natural gas deposits you are most likely referring to are in the east, Pennsylvania, New York, etc.
Shale oil is routinely being extracted from horizontal wells 12,000 ft below the surface and extending up to 2 miles laterally. The industry is always looking at ways to go deeper and longer and is currently developing new tools to do that. The US is becoming a leader in oil production due to private land development despite the best efforts of the administration to limit access to public land leases. When the pendulum swings back away from the socialist in power, more drilling on public land will be allowed and the oil supply will continue to increase and the technology will continue to evolve to reach deeper and longer and extract more oil.
BTW, it is good for the plants too, more CO2, more growth.
Matt
We have all spent our lives being hectored about coming ‘peak oil’ despite the amount available always rising with price.
Now the amount available is so huge with the benefit of new technology that availability will soon become detached from price.
All those doom mongers are having their plans frustrated at the very moment that they try to drive forward a scheme for global energy rationing.
No wonder they need another cause in the form of hyped up environmental damage.
But the truth is that energy rich societies invest more time and wealth in care of the environment.