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 peopleās home will not wash. So now she has got to get thinking ā 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 āgreenā tax dollar out of the idiots who voted for me last time?
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 worldās 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.
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 @ 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
āThe 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 worldās largest oil producer as soon as this year.ā
===========================
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 āfantastic energy windfallā 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.
QUICK! Find an animal we can claim is endangered!
David Middleton says:
January 24, 2013 at 7:44 am
D&M, a well-respected consulting firm
###
You just like the initials š
Obviously they are going to leave it in the ground, because they are so concerned with the CO2 emissions. For sure they rather stick to their principles than gain fossil fuel money. Even if it’s trillions
Like everything else on the Internet, fact checking is required. 235Bbbl is a hyped speculation, not even close to likely technically recoverable reserves. What the CEO of Linc Energy actually said is that if you take the probable sweet spots (just like one must in the Bakken) then TRR is probably about 3.5Bbbl. That is very significant for Australia. It is not for the world. Actual remaining Saudi reserves alone are about 190Bbbl after removing ‘quota war’ exaggeration.
More evidence the eco-loons are just useful idiots for the oil companies, the reason we find Shell ect funding the CRU and Sierra Club, is their activities drive oil prices higher.
This gets us public resigned to paying too much for fuel.
These unearned profits allow the oil companies to develop marginal fields and explore new areas, almost out of pocket change.
“Big Oil” can’t lose, if fact must act in this manner when faced with absolute loonies holding the power to destroy their business.Self defence is no crime.
Most geologists know, there is not a resource shortage, as much as a cost barrier.
When its profitable to develop a resource it will be developed.
Eco-lunies are making development profitable sooner, when they restrict more accessible resources for ideological reasons.
rockdoc
January 24, 2013 at 7:10 am
####
I hope you realize that all you have done is to quote the, required by lawyers, Disclaimer paragraph. Its inclusion in any report is meaningless. Pretending such a thing is meaningful and using to support an argument is something that only the ignorant or the Marxist propagandist(or their brainwashed minions) would do.
‘Peak Oil’ is a myth. The more we look, the more we find, and the more our technology progresses, the more we are able to recover. The factors that cause high prices are numerous. In some cases, it’s obvious that the petroleum companies’ hands are tied by politicians looking out for their own interests, but in other cases it’s equally obvious that the cartel is watching out for its main interest: to maintain high prices/profits.
It may be much more common than we currently believe:
http://www.canadafreepress.com/index.php/article/28111
I just wonder how many people are suddenly going to remember they misheard their grandmother when she told them they were born in Portland, Shepparton or Echuca when she really meant Coober Pedy.
john robertson says:
January 24, 2013 at 8:21 am
More evidence the eco-loons are just useful idiots for the oil companies, the reason we find Shell ect funding the CRU and Sierra Club, is their activities drive oil prices higher.
###
Most of the “Great” American Industrialist, that are often denigrated in our schools as those evil capitalistic “Robber Barons”, where in fact died in the wool socialists. The businesses they founded were designed to support socialist aims, and for the most part they still do. It is why we now call such, Corporatists because capitalists they are not.
mpainter says:
January 24, 2013 at 7:05 am
āThe 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 worldās largest oil producer as soon as this year.ā
===========================
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 āfantastic energy windfallā with oil shale because the prospect of oil shale development is a big unknown.
————————————————————————————————————
Bakken estimated recoverable oil is 24 billion barrels… and climbing. Who has a problem with reality?
mpainter says:
January 24, 2013 at 7:05 am
References please.
I touched on this in http://wattsupwiththat.com/2012/10/03/cheap-natural-gas-but-wait-theres-more/ :
The discussion paper is worth reading, see http://belfercenter.ksg.harvard.edu/files/Oil-%20The%20Next%20Revolution.pdf
Some here are conflating recoverable oil associated with shale formations with “shale oil,” i.e., oil released from shale via thermal decomposition. The latter is the wave of the future. And always will be.
mpainter says (January 24, 2013 at 7:05 am)
āThe 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 worldās largest oil producer as soon as this year.ā
===========================
This is an absurd statement. The U.S. shale production is gas, not oil.
——————————————————————————————————
Sorry, but thanks to the development of hydrofracturing, the Bakken and Eagle Ford ARE producing massive amounts of oil from shale – the Bakken grew from 4470 barrels of oil per day (bpd) starting in 2006 to 669,091 bpd in 2012, and is expected to soon reach 1 million. Only six other fields (Saudi Arabiaās famed Ghawar field, Burgan (Kuwait), Cantarell (Mexico), Daqing (China), Samotlor (Russia) and Kirkuk (Iraq)) have ever topped 1 million barrels per day. See https://www.dmr.nd.gov/oilgas/stats/historicalbakkenoilstats.pdf for official government Bakken numbers. The Eagle Ford has jumped from 842 bpd in 326,978 in late 2012. http://www.aei-ideas.org/2012/12/texas-eagle-ford-shale-map-and-chart/
While the first shale fracturing production was gas, they have now learned to do it in oil shales also. I am an employee of a state oil & gas regulatory agency.
In fact, in Bakken they are just burning off the gas since there is no infrastructure to pipe or liquify it.
@Ric Werme @9:14. Thank you for the link to Maugeri’s paper. I just took a quick look at the executive summary. Looking forward to sitting down and reading the entire paper. Highly recommended to others.
Mods: This paper appears to be a solid look down the road at the import of shale oil and gas in the future and the likely impact on geopolitics. Please consider a separate discussion of this paper.
Thanks,
RG
The Sierra Club has declared war on the KeystoneXL pipeline.
When an enemy is making a mistake, don’t stop him.
Really, what difference would another pipeline make? There are thousands of oil and gas pipelines in the U.S. and Canada.
KeystoneXL will create thousands of high paying jobs, and help protect U.S. consumers from Middle East politics. Unfortunately, the Sierra Club has been hijacked by anti-American activists.
Decisions, decisions for us now down here in South Oz. We are already the Saudi Arabia of uranium (hypocritically we smoke but never inhale if you get my drift) so what say you now Greeny warmenistas?
I think John Wright should amend is comment to the following:
“squeezing every last āgreenā tax dollar out of the idiots who voted AGAINST me last time?”
The political/financial feedback loop always takes care of the ones who voted for them. At least the ones who are more equal than the others.
More on my comment at 9:47 above. You might ask Maugeri to draft a post. It would gain much wider coverage than the paper itself.
When Mussolini create fascism, he said the more appropriate term is “corporatism.” Keep in mind that what Mussolini meant by “corporatism” is far different from what the 99% Unoccupied useful idiots call corporatism. In fascism, the state doesn’t own the means of production, it just controls it through laws and regulation. The state pulled the strings, and as long as the businessmen and industrialists danced, they were allowed to profit all they wanted.
Gillard will be long gone before she can stymie this, if the AWU investigation stays in top gear…
Water supplies are the critical issue. Even with gel-fracking, you still need water to make the gel.
You could have saltwater in overlying/underlying rock formations, porous and permeable ones that are completely wet. (I don’t know the geology, but all zones start out wet because all sendimentary rock starts out in either freshwater streams or salt water seas). You’d have to treat the water, though, possibly desalinate it completely. Very expensive (especially if you use solar power!), but do-able.
The “stress test” to the core area is said to drop the number to 3.5 billion barrels. That is still a RESOURCE number Linc is giving not producible reserves and not (even less) recoverable reserves. It is still big, but we are now talking about 3%, or 100 million barrels.
These days everyone tells you “resource” numbers because the security exchange rules on “reserves” and “recoverable reserves” are tight these days. A resource is simply a molecule-in-the-ground.
Not to say there aren’t some recoverables here, but keep an eye on the thimble when it comes to the pragmatic understanding of what it means.
Sounds like a very big number, but how big when compared to Saudi reserves?
Just looked up the answer on Wikipedia :
Venezuela – 296
Saudi 265
Australia 233 (?)
Iran 151
Iran 151
Iraaq 143
Kuwait 101
UAE 136
Russia 74
Khasakstan 49
Libya 47
Nigeria 37
Well if you believe it! But it is a promising find
Good let all the greens choke on this! They hate to hear good news (for the rest of us).
Maybe someone could make Yoko a milkshake out of it and send it to her!
I used to be troubled about the oil well in “Mad Max” – not any more.
If these oil proves to be recoverable, that will just make Australia a more enticing target for Chinese invasion. I would keep it quiet if I were you.
{ mpainter says:
January 24, 2013 at 7:05 am
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 āfantastic energy windfallā with oil shale because the prospect of oil shale development is a big unknown. }
Add in the Mississippian Lime shale play in OK and KS to the previous dismantling of mpainter.
As someone who posted on WUWT a year or two ago on peak oil, saying I thought we were at or near peak oil, I will be happy to be proved wrong. This new shale find does not quite do that. As I pointed out then, global R/P (reserves over production) was at a high at least partly because the reserves we now have are difficult to produce.
The Linc (LNC on ASX) share price has gone up a lot in 2 months, but its market cap is still only $A1.38bn (a bit under $US1.5bn). The market isn’t taking the “233 billion barrels” too seriously – well not yet anyway. [Arckaringa is 100% LNC].
Desert Yote said:
“I hope you realize that all you have done is to quote the, required by lawyers, Disclaimer paragraph. Its inclusion in any report is meaningless. Pretending such a thing is meaningful and using to support an argument is something that only the ignorant or the Marxist propagandist(or their brainwashed minions) would do.”
hardly….I’ve been in this business for 30+ years and have previously been in the role of internal reserve auditor so I think I know what is meant here and had good reason for pointing to it. The definition and disclaimers I pointed to mean exactly what they say and are put in by the auditors so that the meaning of prospective versus contingent is well understood. A Prospective Resource is one that has not yet been proven to exist, which, in the case of unconventional resources, means they have not fracced anything to this point in time. If it was a case where the shales had been fracced and tested and they were waiting on infrastructure to follow to improve economics then D&M would have granted Contingent Resource status. I suspect you are unfamiliar with reserves and resource definitions and the rules that apply to third party audits or you wouldn’t have posted your comment, which I’m afraid is nonsensical.
The bottom line here is they have not tested hydrocarbons or likely even attempted to test hydrocarbons which isn’t that unusual in a new basin. You study the rock properties and then you decide whether or not it is worth fraccing.
Ric Werme, the Harvard paper you cite but perhaps have not studied is so flawed it is embarrassing. So bad, “not even wrong”. It used the averagedecline rates for conventional oil wells, not fracked tight oil. Bakkens decline rates have been published by North Dakota for some years now. Google. Canada does the same for all it’s tight oil formations. Bottom line is, Maugeri assumed 15% decline over the first 7 years, when actual tight oil wells decline by 90% in two years. A consequential difference.
If Anthony is up for it, I will post a longish standalone peak oil write up drawn from four years of research and two books. Plenty of footnotes, plenty of fairly certain facts. No GCMs. Might not be right, but sure would raise the game here. Is sort of on topic, because shows how off base the IPCC is with its scenarios. IPCC believes in CAGW without any solid evidence, and doesn’t believe in peak fuels within mere decades despite 60 years of solid evidence and many successful predictions.
Disappointing how folks who can tear apart bad CAGW facts and science do the opposite with fossil fuels. Disappointing, but not surprising.
Probably of more significance
UKRAINE and the global oil giant Royal Dutch Shell have signed a $US10 billion ($A9.53 billion) shale gas production sharing agreement aimed at helping the ex-Soviet nation ease its dependence on Russia.
The Ukrainian government estimates the eastern Donetsk location may hold three trillion cubic metres of natural gas — enough to last the nation of 46 million people 70 years at current consumption rates.
As for water in South Australia. There will be aquifers in the general area. There is one across the Western Australia border with enough water to supply Perth for 400 years.
Robert M, could you please provide the source for your estimate that Bakken has 24Bbbl of reserves? In 2008 the ever optimistic USGS redid its Bakken technically recoverable reserves estimate (at any price including much higher than today) and increased them to 3-4.5Bbbl. Fact.
As of 2012, their estimate for all five tight oil formations (in order of size, Bakken, Eagle Ford, Niobrara, Leonard, and Monterey) to less than 17.7Bbbl.
And, a special working group of industry experts ( from the oil companies doing the drilling) concluded for the Commerce department in a special 2012 report that annual production from all 5 by 2030 might reach 3mbpd IF all the environmental restrictions were eased and IF the necessary additional pipeline infrastructure were built, which includes the presently baned Keystone.
So I would like to track down the validity of your alternative facts, in the spirit of WUWT.
Regards
Seems the more we look for oil the more we find.
New finds are a regular occurrence.
The resource is far from exhausted.
For this new South Australian find, if it turns out to be similar to Bakken or Eagle Ford,
Down Under will be sitting pretty.
Easy to export compared to some I’ve seen in Australia – they’ve even got a road nearby!
By the way it is not true to say nobody lives there. These are probably aboriginal controlled lands – please don’t make Cook’s mistake/deception. This land is unlikely to be Terra Nullis!
A point of interest.. The lower one third of the area of interest is currently within the Woomera Prohibited area. The now almost defunct Woomera Rocket Range.
The area is still administered by the Royal Australian Air Force, I recently spent a night at the Woomera Hotel, One of the old Scientist accommodation blocks, I stayed in REDSTONE 4.
A few things that some might not be aware of:
Shale oil and oil shale are not the same thing. Go read up.
It is true that some frac shale produces oil, but the Eagle Ford is a substantial gas play, in addition to oil. The deeper wells produce gas. See Tex RR comm stats & maps. Other shale plays produce only gas.
Current Saudi production: @ 10 mm bbl/d
Current US production @ 7 mm bbl/d
Will the US add over 3 mm bbl/d oil production and surpass Saudi Arabia this year? I think it highly unlikely. The claim sounds like a blue-sky promoterās claim.
There is a big problem with frac shale production- very steep production curves. This is typical of frac reservoir production; it falls off to less than half in a few months, then halves again in the next few. With this type of production you reach the point where new completions are countered by the rapid depletion of existing wells.
Bottom line: depletion rates eventually balance added production, in the overall calculation. There is no predicting when this will happen, but some who have swallowed the blue-sky promo might be surprised.
We could already be there.See news: South Dakota Bakken oil production declined 2.2 % from Oct to Dec last year. This had to do with fall in drilling activity and see how fast the frac reservoirs deplete.
As far as oil shale production is concerned, it is not in sight yet. No oil bonanza here.
Overall, I will stand by my statement: āThe whole post has a problem with reality. There is no āfantastic energy windfallā with oil shale because the prospect of oil shale development is a big unknown.ā I grant that substantial oil production derives from frac shale.
Why does the headline say “southern Australia”? That could mean Victoria, Tasmania. part of NSW, or part of WA. The oil find is located smack in the middle of South Australia. In geographical terms, that puts it closer to central Australia, and well to the north of Vic or Tas. Why not say “South Australia”?
[Anthony: Do you want to change the title? Mod]
Tim Clark says: January 24, 2013 at 1:18 pm
{ mpainter says:
January 24, 2013 at 7:05 am
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 āfantastic energy windfallā with oil shale because the prospect of oil shale development is a big unknown. }
Add in the Mississippian Lime shale play in OK and KS to the previous dismantling of mpainter.
=======================================
Here is an example of blue-sky promotion. Nothing so far from this fabulous play but fabulous talk.
Robert M says:
January 24, 2013 at 9:02 am
mpainter says:
January 24, 2013 at 7:05 am
āThe 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 worldās largest oil producer as soon as this year.ā
===========================
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 āfantastic energy windfallā with oil shale because the prospect of oil shale development is a big unknown.
āāāāāāāāāāāāāāāāāāāāāāāāāāāāāāāāāāāā
Bakken estimated recoverable oil is 24 billion barrelsā¦ and climbing. Who has a problem with reality
=============================
Of the two of us, I don’t think it’s me.
With any luck and all likelihood Gilliard will be voted out of office at next November’ election if not before. With luck she will never get her grubby paws near it all. If she did, she would wreak her usual havoc on it and draw disaster out of the mouth of Victory.
rockdoc says:
January 24, 2013 at 7:10 am
āA 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.”
rockdoc, this is standard, statuatory “safe harbor” disclaimer language to protect unsophisticated investors. That they even mention it means they are pretty excited about the prospects. One has to drill, measure and test a process before more confident language can be used. What is their stock price?
Whilst I agree with the sentiment, she was not elected (at least not by the people). You may argue semantics of democracy, of course, but she ousted the elected Rudd in a bitter leadership battle.
Regarding the oil find, I have always thought that there must be a heap of oil out there, and nobody has found it yet. This may be the first of many…
Hey, moderator. Note both polite post responses immediately above on peak fuel facts still await moderation after several hours.
Please don’t provide tangible future evidence via my just captured screen shots that WUWT has gone over to the dark side of belief, no matter what the facts. No matter what it is, truth is our friend whether you are comfortable with it or not. It just is, and will always prevail in the end.
Anthony previously posted my well recieved guest comment on bogus CAWG crop yields. My factual replies here are not troll comments, nor intended as such. So, what gives other than you might not like/ agree with the verifiable facts just posted?
Regards again
[Reply: Nothing from you found in the Spam folder. Nothing was deleted, either. Please re-submit; it may be a WordPress glitch. We post all comments that do not violate the site Policy page. ā mod.]
Ric Werme says: January 24, 2013 at 9:1
=========================
It is hard to take seriously a report that gets it wrong from the very start:
“The Eagle Ford Shale in the Western Texas Basin,….” (referring (?) to the Permian Basin of West Texas?)- but:
The Eagle Ford Shale is a Gulf Coast play. See maps.
Gary Pearse said:
ārockdoc, this is standard, statuatory āsafe harborā disclaimer language to protect unsophisticated investors. That they even mention it means they are pretty excited about the prospects. One has to drill, measure and test a process before more confident language can be used. What is their stock price?ā
You as well are missing the point. It is disclaimer language not meant for investors but rather as a means of the resource/reserve auditor, in this case D&M, insuring that it is perfectly understood what they are talking about. The reason I pointed to it is it is a good description of what Prospective Resource means and why it is different than contingent resource. It is right there for anyone who cares to read it. The resource audit from D&M is quite clear that these resource numbers are prior to discovery.
The point is this is Prospective Resource and the definition of that under both the US and Canadian instruments refers to āundiscovered resourceā. In the case of unconventionals it means that no frac has been attempted, and as I pointed out in my example regarding Poland the resource assessment prior to fraccing can, in some cases, have no bearing on what the actual resulting contingent resource or for that matter reserve outcome is. There may be a lot of hydrocarbon here, a small amount or none.
I realize that to the vast majority of people who have no exposure to the oil and gas industry that the fast and loose manner in which resources and reserves is used can be confusing. That does not mean that it actually is confusing as the definitions are very explicit and the reserve/resource auditors adhere to them vigorously.
Don’t worry, Gillard will just find someone who can claim to be victimised by this proposal and get them to run in the Senate to help her & the Greens block it. Oh wait…she’s just nominated a real Green-Left sock puppet: Nova Peris!!!
Goldie: Doesn’t matter if a few unfortunate folks live there, except maybe that this is oil/gas and not wind or solar. With wind and solar, the rich NIMBY’s along America’s coastlines dump the monstrous bird killers on rural areas where there’s not enough people to fight them. We all know the politicians don’t care at all about places with few voters. Unless you have tourists to this area, it still may not matter if anyone lives there. Only tourist spots and areas this countries liberals call “national treasures” are exempt, and then again, it’s a NIMBY tactic to avoid having to deal will the crap you’re forcing on those cannot fight back. Environmentalists are bullies–they attack safe targets only. A few native peoples are an easy target–or can be used to stop development, depending on the needs of the group. Consistency is a ridiculous, antiquated notion.
No one lives out there, but there’ll be a clamour from Aboriginal interest groups to claim the lot under the auspices of native title.
There’s also the proximity of the Great Artesian Basin acquifer which the tree huggers will claim is threatened by hydraulic stimulation activities.
In any case, This is speculative stuff, let’s get excited once a few exploration and appraisal wells are drilled and successfully tested.
mpainter says:
January 24, 2013 at 4:11 pm
.See news: South Dakota Bakken oil production declined 2.2 % from Oct to Dec last year.
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Hard to take someone seriously who get it wrong from the beginning. The Bakken production is in North Dakota. The South Dakota portion of the Williston Basin only produces from the Ordovician Red River currently.
Erny72: ‘I agree on waiting to get excited on investments. A few years back, there was a lot of excitement over oil/gas found in eastern and southeastern Wyoming. I said then this was not a sure thing. They are still working out how extract the minerals. Eventually, I am sure they will.’
The North Dakota field is oil. My husband works for an evil energy company and what they are pulling out of the ground in the Bakken is oil.
Doug says: January 25, 2013 at 8:21 am
mpainter says: January 24, 2013 at 4:11 pm
See news: South Dakota Bakken oil production declined 2.2 % from Oct to Dec last year.
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Hard to take someone seriously who get it wrong from the beginning. The Bakken production is in North Dakota. The South Dakota portion of the Williston Basin only produces from the Ordovician Red River currently.
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Yes, I mis-quoted the article by Dan Murtaugh in Bloomberg. It should have been North Dakota, not South Dakota. The article is worth a read because it illustrates my point about the steep production decline of oil from frac shale.
Concerning egregious mistakes in published papers, a lot of these can be avoided by a little fact checking. The cited paper was sloppy, and worse than that if they confused conventional production curves with fract reservoir production curves, as asserted in another comment above.
As shale oil production climbs the price of crude will fall. Nothing new here. This will change the economics of the shale plays. Everything is in a flux.
Recovering oil or gas from shale rock requires horizontaly drilling and subsequent fracking through injection of lots of water-based fluids. In that desert area, where will the vast quantities of water come from on an economic basis?
mpainter says:
January 24, 2013 at 5:28 pm
Ric Werme says: January 24, 2013 at 9:1
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It is hard to take seriously a report that gets it wrong from the very start:
āThe Eagle Ford Shale in the Western Texas Basin,ā¦.ā (referring (?) to the Permian Basin of West Texas?)- but:
The Eagle Ford Shale is a Gulf Coast play. See maps.
We may both be posting bogus information, but it does look like the author should have referred to “Western Gulf Basin” which is well inland, but certainly not in West Texas. I don’t see references to Eagle Ford with either “Western Texas Basin” or “Gulf Coast”. Perhaps you can post references for “Gulf Coast.”
I see maps that say “Western Gulf Basin” – http://eaglefordshale.com/maps/attachment/eagle-ford-shale-map-800×614-2/
Also “Western Gulf Basin” and some useful background – http://geology.com/articles/eagle-ford/
This doesn’t name the structure, but has very cool photos that suggest there is “some” activity there, away from the coast. – http://eagleford.org/eagle-ford-lights-up-nasas-satellite-night-images/
Bonus – This shows the Bakken formation in MT, ND, and Alberta. About as far from SD as it can be – http://www.initialenergyservices.com/shalemaps.html
Ric Werme says: January 25, 2013 at 10:58 am
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The Eagleford Shale is a Cretaceous age petroliferous shale outcropping along the margins of the Balcones-Luling-Mexia-Talco fault zone and extending coastward in the subsurface at the regional dip of approx 1 degree, but also continuuing around the margins of the East Texas Basin, and dipping towards its center. Thus the formation is found in two separate oil provinces: the Gulf Coast and the East Texas. The present play is in the Gulf Coast province. A map is helpful.
The map shows the play extending across the Rio Grande into Mexico, and indefinitely southward, so when and if the Mexicans develop the play on their side of the border it could add very considerably to world production figures. There is no question that shale oil has changed the picture and put pressure on the price of oil, but the rapid depletion of frac reservoirs puts an incalcuable factor into all of this. Nothing new here.
With the amount of profit coming from Eagle Ford amd Bakken wells, you might try looking at those decline curves in different light. Payout time is something we worry about when looking at the economics of drilling a well. The high initial production rate of the fractured shale wells means we get our money back in a hurry and can move on to the next well. We’d rather have a big gush followed by a steep decline than slow steady well.
I had an interest in a naturally fractured Niobrara well which basically refused to decline—-20 barrels a day, every day for 30 years. I finally sold it out of boredom. No one was chasing the Niobrara shale when that was the reward.
PS: Does the Niobrara count as one of the “five tight formations in America? I’m still waiting for your list.
More Soylent Green! says:
January 24, 2013 at 7:00 am
The world has more oil than anybody ever dreamed.
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iron + limestone + water + heat = hydrocarbons + rocks
Fossil fuels are not decomposed animals. Fossil fuels are the product of the reduction of limestone and water by iron in the presence of heat. Limestone is “fossilized” CO2.
Water and limestone are carried into the earth by plate tectonics, where they are heated and mix with iron (iron is the ultimate stable byproduct of both fusion and fission). The iron serves to reduce (opposite of oxidation) the water and limestone to produce hydrocarbons. The hydrocarbons percolate up through the earth, where they either escape into the environment where they are oxidized (to form water and CO2 and eventually limestone), or are trapped under the earth by rock formations. These trapped hydrocarbons are know as fossil fuels, being made from fossilized CO2.
The notion that fossil fuel is derived from dead animals help preserve the notion that it is scarce and thus demands a high price. The simple fact that it is the product of a reaction between water and limestone within the earth does not serve the purpose of oil suppliers.
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 āfantastic energy windfallā with oil shale because the prospect of oil shale development is a big unknown.
My local newspaper says gasoline prices in the Midwest are low because we are close to South Dakota oil. So evidently, at least locally, shale oil development is not unknown. I don’t know how they managed to keep it secret from you.
M Simon says: January 25, 2013 at 11:18 pm
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 āfantastic energy windfallā with oil shale because the prospect of oil shale development is a big unknown.
My local newspaper says gasoline prices in the Midwest are low because we are close to South Dakota oil. So evidently, at least locally, shale oil development is not unknown. I donāt know how they managed to keep it secret from you.
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Do you know the difference between oil shale and oil from shale?
My readings in the subject indicate that the Bakken oil play is marginally economic, with break even at $80-90/bbl. If the price of crude falls much further, expect an exodus of drilling rigs from the Williston Basin area. Another oil play boom and bust, it seems.
M Simon: Being close to oil has no effect on prices. Being close to a refinery might, but living in a town with a refinery, I can say definitively there is not a one-to-one correlation. Gas prices are determined by as many factors as climate, so far as I can tell, including how much people are willing to pay.
mpainter: transportation for crude is in place, rigs are in place, the tax climate in North Dakota is balmy. I have no idea what you’re reading, but I see no evidence Bakken oil is “marginally” economic.
Reality check says: January 26, 2013 at 6:53 am
mpainter: transportation for crude is in place, rigs are in place, the tax climate in North Dakota is balmy. I have no idea what youāre reading, but I see no evidence Bakken oil is āmarginallyā economic.
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I am reading reports written by those who understand such matters and who have investigated these aspects of the Bakken Shale. If you look, you can find such reports, too. Key words: Bakken, production stats, economics, shale oil, etc. The results of frac shale oil production will not meet the hype. With downward pressure on the price of crude, a re-evaluation of the play is in process.
I googled some of your key words. I found that BakkenDispatch matches your numbers. Other sources predict the price of oil per barrel will continue to rise. Actual production has slowed, but it is winter in North Dakota. Plus, rig counts go up and down all the time. I have lived through multiple boom and bust cycles in oil. Predicting these is virtually impossible no matter what the economists say. One day oil is riding high, the next it is not. I’m still waiting for the bust to return and it’s just not happening. It could happen tomorrow. It could happen in 20 years.
You may feel free to believe those “who understand these matters” but I am going with 30 years of living in a state funded by oil and working off and on in the oil business. I have read “experts” before–and found them to be lacking.
mpainter says:
January 26, 2013 at 8:57 am
You haven’t offered a single URL in any of your comments on this thread. Are you on a cell phone with expensive data access, do you prefer to say “you can find” or “See Tex RR comm stats & maps.” Is that a Google-ready search string? You comments would be a lot more useful if you took a minute to include some references.
That discussion paper I posted a link to, the one you laughed off, left me thinking that once the Eagle Ford play got up to speed, Bakken would get a lot less interest at least until pipelines, refinerys, etc. got into place. I admit I’m a clueless software engineer, but while I’m not surprised there’s a re-evaluation of the play, I’d be hesitant to extend that to Eagle Ford at the moment.
Of course, if people are re-evaluating Eagle Ford too, that might be interesting. Please post a reference. š
Oh, all right. I Googled |Tex RR comm stats maps|. IIRC, the TX railroad agency has fingers (and arms) stuck in crude oil production. One of the first maps that looked promising was http://www.rrc.state.tx.us/forms/maps/ogdivisionmap.php . Hmm. 10 major divisions with names like 1&2 San Antonio or 7B Abilene. Good grief, just how many ways does TX have for naming oil and gas regions?
Ric Werme says: January 26, 2013 at 10:44 am
try: eagle ford evaluation
http://tuscaloosatrend.blogspot.com/2013/01/eagle-ford-shale-evaluation.html
This shows that profits on the Eagle Ford yields are very good at current prices for crude. The profit picture on gas is different.
Ric Werme:
The Oil &Gas Journal is a reputable trade publication. This gives an overall assessment of tight formations currently in production (US).
http://www.ogj.com/articles/print/vol-110/issue-12/exploration-development/evaluating-production-potential-of-mature-us-oil.html
Note the assessment of the Coulee field of Montana (Bakken Shale), with a projected EUR at 130 million bbl. Nothing really big.
The Eagle Ford looks a lot better than the Bakken. Eaagle Ford profits look good but the pressure on crude oil prices builds as these trends are exploited. Also, gas is a substitute fuel and this commodity will serve as additional pressure on crude prices.The whole picture is in a flux and as crude prices decline, the economics change.
Does oil and politics mix? You bet. Domestic producers are not a bit unhappy that Obama nixed the oil sands pipeline from Alberta. Food for thought.
The Tex RR comm. has devised an O&G region nomenclature for administrative purposes. Pay it no attention.
mpainter says:
January 26, 2013 at 1:14 pm
They’re in it for the oil – until we start shipping LNG or getting more domestic consumers of gas, it seems rather pointless to increase gas production these days. Pretty much what I said in “Cheap Natural Gas, but wait ā thereās more.” OTOH, as a NG consumer for heat and hot water, I figure I’m paying the equivalent of $1.50 heating oil, so I don’t mind extra wells. š
mpainter says:
January 26, 2013 at 4:58 am
My readings in the subject indicate that the Bakken oil play is marginally economic, with break even at $80-90/bbl.
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The North Dakota Sweet price as of 12/21 was $66.15. What is it you read?
Shows North Dakota Sweet in early Jan as well as other US produced oil.
My source gives Bakken sweet at ~ $93 delivered at Clearbrook MN. Compare to benchmark WTI at $96.09 yesterday. Seems these prices vary quite a lot. The Clearbrook price includes a freight charge. The link from Richard may be at wellhead, but I don’t know. If the $80-90 break even figure is valid, it does not look so good for Bakken operators.
mpainter: You just cannot possibly believe that Bakken is not doomed to failure, can you? No matter what anyone tells you, it is going to fail. With a grounding in “we’re all doomed”, there really is not much point to answering anything you type.
Forty years ago, my neighbors moved to work on the pipeline in Alaska. It was destined to fail, so they did not sell their house. Twenty years went by and no failure. So they sold the house. Forty years later, they are still in Alaska. Probably still waiting for everything to fall apart because it “always does”.
Again, I don’t really care what your “experts” say. I live and work where oil is the major industry, have for years and know BS when I read it.
Believe what you like–if you are lucky, the economy will collapse and you can revel in your being right.
I imagine that these are well-head figures, as are mine (which are from later in Winter), and they likely are Winter figures, but they would include profit margins.
I imagine that they will decline over time.
The chief problems that I can see are :
a) How water intensive is fracking? South Australia is our most arid state, and let’s bear in mind Australia is the most arid nation already. There are numerous lakes in SA’s inland, but they are all seasonal, only actually filling completely perhaps every quarter century.
b) Speaking of those lakes, depending on the proximity to e.g. Lake Eyre, there could be a heavy conflict with areas designated as being ecologically important, and possibly with an Aboriginal Reserve.
So yes there exists the potential for this to be problematic, even if the PM was eager to engage in such an endeavour. Someone that knows the potential location of such a project will be able to inform better than I can though.