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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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 “fantastic energy windfall” 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: @ur momisugly 10 mm bbl/d
Current US production @ur momisugly 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 promoter’s 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: “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.” 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 “fantastic energy windfall” 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
“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.
————————————————————————————————————
Bakken estimated recoverable oil is 24 billion barrels… 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
“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.”
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. — 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:
“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?”
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 “undiscovered resource”. 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.