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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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
=========================
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.
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
==================================
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.
==========
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 “fantastic energy windfall” 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 “fantastic energy windfall” 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.
=================================
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 you’re reading, but I see no evidence Bakken oil is “marginally” economic.
====================================
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. 🙂
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 – there’s 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. 🙂
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.
————————————————————————————————————————————
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.