The Never-Ending Shale Revolution That Keep On Giving
On Tuesday, the USGS announced that a swath of West Texas known as the Wolfcamp shale contains 20 billion barrels of oil and 16 trillion cubic feet of natural gas.
That is nearly three times more petroleum than the agency found in North Dakota’s Bakken shale in 2013.
As NPR’s Jeff Brady reported, the amount of oil in the Wolfcamp shale formation is nearly three times the amount of petroleum products used by the entire country in a year.
The USGS says all 20 billion barrels of oil are “technically recoverable,” meaning the oil could be brought to the surface “using currently available technology and industry practices.”
“The Texas discovery is in a place that has been drilled before by conventional methods,” Jeff reported for NPR’s Newscast Unit. “But now that oil companies use horizontal drilling and hydraulic fracturing — or fracking — they can access reserves that previously were out of reach.”
“Changes in technology and industry practices can have significant effects on what resources are technically recoverable, and that’s why we continue to perform resource assessments throughout the United States and the world,” said Walter Guidroz, a program coordinator for the USGS Energy Resources Program, in the USGS statement.
“Even in areas that have produced billions of barrels of oil, there is still the potential to find billions more,” he said.
The complete oil and gas assessment is publicly available here. A map shows the six separately assessed regions, designated according to depth by the petroleum industry, that make up the Wolfcamp shale.
Full story — Rebecca Hersher, NPR, 16 November 2016
For those who might be wondering, the estimate for the Wolfcamp Shale is almost 19 times larger than the USGS estimate of continuous oil in place for the Eagle Ford Shale, released in 2012. To put the magnitude of this estimate for the Wolfcamp Shale into further context, the Prudhoe Bay formation on the North Slope of Alaska, to date the largest producing oil field ever discovered in North America, has produced just over 12 billion barrels oil over the past 43 years. The largest producing oil field ever discovered in the Lower 48 states of the U.S., the East Texas Field, has to date produced just over 7 billion barrels since the early 1930s. –David Blackmon, Forbes, 15 November 2016
Surplus LNG volumes, supplemented by new production in the US, Australia, Canada and East Africa, “will create the catalyst for a second natural-gas revolution, with far-reaching implications for gas pricing and contracts” – so says the International Energy Agency (IEA) in its latest World Energy Outlook, unveiled at a Westminster, central London press conference this morning. –Arthur Fields, Highbury Clock, 17 November 2016
h/t to Dr. Benny Peiser at The GWPF
Isn’t this a rehash of the previous post regarding the Wolfcamp field?
Dear WUWTers,
Please forgive my interjecting this here, but, I could use someone’s help.. I’d prefer that it be a WUWT “regular,” so I can feel comfortable doing what I describe below.
It’s 9:30AM on the west coast of the U.S.. Apparently, Anthony has decided not to celebrate the 10th Anniversary of WUWT (it’s today) or even to mention it, thus, I am writing on this thread.
My plea: I spent from January, 2016 until August, 2016 working, almost full time, on an anthology of WUWT over the past 10 years. It is 2,436 pages (Word doc). In it are over 1,000 links to WUWT articles I considered representative of the content of WUWT over the years. The first approx. 36 pages, in fact, are just links to pages in the anthology where you find the link to that article on WUWT.
I gave this anthology to Anthony last August to turn into a .pdf and use as a fundraiser for WUWT (any donation amount okay, I suggested, so that EVERYONE could have a copy). He seemed to be pleased with the idea.
Apparently, he changed his mind.
Is there anyone who can:
1. turn my Word doc into a .pdf (I will e mail it to you — it made it to Anthony’s server just fine last August)
AND
2. make it available to WUWTers FOR FREE.
The only condition I ask is: I remain the sole author/editor (NO changes without my prior permission).
Again, please forgive this interruption, but I’m almost sick with sorrow over all that work going completely to waste. PLEASE, SOMEONE, IF YOU CAN, HELP ME. Just ask a mod (spell out Mod’tor completely to summon one) to give me your e mail address.
Thank you!
With earnest hope that help is on the way,
Janice
P.S. I told Anthony I hoped he would use it to celebrate WUWT’s 10th Anniversary (thus, I write today)
Hi Janice;
I have software to convert a Word doc into pdf. I am not a “member” of WUWT, but I visit the site regularly. If you want to send it to me I will convert it and send it back. Not sure how to find a moderator or ask them to share my email address. I have checked the box below to receive new comments by email.
Ray
Janice, on my Word program I go to “save as” and at the bottom it says ” save as type” and in the drop down arrow go to pdf and save it. I hop that works for you. Ed
Janice;
I’m pretty sure I can do this.
Moderator, you have my permission to give Janice my e-mail address.
Hi Janice,
When you ha e the word ducument open you should be able to click on file and then save as and choose file type *.pdf from a dropdown list. That should work unless you maybe have avery old version of word.
Good luck
Jeff
ALL IS WELL (See this thread: https://wattsupwiththat.com/2016/11/17/wuwt-milestone-10-years/comment-page-1/#comment-2344229 )
THANK YOU, oh, thank you SO MUCH, for coming to my rescue. I was SO sad. Thank you, dear, dear, Raymond, Eddie, D.J., Jeff, and Keitho who responded via e mail. I will always remember that you came to my rescue!
Janice
Janice;
Not sure about Windows, bu any mac running some version of OS 10 with Word installed can convert your document easily just by using the “Print” command, then selecting “Save as PDF file” in the ensuing dialog used to select a printer. There’s also a “Preview” option that lets you verify the format is correct after the conversion.
I can’t imagine this feature not being available on other OSs.
Moderator, you have my permission to forward my eMail address to Janice. I expect I could have it done in a few minutes.
MS Word will save as a pdf – at least since 2010. If not google – online conversion of doc into pdf. I’ve done it before and it’s pretty simple.
This is old news. The E&P companies have been increasing their leases for quite some time now. My son is a Petroleum Engineer for a very good service company based in Midland. One of his duties is to design the way wells are to be fracked. Sometimes information is easy to come by. Proud and lucky dad. The price of oil will determine how Wolfcamp is brought into production.
20 bn bbls. Might seem like a big deal for the USA, but it really isn’t that big a deal globally.
Abu Dhabi’s Upper Zakum has 50 bn bbls, discovered way back in 1963 it’s only the 4th largest find.
PS. It is only now being upgraded (at vast expense) from just 0.5m bbls pd to 0.75m bbls pd.
Yes it is… https://wattsupwiththat.com/2016/11/16/peak-oil-indefinitely-postponed/
Yes:
https://wattsupwiththat.com/2016/11/16/peak-oil-indefinitely-postponed/
America uses 19,000,000 barrels of oil per day annualized. Thus, this “find” would provide 1,53 days worth of crude if 100% extracted. That is 2.89 years worth of crude.
did you allow for the 9 1/2 per day now….
Well who said anything about the USA needs.
If Texas secedes along with California, the Remaining 55 States, can use their own oil, and at least Texas will have enough for itself.
G
Correction to above. (1,053 days.) America uses 19,000,000 barrels of oil per day annualized. Thus, this “find” would provide 1,053 days worth of crude if 100% extracted. That is 2.89 years worth of crude.
America produces 9 1/2 million per day now…..wouldn’t this be about 6 years worth of crude?
US production is down to about 7.5 MM bbl per day iirc
Current production per the EIA is 8.681 million barrels per day as of 11/11/16.
http://www.eia.gov/petroleum/supply/weekly/pdf/table1.pdf
True, if all the uses of crude were to be satisfied by this one source. Add this to the aggregated proven reserves, and what do you get?
Sad. A $900 billion dollar windfall won’t even pay two years interest on the National Debt the Democrats have run up.
The $900B comparison to interest on the US debt is stunning.
Leo Morgan, you are only looking at the raw value of the bulk commodity. When that much oil is utilized by the manufacturing sector of the United States economy, the multiplier effect will make more than an order of magnitude difference. With a booming economy, Government outlays for entitlements and other social expenditures is reduced while greater earning results in enhanced revenue collection. That 900 billion dollars worth of oil will result in value added to the economy that will reduce the National Debt by as much as half.
I’m happy to grasp at the straw you floated there. While I follow the broad strokes, could you possibly “show your work”, or point to where the math is illustrated for the layman?
And, furthermore, the Wolfcamp is just one of the multiple layers of “new” reservoirs in the Permain Basin.
typo: Permian Basin
Chevron:
“The Permian Basin’s geology is unique because it contains multiple “stacked plays,” which means one well can produce oil and natural gas from several layers of rock in different geological zones. This multiplies the basin’s oil and natural gas resource potential.
“Today in the Permian Basin, Chevron is targeting these stacked plays above and below the rock layers from which we have produced for decades. Application of horizontal drilling, combined with hydraulic fracturing, enables the economic development of these previously inaccessible resources. The stacked plays enable efficient development and production from multiple zones. They also allow for multiple wells from a single pad location using our shared infrastructure.”
https://www.chevron.com/projects/permian
Well I can’t wait for Texas to secede from the Union, and California too.
The lame brains who rabble rouse about eliminating the Electoral College, and presumably the Senate as well, as undemocratic institutions, at least in California don’t seem to understand that California is totally dependent on OTHER STATES for much of its existing supplies of WATER AND ENERGY.
We don’t have enough water or energy to supply the needs of even just those Californians who gave a popular vote win to Hillary Clinton, if they kicked the rest of us out of the State.
And California’s Moonbeam government has an official State directive to go 100% Renewable for ALL energy in California, and 100% electric for ALL of that energy. That position, was directly stated in words of one syllable by the California Secretary of State, Alex Padilla just last month at the UC Davis Solar Symposium, in the keynote speech of the conference; which I attended, and photographed his presentation slides, showing the program.
So at least Texas has a critical mass of energy to survive as a free country; but California simply has a critical mass of the largely uneducated population.
We have family origins in Texas, so I would be happy to move there when they both secede, or move back into the New United Sates with its new 55 instead of 57 States.
G
Let’s see how well they do on transiting to Solar and Wind when the federal subsidies are removed next year.
Additionally how much federal money flows into the state to fund educating and providing health care to all the illegal aliens, research grants to the universities, highway funds, food stamps and 1000 other programs.
And what about Social Security and Medicare? I’m pretty sure if they secede, the remaining states would not be too agreeable to continuing these payments.
I’ve seen a $2T GDP touted for California, but how much of that is US government money flowing in? Basically this isn’t going to happen, but makes for good press.
California is a net creditor state, it receives approximately 60% of the funds it pays in federal taxes back in the form of federal funding.
It’s hamstrung itself by not investing in the infrastructure necessary to support its growing population, a population that primarily grows by immigration. Under a reasonable government, California would do quite well as a sovereign nation. There’s no advantage to that for the feds though, or any other state in the union. As far as energy is concerned, there’s been no exploration permitted in the state since the 1960s so it’s difficult to say what resources might be available.
For a reasonably entertaining overview of California’s historic water problem, I suggest watching the film “Chinatown”. In a nutshell, real estate developers sold land without developing the water needed to make the land useful. It’s been going on for nearly a century with no sign of letting up. Water seems to be the one thing the California legislature allows developers to sell over and over again.
Well the Town of Delano, home of the late Cesar Chavez, is supposed to be sitting right on top of a huge natural gas deposit, that was discovered a few years ago, right under main street.
As far as I know they are just going to leave t there so Delano remains as an impoverished part of the State.
G
LOL……60
Obama says he’s been to “fifty seven states”.
“One left to go”
“Alaska and Hawaii I was not allowed to go to”
57 + 1 + 2 = 60
Spoken like a Navy corpse-man. 😉
I doubt think Texas could build a wall long enough or high enough to keep out all the refugees.
That’s what concealed carry is for.
But George, if California secedes then Texans may want to stand pat. Losing California would solve many, if not most, of the real and political problems in the U.S., who wouldn’t want to stay.
Further, since so much of the land in the state of California is Federal Land we would be able to carve out huge swaths of territory that they could not take with them, like most of the Sierra’s the Angeles, Shasta and Trinity National Forests, and Big Sur.
Well Texas puts up with crap from a lot more than just California. Well you flyover folks do too.
“Federal Land”. Just how much Federal land is there ? Well I know there’s Washington DC, that IS the Federal land.
So where the hell else is there Federal land ??
G
Why not just wait for that CO2-induced mega-earthquake to kick Kalifornia out of the union? No fuss, no muss.
George look it up on goggle. In the Western United states and Alaska land owned by or controlled in trust by the Feds is greater than that which is privately held.
Does anyone here recall how West Virginia came into being? The northern and eastern parts could secede from California, there is a precedent for parts of a State voting to leave and setting up shop on their own.
For States leaving the Union though not so much, The proponents of this idea may want to check with the folks of Atlanta on how it worked out for them. I seem to remember some guy by the name of Sherman putting the “kibosh” on the scheme
michael
Mike, that just proves that the side with the most guns gets to tell everyone else what to do.
This time, the liberals are so scared of guns they would mess their pants if anyone asked them to fire one.
States have just as much a right to secede as they did when the Confederacy was formed. The right to secede was never invalidated by the Civil War, which was an illegal force of arms.
Lincoln’s claim that secession was treason was sopathetically stupid that only Yankees bought into it, at least their more ignorant Yankees. Many newspapaers and lawyers in the North defended the right of the Southern states to secede. That was before LIncoln provoked the war and acquired dictatorial powers and used them extensively, especially against any publication that even criticized
his handling of the war. His prisons were full of political prisoners, who were never charged and released only after the war was over. Lincoln’s Union was a military dictatorship. There were no individual rights, unlike the Confederacy.
Lincoln himself gave a speech in 1848 defending the right of a state to secede. It went like this :
” Any people anywhere, being inclined and having the power,
have the right to rise up and shake off the existing government,
and form a new one that suits them better. This is a most
valuable, a most sacred right – a right, which we hope and
believe, is to liberate the world. Nor is this right confined
to cases in which the whole people of an existing government
may choose to exercise it. Any portion of such people, that
can, may revolutionize, and make their own of so much of the
territory as they inhabit.”
Speech to Congress Jn 12, 1848
The reason the Feds decided not to try Jeff Davis for treason was because they figured
that it was likely they would lose. The Supremes decided against secession later on,but that was nothing more than a bunch of Yankees trying to cover their asses. The decision had no plausible logic behind it. Several states, including Virginia, entered the Union conditionally, and reserved the right to leave, a right that was never questioned by the Union. Additionally, the Declaration of Independence has as its primary theme the claim that people have a universal right to determine which govt they want to live under.
Well,
MarkW November 17, 2016 at 2:01 pm
correct I think some guy from Corsica said “god sides with the heaviest artillery”
arthur4563 November 17, 2016 at 2:36 pm
Sorry the United States army of the Potomac and the United States army of Tennessee kind of make all your puffery moot. Oh and it was not Yankees, it was the United States there were Regiments from most of the southern states in the United States army in 1865.
Oh and no one took the Taney Court seriously after Dred Scott.
michael
deanfromohio November 17, 2016 at 10:17 pm
howl? Gee anything would be better then the whimpering and whining, by the way does silicon burn?
michael
For some random reason I had this. Long story. My wife got it from Wikipedia, I think. It is interesting.
West Virginia is one of two American states formed during the American Civil War (1861–1865), along with Nevada, and is the only state to form by seceding from a Confederate state. It was originally part of the British Virginia Colony (1607–1776) and the western part of the state of Virginia (1776–1863), whose population became sharply divided over the issue of secession from the Union and in the separation from Virginia. Creation of the state of West Virginia was formalized by admittance to the Union as a new state in 1863.
In 1861, as the United States became massively divided over regional issues, leading to the American Civil War, the western regions of Virginia split with the eastern portion politically, and the two were never reconciled as a single state again. Even before the American Civil War, counties in northwest Virginia were desiring to break away from Virginia to form a new state. However, the U.S. Constitution did not allow a new state to be created out of an existing state unless the existing state’s legislature gave its consent. In Richmond on April 17, 1861, a vote was held on the Ordinance of Secession which paved the way for Virginia’s secession from the Union. Representatives from the current state of West Virginia voted 17 for, 30 against, and two abstained. Almost immediately after the adoption of the ordinance, a meeting at Clarksburg recommended that each county in north-western Virginia send delegates to a convention to meet in Wheeling (the Wheeling Convention) in May 1861. An act for the reorganization of the government was passed on June 19, 1861.The Wheeling Convention, reassembled in August 1861, and called for a popular vote on the formation of a new state and for a convention to frame a constitution if the vote should be favorable. On May 13, 1862, the state legislature of the reorganized government approved the formation of the new state and an application for admission to the Union was made to Congress. On December 31, 1862, an enabling act was approved by President Lincoln admitting West Virginia to the Union, on the condition that a provision for the abolition of slavery be inserted in the Constitution. In 1863, the western region was admitted to the Union as a new separate state, initially planned to be called the State of Kanawha, but ultimately named West Virginia.
IF you eliminated the Electoral College and used the popular vote:
There is less than 1% of difference in the popular vote
This would trigger an automatic recount of the votes
There would be lawsuits in every state by both sides claiming voter fraud, voter suppression, voter irregularities in EVERY state
There would be riots in the streets by both sides, each claiming victory
Candidates would campaign differently, concentrating on populous areas
The voter turnout would be different, since voters in both parties are likely to not vote if the other party is likely to win the state in the present methodology
Anarchy would reign
Middle America would have no voice in elections, and be subject to the tyranny of the majority living on the east and west coasts.
We should thank God for the Electoral College.
Thinking that the election results show that we’d have a president-elect Hillary Clinton (shudder) if we went by popular vote is the same kind of simplistic thinking that leads them to believe that they could double revenue by doubling taxes. They think that people would just keep doing whatever they are doing and definitely would not change anything to minimize their tax exposure, just as they seem to think that Trump (and Clinton) still would have concentrated on the then-irrelevant battleground states rather than campaigning in population centers, and that the conservative voters in liberal states (and vice versa) would not come out in greater numbers. In other words, they think we’d have the same election results even with a much different set of rules in place.
Time and time again, leftists fail to see that the world doesn’t just keep working in the same way when you change the rules.
Trump swept the battleground states he needed to get to win, and even managed to pick up the solidly-blue Wisconsin. To suggest that Hillary would have won if we had a popular vote system is ridiculous. It was clearly a Trump kind of night on election day, and the voter anger at the establishment (of both parties) would still have been there if we went by popular votes. I have no doubt that Trump still would have won.
Won’t the land begin to subside sooner or later?
Not if congress passes a law against it.
I think it would mostly be the land west of the San Andreas Fault, a long, narrow strip running from the Salton Sea to Pt Reays (little north of San Francisco).
We’d lose Pebble Beach golf course…
“We’d lose Pebble Beach golf course…”
Some sacrifices must be made.
Javert writes: “I think it would mostly be the land west of the San Andreas Fault”
I wouldn’t take that to the bank. The last major quake, the 1989 Loma Prieta, which weighed in at 7.1, raised my property in the Santa Cruz mountains west of the San Andreas by 3 feet in about 30 seconds. It seems to be going the other direction, which would explain California’s Coastal Range?
Well no; we would just have to go to Alaska to play Pebble Beach.
Well I don’t play Goof, but I would go to Alaska to watch Lydia Ko and Ariya Jutanagarn play Pebble Beach.
G
All that “carbon pollution!!!” The horror of inexpensive carbon energy driving the North American 21st Century economy.
Meanwhile, heads are exploding at 350.org and across OPEC. And there are no indian reservations for George Soros to secretly fund to block new pipeline construction.
What are the watermelons next move? Do they have one, or is it checkmate with President Trump about to toss out Obama’s CPP, overhaul and severely downsize the EPA, and ignoring the Paris COP21 agreement?
Also with the War on Coal over to produce electricity, the renewable industry is going to get decimated.
Acquiring slightly used 1-5 MW Wind Turbines on eBay are basically going go for the value of the copper inside, as long as you agree to dismantle it and move it on your own dime.
“heads exploding at 350.org” ???? How can something that they do not have explode?
As for Soros, he’s too busy trying to get his money back from the Clinton Foundation to be of much trouble anymore.
Wasn‘t Soros “hedging-his-bet” that Hillary was going to win the POTUS election when he invested a “big” pocketful of change in Brazil’s off-shore drilling venture?
With Trump winning the POTUS job ……. the US won’t be needing to purchase any of Soros’s Brazilian oil.
joelobryan November 17, 2016 at 10:11 am
All folks will need is google maps and no one looking
http://www.foxnews.com/science/2016/11/16/3-wwii-shipwrecks-have-mysteriously-vanished.html
michael
Which reminds me, has Trump mentioned reviving Keystone XL? Or is it too late (Canada having since been retaken by the socialite socialists)?
There is much misunderstanding in the reporting around around this new report. I read the entire USGS document yesterday to make sure.
Wolfcamp is actually 4 shales, a-d. Some are already producting, with laterals on 60 acre spacing (quite dense). The operators expect a recovery factor of 3.5% compared to 1.5% in the Bakken. That is plausible, as there are Wolfcamp a regions with 4% -12% porosity and ~0.1 miilidarcy permeability. By comparison, middle Bakken is 4% porosity and ~0.01 mD permeability.
The USGS uses a recovery factor (EUR) of 16.5% of OIP (oil in place). That is about right for the natural gas and NGL, ( the Marcellus has similar recovery factors in Pennsylvania) but is far too high for the petroleum. How badly too high dunno. Maybe a factor of 4. And, some of Wolfcamp must be already naturally depleted because it is one of the source rocks for the overlying conventional oil reservoirs of the Permian basin. Those have been pumped since the 1920s with cumulative production ~30 billion barrels. This was ignored. Both errors were also made in the assessment of Russia’s Bhazenov. See essay Matryoschka Reserves in ebook Blowing Smoke. The EIA estimate for Bhazenov was 78Bbbl; the likely correct estimate is maybe 5 based on Russian information available in English.
And even if perchance this new Wolfcamp estimate was right, there is no MSM sense of proportion. After Saudi Arabia finished reworking the southernmost Harahd portion of its Ghawar field (world’s largest) in 2010, estimated remaining EUR was~65billion barrels. Ghawar produced 6% of the worlds total crude production in 2012, last year checked for ebook Gaia’s Limits. Wolfcamp is not the next Saudi Arabia. Its not even what remains in Ghawar.
What incentive do the Russians have to report the real size of recoverable reserves? It’s not like they are a publicly traded company.
As an oil exporter, they have every incentive to under-report their reserves to minimize the long-term impacts to world price expectations and reduce the UNFCCC COP pressure of limiting production for carbon emission goals.
The USGS is no where near the authority on estimating recoverable reserves and they are consistently low on their estimates.
Effective porosity (total porosity is much higher) and permeability are second to how resource plays react to completion techniques. A proper hydraulic frac with the right fluid and proppant will greatly increase effective porosity.
Yes. But getting at oil not already in natural fissues depends on those porosity/permeability numbers for the unnatural fracked fissures. That is why I cited the ‘actuals’ for both Wolfcamp and Bakken. And that is why the steep decline curves.
USGS and EIA have been egregiously wrong high on other shales. Specifically California’s Monterey (nothing horizontal to drill) and significant parts of China’s Sichuan (same reason western half). And Bhazenov was high for 5 reasons. Sufficiently thick shale with sufficiently high TOC is about 1/4 of the total shale area. Of that, 1/3 is autofractured and fully depleted into all the overlying conventional oil reservoirs like Samotlar, worlds 6th biggest field. Of the rest, the total strata is ~ 100 feet thick compared to Bakken total 140 feet. The actual Bhazenov shale proper is too plastic to be fracked. There are five interspersed drilling targets like Middle Bakken. Unlike middle Bakken (80 feet thick) these targets are at most 8 feet thick. Based on actual Bhazenov drilling and experimental fracking by a Shell/Rosneft JV.
California’s undeveloped off-shore hydrocarbon resources are not shabby either. But based on the ideological trajectory they are on, they will remain locked up forever.
But..but…you will ruin the beaches. I was on the beach at Oxnard a couple of weeks ago and I came upon a couple looking at some kelp with a big glob of oil in it. They were bemoaning the fact that you could see the legacy oil platforms in the distance. I casually mentioned that I grew up on SC beaches and knew that there had been globs of oil from natural oil seeps forever. They looked at me like the devil and silently walked away.
You are right, oil has been seeping out of the ground in the region for a long time. The Spanish colonials knew to careen their boats on the beaches of Santa Barbara for a good coating of tar. Animals also met their demise for millennia a few miles away at La Brea.
From what I’ve read, the amount of seepage has actually decreased since oil drilling started. Less oil to leak means less oil leaking.
From the previous story:
As I posted earlier on this story, if you want a little better understanding of the whole Shale revolution, please visit: https://insuspectterrane.com/2016/05/25/the-petroleum-age-has-just-begun/
Because we have strongly tended to view unconventional resource estimates through the lense of conventional resources, major misunderstandings abound in interpreting them. The discussion of the USGS estimates of the various Wolfcamp plays in the Midland Basin is another example of these misunderstandings.
First of all, the USGS estimates are of “technically recoverable resources”. This concept is next to worthless in evaluating unconventional resources like tight oil. In its basic meaning, all this concept says is that the technology exists to recover this range of resources, irrespective of the cost of doing so. It may cost $1000/barrel to do so, but by the strict definition of technically recoverable resources, such absurdly expensive resources still count as recoverable resources.
The two most important facts about any unconventional resource assessment are first that a very substantial spatial and statistical variation – often exceeding an order of magnitude – exists in the productivity of wells across any unconventional play. The distribution of this variation is the primary determinant of play potential.
Secondly, this variation in productivity determines the cost of production and thus the commercial viability of any portion of the play. As we have seen in the past two years, only a small proportion of tight oil plays are commercially viable at $40-50/barrel oil, even with substantial reductions in drilling costs and improvements in well productivity through better completions.
A key detail in the USGS assessment (as found on their fact sheet) is that their estimate of mean recovery per well in the best of their assessment units is only 160,000 barrels (an assumption I think is much too low).
A mean recovery at this levels entails that at least 80-90% of their total resource estimate requires a price exceeding $70-80/barrel to be commercially viable.
In other words, the Midland Wolfcamp is likely to contain substantial oil resources, but a large proportion of these resources could never be economically viable.
Hi Richard,
Thank you for your comments. The regulars here may not be aware that in the energy community, Mr. Nehring is considered of our most thoughtful analysts.
I would also like to add that the USGS estimate is for “undiscovered” resources. They are not proved.
Dave
I have never been able to understand the conflation of oil with electricity production. In the US we do not generate electricity by burning actual liquid oil. Natural gas yes and a few standby generators if needed but not base power. Oil we use for many other things but mainly transportation.
At any gathering on energy it seems that people quickly begin discussing oil and renewables as if they are replacing oil. And is it to much of a stretch to ask how making electricity more expensive facilitates adoption of electric vehicles.
Have you ever been in a room where nothing being discussed makes sense to you. I suppose this is the moral of the story about the Kings new clothes. Frac on.
I have never been able to understand the conflation of oil with electricity production. In the US we do not generate electricity by burning actual liquid oil. Natural gas yes and a few standby generators if needed but not base power. Oil we use for many other things but mainly transportation.
At any gathering on energy it seems xx that people quickly begin discussing oil and renewables as if they are replacing oil. And is it to much of a stretch to ask how making electricity more expensive facilitates adoption of electric vehicles.
Have you ever been in a room where nothing being discussed makes sense to you. I suppose this is the moral of the story about the Kings new clothes. Frac on.
Hear that? That’s the sound of a nationwide hissy fit from the eco-fascist Left.
Yeah and that’s just in anticipation of the pain that’s coming.
Production from these wells is not very high, its just that the shale bed is HUGE and very thick and it will probably be a producer for decades upon decades.
Break-evens are in the $50 barrel range so it is worthwhile for companies to drill and expand and produce in this area. As long as the long-term oil price is expected to be be higher than this break-even, the companies involved will do well and they will produce for decades but these are not gusher wells.
When this news article first popped up what I focused on was the Natural Gas reserves. The reason was that I had this image pop into my head of Texas building lots of cheap clean natural gas generators and lowering their electrical rates at the same time the rates in California are going through the roof. At the same time California’s power is getting less and less reliable. There are already businesses moving to Texas from Ca. this would certainly speed that up.
President mother nature has handed you and your country a HUGE gift please use it all wisely.
The Permian Basin TX — the gift that keeps giving.
oops pressed the button too early, that should be —
President Trump,
Mother nature has handed you and your country a HUGE gift please use it all wisely.
The Permian Basin TX — the gift that keeps giving.
Wow! I worked with Walter Guidroz way back when at ……………. a large multinational oil and gas exploration company AND worked with Mr. Nehring’s databases at this company. Small world! BTW, thank you Mr. Nehring!
I have one quibble with the captioned picture at the top of the article. The Permian Basin IS NOT a desert. We get an average of 13-15 inches of rain a year. very productive farmland for cotton and grain, Even the dryland famers that do not have irrigation water get good crops most years.