Guest essay by Eric Worrall
Oilprice.com has announced discovery of 1.2 billion barrels of oil on Alaska’s North Slope, which they expect will revitalise Alaska’s oil industry.
Huge Oil Find Could Save Alaska’s Oil Sector
By Nick Cunningham – Mar 10, 2017, 1:30 PM CST
Spanish oil firm Repsol SA just announced the largest onshore oil discovery in the U.S. in three decades, a 1.2 billion barrel find on Alaska’s North Slope. Repsol has been actively exploring in Alaska since 2008 and finally hit a big one.
The find came after drilling two wells with its partner, Armstrong Oil & Gas. Repsol says that it if it moves forward and develops the project, first oil could come by 2021. The field could produce 120,000 bpd, a significant volume given the predicament the state of Alaska finds itself in.
Alaskan oil production has been declining for decades. After BP’s massive Prudhoe Bay oil field came online in the 1970s – the largest oil field in North America – Alaska’s oil production shot up. But the field saw its production peak in the late 1980s at 1.5 million barrels per day, after which it went into long-term decline.
…
Read more: http://oilprice.com/Energy/Crude-Oil/Huge-Oil-Find-Could-Save-Alaskas-Oil-Sector.html
Great news for the USA, especially for Alaska. I guess peak oil will have to be postponed again.
Yay!
Shale will provide that output with 100 more drill rigs, employing thousands, right here. Which is better?
Both are good.
ECB March 13, 2017 at 5:03 am
It depends on the geography. Will the Alaskan oil be easier to harvest and transport.
Bulk tankers or pipelines both have their pluses and minuses. The nearest refineries are on the left coast.
Of course we could sell the Alaskan crude and pipe the Shale oil to the gulf refineries which have a more stable local governments.
michael
Not a bad find
120,000 bpd
1,200,000 b 10 days
12,000,000 b 100 days
120,000,000 b 1000 days
1,200,000,000 b 10000 days
It will take approx. 30 years to deplete the field’s estimated recoverable reserves.
Moderate term “Game Changer”
Though, considering that the US uses 18.9 M BPD, this field will produce only around .006% of our usage
ECB asked: Shale will provide that output with 100 more drill rigs, employing thousands, right here. Which is better?
Given that the crude oil in the Alaska pile line will freeze solid if oil doesn’t continue flowing through it, I’d prefer to keep oil from the North Slope coming.
Both options produce jobs, but the ones in Alaska pay really well. Economic forces – not the politics of jobs – should determine which domestic resource should be exploited right now.
@Bryan A
You slipped a couple of decimal places there. More like 0.64%. Not a lot, but better than a poke in the eye with a sharp stick.
It is not an either/or, Do both.
“Shale will provide that output with 100 more drill rigs, employing thousands, right here. Which is better?”
Let the market decide.
Last I checked, Alaska still is part of the US, which means that Alaska IS right here.
Well 1.2 BB seems like chump change these days. Not that we shouldn’t go get it, but I don’t consider that a large amount.
These days we talk in trillions; or TB is you wish.
G
George,
#Agree totally.
As DJ Hawkins, above, notes –
“better than a poke in the eye with a sharp stick.”
I always say “better than a poke in the eye with a sharpened and fire-hardened stick.”
Same principle.
Auto
Auto, “Kick in the head with a frozen boot”, I always liked that one, at least you might learn something and only have to recover from a concussion.
Dang, you hang with a rough crowd! 😀
At 7.08 BB Bbl/per year, that’s sort of 2 month’s supply for the USA at present rates of consumption….
https://www.eia.gov/tools/faqs/faq.cfm?id=33&t=6
Two months it didn’t have of course.
The world needs Trillions of barrels not billions
True, Mike. It’s also on the order of three hundred fifty BILLION dollars gross value, which will be greatly appreciated in Alaska.
w.
>>three hundred fifty BILLION dollars gross value
Willis, you may want to check your math:
1.2 billion barrels * $50/barrel => $60B
And 120,000 barrels/day * $50/barrel => $6M/day => ~$2B/YR for 30 years
But they’ve only drilled 2 test wells. If $50/barrel justifies actually producing this reservoir, it would be routine they will find more and more oil as they drill around the new reservoir. That’s why producing reservoirs grow over time.
gregfreemyer on March 13, 2017 at 1:44 am
>>three hundred fifty BILLION dollars gross value
Willis, you may want to check your math:
1.2 billion barrels * $50/barrel => $60B
And 120,000 barrels/day * $50/barrel => $6M/day => ~$2B/YR for 30 years
But they’ve only drilled 2 test wells. If $50/barrel justifies actually producing this reservoir, it would be routine they will find more and more oil as they drill around the new reservoir. That’s why producing reservoirs grow over time.
greg, you really wanted sharing.
you did.
@ gregfreemyer
“But they’ve only drilled 2 test wells.”
Not true -just 2 new new penetrations, extending the accumulation 21 miles to the south -Armstrong & Repsol already had drilled over a half dozen wells into the accumulation to the north. It is at least 30 miles long.
Well the feds will grab most of those revenues. They grabbed most of the land so why not grab the output from same.
And how much more is there in the ANWR, which is 19.2 million acres of land that the oilers would like to drill on maybe 2,000 acres.
And for scale, the State of Rhode Island, will fit in 20 non-overlapping different places, in ANWR, and the State of Delaware can be put in 12 different non overlapping places in ANWR.
or the State of Delaware can just fit between downtown Anchorage, and Sarah Palin’s home in Wasilla AK.
G
A billion here, a billion there. It adds up.
And pretty soon you are talking about real money.
The original quote was a million here, a million there.
Sad how the world has changed since then.
Things are always being scaled by factors of 10, now even factors of 10 are being scaled by factors of 10²
The entire oil market is made up of “a few billion here, a few billion there”. Nowhere on the Earth is an oil field that offers 80% of our needs for 50 years. This is just a bad argument…like when everyone said ANWR would take 8 years to develop so we shouldn’t even start. If we had started back then, we would be 5-10 years into production now. Small thinking.
That’s assuming that there is significant petroleum in ANWR. My vague understanding is that oil industry enthusiasm for drilling ANWR even were leases available has faded over the years. Don’t know why. Maybe someone who actually works in the field knows more.
There seems, BTW, very little reason not to drill ANWR with a bit of environmental protection. My understanding is that the wildlife in the Prudhoe Bay field is coexisting with oil production just fine and oil fields here in the lower 48 seem to have a lot more wildlife than the farms, shopping malls, and subdivisions in nearby areas.
More like 10’s of thousands of a few million barrels here and a few million there.
99% of oil discoveries are far less than 1 billion barrels.
This is the third major discovery on the North Slope over the past few months. ConocoPhillips had a major discovery in the NPR-A and Caeulus Energy chalked one up in Alaska State waters in Smith Bay.
@Don K,
There has been no fading of enthusiasm about ANWR Area 1002’s hydrocarbon potential. It is almost a step-out from Prudhoe Bay.
The only fading of enthusiasm had been political. The actions of the Obama maladministration effectively put development of ANWR off until well after TAPS ceased to be economic and was forcibly dismantled.
The recent discoveries will add many years to the life of TAPS. Hopefully enough years to rectify Obama’s malfeasance and open up TAPS and reopen the Chukchi and Beaufort OCS areas.
@Don K,
One of the challenges facing the industry wrt ANWR assessment is the paucity & vintage of data. As a result, it is difficult to confidently estimate likely resource potential of the province. Existing seismic data, crucial for gaining fundamental understanding of the structural geology, stratigraphy, petroleum systems, etc., consists of a coarse ‘grid’ of 70’s vintage 2D traverses.
ANWR may or may not possess significant HC potential, however acquisition of modern data (of many types) along with significant time to analyze & interpret the data will be required before we gain a reasonably confident assessment.
They’re figuring 120,000 bpd and this is presumably real oil not goosed by “Natural Gas Liquids” which, the name not withstanding, are gases.. That’s good. On the other hand, 120,00bpd is only about 6% of the 2.1 mbpd capacity of the severely under utilized Trans-Alaska Pipeline. It’s good news of course. But they/we really need 10 or 20 fields like this.
Natural gas liquids are “real oil.” From a refinery perspective, they are often better than crude oil.
David, Im selling a 1000 barrel load of ethane at $45 per barrel delivered at Port Arthur, Texas. Do you want it?
I just find the stuff. I don’t trade it. If you’re getting $45/bbl for ethane, you’re doing well. I was including condensate in NGL’s, not just natural gas plant liquids.
The press release says “light oil” , not NGLs.
“Natural gas liquids are “real oil.” From a refinery perspective, they are often better than crude oil.”
Not so I think.. Most are gases at room temperature and pressure. You can’t put them in your gas tank and expect them to be there the next morning. NGLs aren’t useless. They are great feedstock for plastics for example. But they have low energy density compared to heavier hydrocarbons. They are priced accordingly. Except for Pentane (boiling point 36.1C) they aren’t used in conventional transportation fuels.
David, the statistics we see have crude oil and condensate as a single stream, because thats what gets refined. There’s a stream which lumps crude oil, condensate, NGL (which i define as C2,C3,C4, and a tiny amount of C5 which gets through with the demethanizer over head). USA and international agencies throw in refinery gain (achieved by breaking up molecules and adding hydrogen), gas to liquids syncrude, coal to liquids syncrude, and biofuels.
Natural gas liquids are a separate stream, because, if we spike a crude stream with NGL, the vapor pressure gets too high. This makes transport a problem. The north slope plants are designed to take the NGL out, and right now it’s used for enhanced recovery. Therefore the NGL in a north slope stream aren’t booked as saleable crude oil.
It’s important to note the definitions can change depending on the country and the actual crude stream. I was trained to design plants so I look at it as molecules we can shift back and forth while achieving maximum profit within existing regulations, and ensuring we avoid flares and/or risks. When I was designing plants which had to meet pipeline and tanker transport specs I would add butane to the crude to swell it a bit, it’s easier to pump and refineries do like it. But I didn’t put in so much it would cause tank venting at midday.
In conclusion, NGL isn’t crude as far as the north slope is concerned, and it’s important not to mix NGL in real life because they fetch a lower price. Unfortunately, the oils we get from the “shales” can be too light, they have a lot of NGL, and thus their prices can be lower than WTI or Brent. I’ve also noticed some operators are irresponsible and put crude in tanks which vent the NGL, which tends to drag pentane, hexane and benzene into the air. This really ought to stop.
It’s not fair to the discovery to reference it that way. The gross in-situ value of 1.2 billion barrels is over $50 billion. Show me something else that could add so much value to Alaska’s economy.
That’s the total value of the oil @ $50/bbl. Alaska’s take would be a fraction of that, typical 1/16th, not including the added value of jobs income of production personnel.
Meanwhile the price of oil is wavering on the low side of short term expectations and likely not meeting goals set by OPEC to prop up prices with allocated production cuts. It takes more than one-dimensional advocacy logic to sort out the true signals in supply, demand, price, and stockpiles in a global market and with a complex mix of investment horizons and state oil companies.
http://www.macrotrends.net/1369/crude-oil-price-history-chart
https://www.eia.gov/outlooks/steo/realprices/
That’s the classic anti-oil line used by GreenPeace and others with each incremental oil reserve addition—-individually of course. That certainly works with a low-attention span public audience.
Wasn’t the ANWR find about 5x bigger?
ANWR hasn’t been “found” yet. It
A quick internet search tells me that estimated ANWR reserves have been shrinking over time. Apparently because exploration in adjacent areas indicates that a lot of the hydrocarbons that are oil in the same formations further west are likely natural gas at ANWR? Estimated recoverable reserves are currently a bit less than a Billion barrels in the area likely to be available for drilling. But recoverable oil is a lot better than total oil. Unfortunately there is currently no way to get natural gas from the North Slope to civilization. Lots of speculation there.
There’s a lot of discussion in Wikipedia and most seems fairly well balanced. Here’s the Wikipedia link https://en.wikipedia.org/wiki/Arctic_Refuge_drilling_controversy#Department_of_Energy_projections_and_estimates
The Earth’s crust is awash with all the energy we need for centuries.
By the time there is any supply issue our renewable energy technology should have advanced to the point where we no longer need fossil fuels.
The great tragedy of today’s renewable energy is that it was pushed too far, too early and with immature technology such that the environmental effect will one day be recognised as having been worse than that of fossil fuels.
Renewables have indeed been subsidized too much, governments have wasted a large amount of resources backing economically unsound power plants, wind turbines and home solar panels. However, many of us who work in the oil industry realize we are running out of oil. I get the sense that many readers in this blog are a bit misled and think that somehow we will be able to keep producing at current rates for decades (some even believe we can increase production to the surreal forecasts used by the IPCC).
You work in the oil industry. Is the oil industry to be trusted on how much oil is in the ground? The world is hooked on oil and the oil industry, like the drug dealer trying to get as much as he can out of his buyers, makes us believe the oil is scarcer than it really is, a scam I believe has been going on for decades. But of course, just another conspiracy theory, right?
We will never run out of oil, it is economically impossible. However, as producers have less ability to deliver, prices will go up until people naturally, without government help, start looking for substitutes, then we will get a market efficient solution to the “problem” instead of wasting government funds on all sorts of offbeat technologies which are neither necessary, nor optimal.
The whole reason we have shale /w fracking and lateral drilling is because private market people were looking for substitutions for traditional oil back when it was relatively pricey at $150 per bbl. Next time oil goes up that high, a new solution will be found. Maybe next time it will be windmills, maybe it wil be Methane Clathrate, who knows, but we don’t need all these people winging and coming up with 1000 reasons why the world is ending (we are running out of oil, oil is causing global warming, O2 will run out on the planet if we keep burning, etc, etc)
Marque2, windmills don’t seem like a good solution unless we develop a cheap energy storage, and work around the sound and dead bird problems. Methane clathrates are a Japanese conspiracy to convince Australians to sell their gas real cheap.
We will never run out of oil
===================
we might run out of cheap oil. pretty sure expensive oil isn’t going to run out.
Well I don’t work in the oil industry, but I would rather bet on the OI Moguls knowing how much is there rather than a panel of talking head on CNN.
The OI moguls livelihood depends on them being correct.
CNN panelist get theirs for doing nothing of any value to the US or world economies.
G
Likely better technology will replace fossil fuels before we run out. To exit the fossil era needs Jules Verne type innovations however. The only technology capable is nuclear. Problem is the demonization of nuclear power so ironically democracy is the biggest obstacle to a more sustainable lifestyle. Therefore I expect that over time we have to buy these compact thorium or fusion reactors from the Chinese.
Forget fusion reactors in our lifetimes. And Thorium is not the preferred fuel for molten salt reactors – uranium is. and They can extract twice the energy from uranium that conventional nuclear can and can even use nuclear wastes for fuel. There are over half a dozen companies (and two govts – China, India) pursuing molten salt reactors (which can be configured to burn either uranium or Thorium) . I don’t believe the world will ever run out of uranium – the oceans are full of the stuff and the cost of extracting the stuff just got lower. Most uranium mines have been idle for years because of the oversupply of uranium and low prices. Uranium fuel in a conventional reactor these days costs 3/4ths of a cent per kWhr. In a molten salt reactor the cost woulld be half that – 3/8th of a cent per kWhr. Nuclear plants also pay into a Fed govt fund to take care of nuclear wastes – it is I believe 1/10th of a cent per kWhr, but was way too much and much of the moneys have been returned to the nuclear plant operators. with molten salt reactors, the cost would be half that for waste disposal. One European country is building nuclear waste depositories to handle the world’s wastes.
arthur4563
March 13, 2017 at 3:55 am
Polywell Fusion. About 5 years and $1/2 billion for a definite yes/no answer.
If it works we get Fusion Rockets. Earth to Mars in 2 weeks. And asteroid mining.
Fusion Rockets
I can sell you accessable nuclear fusion energy right now, at a perfectly reasonable cost.
I have a nearly endless supply stashed where I can get at it more or less when I want to.
As for developing more nuclear fusion energy than I already have, I’m not interested. It is still fairly dangerous stuff to have around population centers.
G
We don’t need Jules Verne, who was nothing but a hack anyway. We are pretty close to catalyzed reactions of hydrogen and CO2 to produce methanol. Pretty much compatible with the liquids storage and dispensing systems we use today and comparable energy storage. Powered by nuclear or renewable supplied electricity and we really won’t have to live any different.
Stephen,
an insightful comment. I don’t believe any of we sceptics dislike renewable’s, or that one day, perhaps hundreds of years hence, that they will be necessary. What we object to is the insane panic because of fanciful computer projections that, whilst almost credible in the 70’s and even into the 80’s, have proven wildly inaccurate when compared to observed climate change trends over the last 40 years.
We object to the vast waste of money and the suffering imposed by unnecessary taxes being levied on the general public to support academics in their financially motivated drive to prove humans are solely responsible for causing a climate disaster that isn’t happening.
We object to the green community and their ideological desire to prove humans as unworthy occupants of this planet. We object to their cynical, underhand and dishonest methods to discredit and vilify those who question their cultist behaviour.
We object to the inequitable funding of science which simply promotes bandwagon jumping, with money wasted on any project that happens to include climate in it’s text, despite the subject matter being ‘changes in knitting patterns of outer Uzbekistan women’. (To my knowledge, there is no such paper, but it’s only a matter of time).
We object to stupid politicians pursuing their own micro agenda’s (including personal wealth and self promotion) under cover of ‘climate change’ and it’s fanciful, disastrous consequences.
We object to large parts of the MSM and their irresponsible ambulance chasing reporting, with lurid pronouncements of environmental disaster, citing local weather events as proof of impending Armageddon.
And whilst we sceptics are accused of condemning our children and grandchildren to a fate worse than death, from imaginary climate change, no one but us are highlighting the very real prospect of the crippling financial hardship we are visiting on generations to come. Not fanciful predictions, but real observations of monumental money squandering and corruption.
Personally, I object to minority groups like the greens overturning democracy by insisting their shrill whining is prioritised over the voice of the majority. It is, most certainly, a case of the dog being wagged by the tail.
Thanks for reading.
Yay! +10^6
Hear hear!
Great statement !
What is not to dislike about windmills?
[What is not to dislike about windmills?]
Little !
Once fossil fuels ended the feudal system by separating energy from land ownership. Windmills require big space and so may bring back a new feudal system. Also, energy shortage is typical for such a feudal system with some rich and many poor people: their servants. Renewables, by the nature of their shortcomings, paves the way to a slave state.
Oh yes we do. Pointless waste of money, and will never be useful.
thank YOU for such a clear and precise statement
I am sen ing it with link, to a sane politician i know;-)
Wind turbines make for great YouTube wind porn as they catch fire, shed blades, or just fall down and go Boom!. Or all three at once.
+10
Good summary
+1 A worthy rant.
Ditto +10^9
YES!
Well said, HotScot.
Can’t argue with that!
HotScot says –
” I don’t believe any of we sceptics dislike renewable’s”……
As Tonto said, “speak for yourself, white man”.
This sceptic hates what we today call renewables, the large scale windmill farms and solar arrays.
Back in the 1970s my colleagues and I were studying energy supply/demand because they had discovered the globally important Ranger Uranium Mines deposits in Australia’s Northern territory and some of us were tasked with keeping tabs on long term global energy patterns. W even had hands on experience with owning and operating remote electrical power generation stations, like the one supplying the iron ore province of the Pilbara.
It was immediately obvious in the 70s that there was a place for what we called ’boutique renewables’ and that place was in a boutique. As early as 1956 my Dad and his sons built a rooftop solar hot water system to a design from CSIRO. It was in tropical Townsville at 19 deg S latitude and it worked ok in summer but was intermittent in Winter for the boutique of our family supply. There was no inherent dislike of renewables, providing one remembered horses for courses.
Back to global energy patterns, in the 1970s it was evident that the pecking order was roughly nuclear, coal, oil, gas, hydro then a big gap to miscellaneous things like fission, solar, wind then another big gap to geothermal, wave energy, batteries, pumped hydro, inversions in water bodies and assorted others.
Naturally, a big breakthrough in any one, especially fission, would change the order. The order was strongly based on incoming energy density and intermittency and in the special case of geothermal, if you had the natural resource, then go for it.
Skip to the present and nothing should really have changed the order. But the madness of crowds has had machinery built before it was commercially viable, even when knowing beforehand it would be 2-3 times the old cost. The madness of crowds who made acts and regs to favour expansion of uneconomic renewables. Yes, I hate renewables because they are like leeches deliberately used to draw blood and keep from advancing the much better technologies of nuclear and fossil fuel. All the regs in the world will not change energy density and natural intermittency. Those leeches have seen our personal domestic electricity cost increase at 11% pa over the last 10 years, with the promise of more to come.
I love the sight of a new looking nuclear power reactor silently generating enormous energy with little fuss, a tribute to the ingenuity of man with physics, chemistry, engineering. I hate lines of ugly windmills in places formerly for quiet contemplation of natural beauty and soaring raptors.
Geoff
Geoff, my comment on renewables was assuming they are used where and when appropriate. At the moment they are useless, but perhaps in the future they may become more valuable.
I should have made that clear.
David, Geoff Sherrington.
Y’know, I actually take offence that you would extract a single statement from a post that addressed many issues, and thereby seek to condemn the entire comment. And whether you realise that’s what you have done or not, that is what you have done.
Indeed, it is symptomatic of the institutions you probably despise, the MSM, who conduct themselves in precisely the same manner.
So whilst I value your knowledgeable input, please, either support or condemn the entire article, line by line if you want, but kindly don’t isolate passages and, in this case condemn, or in others, support, on the basis of a single line of comment.
Thanks for reading.
Geoff Sherrington March 13, 2017 at 4:50 pm:
I think you meant to say ‘fusion’ where you wrote ‘fission’.
Yes, excellent statement. Renewables are “like leeches deliberately used to draw blood and keep from advancing the much better technologies of nuclear and fossil fuel.” Well said, sir!
/Mr Lynn
David, Geoff Sherrington.
Y’know, I actually take offence that you would extract a single statement from a post that addressed many issues, and thereby seek to condemn the entire comment. And whether you realise that’s what you have done or not, that is what you have done.
Indeed, it is symptomatic of the institutions you probably despise, the MSM, who conduct themselves in precisely the same manner.
So whilst I value your knowledgeable input, please, either support or condemn the entire article, line by line if you want, but kindly don’t isolate passages and, in this case condemn, or in others, support, on the basis of a single line of comment.
Thanks for reading.
HotScot,
On reflection, you are correct about my hijack of the theme. My apologies with a brief explanation. The main article was about discovery of a new resource in Alaska. Becuse I spent much of my career in exploration including successful discovery, it was not newsworthy for me to comment because my mind was saying “Good one, more resource for the airlines of the future.”
As for the views on renewables, I don’t change my views but I do understand your objection to my placement of the comments. Again, apologies.
Geoff
P.S. and yes, I did mean ‘fusion’ where I wrote ‘fission’. Thanks for the correction.
Plus, each renewable ‘solution’ requires back-up for when it doesn’t deliver. By contrast, none of the fossil fuel sources needs backup (at least, not to a comparable extent).
Those pushing renewables fail to recognize the costs of the back-up, or even, in many cases, acknowledge the subsidies that renewables require/demand in order to be ‘competitive’.
Glad to see Repsol involved. Run by a Basque who used to be a politician! Vice-President of the Regional Basque Government who ‘sold out’ to Big Oil :-). Actually, even some of his enemies recognise his professional worth.
Brufau isn’t known for his oil industry skills. And I bet this Alaska venture will show full cycle negative internal return.
That might be true if Repsol was operating … but they are not – Armstrong is the operator
Armstrong has no way to influence Repsol’s full cycle returns (full cycle being from the first steps to carry out exploration to field abandonment). I also wonder if a small independent will have what it takes to carry out development and operate the field. I’ve consulted for small outfits and they tend to have large knowledge gaps.
If you are right, it sound like it’s time for Repsol to sell out to someone who can make a return on it.
Eric, the Alaska discovery isnt a game changer. This is an extensión of a previous discovery on acreage located West of the Kuparuk unit, and it will indeed help sustraían the Alyeska pipeline flowing.
The reservoir rocks are not easy to water flood, therefore they will have to be very careful with the well design. The rate they project, 110,000 BOPD, is about 0.13% of world production. Right now we are seeing an average decline in existing fields -4% per year, and this means we have to deliver over 3 million BOPD per year of new production just to keep world production from declining.
I meant the discovery will help SUSTAIN Alyeska pipeline flow. My spell checker switches languages on the fly and replaces words into a different language.
Yep… Extending the life of TAPS is *the* critical issue.
re extending TAPS: where else can you find oil (or any other energy source) where there is a ready made, fully amortized, high capacity delivery system ready to safely take the product the first 800 miles to marked for a very low unit cost? If you can find it, USE IT! Without more oil the pipeline will have to be shut down and taken apart, a HUGH waste!
Sounds like more oil to me.
Actually it is a 21 mile step out to the existing wells Armstrong & Repsol drilled to the north. And they found it to be in the same accumulation. That is a big deal … more than just a simple extension. And it is a conventional accumulation – ie – it will flow a very high rates compared to shale production… also a big deal.
Remember that Repsol is a public company & is restricted to what they can say … public companies rarely say initially just how big discoveries are but slowly increase the estimates as additional wells are drilled. Do the math on aerial extent & reservoir thicknesses announced – this thing ultimately should have more reserves and higher production rates than announced.
The rates aren’t that high. I looked up the plan they have for the 110,000 BOPD development, and checked the field geólogy. The field seems to be extensive, but rock quality seems to be so so.
The Alaska Pipeline is crucial.
The Pipeline must flow at a critical rate, or shutdown, likely permanently.
The Obama administration did everything it could to restrict new development in the North to choke off the Pipeline, and end Alaska oil forever. {See “War On Coal”}
This find is a huge bonus to keep the Pipeline open, and buys time for other oil plays to come online.
A most welcome development.
Tony, if the oil is as light as they say it may even allow more production from the heavy oil reservoirs in the Kuparuk and Milne Point Units. If prices go up to $100 they’ll be able to crank up another 50,000 BOPD to make a medium grade blend.
But whether they produce from this discovery will depend on the world oil price – is that right?
what would it have to be to make this profitable??
I read Shell are pulling out of Canadian Tar Sands where cost of extraction means product is above current world price…
will the Saudis ever quit pumping? Is shale oil going to be able to keep pumping if the price doesn’t go up?
Will European switch to EVs even dent oil demand?
Lots of questions for the non-expert… would you care to give an expert opinion?
@Griff,
Repsol’s Pikka Unit is right next door to the Kuparak River field.
http://aemstatic-ww1.azureedge.net/content/dam/ogj/online-articles/2017/03/Horseshoe%20Alaska%20North%20Slope%20map.png
ConocoPhillips just announced a large discovery in the Greater Mooses Tooth Unit, just to the west of Pikka. These discoveries would likely be developed even at $20/bbl. However, projects like these aren’t sanctioned on the basis of the price of oil today. The decisions are made based on oil price forecasts.
No and yes. Existing wells are produced if they are cash flow positive on a go-forward basis. Fluctuations in the price of oil affect the drilling tempo. The OPEC production cut led to higher prices, which led to an increase in the rig utilization rate in the US (more shale wells), which is in part responsible for the drop in oil prices over the past week.
@Griff,
It also depends greatly on what infrastructure is already in place nearby, i.e. Trans Alaskan oil pipeline. That is why the shale investments in the Permian Basin of TX and NM is doing just fine at $50 and major companies are piling in weekly.
Griff – nice misdirection – read CNRL and 8 billion dollar price. Nice pullout.
Griff, electric cars in Germany run mostly on coal. In France they run on nuclear. It’s easy to find: http://ec.europa.eu/eurostat/statistics-explained/index.php/Renewable_energy_statistics On a daily basis “renewables” account for about 24% of production, at guaranteed prices 2-3 times that of coal, oil, or nuclear. The costs don’t include the expense of maintaining a spinning back supply. About 63% of renewables are biomass- wood chips from US and Canadian forests, also from fresh cut forests in the central Slavic states. It’s supposed to be trash wood but the subsidies make it worthwhile to just clear cut whole forests. Hopefully the required replacement forests will grow fast enough to actually provide a renewable supply. They also burn some garbage and farm wastes, thus depleting the soil of nutrients unless extra fertilizers are used.
Several studies have shown that producing and shipping wood chips, esp. from the North America is much more expensive and produces more CO2 and more air pollution and produces less energy than simply burning coal in a modern coal plant. There’s still plenty of European coal available. Which is not green, but black and awful.
@ Griif, the Shell deal was what they call a repositioning . They sold a part of their company to a company that is in a better position to further develop that field, at the same time they acquired other properties that they project are more in their future thinking and they would be making a better, more stable situation for themselves. FI on their property they sold they would have had to build a new infrastructure that is already in place in the buyer’s case.
To keep it simple , oh forget it, that was simple enough for me. ( Okay Shell has been repositioning for the last few years worldwide and this was in all reality a minor deal.)
Keep dreaming, Griff. Shell pulling out is actually selling to somebody else who wants the operation. And production costs for those operations are less there an $30 Canadian. There is another 500,000 barrels per day coming on stream in the next 3 years from projects already underway.
Wow! Griff the anonymous, woman-attacking, polar bear expert is also a petroleum expert.
Who knew?
Griff: the USA shales will not sustain production at $50 per barrel. Right now the companies are trying to survive by cherry picking the best known areas, and take advantage of lower costs offered by drilling contractors and other suppliers who are threading water trying to stay alive. Based on what I’ve looked at, things get slightly better at $60, and look rosy at $70.
But these shale fields won’t last forever. For example, North Dakota’s Bakken is already showing its age, the water cut is increasing, the wells are starting to make more natural gas, and drilling locations just aren’t as good as they were five years ago.
My guess is a new field discovery intended to hook up to the Kuparuk pipeline will require about $80 per barrel minimum. The economics are influenced by the result of negotiations with the state and the other unit operators. If the field is half decent we may even see an outfit like ConocoPhillips buy say 35% and become the operator.
Thanks David and Fernando for your replies…
no I’m not a petroleum expert… I venture to suggest Fernando is.
EVs mayhave their power supplied now by coal or nuclear in part, but by 2050 the EU target is 80% of electricity from renewables. In Norway where 505 or better of all new cars are EVs, they are mostly ‘hydropowered’.
Fossil fuels.
How much of the access to it in the US has been “verboten” since agGW began to grab headlines? Maybe even before.
Clean coal in Utah that Clinton set off limits (at a price..for those who would profit)? Oil exploration and ANWR?
What happened to peak oil ? Oh the same as peak stupidity only oil is useful !
Peak oil is exactly were it was last year. We assume new discoveries and improved recovery from existing fields when we estimate the peak oil timing. A find this size doesn’t impact the estimates at all.
It has been delayed for a while longer.
To put this find into perspective…
Prudoe Bay was a 25 billion barrel find. Repsol SA’s find is 1.2 billion barrels, twenty times smaller.
I wouldn’t count those barrels. Repsol has been having hard times, their stock needed a boost, and this may not pan out at all. We will have to wait about 8-10 years to see how it pans out. I think oil prices will be above $100 per barrel in the 2020’s, and that should help.
Hey, Fernando
Use those barrels to store the carcases of the birds, bats, et cetera killed by your wind turbines!
Hey Horace,
Fernando is an oil industry man that knows what he talks about. You just couldn’t be more wrong. Try to get your facts before demonstrating everybody your unbearable lightness.
Beware the press release discoveries… 😉
Javier, I have read many incorrect posts from Fernando Leanme. His knowledge is not complete and he misrepresents many things. His income depends on it.
David, my income doesnt depend on my internet comments. However, if you know somebody who may be willing to pay me please send me their email.
Fernando Leanme March 14, 2017 at 12:07 am says;
David, my income doesnt depend on my internet comments
Nice obfuscation, Fernando.
Soros usually just pays a flat rate.
To put this find into better perspective:
The government’s original forecast for the North Slope’s total production was 10 billion barrels. From 1981 through 2016, cumulative North Slope production has been over 15 billion barrels and there’s still a lot of oil remaining to be recovered in existing fields.
Just since last summer, there have been three large oil discoveries on the North Slope
Smith Bay, Caelus Energy: 2-4 billion barrels.
Greater Mooses Tooth Unit NPR-A, ConocoPhillips: 300 million barrels.
Pika, Repsol: 1.2 billion barrels.
If developed, these discoveries could add over 400,000 bbl/d of production to TAPS.
The USGS P-mean estimate of recoverable resource in ANWR Area 1002 is about 11 billion barrels.
The recent discoveries plus the ANWR P-mean add up to over 15 billion barrels. Prudhoe Bay will probably produce another 1 billion barrels. This adds up to over 30 billion barrels, three the government’s original estimate. Fully open up NPR-A and the Alaska OCS and you could probably tack on another 30 billion barrels.
https://www.adn.com/business-economy/energy/2016/10/04/caelus-claims-world-class-offshore-arctic-oil-discovery-that-could-among-alaskas-biggest/
http://www.ogj.com/articles/2017/01/conocophillips-alaska-makes-oil-discovery-in-npr-a.html
https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=manfpak2&f=a
https://pubs.usgs.gov/fs/fs-0028-01/fs-0028-01.htm
https://www.yumpu.com/en/document/view/10990727/alaska-north-slope-oil-and-gas-resources-national-energy-
Prudhoe is actually 15 BBO recoverable and hands down the biggest conventional (note – conventional, not unconventional ) field in the US. 2nd biggest drops substantially to 5.5 BBO at the East Tx field.
Check out this link :
https://en.wikipedia.org/wiki/List_of_oil_fields
There are only about 10 conventional fields over 1 BBO in the US. It puts it in perspective – perhaps a top 10 conventional field ever in the United States. That’s a big deal when many have said conventional exploration was dead.
Conventional exploration IS dead. That’s easy to see by checking the results of worldwide exploration results over the last 10 years. The money being put into conventional exploration simply fails to deliver adequate full cycle returns, and only the very best performers or the very lucky have hopes of getting by.
I’ll give you an example: the Smith Bay discovery in Alaska has a significant amount of oil, but appraisal and development are going to take so much time and cost so much money the field is unlikely to pay for all the money poured into the project. That field may get developed at $120 per barrel price, but the present value of the money sunk over the prior years will be so high the field production phase is unlikely to repay it.
An old saying in exploration: “The Pessimists won’t be disappointed”
Conventional exploration isn’t dead. Activity has merely shifted to a different stage of the process until either economic conditions improve or technology / innovation enables resumption of work across the entire business segment, as it always does during prolonged downturns.
The massive amounts of data collected during the ‘blow-and-go’ days are incorporated into regional geologic studies, petroleum system(s) & petrophysical analyses, rocks are reexamined, seismic is reprocessed & reinterpreted, drilling & completion results are reevaluated, new potential reservoirs / plays / prospects are identified and exploration strategies / tactics are crafted.
A significant amount of exploration work is conducted; it’s just not the kind of activity which is apparent to anyone outside the industry.
I’m not outside the industry. I’m retired and live on the beach, but I get called to consult by people who know me, sometimes I charge them because they have to give me a paper to sign so I keep the information confidential, sometimes I just chat with them because it involves personnel issues or career advice.
Thus I have a spotty perspective based on a previous 40 year career, which included a stint as a senior advisor to an exploration VP. And I assure you, large multinationals have humongous data bases, are linked to data outfits such as IHS, get almost everything done by banks, and sometimes give feedback to outfits such as Woodmac (I was one of the individuals Woodmac interviewed every year to get feedback on the quality of their work).
The deterioration in exploration is noticeable as far back as 1980. At that time we suffered from a significant drop in personnel quality and rushed into nonsense exploration. It had poor results until around 1999, when high prices came to the rescue, but it has really hit the wall over the last five years because we are running out of room in deep water, the Arctic is still too expensive, and whatever else is left simply doesn’t justify budgets. Exploration spend for oil simply has to be reduced. And this is why oil majors are shifting to natural gas. But the natural gas is mostly in frontier areas, or shales like say the Utica.
To me it’s clear we do need ever increasing prices to keep the industry alive. And eventually they will be too high, and crude oil will be replaced gradually as an energy source. It won’t be global warming it will be market forces.
@Fernando,
My ‘outside of the industry’ comment wasn’t directed at you. We just disagree on the state of conventional exploration. Like you, I’m a retired 40+ year industry member with a global career that included assignments in management, advanced technology, prospecting & field development and am currently on the board of an oilfield service company.
My experience has been that, historically, high prices encouraged a lot of the ‘nonsense exploration’ and low prices encouraged thoughtful review of the data collected during the high pace – high price periods. The in-depth reviews & analyses also led to the development and application of formalized risk assessment & probability theory throughout the E&P process which resulted in higher wildcat / exploration drilling success and improved economic returns.
While I generally agree with your macro view, I think you’re a bit off on the timing of high oil price.
http://inflationdata.com/articles/charts/inflation-adjusted-oil-prices-chart/
You live on the beach!!!
Either you know that “sea level rise” due to burning fossil fuels is BS or you have no offspring to which you can leave your beachfront property … but CAGW can pay the rent in the meantime.
(Is your beachfront property close to Al Gore’s?)
https://www.eia.gov/petroleum/supply/weekly/
Here’s a bunch of information from EIA. It’s interesting. Also, if you go back in the reports to mid October 2016, you will notice a change in the verbiage.
The EIA isn’t that good anymore. They simply lack the staff to deliver really good quality insights.
Drill baby, drill!!!
More hyperbole from Eric. A couple of weeks of global oil supply is neither huge nor game changing.
He writes
Sure. Report back in a fortnight with another find of this size so we can see that peak oil is being postponed as suggested…
Every newly discovered barrel of oil, by definition, delays Peak Oil.
when most of this planet has not been discovered….or is off limits
Hubbert’s prediction failed because the total recoverable resource was much larger than his estimate…
http://opstatic.com/img/usermedia/L56E0w4kSUiZxx50_nt9pw/w645.png
The sum total of recoverable resource is equal to cumulative production + proved reserves + undiscovered recoverable resource…
?w=680
Proved reserves, by definition, tend to increase year after year and the undiscovered resource has been continuously revised upwards.
David writes
Peak oil is about production not reserves so no, not by definition.
Try reading Hubbert’s paper, which defines peak oil. Peak oil is a logistic function.
This is from Hubbert’s 1956 paper…
It is a rate vs cum plot. Peak resource production occurs at or near the point at which half of the recoverable resource has been produced.
https://en.wikipedia.org/wiki/Hubbert_curve
David writes
and then
The bold bit is the definition. The “at or near” bit is something 2 more weeks in 100+ years of production wont have any predictable impact on because there are many more variable factors that impact production. Definitions matter. Understanding of reserve finds and their likely impact is also important and I’m seeing no appreciation of that with these posts.
Not all of us climate sceptics appreciate the blindness to oil issues displayed here.
Peak Oil is a set of equations. It’s essentially a model. It is an idealized approximation of a finite resource depletion.
David writes
Perhaps this is why you are confused.
From the wiki comes a reasonable definition “Peak oil, an event based on M. King Hubbert’s theory, is the point in time when the maximum rate of extraction of petroleum is reached, after which it is expected to enter terminal decline.”
Peak oil is not equations, it is an event that can only be seen in hindsight and that event is the peak in oil production. Predicting when peak oil might occur is through calculations based on reserves and other factors…but that’s not what peak oil is
The peak in Peak Oil is derived from a set of equations, called Hubbert equations…
Hubert’s 1956 paper is a better source than Wikipedia.
If this comprises all of the recoverable resource in the USA, Peak Oil occurred here in about 2008…
?w=680
Since proved reserves and the estimated undiscovered resource have recently been growing, there’s no way to know when Peak Oil will occur… because the total recoverable resource is unknown.
David writes
The total recoverable resource is unknown so the best you can do is look at associated factors and discovery rate and size has been dropping. Many producers’ production rates have been in decline for a long time now too.
I’m very glad it hasn’t happened yet but I’m not so naive to believe it never will…
I think I pretty clearly stated that it will happen and that it may have already happened in the US… Although, we can’t know when Peak Oil will occur or has occurred without knowing the total recoverable resource.
“A couple weeks of global oil supply is neither huge nor game changing..”
Currently, the pipeline has such reduced flow, it creates temperature and flow problems. Finding more oil isn’t just a revenue spike or “global supply benefit” but a local production benefit. It will allow for a more efficient and safe transport of current oil from that area with fewer issues of oil separation and freezing.
+1
I have seen reports that 350,000 bbl per day is a critical minimum flow rate for the TAPS (15% of design capacity). Slower than that, the oil cools below it’s “pour” point, i.e. where the oil turns into a solid.
How significant is 350,000 bbl per day? Let’s look at it this way: One 1.5 MW rated wind turbine at a 30% utility factor delivers the energy equivalent of 6 bbl/day per wind turbine. So, a TAPs pipeline limping along at near shut down volume of 350,000 bbl per day is giving us the energy equivalent of about 60,000 1.5 MW wind turbines! . Which is about equal to the total number of wind turbines in the USA (total nameplate capacity = ~ 82,200 MW)
How is that for changing your view of the game and the stakes?
Dave writes
Which is great and Alaska will indeed benefit. None of that is in doubt….but the “huge and game changing” story Eric wrote ended off with the obligatory “peak oil statement” and as far as that goes, this find is irrelevant.
Actually it reminds me of the obligatory “but AGW is still real and probably dangerous even though our paper would suggest otherwise” statements we so often see.
Well another indication that the Saudi plan to lower oil prices and squeeze out American oil exploration didn’t work….. I’m so sad for them…..[not really!]
I have no idea why so many put so much stock in the “peak oil” estimate. The record of estimates over the history of mans use of oil is laughable. Worse than the climate models that the IPCC uses.
Exploration in Alaska is planned and carried out in decade long proyects. The oil price impacts budgets but these ventures don’t rely on today’s prices to make decisions. I guess they use a $80 to $100 price range to justify what they are spending. The Saudis were engaged in a price war in part to reduce drilling for light oil in the “shales”. But they also seemed to be aiming at Iran. Obama backed them thinking it would also hurt the Russians. So what happens has a lot of geopolitics and it isn’t sustainable (I’m assuming the conflict between Shiites and Sunnis will now move into a tense standoff in Syria and Iraq, but Turkey does look like a wildcard).
The real question for Alaska is what would that state do without oil.
Repsol’s Pikka and ConocoPhillips GMT discoveries probably don’t need $80-100 oil prices. They’re fairly short tiebacks to existing infrastructure.
@Steve from Rockwood,
The same thing the rest of the world would do… “Freeze in the dark.” /Sarc
I have trouble visualizing Brazilians freezing. Dark or not.
“What would Alaska do without the oil?”
I live in Alaska and the politics of scarcity is intensifying. We read daily about the budget battles (over two thirds of state government funding is derived from oil revenues). Jobs are being cut in government (not just bureaucrats but public safety funding) and private sector jobs as well. The bust side of the boom is difficult but inevitable. Keeping the TAPS open is vital.
David, the question is whether they’ll hook up Pikka to use the Kuparuk oil treating plant and compressors. I can see the Kuparuk unit owners playing hardball to allow use of these facilities (I’m not sure about the state of Alaska’s involvement in what’s sure to be hardball negotiations). I just got an email from a friend who works in the north slope and he mentioned $80 as a minimum threshold. If they have to go stand alone they’ll be looking at a $1.5-2 billion central plant.
No doubt they will play hardball and demand a stiff tarrif. But everyone from the State government to Caelus Energy to ConocoPhillips to the operators of the existing North Slope fields and TAPS have a vested interest in seeing these new discoveries developed.
Meanwhile there are 4 billion tonnes of Uranium sloshing around in the worlds oceans.
What we need is a cheap industry standard design reactor to use it.
every tonne of uranium has 80 trillion megajoules, or 22GWh of energy. A tonne of seawåter derived uranium is around $200,000 estimated extraction cost.
That gives us electrical energy in terms of raw uranium at $0.009 per unit.
Currently uranium ore is around £50,000 a tonne. The energy might as well be free.
I would like the audience here to consider what would happen to natural gas, coal, and quite a large fraction of the oil market if radiation standards were relaxed by the 10-100 times that nuclear experts* consider is reasonable. And instead of $7,000 per kW capacity a nuclear plant could be knocked out at $2,000 per kWh or less. At these prices synthetic fuels, from water and CO2 feedstock, start to look competitive with oil distillates.
Nuclear costs because of deliberately fostered unreasonable fear and bureaucratic interference. Big Oil has every incentive to play the green card and the radiation card to protect fossil fuel. Renewables suit Big Oil, because Renewables do not work.
#exxonknew all right, as did Shell, BP and all the other players, Way back on the mid 90’s I talked to all their research boys on ‘alternative energy’. Not a single project was viable without massive government intervention. Including solar panels and windmills and batteries or fuel cells. They paraded their green research then quietly shut it down as the public interest waned.
The irony is that big oil owns big green: It took it over way back when to use as a marketing tool to support its interests whilst claiming the exact opposite.
Goebbels himself would have been proud of the Big Lie that Al Gore started. A Very Convenient Lie.
My Prediction? Well I wont live to see it, but in 50 years renewables will be dead and buried, peak oil will have come and gone, and if there is a civilization at all it will be centred around the first country that stood up to world opinion and built itself an all nuclear infrastructure.
We will still have hydrocarbon fuel, but it will be synthesised, not drilled and distilled.
Nuclear means…
– No dependence on foreign fuel imports, Sure today cheapest uranium comes from just a few places, but the cost of digging up thorium (India) mining the sea (japan, UK) or staring local mines (Europe mainland Americas) . $10 billion has been spent by oil exporting countries on subsidising Wahhabism – the creed than underlies so called radical Islam.
– Lowest environmental impact of all technologies. The nuclear footprint is physically small, the power stations don’t even emit steam if sited by rivers lakes or the sea, and apart from waste heat (which is the by product of almost any thermal power station, and can be used for district heating or desalination)
– Such waste as there is is physically very small compared to the huge volumes of CO2 or coal ash produced by other thermal technologies.
– Nuclear gives reliable dispatchable** 24×7 power like other thermal technologies do, but intermittent renewables absolutely do not.
The problem is that apart from synfuel, traditional oil companies have no chance to profit from really cheap nuclear power.
*http://www.templar.co.uk/downloads/Public_Trust_in_Nuclear_Energy.pdf
** yes, you can throttle nukes. If they are designed to do it. You can also schedule maintenance for lower demand times of the year (summer in temperate climes, winter in tropical climes).
Nah.
We got loads of uranium here in Oz you can have cheaper, mate…
We have lots in the United States, except that Hillary Clinton took bribes from the Russians and allowed them to buy up the mines. Her crime partners in the Democrat party are also taking Russian and Arab money to wage war against the extraction of primary energy resources in the US on the bogus cleims of “environmentalism”.
Yes you do, and you drove everyone else out business in the process with low prices.
We will NEVER run out of uranium – the oceans are full of it and just few weeks ago came news of an improved method of extraction. Right now the cost of uranium as fuel is 3/4th of a cent per kWhr (for a conventional reactor). Ocean extraction costs are now probably about twice the cost of terrestrial mining. The ocean contains enormous amounts of uranium. But molten salt reactors can extract at least twice the energy that current reactors can from uranium and so they can use ocean uranium and have the same fuel costs as current reactors using mined uranium. Molten salt reactors are extremely proliferation resistant and cannot physically do any harm under any circumstances (including terrorist attacks). They also cost about one third of the cost of current nuclear reactors to build and have a levelized cost of around 3 1/2 cents per kWhr. They can be built in factories, require minimal site preparation and deployed rapidly. They can be sited within cities and have a very small environmental footprint. At least 5 companies and two countries (China, India) are developing molten salt reactor designs. One (Moltex Energy) can essentially go commercial right now, if allowed.
http://www.templar.co.uk/downloads/Public_Trust_in_Nuclear_Energy.pdf
Always appreciate somebody posting a link without the courtesy of a concise statement of relevance.
The problem with nuclear is not lack of uranium. It is probably construction costs and definitely public perception.
“Currently uranium ore is around £50,000 a tonne.”
What planet is that again?
No matter what, we still will need oil, just for it’s byproducts, which are ” existential” for the whole planet. From clothing to fertilizers.
“The irony is that big oil owns big green”
Few readers here would agree with that.
I used to be marginal to big oil. Was in small oil and wanting to go big.
We were strongly anti green.
For the past several decades, people like me have been wondering when big oil would finally stop trying to please all comers, stop mouthing soothing noises to greens, start hauling greens before courts for slander and financial harm through reputation loss – the sort of things I used to do for my employer.
Geoff.
I think you are allowing for too much U235 in your estimates Leo.
U235 is the only naturally occurring isotope that is fissile….The most common isotopes in natural uranium are 238U (99.27%) and 235U (0.72%).
So there is even less Fissile Uranium than you thought.
A Molten Salt Reactor using Th90 requires a large quantity of U235 to transmute some Th90 and U235 into U233….. to generate heat for steam turbines, the U233 is in essence the ash of that process….. Because U233 is a fissile material it can be used by itself as a fuel.
Once enough U233 has been stockpiled a Th90 molten salt reactor can be initiated using Th90 and U233, skipping the U235 bit while using U238 as feedstock to maintain an accumulating stockpile of fissile U233.
If it ever becomes practical… and there are a lot of technicalities to be overcome…. Liquid Fluoride Thorium Reactors and its use of Th90 and U238 would revolutionize Electricity production, industry and society.
But I don’t think they are anywhere near close enough…. Only time will tell.
For now its oil and gas. Which should be just fine. In the US we us oil mainly for transportation. Not electricity generation. We made that switch decades ago. Therefore renewables as currently used do not enter into it. Coal and nuclear are a different story. They compete with wind and solar.
If and its a huge if, we transition to electricity powered transportation the renewables will come into play big time. Which is a dichotomy at the heart of green strategy. You make electricity generation less reliable and more expensive while shifting your economy toward that source. Not going to go well for the people’s standard of living.
Don’t forget that a wholesale shift to electricity for transportation leaves the road network without gasoline and diesel taxes to fund it. If those taxes are applied to electric vehicles so they can have roads to drive on, they become a whole lot less cost effective. This would be massively disruptive in transition and would probably require aggressive government action to remove choice from people. Good luck getting elected after that!
Some states have already gone to a “mileage” tax (I think Oregon was first, but Virginia played around with a fee for Electric cars as well). When it comes to revenue, the government will not be denied.
Who wants to bet that they were sitting on news of this discovery until after Obama left office? 🙂
That may be considered stock manipulation. Exploration wells are drilled in winter time, results are usually available by January.
Fernando,
You are correct, I worked in Northern Alberta and many of the areas are only accessible in the winter by ice roads which are fun to drive on. You can’t get there on the road in the summer.
Happy USA and Happy Trump. Hardly elected, there was already a huge oil field in Texas and after 50 days in office the next huge in Alaska. It almost seems that oil researchers were intimidated by the predecessor anti-oil Obama to report large finds. We can not think of such findings in Germany. Firstly, the SPD CDU government strangles every major exploration and secondly, we simply do not have these resources. You can not even think of shale gas and oil. If Merkel is sitting opposite Trump today, he will crush this louse in the fur of the Germans (figuratively speaking). And with economic resources behind it, of which Germany can not even dream. We have coal, too. Only coal in the German block parties is even more unpopular than oil and gas.
The “huge oil field in Texas” wasn’t a new discovery. It was a rough estimate of oil resources in the Wolfcamp by the USGS Texas office. That zone is being produced by thousands of wells at this time. The discovery in Alaska doesn’t impact the USA that much, it does have a positive impact for Alaska.
To impact USA oil supplies and economy a new field would have to be say 5-10 billion barrels offshore Alabama. Something huge and close to refineries.
Hans-George.
Merkel is from East Germany, correct?
Her loonie-green energy policies also favour Russian and hurt the German people, correct?
Maybe she is not so crazy; maybe her energy policies reflect her loyalties, which also lie to the East.
Merkel was born in Hamburg, not the east.
Merkel’s father moved the family from West Germany to East Germany. She grew up in East Germany and grew up in a household that fled the west. Think about that.
That’s right. Merkel was in her youth in the East Berlin FDJ (communist youth organization). At the time, she was specialized in the house arrest of Professor Havemann, who had been converted from the strict Communist to the regime critic in the GDR. Havemann was a chemist, a communist, a resistance against national socialism (Rote Kapelle and a European Union resistance group) and a regime critic in the GDR. In 1964 he resigned from the SED (Socialist Unity Party) and since then he had no future in the GDR. And Merkel, during her youth, observed in the FDJ precisely this Prof. Havemann, and his observance of the house arrest, which had been imposed upon him. So earlier a socialist playmate today converted to the CDU. But a good politician was not made of her anyway. She is only chancellor because the strongest party has no one who would have the power to do so in terms of power politics. It is not the same with us in the USA, where for every failed politician others are ready to inherit it. The German people have become lame and sleepy, almost as in France.
The best solar panel by far is your garden in summer or the amazon, tropics all year round ect. It produces petroleum over 1000 of years from dead vegetable matter. that is why probably as said above, it is renewable energy and will never run out and is the most environmentally clean and organic ect. No one seems to realize this. LOL
unless the rate of extraction vastly exceeds the rate it is laid down at?
If you plug in a solar panel, you can use the energy thousands and thousands of years sooner.
So Griff, I want you to schedule a routine colonoscopy at a surgery center that is only powered by solar. I want you to go through the prep the day before. Tell me what happens if the day of your procedure is overcast and rainy.
Griff,
then we’re doing the world a favour by burning the stuff, which adds CO2 to the atmosphere, which makes plants grow faster and stronger, before falling to ground and eventually turning into more fossil fuel.
All that plant life laid down millions of years ago is, after all, only accidentally, naturally sequestered CO2. Humankind is merely liberating it. One hundred years ago the planet was within 80ppm of CO2 of gradually dying off altogether, if humans are responsible for rising atmospheric CO2, we unintentionally dodged a bullet mate.
The planet has never been as cold as it is now without being in an ice age. Atmospheric CO2 levels have never been as low as they were 100 years ago.
If there is a God, and whilst he cut things a bit fine, he might have designed humankind to save the planet from becoming uninhabitable through CO2 starvation. We are, after all, the only animal on the planet with the concious ability to make fire.
Extraordinary coincidence really, don’t you think?
And you can extract tax dollars from everyone around you because its a credit and not a deduction.
Wow. Griff ain’t no respect from anybody.
Good. He’s (it’s?) earned it.
Tom I would imagine that you have a very good chance of knowing 24 hours in advance how much sun will be shining on Florida. (I do hope you aren’t actually scheduled for a colonoscopy)
In the UK wind forecasting 24 hours in advance is now at 95% and better accuracy.
Renewables that are intermittent are perfectly predictable.
“In the UK wind forecasting 24 hours in advance is now at 95% and better accuracy.”
You’re making stuff up again Skanky.
https://www.bmreports.com/bmrs/?q=generation/windforcast/out-turn
Why do you lie about stuff that can be easily checked with a few mouse clicks?
Ah, of course, you’re paid to, aren’t you?
Apologised to Dr. Crockford yet?
Eliza,
“Vegetable matter” ultimately produces coal under the right depositional circumstances, not petroleum.
Where do plankton fall on the animal to vegetable scale?
Well, on Sponge Bob Squarepants Plankton is more animalistic.
Meanwhile in South Australia, Premier Weatherill is set to make a big announcement to save we deplorables from having to be deplorable in the dark and no prizes for guessing who’s in town with the musky smell of taxpayer slushfunds in the air.
Feeble, intermittent and expense wind and solar are pure [pruned] and despoil the landscape. They produce lots of pollution and use lots of energy in their manufacture, installation and disposal. Life-giving-CO2-producing fossil fuels, hydro and nukes are the way to go. BTW, moderate amounts of radiation are actually good for you. Look it up. In any event, let the market decide as we once did. I’m pretty sure the market will agree with me.
I get my daily radiation dose from eating bananas. If I take a flight across the CONUS, I’ll refrain from eating bananas for a few days to keep my dosage on an even keel.
I really don’t care much for this type of sound bite post on a news release. It encourages flippant drive by opinion instead of serious journalism. Think before you submit. Does your writing meet the high standards of argumentative traits? Or expository? This fluff piece does not.
Pamela may I posit that we are a coalition. Serious scientists and writers allied with political activists and stiff necked contrarians. Climate Change is a political and scientific stew. To succeed we need each other. Posting a large oil find is good news. That is all I read into the post. Need that for balance.
Pamela, it is rare that I disagree with you but these oil find announcements are primarily intended for the oil and gas industry as well as the stock holders and the financial folks. I read the API Smart briefs daily and these kind of news releases happen every day and affect the price of oil, rig counts etc. I don’t think they are intended to affect peak oil discussions which occur on this blog.
Public companies are required to have press release for anything that could materially impact their stock price / valuation. The OilPrice.com article is simply quoting the Repsol press release. Here’s a link to the original press release :
https://www.repsol.com/es_en/corporacion/prensa/notas-de-prensa/ultimas-notas/09032017-repsol-realiza-el-mayor-descubrimiento-de-petroleo-de-los-ultimos-30-anyos-en-suelo-estadounidense.aspx
The interesting geopolitical effects of this will be the effect on oil prices. Far right and far left authoritarian regimes rely on oil to fund their grip on power. Vlad ( Ras) Putin is one of them.
I’ve always been fascinated how someone who wants the government to control everything is classified as far right by the far left.
Newspeak
MarkW,
Likewise I have been fascinated by the growth of the number of people who evaluate proposals for new developments on the basis of whether suitable regulations can be formulated.
Won’t fly, mate, too complex to regulate.
In that nice, ideal world, there are no regulators.
How did we go from near ideal to mired down in bureaucracy in a decade or three?
The President’s plan of 2 old regs gone for each new one is tops and ought to get more publicity.
Young people who have not seen the full spectrum might find my comments puzzling. Believe me, I have worked through much more beautiful times of greaterb intellectual and scientific freedom.
Geoff
It’s just not that big a deal, Gareth. One medium sized kerfuffle in the Middle East would more than compensate. That’s why the oil market can never seem to find a balance. Too many unpredictable factors.
Even a decade ago, this announcement would have been greeted as extraordinarily good economic news for Alaska and its residents and for the United States. What Alaskans are about to find, however, is what we in Canada have found – the unrelenting opposition of “climate justice” warriors determined to block development, transportation and use by all means possible. The state should get ready to face the complete range of alarmist weapons – demonstrations; claims that groundwater, local air and wildlife will be threatened; native opposition and possibly renewed land claims; thousands of participants in any regulatory hearings all saying the same thing; court cases if the development is approved; calls for bans on the tanker traffic; and well-funded opposition in every other way, all based on the thesis that increased oil production/consumption is unacceptable and will “ruin the planet”. Welcome to our world. At least, you have a sympathetic head of government.
Bob, we Alaskans have been in the middle of the anti-development bullseye for decades. Even elected a governor who spent his entire lifetime suing the producers in 2014. He ran as an “independent.” He has been warring on the producers ever since he took office. Last year he managed to bring with him a democrat majority in the House who are also anti-development.
The real sadness is that there should be as much oil in ANWR, NPR-A and the Chukchi as there was in Prudhoe. Unfortunately the State of Alaska does everything humanly possible to kill the golden goose by dinking with taxes, exploration and production credits, they take their investment money elsewhere.
Governor Walker has been trying to build a large diameter natural gas pipeline from Prudhoe to Valdez. The economics doesn’t support its construction or operation. OTOH, economics do support a GTL operation in Prudhoe batch shipping synthetic diesel with oil down TAPS for sale on either side of the Pacific Rim. $40/bbl seems to be the break even point.
Nice to know new oil is up there. It confirms a lot of speculation. Now need to get the State out of the way so it can be produced and sent to market. Cheers –
A few years ago I was looking for more NGL and co2 to do an EOR project in one of the north slope units, and proposed the gas line go down to Fairbanks, where the syncrude plant could use a mixture of north slope gas and local coal. That idea didn’t pan out at all.
I am sure that the Federal Courts can issue injunctions against the development of oil in Alaska that will keep in the oil in ground until the next time the Democrat crime syndicate takes power in Washington and can end the production of fossil fuels in the US forever.
So who are those Armstrong guys? Exploration studs evidently, as they also found the last 2 fields brought to development on the AK North Slope as well.
“Armstrong has discovered two of the most recent developments on the North Slope — Oooguruk in 2002 and Nikaitchuq in 2004 — but sold the development rights to Italian company Eni.”
https://www.adn.com/business-economy/energy/2016/09/11/overlooked-north-slope-formation-may-hold-120000-barrel-per-day-secret/
Game changer? No. It will just give the Alaska legislature another excuse to avoid taking action on our $4 billion budget gap. It is a nice find. Now all we need is a few more, so Alaska can waste a lot more money.
Great news for America…not such great news for Democrats though!
The rational conclusion is that oil is finitely available and accessible, but this does not preclude that it is a renewable resource. Plan accordingly.
The only thing Peaking is the Progressive insanity. It appears to have run it’s course.
+10
Except the young and under-educated progressive is a vast and undetermined resource much like crude oil.
The insanity may never peak even when they lose the next election as they cannot understand our Constitution.
Related supplimental recent item.
https://mishtalk.com/2017/03/12/crude-dips-below-48-00-first-time-since-november-29-cpi-where-to-from-here/
Not much of a game changer, but it is nice to have, unless they are three orders of magnitude under reporting it it should be listed as trillions rather than billions.
“The U.S. Energy Information Administration (EIA) includes biofuels in consumption of petroleum products. In 2015, the United States consumed a total of 7.08 billion barrels of petroleum products, an average of about 19.4 million barrels per day. EIA uses product supplied as a proxy for U.S. petroleum consumption.”
In other words, they discovered enough oil to feed the United States of America oil for all of 2 months.
And the Saudis will fight for market share during those two months.
1.2 billion barrels can supply approximately 63 days of the current U.S. demand of approximately 19 million barrels of crude oil per day. What are the one time NRI costs associated with the extraction, production and transportation to the lower 48 states?
1.2 billion barrels have a current value at 49 dollars / barrel of about 59 billion US dollars. Transport costs should not be as high as in other cases, since the Alaska pipeline is already built and is chronically underserved. I estimate the gain and transport costs of $ 30 / barrel. That would give a profit of 22.8 billion dollars. Not just a little.
Spanish oil firm Repsol SA just announced the largest onshore oil discovery in the U.S. in three decades
This vindicates Trump’s energy policy.
So the Spanish are back on the west coast of the USA.
Hasta la vista!
I guess no shortage of Spanish-speakers in the US who could use the work.
Save the Plant Kingdom !!!
End CO2 starvation !!!
This is a very nice find but is not anywhere the size of Prudhoe Bay. It is an overstatement to characterize it as a “game changer.” Along with other announced finds on the North Slope, it does confirm that oil production is not yet finished, either in Alaska or elsewhere.
Not a game changer. At 150,000 bopd initial rates, equivalent to one more medium sized oul company. Fabulous for the investor if a startup, excellent for the State, but not a game changer.
North Dakota Bakken got to 1.1 million per day. That was a short-term game changer. Now in long-term decline. The Permian basin is a long-term term game changer. Not this new Alaskan find.
On a regional scale already. And that is exactly what the title was meant. It’s already a gamechanger for Alaska. Above all, because this oil was found on land and not in the Arctic Ocean, where it would have promoted under inhospitable conditions. And an old explorer says where oil is, there’s more oil. Similarly, where smoke is, it burns.
drill baby drill!
What! Not more windmills and solar panels Premier?
http://www.adelaidenow.com.au/news/south-australia/sa-electricity-crisis-government-unveils-550-million-power-plan/news-story/e2ab8a28eae35758610bee62d52e9c96
In that wonderful British comic strip “The Perishers”, the character Wellington warned us that extracting the oil from the Earth would lead to the gears seizing up, and then the Earth would stop rotating. It hasn’t happened yet, but it can’t be long now.
We’re doomed.
yes and extracting power from the tides will pull the moon closer to the earth…
Do not say anything against the moon. It is also part of the thermohaline circulation, and if it pleases it, it removes it.
Enough to offset its drift away from the planet?
I see in today’s Times that 2 firms have been brought in to audit Saudi oil reserve levels, in advance of the Aramco sale…
That should be interesting… if we can believe it.
No detail expected, just a total and spokesmen are suggesting it will be ‘higher than expected’.
Since the Aramco “sale” is only a small fraction of assets involved, they don’t have to audit everything anyway. Besides reserves, the Saudis could do a lot more for exports and revenue if they would stop making electricity with crude oil and giving fuel away to its growing domestic market. They are making reforms now on subsidies and other waste but then that is compared to a long history of fake reforms and foot dragging.
But wasn’t the big “find” in TX the biggest blah blah?
And there’s the Green River formation?
Keep in mind the crucial aspect is viability of producing the oil.
Beware over-hype from financial promoters.
Good reminder. It happens a lot.
Rguy,
Does it?
Has the formal reporting of the facts and data improved over the years, so that people can extract reality versus press hype?
I do not follow this topic in my reading, so I do not know. What is your take?
Geoff
It makes you wonder what a single test well would show about ANWR on the one main geologic structure there. A dry hole would probably answer the debate. But Dems are not willing to risk the possibility of a success for the nation there. It would be far too positive an outcome to deal with.
@ResourceGuy,
One test in an area as large as ANWR, while yielding valuable information, is not adequate for determining its overall potential for hydrocarbon production. A fair amount of up-front work is necessary (e.g. acquisition of modern seismic data, et al) which would be followed by a series of appraisal wells (along with associated data collections). Subsequent data analysis & interpretation would yield a reasonable ball-park estimate of the area’s potential.
The work could be conducted in an environmentally sensitive way, IMO.
What if the Russian Geo-Nerds are right about “abiogenesis” of oil?
At the very least, it means that the stuff is constantly being “cooked” down at the nether-regions of a floating crust and that it just takes a scientific approach, financial muscle and a non-sociopathic government to “make it happen”.
As Meatloaf sang: “Two out of three ain’t bad”.