Who woulda thunk?

[REWahoo]

LONDON--A shale oil boom means the U.S. will overtake Saudi Arabia as the world's largest oil producer by 2020, a radical shift that could profoundly transform not just the world's energy supplies, but also its geopolitics, the International Energy Agency said Monday.

In its closely watched annual World Energy Outlook, the IEA, which advises industrialized nations on their energy policies, said the global energy map, "is being redrawn by the resurgence in oil and gas production in the United States."

"By around 2020, the United States is projected to become the largest global oil producer" and overtake Saudi Arabia for a time, the agency said. "The result is a continued fall in U.S. oil imports (currently at 20% of its needs) to the extent that North America becomes a net oil exporter around 2030."

U.S. set to overtake Saudi in oil output: IEA - MarketWatch

In a related story, NASA is considering opening a swine flying school...

 

[Midpack]

I hope it's true, but the article would have been a lot more convincing if the author had included the relative costs (not price) of shale oil vs "conventional" oil. More reserves is indeed great, but unless production costs are comparable, the authors claim may be a leap. I thought shale oil was significantly more expensive to extract/produce (and with more contaminants), though horizontal drilling and/or fracking have reduced tight oil extraction costs. I Googled but could not find anything current, anyone know?

 

[Lazarus]

I might be cheaper to extract shale oil and gas than keep a standing army in the middle east to protect the flow. I mean this purely from an economic standpoint. No political comments intended.

 

[NW-Bound]

Shale oil production cost is high, but perhaps experts expect that the cost of conventional oil will rise to make shale oil competitive. I guess the good news is that the US will reach energy independence. The bad news is that gas will still be expensive.

So, when is somebody producing an RV that gets 20mpg? No, I do not mean a VW camper. I mean one that's 26 ft long, weighs 11,000 lbs empty, and can carry 2,600 lbs of [-]gold[/-] cargo. Yes, one like the one I now have.

Oh well, I guess letting other countries worry about the Middle East is worth the higher price of gas. It's OK. The money I spend on gas will stay inside the country. I do not see anything bad about that, do you?

 

[ls99]

U.S. set to overtake Saudi in oil output: IEA - MarketWatch

Awright, my suburban is thirsty.

 

[EllisWyatt]

In the process of startng to frac a well today, and have spent the majority of my career exploring offshore, so may be able to add something....(or not)

Costs of drilling and frac'ing an onshore well can be ~1/10th of drilling a deepwater production well. Unfortunately, the production from each well is significantly less as well. Inital rates are significantly lower - 200 to 2,500 BOPD per well for "shale" wells, vs up to 100,000 BOPD per well at the Thunderhorse deepwater Field. The decline rate for the "shale" oil plays is significantly higher - up to an 80% decline rate the first years, vs. a 30% decline rate offshore. But the plan is to put ALOT more horizontal wells into the reservoir, as the rervoirs are not as areally limited as conventional fields.

Depending on the play and assuming light oil production, the average break-even cost is about $70/bbl (has been quoted as low as $50/bbl for the Bakken "shale"). The price of gas is currently below the break-even drilling and completion costs for most plays, which means that the existing wells continue to produce, but few new wells will be drilled (mainly for lease-holding operations).

And, having worked inthe Middle East, I really like the idea of not having to depend on the stability (??) of that area for our energy.

 

[samclem]

I guess we'll be hearing less about "Peak Oil" from now on. (fixed typo--was "peal oil"--Thanks EllisWyatt!)

The whole idea of "running out of oil," as we frequently heard on the news, was always dumb. We'll never "run out", it will just get more expensive and gradually it will price itself out of some uses. The new technologies promise a more gradual price/production slope, which is good news and will give more time to develop practical alternatives. We'd better figure out if anthropogenic global warming is real and decide what to do about it if it is, as it looks like the back gold will be coming out of the ground in larger amounts than some had hoped.

 

[EllisWyatt]

I guess we'll be hearing less about "Peal Oil" from now on.

The whole idea of "running out of oil," as we frequently heard on the news, was always dumb. We'll never "run out", it will just get more expensive and gradually it will price it self out of some uses. The new technologies promise a more gradual price/production slope, which is good news and will give more time to develop practical alternatives.

+1

(assume you mean "Peak Oil".......)

BTW -when I came back from Saudi, Matt Smmon's (Mr. "Peak Oil") "people" called me and asked if he could talk to me about the Saudi fields I had worked. So I did. I quickly realized that he didn't want to be confused by data that did not support his assumptions. But otherwise he was an engaging and charming individual.

 

[travelover]

This is good news for plants, because they love carbon dioxide.

 

[Midpack]

I guess we'll be hearing less about "Peak Oil" from now on. (fixed typo--was "peal oil"--Thanks EllisWyatt!)

The whole idea of "running out of oil," as we frequently heard on the news, was always dumb. We'll never "run out", it will just get more expensive and gradually it will price itself out of some uses. The new technologies promise a more gradual price/production slope, which is good news and will give more time to develop practical alternatives.

Agree that oil "will just get more expensive and gradually it will price itself out of (more and more) some uses" and therefore we'll never literally run out (sorta like whale oil) But wasn't the point all along not that we'll actually run out, but rather that oil will one day become significantly scarcer and more expensive, and therefore be disruptive to the world economy far beyond transportation alone? Still seems like a viable issue aside from whatever environmental impact that may come with it...

 

[LOL!]

I think we should import more oil. After all, don't we want to use up everyone else's oil before we start using ours up?

 

[NW-Bound]

It's a good idea, except that these "greedy" people want too much money for their oil. Do we export enough to have money to pay for that oil?

If we can just take over their oil fields and pump them dry, it would be another story.

PS. I use the adjective "greedy" in a tongue-in-cheek fashion, because they are entitled to charge as much as the market will bear. It's not any different than the price of Apple's iThings possibly being way above the production cost.

 

[EllisWyatt]

Going back to the original article..... while it is true that the shales and tight oil sands in the U.S. have oil resources (in place oil) far in excess of what the Saudis have, the authors have extrapolated that into reserves (economically producable at current market conditons). Not the same thing. While new production (especially from the Eagle Ford Formation, which has gone from almost nothing to a major producer in the last 3 years) is encouraging, the long-term viability of oil "shale" production is still unknown.

For many reasons, I personally hope that the article's prognosis proves correct, but it's a long way from a certainty.

 

[samclem]

. . . but rather that oil will one day become significantly scarcer and more expensive, and therefore be disruptive to the world economy far beyond transportation alone? Still seems like a viable issue aside from whatever environmental impact that may come with it...

Yes, but two recent developments (the significantly lower cost of recovering shale oil and fracking technology for recovering natural gas) significantly increase the stocks that can be recovered economically at today's prices. And as prices go up, we know how and where to get more of the same, for some time. That's significantly different from the old public perception ("as oil gets more expensive we'll look in increasingly remote and inaccessible places and we might find some more").
I'm sure work will continue on alternatives. But if anthropogenic climate change is really an issue we'd better address it because it doesn't look like carbon emissions will be curbed due to scarce fuel supplies anytime soon.

 

[HFWR]

We (the US of A) find ourselves between shale and a hard place...

Economically speaking, we need the domestic hydrocarbons, to boost our exports, and to create jobs/commerce. We really can't afford to be too environmentally friendly right now...

But one problem I've always has with "drill, drill, drill": we never seem to get around to addressing either replacement fuels or the environmental damage. It's always "we have X decades of fuel if we drill in Y", a continuation of eating our seed corn, as it were.

I posted something a few years back (not at my fingertips on the mobile), the premise of which was that we couldn't really stop climate change from happening, just start adapting to it; i.e. preparing for rising sea levels, changing weather patterns, etc. But any benefit from increased production goes to pay for past over-consumption, not leaving much for "preparation".

 

[HFWR]

We (the US of A) find ourselves between shale and a hard place...

Economically speaking, we need the domestic hydrocarbons, to boost our exports, and to create jobs/commerce. We really can't afford to be too environmentally friendly right now...

But one problem I've always has with "drill, drill, drill": we never seem to get around to addressing either replacement fuels or the environmental damage. It's always "we have X decades of fuel if we drill in Y", a continuation of eating our seed corn, as it were.

I posted something a few years back (not at my fingertips on the mobile), the premise of which was that we couldn't really stop climate change from happening, just start adapting to it; i.e. preparing for rising sea levels, changing weather patterns, etc. But any benefit from increased production goes to pay for past over-consumption, not leaving much for "preparation".

Ah, here it is... David MacKay FRS: Sustainable Energy - without the hot air: Contents

 

[Chuckanut]

As my old grand pappy used to say, "You can never do just one thing."

Apparently, areas where fracking has occurred are subject to higher than normal amounts of ozone. This could be harmful to public health. However, there is much to learn and it is to early to draw any firm conclusions. The writer of the blog below is a weather scientist and has some good credentials, IMHO.

Cliff Mass Weather Blog: The Fracking/Ozone Mystery

 

[bld999]

I am curious to hear opinions of people in the business as to whether co2 has much of a future as a fracking "fluid". That might be a sequester technique if the costs were in line in the future.

Another old technique is gelled propane injection, which propane is recovered with the ng after it does it's job below. No sequestering benefit, but it is not water with treatment complications. An alberta co., "gasfrac" does some of this.

 

[martyp]

Shale oil was big in the early 80's. The big deposits are in western Colorado and eastern Utah. I was working at a national lab developing mercury monitoring instrumentation for the EPA because there are large concentrations of mercury in the shale oil formations. They were doing an early version of fracturing where they pumped hot gas through the fractured rock and drove the oil to the bottom of the retort and then pumped it out. The mercury came out with the waste air the flowed through the formation. The US Navy owned large portions of the deposits because the type of oil recovered was best used for jet fuel. Shale oil soon went bust and left a lot of economic turmoil in places like Rifle, CO.

I will assume that the technology is better and the economics are better these days. I expect that there would be some local ecological impact. However, the people in the area, at that time, seemed to support oil development.