Arthur Berman: "Shale Oil and the Slurping Sound" | The Great Simplification
HTML-код
- Опубликовано: 5 июн 2024
- On this episode, Arthur Berman returns to unpack the complexity underpinning the oil trends of the last 75 years and what new data can tell us about availability in the coming years. After decades of declining oil production in the United States, the past decade of rising oil extraction has eased many worries about peak oil. But the past few years of continued growth have been obtained by using “a larger straw”, merely delaying the inevitability of the depletion of a finite resource. Art presents recent data on well productivity in US shale plays indicating we are much closer to ‘the slurping sound’. How does technology hide the declining availability of oil reserves, causing us to extract and use them faster without creating any new resources? Going beyond geology, how do geopolitics, finance, and social opinion affect oil availability? Where do we go when economically viable oil isn’t available anymore - and will we have the prudence to make the cultural shifts necessary before we have no other options? Have we now passed ‘peak oil’?
About Arthur Berman:
Arthur E. Berman is a petroleum geologist with 36 years of oil and gas industry experience. He is an expert on U.S. shale plays and is currently consulting for several E&P companies and capital groups in the energy sector.
For Show Notes and More: www.thegreatsimplification.co...
00:00 - Episode highlight
00:33 - Guest introduction
06:38 - Art’s new research findings
13:49 - What is well performance?
17:48 - New high production leads to faster depletion
20:02 - Do oil and gas companies need money for drilling and upstream investment?
23:00 - History of U.S. Production of shale
26:48 - What do we drill next after tight oil?
29:56 - Tight oil peak before COVID and recent peak
33:26 - Are there other tight oil areas? Or will we try to do oil shale?
36:15 - Graph of the production of different types of oil
40:53 - What do we do about our financial claims once energy starts to decline?
41:59 - Is the U.S. aggressive in current conflicts because we do have abundance of oil?
44:45 - Over drilling and cannibalizing wells
53:11 - Rig count
1:03:50 - How much would oil executives and US Energy, ENP experts agree with Art and where would they disagree?
1:05:04 - What will production be in the future?
1:10:07 - What are the potential outcomes?
1:12:02 - Importance of lowering usage
1:15:39 - Why is the U.S. experiment unlikely to be repeated as a global extension of oil supply in the coming decade?
1:19:19 - How could AI change our energy future?
1:22:25 - Should AI coordinate the oil drilling so that we don’t cannibalize the wells?
1:25:05 - Final thoughts
1:28:07 - Future topics
#natehagens #thegreatsimplification #energy #oil #climate #cop28
10 years ago when I started to become "collapse aware", oil & oil reserves was the most mysterious topic for me, I was exactly looking for this kind of quality content. Thank you Nate & Art for this belated present, it is fascinating. It's like reading the "blood test results" for our civilization....
I’m sooooo grateful for them!
In whatever direction society moves toward, I credit this podcast in giving me some clarity as to what we are experiencing now. A clear mind certainly lowers anxiety and helps with addressing our numerous problems.
Oil companies are only required to publish proven reserves. I'm betting that ExxonMobil and Chevron have more than they're disclosing. 🤞
The great unknown is the Natural Gas associated with shale oil, and the sprawl of Natural Gas power plants and the data centers that followed this sprawl, data centers also known as "the cloud" the big baskets that keeps all the eggs of the modern civilization and modern life...
Probably not, actually. The historical tendency is for the oil companies to over estimate their "proven" reserves. How else do you think they motivate banks and Wall Street investors to lend them the money?@@ivancho5854
🎯 Key Takeaways for quick navigation:
02:10 🛢️ *Shale oil, responsible for most of the recent growth in global oil output, is facing declining well productivity, with wells producing 50% less per well than a few years ago.*
13:42 💼 *While the US recently reached a new peak in oil production, the average performance of US wells is declining. The current high production is attributed to new wells having exceptionally high early rates, masking the overall declining trend.*
18:32 📈 *The disconnect between high production levels and actual well performance brings concerns of getting closer to the depletion point, emphasizing challenges in sustaining such production levels in the coming years.*
20:54 💰 *Oil companies need significant upfront investment, around $6-10 million per well, and require an estimated ultimate recovery of nearly 300,000 barrels per well to break even at current prices.*
23:35 📉 *The US oil supply is heavily dependent on shale oil (tight oil), while conventional, Alaskan, and offshore sources are on a declining trajectory, indicating a substantial shift in the country's oil production landscape.*
26:42 🌊 *Alaska's oil production is approaching zero, contributing minimally to the overall US supply, and the offshore and conventional sources are in decline, accelerating over time.*
26:56 ⛽ *The majority (about 70%) of current U.S. oil production comes from tight oil.*
28:31 ⬇️ *Of the three major shale oil plays (Permian, Bakken, Eagle Ford), only Permian is still growing, but its peak and decline seem imminent.*
30:02 📉 *Tight oil production, especially in the Permian Basin, has faced peaks and declines, impacting overall U.S. oil output.*
32:00 🛢️ *Oil shale, an immature source rock, remains a potential resource, but technical and environmental challenges hinder its widespread use.*
34:57 🌐 *Global oil supply growth since 2010 is primarily attributed to tight oil, significantly impacting the world's energy landscape.*
36:43 💡 *The dependency on tight oil, particularly in the Permian, is crucial for meeting U.S. oil demands.*
40:37 🌐 *The declining trend in oil production raises questions about societal adaptation, financial claims, and geopolitical implications, especially in times of war.*
44:58 📉 *The estimated ultimate recovery (EUR) in the Permian Basin has dropped by around 50% in recent years, possibly due to overdrilling and cannibalization of wells.*
47:31 🔄 *Shale companies, optimizing for faster returns, may have overdrilled the Permian, affecting well performance and long-term oil recovery expectations.*
51:46 💸 *Investors' reluctance to fund shale companies stems from a history of poor returns and concerns about capital destruction.*
52:36 🛢️ *Energy, crucial to our lifestyles, has low returns and a small percentage in the S&P 500, impacting the economy.*
53:30 🛢️ *Rig count correlates with future oil production; recent rig counts might not reflect immediate oil supply changes.*
55:32 🛢️ *Current record oil production (13.1 million barrels/day) is a result of rigs drilling in 2021-2022, indicating a potential lag in effects.*
56:41 🛢️ *Well productivity decline (50% since 2019) implies the need for twice as many wells to maintain current oil production.*
57:31 🛢️ *Rig count in the US is around 600-625, significantly lower than pre-2014 levels, with advancements in technology increasing rig productivity.*
59:07 🛢️ *Increasing disconnect between rig count and oil production due to advanced technology; focus should be on the number of producing wells added each month.*
01:00:45 🛢️ *Recent research suggests shale oil plays, including the Permian Basin, are in permanent decline due to overdrilling.*
01:01:55 🛢️ *At current oil prices, new drilling might not make economic sense; financial constraints might impact future oil production.*
01:05:44 🛢️ *Predicted future oil production decline due to a combination of geology, limited low-hanging fruit, and financial challenges; potential 20% lower by 2040-2050.*
01:13:29 🌍 *Balancing the need to decrease fossil fuel consumption with avoiding societal collapse; the challenge of transitioning away from an oil-based economy.*
01:19:54 🤖 *Artificial intelligence is unlikely to change the geology of the Earth but may enhance technology for oil and gas production.*
01:20:22 🤖 *AI could improve decision-making, potentially preventing drilling in suboptimal locations, but major contributions to energy supply might take many years.*
01:25:19 🔄 *Lowering energy consumption seems necessary, but coordinating efforts globally or through AI faces challenges due to historical patterns and human tendencies.*
01:27:23 🌍 *Understanding geopolitical conflicts, like those in the Middle East, requires acknowledging the role of resources and energy, emphasizing the impact on global politics.*
01:28:35 ☀️ *The next discussion could focus on renewable energy, energy density, nuclear power, and why these may not entirely replace the energy quality provided by oil and gas.*
Made with HARPA AI
Thanks. I am watching fewer and fewer of Nate's podcasts because of declining relevance to my own work, so a synopsis is welcome. I always need more info.
pin this!
@@ShaneNullwhy?
You are all clowns to believe any of this nonsense.
You are fools.
Larger straw my ass.
Stop falling for the criminals. Wake up.
The US will have less than 120 million humans alive by 2025
There are conflicting ‘comments/information stated’ within this synopsis.
Whatever the future supply, you can bet the price will go up !
"How we going to fight our wars, without oil?"
If politicians & The statedepartement would be as energy aware as the military, we wouldn't be in this situation.
It is rare to discover such
Pure honesty!
Art and Nate shouldn't apologize for their 2005 call of peak oil; they were right, conventional oil peaked. Our investment group called the Bakken Peak in 2019; Eagle ford is getting there now. Yes, the mighty Permian is still growing, but the "Red Queen" catches all who oppose her eventually (legacy well collapsing production vs. new IP). We follow all the major shale players in the U.S., look at Devon 10Q data, lot's of CapEx just to standstill (running ever faster just to keep production flat).
The decline in production was mainly due to the drop in oil prices from the pandemic. Not because the productivity of wells got worse and continued to go down.
I have two shale wells that have produced over 500kbbl each. The first was drilled in July 2014 and the second was drilled in Nov 2017. The second one was recently refracked and is producing back at nearly initial levels and has done so since it was re-fracked in July. That's on one section that only has 5 wells. On another section we have 25 wells and none of those wells have produced as much oil as the ones on the less densely developed property. The overall production on that section is higher but not on a per well basis.
I should also add that the section with 25 wells also had 10 of the older wells drilled between 1960 and 1990. None of those wells produced more than 40kbbl over their lifetime and their max production was maybe 100 bbl/day. The shale wells generally produced over 400 bbl/day initially and some were producing as much as 800bbl/day and those are just oil figures not including gas of which there is quite a lot. The calls made by people like Art were way off base as he admits.
itll be wrong again, so tired of hearing about opeak oil when shale hasnt even been tapped across the world
@@adairjanney7109
The need for shale and the like is in itself proof positive of peak oil. Noone would be messing with that if sweet light were still abundant.
The question is not that oil will become non-viable but when.
@@SundogbuildersNet tell that to the Russians their petroleum industry is based almost entirely on fracking especially the gas wells and they have only ever increased their production levels. the Russians operate on the theory that oil is not a fossil fuel at all , they started fracking under the assumption that oil was produced by extremophile bacteria in ground water at depth. right or wrong the process works and the very existence of Russian energy exports falsifies your claim.
Just out of interest, how many tonnes of sand is required each time you frack a well?
@@bbking0064 I don't know that answer. I know how much water is used, about 125,000 barrels per well depending on the length but that would be a 4400 ft horizontal.
By far, Art is my favorite guest. He seems to be the least addicted to hopium and the single most realistic and grounded guest you have on. Keep bringing him back.
Suggestion...would love you to have Paul Beckwith on.
And Shackleton 🖤🐱
And Newton! And the Sesame Street rocking chair! 🤣
Back in 2003 my wife and I learned about peak oil, and also in consideration of oncoming global climate chaos, decided move from our beautiful homes and employment in Sacramento California to somewhere we might be able to ride out the coming storm, a place where permaculture was possible, so in 2006 we moved to Oregon. Best relocation decision I ever made in my thankfully long life so far (I'm a Vietnam vet).
Wow! My (ex) wife and I did exactly the same thing in 2003, starting a permaculture garden and building an off grid adobe homestead, in the highlands of Arizona. And I too am a Vietnam era veteran.... it was because of awareness of peak oil..... but now I'm pretty skeptical that anything major will happen in my lifetime. Just getting Iran, Venezuela and Russia back in production should keep the party going for decades to come.
After 2 decades of living off grid, i can say that living with batteries is a pain in the ass. The idea that we can run modern industry on solar is delusional.
Passive solar construction works great! All new construction should take into account the trajectories of the sun through the year!
Permaculture turned out to be a scam though. Double digging, "Lasagna" gardening works far better!
This is the only place where I hear loudly about energy blindness. How come there's not more ruckus about this? I keep coming back but it puts me in cognitive dissonance every time. Thanks for keeping the flame up.
It's mindblowing, isn't it? Why isn't everybody talking about this on the daily everywhere? Why are we even talking about anything else at all?
Is the Green New Deal, just green smoke? The real agenda is here.
Peak Prosperity has a few great videos discussing and comparing historical extraction and the various lag times involved in transportation and refining the components and various grades that influence total production, as well as how dire the situation really is.
Cannibalism is an apt metaphor for the modern world. Consuming the basis of one own’s existence to get more in the present. Entirely avoidable with a little insight beyond capital maximization, but hardly surprising in a culture that vilifies planning, denounces cooperation, and disavows sharing.
The best way to look at oil is how much energy in oil terms doe it take to get a barrel out. Like 10% 20% 50%. Best way to look at it . Not price.
Always appreciate hearing from Art. Unfortunately, energy blindness will continue to the end.
Yes, but can you blame the general public? People (including smart and knowledgeable people) have been talking about peak oil since the 1970s, and it never seems to happen. Of course, if oil is decomposed biological matter that has undergone some geophysical process, everyone understands that there must be a limit to how much oil there is out in the world, but the goalposts keep moving. Somebody could have started their career as a 20-year-old back in 1970 and gone through their entire professional life listening to people talk about how peak oil is just around the corner, and they would have been wrong every time. Nobody will take peak oil arguments seriously until we actually start seeing sub 100M BPD figures, at which point my guess is that there will be panic.
"To the end" says it all. That presumption, as realistic as it now is, is self-inflicted. The Earth proceeded quite nicely without us for BILLIONS of years. Humans, and humans alone upset an ancient balance that will never be restored. Yaaay humans!
@@mithrandirthegrey7644 As Art pointed out, even when we see it behind us, we will still be blind to it and blame the troubles on "those people," whoever they are. Just as we are blind to human overshoot.
You'll be amazed at what $200 oil will accomplish.
And the end might be after we finish living. A lot of oil yet to be drilled, China is going to fund Africa wherever they can, oil in sub Saharan Africa, South America, Artic Circle, still yet to fully come online, Africa is supposed to be almost half the world by 2100, even if they just supplied themselves, the emissions of the last 200 years could equal the next 100.
$200 oil would be explained away as "growth".
I'm starting to equate the energy in a tank of diesel to my electrical usage, at 4.07kwh per day, it's 5.2 months. A huge amount of energy just to go for a drive.
I was one of the people who, in 2006, heard Congressman Bartlett's series of one hour talks on the floor of US Congress via C-Span. Lead me down the rabbit hole. I read Heinberg, Greer, Kunstler, watched videos of various productions about peak oil and the near term implications. I changed my business relationships based on the information and proceeded to loose my financial ass so to speak. I suppose I am more ready than most because of the decisions I made. lol
All the young men who bought new pick up trucks at high prices over the last decade will not go along with the program being designed by those who deeply care about the ecology. So, now, I must make a statement of I have no idea what these men will do once they are told to keep up the payments but sorry, they can't drive the truck anywhere...
AI is automatically incompetent. I predict AI will draw enough energy from the economy that it shuts it (the economy) down.
Believing all those you listed that were early/wrong has been extremely costly for our family too.
@@RickLarsonPermacultureDesignerWon't be pretty if the Elites are flying their G-6s to Davos. BTW, if they can't drive the truck they can't make the payments.
Crash now and avoid the rush! Well, one nice thing is having money is also stressful in these bare knuckle investment environments, something to be said about just having enough to build up real useful life-force tools is exceptionally satisfying. I'm not a poor starving creature getting screwed.
To have/increase digits on the screen one has to be screwing somebody.
At some point discussions like this will have to take place in public with world leaders present answering questions. There will be a time where "oh, we can't talk about that" will no longer be accepted.
One thing people constantly underestimate when they try to predict the future is how much civilization wants to stay alive. So I would not reject the idea of cooking oil in Utah, even if it literally boils the planet. It is rather reasonable to suppose that after three or four recessions down the line half of Utah will cook oil without a second thought and nobody will care if it only buys a few years before the total ecological collapse.
Same thing with NY state with their “ban on fracking”. Turn the screws hard enough and they’ll all be begging for their water to light on fire too like it does down in PA around the Marcellus shale area.
Art Berman has it pretty well nailed down here. (Petroleum Geologist here speaking...)
hard to overstate how good Art is trying to explain a very complicated subject. There is no one better and Nate is a good part of the discussion with his common sense basic questions. Thanks guys!
Here's my two cents
I left serving to work in the oilfield Central California as a oil well field service worker? What I learned was how we screwed everything up at the very top by sucking it out fast and everything falls to the bottom very quickly and it uses a lot of energy to pull that oil out of the sand. They cap them and all the companies that were there back in the 90s are gone and they've never opened them again because they ran dry quick. And those production days are gone in the 90s and the big oil will run out by the middle of the century and no more by the end.🎉
Oh yes please, would love to hear Nate and Arthur discuss energy quality. It’s an aspect of peak energy where I still have questions and where I’d really like to understand in depth. It’s also an area where the dominant narrative is different than what I hear on this channel, so would love to understand the detailed facts behind it to better understand the reality. 🙏
I spent nearly fifty years in the oil industry, working in various areas including energy transportation, deepwater drilling and in and around oil refineries. More recently I’ve been involved in the regulatory oversight of extremely large solar projects. If nothing else, I’d certainly consider myself a student of the energy business.
Alaska and the US Deepwater Oil Drilling which are almost completely controlled by the Federal Government has been largely hamstrung by the Climate Alarmists in the Biden Administration and the Democrats. The same pretty much applies to the vast federal lands of the US West. If the US becomes serious about increasing oil production it can open up these areas which can probably push production shortfalls out another few decades.
A great interview as always and I very much appreciate hearing from Arthur. These talks have greatly improved my understanding of our most important resource. Thank you guys!
What blows me away is that not one mention has been made in this podcast to bring the awareness that oil is the number 2 naturally self sustaining renewable resource behind water on the planet !!
Such as it will never run out of!!
Your children will grow to old age with no heat, no fuel, after 20 years if any is available it will be imported at his prices. You are misinformed, dear.
Wow, if the shale oil peaks next year, it'll be consistent with the latest recalculation of Limits to Growth, which shows global industrial output peaking in 2024, then dropping... Forever. Probably the single scariest piece of data I've seen in recent years.
Great conversation!
Since I am getting older and older I see peak oil as an ongoing discussion. Decades ago I read a book called "the last drop" and it made the case for declining oil. Since then decades passed and every year someone finds new sources or technology finds new ways.
The only thing I really feel is hurting on the long run are the under investments because of ESG. If this keeps going (which I don't think) other parts of the world will take over in terms of energy production.
Also, just from an investor point of view. You are right, funding or loans are difficult to get for oil companies but the majors like Chevron, Shell, Equinor and so on are flooded with cash. So they do not need any credit. But still ESG is one of the major problem in the energy market (my opinion).
Thanks Art and Nate - I look forward to your next get together! It is so refreshing to hear such rational dialogue.
Thank you Nate and Arthur for this superb, non-ideological, deep dive into the energy connindrum the world faces today and in the future. I eagerly await your Feb-March discussion on renewables, nuclear, energy density issues which, having studied it a bit, has concerned me that many backers of these approaches (I among them) have not sufficiently analyzed and so are ill-prepared to understand in their unforseen and unintended conequeces. Thanks again!
Right on time. Good morning Nate ☀️
Thank you nate.....thank you so much....for your honesty, courage, care, and concern for your lifes work......please continue
1:30:27 Read "Oil, Power, and War: A Dark History" from Matthieu Auzanneau for a great book about how oil changed history, specially during WW2.
I am most definetly looking forward to the next episode with Art! :-) Thank you so much for this wonderful podcast and all the information you put out there for us, you are really making a difference!
One of these days there will be an episode "What just happened" with techno optimists with egg on their faces.
I really look forward to Art coming back on. His proposal for discussion next time should be great. Thanks a lot. 👍
Love Art Berman! I always tune into your podcasts with him, Nate.
I enjoyed this thoroughly and I learned a lot. Thank you so much Art and Nate. 🙏
Found you on Canadian Prepper youtube channel. New subscriber from Canada 🇨🇦
So, to sum it up in geopolitical context, it should come as no surprise why US ( The country totally addicted to oil, and built/organised around oil-car culture) is pretty, pretty, pretty active in supporting it’s great ally in middle west( for which whole world will probably pay the biggest price.. great 👍
Thanks so much for this interview Nate and Art Berman - I have really learned a lot from you both!
Would be interesting to hear Art talk about maybe places where he is missing new supply (i.e. new peak oil argument is wrong again). Makes me think of new oil off Guyana, Venezuelan oil coming back online, increased Oil Sands Develpment in Canada, Artic Drilling, etc. Keeping the important emissions piece out of the equation, could humans not have a lot of more oil (albeit more expensive) to develop?
I’m no expert but here’s my sense: those places will be drilled/attempted but the new production won’t be enough to offset decline. Still that's why Art says we'll be at 80% of current levels in 2 decades - because of such projects
There are centuries worth of oil. However the costs are the key thing. We've already passed the peak for the cheap-to-produce oil. Peak oil is an economic phenomenon.
So Art got a few things wrong about the oil production on the North Slope and drilling in general.
North slope production peaked at 2 million barrels a day in the late 80's. Prudhoe Bay peaked at about 1.6 million barrels per day. It is now down to about 250,000 barrels. That's part of the natural decline of an oil field.
Today's throughput through the trans-alaska pipeline is about half a million barrels a day.
There have been a lot of new discoveries made in the last 5 to 10 years, but the environmentalists have slowed development considerably with lawsuits, even after permits were granted..
In spite of this, new field's will come online and get the throughput to 700000 and potentially up to 1 million barrels per day. They keep finding more oil up on the North Slope.
When they drill Wells on the North Slope, they drill production wells and injection wells. They inject treated sea water and a miscible injection, which is basically a solvent to increase the production. It essentially washes more oil through the rock. Even with the present decline, all the North Slope Fields have produced much more than the original estimate of recoverable reserves.
I'm not sure of Art's background I'm thinking it may be refining and you need to talk to a petroleum geologist to get more knowledgeable information on drilling.
Outstanding interview and timely.
This is one more great episode; thank you.
Art made a great point here, that pretty much all wars are resource wars and I would add one more viewpoint; the pandemic caused so much more damage than we have yet experienced. I watched a video yesterday, on the UK and the mental problems among young people since the pandemic is quite shocking; for instance.
great analysis, great guest, great work Nate. Thanks
Lots of knowledge here I wasn’t informed about. Thanks.
Some of the wells have multiple laterals that go out 3 to 5 miles from a single well head. So they can drill Wells very close together on the but are able to draw oil from a very large area.
How much oil is in the ground in places that have lost the infrastructure necessary to extract it? Places like venezuela, Iraq, Mexico?
Another good show. However, I would enjoy more of the "how to" shows. We became very serious about our lifestyle and modern system dependence about 4 years ago. It has been a journey blessed by finding folks who share how they do things. Yes there is a problem, now what should I do. Again, I'm not trying to be critical. I'm just thinking that with your network, you might find folks from a wide range of practical experience.
Peace.
Shale is an old ocean bed subject to maturation. In Appalachia it starts at 3,000 feet and ends at 52,000 feet we know there is huge oil ,well below the current wells 6-12k feet deep including 23,000'
Thanks Nate, wondered when we’d get an up date from Art, and thanks Art.
Was convinced Oil had peaked when from one of your previous discussions Art explained (with graph) Oil wasn’t just Crude Oil (Conventional) in the Old sense anymore, but was being made up from Crude, Tight Oil (Fracked), Refinery Gain, Bio fuels, NG distillates, and Renewables and Oxygenates.
And so the Oil industry is now in the Red Queen Syndrome, and only a matter of time, I’d say before the end of this decade, before it’s fully in the public domain.
And so as you touched on at the end of your conversation, when the implications are fully understood will it result in panic with every human and country for themselves, or some form of “The Great Simplification”.
In the meantime Nate and Art you will remain labelled as Cassandras🤔
Back in the 1990s, a number of the independent participants in the Canadian natural gas industry (as opposed to oil) appealed to provincial governments in to "enumerate" gas extraction icenses. That is because when 2 competitors are licensed to draw from the same reserve, any gas I don't get is gas the other guy gets. So even when prices fall, both operators self-cannibalize, primarily to limit the share of the reserve's supply that their competitor gets. If licenses are enumerated (they could be renewable), then I don't lose out to the other guy if I cut back my production until prices start to pick back up--as kong as the sum of the production limits in our two licenses does not obviously exceed reserve capacity to supply. Big oil intervemed, not wanting the provinces to attach an enumerated production volume to each license. And gettingnsuch a orocess right would be hard, and governments did not want to deal with the complications, anyway. Innthis context, "self-cannubalizing" is a rational producer behaviour.
I hope you have good quality time off Nate and come back feeling recharged. We rely very much on the information you are providing, but understably it must take a toll on you. Gratitude!
Arthur Berman is an amazing guest and you did a great job on this interview. Thank you
Thanks to inform us in this way.
Valuable insights. Looking forward to more. I'm definitely a new sub.
Great discussion
Always a great discussion. One question, and I'm only half way through so I apologize if this was answered by Art.
Each fracking well requires millions of gallons of water. The last big play that hasn't peaked yet is in the driest part of the US. Is water availability, and affordability a limiting factor in the overall production of the Permian?
As you may know most of the South West is living off of fossil water aquifers that replenish on a very long time scale. Like 1000 years long, so how long before those aquifers are drained and what does that mean for the residents of West Texas and NM?
Thanks again for the work you both are doing.
No problem. People have got that all figured out. I see the word "hope" in there.
"New Mexico governor proposes $500M to treat fracking wastewater... The administration hopes to make the water available to businesses ranging from microchip manufacturers to hydrogen fuel producers." -AP 12/5/2023
Don’t forget the sand, like a lot of sand, were talking 10,000 tons of sand per well, and it’s not just any only sand it’s silica sand, and it has to come from somewhere, and we mustn’t forget thousands of litres of chemicals, toxic chemicals, that aren’t just for the drilling process, no, the fracking process, if they contaminate you water system, you’ve got problems real problems🤔
@@A3Kr0n That's a lot of taxpayer money there, don't ya know. Who benefits from that? Fat cats imo. Its like a big subsidy for the industry paid for by the people of NM who are also paying more for road maintenance from the wear and tear of hundreds of thousands of trucks. It doesn't seem worth it for a resource which will be uneconomic soon, like 10 years or less.
@@barrycarter8276 Something to ponder, without fossil fuels you would be dead.
@@A3Kr0n Water remediation to potable standards should be priced into production costs.
My gut feeling if the politicians see this information cognitive dissonance would be shown. The way I interpret your podcast is to have discourse how we organize ourselves for the coming disaster. Our addiction to Dopamine and our financial system will stop us from becoming enlightened. Would be great to talk to Ken Wilber.
Ken Wilber, haven't heard that name in the context of oil, or energy. He dipped his toe in the futures business a couple years ago and was way off so he seems to have backed off. What would you have him talk about? @elliottmcintyre9092
@elliottmcintyre9092
Collectively our knowledge has grown although our enlightenment has not.
Correct it doesn’t add anymore but we are also able to tap into reservoirs we weren’t in the past. We are currently drilling longer laterals and depleting the backlog of DUC’s finally which is contributing to increased production. Look at the oil rig count vs frac spreads. DUC inventory is severely declining while Drilling rigs are declining and frac spreads are up which points to puting many DUC’s into production.
Additionally much of the tier 1 Permian acreage is depleting.
I largely subscribe to the peak oil narrative. What I don't understand about what Mr. Berman said is that although oil supply is on the verge of peaking if not declining, his forecast for oil prices is fairly low to declining. When inflation is factored into that, oil seems to be even cheaper. He forecasts that even though he says there will be a lot of pain as supply declines even slowly. That seems counter-intuitive.
Awesome interview
Interesting that you have both reached the same conclusion as Steve St Angelo has, only several years later. Great stuff. Thanks. 🇦🇺
The North Slope is also one of the most efficient places to produce. They have centralized facilities, they re-inject 7.5 billion cubic feet of gas per day because that gas is stranded. The cost of a gas pipeline for all the gas up there is prohibitive and can't compete with the price of gas in the lower 48 or elsewhere in the world.
Initially they drilled Wells on 300 ft centers at Prudhoe Bay. Now they are drilling Wells at 20 to 40 ft centers to limit the amount of tundra that is impacted. The total amount of tundra that has been lost oil production facilities is minimal compared to the vast amount of tundra up there. It is a cold desert.
I find the discussion at 1:15:00 or so very frustrating. Yes, if we wind down oil energy too quickly bad things are likely to happen. But doing it too slowly, bad things will happen. The frustration is - if we consider that there is a limit we don't want to cross, we've walked ourselves deep into a dead-end, where as if we had started transitioning in the early 90's that is another 30 years of gradual change we could very much do with, and those cuts would have bought us even more time.
But I have to accept that it is all under water under the bridge now, and like Art, it's hard to see a plan plus globally accepted action that can move us anywhere near fast enough.
Only the Magic bullet cold Fusion can Dodge the Energycliff.
@@GoetzimRegen Extremely unlikely technologically and time wise - especially at the scale required.
@@mkkrupp2462 then be ready for an inverse 70s, with inflation and loosing living standard around the globe.
Excellent chart @minute24
What a great conversation it was ! May I ask a question. Where EROI stands in this topic? I've learned from the thesis of VIctor Court "ENERGY, EROI, AND ECONOMIC GROWTH IN A LONG-TERM PERSPECTIVE" that an EROI lesser than 11:1 could create turmoils : " Now that we have estimated that, at current energy intensity, the US requires a minimum societal EROI of 11:1 (with a most likely interval of [8-13.5]) in order to possibly have positive economic growth" (page 173). He also wrote: " New renewable technologies toward which human future is destined have relatively lower EROIs, with average values for wind power, photovoltaic panels, and first generation biofuels respectively around 15-20:1, 4-6:1, and 1-2:1 (Hall et al. 2014). Adding the intermittent nature of renewable energy to this perspective suggests that (so far) new renewable technologies hardly seem capable of coping with the minimum required societal EROI of 11:1 that we have calculated." (page 174). Maybe it's an interrogation for the next podcast with Art Berman?
Great. Thank you
“In any system of energy, Control is what consumes energy the most.
No energy store holds enough energy to extract an amount of energy equal to the total energy it stores.
No system of energy can deliver sum useful energy in excess of the total energy put into constructing it.
This universal truth applies to all systems.
Energy, like time, flows from past to future” (2017).
With hydraulic fracturing we have opened up so much economic resource extraction from shale that we knew was there for years but it wasn’t until recently we have learned how to economically extract it in the earlier 2000’s
How about a step change in energy efficiency as a solution? A quoted figure is that 40% of the heat value of crude oil is consumed in the Oil Refining process. How do we make that 20%? How about creative uses for heat below 300 degree F?
The experts have been saying we are out of oil for 40 years. I have been in the oil field all my 80 yr. life. There is millions of acres yet we can drill on.
In the face of both pioneer and continental resource ceos saying the Permian is maturing the following several months until now production has ultimately increased. Thus I think sometime next year we start to see a meaningful production reversal as the DUCs get used up and longer laterals can only go so far in the little tier 1 acreage left and the subsequent tier 2 and 3 but drilling needs to pick back up just to replace it and rigs are down noticeably.
1:23:39 1:23:44 "The best forward strategy for humanity and the earth is for humans to use less energy."
good luck with that
I'm fine with O&G, produced and used as cleanly as possible. At the same time, it makes sense to leave ourselves some runway by expanding electricity production and having some portion of light transportation being using electrical where it can. Given the advancements in solar cells and storage, you can pick up many percentage points there on the transportation side. Add some MPG improvements on the current lower MPG targest and you've made some real net progress. Gas and diesel are the 2 biggest from crude, far and away - stretch those to meet the hard demanding performance curves they're not ready to do with BEVs etc, flight etc.
As a Development Geologist I find this presentation of enormous importance. Uranium it is then!
Hehe, Mister Berman doesn’t agree sadly! Look up his articles on nuclear.
@@ericstaib8035Berman's conclusions are logical to me. Interesting too that the big boys are judiciously selling their Shale assets, even Chevron following it's recent acquisitions.
Tight o&g requires a continuous stream of new wells and the corresponding capex stream. Current financial conditions are working against that model.
45:37 45:43 The wells are drinking each-other's milkshakes.
Art is great but only 20% decline in 20 to 30 years? That seems a bit optimistic to me. Especially given the last driver of oil production, ( the permian) is seeing a 50% decline in total well production over 3 or 4 years. That is despite an increase in rig count. If half of US oil production declines by anywhere near 50% in the next few years, that would be a 25% drop in just a couple of years.
With dropping liquidity and, market volatility increasing it seems unlikely there will be an increase in rig counts. There will probably be a huge drop off which means an even bigger decline in productivity in the near future.
Even if the big straw keeps on getting bigger, eventually there will be a big Seneca cliff of dropoff in production.
Will the dollar survive when the world realizes the vast oil reserves it supposedly has are not so vast after all?
Damn good questions - damn good answers!
Does this means the U.S. has to go back and aggressively exploit some other country? I live all too near the Permian Basin in Texas and New Mexico and we have had three 5.1+ earthquakes caused by fracking and all my wall surfaces are cracking and my home’s value deteriorates due to this. There is subsidence in the landscape around this oilfield and roads in that area are a disaster due to the large oil rigs moving 24/7. FYI: my dad used to be a chemist working for Humble Oil in Houston, Texas.
We love you Senior Petroleo! You too Nate.
So what happens if we take all the remaining carbon from the ground and put it in the air? That's like an event on a geological scale we are even more blind to than energy.
I would like to ask Arthur:
If we use less, I guess that would mean the infrastructure takes a hit. Which means we would be locked into using the oil to repair and replace. Instead of using that oil for an infrastructure that only asks but doesn’t give, would it not be better to use the remaining oil to build an infrastructure that doesn’t demand that much? Mining the old infrastructure for materials? (I understand some of it is not recyclable)
My cousin invested in a Railroad shipping to haul shale oil - "Hempel, Inc." - looks like he set it up in Delaware - says still active in 2022. He passed on in 2018.
The data shows improved well performance but as the tier 1 acreage gets used up it will eventually reach a peak where productivity gains will plateau.
Reference EIA data for reference. On a monthly and yearly basis production per well has on average increased. Not sure they would include the lifetime gross production in this calculation though.
It's costing more dollars per barrel. Luke Gromen talks about this too. Nice to learn more, subbed.
Solid discussion: there is a comment below that focuses on natural gas. More on that pretty please.
Sénior Petrolio is always a great guest.
Several things, yes the US production is up and its due to shale oil but in the greater scheme of things in possible long term production that is pretty minimal. Canada has the 3rd largest reserves in the world and has only made a tiny dent same as Venezuela. In both places its mostly high capital heavy oil. But once you build the project lets say 30K BPD for steam injection or 200k BPD for mine you have that production for 25-30 years. The only reason Canadian oil production didn't keep on increasing was gov't policy stopping it. No one is building steam plants or mine projects. Also Canadian reserves could be number 2 with a little more work on the carbonate heavy oil resource.
Oil companies don't need any money right now to fund expansion because none of them are expanding production. All those profits are being returned to shareholders in dividends , special dividends and share by backs. Any company going out to buy another company is hammered in the market.
Picky point but very very few people in Canada own mineral rights to the oil under their land. The provinces own the mineral rights and get royalty payments from oil companies. landowners get a payment but that is to compensate them for the inconvenience of the oil company coming on their land. Not going to get rich off it. And you cannot say no.
Historically, overproduction has been the kryptonite of the Oil Industry; preventing, and controlling overproduction is the business model for profitability.
The only thing left after shale oil is "Oil Shale" - and no I'm not playing semantics. Shale oil is oil that can be produced at depth from low permeability reservoirs using fracking. Oil Shale has to be mined - physically mined - and the moveable oil must be squeezed, or crushed, or solvent cut, or even cooked out from the crushed rock. (And this ain't pretty nor is it cheap.) The Green on this chart is smeared out in time . The red peak will go down as fast (or faster?) than it it went up. Once it's gone - it's done - over - kaput - finito! This is the thing about a "Finite Resource" - it is finite - simple - right.
Just to cut to the chase, what you are discussing is the economics of shale oil production as compared to conventional oil on a global market. This is a real day-to-day issue for the shale oil plays in the US, but it has nothing to do with the actual reserves available to us. These shale reserves are missive, not only in the US but in many other locations on earth. Therefore, descriptors like "peak oil" don't really have a meaning with regard to how much recoverable hydrocarbon is left to exploit on earth. It's actually a term tied to global oil price from conventional plays versus the increasing cost of shale oil production. But in the big picture, the US will never be subject to the kind of leverage that OPEC has applied in the past, or at least will not be subject to it in the same way, when we only thought in terms of conventional oil reserves. This is a good thing, gentlemen, and should be described in this way, rather than a "slurping sound", as if nothing is left to recover
I listened to 4.5 minutes and there was no mention of the environmental damage caused by extracting, transporting and burning oil. And I got the distinct feeling there wouldn't be any mention of it.
"Experts" have been predicting "peak" oil since 1970 and it hasn't occurred yet thanks to ever changing technology where the industry is finding undiscovered huge pools of the stuff. We still haven't yet realized the degree to which we are addicted to oil and will still be using it (necessity) 40 years from now despite electric vehicles much to the chagrin of the environmentalists.
You love dirty air and water. Keep paving and driving. The earth is flat and expanding.
I'm surprised that USA has the highest oil production, is that really true? I always thought it would have been the middle east (Saudia Arabia, Iran, Iraq, etc) who would have produced more.
I’m also confused about the difference between oil production and oil reserves: they said in the podcast that the US has the highest production, but the Middle East has 1/2-2/3rds the world’s reserves. Would love if anyone could clarify how both those can be true. Are they just sitting on the oil in the Middle East and not pumping it out as fast at the US?
'Production' is what is pumped out of the ground every year, reserves are total amount left in the ground that could be or will be extracted. Reserve numbers however are not necessarily trustworthy, there are various incentive to skew them.@@lizt.5374
Production is the rate that you take the oil out. Reserves is the total amount that you may be able to take out over a long time. The middle east has the highest production of oil, by area. The US by country.Both Iran and Iraq could increase production by 3 mill. barrels a day if they weren't nutso f55kup hellholes.@@lizt.5374
That's because the US consumes most of the oil it produces domestically so very little of it is bound for export. Meanwhile, in the Middle Eastern countries especially Saudi Arabia and Iraq very little is actually consumed at home and so they end up exporting far more than the US while producing less.
And about the reserves.
So essentially the estimated quantity of oil contained in a subterranean or submarine resevoir is called oil-in-place or OIP, as a general rule only a fraction of that OIP is actually extractable/recoverable depending on factors like oilfied geology and the technology used to extract it.
And of that fraction of what's technically recoverable, only about a fraction of that can be *profitably* recovered under preexisting socioeconomic conditions. So on an energetic (EROI/EROEI) and price basis, this is what's counted as a _proven/proved reserve._
The Middle East has the most proven reserves and is subsequently the top oil exporting region (minus Iran because sanctions), meanwhile, the US is the top oil producer and consumer globally so it all evens out.
The problem I have with the Alaskan Oil is that a lot of the production is limited in that so much of the Federal Land is Not available to be drilled. Particularly with the current administration.US offshore is also limited because of Federal policy. It is a complex situation.
So question? With the all the oil being produced why the the huge drawdown from the strategic reserve? I am aware that most of the the tight oil is being refined outside the US. Just what some insight on why it wasn't drained completely
It’s not just shale. Two thirds of oil was initially left in the ground before fracking and lateral drilling became possible. It’s unlikely peak oil will be reached for another 20 to 30 years.
Haha, great title!
the problem is that oil isnt running out fast enough (so the megacancer can collapse asap]. times running out for most species. maybe some encouragement is required
You first.
@@ivancho5854 i think you mean 'thank you for telling the truth. im sick of the lies of the human species. what you said is a fcking breath of fresh air'.
Thankfully the price of oil will not long be high enough to cover the cost to produce it from most wells in the USA.
Ken Wilber would talk about integral theory, essentially how reality has developed and how as the collective we need to transcend consciousness
Slurp, slurp, slurp, the final sound heard from the failed parasite!
Future oil scarcity is not just about "bending" to the new reality and pressures in order to make the necessary, hopefully measured lifestyle changes, but as the world becomes more mired in a downward economic spiral of limited growth from our quantitative oil depletion, one area that has been over looked is the increase activity of organized crime as agents acting in the interest of competing nation states. We are witnessing this play out in real time today with illegal oil shipments to North Korea using "ghost" ships funneling illicit shipments from Hong Kong, China, Taiwan, and probably Russia to feed North Korea's underground economy.
Black market traders will exploit the misery from resource scarcity, undermining legitimate channels of trade between countries struggling to meet their own energy needs. This will have a knock-on effect driving oil prices even higher. You think inflation is bad now, the rule of law on the high seas will erode very quickly with each country resorting to any means possible to prevent their own internal sociatal collapse.
(26:37) what does "cantarelle" mean?
*_"Cantarell Field or Cantarell Complex_* is an aging supergiant offshore oil field in Mexico. It was discovered in 1976 after oil stains were noticed by a fisherman, Rudesindo Cantarell Jimenez, in 1972. It was placed on nitrogen injection in 2000, and *_production peaked at 2.1 million barrels per day in 2004."_*