Category: Peak Oil

Shell announced this week that it was abandoning efforts to develop oil from the Alaska’s outer continental shelf (OCS). The company had drilled a well in the Burger prospect in the Chukchi Sea this past summer, but the results were disappointing. Although the company found hydrocarbons, the flows were insufficient to warrant further exploration. With that, Shell decided to suspend activities in Alaskan waters indefinitely. Shell had such high hopes. If all went well, it would have produced an average of 650,000 barrels of oil for 35 years from the OCS. From 2025 until 2060, the OCS would power Alaska’s economy and contribute up to 10 per cent of domestic US oil production. The project, which we estimated would cost more than US$300 billion in total, would have represented the largest infrastructure project in the United States in the next 15 years. There was no more visionary initiative anywhere […]

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Many environmentalists hope, and oil producers worry, that we’re entering a post-car era spearheaded by tech-savvy, bike-path-loving, urban-dwelling, Uber-using millennials—leaving behind generations of automobile owners whose thirst for gasoline seemed limitless. “Millennials have been reluctant to buy items such as cars,” a Goldman Sachs GS 1.30 % analysis concludes, turning to “what’s being called a ‘sharing economy.’ ” David Metz, former chief scientist at England’s Department of Transport, claims that the growth of Uber and its competitors guarantees a decline in automobile and fuel use. Thomas Frey, the DaVinci Institute senior futurist, says that “wealthy economies have already hit peak car.” The idea may seem plausible given recent history: tepid new-car sales, fewer miles driven per capita and shrinking gasoline use. In reality, it’s poppycock: The car habits of young adults ages 18-33 simply reflected a lack of jobs and money. Now J.D. Power finds that millennials are the […]

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(Bloomberg) — The speed at which oil producers shut down wells spitting out their final drops of unprofitable crude may speed the drop in U.S. output and hold the key to an eventual rebound if prices fall further. Crude prices tumbling to $30 a barrel would threaten the profitability of about 206,000 barrels per day of production from older wells that produce minimal amounts of oil, according to a report Thursday from Bloomberg Intelligence. The wells, which are most prevalent in Texas’ Permian Basin, are about 25 years old on average and produce no more than 15 barrels a day. They require regular maintenance to help pump even that much after years of sagging pressure. "These wells dance on the edge of profitability," Peter Pulikkan and William Foiles, analysts at Bloomberg Intelligence, wrote in the report. "The reaction of smaller mom-and-pop operators to sustained low oil prices will dictate […]

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According to EIA data, monthly US crude oil production peaked in April 2015 at 9.6 mb/d. Fig 1: US crude oil production to June 2015 The above graph shows that US crude production increased by around 4 mb/d between mid 2011 and mid 2015, mostly from shale oil which took off – with a delay – when oil prices exceeded US$ 80-90. That stellar growth has come to an end, also with a delay, after oil prices plummeted. Let’s zoom into the period starting with January 2014: Fig 2: US incremental crude production Jan 2014 – Jun 2015 The April 2015 peak was caused by higher GOM production resulting from production start-ups after lifting the drilling moratorium in 2010. Shale oil peaked one month earlier, after the winter drop. However, month by month production can change and future revisions of data are likely due to reporting delays. What is […]

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Living Renewable Energy By Robert and Sonia Vogl President and Vice President Illinois Renewable Energy Association We were both surprised and pleased that Chris Schneider of Honda Motorwerks in LaCrosse returned to being an important presence at the annual Renewable Energy and Sustainability Fair. He is a long-standing advocate of hybrid electric vehicles and always provides an up to date presentation on progress in providing cleaner transportation options. His presence supplements the fine presentations by Tom Brunka on electric vehicle conversions, Allen Penticoff on sustainable cars of the future and Jeff Green on amazing batteries in our future. Schneider acknowledged that low gasoline prices are negatively impacting the sales of hybrid and electric vehicles but believes as many others do that low gasoline prices may not last very much longer. He did point out the existence of impressive savings on used electric vehicles. Brunka took advantage of the low […]

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Summary Expect higher gasoline and oil prices in 200 days. US Peak Oil from Fracking was in July 2015. US Oil Production down 474,000 barrels per day since July 2015. Watch EIA TWIP Report to understand oil inventories. “Glut” of oil to deplete in 200 days. Two forces, acting in opposite directions, will soon align to cause gasoline and oil prices to ratchet much higher. Those two forces can be easily tracked by watching EIA’s “ This Week in Petroleum ” or TWIP. The two forces are: US crude oil domestic production. US crude oil stocks The current TWIP reports a 474,000 barrel per day decrease in US oil production since July 2015. (click to enlarge) seeking alpha 2 Comments on "$4 Gasoline By May 2016" makati1 on Wed, 30th Sep 2015 10:31 pm “Two forces, acting in opposite directions, will soon align to cause gasoline and oil prices […]

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Most people believe that low oil prices are good for the United States, since the discretionary income of consumers will rise. There is the added benefit that Peak Oil must be far off in the distance, since “Peak Oilers” talked about high oil prices. Thus, low oil prices are viewed as an all around benefit. In fact, nothing could be further from the truth. The Peak Oil story we have been told is wrong . The collapse in oil production comes from oil prices that are too low, not too high. If oil prices or prices of other commodities are too low, production will slow and eventually stop. Growth in the world economy will slow, lowering inflation rates as well as economic growth rates. We encountered this kind of the problem in the 1930s. We seem to be headed in the same direction today. Figure 1, used by Janet […]

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Quebec environmental groups are calling on the government to publish the results of 2015 drilling for shale gas on Anticosti Island and to hold an environmental review. (Radio-Canada) The Quebec government is not being straightforward about the data it has on shale-gas exploration on Anticosti Island, a coalition of environmental and citizens’ groups said Friday. The coalition is asking the Liberal government to order environmental review hearings through its provincial assessment agency, known as the BAPE, and to publish the results of its drilling activities on Anticosti. The director of Nature-Québec, Christian Simard, said there are eleven sites where drilling has been completed over the past two years. Simard said in 2014, the findings were published on the government’s website, however, this year’s findings have yet to be made public. "It is time to have an assessment, and to make it public — to open a debate," he said. […]

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Art Berman is out with a new deck: “ The North American Unconventional Revolution & The 2014-2015 Oil Price Collapse ” (pdf) and it’s a great review of US shale, Saudi/OPEC response, and the great price fall over the past year. As always, Art is out to tell you some facts you don’t often see in the headlines: The story of the price collapse is pretty simple: It’s Chinese demand fall + US oil production growth + response of Saudi oil production growth. That’s pretty much it. Lower demand and production gains leading to surplus and lower prices. The heroic tales of rig productivity and drilling efficiency gains are what oil companies have to tell investors to show a brave face. Dig a little deeper to realize – what should be obvious to everyone – that companies are getting killed at these low prices. But future higher oil prices […]

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The latest catch phrase to enter the lexicon of the oilpatch is “lower for longer.” One assumes it simply means oil prices are down and will stay that way for a long time. The difference between a catch phrase and an essay is the detail for purposes of definition. “Lower” must be oil prices below what they used be, although in fact they are not lower than they have ever been. “Longer” refers to an extended period of time, clearly undefined. “Longer” after the oil price collapse of 1985 was over 15 years. Oil is often treated as something a bit more special than a typical commodity because it is so essential to modern life. But let’s take a simple definition for “commodity”, such as, “any useful or valuable thing…something that is bought and sold”, and when the price of this thing falls to the point that it is […]

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