U.S. geologists stumble upon shale oil reserve motherlode ..

[kenneal - lagger]

Is the climate now totally f***ed?

U.S. geologists stumble upon shale oil reserve motherlode valued at US$900 billion in shale below West Texas and US drillers rush for a piece of the action. Who's going to tell them that they can't drill it?

[PS_RalphW]

Rockman over at peakoil.com says that this 'new discovery' already has 6000
wells drilld through it over 20 years. The Texas geologists have reported its economic potential at a few percent of this figure.

It would not be the first time that the US geological service has overestimated economic reserves by 2000%.

– “The ‘NEW” oil discovery is just more Texas bullshit.” Not Texas BS…USGS BS. LOL.
Texas state govt has its own evaluation group, the BEG…Bureau of Economic Geology. As you’ll see the folks who understand Texas petroleum geology far better then any other research group have a rather different view of the Wolfcamp potential then the USGS. BTW if you read all the way down you’ll see that almost 6,000 wells have been completed over the last 20 years in the “newly discovered field”. Data that the BEG has used to evaluate the trend potential:
“Established in 1909, the Bureau of Economic Geology in the Jackson School of Geosciences is the oldest and second-largest organized research unit at The University of Texas at Austin. In addition to functioning as the State Geological Survey of Texas, the Bureau conducts research focusing on the intersection of energy, the environment, and the economy, where significant advances are being made tackling tough problems globally. The Bureau partners with federal, state, and local agencies, academic institutions, industry, nonprofit organizations, and foundations to conduct high-quality research and disseminate the results to the scientific and engineering communities as well as to the broad public.
Talented people are the Bureau of Economic Geology’s formula for success. Our staff of over 250 includes scientists, engineers, economists, and graduate students, representing 27 countries, often working in integrated, multi-disciplinary research teams. The Bureau’s facilities and state-of-the-art equipment are world class, and include more than fifteen individual laboratories hosting researchers investigating everything from nanoparticles to shale porosity and permeability. The Bureau also maintains three major well core research and storage facilities, in Houston, Austin, and Midland–together believed to be the largest archive of subsurface rock material in the world, as well as an extensive wireline log library.”
So what does the BEG think of the Wolfcamp shales? Can’t find that number broken out but for the entire Spraberry trend, including all the conventional reservoirs: 10 billion bbls. Over the last 14 years the BEG calculates a total of 120 million bbl from the Wolfcamp…less then 9 million bbls per year. From the BEG publication:
“Known as the Spraberry Trend, productive areas extend across 18 counties and contain more than 10 Bbbl of oil. The Wolfcamp (Permian) underlies the Dean and then deeper zones in the Pennsylvanian. This expanded productive interval is called the Wolfberry Play. Multiple fracture stimulation stages open up these low permeability formations. More than 5,800 Wolfberry oil wells have been completed since the late 1990s. Initial production averages 30 to 125 BOPD, and ultimate per-well recovery is estimated at 100 to 140 MBOE. The BEG team is collaborating with several Wolfberry operators to achieve a better understanding of this complex hydrocarbon system.”

[Pepperman]

http://www.forbes.com/sites/arthurberma ... 2c2dae9dbc

[kenneal - lagger]

http://www.forbes.com/sites/arthurberma ... 2c2dae9dbc

It would need an oil price of $70/bbl to just break even on the basis of the above article. There's a while to wait before they even think about drilling to see if the oil is actually there then!

Maybe we still have time to save the occupants of the planet.

[woodburner]

Come on, you know that between 75% and 90% are going to have to go, so "saving" is not relevant.

[kenneal - lagger]

True! Perhaps I should have said "leave a slightly better place for the remnants of the populations to live." And by populations I mean all life.

[woodburner]

I'll support that.

[Mark]

On the other hand, The Wall Street Journal is reporting that the Oil Industry Anticipates Day of Reckoning:
http://www.wsj.com/articles/oil-industr ... 1480248012

This month, European oil company MOL Group delivered a stark message to investors: Demand for fuel in its key markets is bound to fall. So-called peak oil demand is a mind-bending scenario that global producers such as Royal Dutch Shell PLC and state-owned Saudi Aramco are beginning to quietly anticipate. But MOL has a transformation plan that is among the most explicit responses to the trend, indicating how the landscape may change for big energy providers over the next decade. The Hungarian company is rethinking its traditional focus on fuel supply and shifting investment to petrochemicals, the key ingredient of everyday plastic products and a sector where MOL believes growth will continue even when its fuel business falters.

Although there will still be customers for its fuel, the company reckons demand will soon flatten and then start falling in its Eastern European markets around 2030. “We see that as an inevitability,” MOL Chief Financial Officer Jozsef Simola said. Big oil players such as Exxon Mobil Corp, BP PLC and Saudi Arabia—which is leading recent efforts by the Organization of the Petroleum Exporting Countries to boost oil prices—are also anticipating significant shifts in demand, though there is no consensus on the timing and their moves have been gradual. They are increasing their investment in petrochemicals, pumping more natural gas, driving down costs and even diversifying into alternative energy sources like solar power.

Continues...

[raspberry-blower]

Robert Rapier: Is the Permian 20 Billion barrel oil Discovery Real?

It is important to understand what this assessment actually means. This oil has been assessed as an “undiscovered resource.” This scientific assessment means the forecasters have a certain degree of confidence that the oil is there. For this particular assessment, the 50 percent confidence level is that there are at least 20 billion barrels there. The study further estimates that there is a 95 percent chance that there are at least 11 billion barrels there, and a 5 percent chance that there are at least 31 billion barrels there.

However, the fact that the assessment refers to the “resource” means that they are estimating the technically recoverable oil in place. This says nothing of the economics of recovering this oil. The amount that would be economically worthwhile to recover at prevailing commodity prices — which would be classified as “proved reserves” — will be a smaller subset of the assessed amount. It would even be zero at a sufficiently low oil price. This is merely an attempt by the USGS to estimate the amount of oil that could be extracted over time if cost was not a concern.