Fracking: The End Is Nigh

[kenneal - lagger]

According to this article anyway.

Apparently even the company bosses are trying to get their money and themselves out without rocking the boat too much and collapsing the share prices. The banks are on the same game as well. Hopefully it won't end in a taxpayer bale out and the reverberations running around the world, 2008 wise. It will probably hike the oil price up as the US starts to buy in oil to replace lost domestic production.

[PS_RalphW]

Fracking has always used the British Leyland model of economics, "whatever I lose on individual Wells I will gain by drilling more".

The companies sold shares based on continual growth of drilling to befuddle naive investors into thinking they were on the brink of massive payback.

This will result in many smaller companies defaulting on their debts and many investors losing their money. However the Wells will be sold to the big oil companies and run as stripper Wells until they become uneconomic. Fracked Wells produce the vast majority of their oil in the first 2 or 3 years, which means if they come on line when prices are high, they make money, but if prices are lower they lose it.

The banks and investors are finally realising this, so much less money is being put into fracking, and drilling will never be fast enough to overcome depletion and regain the previous record high levels of total Fracked production. However, as demand recovers after the pandemic, and Opec's reserve production is all brought back on line, prices will rise rapidly and the level of fracking will increase too. Fracked oil is expensive oil, but it is still oil.

This means that USA is once again past the peak of production, but now electric cars are going mainstream, so global peak oil is not going to be the massive economic hit we thought it would be, at least not in rich industrial countries that afford the transition to EVs. As always, it will be poor countries that take the big hits. In terms of global limits to growth it will be climate change, or a secondary effect of overpopulation, a pandemic, that finally tips human civilisation over the edge.

[Mark]

Cuadrilla ordered to plug and abandon shale gas fracking wells in Lancashire:
https://news.sky.com/story/climate-chan ... e-12538040

Some good news....

[johnny]

Fracking has always used the British Leyland model of economics, "whatever I lose on individual Wells I will gain by drilling more".

The companies sold shares based on continual growth of drilling to befuddle naive investors into thinking they were on the brink of massive payback.

So....between the late 1940's when hydraulic fracturing started and about 1957 when Hubbert began talking about the first 100,000 frac jobs done by the end of 1955......investors just kept going back for more over the next 60 years because they are stupid and only now figured it out?

[kenneal - lagger]

Hydraulic fracturing used on conventional wells, "late 1940s to 1957", to increase flow rates is a different beast to the fracturing of shale beds to get any oil or gas out at all. The two should not be compared from what I have read.

[johnny]

Hydraulic fracturing used on conventional wells, "late 1940s to 1957", to increase flow rates is a different beast to the fracturing of shale beds to get any oil or gas out at all. The two should not be compared from what I have read.

Conventitonal wells are drilled from the surface to a sub-surface location, mostly with rotary drilling, cased wiith steel pipe, and completed using various means. Those kinds of wells have been going on like...most of last century probably. Are you implying that even when hydraulic fracturing delivered inferior results, investors were so ignorant back in the 1950's that they just kept doing it for another 60+ years anyway, and then the results just kept getting...better? And modern better results convinced them they were being scammed?

Seems like maybe folks were being scammed in 2014, but day-yam....them oil field folks haven't been getting worse at this.



The article references how much better the performance has been increasing just from improvements in completion design, double digit increases just across the last 6 years or so. Getting better is a scam?

https://www.eia.gov/naturalgas/weekly/a ... 022/01_27/

[kenneal - lagger]

The graphs also show the rapid drop off in production in fracked shale beds in less than a year and that they haven't been able to do anything about that. Those graphs show why wells in shale beds have to be continuously refracked and eventually redrilled to keep production going, why fracked oil is so much more expensive in both monetary and energy terms and why it can never replace conventional oil in any nation's economy.

Your comments also show that you haven't appreciated that there is a difference between fracking in conventional oil fields and fracking in shale plays.

[emordnilap]

johnny = RGR

[kenneal - lagger]

That's what I was wondering.

[kenneal - lagger]

The production rate might start higher but the production drop off is a lot faster.

[johnny]

The graphs also show the rapid drop off in production in fracked shale beds in less than a year and that they haven't been able to do anything about that.

The graphs show well decline based on the physics of removal of a volume from a pressured container (the rock it is contained within), dropping the pressure, less pressure meaning less volume produced, and the same effect that caused Drake's well to make less works in light tight oil or shale gas wells. There is no escape from the physics of this kind of volume decline.

It was going on before you and I were born, but is suddenly important when it happens in one type of rock rather than another?

Those graphs show why wells in shale beds have to be continuously refracked and eventually redrilled to keep production going, why fracked oil is so much more expensive in both monetary and energy terms and why it can never replace conventional oil in any nation's economy.

So because additional money needs to be spent to keep wells producing....just like they do in Prudhoe Bay with workovers and coiled tubing units and recompletions in stacked sand beds, say for example the Lisburne formation, when they do this in shales for the same reason...it is a bad thing? As far as what it can replace or not, the US has demonstrated that it is capable of making a washed up, peaked 50 years ago no hope left for new production country into the world's largest oil and gas producer, and recently the world's largest LNG exported.

What is it you said about "can never replace" when...apparently...it already has?

Your comments also show that you haven't appreciated that there is a difference between fracking in conventional oil fields and fracking in shale plays.

Well, I might not appreciate it, but the US becoming he world's largest exporter of LNG because you are incorrect would seem valuable to some folks. Doing what the rest of the world seems to consider impossible for our friends and allies. What else is there to say? How about, yes Europe, we would love to help out.

[kenneal - lagger]

Show me the production graphs of a newly opened conventional oil well and I bet that they don't show a drop off anywhere near the ones for those fracked wells show.

The US might have had a new peak of production but you have paid through the nose for it and are continuing to do so. The financial fallout will hit you one day soon.

And, no, we don't need your help in gas supply thank you. We just need to insulate our houses properly, a lesson our government will learn pretty soon.

[johnny]

Show me the production graphs of a newly opened conventional oil well and I bet that they don't show a drop off anywhere near the ones for those fracked wells show.

I completely agree with you that the decline parameters of any two wells are different in the following conditions:

1 well in a continuous formation compared to another well in the same continuous formation.
1 well in a continuous formation compared to a well in a discretely reservoired formation.
1 well in a discretely reservoired formation to a well in the same discretely reservoired formation.
1 well in a continuous formation compared to another well in a different continuous formation.
1 well in a discretely reservoired formation compared to a well in a different discretely reservoired formation.

And so on and so forth. However, it seems reasonable to just provide information apropos to your point and let you decide for yourself the value of the difference in these steeper declines.

In the previously provided Marcellus graphs, there are 4 different declines based on drilling the same formation, the usual conventional wells using rigs to drill holes in the ground, lined with steel pipe and cement, by the same companies, using the same basic completion techniques. Even steven as it were.

The approximate decline % using the charts from first month to last for each of the 4 groups are as follows:

2014: 37% drop
2016: 39% drop
2018: 44% drop
2020: 42% drop

Looks like 2014 is a winner-winner chicken dinner in the best well via lowest decline department.

Now multiply all the volumes by month for each years group volumes on that chart by the same price, and add up those sums, and tell me again...well...to be honest...your affifnity for making the least amount of money? Is it your impression that American E&Ps (these being the same folks who turned these wells into the US being the world's largest natural gas producer and LNG exporter) should have just kept drilling those shitty wells compared to the ones that they went out and made bigger, more profitable, and.....declined faster?

The US might have had a new peak of production but you have paid through the nose for it and are continuing to do so. The financial fallout will hit you one day soon.

There is no MIGHT about the FACT of the US having peaked again half a century after Hubbert called it. The COMPANIES paid through the nose to develop expensive resources....not the US. Consumers in the US and around the world benefitted from free market competition keeping prices low. So not only did US consumers love it and benefit from it, so too did European consumers. You are welcome. And if the companies go bankrupt making bad financial decisions...like drilling shitty low declining wells rather than big, faster declining ones, I recommend not investing in them in the first place. I certainly don't.

So yes, consumers will pay higher prices...including Europe...if US companies decide to pay down debt and hoard cash rather than burying the planet in oil and natural gas. Again. Or some more.

And, no, we don't need your help in gas supply thank you. We just need to insulate our houses properly, a lesson our government will learn pretty soon.

Well, then insulate faster because the data says you are an outstanding growth market for our fast declining but DAMN big gas wells.