ND's concentrated oil production
Thanks for your post, Firn.
We've seen posts all week heralding a return to cheaper oil, mocking peak oil concerns, etc. But many people seem unaware of the fact that conventional oil has peaked and that the increased production that we've enjoyed for the last 8 years has come almost entirely from two North American sources: US tight oil and Canadian bitumen.
Both sources are very expensive, as your graph illustrates, and will be scaled back if they face sustained unprofitable prices.
Yesterday Ron Patterson posted an examination of ND oil production by county. The degree to which ND's production depends on the sweet spots in two counties is quite remarkable: McKenzie and Mountrail produce about 60% (around 666,000 bpd) of ND's oil:
http://peakoilbarrel.com/bakken-oil-production-county/
Meanwhile, EIA continues to forecast a peak in US tight oil (and therefore US overall production) within the next few years.
This thread has been running for over 5 years, during which time we've seen several ups and downs re. oil & gas. Five years from now I expect that the prevailing view will be that concerns over long-term global oil supply (and climate change, the flip side of the energy coin) were well-founded.
Hughes' report re. US oil & gas supply
David Hughes is a veteran geoscientist, now retired from the Geological Survey of Canada. He is also a meticulous researcher who carefully sources the data upon which his conclusions are made.
This morning his latest analysis of US shale/tight oil and shale gas supply was released. "Drlling Deeper" is a massive document (315 pgs, 25 MB). Here is the Abstract (my emphasis in italics):
Quote:
Drilling Deeper reviews the twelve shale plays that account for 82% of the tight oil production and 88% of the shale gas production in the U.S. Department of Energy’s Energy Information Administration (EIA) reference case forecasts through 2040. It utilizes all available production data for the plays analyzed, and assesses historical production, well- and field-decline rates, available drilling locations, and well-quality trends for each play, as well as counties within plays. Projections of future production rates are then made based on forecast drilling rates (and, by implication, capital expenditures). Tight oil (shale oil) and shale gas production is found to be unsustainable in the medium- and longer-term at the rates forecast by the EIA, which are extremely optimistic.
This report finds that tight oil production from major plays will peak before 2020. Barring major new discoveries on the scale of the Bakken or Eagle Ford, production will be far below the EIA’s forecast by 2040. Tight oil production from the two top plays, the Bakken and Eagle Ford, will underperform the EIA’s reference case oil recovery by 28% from 2013 to 2040, and more of this production will be front-loaded than the EIA estimates. By 2040, production rates from the Bakken and Eagle Ford will be less than a tenth of that projected by the EIA. Tight oil production forecast by the EIA from plays other than the Bakken and Eagle Ford is in most cases highly optimistic and unlikely to be realized at the medium- and long-term rates projected.
Shale gas production from the top seven plays will also likely peak before 2020. Barring major new discoveries on the scale of the Marcellus, production will be far below the EIA’s forecast by 2040. Shale gas production from the top seven plays will underperform the EIA’s reference case forecast by 39% from 2014 to 2040, and more of this production will be front-loaded than the EIA estimates. By 2040, production rates from these plays will be about one-third that of the EIA forecast. Production from shale gas plays other than the top seven will need to be four times that estimated by the EIA in order to meet its reference case forecast.
Over the short term, U.S. production of both shale gas and tight oil is projected to be robust—but a thorough review of production data from the major plays indicates that this will not be sustainable in the long term.
These findings have clear implications for medium and long term supply, and hence current domestic and foreign policy discussions, which generally assume decades of U.S. oil and gas abundance.