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the frack thread
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boisdevie



Joined: 26 Dec 2012
Posts: 296
Location: N Lancashire

PostPosted: Wed May 01, 2019 4:18 pm    Post subject: Reply with quote

kenneal - lagger wrote:
If the government insulated our homes properly we wouldn't need so much gas. Such insulation could reduce the national requirement by 30% at least on the basis that 40% of gas is used in home heating and an 80% saving is possible.


Instead of the government taking money off people and then spending some of it on insulating homes of the same people, couldn't the people themselves use their money to insulate their homes?
PS - I'm a big fan of very small government given that taxation is theft.
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kenneal - lagger
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PostPosted: Wed May 01, 2019 6:46 pm    Post subject: Reply with quote

boisdevie wrote:
kenneal - lagger wrote:
If the government insulated our homes properly we wouldn't need so much gas. Such insulation could reduce the national requirement by 30% at least on the basis that 40% of gas is used in home heating and an 80% saving is possible.


Instead of the government taking money off people and then spending some of it on insulating homes of the same people, couldn't the people themselves use their money to insulate their homes?
PS - I'm a big fan of very small government given that taxation is theft.


They should pay for it by Quantitative Easing. i.e. they should just print the damn stuff like they did to bail out the banks. The situation is just as bad as it was when they bailed their mates out.

The "economics" of the situation just don't stack up for most people because economics is broken and doesn't take into account environmental issues. We have an environmental imperative to act on climate change so either we readjust all economics to make it feasible for everyone to do or the government just prints the money and gets on with sorting the situation out. I don't think that we have the time to sort economics out but the government can conjour up the money at the flick of a mouse switch.
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emordnilap



Joined: 05 Sep 2007
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PostPosted: Wed May 01, 2019 9:17 pm    Post subject: Reply with quote

It's a matter of feeding printed money in at the bottom and taxing it out at the top, boisdevie. In other words, too sensible to ever happen.
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vtsnowedin



Joined: 07 Jan 2011
Posts: 5243
Location: New England ,Chelsea Vermont

PostPosted: Wed May 01, 2019 10:59 pm    Post subject: Reply with quote

boisdevie wrote:

PS - I'm a big fan of very small government given that taxation is theft.

While many a tax dollar is wasted it can not be said that all taxation is theft.
Would you like to live in a community with no public roads, National defense, police protection, or ambulance service to name a few legitimate uses of tax dollars.
The problem is finding elected officials to vote for that will only raise and spend the taxes that are really worthwhile. They are scarcer then hens teeth.
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BritDownUnder



Joined: 21 Sep 2011
Posts: 571
Location: Hunter Valley, NSW, Australia

PostPosted: Thu May 02, 2019 12:33 am    Post subject: Reply with quote

I am surprised in the windy (and occasionally sunny) UK someone has not invented a rooftop mounted wind and/or solar powered heat pump to replace or alleviate gas heating. On a cloudy day in Australia yesterday my water was still solar heated to 42 degC. I am all for the ending of gas power but there are a lot of nasty ruthless people in that industry who are very self interested and can buy a lot of friends.

I was very interested in one of the links posted earlier on this thread on the Drill or Drop website that the Egmanton oil field is still producing oil (about 240 m^3 last year so the Saudis can sleep easy). It has been there all my life, I was born there, and one of my earliest memories as a naughty child was going up to what was must have been an injection well, turning a wheel valve and seeing an oily black watery liquid shooting out the end of a pipe nearly hitting my 5 year old partner in crime.
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raspberry-blower



Joined: 14 Mar 2009
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PostPosted: Fri May 10, 2019 7:41 pm    Post subject: Reply with quote

The Shale Boom is about to go bust

Quote:
As the shale play matures, the field gets crowded, the sweet spots are all drilled, and some of these operational problems begin to mushroom. “Declining well productivity in some plays, despite application of better technology, are a prelude to what will eventually happen in all plays: production will fall as costs rise,” Hughes said. “Assuming shale production can grow forever based on ever-improving technology is a mistake—geology will ultimately dictate the costs and quantity of resources that can be recovered.”

There are already examples of this scenario unfolding. The Eagle Ford and Bakken, for instance, are both “mature plays,” Hughes argues, in which the best acreage has been picked over. Better technology and an intensification of drilling techniques have arrested decline, and even led to a renewed increase in production. But ultimate recovery won’t be any higher; drilling techniques merely allow “the play to be drained with fewer wells,” Hughes said. And in the case of the Eagle Ford, “there appears to be significant deterioration in longer-term well productivity through overcrowding of wells in sweet spots, resulting in well interference and/or drilling in more marginal areas that are outside of sweet-spots within counties.”

In other words, a more aggressive drilling approach just frontloads production, and leads to exhaustion sooner. “Technology improvements appear to have hit the law of diminishing returns in terms of increasing production—they cannot reverse the realities of over-crowded wells and geology,” Hughes said.

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raspberry-blower



Joined: 14 Mar 2009
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PostPosted: Mon Jun 10, 2019 8:37 pm    Post subject: Reply with quote

Early financial reports from Q1 in 2019 demonstrate that fracking companies are still losing money hand over fist. It also appears that investors are finally waking up to the idea that this may never be any major returns on investment.

Nick Cunningham:

A Gusher of Red Ink for US Shale Oil

Quote:
The industry kept humming along over the past few years, riding out multiple downturns due to periodic reinjections of capital from Wall Street. But, investors are beginning to sour on shale drillers. Very little fresh capital has been raised by shale companies, either from new equity or bond issuance, since late last year, according to IEEFA and Sightline.

The industry now finds itself at a cross roads. With capital markets beginning to shun shale drillers, consolidation is likely the direction the industry will take. The best bet for struggling companies now is to find a willing buyer.

But several oil majors have recently said that shale drillers are fooling themselves with their asking prices. “Most of the things we see tend to look overpriced, and we have tried to maintain cool heads,” Royal Dutch Shell’s CFO Jessica Uhl said on Tuesday, according to Argus Media. Exxon’s CEO Darren Woods echoed that, saying last week that there is “not always alignment among buyers and sellers.” ConocoPhillips’ chief executive Ryan Lance said there are “a lot of bid-ask issues in the market today,” adding that an “expectations change” will be needed before more M&A can occur.

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ReserveGrowthRulz



Joined: 19 May 2019
Posts: 210
Location: Colorado

PostPosted: Tue Jun 11, 2019 4:51 am    Post subject: Reply with quote

raspberry-blower wrote:
The Shale Boom is about to go bust

Quote:
As the shale play matures, the field gets crowded, the sweet spots are all drilled, and some of these operational problems begin to mushroom. “Declining well productivity in some plays, despite application of better technology, are a prelude to what will eventually happen in all plays: production will fall as costs rise,” Hughes said. “Assuming shale production can grow forever based on ever-improving technology is a mistake—geology will ultimately dictate the costs and quantity of resources that can be recovered.”

There are already examples of this scenario unfolding. The Eagle Ford and Bakken, for instance, are both “mature plays,” Hughes argues, in which the best acreage has been picked over. Better technology and an intensification of drilling techniques have arrested decline, and even led to a renewed increase in production. But ultimate recovery won’t be any higher; drilling techniques merely allow “the play to be drained with fewer wells,” Hughes said. And in the case of the Eagle Ford, “there appears to be significant deterioration in longer-term well productivity through overcrowding of wells in sweet spots, resulting in well interference and/or drilling in more marginal areas that are outside of sweet-spots within counties.”

In other words, a more aggressive drilling approach just frontloads production, and leads to exhaustion sooner. “Technology improvements appear to have hit the law of diminishing returns in terms of increasing production—they cannot reverse the realities of over-crowded wells and geology,” Hughes said.


Nick's reporting is suspect several reasons, not the least of which is being an industry neophyte and more importantly relying on David "It's the EIA's fault that I haven't been right yet about resource play potential" Hughes. I believe he learned about well interference in his last report, the one before the most current that he now wants to sell. I haven't paid for the most recent, but I've been through all his others. I am familiar with his routine. It will be the EIAs fault that somehow shale production didn't crash and burn the better part of a decade ago before it got started.

The good news for David Hughes is that the EIA has been substantiating some doomer ideas in regards to resource OIL production and has built those ideas into their models that only now is David discussing. Last week the EIA had their industry workshop, and both David and I were there. The EIA has been accounting for well inference since about 2014 or so, and they are also running a peak oil scenario in the early to mid 2020's, but not in natural gas. Of course, their modeling is quite thorough compared to what David does, and their expertise far more substantial.
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ReserveGrowthRulz



Joined: 19 May 2019
Posts: 210
Location: Colorado

PostPosted: Tue Jun 11, 2019 5:03 am    Post subject: Reply with quote

raspberry-blower wrote:
Early financial reports from Q1 in 2019 demonstrate that fracking companies are still losing money hand over fist. It also appears that investors are finally waking up to the idea that this may never be any major returns on investment.

Nick Cunningham:

A Gusher of Red Ink for US Shale Oil


Robert Rapier, with a demonstration that even a peak oiler can figure out how non cash expenses like DD&A work.

Someone please tell me that the Brits at least haven't fallen for "analysis" as written by the likes of Steve St. Angelo and the SRSRocco report?
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raspberry-blower



Joined: 14 Mar 2009
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PostPosted: Mon Jul 29, 2019 11:35 am    Post subject: Reply with quote

What is actually happening in the Shale sector:

Robert Rapier: Permian Basin Oil Production Growth is Falling Fast

Investors have become sick and tired of the "Jam tomorrow" promise yet every year the shale patch turns in "Negative Cash Flow" economic results. A financial loss is a financial loss no matter how you try to dress it up.

The reluctance of investors to keep pouring money in through loans, IPOs etc is one thing.
It is when they start heading for the exits on masse is quite another.
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ReserveGrowthRulz



Joined: 19 May 2019
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Location: Colorado

PostPosted: Mon Jul 29, 2019 3:59 pm    Post subject: Reply with quote

raspberry-blower wrote:
What is actually happening in the Shale sector:

Robert Rapier: Permian Basin Oil Production Growth is Falling Fast


Robert is doing okay, now that he got burnt by listening to the wrong folks.

Permian basin GROWTH has fallen before. Same as the US at large, the Bakken and Eagle Ford. And it isn't even a surprise in a lower price environment.

What doesn't appear to be mentioned, because Robert doesn't do this kind of analysis, is a count of how many drilling locations remain, the cost per unit of commodity to allow the drilling and development, the distribution of those two pieces combined, and the underlying geology which dictates the infill well counts and performance potential in terms of increased per unit commodity cost.

raspberry-blower wrote:

Investors have become sick and tired of the "Jam tomorrow" promise yet every year the shale patch turns in "Negative Cash Flow" economic results. A financial loss is a financial loss no matter how you try to dress it up.


At last weeks national URTeC conference, this was certainly a topic of discussion. Fortunately, hand holding the investors has nothing to do with estimating the potential of the Midland and Delaware basins in general. Eyes on the prize doom-o-philes! Resources and their cost matter in the long run, not today's growth or non-growth. Learn this better and maybe next time the doomer-elite won't screw the pooch with idiot predictions as they did last time.

If memory serves, Robert also recently wrote an article on how the free cash flow half wits (SRSRoccoReport and Steve spring to mind here) really don't understand oil and gas accounting, and couldn't be bothered to learn prior to claiming something completely different from Robert, who did learn.

raspberry-blower wrote:

The reluctance of investors to keep pouring money in through loans, IPOs etc is one thing.
It is when they start heading for the exits on masse is quite another.


The sooner it happens, the better. Because then we can talk about the really cool part of oil and gas development, the resulting economics!
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raspberry-blower



Joined: 14 Mar 2009
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PostPosted: Wed Jul 31, 2019 9:24 am    Post subject: Reply with quote

ReserveGrowthRulz wrote:


The sooner it happens, the better. Because then we can talk about the really cool part of oil and gas development, the resulting economics!


Oh what, you mean bankruptcy followed by a bailout? Twisted Evil Twisted Evil Twisted Evil
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ReserveGrowthRulz



Joined: 19 May 2019
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Location: Colorado

PostPosted: Wed Jul 31, 2019 2:23 pm    Post subject: Reply with quote

raspberry-blower wrote:
ReserveGrowthRulz wrote:


The sooner it happens, the better. Because then we can talk about the really cool part of oil and gas development, the resulting economics!


Oh what, you mean bankruptcy followed by a bailout? Twisted Evil Twisted Evil Twisted Evil


No. As supply diminishes with respect to demand, prices begin their upward trajectory. At some point along that path the risk adjusted value calculation changes and presto...Saudi America or Saudi Natural Gas or whatever kicks back on with more drilling. Again. This pattern, there for folks to see at both the micro (country) or macro (global) levels has been there for a century now, it won't go away until resource scarcity comes into play.

Hence the need for scientifically and even more importantly, geologically based resource estimates. The entire peak oil side got it wrong when they concentrated on just existing production and reserves of today. The information they needed to know about (to not look as silly as they have all those times in the past) is the resources of today, that will be the reserves and production of tomorrow. Reserve growth itself being a large part of that, but obviously there are other components of this puzzle as well. The USGS yet to find, the "gee I never knew they were there..duh" resource plays, quantified globally 5 years ago or so (but still lacking in some respects), the truly large hydrocarbon resources handicapped by economics or geopolitics.
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kenneal - lagger
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PostPosted: Wed Jul 31, 2019 7:57 pm    Post subject: Reply with quote

To stop oil production we will either have to find ways of reducing demand in concert with reducing supply so that prices remain low and shale oil remains a loser or we have to make it illegal to explore for more. Until the banking system, which drives economic growth, changes or loses its political power, we have no chance of stopping oil production for the benefit of the environment politically.
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Last edited by kenneal - lagger on Wed Jul 31, 2019 8:34 pm; edited 1 time in total
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ReserveGrowthRulz



Joined: 19 May 2019
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PostPosted: Wed Jul 31, 2019 8:20 pm    Post subject: Reply with quote

kenneal - lagger wrote:
To stop oil production we will either have to find ways of reducing demand in concert with reducing supply so that prices remain low and shale oil remains a loser or we have to make it illegal to explore for more.


Currently, peak demand scenarios are the most commonly accepted future pathway among the think tanks and private analysis/market watching organizations. This scenario naturally requires a lessening of supply, with no need for making anything illegal. Price will bounce around in relation to how well that balance is maintained, but because US resource play development is the marginal barrel, it will die out for completely expected and predictable economic reasons. Gotta love how economics works! No need for magic miracle bell shaped curves or net energy or even understanding a smattering of geology! Just good ol' fashioned supply and demand!

kenneal-lagger wrote:

Until the banking system, which drives economic growth, changes or loses its political power, we have no chance of stopping oil production for the benefit of the environment politically.


I agree with you about no one stopping oil production for the benefit of the environment. It would be easily accomplished if enough people cared, but they obviously don't. Humans gotta do human!
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