[TDoS]

The company argues a rapid decline in production, especially from unconventional sources like shale, could lead to severe energy shortages and price hikes.

As predicted, the low prices are making the fracked oil uneconomic, so the oil companies are trying to jawbone up more investment.

LTO exploded in the US starting in 2010 or so... at $75/bbl wti through $100/bbl in 2014. Then prices collapsed. And then the 2nd wave of LTO kicked off in the Permian in particular post 2015 and that was all an explosion at <$70/bbl.

So...as $50/bbl doesn't make LTO uneconomic, and some of the only available research on the topic sure seems to indicate that while with more price there is more oil, there is no sharp break in activity at one price or another, matter of fact it is a typical economic scale...less price certainly should generate less supply, as higher price generates more.

There is no on/off switch, it is a graduated scale of more, or less, economic.

At some point in the not too distant future, Rock will meet Hard Place.  Stay Tuned.

Been tuned in since alt.newsgroups and ROE...."not too distant" has been going on for decades now...we can all continue to hope and pray that "not too distant" isn't another 20 years or all us old farts might miss the excitement!

[TDoS]

Our troll will likely say Exxon does not know anything about oil. 

Why would anyone who knows Ken Hood and paid close attentin to everything he wrote say that?

He is a geo genius. We did a Hedberg conference in Vail 2005 and had similar methods on how to figure out shales, although at the time I was more interested in geostats. He asked for a team of mine to review his newest geomethods he was teaching his geologists on shale resources a couple years later, in a Canadian CSPG meeting he already was finishing up this paper and mentioned it, it was sheer brilliance and a decade ahead ahead of the method the EIA created AFTER collecting a bunch of data and doing it the eays way.

Please...he as the head of some of their best geoscience work knows what he is doing.

As for the business types? Who knows.

How many times has he ignored my demands that he acknowledge that light sweet crude is not the same product as fracked oil.

How many times have I pointed out that light sweet crude comes from wells that are fracked, and those that aren't? Any geoscience lab that does this work can confirm it in minutes.

Remember, personal experience is really valuable here, you said so yourself. You tell me how many oil samples you've tested over the years, fracked wells, other kinds of completed wells, in-situ from coring runs, provided by refineries or pipeline drips, and if I haven't done or supervised 5 orders of magnitude more, I promise not to use my decades of personal experience, lab experience, production experience, drilling experience or industry knowledge against your lack of any ever again.

[RE]

Looks like the traders are siding with the EIA and betting against the House of Saud predicting an Oil Glut and low. low prices for gas every day at your neighborhood convenience store.  Perhaps they'll escalate  the wars to boost prices.

https://oilprice.com/Latest-Energy-News/World-News/Oil-Net-Short-For-First-Time-in-History.html

Oil Net Short For First Time in History

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[TDoS]

Looks like the traders are siding with the EIA and betting against the House of Saud predicting an Oil Glut and low. low prices for gas every day at your neighborhood convenience store.  Perhaps they'll escalate  the wars to boost prices.

https://oilprice.com/Latest-Energy-News/World-News/Oil-Net-Short-For-First-Time-in-History.html

Oil Net Short For First Time in History

RE

So finally peak oil 6 years ago FINALLY has generated some good, if counter-intuitive results? Doomers should be cheering on the burning of fossil fuels at yet higher volumes and lower prices because it will accelerate the climate change which might finally cause doomer wet dreams! Climate wet dreams though, as opposed to political, oil or societal based dieoff though, climate change not being particularly sexy in the  sometime between now and the end of the current century.

[RE]

So finally peak oil 6 years ago FINALLY has generated some good

At least you acknowledge we hit Peak Oil 6 years ago. 

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[TDoS]

At least you acknowledge we hit Peak Oil 6 years ago. 
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Absolutely. There is no disputing that 2018 is the most recent global peak oil. #6 of this century, claimed or occurred. Only the rest of the price/demand relationship can dictate if it holds though.

Currently a lack of increasing demand seems to have brought this particular boogey man to heel for 6 years. Quite a surprise to some of those claimed industry experts if they are still alive I imagine.

The scenario I foresee is that market-based panic will, within a few days, drive prices up skyward. And as supplies can no longer slake daily world demand of over 80 million barrels a day, the market will become paralyzed at prices too high for the wheels of commerce and even daily living in "advanced" societies. There may be an event that appears to trigger this final energy crash, but the overall cause will be the huge consumption on a finite planet.

EIA link:
https://www.eia.gov/international/data/world/petroleum-and-other-liquids/annual-petroleum-and-other-liquids-production?pd=5&p=0000000000000000000000000000000000vg&u=0&f=A&v=mapbubble&a=-&i=none&vo=value&&t=C&g=00000000000000000000000000000000000000000000000001&l=249-ruvvvvvfvtvnvv1vrvvvvfvvvvvvfvvvou20evvvvvvvvvvnvvvs0008&s=94694400000&e=1704067200000

An interesting aside is that, some 19 years later, the world is still making about  81 mmbbl/d (according to the 2023 annual number from the EIA). So if you wanted to discuss a peak, the one in 2018 (about 82.9 mmbbl/d) in the context of the 2005 vintage hysteria, it seems like you could call it all 20 years of plateau, +/-, if someone wanted to.

In either case, its a good thing that the world hasn't been needing much oil because the environment will only be a better place as we continue to grow population, and obvious now need much less oil per person!

[TDoS]

These guys make for an interesting conversation.

2 hours?  Can you give us a brief synopsis of this marathon talk fest?  Maybe give us the time on a coupe of highlights?  Last time I listened to Simon I was not impressed.

RE

Simon knows his stuff. Not on the petroleum geology side, as demonstrated by prior work related to oil in his Geologic Survey of Finland writeup. Screwed that pooch pretty badly on the reference side, but he might not know any better, as his work was mostly internet based, and the internet tends to provide the information you want, as opposed to the full spectrum answer you think you've gotten. Makes sense though, Finland doesn't have dick for oil, it isn't like he interviewed the USGS folks who do inside and out. But he has interesting credentials and experience on the hard rock side.

But the one you REALLY missed was IVER!!! Mr. Lofling if you want to be formal. School art teacher, built an electric car on his own during the pre-2005 peaker days, was around peakoil.com (THE place to be for awhile) and has been a consistent declarer of every peak oil that came down the pike for decades now. An artist by trade, not a technical thought in his head so he was naturally behind the curve, but a born sucker for the idea for decades since his Peace Corp work, if not longer.

We have some friends in common, in that he runs his art shop on Swan island I believe, and I know homeowners there who occasionally hang with Iver. His wife passed recently, he still declares peak oil every time some new internet person tries to fire up the idea, and he ran for a seat in the Maine state legislature last election cycle. Lost.

But an interesting guy, and yet another of us geriatrics.

[RE]

But an interesting guy, and yet another of us geriatrics.

Demographic result of the collapsing birth rate in industrial civilization.

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[TDoS]

But an interesting guy, and yet another of us geriatrics.

Demographic result of the collapsing birth rate in industrial civilization.

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Iver doesn't care about that much. I tihnk he is another of those childless types lacking the experience of raising, caring for, dealing with and turning crying little sleep destroyers into college educated productive adults.

He was just another hanger on of peak oil with a better story than most. Got it wrong, as usual, and then moved on. Bought an ICE car later after his wife passed. Still has the art shop on the island I think.

[RE]

Good newz for a change.  Demand Destruction at work!

https://marcellusdrilling.com/2024/11/ceo-of-pa-fracking-company-says-frackers-idle-hitting-rock-bottom/

CEO of PA Fracking Company Says Frackers Idle, Hitting Rock Bottom

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[TDoS]

Good newz for a change.  Demand Destruction at work!

https://marcellusdrilling.com/2024/11/ceo-of-pa-fracking-company-says-frackers-idle-hitting-rock-bottom/

CEO of PA Fracking Company Says Frackers Idle, Hitting Rock Bottom

RE

I recall you once claiming that for fun you and some of those smart New Yorkers chosen by the Illuminati or the Ivy League or somebody once sat around and played out economic scenarios proving like illogical outcomes for fun?

This one is easy. How much fracking do you think SHOULD be taking place when the net back commodity price to the producer is <$0/mcf?

[RE]

This one is easy. How much fracking do you think SHOULD be taking place when the net back commodity price to the producer is <$0/mcf?

That's the reason it's Good Newz.  As I said when the IEA projections came out if the oil price on the futures market dropped further (it was $75 at the time) the frackers would have to shut down production because below $70 there's little orofit in it.  Price currently is $71.80, it was briefly below $70 today and a few days ago it went below $69.

The FSoA has become the world's biggest producer as a result of the fracking boom.  But once the fracking isn't profitable, the export will dry up.  Cheap oil producers can still sell, namely the Saudis, Iranians and Ruskies.

Even at $70, many countries can't afford the oil and they are dropping out of the market, on their way back to 17th Century living.  Cuba's well on the way, and I'll bet Greece is having trouble keeping the lights on too.  As these countries lose access to the credit markets, they lose access to the money to buy the oil.  Unless the IMF helicopters in new loans, they're fucked.  The Cubans are sanctioned, so they're fucked.  Greece maybe gets another round of generosity from the IMF.  The Chinese have their own economic problems so their oil demand is down too.

All in all, the economics don't look too good for the frackers.  This would have been fun to screw with in the Blackboard Contests in the basement of Havermeyer Hall while smoking hash with the other elves & stoners from the physics and math departments.  I think that's what you were referring to.

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[TDoS]

This one is easy. How much fracking do you think SHOULD be taking place when the net back commodity price to the producer is <$0/mcf?

That's the reason it's Good Newz.  As I said when the IEA projections came out if the oil price on the futures market dropped further (it was $75 at the time) the frackers would have to shut down production because below $70 there's little orofit in it.

The "fracker" in the article is a service company. E&Ps make the decision to drill, complete, and produce oil and gas. The fracker makes his money off providing a service, the E&P decides if it wants to drill any more wells because of a given price.

And obviously all plays have higher and lower quality geology, so even at $70/bbl, there is money to be made. Just in a more limited geographic area.

Price is then linked directly to the estimated amount of additional oil available across a given area. More price, more oil, less price, less oil, and service companies living or dying off of the activity at any given momeent along the way.

Price currently is $71.80, it was briefly below $70 today and a few days ago it went below $69.

So on the chart, looks like there is some 3 billion barrels available at $68/bbl in the Eagle Ford. All US shale plays obviously have charts like this, they are hard to find though. They answer too many questions that folks would rather speculate on.

All in all, the economics don't look too good for the frackers.
RE

Service companies certainly lay people off far faster than those who own and sell the oil do. Of course, they also hire far quicker when the price increases.

[RE]

Service companies certainly lay people off far faster than those who own and sell the oil do. Of course, they also hire far quicker when the price increases.

Sure.  The issue is how long does the low price persist?

If it's short term, say a couple of months, the worker goes on UE and takes a vacation in Vegas until the price rebounds and his old boss calls him up and says "Hey Joe, we need you to leave the hookers and bring your 6-pack here to Eagle Ford to destroy a little more of the environment for your old salary of $100/hr.", or whatever the going rate is for expert Frackers.

If the EIA projections are right though of a decade long Glut and persistently low prices. well Joe's UE runs out after 6 months and he's blown all his savings at the blackjack table and on cheap hookers, so he's either found some other type of work that pays decently or he's flipping burgers at Mickey Ds living in his retired parents basement mooching off their social security, or he's homeless living on skid row in LA in a cardboard box with a 6 pack of used needles next to his sleeping bag.

Far as how much oil is available at what price, this impacts the finance drones who dish out a pile of money so a given service company will start up again to offer J6P Fracker his old job back.  If the prediction is for high prices with plenty of oil available at said prices, the drone sees big profits and $$$ signs flash before his eyes and happily dishes out the money.  If on the other hand the prediction is for low prices with only 3 billion measely barrels available to frack up at a profit, he's not so willing to fork over the money for Joe's salary and leases on equipment etc etc etc.

Thus you get guys like this service company CEO moaning about the price and trying to figure out how he's going to keep his company going ad pay the mortgage on his $1M McMansion and the Tuition for his kids private school.  I feel really bad for him. lol.

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[TDoS]

Service companies certainly lay people off far faster than those who own and sell the oil do. Of course, they also hire far quicker when the price increases.

Sure.  The issue is how long does the low price persist?

Always the question that professional economists will pontificate on endlessly. The good news being that if the EIA knows how much oil is available for a given price from a resource perspective, they know all the others in the US, and possibly the world (based on a paper they released some 7 or so years ago).

So then all their economists pontificate like all the other economists, the only difference being they seem to have a better geologically based foundation to match with it.

If the EIA projections are right though of a decade long Glut and persistently low prices. well Joe's UE runs out after 6 months and he's blown all his savings at the blackjack table and on cheap hookers, so he's either found some other type of work that pays decently or he's flipping burgers at Mickey Ds living in his retired parents basement mooching off their social security, or he's homeless living on skid row in LA in a cardboard box with a 6 pack of used needles next to his sleeping bag.

I was laid off for a year during low prices. I didn't do any of the things you have speculated on. And then a call came in one day and it was just back to the races. Only layoff in my entire career. Many of those I worked with when we were called back had similar circumstances. The game is known, and it doesn't involve the behavior of gamblers and addicts. 

Service company folks already know what the future holds for them with lower prices. Because it happens all the time. Covid for example. Happens to drill rig crews same as completion crews, dozer operators, landmen, only when it gets really bad do the owners of the oil themselves start to cut jobs. The number of people, including myself, who left the field for an office job paying 50% less, is innumerable.

When the opportunity presents itself, you make a choice. Leaving the field was the smartest thing I ever did, my paycut was 65%. But it opened up entirely new career paths.

Far as how much oil is available at what price, this impacts the finance drones who dish out a pile of money so a given service company will start up again to offer J6P Fracker his old job back.

Halliburton doesn't "start up again". It never stopped. It just shrunk. Schlumberger sold all its assets to Liberty. Smart cookie, the guy who runs that one, I've had meetings with him in his local office. And Liberty will be doing the same thing. The only question is how fast and thoroughly a company battens down the hatches. Work doesn't STOP....there is just less of it. Hence the layoffs, and occasionally they'll sell off equipment that is multi-use/ Dozers, trucks, cranes, etc etc.  They can always buy more when activity fires up.

If the prediction is for high prices with plenty of oil available at said prices, the drone sees big profits and $$$ signs flash before his eyes and happily dishes out the money.  If on the other hand the prediction is for low prices with only 3 billion measely barrels available to frack up at a profit, he's not so willing to fork over the money for Joe's salary and leases on equipment etc etc etc.

The industry doesn't function on predicted prices from others, they are quite capable of doing their own crystal ball reading. And then they prepare for it. They also use some of those quite sharp tools of stochastic modeling to decide when and how much to cut/sale/buy/hedge  as they have been taught by certain industry experts.  .

Thus you get guys like this service company CEO moaning about the price and trying to figure out how he's going to keep his company going ad pay the mortgage on his $1M McMansion and the Tuition for his kids private school.  I feel really bad for him. lol.
RE

Perhaps I need to contact him to help him through tough times, as it sounds as though he really hasn't reached the level of major operator yet.