The Whole Perspective Thing

The New York Times published an amusing article about a “vast” shale oil field in California. I think these are the money quotes:

Comprising two-thirds of the United States’s total estimated shale oil reserves and covering 1,750 square miles from Southern to Central California, the Monterey Shale could turn California into the nation’s top oil-producing state and yield the kind of riches that far smaller shale oil deposits have showered on North Dakota and Texas.

For decades, oilmen have been unable to extricate the Monterey Shale’s crude because of its complex geological formation, which makes extraction quite expensive. But as the oil industry’s technological advances succeed in unlocking oil from increasingly difficult locations, there is heady talk that California could be in store for a new oil boom.

Though production has been declining for years, California remains the country’s fourth-largest oil-producing state, after Texas, North Dakota and Alaska. So far, little of the crude is derived from the Monterey Shale, whose untapped deposits are estimated at 15.4 billion barrels, or more than four times the reserves of the Bakken Shale in North Dakota, according to the United States Energy Information Administration.

What the article fails to note is that calling this field “vast” is utterly laughable. Ghawar is (was) vast.

Quote #1: This field is two thirds of our total estimated shale oil reserves and it is only 15.4 billion barrels (see quote #3). We American use 20 million barrels per day. Do the math. That’s about 750 days of oil if you could pump 100 percent of it.

Quote #2: That oil companies are looking for new technologies to make expensive drilling worth the effort means that all the easy-to-get stuff is gone or already in the process of being pumped/depleted.

Quote#3: That uptick in U.S. oil production you’ve heard about? Well, here’s what it really looks like. We can’t get back to the levels of production we saw around 1970 because we just don’t have enough oil that’s easy or cost-effective enough to “recover.” Energy independence based on oil — drill, baby, drill — is a dream that can’t come true.

The only solution I can think of is burn less oil. I wonder how we can do that ;-)

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Comments 9

  1. Steve A wrote:

    For comparison, Wikipedia notes the Barnett Shale as the largest gas field with up to 30×10**12 cu ft and that GOM oil production from offshore drilling alone will be 2 million barrels per day by 2020. They reneged on our Barnett lease signing bonus because gas prices have collapsed.

    Posted 05 Feb 2013 at 12:11 pm
  2. Ian Brett Cooper wrote:

    Yeah, it’s pretty sad what the oil industry calls ‘vast’ these days. And most of the current plays are shale oil – oil that they don’t bother with when oil is under $80/bbl. These are essentially depleted reservoirs that fracking can get at, as long as the oil price is high.

    Wait a few years, and they’ll start going on about vast oil shale reserves (actually, they already are) – this is kerogen that is so expensive to turn into oil that it will probably stay in the ground forever.

    Posted 05 Feb 2013 at 2:00 pm
  3. Mighk Wilson wrote:

    They keep trying to put a happy face on it. US annual oil production dropped from 3.5 billion barrels in 1970 to 1.8 BB in 2009, and has come back up to 2 BB. In the mean time, our annual consumption went from 5.3 BB to 7.7 BB. But hey, we’ll be self-sufficient in no time!

    Posted 05 Feb 2013 at 2:09 pm
  4. Ian Brett Cooper wrote:

    And all the increase is from shale oil, which depletes at a very high rate. They basically have to deploy exponentially more rigs to maintain an increase in production. So far, they’ve managed to do that, but it’s only a matter of time (measured in a few years maximum) before that will no longer be possible.

    But they keep selling the lie that shale oil will make the US energy independent. They’ll say anything to keep the investors believing that shale oil is the next big thing. It’s a game of musical chairs, and the music is about to stop. The poor saps that are investing in rigs will be left holding the bag.

    Posted 05 Feb 2013 at 2:58 pm
  5. Khal Spencer wrote:

    Yep. Peak Oil has not been disproven, and if you look at the EIA chart that Andy links to, it doesn’t look much different than the graphs that M. King Hubbert published in the 1950’s. Supply vs. demand price pressure will undoubtedly result in oil being extracted if the price is high enough. We are wringing the towel dry. I made much the same argument a few years back regarding North Slope oil fields vs. US consumption rates and global demand. Those vast fields look vast until you do the math on demand.

    Sadly, oil prices alone don’t tell the whole story. Incidental costs such as disposal of fracking fluids and potentially, groundwater contamination forcing people to alternative sources of clean water are passed along to the public, but often, not at the pump.

    Posted 05 Feb 2013 at 4:10 pm
  6. Steve A wrote:

    Reading Grist, the total reserve may be more like upwards of 400 billion barrels. That IS a lot.

    Posted 06 Feb 2013 at 9:17 am
  7. Khal Spencer wrote:

    Seems like a lot except its fifty years at the current use rate. That’s a lot of CO2 in the air as we draw down supplies, pay more for extraction, and commit to a lot of collateral damage.

    Then again, I rode the motorcycle today. Who am I to complain?

    Posted 06 Feb 2013 at 9:37 am
  8. Ian Brett Cooper wrote:

    If there’s 400 billion barrels of oil in the ground, just waiting for someone to drill it, why are we fracking to get at the last dregs from exhausted fields, and why are we searching the Arctic and Africa for new sources of sweet crude?

    The problem is, total estimated reserves do not imply that such reserves are at all possible to produce. The Earth contains enormous amounts of oil and it always will. The problem is getting to it and getting it out without spending more money and energy than it will yield. We can only get at a very small proportion of the estimated reserves, and only a small proportion of that will be crude oil of a quality that makes it profitable to produce.

    When the Age of Petroleum is over, there will still be trillions of barrels of oil in the ground. There it will stay, because it will never be possible to extract it economically.

    There is more gold and other precious metals in the oceans of the world than has been mined in all of history, and there it will remain, for the same reason.

    Reserves are not supply. Supply of sweet crude oil has been dropping since 2005. Supply of all liquid fuels is set to follow suit within this decade. After that, it doesn’t matter how much oil is in the ground, because the world’s economies will be too constrained to ever get the remaining oil out.

    Posted 06 Feb 2013 at 9:53 am
  9. Khal Spencer wrote:

    I’m not sure I buy that 400 billion number unless I see the actual studies, or peer reviews of them. The NY Times says 15 billion. Somewhere in between is probably a number that is both plausible and recoverable with present and future technology.

    You are of course correct, Ian, that the easy stuff has already been tapped out. The harder or more hazardous sources, such as hydrocarbon locked in shale beds or oil in deep water resevoirs, requires either more expensive technology, drilling at higher risk of a damaging accident (Deepwater Horizon, aquifer contamination, surface destruction such as in Alberta, etc) or both.

    At some point the rate of return should make some other forms of energy much less expensive in terms of price plus impact. I’m just worried that we will rape, pillage, and burn long after we need to do so. Human nature doesn’t tend to see past the life the individual human.

    Posted 06 Feb 2013 at 11:45 am