Thread: US Dependance on Foreign oil

Great article from today's NY Times........You know that this will become a political issue.

http://www.nytimes.com/2012/08/17/bu...n.html?_r=1&hp

Very interesting article. Crazy how Iran's shenanigans effect how we deal with the Saudis. This is definitely going to be a political issue.

A bit of my own experience about our domestic production: I work with the BLM on a regular basis, acquiring leases on federal lands. While the people I deal with there have been awesome, the red tape and bureaucracy higher up the chain is slower than frozen molasses. Despite what I've heard the President say about how we're opening up more BLM lands for drilling, I haven't seen ANY change.

On private lands, we do the research to find all proper mineral owners, we work out an agreement with them, shake hands, bam. Lease is signed, and we can move forward on getting permits and stuff. State governments still slow us down there, but I fully appreciate the need for permitting and regulation, and they're not too bad.

Federal lands I'm dealing with RIGHT NOW, however, require me to submit an "Expression of Interest," which they proceed to do a bunch of environmental studies, research, more paperwork, etc., etc., which gives me a CHANCE of having it go up for auction October of 20freaking13! And THEN if I'm successful, I go through the normal course of things. All in all, from the time you put a prospect together, get the funds together, do the research, go through the lease process, and finally to the actual drilling and production stage, it can take a few years. Tack on a couple more years when you're dealing with the federal government.

Sick of our dependance on foreign oil? Don't look to Uncle Sam for relief. The article mentions tapping into reserves to keep costs down? Psssh. We aren't anywhere near having to tap into that with the barrels I'm seeing come out of North Dakota, Montana and South Texas. Don't even get me started on natural gas!

long read but worth it IMHO

http://www.rollingstone.com/politics...-math-20120719

Originally Posted by AustinFromSA

Very interesting article. Crazy how Iran's shenanigans effect how we deal with the Saudis. This is definitely going to be a political issue.
A bit of my own experience about our domestic production: I work with the BLM on a regular basis, acquiring leases on federal lands. While the people I deal with there have been awesome, the red tape and bureaucracy higher up the chain is slower than frozen molasses. Despite what I've heard the President say about how we're opening up more BLM lands for drilling, I haven't seen ANY change.
On private lands, we do the research to find all proper mineral owners, we work out an agreement with them, shake hands, bam. Lease is signed, and we can move forward on getting permits and stuff. State governments still slow us down there, but I fully appreciate the need for permitting and regulation, and they're not too bad.

Federal lands I'm dealing with RIGHT NOW, however, require me to submit an "Expression of Interest," which they proceed to do a bunch of environmental studies, research, more paperwork, etc., etc., which gives me a CHANCE of having it go up for auction October of 20freaking13! And THEN if I'm successful, I go through the normal course of things. All in all, from the time you put a prospect together, get the funds together, do the research, go through the lease process, and finally to the actual drilling and production stage, it can take a few years. Tack on a couple more years when you're dealing with the federal government.

Sick of our dependance on foreign oil? Don't look to Uncle Sam for relief. The article mentions tapping into reserves to keep costs down? Psssh. We aren't anywhere near having to tap into that with the barrels I'm seeing come out of North Dakota, Montana and South Texas. Don't even get me started on natural gas!

It does not matter what Uncle Sam does, the US is doomed to dependence on imported oil.
US has about 1.5% of world oil reserves, and consumes about 22% of world oil production, while demand from developing countries is exploding but world production is flat.
http://www.politifact.com/truth-o-me...-worlds-oil-c/
Once we use it up, oil is gone forever, and the vast majority of initial US petroleum resources are used up, never to be seen again.

US oil production peaked in 1970 and has been heading down ever since, under both R and D administrations.
You cannot drill what you do not have.
Railing against government regulations makes no impact on the finite geological reality.
Shale oil makes a small upward bump in the overall downward trend. All that government delay on drilling permits does is increase the chance that future US generations might have a few drops of oil for their use. I know the Republican thought pattern is "Fuck the children and the grand-children, give me MINE NOW!" but there are still logistical limits.

Originally Posted by tommyvee

...US has about 1.5% of world oil reserves, and consumes about 22% of world oil production, while demand from developing countries is exploding but world production is flat.

but Canada's reverves are no.3 and could soon be no.1 but only consumes 2.2% of production, just saying

Originally Posted by DougW

but Canada's reverves are no.3 and could soon be no.1 but only consumes 2.2% of production, just saying

Yup. Between Alberta and North Dakota alone, there is a ballsload of oil out there. Geologists and petroleum engineers I've talked to have told me that the it's speculated that the Bakken Shale formation alone may rival the middle east. The Eagleford Shale which I used to work in South Texas is proving to be quite prolific, and they're finding more every day. I'm hearing about the Wolfcamp Shale formation in West Texas picking up steam. These are out of formations that were thought to be pretty well played out nearly a hundred years ago. Between new drilling techniques, improved seismic work, and more exploration, we're discovering more all the time. You wouldn't believe the revitalization of the Permian Basin in West Texas and Southeast New Mexico.

I highly doubt we're going to run out in 50 years, especially if we start utilizing natural gas more and ramp up windtricity/solar/nuclear power. That's not to say we don't need common sense regulation and exploration of alternative fuels, though! It's a combination of these things that will help ween us off of foreign oil.

The funny thing is how most people are absolutely clueless about the way we operate these days. The general public pictures a bunch of oil gushers, boom towns, and scenes out of the movie "Giant," with thousands of wells packed into a few acres. That WAS true a hundred years ago, but irresponsible drilling practices lead to collapsed formations, less production overall, and hurt companies in the long run. In comes agencies like the Texas Railroad Commission who regulates oil and gas production in the state of Texas. They put strict limitations on the amount of oil and gas we can extract in any given month. By going by their standards, a well can produce steadily for a long, long time. Like hundreds of years long (projected) if they tap into a great source. I've seen some well logs for old shallow wells that go back about a hundred years. Slow and steady wins the race and all that.

If we get to ramp up current drilling and exploration, produce what we have and what we've yet to find, move on to more alternative energy sources, and stop screwing around the in the middle east so much, I'm sure we could could become mostly independent from foreign oil. I say mostly, because Canada obviously has a lot to offer, and I'd much rather do business with them than the Saudis.

Originally Posted by AustinFromSA

Yup. Between Alberta and North Dakota alone, there is a ballsload of oil out there. Geologists and petroleum engineers I've talked to have told me that the it's speculated that the Bakken Shale formation alone may rival the middle east.

This is true.

What is also true is that the extraction of this oil is very very expensive, and technology has only recently been developed to do so at a minimal profit.

What do you think will happen if the price of oil drops?

Originally Posted by AustinFromSA

Yup. Between Alberta and North Dakota alone, there is a ballsload of oil out there. Geologists and petroleum engineers I've talked to have told me that the it's speculated that the Bakken Shale formation alone may rival the middle east. The Eagleford Shale which I used to work in South Texas is proving to be quite prolific, and they're finding more every day. I'm hearing about the Wolfcamp Shale formation in West Texas picking up steam. These are out of formations that were thought to be pretty well played out nearly a hundred years ago. Between new drilling techniques, improved seismic work, and more exploration, we're discovering more all the time. You wouldn't believe the revitalization of the Permian Basin in West Texas and Southeast New Mexico.

I do hope the speculation pans out. I have some $$$ riding on some of those plays.

I highly doubt we're going to run out in 50 years, especially if we start utilizing natural gas more and ramp up windtricity/solar/nuclear power. That's not to say we don't need common sense regulation and exploration of alternative fuels, though! It's a combination of these things that will help ween us off of foreign oil.

100% agree. It's pissing me off that we aren't taking a hard look at nuclear again and incentivizing solar panels and windmills.

The funny thing is how most people are absolutely clueless about the way we operate these days. The general public pictures a bunch of oil gushers, boom towns, and scenes out of the movie "Giant," with thousands of wells packed into a few acres. That WAS true a hundred years ago, but irresponsible drilling practices lead to collapsed formations, less production overall, and hurt companies in the long run...

There's still some work to be done in terms of risk management, lest we forget the impact Deepwater Horizon had.

If we get to ramp up current drilling and exploration, produce what we have and what we've yet to find, move on to more alternative energy sources, and stop screwing around the in the middle east so much, I'm sure we could could become mostly independent from foreign oil. I say mostly, because Canada obviously has a lot to offer, and I'd much rather do business with them than the Saudis.

100% agree. Not a fan of doing business with the house of Saud, looking forward to (safely) tapping the Arctic.

Originally Posted by Tippster

This is true.

What is also true is that the extraction of this oil is very very expensive, and technology has only recently been developed to do so at a minimal profit.

What do you think will happen if the price of oil drops?

Not really sure why the price of oil would drop when demand is rising in China and India (~35% of the world's population) while supplies can't keep up?

Not trying to be a dick, but I'd like to hear some contrarian views on the above.

Originally Posted by AustinFromSA

but irresponsible drilling practices lead to collapsed formations, less production overall, and hurt companies in the long run. In comes agencies like the Texas Railroad Commission who regulates oil and gas production in the state of Texas. They put strict limitations on the amount of oil and gas we can extract in any given month. By going by their standards, a well can produce steadily for a long, long time. Like hundreds of years long (projected) if they tap into a great source. I've seen some well logs for old shallow wells that go back about a hundred years. Slow and steady wins the race and all that.

Hmmm..... I always thought AustinFromSA was a political conservative ???

And yet here he is saying that the the free market, private enterprise, capitalist market is a failure. And that the intervention of Big Government saved the private companies from their self-destructive ways.

This Texas Railroad Commision (that regulates the oil industry ???) sounds like something Karl Marx would set up.

Does Rick Perry know this is going on in his state ? Texans sure are weird.

So much bullshit in this thread

There is a huge difference between oil and kerogen. The later is what 90% of the oil shale is, it is only the middle east if you wait a couple million years.

Oil in the ground is meaningless, BPD is all that matters. The Bakken at most will do 1mil a day or about 1/20th.

Deepwater Horizon was the fucking boat, the spill was Macondo 252.

None of this has anything to do with EROEI and that is the mother fucking killer.

Super deep or shallow super deep and some conventional ERD is where the vast majority of the gains have been found in the last 20 years not shale.

Shale plays are old tech, peeps been rocking the Eagle Ford since 1950, only the proppants are new and shale plays to be frank at least for the moment are more about wall st than energy production.

Safe arctic drilling is a joke and this is coming from someone who defends BP with the Macondo dealio.

2/3rds of the current offshore and 1/2 of the current onshore O&G gov't leases are sitting unused and unexplored, ramping up drilling is a joke for idiots. Where the fuck you going to get your million dollar a day drilling boat ? That shit is in Brazil mother fucker and won't be back for three years, you going to build some more ? Why ? So in a year when the whole thing craps out you can be stuck with a bunch of really fucking expensive rusting metal ?

IFR is the only non fusion nuclear tech worth developing and that shit will never happen for obvious reasons to anyone that knows 2 things about IFR's.

Magnetic confinement fusion is very very close, the Polywell is less than 5 years from the make it or break it point. We can do fusion we just can't make a box to do it in.

Lastly running out is for dumb fucks who don't know anything about oil, EROEI and what happens to fractional reserve economies are what peak oil is about.

Solar energy is fucking dirt cheap, ask ze germans or better yet ask German conventional power producers.

Coal is dead.

Originally Posted by Tippster

This is true.

What is also true is that the extraction of this oil is very very expensive, and technology has only recently been developed to do so at a minimal profit.

What do you think will happen if the price of oil drops?

Quite true. Our production there is dependent on the high prices. If the oil market crashes, it just wouldn't be worth the money to finance those kinds of operations.

However, I tend to be optimistic due to 13's point about rising demand in China, India, and the rest of the world. The need for oil isn't going anywhere any time soon. However, that doesn't mean that we shouldn't be on our toes and safeguard our energy future as much as possible through a myriad of different avenues. The interesting thing to see will be how much those countries decide to produce on their own. China's been coming along with drilling in the Gobi desert. Hopefully they can start to be more self-dependent as they develop, as I hope we do too.

Originally Posted by Harry

Hmmm..... I always thought AustinFromSA was a political conservative ???

And yet here he is saying that the the free market, private enterprise, capitalist market is a failure. And that the intervention of Big Government saved the private companies from their self-destructive ways.

This Texas Railroad Commision (that regulates the oil industry ???) sounds like something Karl Marx would set up.

Does Rick Perry know this is going on in his state ? Texans sure are weird.

Haha. Funny thing is that the TRRC is always at odds with the EPA and the Feds. I'm not against STATE regulation, when the state knows what the frick it's doing due to over a century of intimate experience with the industry. What I AM against is a bunch of Washington bureaucrats who know nothing about the industry dictating how every state is going to go about their business. Every state is different, formations are all different, and should be treated differently with differing regulations. The federal government can't possibly keep up with that without becoming even more bloated. And yes, Rick Perry knows exactly what's going on with the Railroad Commission. I'm not a fan of big government regulation, but I've looked at it from both sides, and have observed how Texas has done an outstanding job with its reasonable and prudent regulation of oil and gas drilling, and it's proven through long-lasting, healthy wells. And btw, if you want a permit from them, its a very efficient process to do so. Your applications don't take years being lost in bureaucratic space. Want to drill on State lands? Just work with the General Land Office. You can even stop by the office and talk to the commissioner, Jerry Patterson. They actually help us instead of just get in our way. Working with States in my experience has been 100000x better and easier than dealing with the BLM.

Originally Posted by AustinFromSA

Yup. Between Alberta and North Dakota alone, there is a ballsload of oil out there. Geologists and petroleum engineers I've talked to have told me that the it's speculated that the Bakken Shale formation alone may rival the middle east. The Eagleford Shale which I used to work in South Texas is proving to be quite prolific, and they're finding more every day. I'm hearing about the Wolfcamp Shale formation in West Texas picking up steam. These are out of formations that were thought to be pretty well played out nearly a hundred years ago. Between new drilling techniques, improved seismic work, and more exploration, we're discovering more all the time. You wouldn't believe the revitalization of the Permian Basin in West Texas and Southeast New Mexico.

I highly doubt we're going to run out in 50 years, especially if we start utilizing natural gas more and ramp up windtricity/solar/nuclear power. That's not to say we don't need common sense regulation and exploration of alternative fuels, though! It's a combination of these things that will help ween us off of foreign oil.

The funny thing is how most people are absolutely clueless about the way we operate these days. The general public pictures a bunch of oil gushers, boom towns, and scenes out of the movie "Giant," with thousands of wells packed into a few acres. That WAS true a hundred years ago, but irresponsible drilling practices lead to collapsed formations, less production overall, and hurt companies in the long run. In comes agencies like the Texas Railroad Commission who regulates oil and gas production in the state of Texas. They put strict limitations on the amount of oil and gas we can extract in any given month. By going by their standards, a well can produce steadily for a long, long time. Like hundreds of years long (projected) if they tap into a great source. I've seen some well logs for old shallow wells that go back about a hundred years. Slow and steady wins the race and all that.

If we get to ramp up current drilling and exploration, produce what we have and what we've yet to find, move on to more alternative energy sources, and stop screwing around the in the middle east so much, I'm sure we could could become mostly independent from foreign oil. I say mostly, because Canada obviously has a lot to offer, and I'd much rather do business with them than the Saudis.

From wikipedia, Bakken recoverable and non-recoverable reserves estimated at 18 billion barrels.
http://en.wikipedia.org/wiki/Bakken_Shale

From wikipedia, Saudi Arabia alone (not the whole Middle East) estimated 267 billion barrels, proven reserve.
http://en.wikipedia.org/wiki/Bakken_Shale

So the Bakken is not even 7% of Saudi Arabia alone, let alone the whole Middle East.

If you want to believe the "speculation" of some geologists you know, as opposed to scientific research by industry experts, be my guest.
Denying reality is normal behavior in the USA, we can believe whatever we want, but that will have no impact on geological reality, and only help us make stupid policy choices (like Mitt Romney plan to cancel the wind energy production tax credit, killing a successful US business sector that employs thousands and generates billions in revenue).

The bottom line, is that US oil production peaked in 1970 and has never come close to those levels since, even with the Bakken in production.
Anybody talking about US oil independence is blowing smoke up somebody's ass, talk is cheap.

Originally Posted by ArmadaBC

Shale plays are old tech, peeps been rocking the Eagle Ford since 1950, only the proppants are new and shale plays to be frank at least for the moment are more about wall st than energy production.

Umm. I don't know how much you know about the Eagle Ford, but I have a feeling you haven't worked it for years like I have. Shale plays are NOT old tech. The numbers and well logs are easy to read and see the history of how it has played out. The boom in the 1950s and again in the '70s was very shallow drilling. You didn't see much drilling past the shallow zones. Shale formations have been extremely difficult to drill in the past, as it's pure, hard rock. Now due to new drilling technology (new bits, horizontal drilling, fractional drilling, etc.) that has come about in the last couple decades, we're able to go much, much deeper and access more than ever before.

Shale plays = old tech? I don't freaking think so! Revolutionary new technologies in drilling are what's getting the entire industry so amped!

Originally Posted by ArmadaBC

Safe arctic drilling is a joke and this is coming from someone who defends BP with the Macondo dealio.

If you mean offshore drilling and transportation, then yeah. That might be ludicrous with the nasty seas out there, but onshore arctic drilling should be just fine, and just as safe as anything else. Transportation would be another issue, but if they built a good pipeline infrastructure, then I think it'd be ok. Think of the thousands of high-paying jobs that would create!!!

Originally Posted by ArmadaBC

2/3rds of the current offshore and 1/2 of the current onshore O&G gov't leases are sitting unused and unexplored, ramping up drilling is a joke for idiots.

I don't think you fully comprehend the way all of this works. Too much to explain in a post, but essentially there's a reason that leases contain a "Primary Term." BLM leases are typically 10 years. Just because leased lands aren't being drilled at that very moment doesn't mean people are just sitting around either. Lots of stuff going on the background leading up the drilling part, if and when that happens. Also, just because you lease an area doesn't mean you are going to drill it after all. What if you purchase a lease, do the seismic work, do the preliminary geological research, and ends up that it doesn't look like it's worth it to drill just yet, if at all? Sometimes it makes more sense to let those leases expire or release them. Why spend millions upon millions of dollars to drill, if the seismic data doesn't stack up? However, none of that can even start until it's leased. Just because something is lease does not guarantee drilling, but holding up the lease and permits to begin with holds up the entire process.

Originally Posted by ArmadaBC

Coal is dead.

As for your coal comment, I'd say take a look at all of China's new coal power plants, not to mention our own, and tell me if coal is really dead. Now, it's definitely not my favorite energy source since it's so dirty, but it IS another part of the current energy equation, and can't be overlooked for now.

Seriously. How the hell would the Iranians shut down the straights? Boston Whalers?

Originally Posted by AustinFromSA

post

I do BLM leases every fucking day the 2/3 offshore are NOT explored, no one has done jack shit they are fucking sitting there. Every fucking day I shit in a 10x10 cage and value these shitty pieces of unused land don't fucking tell me what I do and don't know.

Secondly I work in tight oil every day, not that it matters. This is just like your stupid ass welfare thread, where no amount of reality is going to change your frankly useless how I feel statements, but fuck it thats how america works. Go look the shit that comes below up, don't take my word for any of it, go look it up and tell me where the numbers are off.

Oil shale is old shit, just ask James Parafin or check out the shit piles in Scotland. Again the proppants are new but people have been fucking with and know about shale plays since the 50's. Tech helped but nobody is doing shit in ND if the barrel price isn't right. If you know fuck all about oil you know that is as true as the industry gets. As fast as it has gotten hot to throw money at the first second the barrel price drops all that shit is rusting.

Before we even get into the two producing plays you have to stop using shale interchangeably, the green river formation is true shale and hence kerogen. This is the 2 trillion barrels not Eagle Ford and Bakken. Unless you plan to wait 2 million years or find the water to run a 1000mw cooker you ain't getting fuck all out of the Green river. The Bakken is an unconventional reservoir consisting principally of two organic rich source beds adjacent to naturally and anthropogenically fractured mixed lithology limestone, dolomite, siltstone and sandstone layers its super tight but not technically shale but really who cares. The important part is you aren't getting the 2 trillion in place in green river.

Lets start with the Bakken which in 1999 was 500 billion but down to 32 billion with 02 M&B, USGS says 3.65 but lets get crazy and say its 400 billion in place. For those not in O&G or who actually have hobbies, in place oil is irrelevant what is relevant is technically recoverable. The shale producers go from 5-12% which is horseshit to get money from wall st which to be frank is what is driving most of the shale industry. Real recovery numbers are around the standard 1%, the recoverable oil is in the natural fractures whereas the fantasy in place oil is in the darcy rock matrix. Fracture recovery rates are near 100% but in rock matrix recovery is near 0. This is why you'll never get close to 4mbd and don't take my word for it look at the fucking numbers coming out of the ground.

It doesn't matter though all the Bakken and Eagle Ford recoverable is 4-6 billion barrels or about a year of U.S. Usage. That's right friends all you hot shit tech shale bs is one fucking year, shit the pilocene GOM KC919 and 918 is about the same and that shit will actually come out of the ground. By the way isn't it interesting that we are out of the 2.5 million year old Miocene and on to the 2 million years older Pilocene. Fuck I'll even throw in the much bigger California play and give you 2% recovery which you'll never reach and then your at three whole years!!! It helps with the price, particularly at WTI but that's about it.

Never mind that all of your ramblings never mention the single most important factor EROEI or how this shit works with the all important economy. Never mind that shale plays require crap tons of water that we don't have or that its dirty as fuck (ask the Estonians about shale or the dead North Sea off Finland) I mean Austin from SA feels good about shale oil so I'm on board.

Please don't make me write another 4000 stupid paragraphs on Monterey, Tuscaloosa, Woodbine/Eaglebine, Utica, Niobara, and Hogshooter Wash.