Shale Oil Fiasco

[Guest]

5 hours ago, PE Scott said:

Thank you.    Again, I like to think I'm person "C" in your previous argument and think more of this has to do with a disagreement between what constitutes new technology vs revised technology.....at least the bit I saw being argued heavily before. 

No worries, and yeah, maybe it is, but still circular.

Just seems mad to me, surely whole point of thread was the future of shale at all, so whether something is new or technically old and revised, I don't get it - If it's used to get shit out the ground, and works, that's the end of it to me mate - so now it's about financial viability, how much is down there, environmental impacts, whatever (believe it or not this is not my field hahah  - shocking I know, but I'm dumbing down for you guys).

Arguing about the technicality of 'newness', I don't get the relevance when talking the future of shale. Is it 'new' enough to get shit out the ground, profitably, for 100 years let's say? It's questions like this that matter surely? Not ''well technically that's something we have used for ages, it's just been renamed or had a touch up''. 

Edited December 20, 2019 by Guest

[Guest]

Bear in mind this thread has 500 posts in it and over 30,000 views ... and I'm guessing not one of you have changed your mind on what your original position was? 

Edited December 20, 2019 by Guest

[Gerry Maddoux + 3,627]

9 minutes ago, DayTrader said:

Bare in mind this thread has 500 posts in it and over 30,000 views ... and I guessing not one of you have changed your mind on what your original position was? 

HaHa, you'd be right. I wish I had been born with your talent for short, pithy comments that go right to the heart of the matter. I had to play Cicero in a school play--I think that made me verbose, unable to think or communicate in fewer than 3,000 words. But here's a shocking article from the Oil & Gas Journal, which isn't biased at all. All of you who want to squash shale, think again. SHALE HAS KEPT OUR COUNTRY ENERGY-INDEPENDENT AND ECONOMICALLY STRONG!

US Chamber study lists impacts of banning fracing domestically

Banning hydraulic fracturing in the US would eliminate 19 million jobs while reducing Gross Domestic Product by $7.1 trillion between 2021 and 2025, a study by the US Chamber of Commerce’s Global Energy Institute concluded Dec. 19.

Nick Snow

Dec 19th, 2019

Banning hydraulic fracturing in the US would eliminate 19 million jobs between 2021 and 2025 while reducing Gross Domestic Product by $7.1 trillion between 2021 and 2025, a study by the US Chamber of Commerce’s Global Energy Institute (GEI) concluded on Dec. 19.

 

Energy prices would skyrocket, with natural gas prices rising by 324%, causing household energy bills to quadruple and the cost of living to increase by $5,661 for the average American, it warned. By 2025, the price of gasoline would double, and government revenue would plunge by nearly $1.9 trillion, the study said.

“Increased oil and gas production driven by hydraulic fracturing has been fueling America’s sustained period of growth over the past decade, while making us both cleaner and stronger,” GEI Pres. Martin J. Durbin observed.

“Our study shows that banning fracing would have a catastrophic effect on our economy, inducing the equivalent of a major recession and raising the cost of living for everyone across the country. This bad idea should be abandoned,” he maintained.

The report is the first in the 2020 edition of GEI’s “Energy Accountability Series,” which looks at what could happen if energy proposals from candidates and interest groups actually were adopted. It updated a 2016 study with new data and analysis, and information about several new states.

Impacts in seven states

The report provided national impacts of a fracing ban, as well as state-specific impacts for five energy producing states (Colorado, New Mexico, Ohio, Pennsylvania, and Texas) and two states with limited energy production, Michigan and Wisconsin.

“Under a fracing ban, less domestic energy production also means less energy security as the US once again returns to heavy dependence on imported oil and natural gas,” the report warned in its executive summary.

“This would quickly reverse America’s rise as a major oil and gas exporter, an achievement that has reduced our trade deficit while helping our allies and trading partners enhance their energy security, reduce emissions, and ensure the energy they purchase is produced under one of the most stringent environmental regulatory regimes in the world,” it said.

Significantly higher gas prices also would undermine US progress in reducing greenhouse gas emissions, the report’s executive summary continued.

“Since 2005, the increased use of gas has helped reduce US carbon dioxide emissions by more than 2.8 billion metric tons – roughly the equivalent of annual emissions from Australia, Brazil, Canada, France, Germany, and the United Kingdom combined,” it said.

 

[Guest]

1 minute ago, Gerry Maddoux said:

I wish I had been born with your talent for short, pithy comments that go right to the heart of the matter.

Haha thanks man, that means a lot from you. I just think life is short so cut through the shit.

There's another one for you. I should charge. 

[Guest]

@Gerry Maddoux , you know the reply to that article is ''I don't believe those stats'' yes?

20 pages of this ...

''Shale is great, it's the future''

''Nah it won't last, the writing is on the wall''

''Yeah it will, look at my stats''

''Those are false, look at these stats''

''But there are new technologies, so there may be better stats''

''What technologies?''

''These ones''

''Those aren't new!''

''Errr, well what about these stats instead?''

''I don't like those stats''

''Shale is great, it's the future''

 

20 f**king pages mate. 

[ceo_energemsier + 1,818]

People who dont like shale have probably a few issues..................

Merry Xmas!!!

I am still making $$$$$ ON SHALE !!~!!!!!

 

[Coffeeguyzz + 454]

Mr. Maddoux 

In a brief followup to your article on the impacts of frac'd hydrocarbons and the consequent economic impacts, one need look no further than the electricity supply/cost events from today's New England grid and yesterday's Australian situation.

(Sourced data from ISO New England and AEMO dashboard).

 

Natgas-adverse New England paid over $150/Mwh spot wholesale this afternoon ... 7 times the average rate.

Coal and OIL(!!!) currently providing 8 % fuel for power generation  for those Yankees this cold evening.

(Trinidadian sourced LNG tanker just arrived at Everett).

 

South Australia - self proclaimed 'Wind Power Capital' for the country - paid $14,700/Mwh during yesterday's heat wave. (Yes, you read that number correctly).

 

If more people were aware of these catastrophic results of shunning hydrocarbons, more prudent policies may be implemented.

 

 

[ceo_energemsier + 1,818]

On 12/11/2019 at 10:51 AM, Tom Kirkman said:

Thanks : )  a bit colder here than the Tropics.

Yes for Singapore, no for Philippines.

How are your O&G businesses doing these days?

Doing great, enjoying the almost holidays!!!

Message me , so we can discuss this Singapore potential. I need to hire an O&G person for tech application on a big project!!

 

Thanks

[Douglas Buckland + 6,308]

17 hours ago, remake it said:

Would you like commas to help decipher it as it was only a mildly complex sentence?

How about hiring an editor?

[James Benjamin Oppenheim + 1]

On 12/5/2019 at 8:55 AM, Jabbar said:

Not all fractures created equal

Technical Engineering Reservoir Modeling Article.

https://pubs.spe.org/en/jpt/jpt-main-page/

https://pubs.spe.org/en/jpt/jpt-article-detail/?art=6240

Shale going bust laughable.  Shale and actually whole energy industry going thru transition. That is not to say over half of today's shale producers will not be gone in a year or two.  They will.  

DOUBLE YIELD 10% TO 20%

During Investor Day Conoco discussed how they used 5 technologies to double yield.  It is primarily based on (1) CORE SAMPLING, (2) ADVANCED SIESMIC TECHNIQUES /ANALYTICS, and (3) PRESSURE CONTROL.  

(4) They have also stated that they solved the  well stack/spacing (parent/child) deleima and are able to drill 12 to 16 wells per section. 

Conoco champions 5 TECHNOLOGIES to achieve greater productivity.  Conoco recent Investor Day Presentation stated they are doubling yield from 10% to  20% at their pilot test wells and .  .  .  .  . .  .  .    they said they can do even better (> 20%) !

ADDITIONALLY THEY ARE REFRACING ALL VINTAGE 1 AND Vintage 2 WELLS (2009 thru 2014) and doing so at COST BELOW $30 BARREL.

TRANSITION / CONSOLIDATION

All those producers that survive the Consolidation and Transition will be using these new 5 technologies 

This in effect is doubling reserves and cutting costs per barrel by as much as 30% to 40%. 

Look forward not backward.  When DUCs drawn down the weak go out of business.  The strong continue to drill now. 

At least half of the shale industry will merge consolidate or file bankruptcy.

Shale industry hiring .  . Mathematicians and Computer Science grads.  Don't need more field engineers.  

Don't fight it.

EMBRACE THE NEW SHALE INDUSTRY.

Yesterday Conoco CEO said U.S. will probably increase production about a million barrels a day by end of 2020.

U.S. Production up to 12.9 million barrels day week ending Nov 29th

I agree 

[Rob Plant + 2,635]

9 hours ago, DayTrader said:

Bare in mind this thread has 500 posts in it and over 30,000 views ... and I'm guessing not one of you have changed your mind on what your original position was? 

I think this is a totally different meaning to the one you meant

[Gerry Maddoux + 3,627]

Article by Nick Cunningham: Does this guy ever write anything positive for oil or gas? I'm going to add a few comments after the article. 

The malaise creeping over the gas industry is forcing spending cutbacks, which is already starting to translate into a production slowdown. The EIA forecasts a decline in gas production in Appalachia by 74 million cubic feet per day in January, month-on-month. Gas production declines are also expected in the Anadarko basin in Oklahoma and in the Eagle Ford in South Texas. Overall production for the country is still expected to rise, due to associated gas output still rising in the Permian, and due to the ongoing revival in the Haynesville shale.

As a result, the industry finds itself in an odd predicament – total production is still at record levels, and may continue to climb, albeit at a slower and lower rate. At the same time there are widespread financial problems in the industry, particularly for gas-focused companies. One of the big questions regarding production is whether Texas oil drillers can keep gas output growing enough to offset the declines underway in Appalachia.

Meanwhile, the supply surplus is also a global problem. Chevron’s recent announcement that it would take an $11 billion write down revealed two things: its shale gas assets in Appalachia are not as valuable as once thought, and the write down of its LNG project in Canada also reflects the souring of the global market for gas.

Asian spot prices for LNG are at their lowest on record for this time of year, falling as low as $5.65/MMBtu for January delivery. The glut is so bad that an LNG buyer in Singapore recently cancelled its order, but decided to pay for it anyway. It could take years for the supply overhang to get worked out.

NG is like any other commodity: Its market value is related to supply and demand. Due to this Permian frenzy--mindless and destructive, almost without thought or preparation--the world is relishing a glut of NG. The LNG network is expanding like crazy and shipping--from what I've been told--is cheap. In fact, one gentleman on this board says LNG is cheaper than piped gas in several instances. If China and India pivot to NG over coal, well, it's going to be a brand new ballgame . . . and why wouldn't they: much cleaner and they both have horrible pollution problems and are under pressure from the world community to do something about it. NG production in the shale fields is falling like a stone. Jerry Jones just bought the Comstock gas--I suppose he makes mistakes too but he's pretty savvy when it comes to hydrocarbons. This stuff has happened before. In 1975 we were selling "deep" NG from the Granite Wash wells for $13/tcf--Mr. Reagan had put a floor under it and Elk City erected a sign, "Deep Gas Capital of the World." Or something like that. One day we got up and that floor for deep gas had been removed. Those deep wells (very deep; our deepest was 29,000 feet) were costing about $10 M to drill--an awful lot back then. The drillers who had a few rigs in deep positions went broke that day. Natural gas production fell dramatically. Then in 1987 came the huge stock market crash. Mr. Reagan, alas, was likely already in the early stages of Alzheimer's, because he went from being a cheerleader of deep gas to jerking the rug with very little persuasion by a malicious couple of people. I'm relating this to tell you these stories appear out of the blue, written by some young person who hasn't lived through history, and by the looks of it, hasn't researched history either. We're in a transition whereby maybe half of the shale drillers go belly-up. Others will pick up their properties. I've lived through several of these scenarios of change (Chesapeake to Linn comes to mind): there is always a loss of momentum. So unless I'm getting that dread disease myself, 2020 is going to see a sputtering in drilling. Prices of LTO are going to rise. NG production is going to fall, perhaps severely, because the Haynesville and Appalachian Basin drillers are strung out. The Eastern Permian has slowed dramatically, from what I'm told. I expect NG prices to fall to about a buck fifty, and then come roaring back. Probably overshooting in the process because of desperation. Where will the prices settle, say in 2021? I dunno, but if the United States makes a deal with China and helps them with their utility plant conversion to NG, and if India is watching, then it'll go above $2.50/tcf and settle there. That's a nice place where everyone can make a little money and the low-cost, low-carbon fuel source can change the world for the better. Carbon capture is coming. NG always has been a superior fuel. In a world filled with poor but emerging countries with mass populations, it still is.

[D Coyne + 305]

For the cheerleaders keep in mind that the concern of the naysayers is how long will this last if we make reasonable economic assumptions (this requires a guess about future oil prices, and I agree with the fact that we do not know what they will be), take the mean estimates provided by the USGS for the major tight oil basins and model future output.

Chart below and spreadsheet at link, note the spreadsheet focuses on Permian basin and adjusting completion rate in row 4 (for Permian basin only) one can try different future scenarios with higher or lower completion rates.  It is assumed that average new well EUR in the Permian basin begins to decrease in Jan 2020.  Average new well EUR has been flat from 2016 to 2019 when we normalize for lateral length (EUR/foot of lateral has been constant).  At some point this is likely to decrease. I have guessed this to begin in Jan 2020, changing row 5 to all ones would relax this assumption (that would assume that new well EUR will never decrease, that is, the productivity throughout the play is relatively uniform, such an assumption is unrealistic in my opinion.)

https://drive.google.com/file/d/1662RQ-8wnF2sEo1kSV4Sbhy0umHDblL7/view?usp=sharing

EIA data for tight oil at link below

https://www.eia.gov/energyexplained/oil-and-petroleum-products/data/US-tight-oil-production.xlsx

The R squared for the US tight oil model vs EIA tight oil data from Jan 2010 to October 2019 is 0.99932.

Edited December 20, 2019 by D Coyne

[D Coyne + 305]

16 hours ago, Gerry Maddoux said:

And a proctologist to pull your head out of your . . .

Do you honestly think there's enough wind and solar to warm houses and run factories? It's about 10%.

Without oil and gas we'd be in one heck of a pickle. 

Gerry,

True that we need the energy, but it will become very expensive as it depletes, we will need something to replace depleting fossil fuel, at some point output will peak and then after a few years on a plateau, output will decline.  As the plateau is reached fossil fuel will become very expensive in order to match supply and demand, at that point wind, solar, nuclear, etc will take off with the cheapest option likely growing fastest,  it will take quite a while to accomplish, we should start now as peak oil is likely in 5 or 6 years.

[Gerry Maddoux + 3,627]

Nice graph, but man, the EIA is just about the worst at estimating anything. 

I don't know if I'd qualify as a cheerleader . . . probably not, as I've always been skeptical of it. However, there is an awful lot of shale out there, and, if properly approached, a great deal of it is profitable at $50 oil. 

They've also shortchanged the "NonPermian" somewhat. The Bakken doesn't have the parent-child interaction, and the well economics are good. Those huge IP figures have just swamped everything else. 

Anyway, thanks for posting it. The whole shale movement may be just a scam in the history of time.

[D Coyne + 305]

18 minutes ago, Gerry Maddoux said:

Nice graph, but man, the EIA is just about the worst at estimating anything. 

I don't know if I'd qualify as a cheerleader . . . probably not, as I've always been skeptical of it. However, there is an awful lot of shale out there, and, if properly approached, a great deal of it is profitable at $50 oil. 

They've also shortchanged the "NonPermian" somewhat. The Bakken doesn't have the parent-child interaction, and the well economics are good. Those huge IP figures have just swamped everything else. 

Anyway, thanks for posting it. The whole shale movement may be just a scam in the history of time.

Gerry,

Those are my estimates based on well profiles estimated based on data from

https://shaleprofile.com/blog/

Only the EIA data is from the EIA.  The URR of the scenario through 2080 is about 85 Gb of tight oil.

The oil price scenario used is on the right axis of chart below and the Permian basin tight oil scenario is on the left axis (URR for Permian is 56 Gb).  Output from basins besides the Permian (as a group) is unlikely to rise much further some might rise a bit (Bakken) others like Niobrara and Anadarko are likely to fall, overall most of the increase in tight oil in the US will be from the Permian basin in my opinion.

[Gerry Maddoux + 3,627]

16 minutes ago, D Coyne said:

True that we need the energy, but it will become very expensive as it depletes, we will need something to replace depleting fossil fuel, at some point output will peak and then after a few years on a plateau, output will decline.  As the plateau is reached fossil fuel will become very expensive in order to match supply and demand, at that point wind, solar, nuclear, etc will take off with the cheapest option likely growing fastest,  it will take quite a while to accomplish, we should start now as peak oil is likely in 5 or 6 years.

I agree with your timetable, with a very large hmmmm. I recall Mathew Simmons with great fondness. He was perhaps the best energy consultant around. He wrote a book in the nineties, "Twilight in the Desert." In it he described the abysmal features of oil and gas: the Saudi fields were in decline, domestic production was almost at a standstill in the US, offshore sites had been found and exploited. It was a chilling account, literally, because people were going to freeze by the truckloads. The Saudi fields are in decline but they're covering it up by water-flooding using salt water from the Arabian Sea. Shale came along. Then, wonder of wonders, lots of offshore site were discovered. As I write this, I find that I have convinced myself--all over again--that in five years we'll have plenty of hydrocarbons. And when I consider an American southwest covered by solar panels and windmills, with thousands of transmission lines headed to cold places that don't have much sunshine, it makes me want to follow Mathew Simmons to the grave. The financial cost of giant windmills, solar farms, batteries is huge. The petrochemical cost is just as huge. In America, spread out and gangling, it would be doable. In Europe, not so much. Fukushima made the whole world reconsider nuclear, which was and is the finest and cleanest source of energy . . . and it works anywhere in the world whether the wind blows or the sun shines. All of these people have forgotten the fact that solar has been unreliable from time to time. Wind corridors shift, and the changing climate is likely to shift them more. So maybe I am a cheerleader, but not just of shale; rather of well-controlled hydrocarbon use. Many oil and gas people have always given hydrocarbons a bad name. Where I grew up, open slush pits swallowed up horses and cattle before they were turned into slimy marshes. The Texas Railroad Commission has become a rubber stamp, allowing venting of almost pure methane and flaring of gases for up to a year when pipelines were either coming or nearby. But I have no doubt that in five years there will be plenty of hydrocarbons, and regulations will be tighter than a tick. Sure, bring on windmills and solar, but have you taken a pencil to how much money and petrochemical expenditure goes into building a single giant windmill that may or may not turn? It's huge! Solar? Talk about apocalyptic! I have a map inside my head showing the landscape capable of producing all the power used by the United States, delivered by solar and wind. On it are frigid northeast cities with millions dying because the power went out, or the battery storage was sabotaged. I suppose one can build whatever nightmare the mind needs to build in order to feel better. The wind and solar and lithium battery stuff will likely come along and supplant to some extent hydrocarbons, but damn it, they're not going to be without a massive financial cost. You must consider--all you young people--that we have not had a cataclysmic recession since 2009. Ten years. That's precisely the ten years when all of this Green Energy has exploded. I'm not pulling for one, but one is coming as a natural cycle, and when it does, most people in this old world are going to do whatever they have to do in order to survive it. That means hydrocarbons. Tesla stock price will go to $100, maybe go away. Are you seriously going to build a $100,000 windmill tower in such times? Is a government that now has a national debt that could not possibly be paid unless interest rates were zero going to subsidize such a thing? I don't think so.

[D Coyne + 305]

26 minutes ago, Gerry Maddoux said:

I agree with your timetable, with a very large hmmmm. I recall Mathew Simmons with great fondness. He was perhaps the best energy consultant around. He wrote a book in the nineties, "Twilight in the Desert." In it he described the abysmal features of oil and gas: the Saudi fields were in decline, domestic production was almost at a standstill in the US, offshore sites had been found and exploited. It was a chilling account, literally, because people were going to freeze by the truckloads. The Saudi fields are in decline but they're covering it up by water-flooding using salt water from the Arabian Sea. Shale came along. Then, wonder of wonders, lots of offshore site were discovered. As I write this, I find that I have convinced myself--all over again--that in five years we'll have plenty of hydrocarbons. And when I consider an American southwest covered by solar panels and windmills, with thousands of transmission lines headed to cold places that don't have much sunshine, it makes me want to follow Mathew Simmons to the grave. The financial cost of giant windmills, solar farms, batteries is huge. The petrochemical cost is just as huge. In America, spread out and gangling, it would be doable. In Europe, not so much. Fukushima made the whole world reconsider nuclear, which was and is the finest and cleanest source of energy . . . and it works anywhere in the world whether the wind blows or the sun shines. All of these people have forgotten the fact that solar has been unreliable from time to time. Wind corridors shift, and the changing climate is likely to shift them more. So maybe I am a cheerleader, but not just of shale; rather of well-controlled hydrocarbon use. Many oil and gas people have always given hydrocarbons a bad name. Where I grew up, open slush pits swallowed up horses and cattle before they were turned into slimy marshes. The Texas Railroad Commission has become a rubber stamp, allowing venting of almost pure methane and flaring of gases for up to a year when pipelines were either coming or nearby. But I have no doubt that in five years there will be plenty of hydrocarbons, and regulations will be tighter than a tick. Sure, bring on windmills and solar, but have you taken a pencil to how much money and petrochemical expenditure goes into building a single giant windmill that may or may not turn? It's huge! Solar? Talk about apocalyptic! I have a map inside my head showing the landscape capable of producing all the power used by the United States, delivered by solar and wind. On it are frigid northeast cities with millions dying because the power went out, or the battery storage was sabotaged. I suppose one can build whatever nightmare the mind needs to build in order to feel better. The wind and solar and lithium battery stuff will likely come along and supplant to some extent hydrocarbons, but damn it, they're not going to be without a massive financial cost. You must consider--all you young people--that we have not had a cataclysmic recession since 2009. Ten years. That's precisely the ten years when all of this Green Energy has exploded. I'm not pulling for one, but one is coming as a natural cycle, and when it does, most people in this old world are going to do whatever they have to do in order to survive it. That means hydrocarbons. Tesla stock price will go to $100, maybe go away. Are you seriously going to build a $100,000 windmill tower in such times? Is a government that now has a national debt that could not possibly be paid unless interest rates were zero going to subsidize such a thing? I don't think so.

Gerry,

I am much less certain that there will be plenty of oil in 5 years time.  The problem is that demand will grow faster than supply for C+C.  See chart below and find my book at your local university

http://ursus.maine.edu/search~S1/?searchtype=t&searcharg=Mathematical+Geoenergy+%3A+Discovery%2C+Depletion%2C+and+Renewal+%2F+Paul+Pukite%2C+Dennis+Coyle%2C+Daniel+Challou&searchscope=1

or buy it

https://www.amazon.com/Mathematical-Geoenergy-Discovery-Depletion-Geophysical/dp/1119434297

Also see (free)

https://royalsocietypublishing.org/doi/full/10.1098/rsta.2013.0179

Chart assumes high oil prices eventually lead demand to decrease as people switch to alternatives to oil and oil prices to fall after 2045.  Note that from 1980 to 2019 World demand for C+C increased at at average annual rate of 800 kb/d, we will have great difficulty continuing to meet that level of C+C demand after 2023 as the rate of increase in output approaches the 2025 peak.  I expect by that time Brent oil prices will be well north of $100/b in 2019$, perhaps as high as $140/bo.

As far as expensive wind and solar see

https://www.lazard.com/perspective/lcoe2019

not really as expensive as you seem to believe.  I agree we should conserve resources and build more efficient buildings that utilize passive solar design, it will help to conserve depleting resources.  We will need to reduce fossil fuel demand at some point, perhaps not 5 years (though this is my best guess) maybe in 10 (10% probability that will be correct in my view) or 15 years (less than a 1% probability C+C output will not have peaked by 2035).

Edited December 20, 2019 by D Coyne

[Gerry Maddoux + 3,627]

Dennis, I have to yield to you, for you have written the book and built models about this. I will order your book. However, I must register a reservation: Most models work on the probability system, not the chaos system. Most models assume a certain degree of ergodicity. In my experience, the petroleum business is a) chaotic, b) full of surprises, and c) the future looks nothing like the past. For example, the late Mathew Simmons--as good a modeler as ever existed--would be absolutely astounded at the growth of LTO. And at the fact that the giant Saudi fields are still producing at the same rate. Or even that gasoline is $3 at the pump.

While there's been an awful lot of 3-D maritime seismography performed, I'd be willing to surmise that there are huge pools of as-yet-undiscovered oil trapped in oceanic coves by ancient anticlines. Additionally, I'm just about the smallest fish in the oil ocean, but I've been told by a seasoned petroleum engineer that I have 550 to 750 new sites if prices stay above $60. If I'm this small and the minerals have that much to yield, what is the total capacity in just the shale fields alone? A million new wells? Ten million? I honestly don't know.

Well, no one loves the modeling process more than I, and no one appreciates the mathematical process more, so I am forced by my nature to give in to your research. And I appreciate it. But $128 for that book? Every purchase in these days of intolerably low oil prices makes me cringe.

Modeling? Well, here's one for you. If we could turn back the clock and model today's oil and gas environment using the probability system, we would not be looking at cheaper oil than latte. And that windmill and solar panel graph? Well, I'm just thinking, on a drive through Texas, Arizona, or California deserts, you look out the window and see all these giant, spidery windmills turning, these solar panels. Yet I'm assured that wind and solar make up only 10% of energy. If you multiply the windmills and solar panels by 10, you get this horrid landscape which, I guarantee you, will pose unintended consequences. I don't know what they are, but they're there, and since unintended consequences always take more of a toll than one would expect, those things are going to raise the cost. What I'm saying is that renewables are not going to come without their own set of problems.

But I do like your graphs and the thought that went into all this. I wish I had conceived it. When I first met Bill Sharpe, the man who won the Nobel Prize for coming up with the Sharpe Ratio, I went home and looked at the equation on the computer. He later became one of my best friends and is a wonderful person. At one point, I said something like, I saw your ratio, to which he replied, Oh, you did, did you? And I said, I believe I could have come up with it. He didn't miss a beat, saying, you should have, it has been really good to me. I sincerely hope your research pans out in predictability, because--selfishly--that will be very good for me. 

[Coffeeguyzz + 454]

Directly related to this topic of US LTO viability ...

Record breaking charter rates are now taking place for Aframax carriers lifting oil from Da Guf and delivering to European and Mediterranean refineries.

Although no explanation has yet been put forth to explain this surge in demand, observers may deduce that it is tied into the fact that VLSFO will become rhe 'go to' marine fuel and US LTO is now determined to be the preferred feedstock with which to produce this globally demanded fuel.

Long term bullishness for producers should this speculation prove valid.

[Gerry Maddoux + 3,627]

Yes, the IMO2020 should push LTO to the forefront. Ironically, it was largely China that gave this paper tiger any teeth at all, because the power is all in the hands of the Flag States, not the Port States. To show you how crazy the world has become, China pushed for IMO2020, yet is building more new coal-fired utility plants than are in all of Europe.

[Coffeeguyzz + 454]

Mr. Maddoux

Yes, interesting times.

The Ukraine/Russia transit contract has just been announced.

With UK pipe delivery cost of 36.25 pence/therm, I reckon that's about $4.70/mmbtu.

Again, within shouting distance of US LNG pricing of ~$5.60/mmbtu.

Coming spring/summer LNG pricing expected to plummet.

[Gerry Maddoux + 3,627]

18 minutes ago, Coffeeguyzz said:

Coming spring/summer LNG pricing expected to plummet.

Makes perfect sense: the stuff is whistling out our ears. Putin's too. I have to say, I can't help but believe this Nord Stream 2 deal to be a major screw-up on Angela Merkel's part. And I think it'll bite her in the end. Just sayin' . . . the US is the biggest buyer of German cars, and when Mr. Trump gets acquitted by the Senate he's going to go on full-attack. If he then gets reelected, and I think he will, then I sure wouldn't want to be the head of a country that crossed him in any way. If you're planning on buying a new Mercedes, I think I'd go ahead and do it now. I don't think the LNG sales to Germany will make or break this industry, but the Nord Stream II sends a strong message. Tom Kirkman is very smart about all this, too, and I asked him to provide a little color why he thinks it's a good deal.

[El Nikko + 2,145]

Rig count is going up again

https://oilprice.com/Energy/Energy-General/US-Sees-First-Double-Digit-Oil-Rig-Count-Increase-In-8-Months.html

[ceo_energemsier + 1,818]

4 hours ago, El Nikko said:

Rig count is going up again

https://oilprice.com/Energy/Energy-General/US-Sees-First-Double-Digit-Oil-Rig-Count-Increase-In-8-Months.html

Rig count is up so is demand for US crude and IMO 2020 is and will be playing a bit big part for the demand increase in light sweet crude bringing with it a price increase.

https://oilprice.com/Latest-Energy-News/World-News/Oil-Freight-Rates-From-US-Gulf-Coast-Hit-New-Record-As-Demand-Booms.html