10 years ago when I started to become "collapse aware", oil & oil reserves was the most mysterious topic for me, I was exactly looking for this kind of quality content. Thank you Nate & Art for this belated present, it is fascinating. It's like reading the "blood test results" for our civilization....
In whatever direction society moves toward, I credit this podcast in giving me some clarity as to what we are experiencing now. A clear mind certainly lowers anxiety and helps with addressing our numerous problems.
The great unknown is the Natural Gas associated with shale oil, and the sprawl of Natural Gas power plants and the data centers that followed this sprawl, data centers also known as "the cloud" the big baskets that keeps all the eggs of the modern civilization and modern life...
Probably not, actually. The historical tendency is for the oil companies to over estimate their "proven" reserves. How else do you think they motivate banks and Wall Street investors to lend them the money?@@ivancho5854
This is the only place where I hear loudly about energy blindness. How come there's not more ruckus about this? I keep coming back but it puts me in cognitive dissonance every time. Thanks for keeping the flame up.
Peak Prosperity has a few great videos discussing and comparing historical extraction and the various lag times involved in transportation and refining the components and various grades that influence total production, as well as how dire the situation really is.
Yes, but can you blame the general public? People (including smart and knowledgeable people) have been talking about peak oil since the 1970s, and it never seems to happen. Of course, if oil is decomposed biological matter that has undergone some geophysical process, everyone understands that there must be a limit to how much oil there is out in the world, but the goalposts keep moving. Somebody could have started their career as a 20-year-old back in 1970 and gone through their entire professional life listening to people talk about how peak oil is just around the corner, and they would have been wrong every time. Nobody will take peak oil arguments seriously until we actually start seeing sub 100M BPD figures, at which point my guess is that there will be panic.
"To the end" says it all. That presumption, as realistic as it now is, is self-inflicted. The Earth proceeded quite nicely without us for BILLIONS of years. Humans, and humans alone upset an ancient balance that will never be restored. Yaaay humans!
@@mithrandirthegrey7644 As Art pointed out, even when we see it behind us, we will still be blind to it and blame the troubles on "those people," whoever they are. Just as we are blind to human overshoot.
And the end might be after we finish living. A lot of oil yet to be drilled, China is going to fund Africa wherever they can, oil in sub Saharan Africa, South America, Artic Circle, still yet to fully come online, Africa is supposed to be almost half the world by 2100, even if they just supplied themselves, the emissions of the last 200 years could equal the next 100. $200 oil would be explained away as "growth". I'm starting to equate the energy in a tank of diesel to my electrical usage, at 4.07kwh per day, it's 5.2 months. A huge amount of energy just to go for a drive.
🎯 Key Takeaways for quick navigation: 02:10 🛢️ *Shale oil, responsible for most of the recent growth in global oil output, is facing declining well productivity, with wells producing 50% less per well than a few years ago.* 13:42 💼 *While the US recently reached a new peak in oil production, the average performance of US wells is declining. The current high production is attributed to new wells having exceptionally high early rates, masking the overall declining trend.* 18:32 📈 *The disconnect between high production levels and actual well performance brings concerns of getting closer to the depletion point, emphasizing challenges in sustaining such production levels in the coming years.* 20:54 💰 *Oil companies need significant upfront investment, around $6-10 million per well, and require an estimated ultimate recovery of nearly 300,000 barrels per well to break even at current prices.* 23:35 📉 *The US oil supply is heavily dependent on shale oil (tight oil), while conventional, Alaskan, and offshore sources are on a declining trajectory, indicating a substantial shift in the country's oil production landscape.* 26:42 🌊 *Alaska's oil production is approaching zero, contributing minimally to the overall US supply, and the offshore and conventional sources are in decline, accelerating over time.* 26:56 ⛽ *The majority (about 70%) of current U.S. oil production comes from tight oil.* 28:31 ⬇️ *Of the three major shale oil plays (Permian, Bakken, Eagle Ford), only Permian is still growing, but its peak and decline seem imminent.* 30:02 📉 *Tight oil production, especially in the Permian Basin, has faced peaks and declines, impacting overall U.S. oil output.* 32:00 🛢️ *Oil shale, an immature source rock, remains a potential resource, but technical and environmental challenges hinder its widespread use.* 34:57 🌐 *Global oil supply growth since 2010 is primarily attributed to tight oil, significantly impacting the world's energy landscape.* 36:43 💡 *The dependency on tight oil, particularly in the Permian, is crucial for meeting U.S. oil demands.* 40:37 🌐 *The declining trend in oil production raises questions about societal adaptation, financial claims, and geopolitical implications, especially in times of war.* 44:58 📉 *The estimated ultimate recovery (EUR) in the Permian Basin has dropped by around 50% in recent years, possibly due to overdrilling and cannibalization of wells.* 47:31 🔄 *Shale companies, optimizing for faster returns, may have overdrilled the Permian, affecting well performance and long-term oil recovery expectations.* 51:46 💸 *Investors' reluctance to fund shale companies stems from a history of poor returns and concerns about capital destruction.* 52:36 🛢️ *Energy, crucial to our lifestyles, has low returns and a small percentage in the S&P 500, impacting the economy.* 53:30 🛢️ *Rig count correlates with future oil production; recent rig counts might not reflect immediate oil supply changes.* 55:32 🛢️ *Current record oil production (13.1 million barrels/day) is a result of rigs drilling in 2021-2022, indicating a potential lag in effects.* 56:41 🛢️ *Well productivity decline (50% since 2019) implies the need for twice as many wells to maintain current oil production.* 57:31 🛢️ *Rig count in the US is around 600-625, significantly lower than pre-2014 levels, with advancements in technology increasing rig productivity.* 59:07 🛢️ *Increasing disconnect between rig count and oil production due to advanced technology; focus should be on the number of producing wells added each month.* 01:00:45 🛢️ *Recent research suggests shale oil plays, including the Permian Basin, are in permanent decline due to overdrilling.* 01:01:55 🛢️ *At current oil prices, new drilling might not make economic sense; financial constraints might impact future oil production.* 01:05:44 🛢️ *Predicted future oil production decline due to a combination of geology, limited low-hanging fruit, and financial challenges; potential 20% lower by 2040-2050.* 01:13:29 🌍 *Balancing the need to decrease fossil fuel consumption with avoiding societal collapse; the challenge of transitioning away from an oil-based economy.* 01:19:54 🤖 *Artificial intelligence is unlikely to change the geology of the Earth but may enhance technology for oil and gas production.* 01:20:22 🤖 *AI could improve decision-making, potentially preventing drilling in suboptimal locations, but major contributions to energy supply might take many years.* 01:25:19 🔄 *Lowering energy consumption seems necessary, but coordinating efforts globally or through AI faces challenges due to historical patterns and human tendencies.* 01:27:23 🌍 *Understanding geopolitical conflicts, like those in the Middle East, requires acknowledging the role of resources and energy, emphasizing the impact on global politics.* 01:28:35 ☀️ *The next discussion could focus on renewable energy, energy density, nuclear power, and why these may not entirely replace the energy quality provided by oil and gas.* Made with HARPA AI
Thanks. I am watching fewer and fewer of Nate's podcasts because of declining relevance to my own work, so a synopsis is welcome. I always need more info.
@@ShaneNullwhy? You are all clowns to believe any of this nonsense. You are fools. Larger straw my ass. Stop falling for the criminals. Wake up. The US will have less than 120 million humans alive by 2025
"How we going to fight our wars, without oil?" If politicians & The statedepartement would be as energy aware as the military, we wouldn't be in this situation. It is rare to discover such Pure honesty!
Art and Nate shouldn't apologize for their 2005 call of peak oil; they were right, conventional oil peaked. Our investment group called the Bakken Peak in 2019; Eagle ford is getting there now. Yes, the mighty Permian is still growing, but the "Red Queen" catches all who oppose her eventually (legacy well collapsing production vs. new IP). We follow all the major shale players in the U.S., look at Devon 10Q data, lot's of CapEx just to standstill (running ever faster just to keep production flat).
hard to overstate how good Art is trying to explain a very complicated subject. There is no one better and Nate is a good part of the discussion with his common sense basic questions. Thanks guys!
A great interview as always and I very much appreciate hearing from Arthur. These talks have greatly improved my understanding of our most important resource. Thank you guys!
I have two shale wells that have produced over 500kbbl each. The first was drilled in July 2014 and the second was drilled in Nov 2017. The second one was recently refracked and is producing back at nearly initial levels and has done so since it was re-fracked in July. That's on one section that only has 5 wells. On another section we have 25 wells and none of those wells have produced as much oil as the ones on the less densely developed property. The overall production on that section is higher but not on a per well basis. I should also add that the section with 25 wells also had 10 of the older wells drilled between 1960 and 1990. None of those wells produced more than 40kbbl over their lifetime and their max production was maybe 100 bbl/day. The shale wells generally produced over 400 bbl/day initially and some were producing as much as 800bbl/day and those are just oil figures not including gas of which there is quite a lot. The calls made by people like Art were way off base as he admits.
@@adairjanney7109 The need for shale and the like is in itself proof positive of peak oil. Noone would be messing with that if sweet light were still abundant. The question is not that oil will become non-viable but when.
@@SundogbuildersNet tell that to the Russians their petroleum industry is based almost entirely on fracking especially the gas wells and they have only ever increased their production levels. the Russians operate on the theory that oil is not a fossil fuel at all , they started fracking under the assumption that oil was produced by extremophile bacteria in ground water at depth. right or wrong the process works and the very existence of Russian energy exports falsifies your claim.
@@bbking0064 I don't know that answer. I know how much water is used, about 125,000 barrels per well depending on the length but that would be a 4400 ft horizontal.
By far, Art is my favorite guest. He seems to be the least addicted to hopium and the single most realistic and grounded guest you have on. Keep bringing him back. Suggestion...would love you to have Paul Beckwith on.
I was one of the people who, in 2006, heard Congressman Bartlett's series of one hour talks on the floor of US Congress via C-Span. Lead me down the rabbit hole. I read Heinberg, Greer, Kunstler, watched videos of various productions about peak oil and the near term implications. I changed my business relationships based on the information and proceeded to loose my financial ass so to speak. I suppose I am more ready than most because of the decisions I made. lol
All the young men who bought new pick up trucks at high prices over the last decade will not go along with the program being designed by those who deeply care about the ecology. So, now, I must make a statement of I have no idea what these men will do once they are told to keep up the payments but sorry, they can't drive the truck anywhere...
@@RickLarsonPermacultureDesignerWon't be pretty if the Elites are flying their G-6s to Davos. BTW, if they can't drive the truck they can't make the payments.
Crash now and avoid the rush! Well, one nice thing is having money is also stressful in these bare knuckle investment environments, something to be said about just having enough to build up real useful life-force tools is exceptionally satisfying. I'm not a poor starving creature getting screwed. To have/increase digits on the screen one has to be screwing somebody.
Oh yes please, would love to hear Nate and Arthur discuss energy quality. It’s an aspect of peak energy where I still have questions and where I’d really like to understand in depth. It’s also an area where the dominant narrative is different than what I hear on this channel, so would love to understand the detailed facts behind it to better understand the reality. 🙏
Thank you Nate and Arthur for this superb, non-ideological, deep dive into the energy connindrum the world faces today and in the future. I eagerly await your Feb-March discussion on renewables, nuclear, energy density issues which, having studied it a bit, has concerned me that many backers of these approaches (I among them) have not sufficiently analyzed and so are ill-prepared to understand in their unforseen and unintended conequeces. Thanks again!
Great conversation! Since I am getting older and older I see peak oil as an ongoing discussion. Decades ago I read a book called "the last drop" and it made the case for declining oil. Since then decades passed and every year someone finds new sources or technology finds new ways. The only thing I really feel is hurting on the long run are the under investments because of ESG. If this keeps going (which I don't think) other parts of the world will take over in terms of energy production. Also, just from an investor point of view. You are right, funding or loans are difficult to get for oil companies but the majors like Chevron, Shell, Equinor and so on are flooded with cash. So they do not need any credit. But still ESG is one of the major problem in the energy market (my opinion).
The decline in production was mainly due to the drop in oil prices from the pandemic. Not because the productivity of wells got worse and continued to go down.
I am most definetly looking forward to the next episode with Art! :-) Thank you so much for this wonderful podcast and all the information you put out there for us, you are really making a difference!
At some point discussions like this will have to take place in public with world leaders present answering questions. There will be a time where "oh, we can't talk about that" will no longer be accepted.
I spent nearly fifty years in the oil industry, working in various areas including energy transportation, deepwater drilling and in and around oil refineries. More recently I’ve been involved in the regulatory oversight of extremely large solar projects. If nothing else, I’d certainly consider myself a student of the energy business. Alaska and the US Deepwater Oil Drilling which are almost completely controlled by the Federal Government has been largely hamstrung by the Climate Alarmists in the Biden Administration and the Democrats. The same pretty much applies to the vast federal lands of the US West. If the US becomes serious about increasing oil production it can open up these areas which can probably push production shortfalls out another few decades.
What blows me away is that not one mention has been made in this podcast to bring the awareness that oil is the number 2 naturally self sustaining renewable resource behind water on the planet !! Such as it will never run out of!!
Your children will grow to old age with no heat, no fuel, after 20 years if any is available it will be imported at his prices. You are misinformed, dear.
Back in 2003 my wife and I learned about peak oil, and also in consideration of oncoming global climate chaos, decided move from our beautiful homes and employment in Sacramento California to somewhere we might be able to ride out the coming storm, a place where permaculture was possible, so in 2006 we moved to Oregon. Best relocation decision I ever made in my thankfully long life so far (I'm a Vietnam vet).
Wow! My (ex) wife and I did exactly the same thing in 2003, starting a permaculture garden and building an off grid adobe homestead, in the highlands of Arizona. And I too am a Vietnam era veteran.... it was because of awareness of peak oil..... but now I'm pretty skeptical that anything major will happen in my lifetime. Just getting Iran, Venezuela and Russia back in production should keep the party going for decades to come.
After 2 decades of living off grid, i can say that living with batteries is a pain in the ass. The idea that we can run modern industry on solar is delusional. Passive solar construction works great! All new construction should take into account the trajectories of the sun through the year! Permaculture turned out to be a scam though. Double digging, "Lasagna" gardening works far better!
Art made a great point here, that pretty much all wars are resource wars and I would add one more viewpoint; the pandemic caused so much more damage than we have yet experienced. I watched a video yesterday, on the UK and the mental problems among young people since the pandemic is quite shocking; for instance.
Another good show. However, I would enjoy more of the "how to" shows. We became very serious about our lifestyle and modern system dependence about 4 years ago. It has been a journey blessed by finding folks who share how they do things. Yes there is a problem, now what should I do. Again, I'm not trying to be critical. I'm just thinking that with your network, you might find folks from a wide range of practical experience. Peace.
Always a great discussion. One question, and I'm only half way through so I apologize if this was answered by Art. Each fracking well requires millions of gallons of water. The last big play that hasn't peaked yet is in the driest part of the US. Is water availability, and affordability a limiting factor in the overall production of the Permian? As you may know most of the South West is living off of fossil water aquifers that replenish on a very long time scale. Like 1000 years long, so how long before those aquifers are drained and what does that mean for the residents of West Texas and NM? Thanks again for the work you both are doing.
No problem. People have got that all figured out. I see the word "hope" in there. "New Mexico governor proposes $500M to treat fracking wastewater... The administration hopes to make the water available to businesses ranging from microchip manufacturers to hydrogen fuel producers." -AP 12/5/2023
Don’t forget the sand, like a lot of sand, were talking 10,000 tons of sand per well, and it’s not just any only sand it’s silica sand, and it has to come from somewhere, and we mustn’t forget thousands of litres of chemicals, toxic chemicals, that aren’t just for the drilling process, no, the fracking process, if they contaminate you water system, you’ve got problems real problems🤔
@@A3Kr0n That's a lot of taxpayer money there, don't ya know. Who benefits from that? Fat cats imo. Its like a big subsidy for the industry paid for by the people of NM who are also paying more for road maintenance from the wear and tear of hundreds of thousands of trucks. It doesn't seem worth it for a resource which will be uneconomic soon, like 10 years or less.
I hope you have good quality time off Nate and come back feeling recharged. We rely very much on the information you are providing, but understably it must take a toll on you. Gratitude!
One thing people constantly underestimate when they try to predict the future is how much civilization wants to stay alive. So I would not reject the idea of cooking oil in Utah, even if it literally boils the planet. It is rather reasonable to suppose that after three or four recessions down the line half of Utah will cook oil without a second thought and nobody will care if it only buys a few years before the total ecological collapse.
Same thing with NY state with their “ban on fracking”. Turn the screws hard enough and they’ll all be begging for their water to light on fire too like it does down in PA around the Marcellus shale area.
Absolutely brilliant interview!! However, the most important aspect of petroleum, and natural gas, whose synthesis have the same origin, namely organic decomposition, is amonium, which is used as fertlizer for food production. Neither renewable or nuclear energy sources can produce amonia. Food for thought, so to speak. Another aspect I would like to highlight is that all the energy we are using to switch from combustion engine transport to electric transport is wasted energy, because unless we build nuclear power plants galore, thermal generation of base load power capacity is all we have to supply the energy our vehicles use today, and that means burning oil, gas, or coal!!
Wow, if the shale oil peaks next year, it'll be consistent with the latest recalculation of Limits to Growth, which shows global industrial output peaking in 2024, then dropping... Forever. Probably the single scariest piece of data I've seen in recent years.
@@ericstaib8035Berman's conclusions are logical to me. Interesting too that the big boys are judiciously selling their Shale assets, even Chevron following it's recent acquisitions. Tight o&g requires a continuous stream of new wells and the corresponding capex stream. Current financial conditions are working against that model.
Would be interesting to hear Art talk about maybe places where he is missing new supply (i.e. new peak oil argument is wrong again). Makes me think of new oil off Guyana, Venezuelan oil coming back online, increased Oil Sands Develpment in Canada, Artic Drilling, etc. Keeping the important emissions piece out of the equation, could humans not have a lot of more oil (albeit more expensive) to develop?
I’m no expert but here’s my sense: those places will be drilled/attempted but the new production won’t be enough to offset decline. Still that's why Art says we'll be at 80% of current levels in 2 decades - because of such projects
There are centuries worth of oil. However the costs are the key thing. We've already passed the peak for the cheap-to-produce oil. Peak oil is an economic phenomenon.
What a great conversation it was ! May I ask a question. Where EROI stands in this topic? I've learned from the thesis of VIctor Court "ENERGY, EROI, AND ECONOMIC GROWTH IN A LONG-TERM PERSPECTIVE" that an EROI lesser than 11:1 could create turmoils : " Now that we have estimated that, at current energy intensity, the US requires a minimum societal EROI of 11:1 (with a most likely interval of [8-13.5]) in order to possibly have positive economic growth" (page 173). He also wrote: " New renewable technologies toward which human future is destined have relatively lower EROIs, with average values for wind power, photovoltaic panels, and first generation biofuels respectively around 15-20:1, 4-6:1, and 1-2:1 (Hall et al. 2014). Adding the intermittent nature of renewable energy to this perspective suggests that (so far) new renewable technologies hardly seem capable of coping with the minimum required societal EROI of 11:1 that we have calculated." (page 174). Maybe it's an interrogation for the next podcast with Art Berman?
So, to sum it up in geopolitical context, it should come as no surprise why US ( The country totally addicted to oil, and built/organised around oil-car culture) is pretty, pretty, pretty active in supporting it’s great ally in middle west( for which whole world will probably pay the biggest price.. great 👍
Thanks Nate, wondered when we’d get an up date from Art, and thanks Art. Was convinced Oil had peaked when from one of your previous discussions Art explained (with graph) Oil wasn’t just Crude Oil (Conventional) in the Old sense anymore, but was being made up from Crude, Tight Oil (Fracked), Refinery Gain, Bio fuels, NG distillates, and Renewables and Oxygenates. And so the Oil industry is now in the Red Queen Syndrome, and only a matter of time, I’d say before the end of this decade, before it’s fully in the public domain. And so as you touched on at the end of your conversation, when the implications are fully understood will it result in panic with every human and country for themselves, or some form of “The Great Simplification”. In the meantime Nate and Art you will remain labelled as Cassandras🤔
Correct it doesn’t add anymore but we are also able to tap into reservoirs we weren’t in the past. We are currently drilling longer laterals and depleting the backlog of DUC’s finally which is contributing to increased production. Look at the oil rig count vs frac spreads. DUC inventory is severely declining while Drilling rigs are declining and frac spreads are up which points to puting many DUC’s into production.
Some of the wells have multiple laterals that go out 3 to 5 miles from a single well head. So they can drill Wells very close together on the but are able to draw oil from a very large area.
our societies in the west are deeply declining, but in contradiction, oil output based upon the destruction of water by fracking is increasing to record levels; in fact the U.S. is producing more oil right now than any country in history, and exporting more oil than any other country; it is truly a catastrophic sh*&&tsh%(w
Shale is an old ocean bed subject to maturation. In Appalachia it starts at 3,000 feet and ends at 52,000 feet we know there is huge oil ,well below the current wells 6-12k feet deep including 23,000'
Back in the 1990s, a number of the independent participants in the Canadian natural gas industry (as opposed to oil) appealed to provincial governments in to "enumerate" gas extraction icenses. That is because when 2 competitors are licensed to draw from the same reserve, any gas I don't get is gas the other guy gets. So even when prices fall, both operators self-cannibalize, primarily to limit the share of the reserve's supply that their competitor gets. If licenses are enumerated (they could be renewable), then I don't lose out to the other guy if I cut back my production until prices start to pick back up--as kong as the sum of the production limits in our two licenses does not obviously exceed reserve capacity to supply. Big oil intervemed, not wanting the provinces to attach an enumerated production volume to each license. And gettingnsuch a orocess right would be hard, and governments did not want to deal with the complications, anyway. Innthis context, "self-cannubalizing" is a rational producer behaviour.
Just to cut to the chase, what you are discussing is the economics of shale oil production as compared to conventional oil on a global market. This is a real day-to-day issue for the shale oil plays in the US, but it has nothing to do with the actual reserves available to us. These shale reserves are missive, not only in the US but in many other locations on earth. Therefore, descriptors like "peak oil" don't really have a meaning with regard to how much recoverable hydrocarbon is left to exploit on earth. It's actually a term tied to global oil price from conventional plays versus the increasing cost of shale oil production. But in the big picture, the US will never be subject to the kind of leverage that OPEC has applied in the past, or at least will not be subject to it in the same way, when we only thought in terms of conventional oil reserves. This is a good thing, gentlemen, and should be described in this way, rather than a "slurping sound", as if nothing is left to recover
1. 50,000 tight oil wells, and drilling more, just to stand still... are adequate or even any $$ reserves put aside for capping and rehab? or are they stranded, emitting COH4 etc.? Is that cost included in Art's summary of costs to breakeven at 300K B per well? 2. what's going to peak first: tight oil or fossil water to feed these wells?
I'm fine with O&G, produced and used as cleanly as possible. At the same time, it makes sense to leave ourselves some runway by expanding electricity production and having some portion of light transportation being using electrical where it can. Given the advancements in solar cells and storage, you can pick up many percentage points there on the transportation side. Add some MPG improvements on the current lower MPG targest and you've made some real net progress. Gas and diesel are the 2 biggest from crude, far and away - stretch those to meet the hard demanding performance curves they're not ready to do with BEVs etc, flight etc.
I would like to ask Arthur: If we use less, I guess that would mean the infrastructure takes a hit. Which means we would be locked into using the oil to repair and replace. Instead of using that oil for an infrastructure that only asks but doesn’t give, would it not be better to use the remaining oil to build an infrastructure that doesn’t demand that much? Mining the old infrastructure for materials? (I understand some of it is not recyclable)
I find the discussion at 1:15:00 or so very frustrating. Yes, if we wind down oil energy too quickly bad things are likely to happen. But doing it too slowly, bad things will happen. The frustration is - if we consider that there is a limit we don't want to cross, we've walked ourselves deep into a dead-end, where as if we had started transitioning in the early 90's that is another 30 years of gradual change we could very much do with, and those cuts would have bought us even more time. But I have to accept that it is all under water under the bridge now, and like Art, it's hard to see a plan plus globally accepted action that can move us anywhere near fast enough.
The North Slope is also one of the most efficient places to produce. They have centralized facilities, they re-inject 7.5 billion cubic feet of gas per day because that gas is stranded. The cost of a gas pipeline for all the gas up there is prohibitive and can't compete with the price of gas in the lower 48 or elsewhere in the world. Initially they drilled Wells on 300 ft centers at Prudhoe Bay. Now they are drilling Wells at 20 to 40 ft centers to limit the amount of tundra that is impacted. The total amount of tundra that has been lost oil production facilities is minimal compared to the vast amount of tundra up there. It is a cold desert.
I'm pretty sure the engineers are on it. Wells are often capped to allow them to re-pressurize. Ethanol and related products are very much "renewable" and virtually limitless. Big oil is part of that too, so we have to watch for "the broad-brush" tendency to emotionalize what is the state of affairs. It's not that bad or fearsome. We do have a full-plate though - it ain't never going to be boring again - hooray for that.
Does this means the U.S. has to go back and aggressively exploit some other country? I live all too near the Permian Basin in Texas and New Mexico and we have had three 5.1+ earthquakes caused by fracking and all my wall surfaces are cracking and my home’s value deteriorates due to this. There is subsidence in the landscape around this oilfield and roads in that area are a disaster due to the large oil rigs moving 24/7. FYI: my dad used to be a chemist working for Humble Oil in Houston, Texas.
My gut feeling if the politicians see this information cognitive dissonance would be shown. The way I interpret your podcast is to have discourse how we organize ourselves for the coming disaster. Our addiction to Dopamine and our financial system will stop us from becoming enlightened. Would be great to talk to Ken Wilber.
Ken Wilber, haven't heard that name in the context of oil, or energy. He dipped his toe in the futures business a couple years ago and was way off so he seems to have backed off. What would you have him talk about? @elliottmcintyre9092 @elliottmcintyre9092
With hydraulic fracturing we have opened up so much economic resource extraction from shale that we knew was there for years but it wasn’t until recently we have learned how to economically extract it in the earlier 2000’s
So Art got a few things wrong about the oil production on the North Slope and drilling in general. North slope production peaked at 2 million barrels a day in the late 80's. Prudhoe Bay peaked at about 1.6 million barrels per day. It is now down to about 250,000 barrels. That's part of the natural decline of an oil field. Today's throughput through the trans-alaska pipeline is about half a million barrels a day. There have been a lot of new discoveries made in the last 5 to 10 years, but the environmentalists have slowed development considerably with lawsuits, even after permits were granted.. In spite of this, new field's will come online and get the throughput to 700000 and potentially up to 1 million barrels per day. They keep finding more oil up on the North Slope.
When they drill Wells on the North Slope, they drill production wells and injection wells. They inject treated sea water and a miscible injection, which is basically a solvent to increase the production. It essentially washes more oil through the rock. Even with the present decline, all the North Slope Fields have produced much more than the original estimate of recoverable reserves. I'm not sure of Art's background I'm thinking it may be refining and you need to talk to a petroleum geologist to get more knowledgeable information on drilling.
How about a step change in energy efficiency as a solution? A quoted figure is that 40% of the heat value of crude oil is consumed in the Oil Refining process. How do we make that 20%? How about creative uses for heat below 300 degree F?
So question? With the all the oil being produced why the the huge drawdown from the strategic reserve? I am aware that most of the the tight oil is being refined outside the US. Just what some insight on why it wasn't drained completely
Nate, serious question, with between 8-9 billion barrels of global oil inventories right now, why would a 1m bopd deficit have such an affect on the oil price. You could have almost a 5m bopd deficit for close to 5 years before working through all the inventories. Sure that cannot happen but there seems to be tons of slack in the oil industry. What am I missing?
In the face of both pioneer and continental resource ceos saying the Permian is maturing the following several months until now production has ultimately increased. Thus I think sometime next year we start to see a meaningful production reversal as the DUCs get used up and longer laterals can only go so far in the little tier 1 acreage left and the subsequent tier 2 and 3 but drilling needs to pick back up just to replace it and rigs are down noticeably.
I largely subscribe to the peak oil narrative. What I don't understand about what Mr. Berman said is that although oil supply is on the verge of peaking if not declining, his forecast for oil prices is fairly low to declining. When inflation is factored into that, oil seems to be even cheaper. He forecasts that even though he says there will be a lot of pain as supply declines even slowly. That seems counter-intuitive.
How much do you now factor in enormous off shore fields in Guyana, Equator (largest know in the world) being developed by Exxon, Hess/Chevron Thank you ?
I retired in 2003 after 30 years drilling contractor. on various rig forms from drill ships to semi submersible. land rigs jack ups & platforms as I saw this shale fracking plays being promoted Seemed to me like that's really got to be "Scraping the Barrel". Esp when I viewed the BS promotional material that went with it . Subsequent turn of events have shown this to be correct.
Guyana's oil fields are not only massive, but light "sweet" crude. (the best kind), whereas Venezuela's oil fields are super-heavy "sour" crude which is difficult gunk to extract and pump, usually only used for shipping fuel unless you do some very expensive extra refining, and only a handful of countries have refineries which can handle it - hence it usually sells at a lower price. So much for "peak oil" LOL... there's more out there. But demand is slowing globally which is keeping prices down, and US is playing its usual games in engineering supply/prices trying to undermine OPEC countries and anybody else it deems "evil". We cant 'phase out' fossil fuels, global warming will continue apace because its based on Energy Imbalance, and GHG forcing is just one part of that - and there's enough GHGs in the atmosphere, but more importantly, far more heating already baked into the oceans, to keep global warming going for decades - (ie "in the pipeline"), even if we stopped burning every last kilo and litre tomorrow. Besides by now, natural emissions have begun to overtake human emissions. The Canadian, Siberian, European fires last summer pumped out more C02, and most methane is now coming from damaged tropical wetlands, forests and melting permafrost. Not to mention, all the wars going on at the moment - as the MIC factories pumps out artillery shells, tanks, and other WMDs.
The only thing left after shale oil is "Oil Shale" - and no I'm not playing semantics. Shale oil is oil that can be produced at depth from low permeability reservoirs using fracking. Oil Shale has to be mined - physically mined - and the moveable oil must be squeezed, or crushed, or solvent cut, or even cooked out from the crushed rock. (And this ain't pretty nor is it cheap.) The Green on this chart is smeared out in time . The red peak will go down as fast (or faster?) than it it went up. Once it's gone - it's done - over - kaput - finito! This is the thing about a "Finite Resource" - it is finite - simple - right.
The experts have been saying we are out of oil for 40 years. I have been in the oil field all my 80 yr. life. There is millions of acres yet we can drill on.
Art is great but only 20% decline in 20 to 30 years? That seems a bit optimistic to me. Especially given the last driver of oil production, ( the permian) is seeing a 50% decline in total well production over 3 or 4 years. That is despite an increase in rig count. If half of US oil production declines by anywhere near 50% in the next few years, that would be a 25% drop in just a couple of years. With dropping liquidity and, market volatility increasing it seems unlikely there will be an increase in rig counts. There will probably be a huge drop off which means an even bigger decline in productivity in the near future. Even if the big straw keeps on getting bigger, eventually there will be a big Seneca cliff of dropoff in production. Will the dollar survive when the world realizes the vast oil reserves it supposedly has are not so vast after all?
*_"Cantarell Field or Cantarell Complex_* is an aging supergiant offshore oil field in Mexico. It was discovered in 1976 after oil stains were noticed by a fisherman, Rudesindo Cantarell Jimenez, in 1972. It was placed on nitrogen injection in 2000, and *_production peaked at 2.1 million barrels per day in 2004."_*
Several things, yes the US production is up and its due to shale oil but in the greater scheme of things in possible long term production that is pretty minimal. Canada has the 3rd largest reserves in the world and has only made a tiny dent same as Venezuela. In both places its mostly high capital heavy oil. But once you build the project lets say 30K BPD for steam injection or 200k BPD for mine you have that production for 25-30 years. The only reason Canadian oil production didn't keep on increasing was gov't policy stopping it. No one is building steam plants or mine projects. Also Canadian reserves could be number 2 with a little more work on the carbonate heavy oil resource. Oil companies don't need any money right now to fund expansion because none of them are expanding production. All those profits are being returned to shareholders in dividends , special dividends and share by backs. Any company going out to buy another company is hammered in the market. Picky point but very very few people in Canada own mineral rights to the oil under their land. The provinces own the mineral rights and get royalty payments from oil companies. landowners get a payment but that is to compensate them for the inconvenience of the oil company coming on their land. Not going to get rich off it. And you cannot say no.
Historically, overproduction has been the kryptonite of the Oil Industry; preventing, and controlling overproduction is the business model for profitability.
Kuntsler went all pro conspiracy during Covid and also became a Trump supporter. He may still be very energy conscious but I dont know his current position re climate change or ecological overshoot as I stopped following his site a couple of years back.
Reference EIA data for reference. On a monthly and yearly basis production per well has on average increased. Not sure they would include the lifetime gross production in this calculation though.
10 years ago when I started to become "collapse aware", oil & oil reserves was the most mysterious topic for me, I was exactly looking for this kind of quality content. Thank you Nate & Art for this belated present, it is fascinating. It's like reading the "blood test results" for our civilization....
I’m sooooo grateful for them!
In whatever direction society moves toward, I credit this podcast in giving me some clarity as to what we are experiencing now. A clear mind certainly lowers anxiety and helps with addressing our numerous problems.
Oil companies are only required to publish proven reserves. I'm betting that ExxonMobil and Chevron have more than they're disclosing. 🤞
The great unknown is the Natural Gas associated with shale oil, and the sprawl of Natural Gas power plants and the data centers that followed this sprawl, data centers also known as "the cloud" the big baskets that keeps all the eggs of the modern civilization and modern life...
Probably not, actually. The historical tendency is for the oil companies to over estimate their "proven" reserves. How else do you think they motivate banks and Wall Street investors to lend them the money?@@ivancho5854
This is the only place where I hear loudly about energy blindness. How come there's not more ruckus about this? I keep coming back but it puts me in cognitive dissonance every time. Thanks for keeping the flame up.
It's mindblowing, isn't it? Why isn't everybody talking about this on the daily everywhere? Why are we even talking about anything else at all?
Is the Green New Deal, just green smoke? The real agenda is here.
Peak Prosperity has a few great videos discussing and comparing historical extraction and the various lag times involved in transportation and refining the components and various grades that influence total production, as well as how dire the situation really is.
What is the impact of the Biden ban on drilling on Federal lands?
Always appreciate hearing from Art. Unfortunately, energy blindness will continue to the end.
Yes, but can you blame the general public? People (including smart and knowledgeable people) have been talking about peak oil since the 1970s, and it never seems to happen. Of course, if oil is decomposed biological matter that has undergone some geophysical process, everyone understands that there must be a limit to how much oil there is out in the world, but the goalposts keep moving. Somebody could have started their career as a 20-year-old back in 1970 and gone through their entire professional life listening to people talk about how peak oil is just around the corner, and they would have been wrong every time. Nobody will take peak oil arguments seriously until we actually start seeing sub 100M BPD figures, at which point my guess is that there will be panic.
"To the end" says it all. That presumption, as realistic as it now is, is self-inflicted. The Earth proceeded quite nicely without us for BILLIONS of years. Humans, and humans alone upset an ancient balance that will never be restored. Yaaay humans!
@@mithrandirthegrey7644 As Art pointed out, even when we see it behind us, we will still be blind to it and blame the troubles on "those people," whoever they are. Just as we are blind to human overshoot.
You'll be amazed at what $200 oil will accomplish.
And the end might be after we finish living. A lot of oil yet to be drilled, China is going to fund Africa wherever they can, oil in sub Saharan Africa, South America, Artic Circle, still yet to fully come online, Africa is supposed to be almost half the world by 2100, even if they just supplied themselves, the emissions of the last 200 years could equal the next 100.
$200 oil would be explained away as "growth".
I'm starting to equate the energy in a tank of diesel to my electrical usage, at 4.07kwh per day, it's 5.2 months. A huge amount of energy just to go for a drive.
🎯 Key Takeaways for quick navigation:
02:10 🛢️ *Shale oil, responsible for most of the recent growth in global oil output, is facing declining well productivity, with wells producing 50% less per well than a few years ago.*
13:42 💼 *While the US recently reached a new peak in oil production, the average performance of US wells is declining. The current high production is attributed to new wells having exceptionally high early rates, masking the overall declining trend.*
18:32 📈 *The disconnect between high production levels and actual well performance brings concerns of getting closer to the depletion point, emphasizing challenges in sustaining such production levels in the coming years.*
20:54 💰 *Oil companies need significant upfront investment, around $6-10 million per well, and require an estimated ultimate recovery of nearly 300,000 barrels per well to break even at current prices.*
23:35 📉 *The US oil supply is heavily dependent on shale oil (tight oil), while conventional, Alaskan, and offshore sources are on a declining trajectory, indicating a substantial shift in the country's oil production landscape.*
26:42 🌊 *Alaska's oil production is approaching zero, contributing minimally to the overall US supply, and the offshore and conventional sources are in decline, accelerating over time.*
26:56 ⛽ *The majority (about 70%) of current U.S. oil production comes from tight oil.*
28:31 ⬇️ *Of the three major shale oil plays (Permian, Bakken, Eagle Ford), only Permian is still growing, but its peak and decline seem imminent.*
30:02 📉 *Tight oil production, especially in the Permian Basin, has faced peaks and declines, impacting overall U.S. oil output.*
32:00 🛢️ *Oil shale, an immature source rock, remains a potential resource, but technical and environmental challenges hinder its widespread use.*
34:57 🌐 *Global oil supply growth since 2010 is primarily attributed to tight oil, significantly impacting the world's energy landscape.*
36:43 💡 *The dependency on tight oil, particularly in the Permian, is crucial for meeting U.S. oil demands.*
40:37 🌐 *The declining trend in oil production raises questions about societal adaptation, financial claims, and geopolitical implications, especially in times of war.*
44:58 📉 *The estimated ultimate recovery (EUR) in the Permian Basin has dropped by around 50% in recent years, possibly due to overdrilling and cannibalization of wells.*
47:31 🔄 *Shale companies, optimizing for faster returns, may have overdrilled the Permian, affecting well performance and long-term oil recovery expectations.*
51:46 💸 *Investors' reluctance to fund shale companies stems from a history of poor returns and concerns about capital destruction.*
52:36 🛢️ *Energy, crucial to our lifestyles, has low returns and a small percentage in the S&P 500, impacting the economy.*
53:30 🛢️ *Rig count correlates with future oil production; recent rig counts might not reflect immediate oil supply changes.*
55:32 🛢️ *Current record oil production (13.1 million barrels/day) is a result of rigs drilling in 2021-2022, indicating a potential lag in effects.*
56:41 🛢️ *Well productivity decline (50% since 2019) implies the need for twice as many wells to maintain current oil production.*
57:31 🛢️ *Rig count in the US is around 600-625, significantly lower than pre-2014 levels, with advancements in technology increasing rig productivity.*
59:07 🛢️ *Increasing disconnect between rig count and oil production due to advanced technology; focus should be on the number of producing wells added each month.*
01:00:45 🛢️ *Recent research suggests shale oil plays, including the Permian Basin, are in permanent decline due to overdrilling.*
01:01:55 🛢️ *At current oil prices, new drilling might not make economic sense; financial constraints might impact future oil production.*
01:05:44 🛢️ *Predicted future oil production decline due to a combination of geology, limited low-hanging fruit, and financial challenges; potential 20% lower by 2040-2050.*
01:13:29 🌍 *Balancing the need to decrease fossil fuel consumption with avoiding societal collapse; the challenge of transitioning away from an oil-based economy.*
01:19:54 🤖 *Artificial intelligence is unlikely to change the geology of the Earth but may enhance technology for oil and gas production.*
01:20:22 🤖 *AI could improve decision-making, potentially preventing drilling in suboptimal locations, but major contributions to energy supply might take many years.*
01:25:19 🔄 *Lowering energy consumption seems necessary, but coordinating efforts globally or through AI faces challenges due to historical patterns and human tendencies.*
01:27:23 🌍 *Understanding geopolitical conflicts, like those in the Middle East, requires acknowledging the role of resources and energy, emphasizing the impact on global politics.*
01:28:35 ☀️ *The next discussion could focus on renewable energy, energy density, nuclear power, and why these may not entirely replace the energy quality provided by oil and gas.*
Made with HARPA AI
Thanks. I am watching fewer and fewer of Nate's podcasts because of declining relevance to my own work, so a synopsis is welcome. I always need more info.
pin this!
@@ShaneNullwhy?
You are all clowns to believe any of this nonsense.
You are fools.
Larger straw my ass.
Stop falling for the criminals. Wake up.
The US will have less than 120 million humans alive by 2025
There are conflicting ‘comments/information stated’ within this synopsis.
Whatever the future supply, you can bet the price will go up !
"How we going to fight our wars, without oil?"
If politicians & The statedepartement would be as energy aware as the military, we wouldn't be in this situation.
It is rare to discover such
Pure honesty!
Art and Nate shouldn't apologize for their 2005 call of peak oil; they were right, conventional oil peaked. Our investment group called the Bakken Peak in 2019; Eagle ford is getting there now. Yes, the mighty Permian is still growing, but the "Red Queen" catches all who oppose her eventually (legacy well collapsing production vs. new IP). We follow all the major shale players in the U.S., look at Devon 10Q data, lot's of CapEx just to standstill (running ever faster just to keep production flat).
hard to overstate how good Art is trying to explain a very complicated subject. There is no one better and Nate is a good part of the discussion with his common sense basic questions. Thanks guys!
A great interview as always and I very much appreciate hearing from Arthur. These talks have greatly improved my understanding of our most important resource. Thank you guys!
I have two shale wells that have produced over 500kbbl each. The first was drilled in July 2014 and the second was drilled in Nov 2017. The second one was recently refracked and is producing back at nearly initial levels and has done so since it was re-fracked in July. That's on one section that only has 5 wells. On another section we have 25 wells and none of those wells have produced as much oil as the ones on the less densely developed property. The overall production on that section is higher but not on a per well basis.
I should also add that the section with 25 wells also had 10 of the older wells drilled between 1960 and 1990. None of those wells produced more than 40kbbl over their lifetime and their max production was maybe 100 bbl/day. The shale wells generally produced over 400 bbl/day initially and some were producing as much as 800bbl/day and those are just oil figures not including gas of which there is quite a lot. The calls made by people like Art were way off base as he admits.
itll be wrong again, so tired of hearing about opeak oil when shale hasnt even been tapped across the world
@@adairjanney7109
The need for shale and the like is in itself proof positive of peak oil. Noone would be messing with that if sweet light were still abundant.
The question is not that oil will become non-viable but when.
@@SundogbuildersNet tell that to the Russians their petroleum industry is based almost entirely on fracking especially the gas wells and they have only ever increased their production levels. the Russians operate on the theory that oil is not a fossil fuel at all , they started fracking under the assumption that oil was produced by extremophile bacteria in ground water at depth. right or wrong the process works and the very existence of Russian energy exports falsifies your claim.
Just out of interest, how many tonnes of sand is required each time you frack a well?
@@bbking0064 I don't know that answer. I know how much water is used, about 125,000 barrels per well depending on the length but that would be a 4400 ft horizontal.
By far, Art is my favorite guest. He seems to be the least addicted to hopium and the single most realistic and grounded guest you have on. Keep bringing him back.
Suggestion...would love you to have Paul Beckwith on.
And Shackleton 🖤🐱
And Newton! And the Sesame Street rocking chair! 🤣
Lots of knowledge here I wasn’t informed about. Thanks.
I was one of the people who, in 2006, heard Congressman Bartlett's series of one hour talks on the floor of US Congress via C-Span. Lead me down the rabbit hole. I read Heinberg, Greer, Kunstler, watched videos of various productions about peak oil and the near term implications. I changed my business relationships based on the information and proceeded to loose my financial ass so to speak. I suppose I am more ready than most because of the decisions I made. lol
All the young men who bought new pick up trucks at high prices over the last decade will not go along with the program being designed by those who deeply care about the ecology. So, now, I must make a statement of I have no idea what these men will do once they are told to keep up the payments but sorry, they can't drive the truck anywhere...
AI is automatically incompetent. I predict AI will draw enough energy from the economy that it shuts it (the economy) down.
Believing all those you listed that were early/wrong has been extremely costly for our family too.
@@RickLarsonPermacultureDesignerWon't be pretty if the Elites are flying their G-6s to Davos. BTW, if they can't drive the truck they can't make the payments.
Crash now and avoid the rush! Well, one nice thing is having money is also stressful in these bare knuckle investment environments, something to be said about just having enough to build up real useful life-force tools is exceptionally satisfying. I'm not a poor starving creature getting screwed.
To have/increase digits on the screen one has to be screwing somebody.
Thanks Art and Nate - I look forward to your next get together! It is so refreshing to hear such rational dialogue.
Oh yes please, would love to hear Nate and Arthur discuss energy quality. It’s an aspect of peak energy where I still have questions and where I’d really like to understand in depth. It’s also an area where the dominant narrative is different than what I hear on this channel, so would love to understand the detailed facts behind it to better understand the reality. 🙏
Thank you Nate and Arthur for this superb, non-ideological, deep dive into the energy connindrum the world faces today and in the future. I eagerly await your Feb-March discussion on renewables, nuclear, energy density issues which, having studied it a bit, has concerned me that many backers of these approaches (I among them) have not sufficiently analyzed and so are ill-prepared to understand in their unforseen and unintended conequeces. Thanks again!
Great conversation!
Since I am getting older and older I see peak oil as an ongoing discussion. Decades ago I read a book called "the last drop" and it made the case for declining oil. Since then decades passed and every year someone finds new sources or technology finds new ways.
The only thing I really feel is hurting on the long run are the under investments because of ESG. If this keeps going (which I don't think) other parts of the world will take over in terms of energy production.
Also, just from an investor point of view. You are right, funding or loans are difficult to get for oil companies but the majors like Chevron, Shell, Equinor and so on are flooded with cash. So they do not need any credit. But still ESG is one of the major problem in the energy market (my opinion).
The decline in production was mainly due to the drop in oil prices from the pandemic. Not because the productivity of wells got worse and continued to go down.
Thank you nate.....thank you so much....for your honesty, courage, care, and concern for your lifes work......please continue
I am most definetly looking forward to the next episode with Art! :-) Thank you so much for this wonderful podcast and all the information you put out there for us, you are really making a difference!
One of these days there will be an episode "What just happened" with techno optimists with egg on their faces.
Right on time. Good morning Nate ☀️
At some point discussions like this will have to take place in public with world leaders present answering questions. There will be a time where "oh, we can't talk about that" will no longer be accepted.
I spent nearly fifty years in the oil industry, working in various areas including energy transportation, deepwater drilling and in and around oil refineries. More recently I’ve been involved in the regulatory oversight of extremely large solar projects. If nothing else, I’d certainly consider myself a student of the energy business.
Alaska and the US Deepwater Oil Drilling which are almost completely controlled by the Federal Government has been largely hamstrung by the Climate Alarmists in the Biden Administration and the Democrats. The same pretty much applies to the vast federal lands of the US West. If the US becomes serious about increasing oil production it can open up these areas which can probably push production shortfalls out another few decades.
Found you on Canadian Prepper youtube channel. New subscriber from Canada 🇨🇦
What blows me away is that not one mention has been made in this podcast to bring the awareness that oil is the number 2 naturally self sustaining renewable resource behind water on the planet !!
Such as it will never run out of!!
Your children will grow to old age with no heat, no fuel, after 20 years if any is available it will be imported at his prices. You are misinformed, dear.
Art Berman has it pretty well nailed down here. (Petroleum Geologist here speaking...)
Back in 2003 my wife and I learned about peak oil, and also in consideration of oncoming global climate chaos, decided move from our beautiful homes and employment in Sacramento California to somewhere we might be able to ride out the coming storm, a place where permaculture was possible, so in 2006 we moved to Oregon. Best relocation decision I ever made in my thankfully long life so far (I'm a Vietnam vet).
Wow! My (ex) wife and I did exactly the same thing in 2003, starting a permaculture garden and building an off grid adobe homestead, in the highlands of Arizona. And I too am a Vietnam era veteran.... it was because of awareness of peak oil..... but now I'm pretty skeptical that anything major will happen in my lifetime. Just getting Iran, Venezuela and Russia back in production should keep the party going for decades to come.
After 2 decades of living off grid, i can say that living with batteries is a pain in the ass. The idea that we can run modern industry on solar is delusional.
Passive solar construction works great! All new construction should take into account the trajectories of the sun through the year!
Permaculture turned out to be a scam though. Double digging, "Lasagna" gardening works far better!
Love Art Berman! I always tune into your podcasts with him, Nate.
I really look forward to Art coming back on. His proposal for discussion next time should be great. Thanks a lot. 👍
This is one more great episode; thank you.
Art made a great point here, that pretty much all wars are resource wars and I would add one more viewpoint; the pandemic caused so much more damage than we have yet experienced. I watched a video yesterday, on the UK and the mental problems among young people since the pandemic is quite shocking; for instance.
Arthur Berman is an amazing guest and you did a great job on this interview. Thank you
I enjoyed this thoroughly and I learned a lot. Thank you so much Art and Nate. 🙏
Another good show. However, I would enjoy more of the "how to" shows. We became very serious about our lifestyle and modern system dependence about 4 years ago. It has been a journey blessed by finding folks who share how they do things. Yes there is a problem, now what should I do. Again, I'm not trying to be critical. I'm just thinking that with your network, you might find folks from a wide range of practical experience.
Peace.
Always a great discussion. One question, and I'm only half way through so I apologize if this was answered by Art.
Each fracking well requires millions of gallons of water. The last big play that hasn't peaked yet is in the driest part of the US. Is water availability, and affordability a limiting factor in the overall production of the Permian?
As you may know most of the South West is living off of fossil water aquifers that replenish on a very long time scale. Like 1000 years long, so how long before those aquifers are drained and what does that mean for the residents of West Texas and NM?
Thanks again for the work you both are doing.
No problem. People have got that all figured out. I see the word "hope" in there.
"New Mexico governor proposes $500M to treat fracking wastewater... The administration hopes to make the water available to businesses ranging from microchip manufacturers to hydrogen fuel producers." -AP 12/5/2023
Don’t forget the sand, like a lot of sand, were talking 10,000 tons of sand per well, and it’s not just any only sand it’s silica sand, and it has to come from somewhere, and we mustn’t forget thousands of litres of chemicals, toxic chemicals, that aren’t just for the drilling process, no, the fracking process, if they contaminate you water system, you’ve got problems real problems🤔
@@A3Kr0n That's a lot of taxpayer money there, don't ya know. Who benefits from that? Fat cats imo. Its like a big subsidy for the industry paid for by the people of NM who are also paying more for road maintenance from the wear and tear of hundreds of thousands of trucks. It doesn't seem worth it for a resource which will be uneconomic soon, like 10 years or less.
@@barrycarter8276 Something to ponder, without fossil fuels you would be dead.
@@A3Kr0n Water remediation to potable standards should be priced into production costs.
Outstanding interview and timely.
The best way to look at oil is how much energy in oil terms doe it take to get a barrel out. Like 10% 20% 50%. Best way to look at it . Not price.
I hope you have good quality time off Nate and come back feeling recharged. We rely very much on the information you are providing, but understably it must take a toll on you. Gratitude!
Thanks so much for this interview Nate and Art Berman - I have really learned a lot from you both!
great analysis, great guest, great work Nate. Thanks
1:30:27 Read "Oil, Power, and War: A Dark History" from Matthieu Auzanneau for a great book about how oil changed history, specially during WW2.
One thing people constantly underestimate when they try to predict the future is how much civilization wants to stay alive. So I would not reject the idea of cooking oil in Utah, even if it literally boils the planet. It is rather reasonable to suppose that after three or four recessions down the line half of Utah will cook oil without a second thought and nobody will care if it only buys a few years before the total ecological collapse.
Same thing with NY state with their “ban on fracking”. Turn the screws hard enough and they’ll all be begging for their water to light on fire too like it does down in PA around the Marcellus shale area.
Absolutely brilliant interview!!
However, the most important aspect of petroleum, and natural gas, whose synthesis have the same origin, namely organic decomposition, is amonium, which is used as fertlizer for food production. Neither renewable or nuclear energy sources can produce amonia. Food for thought, so to speak.
Another aspect I would like to highlight is that all the energy we are using to switch from combustion engine transport to electric transport is wasted energy, because unless we build nuclear power plants galore, thermal generation of base load power capacity is all we have to supply the energy our vehicles use today, and that means burning oil, gas, or coal!!
Wow, if the shale oil peaks next year, it'll be consistent with the latest recalculation of Limits to Growth, which shows global industrial output peaking in 2024, then dropping... Forever. Probably the single scariest piece of data I've seen in recent years.
As a Development Geologist I find this presentation of enormous importance. Uranium it is then!
Hehe, Mister Berman doesn’t agree sadly! Look up his articles on nuclear.
@@ericstaib8035Berman's conclusions are logical to me. Interesting too that the big boys are judiciously selling their Shale assets, even Chevron following it's recent acquisitions.
Tight o&g requires a continuous stream of new wells and the corresponding capex stream. Current financial conditions are working against that model.
Would be interesting to hear Art talk about maybe places where he is missing new supply (i.e. new peak oil argument is wrong again). Makes me think of new oil off Guyana, Venezuelan oil coming back online, increased Oil Sands Develpment in Canada, Artic Drilling, etc. Keeping the important emissions piece out of the equation, could humans not have a lot of more oil (albeit more expensive) to develop?
I’m no expert but here’s my sense: those places will be drilled/attempted but the new production won’t be enough to offset decline. Still that's why Art says we'll be at 80% of current levels in 2 decades - because of such projects
There are centuries worth of oil. However the costs are the key thing. We've already passed the peak for the cheap-to-produce oil. Peak oil is an economic phenomenon.
Excellent chart @minute24
What a great conversation it was ! May I ask a question. Where EROI stands in this topic? I've learned from the thesis of VIctor Court "ENERGY, EROI, AND ECONOMIC GROWTH IN A LONG-TERM PERSPECTIVE" that an EROI lesser than 11:1 could create turmoils : " Now that we have estimated that, at current energy intensity, the US requires a minimum societal EROI of 11:1 (with a most likely interval of [8-13.5]) in order to possibly have positive economic growth" (page 173). He also wrote: " New renewable technologies toward which human future is destined have relatively lower EROIs, with average values for wind power, photovoltaic panels, and first generation biofuels respectively around 15-20:1, 4-6:1, and 1-2:1 (Hall et al. 2014). Adding the intermittent nature of renewable energy to this perspective suggests that (so far) new renewable technologies hardly seem capable of coping with the minimum required societal EROI of 11:1 that we have calculated." (page 174). Maybe it's an interrogation for the next podcast with Art Berman?
So, to sum it up in geopolitical context, it should come as no surprise why US ( The country totally addicted to oil, and built/organised around oil-car culture) is pretty, pretty, pretty active in supporting it’s great ally in middle west( for which whole world will probably pay the biggest price.. great 👍
Thanks Nate, wondered when we’d get an up date from Art, and thanks Art.
Was convinced Oil had peaked when from one of your previous discussions Art explained (with graph) Oil wasn’t just Crude Oil (Conventional) in the Old sense anymore, but was being made up from Crude, Tight Oil (Fracked), Refinery Gain, Bio fuels, NG distillates, and Renewables and Oxygenates.
And so the Oil industry is now in the Red Queen Syndrome, and only a matter of time, I’d say before the end of this decade, before it’s fully in the public domain.
And so as you touched on at the end of your conversation, when the implications are fully understood will it result in panic with every human and country for themselves, or some form of “The Great Simplification”.
In the meantime Nate and Art you will remain labelled as Cassandras🤔
Correct it doesn’t add anymore but we are also able to tap into reservoirs we weren’t in the past. We are currently drilling longer laterals and depleting the backlog of DUC’s finally which is contributing to increased production. Look at the oil rig count vs frac spreads. DUC inventory is severely declining while Drilling rigs are declining and frac spreads are up which points to puting many DUC’s into production.
Additionally much of the tier 1 Permian acreage is depleting.
Awesome interview
Valuable insights. Looking forward to more. I'm definitely a new sub.
Thanks to inform us in this way.
Some of the wells have multiple laterals that go out 3 to 5 miles from a single well head. So they can drill Wells very close together on the but are able to draw oil from a very large area.
How much oil is in the ground in places that have lost the infrastructure necessary to extract it? Places like venezuela, Iraq, Mexico?
27:00 what does art berman say about coal to oil ?
our societies in the west are deeply declining, but in contradiction, oil output based upon the destruction of water by fracking is increasing to record levels; in fact the U.S. is producing more oil right now than any country in history, and exporting more oil than any other country; it is truly a catastrophic sh*&&tsh%(w
Great discussion
Shale is an old ocean bed subject to maturation. In Appalachia it starts at 3,000 feet and ends at 52,000 feet we know there is huge oil ,well below the current wells 6-12k feet deep including 23,000'
Back in the 1990s, a number of the independent participants in the Canadian natural gas industry (as opposed to oil) appealed to provincial governments in to "enumerate" gas extraction icenses. That is because when 2 competitors are licensed to draw from the same reserve, any gas I don't get is gas the other guy gets. So even when prices fall, both operators self-cannibalize, primarily to limit the share of the reserve's supply that their competitor gets. If licenses are enumerated (they could be renewable), then I don't lose out to the other guy if I cut back my production until prices start to pick back up--as kong as the sum of the production limits in our two licenses does not obviously exceed reserve capacity to supply. Big oil intervemed, not wanting the provinces to attach an enumerated production volume to each license. And gettingnsuch a orocess right would be hard, and governments did not want to deal with the complications, anyway. Innthis context, "self-cannubalizing" is a rational producer behaviour.
Just to cut to the chase, what you are discussing is the economics of shale oil production as compared to conventional oil on a global market. This is a real day-to-day issue for the shale oil plays in the US, but it has nothing to do with the actual reserves available to us. These shale reserves are missive, not only in the US but in many other locations on earth. Therefore, descriptors like "peak oil" don't really have a meaning with regard to how much recoverable hydrocarbon is left to exploit on earth. It's actually a term tied to global oil price from conventional plays versus the increasing cost of shale oil production. But in the big picture, the US will never be subject to the kind of leverage that OPEC has applied in the past, or at least will not be subject to it in the same way, when we only thought in terms of conventional oil reserves. This is a good thing, gentlemen, and should be described in this way, rather than a "slurping sound", as if nothing is left to recover
1. 50,000 tight oil wells, and drilling more, just to stand still... are adequate or even any $$ reserves put aside for capping and rehab? or are they stranded, emitting COH4 etc.? Is that cost included in Art's summary of costs to breakeven at 300K B per well?
2. what's going to peak first: tight oil or fossil water to feed these wells?
I'm fine with O&G, produced and used as cleanly as possible. At the same time, it makes sense to leave ourselves some runway by expanding electricity production and having some portion of light transportation being using electrical where it can. Given the advancements in solar cells and storage, you can pick up many percentage points there on the transportation side. Add some MPG improvements on the current lower MPG targest and you've made some real net progress. Gas and diesel are the 2 biggest from crude, far and away - stretch those to meet the hard demanding performance curves they're not ready to do with BEVs etc, flight etc.
I would like to ask Arthur:
If we use less, I guess that would mean the infrastructure takes a hit. Which means we would be locked into using the oil to repair and replace. Instead of using that oil for an infrastructure that only asks but doesn’t give, would it not be better to use the remaining oil to build an infrastructure that doesn’t demand that much? Mining the old infrastructure for materials? (I understand some of it is not recyclable)
I find the discussion at 1:15:00 or so very frustrating. Yes, if we wind down oil energy too quickly bad things are likely to happen. But doing it too slowly, bad things will happen. The frustration is - if we consider that there is a limit we don't want to cross, we've walked ourselves deep into a dead-end, where as if we had started transitioning in the early 90's that is another 30 years of gradual change we could very much do with, and those cuts would have bought us even more time.
But I have to accept that it is all under water under the bridge now, and like Art, it's hard to see a plan plus globally accepted action that can move us anywhere near fast enough.
Only the Magic bullet cold Fusion can Dodge the Energycliff.
@@GoetzimRegen Extremely unlikely technologically and time wise - especially at the scale required.
@@mkkrupp2462 then be ready for an inverse 70s, with inflation and loosing living standard around the globe.
The North Slope is also one of the most efficient places to produce. They have centralized facilities, they re-inject 7.5 billion cubic feet of gas per day because that gas is stranded. The cost of a gas pipeline for all the gas up there is prohibitive and can't compete with the price of gas in the lower 48 or elsewhere in the world.
Initially they drilled Wells on 300 ft centers at Prudhoe Bay. Now they are drilling Wells at 20 to 40 ft centers to limit the amount of tundra that is impacted. The total amount of tundra that has been lost oil production facilities is minimal compared to the vast amount of tundra up there. It is a cold desert.
I'm pretty sure the engineers are on it. Wells are often capped to allow them to re-pressurize. Ethanol and related products are very much "renewable" and virtually limitless. Big oil is part of that too, so we have to watch for "the broad-brush" tendency to emotionalize what is the state of affairs. It's not that bad or fearsome. We do have a full-plate though - it ain't never going to be boring again - hooray for that.
Does this means the U.S. has to go back and aggressively exploit some other country? I live all too near the Permian Basin in Texas and New Mexico and we have had three 5.1+ earthquakes caused by fracking and all my wall surfaces are cracking and my home’s value deteriorates due to this. There is subsidence in the landscape around this oilfield and roads in that area are a disaster due to the large oil rigs moving 24/7. FYI: my dad used to be a chemist working for Humble Oil in Houston, Texas.
My gut feeling if the politicians see this information cognitive dissonance would be shown. The way I interpret your podcast is to have discourse how we organize ourselves for the coming disaster. Our addiction to Dopamine and our financial system will stop us from becoming enlightened. Would be great to talk to Ken Wilber.
Ken Wilber, haven't heard that name in the context of oil, or energy. He dipped his toe in the futures business a couple years ago and was way off so he seems to have backed off. What would you have him talk about? @elliottmcintyre9092
@elliottmcintyre9092
Collectively our knowledge has grown although our enlightenment has not.
Great. Thank you
With hydraulic fracturing we have opened up so much economic resource extraction from shale that we knew was there for years but it wasn’t until recently we have learned how to economically extract it in the earlier 2000’s
It's costing more dollars per barrel. Luke Gromen talks about this too. Nice to learn more, subbed.
So Art got a few things wrong about the oil production on the North Slope and drilling in general.
North slope production peaked at 2 million barrels a day in the late 80's. Prudhoe Bay peaked at about 1.6 million barrels per day. It is now down to about 250,000 barrels. That's part of the natural decline of an oil field.
Today's throughput through the trans-alaska pipeline is about half a million barrels a day.
There have been a lot of new discoveries made in the last 5 to 10 years, but the environmentalists have slowed development considerably with lawsuits, even after permits were granted..
In spite of this, new field's will come online and get the throughput to 700000 and potentially up to 1 million barrels per day. They keep finding more oil up on the North Slope.
When they drill Wells on the North Slope, they drill production wells and injection wells. They inject treated sea water and a miscible injection, which is basically a solvent to increase the production. It essentially washes more oil through the rock. Even with the present decline, all the North Slope Fields have produced much more than the original estimate of recoverable reserves.
I'm not sure of Art's background I'm thinking it may be refining and you need to talk to a petroleum geologist to get more knowledgeable information on drilling.
Solid discussion: there is a comment below that focuses on natural gas. More on that pretty please.
We love you Senior Petroleo! You too Nate.
How about a step change in energy efficiency as a solution? A quoted figure is that 40% of the heat value of crude oil is consumed in the Oil Refining process. How do we make that 20%? How about creative uses for heat below 300 degree F?
So question? With the all the oil being produced why the the huge drawdown from the strategic reserve? I am aware that most of the the tight oil is being refined outside the US. Just what some insight on why it wasn't drained completely
I'm curious about your opinion regarding SSR rocko reports take that we're not at peak oil but peak oil for the complexity of our society
Nate, serious question, with between 8-9 billion barrels of global oil inventories right now, why would a 1m bopd deficit have such an affect on the oil price. You could have almost a 5m bopd deficit for close to 5 years before working through all the inventories. Sure that cannot happen but there seems to be tons of slack in the oil industry. What am I missing?
In the face of both pioneer and continental resource ceos saying the Permian is maturing the following several months until now production has ultimately increased. Thus I think sometime next year we start to see a meaningful production reversal as the DUCs get used up and longer laterals can only go so far in the little tier 1 acreage left and the subsequent tier 2 and 3 but drilling needs to pick back up just to replace it and rigs are down noticeably.
I largely subscribe to the peak oil narrative. What I don't understand about what Mr. Berman said is that although oil supply is on the verge of peaking if not declining, his forecast for oil prices is fairly low to declining. When inflation is factored into that, oil seems to be even cheaper. He forecasts that even though he says there will be a lot of pain as supply declines even slowly. That seems counter-intuitive.
Interesting that you have both reached the same conclusion as Steve St Angelo has, only several years later. Great stuff. Thanks. 🇦🇺
Damn good questions - damn good answers!
45:37 45:43 The wells are drinking each-other's milkshakes.
I came here and subscribed from Canadian Prepper channel after seeing your interview. Great interview!
1:23:39 1:23:44 "The best forward strategy for humanity and the earth is for humans to use less energy."
good luck with that
How much do you now factor in enormous off shore fields in Guyana, Equator (largest know in the world) being developed by Exxon, Hess/Chevron Thank you ?
I retired in 2003 after 30 years drilling contractor. on various rig forms from drill ships to semi submersible. land rigs jack ups & platforms as I saw this shale fracking plays being promoted
Seemed to me like that's really got to be "Scraping the Barrel". Esp when I viewed the BS promotional material that went with it . Subsequent turn of events have shown this to be correct.
Guyana's oil fields are not only massive, but light "sweet" crude. (the best kind), whereas Venezuela's oil fields are super-heavy "sour" crude which is difficult gunk to extract and pump, usually only used for shipping fuel unless you do some very expensive extra refining, and only a handful of countries have refineries which can handle it - hence it usually sells at a lower price.
So much for "peak oil" LOL... there's more out there.
But demand is slowing globally which is keeping prices down, and US is playing its usual games in engineering supply/prices trying to undermine OPEC countries and anybody else it deems "evil".
We cant 'phase out' fossil fuels, global warming will continue apace because its based on Energy Imbalance, and GHG forcing is just one part of that - and there's enough GHGs in the atmosphere, but more importantly, far more heating already baked into the oceans, to keep global warming going for decades - (ie "in the pipeline"), even if we stopped burning every last kilo and litre tomorrow. Besides by now, natural emissions have begun to overtake human emissions. The Canadian, Siberian, European fires last summer pumped out more C02, and most methane is now coming from damaged tropical wetlands, forests and melting permafrost.
Not to mention, all the wars going on at the moment - as the MIC factories pumps out artillery shells, tanks, and other WMDs.
Sénior Petrolio is always a great guest.
The only thing left after shale oil is "Oil Shale" - and no I'm not playing semantics. Shale oil is oil that can be produced at depth from low permeability reservoirs using fracking. Oil Shale has to be mined - physically mined - and the moveable oil must be squeezed, or crushed, or solvent cut, or even cooked out from the crushed rock. (And this ain't pretty nor is it cheap.) The Green on this chart is smeared out in time . The red peak will go down as fast (or faster?) than it it went up. Once it's gone - it's done - over - kaput - finito! This is the thing about a "Finite Resource" - it is finite - simple - right.
The experts have been saying we are out of oil for 40 years. I have been in the oil field all my 80 yr. life. There is millions of acres yet we can drill on.
@Nate Hagens what you talked about spanish sanitary system ??
Art is great but only 20% decline in 20 to 30 years? That seems a bit optimistic to me. Especially given the last driver of oil production, ( the permian) is seeing a 50% decline in total well production over 3 or 4 years. That is despite an increase in rig count. If half of US oil production declines by anywhere near 50% in the next few years, that would be a 25% drop in just a couple of years.
With dropping liquidity and, market volatility increasing it seems unlikely there will be an increase in rig counts. There will probably be a huge drop off which means an even bigger decline in productivity in the near future.
Even if the big straw keeps on getting bigger, eventually there will be a big Seneca cliff of dropoff in production.
Will the dollar survive when the world realizes the vast oil reserves it supposedly has are not so vast after all?
(26:37) what does "cantarelle" mean?
*_"Cantarell Field or Cantarell Complex_* is an aging supergiant offshore oil field in Mexico. It was discovered in 1976 after oil stains were noticed by a fisherman, Rudesindo Cantarell Jimenez, in 1972. It was placed on nitrogen injection in 2000, and *_production peaked at 2.1 million barrels per day in 2004."_*
Several things, yes the US production is up and its due to shale oil but in the greater scheme of things in possible long term production that is pretty minimal. Canada has the 3rd largest reserves in the world and has only made a tiny dent same as Venezuela. In both places its mostly high capital heavy oil. But once you build the project lets say 30K BPD for steam injection or 200k BPD for mine you have that production for 25-30 years. The only reason Canadian oil production didn't keep on increasing was gov't policy stopping it. No one is building steam plants or mine projects. Also Canadian reserves could be number 2 with a little more work on the carbonate heavy oil resource.
Oil companies don't need any money right now to fund expansion because none of them are expanding production. All those profits are being returned to shareholders in dividends , special dividends and share by backs. Any company going out to buy another company is hammered in the market.
Picky point but very very few people in Canada own mineral rights to the oil under their land. The provinces own the mineral rights and get royalty payments from oil companies. landowners get a payment but that is to compensate them for the inconvenience of the oil company coming on their land. Not going to get rich off it. And you cannot say no.
Ken Wilber would talk about integral theory, essentially how reality has developed and how as the collective we need to transcend consciousness
Historically, overproduction has been the kryptonite of the Oil Industry; preventing, and controlling overproduction is the business model for profitability.
Do your charts cover Russian oil and Russian reserves?
Great conversation! Are you aware of James Howard Kuntsler? Would be interesting to see him join you in an upcoming chat!
Kuntsler went all pro conspiracy during Covid and also became a Trump supporter. He may still be very energy conscious but I dont know his current position re climate change or ecological overshoot as I stopped following his site a couple of years back.
The data shows improved well performance but as the tier 1 acreage gets used up it will eventually reach a peak where productivity gains will plateau.
Reference EIA data for reference. On a monthly and yearly basis production per well has on average increased. Not sure they would include the lifetime gross production in this calculation though.
Brazil and Russia have also contributed to global oil supply since 2010, not just the U.S. although of course the US has been the largest contributor.