cool story... now tell us about the average annual decline rates of those wells.

speaking of having a clue.

No, sorry... they're not. Unless you're in the business of redefining what constitutes cost, like many are.

Report: Investments in Alberta’s Tar Sands ‘Make Neither Economic Nor Climate Sense’

“For the first time, this report bridges the worlds of oil project economics—in terms of both the marginal cost of supply—and carbon, allowing investors to gauge where risk lies, given a range of demand scenarios,” said Mark Fulton, adviser to Carbon Tracker Initiative and a former head of research at Deutsche Bank Climate Advisors.

“It makes it clear that investors have reason to engage companies on many high-cost and high-carbon-content projects.”

The report recommends investors identify companies investing the majority of their capital in high-cost projects, set thresholds for investor exposure and demand greater transparency and disclosure from industry.

can't believe I missed this one:

that might be relevant if the cost for each of them weren't almost exactly the same.

his point appears lost on you: ... why drill for twice-as-expensive oil off shore when there's supposedly all this "easy" stuff on shore? ... from a cost/benefit standpoint, it's not optimal. Do we think they've been "saving" a large portion of the cheap, easy-to-reach fields all these decades? of course not. They went first. .... The oil majors certainly don't drill offshore because they prefer to. They do it because they need to. The reality is that the fat juicy "super-giant" fields are all slowly dying, and yet the oil majors have to maintain flow rates. So in order to do so, they turn to this twice as expensive, less-efficient oil. In the process, their profit margin is taking a huge hit the more they lean on tight oil expansion.

It's another of dozens of contradictions that the "no problem" camp's narrative runs face-first into.

It can't be any more plain (and push back against it continues to sound ever-more ridiculous): Advanced societies are turning to far more-expensive methods of extraction - deep water, oil/gas baked/cracked from rock, volatile nation-building - because the Ghawars, Burgans and the Cantarells of the world are now in terminal decline.

Everyone knows that some of the major easy oilfields are in terminal decline. So what are you missing that you feel the need to expound such an obvious point, that every participant knows? Oil costs <$10 to get out of the ground from the best fields. It costs ~$40-$80 to get out of the ground from the worst fields. Guess what the oil price is? It isn't $10. The market has already priced in this change.

Time to lock this thread. You were run out of politics with your peak oil looniness, now you bring it here. That was fine while people were talking, but now you're bumping it repeatedly when it's clear the thread has died. Two bumps a week apart with zero replies.

You've stated you have no idea how to make money out of this thesis. So it's not about business, finance or investing - it's a loony toon's blog which doesn't belong here. Your latest bump is to post a spin link from the kind of greenies who are against all fossil fuels, who massage the data to achieve their ends (the end of fossil fuels). I'll give you a hint as to why it's bull**** - the people most in the know with the most savvy (all the oil companies) are planning to spend a trillion dollars in capex expanding production in the oil sands in the coming decades. Do you think they're doing that to lose money?? Do you think they have a worse idea of what's profitable, or not, than green groups pushing an agenda? The guys actually running the fields, mining the stuff, doing billions in due diligence, and already extracting 1.6 million barrels/day profitably?

This is just the latest in a long line of posts that prove you're completely irrational. Even if peak oil was true, you're so irrational about it you have nothing useful to say on the topic from any perspective, let alone an investing one.

Uh ya there are. The average well up here costs about $7.5 to $8 Million to drill. I live here, am involved in it. I fully understand the costs associated with drilling wells. I work with this stuff everyday.

[QUOTE=JiggsCasey;43084054]cool story... now tell us about the average annual decline rates of those wells.

It's not what it once was, and it's only getting better. They are spacing the wells closer together nowadays compared to the old days. The rate of decline in my area is dropping. Once a company comes back in and drills a new well near an old well, the fracking from the new well will stimulate the old well. Some of these wells are being fracked 60 to 90 different stages. After the wells have been in production for sometime a workover crew will come back and bring the well back up to production. So, you can read all the crap you want on the internet that some idiot writes and believe it, I'll stick with first hand knowledge.

Never a good sign when we agree.

I did visit one of the oldest continuously operating oil field in the US yesterday. Reminded me of a flock of these:

Because people like you insist that dirtier forms of the resource (and ever more of it) are the obvious answer. You know the subject material ONLY to a degree; enough to try and pass off the cornucopian narrative that always falls flat up against any semblance of critical analysis.

What follows is ever more of that:

Lie No. 1 The worst fields cost far more than that. When challeged with that fact, you pretended the high Brent/WTI prices the companies required (in the OP) was merely about "front-end" costs that wouldn't need to be sustained.

Fail.

Sounds like an exasperated poster whose argument went swirling down the toilet a few pages ago. If you don't like the topic, don't click on it. But it's quite relevant, regardless of how badly you prefer to bury it.

There's nothing "looney" about it. It's the reality of triple-digit oil prices staring your looney "no problem" narrative right in the face. Your squawk is not much different from climate change denial. That you'd want the discussion shut down because the numbers don't work in your favor is typical.

Hey, I'm keeping it contained to one thread. If you'd like, I can enter other investment threads where high oil prices affect asset value and liquidity. If you don't like being reminded that, yes, finance is subservient to the basic laws of thermodynamics, and people should adjust accordingly, don't click the thread.

Nope. Never said that. My modest energy-sector investments are doing fine, thanks.

It's amusing that you believe the only purpose of this sub-forum is to make other members some money. All other relevant discussion about monetary theory, and perhaps what actually IS capital, should be censored. Got it.

Good work you're doing as the forum's Jim Cramer.

... a real sore spot for you, considering you bailed from the discussion after trying to compare the 1970s oil crisis to the events of today, and getting called on it.

Your lazy dismissal of an entity that does financial investment risk analysis aside, please show what data they "massaged." You won't because you just threw that out there, but I wanted to be on record as calling you on it.

Yeah, ummm... the same guys dumping expenditures because their profits are way down, as painfully revealed in the OP.

Where "irrational" is code for "resolute, because of the maths." Got it.

... and it is...

If holding up a mirror to the nonsense that people like you promote (and watching you have a hissy fit that your failures itt have been inadvertently revisited) is all it accomplished, it would already be useful. But it does quite a bit more than that.

You were asked to link to a single piece that claims oil from sands - your pet industry, apparently - can expand to the levels you suggest are capable. You refused to do so. The best you did was proclaim "yeah, it's dirty, but we can do it, so we are gonna do it." ... Scintillating.

You were asked to give a figure for the average decline rates. Instead, you provided a nice industry puff piece about how it's allegedly "trending."

Where "some idiot" is often executive-level petroleum engineers and risk managers considerably higher up the cost/benefit analysis chain than you. Got it. I'll stick to considering the sources on an individual (and verifiable) basis. Not the vague "trust me" antics of a random, anonymous wild-catter who's unwilling to provide figures when challenged for them.

The EIA - the foremost experts - and the oil companies themselves - agree with me. You are the one starting on the back foot. You have to show why they wrong, which you have never done. A couple of retirees, some survival websites and some greenie groups with massive agendas don't cut it - sorry.

I simply decided to ignore the discussion (as did everyone else) when you went completely off the reservation and refused to be rational. Which is why you're now self-bumping this thread weekly. If that's winning in your mind, well, you can't argue with an end-of-society truther.

It's pretty simple. Your straightforward claim is that economic growth is finished for oil prices above $100. This is YOUR claim and you fail to provide any evidence for it. It is also against common sense, such as the facts that:

- Oil recovery is a small fraction of total economic activity. If we put an extra 1% of our global workforce into oil extraction (equivalent to a $250 oil price), why is this going to destroy the economy, exactly?
- Oil and other commodities have gone up 3x-10x or more without the end of civilization; you now claim that a further 0.4x is lethal!

and the opinions of the experts. Basically, your position is completely nonsensical, and you haven't backed it up with rational argument, let alone evidence.

Complete conspiratarding on your part. And it's the climate change proponents who want to shut down debate; not the other side. Your analogy is backward. The mainstream, expert consensus here is strongly that peak oil will not happen. You are the denier of the consensus, and you squawk like one.
I asked you for how to invest based on your thesis. You came back with crickets. This is Business, Finance and Investing dude, not the "present your crazy end of world thesis and keep bumping the thread each week after everyone decides you are a moron and ignores you" forum

Dude, you didn't call me on anything. The point was that oil and commodity prices move huge amounts and stay elevated for years on many factors where there is no terminally peaking supply. Thus, a prolonged highly elevated price is insufficient to establish something is peaking. As for my points, most regular posters here agree with me. They're as close to impartial as you'll get. You've lost.
You're presenting research from "The Carbon Initiative" (linked on resilience.org), who look at all carbon investing from a global warming perspective. You are an absolutely irrational crackpot if you think repeatedly bumping your dead thread with "research" from such an organization - compared to the EIA, oil companies and other bodies actually in the know - will sway anyone, rather than merely make you look very sadly suffering from confirmation bias and lack of skepticism.
Dude, I have a math degree. Please lay out this "math" for me. Be rigorous. All I see from you is capex numbers and a massive amount of hand waving claiming that these numbers therefore mean PEAK OIL. That's just clownish. As I pointed out, similar numbers are happening in the iron ore industry - in fact more extreme - and other commodities where prices skyrocketed and have since pulled back a little. But you have PEAK OIL on the brain and assume with horrible logic that a capex boom followed by decline means PEAK OIL. Well, you better start screeching about peak iron ore as well (the most abundant metal in the world).
You asked for a peer reviewed study that showed the oil sands could do 20 million barrels/day. You want me to search the literature for you, for something that is unlikely to exist? Production is being expanded to 5 million barrels/day over the next one to two decades in a single field; given the nature of the resource, the estimates of reserves recoverable at current prices (180 billion barrels), what precisely do you think is going to make it impossible??

Here are the relevant claims:

You claim this is false, and worse, so false that even at $100+ it won't be recoverable. You have provided no evidence of this. And no counter to the point that companies - who exist for profit - are already producing 1.6 million barrels every day from this single field, and pouring large amounts of capex into expansion. You think their estimates of cost are off by over 100%, and despite this, every oil company keeps investing. Apparently they enjoy setting money on fire. Or maybe greenies know better than the guys actually doing it, how much it costs to extract oil from oil sands?

Anyway, you are just an irrational crackpot, which is why I stopped responding. That you actually think you're winning here is very sad. Why do you think everyone has stopped responding? They wouldn't if they believed you. This thread would be totally different. This is a serious issue; this is the end of civilization as we know it if you're correct and we haven't mitigated in time, which will take at least 10 years. It has huge investing implications, if true. Yet people give this is glance and then ignore you. The fact is that no one here finds you convincing. If you have truth on your side, why is that? You're either an irrational crackpot who's correct, or an irrational crackpot who's not correct. Which is it?

There's no point talking to you; you don't even know how to rationally argue your case. I've argued with 9/11 truthers before with similar views and found it a waste of time.

LOL... fish caught. Thank you for the slow-pitched softballs.

There is so much laughably wrong here, I have serious doubts you earned a major in anything. But then you confirmed the crazy in your dual support of climate denial in tangent with your assertion that "the consensus" is that peak won't happen. Ooops. No, most rational people accept that the affects of peak (like climate change) already IS happening.

What a wonderful world you must live in when you can create a caricature of the esteemed and scientific sources your opponent used in an effort to surface-dismiss them. You then turn around and trumpet the virtues of government AND private industry. Unfortunately, that won't go unchecked.

Nevermind that both the government AND industry reports work off demand-based forecast models (which the OP effectively eviscerated as nonsensical), here's the record of the EIA - you know, "the foremost experts" :

Systematic bias in EIA oil price forecasts

• In 1998, EIA predicted world oil prices would be $24.34 (2006 dollars) in 2000. Actual prices were $32.21, a 24% underestimate.
• In 2002, EIA predicted world oil prices would be $26.41 in 2004. Actual prices were $38.22, a 31% underestimate.
• In 2004, EIA predicted world oil prices would be $25.15 in 2006. Actual prices were $63.64, a 60% underestimate.

Although these data are only a select example, on the surface, they support the argument that there is an inherently low-price bias to the EIA analyses.

Concluding Comments: This analysis suggests that policymakers should exercise considerable caution when using EIA oil price forecasts.

Deceiving EIA Forecasts

it was forecast that we would reach 0.45 GW of Solar PV on the grid by 2035, in November 2013 we reached 7.11 GW according to the FERC.

Surely, in making new predictions it would be appropriate for the EIA to address how their models could produce a 25 year forecast which has already been surpassed 16 times over in less than 3 years.

California Dreaming

Two years ago the EIA released a 105-page assessment of technically recoverable shale gas and tight oil in the lower-48 states. Among other things, it estimated a massive amount of tight oil in California's Monterey formation: 15.4 billion barrels, or over 64% of the country's projected total tight oil resource base.

We found that the EIA report's authors had tallied up 15.4 billion barrels simply by assuming that every square mile of the Monterey would be more productive than practically all the best areas in America's two best tight oil plays, the Bakken shale (in North Dakota) and the Eagle Ford shale in Texas. That's it. No consideration of the Monterey's significant geological complexity compared to the two plays, nor of data from actual Monterey oil production. In other words, our new cornerstone of energy independence rested on a back-of-the envelope calculation that any first-year petroleum geology student would recognize as unrealistic.

and what came of the Monterey claim? ... oh, only wrong by 96%

Write-down of two-thirds of US shale oil explodes fracking myth
Industry's over-inflated reserve estimates are unravelling, and with it the 'American dream' of oil independence

EIA officials told the Los Angeles Times that previous estimates of recoverable oil in the Monterey shale reserves in California of about 15.4 billion barrels were vastly overstated. The revised estimate, they said, will slash this amount by 96% to a puny 600 million barrels of oil.

Yeah, "the foremost experts." At least, for spurring industry investment with horse**** claims.

I fail to see why you are so butthurt that I revisited a thread topic I created when new information was published, as if it was some affront to your own personal dignity. Sounds like you're very insecure about being so horribly wrong, even though the bump never addressed you.

Anyhow, whatever you need to tell yourself. Meanwhile, I'll continue to revisit the thread as endless streams of information continues to support my widely-accepted thesis. I may, or may not, leave you out of it. But you won't be dictating whether the information is shared or not.

Like I said, there is nothing "irrational" about this position. Nothing. It's your hysterical reaction that has proven irrational.

Addressed above...

Anyhow, your latest straw man argument aside, I said growth as we've known it is finished with prices at that elevated level. As for "providing evidence for it," I didn't realize I'd need to show an alleged "math major" how macro-economics work, as high energy costs cut into discretionary spending, balance sheets, and company payroll, as well as balloon food prices and asset values.

Perhaps you skipped that week of class.

As for "the opinions of experts," what experts? Only the ones you admire who adhere to traditional economic theory, and believe money can create energy? Certainly not the physicists I adhere to who understand that it's energy that does the actual work, and dictates to finance. Those are the kinds of people you dismiss as "crackpots."

Meanwhile, all the "EVIDENCE" you require that triple-digit oil price seizes up the global economy is right in the presentation from the original post, which, for all your squawking, you undoubtedly never watched.

Here's another expert you'll ignore:



LOL @ you defending climate denial. I now see what I'm working with here, and it explains so very much, including your wild-eyed devotion to disgusting tar sands development (which is not actually oil, but a synthetic from bitumen)

Meanwhile, regardless of what the media attempts, I've yet to see any of the 97% of global scientists cowering from the climate debate, nor trying to "silence it." They more like, "bring it on, crazies."

Now, will I have to "show evidence" for how the cost of energy affects of basically every sector of the market? Or can we agree on a basic known of macro-economics so as to keep the discussion moving a bit, and not muddled in semantics as you'd prefer?

It is amusing, however, watching you continue to pretend 1) iron markets are somehow relevant to the energy discussion, and 2) insisting the economics work for Alberta tar sands expansion enough to offset world decline.

Ha! Where did I mention ANYTHING about any end of the world scenario, you perpetual fraud? You guys in the "no problem" camp are all alike. In the end, you create fake arguments we never actually mentioned, nor implied. It's an infantile bid to feel superior.

LOL... who said price, alone, was? In addition to spiking price points, you also have more than 3/4 of oil producing nations past peak, super giant fields like Cantarell, Ghawar and Burgan in terminal decline, and massive investment shifts to far-more expensive forms of oil/gas production (deepwater, fracking, Arctic, etc.)

If there was "plenty" of the good stuff, why turn to the much harder stuff?

Oh, I forgot. You mentioned before, they happily spend more because they can.

Awww...Look at you trying to drum up support via presumption.

Most regular posters know infinite growth is impossible on a finite planet. At least, the ones who have a basic grasp of the Laws of Thermodynamics. I haven't "lost" anything. You have, the moment you suggested "the consensus" is that peak won't happen.

LOL... yeah, you keep telling yourself that. We already covered how routinely wrong the EIA is in their forecast models. It doesn't take a genius to understand the motive behind rosey reports from the oil industry itself, desperate to maintain federal subsidy and foreign investment.

In any event, hand-waving Post Carbon Institute's findings away doesn't do much for your argument. You'd have to actually address their findings for that to work. See, they're geologists and physicists, and no one counters their reports. Even the oil industry stays silent every time PCI corrects their bogus forecasts. But, being a math major, you're welcome to try.

How's that 96% downgrade in California reserves doing for your "no problem" argument? One of many revisions your heroes have had to endure the past 20 years.

Actually, my logic is sound. Yours, however, continuously comparing energy markets to that of metals? Fail. But do let us all know when oil prices "pull back a little" for any reason other than slowed growth and curtailed demand.

Hey, it was your claim that the Alberta bitumen industry could grow that massive. I merely asked you to back it up. You still haven't.

Again. Citation please.

You mean besides environmental regulations, water pollution, geological logistics, a shortage of workers, plight of indigenous people, investment draw down and the reality of real cost? Gee, I dunno.

LOL... you continue to confuse reserve totals with flow rate. It doesn't matter how much you can show is there. What matters, ONLY, is what amount you can produce each and every day.

As for cost, forgive me for trusting the figures from entities who actually include pollution costs, refinery costs, transport costs and every other cost that your heroes don't factor. But you keep clinging to that $69 figure, as if it's gospel. After all, refining that fake oil, and cleaning up messes? Externalities!?!? That's someone ELSE'S problem!!!!

Oh, and 1.6 million barrels < 20 million barrels.

You've got a long way to go, and despite 10 years of elevated oil price, this is as much as your pet industry has managed? Cool story, bro.

Uh huh. No, you stopped responding because you didn't know how to respond. Then when really exposed, you scrambled to 'teh Googlez' to drum up some industry spin that claims it can be done at $69/barrel.

There's nothing to "win" here. Just holding your "burn it all" nonsense accountable. But if it is about winning, you surely aren't doing it.

Perhaps you don't understand how message board debate works. They WOULD stop if they believe me. If they had a counter argument, rest assured they'd take great glee in providing it. You being case in point. You think you have a counter argument. You tried. ... It just sucked, because you really want something to be true and you take corporate/government claims as gospel. To hell with geologists.

I'd wager many, many do. But don't let that stop you from saying "the fact is" a lot of times in a row if it makes you feel better.

Nonetheless, I'm well aware that this is a subforum of true believers in traditional economic theory, which operates off many known false assumptions. I didn't create the thread here to make friends. I created it to challenge flawed assumptions.

I have truth on my side because conventional oil production has flattened since 2005, unconventional investors are "losing their shirts," price keeps rising, wages are down, and the U.S. economy still needs monthly QE of $85 billion each and every month. That's the truth on my side.

Translation: "I can't figure out a way to show how fake oil production can grow to 20M barrels per day, so I'll pretend my debate opponent is 'crazy.'"

petro apocalypse now .com?

Sounds legit, lol.

OP, any updates on your thesis now that oil has lost 40% in a month and the world is majorly oversupplied?

Ah, TS.

Read the thread Loz. I am not arguing for OP's position (in fact, I am against it strongly), I was arguing that people arguing against OP's position were making invalid arguments.

don't ever change, TS

OP has argued in other forums this price move strongly supports peak oil.

Epic backfire effect

This reminds me very much of a friend of mine who, when playing stud hi/lo, would raise every hand if he had one of the highest or lowest cards showing without bothering to look at the hole cards.

Raise with the low card because "clearly I have the low on lock and all y'all are screwed", and raise with the high card because "clearly I have the high on lock and all y'all are screwed."

So here we are 14 months on, and oil is half the price it was. Here's Goldman's latest prediction:

I thought I'd ask our resident "oil expert" what his timeline is now. It looks like no end to cheap oil. Is it an end to imminent peak oil predictions, however? Any comment, Jiggs?

Had we invested as you suggested, we'd be broke.

Yeah, see, if you take a week to respond, understand I don't check in regularly after a while. Rest assured, I'd never run from you and your horrible overall argument. In the rare time I have to post lately, BFI and it's horde of unwavering finance cultists isn't tops on my list to peruse. You can stop patting yourself on the back, as you clearly still don't understand the dynamic being discussed

Now, I have to get back to the hospital to be with my kid, so I can't take your latest dumb post apart right now. But I promise you I will.

but for now, a couple things...

when I refer to "cheap oil," I'm referring to cheap TO PRODUCE. Not the manipulated, reactionary Brent/WTI price. In that regard, the new oil used to currently flood markets is absolutely not cheap to produce.

next, this is a deflationary situation... Not a true mark of "abundance." ... Price is down far more due to slowed demand than any promise of a glut.

Consider that a barrel of oil being about half as efficient as it was 40 years ago (in terms of BTU), there just aren't as many buyers as there used to be ... Oil's ability to power the global economy is falling, and has been for some time. .... You can't really maintain a ****-eating grin and claim things are rosey when recessionary conditions are just about everywhere. ...

So , basically, you're crowing about short-term "abundance" buoyed by a half decade of extremely easy credit for U.S. shale revolution.... Because U.S. producers are absolutely is taking a beating currently, with layoffs all over the place and CAPEX spending being scaled way back.... There's obviously a lag period, but production at almost every domestic field has finally begun to fall.. It will continue if prices stay under $70...

Just because Saudi is flooding the market (getting them closer to their own peak, and faster) in order to desperately maintain market share for now is zero indication of the planet's ability to meet demand in the medium- to long-term. Meanwhile, they just had an enormous bond sell-off and had to borrow $27B last week. So everyone is hurting.

And yes, I look forward to addressing your weak sauce defense of racism in the Greek thread, as well.

Hey, thanks for coming back. It's nice to see your thesis is unmarred by developments in the real world.

I have to grant you that you'll be right eventually. Oil will run out in about 100 years and start declining well before then, so I look forward to your victory post when oil peaks in around 20 years. Although I think we'll be driving electric cars by then.

Given that I grant that you will eventually be correct about the end of oil, will you grant me that you were dead wrong on the time frame? The post made by you and quoted above yours is not going to happen, or even close. You were clearly a long way off on "1-2 years" before the markets were uncalmable. And your investment thesis was clearly completely incorrect and would have lost you a fortune. Oil has more than halved since this thread.

Nothing worse in life than reading someone's opinion on oil, gold, or silver. I mean, the leading experts who have been in the business for decades have no clue what the price will be at any given time, so the chances are zero that some nut with a bunch of charts has any idea at all what he is talking about. It is like religion. Every opinion is wrong.

Hi March 20th 2014 Jiggs!