Sunday, November 28, 2010

The Oil and Gas Production Sunday Series

We are now in the period where the subject of peak oil is no longer getting the ridicule that it created when we started discussing the topic as Kyle and I formed The Oil Drum back in 2005. It is still not a widely accepted fact, and my object, in helping Kyle to found TOD was not to merely publicize the coming of this particular point in history. Rather it was to help folk understand the background to the evolution of the crisis, and to document it as it developed. That particular mission is far from being over, though Nate Hagens would argue differently about the initial mission of TOD:
For the past 5 years, The Oil Drum has been a home base for many high level discussions about the details and implications surrounding an early peak in global crude oil production as well as topics on society and energy in general. The entire site was started, and continued, by volunteers, in what might be described as a loose anarchy glued by social capital and a desire to puzzle solve the complexities surrounding energy depletion. Over time, on these pages, our contributing staff and especially the many readers who joined the discussions, have pushed the envelope in publicly analyzing what was/is one of the central issues of our time - the opportunities and constraints facing society during the upcoming energy transition.

In many ways our initial mission is over.
Given that and the changes at TOD, it may be that they will move away somewhat from what I initially set out to do. And so this site will continue its merry way, trying to meet that original goal which will, perforce, remain my mission here at Bit Tooth, since it is one that I feel is far from over.

Part of the problem for a lay person, in trying to understand the reality that is coming to pass, is that there are many conflicting stories, and ways in which data is presented, so that without a basic appreciation of what oil is where, and what will and won’t be available when, and who wants it, it becomes difficult to understand what is actually going on.

Over the past couple of years I have tried to provide, in Sunday posts, some basic explanations on how oil and natural gas are extracted from the ground, and I followed that with a series on coal that has just concluded. I will shortly re-arrange these and provide an archival list for them at the bottom right of the page. At the top of the page I am going to start providing an archive to the series that I now anticipate will form the next set of Sunday posts.

It is going to combine a little bit of history (along the lines that Econbrowser posted on Saturday about the initial discovery by “Colonel” Drake, in Pennsylvania in 1859, with the evolution and current status of some of those fields. (And again Econbrower has beaten me to that particular punch by posting the plot, taken from Caplinger which shows the historic production from the more than 350,000 oil and gas wells that have been drilled in that state, since that time.

PA production of oil from 1890 to 1990.

The production of PA oil did not, however, come from just one single oil reservoir, but rather from a large number of different pools, of which 149 had been identified, and listed, by 1928. The last reported was the Atlantic in Crawford County. More recent evaluations have consolidated these down to a list of 24 fields. But it illustrates a point that one cannot focus just on the oil in a state (or country) one has to consider the reservoirs, and their sizes, in which the oil and gas are found.

Original map from Pennsylvania’s Mineral Heritage, as quoted by Caplinger.

Since the time that the above map was made oilwell drilling technology has undergone considerable change, so that, with the coming of long horizontal, multi-fractured slick-water wells it has become possible to produce gas from the Marcellus shale in PA, and the energy production capacity of the state has been resurrected.

Extent of the Marcellus Shale (Marcellus Shale Coalition)

However, based on the performance of somewhat similar gas wells drilled into the Barnett Shale in Texas, and the current glut of gas that has come to a market as the development of gas shales has expanded, the exact immediate future of that production is not yet clear.

There is therefore both a historic and a current importance to visiting PA (not to mention the coal reserves – but we’re going to leave that for a later series). So it is with a number of other states. Colorado, for example, was the second state to discover an oilfield within its bounds, 13 months after the PA discovery. It still ranks 11th in the country in proven reserves of oil, and is the 7th largest producer of natural gas, from 7 of the top 50 gas fields in the country. It also has the largely undeveloped oil shales which hold a kerogen that, if it could be viably produced at scale, would provide a significant change to the world energy supplies. And in that roll I had better not forget Texas, or . . . . well the list goes on.

It would be very easy to get into great technical detail in this series, but that would defeat the intent with which I am starting out. Rather the goal is to try and show how oil (and gas) production developed, what it is now, and what can be expected in the future. There has to be some level of detail to the discussion, since some of the super-giant oil fields, such as Ghawar in Saudi Arabia, have been producing for many decades and may thus require a post of their own. And then there are claims of planned increases in production from fields such as the Ramaila field in Iraq. The Chinese are helping develop, and push this field from a production of 1 mbd to a target of 2.85 mbd. Since that production and similar volumes from similar relatively underdeveloped fields might impact the overall volumes of oil that are available, I will stop and discuss those individually as the series moves along.

So while the overall intent is to provide a broad picture of the oil and gas supplies of the world, and where they are used, the series will focus, as it evolves, on individual producers and the history of some of the fields, since it serves both as a way of predicting what might come in the future, but also serves as an indication of the results of different ways of extracting the fuel through different strategies in the past.

Well that is the plan! See you here next Sunday?


  1. Thanks, HO, for your part in setting up The Oil Drum. It has been a valuable resource for a number of years -- although unfortunately has now begun to take on a growing tinge of low-value "Doomer Porn".

    Let me offer a couple of suggestions for your new (& welcome) series.

    First, it would be great if you could include a bibliography of the more useful histories as part of your new series.

    Discussion of "Peak Oil" dates back almost to the Drake well. There have been a number of fine histories of the oil industry in various provinces, including recurring discussion of this fear. Your recommendations on further reading would be much appreciated.

    Second, please cover the development of technology in your series, rather as you have done for coal mining.

    Doomers often concentrate on what they call "Business As Usual" (BAU), which they apparently imagine to be static. In contrast, reality is that BAU has always been a moving target, as human knowledge and technology expanded. In Drake's day, BAU was a well drilled to less than 100 feet -- no thought of wells drilled to 30,000 feet, wells drilled in the Arctic, wells drilled offshore, wells drilled horizontally.

    The continuous expansion of human knowledge & technology has been an important reason why so many earlier predictions of Peak Oil were embarrassingly wrong. The implications for us today need to be considered. (Why is today different?)

  2. Thanks for the suggestions. One of the resources that I will be using extensively lies in the library that I have built up over time, and I will be glad to share the sources of the information that I provide - together with some additional reading.

    Technological evolution is also, as you say, something that is changing the availability of different resources, and I will try and include comments on this where appropriate.

  3. You shouldn't risk making an uninformed decision and immediately sell off your Eagle Ford Shale Mineral Rights since you might regret your decision later on.

  4. Great Stuff ! I have question, Is it possible to buy that land where oil well was located in past ?

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