Write-down of two-thirds of US shale oil explodes fracking myth

[GliderGuider]

Write-down of two-thirds of US shale oil explodes fracking myth

Next month, the US Energy Information Administration (EIA) will publish a new estimate of US shale deposits set to deal a death-blow to industry hype about a new golden era of US energy independence by fracking unconventional oil and gas.

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.

The latest revelations follow a spate of bad news for industry reassurances about the fracking boom. New research published this month has found that measured methane leaks from fracking operations were three times larger than forecasted. The US Environment Protection Agency therefore "significantly underestimates" methane emissions from fracking, by as much as a 100 to a 1,000 times according to a new Proceedings of the National Academy of Sciences study published in April.

Read it and weep cornucopians. Shocking I know, but, IT WAS ALL A LIE.

Please note, solar roads and wind farms, etc, as a means to continue the global party are also GREAT BIG FRACKING LIES.

[FBaggins]

1. Sorry... that's nonsense.

This is one shale formation (Monteray) that the major players in the industry have been saying for years is not particularly viable. It's geologically different from the ones that have driven the huge increases in US production over the last few years.

All this means is that California isn't going to see a big increase in oil/gas any time soon (unless some new technology comes along). The change doesn't say a thing about shale plays in the US in general. They continue to to substantially outperform what the malthusians have been saying.

[hatrack]

2. The INTEK study and EIA estimates put Monterey at 64% of total tight oil in the Lower 48

So, no, Monterey's lack of viability doesn't mean THE END for similar operations elsewhere.

However, it does (how shall I put this . . . ) revise the overall outlook for US production from that particular flavor of oil development.

[FBaggins]

3. That's not particularly relevant

Because production estimates for the coming years weren't driven by the EIAs estimate of "total tight oil in the lower 48"... they were driven by shale plays that continue to perform at or better than expected.

The big boys aren't drilling there (and therefore don't include it in reserve estimates) because they didn't conisder it viable... and the little players that have drilled there haven't been able to produce anything that would make a meaningful bump in their production or reserves.

More importantly... using this as evidence that the fracking boom (which continues to confound malthusians) was "a big lie"... is nonsense.

However, it does (how shall I put this . . . ) revise the overall outlook for US production from that particular flavor of oil development.

All it revises are predictions for production from that specific shale... not shales in general. The Monteray is distinct geologically from the more successful plays.

The estimates that say that the US is close to topping what was once thought to be a "peak" are unchanged.

BTW... those estimates often itemize where the oil will come from. If you could provide one relying on Monteray for significant production in 2020... or 2030... then your claim would (how shall I put this...) seem more reliable.

[GliderGuider]

4. Another take: US Officials Blow Up Oil-Boom Myth

US Officials Blow Up Oil-Boom Myth

The story broke last night. 9 pm. By now every mass media website should have it as the lede and every cable channel should be wall-to-wall with it. Why? Because it is a mortal blow to the five-year myth that America is in the midst of an oil-and-gas revolution that will return us to world supremacy, make us an exporter again, and bring us closer to energy independence.

Of course, some of us knew that these were all lies, all the time. But gullible people, especially gullible investors (who were the targets of the hype) bought the bogus claims. Chief among these — the biggest, most persuasive lie — was that the Monterey Shale in central California held a vast treasure in oil reserves,

14 billion barrels, two-thirds of America’s shale oil reserves, just waiting to be harvested for profits, 2.8 million jobs and $25 billion a year in extra tax revenues. That has been the oil-bidness mantra since a 2011 study by an “independent” company came up with the numbers.

Turns out their “independent study” consisted of reading oil industry press releases and adding up all the numbers therein. Turns out the main pillar of the oil-boom hype required a little fine tuning. Last night the Los Angeles Times reported that the U.S. Energy Information Administration has done the research, run the numbers and says go ahead and use the former estimates of the potential of the Monterey Shale – just reduce them by 96 percent!

[FBaggins]

5. More wishful thinking

Somehow they've all got the notion that this says something about shale oil/gas plays in general... but it doesn't.

He's actually trying to pretend that the Monteray shale was the key to predictions of continued oil production gains - specifically in the short term. That this was "main pillar of the oil-boom hype" about production over the next five years.

That's simply not true... bordering on intentionally dishonest.

Given the author's predictions over the last few years... and how badly wrong they've been... it's clear that he's grasping at straws hoping that this time it will be different.

[Brace for Impact]

8. Straw Grasping

I did not express the "notion" that the Monterey bombshell "says something" about fracking in general. I pointed out that it took off the board nearly two-thirds of the reserves considered available for fracking. How do you lose two-thirds of your assets and try to pretend that nothing just happened?

Nor was I talking about specific production prediction,s short- or long-term; I was talking about the hype, headline after headline about "inching toward" energy independence (USA Today's favorite phrase) and surpassing Saudi Arabia and exporting LNG to Europe to trump Russia's gas supremacy there. Talk about bordering on intentionally dishonest -- there's no border there. These are lies and damned lies, designed to sucker Wall Street into participating in the ponzi scheme of frenzied well-drilling required by the fact that fracking wells have a hideous decline rate of about 50 per cent a year.

I'd be interested to know what predictions I've made over the past few years that have been "badly wrong." If you're referring to predictions of the collapse of the fracking bubble -- they are sort of like the predictions of the big California earthquake; they are not proven wrong by the fact that it hasn't happened yet.

[gopiscrap]

9. Welcome to DU

[GliderGuider]

10. Thanks for chiming in.

And welcome to DU!

[LouisvilleDem]

6. It only explodes fracking myth...

...if you think the Monterey shale reserves are the only thing that matters.

[FBaggins]

7. Exactly

I remember an IHS-CERA estimate from a year and a half ago that the Monterey shale would have no impact before 2020... would add 10,000 bpd by 2025... and 60,000 bpd by 2035 - for exactly the same reasons that the government had to just revise their earlier estimate. It simply isn't like other shales.

And that's the key takaway. The authors presented here believe specific things about the other shale plays... and they've been saying those things for years... while watching each prediction fall to reality. They would really like for this report to say something about the other shales (something that would make them seem less-wrong)... but they can't. None of the reasons that made this change necessary apply to the Bakken, etc.

[GliderGuider]

11. Relax: Monterey downgrade won’t dent US shale boom—yet

Relax: Monterey downgrade won’t dent US shale boom—yet

Because the Bakken and Eagle Ford shale plays currently generate nearly 70 percent of U.S. unconventional oil and gas, experts say the downgrade to Monterey does little to alter the near-term trajectory of the energy renaissance. However, they added it does bring into focus two major red flags: A well depletion factor that ramps up the urgency of finding new shale plays, and the need to upgrade new technology for that same purpose.

Yet the practical impact of the EIA's downgrade puts a spotlight on an element of the shale boom that often goes unremarked by fracking advocates. Shale wells are prone to rapid depletion rates—spots in North Dakota's Bakken lose 85 percent of their capacity within a few years.

"At some point we're going to hit a wall," Hughes said. "Monterey was a huge field wiped out with a stroke of a pen: That's like two Bakkens off the table in one fell swoop."

If the U.S. boom is to be sustained beyond 2020, new shale plays will need to be discovered within the next few years, he added. "You're going to have a whole slew of poorly producing wells in a decade or so," Hughes said. "The good news is that supply grows short term, but the bad news is that we may have a very serious supply issue 10-15 years out."

Well, at least the MSM is noticing.