$1.2 Trillion Value Oil in West Texas Wolfcamp Shale Oil Deposit.

[jpd80]

Gizmodo Australia

Maddie Stone

1 day ago

 

"An estimated 20 billion barrels of oil valued at up to $US900 billion ($1.2 trillion) has been discovered

in a West Texan shale formation, the US Geological Survey announced this week. Three times the size

of the Bakken oilfields in North Dakota, it could be the largest such deposit ever assessed in the United

States.

The USGS has released a new assessment of oil reserves located in the Wolfcamp shale in West

Texas' Permian Basin, one of the most productive areas for oil and gas extraction in the United States.

In addition to a whopping 20 billion barrels of oil, the shale is steeped in an estimated 453 billion cubic

metres of natural gas and another 1.6 billion barrels of natural gas liquids.

 

The estimate consists of "undiscovered and technically recoverable" resources of "continuous" oil

and gas. Understanding all of this jargon is key. Undiscovered resources are estimated based on

existing geologic knowledge and theory, meaning the exact amount of oil and gas in the Wolfcamp

shale could be larger or smaller. Technically recoverable resources are those that can in theory be

produced using current technology and industry standard practices. Finally, continuous resources

are dispersed in small amounts throughout a basin rather than large, discrete deposits. "Because

of that, continuous resources commonly require special technical drilling and recovery methods,

such as hydraulic fracturing," the USGS writes. (According to The Guardian, fracking is already

common practice at the more than 3000 horizontal oil wells located in the Wolfcamp region.)

Importantly, the USGS has not determined whether it is profitable to exploit all or even most of

this vast new oil reserve. But given the numbers and dollar signs attached to its discovery, it is

difficult to imagine that America's incoming, oil-friendly administration will not try.

In the disturbingly prescient words Sarah Palin, get ready to drill, baby, drill."

 

http://www.msn.com/en-au/money/marke...cid=spartandhp

Edited November 20, 2016 by jpd80

[lfeg]

Hey, old basins stilll can have resources. And the Europeans will buy all the natural gas (liquified) that we will sell them.

[jpd80]

Hey, old basins stilll can have resources. And the Europeans will buy all the natural gas (liquified) that we will sell them.

 

 

[blksn8k2]

I can already hear the opposition crying "earth quakes!".

[jpd80]

The strategy behind Shale Oil (I think) is to act as a glass ceiling for oil prices.

This year, oil prices have recovered, going from $27/barrel to $44/barrel and OPEC is wanting it to rise

to between $65/barrel and $70/barrel. At that price, minimg shale oil becomes more financially viable.

 

So the US is basically throwing up domestic competition for when the price of oil increases enoughf

or consumers to feel the cost. I just like the idea of less money flowing out of the country, the nett

effect is more local business activity where more Americans benefit.

Edited November 21, 2016 by jpd80

[rperez817]

Here is a map highlighting the location of Wolfcamp Shale Formation. The cities of Lubbock and Midland are in this area, though not shown on the map.

 

[J-150]

Meh. 166 billion barrels in the Alberta oil sands.

 

The Bakken formation that runs under Saskatchewan, Manitoba, North Dakota and Montana is estimated to have 400 to 500 billion barrels.

Edited November 21, 2016 by J-150

[tbone]

What it should mean is the US and Canada should be able to prevent the Middle East from having a large impact on the supply and price of oil, which is a good thing.

[J-150]

What it should mean is the US and Canada should be able to prevent the Middle East from having a large impact on the supply and price of oil, which is a good thing.

Or, bleed them dry THEN start using ours.

 

Oh, and to make this political, American ownership of many oil sands developments are courtesy of NAFTA.

[jpd80]

Just having the sheer presence of those resources and some mining in progress is enough to make OPEC blink,

they know that North America as a block will never accept continuing high fuel costs and will instead turn to alternative sources.

[Bob Rosadini]

Just having the sheer presence of those resources and some mining in progress is enough to make OPEC blink,

they know that North America as a block will never accept continuing high fuel costs and will instead turn to alternative sources.

One big reason Aramco is making the huge investments in chemicals. Amazing how the markets swing-was it three years ago-there were not enough tank cars to move the crude out of the Dakotas. Today huge numbers are parked. But the key is the systems are in place to handle all that crude if need be. The smart OPEC countries recognize that.

[SoonerLS]

I can already hear the opposition crying "earth quakes!".

Eh, the potential problem is the disposal wells, not the hydraulic fracturing itself. We can build a pipeline to Mexico then sell them the water that would normally go into the disposal wells, then they could use it to make high-dollar (high-peso?) tequila and sell it to American hipsters, thereby solving many problems in one go...

[tbone]

Meh. 166 billion barrels in the Alberta oil sands.

 

The Bakken formation that runs under Saskatchewan, Manitoba, North Dakota and Montana is estimated to have 400 to 500 billion barrels.

My wife works for a company that had a multi million dollar project for a large oil company working the oil sands, and they cancelled the project last year and paid a large penalty in doing so. It was as a result of them reducing production. That production can easily be brought back up to speed if the market conditions are right.

[92merc]

I don't think the economics for the oil sands will be there any more. Takes too much power to heat up the sands and get to the oil.

 

Here in the Bakken, they've cut back production. A lot of wells still on hold waiting to be fracked. It'll be a lot easier to finish those wells off in the Bakken, and easier to start tapping the Wolfcamp than to run the oil sands.

 

Likelihood of the of the Keystone being done with Trump coming, is not good. Not because of Trump, but because oil sands won't be as profitable shale. And with Texas already having major infrastructure there, it'll be easier for those guys to expand.

[J-150]

I don't think the economics for the oil sands will be there any more. Takes too much power to heat up the sands and get to the oil.

 

Here in the Bakken, they've cut back production. A lot of wells still on hold waiting to be fracked. It'll be a lot easier to finish those wells off in the Bakken, and easier to start tapping the Wolfcamp than to run the oil sands.

 

Likelihood of the of the Keystone being done with Trump coming, is not good. Not because of Trump, but because oil sands won't be as profitable shale. And with Texas already having major infrastructure there, it'll be easier for those guys to expand.

The economics are this: OPEC and the Russians are keeping prices low so the oil sands and oil shale stay shuttered.

 

They know if prices get too high, our domestic production returns. It's oil. It doesn't spoil. It will wait.

[jpd80]

The economics are this: OPEC and the Russians are keeping prices low so the oil sands and oil shale stay shuttered.

 

They know if prices get too high, our domestic production returns. It's oil. It doesn't spoil. It will wait.

And OPEC is walking a fine line here because its members want as as much immediate revenue as possible.

So it's hard to set limits on production volume dry up stockpiles and watch the price to go up.

 

The good part for shale oil and oil sands is that as OPEC raises the market prices, those alternative strategies

become viable again which eats into OPEC's volumes.. an interesting situation..

[J-150]

And OPEC is walking a fine line here because its members want as as much immediate revenue as possible.

So it's hard to set limits on production volume dry up stockpiles and watch the price to go up.

 

The good part for shale oil and oil sands is that as OPEC raises the market prices, those alternative strategies

become viable again which eats into OPEC's volumes.. an interesting situation..

True. But they also want to get rid of the competition

[jpd80]

True. But they also want to get rid of the competition

But they can't get rid of the competition, those North American companies effectively put a cap on the

upper limit of oil pricing.

 

The conundrum for OPEC seeking highest possible price for oil by tightening supply

is completely at odds with lowering the oil price driving away the competition.

Edited November 28, 2016 by jpd80

[focus05]

We're missing a massive trend in this, though: the rise and fall(ing price) of solar energy. The cost per watt installed now is just about equivalent to oil and has all but left coal dead (sorry West Virginia). In a few years, even with subsidies disappearing, solar undercuts everything else. Storage, one of the key challenges of renewables, is becoming vastly cheaper as well. Enough so that every new house should be built with solar installed.

 

The drop in storage leads to the second point, which is electrification of our car fleet. I don't expect this to change. Tesla, GM, Audi and others will see to that and the only thing that will change that is some magical ICE improvements. It's not just the full efficiency plant to tail pipe, but the dynamics of an electric vehicle (torque!). On a more practical level, as storage become cheap, driverless + electrification is basically the panacea of local delivery.

 

I guess what I'm saying is: having all this shale oil is great. Drill baby, whatever. But honestly, I would go full bore into the trend (solar + storage) and decouple ourselves from imported oil and allow our deposits to stretch as far as they can until they are eventually supplanted by biofuels altogether. You want to see our trade deficit evaporate in the next 5-7 years? There you go. That's your policy.

 

 

[SoonerLS]

But they can't get rid of the competition, those North American companies effectively put a cap on the upper limit of oil pricing.

One popular theory is that the Saudis were counting on the relatively low cost of production in the Gulf States as compared to the relatively high cost of production in North America--if they could drive the per-bbl price of oil lower than the cost of production in NA and keep it there, they would force the NA production companies out of business.