(Chart via Carpe Diem)
Friday, December 21, 2012
US Oil Production Increases to Highest Level Since 1993
So much for peak oil. New technologies, fracking and extraction of oil from shale, is sending U.S. oil production through the roof. The added supply is going to put some downward pressure on oil prices and given Bernanke a little more breathing room before serious price inflation kicks in.
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But, but James Kunstler says...
ReplyDeleteAlso see:
ReplyDeleteSurprise! Iraqi oil production is set to explode.
Exxon Deal Brings Iraq, Kurdistan to Brink of Civil War
When government print money and interfere in markets malinvestment is common place. This may just be another example.
ReplyDeletehttp://www.theoildrum.com/node/9506
Findings from this in-depth study of time series for production from some individual wells:
Presently the estimated breakeven price for the “average” well in the Bakken formation in North Dakota is $80 - $90/Bbl In plain language this means that presently the commercial profitability for new wells is barely positive.
The “average” well now yields around 85 000 Bbls during the first 12 months of production and then experiences a year over year decline of 40% (+/-) 2%
The recent trend for newer “average” wells is one of a perceptible decline in well productivity (lower yields)
As of 2007 and also as of recent months, the total production of shale oil from Bakken, has shown exceptional growth and the (relatively high) specific average productivity (expressed as Bbls/day/well) has been sustained by starting up flow from an accelerating number of new wells
Now and based upon present observed trends for principally well productivity and crude oil futures (WTI), it is challenging to find support for the idea that total production of shale oil from the Bakken formation will move much above present levels of 0.6 - 0.7 Mb/d on an annual basis.
Abundant Natural Gas supplies have already been one of the main things keeping inflation down.
ReplyDeleteThat chart is very deceptive. US oil production peaked in 1970 and has collapsed. Look at a long chart.
ReplyDelete