I'm hearing that the new Texas formation, the Permian Basin / Wolfcamp Shale stuff, is profitable even at current prices. And it is big enough to challenge the Saudis. This could hold prices down for an extended period.
A quick into this found only one company claiming the Wolfcamp Shale deposit could have 75 billion barrels and thus rival Saudi Arabia's Ghawar field. The USGS's assessment puts it at 20 billion, and this is a well studied, educated guess, not actual discovery. The good news seems to be that the cost of horizontal drilling and fracking has come down, though it might go back up. Then the increases to shale oil production are in response to increasing crude prices. USGS Estimates 20 Billion Barrels of Oil in Texas’ Wolfcamp Shale Formation (note: shale oil is tight oil) Experts say US shale oil output growth will not bring down oil prices for long | Hellenic Shipping News Worldwide U.S. shale oil output to soar in April, Permian to hit fresh record| Reuters
In my world 6 cents a kWh is expensive. Colorado has a nice solar supply at about 2 - 2.5 cents a kWh for DIY'ers
Jimmy Carter is smiling: Unocal to Close the Nation's Last Shale Oil Project - latimes In a last gasp for Jimmy Carter-era synthetic fuel programs, Unocal Corp. said Tuesday that it will suspend production at its $650-million shale oil project in Parachute Creek, Colo., citing continued losses. Closure of the 13-year-old project, the only remaining commercial shale oil operation in the country, spells the apparent end of major efforts to squeeze oil from rocks as a way to displace imported crude. Officials blamed the project's lack of profits on falling oil prices and production problems. The plant, which was first announced in March, 1978, will shut down June 1, despite renewed concerns about the nation's energy security in the wake of the Persian Gulf War. . . . What goes around, comes around. Bob Wilson
That was Black Monday or whatever day, in the 1980's when all the CO shale projects died, and many thousands were laid off. That CO shale had 3 issues at least (1) wacky expensive stuff to refine due to ultra high contaminants, (2) located in the ski Country where expensive homes became the new norm, and (3) the price of crude oil collapsed to very low. From a science/engineering perspective Unocal was a technologically superior company, so they were talented enough to give it a shot, but unfort they were barking up the wrong tree. Keep on mind in those days it was believed oil would be totally used up by 2000, so there was sense of national security urgency, which is forgotten today.
Did you catch the date of that article? There are some big differences between shale oil and oil shale, but laxness in use of technical terms in the media makes confusion understandable. Shale oil is referred to as tight oil in the industry. It is conventional crude that just can't be pumped out as easily as in regular petroleum fields. The rocks, which doesn't have to be shale, are said to hold the oil tighter. Advanced techniques like horizontal drilling and fracking make getting it possible. This what the Bakkan and Permain oil fields are. Allowing the export of these oils on the grounds that they required more processing than other crudes is just BS. Those companies that have lower operation costs for that tight oil do so for reasons beyond lowering the cost of the actual drilling. They could hold cheap land leases from before the oil booms, can take advantage of petroleum pipelines already in place, already have extensive knowledge of the field(the Permain fields in Texas have been vertically drilled since 1980), and the oil services sector has crashed meaning they have had to cut prices to the oil companies. Oil shale that the above factory was processing is an unconventional crude like tar sands. The carbon portion is actually a solid called kerogen. It has to be dug up and processed like tar sands, but at increased cost because it is farther from a pumpable product and is more tightly bound up in porous rock versus being a thick tar mixed with sand.
Adding to the costs of the very heavy products is the purchase of solvents or other light oils to dilute the heavy stuff down to a range where it can be pumped. The product out of the Alberta tar sands is called dilbit...diluted bitumen. It isn't oil, more like gooey tar before it is diluted to be pumpable. Venezuela has the world's larges crude oil deposits which are so heavy that they need either a solvent or light crude mixed in so it can be pumped and exported. Venezuela's economy is so bad that they can't buy the dilutant and therefore can't export. Here's more about near future oil prices. 4 Factors Driving Oil Prices This Summer | OilPrice.com Nobody knows what the supply will be. Nobody knows about the future political climate in oil exporters like Nigeria, Libya, Venezuela, and other volatile regions. More: U.S. Shale - The New Swing Producer | OilPrice.com And, more: EMEA Investor Of the Year Predicts Brent At $70 By 2017 End | OilPrice.com
