Predictions for 2025
Make the most of the upcoming year - it might be your last
The big moment has arrived. The only growing source of oil on the planet - shale - is now in decline. This has the potential to turn ugly very fast.
Keep in mind as you read these articles, conventional oil production peaked two decades ago and every single day that oil source further depletes.
October 27, 2019
According to Rystad, the current resource replacement ratio for conventional resources is only 16 percent. Only 1 barrel out of every 6 consumed is being replaced with new resources. Read More
October 13, 2020
Conventional Oil Sources peaked in 2008 and the Shale binge has now spoiled US reserves, top investor warns
Preface. Conventional crude oil production may have already peaked in 2008 at 69.5million barrels per day (mb/d) according to Europe’s International Energy Agency (IEA 2018 p45). The U.S. Energy Information Agency shows global peak crude oil production at a later date in 2018 at 82.9mb/d (EIA 2020) because they included tight oil, oil sands, and deep-sea oil. Though it will take several years of lower oil production to be sure the peak occurred. Regardless, world production has been on a plateau since 2005.
What’s saved the world from oil decline was unconventional tight “fracked” oil, which accounted for 63% of total U.S. crude oil production in 2019 and 83% of global oil growth from 2009 to 2019. So it’s a big deal if we’ve reached the peak of fracked oil, because that is also the peak of both conventional and unconventional oil and the decline of all oil in the future. Read More
BOOM!
December 19, 2024
The Great Drama of American Shale Production may now be nearing its final act - Goehring & Rozencwajg Natural Resource Investors
For years, we have anticipated that the relentless growth in shale output would crest by late 2024 or early 2025, catching many off-guard. In hindsight, even this expectation might have erred on the side of caution. Quietly and without much fanfare, both shale oil and shale gas appear to have passed their zenith several months ago.
Recent data from the Energy Information Agency (EIA) reveal that shale crude oil production reached its high-water mark in November 2023, only to slide 2%— roughly 200,000 barrels per day—since then. Likewise, shale dry gas production peaked that same month and has since slipped by 1% or 1 billion cubic feet per day. The trajectory from here, according to our models, looks steeper still.
Our models point to a sobering conclusion: even with substantially higher prices and an abundance of undrilled locations, production is set to continue its decline. We call this phenomenon the “depletion paradox.” It is a familiar story, and history provides a clear precedent.
Consider the case of conventional U.S. crude production in the 1970s. Production peaked in November 1970 at 10 million barrels per day, with oil priced at just $3.18 per barrel. At that time, the industry operated a modest 302 rigs drilling for oil. The first OPEC oil crisis in 1973 sparked a response from President Nixon in the form of Project Independence—a sweeping initiative aimed at reversing the decline in U.S. output through deregulation and expedited permitting. Much like today, optimism abounded among oil producers, who believed that higher prices would unleash a drilling boom and restore U.S. production growth. They were confident they knew where to drill; all they needed was the right price signal.
Prices soared from $3.18 per barrel in 1973 to $34 per barrel by 1981. Producers, true to their promises, responded with vigor. The rig count climbed from 993 in 1973 to a staggering 4,500 by late 1981. Yet despite this unprecedented surge in drilling activity, U.S. oil production steadily declined throughout the 1970s. By the end of 1981, production had fallen to 8.5 million barrels per day—far below the peak achieved a decade earlier and lower than when Nixon announced his ambitious goals.
Three decades later, in 2010, U.S. oil production hit a nadir of 5 million barrels per day, even as prices hovered around $100 per barrel—30 times higher than in 1973. The depletion paradox had firmly taken hold. The industry’s assumption—that higher prices alone could counteract geological realities—proved tragically flawed. Today, as we observe the shale sector grappling with similar dynamics, it seems history may once again be repeating itself.
We believe the U.S. shale sector now stands at a crossroads eerily similar to that faced by conventional oil production in 1973. While shale’s achievements have been extraordinary, they remain subject to the inexorable forces of depletion.
Between 1973 and 1985, the U.S. drilled more conventional well feet than during any other 13-year period. Yet production still declined. Today, we face a similar paradox: while undrilled locations remain and higher prices may render them economic, it is unlikely they will materially boost total U.S. production. In the end, the paradox remains—depletion is an unstoppable force, and it is becoming harder and harder to keep up. Read More
When shale tips into decline, we will go the way of New Zealand
Make the most of the year 2025 - it might be your last.
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It's like this. Ask 10,000 people what the economy runs on and 9,500 will say money. 499 will say energy and just 1 will say surplus energy, the energy left over after you have rebuilt, replaced or repaired all the stuff we have built in the last 100 years.
Now as Fast Eddy has pointed out energy production is dropping but cos he is not one of the really special people who can see clearly that the world runs on a very special sort of energy, called in the trade, "surplus energy " he fails to see that surplus energy supply is collapsing at an astonishing rate.
And The Men Who Run The World? Well they have been well aware of this particular predicament for well over 60years so you can all be sure that plans have been put in place to manage the situation.
As the famous quote goes: "How do you go bankrupt? A little at first, then all of a sudden". I see 2025, unfortunately more of the same but with more headwinds. My wish is for a global thermal nuclear war to finally fix and eliminate stupid once and for all, aka "Humans".
But as been mentioned many times, energy is the "lifeblood" on industrial civilization and cheap easy to extract oil is harder and harder to get at. If it wasn't for exploding debt and speculation, Shale Oil, Tar Sands, Wind/Solar would be an afterthought. As cheap and affordable energy goes, so does Industrial Civilization.
https://www.zerohedge.com/energy/europe-fall-holy-renewable-empire
Europe and especially Germany are already realizing that Wind and Solar are not the solution to fossil fuels. Their economies are going into recession and in some cases depression. Germany's auto industry is collapsing because China can now produce quality vehicles at a fraction of the price Germany needs.
Eventually it all comes crashing down because people will not be able to afford the taxes and the prices needed by the energy producers to pull it out of the ground. And NO, Big Government is not the solution. It cost the US Gov't several billion dollars to build "7 EV charging stations". That's Big Government for you.