Oil Shock Models with Different Ultimately Recoverable Resources of Crude plus Condensate (3100 Gb to 3700 Gb)

The post that follows relies heavily on the previous work of both Paul Pukite (aka Webhubbletelescope) and Jean Laherrere and I thank them both for sharing their knowledge, any mistakes are my responsibility.  

In a previous post I presented a simplified Oil Shock model that closely followed a 2013 estimate of World C+C Ultimately Recoverable Resources (URR) by Jean Laherrere of 2700 Gb, where 2200 Gb was from crude plus condensate less extra heavy oil (C+C-XH) and 500 Gb was from extra heavy (XH) oil resources in the Canadian and Venezuelan oil sands.

In the analysis here, I use the Hubbert Linearization (HL) method to estimate World C+C-XH URR to be about 2500 Gb.  The creaming curve method preferred by Jean Laherrere suggests the lower URR of 2200 Gb, if we assume only 200 Gb of future reserve growth and oil discovery.  

Previously, I have shown that US oil reserve growth (of proved plus probable reserves) was 63% from 1980 to 2005.  If we assume all of the 200 Gb of reserves added to the URR=2200 Gb model are from oil discoveries and that in a URR=2500 Gb, oil discoveries are also 200 Gb, then 300 Gb of reserve growth would be needed over all future years (we will use 90 years to 2100) or about 35% reserve growth on the 850 Gb of 2P (proved plus probable) reserves in 2010.  I conclude that a URR of 2500 Gb for C+C-XH is quite conservative.

A problem with the Hubbert Linearization method is that there is a tendency to underestimate URR.

Eagle Ford, Permian Basin, and Bakken and Eagle Ford Scenarios

Increased oil output in the US has kept World oil output from declining over the past few years and a major question is how long this can continue.  Poor estimates by both the US Energy Information Administration (EIA) and the Railroad Commission of Texas (RRC) for Texas state wide crude plus condensate (C+C) output make it difficult to predict when a sustained decline in US output will begin.

About 80 to 85% of Texas (TX) C+C output is from the Permian basin and the Eagle Ford play, so estimating output from these two formations is crucial.  I have used data from the production data query (PDQ) at the RRC to find the percentage of TX C+C output from the Permian (about 44% in Feb 2015) and Eagle Ford plays (40% in Feb 2015).  Dean’s estimates of Texas C+C output are excellent in my opinion and are close to EIA estimates through August 2014.  I used EIA data for TX C+C output through August 2014 and Dean’s best estimate from Sept 2014 to Feb 2015.  By multiplying the % of C+C output from the RRC data with the combined EIA and Dean estimate, I was able to estimate Eagle Ford and Permian output.  The chart below shows this output in kb/d.

 

 

Oil Shock Model for the World - 4100 Gb

I recently used the Oil Shock Model to create a future oil output scenario using Jean Laherrere’s estimate for World C+C URR of 2700 Gb.  About 500 Gb of extra heavy oil from Canadian Oil Sands and Orinoco Belt oil is included in the C+C URR estimate.

 The United States Geological Survey (USGS) estimates that the World C+C URR is 4100 Gb, including 1000 Gb of extra heavy oil.  The chart below is a new scenario created using Paul Pukite’s (Webhubbletelescope’s) Oil Shock Model with Dispersive Discovery.

 

I intended this to be an April Fool's joke.  I do not expect that extra heavy oil output will actually reach 28 Mb/d by 2100.  Note however that Jean Laherrere's 2013 estimate for extra heavy oil(XH) has a peak of about 16 Mb/d in 2070, with a URR of 500 Gb for XH oil. 

I believe that the USGS estimate is too optimistic and think 3100 Gb for C+C-XH and 700 Gb for XH oil for a total C+C URR of 3800 Gb is as high as C+C output will go (my optimistic scenario).

My pessimistic scenario is 2500 Gb of C+C-XH and 500 Gb of XH oil for a total C+C URR of 3000 Gb.  My best guess is 2800 Gb of C+C-XH and 600 Gb of XH oil for a total C+C URR of 3400 Gb.

The Oil Shock Model with Dispersive Discovery- Simplified

The Oil Shock Model was first developed by Webhubbletelescope and is explained in detail in The Oil Conundrum. (Note that this free book takes a while to download as it is over 700 pages long.) The Oil Shock Model with Dispersive Discovery is covered in the first half of the book.  I have made a few simplifications to the original model in an attempt to make it easier to understand.

Figure 1

In a previous post I explained convolution and its use in modelling oil output in the Bakken/Three Forks and Eagle Ford LTO (light tight oil) fields.  Briefly, an average hyperbolic well profile (monthly oil output) is combined with the number of new wells completed each month by means of convolution to find a model of LTO output.