Drumbeat: June 15, 2013

The Shrinking Road, Part 1: Have We Hit 'Peak Cars'?

BOULDER, Colo. -- Remember the concept of "peak oil"--that the world will soon achieve the maximum rate of petroleum extraction possible, if it hasn't already? Now the question may be have we reached an era of "peak cars"?

In a recent webinar held by Navigant Research, "Peak Cars: Flattening Vehicle Sales & Their Implications for Automakers, City Planners & the Cleantech Industry," analysts shared their projections on the potential and impact of long-term static and declining automotive sales. While North America has not yet hit its "peak" in automotive sales and is still several years off, Navigant Research believes it is next in line.

Texas: Long-term funding for roads needed

Some are calling for using money from the Rainy Day Fund, but that might be a tough sell because during the regular session $4 billion was tapped for water supply projects, education and wildfires.

An even tougher climb is faced by those seeking to earmark for transportation a portion of the oil and gas severance taxes that make up the Rainy Day Fund. That might not be the best way to pay for roads, but at least it would be sustained dedicated funding.

US Oil Demand Has Peaked And Oil Markets Don't Care

There are lots of reasons for Americans to use less oil.

They'll improve the environment.

If it involves driving less, they'll save lives.

And in the long run, they'll save money.

But a collective reduction in fuel use is not yet enough to put a long-term dent in global oil prices.

The myth of peak oil

A few years ago, I was regularly ambushed by peak oil enthusiasts, who inisted that global oil production was either at or beyond its peak. That peak, it was said, either occurred in 2005 or in 2008-9. My response was that, while it might be possible to think of a peak in global oil production in 20-30 years' time, it was not imminent. Not only that but high oil prices would encourage more exploration, and make marginal oil provinces viable.

Crude Rises to Four-Month High on Middle East Tension

West Texas Intermediate crude rose to a four-month high after President Barack Obama was said to authorize arming Syrian rebels groups, ratcheting up tensions in a region home to about a third of the world’s oil supply.

Prices capped a second weekly gain after a U.S. official familiar with the decision said Obama is issuing a classified order to the Central Intelligence Agency to provide small arms and ammunition to the Syrian opposition. The official asked not to be identified. Yesterday, the administration said it had confirmed the use of chemical weapons by President Bashar al-Assad’s forces during the civil war.

WTI Futures Have Support at $93.80: Technical Analysis

West Texas Intermediate crude futures have supports around $93.80 a barrel, where the 200-day and 50-day moving average of the July contract converged, according to a technical analysis by Iitrader.com.

The contract has traded above $93.80 for the past four days and is below the resistance level of $98.22, the three-month intraday high, according to Bill Baruch, a senior market strategist at Iitrader.com in Chicago. The 50-day moving average closed at $93.79 yesterday and the 200-day average settled at $93.77.

UAE May oil output up 1.1% over April - IEA

The UAE’s May oil output rose 1.1 per cent over April to 2.73 million barrels per day (bpd), latest data from the Paris-based International Energy Agency (IEA) showed.

“Opec [Organisation of Petroleum Exporting Countries] crude oil supply in May rose to its highest level in seven months due to increased output from Saudi Arabia and, to a less extent, Iran, the UAE and Kuwait. May Opec output was up by around 135,000 bpd to 30.89 million bpd, with higher output from the Gulf producers only partially offset by reduced supplies from Iraq, Libya and Nigeria, where terrorist and militant activity continued to undermine production levels,” said the IEA, which advises 28 industrialised countries on energy policy.

North Dakota’s Bakken Hits Record Oil Production Level in April

Producers in North Dakota’s Bakken shale formation increased oil output to a record 727,149 barrels a day in April, according to preliminary data compiled by the state Industrial Commission.

Continental Resources Inc. (CLR) and Whiting Petroleum Corp. (WLL) are among companies that boosted production in the largest U.S. shale formation by 1.2 percent from March. Output was up 33 percent from April 2012.

Energy Secretary Moniz Signals LNG Exports Will Soon Get Moving

U.S. Energy Secretary Ernest Moniz made his first official visit to Capitol Hill to, in part, reassure an improving manufacturing sector that domestic natural gas production would grow and that it would have access to affordable fuel. With that, he said that his agency would decide on more gas export applications by year end.

US Energy Secretary to visit India to discuss shale gas export

WASHINGTON: US Energy Secretary Ernest Moniz will be travelling to India in less than a fortnight, during which he is expected to discuss the issue of shale gas export with Indian counterparts.

Coal Industry Pins Hopes on Exports as U.S. Market Shrinks

CROW AGENCY, Mont. — Every few hours trains packed with coal pass through the sagebrush-covered landscape here in southern Montana, some on their way north to Canadian ports for shipment to Japan and South Korea. If the mining company Cloud Peak Energy has its way, many more trains will cross the prairie to far larger proposed export terminals in Washington State.

It’s part of a push by the nation’s coal industry, hobbled by plummeting demand as Americans turn to cleaner natural gas, to vastly expand what it sends to Asia and Europe. But the aggressive effort to rescue the $40 billion industry is running into fierce opposition from environmental groups, who say pollution caused by burning coal should not be exported.

Coal on the Wrong Side of Energy's Future

The U.S. coal industry continues to struggle with falling demand domestically, and low prices for exports. New emissions regulations have caused the closure of hundreds of coal plants in the last few years, and the low price of natural gas has been a death knell for companies like Patriot Coal, which couldn't find low cost supply.

Long-term, there's nothing that's going to stop the trend of falling consumption domestically. It may ebb and flow from month to month, but we have plenty of natural gas, and renewable alternatives are growing like a weed.

Petrol prices to rise by Rs.2 per litre

New Delhi (IANS) Petrol prices will go up by Rs.2 per litre, excluding taxes, from midnight Saturday due to the depreciating rupee and hardening of international prices, a state-run oil marketing company (OMC) said.

The country's largest oil marketing firm Indian Oil Corporation (IOC) said the prices have been revised upward due to the depreciation in the value of rupee and rise in international crude oil prices.

Narayanasamy plays safe on Moily's claims of import lobbies threatening petroleum ministers

Chennai (ANI): Minister of State in Prime Minister's Office (PMO) V. Narayanasamy on Saturday avoided commenting on Oil Minister Dr. M. Veerappa Moily's revelations that petroleum ministers are 'threatened' by import lobbies for not taking decisions that will cut India's USD 160 billion oil imports

Qatar emir 'set to transfer power to son'

The emir of Qatar, Sheikh Hamad bin Khalifa al-Thani, is preparing to hand control of the gas-rich Gulf state to his son, Qatari diplomats and officials said.

A cabinet reshuffle is also expected in which powerful Prime Minister Sheikh Hamad bin Jassem al-Thani may lose his post, or at least the foreign affairs portfolio, the sources said.

Is Egypt's Muslim Brotherhood backing a jihad in Syria?

The powerful involvement of jihadi groups like the Jabhat al-Nusra, which the Obama administration designated a terrorist group at the end of last year, has been a key reason the US has been so reluctant to provide direct military aid to the rebellion. The US fears that weapons it supplies will end up in jihadi hands and that the consequences, if such groups prove decisive in driving Bashar al-Assad and his cronies from power, will not be entirely to American likings.

Nigeria’s MEND Attacks Two Gasoline Trucks, Threatens Industry

Nigeria’s Movement for the Emancipation of the Niger Delta said it attacked two gasoline-laden trucks and threatened more action against the downstream petroleum industry of Africa’s largest oil producer.

MEND, as the group is known, used military-grade timed magnetic explosives on the trucks that were queued outside a fuel depot operated by the state-owned Nigerian National Petroleum Corp. in Abaji, about 77 kilometers (48 miles) south of Abuja, the capital, spokesman Jomo Gbomo said in an e-mailed statement.

“How to reduce unemployment through Grasscutter farming”

The rising unemployment rate in Nigeria can be curtailed if unemployed Nigerians are willing to go back to farming, which was the country’s mainstay prior to discovery of oil in 1956 at Oloibiri, Bayelsa State. With more Nigerians becoming unemployed and a few with steady employment, many can earn income with little investment into Grasscutter farming with a small or big space provided in their home.

Protest blocks road in front of Brasilia stadium

RIO DE JANEIRO (AP) — After violent protests in three cities heading into the warm-up event for the 2014 World Cup, FIFA expressed “full confidence” on Friday that Brazilian authorities have shown they can manage disorder in the streets.

There were clashes with police Thursday night in Sao Paulo and Rio de Janeiro after thousands protested rising bus and subway fares. And in Brasilia, at the venue staging the opening match of the Confederations Cup on Saturday, some 200 people burned tires and blocked the main road, objecting to the cost of staging the showpiece FIFA events.

Fracking Is Already Straining U.S. Water Supplies

As the level of hydraulic fracturing of oil and gas wells in the United States has intensified in recent years, much of the mounting public concern has centered on fears that underground water supplies could be contaminated with the toxic chemicals used in the well-stimulation technique that cracks rock formations and releases trapped oil and gas. But in some parts of the country, worries are also growing about fracking’s effect on water supply, as the water-intensive process stirs competition for the resources already stretched thin by drought or other factors.

Nuclear Plants, Old and Uncompetitive, Are Closing Earlier Than Expected

Washington — When does a nuclear plant become too old?

The nuclear industry is wrestling with that question as it tries to determine whether problems at reactors, all designed in the 1960s and 1970s, are middle-aged aches and pains or end-of-life crises.

This year, utilities have announced the retirement of four reactors, bringing the number remaining in the United States to 100. Three had expensive mechanical problems but one, Kewaunee in Wisconsin, was running well, and its owner, Dominion, had secured permission to run it an additional 20 years. But it was losing money, because of the low wholesale price of electricity.

“That’s the one that’s probably most ominous,” said Peter A. Bradford, a former member of the Nuclear Regulatory Commission and a former head of the Public Service Commission in New York. “It’s as much a function of the cost of the alternatives as it is the reactor itself.”

Anti-Dumping Duties Will Cost EU 1.3 GW Of Solar In 2013 (IHS Report)

A new report from research group IHS has found that the EU’s anti-dumping duties on Chinese solar products, if implemented, will result in over 1.3 GW less solar power capacity being installed in the EU in 2013.

With Treetop Trail, Philadelphia Zoo Opens Grounds to Prowlers

By allowing them to get closer to the animals, the Philadelphia Zoo hopes to encourage its 1.2 million annual visitors, particularly children, to understand and act on the conservation that is an increasingly important part of its mission.

Inhaling auto emissions makes good cholesterol go bad

Inhaling motor vehicle emissions may transform good, protective cholesterol into bad, artery-clogging cholesterol that increases the risk of heart disease and stroke, says a new study by researchers at the University of Washington and the University of California-Los Angeles.

Judge sides with feds in Montana oil lease dispute

BILLINGS, Mont. (AP) — A federal judge on Friday dismissed a lawsuit from environmentalists who tried to block almost 80,000 acres of oil and gas leases in Montana in a bid to force companies to reduce greenhouse gas emissions.

U.S. District Judge Sam Haddon said in his ruling that the emissions from future drilling activities would be too small — only a fraction of 1 percent of total emissions in the state — to make a "meaningful contribution" to global greenhouse gas levels.

In Colorado, Nature Takes a Fiery Toll Despite a Community’s Efforts to Prepare

DENVER — For years, families in Black Forest, Colo., did what they could to keep the flames at bay. They scooped up pine needles and trimmed low-hanging branches around their homes. They chopped down saplings and hauled dead trees to the community mulcher.

But when the fire came this week, hundreds of their homes still burned.

How climate change makes wildfires worse

We can expect “as much as a fourfold increase in parts of the Sierra Nevada and California,” in fire activity across the rest of this century, says Matthew Hurteau, assistant professor of ecosystem science and management at Pennsylvania State University. It’s a trend likely to continue: A 2012 study in Ecosphere, the peer-reviewed journal of the Ecological Society of America, found a high level of agreement that climate change will fundamentally alter fire patterns across vast swaths of the globe by 2100: While some areas around the equator will see fewer fires, there will be striking increases in high altitude boreal fires in the Northern Hemisphere. Fire will even reach a thawing Arctic, which will be more capable of growing plants to burn.

Climate talk shifts from curbing CO2 to adapting

WASHINGTON (AP) -- Efforts to curb global warming have quietly shifted as greenhouse gases inexorably rise.

The conversation is no longer solely about how to save the planet by cutting carbon emissions. It's becoming more about how to save ourselves from the warming planet's wild weather.

UN climate talks marred by decision-making spat

BONN, Germany (AP) -- U.N. climate talks have hit a stumbling block that some delegates say poses a serious challenge to their already slow-moving attempt to craft a global response to climate change.

As the latest negotiation session ended Friday in the German city of Bonn, one track of the talks was paralyzed by a request by Russia, Ukraine and Belarus to review the decision-making procedure in the two-decade-long U.N. process.

Obama Quietly Raises 'Carbon Price' as Costs to Climate Increase

Buried in a little-noticed rule on microwave ovens is a change in the U.S. government’s accounting for carbon emissions that could have wide-ranging implications for everything from power plants to the Keystone XL pipeline.

The increase of the so-called social cost of carbon, to $38 a metric ton in 2015 from $23.80, adjusts the calculation the government uses to weigh costs and benefits of proposed regulations. The figure is meant to approximate losses from global warming such as flood damage and diminished crops.

"Regret-Free" Approaches for Adapting Agriculture to Climate Change

BONN, GERMANY (14 JUNE 2013) — Whether it's swapping coffee for cocoa in Central America or bracing for drought in Sri Lanka with a return to ancient water storage systems, findings from a new report from the CGIAR Research Program on Climate Change, Agriculture and Food Security (CCAFS) chart a path for farmers to adapt to climate shifts despite uncertainties about what growing conditions will look like decades from now.

Re: UN climate talks marred by decision-making spat

Climate change (aka: Global Warming) is a world wide problem, thus a solution must involve all nations. Actions by one nation or a small group of nations won't solve the problem. Here we see another example of the tragedy of the commons, where national self interest overrules collective efforts to reduce emissions of greenhouse gases. The future doesn't look good as the time remaining to slow the warming slips away...

EDIT: Here's another commentary from the WaPo web site:

As Obama moves forward on climate, he faces a tough political task

E. Swanson


From your link,

Obama added, according to a White House transcript. “Because if you haven’t seen a raise in a decade; if your house is still $25,000, $30,000 underwater . . . you may be concerned about the temperature of the planet, but it’s probably not rising to your number one concern. And if people think, well, that’s shortsighted, that’s what happens when you’re struggling to get by.”

This is where I believe the prescription outlined in my post below on energy co-operatives comes into play.

The old saying of follow the money is still true and if joe&mary6pack can profit from the solutions then surely the admitted political hardships melt away, political donations from the major energy companies might not be as plentiful but they might not be needed so much if voters approve and support policy decisions.

I speak from a country where carbon taxes designed by the Green Party when they were in power have actually been implemented by their more conservative successors in government, significant carbon taxes are applied at the point of sale of ALL fossil fuels in Ireland with a percentage of the tax take refunded as energy efficiency grants to low income home owners.

As Islandboy pointed out a few minutes ago I made a mistake and started a new thread on the last Drumbeat, minutes before this Drumbeat was posted, perhaps Leanan might not be upset if I repost the following.

As some readers of Drumbeat might have realised, my passion is community energy co-operatives, I believe that giving ordinary individuals the means to control their own energy future can solve a lot of problems at the macro and micro scale. Currently in Ireland an enormous opportunity has opened up for Ireland to export some its enormous wind resources to keep the lights on in Britain but a pushback from the communities in which the wind farms will be built is now beginning to be organised, I wrote the following in a political forum in Ireland but I believe that the main points can be applied anywhere in the world, I would appreciate the thoughts of TOD readers on this subject.

Politics is an important part of the modern life experience but sometimes we give too much power to politics and politicians and almost without fail give ourselves, friends and neighbours as little power as possible.
Renewable energy is one such example, if we ask ourselves why renewable energy is necessary, the answer most people arrive at is that fossil fuels are becoming very expensive, chiefly because the easy resources have been consumed and the more expensive harder to recover resources are all that is left.

The depressive economic effect of expensive energy is now becoming apparent to all, Our present economy was built on cheap energy and economic growth is almost impossible with expensive energy.

But there is another dynamic at play, our present energy infrastructure is dominated by large national and international utilities and oil companies and renewable energy by its very nature occurs within communities and so is an easily democratised business.

Local energy co-operatives can supply energy to their own members and this becomes a problem for the incumbent players who see this danger all too clearly. However it will take decades to enable 100% self reliance to be achieved and large companies adjust to market dynamics over such timeframes.

The current controversy in the Midlands re the mega wind farms proposed by Mainstream and Element Power just might become a gamechanger in this larger dynamic provided suitable leadership can be mobilised to turn the sentiment of the protest groups away from protest and into a demand for participation. A smart campaign organised on this basis could I believe be extremely successful, for the communities, Mainstream / Element and most importantly Ireland.

Over the next few months this is the message I will be bringing to the politicians, I wouldn't mind a little assistance.

At the end of the day, he who controls a countries energy supply controls the country.

I'll let it go this time, but please don't make a habit of it. The Drumbeats go up on a regular schedule. It shouldn't be a surprise when a new one goes up.

If I understand correctly, you are asking communities to cease their objections to wind farms in their area in exchange for some direct benefit from the wind farms.

The words 'birthright' and 'mess of pottage' come to mind.

Well more correctly I am asking people to take more responsibility for their own energy future and as importantly profit from the endevour as well. I fully understand how someone might feel when a large corporation moves into an area to build wind farms leaving the local people with the physical result but no recompense. However I also deal with pro active communities who seek to build and own their own wind and solar farms yet meet opposotion from the same large corporations.

The case in point in the Irish midlands is that the sites involved are chiefly cut away peatlands, similar to the remains of old coal mines, with very little of the scenic beauty which other parts of Ireland are renowned for.

But on a global scale, because renewable energy generation occurs within communities rather than behind the fence of a thermal powerplant, the opportunity to democratise this vital industry is an opportunity which shouldn't be missed.

Interestly it is only in the developed world where opposition to local energy co-operatives is encountered.

Every form of energy production has an ecological and scenic amenity footprint and the attitude of many in the developed world is that as long as its not in my backyard its ok just keep sending me the energy.

The term idiocracy comes to mind.

I'm not close to being convinced that community or local energy is the solution, versus larger usually more distant sources. Wind is a case in point. It is most economical with very large turbines constructed in favorable sites. That means that the scale per project is large. Maybe groups of people -even several communities can all buy partial ownership shares of large projects. Otherwise "investors" of some flavor or other will end up financing and owning the energy sources. Trying to build your own locally will result in inefficient usage of resources. This is less true for solar, however currently rooftops are considerable more expensive than largescale ground mounts. At work they are putting flatroof solar up. The contractor is spending more money beefing up the roof, than he will installing the panels. I don't know how common this situation is, but I do know that larger scale flatroof PV is the sector of PV that is growing the slowest in the US.

I'm not close to being convinced that community or local energy is the solution, versus larger usually more distant sources.

Absolutely. There are a large number of fairly detailed nuts-and-bolts studies of low-carbon electric power for the US Western Interconnect (the Eastern and Texas Interconnects are harder problems, each with its own difficulties). Pretty much all of the studies, after taking out efficiency gains and other conservation factors, depend highly on it being the whole interconnect. Geographical distribution to deal with renewable intermittency on all of the temporal scales. Wind diversity from north to south; solar from east to west; hydro across much of the area because droughts vary from place to place; pumped hydro for storage at specific places where it's practical; fairly easy to define transmission routes needed to tie it together.

I think there's a general rule here: the smaller the area on which your generation depends, the less reliable the power supply becomes. As the reliability drops, so does the overall level of tech you can sustain. Self-sufficient villages, for example, operate with a very low level of tech.

I think it's wrongheaded to look at this as an either/or. It's a question of proportions, and naturally, of location.

As an offshoot of diversifying your portfolio, I feel it is essential for communities to take an active hand in these sorts of choices, whether it be one sort of generation or another, it's really not that hard to get some good advice about the quality of your site in relation to the options, and neither does it necessarily keep you from putting other investments in other wise places.

I have a cousin on Hull, Isl. Mass, and they have had enough success with one turbine that they're adding a second one. Other islands along the Maine Coast have had to pay exorbitant prices for the grid spur that has fed them Juice, and getting more community power, and more personally owned power only increases their resiliency.

You can say these are just unique cases.. but all there is to say to that is- 'exactly'.


I think what McCain and myself are arguing about/warning about, is the attitude that throws up obstacles in the way of large scale renewables projects. Attitudes like "no to a utility scale PV plant -PV should be on individual rooftops. Well its not a binary thing, it should be on as many rooftops and over parking lots as is practical. But we will not get where we need to be by that route alone. And the total installed cost per watt matters, we cannot afford to place the most cost effective solutions and deployment areas off limits.

Again, if people want to come up with better ownership models for large scale projects, -I'm all for that. Community solar/wind, whereby a crowd buys shares of a largescale project located on some other location could be a game changer. But it will never be a substitute for big utility scale plants -usually investor owned -like Warren Buffet's MidAmerican owning the Antelope Valley Solar Ranch (at >550MW the worlds largest solar plant). All power demand isn't residential and small scale commercial -we have to power the big things, factories, electric trains as well. Indeed these are crucial to the functioning of the economy. For the most part such consumers can only the fully supplied by largescale offsite generation.

I do think that communities are going to be wise enough to make good calls in that regard. In Maine, we have a lot of corporate money eager to staple farm after farm along the ridges of Appalachia, and those calls DO need to be made very consciously, as some of the programs will be a detriment, some will be bad deals for the locals.. I liken it to looking towards the Oil-Rich countries, and taking note of when, if ever, the energy bounty there really did any good for the local people and economy.

Sure, the big farms might be the most cost-effective, and some local leasing agreements could be the right call, but to open a can of Marx-Engels on all this, 'Owning the Means of Production' is a key element of real self-subsistent power.

Maine has enough of a history with current Casino companies and legacy Paper companies and other clever industrialists who sing a sweet ballad to the locals, and then waltz off with the profits, the equity, the royalties, the properties. Yet another Pig in a Poke. It's Green, but it's THEIR green.

We just got the first test Floating Turbine (1/8 scale) starting to offer data in the Penobscot Bay, initiated in part by our Past Gov. Angus King. Everybody is eager to see if Maine Offshore Wind is going to be set up with the Maine Economy as a beneficiary or just a convenient pulse to leverage off of.

I'm not criticizing people in isolated areas for putting up a small number of turbines -- in fact, it's probably a good idea. The main point I'm trying to make is that the people in the isolated area can't manufacture a wind turbine themselves. Consider a short list of what you need: steel of various sorts; all sorts of precision metal working capabilities; large amounts of concrete; fiberglass and epoxy blades; big rare-earth magnets and copper windings for the generator; control electronics based on cheap ICs. Any plan that says "We'll be able to get replacement parts, or even another new turbine, in 30 years" is implicitly assuming that heavy industry will still be running in 30 years.

Once you get to wind-powered large-scale heavy industry, you're to enemy's point: you're not talking one or two turbines, you're talking on the order of a million turbines, which need to be sited in geographically diverse locations with good wind resources. You need that much power, and you need high-availability to keep from ruining batches of whatever too often because the power went out. Those turbines are going to be clustered in order to reduce the cost of collection networks. The studies I mention above also suggest that you need a diversity of sources; wind alone is not enough.

In putting together an overall low-carbon system design, studies for the Western Interconnect suggest conventional hydro as the foundation. The Western Interconnect currently gets 20-30% of its annual power generation from hydro (depending on how wet the year is), and there is a lot of conventional hydro still undeveloped. For the Eastern and Texas Interconnects, the problem is harder. Attempts to design a low-carbon system for those grids does tend to come back to nuclear as the foundation. I'm not opposed to them depending on nuclear; I am fairly violently opposed to attempts to bury the wastes in my back yard in the West.

I offer the thought that resources have always been developed with the needs of the coastal urban powers in mind, rather than the locals. Maine wind will be developed on a large scale to benefit the BosWash corridor; Colorado and Wyoming wind will eventually benefit California (see this for one proposed plan). Those of us who live in areas with renewable energy resources but relatively little financial and political power are going to be energy colonies -- it's up to us to make that work to our benefit as well.

One could use local renewable energy sources for many things - passive solar to heat water and to heat living spaces, and wind a source of mechanical energy for various tasks like pumping water, etc. Such things will be very important when the grid no longer functions in any reliable way.

enemy of state,

I agree that it should not be an either or argument, the opportunity here is that a model of energy supply ownership which has endured almost a century is now ripe for change though.

Many of todays mega corporations started life as municipal supply companies, were privatised, merged and before we knew it our energy system was being run for the benefit of shareholders and pension funds rather than consumers, perhaps its time to begin to close the circle and to some extent get back to the way energy companies were run at the beginning.

We see a lot of examples of people becoming energy self sufficient in the DB threads, but for many people, particularly those living in cities, this is difficult to achieve.

I read a report recently on the availability of US household roofspace suitable for solar, surprisingly less than 20% of rooftops are suitable. What is to prevent a local energy co-op buying a brownfield site close to their homes and developing a community solar garden. In Europe its even possible for that community to set up a mini utility in order to supply their own homes directly and buying electricity from other co-ops or the spot market as and when it is required.

I still feel strongly that the only way to educate the public about the energy challeges coming down the tracks, never mind the challeges of Climate Change is to get them involved in the solutions.

As I stated at the top of the thread we tend to give a lot of power away to politicians and the system and deprive ourselves and our friends of the same power.

Pat. I think you got a great plan, and am pursuing it. I have trouble seeing things like community solar being more than bit parts. When everything comes together in the right way, its a wonderful solution -hopefully it also accomplishes some social goals of letting the participants appreciate that they are members of a community. I don't think slapping on PV does much for energy awareness, for the average homeowner. A few may then start monitoring, with a goal of reaching net-zero -most just take it as a license to consume without worrying as much about the bill.

I think of energy use primarily as having three major sectors residential, small commercial/institutional, and industrial. These later two sectors are very important and tough to reach via the local/community coop type approach -but are crucial to getting off fossil fuels. When I see, solar PV shaded parking going up on the local WallMart, and the grocery store, and around JC Pennys, and the local boutique clothing stores, then I'll know we got the commercial sector on-board. I'm not seeing that, they'd rather claim green credentials on the cheap.

When I see, solar PV shaded parking going up on the local WallMart, and the grocery store, and around JC Pennys, and the local boutique clothing stores, then I'll know we got the commercial sector on-board. I'm not seeing that, they'd rather claim green credentials on the cheap.

Maybe you just aren't looking in the right places...


UL1598 and UL8750 COMPLIANCE

I read a report recently on the availability of US household roofspace suitable for solar, surprisingly less than 20% of rooftops are suitable.

I'd like to see that study because I find that highly doubtful. Perhaps it is an old study. A few years back when we were building PV systems with DC strings of PV panels where a shadow on 1 panel would hurt the whole string and the PV panels alone cost $5/watt, it was a good idea to make damn sure you put your PV systems in optimized places.

But now that PV panels can be purchased for around 85 cents per watt and residential systems can use per-panel microinverters such that shade on 1 panel only affects that 1 panel alone, you don't have to be so cautious about where you put up your panels. The game has changed.

Trying to build your own locally will result in inefficient usage of resources. This is less true for solar, however currently rooftops are considerable more expensive than largescale ground mounts.

That's the nice thing about solar . . . it is actually more efficient with small local installations because you don't have to deal with transmission lines since the power is consumed right on site or in the neighbor's houses. And residential rooftops are generally strong enough for small PV installations and only need simple racks, so they are generally cheaper than ground installations.

But, yeah, wind is much better done at a larger scale.

We are not seeing small residential roofs come in cheaper, generally residential $4/watt plus, commercial $3plus, and utility scale ground mount $2.
Also -especially residential if one opts for more than maybe 15% from PV, you are using the grid to sell power back, and buy power when you need more than you produce. That is a huge service that will be unlikely offered for free once penetration reaches high levels.

I know people would love to throw off the exploitive capitalist model. The planet doesn't have time to wait for an political/social/economic revolution that probably won't happen. We will all be fried if we wait for that.

Point taken. I guess when you add in the permit & transaction costs, the small scale residential requires a new set of designs & drawings for every little installation whereas the utility scale is just one plan. I'm being blinded by the low costs of my own self-install where I'm not appreciating the cost of designing and installing the system.

However, utility scale ground mount is going to likely require new transmissions lines which will raise the costs much more. And the utility scale system is trying to sell electricity on the wholesale market where it will need a subsidy to be cost effective. A residential system replaces electricity being purchased at retail rates so the residential consumer is effectively getting a better price for the same electricity.

As I live within walking distance of one of those bogs I can say that it can be quite bleak in the winter, I personally have no problems whith wind farms. As it is; I'm in Co. Roscommon so I'm in an area that's not part of the wind farm plan. There are many acres of barren bogland around here that could provide a good setting for windfarms without affecting people living a couple of Km away.

In effect these are brownfield sites, in decades past they provided peat for both power generation and horticultural products, the energy efficiency of the power generation was many times less than a modern wind farm. Part of the social contract of building wind farms could be the restoration of these areas, but the secret ingredient is to allow the ordinary citizen to participate in the ownership of these modern energy resources, whether for export to Britain or to to provide for local needs.

Wind energy already provides for close to 20% of Irelands annual electrical demand saving hundreds of million euros of natural gas imports, that is money that stays in the Irish economy, even better if it found its way directly into the pockets of the members of the energy co-operatives who could part own these resources.

Participation does help. It doesn't have to mean 100% ownership. Farmers who lease windfarms look and the turbines and think "turn and earn", and become big fans -because they love to get monthly payments. Of course the developer, doesn't want to share any revenue he doesn't have to, some it kinda clashes with our capitalist values. Providing some good local jobs helps as well.

Sometimes things can change. The Antelope valley (a desert valley NE of LA) is hugely preferred for both wind and solar farms. There was huge local opposition, but now they have excepted their status as solar capital of the world with pride -they even became the first town in the country to require some PV on all new construction. Early projects ended up making payments to local town councils in order to get project approvals, along with promises to mostly hire locals etc. With patience and wisdom these objections can usually be overcome.

"Interestly it is only in the developed world where opposition to local energy co-operatives is encountered."

People living on the peak aren't looking for alternatives; they're fighting to maintain their status quo. Those that can most afford change have the fewest incentives to do so. Nothing new there.

Interestly it is only in the developed world where opposition to local energy co-operatives is encountered.

Huh? I have a post further down in this DB in which I present an update to the story I posted in the June 12 DB. There is a quote of a comment on the linked story which I quoted in my post that tries to make essentially the same point that you are making, that broad based local ownership of renewable electricity facilities can have a significant, beneficial financial impact in the locations it exists in. If ignorance of the possibility and benefits of, or opposition to, local energy co-operatives did not exist, the quoted comment would not need to have been made.

Alan from the islands


The advantages of ordinary people taking at least part ownership of their own energy supply goes much deeper than mere profit and consent to build. It educates as well, when people realise that sufficient energy is a privilige rather than a right, then society benefits in many ways.

One of the projects I had a hand in getting over the line is an 80MW windfarm in rural Ireland owned 50% by the local people and 50% by experienced developers, another energy co-op I advise started with Negawatt projects to reduce local consumption and plan to own their own small wind farm by the end of the year with future profits earmarked for further Negawatt projects and local solar production, this particular community are in advanced discussions with a company willing to locate to their community and provide much needed employment, this company is attracted by the cheaper energy which the community can provide.

Yet another group have assembled 1500 acres of cut away bogland and are now looking to city based co-ops to help finance the building of the largest windfarm in the country, payback to all participants will be in monetary and energy units.

At the end of the day this concept is about people providing for their own energy future because not everyone can go off grid.

The motto of our network is each to their own ability, together we progress.

Interesting stuff! I agree with the idea that "people taking at least part ownership of their own energy supply goes much deeper than mere profit and consent to build". One of the battles I'm fighting in my neck of the woods is to spread the idea that it is entirely possible for one to generate electricity from solar PV, for example and that it is not as expensive as it used to be. One of the important aspects of thinking about making that investment is to look at reducing the demand on the system by using various energy saving options.

One items that I am introducing to people is the "energy monitor", a device that shows how many watts a given premises is using rather than the accumulated total of kWh it has used, which is what the typical utility kWh meter does. These devices provide real time feedback to the interested parties about the rate at which they are consuming energy and the last guy that I set one up for, told me it has been a big eye opener for him. A buddy of mine that I set one up for has made significant changes to his behaviour since now, all he has to do is look at the shelf behind him, for the energy monitor to tell him how much energy his building is using and what the cost of that rate of consumption is likely to be.

Through comments to articles on a particular newspaper web site, I am trying to disseminate the idea that it is possible to do small scale electricity generation using renewable sources and that it can also provide a decent return on investment. I am also trying to point out that my island, like Ireland, should be looking to it's own indigenous (renewable) resources to generate electricity rather than continue to spend a huge portion of our export earnings on imported fuel (energy).

The problem is that the status quo is "how it's always been done" and many people cannot see that there are alternatives or that the alternatives can actually make a significant contribution. That is why, when commenting on the newspaper web site, I frequently cite Germany, as a developed, highly industrialised ,country that is making big strides in renewable energy. In an attempt to wake at least some people from their stupor, I tend to use screen names that might provoke curious people to do a search for "Peak Oil" with the hope that, more and more people will come to the conclusion that BAU is patently unsustainable.

Alan from the islands

First off Sorry for geting local Here.
I am totally pro wind provided they are sited in the correct locations. I think it is the only sensible solution for Ireland. I also think the Wind company's should Pay for in part Pylon upgrades and Storage themselves. Pumped storage as "Sprit of Ireland" Proposed a number of Years ago but on a smaller scale like "The Okinawa Yanbaru Seawater" system Or pump flow batteries that were trialed at "Cark wind farm" a few years ago
Rightly or wrongly some people see them as a blight, NIMBYS so to say.
I am intrigued as to how Mainstream / Element siting turbines in the flattest part of Ireland with the lowest mean wind speed ( up to 40% less than other parts of the country) with export contracts for all their electricity to UK is going to be a game changer for Ireland.
The main issue I see here is wind energy company's trying to do things as cheap as possible for themselves to make largest profits at the expense of locals There are dozens of better potential, sparsely populated sites still available in Mayo Galyway, Donegal. But this would entail distribution grid upgrades, which the ESB have had a terrible record of doing without upsetting everybody on the route. Donegal /Barnsmore upgrade which is desperately needed, case in mind 12 years and 3 planning application's later county is still on one 110kva line.
Re Local energy co-operatives are not legaly allowed to supply power to themselves over ESB networks.You need an export licence 20,000 euro in Ire ~£200 in UK for same,last I checked. Only option is to use on site and sell surplus into spot market at 4~6 cent KwHr and buy back @~17cent or else enter into power purchase agreement with Bord Gais or the likes

Must rush out to a Fathers Day lunch in my honour but briefly, I am a founder member of the Spirit of Ireland group and in a future DB I intend to explain how that concept is not needed for the Irish grid just yet, pretty innovative grid engineering has allowed the Irish grid to be capable of accepting 50% intermittant generation without any problems whatsoever, and it regularly displays that ability, the target is 75% by 2017 but at that stage storage will probably be required for economic rather than technical reasons.

The problem of suppling energy to co-op members offsite has been solved, again I will give details later.

We have been looking at the possibilities of solar in Ireland for the past while and the figures from actual installations in the south of the country are not that bad, we are sponsoring a study this year to measure the extra energy which solar PV can gather when located close to large bodies of water, the results will be made public.

The location of the Mainstream / Element Power project in the midlands is quite another story, maybe I might write a book about it sometime, lol.

Jerome a Paris used to post articles on the financing of wind farms here on TOD. The last was a couple of years ago, so I was interested to see what he's been saying lately.

The new economics of the power sector

Given that the penetration of renewables changes every year, it is hard to identify the business model to use for flexible plants - and even harder to know what it will be in 1, 5 or 10 years from now. These plants will be needed, at least to some extent, and they need to be paid for, and that cannot really happen with today's regulatory regime (and stopping support regimes for renewables won't change that now: the existing stock of wind and solar is already big enough in several countries to keep the current market arrangements broken). One solution, thankfully being considered in several markets (and which already exists in places like California), is to put in place a capacity market, where plants make themselves available for rapid changes in output, without actually producing anything most of the time, and get paid for that availability: they sell MW rather than MWh.


Ireland already operates a capacity market and it has been very successful in incentivising the building of modern power plants, in the Irish system even wind farms qualify for capacity payments according to formula used to calculate their annual capacity to supply.

Our neighbours in Britain have a looming electricity generation crisis precisely because there has not been any incentive to provide new capacity for decades.

Also as an isolated synchronous grid operating in a country with precious little domestic fossil fuels, the grid operator has had to be pretty innovative in the way it builds and maintains the grid.

To change the topic a bit (OK a lot); what about all those mined out peat bogs? Many see them as degraded brownfield sites. I see them as a significant carbon sequestration asset. Re-establish the conditions that allowed the organic material to accumulate, and you have a carbon sink.

enemy of state,

Excellent point, peatlands are one of nature's greatest carbon sinks.

When those boglands began to to mined on an industrial basis back in the 1950's, the first thing that happened was that they were drained in order to create the conditions for heavy machinery to access them. Peatlands do regenerate although slowly. There are many thousands of acres of these depleted bogs in Ireland and there are now only three peat fueled power stations left in Ireland, which are due to close in 2017/18, no more will ever be built.

Now what if we firstly create the foundations for large turbines, with access roads built on top of concrete piping to allow water to flow underneath them and then block the original drains.

Would we now get the best of both worlds, regrowth of the peatlands and energy production infrastructure that would last for generations, many Gigawatts of energy per year and many millions of tons of carbon safely sequestered naturally.

FWIW, Jerome is still on staff here at TOD, and, near as I can tell, is still as high on renewables as ever.

Up top is the statement about the latest record of Bakken oil production, courtesy of Bloomberg, 727,149 bbl/d.

The media headlines scream record, yet nary a mention of the inexorable effect of the red queen so elegantly highlighted by Rune.

In the last 6 months 43,291 bbl/d have been added to total production, yet it took an increase of 822 producing wells to do it. The table below shows just how quickly the red queen effect is catching up to Bakken production numbers.

6 month prod adds....wells added

If the current trend continues it will not take long before the addition of 800+ new wells over 6 months will be needed just to maintain production levels. What is the cost of 800+ wells? $5b?

I will predict that the boom in Bakken production growth will come to an end a lot quicker than anyone is expecting, possibly by the end of this year. Of course a rush of more wells producing, say 1000+ wells added in a 6 month period, could stave off the inevitable finishing in growth of production. Given that the above article states a reduction of rigs in ND, a large rise in oil price will be needed to continue the boom, unless they have run out of sweet spots.

Put 'ND Bakken historical oil production statistics' in your favourite search engine, should be the first hit for the raw numbers.

This is a very important comment, thanks.
Reviewing the daily Prices of
- Dollar index
- WTI Price
- Gold
- s&P 500

a relatively new pattern has emerged:
- S&P 500 falling
- $ is falling
- WTI is increasing (around 97)
- Gold is increasing

Could it be, that the US shale oil "Revolution" is running out of steam?

- $ is falling
- WTI is increasing (around 97)

I would say trade deficit. As the dollars leave the country there will be an over supply of dollars and less other money need to be paid for each dollar as price is set in dollar it increase.

Indeed. We may already be seeing this manifested in the total US production - the rate of increase seems to have slowed markedly in the first 6 months of this year. Now this does coincide with some poor weather, so that may be to blame but there is no doubt in the Bakken they are having to run faster just to stand still. Barrels of oil produced per well and daily oil per well produced in the Bakken are also on the way down (both by around 10% or so), having hit a high in the middle of 2012 (see ND Bakken link mentioned above).

I think your prediction will be right - I had figured 2015 would be when we saw the Bakken boom peak out, but I think 2014 might be on the cards now.

That was an interesting way to illustrate that it increasingly gets harder to grow production from Bakken.
If it only were possible to get an estimate on how many wells it would require just to stay flat for each of the defined periods you used, that would in a good way illustrate how demanding it gets with time to grow production.

Rune... I have been reading your work on the Bakken and wanted to ask what you thought of the recent USGS increase of oil reserves in the Bakken.


I have seen the update, and when it comes to reserves I take the USGS numbers at face value as I have no way to challenge those numbers.

To me what is important is how many wells can potentially be drilled that meets commercial criteria. This is much related to flow profiles, costs, prices and returns. I am aware of work being done to identify the commercial areas. One way to look at this is what areas are commercial at $60/bbl and below, then what areas are commercial in the range of $60 - $80/bbl and so forth. So I would prefer to see a distribution of recoverable reserves as a function of price, costs and returns.


Rune... thanks for the reply. I agree with your assessment as it pertains to recoverable reserves as a function of price, costs and returns.

"What is the cost of 800+ wells? $5b?"
Is that a question ?
If you're clueless about drilling costs and cost trends in Bakken, how can you make predictions ?
What's your track record regarding Bakken oil production ?

$5b sounds about right for 800 wells - that would be around $7,000,000 per well. How did you infer cluelessness from that comment? That is not an inference I usually make when someone's estimation is quite close to correct.

I'm shocked. Positively shocked, I say.

Point Lepreau loses millions in May as targets missed
NB Power says the Point Lepreau Nuclear Generation Station operated at 43% in May

The Point Lepreau Nuclear Generating Station operated at 43 per cent power in May new figures show, losing millions of dollars for the month and dragging its overall performance numbers to a new low, six months after coming back online.

"It's exactly what the Public Utilities Board warned against back in 2002 when it rejected the refurbishment as too risky," said Green Party Leader David Coon.

"The costs are higher than expected, the performance is poorer than expected, expensive repairs crop up that were not expected. That's the story of nuclear power in Canada."

See: http://www.cbc.ca/news/canada/new-brunswick/story/2013/06/14/nb-lepreau-...


The Lepreau refurbishment seems to be somewhat of an anomoly. Other Candu refurbishments have been completed in far less time and at far less cost. It's unfortunate it happened in New Brunswick which has a fairly small population and only a single reactor.

The troubled New Brunswick experience makes a second or replacement reactor in that province a tough sell, politically speaking, and Québec has pulled the plug on Gentilly; that leaves just Ontario, where the cost of new nuclear (CANDU or otherwise) appears to be a sticking point. And, of course, we have SNC-Lavalin which seems to be having problems of its own. Things are looking rather bleak at the moment.


It just goes to show how dangerous the failure modes are and how flawed the technology is.

As I understand most reactors are refueled periodically with enough fuel to run for quite a long time, they have the potential to release a lot of the energy over a short period of time if not correctly handled and they may overheat even then turned off if not sufficiently cooled.

Nitroglycerine is safe as long as correctly handled but dynamite is preferred today. Basically there are three major safety problems.
1. Put all fuel in at once.
2. Fuel burn by itself if not correctly handled.
3. Sufficient active cooling is needed even then turned off.

Some of the non-technical risks are arguably more vexing. There are major structural changes underway, falling electricity demand in particular, e.g., Ontario provincial demand in 2012 is comparable to that of 1998. Lepreau was central to NB Power's plans to supply the New England market and, in turn, bolster its revenues. Well, those export opportunities vaporized before its very eyes, all courtesy of crippled load growth, cheap natural gas and a vastly stronger Canadian dollar. There are a lot of gotchas out there.


But a collective reduction in fuel use is not yet enough to put a long-term dent in global oil prices.

The naivety of such statements are stunning. The reduction in fuel use IS BECAUSE OF THE HIGH PRICES. You've got your cause & effect backwards.

It is also naive from the point of view that

But a collective reduction in fuel use in the USA is not yet no longer enough to put a long-term dent in global oil prices.

My correction of the sentence, in bold, highlights something often pointed out by westexas, that the OECD countries are being outbid by the Chindia and any other rapidly growing developing oil importers, for a dwindling quantity of global oil net exports.

Alan from the islands

Texas' Roads.
Don't cry for Texas 'cause highway funds are diverted (robbed?)for other uses. California has done the same thing for years and the roads show their age and wear. When towing my trailer I'm limited to the "Truck" lanes which are unbelievably rough and the inside of the trailer was a mess when I stopped for gas and a break. I pay "off-road" fees and those funds have been diverted as well.
It's the legislators, stupid.
I drove between Austin, New Braunfelds and the Circuit of The Americas in Texas and the highways were modern, clean and fast. Around 400 miles driving cost $30.00 (USD) in tolls, but toll roads have mixed results and problems here in crowded South California.

I'll accept "robbed" if you can bring numbers. Most states, including Texas and California, I suspect, have been through a sequence like my state. In the 1990s, the taxes and fees dedicated to roads (very often the protection is written into the state constitution) began to fall short of what was needed. But the economy was booming and states were able to make up the shortfall out of their General Funds. Then the recessions hit in '01 and '08, and the General Funds couldn't cover up the shortfall in the dedicated taxes. That's not robbed -- it's "the state programs that always got first call on the GF still get first call on the GF." K-12 education (almost all states now provide significant amounts of K-12 funding out of state general funds). Medicaid. Prisons and courts. Other human services. Higher ed. If you look across the country, higher ed has taken a much harder hit than roads.

“How to reduce unemployment through Grasscutter farming”

Cute lil' feller, the grasscutter. Good eating too, they say.


The chart above shows modeled production with the “2011 average” well described in my post
Is the Typical NDIC Bakken Tight Oil Well a Sales Pitch? and net added producing wells by month as reported by NDIC. The thick black line shows actual production from Bakken (ND) (lh scale). The white circles (rh scale) number of net added producing wells by month.

The model has in recent months predicted slightly higher production than actual (that is by adding same number of “2011 average” wells as actually added.)
This now suggests both a higher decline rate from year 2 to year 3 than the “2011 average” well and so far a further decline in average well productivity (which is believed to be dominant).

In the chart is also shown a scenario with 1 500 wells added in 2013 and 2014 (125 wells/month), red dotted line. For the 1 500 wells scenario a total of 500 “2011 average” wells were added in the period January - April 2013.

(The reason for the 1 500 wells scenario was to establish another reference from which to evaluate developments in average well productivity with time.)

Actually net added producing wells in the same period (Jan - Apr 2013) was 570 according to NDIC data. This lends further support to a decline in average well productivity for the most recent wells.


Beautiful graph! It clearly shows the slowing production growth over the last year or so, and the number of net added wells appears to be on a plateau, which isn't surprising considering the current cost of a fracked tight oil well. The Bakken production numbers over the next year should confirm or rebut the Red Queen hypothesis -- by this time next year, we'll know.

One thing which did not come clearly through with my comment is that the 1 500 well scenario (red dotted line, and modeled as from January 2013) had 500 producing wells (125 wells/month) added Jan - Apr 2013, had as of April 2013 a slightly higher modeled production than actual production which came from 570 net added producing wells for the same period according to the recent NDIC data.
Modeled and actual was identical as of December 2012.

Great stuff Rune. If I understand you correctly by using an 'average 2011' well in your projections you are implicitly biasing production higher than it is likely to be. This is on the basis that sweet spots will have been drilled first, and that productivity from post 2011 wells almost certainly has to be progressively lower than the 'model'well used? My take home message would therefor be that there is far more downside risk to your projections going forward than upside risk (with the proviso that if oil went to $150/barrel a short lived drilling frenzy would erupt). A complete levelling off in production in 2014 does not look out of the question then.

As of now it appears as the use of the "2011 average" well in the model gives a slight positive bias to total actual production development (what is presented is production development for the portion of Bakken in North Dakota).

Developments in the oil price is a key factor.

Another thing which could impact development pace is the health of the balance sheets for the companies that produces tight oil.
Some companies have already stated they will use fewer rigs during 2013 than in 2012 and others have made references to reduced budgets for 2013, which of course could be offset by less costlier wells.
For some companies levels of debt cold become an issue affecting their CAPEX.

Certainly it will be interesting to follow the developments the next months.

Hi Rune,

After working with a few of the numbers I have quickly realised the amount of time involved with what you have done, thank you for your work and the wake up call on what is happening in the Bakken.

From the above quick numbers I have come up with a couple of points seem to stand out to me. Firstly in your graph you take "2011" wells as the standard, yet in 2011 we see that an addition of 646 wells between April and October to add 138,142 bbl/d to the total. In the same 6 month period in 2012 it took 982 new wells to add around the same number, or an increase of 50% wells added to do the same. The latest 6 months addition of only 43,291 bbl/d for 822 wells added is indeed a poor result. Has there been a colder than usual winter curtailing production for the current 6 month period?

I'm wondering if using a "2011" number for the type of wells added is no longer appropriate as production should be way above your graph for the current 1750-1800 new wells added annually. The combination of depletion and fewer 'sweet spots' taking an increasing toll. Is using a "2011" number overly optimistic?

Are you doing any work on 2012 or 2013 wells (I know not enough data yet for accurate statistics, but interpolated from current patterns) to come to a current "Red queen" number, ie the number of new wells needed to stand still in terms of production?

Oops, thanks for starting to answer my questions Rune, before I had even asked them. Such being the slow speed of my typing and nature of forums on the internet.

One of the things to keep in mind is that with time there is a need to offset declines from a rapidly growing population of older wells.

How much adding wells has been affected by weather related conditions this winter I will not speculate about. However what production data from newer wells suggest is that their average productivity is in decline relative to the "2011 average", in that way the "2011 average" serves as a reference well (which was one of the intentions when it was derived from actual data).

The "2011 average" well was composed from data from around 240 wells starting to flow as from June 2011 and through December 2011. Dry wells and wells with little and erratic flows was excluded for the "2011 average".

I have added a scenario with 1 800 "2011 average" wells for 2013 and 2014 (in another comment) which also will serve as another reference point to monitor developments in well productivity with time.

In a previous post I presented that the model estimated that around 1 200 "2011 average" wells were needed in 2013 just to sustain a production level of 700 kb/d (North Dakota's portion of Bakken).

Actual data now suggests that productivity for the most recent wells (most notably those added this far in 2013) relative to the "2011 average" well has declined. I have some idea about how much, but still needs to do more number crunching and tentatively it could be as much as 7 - 10 % loss in productivity for the average recent wells relative to the reference well.

And yes it now appears that more than 1 200 wells are needed in all 2013 just to sustain the level of 700 kb/d.

Permits are being issues at the rate of 200 per month. I am unsure of what fraction actually get drilled, but it does seem that if the economics remain solid the rate could actually go up.

The people I hear from are predicting a busy year, with few rigs but similar drill completions to last year -- costs are a little lower, drilling is now a little faster, and the net is similar throughput at lower cost. My sample set of cusotmers is fairly small, though.

Same story with the Eagle Ford. Midland will be busier. East Texas flat to modestly up. East Colorado will be up a bit. Marcellus up a little. So say my sources. Your mileage may vary.....

This is for drilling? Do they say anything about expected production?

I'll start asking. My interest has been in wells completed, since that where equipment like mine goes.

It's still all oil focused for now. There is gas drilling to hold acreage and in a few sweet spots, but not much growth yet. At $4.50 or $5.00 that'll change, though.

Pipeline build rates are strong, too. Some pipeline companies are struggling to stay inside their budgets, and profits aren't as good as they'd like, but they're still at similar to the budgets of last year. Pipeline building is a decent low-pass filter for production, as they don't lay pipe without committed flow to pay for it, for quite a few years (like a decade). Ergo, production is not yet done growing, from their perspectives.

New regulations are pulling some cash too. EPA, DOT, and BLM all have add'l regs in the works. There is still a lot of room for improvement, for sure.

This reminds of the graphs "Ace" used to post of global oil production several years ago. We were always at the peak and about to start a steep decline. Here we are years later still on the bumpy plateau :-)

Hi Suyog,

I'm not sure if your comments are directed at Rune or myself, but the real prediction is that an increasing number of wells need to be added each year to stave off decline in the entire Bakken production. As more wells are producing each year, there are more wells declining at the fast rates. Logic implies that more are needed to stay flat.

Do you believe the numbers are incorrect?
Do you believe there will be an increase in the number of wells drilled? If yes where/why will it happen?

Just to be specific.
The colored areas shows/are forecasts of production development from the existing well population added by month (one colored band represents one month) as of April 2013.

The chart is not a forecast of future developments of production of tight oil from Bakken, with the exceptions of the 1 300 and 1 500 wells scenarios for 2013 and 2014 which primarily objective is to serve as another reference to evaluate developments in well productivity with time.

Suong I think you may be misreading Rune's graph. He is not predicting that production will fall away like the shark fin shape that is most prominent in the graph, but rather he offers two possible future production curves as dashed lines. The variation being dependant on the number of new wells.

The point being that the rate of growth is slowing, not that total production will suddenly fall away next year. It could, if no new wells were drilled which I guess is possible were the oil price to collapse, but that isn't what the chart in particular shows.

Perhaps those dashed lines could be more prominent but I think Rune is avoiding giving too much emphasis to predictions of actual data. Rightly.

OK, I misunderstood the graph. It is my fault. Rune, do you have an estimate for when the shale oil production will start declining? Also, do you have an estimate for what the peak production will be?

To me development in tight oil production has a lot to do with the oil price and productivity developments, remaining area of sweet spots and companies balance sheets.
At present oil prices and productivity trends I expect growth in production to slow down during 2013. There is also an inventory of back logged wells that have not been completed.

As oil price is IMVHO the most dominant factor for future production developments from Bakken, I think any predictions on production developments (including a peak) should be a function of both the oil price and (as of now) well productivity developments.


Based upon comments received I have added a scenario with 1 800 “2011 average” wells added annually (150 wells/month) during all of 2013 and 2014.

The chart above shows modeled production with the “2011 average” well and net added producing wells by month as reported by NDIC. The thick black line shows actual production from Bakken (ND) (lh scale). The white circles (rh scale) number of net added producing wells by month.
In the chart is also shown forecast with respectively 1 300, 1 500 (125 wells/month) and 1 800 (150 wells/month and black dotted line) wells added annually through 2013 and 2014.

NOTE: The colored bands are total production added by month as of April 2013 and forecast development in production from the existing population of wells. There is every reason now to believe that a considerable amount of wells will continue to be added.

The model “2011 average” well added at a rate of 150 wells/month as from January 2013, would have given a projected total flow of 745 kb/d for April 2013.

Most recent actual data from NDIC shows that 570 wells were added for the period Jan - Apr 2013 resulting in a total flow of 727 kb/d for April 2013.
As of April 2013 there is now a growing deficit between actual reported and modeled (the 1 800 wells/a scenario) production.

If 1 800 wells (“2011 average”) are added through 2013 and 2014 (at a rate of 150 wells/month) the model predicts a total flow of 843 kb/d by December 2013. By December 2014 this modeling predicts 964 kb/d by December 2014.

All what is described above is for tight oil production from North Dakota’s portion of Bakken.


Rune, Maybe a dumb question. Why are you writing the numbers for annual new wells as 1 300, 1 500, 1 800?

1800, or 1,800 would be what I expect.

In French-speaking countries, the numeric separator is either a period or space, as opposed to a comma.



I have grown used to separate the steps of thousands with a space (use it all the time) like 12 345 678,00 (meaning 12 million 345 thousands and six hundred and seventy eight) this enhances IMO readability.

I am aware that in US it would be like 12,345,678.00


The advantage of using commas (or periods) with respect to readability is that the number won't be split by a line break; thus, if a number can't fit at the end of a line, the entire numeric string carries forward. The other alternative is a non-breaking or "hard" space.


That sounds like a good reason to use commas/periods. I will try to remember that (especially when I post in English).


Interesting how there are more comments about the style of writing numbers than the actual numbers. Must admit it took me a while to work out why you were writing ONE THREEHUNDRED not 1,300 as we are accustomed to here in Australia.

Rune, What is the starting date for the models projections using the 1,800 (2011) wells? Is the projection from end Dec 2012? If so the projected 745k bbl/d is already vastly different from the actual number. The model would have added 40k bbl/d whereas reality has only added 22.7k bbl/d.

BTW, I think your model is excellent, I'm just trying to work out how far behind the '2011' average well the industry is getting and what the implications will be.

All the scenarios 1,300, 1,500 and 1,800 "2011 average" wells starts out the simulation as of January 2,013 2013. ;-)

The 1,800 scenario adds 41 kb/d to 745 kb/d of production with a total of 600 added wells from Jan - Apr 2013.
The 1,500 scenario adds 24 kb/d to 728 kb/d of production with a total of 500 added wells from Jan - Apr 2013.

Actual added 23 kb/d of production to 727 kb/d with 570 wells added from Jan - Apr 2013.

The results from the model as of now suggests a decline in the average well productivity for the most recent wells.
The "2011 average" serves as a reference well so if the model undershoots actual numbers this would suggest improved well productivity and vice versa.

Was that of any help?


A lot of computer parsing schemes use white space as a significant delimiter. So
12 345 would be the numbers 12 and the number 345 -not a single larger number. Commas are also often used as delimiters so 12,345 isn't much better.

Most HTML parsers will put carriage returns at whitespace to wrap.

To tell the browser you know where you wanted things to go/wrap use the pre (as in: preformatted) tags:

10 300 421

Sorry for the distraction from your great work.

What is the maximum number of wells that could be put into the Baken? There must be a constraint due to the total area and the are that each well can service. How long until you cannot put in any more wells working at that rate?


EDIT: Spilling

That is an interesting question. Companies are looking at various spacing arrangements and possible infill wells. I do not have a hard answer to that question, but know for certain that at some point an area will be saturated with wells.

From what I read out of the monthly NDIC well reports it appears that the companies now are focusing on the real sweet spots and deferring drilling of the not so sweet spots. This apparently is done as the companies will prioritize those wells that are expected to meet their return requirements.

Total number of wells that will be drilled is also very much dependent on the oil price.

Just a quick update to a comment I posted on last Wednesdays (June 12) DB about a somewhat off topic newspaper article with the headline "TRAPPED! IMF rep says without key policy changes, Jamaica will remain in economic rut". As could have been predicted, the comments section descended into a shouting match between supporters of the two main political parties as to who's policies were most damaging.

The interesting thing is that, up to the time of this post, the comment I quoted in my post on Friday had received 24 "likes". This means that at least 24 people read the comment and liked it. It is my sincere hope that the dissemination of ideas such as those in the quoted comment will raise the level of the debate on "energy and our future" in my country.

Alan from the islands


Director of Pro-Nuclear Power Film: No one ever will get sick or die from Fukushima’s radioactive contamination

No necessarily correct - Of the approximately 15,000 TEPCO workers monitored, the highest dose recorded was one worker who received a total internal dose of 0.59 Sv. This is equal to about the world average background dose from both natural and artificial sources one would expect to receive in 197 years. This is quite a high dose. Per the linear no threshold model, which is likely to be accurate at this dose, the worker will be at about a 6% increased lifetime risk of cancer. The increased risk of the worker dying of cancer as a result is about 3%.

much of the above is referenced in the American Nuclear Society Special Committee report on Fukushima.

Of the approximately 15,000 TEPCO workers monitored, the highest dose recorded


Tokyo (CNN) -- Japan's Ministry of Health, Labor and Welfare is investigating a report that workers at the damaged Fukushima Daiichi nuclear power plant were told to use lead covers in order to hide unsafe radiation levels, an official said.

If this worker was oldish, the risk would be a bit lower. Safer to be a 50 year old hero than a 20 year old one
The %/Sv (additional) risk dropping off quite well with increasing age

Risks are very difficult to compare. There is always a heated debate with nuclear. Its an easy fire to light. As I know I always fail this test myself , it can be applied. Would I give £x to prevent a preventable death in a poorer country. The answer is usually, I don't think about it much. I think the view might be nuclear is bad because 'something might happen to my nice western comfortable life' because of radiation. Where deaths among miners in China in a rare earth metal mine say, for the TV factory supplies , well...

Nuclear can be bad, but its not like we care generally about other bad things we could click our fingers and eradicate

Ice free Arctic this summer!

As I have been posting 2 times here before, a large "crack" in the Arctic sea ice almost right across the very North Pole itself appeared early this June. Here is a map from june 5:th this year.


This has worried me for a while, and I have been looking for some ansewar. What is this? What is going on? From some different sources I have put the pieces together and this is what I understand: Over a period of several years, the ice have thinned from year to year. Now the ice is so thin it would not make it past a heavy storm. One such storm went over the area in the very beginning of June and cracked the ice to pieces. This ice is now drifting southwards. It will either hit the shores of Siberia or Alaska/Canada, where it will melt in the summer, or be exported into the Atlantic, where it will be sent southwards and melt away.

This ice is exported southwards from the North Pole area itself. This will leave the Pole ice free this summer.

I also found a blog post analysning this in greater detail.


It is well worth a reading for those who worry about the sea ice cover.

Arctic sea ice volume decreasing to 0.0 km3 this year would require a decrease of 3.2 km3 relative to 2012 according to PIOMAS September Minimum Arctic Ice Volume, the largest annual decline on the graph since 1981. That would beat the exponential fit. I do not think the thick ice will melt that fast. Next year or 2015 are more likely for the ice disappearing completely for at least one day in the summer.

Jedi ...

Neven at Arctic Sea Ice has also been monitoring this situation. See http://neven1.typepad.com/blog/2013/05/if-this-is-real.html and http://neven1.typepad.com/blog/2013/06/asi-2013-update-2-shaken-and-stir...

They are posting predictions on where the ice will be in September http://neven1.typepad.com/

I think we may still have 1-2 more years before it's icefree but this situation will play havoc with the weather, agriculture and the food supply.

A weather update from down here....
Last year there was a near drought, this year it looks like a flood like situation, Monsoon arrived 2 weeks early (2 weeks !!). Weather is see-sawing between bone chilling cold, drenching rain and oven like heat. We no longer have anything called moderate weather. A global climate on steroids.

We no longer have anything called moderate weather. A global climate on steroids.

Maybe instead of calling it climate change we should call it a 'Severe Atmospheric Energy Imbalance"...

The total energy imbalance now is about six-tenths of a watt per square meter. That may not sound like much, but when added up over the whole world, it's enormous. It's about 20 times greater than the rate of energy use by all of humanity. It's equivalent to exploding 400,000 Hiroshima atomic bombs per day 365 days per year. That's how much extra energy Earth is gaining each day.

From TED TALK, James Hansen: "Why I must speak out on climate change."

The change in energy of a system is equal to the difference between the heat added to the system and the work done by the system. The system is doing lots of work all right!

That's called the F@cking First Law of Thermodynamics, Mr Politician, Business Person, Banker, Economist! And guess what, you can't pay off Momma Nature to get an exemption!


Calls to phase-out coal have been proved ineffective every single year of the past decade – coal consumption continues to grow much faster than that of any other fuel outside renewable energy. Coal has also provided half of the incremental energy demand globally since the beginning of the 21st century.