ASPO-USA Conference, November 30-December 1, Austin, Texas

Register now to attend ASPO-USA's 8th conference, held this year at the University of Texas on November 30 and December 1. The theme this year is "The Next Oil Crisis: Is the Boom Just Another Bubble?" The conference features a debate on the subject, "Do Energy Limits Require a New Economic Framework?" among three noted speakers:

  • James Kenneth Galbraith - Prof of Economics, University of Texas
  • Charles A. S. Hall - ESF Foundation Distinguished Professor, SUNY College of Environmental Science and Forestry
  • Jason Schenker - President and Chief Economist, Prestige Economics

Other speakers Oil Drum readers are likely to be familiar with include Arthur Berman, Robert Rapier, Jeff Brown, and Robert Hirsch. Additional information below the fold. Full conference information can be found at the ASPO-USA Conference website.

The regular program includes the following:

November 30:

Overview - The Next Oil Crisis - Robert Hirsch, Management Information Systems, Inc.

North American Oil Outlook: Abundance or Mirage Scott Tinker, Univ. of Texas; Arthur Berman, Labyrinth Consulting Services; and Tadeusz Patzek, Univ. of Texas

Will Natural Gas Forestall a U. S. Oil Crisis? Bill Powers, Powers Energy Investor

Lunch - Forums and Mini-Presentations

Whose Oil Is It Anyway? - Global Supply and Competing Demands for Oil Exports Michael Kumhof, IMF; Mark Lewis, Deutche Bank; and Jeffrey Brown, Independent Geologist

Featured Debate: Do Energy Limits Require a New Economic Framework? James Kenneth Galbraith, Univ. of Texas; Charles A. S. Hall, SUNY-ESF; Jason Schenker, Prestige Economics

December 1:

Overview - Imagining a World of Increasing Oil Scarcity Robert Rapier, Merica International

Economic and Geopolitical Scenarios Steven Kopits, Douglas-Westwood; Daniel Davis, U.S. Army

Energy and Environmental Scenarios Michael Bodell, Aperio Energy; Gregg Marland, Appalachian State University

Lunch - Forums and Mini-Presentations

Why is the Media Missing the Story? The Role of Communications Loren Steffy, Houston Chronicle; Greg Gordon, McClatchy Newspapers; Robert Jensen, University of Texas

Closing Discussion

In addition to the regular meeting, there will be a Preconference Workshop from 1:00 pm to 4:00 pm on Thursday with Arthur Berman, Tad Patzek, Jeffrey Brown, Carey King, and Louis Powers, for a charge of $50.

There is also a Leadership Brunch from 9:00 am to 12:00 noon on Sunday, for a charge of $50.

Early registration fees until October 31 are $95 for Students, $295 General Registration, and $495 for Pioneer Package. The latter includes the Preconference Brunch, video recordings of the sessions, and a reception. There is a $30 discount for ASPO-USA members.

I have other commitments, so I can't attend, but try and have a good time anyway.

I very much hope to attend. It’s so difficult to properly harass folks like Jeffery and Robert the net. Will be so much fun when I’ll be able to reach out and wack them with a crutch. Since I’m on 24/7 call I can’t predict my schedule then. But I have high hopes.

I plan to attend too. Hope to see you there, and meet you in person.

Great. Looking forward to some face time with so many of the regulars here. Have a lot of year end drilling so I won't know until a day or so before if I will be in Austin or on a well. In the meantime I need to think about what sort of costume to wear.


I wonder if it's too late to have a screeing the weekend of the conference?

"There is a screening of the film Switch scheduled for Austin:

They say 'Audiences are calling it "the first truly balanced film on energy."'
Has anybody seen it?"

Scott Tinker will be speaking at the conference. He and Art Berman will be doing a session on North American oil & gas production.

And the film is hightlighted on the ASPO-USA website:

But I'll check with Jan Mueller about the possibility of a screening at the conference.

Incidentally, the plan for this conference was for a smaller number of high quality speakers, with more time for discussion. Day One is more focused on supply issues, with Day Two more focused on responses and general discussions. I think that it is going to be a great conference. (By the way, I will be moderating a session, and not speaking.)

Jeffrey Brown

wt - Thanks. I really hope I can make it. Won't ever complain about having to many wells to log but getting busy at year end. I give myself a 50/50 chance of making the meet vs. dining on Vienna sausages and honey buns in the logging unit. LOL. FYI for others: VS and HB are standard food rations on a rig. Just makes your mouth water, eh wt?

Here is a topic which will confuse the public:

US may soon become world's top oil producer
NEW YORK — U.S. oil output is surging so fast that the United States could soon overtake Saudi Arabia as the world's biggest producer.

Driven by high prices and new drilling methods, U.S. production of crude and other liquid hydrocarbons is on track to rise 7 percent this year to an average of 10.9 million barrels per day. This will be the fourth straight year of crude increases and the biggest single-year gain since 1951.

The boom has surprised even the experts.

Washington Post is also omitting the 1970 peak:

US crude production on track for biggest jump since 1951

Matt - Confusing on several levels. First, the KSA isn't the largest oil producer...Russia is. And how far are we trailing the KSA? They produce about 10% of global production. The USA, the 3rd largest oil producer on the planet, produces about 9% of global production. Pulling into the Number 2 slot wouldn't be much of an unimaginable achievement IMHO. And once again they enjoy mixing apples and oranges by first talking about US vs. KSA oil production and then mentioning all liquids which includes much more than crude oil.

As far as the biggest increase in crude oil production since 1951: from 1922 (1.53 mm bopd) to 1971 (9.45 million bopd) there was a fairly uniform increase in daily production in the US. So that statement is deceptive to a degree. US oil production increased annually by a comparable amount for almost 50 years. Much of today's US oil production (averaging less than 10 bopd per well) is coming from many of those fields brought on line in the 1940's and 50's. Just MHO but I doubt we'll see the current rate of increase in oil production run for another 50 years. For instance between 1965 and 1968 the oil rate increased 17%. From 2008 to 2011 the rate increased 13%. Any increase is good but they seem to trying to spin this as the beginning of a new trend that could potentially return us to our domestic PO rate. It took 50 years of developing all of the largest fields ever discovered in the US (including the 5.2 billion bo East Texas Field and the 11+ billion bo Prudhoe Bay field) for us to reach our peak 1970. Just MHO but I don't think we're on that path at the moment.

Methinks that thousands of wells quickly headed toward stripper well status are more likely to make an incremental difference, rather than a material difference. And as you know, that's a key difference between a field like East Texas the shale plays. The wells on the updip, East edge of the East Texas Field were probably capable of making virtually as much oil in 1972, as they did in 1932.

And for readers, the Yates Field is a another example of the kind of field that contributed to the upslope in US crude oil production, leading up to the 1970 peak:

Production from the field peaked in 1929, with a total production of 41 million barrels (6,500,000 m3) of oil. That year also saw the spudding of well Yates 30-A, which blew out with the spectacular flow of 8,528 barrels (1,355.8 m3) per hour, and over 200,000 in a day, setting the world record; even the Lakeview Gusher at the Midway-Sunset field in California, which spewed a total of approximately 9 million barrels (1,400,000 m3) in its 18-month uncontrolled run, only attained half of that daily flow rate.

WT - I think the most misleading aspect of some of these stories about increased production is that most folks don't appreciate the difference in reservoir dynamics and field life profiles of conventional fields vs. the fractured shale reservoirs. Probably most on TOD probably do but not the general public. They see a report of a shale well coming on at 900 bopd and they figure it will produce similar to a conventional 900 bopd well drilled 40 years ago. And maybe even better because of all the "new technology" we have today.

In case anyone does not know, the economist James Kenneth Galbraith is the son of John Kenneth Galbraith

Yay!! This is exciting James Galbraith is presenting his latest work.

I posted earlier how James Galbraith is trying to re-incorporate resource constraints into traditional economics outside of a Marxist framework. Can we give out plane tickets to Paul Krugman, Joseph Stiglitz, Dean Baker and other noted progressive economists to go to this meeting and attend Galbraith's talk??

We need to get some open-minded mainstream economists to start paying attention to this instead of living in Keynesian delusions of endless cornucopia.

Classical supply demand curves do incorporate resource constraints. If supply decreases when demand tends to be stable, the price will rise until there is a new equilibrium. However any potential unpleasantness is often ignored amid claims of infinite substitutability or price induced production increases. TOD is a place to reemphasize price resistant constraints. Are we dealing with something beyond the classic inelastic supply?

Incidentally, for those who are interested in this kind of thing, I will be on a History Channel special on Thursday night called "What's the Earth Worth?" The program description is:

Forged over 4.6 billion years, the Earth is stacked with valuable riches, from timber to cattle to gold. Together, these resources have built our greatest civilizations. But what if we could scan the planet as if it were in a checkout line, counting up every tree and every nugget of gold left on Earth in the biggest inventory ever attempted? This special will put a price tag on everything the planet has to offer, look at how much we ve used through human history and how much is left, to reveal the absolute value of the Earth.

I will be talking about the energy resources, with a focus on oil. I don't know what made the final cut, but we spent a lot of time discussing oil depletion. Here is a graphic advertising the show:

I hope to be watching. Will they attempt to put a value on the dilute and currently uneconomic concentrations of uranium, precious metals etc. in the ocean or in granite? How about marginal deposits that require large amounts of energy to mine and process?

Time Warner has the two hour program scheduled for 9PM Thursday in Camarillo CA

I explained to them that the future price of oil is likely to be much higher than the current price, so that makes it hard to gauge the value of the oil in the earth. But I did tell them at one point "You can't put a price on the earth."

Robert - I suppose the lighter side of that comment ("You can't put a price on the earth.") is that we don't really "buy" Mother Earth's commodities as much as we just rent them for a while. Sorta like beer. And just like beer in the end we just wind up pissing most of it away. Funny, eh? In a sad sorta way.

It will be interesting to see how low the oil price will be by November 30th - it might negate the idea of peak oil, but on the plus side will make the trip to Austin by car by anyone more affordable.

Does anyone have a thought about at what price level new drilling in the shale stops? And, when the price jumps again, how long will it take to restart? And, how high the bounce?


zap - I see no one has answered so I'll toss something out. I know you know it varies a good bit from play to play especially if you count the Bakken in. But even just focusing on the Eagle Ford I'm not sure if there's a good universal number. First, some spots are sweeter than others. I have no doubt some areas are being bypassed even at $100/bbl. Others may get passed over at $60/bbl. And then there's the financial position of each company. Company A may have the capex to drill a lease but Company B may not be able to drill the same lease because they've tapped out their credit line. Just a rough guess but most of the E Texas dry gas prospects probably don't work very well at NG much under $4- $5/mcf. The oily EFS? A wide range IMHO: $50 to $110/bbl. How profitable (or more to the point: how important a particular well is to a company) hinges on a lot more than the price of oil.

Rockman: in your opinion, is the $50 to $110 range applicable across the range of shale plays? I though it might be a bit higher, but I suppose that could be the case.

What level of profit is generally looked to as an acceptable ROI? Is that perception adjusting to the newer reality? Can a development company continue to operate at < 10% ROI/y with zero real growth (simply a 10% return, and steady based capital)?

What about a negative capital scenario, where stated capital diminishes over time, and yields are less than 8 to 10%?

IMVHO, we are entering a period of time, perhaps extended, and perhaps endless(?), during which all capital, human and financial, are going to drop. I am not certain whether this is going to be more similar to Greer's vision, or the extreme doomer fears. I hope for the better, and am making plans that hopefully will enable at least a few of my progeny to be amongst the survivors in either eventuality. The information I lack has to do with how any serious adult planners are viewing the future. And as you may imagine, that is something difficult to ascertain, since adult discussion is not widely published.

Would appreciate your thoughts.


Zap - That’s why I had to offer such a wide range. Not just for comparison of one play to another but variations with in a play. There are many EFS wells that won’t payout at $150/bbl and others that will make 3X their money. And as I said there can be big variations in profit due to different operators. Some do a good job. Some, especially those funded by stupid money, don’t. A promoter can pocket an easy half mill by cutting corners and going cheap with investor money.

As far as acceptable ROI that’s not easy to define. Remember the big players are public companies intent on keeping/increasing stock values up. Look at the difficulty the smart folks at TOD have with estimating profit in these trends let alone on an individual company basis. What chance would the Wall Street wizards have? But it’s very easy for them to read proved reserve numbers from annual reports. A public company could be very content making just a few % ROI if they can continue to increase booked reserves and thus get stock prices up. IMHO that’s where the big profit motive lies: stock value and not wellhead revenue.

Remember my tale of spending $18 million to drill 4 hz wells for small public company. Not just a low ROI but zero return: those wells were going to produce the same NG from existing vertical wells. But it did increase the company’s production rate 400%. Wall Street responding by boosting the stock price over 500%. All legal but all smoke and mirrors. An extreme example but real life. To a lesser degree I see the same game being played in the shale plays.

This game works very well…until it doesn’t. That same small public company was taken over in a hostile move by a major WS player that you would think might be smarter. He eventually lost his butt when the company went into bankruptcy and the stock value went to $zero. The same guy has put a similar move on Chesapeake recently. We’ll see if he’s learned anything from that past experience. This can be a very profitable game…as long as you’re not the last man holding the stock.