Shale Oil Keeps Growing on Trees

(By Mike Shellman),

The United States Geological Society (USGS) today released a report stating there is an estimated 46.3 billion barrels of theoretical, technically recoverable, as yet undiscovered light tight oil reserves in the Wolfcamp, Bone Springs and Avalon shaley carbonate formations in the Delaware Basin of West Texas. Shale oil, it seems, keeps growing on trees.

NOTE:  Article written by Mike Shellman on Dec 6th at the OilyStuffblog.com

There are lot of “qualifications” to this estimate but it will nevertheless cause people’s panties to get plum bunched up, including the President of the United States who believes we are sitting on the Atlantic Ocean of light tight oil in America, so much so we no longer even have to worry about conserving the stuff anymore.

What price of oil will it take for all this imaginary oil to actually be recovered in the Delaware Basin? Well, the USGS does not bother itself with that kind of small stuff. Taxpayers pay for it to make wild ass guesses and that’s that.

Art Berman reviewed the study in detail to determine the USGS itself estimates it will take 318,000 wells to recover this oil, costing over $3.0 trillion. Some of the USGS EUR estimates for various benches in their assessment will only be economical at oil prices above $150 per BO.

Where that money is going to come from beats the hell out of me. The US shale oil industry has drilled almost 70,000 shale wells the past decade all across America and is hammering its sweet spots in the major shale oil basins. It has recovered a little less than 10 billion barrels of oil so far (EIA, DI, IHS, shaleprofile.com). The shale oil industry is somewhere around $300 billion in long-term debt, so it essentially has not even paid for what its already produced.

It’s important to keep these sorts of wild ass guesses about America’s hydrocarbon future in proper perspective. That will not happen, however, and this USGS study will be used for political purposes and to influence foreign policy. This from the Director of the USGS himself, “Knowing where these resources are located and how much exists is crucial to ensuring both our energy independence and energy dominance.”

Goats grow on trees, the USGS thinks America’s shale oil resources do as well.


This article was written by Mike Shellman at his OilyStuffBlog.com site.  Mike has been working in the conventional oil industry for 40 years and I would recommend checking out his site as his articles provide a lot of insight about the industry.

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15 Comments on "Shale Oil Keeps Growing on Trees"

  1. The goats are really resourceful animals , not much food at the bottom of tree but at the top a lot. Masters don’t give crap if we will have petrol or not. We will have to fight and manage ourselves whatever left.If you want job to be done do it yourself.

  2. Michael Kohlhaas | December 23, 2018 at 4:11 am | Reply

    Let’s face it. We are screwed!

  3. The increasing costs of oil extraction, coupled with globally depleting hydrocarbon sources will prove Steve’s EROEI thesis correct; while the price might be down for now, it will ultimately be much much higher, and it will likely take the coming monetary reset to cover it all up. I expect to see zero’s slashed off all fiat currencies; that’s the way the old (read current) debt will be defaulted upon. Hard assets may be the only thing that will make it “across” more or less intact.

  4. This is what happens when the locals cannot afford gasoline.

    https://mexiconewsdaily.com/news/pipeline-taps-soar-45-in-first-10-months/

  5. Crude and liquid gas are intermingled in the same category(“hidrocarburos”) and if the latter is excluded from the final tally, the crude
    production for the month of November was only 1,717,000 bpd.Is obvious that KMZ is now
    in a rapid decline and if so, Mexico is officially “kaput”.

    http://www.pemex.com/ri/Publicaciones/Indicadores%20Petroleros/eprohidro_esp.pdf

  6. 46 Billion barrels of oil we found??? ( Which roughly works out to be only 1.3 years worth of global oil consumption)

    YIPPIE WE ARE ENERGY INDEPENDENT! FINALLY! See, told ya’ll peak oil is wrong! Technology provides!

    (sarcasm)

  7. What I want to know, is the US the only place where shale oil is found? Or can we expect other such “discoveries” throughout the world?

    • “What I want to know, is the US the only place where shale oil is found? Or can we expect other such “discoveries” throughout the world?”

      A quick Google search says it’s the US, Canada, China and Argentina but i’ve read that the Saudi’s as well as the Russians are looking into Shale as well.

  8. Why are we listening to these blatering politicians any way? Where did they get their jurisdiction. Actually, they are just like us. What we need to do is put the on our level in our mind and speak like they are on our level. How about doing some Yellow Jackets like the French? 🙂 Screw these pontificating dudes. We have got to stand up for ourselves. In fact, I encourage to write any politician letter telling them we do not agree. I started to call and write. At least it will put the words into the minds that the people do not agree and have taken to pen and paper enmasse. The current director of USGS is James F. Reiley. Write and call the guy. Tell them to get their act together, NOW, by starting slow and orienting toward something more sustainable with real plans not giberrish.

  9. Thanks Steve,

    Drive your car to the supermarket and back for a gallon of milk and the journey may take more than a gallon of gasoline – when repairs against wear and tear internal to matter, energy put into traffic lights, infrastructure and many others – are factored.

    Now make the journey thousands of meters underground to bring a gallon of crude oil up from an oil well. How much that would take of fuel, and fuels to manufacture the industrial base that produced and ran the machinery involved, plus what sustains humans involved?

    When an industrial process turns an Energy sink, all the Energy put into it must come looted.

    It cannot be that one pays fairly for the Energy that produces less Energy!

    Gold-grade crude oil and gas supplies from OPEC and Russia must become increasingly looted into the international Energy black market for Shale Oil, Tar Sand Oil, Fusion, Nuclear, Solar, Wind, Hydro and other industries to sustain themselves (in fact, all power plants are heavily subsidized as the energy put into building, running, repairing and fueling them always less than the energy they ever produce, and that is the status quo since the days of Edison).

    Is not better faking Shale Oil production, turning it a CGI operation – making the trucks driving empty, the oil rigs turn but don’t drill, all workers running them are told to choreograph-it, and Energy reports come telling on higher and higher rates of production all the time?!

    Many think SpaceX, going to the outer space and its boosters landing back, is achieved this way – with a huge social and media success, anyway!

    The gold-grade conventional Energy supplies saved by the CGI process is then to be labeled ‘Shale Oil’ – Wallah!

    Will it work? No! Because humans are already made by Economics to perceive Energy as a ‘CGI’ reality, or they’ve not traded fossil fuels since the 1800s days of Jevons on the basis of supply-and-demand but on the basis they are finite.

    We are entering the age when Economics prefer not to allow individuals knowing from where the fuel they put in their cars is coming from?

    Is not that better for us? Yes, but the portion of people made forcefully living energy-less will become bigger and bigger over time (see Venezuela, Yemen, Syria, Libya, Iraq, Afghanistan and others), until the size of that portion reaches 99% of all the population – god forbid!

  10. Hey, Steve, thanks for this, man! I just saw this on Twitter. I am flattered.

    It is important to remember how the USGS and the EIA derive these resource estimates. They pretty much assume a certain bench (strata) like the Wolfcamp B is homogenous across 3.6 million acres and each well will make x… and there you go. Its actually sort of ridiculous.

    This USGS report has stirred everybody’s oatmeal up in America and I am sure helped to sell a lot of SUV’s. The question remains, where are the trillions of dollars required to develop this resource going to come from? Thanks again, Steve.

    Mike Shellman

  11. They will never stop printing money to pay for shale. Its never going to stop.

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