The Hill’s Group Response To The USGS Wolfcamp Shale 20 Billion Barrel Deposit

(The Hill’s Group),

Yes, the magic words; “technically recoverable”. I wonder how much “technically recoverable” oil is on Mars? There may be a lot, but oil that will ever see the surface of the Martian landscape is a different matter. Those would be reserves, and at $45/ barrel there is exactly zero. The same that can be said for the Wolfcamp.


I asked The Hill’s Group what they thought of the recent USGS announcement of the 20 billion barrel Wolfcamp shale Deposit in Texas:

Release Date: November 15, 2016

This is the largest estimate of continuous oil that USGS has ever assessed in the United States.

wolfcamp-shale

The Wolfcamp shale in the Midland Basin portion of Texas’ Permian Basin province contains an estimated mean of 20 billion barrels of oil, 16 trillion cubic feet of associated natural gas, and 1.6 billion barrels of natural gas liquids, according to an assessment by the U.S. Geological Survey. This estimate is for continuous (unconventional) oil, and consists of undiscovered, technically recoverable resources.

The estimate of continuous oil in the Midland Basin Wolfcamp shale assessment is nearly three times larger than that of the 2013 USGS Bakken-Three Forks resource assessment, making this the largest estimated continuous oil accumulation that USGS has assessed in the United States to date.

This was The Hill’s Group Response:

“the U.S. Geological Survey assessed technically recoverable mean resources of 20 billion barrels of oil and 16 trillion….”

Yes, the magic words; “technically recoverable”. I wonder how much “technically recoverable” oil is on Mars? There may be a lot, but oil that will ever see the surface of the Martian landscape is a different matter. Those would be reserves, and at $45/ barrel there is exactly zero. The same that can be said for the Wolfcamp.

Some geologists at the USGS did some investigation (because that is what they get paid to do) and found some liquid hydrocarbons that no one could ever make money producing. The USGS team are not engineers, they are geologists, they just want to acquire knowledge about the quantity of liquid hydrocarbons in the earth’s crust. As far as they are concerned whether or not it would ever benefit the economy to extract them is beyond the point. In other words, that is not their department!

We then find this non event (just the acquisition of the zillion’th piece of scientific information) plastered all over the media. To an uniformed public it is a bonanza of wealth. Of course, in reality it is a big puddle of black goo that will never do anyone any good. Which of course the public doesn’t know.

Someone is selling snake oil, but who? Could it be the same bunch that convinced investors to part with over 1$trillion to construct an industry that produces $362 billion per year in gross sales. Which means that if they generate a 10% profit margin (which they don’t) on those sales the investor will never get their money back. They will have just transferred it to some other pocket besides theirs.

What we are dealing with is one of the biggest, best funded, sneakiest con jobs in history. We shouldn’t be surprised! It is the type of thing that one would expect to happen at the end of an era. That is, the vultures showing up to feed on the carcasses!

TheHillsGroup.org


I asked The Hills Group if they would be interested in providing articles from time to time on the oil industry, their ETP Oil Model, oil depletion and other aspects of the energy industry.  They agreed.  I look forward to publishing their articles as they submit them to the SRSrocco Report site.

Lastly, if you are interested in checking out The Hill’s Group Report 67 page report, CLICK HERE.

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JEAN
Guest
JEAN

I SUPPOSE WHEN THEY FIND THE NEXT RECOVERABLE MAJOR DEPOSIT..YOU WILL STICK TO YOUR NUTTY REJECTION OF THE TRUTH…RECOVERABLE OIL IS OUT THERE..RESERVES NOT DISCOVERED ARE OUT THERE..WHEN GOVNMENT LANDS ARE “RE-OPENED” FOR EXPLORATION WE WILL FIND MORE OIL….YOUR FORMULA FOR DECLINE IS FULL OF HOT AIR…LOL….LOL…LOL….LOL…

steve from virginia
Guest

A big mistake oil analysts — and citizens — make is they pay too much attention to the extraction side of the industry and not at all to the consumption side, which is where most of our problems lie. Petroleum use in general is non-remunerative. Only about 5% of total is used for commercial purposes which offers a return to the user: agricultural, delivery, transit, construction, emergency, etc. The rest — 95% — is entertainment, it does not pay to drive. What pays instead is credit and lots of it. Because of diminishing returns on driller investment, increased percentages of… Read more »

Roy
Guest
Roy

All bleeding eventually stops. Your only outcomes/solutions can only slow the bleeding. The patient is terminal, there is no solution. This is the third way.

Hubbs
Guest
Hubbs

Spoken like a true surgeon. I was wondering how much money has gotten sucked in by the brokers on just drilling permits, real estate sales, speculation, royalties and commissions, you know, all the stuff before the first truck pulls up to the site to start drilling?

Colin
Guest
Colin

Not sure what you mean. 95% of energy the energy from burning FF is used in its production? Here in old Europa most of the money you pay for filling your tank goes straight to the government. Hard to credit that the state can cream off so much off the top of this process if as you imply the net benefits are mostly imaginary. Even here alternative energy is subsidised by billions of dollars taxed from the fossil fuel industry. As an aside I worked on offshore oil rig for several years. Even when the reservoir was more or less… Read more »

houtskool
Guest
houtskool

Awesom summary Steve. There’s no third way. Maybe Brexit and Trump are managed ways to localized economies. Spreading the word will crash everything in an eyeblink. For now, my opinion is the ivory towers are working on degrowth. Managed degrowth. I hope so.

houtskool
Guest
houtskool
Adam
Guest
Adam

Steve, any idea when you’re going post the interview with hills group? The good news is my wife is slowly beginning to understand this and its ramifications

Barry
Guest
Barry

There are a lot of people praying physical gold and silver will “go to the moon”. Ever since oil was discovered gold and silver have been linked to the price of oil. The bull market in the late 70s was an oil crisis. For gold and silver to “go to the moon” oil would either have to “go to the moon” too or gold and silver would have to decouple from oil. If either of these occurrences happened the people praying for high gold and silver prices might change their minds because of the catastrophic implications of of either gold… Read more »

Counterfiat
Guest
Counterfiat

What the people who have stolen the savings of generations seeing their fiat benefits cut off will be bad?

Why isn’t it bad that the debt abusing user hasn’t yet been called into account?

Your fear of a correction in debauchery is unfounded.

DisappearingCulture
Guest
DisappearingCulture

“Physical gold and silver are hedge against currency and that is why I own them. But if you make a lot of money from them the world will be in a very bad place indeed.
Be careful what you wish for.”

But what is going to happen has nothing to do with wishful thinking. What is going to happen, will happen. What has already been set in motion can’t be changed by anything I can think of. Although some actually believe a new president or some other hopium will change things into a utopian future.

Barry
Guest
Barry

Unlike you I am not psychic. That is why I hedge for all possibilities. Gold and silver are one possibility. That is why I own some. But for mine it is the worst possibility and I would be happier if my gold and silver appreciated at it’s present rate for me of around 10 per cent per year. Steve thinks gold and silver will decouple from oil. He has not given enough evidence for this conclusion. He might be right. Or he might be wrong. There is always a danger in saying it’s different this time. I went sailing a… Read more »

DisappearingCulture
Guest
DisappearingCulture

And that is why I look at cost of production.

Roy
Guest
Roy

There is more gold dissolved in the ocean than on dry land. Fritz Haber of Haber Bosch fame developed a process for extracting gold from sea water. The only problem was the cost of extracting the gold far exceeded the market price of gold. If the production price exceeds the market price you need one of two things to stay in business, a subsidy or a. loan (credit). To pay off the loan or if there are no more lines of credit available you have to have the price of your stock rise. For the price of your stock to… Read more »

efskeletor
Guest
efskeletor

If we have a reset and all assets are repriced, say 20%of the top in oil which is about 30.00 a barrel. Won’t we be able to extract oil for another generation at an economical price. If so, it will give us time to create alternatives. Solar for cheap. Like the Chinese are doing now. This deflation cycle is not complete.

Randall
Guest
Randall

The public who invest understand the price of a barrel of oil and the price they paid for the stock, what few understand or know is what’s the real “all-in” cost to produce the barrel of snake oil ?

Bill Sodomsky
Guest
Bill Sodomsky

What a pleasure, what a privilege to have a site where we have the confluence of the Hills Group, Steve Ludlum (a.k.a. Steve from Virginia), Louis Arnoux and Steve St. Angelo.

We’re getting somewhere now albeit too little too late from a Modern industrial Society perspective. In the meantime, imagine Gail Tverberg, Louis Arnoux, Steve Ludlum, Steve St. Angelo, Alice Friedemann, Ted Patzek, Norman Pagette and a few others, gathering together on a common ground website sharing their insights. Let’s hope! Way to go Steve!

Virginia
Guest
Virginia

Thanks, Steve and all for your work and comments. I live way out in the sticks, starting to research electric vehicles. Steve, simple explanation of the n-Geni technology, please.

Northwest Resident
Guest
Northwest Resident

“Someone is selling snake oil, but who?” In my opinion, at the highest levels of industry, finance, defense and intelligence, there has been an acute awareness of the approaching energy collapse for many years. The selling of the snake oil in the instance is merely part of a well planned and deployed propaganda effort on a massive scale to keep the general public ignorant of the dangers that lie ahead and to keep the illusion of “all is well” alive and viable. The only possible reason for doing all this is to buy time — time to prepare for what… Read more »

houtskool
Guest
houtskool

Agreed NR. They know. Degrowth seems impossible, so they keep pushing. They should try an inversed worldwide Marshallplan.

Bhavesh Modi
Guest
Bhavesh Modi

Was well said from Hills group, and good to know they ready to let you publish their research based articles…win-win scenario for everyone….for Hills Group because their message would be reaching to many people (I am sure they would love as many people as possibly understand their concept of Thermodynamic collapse) and for readers (like myself) “well researched material” at their finger tips to learn and stand in front of billions…who did not learn….thanks Steve.

silverfreaky
Guest
silverfreaky

Looks not good for gold and silver.HUI from 285 to 170.Such a crash in the stocks?Unbelievable.
All the analysts totally wrong.Maybe i should change my profession.Such predictions should be no problem.

Silvrwllwin
Guest
Silvrwllwin

Don’t take yourself too seriously in this present day circus of a market.
No one will get it right accept for the ones who’s fingers are the pushing control play.

Silvrwllwin
Guest
Silvrwllwin

* except

Benito Camela
Guest
Benito Camela

And remember, nuclear energy is a scam.

https://www.youtube.com/watch?v=iGkMRAq4kzQ

Rytis
Guest
Rytis

Steve,

The majors will drill the Wolfcamp and turn a profit at $30/bbl. This is fact.
You are not following the ‘step-change’ that has occurred in the industry.
Please elaborate on why the Wolfcamp is not economically viable?

Rytis
Guest
Rytis

Steve,

Not talking about the oil industry as a whole, not talking about CAPEX, etc.

lol

Talking about the Wolfcamp and its viablility or its non-viability..

Take care 😉

Cathal Haughian
Guest

What I don’t understand is this: how do you guys stay positive?

I’ve read the Hills Report twice and most of Steves output, it’s pure Doom. I’ve no idea how Steve does it! And I’m a doomer 😉

Ok, theoretical question, by 2025 what’s the carrying capacity of the planet without oil?