As you might expect from OilyStuffBlog we're not buying this dookey about centuries of affordable natural gas in the United States and feel strongly that uncredible ANALysis like this below harms our country, negatively influences political policies regarding conservation of our natural resources and that unfettered exports of LNG threatens our nations ability to compete with the rest of the world from the standpoint of manufacturing, our ability to power artifical intelligence technology, our ability to meet electricity needs for transporation fuel, to heat our homes, cook our food and maintain our nations long term energy security. Natural gas to people's homes in this country have already increased we believe in large part due to exports.
Who these green chicken folks are we have no idea but question their credibility with regard to our nation's hydrocarbon future. Just because you read it on the internet does not make it true.
To satisfy everyone else’s curiosity:– Doomberg is a team of 2+ people;– one woman, one man;– colleagues from work, not working there anymore;– this work place is, let’s say, energy/plastics/chemicals related;– one is Canadian, another one is American, both live in the States;– one has MBA, another one has degree in chemistry;– they have other Twitter account(s).
Why is Doomberg anonymous?
Doomberg: Now, why stay anonymous? "We have observed that when popular Twitter accounts or big anonymous social media accounts reveal themselves, sort of the error is let out of the balloon; the mystique, the intrigue is gone. So Doomberg has grown so big and so fast that we just can't have a reveal ourselves."
Our take on anonymity has to do with credibility and once the cat is out of bag, or the chicken has flown the coop, intrigue is gone because credibility is gone. If you want to subscribe to Doomberg's Substack page its pretty pricey for a bunch of opinions, its up to you. We were able to pirate their latest post on natural gas abundance and warn you in advance if you don't agree with this analysis it appears you might be stoopid.
I am told the comments on this post are quite interesting. My friend Anne, a well known mid-stream gas and natural gas liquids expert commented on it, using some OSB quotes. The first place we will try and pick this analysis apart is the use of high GOR areas of shale oil plays as a source for long term gas supply. Thats a big no-no. This will be a good thread to discuss the Appalachain Basin also and what is happening there.
We don't consider ourselves pessimists on OSB, just realists. Once the last of our nation's resources are shipped away, they're gone forever. Everything in life, particularly the oil and gas businsess is fraught with risk, we tend to error on the side of caution. We believe strongly in retirement accounts and being able to take care of our family's future.
The United States has 6.7% of the worlds proven natural gas reserves but is hell bent on being the world's No. 1 exporter for LNG and it goes back and forth with Qatar over that allustrious title. LNG lovers believe the U.S. will be exporting 35 TCF of LNG by 2030 if given all the rope they need. In other words, all the production from the App Basin would theoretically be exported and we will be totally dependent of associated shale gas from tight oil wells for our own country's needs.
Dumb, uh? Why would the powers that set energy policy in America allow that?
Because they have been brainwashed by the shale gas industry, lobbyists, and the lure of imaginary technically recoverable natual gas resources. Resources are way different that proven or probable reserves. Technically recoverable resources generally means a portion of those resources might be recovered some day...providing the price of gas is high enough for private enterprise to be profitable at it.
Shale production, oil or gas, is very CAPEX dependent. Wells are expensive to drill and complete and they decline like throwing an anchor over a ship in the open ocean. The American public, and the politicans that represent them, have watched shale gas and shale oil be drilled now for over 22 years, non-stop and they therefore believe, based on the lies they are told, that will continue to happen forever. Nobody lies on the internet, right? And they would not be drilling that stuff if they weren't making money, right?
Well, the shale oil sector we believe is $500B in the red, still, since 2009 and I have no idea how much money shale gas has lost. For years the App Basin was netting less than a dollar an MCF and they were still drilling that stuff; there have been bankruptcies and failure is THAT sector, just like shale oil. Costs keep going up and rig counts keep going down. App Basin gas production has plateaued.
All fixable with more rigs, you say? Where is the money going to come from to add more rigs? Higher prices, you say? More gas production means lower gas prices. Qatar can produce and liquify natural gas, for 1/2 of what the U.S. can...and sell it cheaper. Qatar's gas is 90% proven developed, not technically recoverble resources. Qatar's infrastructure to export is in place and can be upgraded, America's has to be built, effectively from scratch, from pipe in the ground to LNG export facilities themselves.
The 100 years of American gas supply dung heap is based entirely on technically recoverable resources that may or may net be buried down there in the dark, but have not even been drilled yet to even know for sure.
https://www.tgs.com/weekly-spotlight/05-03-2024
Here is a diagram showing the life span of gas depletion (oil expansion?) drive mechanism in a typical shale oil well. GOR rises at the bubble point threashold, free gas breaks loose from liquids, those liquids decline, then associated gas declines, GOR goes down and the well faces death as it reaches economic limits. Gas does not produce forever as some seem to think.
Midland and Martin Counties are so heavily saturated with HZ wells the entire counties are basically bubbling out, GOR is increasing, for the moment, but that gas will decline in a few years to very low pressure, low volume stripper well production.
Water production is a major factor in the economic limits of any well, particularly a well in the Permian Basin where 24 MM BWPD is already being injected into severely stressed formations that every month or so belch and cause earthquakes. That pertains to high GOR "gas" wells also. Suggesting high GOR legs in both sub-basins of the Permian will produce economic gas for decades is dumb.
Where will they get the frac source water to frac high GOR wells in West Texas and New Mexico? Source water in the Permian is fast approaching 20% of total well costs and will be going up even higher.
Howard County to the NE, within the productive limits of the Midland Basin but thought to be very flank, Tier 3/4 country, particularly to the east, is already bubbled out and gas production for the country is tanking. All pressure depletion shale ultimately behaves the same way as it depletes and dies.
This map defines the productive limits of both sub-basins in the Permian as late as 4Q2023. Red and yellow indicates high structural areas where initial GOR is high and gets higher as wells deplete. In the Midland Basin there are areas of very high GOR from wells drilled on too close a spacing that resulted in ensuing pressure depletion. There are thousands of wells drilled in these high GOR areas already. To suggest wells are not being drilled in these high GOR areas because of low natural gas prices, that they are being saved, is incorrect and that there is great potential for gas there is false.
Alpine High, for instance, in SW Reeves County, was thought to be a liquids rich area of high GOR that would be very economic. It failed miserably. Those wells are very gassy but their decline rates were very signficant.
Overproduction in the Permian plagues the future of both oil and gas.
High structural areas in these sub-basins are conducive to thinning of the gross bench thickness and BHP is lower than deep in the basins. Rock quality, or shale quality becomes even less consistent, less homogenous than basinward. Associated gas EUR's in these flank areas will be less. These areas are different than dry gas production in the APP Basin, or a dry gas leg in the downstructure part of the Eagle Ford trend.
For an example of depletion of dry gas in shale look at EOG's Dorado play in the dry gas leg of the Eagle Ford, in Webb County. Or all along the Shelf Margin in the down dip Eagle Ford.
"Technically recoverable" at some unknown future product price can mean $15 /MMBTU (Saputra etal, 2024) and a P50 of estimated URR can be amazing...provided there are not extenuating circumstances that treaten those recovery rates. Like produced water costs, or sesimic response areas. SRA's in the Toyah area of Reeves and Culberson Counties are pretty much on the productive limits of the play, in maximum initial GOR areas.
There is a field in the Bakken, Sanish, I think, the bubbled out completely; liquids went to nothing and within three years the associated gas was completely depleted. You could not get enough gas out of 160 someodd wells to pressure up a bicycle tire.
Where will CAPEX come from to drill high GOR flanks in the Midland and Delaware sub basins? HZ rigs drilling for oil are constrained already, even at $75 oil, because the shale oil sector no longer has access to other people's money. How high would natgas prices have to be to create CAPEX for drilling oily gas wells in the Permian?
I don't know what stupid people are capable of doing using other peoples money (never seen too much of until 10 years ago) but I can tell you that in the 65 years I explored for gas the targets my industry looked for were unassociated dry gas formations that produced for 40-50 years with low decline rates, NOT high GOR oil plays. Green chickens think shale oil is a great source of gas in the future; lets see them put their money where their beaks are.
Being extemely cautions about hydrocarbon exports is NOT pessmism, its just being smart about an unknown future. Better to be safe now rather than sorry later.
Thanks for this Mike. I learned at the foot of my fathers chair that a barrel and/or a mcf once produced is gone forever and you had better be looking for a replacement barrel and/or mcf.
I can't get my head around people equating a resource with a barrel/mcf reserve or a technically recoverable reserve with a barrel or mcf.
Fiat dollars can be printed up out of thin air. Barrels and mcf not a chance.
John
I have addressed the green chicken's comments about abundant associated gas remaining to be drilled in areas of high GOR in the Permian Basin tight oil play, up hole. There are a host of problems associated with that future source of natgas in the U.S.
The Haynesville, thought to be the second largest source of unassociated wet gas in the U.S. then downgraded signficantly as production ensued, is expensive and at best marginally profitable for operators at less than $4/MMBTU. In the hands of private enterprise oil and gas extraction must NOT breakeven, it must make lots of money for those resources to be developed. LOTS of money.
The Appalachain Basin is the single biggest source of natural gas in America. It represents our biggest hope. But there are problems.
Below, APP Basin natgas production has been flat since 3Q2021, this in spite of product prices being over $4/MMBTU for two of the past four years and LNG exports of 12-14 BCFGPD to Europe for over $28/MMBTU. Rig counts have fallen to the high 30's, half of what they were in 2021. They drill lots of super long laterals in the Marcellus, thus the production plateau even with lower rig counts:
Whats up with all this? To dominate the world with cheap America natgas the APP Basin ought to be drilling like the roof was on fire, right? The chickens would have us believe this plateauing is all fiscal discipline related, that production is curtailed because of low prices, and rigs have been sent to the barn also because of low prices. The shale gas sector can ramp up and produce any amount of natgas the world needed and the U.S. could regain its status as the world's top LNG exporter in Midland minute if it wanted to.
Well, Trump wants it to.
But as early as 2021 well productivity began to wane in the Marcellus and has continued to fall when wells are normalized for lateral length. This falling well productivity has been masked over because of increased lateral lengths. Remember, cheerleaders just like to see big numbers. You can explain why the numbers are bigger, but they don't hear that. Its like telling your Lab you and her are going to get in the pickup, run an errand, stop for coffee, then go for a walk. All she hears is walk and she is amped up, ready to go !
Whoa Nellie have people been mislead about the size of the APP Basin and "technically recoverable" natgas in the Basin.
The entire basin consists primarily of two core areas that have been hammered with 18,000 HZ wells. Between the two cores is a fairway of Tier 3 and 4 level well locations that can be drilled at $8 natgas prices (orange productive limits, above, from the AAPG). The rest of the Basin outlined in grey, above, contains gobs of technically recoverable resources whereby the United States Geological Society (USGS) fails to mention at what price that gas could be attempted. Saputra etal, with the University of Texas, Austin, School of Engineering has done an extensive study and modeling of the App Basin and they were on record as suggesting outside the orange economic limits of the basin, above, those imginary resource reserves can only be recovered at $15 natgas plus.
Next up I will present that paper and discuss it.
The productive/economic limits of the APP Basin are actually quite small in comparison to other shale basins in the U.S. and Devonian Marcellus and Ordovician Utica are the only two gas targets in the Basin that have thus far been remotely commercial. Its important to remember that natural gas is very conductive to a HZ lateral that has been frac'ed and existing wells drain very large areas. It is very different than say Wolfcamp A wells in the Midland Basin drilled on <600 foot spacing between wells.
Simple people have simple solutions to potential scarcity problems so they tout the lack of takaway, or export facilities, and suggest when thats all taken care of their will be natural gas seeping out of cracks in the ground. None of the folks will put their own personal money into that notion. Unconventional shale gas is marginally profitable and declines like life span of a fat labrador retriever.
1) I cannot take seriously someone that presents himself/itself as a cartoon green chicken. 2) Green Chicken looks like a psyop. If it's a psyop we deserve better psyops.