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We Could Unlock More Than 267 Billion Barrels of Oil in America
fool.com ^ | July 30, 2014 | Tyler Crowe

Posted on 07/30/2014 6:51:03 PM PDT by ckilmer

We Could Unlock More Than 267 Billion Barrels of Oil in America

By Tyler Crowe | More Articles | Save For Later
July 30, 2014 | Comments (0)

Photo credit: WPX Energy

If I had told you five or six years ago that America would be producing more oil than ever before and potentially becoming an exporter of crude within a decade, you probably would have had me institutionalized. Yet thanks to the advancements in drilling techniques, we have been able to access one of the most abundant resources we didn't think were possible: shale and tight oil. Today, oil production from these sources total 4.6 million barrels per day and represent about half of our oil output.

What makes this story even more compelling, though, is the future ahead. Core Laboratories, a provider of oil and gas production technology, believes that some of the advancements it is working on could unlock hundreds of billions of barrels of more oil from shale. How is this possible? Let's take a look at how Core's work in shale could potentially lead to America becoming the worlds largest source of oil.

Going that extra 2% goes a long, long way
One of the things that many people don't understand about shale resources is that they are very, very hard to access. Despite the immense success that we have had extracting these resources over the past several years, we are only scratching the surface of these resources. According to Schlumberger research scientist Robert Kleinberg, we are only presently able to access 5% of the oil and gas available in these new resources, and based on the estimates from several companies working in some of America's top shale plays, even getting to a 5% recovery factor would be huge.

Shale play Estimated recoverable oil (barrels of oil) Current oil recovery factor in region
Permian Basin (multiple formations) 75 billion barrels 3.5%
Bakken/Three Forks 31.5 billion barrels 3.5%
Eagle Ford 26 billion barrels  6%
Niobrara 7 billion barrels 1.4% 

Sources: Pioneer Natural Resources, Approach Resources, EOG Resources, and Continental Resources investor presentations, Oil & Gas Journal

Think about that for a second. The amount of oil these companies are estimating are absolutely massive, but they assume that we leave upward of 95% of the oil from these resources still in the ground. Using these recoverable resources and recovery factors as a rough guide, that means that the total oil in the ground in shale looks something like this:

Shale Play Estimated Oil-in-Place (barrels of oil)
Permian Basin (multiple formations) 2,142 billion 
Bakken/ Three Forks 900 billion 
Eagle Ford 530 billion 
Niobrara 500 billion 

Source: Continental Resources & Pioneer Natural Resources Investor Presentations, and Oil & Gas Journal

There are multiple reasons why that oil recovery factors are so low for shale, but one simple reason is that we haven't been working with them very long to completely figure them out. Shale and tight oil have been a commercial success for less than a decade, while we have had over a hundred years to figure out conventional oil reservoirs. This is where Core Labs comes in. On the company's most recent conference call, CEO David Demshur said that the company is looking at ways of increasing oil recovery factors in the Eagle Ford and Bakken shale formations into the low teens. Based on where oil recovery is today for these formations, that is an additional 94 billion barrels of oil from just those two formations alone.

More importantly, though, is the potential impact that a move like this could have on all shale formations across the U.S. If oil recovery factors in shale could be increased to greater than 10%, then several prospective areas not currently economical could be attainable. For example, the Monterey shale in California is estimated to have 500 billion barrels of oil in place, but the geology is so complex that only a small portion of the oil in place -- about 0.12% -- is considered recoverable. If we could increase recovery factors. Increasing oil recovery there may not make all of it attainable, but it could certainly make a larger portion of that oil in place accessible. 

Just to give you an idea of this level of potential, lets use the four major shale plays from above. If we were to increase oil recovery factors to just 10%, then the estimated recoverable resources would look a little something like this:

Shale Play Estimated recoverable resource using current recovery factors above (barrels of oil) Estimated recoverable resource using 10% oil recovery rate (barrels of oil)
Permian Basin (multiple formations) 75 billion 214.2 billion
Bakken/ Three Forks 31.5 billion 90 billion
Eagle Ford 26 billion 53 billion
Niobrara 7 billion 50 billion
Total  139.5 billion 407.2 billion

That's more than 267 billion barrels from just these four formations alone! If the economic conditions were right and these barrels of oil were to become proven reserves, we would have more reserves than Saudi Arabia. 

What a Fool Believes
So far, the U.S. shale revolution has been a revelation. We are on the verge of producing more oil per day than in any other time in our history, and we are at a point where exporting oil to the world is a very real prospect. What is even more amazing, as these numbers show above, is that we barely have tapped the full potential of shale oil. It's highly unlikely that we will ever be able to recover shale and tight oil at the rate we can in conventional reservoirs -- about 50% today -- because of the specific nature of these geological formations, but even getting to 10% like Core Labs believes is possible would be a massive development for every company involved in oil and gas exploration and production and could drastically improve America's position in the global oil market.


TOPICS: Business/Economy
KEYWORDS: energy; fracking; gas; hydrocarbons; methane; oil; opec; petroleum

1 posted on 07/30/2014 6:51:03 PM PDT by ckilmer
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To: ckilmer

Loosen that tight oil


2 posted on 07/30/2014 6:56:53 PM PDT by HiTech RedNeck (Embrace the Lion of Judah and He will roar for you and teach you to roar too. See my page.)
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To: thackney; bestintxas; Kennard; nuke rocketeer; crusty old prospector; Smokin' Joe

The genesis of this article is that in Core Labs earnings conference call they talked about new work in their labs that will result in recovery rates that are double or triple current rates.

Their work in the baaken and eagle ford has declined in the last couple quarters so in the very least it looks like they want more work there.

As well this may mean that they’ll enable companies in the Tuscaloosa marine shale — where they are currently getting more work — to get more oil. Same goes with the permian basin where they’re also getting more work.

May be that they learned something new recently by doing more stuff in these very different formations.


3 posted on 07/30/2014 6:57:28 PM PDT by ckilmer (q)
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To: ckilmer

Obama will build the pipeline if he has to to support his illegal aliens...

for the veterans...Butkis...


4 posted on 07/30/2014 6:58:32 PM PDT by Tennessee Nana
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To: ckilmer

Oh no, don’t!

That would annoy our muzzie “friends” in the ME.


5 posted on 07/30/2014 6:59:42 PM PDT by 353FMG
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To: ckilmer

Ten years ago I would have said that these figures are wildly inflated and nowhere near reality, and do not represent economically recoverable reserves.

I’m not saying that today.


6 posted on 07/30/2014 6:59:53 PM PDT by henkster (Do I really need a sarc tag?)
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To: thackney

Ping.


7 posted on 07/30/2014 7:02:43 PM PDT by gov_bean_ counter (Romans 1:22 Professing themselves to be wise, they became fools)
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To: ckilmer

But but but Peak Oil and Global Warming and stuff!!! /libidiot


8 posted on 07/30/2014 7:05:04 PM PDT by piytar (The predator-class is furious that their prey are shooting back.)
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To: ckilmer

Would have to clean house in DC first.


9 posted on 07/30/2014 7:07:46 PM PDT by SkyDancer (If you don't read the newspaper you are uninformed. If you do read the newspaper you are misinformed)
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To: piytar

Nope...the enviro-weenies would NEVER agree to it.

Which is why they need to have a shoot-on-sight rule for protesters who show up to picket. We need a leader who will look out for the interests of the US FIRST and give these libtards the big middle finger.

Just my .02


10 posted on 07/30/2014 7:08:29 PM PDT by hoagy62 ("Tyranny, like hell, is not easily conquered..."-Thomas Paine. 1776)
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To: ckilmer

Damnocrats will fight against any improvements in Oil recovery. We must make certain they get to minority status, and kept down.


11 posted on 07/30/2014 7:15:09 PM PDT by rockinqsranch ((Dems, Libs, Socialists, call 'em what you will. They ALL have fairies livin' in their trees.))
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To: henkster

Ten years ago I would have said that these figures are wildly inflated and nowhere near reality, and do not represent economically recoverable reserves.

I’m not saying that today.
...........
From looking at old production numbers going back decades and correlating them with other parts of the USA econonmic and political activity...I think that a lot of the vigor went out of the USA when oil production peaked in 1970. What most people don’t realize is that oil production had been going up almost steadily since before the turn of the century.

Anyhow that vigor is returning.


12 posted on 07/30/2014 7:27:20 PM PDT by ckilmer (q)
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To: ckilmer
More foolish non sense from the fools...

The Green River Formation weighs in a 3 TRILLION Barrels of oil with 1 trillion recoverable with todays technology...

An American Oil Find That Holds More Than All of OPEC Nov. 13, 2012 By ALAN FARNHAM via World News

Drillers in Utah and Colorado are poking into a massive shale deposit trying to find a way to unlock oil reserves that are so vast they would swamp OPEC.

A recent report by the U.S. Government Accountability Office estimated that if half of the oil bound up in the rock of the Green River Formation could be recovered it would be "equal to the entire world's proven oil reserves."

Both the GAO and private industry estimate the amount of oil recoverable to be 3 trillion barrels.

"In the past 100 years — in all of human history -- we have consumed 1 trillion barrels of oil. There are several times that much here," said Roger Day, vice president for operations for American Shale Oil (AMSO).

The Green River drilling is beginning as shale mining is booming in the U.S. and a report by the International Energy Agency predicts that the U.S. will become the world's largest oil producer by 2020. That flood of oil can have major implications for the U.S. economy as well as the country's foreign policy which has been based on a growing scarcity of oil


13 posted on 07/30/2014 7:29:18 PM PDT by spokeshave (OMG.......Schadenfreude overload is not covered under Obamacare :-()
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To: spokeshave

yeah, I love that story too. But its not going to happen anytime soon. There’s easier picking in shale oil—which is a very different animal from oil shale which is the hard rock of the green river basin. That oil shale has to be melted before its oil—which is a process that’s currently more expensive than expensive fracking techniques—and requires lots of electricity and water in places where there is little available—especially water.


14 posted on 07/30/2014 7:36:20 PM PDT by ckilmer (q)
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To: ckilmer

Remember when Bush said “drill baby drill” and Obama said it would never work?


15 posted on 07/30/2014 7:37:16 PM PDT by jyro (French-like Democrats wave the white flag of surrender while we are winning)
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To: ckilmer

The TMS ain’t working. Too much clay and too little TOC.


16 posted on 07/30/2014 8:05:18 PM PDT by crusty old prospector
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To: HiTech RedNeck
Loosen that tight oil

there is something just a bit off in that

17 posted on 07/30/2014 8:05:54 PM PDT by Mastador1 (I'll take a bad dog over a good politician any day!)
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To: jyro

Yup. And drilling is the only thing keeping us of a deeper Great Depression.

So obastard of course hates it. Well, that, and a lot of the money is flowing to Texas.


18 posted on 07/30/2014 8:22:45 PM PDT by piytar (The predator-class is furious that their prey are shooting back.)
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To: spokeshave
We need another Ronald Reagan to see the future is bright. Oil Shale recovery is the future.

The BLM controls most the Green River Lands. That is a major problem.

If we had a Congress and President with half a brain, we could be exporting oil in 5 years.

19 posted on 07/30/2014 8:44:23 PM PDT by agincourt1415 (2 more years of HELL!)
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To: ckilmer
I am not sure if this question has been explored here on FR but whats the fracking world concerning fracking for oil in the oceans ?
Is it more difficult in the oceans ?
Not counting the difficulty of drilling for conventional oil deep in the oceans is the geology more difficult or more easy for fracking in the oceans ?
20 posted on 07/30/2014 9:16:08 PM PDT by American Constitutionalist
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To: hoagy62

Build a mote around drilling sites with hungry crocks and alligators.


21 posted on 07/30/2014 9:18:03 PM PDT by American Constitutionalist
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To: American Constitutionalist

THAT is a really outside the box question! My son works on oil rigs in Texas. Let me ask him.


22 posted on 07/30/2014 9:18:07 PM PDT by superfries
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To: superfries
At the current rate of consumption how many years would 267 billion of barrels of oil give the US ?
The US uses about 18 million barrels a day ?
So in 10 days that would be ?
180 million barrels.
100 days, that would be ?
1.8 Billion ?
I just used a calculator, if it's 18 million a day, that would be 6 billion 570 million barrels a year, or rather, 6,570,000,000 a year.
So ? that would give us 41.07 years of oil.
23 posted on 07/30/2014 9:31:21 PM PDT by American Constitutionalist
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To: crusty old prospector

The TMS ain’t working. Too much clay and too little TOC.
..................
That was the take four years ago. Most companies pulled up stakes and went to the Bakken.

Recently however four or five companies have been successful aided by core labs. This a new story.


24 posted on 07/30/2014 9:32:04 PM PDT by ckilmer (q)
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To: American Constitutionalist

So ? that would give us 41.07 years of oil.
...............
BP put out an estimate on oil demand last year which predicted that total oil demand would start to decline after 2030.

Why?

There’s a pretty large shift over into natural gas trains trucks busses and buildings. As well, a much much larger shift into electric cars is being jerked into motion by elon musk’s tesla.

We’ll never see the end of oil. Rather what will happen will be that it will occupy an ever smaller part of the economy starting in 10-15 years.


25 posted on 07/30/2014 9:40:48 PM PDT by ckilmer (q)
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To: ckilmer

Hope I can still drive my petro fueled car in 15 years, or so I should say keep it running in the next 15 years, can’t afford a electric car.


26 posted on 07/30/2014 9:49:56 PM PDT by American Constitutionalist
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To: ckilmer
Drill Frack here, drill frack now.

Drill Frack baby, drill frack

27 posted on 07/30/2014 10:11:21 PM PDT by upchuck (It's a shame nobama truly doesn't care about any of this. Our country, our future, he doesn't care.)
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To: All

If we started exploring ANWR 10 years ago as GWB suggested, we could be reaping the benefits from that oil right now.

But the media kept running clips of the “pristine” Alaska wilderness, failing to mention that the oil is literally seeping up thru the ground there.


28 posted on 07/30/2014 10:53:47 PM PDT by Rodney Dangerfield (Has any President in history sunk to such a level of self-flattery & validation-seeking?)
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To: ckilmer
We Could Unlock More Than 267 Billion Barrels of Oil in America

This is such BS. I heard in 1969 that we would be out of oil by 1979.


29 posted on 07/30/2014 11:32:40 PM PDT by 867V309 (Don't tread on me, bro)
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To: ckilmer

A billion barrels is about 45 days of US domestic consumption at current rate. 200 billion barrels = 200 x 45 = 9000 days, which is something like 27 years worth.

However, that domestic reserve could be used to leverage down the world price of oil for far longer than that, if managed prudently.


30 posted on 07/31/2014 12:41:39 AM PDT by Steely Tom (How do you feel about robbing Peter's robot?)
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To: Steely Tom

The key words are, “we could” but unfortunately, we WON’T.


31 posted on 07/31/2014 3:59:10 AM PDT by DaveA37
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To: Steely Tom

However, that domestic reserve could be used to leverage down the world price of oil for far longer than that, if managed prudently.
..............
I think US consumption of oil will start to go into decline after about 2020. Further that decline will start to steepen by 2025. By 2030 there will be a price collapse on oil. It will be hell on oil producers but heaven for American consumers and the worldwide economy. Oil prices will wind up about $+-35 a barrel — which on a btu basis is about where coal and natural gas are today.

There will always be oil in the ground mostly because it will no longer be used so much.

As a saudi sheik once said, “the stone age didn’t end because we ran out of stones.”


32 posted on 07/31/2014 5:07:12 AM PDT by ckilmer (q)
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To: American Constitutionalist

Hope I can still drive my petro fueled car in 15 years, or so I should say keep it running in the next 15 years, can’t afford a electric car.
................
The only way sales volumes for electric cars will go up will be is prices come down. According to the Tesla guy —that’s going to happen in about 3 years—like it did with the first cars at the 20th century. The first cars were rich people’s toys. Ford’s model T changed that so that everyone could drive. That’s what Tesla aims to do with electric cars.


33 posted on 07/31/2014 5:10:29 AM PDT by ckilmer (q)
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To: Rodney Dangerfield

If we started exploring ANWR 10 years ago as GWB suggested, we could be reaping the benefits from that oil right now.

But the media kept running clips of the “pristine” Alaska wilderness, failing to mention that the oil is literally seeping up thru the ground there.
...............
All true. The Alaskans currently have chipped in to help oil companies construct a huge new pipeline to ship natural gas south from the north slope. So they’ll be able to get that out of the north slope.


34 posted on 07/31/2014 5:13:05 AM PDT by ckilmer (q)
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To: jyro

Remember when Bush said “drill baby drill” and Obama said it would never work?
..............
Hell its even worse than that. The Obama administration is currently trying to take credit for the oil boom when they have done nearly everything they could to stifle it. Similar things happened in the Clinton administration,.


35 posted on 07/31/2014 5:14:55 AM PDT by ckilmer (q)
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To: agincourt1415

If we had a Congress and President with half a brain, we could be exporting oil in 5 years.
...........
It currently looks like the USA will be oil independent by the end of 2019.


36 posted on 07/31/2014 5:19:06 AM PDT by ckilmer (q)
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To: American Constitutionalist

“I am not sure if this question has been explored here on FR but whats the fracking world concerning fracking for oil in the oceans ?
Is it more difficult in the oceans ?
Not counting the difficulty of drilling for conventional oil deep in the oceans is the geology more difficult or more easy for fracking in the oceans ?

The subsurface does not care if the surface is under water or not.

Fraccing is done offshore but not very frequently. Basically, it takes too much equipment to frac, equipment that is difficult to handle on a platform or attendant barge.

Makes it very expensive and must be wisely undertaken on proper wells.


37 posted on 07/31/2014 5:58:38 AM PDT by bestintxas (Every time a RINO bites the dust a founding father gets his wings)
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