IEA: U.S. energy sector will lead world with "second wave of shale"

[thackney]

IEA: U.S. energy sector will lead world with "second wave of shale"
https://www.chron.com/business/energy/article/IEA-U-S-energy-sector-will-lead-world-with-13679039.php
March 11, 2019

The U.S. energy sector will dominate the global oil and gas industry in the coming years as the "second wave" of shale growth takes hold, the International Energy Agency said Monday.

Even as the pace of global crude demand slows, the U.S. will account for about 70 percent of the growth in global oil production in the next five years and about 75 percent of the surge in liquefied natural gas exports, the IEA said in its annual oil market outlook.

"The second wave of the shale revolution is coming," said IEA Executive Director Fatih Birol. "It sends a lot of shock waves."

Led by West Texas' booming Permian Basin, the U.S. will increasingly export more oil and gas from port hubs along the Gulf Coast as the race to build new pipelines and terminals continues....

[IsailedawayfromFR]

Some, maybe even this guy, appear to just extrapolate current trends in production and rates to come up with conclusions like this.

I have serious doubts that the underlying technical abilities exist to do this extrapolation like the IEA is doing.

One needs to pay attention to the rock itself and where it exists.   Companies typically drill the best wells to begin with, then the well capabilities taper off as the rock is not as good to frac, the maturity level is not ideal, the liquids are not the most conducive to easy flow, etc.

Example of paying attention to the underlying technical premises is the extensive writeup then subsequent writedown in the Monterrey shale within just a few years.  There never was foundation to support that large amount of technical resources to exist to begin with.

I have thought for some time that sometime in the next decade we will exhaust the exploitable unconventional liquid horizons to an extent that the inevitable decline in keeping liquid production rates at high levels will occur.

Natural gas, not oil, is the big opportunity for decades to come.

And I remain unsure of what he means by a 'second wave of shale'.   It may be the abilities to move more fluids via pipelines for export but am unsure.

[Smokin Joe]

Some, maybe even this guy, appear to just extrapolate current trends in production and rates to come up with conclusions like this.

I have serious doubts that the underlying technical abilities exist to do this extrapolation like the IEA is doing.

One needs to pay attention to the rock itself and where it exists.   Companies typically drill the best wells to begin with, then the well capabilities taper off as the rock is not as good to frac, the maturity level is not ideal, the liquids are not the most conducive to easy flow, etc.

Example of paying attention to the underlying technical premises is the extensive writeup then subsequent writedown in the Monterrey shale within just a few years.  There never was foundation to support that large amount of technical resources to exist to begin with.

I have thought for some time that sometime in the next decade we will exhaust the exploitable unconventional liquid horizons to an extent that the inevitable decline in keeping liquid production rates at high levels will occur.

Natural gas, not oil, is the big opportunity for decades to come.

And I remain unsure of what he means by a 'second wave of shale'.   It may be the abilities to move more fluids via pipelines for export but am unsure.

I tend to be cautious of the IEA pronouncements, simply because I recall a year where their predictions of a worldwide glut crashed oil prices (but had failed to take into account East Asian demand). There are untapped resources out there, but some of the low hanging fruit and the juciest has already been picked. 

[IsailedawayfromFR]

I tend to be cautious of the IEA pronouncements, simply because I recall a year where their predictions of a worldwide glut crashed oil prices (but had failed to take into account East Asian demand). There are untapped resources out there, but some of the low hanging fruit and the juciest has already been picked.

As I have stated before, the Williston Bakken and 3Forks I view as low hanging fruit, along with the Eagleford. Niobrara is too sporadic and problematic for horizontal wells to stay in zone with the geologic movements occurring.

Permian has lots of oil but the abilities to exploit horizontally frankly are still being assessed.  The formations are not laid down as neatly as the Bakken so the target carbonates come and go within the shales.  Having good moderate viscosity oil is a plus, but what is lacking is the significant overpressure like the Bakken or the high gas oil ratios like the Eagleford, both of which can drive the liquids towards the wells.