Official (Alberta) Oil Discussion Thread

[accord1999]

Originally Posted by Leeman4Gilmour

WTI is up, but WCS is still getting hammered.

https://oilprice.com/oil-price-charts

BNN Bloomberg has WCS price that seems to be more up to date.


https://www.bnnbloomberg.ca/oil

[Bill Bumface]

Originally Posted by crazy_eoj

Marginal cost of production is much higher today.

Yup, and that correlates directly the the energy intensity of marginal barrels today vs. then.

For every marginal barrel today, we are using significantly more energy to acquire it, thus making the net energy provided to the world of a produced barrel of oil lower than it was in that era.

Oil is effectively becoming less energy dense.

[crazy_eoj]

Originally Posted by Bill Bumface

Yup, and that correlates directly the the energy intensity of marginal barrels today vs. then.

For every marginal barrel today, we are using significantly more energy to acquire it, thus making the net energy provided to the world of a produced barrel of oil lower than it was in that era.

Oil is effectively becoming less energy dense.

While this is somewhat true, I think the much larger impact in Alberta in particular is increased taxes, fees, royalties, regulatory requirements, egress costs, etc. It all adds up.

[Bill Bumface]

Originally Posted by crazy_eoj

While this is somewhat true, I think the much larger impact in Alberta in particular is increased taxes, fees, royalties, regulatory requirements, egress costs, etc. It all adds up.

I would beg to differ.

Canada Oil and gas barrel production Cost, March 2016:

Gross taxes: $2.48
Capital spending: $9.69
Production costs: $11.56
Admin transport: $2.92
Total: $26.64

https://en.wikipedia.org/wiki/Price_of_oil

Yes, old numbers, but the bulk of the costs are in extraction and production, which are very energy intensive.

[crazy_eoj]

Originally Posted by Bill Bumface

I would beg to differ.

Canada Oil and gas barrel production Cost, March 2016:

Gross taxes: $2.48
Capital spending: $9.69
Production costs: $11.56
Admin transport: $2.92
Total: $26.64

https://en.wikipedia.org/wiki/Price_of_oil

Yes, old numbers, but the bulk of the costs are in extraction and production, which are very energy intensive.

Can't see any details of how they calculated those numbers, but I would assume a large portion of "production costs" may include what I was referencing in my previous post.

And regardless, aren't we are talking about the net increase in the proportion of these costs from 1999?

[Bill Bumface]

Originally Posted by crazy_eoj

Can't see any details of how they calculated those numbers, but I would assume a large portion of "production costs" may include what I was referencing in my previous post.

And regardless, aren't we are talking about the net increase in the proportion of these costs from 1999?

I think those costs are included for sure, I just highly doubt they are the majority of any of the other sub-categories.

And yes, the point I was trying to make is that a marginal barrel now is a lot more energy intensive than in 1999, globally.

[crazy_eoj]

Originally Posted by Bill Bumface

I think those costs are included for sure, I just highly doubt they are the majority of any of the other sub-categories.

And yes, the point I was trying to make is that a marginal barrel now is a lot more energy intensive than in 1999, globally.

Right I agree with that for sure.

I think my point was that Alberta, in particular, has seen a larger increase in the other costs versus competing jurisdictions which explains why you see the 'panic' from many of the domestic companies with the price drop.

Especially if you separate out oilsands which is really an outlier in many ways anyways.

[Bill Bumface]

Ah, I understand now, thanks!

Look at us, having a slight misunderstanding on the internet and not even insulting each other's mothers or bringing up Hitler on our way to resolution.

[SeeGeeWhy]

Originally Posted by Bill Bumface

I think those costs are included for sure, I just highly doubt they are the majority of any of the other sub-categories.

And yes, the point I was trying to make is that a marginal barrel now is a lot more energy intensive than in 1999, globally.

This is generally true globally, and acutely true in Alberta as our average barrel continues to weigh towards oilsands production.

Not only does it take more energy to surface that barrel, the energy content of the crude is lower than conventional light options.

The average barrel of oil put towards oil exploration in 1950 would yield somewhere between 50 - 100 barrels of useful output. Today, it is more like 10 - 20. In Alberta it is closer to 6. This is NOT a curve that reverses, and it is NOT a linear decline. This is in line with resources like Wind.

Dissipative systems like human civilization require a lot of energy to maintain, even more to grow or improve. The excess energy supplied by it's fuel sources go towards that build out. If more energy has to go towards energy collection, that is LESS available for everything else.

Modern industrialized civilizations require an energy return rate around 15. Any sources less than that require energetic subsidization from more abundant supplies. Oil is very much at the cusp of that reality and the oilsands are the perfect example - they are subsidized by natural gas.

[Flash Walken]

Originally Posted by SeeGeeWhy

This is generally true globally, and acutely true in Alberta as our average barrel continues to weigh towards oilsands production.

Not only does it take more energy to surface that barrel, the energy content of the crude is lower than conventional light options.

The average barrel of oil put towards oil exploration in 1950 would yield somewhere between 50 - 100 barrels of useful output. Today, it is more like 10 - 20. In Alberta it is closer to 6. This is NOT a curve that reverses, and it is NOT a linear decline. This is in line with resources like Wind.

Dissipative systems like human civilization require a lot of energy to maintain, even more to grow or improve. The excess energy supplied by it's fuel sources go towards that build out. If more energy has to go towards energy collection, that is LESS available for everything else.

Modern industrialized civilizations require an energy return rate around 15. Any sources less than that require energetic subsidization from more abundant supplies. Oil is very much at the cusp of that reality and the oilsands are the perfect example - they are subsidized by natural gas.

wonderful post

[Slava]

I think a double-meat sub is more expensive than a barrel of WCS ($7.47) at this point. Desperate times.

[burn_this_city]

Originally Posted by Slava

I think a double-meat sub is more expensive than a barrel of WCS ($7.47) at this point. Desperate times.

The price could go negative in AB once the tanks fill. Companies need to rapidly shut in production, we are way below cost here.

[Fuzz]

Originally Posted by Slava

I think a double-meat sub is more expensive than a barrel of WCS ($7.47) at this point. Desperate times.

Amazing that an entire barrel of oil is cheaper than 8L of milk.

[Envitro]

I see a conflict / attack in Saudi Arabia at oil infrastructure in the near future

[Tacopuck]

North America needs to temporarily ban the importation of foreign oil. CAN/USA/MEX can still export / import between each other.

[Envitro]

Originally Posted by Tacopuck

North America needs to temporarily ban the importation of foreign oil. CAN/USA/MEX can still export / import between each other.

This, exactly, is what is needed. We need to also be repurposing existing pipe and constructing new pipelines to support this.

[Mayo]

Originally Posted by Envitro

I see a conflict / attack in Saudi Arabia at oil infrastructure in the near future

Should be at Houston for recklessly expanding and putting us into this position - or the banks that allowed them to do it

[Khel]

Originally Posted by Tacopuck

North America needs to temporarily ban the importation of foreign oil. CAN/USA/MEX can still export / import between each other.

I was thinking this this morning, I'm not in O&G, is this even feasible?

[nik-]

It's not going to matter. So much oil is going to flood the no-demand market in the next weeks/months that that resulting glut will suppress prices for years.

It's over.

[Mayo]

Originally Posted by Khel

I was thinking this this morning, I'm not in O&G, is this even feasible?

Don't think it would work - too much complexity with downstream business - and too much oil produced between the 3 countries