Energy update

Five more reasons Saudi Arabia is in a jam and American pipelines are overfull. There will be many more reasons on that site before all the drilling is done. Oh, check out that gorgeous sky. Photo by James Ulvog.

A few articles that caught my interest over the last months on energy issues:

  • Another new field with one and half or two billion barrels of oil that not even the energy wizards were sure was there – Oh yeah, what Peak Oil?
  • Saudi Arabia cracks down
  • Two billion a year is consumed for lifestyle support stipends paid to every descendant of the house of Saud
  • Pipeline capacity is constraint for otherwise expanding shale production
  • US hit crude export level of 1 million barrels a day this past summer

What Peak Oil?

7/12/17 – Houston Chronicle – Houston’s Talos Energy makes ‘significant’ find in Mexico’s waters – Two years ago the Mexican government allowed private companies to start exploring for oil in the country. The improved freedom for private companies to do what private companies do is paying off.

On 7/12 Talos Energy announced the “Zama-1” exploratory well has confirmed a new find which is estimated to hold between 1.4 billion and 2.0 billion barrels of oil-in-place.

Oil that can now be pulled from under the ocean to provide energy to a fuel-hungry world.

I don’t know what typical recovery rates are for deep-water oil fields. So let’s look at it this way: every 10% recovery will be something in the range of 140 million or 200 million barrels. That is oil the energy wizards didn’t know for sure was there and maybe only suspected.

Oh, and that is 1.4B or 2.0B barrels that Dr. King had no clue even existed. But then, lack of clues was a core competency to support his calculations.

Again I ask, what Peak Oil?

Saudi Arabia

9/13/17 – Wall Street Journal – Saudi Arabia Clamps Down as Crown Prince Consolidates Power – Word floating around among people inside the kingdom indicates that about 30 people have been detained in the last week, about half of them are clerics, most of whom have some affiliation with the Muslim Brotherhood.  Those targeted are reported to have large social media followings.

Speculation is this an effort Mohammed Bin Salman (referred to as MBS) to consolidate his power. Further speculation is King Salman, current ruler, will abdicate in favor of his son and is expected to do so this year or early in 2018.

All those detained are reported to be opposed to MBS’s opposition to Qatar.

9/11/17 – The Million Dollar Way – The Saudi Trillions – The London Review of Books – Article highlights a report in the London Review of Books which summarizes a classified cable leaked by WikiLeaks.

The leaked cable reports that every one of the descendent’s of Ibn Saud, the founder of Saudi Arabia receives a monthly stipend, which ranges from $270,000 for the most senior princes down to a mere $8,000 for the latest generation in the most remote branches of the royal family.

The leaked memo reported the following tally for descendants of the, um, rather prolific founder, along with their reported monthly income:

  • 60 – $270,000 – surviving sons and daughters
  • 420 – $27,000 – grandchildren
  • 2,900 – $13,000 – great-grandchildren
  • 2,000 – $8,000 minimum – great-great-grandchildren with that tally likely growing by the week

Just to be clear, that is $3.2 million a year for the first generation and a mere $96 thousand a year for the fourth generation.

Million Dollar Way calculates that in 1996 (the date of the above descendent tally) that would add up to something in the range of 2 billion a year. As in $2,000,000,000.

That is a lot of oil. As in 40,000,000 barrels a year, or about 110,000 bopd. Just for monthly living allowances.

US shale production

6/26/17 – Reuters – Clogged oil arteries slow U.S. shale rush to record output Developing sufficient pipeline capacity (mid-stream) routinely runs behind new oil production (upstream). The lag in new pipelines is a drag on production from U.S. shale. I’m confident when we see stats, it will be quite clear DAPL is helping a lot.

7/7/17 – Quartz – The US is exporting more than one million barrels of crude oil a day for the first time ever – In 1975 Congress banned the export of crude oil in an attempt to protect the US economy. Since 2012, oil production in the US has boomed. In 2016 Congress lifted the export ban.

In the last year, exports have taken off, reaching 1M bopd. Check out this graph of exports:



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