Of the 631 rigs running in the U.S. the week of August 26th, only 17 of those rigs were vertical rigs drilling conventional oil and natural gas prospects, the rest were HZ rigs working shale basins.
Conventional oil peaked in 1970 at 9.85 MM BOPD and in 2024 still represents 33% of total US production, currently declining at a rate of <4% annually. ALL of this conventional oil stays in America for refinery absorbtion and consumption by American consumers.
47% of all U.S. tight oil production has to be exported to foreign countries because of its poor quality. We can't use it in America and exports are the only way to get rid of it. We DO, however refine and use 4.8 MM BOPD here in our country.
There were NO crude oil and condensate exports from the U.S. until 2016. In 1970 the U.S. Trade Deficit was one half of what it is today, 2024.
Deduct oil exports to foreign countries from total U.S. production today and we produced less refinery-usable oil than we did in 1970.
U.S. shale oil declines at the annualized rate of 43%, 11 times faster than conventional oil from conventional resources.
I wish the average American could understand this.
Not oil related . Seneca vs Zuckerberg
Oil related .
https://finance.yahoo.com/news/shell-plans-20-cut-oil-105701554.html
Stephen, thank you; I stand corrected then. I might have otherwise stayed with the premise that only so much LTO can be absorbed by U.S. refineries, regardless of quality. Your description of its "usability" increases its future value in our refinery system here in the U.S., and as I have emplied, just because we can't use it all at the rate it is being extracted does NOT mean we will not be able to use it in future. All the more reason NOT to be exporting half of it.
Thank you for the use lesson. It was good ! I hope you are well, sir.
Even when we exclude the possibility of a sudden collapse in tight oil production—which is neither impossible nor improbable—we can still observe key trends. Tight oil, by its nature, is more volatile in production rates, and the declines in production tend to be much steeper compared to conventional oil. Given this pattern, it is reasonable to predict that when the time comes for tight oil to reach its peak and subsequent decline, it will exit the stage rather hastily.
Dear Mike,
It is rare I am not in agreement with you, but I would not call LTO poor quality. It is just different and is more akin to a volatile oil. The main issue is the lack of heavy distillate which is used in FCC units that make up a large part of the gasoline poll The other issue is the light distillate which is significant in quantity but usually rich in paraffins. That makes the heavy naphtha fraction not the best feed for catalytic reforming, which also makes up a large part of the gasoline pool.
As the US refiners are configured to make about 45% + gasoline LTO is a sub-optimal feed.
The jet and diesel from LTO is however very good, and the light distillate is also very good as steam cracking feed for petrochemicals.
I do fully accept you main point, in that the US is now exploiting its last major hydrocarbon reserves and it would have been better to manage production and conserve the resources for future generations, only producing enough LTO and gas to meet US domestic demand.
Britain did much the same with North Sea oil, much of which was light and paraffinic. It used to irritate me that the refineries were importing heavier crude and exporting the Brent, Forties and others. But I soon realised that the refinery configurations could only swallow part of the North Sea production, so it was exported just like US LTO, some even going as far as Korea.