Two Charts and Their Portent

Last week brought news that the Energy Information Agency (EIA) has reduced its estimate of recoverable oil from the Monterey Shale in California from 13.7 billion barrels to 600 million barrels. To put that in perspective, the U.S. consumes 6.9 billion barrels per annum and produces 2.7 billion barrels. The shortfall of production relative to consumption is made good by spending $400 billion a year-odd on imported oil. While the initial estimate for the Monterey Shale can be put down to hubris, there is another tight oil formation in which the EIA’s reserve estimate looks quite good given the vagaries of geological science. Specifically, their estimate of 3.2 billion barrels recoverable from the Bakken Formation centred on North Dakota.  Why we now know that the EIA estimate for the Bakken is in the ballpark is because of these two figures produced by a retired French oil geologist by the name of Jean Laherrere: First a short primer on logistic decline plots...(Read Full Post)