Very good post. BTW, what does the RRC show for the recent decline in Barnett Shale production?

FYI--Texas has shown an increase in annual natural gas production, because of the Barnett Shale, but we are still one-third below our 1972 peak rate, and it took four times as many wells in 2007 as 1972 to bring production up to two-thirds of our peak rate. This is the nationwide problem that we are facing, as we replace large conventional wells with generally lower volume unconventional wells, generally with a faster decline rate.

DownSouth, I tend to agree with you. I think the EIA often fudges the numbers, or often just makes wild guesses as to crude oil production. OPEC does not publish any official figures about production however they do publish production figures and inform us that they are according to "external sources". The figures the EIA publishes, for crude oil, average average about 1,500,000 barrels per day above what OPEC reports from their "external sources".

Occasionally one can find glaring errors in the EIA figures. In May, Saudi Arabia announced that they were increasing production by 300 thousand barrels per day. They said they had started increasing production on May 10th. They did not say when that extra 300 thousand barrels would be completely on line most expected it to be there by the end of May. However the EIA simply added the 300 thousand barrels per day from the beginning of May. The EIA showed Saudi production increased from 9,100,000 bp/d in April to 9,400,000 bp/d in May. However OPEC's "external sources" reported Saudi production increasing from 8,984,000 bp/d in April to 9,155,000 bp/d in May, an increase of 171 thousand barrels per day.

Ron Patterson

In June 07 alot of weirdness happened.

In the middle of June we got a 6 mb rise in gasoline inventories.

"Even as Summer driving season kicked off.

AP-updated 6:44 p.m. CT, Thurs., May. 17, 2007

WASHINGTON - Despite record fuel prices above $3 per gallon, more Americans will travel by car over the Memorial Day holiday weekend than a year ago, according to a survey by travel agency AAA."

And no one postulate then that demand destruction was occurring.

Along with 400 k per day in ethanol starting then(which was also denied).

I've been looking for documentation of the last reliable indicator/thermostat
being shot off the wall.

Thanx for that, DS.

James

DownSouth -

It is indeed curious!

While I am not sufficiently knowlegeable on how US government energy statistics are collected and manipulated, from the many years I spent in the environmental consulting field, I can safely say that a lot of the aggregated environmental data collected by the US government, such as air emissions, waste generation rates, and toxic materials inventories, are so loosey-goosey as to be virtually worthless, particularly when making year-to-year comparisons.

What typically happens is that someone fills out a questionnaire where he has to choose say between being in a category spanning 10,000 to 100,000 or a category spanning 100,000 to 1 million, and so he guesses. Then those thousands of questionnaires are compiled to come up with a grand total, usually given to within four significant figures. It looks like real data but it is not.

Now, I don't know whether that sort of thing is happening here, but one can't go too far wrong in distrusting any aggregated statistic generated by some US government agency.

Whenever there is unaudited voluntary data reporting, there is bound to be a bit of 'creativity' injected into the reporting process. Then if you have a government agency on the other end 'correcting' or 'adjusting' the data, you basically are left with garbage.

It raises the question, that maybe word-wide oil production figures are also falsified. Increases in production do not seem to result in increasing exports, even when you account for rising consumption in oil producer countries.

Geez, things just keep getting curiouser and curiouser.

I went to the Texas RRC Production Data Query to get a breakout of statewide casinghead gas vs. gas-well-gas to answer westexas' inquiry regarding these two. And now I'm getting different data than what I did yesterday doing the exact same search. Here are the results yesterday vs. the results today:

Month     Texas RRC     Texas RRC     Texas RRC      Texas RRC
         (statewide)   (statewide) (Barnett Shale) (Barnett Shale)
           8-18-08       8-17-08      8-18-08         8-17-08
Jan 07      17.48         17.47        2.27             2.27
Feb 07      17.91         17.89        2.35             2.35
Mar 07      18.30         18.28        2.47             2.45
Apr 07      18.30         18.28        2.54             2.53
May 07      18.47         18.44        2.64             2.62
Jun 07      18.71         18.66        2.73             2.70  
Jul 07      18.76         18.67        2.84             2.76
Aug 07      18.91         18.77        2.97             2.84
Sep 07      18.92         18.73        3.00             2.84
Oct 07      18.99         18.75        3.04             2.95
Nov 07      19.07         18.75        3.06             2.82
Dec 07      19.04         18.55        3.07             2.70
Jan 08      18.84         18.21        3.07             2.59       
Feb 08      18.90         18.20        3.01             2.49
Mar 08      18.64         17.89        2.85             2.36  
Apr 08      18.20         17.36        2.71             2.26
May 08      17.70         16.58        2.61             2.18

Although this doesn't substantially alter the point I was trying to make, since the discrepencies between the EIA data and Texas RRC data are still quite large, it nevertheless raises some questions about what in the sam hill is going on! Were there some overnight or early-morning revisions in the Texas RRC data? I've always believed that, when it comes to oil and gas production data, the Texas RRC data was like a bible. Could I be mistaken?

Fantastic Work! This does deserve a keypost. I do have multiple reasons for why a lie would have come out this summer and I will put them in another post.

Let us just assume for a moment that the EIA data is correct. Can we brainstorm the places this production could have come from and then try to figure out how to eliminate those sources? I propose this as "due diligence" just to be sure we did not miss something we will regret later.

Off shore was a prior suggestion. Does nat gas piped from the gulf get counted in the state totals? The EIA seems to have the gulf increases pulled out.

Associated (casing head gas) was another idea. Blowing off gas caps. (but it sounds like this gas is tracked separate so we know it was not this).

Can anyone suggest other possibilities?

I am not normally a conspiracy theory person. But the Bush Administration has shown that it is willing to state outright lies at the very highest level. They buried the Hirsch report, the Climate change impact report, the treasonous Plame outing, authorization of torture, WMD, Iraq buying yellow cake, etc.

Why might the EIA be pushed to lie? Why now? (and why did the head of statistics resign?)

The natural gas industry is in a pinch. Drilling costs are right under prices. EROI is falling. Ever rising prices are needed to keep up this rate of drilling. Any fall back in prices and company profits will tumble.

Industrial uses of nat gas are collapsing as prices rise. The commercial and home heating markets are also in danger with large debt balances at the end of each winter.

The natural gas industry needs another market with a higher willingness to pay. Enter natural gas used for transportation. Gasoline trades at well over $25.00 per mmBTU while nat gas is one third that much at $8.00 per mmBTU. If they can get the marginal buyer of nat gas willing to pay $25.00, well, problem solved.

However that involves convincing Congress to push for CNG. And that means convincing people that there is plenty of natural gas. Which is pretty tricky to do when production has been flat/declining despite a huge drilling increase.

So the nat gas industry releases a new report showing how unconventional natural gas is booming. What they fail to mention is that the "boom" would not even reach half of todays maximum production.

Here is what they claim:

“New technologies have allowed the rapid emergence of gas shales as a major energy source, representing a truly transformative event for U.S. energy supplies. American producers can clearly supply enough natural gas to meet today’s uses and become an economical source of transportation fuel in the form of CNG or greater supplies of electricity for plug-in hybrids for generations to come.”

http://www.cleanskies.org/

http://www.cleanskies.org/upload/MediaFiles/Files/Downloads2/finalncippt...

Here is commentary on the Navigant Report from the EIA

A new study from Navigant Consulting and the American Clean Skies Foundation (ACSF) suggests that the United States has ample supplies of natural gas in "unconventional" sources such as shale formations, coal beds, and so-called tight sands, which are geologic formations with low permeability to natural gas. The report finds the most potential in shale formations, estimating that the seven largest U.S. formations will yield at least 27 billion cubic feet (Bcf) of natural gas per day, equal to about 43% of the current natural gas consumption in the United States. That diverges from projections of DOE's Energy Information Administration (EIA), which predicts 26 Bcf per day of natural gas from all unconventional sources by 2030, even though tight sands are currently producing 5.8 Bcf per day and coalbed methane is producing 4.1 Bcf per day.

So this new "abundance" is really only 43%. When did getting cut in half mean abundance? Clearly this is just spin.

Putting a real downer on this whole planned marketing campaign is the reality that Barnett is now in decline. Millions of dollars of advertising are already being spent. A decline would really sour the unconventional gas party. Need to cover that up, and quick.

So the EIA changes the data and even writes a special press release saying how great production is booming.

Down South,

Sorry I’m still relatively new here & don’t want to step on any TOD procedures or conventions, but is it possible to make this a key post as a lot hangs on the credibility of EIA data not least the 2005 peak.

A request to all those who use the newfangled "preformatted text" method of posting tables: please make them as narrow as possible, otherwise some of us cannot see the rightmost part of the table. Depending on ones screen resolution, level of nesting of comments, etc, there may not be any way to make the column wider.

And to TOD technical gurus: if there is a way to make the main text column wider, especially when "zoomed in" in the browser, at the expense of the width of the columns on the left and right (which are blank once one scrolls well down into the page, a pure waste of screen area!), I would be grateful.

What is troubling in the Barnett Shale data is that rates declined since October of last year when natural gas prices were rising, and one would expect producers to produce more in a rising pricing environment…

Could it be that the smart money has already found the stinking fish? When I have a look at Chesapeaks share price... They are around 45$. Compared with 75$ just some 4 months back. That's a whopping 40% minus.

Fantastic post.

SailDog one thing I would like to add is that Gulf Coast injections and storage has been miserable all year and this is the producing region. It fits well with your RailRoad commission numbers.

Long time reader, first time poster.

Regarding the difference between EIA and Texas RRC: Could it be that the EIA is trying to forecast where the Texas RRC number will end up? Reading the EIA methodology, they use current data and try to estimate what future changes will be made to the data. If you look at the difference between RRC and EIA, it is biggest in near months and get smaller the more you go into the past. With time, the 2 series should converge if the EIA forecasting model works.

wow ! that is a bobmshell. as far as i know, this is a standard method the govt uses to collect data. i'm not so sure it is manipulation as much as a lousy model, i wouldnt put manipulation past this administration though.

if i read the govt's reasoning correctly, the individual state's data is too late and not accurate enough ? apparently the govt thinks it is ok to use bogus data as long as it is quick ?

cowboys, often shoot from the hip, or so i have heard.

wyoming data is available here:

http://wogcc.state.wy.us/

but the statewide data is currently not available. for all of 2007, wyoming produced 2.254 tcf. can anyone confirm if wyoming data is reported correctly by the eia ?

When I look at the EIA state data, it isn't just that Texas is increasing fairly rapidly. There are other states that are also increasing rapidly - Wyoming and Other States. I can understand Wyoming and Other States increasing because of the increasing production of unconventional. I agree that Texas does look strange.

I am going to try to contact someone at the EIA to see if I can get an explanation.

As you can see, the EIA figures began diverging from Texas Railroad Commission figures beginning in July of last year and have progressively grown farther apart.

If your concerns have a basis in reality, i.e. they are cooking the books, it may be instructive to note it was last June - August that the big reports of Peak Oil finally started hitting the mainstream.

This administration has lied about everything, almost literally, so SailDog may well be right.

Cheers