Tuesday, September 30, 2014

Cove Point LNG Export Terminal Approved; Dominion Resources -- September 29, 2014

Comment: if one can get a LNG-export terminal approved this close to Washington, DC, on the Chesapeake Bay, it seems it would be very difficult to deny a permit elsewhere if all conditions were met. The only "new" condition I can think of is whether one of the approving agencies could question the "need" for yet another LNG-export terminal. But for me, this is the tipping point when it comes to LNG-export terminals in the US. 

Link here.
U.S. federal regulators on Monday approved construction of Dominion Resources Inc's liquefied natural gas export project in Cove Point, Maryland.
Cove Point is the fourth U.S. LNG export project to get the green light to begin construction from the Federal Energy Regulatory Commission.
It will be able to export up to 5.75 million metric tons of LNG a year when fully operational.
Dominion's facility is one of about two dozen projects that hope to ship a growing bounty of domestic natural gas to countries in Asia and Europe.
The Cove Point site, a little more than an hour's drive southeast of Washington, D.C. on Chesapeake Bay, boasts four large storage tanks and a pier built in the 1970s to import LNG from Algeria, underscoring just how much U.S. market dynamics have changed.
Construction is estimated to cost between $3.4 billion and $3.8 billion, the company said, adding that it has fully subscribed the marketed capacity of the project with 20-year service agreements that will see LNG shipped to Japan and India. 
Most interesting thing about this article? No one sent me the link; I didn't see it in any of the headlines of the "things" I routinely read; it was buried pretty deep at Rigzone. I easily could have missed it. US LNG-export licenses are becoming a "dog-bites-man" story. Interesting.
FERC has approved three other LNG export projects, all in the Gulf of Mexico: Cheniere Energy's Sabine Pass, the Freeport LNG Development project and Sempra Energy's Cameron facility. Some 14 more projects are pending with FERC with additional applications expected.
The project has been criticized by environmental groups. It lies close to hundreds of homes in the town of Lusby, a golf course and a state park, as well as the complex ecosystem of Chesapeake Bay itself, the largest estuary in the United States.

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His "Walter Cronkite Moment"

Senior citizens will remember the evening Lyndon B. Johnson lost the American voter on his Vietnam War. The story is apocryphal but the timeline was not.

With this op-ed in The Los Angeles Times, one wonders if we aren't seeing the "Walter Cronkite moment" for Barack H. Obama and the ObamaWar.
t's funny how President Obama is always talking about "I" and "me" whenever it makes him look good, but suddenly it's "they" and "we" when mistakes are made.
For instance, for years, Obama boasted about how he ended the Iraq war and how he withdrew American troops. "You know I say what I mean and I mean what I say," he boasted on the campaign trail in 2012. "I said I'd end the war in Iraq. I ended it."
Then, over the summer, as one Iraqi city after another fell to Islamic State militants, and as critics insisted that Obama's decision to pull all of our troops out of Iraq was partly to blame, he suddenly changed his tune, mocking the critics. "What I just find interesting is the degree to which this issue keeps on coming up, as if this was my decision [to withdraw U.S. troops]."
On Sunday night, the always-congenial Steve Kroft of CBS' "60 Minutes" noted comments by James Clapper, the director of national intelligence. Clapper said, "We overestimated the ability and the will of our allies, the Iraqi army, to fight."
"That's true. That's absolutely true," Obama replied. "Jim Clapper has acknowledged that I think they underestimated what had been taking place in Syria."
Eli Lake of the Daily Beast contacted a "former senior Pentagon official who worked closely on the threat posed by Sunni jihadists in Syria and Iraq," who was, in Lake's words, "flabbergasted" by the president's remarks. "Either the president doesn't read the intelligence he's getting or he's bulls—ing," the official said.
It's almost surely the latter.
Now it's "we" and "they" where it used to be "I." Or "Michelle and I." 

By the way, there was a great question on NRP today when discussing the ObamaWar: "Exactly who are we bombing in Syria?" Great question.

Monday, September 29, 2014

Time For A Good Sweating In The Oil Market -- Reuters -- Rigzone

Link here:
U.S. demand for petroleum products has experienced an unprecedented and broad-based decline over the last eight years as soaring oil prices have forced consumers to become more efficient and seek cheaper alternatives.
Consumption of oil-based products has fallen in every major category - from gasoline, diesel and jet kerosene to heating oil, fuel oil, petrochemical feedstock, petroleum coke and asphalt, according to the U.S. Energy Information Administration.
In every case, consumption has fallen in absolute terms and the decline is even steeper compared with the growth in population and the size of the economy since 2005. The extent of demand destruction varies from a relatively small reduction in motor gasoline and diesel to steep falls in the use of heavy fuel oil, petroleum coke, asphalt and oil-based products as feedstock for making petrochemicals.
The final two paragraphs:
In the next couple of years, there will be plenty more headlines about cancelled projects and producers struggling to break even, as well as signs of recovering consumption. For oil bulls, that is reason to hope prices will soon recover. But it is more useful to see it as a necessary adjustment and reaction after several years of exceptionally high prices.
Only lower prices can slow the shale juggernaut and high-cost offshore exploration while slowing consumption losses in the advanced economies and encouraging faster demand growth in emerging markets.
Unmentioned in the article are the high CAPEX wind, solar, renewable energy projects. But back to fossil fuel: I think "demand destruction" is huge. It will be interesting to see the changes in the US if oil drops "permanently" to $80/bbl or less. I'm thinking Dwight Eisenhower and the nifty fifties.

Why Peak Oil Predictions Haven't Come True -- The WSJ -- September 29, 2014

Today's WSJ has a special section on energy.

The front page, full-page article: why peak-oil predictions haven't come true:
To the peak-oil adherents, this is just a respite, and decline is inevitable. But a growing tide of oil-industry experts argue that peak oil looks at the situation in the wrong way. The real constraints we face are technological and economic, they say. We're limited not by the amount of oil in the ground, but by how inventive we are about reaching new sources of fuel and how much we're willing to pay to get at it.
"Technology moves so quickly today that any looming resource constraint will be nothing more than a blip," says petroleum economist Phil Verleger. "We adjust."
And then Mason shows up again (and some people say he's a "smart" peaker:
If M. King Hubbert were alive today—he died in 1989—would he admit defeat?
Probably not, says Mason Inman, who has written a biography of Mr. Hubbert that will be released next year. He argues that the recent shale boom is just a temporary respite in a long march downward. U.S. oil production could be about to hit a second peak, and then return to its terminal decline.

The production boom "makes things better for a while, but it doesn't change the long-term picture," Mr. Inman says.
If Mr. Hubbert were around, he might be dumbstruck by what he sees, Mr. Inman says. Mr. Hubbert, he says, advocated turning to solar power and energy efficiency to break the dependency on oil.
As for the power of innovation to reach new oil reserves, Mr. Hubbert believed that technology would help extend the limits of oil production, but thought its impact was exaggerated, Mr. Inman says. He felt people would invoke technology as a kind of panacea—which it isn't.
There will eventually be diminishing returns, Mr. Inman says, since oil is a finite resource, even though we don't really know its limits. "He would probably say, 'You guys are crazy to be drilling this so fast and using it up and pretending it's a solution,' " says Mr. Inman.
And Mason still doesn't have his own wiki page. 

Reason #3450 why I love to blog: one week ago I did not know who Mason Inman was; now I do, and my life is much richer. Not.

A Pimple At Risk Of Being Popped -- September 29, 2014

I track pipelines of interest here; one of the first I tracked was Enbridge #9 (#9A). I suppose I first blogged about Enbridge #9A two years ago. RBN Energy has talked about it at least once.

This is a story about the crude oil pipeline from Portland, Maine, to Montreal, Quebec, the Portland-Montreal Pipeline (PMPL), which is, to some degree, related to the Enbridge #9.

**********************************

Historically, ocean-going tankers brought crude oil to the Port of Portland (Maine) where it was offloaded and then by pipeline brought to the refineries in Montreal, Canada.

But now, foreign oil is not needed, and is more expensive than North American oil, so the port is seeing less crude oil traffic.

There is a chance that the Canadians could end up exporting their oil through the Portland, Maine, port.

At least that's how I understand the story.

From the linked story:
The rapid decline is tied to shifting market conditions in Canada that have put the operation of the pipeline and its South Portland marine terminal in jeopardy.
The pipeline’s sole remaining refinery customer in Montreal is in the process of weaning itself from imported crude oil in favor of less-costly supplies in North America.
The transition will be aided by work underway to reverse the flow of an oil pipeline that connects western Canada and Montreal through Ontario, called Line 9. These changes are on track to be done next year.
These events call into question the economic viability of the 73-year-old South Portland facility, which at its peak served several refineries in Quebec and Ontario.
The reason lies with the changing business practices of the last Montreal refinery, owned by Suncor Energy, a minor partner in the pipeline. Suncor can process 137,000 barrels per day. It’s making a transition from overseas crude oil to supplies from western Canada and North Dakota, and, to a lesser degree, off the coast of Newfoundland. It began making the switch last year via rail cars, but the big change will come next year when Enbridge Corp. reverses Line 9.
At a hearing last year before the National Energy Board of Canada on the Line 9 re-reversal, Suncor cited a consultant’s report that estimates an average $2-per-barrel price advantage for North American oil projected out to 2025. Suncor is a major producer of tar sands oil, so it’s not surprising that the company wants to use cheaper oil that it’s producing to feed its oil refinery. Suncor has indicated that the switch is critical to the refinery’s economic survival.
Various media reports in Canada have noted that both Suncor and the only other operating Quebec refinery, Valero Energy Corp. near Quebec City, plan to use only North American crude by next year.
The best bet for the future of the Portland-Montreal Pipe Line, said Auers, the Dallas petroleum consultant, is for its owners to reverse the flow to export Canadian crude through South Portland. A reversal has been proposed in the past, but it’s strongly opposed by environmental activists. The company has insisted there are no current plans to reverse the flow, but has said it’s keeping all options open.
The good folks in Portland, Maine, should visit Bedford, Massachusetts. 

What Some Of Us Will Be Talking About Tuesday; GE Closes Huge Deal; California Drought And Global Warming Not Related -- September 29, 2014

GE continues to focus on fossil-fuel: is reporting:
General Electric’s new high-efficiency gas turbines, fired at temperatures 200 degrees hotter than an erupting volcano, will see their U.S. debut at two gas power plants near Houston and Dallas.
GE is getting paid more than $500 million to build four of its most advanced gas turbines and other equipment to power two of Exelon Corp.’s planned combined-cycle gas turbine units at its existing gas-fired plants in Texas. Combined-cycle units are more flexible than plants that rely only on gas or coal.
GE’s new 440,000 horsepower gas turbines, each as powerful as about 1,000 Ferraris, use advanced air-cooling technologies to cut into electricity costs and carbon output, features that the Chicago power generator says will make its Texas power plants “among the cleanest, most efficient” units in the United States.
“Being mindful of increased water efficiency in drought-prone Texas, the new units will be cooled with air instead of water,” Exelon said in a written statement Monday. GE is also building two steam turbines and six generators for Exelon.
The new combined-cycle units will each add 1,000 megawatts to the Texas power grid, which means they can light up 2 million Texas homes combined. The four turbines combined could save Exelon up to $32 million a year in power costs.
Interesting:

$500 million / 1,000 MW = $500,000 / MW. What does wind and solar cost?
  • Solar: $3 million / MW
  • Wind: $2.5 million / MW
  • Natural gas: $865,000 / MW
The Wall Street Journal

Top story, front page: hundreds of thousands face health law subsidy deadline. The hundreds of thousands face a deadline Tuesday to reconcile their state income when applying for ObamaCare and the income reported to the IRS. Not gonna be a pretty picture.

Ford sharply cuts earnings outlook. And I thought they were doing so well. Ford cites "higher than expected costs of auto-safety recalls in the US and economic weakness in Europe.

Huge story: Encana will buy Athlon for almost $6 billion. By acquiring Texas-based Athlon Energy, Encana will acquire a large position in the Permian Basin.

Microsoft to give "sneak preview" of its new Windows software on Tuesday

PIMCO is in a race to keep investors after Bill Gross exits. Too big to fail?

A US judge declared Argentina in contempt of court.

Deep pockets: Bank of America will pay $7.65 million in penalties.

Venezuela's currency hits a new low. I wonder if Venezuela is still giving away free heating oil to Massachusetts?
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From The Los Angeles Times: early snow blankets Sierra Nevada, delighting drought-weary Californians, stunning warmists. 
An unusual early snowstorm blanketed the Sierra Nevada over the weekend, but the welcome sight isn't expected to last long as a warming trend spreads across California.
The first snow of the season dumped up to 3 inches along the Lake Tahoe Basin, forcing authorities to shut down California 108 at Sonora Pass, which remained closed Monday, said Tom Dang, a meteorologist for the National Weather Service in Sacramento.
It was the first time in several years that a storm had dropped so much snow on the Sierra this early in the year, he added.
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Global Warming

From The Los Angele Times (I think this article was previously posted, but it has a September 29, 2014, dateline): no evidence that California drought and climate change are linked -- study.
Global warming contributed to extreme heat waves in many parts of the world last year, but cannot be definitively linked to the California drought, according to a report released Monday.
The third annual analysis of extreme weather events underscored the continuing difficulty of teasing out the influence of human-caused climate change on precipitation patterns.
One of three studies examining the California drought in 2013 found that the kind of high-pressure systems that blocked winter storms last year have increased with global warming.
But another study concluded that a long-term rise in sea surface temperatures in the western Pacific did not contribute substantially to the drought. And researchers noted that California precipitation since 1895 has "exhibited no appreciable downward trend."
Overall, the report editors concluded that the papers didn't demonstrate that global warming clearly influenced the drought, which is one of the worst in the state record.
In the report, published in the Bulletin of the American Meteorological Society, 20 research teams explored the causes of 16 extreme weather events recorded in 2013, including torrential downpours in Colorado, heat waves in Korea and Australia and a blizzard in South Dakota.
That's refreshing. And reassuring. 

Reader With Question About Four CLR Banks Permts Expiring This Month -- September 29, 2014

A reader asked about the status of permits, 23790 - 23793. They were originally permitted in September, 2012; and, permits renewed in September, 2013. No activity yet; curious if CLR will renew the permits?
  • 23790, conf, CLR, Pasadena 2-2H, Banks, 
  • 23791, conf, CLR, Pasadena 3-2H, Banks, 
  • 23792, conf, CLR, Monroe Federal 2-2H, Banks, 
  • 23793, conf, CLR, Monroe Federal 3-2H, Banks, 
I doubt CLR would lose these permits. Banks oil field is a great field.

Paperwork often lags events; posting data to the NDIC website takes a bit of time. The wells are still shown as confidential on the GIS map server and the scout tickets.

Sited in this same section, just a few feet to the north of the proposed four-well pad is this well:
  • 22891, 947, CLR, Monroe 1-2H, t8/12; cum 209K 7/14;
And another well on 1280-acre spacing ends in this same section; the well is sited in the section to the south:
  • 21148, 809, CLR, Pasadena 1-11H, t7/12; cum 138K 7/14;
From a mineral owners perspective, I would be happy if CLR waited until all their new completion data was analyzed, to get the best possible well. It's possible CLR simply has more work than it can handle and is prioritizing based on available resources. It's also possible that CLR is still analyzing the data. This is a great field; they might as well optimize it.

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Wind

If you enjoy spin, you might enjoy this Prairie Business article on wind farms in North Dakota. I'm not going to go through it again, but I link/post it to remind folks of the relative cost of wind/solar/coal:
“A 500 megawatt project will cost about $1 billion when it’s done and we just can’t raise that kind of capital in South Dakota,” Johnson says.
He anticipates the project could be complete by 2018. The company, which is based in Colorado with regional offices in Texas and Minneapolis, has been developing projects in North America since 1997 but didn’t log its first North Dakota project until earlier this year with the purchase of the Border Winds Project near the Canadian border in Rolette County.
Construction began in June and is expected to be complete in October next year, when ownership will transfer to Excel Energy. T
he wind farm will be spread across 23,000 acres and will be capable of producing 150 MW of power from 75 turbines. The cost of the project is not being disclosed, but Morgan says Xcel Energy expects the project could reduce customer costs by about $45 million over its lifetime. 
The cost of the project is not being disclosed; isn't that interesting? That speaks volumes and suggests the cost ....

For comparison in cost:
  • Solar: $3 million / MW
  • Wind: $2.5 million / MW
  • Natural gas: $865,000 / MW
In this Prairies Business article, it sounds like the wind projects are over $2.0 million / MW, in line with other wind projects. New coal plants are in the $600K range. 

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For Newsaholics / Political Junkies

I am currently reading two books on the Kennedy assassination (Crossfire: The Plot That Killed Kennedy) and A Cruel and Shocking Act: The Secret History of the Kennedy Assassination.

I am not follow the conspiracy theory but the books are excellent resources to help understand the processes involved.

Meanwhile, I have just finished watching the first two full seasons of House of Cards on DVD.

The two books and the TV series really, really put The (London) Mail in perspective: Obama had accurate intelligence on ISIS before the 2012 election. It's pretty clear the president was disengaged from running the country these past two years, and things are now starting fit the timeline quite well. From The (London) Mail:
  • a national security staffer in the Obama administration said the president has been seeing 'highly accurate predictions' about the rise of the ISIS terror army since 'before the 2012 election' 
  • Obama insisted in his campaign speeches that year that America was safe and al-Qaeda was 'on the run' 
  • the president said during Sunday's '60 Minutes' program that his Director of National Intelligence had conceded he underestimated ISIS 
  • but the administration aide insisted that Obama's advisers gave him actionable information that sat and gathered dust for more than a year 
  • 'He knew what was at stake,' the aide said of the president, and 'he knew where all the moving pieces were' 
  • Obama takes daily intelligence briefings in writing, he explained, because no one will be able to testify about warning the president in person about threats that the White House doesn't act on 
Harvard trained him well. He can always say he never saw the briefings.

Eleven (11) New Permits In North Dakota; SHD Will Report A Huge Clarks Creek Well Tuesday;

Active rigs:


9/29/201409/29/201309/29/201209/29/201109/29/2010
Active Rigs187184190196143

Wells coming off the confidential list over the weekend, today were posted earlier; see sidebar at the right.

Eleven (11) new permits --
  • Operators: Hess (5), HRC (2), Corinthian (2), Enduro (2)
  • Fields: Alkali Creek (Mountrail), Tyrone (Williams), Souris (Bottineau), Newburg (Bottineau)
  • Comments:
Seven (7) producing wells completed:
  • 25673, 3,165, Statoil, Lucy Hanson 15-22 3TFH, t8/14; cum --
  • 26307, 847, Hess, LK-Bice-147-97-1201H-6, t8/14; cum --
  • 26791, 1,166, Hess, BB-Belquist-150-95-1110H-5, t9/14; cum --
  • 27023, 1,307, Hess, HA-Nelson A-152-95-3427H-4, t9/14; cum --
  • 27024, 1,074, Hess, HA-Nelson A-152-95-3427H-3, t4/14; cum --
  • 27091, 581, Hess, GN-Alice-158-97-1324H-1, t8/14; cum --
  • 27316, 490, Hess, EN-Joyce-LE-156-94-1721H-3, 4 sections, t9/14; cum -- 
Wells coming off the confidential list Tuesday:
26956, conf, CLR, Overloon 1-34H1, Ukraina, producing,
27040, see below, SHD, Thud 12-36H, Clarks Creek, producing, a huge well,
27152, conf, MRO, Cloon 14-32H, Reunion Bay, no production data,
27350, conf, Hess, GN-Willarrd-158-98-0508H-1, Rainbow, no production data,
27469, conf, Petro-Hunt, Moody 159-94-15B-22-4H, North Tioga, no production data,
27574, conf, Hess, EN-Jeffrey A-155-94-2734H-9, Alkali Creek, no production data,
27748, conf, XTO, Willey 31X-3F, West Capa, no production data,

Comments: SHD has permits for eight wells sited in that section; one 4-well pad; two 2-well pads; this is going to be quite a location for SHD. To learn a bit more about SHD, click here.

**********************************

27040, see above, SHD, Thud 12-36H, Clarks Creek:

DateOil RunsMCF Sold
7-20142899324058
6-201475360

Odds And Ends From The Bakken And Elsewhere -- September 29, 2014

Updates

Later, 6:18 p.m. CDT: with regard to the Simplot story below, a reader sent the following comment which I brought up here for easier access:
This is a very planned move by Simplot. It was announce last year that there would be 20,000 natural gas wells developed 70 miles west of Rock Springs, starting in 2016. This maske for a cheap and easy business decision for Simplot.
http://trib.com/business/energy/plans-for-wells-buoy-wyoming-s-oil-and-gas-future/article_f3d3ec28-41a5-566c-bde1-3009881dbe48.html.
From the linked article:
A series of Wyoming oil and natural gas project proposals which carry more than 20,000 planned wells are making their way through the study and permitting process.
The vast majority of the proposed wells are contained in only a handful of projects in western and central Wyoming, primarily targeting natural gas.
Each project proposal is likely to create hundreds or thousands of direct and immediate jobs and millions or billions in tax revenue for local governments. Each developed field could produce oil or gas for five decades.
"Five decades of production." In North Dakota they are drilling about 2,000 wells/year. If that holds true in Wyoming that's ten years of drilling.   

Original Post
Stories sent to me by readers today.

US poised to become world's largest oil producer, surpassing Saudi Arabia, this month or next. President Obama will, most likely, schedule a presidential press conference in Watford City next month. The first linked story was in the Financial Times five hours ago. VOAnews, quoting EIA, almost exactly one year ago , said the US would be the largest oil producer by 2015:
The International Energy Agency (IAE) says that by 2015, the United States will surpass Saudi Arabia and Russia as the world's biggest oil producer and is on track to become energy self-sufficient in two decades.

The IEA said Tuesday that for the next 10 years the recent U.S. and Canadian success with shale oil drilling and deepwater production in Brazil will reduce the role of the Middle East-dominated Organization of the Petroleum Exporting Countries as the world's most prominent oil producer.

But the Paris-based adviser to 28 energy-consuming nations said the U.S. position as the top world oil producer will end by the mid-2020s as resources diminish at the fields being tapped at the moment in the mid-country states of North Dakota and Texas. The IEA said Middle East countries will then provide most of the increase in the global oil supply.
Mid 20's? I doubt it.

The Casper StarTribune is reporting:
But some business leaders see signs of change in fertilizer maker J.R. Simplot Co.’s plans to build a $300 million ammonia production plant near Rock Springs. The ammonia will be used as a key ingredient in the fertilizer made at Simplot’s existing production facility 4.5 miles outside the southwestern Wyoming town.
Others see the development as a result of the fertilizer industry’s unique dynamics, namely its need for cheap natural gas and its rural customer base.
The pay-off for Rock Springs, and Wyoming, is potentially large. At its height, in 2015, construction will require 440 workers. The project is expected to generate more than $11 million in local tax revenue for Sweetwater County through 2016, according to company filings with the state. And 25 fulltime jobs are anticipated to be added once it begins operations in 2016.
Simplot has long bought ammonia for its fertilizer production. Now the company will be able to improve the efficiency of its operations by producing ammonia on its own, said David Cuoio, a Simplot spokesman. The new plant, which will produce 600 tons of ammonia daily, is expected to cut the company’s shipping costs, he said.
Natural gas is key to ammonia production.

And finally this story from The Washington Post. I normally don't post these stories; there are plenty of sites that will archive them. My response when I got to the end of this article, "So what?" There has been a huge alcohol problem in the Dakotas for decades, and if one takes the time to google the issue one will find the same problem with "meth" in the Dakotas. Colorado found one way to deal with the marijuana issue: legalize it.

[Later. After posting the link to the Washington Post story, I posted an update regarding SHD. It would be interesting for that same reporter to do an in-depth story on the background of the folks running SHD. I think there would be quite a story line there. One can spend one's life reporting stories like the one linked above (the Washington Post story) or one can write stories that show how folks overcame diversity to became highly successful (however one wants to define success); or stories on redemption. But a story that tells me drugs exist where there is billions of dollars being spent, is a "dog-bites-man" story. Okay.]

The SHD story can be found here and here:
  • 27040, see below, SHD, Thud 12-36H, Clarks Creek, producing, a huge well,
Comments: SHD has permits for eight wells sited in that section; one 4-well pad; two 2-well pads; this is going to be quite a location for SHD. To learn a bit more about SHD, click here.

Update On EPD's Fractinating Facilities Around Houston, TX -- September 29, 2014; NGL Fundamentals

Updates

Later, 4:00 p.m. CDT: a reader is wondering how y-grade is transported to the fractionator since different components have different monetary value. Hopefully a reader will provide more insight. My hunch is that there is a "black box" at the pad that measures the percentage makeup of the NGL. But I really don't know. Way beyond my expertise. But it's a great question. Wiki comes close to answering the question, but not quite (unless I missed it, which is possible). It's very possible, the value of the y-grade (and its components) is determined "after the fact," after it has been processed at the natural gas processing plant.
 
Original Post
Houston Business Journal is reporting
Houston-based Enterprise Products Partners LP will build its ninth natural gas liquid fractionator at its complex in Mont Belvieu that is just east of Houston.
The massive pipeline company is increasingly busy in the Houston region, already building the world's largest ethane export facility at the Houston Ship Channel, and also just completing this week the the first segment of the Aegis ethane pipeline between Mont Belvieu and Beaumont.
Enterprise's fractionators are used to separate ethane and NGLs like butane and propane from the natural gas, or methane. This ninth fractionator will have a capacity of 85,000 barrels a day and is expected to begin operations as early as January 2016, according to Enterprise.
Enterprise also said it has secured the required permits and emission credits for a similarly sized 10th NGL fractionator at the same complex. Upon completion of the ninth fractionator, Enterprise will have gross NGL fractionation capacity of 755,000 barrels a day at Mont Belvieu and total gross NGL fractionation capacity of approximately 1.2 million barrels daily. Enterprise will have 265,000 barrels a day of propane production capability at Mont Belvieu upon the completion of the ninth fractionator.
I would assume RBN Energy has discussed these developments; I can't recall everything RBN Energy has touched on but they have discussed the activity in the Houston and the Houston Ship Channel on many occasions and in great detail. A search of "Houston Ship Channel will bring you to several posts of all the activity going on there.

RBN Energy provides a great introduction to the NGLs:
Let’s start at the beginning – before the NGL products become NGL products. 
The majority of US natural gas liquids (NGLs) reach fractionation centers such as Mont Belvieu in the form of semi-processed y-grade. Traders do not trade y-grade and there is no posted price for it.  All you can do with y-grade is fractionate it into purity products. 
The value of y-grade is all in the purity products. So when you talk NGL trading, you are talking trading of the individual NGL products.
Recall that once fractionated, y-grade becomes five unique purity products; ethane, propane, normal butane, isobutane and natural gasoline. Unlike y-grade, each of these products has a specific market value and they are traded each day.  A lot.  The majority of those trades occur at market hubs where there is a critical mass of infrastructure – with the two biggest being Mont Belvieu, TX and Conway, KS.
Purity products are traded both physically (transfer from seller to buyer at a point within the physical trade location) and financially (via derivative transactions where the parties settle up against an index price, usually OPIS). 
NGL fundamentals can also be found here

A New Madison Oil Field In North Dakota? Cool, Clear Water -- September 29, 2014

This is really, really cool. Subtle, but cool.

A Madison update. A writer reminded me about the Madison with a recently reported well:
  • 27319, 600, Ballard Petroleum, Fines 24-19, t6/14; cum 9K 7/14; 
This well was a wildcat; it's now said to be in Chatfield oil field. It is a vertical well, drilled successfully, total depth of 4,700 feet, to the MC-2 Anhydrite. The main objective of the well was to test the Wayne Pay interval. It is located approximately four miles north of Glenburn, about 20 miles NNE of Minot. At the time it was drilled, it was in the "wildcat field of Bottineau County." The well was spud on February 27, 2014, and reached TD on March 14, requiring 15 operational days to drill, core, and test.

The "stratigraphic correlation chart" is located here. See also the North Dakota Geological Survey site. At that link scroll down/search "Wayne."
The Madison Group has been divided into a number of informal, wireline log-defined intervals (Harris and others, 1966; Voldseth, 1986). In ascending order, they are the Bottineau, Tilston, Landa, Wayne, Glenburn, Mohall, Sherwood, Bluell, Coteau, Dale, Nesson, Midale, Ratcliffe, and Poplar intervals. Hendricks (Hendricks-1988)subdivided the Ratcliffe interval into several subintervals, the Berentson, Alexander, Flat Lake, Charles C, Lustre, and Eggebrecht.
I did not find the Chatfield oil field on GIS map server. The scout ticket says the well is in the Chatfield oil field:
NDIC File No: 27319     API No: 33-009-02354-00-00     CTB No: 127319
Well Type: OG     Well Status: A     Status Date: 6/2/2014     Wellbore type: Vertical
Location: SESW 19-159-81     Footages: 660 FSL 1980 FWL     Latitude: 48.576280     Longitude: -101.181315
Current Operator: BALLARD PETROLEUM HOLDINGS, LLC
Current Well Name: FINES 24-19
Total Depth: 4700     Field: CHATFIELD
Spud Date(s):  2/27/2014
Pool: MADISON     
If this is a new oil field, it is the first new oil field since the Cottonwood oil field, to the best of my knowledge.

An IP of 600 compares favorably with any Bakken well, though the EUR will be much, much lessThat statement needs to be retracted; see comments below. But this would have been a relatively inexpensive vertical well.

Later: this is really quite exciting. Ballard has two more wells in the same general area, both on confidential. The Fines well is in section 19-159-81. The other two Ballard wells on confidential are 6 to 10 miles north in township 160-81.
  • 27703, conf, Ballard, Middaught 33-23, wildcat, 23-160-81;
  • 27704, conf, Ballard, Drovdal 13-2, wildcat, 2-160-81; 
If these are also good wells, we might start to see the minimum extent (north-south) of this new field.

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Later, see first comment below. As of this date, from the NDIC website, some selected formations, cumulative production, number of wells, and average production/well to date:
Bakken: 831,017,850 bbls / 7,353 wells =  113,017 bbls/well
Bakken/Three Forks: 3,590,399 bbls / 34 = 105,600 bbls/well
Madison: 939,049,431 bbls/ / 5567 = 168,681 bbls/well
Red River: 110,277,553 bbls / 736 = 149,834 bbls/well
Red River B: 149,294,668 bbls / 550 = 271,445 bbls/well
The current Bakken boom in North Dakota began in 2007. The heyday of the Madison wells was back in the 60's and 70's I believe. The Red River came a bit later but even now is producing some incredibly good wells.  (I could be very wrong on the relative timing of Madison wells vs Red River wells.)

The vast majority of Bakken wells are less than five years old. 

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A Note to the Granddaughters

I am really, really enjoying Judith Nies' 2014 Unreal City: Las Vegas, Black Mesa, and the Fate of the West. The book provides a superficial, but informative, history of Hopi/Navajo conflicts, the Mormons, coal, water, and the growth of Phoenix, Los Angeles, and Las Vegas in the 1950's. I first mentioned the book a few days ago. It is a short book, and so easy to read, one could read it in one setting, but it is so enjoyable to read, I wish it would not end, and that's why I'm reading it slowly. It reads like a very, very long New Yorker article.

I probably wouldn't have posted this, but I needed a music video to re-charge my blogging batteries.

This is not my favorite version, but it is said to be "vintage," and I'm a sucker for "vintage":

Cool, Clear Water, Sons of the Pioneers

I probably shouldn't post this. Spoiler Alert: this will ruin your memories of this song:

Cool, Clear Water, Gaither

For the archives:
Sounds like the 1976 - 1977 drought; I was living in California; the motto was "Shower With A Friend," and, yes, ....