Friday, April 18, 2014

What This Screen Shot Does Not Show

This is kind of noteworthy.

The screen shot below is the route system for Union Pacific Railroad.

Note that big white empty space where all the Bakken oil, all the Montana and Wyoming coal, and all of America's wheat is located. That big white empty space (from northern Minnesota, across both North and South Dakota, all of Montana, and most of Wyoming ... yeah, that space).

That empty white space has a lot of track, also. Just not Union Pacific.



Burlington Northern Santa Fe, owned by Warren Buffett's Berkshire Hathaway.

A Complete Lie -- The Poll

Updates

Later, 1:54 p.m. Central Time: it is unlikely that the decision will be the first thing on his mind after the election. That means one can safely assume another year goes by before a decision is made. One can safely say that the Keystone XL will not be approved in 2014, and if it is, it won't be by much. Regardless, this ensures that a) Cushing will remain under pressure to reach full capacity; b) a continued shortage of the "wrong" type of oil at the US refineries along the coast; c) increased OPEC imports of "heavy oil"; d) upward pressure on the price of oil; and, for the voter in November, e) increased gasoline prices; f) increased public demand for more oil production -- what's not to like? From Bakken investors across the US: thank you, Mr President! In fact.. I think this calls for a new poll -- do you think "no decision" on the Keystone is good or bad for Bakken investors?

Later, 1:51 p.m. Central Time: confirmed by The Wall Street Journal. 

Original Post

The poll can be closed asking whether President Obama would keep his word that he would provide a decision in "a couple of months" regarding the Keystone XL which he said on February 26, 2014, to the governors.

The poll: President Obama's alleged statement about a Keystone XL decision ...
  • was accurately quoted but was a complete lie (my real choice): 44%
  • was accurately quoted but was a bit of hyperbole, but not an outright lie (my "PC" choice): 10%
  • truthful, and he will approve the permit by July 4, 2014 (LOL): 10%
  • truthful, and he will deny the permit by July 4, 2014 (chuckle): 19%
  • was never made: 17%
I don't know if that adds up to 100% or not.

The reason the poll can be closed, from Don: "FOX news just reported that Reuters said the decision on XL pipeline to be with held until  after the election. This was at 12.06 p.m. Mountain Time. The news services have not carried it yet.

[I'm not going to take the poll down for the moment: it's too hard to figure out the format every time I put up a new poll.]

The timing of the announcement is: at 2:06 p.m. Eastern Time, just when everything is closing down for Easter Weekend/Passover. Not one news organization outside of Fox will report it in real time and by Monday, it will be "old news" -- not worth reporting.

Most transparent administration ever. 

For Investors Only -- From Yesterday? OKE, OKS Announce Increased Dividends; AthenaHealth Misses On Revenues

ONEOK increases quarterly dividend by 40% to $0.56 per share from $0.40 per share.

ONEOK Partners increases quarterly distribution to $0.745 per unit from $0.73 per unit.

AthenaHealth misses by $0.05, misses on revs.

Trading at new 52-week highs: AXAS, BHI, BRK.B, CLR, ECA, HAL, NFX, SLB, SRE, WIN, WLL. 

Is UNP looking to announce a 3:2 split this year? Agenda item at annual meeting -- increase outstanding share from 800 million to 1400 million.

Wow, BHI jumped $2.00; up 3%.

I'm not sure if these items were announced yesterday or today. 

Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read here or think you may have read here.  

Add Mexico City To The List Of Extraordinary Sites That Need To Ban Fracking ....

... experiences a 7.2 earthquake.

Update: also add a small town in Alaska -- no fracking. A 5.6 earthquake hits close to Noatak, Alaska.

Highlights Of This Week's Petroleum Report; Obama Halts Oil Production Off-Shore -- But We Already Knew That; The Red Queen Effect -- If You Don't Drill, Oil Production Depletes

Highlights of this week's petroleum report (some rounding):
  • average refinery input: increased by 276,000 bopd (to 15.6 million bopd)
  • refineries operated at 89% capacity
  • gasoline production decreased slightly last week;
  • oil imports increased by 1 million bbls last week, averaging 8.3 million bopd
  •  the previous four weeks, imports average 7.5 million bopd (only 4% less than last year)
  • total US crude oil inventories (including SPR) increased by 10 million bbls (to 394 million bbls)
  • crude oil inventories are above average range for this time of year
  • total gasoline inventories decreased slightly; near the lower limit of the average range
  • propane/propylene rose slightly, but near lower limit of the average range

WTI: $103.68 ($2.52 over last week's price; $12.45 above a year ago).

Average retail gasoline price is about 10 cents more than last year, but it has increased for ten weeks in a row.

Bottom line: importing more oil (significant increase) but refinery input increase minimal; refineries below 90% capacity; inventories increasing slightly; gasoline demand increasing; gasoline inventories near lower limit of the average range; price of gasoline trending up, but not significantly higher than one year ago.

With refineries operating at less than 90% capacity, imports increasing, and gasoline inventories barely keeping up, it suggests that refineries are "seeing" "wrong type" of oil.

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

Daily Caller is reporting:
Oil and gas production has stalled on federal lands for the third year in a row under the Obama administration, despite booming energy production on private and state lands, according to a new government report.
The Congressional Research Service (CRS) says that the share of oil and gas production coming from federal lands have plummeted from 2009 to 2013. Oil production on federal lands fell by 11 percent over this time period and natural gas production fell by 28 percent.
Federal onshore oil production fell for the third year in a row, while offshore oil production increased slightly — just enough to increase total oil production by 15,300 barrels per day in 2013 above 2012 levels.
But total federal oil production is still 316,800 barrels per day below 2010 levels of 1,975,100 barrels per day. The energy industry and federal lawmakers have long criticized the Obama administration for saddling energy producers with lengthy permitting times and environmental review processes.
“The CRS report clearly shows that where the federal government has the most control, on federal lands, it is suppressing development of the energy that all Americans own while preventing job creation and economic prosperity,” said Tim Wigley, president of pro-drilling Western Energy Alliance.
The share of U.S. oil production on federal lands has fallen to a five-year low, according to CRS, from 33.8 percent in 2009 to only 23 percent last year. The share of natural gas production on federal lands has also reached a five-year low of 15.2 percent last year — down from 24.9 percent in 2009.
If someone says their automobile has "stalled," it means one thing to me: it has stopped. In this case, under this administration, off-shore oil production has stalled for the third year in a row. 

So?

*****************************
A Note To The Granddaughters

In the second or third episode of "Cosmos," the narrative included a reference to Joseph von Fraunhofer.

On page 35 of Louisa Gilder's book:
... in the mid-eighteenth century, an inquisitive Scotsman, Thomas Melvill, burned table salt (sodium) and looked through a prism at the light produced, as Isaac Newton had once looked through a prism at white light and seen the rainbown spectrum. Melvill did not see a rainbow spectrum: he saw only a pair of yellow-orange stripes, surrounded by darkness.

Sixty-two years later, Joseph von Fraunhofer looked through a prism at the sun while calibrating surveying lenses for a military supply company. He noticed for the first time that there were dark lines across Newton's rainbow spectrum. The rainbow was, in fact, missing two chunks of warm yellow -- as if it were the salt spectrum turned inside out.

This coincidence went unexplored for almost half a century until Gustav Kirchhoff, a dapper little physicist who walked about the medieval halls of the University of Heidelberg on crutches, deduced why that chunk of yellow was missing: it had been absorbed by the sodium gas swirling about the sun. 
He was working with Robert Bunsen.

So, when you look at the light, through a prism, coming from the sun, you will not see the two yellow/orange lines one sees in the rainbow. Those yellow/orange "lines" are absorbed by sodium gas. 

At about that time, Bunsen and Kirchhof (or Kirchhof and Bunsen) discovered the new element, cesium, which they named. Cesium is one of only five liquid metals at room temperature: cesium, mercury, francium, gallium, and rubidium.

Interestingly enough, and I knew I could eventually get back to the Bakken if I read long enough, according to wiki: since the 1990s, the largest application of the cesium has been as caesium formate for drilling fluids.

In Canada, The Three Forks Is Known As The Torquay

For background to this long post, see this earlier post on Crescent Point wells in Canada, just across the border from North Dakota. 

From an earlier post:
From the April, 2014, dockets:
  • 22225, Crescent Point, Alkabo-Bakken, 8 wells on an existing 1280-acre unit, Divide
  • 22226, Crescent Point, Wildrose-Bakken, 8 wells on an existing 1280-acre unit, Divide
  • 22227, Crescent Point, Blue Ridge-Bakken, 8 wells on each of 2 existing 1280-acre units, Williams
  • 22228, Crescent Point, Ellisville-Bakken, 8 wells on each of 5 existing 1280-acre units, Williams
  • 22229, Crescent Point, Dublin-Bakken, 8 wells each of 2 existing 1280-acre units, Williams
  • 22230, Crescent Point, Church-Bakken, 8 wells an existing 1280-acre unit, Williams
  • 22231, Crescent Point, Little Muddy-Bakken, 8 wells on each of 5 existing 1280-acre units, Williams
  • 22232, Crescent Point, Winner-Bakken, 8 wells on each of 8 existing 1280-acre units, Williams
  • 22233, Crescent Point, New Home-Bakken, 8 wells on an existing 1280-acre unit, Williams
  • 22234, Crescent Point, Wheelock-Bakken, 8 wells on an existing 640-acre unit, Williams,
8 + 8 + 16 + 40 +16 + 8 + 40 + 64 + 8 + 8 = 27 x 8 = 216 wells
************************************

A reader, in response to the earlier linked article, sends this link to a PDF file on a Manitoba survey which provides additional insight, dated August 20, 2013, titled "Bakken-Torquay: Viability -- Analyzing the geology and variability of rock properties in the Bakken-Torquay Play in southwestern Manitoba to determine its viability as a future prospect. The presentation was prepared by Michelle Nicolas, petroleum geologist of the Manitoba Geological Survey. It is 43 slides long, so lots of information. Let's get started.

Where is southwest Manitoba? Minot, North Dakota, is about 70 miles south of the Manitoba-Saskatchewan-North Dakota trisection.

Slide 4: a stratigraphic map exactly like the one I have linked at the sidebar at the right. The Torquay Formation aligns directly with the four benches of North Dakota's Three Forks formation. The Torquay Formation is between the Bakken Formation and the Birdbear Formation. Canada's Torquay Formation is composed of unit 4, which overlies unit 3, which in turn overlies unit 2, which overlies the deepest unit 1.

In southwestern Manitoba, "Big Valley Formation" corresponds to North Dakota's Pronghorn member. The three members of the Bakken formation are the same: upper, middle, and lower.

The Big Valley is isolated to two areas in Manitoba, much like Pronghorn Sand is isolated in North Dakota.

The Torquay formation edge extends all the way to Russell, Manitoba, about 190 miles north of Minot. This is a huge geographic location, which also includes the Bakken.

Importantly, the Nesson Anticline in North Dakota extends ten (10) times farther into Manitoba.

Since 1950, four Bakken-Torquay producing areas have been identified, a bit north of North Dakota.

Slide 43: it is absolutely amazing how big the Williston Basin is. The thickness of the various formations is interesting:
  • Manitoba: very thin formaitons
  • maximum Torquay thickness: 45 meters
  • average middle Bakken: 6 meters
  • Saskatchewan: thick formaitons
  • average Torquay: 87 meters
  • average middle Bakken: 46 meters
  • North Dakota: thick formaitns
  • average Torquay: 90 meters
  • average middle Bakken: 46 meters
The depth of the formations vary; mature in Saskatchean and North Dakota; immature in Manitoba.
It appears the Manitoba more shallow areas will be rather unexciting, but the deeper areas are enticing, but relatively unexplored.

The Canadian Bakken-Torquay play still seems to be centered north and west of Divide County, North Dakota, in southeastern Saskatchewan.

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

The reader who sent me the link made the following observations.

Torquay is just north and across the border from Ambrose, North Dakota.

The side-by-side stratigraphic graphics are superb in the linked presentation above; I agree.

The Sinclair field in the far north of the play was interesting to note. "The maps that show well horizontals for development of the Sinclair field resemble those for our McKenzie and Mountrail counties. Interestingly, laterals run in an East-West pattern."

The reader noted what I also saw: the Manitoba Bakken-Torquay plays are more anomalous than on the North Dakota side of the border. That is one reason the North Dakota Bakken has been such a success: there are sweet spots, but in general, the Bakken appears to be economical across the four, five, or six county region.

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

At risk of losing this before Monday, here is the one well that would be coming off the confidential list today:
  • 24811, conf, Petro-Hunt, State of North Dakota 154-99-16B-2H, 
Over the weekend:

Saturday:
22995, conf, Abraxas,
25010, conf, WPX,
25822, conf, BR,
25912, conf, Zavanna,
26258, conf, CLR,
Sunday:
20257, conf, KOG,
24989, conf, Fidelity,
24990, conf, Fidelity,
25378, conf, XTO,
25899, conf, Hess,
25911, conf, Zavanna,
26462, conf, MRO,
26720, conf, Hess,
Monday:
18120, conf, BR,
23256, conf, SM Energy,
25995, conf, Cornerstone,
26257, conf, CLR,

Premature Post?

I have to chuckle. Just moments ago I posted in jest that Senator Reid will ban fracking because of a 3.3 earthquake reported overnight, near Currant, NV. I assumed there was no fracking in the state. That may have been premature. A reader sent me this link overnight (I'm now going through my e-mail): fracking hits home in Nevada; Noble energy is bringing fracking to Nevada.
In a state world-famous as a gold producer, Houston-based Noble Energy Inc. is looking deep underground to make big bucks from previously untappable oil deposits, spending up to $130 million to identify the possible rewards. The venture is still in its early stages, with company representatives saying they have yet to assess the true potential, but word is out it could be significant.
So is concern by critics. After Noble Energy for the first time in Nevada's history employed the practice of hydraulic fracturing at an exploration well east of Elko in March, environmentalists, tribal members and other critics cite concern over threats to precious water supplies, impacts to a sensitive landscape and the potential that earthquakes could be triggered in one of the country's most seismically active states.
Some insist state officials currently crafting new regulations to guide activities are overly influenced by the very industry they're tasked with regulating.
And so it goes. Same ol', same ol'.

A big "thanks" to the reader for sending me this link.

Good Friday -- Active Rigs Increasing; "Indian Environmentalists" Oppose Sandpiper Pipeline

Active rigs:


4/18/201404/18/201304/18/201204/18/201104/18/2010
Active Rigs188185210175108

No RBN Energy post today.

The Wall Street Journal

Obama: health-plan sign-ups at 8 million. Premiums for 2015 will plummet. LOL.

Ukraine talks gain; Putin keeps force on table. 

Economist known for pioneering work on slanted coverage in the news media wins teh John Bates Clark Medal, one of the profession's most prestigious honors.

For the first time, astronomers have discovered a world nearly the size of Earth orbiting a star wehere water might exist as a life-giving liquid.

As builders pivot from commercial to residential development, municipalities in many Western sttes face a problem: a drop in sales-tax receipts -- which they rely on to keep property taxes low -- and higher costs.

What's Barnes & Noble's survival plan? We've discussed this before.

Costs of GM recalls pile up: about $1 million per day -- providing loaner cars and insurance, to 30,000 US customers waiting replacement parts for their vehicles.

GE plans to sell of more pieces of its sprawling conglomerate: the only real winner for GE is industrial (oil services) and probably its financial services.

UnitedHealth's profit falls amid health-law changes. UnitedHealth is thefirst major health insurer to report its results for the latest quarter, the first period to reflect the Affordable Care Act.

Wal-Mart to launch money-transfer service. The new service will undercut Western Union and MoneyGram with lower and simplified fees.

Tax refunds may fuel retail windfall. Nearly 80% of the tax returns processed through Aprill 4 resulted in refunds averaging amost $3,000. That bodes well for the nation's retailers in the month ahead.

Natural-gas prices posted their biggest one-day gain in two month after a smaller-than-expected increase in US inventories reignited fears that supplies are slow. Folks are already looking ahead ot next winter. Global warming? We hardly knew ye.


The Los Angeles Times

3.3 earthquake strikes near Currant, Nevada. Senator Reid thinks this is God's wrath after the recent BLM stand-off; will ban fracking in response.

Los Angeles faces three more years of deficit.
.... lawmakers won't have the money to rebuild services cut during the recession until the 2018-19 fiscal year, unless new tax revenue is found or other programs are cut. That year, the city is expected to experience a $20.9-million surplus, he said.
... could limit Mayor Eric Garcetti's ability to expand core services during his four-year term. Garcetti has promised to take a "back to basics" approach to city government, proposing a budget with modest hikes in service — additional library hours, more code enforcement inspectors and an expansion of road repairs from 2,200 lane miles to 2,400.
Deputy Mayor Rick Cole said Garcetti is working on ways to generate savings for the city that offset Santana's projections in future years. The mayor is focusing on limiting workers' compensation costs, improving the city's purchasing process and increasing productivity through technology, he said.
Pretty aggressive agenda for a new mayor: expanding road repairs from 2,200 miles to 2,400 miles. Additional library hours. More code enforcement officers.

The Dickinson Press

Let's see if any Dickinson Baptist churches report any more suspicious kissing in cars. If there were any such stories I did not see them; at least not headline stories. I assume the kissing couple reported yesterday are "on the run."
 
Now it's "Indian environmentalists" who are battling the Sandpipe pipeline project. Nice map.I assume once they get their price, everyone will be happy.

Thursday, April 17, 2014

Third CBR Terminal Proposed For Washington State Coast

The Billings Gazette is reporting:
U.S. Development Group is seeking permits to build an oil terminal on the Washington coast that could handle about 45,000 barrels of crude oil a day.
The $80 million proposal at the Port of Grays Harbor is one of several in Washington that together would bring millions of barrels of oil by train from the Bakken region of North Dakota and Montana.
The increase in oil shipments by rail have raised concerns about public safety, the potential for oil spills and the ability of local communities to respond to accidents.
About 17 million barrels of oil were shipped across Washington state last year - mostly to refineries in Anacortes and Cherry Point near Bellingham. That number is expected to triple this year, according to U.S. Sen. Patty Murray, D-Wash., who chaired a congressional hearing Wednesday on oil shipments by train.
Anyone taking any bets? 

Feature Article On Harold Hamm -- Forbes

Link here to the article.

The article begins:
Two Scotches in, with seats on the floor of Oklahoma City’s Chesapeake Energy Arena, Harold Hamm is feeling good.
And why not? His hometown Thunder is spending the evening whupping the Philadelphia 76ers. Earlier Hamm announced big bonuses for Continental Resources employees, courtesy of record oil production.
And a judge’s ruling, revealed that morning, in Hamm’s divorce case suggested the energy tycoon would keep the Continental shares he already owned when he married soon-to-be-ex Sue Ann Hamm 26 years ago. With that chunk of stock, encompassing about $16 billion out of his $16.9 billion fortune, Hamm owns 70% of Continental.
It's been awhile since we've seen a feature on Harold Hamm. A big "thank you" to Steve for sending me the link.