Sunday, October 9, 2011

Just a Reminder: Dakota Oil Processing LLC -- Trenton Diesel Refinery -- Bakken, North Dakota, USA

Link here.

From their website:
Dakota Oil Processing, LLC is a privately held, development stage company formed for the purpose of developing, constructing, owning and operating a crude oil topping refinery near Trenton, North Dakota.

DOP intends to construct a 20,000 barrel-per-day crude oil diesel hydro-skimming refinery near Trenton, North Dakota. The Project will receive and process light sweet crude and sell No. 1 and No. 2 ultra low sulfur diesel (ULSD) refined as the primary products for the local and regional markets. The secondary products produced will be naphtha, residual fuel oil and elemental sulfur, which will be sold as commodities into various markets. Propane will be refined and separated and either sold or used as plant gas.
I don't know the exact location of the proposed refinery but it will no doubt be located very near the Trenton crude-by-rail oil-loading facility.  That's coming along very nicely. It appears track has been laid. It will be interesting to see the actual facility.

As far as I know, the refinery project remains on track.  [I went back to proofread this. No pun in intended in that last sentence.]

Coal to Liquid: China Using It; US Not -- Recipe for Disaster

It looks like I need to bookmark Institute for Energy Research.

Today alone there have been two great articles from that site.

This is the second one: China using coal to liquids technology, a technology that is not allowed in the US.
China is on a fast track to meet its electricity demand, but not through hydroelectric power or wind power, where it leads the world in capacity, but through coal-fired generation. China is now the home of the world’s largest coal to liquids plant that is reaping in the profits. Yet, the United States fails to learn from China’s lead. The United States has banned the use of coal-to-liquids technology because the greenhouse gas emissions over its life cycle will exceed those of conventional oil. This is despite coal to liquids costs estimated at $45 to $65 per barrel.Thus, U.S. military establishments will either continue to pay for imported crude oil or invest in biofuel technologies that have a long way to go before they will ever become competitive with conventional sources.
Whether one buys into the "greenhouse gas emissions" and "global warming," one has to admit that the playing field is not level. China has the advantage. The climate will do what it is going to do, and China will have the resources to react. The US will be playing catch up.

The Final Dot Completes The Picture -- Why Obama Will Scuttle the Keystone XL

This is THE reason I love to blog. Folks help me find the dots that complete the picture.

What industry would be hurt most by the Keystone XL pipeline? The railroad.

What famous democrat owns a huge railroad? Warren Buffett.

Where does Warren Buffett call home? Nebraska.

Where is ground zero for the Keystone LX. Nebraska.

Link here. When you get to the link, go to the first comment, or go direct here.

Spacing on Ward-Williston's Thompson 1, File Number 4383 -- North Dakota, USA

Elsewhere someone asked about the spacing on:
  • 4383, 115, Ward-Williston, Thompson 1, Northeast Foothills, Madison (not a Bakken)
The spacing is listed as "SW" by the NDIC which should indicate the southwest quadrant, or the southwest quarter of the 640-acre section. Thus, the spacing appears to be 160 acres.

Fiction Writing in Business

I see there is a book: Business Writing in the Digital Age available at

It appears there is also a small cottage industry of writing fiction for business. A reader sent me a particularly good example of fiction writing in business, link here.

Here are some of snippets from that story, with regard to GM's explanation of why they are not adding a second shift to build more Volts:
  • The company said Friday it has found ways to make one shift more efficient, so it can produce the same number of cars as two shifts. [Comment: I wonder if the union agreed to doubling output on one shift.]
  • GM said the change had nothing to do with Volt sales, which have been slower than expected. The company said demand for the car still is strong and it's sticking with plans to build 60,000 next year. [They sold about 4,000 this year.]
  • "This decision will significantly reduce costs, and has no impact on the plant's ability to make 60,000 Volts and Amperas," Lee said in a statement. "This approach is just a more efficient way to make the same number of vehicles."
  • GM engineers figured out a way to clear several bottlenecks that were slowing down the Volt plant and increase its assembly-line speed, the company said. For example, they were able to speed up the body shop, where the frame and other parts are welded together, by automating more tasks.
  • "Dealers are still clamoring for them," he said.
When I read the opening paragraph of the story in which GM said it found ways to make one shift more efficient, my cynical mind immediately thought: yes, hire non-union workers.

But I honestly was not going to print that. It sounded mean-spirited.

But then I re-read the post for typos and read closely the second to last data-point, and GM is doing just that. To improve efficiency, GM is hiring non-union workers, i.e., automating more tasks by outsourcing to robots.

I cannot make this stuff up. Great fiction writing, all the same.

Keystone XL: The Chinese Need To Buy It or TransCanada Needs to Shift It Ninety Degrees

The Chinese have bought a second stake in the Canadian oil sands, even as the US continues to debate the need for that oil.

The Keystone XL project is dead in the water, here in the states. TransCanada either needs to shift the pipeline 90 degrees, running it east-to-west, or sell the assets to the Chinese and let them do it.

This is not rocket science. TransCanada just wants to sell their oil; they really don't care to whom.

Peter Kiewit and A Bit of Irony -- Keystone XL

Connecting the dots, this is very, very interesting -- so much irony when you put the stories together, one could probably write a Hollywood movie script.

Two or three months ago I had not heard of Peter Kiewit, although everyone else who reads this blog had. Kiewit is to construction, what Halliburton is to oil services, or Cargill is to grain.

A subsidiary of Kiewit, Granite Peak, is developing several major projects in Williston, as part of the Bakken boom.

It turns out that that Kiewit has an engineering/information technology institute with their name at the University of Nebraska-Omaha/Lincoln, the Peter Kiewit Institute.

Recently the institute posted a paper at their website published by engineering students at the University of Nebraska regarding the Keystone XL pipeline. I would have thought the results would have been different. The results were picked by the mainstream media:
A University of Nebraska-Lincoln professor who analyzed the potential for accidents along the pipeline said that TransCanada had significantly underestimated the potential for leaks and spills.
John Stansbury, an associate professor of water resources engineering, said even if a Keystone XL pipeline failure leaked into a lesser tributary, that could harm a major river like the Yellowstone or the Missouri as spilled oil flowed downstream.

"If someone comes along and knocks a hole in the pipe beneath XYZ creek, it won't make much difference how deep it was beneath the Yellowstone," Stansbury said. "In my estimation, there's going to be spills and there will be some big spills, and they underestimated the frequency and underestimated the volume."
It should be noted that Nebraska has become ground zero in the nationwide effort to stop Keystone XL.

I sort of get a kick out of this. Early on, SecState Hillary Clinton supported the Keystone XL project but lately she has become more circumspect when talking about the project. I no longer know where she stands on the issue. Likewise, many Obama folks know, even if they are unwilling to admit it, that the Keystone XL is best for the nation at large. In fact my hunch is that the Pelosi crowd stands to make huge amounts of money on this project. It certainly looks like a tipping point has been reached: whether or not the project will go through. If it fails to go through, one can argue that administration folks who supported the project dithered too long and now the nationwide effort to stop it has become too big to fail.

And if the Keystone XL project fails to go through, the nationwide move to stop the project can thank the Peter Kiewit Institute for its help. The irony is that the institute is funded by a company that makes its money on these kinds of projects.

I still say TransCanada should shift the Keystone XL ninety degrees: lay it east-to-west, rather than north-to-south.

The Chinese have bought another interest in Canadian oil sands, by the way.

Update On the Holiday Inn Express, Williston, ND -- Bakken, North Dakota, USA

I should have photos up tomorrow.

One link here.

Best link here ... but back in January, 2011.
The estimated cost of the project is $9.5 million. Brutger Equities will be opening and managing the new hotel, which will be located at 415 38th St. West. Construction is set to begin in May and is set to be completed in January 2012.
For those interested, visit the Brutger Equities site, and click on "News." Brutgers has two news items, one dated October, 2009 (not a typo) and one dated October, 2008 (not a typo). The first was for a Days Inn in Cheyenne; the latter was for a Kingsway Estates in LeSueur, Minnesota.

At their website, one learns that Brutger Equities manages two hotels in Williston, both collocated near the airport: Candlewood Suites and HomStay Suites. Brutger says they will be opening a Holiday Inn Express in the first quarter of 2012.

And, indeed, when you go out to the site, it appears they will meet the deadline. There were construction workers out the site today, Sunday, and it looks like it will be closed in by winter.

A passing thought. I took a long walk around north Williston today (around the airport) and noted any number of construction sites with activity -- on a Sunday. My gut feeling is that if this was a work-to-right state, we would not see this much activity on a weekend. Activity slows down on Sunday in the Bakken but not by much.

Parts I, II, and III: Filloon's Series on Bakken Activity Moving to Williams and McKenzie Counties - Bakken, North Dakota, USA

Part III of Filloon's series on "Bakken activity moving to McKenzie and Williams counties."

Part II of Filloon's series on "Bakken activity moving to McKenzie and Williams counties."

The first part is here.

Of the many nuggets in these two articles, this was particularly interesting:
Kodiak will have a total of 110000 net acres in the Bakken/Three Forks. EUR for the middle Bakken wells in this purchase are estimated to be 650000 Boe. Rumors Kodiak will have cash issues because of this purchase are floating around. This created a very good buying opportunity, as the stock pulled back below $4/share. I do not believe Kodiak has any liquidity issues, as it just cleaned up its balance sheet. Kodiak plans to pay for this acquisition with cash on hand and increased borrowings from its credit facility.
I remember the missed opportunity of buying BEXP a couple years ago for similar reasons.

Folks Who Went to the Herald Evicted -- Bakken, North Dakota, USA

Link here.
Several tenants of Western Apartments — the Williston apartment complex where managers recently announced a rent increase from $700 to $2,000 per month — were given eviction notices last week, according the residents who live in the apartments.

Sanford said she and her husband have been in the apartment since last November, and have been good tenants, paying their rent on time. "I have a feeling that she is singling us out," Sanford said, adding the management saw her speaking to one of the seniors who spoke with the Williston Herald recently about the news of the rent going from $700 to $2,000 per month by next April.
Other items in the on-line edition of the Williston Herald today:

First published on Friday, the furor/backlash over bonus payment.
In a special meeting on Wednesday the Williston Area Chamber of Commerce Board decided to give Executive Director Kevin Paschke a bonus, that some say could be up to $25,000, for organizing last month’s Williston Basin Energy Festival.

The decision ignited a string of angry emails and discussion across town Thursday as several companies who are members of the Chamber were not happy with the estimated bonus amount, and that backlash apparently caused the Chamber Board to reverse its decision in a special meeting Thursday night.
The Williston Herald publisher and member of the chamber explained why she voted to take back the bonus -- it's available at the paid on-line Williston Herald edition.

Another editorial on landlords raising rent from $700 to $2000 overnight with the headline: it's not about "supply and demand." If the ability to raise the price from $700 to $2000 overnight on a two-room apartment is not about "supply and demand," I don't know what is.

An article about the new Busek development in Minot was also published in today's on-line edition of the Williston Herald, paid subscription. It's a very well-written, long article on the story. Here's the story from the Minot Daily News about a month ago, which I linked before.

List of Coal-Powered Plants That Will Close Due to EPA Regulations

As you go through this, think: JOBS. 

Link here.

This is probably the best database on this issue that I have seen anywhere. 

Data points:
  • The coal-powered plants that will close represent almost 10 percent of US total coal-generating capacity.
  • The closures are the equivalent of closing every coal-generating plant in North Carolina or Indiana.
  • The majority of states will be affected, some more than others.
 I won't link it again; I've posted the YouTube link many, many times on this blog; it's easy to find.

“So if somebody wants to build a coal-fired plant they can. It’s just that it will bankrupt them…”
– Barack Obama speaking to San Francisco Chronicle, January 2008