Sunday, October 28, 2012

Wells Coming Off Confidential List Monday

RBN Energy: the series continues on master limited partnerships (MLPs); pipelines

Random comment on MLB: was it just me or did this seem to be one of the shortest, most uninteresting playoffs/World Series in quite some time (except for Detroit and SF fans)?

Active rigs: 186 (steady)

Wells coming off the confidential list tomorrow:
  • 21752, drl, ERF, Beluga 148-93-06B-05-3H, McGregory Buttes,
  • 22165, 709, Slawson, Athena 6-36TFH, Alger, t6/12; cum 19K 8/12;
  • 22558, drl, Triangle, State 154-102-25-36-1H, Rosebud,
  • 22657, 1,204, MRO, Judy Christensen 31-4H, Bailey, t8/12; cum 8K 8/12;

  • 19859, 1,102, Newfield, Chameleon State 153-97-16-21-1H, Banks, t7/12; cum 16K 8/12;
  • 21988, A, Whiting, Tiisto 44-7TFX, Sanish, t --; cum 13K 8/12;
  • 21989, 2,480, Whiting, Tiisto 44-7XH, Sanish, t5/12; cum 86K 8/12;
  • 21990, 688, Whiting, Tiisto 43-7TFX, Sanish, t4/12; cum 20K 8/12;
  • 22264, 276, Hess, EN-Patrick Joseph 157-94-2314H-1, Big Butte, t6/12; cum 19K 8/12;

  • 21751, 770, ERF, Humpback 148-93-06B-05-4H TF, McGregory Buttes, t8/12; cum 20K 8/12;
  • 22272, 471, CLR, Bismarck 2-9H, Brooklyn, t9/12; cum 10K 8/12;
  • 22284, 148, CLR, Olaf 1-7H, Wildrose, t7/12; cum 1K 8/12;
  • 22589, 490, Petro-Hunt, King 157-101-3B-10-1H, Otter, t7/12; cum 11K 8/12;

New permits: Through Sunday, October 28, 2012: on track for 2,574 new permits for 2012.

A Note to the Granddaughters
Monday Morning, 7:50 am, Update on Hurricane Sandy
Inland, about 5 miles west of Boston
I am at Starbucks. The weather has not gotten particularly bad yet. It is misting, and starting to rain lightly. Breezy, starting to get windy but no problem riding the bike. They say the gusts to 55 mph in this area will begin after 10:00 a.m. and last throughout the day.

Traffic was about 30% of normal. Starbucks with skeleton crew; very few patrons.

Another Neat Data Point: U-Haul Rates To/From the Oil Patch

Link here to CarpeDiem.

Several data points are provided at the link. This is just one:
From Chicago to Williston, ND: $1,879
From Williston, ND to Chicago: $876 
Ratio: 2.1

Carpe Diem With Another Nice Bakken / Eagle Ford Graph

Link here to CarpeDiem.

The chart [at the link] displays the daily crude oil output in America’s top four oil-producing states: Texas, North Dakota, Alaska and California over the last ten years (EIA data). Two states are pretty much out of the reach of the feds; two states are pretty much stymied by the federal government. This is not rocket science.

Here are some highlights:
1. After producing a relatively inconsequential share of the nation’s crude oil for many years (fewer than 100,000 barrels per day and only 1.5% of total domestic output), North Dakota’s oil production took off about five years ago when advanced drilling techniques including hydraulic fracturing started tapping into the vast resources of shale oil in the state’s Bakken region.  In just the last five years, the state’s oil output has increased seven-fold, and North Dakota is now producing more than 700,000 barrels of oil per day, which is close to 11% of total US output.
2. In December of last year, North Dakota was producing so much shale oil in the Bakken region that it surpassed California’s oil production to become America’s No. 3 oil-producing state, and then just three months later in March of this year the Peace Garden State surpassed Alaska to become the nation’s No. 2 oil-producing state.
Go to the link for the rest of the "feel-good" story.

As usual, the comments at the link continue to show that a lot of folks have no clue how this all happened.

Y'all remember all those folks who thought the Bakken was over-hyped? And I love this stat: North Dakota's 7,000 wells out-produce California's 60,000 wells.

Over Time, Cheap Energy in the US Will Widen The Delta in Growth: Europe vs US -- And We Might Being Seeing Some Evidence of It Now

Link here to Yahoo!News.
The latest earnings season had its fair share of short revenues, dimmed outlooks, and layoff announcements. But for a few companies and industry segments, there is a silver lining: energy costs are staying in line, thanks to the natural gas glut.

The natural gas advantage helps on two levels. Chemical companies, plastic makers, and fertilizer outfits use natural gas to make key ingredients for their products. Other companies, like metal workers and utilities, can use natural gas to produce energy for their operations or power customers.

"Our natural gas consumption has gone up 150 percent for this year versus last year so that's the kind of renaissance that's occurring in the energy industry that we haven't seen before," American Electric Power CEO Nick Akins said ...

US Coal Exports To Set New Record -- Breaks 1981 Record -- Nothing To Do With The Bakken


Q: At the turn of the century (1911, e.g.), how much coal did an American Line passenger steamship (such as the the SS New York or the SS Philadelphia) burn per hour?
A: "To produce the superheated steam to drive these engines, the ships' boilers consumed about 13 tons of coal per hour. -- Eugene O'Neill and Dat Ole Devil Sea, Robert A. Richter, c. 2004, page 69.  Passage from New York to Southampton (England) generally took "a week." 24 x 7 x 13 = 2,184 tons of coal per trip. 


October 29, 2012: an alert reader caught the Bloomberg error. It should be 113 million tons.

Original Post
Link here to Bloomberg.
U.S. coal exports are on track to break their annual record of 113 billion (sic) tons, set in 1981, according to the U.S. Energy Information Administration.
Wow, this really caught me off-guard, with all the stories this past year, how badly domestic coal companies were doing.

This tells me that:
  • domestic consumption of coal has historically far outstripped what we sent overseas
  • despite environmental efforts to stop coal exports, a fair amount of coal is still being exported (just one of many links for this source)
  • the insatiable demand for energy continues (perhaps spurred by the Japanese nuclear debacle; the Chinese need for energy) 
Good, bad, or indifferent -- it just surprised me: that US coal exports will break the record set in 1981 -- over 30 years ago. 

On The Montana Side of the State Line, 28 Miles West of Williston, Epicenter of the Bakken, Fracking Sand Terminal, Bainville, MT

Twenty-eight miles west of the epicenter of the Bakken: Bainville, MT
+ largest straight piece of continuous track between Wisconsin and the Bakken
+ neither Roosevelt County nor Bainville have any zoning laws to control growth
+ the Bakken: insatiable appetite for fracking sand  
= One of the most incredible stories in the Bakken: at least $30 million being poured into a town with 208 people and an annual budget of $250,000.
A developer is putting a huge fracking sand off-loading terminal in Bainville, 28 miles west of Williston.
By early next year, each week a pair of 40-car trains, and eventually 100-car trains, will pull weekly off BNSF’s main track onto Procore’s mile-long sidetrack, offloading tons of fracking sand.
At peak production, the Bainville facility could handle 1 million tons of sand per year, enough to fill 600 truckloads a day. But the volume will probably be half that, Milino said.
Back of envelope calculations:
1 million tons x 2,000 pounds/ton = a large number
a typical frack is now up to 4 million pounds of sand
divide that large number by 4 million pounds = 500 wells
2,000 wells/year are being drilled in the Bakken
The story:
By the time most townsfolk learned of the plans by Procore Logistics LLC of Calgary, Alberta, the land was purchased, the permits largely secured, and construction of the rail facility and nearby man camp were under way.
Procore is investing at least $30 million in this town, which has an annual budget of about $250,000. The project alone will more than double Bainville’s population within two years and send 150 trucks a day — and eventually as many as 600 a day — steaming into the nearby oil field.
To solve Procore’s “heads and beds” problem for its 350 workers, work has begun on an employee man camp on Bainville’s eastern edge. The camp will be a mix of pre-manufactured dorms with some multifamily housing, a dining facility, gym and theater.
And that's just the beginning.
It's an incredible story. Go to the link. It will give folks outside the Bakken some idea how fast things have moved, and are moving, in the Bakken.

This may be "the longest, straightest section of track between Wisconsin and the Bakken," but my hunch is there were other reasons Procore Logistics LLC of Calgary, Alberta (Canada) selected Bainville. Regular readers of the blog already know what I'm thinking. [Longest, straightest section of track? All kinds of track is being laid in North Dakota for crude-by-rail projects; I assume new track could have been laid anywhere between Minot/Bismarck and the North Dakota/Montana state line.]

The promoter of this new fracking sand off-loading facility says this was as close as they could get to Williston -- 28 miles. In fact, as oil activity moves back into Montana, Bainville is as close to the "new" Bakken epicenter as Williston was is to the "old" Bakken epicenter.

Another One To File: I Can't Make This Stuff Up -- Nothing To Do With The Bakken

Utah officials have given a Canadian company the green light to begin mining oil sands on a remote plateau in Eastern Utah without first obtaining a pollution permit or monitoring groundwater quality, an action that sets the stage for a possible court battle over the fragile region.
No groundwater permit? "Walloping white water, Batman!"

"Hold on, Robin. There is no water there."
Chris Hogle, an attorney representing the company, told the board that water quality officials and U.S. Oil Sands hydrologists had "traipsed" over the ... mine site for years searching for water.
"They didn't find any," he said. "What water there is is disconnected from the mine site and will not be impacted."
And so it goes. Link to Bloomberg here

Something tells me the fact there is no water there will make little difference to the feds.

Jobless Rate Probably Climbed in October Amid Lax Hiring; Frankenstorm Sandy Updates


November 10, 2012: a bit of trivia comes to light regarding Long Power Light Authority following Frankenstorm Sandy. The dots are starting to connect.

November 9, 2012: liquor drought; authorities want US military to come in to restore power.

November 9, 2012: still out of juice

November 8, 2012: after Sandy, no one lined up for wind turbines.

November 6, 2012: a nor-easter to follow Sandy.

November 6, 2012: Hurricane Sandy and the failures of blue-statism

November 2, 2012: Hurricane Sandy headlines at Drudge.

November 2, 2012: despite Sandy, CLNE was able to get 49 natural gas stations up and running.

November 1, 2012: instant Karma.

Later, 6:29 pm: MDW dots connecting. The other day the global warming story about an early snowfall walloping northern California and now a photo of a global warming winter snowstorm in Montana affecting Frankenstorm Sandy. At the link:
Officials are bracing for the worst: nearly a foot of rain, high winds and up to 2 feet of snow in the highest parts of the Appalachian Mountains from West Virginia to North Carolina.
Later, 6:16 pm: The original post was about the jobless rate, but I included a note to the granddaughters regarding Frankenstorm Sandy. Now more news is coming in regarding the storm. This is particularly interesting: schools in Belmont (west of Boston), where our granddaughters attend school, have just announced cancellation of school for tomorrow. Wow.  And then this: the extratropical cyclone could wreak havoc on the refineries in the northeast.
By 6 pm ET Sunday both the Delaware Bay and New York Harbor will be closed to tanker and barge traffic. This means that the refineries will no longer be able to receive crude oil or load out product.
Product outages can occur not only in the New York and Philadelphia metro areas but extend to Bridgeport, New Haven, Providence and Boston.
As this is written, all five refineries are operating. I expect that they will have to reduce crude processing rates by 40 percent in order to make it through until crude oil resupply resumes.
Original Post

That was the Bloomberg headline: jobless rate probably climbed in October amid lax hiring.

I'm trying to think of the other reasons that would cause the jobless rate to go up.

I can't make this stuff up.

The jobless rate climbing is hardly due to firings and layoffs (though that is part of the story) but the huge firings and layoffs over the past three or four years have cut employee rolls pretty much to the bone, I would think; there's not a lot of fat left in any industry for additional firings and layoffs, I don't suppose. I guess we might see some large disruptions yet in the banking business: Bank of America will cut 16,000 jobs by December. UBS will cut 10,000 jobs.

A Note To the Granddaughters

[Faux environmentalists / global warming fanatics said that Hurricane Sandy was an example of global warming. They did not mention that Hurricane Sandy was barely a Category 1 when it hit New England. No one mentioned the Great Hurricane of 1938 that was a Category 5 over the ocean and was a Category 3 hurricane when it hit New England landfall.]

The East Coast is awaiting the arrival of Tropical Storm Sandy. Or Hurricane Sandy. Or "Frankenstorm Sandy." Or Extratropical Cyclone Sandy.
After moving ashore, Sandy is expected to become an extratropical cyclone rather than a hurricane — but people in its path may not notice the difference. The National Hurricane Center said “it is important to note that this transition will not diminish the overall impacts of this dangerous weather system.”  -- New York Times
The difference between a cyclone and a hurricane is a) the number of syllables; and, b) one starts with a "soft" "c" and one starts with a "hard" "h." But other than that, those in the middle of one or the other would be hard pressed to tell the difference. 

Whatever. The Boston-Framingham radio station WROR is predicting winds of over 500 mph which will they say will result in some broken tree limbs and 18 feet of rain which will cause some local flooding in low-lying areas. And then something about a huge octopus....

So, I drove Miss Daisey up to the north shore (Gloucester-Ipswich-Plum Island) to see first-hand the enormity of the storm at noon, Sunday, about the time the storm was hitting the coast much farther south. It was (and still is) overcast, quite windy, with intermittent rain, but mostly heavy mist. The ocean (as seen from the shore) is full of white-caps, probably four-foot swells. And already causing significant beach erosion. Foreshadowing rising ocean levels due to global warming this next century.

We stopped in at one of favorite destinations, Mass Audubon's Joppa Flats Education Center, just outside Newburyport. No birds today; they are all hunkered down somewhere. We did see one fishing boat, a small trawler of some sorts, high-tailing it into safe harbors. (There's probably a better nautical word for "high-tailing" but I grew up in North Dakota where I didn't see many trawlers.) Speaking of which, our older granddaughter, age 9, wants to be a marine biologist when she grows up and live either in Arizona or North Dakota, where she says the houses are ten miles apart and people have large backyards. A long commute, no doubt, from her house to work.

How Big Is the Minnesota/Wisconsin Fracking Sand Story? Huge --- If This Is Any Indication

America's Sandbox

From a PGL presentation, February, 2013


October 29, 2012: CarpeDiem weighs in on same story.

Original Post
This story in the Minneapolis Star-Tribune has any number of story lines if you want to look for them. The tone of this story tells me that the appetite for sand for the Bakken and Eagle Ford is huge -- but we already knew that, and then all those gas wells elsewhere.

The sand in Wisconsin/Minnesota -- just a short rail trip to North Dakota. Funny how things work out.

Nothing to do with the Bakken, but I love the steel guitar:
Heart With No Companion, Leonard Cohen

Wow! Great Photo-Journalism of the "Gold Rush" in North Dakota

Huge "thank you" to a reader. I  had missed this one: link to Reuters here; October 23, 2012, story -- so current.