Thursday, December 13, 2012

Companies Investing Heavily in Natural Gas in Ohio

Link here to
A shale boom is under way in Ohio. Land has been leased. Nearly 190 wells have been drilled. Natural gas, oil and other liquids are being pumped from the liquid-rich Utica formation deep underground.
Now, Ohio is looking at billions of dollars invested in processing plants, pipelines and compression facilities — so-called “midstream projects” — to get those commodities to market.
Seven processing-separation plants for natural gas plus liquids and four pipeline networks are under construction in eastern Ohio. Their price tag, in excess of $7.2 billion, does not include interim facilities also starting to pop up in Ohio.

Oil Outlook in 2013 -- Forbes

Link here to Forbes.

More oil, less demand, lower prices.

That pretty much sums it up.

China: Another North American Opportunity -- Will Partner With Encana in the Duvernay

Link here to Oil & Gas Journal.
Encana Corp. announced a joint venture arrangement with Phoenix Duvernay Gas, a wholly owned subsidiary of PetroChina, to explore and develop Encana's extensive undeveloped Duvernay holdings in west-central Alberta.

Terms call for Phoenix to gain 49.9% interest in Encana's 445,000 acres in the Duvernay play for $2.18 billion (Can.), and Encana is the operator of the joint venture.
One can read more about the Duvernay; linked at the sidebar at the right.

Phillips 66 To Form A Master Limited Partnership

Link to Oil & Gas Journal.
Phillips 66 plans to form a master limited partnership with some of its transportation assets although the company said it’s still evaluating which assets will go into the MLP.
The energy stories just never seen to quit.

What a great opportunity for all Americans. 

UK Government Lifts Hydraulic Fracturing Ban

Link here to Oil & Gas Journal.
The UK government lifted a temporary moratorium on hydraulic fracturing, opening the way for exploration and development of unconventional natural gas just days after UK Chancellor George Osborne announced a push for gas development in his Autumn Statement.
Hmmm. See London Array for reasons why UK probably made this decision.

Williston Wire

No links; the Williston Wire is easy to subscribe to.

Williston's population could soar to 50,000 by 2017 -- NDSU study. Before the boom, the population was somewhere between 8,000 and 12,000 depending on any number of factors, including the source of the information.

Six leading energy companies joined together: Energy Outreach Williston, to manage the boom impacts on Williston in a positive manner: Baker Huges, Halliburton, Nabors, Oasis, Schlumberger, and Statoil.

School building bond referendum went down in flames; only 28% voted for the $55 million bond issue. The money was to build new schools and repair existing schools. Looks like there is an opportunity for Energy Outreach Williston.

Eleven (11) New Permits -- The Williston Basin

Bakken Operations

Active rigs: 182 (steady, but down a couple)

Eleven (11) new permits --
  • Operators: Samson Resources (6), CLR (3), Sequel Energy (2),
  • Fields: Hamlet (Divide), Burg (Divide), West Ambrose (Divide), McGregor (Williams)
  • Comments:  None
Wells that came off the confidential list today were reported earlier; see sidebar at the right.

About 38 wells listed as transferred from Helis to QEP. See Bakken deals at the sidebar at the right.

Wells coming off confidential list tomorrow:
21418, drl, CLR, Larson 3-21H, Sauk,
22771, drl, Hess, EN-Skabo Trust 155-93-0631H-2, Alger,
22806, drl, BEXP, Cheryl 17-20 3TFH, Banks,

Politics: Susan Rice Drops Out -- Last Post For Awhile -- Nothing in This Post is About the Bakken


December 15, 2012: Trial balloon -- Obama has picked Kerry.

Most Regressive "Tax" To Increase in Minnesota

Click here for

So, here it is.

Cue up Connie Stevens.

Minnesota's electricity rates will be raised 9% (numbers rounded).

And in 2013, likely to be raised another 10%.

No inflation.

Prior to 2006, there had been no rate increases for thirteen -- repeat, thirteen -- years. But now, this is the fifth rate increase in seven years for Xcel customers.

I could be mistaken but 2006 was about the time we first started hearing about "green energy" mandates. Prior to 2006, I assume most of Minnesota's electricity was produced by inexpensive North Dakota coal. Now, two new nuclear reactors. The story does not mention wind energy, unless I missed it. Actually, I am surprised there are two new nuclear reactors. Don reminds me that Minnesota does have a "25 by 25" campaign (25% renewable rate by 2025) which will further increase utility costs (solar is about 3x the cost of coal; I can never get a good figure on wind). But I digress.

The story:
The increase, Xcel said, is needed to recoup investments in its two nuclear power plants, counter a drop in electric sales and pay for other power plant and transmission upgrades and higher property taxes.
As part of the increase, all residential customers will pay an extra $2 for the basic service charge.
It is the fifth electric rate hike for Minnesota Xcel customers in seven years. The cumulative increases since 2006 have raised a typical customer's monthly bill $11.45, the utility said. The January bump goes on top of that.
The good news: the nine percent only amounts to a couple of six packs of beer, or a McDonald's meal for two, each month. For residential customers, this is not a big deal. For industry ... hey, North Dakota just got cheaper ... on a relative basis.''


Meanwhile, in Colorado:

Xcel Energy on Wednesday asked the Colorado Public Utilities Commission for a three-year, 3.6 percent rate hike to cover the cost of upgrading its aging natural-gas pipelines.

If approved, the new rates would take effect in August, increasing bills for the average residential customer by 2.1 percent in 2013 and by 5.8 percent and 2.8 percent in the subsequent two years.
And, so it goes. 

Slawson Blowout Reported Near Lake Sakakawea: On "The 13th"


December 14, 2012: The Bismarck Tribune reports the well "blew out" 6:00 p.m last night and by 9:00 a.m. this morning, was "under control." Correctly, the Tribune now reports the location of the well, "southwest" of New Town.  I am absolutely impressed with the roughnecks who control these things. Good on ya.

December 14, 2012: based on a comment received this morning, sounds like it was the Mooka well.  This well is south of New Town, not east as reported in the news media. As noted below, there is a rig on site at the Mooka. I may be premature in this, but it sounds like the EPA will send some folks out in the dead of winter with clipboards to research this, publish a report about two years from now, and life will go on.

Later, 9:41 pm: check this link to see how often mishaps in the Williston Basin occur -- and then this one on "the 13th."

Later, 7:01 pm: video of blowout at KX News (Minot). East of New Town. Five miles east of New Town there is a Slawson well on confidential status:
  • 22228, conf, Slawson, Vixen Federal 2-19-30H, Van Hook, east of New Town,
I'm not sure this is the one; on the NDIC GIS map server the well is shown as on confidential status, but no "rig" on site. But there are no other Slawson wells on confidential status "east" of New Town. There is a Slawson well with a "rig on site" south of New Town:
  • 20810, conf, Slawson, Mooka 2-29-20TFH, Big Bend, south of New Town
So, we'll see.
Original Post

Link here to The Bismarck Tribune.

Again, no permit number, no well name, .... just superb in-depth reporting.

South Texas Crude Oil Pipeline To Expand

From Yahoo! In-Play:
NuStar Energy enters into a long-term Pipeline and Terminal Services Agreement with ConocoPhillips (COP) that will allow expansion of NS's South Texas Crude Oil Pipeline System: The agreement will include a pipeline expansion project for NuStar that will allow NuStar to serve ConocoPhillips' (COP) growing production in the Eagle Ford Shale play, and new pipeline and terminal facilities will provide Eagle Ford producers with a cost-effective transportation alternative for their growing production. In addition, NuStar is already constructing a new ship dock in Corpus Christi that will support the North Beach Terminal under a long-term lease with the Port of Corpus Christi. Co expects to invest approximately $100 million to $120 million for these expansions, which are backed by a 10-year throughput commitment. The projects are expected to generate approximately $15 million in incremental, annual EBITDA once fully implemented.

Coal Shippers Struggling -- Not a Bakken Story

From: Yahoo! In-Play:
Genesee & Wyoming announces traffic in Nov 2012 was 75,048 carloads, a decrease of 5,406 carloads, or 6.7%, compared with Nov 2011: GWI's traffic in November 2012 was 75,048 carloads, a decrease of 5,406 carloads, or 6.7 percent, compared with November 2011. GWI's traffic in the fourth quarter of 2012 through November was 155,289 carloads, a decrease of 9,496 carloads, or 5.8 percent, compared to the fourth quarter of 2011 through November. Co's RailAmerica unit reported that its total freight carloads for the month ended November 30, 2012 were 70,877, up 1.9% from 69,541 in November 2011.
My limited understanding of the railroad industry is that Genesee and Wyoming is a large coal shipper.

Global Warming Getting An Early Start in Williston This Year; Smoldering Coal Veins In the Badlands

For September, 2012, according to The Bismarck Tribune:
Most of North Dakota was cooler and drier than normal during September, October and November, except for Williston and Dickinson.
Williston got 16 inches of snow, or 7.1 inches above normal, during that period. That compares with 5.5 inches of snow — or 3.4 inches below normal — during the same time last year.
Yes, note: "most of North Dakota was cooler than normal this year." Global warming?

Williston got 16 inches of snow during the last three months -- seven (7) inches more than normal!

When I was growing up in Williston, we generally did not see snow until late December. I remember many, many snowless Christmas eves -- or at most a light powder. As children we were desperate for snow on Christmas eve -- that was the only way to see Santa's sleigh tracks. Four, five, or six of us kids in a sedan driving with Dad, looking for sleigh tracks.

During the summer, Dad would take us to the Badlands so we could chase prairie dogs and see the burning coal seams.  One almost wonders if the faux environmentalists have ever measured the cumulative CO2 produced by these burning coal seams. Now that I think about it, I wonder what has produced more CO2 over the millenia: Harold's flaring or burning coal mines in North Dakota?
Deep smoldering coal veins that seemed to send a sulfurous breath from hell were once common enough in the Badlands for a campground to be named for them.
The Burning Coal Veins Campground west of Amidon has slumping earthworks where the vented coal veins burned underground for decades before finally burning out.
The phenomenon still occurs, but the U.S. Forest Service has a policy of mechanically extinguishing the coal veins where they’re burning on the Little Missouri National Grasslands in order to prevent grass fires.
Or cattle-produced methane

By the way, we never caught any prairie dogs.

A Christmas Note To The Granddaughters

Elsewhere they would tell me to take this post to the water cooler. It's going to be very, very sappy.  Cue Delilah.

There's a line in the linked song, "it doesn't feel like Christmas at all..." This is the fifth year since my retirement from the USAF and it's the first Christmas season for me that it doesn't feel like Christmas at all ... because I'm not celebrating it overseas.

I can't explain it. We returned from overseas in 1994 after 13 continuous years overseas, and then I spent another couple years overseas without my family in shorter segments. So, it's not like it was just last year. But maybe it took five years being away from 30 years of "buds" that it finally hit home.

Christmas overseas at fixed bases, temporary bases, bare bases, remote sites, --- too many, many stories. Too many memories.

1986. The first time on the Letterman Show. Wow.


2000: with the USAF Singing Sergeants.



2011: the 25th anniversary on the Letterman Show.

1995, 2000, 2005, and 2009.

Orchestrating the song.


One of my best memories: "everyone" singing along with Lee Greenwood when his surprise hit, "God Bless the USA" came out -- I was in the officer's club at Rota, Spain. Wiki says the song was released in 1984; that's about right. In 1984 I was in Rota, for the very first time in my life, having just arrived in Europe less than a eight months earlier. The US Navy treated Air Force folks very, very nicely. I was always impressed how well the US Navy always treated us. 

Huge Story on Fracking Water in the Bakken

Link to The Bismarck Tribune.
A temporary cease-fire in the war for Lake Sakakawea water was issued Tuesday by the U.S. Army Corps of Engineers.
The corps will approve its first surplus water agreement to pipe lake water to the oil field, opening the faucet to what could become a significant source of water for hydraulic fracturing of thousands of wells in the oil patch.
Larry Janis, division director for the corps’ Omaha district office, said in an email to Bob Shaver, who directs water appropriations for the State Water Commission, that the agreement was approved at corps’ headquarters in Washington, D.C. The paperwork will be processed in Omaha, Janis said.
The State Water Commission has been sitting on 20 applications for a total of 70,000 acre feet of lake water since the corps said nearly three years ago that it will begin charging a fee for storing the water and needed time to implement the storage policy, said water resource engineer Dan Farrell.
I did not read the "small print" so I do not know what is all about.  All I know is that if the Corps charges a fee for "storage" they are also liable when their "stored water" floods.

For newbies: the amount of water taken from the Missouri for fracking is minuscule. I've talked about that ad nauseam.

Economic Development in Dickinson: Two Hotels, Apartment Complex in West Ridge Center

Link here to The Dickinson Press.
Roers officials said Wednesday that deals to bring more retailers to west Dickinson are in the works, but details are under wraps until after the holidays.
West Ridge Center is the retail corridor in a 500-acre development near Interstate 94 Exit 59. Roers announced in June some of the stores and businesses that would be opening there, but has been tight-lipped ever since.
“I’m not at liberty to discuss them yet,” Roers Vice President Larry Nygard said.
Dickinson City Planner Ed Courton said that two hotels and an apartment complex have been granted building permits at the retail and residential development.

Reuters: Unemployment Claims Fall Sharply -- Thursday Morning Links -- Nothing On the Bakken -- For the Bakken, Scroll Up, Down, or Sideways -- Unemployment Claims: Lowest in .... Two Months!

WSJ Links

Note for newbies: I post links to the WSJ so I can read them later on the iPad. I subscribe to the print/on-line edition of WSJ, but I prefer the print edition and have not downloaded the app (if there is one) and have not registered for the on-line edition. For me, the WSJ links help put the Bakken in perspective. Unless you are interested in non-Bakken articles, I would skip this page. Some folks who write me about the "WSJ links" suggest they have trouble finding posts about the Bakken on this website because of these non-Bakken posts. Whatever.

Section D: great photo of an Apple iPad (simply called a table in the caption, but "we" all recognize it) on the dash of a supervisor driving on Logan Airport. Speaking of which, Google [$10 billion tax free off-shore] has just released its "IOS Maps" app with turn-by-turn directions. It will be a huge hit this Christmas. It downloads for .... free.

Section C: Yup, here it is, as reported in the MDW two days ago:
Warren Buffett's Berkshire Hathaway Inc. repurchased $1.2 billion in stock from an unnamed shareholder, an unusual deal for a company that typically eschews buybacks.
Berkshire bought the shares from a "long-time shareholder," allowing it to cash in on the holdings before the federal government raises taxes on such gains. 
Yup, the ObamaCliff. Another article on same story.

Section B: someone else decided it was worth reporting the number of companies accelerating dividends ahead of the ObamaCliff.

Google has come under complaints that it has quietly made porn harder to find. I cannot make this stuff up.

Section A: no link but the headline story is that the Fed is now focused on jobs, not inflation. Huge, huge story, especially for investors.

Doomsday: the states. States faulted over teacher pension shortfall. States with largest teachers' pension liability, rounded: Illinois, $45 billion; Ohio, $40 billion; Texas, $24 billion; Pennsylvania, $20 billion; Michigan, $18 billion; New Jersey, $16 billion; Colorado, $13 billion; Indiana, $11 billion; Kentucky, $11 billion; Louisiana, $11 billion. But Americans are content/satisfied. Four more yerars.

A quiet day.
Unemployment Numbers

At USA Today, happy days are here again:
The number of Americans seeking unemployment benefits fell sharply for a fourth straight week.
The Labor Department says weekly applications for unemployment benefits fell 29,000 last week to a seasonally adjusted 343,000, lowest level in two months. It is the second-lowest total this year.
"... the lowest in ... drum roll ... two months." I cannot make this up. Yes, happy days are here again. Will the Fed raise rates now that unemployment rates are the lowest in two months?

Then this stellar analyis:
Applications spiked five weeks ago because of Superstorm Sandy. The storm's impact has now faded. The four-week average, a less volatile measure, fell 27,000 to 381,500.
Before the storm, applications had fluctuated between 360,000 and 390,000 this year.
Reuters was also impressed with the plunge in first time unemployment claims.

I don't know about you, but there's not been much change; even "Sandy" seems to be background noise.

Miscellaneous: Medical School Cost. Beekeeping. Nothing To Do With The Bakken

This says it all. The headline:  Buffett, Soros Join List of Billionaires Calling for Tax Hikes They Won’t Pay. Masters of public relations. Grifters.


Ahead of the ObamaCliff: David Geffen is donating $100 million for 30 UCLA medical scholarships -- unprecedented gift, spokesman.
More than 30 incoming medical school students will get a full ride to UCLA's David Geffen School of Medicine thanks to a $100-million gift from the school's benefactor.
My calculator must be broken; maybe someone can calculate how much it costs to go to UCLA medical school based on the data provided at the link.

By the way, the US Department of Defense provides full medical scholarships, also. When I last checked the applications outnumbered available scholarships. Full scholarship for four years of payback, I believe, although that may have changed. One of the best deals in the US. What a great country.


On another note: wow, it's a gorgeous day in the Boston area. A bit cool, but sunny, no wind. Absolutely perfect for an early-morning bike ride.

I continue to read the best book I've ever read on beekeeping: A Book of Bees, by Sue Hubbell, c. 1988. I'm about two-thirds of the way through, and then this (what a great way to wake up to a beautiful Boston morning):
"... in a typical commercial operation in other parts of the country beekeepers will move colonies from, say Florida, where they have worked citrus flowers, to Ohio for spring dandelion blossoms and then on to the Dakotas, which is one of the best honey-producing sections of the country because of its long summer days and ample bloom of clover, alfalfa, and native plants."

Wells Coming Off the Confidential List Today Have Been Post; Newfield With a Nice Well

Link here for the wells coming off the confidential list today.

RBN Energy: Houville -- the big new NGL hub in the Marcellus/Utica.
No, this is not the Whoville located south of Mt. Crumpit within the mountainous high range of Pontoos.  And there is no Grinch in this Houville, at least during the 2012 Christmas season.  Instead, this Houville is the center of an emerging Marcellus/Utica based NGL hub soon to take its place among the largest in North America. 
Over the next couple of years, almost 500 MB/d of new fractionation capacity will be built in the region, and it will start filling quickly.  Sometime in 2016 or sooner, Houville will blast past Conway as the second largest Y-grade hub in the country, exceeded only by Mont Belvieu.  That’s a big deal.  So we need to spend some time understanding what is happening in this Houville, the big new NGL hub in Marcellus/Utica.
A hugely relevant essay in light of the WMB announcement this past week, in a joint venture to buy up the "remaining" midstream assets of Chesapeake.