Wednesday, June 12, 2013

US Crude Oil Production Sets Records -- WSJ

Link here.

The Bakken (North Dakota) was mentioned in the third paragraph.
U.S. crude-oil production grew by more than one million barrels a day last year, the largest increase in the world and the largest in U.S. history.
In the latest sign of the shale revolution remaking world energy markets, crude production in the U.S. jumped 14% last year to 8.9 million barrels a day, according to the newly released Statistical Review of World Energy, an annual compilation of industry trends published by BP PLC for more than six decades.
The wave of new crude, flowing in oil fields from North Dakota to south Texas, helped keep the global market adequately supplied and helped markets weather declining oil production elsewhere in the world. 
I wonder if Snopes or Jane Nielson will ever update their sites regarding the Bakken. 

Story lines -- this crude oil production record:
  • accomplished despite the administration's slow-rolling the permitting process for the oil and gas industry
  • accomplished despite harassment of the oil and gas industry (criminal charges for deaths of six or seven ducks; full immunity for wind turbines for unlimited kills of whooping cranes, eagles, hawks, ducks)
  • accomplished despite the fact that most federal land is off-limits to drilling
  • accomplished mostly on state and private land
  • accomplished mostly on-shore
  • accomplished despite huge marketing blitz for renewable energy sucking resources from industries that actually work
  • accomplished despite production choked back due to inadequate takeaway (Keystone XL killed by the president)
  • accomplished despite threats to ban fracking (sword of Democles hanging over the heads of venture capitalists looking at investing in shale)
  • accomplished even with the neck of one major under the administration's boot (wow, if that doesn't make me think of scenes out of Germany shortly before WWII), and that story is yet to play out, three years after the initial event
Yes, it's quite a success story. Much of the credit needs to go to guys like Harold Hamm, the face of the Bakken, always cheerleading their efforts, and always seeming to be in good humor despite adversity. Unlike the twenty or thirty renewable energy companies that received tons of money from the government before filing for bankruptcy (or simply disappearing), one can count on one hand, the oil and gas companies that have failed in the past few years; and none received bailouts from the federal government before going under.

Yes, this crude oil production record is quite a story. And it should only get better. 

Weekly Montana Update

Week: May 31, 2013 -- June 6, 2013

New locations
  • Denbury,  1 Red River well, Fallon County
  • CLR, 2 Bakken wells, Richland County
  • XTO, 1 Bakken wells, Richland County
  • Oasis, 3 Bakken wells, Roosevelt County
  • CLR, Richland County, 326, Bakken
  • Fidelity, Richland County, 47, Bakken
  • TAQA, Sheridan County, 55, Bakken
  • Primary Petroleum, Teton County, 10, Lodgepole
  • Somont Oil, Toole County, 0,
Transcribed from Montana DNRC; errors possible; see source (a PDF).

Sent to me by a reader. Thank you.

Explosion In Oil Pumping Field In Michigan -- Not A Bakken Story

WLNS is reporting:
LEONI TOWNSHIP, Mich. (WLNS) - Fire crews are headed to what is being called an explosion at an oil pumping field in Leoni Township in Jackson County. The scene is reportedly near Portage and Dorrell roads, east of Jackson. It happened shortly after 6p.m. Wednesday. The fire has been put out. At least one person has been injured.
Thank you to a reader for sending this my way. 

Thirteen (13) New Permits -- The Williston Basin, North Dakota, USA; ~ 100 Wells Transferred From Sequel to Remuda; Whiting With A Nice Well

Active rigs: 187 (no change)

Thirteen (13) new permits --
  • Operators: Fidelity (3), Whiting (3), Hess (3), BR (2), OXY USA, EOG
  • Fields:  Little Knife (Billings), Stanley (Mountrail), Green River (Stark), Corral Creek (Dunn), Parshall (Mountrail), Robinson Lake (Mountrail), Timber Creek (McKenzie), Arnegard (McKenzie)
  • Comments: Nice to see OXY USA and Fidelity with new permits
Wells coming off the confidential list were posted/tweeted earlier; see side bar at the right.

Producing wells completed:
  • 23221, 475, CLR, Rennerfeldt 2-30H, Brooklyn, t5/13; no data; 4-section spacing;
  • 23869, 1,063, Whiting, G Bergstrom 31-13H, Dollar Joe, t4/13; cum 5K 4/13;
  • 23870, 793, Whiting, Kaldahl 34-12H, Ray, t4/13; cum 5K 4/13;
Approximately 100 wells were transferred from Sequel Energy to Remuda Energy.  It looks like they were all in Bowman County, and were from the very early days (permits as old as #03302) as well as some relatively recent wells (permits as recent as #16025).

Wells coming off the confidential list Thursday:
  • 23771, 193, Hess, RC-Svihl 140-95-0706H-1 Davis Buttes, t3/13; cum 13K 4/13;
  • 24164, 898, Enerplus, Nimbus 149-94-33D-28H, Eagle Nest, t4/13; cum 11K 4/13;
  • 24342, 2.823, BR, Waterton 34-32MBH, Keene, Three Forks; no production data;
  • 23616, 964, Fidelity, Bauer 25-36H, Green River, t12/12; cum 45K 4/13;

The President Doubles The "Carbon Price" Overnight -- From About $20 To About $40/Metric Ton

Bloomberg is reporting:
Buried in a little-noticed rule on microwave ovens is a change in the U.S. government’s accounting for carbon emissions that could have wide-ranging implications for everything from power plants to the Keystone XL pipeline.
The increase of the so-called social cost of carbon, to $38 a metric ton in 2015 from $23.80, adjusts the calculation the government uses to weigh costs and benefits of proposed regulations. The figure is meant to approximate losses from global warming such as flood damage and diminished crops
Farmers should make out like bandits. Wahoo! Especially farmers in Texas.

More trouble for the Keystone XL? And that's just the beginning.

It looks like it's easier to double the "carbon tax" than it is to raise the minimum wage.

The real price could be as much as $300/metric ton.

As usual, numbers are rounded.

Cue up Connie Francis.

Tweeted/Facebook: Senator Hoeven, ND, Says The State And Federal Government Are Looking At How To Streamline Permitting Across BLM In The State

Link here will take you to a big photo and a small caption at Facebook. But those are the tea leaves.

This link will take you to The Williston Herald where it is being reported:
Sen. John Hoeven (R-N.D.) called a meeting of the Bakken Federal Executives Group a step forward in streamlining federal permits. 
The meeting of the group was a direct result of Hoeven’s conversation with President Barack Obama, which the senator said was mainly a meeting to push the president on the Keystone XL pipeline.
After pressing Obama on the pipeline and permitting, he was contacted by Heather Zichal, an energy assistant to the president about improving the Bureau of Land Management (BLM) permitting for the Bakken and North Dakota.
“We need to get permitting approval faster,” Hoeven said in a phone conversation with the Williston Herald. “Regulation and red tape is holding up the economy. There’s too much regulation across the board.”

The Downspacing Revolution In The Bakken -- Richard Zeits

At SeekingAlpha, Zeits is posting:
On June 10, Triangle Petroleum, a small-capitalization Bakken operator, reported its first quarter fiscal 2014 results and provided operational update. Some of the operational insights discussed by the company are quite notable.
The most important is the confirmation of 160-acre downspacing feasibility in the deep portion of the Basin. The announcement may be a bellwether report which front runs a wave of downspacing test result releases by several larger operators expected later this year and in 2014.
Triangle is one of the first operators to report results of a high density drilling test in the Middle Bakken. According to the company's press release, its recent downspacing test indicates potential for 6 - 8 Middle Bakken wells per 1,280 acre spacing unit, which is equivalent to 213-160 acre density, "with no communication."
The "no communication" statement by Triangle is quite important. It suggests that there is little or no loss in well productivity and economics due to tighter development spacing. The positive downspacing resolution, if confirmed by further production history and tests by other operators, could essentially double well inventories in the most productive areas in the play, translating to significant economic value.
Disclaimer: this is not an investment site. Do not make any investment decisions based on what you read here or what you think you might have read here. 

As The Date Gets Closer, Expect Illegal Crossings To Continue

Folks from south of the border who have dreams of becoming US citizens are taking note of the Congressional hearings and the immigration law. The immigration law will, no doubt, have a date by which illegal immigrants in this county will be eligible to become citizens rather than be hounded or prosecuted by the law. But the "low-information" crowd -- as is now the popular phrase -- will not pay attention to that date. They feel comfortable that if they are on US soil on/or before the bill is signed, they will be eligible.

One would expect illegal crossings to increase, and that is exactly what The Fiscal Times is reporting:
illegal crossing are up 9 percent.

Forty-Eight Wells Per Spacing Unit -- Lynn Helms

Yesterday it was noted that Lynn Helms had said that in the better Bakken, it might take 48 wells per spacing unit. I had not seen the source for that statement.

Another reader was gracious enough to provide the link (see below). This is an incredible briefing provided back in January, 2013. I am amazed that the regional print media did not pick up on this. If any of them did, I missed it. Forty-eight wells/spacing unit in the better Bakken is simply staggering, and when this does not get a headline in the regional media it speaks volumes about local coverage of the Bakken. It really does appear that most folks are focused on that 10-minute wait for a waitress to meet and greet them at a coffee shop.

It's a very, very long presentation, and one can start anywhere to pick up on incredible / staggering data points.

Lynn Helms on the Bakken, EGC, 2013

But start at 22:40 for some interesting data points. At this point, Mr Helms is addressing fracking concerns, and shortly after that he will discuss pilot projects this summer to test 24 wells and 48 wells/spacing unit (disclaimer: there may be typos in the notes below -- listen to the video to confirm; not verbatim throughout; being provided for a couple of reasons):

".... we have essentially infinite capacity for wastewater in the Dakota formation. The only place that we have ever seen the pressure increase in the Dakota (formation) was in Glenburn  and that was after we had put in over 20 million barrels of water into a single well...

.... beneath that ... nine layers of pure salt...

... and then the Bakken ... one cannot fracture the salt formations ... physically impossible to fracture the salt formations...

... earthquakes ... our water disposable is three miles above the earthquake zone... elsewhere they were pushing water into layers at the earthquake zone ... those states (Arkansas and Ohio) learned and have quit those projects ...

.... 640-acre spacing in the Parshall ... 1% of the surface area....have gone from 10% of surface area required for vertical wells to less than one-half of 1% for horizontal wells in the Bakken

.... surface locations on east-west corridor ... using less than one-half of 1% of the landscape....

.... Sanish field...that's the future of North Dakota oil industry ....

... the pattern ...

... the future....

... five productive layers .... middle Bakken and four benches in the Three Forks....

... in "much" of the Bakken, each one of those layers needs to  have 4 to 5 wells placed in it ...

... one operator this summer, first test, two 1280-spacing units and put 24 wells in EACH spacing unit, off one pad, if possible, at most, two pads, with 24 wells on it. The busiest pad right now is a 14-well pad southwest of Williston ... imagine four rows of six wells on one pad ... 8 - 10 acre pad ...

... also the possibility, it may require 48 wells/spacing unit in some of the better Bakken ... this summer another test ... drill out two pads on a 24-well spacing unit (1280) and then go into the middle of another one and drill it out on a 48-well spacing ....

...  you easily get out to 50,000 wells and more than likely well beyond that .... at a minimum,  four to eight wells/spacing unit up to 24 wells/spacing unit, 200 rigs for 21's rig count ... a constant 190 to 210 rigs for the next 21 years ...

I will quit there; it is a long video with much information.

Pipelines Re-Post

I don't know if folks enjoy / appreciate all the great posts RBN Energy provides, but I thought this interesting enough to re-post from earlier this morning.

Look at the first graphic at the link. Two short pipelines will connect to major pipelines, changing dynamics immediately. Both pipelines will be completed intrastate (one in Illinois and one in Louisiana) so there should be minimal federal interference (I assume FERC still gets involved). And at least one of the states is "oil-friendly" and I doubt the other state will be as short-sighted as the Nebraskans were.

Renewables And A Dose Of Reality


August 12, 2017: in Australia, "zero coal" = "zero heave manufacturing."

July 22, 2017: from Townhall, July 22, 2017 -- a full essay on the absurdity of EVs.

July 16, 2017: from Forbes, June 3, 2016 - a record year for renewable energy.
The "good news:"  
 2015 saw record additions of renewable energy around the world, as well as high-profile agreements and announcements related to renewable energy.
The "bad news":
Renewables made up 19.2% of overall global energy consumption in 2015. This is relatively unchanged in recent years despite the rapid growth rates. Modern renewables like wind, solar, biomass, and geothermal power cumulatively made up 1.4% of global energy consumption. For perspective, the number was 1.2% in 2012.
This illustrates one of the challenges renewables face in rapidly displacing large amounts of fossil fuel. In recent years overall global growth in energy consumption has been greater than the additions from renewables. Hence because renewables are such a small part of the overall energy picture, even with their rapid growth rates they struggle to keep pace with overall demand growth. As a result they displace fossil fuels much more slowly than some have projected.
For 2016, from  the International Renewable Energy Agency shows that global renewable energy generation capacity increased by 161 gigawatts in 2016, a record year for new capacity additions and proof positive of the unstoppable nature of the low-carbon energy transition.

Back of the envelope: 147 GW in 2015; 161 GW in 2016 (161-147/147 = 9.5% increase year-over year.

Remember: this is capacity. 150 GW of capacity might translate to 20% of that, or 30 GW of actual production.
Original Post

Mark this date on your calendar: June 1, 2014 -- the beginning of the end for renewable energy

How much of the US electricity is provided by solar energy after twenty years of investments and subsidies? In 2012: 0.1% Note: that is not one percent; that is one-tenth of one percent.  January 17, 2014.

Electricity is getting more expensive simply because of EPA regulations, December 26, 2013. 
Through unnecessary regulations, government has destroyed another working market, telling us what kind of energy to use regardless of cost — based solely on the green movement's moral beliefs about what kinds of energy are "good."
Electricity is now one of the most regulated goods in the U.S. Thanks to the Environmental Protection Agency's sweeping powers to regulate C02 — a power we can't find anywhere in the Constitution — electricity is becoming a very expensive commodity.
Europe facing continent-wide blackouts; paying four times what Americans pay for electricity; the math for wind energy does not work; simple as that. Irony: CO2 emissions in Europe have risen, WSJ, October 12, 2013. 

Renewable Energy: The Vision and A Dose Of Reality, October 27, 2012

Platts essay on EIA and IEA assessments of 2012 CO2 emissions, June 13, 2013. 

Renewables investment fell 12% in 2012 -- Reuters is reporting:
Global investment in renewable energy fell last year for the first time since 2009 due to the effects of economic slowdown on U.S. and European markets and a drop in solar technology costs ...
Renewables investment fell 12 percent to $244 billion last year, having hit a new high every year since 2004 - except in 2009 when the global financial crisis hit ...

The Pause That Refreshes

During the past 15 years, while global emissions have soared, there has been no increase in global temperatures.


June 1, 2014: Spanish renewable energy company/utility signs 20-year deal with Cheniere (USA) for LNG.

June 1, 2014: CVX gets out of the renewable energy business

June 17, 2013: Siemens sells the last of its solar business; Bosch looking to get out of solar.

Wednesday Morning News And Links

Active rigs: 187 (steady)

RBN Energy: Additional crude oil pipeline capacity; more conversions
This time we look at the open season that Energy Transfer Partners launched last week for their proposed conversion of part of the existing Trunkline gas pipeline into the Eastern Gulf Crude Access pipeline (EGCAP). The proposed Energy Transfer pipeline is being pitched at exactly the same time as a complimentary project operated by Enbridge that would link the latter’s huge Lakehead system running from Western Canada to Flanagan, IL, with EGCAP in Patoka via another new pipeline called the Southern Access Extension Pipeline (SAX).
WSJ Links

Section D (Personal Journal):
A Windows laptop at an Apple price -- Walter Mossberg.
Laptop sales have been tanking as tablets surge. The new Windows 8 is off to a slow start with users. And the hybrid machines that claim to work as both tablets and laptops are still niche products. So what's a laptop maker to do? 
I've been testing a Kirabook for the past five days and I found it to be a good computer whose strongest feature is a brilliant, high-resolution screen. It's a speedy and reliable machine that's thin and light without feeling cheap. 
But I consider it overpriced for what it offers. It actually costs more than a MacBook Air, but with much worse battery life, an older processor and a design that looks like a lot of other grayish, metallic laptops. 
In addition to its high price, the biggest downsides of the Kirabook are Windows 8, whose two very different user interfaces can be confusing; mediocre battery life; and the fact it uses older processors. 
By contrast, as of Monday, the MacBook Air uses the latest Intel processors, just out, which promise huge increases in battery life and better graphics. The Kirabooks aren't due to be upgraded to these new chips till the fourth quarter. 
Section C (Money & Investing):
Section B (Marketplace):
Pandora said in a regulatory filing Tuesday that it believes owning even a single station will entitle the company to pay lower royalties for certain rights, saving it nearly 1% of revenue. Pandora's revenue in the most recent financial quarter totaled $70.6 million.
Section A: