Thursday, May 8, 2014

California CBR -- A Huge Success Story

There are a lot of metrics in this story that will be interesting to follow. InvestorVillage is reporting:
California, the most-populous U.S. state and biggest gasoline market, more than doubled the volume of oil it received by train in the first quarter as deliveries from Canada surged.
The third-largest oil-refining state unloaded 1.41 million barrels in the first quarter, up from 693,457 a year ago.
Canadian deliveries made up half the total and were eight times shipments a year earlier. Supplies from New Mexico jumped 71 percent to 173,081 barrels. Those from North Dakota slid 34 percent to 277,046.
U.S. West Coast refiners including Tesoro Corp. and Valero Energy Corp. are developing projects to bring in more oil by rail from reserves across the middle of the U.S. and Canada to displace more expensive supplies.
Crude production in PADD 5, which includes California and Alaska, has dropped every year since 2002 while drillers are extracting record volumes from shale in states including North Dakota and Texas.
The surging flows of domestic oil to California “reflect a continuing improvement in crude-by-rail receiving facilities here,” David Hackett, president of Stillwater Associates, an energy consultant, said by phone from Irvine, California.
Rail shipments still account for a small fraction of California’s oil demand.
In February, the state imported more than 20 million barrels of crude from abroad.
Crude from North Dakota and Canada trades at a discount to Alaska North Slope oil, which is near $108 a barrel (on the day the story was originally posted). Western Canada Select, a heavy, sour blend, $83.
North Dakota’s Bakken crude is priced slightly over $95.
It costs $9 to $10.50 a barrel to send North Dakota’s Bakken oil by rail to California, according to Tesoro, the West Coast’s largest refiner.
A lot of story lines there. The best one: President Obama's decision to dither on the Keystone XL changed completely the dynamics of the flow of oil and gas in this country. It will be interesting to see how this plays out.

But when California imports 20 million bbls of oil per month, it certainly leaves open the opportunity for a lot more CBR terminals. Regular readers may remember that Canada sees absolutely no more foreign imports of oil for its east coast refineries, except from the US.

A Note For The Granddaughters

This is a must-read for those interested in the status of the sage grouse in North Dakota. The Dickinson Press is reporting:
North Dakota’s sage grouse population appears to have collapsed.
The counters found 31 males. That’s down from 50 last year, continuing a trend that began half a dozen years ago.
This year’s count is the lowest number ever recorded.
It’s down from nearly 300 displaying males in 2000 and 159 in 2007.
Consistent with the Game and Fish Department’s management plan, North Dakota’s hunting season on sage grouse was closed in 2008, when the annual count of dancing males fell below 100 birds.
The results of the count in Bowman, Slope and Golden Valley counties — the state’s three southwestern-most counties, all of them bordering Montana — left Game and Fish biologists disappointed, concerned, puzzled, frustrated, even a little bit angry.
The story does not mention the most likely culprit: West Nile virus

Nor does the article weigh in on wind farms which take up a much larger footprint/energy unit than oil and gas ever will. And unlike oil and gas well pads which will eventually be returned to their original state, wind farms are expected to live on forever.


  1. I am hearing from local ranchers in the SW corner of ND that they think the Gene pool is getting to small for proper genetic distribution in the Sage Grouse.. The ND DNR must agree because they tried to acquire some stock of birds from MT late this winter, but MT refused to release any Grouse to ND for transplanting.. I saw a article in the Dickinson press about this MT/ND deal. don

    1. That would make sense; down to 30 birds or so and that's not much of a gene pool. Having driven through miles and miles of southwestern North Dakota and not seeing a whole lot of activity relative to activity elsewhere in the nation, it's hard to believe that economic development in southwestern North Dakota is the prime culprit.