Monday, April 4, 2016

A Reader Asks About Freezing Temperatures And Severance Taxes When Comparing Well Costs In North Dakota And Texas -- Apriil 4, 2016


April 7, 2016: an individual asked about the soil temperature in North Dakota during the winter. Don provides a link that tracks soil temperature on an hourly basis
Original Post
The other day EIA posted a story about relative costs of wells in various unconventional plays across the US.

In response, a reader asked:
How do severance taxes compare and how many feet does frost go in the ground dead winter when comparing attractiveness of Texas & ND to oil companies?
With regard to severance taxes, it's a bit more complicated than simply provided "one number" for each of the states (for a number of reasons). Here are some links:
With regard to the second question, how deep is the ground frozen in North Dakota in the "dead of winter"? According to this site:
One interesting aspect of winter that affects both plants and animals is one we cannot see: freezing of the soil. Frost depth and the timing of freezing depend upon the soil type, aspect, soil moisture, vegetation, snow depth, and of course, air temperature. In our area, one study indicates that the soil begins to freeze in early November and reaches the maximum depth by April.
This depth varied by year from 24 to at least 70 inches below the surface. The coldest soil temperature of 25 degrees F. occurred at the 2” depth. Another 4-year study near Fargo showed similar results, although the average date of soil freezing was November 26th, with an average of frost depth of 54” on April 1st. The average maximum freezing depth for North Dakota is 50”, with a maximum depth of 84”
Maximum freeze-depth then appears to be less than seven feet; oil wells are drilled vertically about 9,000 feet in North Dakota. Multiple sources suggest the temperature at depth is upwards of 300 degrees centigrade (572 degrees Fahrenheit). We've talked about this before: it's incredible engineering to develop pipe and instruments that can withstand temperature extremes from 60 degrees below zero (at surface) to more than 600 degrees at depth.

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