Wednesday, May 15, 2019

How Many Of You Are Aware Of All The Snow, Cold Weather, Winter Still Forecast For May In The US? -- May 15, 2019

I was completely unaware of all of this. Winter well into May in the United States this year, as well as other parts of the world apparently. At the linked site, scroll down. Obviously, it's a dynamic site and after May 15, 2019, there will be different stories. But this is where we stand now: winter continues in mid-May for the US.



************************************



US Crude Oil Exports -- May 15, 2019

See this note.

I opined at length on US crude oil exports. I suggested the long pole in the tent would be the export terminals.

A reader suggested export terminals would not be the problem. See the reader's comment at the linked post.

He's obviously correct. I was wrong.

From RBN Energy, May 2, 2019:
In terms of raw tonnage, the Port of Houston is by far the busiest in the United States. The 52-mile-long Houston Ship Channel (HSC) — running from just outside downtown Houston out to an area between Galveston Island and Bolivar Peninsula — is the artery that enables the heavy ship traffic, much of it tied to crude oil, LPG, petroleum products and other hydrocarbons. But in the same way that Houston’s Interstate 45 traffic backs up during the morning commute, the ship channel traffic, which normally runs at about 60% of peak levels, can be (and has been) subject to delays when there’s an accident, visibility problems, or a slow-moving double-wide taking up two lanes. With energy-related export activity on the rise, efforts are underway to address those issues. Today, we begin a series on the issues facing some Texas ports and the measures being taken to help alleviate them.
Any way you slice it, the Port of Houston serves as one of the most significant conduits in America. It supports 140 docks (with another six under construction) that are home to more than 300 berths. In 2018, HSC had nearly 19,000 ship movements, more than 10,000 of which were tankers. (Note that tankers may have multiple movements per visit to the HSC.) Of those 10,000-plus movements, there were 8,706 movements by Panamax-class tankers (capacity of 350-400 Mbbl), 1,270 by Aframax tankers (500-725 Mbbl), and 246 by Suezmax tankers (up to 1 MMbbl) — HSC can’t currently handle Very Large Crude Carriers (VLCCs), each of which can haul about 2 MMbbl, or more than 200,000 deadweight tons (DWT).

Huge Shout-Out To My Readers -- May 15, 2019

I am absolutely convinced I have the smartest readers in the world when it comes to the Bakken. My blog may not be very wide -- it's a very, very narrow subject -- the Bakken -- essentially four counties in western North Dakota -- but it's very, very deep. And the readers are paying attention. I'm impressed.

The other day I posted about the shortest post possible. I was somewhat embarrassed that it was so short, but I was pressed for time. More on that later.

Now, two days later, that short little post is the #1 trending post on the blog.

This tells me one thing: readers are really, really paying attention; and, they really, really understand the Bakken. I'm impressed.

This is a screenshot of the post from the sidebar of posts that are trending. Again, this was the #1 trending post.




New York Denies Pipeline -- May 15, 2019 -- Most Interesting Story Coming Out Of The Northeast This Year

Updates

May 16, 2019: this story will now be tracked at this post.

Original Post
 
Link here: story broke 37 minutes ago ....


My hunch: moratorium on new hook-ups for Westchester County, NYC, Long Island -- I give the regulators two months to sort this out. This is no longer about natural gas or the environment. It's about a) elitism; b) anarchy; c) no-growth [Occasional-Cortex can explain].

Huge thanks again to a reader for bringing this to my attention.

This may be the most interesting energy story coming out of the northeast this year.

********************************************
Backstory

This was the backstory, posted yesterday:
Deadline: tomorrow, May 15, 2019 -- a reader brought this to my attention -- one of many links here:

  • New England, NYC, Long Island
  • National Grid needs access to more natural gas if growth is to continue
  • access to more natural gas hinges on permits for pipelines
  • National Grid says it will put the moratorium on hookups back in place if the new pipeline permits are not approved
  • affects Westchester County, NYC, Long Island
  • directly from the article: the problem stems from three things: 
    • significant growth in natural-gas demand created by the current development boom,
    • increased demand from existing buildings converting to gas from dirtier energy sources such as heating oil, and 
    • more extreme heating needs as climate change brings more extremely cold winter days
  • no new pipeline has been approved since 2013
  • at the link, the writer proposes the equivalent of President Carter's solution: wear sweaters in the winter
Actually it sounds like -- according to the article -- even without any growth, the National Grid natural gas supply is already stretched to its limits during the winter.

My hunch: they will find a way to thread the needle.

Likely solution: "forbid" National Grid from any moratorium on hookups but approve no new pipeline permit, waiting to see what this next winter brings. Seems crazy but kicking the can down the road has worked since 2013. If nothing else, the "May 15th" deadline will be extended, as the"parties remain talking."

Note the third point made by a "global warming" proponent: part of the current problem is due to "more heating needs as climate change brings more extremely cold winter days."

Slawson's Periscope Federal Wells

The graphics:



The wells (to be completed later):
  • Slawson has permits for six wells on a Periscope Federal pad in section 10-151-92, Big Bend oil field; #36468 - #36473, inclusive
Existing Periscope Federal wells:
  • 31439, 754, Slawson, Periscope Feeral 6-10-11-12TFH, Big Bend, t2/18; cum 271K 4/19;
  • 19155, huge jump in production, see below; not re-fracked;
  • 25844, 2,036, Slawson, Periscope Federal 7-10-11-12TFH, Big Bend, t3/18; cum 256K 4/19;
**************************************
First Periscope Federal Well
  • 19155, 769, Slawson, Periscope Federal 1-10-11-12H, Van Hook, t7/12; cum 386K 4/19; production profile, area of interest --
BAKKEN9-201827961998571252267185067487
BAKKEN8-20183111767115501669179206289205
BAKKEN7-2018311334213359194729187757318
BAKKEN6-201825122091159221821724433632430
BAKKEN5-20180000000
BAKKEN4-201812461850976377231701768
BAKKEN3-201827129101231629465647604966
BAKKEN2-20180000000
BAKKEN1-20181260451406
BAKKEN12-20170000000
BAKKEN11-20171420027012
BAKKEN10-20171294001480112
BAKKEN9-20170000000
BAKKEN8-20170000000
BAKKEN7-20170000000
BAKKEN6-20170000000
BAKKEN5-2017230396167351012
BAKKEN4-2017161155126167571860929
BAKKEN3-20171838214823712591690
BAKKEN2-20172421311517872117010500
BAKKEN1-201731268120681053170915540

Eleven New Permits; Four DUCs Reported As Completed; WTI Barely Moves -- May 15, 2019

Active rigs:

$62.185/15/201905/15/201805/15/201705/15/201605/15/2015
Active Rigs6559512783

Eleven new permits:
  • Operators: Slawson (6), WPX (3), Whiting (2)
  • Fields: Big Bend (Mountrail); Mandaree (McKenzie); Mandaree (Dunn); Sanish (Mountrail)
  • Comments:
    • Slawson has permits for six wells on a Periscope Federal pad in section 10-151-92, Big Bend oil field
    • Whiting has permits for a two wells on a Hagey page in section 13-154-92 in Sanish oil field;
    • WPX has permits for two wells on a Skunk Creek pad in 23-149-93, Mandaree oil field
    • WPX has a single permit for a Mandaree Warrior well in section 14-149-94, Mandaree oil field
Four producing wells (DUCs) reported as completed:
  • 35109, 956, CLR, Morris 7-26H2, Oakdale, t4/19; cum --; 
  • 29799, 218, Zavanna, George 19-30 4H, Stockyard Creek, t4/19; cum --;
  • 29800, 301, Zavanna, George 19-30 3TFHXW, Stockyard Creek, t4/19; cum --;
  • 35374, 1,818, Whiting, Knut Berg Trust, Pembroke, t4/19; cum --;

The Amazing Bakken -- May 15, 2019

Two-thousand, six hundred, sixty-five (2,665) wells are off-line and North Dakota:
  • sets an all-time natural gas production record
  • barely misses setting a new crude oil production record
  • probably set a new "boepd" production record
See this post.

Two-thousand, six hundred, sixty-five (2,665) wells will be about the number of new wells North Dakota will drill over the next three years.

March, 2019 Data -- North Dakota Sets New All-Time Natural Gas Production Record; Almost Sets All-Time Crude Oil Production Record; Total BOEPD Probably Set A New All-Time Record

Disclaimer: in a long note like this there will be factual and typographical errors. I often make simple errors in arithmetic. If this is important to you, go to the source.

Crude oil production in March, 2019: 1,390,138 bopd
  • February, 2019: 1,335,591
    • average daily increase, month-over-month: 54,547 bopd
    • month-over-month increase: an increase of 4.1%
  • all-time high was January, 2019: 1,403,808
    • delta (January/March): - 13,670 bopd
    • delta (January/March): - 0.97%
Natural gas production in March, 2019: March, 2019: 2,801,434 MCF/day
  • this is a new all-time high; = 466,827 boepd
  • 466,827 + 61,390,138 = 1,856,96 boepd (which is most likely a new all-time record high)
  • this beats the "boepd" production in January, 2019
  • February, 2019: 2,631,118 MCF/day 
    • average daily increase, month-over-month: 170,316 MCF/day (28,381 boepd)
    • month-over-increase: 6.4%
Producing wells:
  • March, 2019: 15,353 -- well below the all-time high of 15,409 in January, 2019
  • February, 2019: 15,154
Permitting:
  • April: 129
  • March: 133 
  • February: 109
Crude price, ND light sweet/ WTI (per barrel)
  • All-time high:  $136.29 / $145.29
  • today: $50.50 / $61.78
  • April: $52.50 / $63.58
  • March: $48.00 / $55.01
  • February: $46.30 / $55.01 
Rig count
  • Today: 65
  • April: 63
  • March: 66
  • February: 64 
Off-line:
  • DUCs: 968 (up 74)
  • inactive: 1,697 (up 30)
Gas capture (flaring):
  • statewide: 80% captured
  • FBIR Bakken: 70% captured (69% last month; 71% two months ago)
  • goal; 88%
February, 2019, data here.

********************************
Off-Line

March, 2019:
  • DUCs: 968, up 74 from last report
  • inactive: 1,697, up 30 from last report
  • total: 2,665 (up from 2,561 last week, about 1,000 more wells than will be drilled this calendar year)
February, 2019:
  • DUCs: 894, up 27 from last report
  • inactive: 1,5667, up a whopping 150 from last report
  • total: 2,561 (up from 2,332 last week, about 800 more wells than will be drilled this calendar year)
********************************
EIA Dashboard: Bakken Region

Link: https://www.eia.gov/petroleum/drilling/pdf/bakken.pdf


Similar to Eagle Ford, except the Eagle Ford is much gassier; completely "swamps" the Permian

An Unexplained Jump In Production Of A Whiting Flatland Federal Well -- May 15, 2019

Note: always be careful with any of my postings. I am inappropriately exuberant about the Bakken. I sometimes see things that don't exist in the Bakken. This is another example. There's always possible there's a typographical error at the source, or an explanation that I have  not found, but here's another example of a jump in production with no obvious explanation. The mom-and-pop mineral owners probably don't really care -- they just appreciate their royalty checks.  The jump in production (see below) was not a full 30-days.

See this Flatland Federal posting for background. FracFocus is "down" right now so I cannot check recent frack data, but there is no sundry form suggesting a recent frack at this well.

The well:
  • 27522, 4,207, Whiting, Flatland Federal 11-4TFHU, t101/14; cum 498K 3/19;
Recent production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN3-20192513063130379185418621926222555
BAKKEN2-2019289616353471460668766
BAKKEN1-201991601031362622480
BAKKEN12-20182929262926391863385780
BAKKEN11-20183030863133375901570161939
BAKKEN10-2018313189314630894598486911
BAKKEN9-2018303109331945396269375191

Neither of the other two wells (#27521, #27520) on that three well pad show any jump in production. 

Three older wells to the west show no jump in production either (#20589, #22360, #22361).

Five "30XXX" wells on a single pad in that immediate area:
  • 30688, 1,391, Whiting, Flatland Federal 11-4-2TFH, t10/15; cum 297K 3/19; GL;
  • 30687, 1,841, Whiting, Flatland Federal 11-4-2H, t10/15; cum 214K 3/19; AL;
  • 30776, 1,345, Whiting, Flatland Federal 11-4-3TFH, t10/15; cum 353K 3/19; F;
  • 30775, AB/175, Whiting, Flatland Federal 11-4-4TFH, t10/15; cum 337 bbls (no typo) 10/15;
  • 30774, 1,844, Whiting, Flatland Federal 11-4-5TFH, t10/15; cum 661K 3/19; F;

On Twitter Today -- May 15, 2019

All stories that have been followed on the blog.




US Crude Oil Exports -- May 15, 2019

Updates

Later, 9:18 p.m. Central Time: see first comment. A reader disagreed with my suggestion that the long pole in the tent would be export terminals along the Gulf Coast. See this post with additional data suggesting why the reader is correct; I was wrong.

Original Post 

EIA tracks US crude oil and petroleum products exports here but the data is almost three months old. Here it is May 15, 2019, and the recent EIA data for US crude oil exports is February, 2019.

In very round numbers, the US has been exporting 8.1 million bopd since October 2018.

There are actually two EIA charts:
I'll have to wait for the twitter folks to sort this out, but it appears in round numbers:
  • the US is building its crude oil inventories by one to seven million bbls each week
  • the US is exporting 2 million bopd but that number is trending up quickly (although export terminals may put a cap on crude oil exports for awhile)
  • 2 million bopd x 7 days = 14 million bbls per week, and yet the US inventory is building at a rate of 1 to 7 million bbls/week (this is why the world will have a supply problem if US export terminals come on line quickly enough).
Rigzone provided a nice update regarding US production, refining capacity, exports at this link on January 17, 2019. Some data points:
  • US crude oil production: topping 11 million bopd; disagreement on the future rate of change
  • US refining capacity: 18.6 million bopd
  • US refiners: generally configured to process heavier crudes imported from longtime suppliers Canada, Mexico, and Venezuela (again, thank you, Mr Obama, for killing the Keystone XL; what a doofus)
  • 65% of US crude oil production has a very high 40-degree API gravity or above
  • explains why the US is still imported an average of 8 million bopd lat year (2018)
  • [Chinese imports in flux]
  • export capacity lagging in the US; might be able to reach 5 million bopd over the next five years
Ah, yes, right on time, the twitter folks come through with the synopsis of where we stand:
  • the US crude oil market has problems (too much)
  • US crude oil producers have a [too much/too fast] supply problem ... and yes, it is higher than what the EIA is reporting
  • US oil refiners have a [good] supply problem as local discounts are starting to appear once again
  • traders, blenders, and exporters have a [good] supply problem as all they need is for those Permian pipelines to start up in 2H19
  • Cushing may have a problem if those pipelines don't start o time in 2H19
  • the US consumer doesn't appear to have a problem with price (yet)
  • the world will have a supply problem in 2H19 when US crude oil supply finally reconnects to the seaborne crude market (via pipelines, ports, and boats)
No, the world won't have a supply problem in 2H19 if Rigzone is correct. The long pole in the tent will be export terminals off the Gulf Coast. Rigzone says the capacity if about 2 million bopd now, and might get to 5 million bopd in five years.

But the numbers are interesting. Saudi Arabia is producing about 10 million bopd and exporting about half that. 

US Crude Oil Inventories Jumped By 5.4 Million Bbls -- EIA -- May 15, 2019

EIA: weekly petroleum report later this morning. Link here. Corroborates the huge build reported by API yesterday.
  • weekly US crude oil inventories: increased by a pretty impressive 5.4 million bbls 
  • weekly US crude oil inventories now stand at 472.0 million bbls
  • weekly US crude oil inventories are about 2% above the five-year average (wink, wink)
  • refineries operating at 90.5% capacity; trending up but still down; maintenance and winter/summer switch-over coming to an end
  • imports: down almost 10% from same four-week period last year
    • having said that, imports last week, just for that one week, increased by almost a million bopd, averaging 7.6 million bopd
  • propane/propylene inventories are almost 20% above the five-year average
  • jet fuel product supplied was up 11% compared with same four-week period last year
  • gasoline demand will be reported later today
Re-balancing:
Week
Week Ending
Change
Million Bbls Storage
Week 0
November 21, 2018
4.9
446.9
Week 1
November 28, 2018
3.6
450.5
Week 2
December 6, 2018
-7.3
443.2
Week 3
December 12, 2018
-1.2
442.0
Week 4
December 19, 2018
-0.5
441.5
Week 5
December 28, 2018
0.0
441.4
Week 6
January 4, 2019
0.0
441.4
Week 7
January 9, 2019
-1.7
439.7
Week 8
January 16, 2019
-2.7
437.1
Week 9
January 24, 2019
8.0
445.0
Week 10
January 31, 2019
0.9
445.9
Week 11
February 6, 2019
1.3
337.2
Week 12
February 13, 2019
3.6
450.8
Week 13
February 21, 2019
3.7
343.8
Week 14
February 27, 2019
-8.6
445.9
Week 15
March 6, 2019
7.1
452.9
Week 16
March 13, 2019
-3.9
449.1
Week 17
March 20, 2019
-9.6
439.5
Week 18
March 27, 2019
2.8
442.3
Week 19
April 3, 2019
7.2
449.5
Week 20
April 10, 2019
7.0
456.5
Week 21
April 17, 2019
-1.4
455.2
Week 22
April 24, 2019
5.5
460.1
Week 23
May 1, 2019
9.9
470.6
Week 24
May 8, 2019
-4.0
466.6
Week 25
May 15, 2019
5.4
472.0

Against 5-year average: EIA says US crude oil inventories about 2% over 5-year average.

Against 350 million bbls, which is way more than needed, 472 million bbls is 35% higher.

Against 300 million bbls which had been the historical "norm,' 472 million bbls is 57% higher.

This is now all about US crude oil exports. One needs to use calculus to calculate how much oil must be exported each week to move the US toward a) re-balancing at 400 million bbls; b) 350 million bbls in storage; c) 300 million bbls in storage.

It would be interesting to see the "target" for US storage of crude oil that Exxon, Chevron, COP, etc, are setting internally. In other words, anticipating exports in 2020, how much storage does the US need, based on estimates by the oil companies and/or the EIA?

Storage at Cushing is apparently no longer an issue and most new storage has been put in along the US gulf coast. When storage got "tight" in Cushing many years ago there were many, many stories on storage issues. However, I haven't seen similar stories now, and I wonder how much excess storage exists.

It seems the EIA weekly petroleum report could:
a) provide storage capacity; and,
b) post the amount of US crude oil exported the previous week; they provide the "import" data, but not the "export" data?
The EIA weekly petroleum report still reflects the way the US was before the shale revolution.

EIA tracks US crude oil exports here.

Fortunately, twitter contributors will provide this data.

Random Update Of A Couple Of CLR Wells -- May 15, 2019

May 15, 2019: my goodness, these are great wells. Production updates here: 32605 and 32606. See original full note here.

Wednesday, May 15, 2019

Twitter: considering all that is going on, twitter is very, very quiet today.

WSJ: From The Wall Street Journal today:
  • US non-essential personnel have been ordered to leave Iraq immediately
  • China's economy was losing steam even before Trump's new tariffs
  • Apple in trouble over trade war
  • return of Boeing's 737 MAX delayed
  • Microsoft warns of monster bug, "in a week of them," affects older systems
  • global warming drought: more flooding: thousands cut off by closed bridges after Missouri floods
  • wow: just a month ago we were talking about a "single" Fed rate cut; now? how about multiple rate cuts?
  • deficits don't matter. Japan not so sure
  • Trump, Jr., will appear before Senate intelligence committee
  • there is a "hit-by-pitch" epidemic in baseball
  • Amazon, in need of drivers, turns to its own employees

A Pipeline Bubble? -- May 15, 2019

North America’s shale boom is paralleled by the record pace of pipeline construction and now, a long pipeline of projects await a final investment decision. Pipeline Bubble, produced by Global Energy Monitor, now calculates that capital spending on proposed North American pipelines will reach $232.5 billion and raise global pipeline capacity by a third.
Pipelines have an operational life of at least 50 years and investors are betting on higher volumes of domestic oil and gas output both for local consumption and for export, as the world’s demand for energy, led by India and China, is forecast to rise by a third by 2040. According to the EIA Annual Energy Outlook 2019 reference case, U.S. natural gas output is expected to rise 36 percent to 43.4 trillion cubic feet by 2050. Crude oil is set for annual records through to the mid- 2020s and remains greater than 14 million barrels a day until 2040. Also, Natural gas plant liquids production is set to reach 6.0 million barrels a day by 2030. Projections of supply and demand appear to favor a boom in pipeline construction and underpins the fact that gas pipe projects outnumber oil, four to one.
The power sector as a major gas customer will see the share of natural gas rise from 35.1 percent today to 39 percent in 2050 to satisfy rising demand and feed the rise in new gas peaking plants, which will be needed to provide base load and back-up for the anticipated rise in renewable energy.
Likewise, with demand for polyethylene expected to grow from 40 million metric tons last year to 60 million metric tons in the next two decades, new pipelines are under construction to meet the needs of new ethane cracker plants located along the Ohio River.
Increased drilling in oil formations in the East and Southwest of the country and burgeoning oil output from the Permian Basin has caused congestion of existing pipeline capacity to refineries on the Great Lakes as well as oil export terminals Houston and Corpus Christi on the Gulf Coast. New take-away pipes are close to completion and more are planned.
More at the link. A relatively short story, lots of data, will take a bit of time to digest. 

Apache: Natural Gas Liquids In The Permian -- May 15, 2019

I probably would not have posted this story, except in light of the Anadarko-Chevron-OXY story. From Bloomberg, Apache bets big on Permian gas liquids. It's a big story -- I am re-posting it as a stand-alone.
A ride through the Permian Basin’s little-drilled southwest corner looks a bit like the rest of the shale patch. Mesquite dots the dry landscape, and bumpy oilfield roads link well sites to the main highways.

But there are a couple of big differences: The drilling rights to about 300,000 acres in the field belong to a single company, Houston-based Apache Corp. And unlike in much of the Permian, the underlying rock here is far richer in natural gas than it is in oil. Welcome to the Alpine High.
These two factors are shifting the focus for one of America’s oldest oil producers in its flagship discovery. After falling oil prices at the end of 2018 forced Apache to cut its budget, the company temporarily stopped its hunt for oil in parts of the field. In the meantime, it’s opening three plants to process the profusion of natural gas it’s found into more marketable propane and butane.
The natural gas liquids “do add value,” said Ryan Luther, a senior research associate for RS Energy Group Inc. Still, that value is only about 40 percent that of a barrel of oil. "I wouldn’t ascribe a terrible amount of value to the Alpine High relative to their other assets,” he said.
In September 2016, Apache said it had made an "immense" find in the Alpine High, with the promise of at least 3 billion barrels of oil in place in two of the five formations. Apache Chief Executive Officer John Christmann described the play as being like a “giant onion,” with the company learning more and more about the discovery as it peeled back each subsequent layer.
But initial tests for crude haven’t shown as prolific a result as seen elsewhere in the Permian, and Apache now talks about crude oil being a byproduct of its natural gas at a time when other drillers can’t get rid of the fuel fast enough.
That’s spurring worry among some investors that Apache may be hanging on to an iffy asset at a time when larger companies might be considering acquisitions in the wake of the bidding war over Anadarko Petroleum Corp. While several central Permian players have found their way onto short lists of expected takeout targets, Apache has been largely absent.
Much more at the link.