A Shout-Out to My Australian Readers

This is way off-topic, but I owe it to my Australian readers, who have been most faithful.

I also have to admit I have a "romantic" relationship with Australia but to discuss it would be maudlin and treacly (like "fracing," "treacly" needs a "k" in it), so I won't go there.

North Dakotans complain about the truck traffic in the oil patch. They should be so lucky: here's what it's like in the outback in Australia:

Roadtrains

 
Slim Dusty

My favorite is the third of these three, and there are plenty more at YouTube.com.

Again, thank you to all my Australian readers.

Update: because you asked, here's a couple more:

BP Prepares to Pay! Fishermen Haven't Kept Records!

In preparation for and in anticipation of paying fishermen whose livelihoods may have been harmed by the oil spill, BP has asked for tax records to help them assess claims.

The only problem: some of these fishermen have not kept records for generations. Some of them often get/got paid in cash and have never reported the income. Hmmm.

"I worked for an uncle last year who paid me in cash," said a crab fisherman who asked to remain anonymous. "The BP guy wanted my tax statements, but how can I pay taxes if everything I earned was in cash?"

How can I pay taxes if everything I earned was in cash? Hmmm.

I can't make this stuff up.

Apparently some of these "companies" haven't even been able to produce a business license, permit, or other evidence of a legitimate business. I suppose BP could ask, "How can we reimburse you for damages if you don't know how much you made last year?" This is going to get real interesting, real fast.

By the way, two years ago I had a conversation with a fresh fish broker in Charleston, South Carolina. He said the same thing. Much of the seafood business is done in cash.

Oops! Hess Did It Again! An Orion Belt. Round 3.

For a full description of a Hess Orion Belt, click here.

Here is a very nice presentation by Hess regarding their multiple-well pads. 

This is really cool. Hess was granted six permits, again, to place six wells on one pad, this time in Robinson Lake, 21-T154N-93W, Mountrail County. They will go in the SWSE subquadrant and three horizontals, all long laterals, will go north; and, three will go south.

Specifically, the Frandson wells will go north into sections 21 and 16; and, the Trinity wells will go south into sections 28 and 33. I assume this is considered 2560-acre spacing which has generated a lot of discussion elsewhere. Some folks were concerned that a company was going to drill a 4-mile lateral on 2560-acre spacing, but obviously one can drill 2560-acre unit with standard "long laterals."

Specifically:

• EN-Frandson-154-93-2116H-1, SWSE 21-154N-93W
• EN-Frandson-154-93-2116H-2, SWSE 21-154N-93W
• EN-Frandson-154-93-2116H-3, SWSE 21-154N-93W
• EN-Trinity-154-93-2833H-1, SWSE 21-154N-93W
• EN-Trinity-154-93-2833H-2, SWSE 21-154N-93W
• EN-Trinity-154-93-2833H-3, SWSE 21-154N-93W

For another discussion of a Hess multiple-well pad, click here. 

119!

Yup, a new record: 119!

That's how many active rigs there are in North Dakota, May 28, 2010.

I still think there may be as many as 125 rigs: a couple days ago when I checked all companies individually, I noted that about ten companies had decreased their active rig count by at least one rig. I assume most of those rigs were in the process of being moved to a new site and not "active."

The big players in the Bakken have all increased their rig count substantially this year (EOG, CLR, and WLL) while one of the bigger voices out there, BEXP, has not increased its rig count in several months: it remains at five. It is hard to believe that the company almost synonymous with the Bakken, Hess, has only six active rigs compared to 17, 14, and 12 for CLR, EOG, and WLL, respectively.

For a more complete listing, click here.

Another Natural Gas Play

Shell pays $4.7 billion to buy private natural gas company.

I have opined for the past year or so that I think something is going on in the natural gas industry. Some smart folks are investing a lot of money in natural gas when prices are at historic lows.

I have accumulated shares in natural gas companies since I first started investing in 1984. I do very little trading, very little selling. I simply include shares of these companies in my overall portfolio. Most of the companies in which I buy shares pay dividends which I reinvest in the same companies that paid them. It hasn't been a pretty picture these past few years, but I continue to accumulate those shares. Time will tell how this all works out but it is interesting to see these natural gas plays.

Unfortunately, the rest of the story about Shell's purchase is full of "bad news."  Be that as it may. 

118!

Yup, a new record: 118!

That's how many active rigs there are in North Dakota, May 28, 2010.

I still think there may be as many as 125 rigs: a couple days ago when I checked all companies individually, I noted that about ten companies had decreased their active rig count by at least one rig. I assume most of those rigs were in the process of being moved to a new site and not "active."

The big players in the Bakken have all increased their rig count substantially this year (EOG, CLR, and WLL) while one of the bigger voices out there, BEXP, has not increased its rig count in several months: it remains at five. It is hard to believe that the company almost synonymous with the Bakken, Hess, has only six active rigs compared to 17, 14, and 12 for CLR, EOG, and WLL, respectively.

For a more complete listing, click here.

As Usual: Peggy Noonan Got It Just Right

I never did like the administration's "we will keep our boot on the neck of BP" attitude. Not presidential. During a national crisis, "we" need to work together to solve the problem, and then go back and sort it out after the immediate problem has been solved.

But some prefer to shoot first and ask questions later.

"We pay so much for the government and it can't cap an undersea oil well!"

Yup, again, as usual, Peggy Noonan got it just right. And now the Feds want to hand over fracking regulations and oversight to the EPA.

For Investors: Dividend-Paying Dividend Stocks

This is an old site, so the share price and yields are not current, but it is a nice list for those interested in buying shares in energy companies paying nice dividends.

I should have posted this when the market was under 10,000, and the price of oil was in free fall. Some of these high-yielders would have been yielding even more.

It certainly is not all-inclusive. It does not include utilities which often pay pretty good dividends, and it doesn't include one of my favorites, EPD.

XTO With New Permits for Two Wells on One Pad

XTO was granted new permits today (May 27, 2010) for two wells on one pad in Dunn County, Haystack Butte oil field, section 16: Big Gulch 41X-16 and Dakota Federal 41X-16, # 19072 and # 19073, respectively, in the NENE subquadrant.

Again, I have to credit Harold Hamm, CLR/CEO, for being such an advocate for placing multiple wells on one pad. The laterals could be targeting different formations (stacked dual laterals) or they could be going in opposite directions, targeting different sections (unstacked dual laterals).

The Fine Print: This Time It's Good for CLR

Continental Resources has a new presentation out today.

Check out slide 20.  CLR says it has a "plenty of running room."

CLR estimates it has 800 unbooked wells in the middle Bakken (500) and the Three Forks Sanish (300), with an additional reserve potential of 210 million barrels of oil equivalent in the middle Bakken and 125 million barrels of oil equivalent in the Three Forks Sanish.

This is what caught my eye, the small print: CLR's internal economic model is based on gross reserves per well of 518,000 barrels oil equivalent for the North Dakota Bakken and assumes one (1) well per section for the North Dakota Bakken.

When I look at the GIS map server, I don't see many sections in the "older" producing areas with only one well. Many sections will have at least two wells, one targeting the middle Bakken and one targeting the Three Forks Sanish. In addition, the 518,000 boe seems to be very conservative.

Fallout: No New Drilling in Alaska

For those wondering if North Dakota could overtake Alaska in oil production, this will add fodder to the discussion: the Federal government halts all new drilling in Alaska until oil spill in the Gulf is resolved.

I seriously didn't think that North Dakota can out-produce but this certainly has to be good news for those concerned with recent "free fall" in price of oil.

And indeed it is: I just checked -- price of oil up significantly in last 12 hours.

By the way, isn't this a great way for the her "enemies" to get back at former governor of Alaska? Just saying. Maybe we won't need that pipeline after all.

Update, four hours later, May 27, 2010: the more I see of this, the better I feel about the Bakken. Already the price of oil is up (mostly due to news out of China and its support of Europe, but I can't but think that removing deepwater drilling will keep oil prices trending higher in the out years.  Yup, the knee-jerk response to put a moratorium on more deep water drilling is about par for the course. I assume the hole is plugged or nearly plugged now that the Administration has taken credit for stopping the leak.

Update, five hours later, May 27, 2010: Obama -- "go to the beaches; most open; most clean."  This sounds like a former president telling folks to go shopping during the recession following 9/11 terrorist events. Also, which is it: worse than the Exxon Valdez or "most beaches clean?"


North to Alaska, Johnny Horton

American Energy Update: Part II

Just after announcing a couple good wells in some quiet areas in the Williston Basin, American Energy is granted another permit in the same area, Ray oil field, #19066, Hickel 15-35H.

For those who may have forgotten, American Energy recently sold all assets in Wyoming to become a pure Bakken play company.

Two More Monster Wells (BEXP)

"Despite all the the talk about inflated IPs, all things being equal, I would rather have my well come in with a 24-flowback of 5,035 barrels of oil versus a dry hole." -- Mark Twain

*****

Yup, today's announcement by BEXP will generate a lot of discussion. BEXP announced two more monster wells with 24-hour flowbacks in red:

• Jack Cvancara 19-18 #1H, 5,035, Ross project area, 83% working interest
• Tjelde 29-32 #1H, 3,171, Rough Rider project area, 77% working interest, 30 frac stages

The Jack Cvancara "apparently" has the second highest initial rate for a Bakken well in the Williston Basin after Brigham's Sorenson 29-32 #1H, which had a 24-hour flowback of 5,133 barrels

From the press release: "Brigham's accelerated development of its core operated acreage in Williams, McKenzie and Mountrail Counties is proceeding as previously outlined with five operated rigs drilling, four of which are located in Rough Rider with an additional rig located in Ross. In addition, one Bakken well is currently fracking and five wells are waiting on completion." [Note: my spelling for "fracking."]



It's Only Make Believe, Conway Twitty -- yeah, it's only make believe, 5, 035 boepd

Making Hay While The Sun Shines

In this case, the sun is the plummeting price of natural gas. Utilities are "making hay" buying up natural gas companies.

I have been opining for some time now that something is up in the natural gas business. I continue to see more stories validating my hunch that natural gas will be the bridge to a new energy framework for the United States. T. Boone Pickens and others have advocated for increased use of natural gas in the US but to date not much seems to have changed. But I think, off the radar scope, smart folks are buying up natural gas at bargain-basement sale prices.

In today's Boston Globe there is another report of utilities buying natural gas companies. Utility company UIL will buy three natural gas companies this year: Southern Connecticut Gas Co., Connecticut Natural Gas Corporation, and the Berkshire Gas Company. These companies serve customers in Massachusetts and  Connecticut.

[October 11, 2014: the Boston Globe link is broken; the story is available at Reuters.]

Cape Wind -- Another Boring Posting On Wind Energy: Skip It

Updates

December 2, 2017: dead, RIP. 

Original Post

Yes, this is a burr under my saddle. If you're not interested in wind energy ignore this article.

I've been following the wind energy story in Massachusetts. You can see original posts here and here.  As you read the note below, you may want to look at what "Wall Street" thinks of wind energy and the challenges it faces. In case that last link is broken, here are the three challenges wind energy faces:

• Price: up to three times higher than conventional sources
• States are ahead of federal and local mandates for alternative energy use
• Bottlenecks: lack of transmission lines

Quick summary: Wind Cape is a $1 billion off-shore wind farm in Nantucket Sound within view of Hyannis Port; it has been in the works for nine years. No turbines are yet in place. One regional utility, National Grid, has signed a 15-year contract for half the electricity produced by this wind farm at a cost significantly more than twice the rate for conventional electricity. The Massachusetts attorney general has now stepped in to see if this contract is in the best interest of the rate payer (obviously not). The wind farm is now courting another regional utility, NStar, who seems rather lukewarm about the offer. You think?

Update: Wind Cape officials have been close-mouthed on actual costs and likely rates of increase in the price of wind energy going forward, but in today's Boston Globe we have a few new data points:

• Wind Cape energy: 21 cents/KWH and will increase at 3.5% annually
• NStar electric rate, no wind energy:    9 cents/KWH
• NStar price will drop in July because of decline in oil price and huge natural gas supplies
• Massachusetts already pays some of the country's highest utility rates

Quotes:

NStar's chief executive: "he supports alternative energy, but is not counting on Cape Wind to meet state requirements that utilities buy a percentage of their power from renewable energy producers."

NStar's cheif executive, again: "Clean energy isn't cheaper energy."

President of Alliance to Protect Nantucket Sound: "We now know that Cape Wind energy will not be cost-effective for National Grid customers. It won't make economic sense for NStar customers either."

Executive Director of advocacy group supporting Cape Wind: "To talk about price per kilowatt hour in a vacuum is to miss the point."

Natural Gas BTUs vs Cape Wind BTUs
Comments:

This is the first time the consumer has seen how much wind energy will cost. Every other argument against this wind farm has been used, so to say "to talk about price in a vacuum is to miss the point" is incorrect. There  has been no vacuum; price is just the latest to enter the discussion.

One issue that has not entered the debate is the fact -- fact -- that the "science" behind man-made global warming has been debunked. As noted, global warming allowed the Vikings to populate Greenland, as noted by no better source than the National Geographic.    

My hunch (note -- my hunches are usually wrong): NStar will out-wait Wind Cape. If, and it's a big if, government mandates remain in place for alternative energy use by utilities, NStar will go with nuclear, about the same price as coal; much less than wind energy. National Grid will be left holding the bag. Assuming of course Cape Wind comes on-line. To date, there are no turbines off the coast of Massachusetts. If the attorney general of Massachusetts says it is not in the economic best interest of ratepayers to pay three times the going rate for conventional electricity, it puts the whole project in question. Again, the US is "swimming" in natural gas for as long as one can see, and nuclear energy remains a very viable alternative.

UPDATES

September 12, 2017: silly rabbit, I thought this project was dead. 

March 30, 2016: regulators appear ready to deny Cape Wind developers permission to lay a transmission cable. 

November 10, 2015: Danish company promotes a much bigger wind farm farther off-shore of Martha's Vineyard, BAY STATE WIND. Data points:

• 100 turbines
• 1,000 MW
• 15 miles south of Martha's Vineyard
• several other wind energy firms also active in same area

September 30, 2015: as of May, 2015, Cape Wind was dead. But that doesn't mean supporters won't quit. Cape Wind supporters have no customers (both customers dropped out when Cape Wind did not meet deadlines) but they have asked for more time. Inquisitr is reporting:

To imagine that building a huge area between Cape Cod and Nantucket with 130 wind turbines more than 400 feet tall that would look like an airport off shore at night time, with all the lights on them, to generate electricity that would cost three times market rate, and that such a project would be supported, does indeed take a lot of hubris. Other than the few who would financially benefit from this offshore Solyndra, its failure is great news for the rest of us, say critics of the Cape Wind project. 

What were the rates that Cape Wind was going to charge?

The rate the two Massachusetts utilities were going to pay for the electricity generated by Cape Wind would have started at 18.7 cents per kilowatt-hour, and would have increased 3.5 cents each year for 15 years, the Institute for Energy Research reported early this year in its analysis of the electricity purchase agreement between Cape Wind and National Grid and Nstar. The report stated the average cost of electricity in the U.S. is about 10.08 cents per kilowatt hour in 2013. At the end of those 15 years under the agreement, Cape Wind would be selling that electricity to the two Massachusetts utilities for 31.19 cents per kilowatt-hour after 15 straight annual increases of 3.5 percent.

This was clearly electricity that was well above the market rate.

January 22, 2014: not exactly a feel-good story coming out of Cape Wind. The Washington Post is reporting that European companies are getting the contracts to provide the steel. I'm not exactly sure what Americans are getting out of this. I know President Obama would not know, though his speechwriters will tell us all the jobs wind energy will bring.


April 5, 2013: Outgoing SecInterior Ken Salazar says Cape Wind likely to "break ground" this year. Cape Wind has "sold" 75% of its electricity (I believe contracts say it has to break ground by end of this year, or the deals are off). The government, like the US Naval bases will buy the last 25% if necessary to get this project off the ground.


May 15, 2012: a huge underwater power line from the off-shore turbines has cleared a regulatory hurdle (yesterday) but is still years away from construction. 

[No link: print edition WSJ, this date, p. A6.] Google and other investors have pledged up to $5 billion for a network of transmission lines. The regulatory hurdle: "The Interior Department said no competitor had proposed a similar project, allowing Atlantic Wind Connection to move forward knowing it is likely to secure a federal right of way. Construction could begin by 2014. 

October 4, 2011: Cape Wind developers want regulators to require new NStar / Northeast merged company to purchase 50 percent of power generated by Cape Wind .

May 15, 2011: So much for that Federal permit. The Feds pull their loan guarantee.


April 19, 2011: Cape Wind gets Federal permit, but still numerous obstacles, least of which is financing. It has only taken ten (10) years. I wonder when venture capitalists start getting a return on their investment?

April 11, 2011: The Cape Wind project might begin construction this year. Developers are looking for financial backers; they are looking for $500 million to get started. A reminder: National Grid will pay an initial price of 18.7 cents a kilowatt hour in 2013--roughly double market prices--which would rise by 3.5% a year over the remaining life of the contract. Expect to see a rate increase request by National Grid.

November 23, 2010: Cape Wind passes last big hurdle -- National Grid can purchase output. For a typical $76 residential electricity bill, $1.26 will go to pay Cape Wind for its energy, if all turbines are built. The cost will rise 3.5% each year. I honestly don't see how Cape Wind can make it financially. Seems like a lot of effort for little return. Remember: all wind energy estimates have been on the high side (exaggerated).

July 29, 2010: The court denied Alliance's request for a three-week delay to review recently released information. The court noted that Alliance waited one week to make the request after the information was released; since then another week has gone by, and before you know it, another three weeks as passed anyway.

July 21, 2010: Cape Wind foes want to delay the project once again. Remember, this project had cleared all hurdles a few weeks ago and looked ready to commence construction after nine years of study and delay. A recent stumbling block was whether or not to release pricing information. The judge has since ruled that pricing information must be kept confidential for three years (competition issues; standard business practice), but the National Grid did release that pricing information to the Alliance to Protect Nantucket Sound after signing a nondisclosure agreement. Now the Alliance say they need another three weeks to review the data. And so it goes. My hunch: we're never gonna see turbines off Teddy Kennedy's (RIP) back porch.

American Energy Update

Of the first four American Energy (AEZ) wells of high interest, three have now been reported, and all have been very good wells.

The Summerfield 15-15H is in Bear Creek, not a particularly well known field but in a fairly active area. The Little Knife and Rattlesnake Point oil fields are in the area. The Rattlesnake Point oil field recently caught my interest with announcement of a CLR Eco-Pad there as well as another CLR Eco-Pad in the immediate area (Jim Creek oil field). The Summerfield is a short lateral and was fracture stimulated with 14 stages. AEZ owns an approximate 33% working interest in this well.

Ron Viall 1-25H is a wildcat that was clearly in an undeveloped area and was a very nice well, at least based on initial results. Time will tell how good the well really was. But if it turns out to be a good well, we have more evidence that there are still "new" places to go for oil in the Williston Basin. The Ron Viall had a similarly high flowback rate and averaged 1,748 bopd in its first seven production days.

Tong Trust 1-20H is in the Ray oil field.  The town of Ray is near the epicenter of the oil success in the Williston Basin, but it is a small oil field and hasn't been particularly active.

Taken as a whole, it certainly appears that AEZ has staked out some new areas and has been very successful, at least based on initial results.

Again, AEZ tends to report 24-hour flowback rates which are significantly higher than the 30-day average. I assume the 30-day average will be closer to 800 and then further decline over the next 60 days where daily production will start to plateau at 500 barrels/day if they are to remain "good" wells.

Now #1 in Growth

North Dakota is #1 in growth among the 50 states over the past ten years.

#1 in several grains, #1 in honey production, #1 in nuclear arsenal, #1 in economic growth.

Week 20: May 18 - 24, 2010

Source rock for the TFS. May 24, 2010.

Total Active Rigs in ND Hit New Record: 117. May 24, 2010. 

NDIC Hearing Dockets for June, 2010. May 24, 2010.

More back of the envelope calculations. May 23, 2010.

Notes From New England. A little bit of humor. May 22, 2010.

Wind Energy Costs Coming In and They Aren't Pretty. May 20, 2010.

Update on Permits. May 20, 2010. 

Update on "Monster Wells." May 19, 2010.

EOG Buys LNG Company. May 18, 2010.

Source Rock for the Three Forks Sanish

Link to presentation on the source rock for Three Forks Sanish.  This is a PDF / slide show and is very, very interesting.

Slide 16: note how far east the play extends; skips Minot and Ward County and goes into McHenry.

Slide 30: total amount of oil in place and estimated ultimate recovery.

There are at least three acronyms/abbreviations you need to know, looking at this presentation:

EUR: estimated ultimate recovery; no matter how much oil is in place, if it can't be recovered, it ain't gonna do anybody any good. This is the important number.

OOIP: original oil in place. Total estimated oil in place, but amount recovered depends to degree on economics and technology

TOC: total organic content -- this has to do with the "source rock" -- the rock that generates the oil.  Look at this definition of TOC from the Schlumberger website:

A rock rich in organic matter which, if heated sufficiently, will generate oil or gas. Typical source rocks, usually shales or limestones, contain about 1% organic matter and at least 0.5% total organic carbon (TOC), although a rich source rock might have as much as 10% organic matter. Rocks of marine origin tend to be oil-prone, whereas terrestrial source rocks (such as coal) tend to be gas-prone. Preservation of organic matter without degradation is critical to creating a good source rock, and necessary for a complete petroleum system. 

Now that you know that a "rich source rock might have as much as 10% organic matter," note that the Bakken source rock has 11% TOC.

The more one learns about the Bakken, the more interesting it gets.

How Long Will the BP Well Have To Leak To = Worst Spill in Gulf?

Two (2) years.

The worst spill in the Gulf of Mexico was in 1979. At current rate, the BP well now leaking will have to leak for two years to equal that spill.

117!

That's the number of active rigs in North Dakota. Up from seven on Friday, although it had been at 114 for a couple of days last week. Over the weekend it jumped to 116 and this morning it is 117. This is the new record.

This number could rise a bit more in the next week or so; several (about 10) companies had a decrease of 1 well since I last looked at this. I assume those wells are moving to a new location; some might be moving to Montana, but I doubt many of them are being mothballed.

Continental Resources leads the field; CLR now has 17 active rigs, up 5 from the last time I checked. Then comes EOG with 14 and WLL with 12. For all its talk, BEXP still has only 5.

I'm still flabbergasted that the company that is synonymous with "Williston Basin," Hess, has only 5 rigs. And Fidelity, whose corporate headquarters is in Bismarck, has only 1 rig in the Williston Basin, putting it in the same league as Kodiak, Sagebrush, North Plains, Peak and others.

It should be noted that Zenergy had a high of 4 rigs at one time; right now it has 1, suggesting that the total number of active rigs could spike higher a week from now.

NDIC Hearing Dockets for June, 2010

Personal notes summarizing June, 2010, NDIC hearing docket.
Typographical errors may occur. See source document for details.


Thursday, June 10, 2010

12698: Murex -- unitized management of Elmore-Madison, Renville
12699: Murex -- unitized management of Elmore-Madison, Renville

Monday, June 14, 2010

12700: Sagebrush -- unitized management of Renville-Madison
12701: Sagebrush -- unitized management of Renville-Madison
12702: Sagebrush -- injection of Rice #3, 8-161-82, Renville
12703: Sagebrush -- injection of Rice #5, 8-161-82, Renville
12704: Sagebrush -- injection of Glessing #1, 8-161-82, Renville
12705: Sagebrush -- injection of Glessing #2, 8-161-82, Renville


Wednesday, June 23, 2010

12706: Petro-Hunt -- spacing for Arnegard-Red River Gas Pool, McKenzie
12707: Petro-Hunt -- commingle several producing wells, Little Knife-Madison
12708: Petro-Hunt -- commingle several producing wells, Little Knife-Madison
12709: Marathon -- 8 wells on one 2560-acre unit; 1, 12, 13, 24-148-96, Dunn
12710: Marathon -- amend; 2 wells on 1280-acre unit
12711: Marathon -- pooling in Bailey-Bakken
12712: Marathon -- pooling in Lake Ilo-Bakken
12713: Marathon -- pooling in Murphy Creek-Bakken
12364 (cont'd): Marathon -- amend; a 1280-acre unit
12365 (cont'd): Marathon -- amend; a 1280-acre unit
12714: Oasis -- amend; a 1280-acre unit
12715: Oasis -- amend; a 1280-acre unit
12716: Oasis-- conversion Erickson 44-15H to salt-water disposal, 15-156-102, #16901, north of Williston
12717: Whiting -- amend; pooling in Sanish-Bakken, 153-91
12718: Whiting -- to extend the Ray field, sections 2, 3, 10, 11-156-97; 1280-acre
12719: Whiting -- pooling in Ray field
12720: Whiting -- pooling in Ray field
12721: Whiting -- pooling in Ray
12695 (cont'd): Whiting -- to establish 15 1280-acre units; in 154-92/154-91 area for purposes of drilling additional horizontal well between two existing 1280-acre units
12696 (cont'd): Whiting -- to pool those 15 new wells as noted in case #12695
12722: American (AEZ) -- amend; to place 4 wells / 640 acres; Bear Creek, 147-96
12723: American (AEZ) -- to extend Ray or Dollar Joe-Bakken pools, 156-98
12724: American (AEZ) -- to extend Ray-Bakken pool, 156-97
12725: BR -- pooling in Blue Buttes
12726: BR -- pooling in Little Knife
12727: BR -- pooling in Bailey-Bakken
12728: BR -- pooling in Bailey-Bakken
12729: Hess -- up to six wells, 25, 26-158-95 (Orion Belt)
12730: Hess -- pooling in Forthun-Bakken
12731: Hess -- pooling in Ross-Bakken
12732: Hess -- pooling in Alger-Bakken
12733: Hess -- pooling in Alger-Bakken
12734: Hess -- pooling in Alger-Bakken
12735: Hess -- pooling in Westberg-Bakken
12736: Hess -- up to six wells, 10, 15, 22, 27-157-90, Orion Belt
12737: Kodiak -- amend; 1280-acre unit in Twin Buttes
12738: Kodiak -- amend; 4 wells on two units, Mandare-Bakken
12375 (cont'd): Kodiak -- amend; extend Moccasin Creek, 1280-acre unit
12739: St Mary -- extend West Ambrose; 12 - 1280 acre unit
12740: St Mary -- pooling 12 units in West Ambrose
12741: St Mary -- extend Dimmick Lake-Bakken; 4 wells in 1280-unit
12672 (cont'd): St Mary -- legalese; revoke a Tracker permit, Arnegard State #36-1H
12742: Ursa Resources -- 2 wells; one 1280-acre; MonDak-Bakken
12743: Ursa Resources -- 2 wells; one 1280-acre; Pierre Creek
12744: Murex -- pooling up to 3 wells on 4 spacing units in Midway-Bakken
12745: James Peterson -- turn an abandoned well into a horizontal well
12248 (cont'd): Gregory Tank -- legalese re: CLR well
12249 (cont'd): Gregory Tank -- legalese re: CLR well
12251 (cont'd): Gregory Tank -- legalese re: Petro-Hunt
12746: TRZ and Tracker -- amend; field rules in Big Gulch-Bakken Pool
12747: North Plains -- to create a 1280-acre unit; one well
12554 (cont'd): North Plains -- extend Truax-Bakken; 3 1280-acre units; 1 well each

Thursday, June 24, 2010

12748: Tracker -- legales; revoke a Petro-Hunt well, Njos 157-100-26B-35-1H
12749: Tracker -- 5 wells; 1280-acre spacing, Stark County
12291 (cont'd): Tracker -- proper spacing in Saxon-Bakken, Dunn County
10792 (cont'): Tracker -- proper spacing for Dressler 13-1H, Dunn
12750: Encore -- proper spacing for Garden-Bakken
12751: CLR -- temporary spacing to develop pool discovered by Ravin 1-1H, 1-150-97
12752: CLR -- temproary spacing for Miles 1-6M, 31-151-96
12753: CLR -- extend Hebron; 1 1280-acre unit for 1 well
12754: CLR -- extend Mondak; 1 1280-acre unit for 1 well
12755: CRL -- amend; establish 1280-acre unit for one well
12756: CLR -- 1 well, 1280-acre
12757: CRL -- 1 well, 1280-acre
12447 (cont'd): CLR -- proper spacing for Ranch Coulee-Bakken
12014 (cont'd): CLR -- temporary spacing for pool discovered by Traxel 1-31H
12316 (con'td): CLR -- amend; Big Gulch-Bakken, 2 1280-acre units; 2 Eco-Pads
12200 (con'td): CLR -- temporary spacing for pool discovered by Ole 1-29H
12553 (cont'd): CLR -- legalese; revoke Sinclair's Pajorlie 1-2H in McKenzie
12758: EOG -- amend; 30 wells; 3 each 10 1280-acre units; Clearwater
12759: EOG -- amend; 18 wells; 6 each on 3 2560-acre units; Clearwater
12760: EOG -- amend; 12 wells; 6 each on 2 2560-acre units; Kittleson Slough
12761: EOG -- 14 wells; 4 wells on a 1920-acre unit, 3 1600-acre units; 1 1280-acre unit; Van Hook
12762: EOG -- amend; 12 wells; 2 1920-acre unts; 6 wells each, Thompson Lake
12534 (cont'd): EOG -- 6 wells; 1 2560-acre addition to Clarks Creek
12539 (cont'd): EOG -- 6 wells; 1 1440-acre addition; McKenzie County
12763: XTO -- one well; 1280-acre
12529 (cont'd): XTO -- legalese, to revoke BR's Olympian 14-35H
12764: BEXP -- legalese, to revoke Petro-Hunt's Borrud 156-101-11D-2-1H
12765: BEXP -- amend; 3 wells; 1280-acre spacing
12766: BEXP -- 1 well; 1280-acre spacing
12767: BEXP -- amend; flaring in Bull Butte
12768: Zenergy -- amend; extend 1280-acre; one well; Camp-Bakken
12769: Zenergy -- amend; extend 2 1280-acre units; 2 wells each unit
12770: Zenergy -- one 1600-acre unit; 1 well
12550 (cont'd): -- Zenergy -- 1812-acre unit; and a 1770-acre unit; 1 well each
12771: Spotted Hawk -- 2 720-acre units; 1 well each
12772: Pride Energy -- 1 1280-acre unit for 1 well
12773: Zavanna -- 6 640-acre units; 1 well each, Stony Creek
12774: Zavanna -- 1280-acre unit; 1 well
12775: Newfield -- amend; 6 wells total; 2 1280-acre units; 3 wells each; Sand Creek
12776: Newfield -- 1280-acre; 2 wells each, McKenzie County
12777: Newfield -- 1280-acre; 3 wells, McKenzie County
12778: Newfield -- 1280-acre; 2 wells; Westberg-Bakken Pool
12779: Newfield -- 1280-acre; 1 well; McKenzie County
12511 (cont'd): Newfield temporary spacing for pool discovered by Manta Ray 1-12H
12780: Hunt -- amend/extend -- 1600-acre and 2 1280-acre units; 1 well each
12781: Hunt -- 3 1280-acre units; 1 well each; Parshall
12782: Hunt -- amend/extend 12 1280-acre units; 1 well each; Leaf Mountain-Bakken
12783: Hunt -- 1280-acre; 1 well; Burke County
12784: Hunt -- 3 1280-acre units; 1 well each; McKenzie County
12452 (cont'd): Fidelity -- Cedar Creek Anticline No. 8A unit; unspecified # of wells
11965 (cont'd): Ward Williston -- unitization for Little Deep Creek-Madison, Renville County
12531 (cont'd): Slawson -- amend/extend; 1 320-acre unit; 1 well; Antelope-Sanish
12427 (cont'd): Stetson -- temporary spacing for pool discovered by MHA 1-11H-148-90
12785: Armstrong -- unitize Patterson Lake-Lodgepole Unit Area
12786: Tracker -- pooling for Bice 6-31; Big Gulch-Bakken
12787: Tracker -- pooling Little Chase Creek 21-1H; Little Knife-Bakken
12788: CLR -- pooling Harriet 1-22H; Hamlet-Bakken
12789: CLR -- pooling Goodson 1-28H; Hamlet-Bakken
12790: CLR -- pooling Evenson 1-18H; Van Hook-Bakken
12791: EOG -- pooling James Hill 9-1201H; Kittleson Slough-Bakken
12792: EOG -- pooling in North Souris-Spearfish; Bottineau County
12793: EOG -- pooling in Roth-Spearfish/Madison; Bottineau County
12794: EOG -- pooling Lostwood 23-3526H; Kittleson Slough-Bakken
12795: XTO -- 3 wells each unit; 2 1280-acre units; Temple-Bakken
12796: XTO -- 3 wells each unit; 1 1280-acre unit; Midway-Bakken
12797: XTO -- 3 wells each unit; 2 1280-acre unit; Beaver Lodge-Bakken
12798: XTO -- 3 wells each unit; 1 1280-acre unit; Alkali Creek-Bakken
12799: XTO -- 3 wells each unit; 1 1280-acre unit; North Fork-Bakken
12800: BEXP -- 3 wells on 1 1280-acre unit; Rosebud-Bakken
12801: BEXP -- 3 wells on 1 1280-acre unit; Todd-Bakken
12802: BEXP -- Salt water disposal well; Painted Woods
12803: Newfield -- commingling of several producing wells; Lost Bridge
12804: Newfield -- commingling of several producing wells; Lost Bridge
12805: Sagebrush -- for injection; Wright 13-12, Kuroki Field
12806: Sagebrush -- Salt water disposal
12807: Fidelity -- pooling Anderson 11-13H; Alger-Bakken
12808: Fidelity -- pooling Harstad 44-9H; Stanley-Bakken
12809: Baytex -- Salt water disposal
12810: Abraas -- pooling in North Fork-Bakken
12811: Abraxas -- pooling in North Fork-Bakken
12812: Anschutz -- pooling Dennis Kadrmas 1-9-4H-143-96; Fayette-Bakken
12813: Anschutz -- pooling Jaeger State 1-34-27H-144-97; Cabernet-Bakken
12814: Slawson -- pooling in Alger-Bakken
12815: Slawson -- pooling in Van Hook-Bakken
12816: Slawson -- pooling in Van Hook-Bakken
12817: Slawson -- pooling in Van Hook-Bakken
12818: Slawson -- pooling in Van Hook-Bakken
12819: Slawson -- pooling in Van Hook-Bakken
12820: Slawson -- pooling in Van Hook-Bakken
12821: Slawson -- pooling in Van Hook-Bakken
12822: Slawson -- pooling in Van Hook-Bakken
12823: Slawson -- pooling in Van Hook-Bakken
12824: Slawson -- pooling in Van Hook-Bakken
12825: Slawson -- pooling in Van Hook-Bakken
12826: Slawson -- pooling in Van Hook-Bakken
12827: Slawson -- pooling in Van Hook-Bakken
12828: Slawson -- pooling in Van Hook-Bakken
12829: Slawson -- pooling in Van Hook-Bakken
12830: Slawson -- pooling in Van Hook-Bakken
12831: Slawson -- pooling in Van Hook-Bakken
12832: Slawson -- pooling in Van Hook-Bakken
12833: Slawson -- pooling in Van Hook-Bakken
12834: Slawson -- pooling in Van Hook-Bakken
12835: Slawson -- pooling in Big Bend-Bakken
12836: Slawson -- pooling in Big Bend-Bakken
12837: Slawson -- pooling in Big Bend-Bakken
12838: Slawson -- pooling in Big Bend-Bakken
12839: Slawson -- pooling in Big Bend-Bakken
12840: Slawson -- pooling in Big Bend- Bakken
12841: Slawson -- pooling in Parshall-Bakken
12842: Slawson -- pooling in Squaw Gap-Bakken

116!

That's the number of active rigs in North Dakota, and sets a new record. The previous high was 114 a few weeks ago; two days ago, the number had dropped to 110 (I assume many rigs were being moved to new sites).

277,000

That's the average amount of oil being taken out of the ground in North Dakota on a daily basis according to new refinery study.

277 is closer to 300 than 250. Just saying.

More Back of the Envelope Calculations

ND Cumulative Oil Production By Formation Through December 2009

Pool.....Cumulative Oil (Bbls).... Percent of Total....# of Wells

Bakken....................119,635,155.......6.86%......1563
Bakken/TFS..................188,597........0.01%............7
Birdbear....................18,136,909.......1.04%.........171
Devonian...................98,911,118.......5.67%.........137
Madison..................905,377,939......51.92%......5469
Lodgepole.................55,848,939........3.20%..........48
Lodgepole/Bakken.............5,883........0.00%............1
Mission Canyon...............17,533........0.00%............1
Red River A,B, C....217,552,348......12.48%......1221
Sanish........................13,224,939........0.76%.........58
Spearfish (all 3).........54,300,149........3.11%........331
Tyler (2).....................17,846,818........1.02%..........87

*****

USGS Estimates of Recoverable Reserves in the Williston Basin

Unconventional

• Bakken-Lodgepole Total Petroleum System (TPS): 3,645 million

Total Unconventional: 3,645 million

*****

Conventional

• Bakken-Lodgepole TPS:  12 million
• Winnipeg-Deadwood TPS: 3 million
• Red River TPS: 56 million
• Winnipegosis TPS: 2 million
• Duperow (Souris/Birdbear): 33 million
• Cedar Creek TPS: 20 million
• Madison TPS: 45 million
• Tyler TPS: 15 million

Total Conventional: 197 million

*****
Comments

Total Cumulative Through December 2009: 1,743,873,545 bbls
Total Cumulative Through December 2009: 1,744 million bbls
Total wells drilled in North Dakota Through Dec 2009: 10,245

Oil discovered in 1951
Several boom/bust cycles since then (four, I believe)
The current "Bakken boom" would be the fifth cycle, I believe

So, after 60 years of drilling in North Dakota, estimates are that there are only 197 million barrels of conventional oil reserves left (and, of course, the last drops would always be the most difficult to get). This (197 million) represents 11% of the amount of oil produced in Williston Basin to date. Thus, unless conventional reserve estimates are increased, the conventional play is near its end, if I understand the data correctly. It took sixty years and almost 10,000 wells to produce this conventional oil. The 197 million remaining plus the 1,744 million produced so far from conventional wells, adds up to 1,941 million barrels of oil.

On the other hand, the unconventional reserves which lie entirely within the Bakken Pool (includes the Three Forks Sanish) is estimated to contain 3,645 million barrels of oil. That is a "mean." It is also based on a limited number of wells, and limited production from this pool as of 2008.

The Madison has accounted for 52% of all oil produced so far in the Williston Basin; all conventional.
In just three years, the Bakken has accounted for almost 7% of all oil produced so far in the Williston Basin.

That is the data.

First, second, and third derivative data can be derived from that.

Final Thoughts

I have opined that 2010 will be a watershed year for the Bakken: a) maximum amount of activity with over 100 rigs on site; b) fracking unimpeded by Federal regulations (EPA); c) FBIR catches up with rest of the basin this year; d) Halliburton fracking crews working 24/7; e) pipeline capacity matches production capability; f) better-than-average oil prices; g) economic recovery.

Assumptions (f) and (g) for continued better-than-average oil prices and an economic recovery are presently being challenged.

The oil spill in the gulf is a singular event which will have little long-term repercussions, but might positively affect oil industry in North Dakota in the short term (I am not convinced).


Data is from NDIC and USGS and has been previously linked and posted at this website.

Incredible Story: Coals --> Microbes --> Natural Gas

I might comment on the story later but for now just a simple link. An incredible story. Again, a clever student and an entrepreneurial spirit.

No Moratorium on New Water Permits

US Army Corps of Engineers will NOT impose a moratorium on new water permits from Lake Sakakawea.

Notes From New England

This posting is not about the oil industry in North Dakota. It is simply a rambling post from some Saturday morning reading. These are some notes from this month's issue of National Geographic and from the Boston Globe. Take it for what it is worth.

First, the cover story from the June, 2010, issue of National Geographic: "Greenland: Ground Zero for Global Warming." On page 49, the big introduction to the story: "Viking Weather: As Greenland returns to the warm climate that allowed the Vikings to colonize it in the Middle Ages, its isolated and dependent people dream of greener fields and pastures -- and also of oil from ice-free waters."

I cannot make this stuff up.

"... Greenland returns to the warm climate that allowed the Vikings to colonize it in the Middle Ages..." I guess the global warming in the Middle Ages was due to man burning all that wood and coal, and had it not been for Sir Gore Alad who instituted cap and trade, trading lutefisk credits for coal briquettes, back in the 1500's, the earth would have been destroyed by rising global temperatures.

Second: same article. Greenland is pinning its economic hopes on oil. "The sea off the central west coast now typically remains ice free for nearly half the year, a month longer than 25 years ago. ... ExxonMobil, Chevron, and other oil companies have acquired exploration licenses. Cairn Energy, a Scottish company plans to drill its first exploration wells this year....Greenland estimates it has 50 billion barrels of recoverable oil and gas reserves. With oil at $80 a barrel, those reserves would be worth more than four trillion dollars."  [Update, May 27, 2011: Cairn to drill four exploratory wells.] [Update, September 21, 2010: yup, a Scottish oil company reports that they have found oil off the coast of Greenland.] [Update, October 26, 2010: Scottish oil company, Cairn, is happy with initial results off Greenland.] [Update, January 6, 2011: Cairn has secured two rigs to drill at least four wells.] [Update, January 27, 2011: Cairn solidifies position off west Greenland with as many as four exploratory wells in 2011.] [Update, November 30, 2011: great news for environmentalists. No oil; Cairn is abandoning two exploration wells in Greenland; the company said it would review its exploration program there.]

I cannot make this stuff up.

Four trillion dollars would work out to a billion dollars for each resident of Greenland.

Third story: this story is from the Boston Globe, Saturday, May 22, 2010. Cape Wind is a wind farm off Nantucket Sound, Massachusetts. It is now in negotiations to start selling electricity to regional utilities. Earlier this month, National Grid, a large regional utility serving several New England states, signed a 15-year contract to buy half the power Wind Cape is expected to generate. The cost is almost exactly twice what conventionally-produced electricity costs, 20 cents vs 10 cents per KWH, respectively. The cost will increase at an annual rate of at least 3.5%.  Massachusetts attorney general has now stepped in to see whether that contract is in the best interests of the state's taxpayers. (Obviously not.) Wind Cape "invited" NStar, another major regional utility over for tea, to discuss contracting for the rest of Wind Cape's production. NStar was polite enough to accept but paying that high a price for electricity was meant with less than a lukewarm response.

It turns out that Wind Cape has been in the works for nine (9) years now, at a cost of $1 billion, "but industry observers say the technology has become more expensive. Officials of the project have declined recent requests for new estimates." It should be noted that not a single turbine is yet in the water.

Again, I can't make this stuff up.

Okay, one more story.

Fourth story, again from National Geographic, this month's issue: the whooping crane is the number 1 endangered species in North America. Great strides have been made in the past several years to save this bird. Things were going well until 2008. Biologists and whooping crane census takers "... are now worried. The flock's population had reached 266 in the spring of 2008. But by the following spring, 57 had died, 23 of them in the birds' wintering grounds in south Texas ... Others probably perished during migration, often after striking power lines, the biggest known killer along the flyway." The flyway is from south Texas to northern Canada, right through "wind farm country." Yup, after all these years of working to save the whooping crane, it appears the environmentalists' answer to coal is killing them.

Again, I can't make this stuff up. (Yes, I know the same transmission lines carry coal-generated electricity as well as wind farm energy, but the wind farms are spread out over hundreds of thousands of acres requiring new transmission arrays, compared to existing conventional power plants where the transmission lines are already in place.)

So, that was my reading this fine Saturday morning in Boston. As JRR Tolkien said, we all have our myths. You have yours; I have mine.

Saturday Morning Reading for Another Slow News Day in the Bakken

For those new to the Bakken and for those trying to sort out recent talk about drilling moving farther east in North Dakota, this might be a good time to review two postings that have lots of background.

The first is a short posting with links to great articles on the Bakken in general.

The second is a post with additional discussion regarding recent talk about drilling farther east.

Michael Reger and NOG

It appears I'm not the only irrationally exuberant fan of the Bakken. And this guy has made millions.

Michael Reger is the CEO of NOG.

From something called MinnPost.com, published May 19, 2010.

Data points from the article in case the link is broken (the exuberance is from the article; I did not embellish a thing):

• NOG's business strategy: participate in the "massive land grab" for leasing rights currently going on in the Williston Basin
• In 2006, Reger got wind of a successful drill site in Mountrail County, an area thought not to be that productive. He founded NOG and immediately began buying up strategically located leasing rights in the surrounding areas, giving him a proportional share of the oil being pumped in exchange for sharing in the upfront cost of drilling
• His first well, 12.5% interest, cost $600,000 up front, and production paid for that working interest in six (6) months "and they'll send us checks on that well for 50 years...That was the 'Eureka!' moment" when he knew the non-operating business model was the way to go
• Realizing he needed to raise more capital quickly to acquire leasing rights, he took the company public in 2007

"Mountrail thought not to be productive"? It has been noted that four townships in Mountrail county currently account for about 50% of North Dakota's annual oil production. 

And this answers another question I often get about the Bakken: how long will a Bakken well last? Michael Regel expects to get royalty checks from that well for 50 years.

Let's see, a stripper well, at 10 barrels/day at $50/bbl = $500/day; $15,000/month.  12.5% of $15,000 = $1,850. About as good as social security. Assuming social security is still around 50 years from now.  

Drilling Range to Extend East

North Dakota spokesman says the Three Forks Sanish extends well beyond the borders of the Bakken formation. He expects oil drilling to move east into Ward County and Minot, North Dakota.

(A reminder: some links remain only for a few days before they are lost to the archives where a subscription might be needed. Some of these subscriptions are free.)

Update, May 22, 2010: this short article about drilling moving toward Minot is being met with skepticism by some. It reminds me of the skepticism of some of the most knowledgeable Bakken geologists just prior to the boom. From another posting:

An interview with Julie Lefever just months before the Bakken boom in 2007 began. The date "March 7" is given but not the date, but it certainly sounds like 2006. Was the article written but not published by the Grand Forks Herald? Regardless, this is an important article for at least two reasons: a) provides a nice overview of what "we" knew about the Bakken just before the boom; and, b) the skepticism (if that's the right word) of perhaps the most knowledgeable person regarding the Bakken just before the boom.

In this article she refers to a new well in Mountrail County as generating a bit of interest in the Bakken. I wonder if this is the same well that propelled Michael Reger and NOG into the "big" leagues?

US Army Corps of Engineers to Put Kabosh on Fracking. UPDATE: Not!

UPDATE, May 22, 2010: The story below was posted May 21, 2010 (yesterday). Today it was announced that the US Army Corps of Engineers will NOT impose a moratorium on new water permits from Lake Sakakawea. Very, very good news.

ORIGINAL POST, May 21, 2010

Earlier this week, I posted a story that there was plenty of water in Lake Sakakawea for fracturing -- that all the water needed for the oil industry represented about two-tenths of one percent of the Missouri River flow.

But it turns out the US Army Corps of Engineers plans to put a hold on any more water coming out of the Missouri.

The corps is proposing a long-term water allocation study that could take at least three years and possibly seven years to complete. During that time, the corps has said, no new lake water intake permits will be issued and existing permits will not be changed for higher capacity.

Yup, anything to destroy the oil industry in this country.

Focus on Dore, North Dakota

NuStar has an oil-loading facility in Dore, North Dakota, shipping oil on the Burlington Northern Santa Fe (BNSF) to St James, Louisiana. 

When I first printed that story, I did not know where Dore was. I had never heard of Dore, North Dakota. This morning, with nothing better to do (with the price of oil in free fall) I decided to find Dore on Google maps.

Dore is located on the road between my home town, Williston, North Dakota, and Fairview, Montana. I have driven that road hundreds of times, often with my dad, sometimes by myself. I never recalled going through Dore. Thinking that Google might be "off" a bit, I checked Mapquest: same result.

Dore is just a few miles north of Fairview on state highway 58, about 30 miles southwest of Williston.

Both Google and Mapquest have satellite images of Dore. From what I can tell there are a few rural, as in farmyard, buildings but that's it. If there's a post office, grocery store, or bar, I would be surprised. Okay, I wouldn't be surprised if there's a bar there.

But the BNSF track does run parallel with the state highway 58 so an oil-loading facility there is entirely plausible.

When googling "Dore, North Dakota," one gets four hits.  Two of the hits are "maps" (Google and Mapquest).  The most interesting hit is:  "How can I sell my timeshare in Dore, North Dakota -- How to get rid..."

Who would have guessed? Time-shares in Dore.

Congress to Quadruple Taxes on Oil

Congress will quadruple taxes on oil to fund the Oil Spill Liability Trust Fund. Specifically, the bill will increase the 8-cent-a-barrel tax that oil companies pay toward the trust fund to 32 cents a barrel, raising $10.9 billion over the next decade.

Update on New Permits Granted So Far This Year

With six (6) new permits granted today, North Dakota is on track for 1,270 new permits in calendar year 2010.

How does this stack up with previous years in this boom?

2006: 422 permits; 193 of those have been drilled to date
2007: 497 permits; 437 of those have been drilled to date; a very few dry
2008: 954 permits; 660 of those have been drilled to date; a very few dry
2009: 628 permits; 314 of those have been drilled to date
2010: 487 permits; 7 of those have been drilled (off the confidential list)

Daily Activity Reports: Dullsville

I don't get it. There are 114 active rigs in the Bakken. They can drill a well in less than 30 days. There is a backlog in fracking, and Halliburton now has crews working 24/7, and we are almost into our sixth month of 2010, and yet, and yet, .... the daily reports of completed wells are well, lackluster.

[Wells can stay on the confidential list for six months.]

Yesterday, two wells reported. The day before, two. Today, none. Only one well came off the confidential list today and that was because the permit was canceled.

The good news is that the list of new permits continue to grow, averaging about four to six new permits every day. Today there were six new permits but even that list was not particularly exciting: no Eco-Pads, no multiple-well sites.

Maybe I will be pleasantly surprised tomorrow, but today was a bummer as far as the daily activity report goes.

Wind Farm Electricity Costs Coming In -- and They Aren't Pretty

I used to publish an energy blog that covered all energy issues, but I deleted it when I simply ran out of time to devote to it.

Actually that's not true. Through that blog I felt I finally understood some of the issues regarding global energy issues, but the more I learned about energy, the more irritated / frustrated I became. It was best just to delete the entire blog and move on. That's why I limit my blog to the oil and natural gas industry in North Dakota -- my home state -- and try to remain unemotional about energy in general, except to one arena: I remain irrationally exuberant about the Bakken, or more appropriately, the Williston Basin.

But on occasion I will blog about other issues. Yesterday it was the recently passed national health care plan. Today it's about energy in the Northeast. 

Today I am in Boston, enjoying The Boston Globe (see Doomsday: Mainstream Media). The Massachusetts utility company, National Grid, has announced a $3 billion contract with Cape Wind -- the wind farm off Nantucket Sound.

Well, it turns out the Massachusetts attorney general wants to see if this a good deal for the taxpayer.

Conventionally-generated electricity costs about ten (10) cents per unit (KWH). The price National Grid will pay for wind-generated electricity: slightly more than 20 cents per unit (KWH), and that cost is rising at a 3.5% annual rate for the foreseeable future.

Maybe the Kennedy family will yet see the demise of the wind farm off the(ir) coast sometime in their lifetime. I'm not holding my breath.

*****

Update, May 23, 2010: Today, there's an opinion piece in the Boston Globe's Sunday supplement, "Boston Uncommon" by Tom Keane about Cape Wind, with the title, "Memo to Cape Wind Foes: Enough Already."

He calls it like it is, showing the hypocrisy of liberal politicians, like Ted Kennedy, strongly in favor of "green energy" as long as it is not in their backyard. Keane strikes every argument, except one, and says the project is finally going to move forward. The one argument Keane conveniently forgot to address: the project is not economically viable.  The cost for energy production is at least twice that of conventionally-generated electricity, and the technology cost is rising. And that cost increase is not inconsequential. Without huge subsidies from local, state, and Federal governments, the project is doomed. Unless the project is saved by new laws and regulations based on debunked myths.

But what struck me most was this (remember, the project has been in the making for nine years): the aerial view of Nantucket Sound off Hyannis Port revealed not one -- not one -- wind turbine yet. It will be a decade before all the wind turbines are put in -- that's my guess. I had thought with the recent announcement that National Grid had signed a 15-year contract to buy half of the electricity produced by Cape Wind that the turbines were up and ready to produce. But the turbines are not there.

Speaking of which, I wonder how the world's biggest off-shore wind farm, the London Thames array is coming along? Off-shore work for the first stage is due to begin in early 2011. We will see.

Update on Monster Wells

My original post on "monster wells" can be found here.

This is an update from the Bakken Shale Discussion Group, a thread started in early April, 2010:

The 500,000 bbls club (500KBC):

As of February, 2010, there are at least four wells that have produced > 500,000 barrels of oil:

• Behr 34: 500,725 bbls in 591 days
• Austin 28: 504,554 bbls in 517 days
• Austin 21: 514,353 bbls in 522 days
• Chandler James: 500,234 bbls in 484 days

As a reminder, 500 days = 16 months; that's barely more than a year. Bakken wells will certainly produce for seven (7) years and I most will last much longer with pumps, work-overs, re-fracks, etc. BEXP says Bakken wells will be economical for 39 years (corporate presentation, August, 2010).

The Austin 28 is now producing over 1,000 bbls/day after getting a submersible pump in December, 2009. At $50/bbl, that's $1.5 million/month at the wellhead.

The Chandler James and the Behr well are still flowing according to the posting, referencing the NDIC website. Wow!

The PetroHunt USA 2D has produced 933,366 bbls and is still producing 586 bbls/day well into its third year of production.   1 million barrels = a minimum of $40 million at the wellhead.

A few points:

1. Oilmen are optimistic and always looking to the next well. I don't think they think much about wells that have already been drilled. They are only looking for cash flow to drill that next well, hoping for a game changer.

2. In the old days in North Dakota, I remember a lot of "dry" wells. I don't see many dry wells in the current boom. Even poor wells (not "uneconomic" and abandoned wells) produce some cash flow. Wells that are only producing 300 barrels/day (about $0.5 million at the wellhead) are reasons for yawning.

3. As one can see by the "monster wells" above, one well can pay for a lot of future drilling with one great well.

Natural Gas Pipeline Expansion in North Dakota

Williston Basin Pipeline Company (a subsidiary of MDU) announced today (May, 2010) plans to expand its existing natural gas pipeline capacity by approximately 33 percent in the Bakken production area in northwestern North Dakota. The proposed expansion would add up to 30 million cubic feet per day to existing volumes from the Bakken production area for delivery to Northern Border Pipeline. The expansion project is expected to begin November, 2011.  (The URL suggests this link my break or point to another story in the future.)

The price of natural gas is very, very low, but yet I keep seeing many, many stories on activity in the natural gas arena.

It doesn't take a rocket scientist to see that there are some folks that think investing in natural gas "today" is going to pay off nicely in the future.

Some things to consider:

1. No matter how much folks talk about "green" power (wind and solar), the fact remains, both of these "renewable" sources will play a marginal role in energy production in the US for the next several decades.

2. That leaves two choices: carbon and nuclear. The carbon choices are coal, natural gas, and/or oil. Without political intervention, coal would remain the least expensive, but sooner or later, the odds are that coal will become more expensive. Oil is good for transportation but it's not going to be used to generate electricity. That leaves natural gas and nuclear energy to generate electricity.

3. The current administration backs increased nuclear power and there are big players advocating nuclear power. These big backers include Bill Gates and General Electric. So, one would think that the expansion of nuclear power is a no-brainer. But the American public is skittish and unpredictable. It's one thing for an oil rig in the Gulf of Mexico to implode/explode resulting in a catastrophic oil spill; it's another thing for a nuclear power plant to implode/explode resulting in a catastrophic nightmare. And that's the rub.

4. US electricity needs will continue to increase over the next decades, partly because of the electric cars about to hit the market. Something is going to be needed to generate that electricity, and there appear to be some folks who think it will eventually be natural gas.

On a completely different note regarding the increased natural gas activity in North Dakota. It has been common practice for oil companies to flare off natural gas in North Dakota. I believe I read somewhere a year or so ago, that North Dakota ranked #1 among states, and western nations, in flaring of natural gas. The state finally stepped in and mandated that oil companies limit their oil production from any well flaring natural gas, until the flaring was eliminated or minimized. Obviously this regulation requires that natural gas pipeline capacity be increased. Obviously the regulation plays a role, but I still think there is more going on in the natural gas arena than meets the eye.

Final comment: This really is a big deal. One starts to get used to all these press releases, it is easy to lose sight of the big picture. In this case, Williston Basin Pipeline/MDU says it currently transports 90 million cubic feet per day, and this expansion will be another 30 million cfpd. I can't deal in large numbers but if I had $90 to spend and someone said they would give me another $30 that's a huge amount. And it appears that this increase capacity should be accomplished with relatively little effort. I would assume most of the environmental impact statements and rights-of-way will be easy to complete.

ObamaCare

Pretty much summarizes Harry Reid's attitude and ObamaCare:

Why would we want to help one kid with cancer? Harry Reid

The Showdown -- September 30, 2013

The Components of ObamaCare
[Initially posted September 27, 2013 as details started to become clear]
There are three components of ObamaCare: employer mandates, individual mandates, and everything else (hidden taxes and fees)
Employer mandates: 

• delayed for one year; delayed until 2015
• cost-shifting began in late 2013; employers moving employees to exchanges

Individual mandates:

One can start to see how ObamaCare is going to turn out exactly like Solyndra.

1. The individual mandate -- the cornerstone of ObamaCare -- will be provided by the "on-line exchanges."

2. None of the large, well-known health insurers will be participating in these "on-line exchanges." Small, under-capitalized, unknown companies will run these "on-line exchanges." Many of these companies will be start-ups with minimal, if any, experience in health care insurance.

3. These exchanges will offer very low premiums for insurance that meets the minimum standards mandated by ObamaCare. My understanding is that some premiums will be as low as $5.00/month (posted with link earlier). Of course, these policies will have huge out-of-pocket expenses: co-pays.

4. The large insurers say they will not support the "on-line exchanges" because they will be inundated with applications from those with pre-existing conditions and open-ended demands for psychiatric care.

5. It is my understanding that ObamaCare does not allow insurance companies to set an upper limit for lifetime claims. If that is true, the under-capitalized, small companies are at risk for large claims that won't be offset by the number of folks they would need to sign up who have minimal claims.

6. It took two to five years for the DOE-backed "Solyndra" companies ("the list of 38") to go bankrupt. We will see the same thing with the "on-line exchanges."  A lot of federal money will be provided these small, under-capitalized companies, but over time, they will run into financial difficulties, and gradually disappear.  [September 16, 2014: CNBC is reporting -- exactly what happened in Minnesota.

PreferredOne, the insurer that sold nearly 60 percent of all private health plans on Minnesota's Obamacare exchange, on Tuesday said it would leave that marketplace. PreferredOne's plans were the lowest-cost options on that exchange, known as MNSure.

PreferredOne cited the costs of doing business on MNSure as the reason for its surprising decision, saying that selling plans is "not administratively and financially sustainable going forward." In other words: bankrupt.

Everything else

• Taxes on medical devices
• Etc 

Data Points

HHS-Granted Waivers -- HHS has removed the link for these waivers. 

ObamaCare Cost Shifting (OBCCS)

Health Exchanges
Those "health exchanges" we are hearing so much about? They are nothing more than "websites." Bloomberg says it's about time states get "on board." But yet, HHS hasn't even provided specific guidelines regarding the websites:

The exchanges will basically take the form of websites, designed to lead people through the process of selecting an insurance plan, based on price and coverage. In the process, users will be able to determine whether they qualify for subsidies or for Medicaid. (The existing Massachusetts Health Connector is a model for what most exchanges are expected to look like.) To design and plan such a website doesn’t require knowing, as McDonnell demands, for example, how the federal government will manage pools of high-risk patients.  [Really?]

It’s true that HHS delayed until this week issuing guidance on the benefits that insurance plans will be required to provide. It’s also true that the department was a little slow to come out with its rules on enrollment periods, rate increases, catastrophic-care plans and the ways in which premiums can vary. It’s eminently possible that these delays were attributable to politics (that is, a presidential election). Yet this information has arrived in plenty of time; the plain fact is that states didn’t need it in order to decide whether to go ahead with an exchange.  [Really?]

At this point, a state that has done absolutely nothing to prepare probably has too little time to create its own exchange before October 2013, when HHS says it must be ready. Still, there is time enough to join in partnership with HHS; the deadline for deciding to do that is not until mid-February. In such partnerships, the federal government could provide the information technology, while the states would work with insurance companies on plans and provide guidance for residents. 

If everything is so easy, and everything is so straightforward, a) why has HHS not published the guidelines; and, b) why are Illinois and Ohio partnering with the Federal government. An "exchange" is simply a webpage, according to Bloomberg.

Federal exchanges: due to time constraints (they need to be in place by October, 2013, less than a year from now), the industry will sort this out for the government. Federal exchanges will be folded into the DOD health care program, Tricare. Humana will be one of several huge winners. Posted November 28, 2012. 

Only 15 states opt for state-run exchanges, December 13, 2012. Link to CNBC. Two less than reported November, 2012. This is going to be one huge mess. -- December 13, 2012. By the way, the "exchanges" are simply websites telling folks which insurance programs meet ObamaCare criteria. The federal government has not posted its own exchange as of this date.  Four states will partner with the federal government, two more than in November, 2012.

Exchanges (as of November 12, 2012, with changes highlighted in bold)

State exchanges: California, Colorado, Connecticut, Hawaii, Idaho (see below, rejects Federal exchange), Iowa, Kentucky, Maryland, Massachusetts, Minnesota, Mississippi, Nevada, New Mexico, New York, Oregon, Rhode Island, Vermont and Washington. (as of November, 2012)

No-state exchanges (defer to the federal exchange):  Alabama, Alaska, Georgia, Indiana, Kansas, Louisiana, Maine, Missouri, Nebraska, New Jersey (see December 6, 2012, note below), North Dakota, Ohio (see below), Pennsylvania (see December 13, 2012 entry below); South Carolina, South Dakota, Texas, Virginia, Wisconsin and Wyoming. (as of November, 2012)

Partnership exchanges with the federal government: Illinois (as of November, 2012); Ohio (see November 16, 2012 entry below).

Undecided about exchanges, state vs federal government: Arizona, Arkansas, Florida, Idaho (see below, rejects Federal exchange), Michigan, New Hampshire, Oklahoma, Pennsylvania (says "no'; see December 14, 2012 entry below), Tennessee, Utah and West Virginia (as of November, 2012)

Medicare gutted by ObamaCare:

Spin

It's such a great program, we're going to delay it for a year. -- July, 2013

Updates

June 26, 2016: Blue Cross Blue Shield Minnesota exits MNsure; 103,000 individual policy owners affected. 

May 7, 2016: now it's the Idaho ObamaCare exchange in trouble. 

April 16, 2016: United Health pulls out of ObamaCare -- first Georgia and Arkansas, now Michigan. 

March 25, 2016: Hillary, Bill, and Chelsea turn on ObamaCare. 

January 20, 2016: UnitedHealth will lose $1 billion on ObamaCare; forces President Obama to tighten ObamaCare rules. 

November 20, 2015: from CNBC --

It's not just UnitedHealth Group that is having very serious red ink problems over Obamacare.

Goldman Sachs just reported that the thirty not-for-profit Blue Cross plans are expected to lose money as a group for the first time since the 1980s—with the Obamacare exchanges being the key driver.

Already, 12 of the 23 Obamacare created health insurance co-ops have become insolvent with almost all of the rest losing money—100 percent of their business is Obamacare business.

The Obama administration itself has reported that in its risk corridor reinsurance program, the carriers losing money are doing so at a rate eight times larger than the few carriers that are making money.

November 19, 2015: one of the country's largest health care insurers may opt out of ObamaCare -- UnitedHeatlh Group, leaving 550,000 folks scrambling to find another source of insurance coverage. 

June 11, 2015: another story suggesting folks know. In this case, it looks like Pelosi leaked the decision to her state officials:

The head of California's Obamacare exchange says the U.S. Supreme Court risks setting a "horrible moral precedent" if it strikes down health-law subsidies across much of the country. 

Peter Lee, executive director of Covered California and a former Obama administration official, said a court ruling against the Affordable Care Act "signals that subsidies don't matter."

"I think it would set a horrible moral precedent if the Supreme Court was to find that we can leave Americans without that financial leg up," Lee said in an interview. "I think it’s a fundamental flaw to not understand how every American needs a leg up."

A court ruling against the Obama administration in the King vs. Burwell case would have no immediate effect on Covered California and its 1.2 million consumers receiving subsidies because it's a state-run marketplace.

June 10, 2015: the tea leaves are swirling. There are two questions with regard to the ObamaCare case before the Supreme Court: when and what. When will the court release its findings? What will the court say? My earlier posts have always been that the best outcome would be to throw the case back to Congress. Now, at 11:40 a.m. today we get this story from Fox News: SecHHS says the same thing: if the Supreme Court rules "against" ObamaCare, it's back to Congress to fix it. That story answers the two questions. The court will rule 6-3 against ObamaCare, and the Supreme Court will release its decision NLT Friday evening, 5:00 p.m. EDT, this week.

June 10, 2015: with regard to the ObamaCare before the Supreme Court right now, the court should call Congress' bluff -- send the law back to Congress saying they have six months to "fix those four words, make their intention clear, make the law clear" or the court will scuttle the federal exchanges. Give Congress six months to fix the law the way they want it. My hunch is the GOP would support Mr Obama. 

June 10, 2015: knowing that the Supreme Court has already made their decision on whether the Federal exchange is legal based on four words in the ObamaCare law, we are seeing more and more articles trying to read the tea leaves to see how the Supreme Court will rule. I was almost ready to write a similar post as this WSJ op-ed that was posted today. 

Does the White House think it is going to lose this year’s big ObamaCare subsidy case at the Supreme Court? We’re beginning to wonder given President Obama’s increasing show of pique when he talks about the law.

On Monday in Austria, Mr. Obama responded to a question about the looming decision in King v. Burwell by treating the Supreme Court like first-year law students for even considering the case. 

“There is no reason why the existing exchanges should be overturned through a court case. It has been well documented that those who passed this legislation never intended for folks who were going through the federal exchange not to have their citizens get subsidies,” Mr. Obama averred. That conveniently ignores comments by ObamaCare architect Jonathan Gruber, but the President kept rolling. 

February 11, 2015: Staples is the latest company to cut hours for its employees because of ObamaCare; will cut to 25 hours/week.

September 21, 2014: IRS will "cut" refunds in 2015 for those who lied about their income status when applying for ObamaCare and the subsidies.

October 22, 2013: Karl then asked Carney about the main contractor that built the website, CGI, and why they were hired after being fired by a provincial health agency of Ontario, Canada. Carney again refused to answer, referring him to Health and Human Services.

October 17, 2013: 99.6% of those who visit, do not enroll. Of those who enroll, the vast majority will NOT purchase an insurance plan. Of those who do purchase an insurance, most will have cancer, AIDs, or AIDS-equivalent medical expenses. Of those who are healthy and do purchase an insurance program, most will drop out after two or three months because of high co-pays or high deductibles.

October 16, 2013: three insurers offer on-line ObamacCare enrollment in North Dakota. As of yesterday, only two have enrolled with one of the three insurers; none for the others. Insurers say they are not worried. It's early in the process.

October 4, 2013: there are a lot of story lines in this article about a man signing up for ObamaCare; he's 28, healthy; earns $20,000/year. The monthly premium: $214. Government pays $150; he pays about $65/month. Something tells me he won't pay the second premium and will drop out. The math, for him, doesn't add up. $20,000/12 = $1800/month. I'm not sure how he gets around LA without a car. If he  is actually paying for rent in Los Angeles he must be living in a dump. But the good news is that $20,000 a young, healthy male with no family can survive.

September 23, 2013: Wisconsin moving 100,000 Medicaid recipients to ObamaCare.

September 23, 2013: Premiums may cost less -- but good luck finding a provider. -- New York Times.

September 23, 2013: it's official -- ObamaCare will increase costs an average of $7,450 for a family of four -- Forbes.

September 18, 2013: seniors turn on ObamaCare. They want it repealed. Just remember that the organization that represents all seniors, the AARP insurance company, was a strong, strong supporter of O'BamaCare. AARP members might want to let AARP know how you really feel.

August 23, 2013: Delta Airlines: health insurance costs will increase by $100 million next year, due partly to ObamaCare.

August 21m 2013: UPS to remove 15,000 spouses from company's health care program. 

August 19, 2013: for those do not know, "Forever 21" is the trendiest young women's store right now. The chain has just announced it will no longer have any full-time non-management employees. 

The predictions and fears of the Affordable Care Act’s adversaries have begun to materialize, specifically fears that the law will encourage employers to demote their employees to part-time positions in order to evade federal health care requirements. Popular clothing company Forever 21 is the first of what might be many companies to limit its non-management workers’ hours to 29.5 a week, just below the 30-hour minimum that the ACA deems full-time work.

Explaining that the company “recently audited its staffing levels, staffing needs, and payroll in conjunction with reviewing its overall operating budget,” Associate Director of Human Resources Carla Macias informed employees that effective August 31, they will no longer be full-time employees of Forever 21.

August 19, 2013: O'BamaCare will be completely unraveled by Labor Day -- Chicago Tribune. But it's perfectly legal to flout the law. I guess.

August 19, 2013: the president has essentially blown off O'BamaCare: waiving, delaying; and now it's reported that the White House has missed more than 50% of the law's deadlines. I don't know if this is how all presidents have worked, but it is clear that this president broke the code -- Presidents can do what they want; they won't be impeached for failing to uphold laws that the public doesn't like.

August 14, 2013: lying, or out of the loop?

NBC News contacted around 20 small businesses and other entities for this report and found that employee hours are being cut to 29 hours because of Obamacare, despite the delay of the employer mandate. But the White House, NBC News reports, says that there is no systematic evidence that this is because of Obamacare and dismisses the report as anecdotal.

Does not matter. This administration threw the truth under the bus a long time ago.

July 28, 2013: about 25% of those who access to health care through their employers turn it down. Why? too expensive.

July 23, 2013: NewsMax contributor on O'BamaCare:

Commenting on Obamacare and the administration's move to delay the employer mandate for a year, Schoen said warned that if the administration is forced to delay the individual mandate as well, "that would effectively kill" the healthcare reform law that the president invested the first two years of his presidency in.

July 23, 2013: even moderate Democrats are throwing in the towel, bailing, they see the impending train wreck.

July 23, 2013: they won't shut down government this autumn, but they will delay ObamaCare. Everyone knows a recession is all but guaranteed going into the 2014 elections if ObamaCare's last leg -- the individual mandate -- is implemented. ObamaCare is dead. Like the Keystone XL, it will wither on the vine. No drama, O'Bama. States won't play along. Unions denouncing it. Young, healthy adults will simply opt out and pay the $95 penalty. The health insurers will continue "pulling out." If not delayed, the largest social disobedience movement in US history -- except maybe Prohibition. And the first profession.

July 22, 2013: this is no longer about cost; it's about the constitution -- ex-HHS; now running for US Senate. It will be interesting to see what the House does this autumn when the government runs out of money -- whether they will fund/de-fund ObamaCare

July 22, 2013: The Hill has a nice essay on status of the impending train wreck.

The White House is working to get back on offense in the debate over ObamaCare, after a surprise delay in part of the implementation knocked its message off course.

July 21, 2013: another California health insurer jumps ship; getting out of the way of the impending train wreck. 

July 11, 2013: another company eliminates health care insurance for part-time workers. 

July 7, 2013: Just 16 states and the District of Columbia have elected to operate their own marketplace. Another seven states are partnering with the U.S. Department of Health and Human Services (HHS) to run their exchanges. And 27 states have abandoned the option of running their own marketplace, and instead are letting HHS run those exchanges within their states.

And then this CNBC headline: it's the fault of the states if ObamaCare fails, not O'Bama's fault

From the comments at the linked article, it's obvious Americans can see through this. And folks wonder why "we" migrate to Fox and to Drudge, and NBC ratings keep dropping.

July 7, 2013: Just 16 states and the District of Columbia have elected to operate their own marketplace. Another seven states are partnering with the U.S. Department of Health and Human Services (HHS) to run their exchanges. And 27 states have abandoned the option of running their own marketplace, and instead are letting HHS run those exchanges within their states.

And then this CNBC headline: it's the states' faults if ObamaCare fails, not O'Bama's fault

July 2, 2013: the "corporate mandate" is delayed one year; this is the guts of the law; probably illegal for the president to do this without Congressional consent; Dems applaud the move; some suggest this is the beginning of the unraveling of the act; risk of social disobedience on a grand scale; at best provides a one-year delay; at worse, doesn't stop the Train Wreck.

June 21, 2013: Kerry, Massachusetts, and O'BamaCare.

June 15, 2013: Carl's Jr sees a train wreck; getting out of the way. 

May 31, 2013: Health care premiums in California will go up 150% due to ObamaCare. Whatever you now pay, double it and then increased the original price by an additional fifty percent. $500/month will now go to $1,250. I guess that's affordable. Cue up Connie Francis.

May 25, 2013: some unions now upset with ObamaCare.

April 3, 2013: a lot of ObamaCare stories today. When the Time Magazine story broke (see below), I e-mailed a friend, suggesting that ObamaCare would be delayed a year. Now, just moments ago (about 4:30 pm CST) a story broke on Fox News that a key provision of ObamaCare will indeed be delayed a year. It's very, very bad news for small business but it will result in ObamaCare, in general, being delayed a year. All those states that signed up to expand Medicaid are now in limbo, I assume, wondering what's in effect, what's not, what is the state liable for. What happens if the state expanded Medicaid, but the federal government now delays ObamaCare? From Fox News:

Parts of ObamaCare are starting to fray, even before full implementation. 

The Obama administration now says a special system of exchanges designed to make it easier for small businesses to provide insurance will be delayed an entire year -- to 2015.
"Lots of small businesses struggle with providing insurance for their workers so this was supposed to facilitate it and make it easier for small business to do this," said Jim Capretta of the Ethics and Public Policy Center. "It was a huge portion of the sale job.

When they passed the law in 2010 there were many senators and members of Congress who were saying 'I am doing this because it's going to help small businesses.'"

April 3, 2013: Cancer clinics turning away Medicare patients; clinics can't survive financially on Medicare reimbursement under ObamaCare. This is not particarly new; it's only going to get worse under ObamaCare.


April 3, 2013: To sign up for ObamaCare, start filling out the forms now, and hire a good accountant. -- Forbes. This is the 60-page form.

April 3, 2013: ObamaCare incompetence. -- Time Magazine.  If they are only starting to plan for ObamaCare, they are way too late.

One thing is clear: Obamacare will fail if he doesn’t start paying more attention to the details of implementation, if he doesn’t start demanding action. And, in a larger sense, the notion of activist government will be in peril—despite the demographics flowing the Democrats’ way—if institutions like the VA and Obamacare don’t deliver the goods. Sooner or later, the Republican party may come to understand that its best argument isn’t about tearing down the government we have, but making it run more efficiently.

Sooner or later, the Democrats may come to understand that making it run efficiently is the prerequisite for maintaining power.

April 3, 2013: Most individual health insurance policies not "good enough" for ObamaCare.


March 25, 2013: Would you like fries with that?

March 22, 2013: ObamaCare and Frequent Flyer Miles.

March 17, 2013: it's personal now. An older couple, husband-wife, both blue collar, older (50's), and relatives (that's why it's personal); both in long-term jobs; he was cut back to 30 hours; she was laid off. Being cut back to 30 hours is interesting isn't it? That's the ObamaCare cutoff. I told my wife this is just the beginning. My hunch is that Congress will start seeing the debacle develop this summer, but by the time they try to postpone implementation of ObamaCare, it will be too late. Once companies lay off workers, or cut back on their hours, the companies learn to do more (or as much) with less (and they will be helped through technology and automation). Once these companies learn to do more (or as much) with less, they won't be hiring folks they laid off. 

March 15, 2013: The government cannot force Domino's Pizza to offer contraceptives to its employees under ObamaCare - federal judge. It is unlikely the administration would take these cases to the Supreme Court and risk further whittling of the program.

March 13, 2013: ObamaCare, gaming the system.

It appears that's exactly what's happening in Massachusetts, which passed its own Obamacare-like reform with an individual mandate in 2006.

Last year Charles Baker, former CEO of Harvard Pilgrim Health Care, one of Massachusetts's largest health plans, noticed some health insurance brokers posting comments on his widely read blog. They expressed suspicions that people were applying for health coverage after a medical condition developed, got the care they needed, and then dropped the coverage.

Coverage for an individual, noted Mr. Baker, now a Republican candidate for governor, might be $2,000 to $3,000 a year, whereas the penalty was only about $900. He asked his finance people to see whether they could find any discernible patterns.

Boy, did they. 

Between April 2008 and March 2009, 40 percent of the individuals who applied to Harvard Pilgrim stayed covered for less than five months. Yet claims were averaging about $2,400 a month, about six times what one would expect.

March 11, 2013: it can't be much plainer -- Five Guys --

a) will not add any more restaurants until they get clarity on the impact of ObamaCare
b) they will pass on the costs of ObamaCare to their customers
c) they are looking at ways to lay off employees; hire fewer employees in the future

February 22, 2013: Gallup poll on US health care.

February 18, 2013: a Financial Times article on ObamaCare as it starts to hit businesses. They started complaining too later. Cue up Connie Francis. The interesting thing: the writer of this story does not "get it." The employer does not determine the number of "full-time" employees; the IRS determines the number of "full-time" employees by dividing total number of employee-hours worked, divided by 120 (as in 120 hours/month). So, if one has 100 "part-time" employees, each working 20 hours/week (well below the 30-hour threshold), the employer may think he/she has 100 "part-time" employees for which health insurance coverage is not required. In fact, 100 x 20 = 2000 hours x 4 weeks = 8,000. Divide by 120 = 67 "full-time" employees for which the company is required to provide health coverage, at $2,000/full-time, or in this case, $2,000 x 67. Very, very clever, how the law was written.

February 17, 2013: government running out of money to fund "uninsurables/pre-existing conditions." Discontinued the program. Decision released at end weekly news cycle, Friday afternoon. President goes on vacation. 

December 13, 2012: Pennsylvania says "no" to state exchange. Idaho rejects federal exchange.

December 6, 2012: New Jersey governor Christie vetoes bill that would have mandated state-run exchanges.

November 28, 2012: majority of Americans do not think government should be guarantor of health care, Gallup. Cue up Connie Francis.

November 28, 2012: The feds blame the states for refusing to become ObamaCare subsidiaries, WSJ.

November 25, 2012: this is how ObamaCare will play out -- each individual mandate will end up in court. Congress mandating specific coverage without co-pays oversteps Congressional authority, some say.

November 21, 2012: Morning Joe sees the world differently; it will be interesting to see how this plays out; I do not understand why Joe surrounds himself with liberals; he has some of the lowest ratings of all tevevision talk shows.

November 20, 2012: states get a say in ObamaCare.

November 16, 2012: governors of Ohio and Wisconsin say they will not set up state-run exchanges; they will defer to the federal government; 

July 10, 2012: California cannot afford ObamaCare -- LA Times.

July 10, 2012: Wisconsin rejects ObamaCare.

Texas, Florida, South Carolina, Wisconsin, Mississippi and Louisiana have rejected the two key provisions of the law, according to americanhealthline.com.

July 10, 2012: 83% of physicians have considered quitting medicine over ObamaCare.  This was the physicians vs the lawyers, and the lawyers won.

January 6, 2012: North Dakota denied waiver; unions granted waivers. 

December 28, 2011: why ObamaCare is killing jobs. 

"Our company, CKE Restaurants Inc., employs about 21,000 people (our franchisees employ 49,000 more) in Carl’s Jr. and Hardee’s restaurants. For months, we have been working with Mercer Health & Benefits LLC, our health-care consultant, to identify Obamacare’s potential financial impact on CKE. Mercer estimated that when the law is fully implemented our health-care costs will increase about $18 million a year. That would put our total health-care costs at $29.8 million, a 150 percent increase from the roughly $12 million we spent last year.

September 20, 2011: Howard Dean, physician, ex-governor, ex-Presidential contender, says most employers will drop employee-health insurance once ObamaCare comes on line. "Small business will get out of the health care business."

September 6, 2011: Percent of health care uninsured adults has increased from 14.9 percent to 16.8 percent under President Obama. The trend continues to rise; this is up from 16.4 percent earlier this year. One can argue that it is due to folks losing their jobs and their healthcare but that was one of the whole purposes of ObamaCare: to protect those who lose their jobs.

July 21, 2011: An inconvenient truth -- the real jobs killer -- ObamaCare. I don't think folks understand that majority of jobs in this country are provided by small business. As long as they stay under 50 employees and do not engage in interstate commerce, they are not affected by Federal law (at least in general). Businesses close to 50 employees will do all they can to stay under that "magic" number.

May 15, 2011: The Obama administration approves 204 more waivers. At some point, there will be no one left to give waivers to.

April 13, 2011: Support for ObamaCare has now dropped below 35 percent; first time support among seniors dropped below 30 percent. Comment: ObamaCare will unravel in 2011/2012. Romney, whose Massachusetts RomneyCare was a model for ObamaCare, will have to finesse his "RomneyCare fits Massachusetts but doesn't fit the nation" theme.


March 23, 2011: One of the administration's strongest advocates of ObamaCare is now considering a waiver to release New York City from ObamaCare. I  cannot make this stuff up. I assume it's a no-brainer to guess NYC will get the waiver if the city applies.

March 8, 2011: The State of Maine was given a waiver.

The federal government Tuesday granted Maine a waiver of a key provision in President Barack Obama's health care overhaul, citing the likelihood that enforcement could destabilize the state's market for individual health insurance. [This is becoming a joke. Any state that wants to opt out will simply "boiler-plate" Maine's waiver application.]

March 6, 2011: Waivers for ObamaCare now exceeds 1,000.  On Friday, March 4, 2011, 261 new waivers were granted. This is truly obscene. The HHS web page has not been updated.

January 31, 2011: Florida judge may rule in favor of 26 states who argue ObamaCare is unconstitutional.

November 18, 2010: Twenty percent of Americans with mental illness last year -- and that's why ObamaCare is doomed to fail. I was one of the twenty percent: hypermanic about the Bakken. My insurance covers that malady but I refused electroshock therapy.

November 14, 2010:  "We" are now up to 111 companies and unions that get waivers from ObamaCare. This is incredible.



November 5, 2010: AARP is increasing the premiums on their health insurance due to ObamaCare. AARP was a big supporter of ObamaCare.

March 10, 2010:  Miami's major hospital network is on verge of financial failure.

Original Post

This has nothing to do with oil industry in North Dakota.

This posting will disappear within a day or two and will be filed elsewhere, so don't despair.

The Wall Street Journal posted a nice op-ed piece yesterday (May 18,2010) by Scott Gottlieb, a practicing internist, a partner in a health-care investment company, and a former official at the Centers for Medicare and Medicaid Services. I doubt he has anything to worry about with regard to his health care. But the rest of us have plenty to worry about.

With regard to ObamaCare, the short term concern: increasing difficulty to access medical care, especially if you are retired, or depend on Medicare.

The long term concern: ObamaCare "bankrupts" the US economy.

1. The new program now mandates everyone have health insurance, which the "man on the street" interprets as meaning "we all have access to medical care." Of course, everyone had access to medical care before the new health care plan but that's a story for another day.

2. There will be a learning curve for those new to the bureaucracy of medicine. It is human nature not to schedule an appointment until a condition becomes urgent or emergent. Even for those who want to schedule an appointment, it is a steep learning curve to learn how.

3. Physicians are opting out of Medicare program at an increasing rate: a) overwhelming bureaucratic paperwork; b) mandates for unfunded information technology upgrades; c) mandates for unfunded training for office staff using that technology; d) risk of violating Federal crime for misunderstanding rules (if one thinks malpractice is a physician's biggest concern, going to prison for Federal crime probably ranks a bit higher); and, e) all the while, decreasing Medicare reimbursements.

4. The act mandated that "we all have access to medical care," but did not mandate that there be enough providers. It is painfully obvious that medical schools cannot ramp up to meet this new need. And even if they could, the new physicians will become specialists, not generalists, and will not necessarily practice where the need is greatest.

5. Short term, the emergency rooms will be overwhelmed. They already are, but the situation will get acutely worse. And if one is already on Medicare, I doubt it will be easy to find a specialist. If one is newly eligible for Medicare, good luck in finding a physician willing to take new Medicare patients.

More to follow. I have to go explore Boston.

Update: We had a great day in Boston. With regard to the above, those are my thoughts only. As JRR Tolkien says, "we all have our myths" and once we have our myths, it is very difficult for us to change our beliefs. The above is my myth and JRR Tolkien's comments about myths could not be truer. Others will disagree with me and that's fine with me. We won't know how this will all work out for several years, and even then, folks will interpret the data through their own lenses.  As for me, I am thrilled that there was an attempt to address the health care challenges facing this country. I just feel very strongly that the growing pains will be great, as they always are with major change. The financial risks to the country are not inconsequential.

Cartoons: this is one of my favorites --
From: http://reaganiterepublicanresistance.blogspot.com/2010/09/reaganites-sunday-funnies_26.html