Saturday, May 1, 2010

Overview of the Energy Picture in North Dakota

The Bismarck Tribune is publishing a several-part series on the "Changing Landscape of North Dakota." This coincides with the biggest petroleum expo north of Houston, TX, which is scheduled for this week (first week in May) in Bismarck.

Often these links are broken after a few weeks, or the story is archived and available only through paid/free subscription, so if the story interests you, you may want to cut and paste what you want for future reference.

One of the best sources of information on the Bakken is the Rocky Mountain Oil Journal, available in some  libraries in the Rocky Mountain region, including my hometown library in Williston, ND, and available on-line by paid subscription. Here is the Journal's 2009 recap. This is also linked at the sidebar on the right.

Another nice story of the history in the Grand Forks Herald, May 1, 2010: the story of UND, Julie LeFever, and the Bakken and the TFS.

An interview with Julie Lefever just months before the Bakken boom in 2007 began. The date "March 7" is given but not the date. 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.

Making Hay While the Sun Shines?

More Good News

On top of the news below about the two new natural gas plants in North Dakota, now we get the story that Enbridge will be adding a cryogenic gas processing plant on its Anadarko natural gas gathering system in the Texas panhandle. It should begin operating in the first quarter, 2011, and will have the capacity to handle more than 650 million cubic feet per day. No cost projections were provided.

And this story: CenterPoint will add more gathering of Haynesville shale gas production: the 250 million cubic foot per day expansion of the company's Magnolia system, along with 750 mcfd announced in September, 2009, and currently under construction. These two projects will add 1bcfd capacity. Incredible. All of their projects will increase their capacity fivefold. Yes, incredible.


Original Post

Hess announces plans to expand its natural gas plant in Tioga. At a cost of $325 million, the company wants to increase capacity at this plant from 100 million cubic feet of natural gas daily to 250 million cubic feet. They hope to complete the project by late 2012.

This comes on top of the news that Oneok plans to construct a new 100 million cubic feet per day natural gas plant -- the Garden Creek plant -- in eastern McKenzie County. The project is estimated to cost about $200 million and will double the company's natural gas processing capacity in the Williston Basin. This project is expected to be complete by the end of 2011.

It is possible that these plants are being built because of political necessity. With natural gas prices so low, it  is/was often more economical for oil companies to simply flare (burn) natural gas at the site rather than gather/process it. If I remember correctly, compared to other states, North Dakota may be #1 in flaring, at least in terms of percent flared vs processed. Whether or not that's good for the environment, it certainly is not politically correct, and the state has mandated that companies process much more of this by-product when producing oil.

If the price of natural gas ever rises, these investments will look brilliant. But right now, I think the state regulatory agencies are driving this activity.

For those who understand English as a second language: "making hay while the sun shines," is a proverb that means "if you have an opportunity to do something, do it before the opportunity expires.  In the case of very low natural gas prices and the possibility for better prices, this proverb could not be more timely.

Tioga is in Williams County, about 35 northeast of Williston as the crow flies.

I do not know where the Garden Creek plant will be other than "eastern McKenzie." There is a tributary of the Missouri River called the Tobacco Garden Creek, about 30 miles long), that begins in the badlands south of the Missouri and then meanders to the Tobacco Garden Bay where it joins Lake Sakakawea/the Missouri River.

How the Sanish Got Its Name

This is an incredible story of the first "Sanish" well in North Dakota. It was drilled in 1953 and considered the first "Bakken zone" discovery. It produced 279,000 barrels in six years before "casing problems forced the plugging of this well" according to "Allen" at this discussion group. A replacement well, another vertical well, near the original well is still producing; to date this 160-acre spacing unit has produced a total of 1.3 million barrels of oil. The well came in at 150 barrels/day.

In case that link is broken, or that site is lost, the well in question that produced for six years was the Woodrow Starr #1. It's "replacement, still active, is the Woodrow Starr 1A.

An article published in 1969 provides additional detail.

Short history of the Bakken, by Julie LeFever, undated but appears to have published in September, 2004.