Over at SeekingAlpha.com, he has a two-part series (which is likely to turn into a three-part series) on the Bakken companies.
- Bakken companies with market caps below $1 billion
- Bakken companies with market caps above $1 billion
Sunday, March 6, 2011
Investors: Great Update of Bakken Companies
Michael Filloon never ceases to amaze.
Over at SeekingAlpha.com, he has a two-part series (which is likely to turn into a three-part series) on the Bakken companies.
Over at SeekingAlpha.com, he has a two-part series (which is likely to turn into a three-part series) on the Bakken companies.
McAlmond 1-35-26H-1: Look How Far East This Well Is -- Bakken, North Dakota, USA
Of the EOG wells in the Parshall oil field, it is the second farthest east:
- 19309, 100, Hunt, McAlmond 1-35-26H-1, t1/2/11, cum 22K 6/12;
- 19602, PNC, Hunt, Oakland 1-12-1H 1
- 16840, 277, BEXP, Bergstrom Family Trust 26 1H, t1/08, cum 44K 6/12; Hmmm. Fracked; unknown number of stages
- 18254, 1,356, Hunt, Lee 8-5H 1, this well is three miles west in same township; it appears to be the only long lateral (two sections) in the Parshall; all the rest are short laterals; t4/10; cum 216K 6/12;
"Permitorium"
While oil spikes to $105, the administration continues to do anything to kill the domestic oil industry.
Interior doesn't want to act on oil permits in the Gulf of Mexico, much less even approve them.
When I see this, I am not convinced that he won't shut down the Bakken through fracking regulations.
Interior doesn't want to act on oil permits in the Gulf of Mexico, much less even approve them.
When I see this, I am not convinced that he won't shut down the Bakken through fracking regulations.
Pioneer Trails Regional Museum and A New Sidebar Addition
This site started out as an educational site regarding the oil industry in North Dakota, but one of the purposes of this blog is to highlight the uniqueness of North Dakota in more than just oil.
To ensure that these are not lost in the blog, I have added a new section on the sidebar at the right: "North Dakota Sights and Sites." It is located just above the "Price of Oil Graph."
The first one to be added is the Pioneer Trails Regional Museum at Bowman, North Dakota. Interestingly there is a tie-in between the oil industry and this blog: dinosaurs. Smile.
Hopefully some day there will be a link to the Petroleum Museum of North Dakota.
To ensure that these are not lost in the blog, I have added a new section on the sidebar at the right: "North Dakota Sights and Sites." It is located just above the "Price of Oil Graph."
The first one to be added is the Pioneer Trails Regional Museum at Bowman, North Dakota. Interestingly there is a tie-in between the oil industry and this blog: dinosaurs. Smile.
Hopefully some day there will be a link to the Petroleum Museum of North Dakota.
Fightin' Sioux
For those who have been following the "Fightin' Sioux" controversy as an issue for the University of North Dakota, you might want to learn that the situation has turned a bit ... "ugly" ... shall we say?
It turns out a few folks take the issue very seriously.
When the folks in Wisconsin have a serious issue, they camp out in the capitol building. (Or flee the state.)
But when the folks in North Dakota have a serious issue, they know that camping out in the capitol building isn't going to cut it. They bring in the big guns.
It may be a bit hard for non-NoDaks to see, but for the rest of us, it is very clear that this freedom-fighter is wearing a "Fightin' Sioux" sweatshirt.
It turns out a few folks take the issue very seriously.
When the folks in Wisconsin have a serious issue, they camp out in the capitol building. (Or flee the state.)
But when the folks in North Dakota have a serious issue, they know that camping out in the capitol building isn't going to cut it. They bring in the big guns.
It may be a bit hard for non-NoDaks to see, but for the rest of us, it is very clear that this freedom-fighter is wearing a "Fightin' Sioux" sweatshirt.
Some Thoughts on the Bakken
Because many folks may not see some of the great comments folks send into the blog, occasionally I highlight them with a stand-alone post.
This is another such case.
"M4570D0N" alerted me to this article on the Bakken. This is an article questioning the relevancy of the Bakken.
Note the date of that post: March 4, 2011. That's like two days ago. I would have thought we were way past these articles. The information posted there has been posted and re-posted on a recurring basis since the Elm Coulee discovery in 2000. Well, I don't know if that's completely accurate, but I have seen these comments posted on a regular basis since 2008.
I "love" The Oil Drum.com. It is one of my favorite sites on the internet, but I don't access it often. I'm too tied up with events in the Bakken.
This particular article on the Bakken in The Oil Drum is another great article. I enjoyed reading the first few paragraphs, and then quit. To me, it's nothing I haven't seen before.
"M4570D0N" asked if I might respond.
My standard reply to such as those articles in The Oil Drum is this: "we all have our myths."
That is not an original observation. It was first noted by JRR Tolkien, author of The Lord of the Rings.
When JRR Tolkien said that"we all have our myths," he did not mean that any single individual's belief system was a myth in the sense of the usual definition, but rather, once one has a certain belief (or as many now say, a "world view"), that belief is not easily shaken.
If one believes that hobbits exist in Middle Earth, no matter how much one tries to convince that individual otherwise, the hobbit-believer isn't likely to change his/her belief system.
*******
At this point, one can stop reading, the rest is rambling.
1. With regard to horizontal drilling and fracking, I get a chuckle out of this. A long time ago I said the same thing, that horizontal drilling was "new." Wow, did I get a boatload (or semi-load) of comments about what an idiot I was. Yes, horizontal drilling has been around since 1949, I guess. In the big scheme of things, a) horizontal drilling pioneered by Meridian in 2000 was "new" compared to what folks had been doing; and, if not, b) 1949 isn't exactly ancient history. But, except for historians, debaters, and navel-contemplators, who cares. The point has been made: horizontal drilling is not new. Let's move on.
2. With regard to everything else, no, the Bakken has not solved "world hunger" and never will. But for me everything about the Bakken is impressive.
I have said numerous times on this blog I am inappropriately exuberant about the Bakken. I love it. I find it fascinating.
I am amazed that a Leigh Price could take data that was known to everyone and be the only one that believed what he was seeing. And put his "myth" in writing.
I am amazed that a single individual, Harold Hamm, with common sense and believing what he was seeing, could "force the government" analysts to agree that there is a bit more recoverable oil in the Bakken than what they originally computed. And now, he says there is a lot more. And the government analysts agree; they are only quibbling over the definition of how much is "a lot."
I am amazed that a specialty steel company in Luxembourg (that's a country in Europe, not a hamlet in North Dakota) can make steel that will be used in a rod that can withstand -40 degree temperature at the surface and thousands of degrees at the end of hole two miles into the earth. The company is Teneris, if any investors want to know.
I am amazed that a 20-year-old roughneck from Texas is willing to push that steel rod into the earth while enduring -40 degree temperatures on the platform of a monstrosity of a modern drilling rig.
I am amazed that the United States is focused on Libya as a great oil producer (1.5 million barrels/day) when North Dakota is on its way to the same amount: predictions are that North Dakota could produce 1 million bopd by 2015; even at my advanced age, that's within my investing lifetime).
I am amazed that multi-billion-dollar Fortune 500 companies are willing to hire 21-year-old men and women to drive multi-ton semis hauling oil over gravel roads in the middle of North Dakota winters that I hazard to drive in the summer.
I am amazed anyone can drill a horizontal lateral 15,000 feet after going down vertically 9,000 feet and ending up pretty much where they wanted to go.
I am amazed they use mud to push the drill bit.
I am amazed a Bakken well can produce 1 million barrels of oil over the life time of the well through a rod with a one-inch diameter. A one-inch diameter that is often choked (closed down) to half an inch. That's a lot of strokes over the lifetime of a pumper. A million barrels of oil through a half-inch opening.
I am amazed that there are "no" dry Bakken wells. In the Permian basin, when they started, fourteen out of fifteen wells were "dusters" or dry. When they started, only one out of 15 wells in the Permian hit oil. It's a headline for me when a Bakken well is dry. Has anyone seen a headline lately in a local newspaper saying they hit oil? Again? 1,000 times this year that headline could be written.
I am amazed anyone can guide a drill bit using mud to hit a specific formation that may be only five feet thick five miles from where the well began at the surface.
I am amazed that a geologist will examine and meticulously record the characteristics of the earth at ten-foot intervals (or whatever the intervals are) for thousands and thousands of feet.
I am amazed there is so much water in the Missouri River that they could frack 10,000 wells this year, and still the Missouri River and its tributaries will flood this spring.
I am amazed that the federal government could shut down domestic drilling. Especially when the loss of "onepointfivemillionbopd" (Libya) causes oil to spike to over $100/bbl. And that oil doesn't even come to the US.
I am amazed that the major pipeline company in North Dakota isn't even going to bother shipping anything other than Bakken sweet oil. As it is, the company is going to have to double pipeline capacity to keep up.
3. I find the Bakken a fascinating story. I am reading a biography of Mark Twain and his newly (2011) released autobiography. It is fascinating that a story about two boys on a raft written by a steamship pilot could change American literature. A story written by a steamboat pilot in the 1800s continues to be a bestseller, and today, in 2011, there are folks who cannot get excited about the Bakken. In fact, that book from the 1800s is still required reading in many schools, while "peak oil" and "global warming" are taught down the hall in a course called "science."
That is amazing. I don't care if the Bakken oil doesn't live up to some of the things written about it. To some extent, the Bakken has already surpassed much that has already been written. I love going back to some of the original scientific articles from the UND geology folks and find this conclusion regarding the Bakken, written as recently as 2007: "The Bakken has potential for producing a fair amount of oil." Yes, that is paraphrased. I don't want to embarrass anyone.
4. This site started out simply as an educational site. Actually, not quite true. It really started out as a way for me to keep track of what was going on in the Bakken. A word document would not suffice, but HTML was perfect. Going that route, I could have kept it private, but I then thought it could serve an educational purpose. My intent never was to bring in the investing side to this site. But over time I realized one could not talk about the Bakken without talking about the men and women and companies involved, and one cannot talk about companies without it naturally leading to investing.
Money is not important to some folks. Lots of money is not important to many folks. But for those few interested in money or investing, learning about the opportunities in the Bakken has been very, very rewarding.
My hunch is that more people are working in the Bakken than are currently involved in building wind turbines in the entire United States. My hunch is that more money has been made investing in Bakken companies than listening to pundits recommending investing in banks on Wall Street, or investing in coal-powered cars.
On a macro-level, the Bakken will not solve "world hunger." To that degree, the writer of that Oil Drum article is correct.
But on a micro-level, a lot of folks have done very well believing in the Bakken. And "believing" is the right word. After all, as JRR Tolkien would say, "we all have our myths."
This is another such case.
"M4570D0N" alerted me to this article on the Bakken. This is an article questioning the relevancy of the Bakken.
Note the date of that post: March 4, 2011. That's like two days ago. I would have thought we were way past these articles. The information posted there has been posted and re-posted on a recurring basis since the Elm Coulee discovery in 2000. Well, I don't know if that's completely accurate, but I have seen these comments posted on a regular basis since 2008.
I "love" The Oil Drum.com. It is one of my favorite sites on the internet, but I don't access it often. I'm too tied up with events in the Bakken.
This particular article on the Bakken in The Oil Drum is another great article. I enjoyed reading the first few paragraphs, and then quit. To me, it's nothing I haven't seen before.
"M4570D0N" asked if I might respond.
My standard reply to such as those articles in The Oil Drum is this: "we all have our myths."
That is not an original observation. It was first noted by JRR Tolkien, author of The Lord of the Rings.
When JRR Tolkien said that"we all have our myths," he did not mean that any single individual's belief system was a myth in the sense of the usual definition, but rather, once one has a certain belief (or as many now say, a "world view"), that belief is not easily shaken.
If one believes that hobbits exist in Middle Earth, no matter how much one tries to convince that individual otherwise, the hobbit-believer isn't likely to change his/her belief system.
*******
At this point, one can stop reading, the rest is rambling.
1. With regard to horizontal drilling and fracking, I get a chuckle out of this. A long time ago I said the same thing, that horizontal drilling was "new." Wow, did I get a boatload (or semi-load) of comments about what an idiot I was. Yes, horizontal drilling has been around since 1949, I guess. In the big scheme of things, a) horizontal drilling pioneered by Meridian in 2000 was "new" compared to what folks had been doing; and, if not, b) 1949 isn't exactly ancient history. But, except for historians, debaters, and navel-contemplators, who cares. The point has been made: horizontal drilling is not new. Let's move on.
2. With regard to everything else, no, the Bakken has not solved "world hunger" and never will. But for me everything about the Bakken is impressive.
I have said numerous times on this blog I am inappropriately exuberant about the Bakken. I love it. I find it fascinating.
I am amazed that a Leigh Price could take data that was known to everyone and be the only one that believed what he was seeing. And put his "myth" in writing.
I am amazed that a single individual, Harold Hamm, with common sense and believing what he was seeing, could "force the government" analysts to agree that there is a bit more recoverable oil in the Bakken than what they originally computed. And now, he says there is a lot more. And the government analysts agree; they are only quibbling over the definition of how much is "a lot."
I am amazed that a specialty steel company in Luxembourg (that's a country in Europe, not a hamlet in North Dakota) can make steel that will be used in a rod that can withstand -40 degree temperature at the surface and thousands of degrees at the end of hole two miles into the earth. The company is Teneris, if any investors want to know.
I am amazed that a 20-year-old roughneck from Texas is willing to push that steel rod into the earth while enduring -40 degree temperatures on the platform of a monstrosity of a modern drilling rig.
I am amazed that the United States is focused on Libya as a great oil producer (1.5 million barrels/day) when North Dakota is on its way to the same amount: predictions are that North Dakota could produce 1 million bopd by 2015; even at my advanced age, that's within my investing lifetime).
I am amazed that multi-billion-dollar Fortune 500 companies are willing to hire 21-year-old men and women to drive multi-ton semis hauling oil over gravel roads in the middle of North Dakota winters that I hazard to drive in the summer.
I am amazed anyone can drill a horizontal lateral 15,000 feet after going down vertically 9,000 feet and ending up pretty much where they wanted to go.
I am amazed they use mud to push the drill bit.
I am amazed a Bakken well can produce 1 million barrels of oil over the life time of the well through a rod with a one-inch diameter. A one-inch diameter that is often choked (closed down) to half an inch. That's a lot of strokes over the lifetime of a pumper. A million barrels of oil through a half-inch opening.
I am amazed that there are "no" dry Bakken wells. In the Permian basin, when they started, fourteen out of fifteen wells were "dusters" or dry. When they started, only one out of 15 wells in the Permian hit oil. It's a headline for me when a Bakken well is dry. Has anyone seen a headline lately in a local newspaper saying they hit oil? Again? 1,000 times this year that headline could be written.
I am amazed anyone can guide a drill bit using mud to hit a specific formation that may be only five feet thick five miles from where the well began at the surface.
I am amazed that a geologist will examine and meticulously record the characteristics of the earth at ten-foot intervals (or whatever the intervals are) for thousands and thousands of feet.
I am amazed there is so much water in the Missouri River that they could frack 10,000 wells this year, and still the Missouri River and its tributaries will flood this spring.
I am amazed that the federal government could shut down domestic drilling. Especially when the loss of "onepointfivemillionbopd" (Libya) causes oil to spike to over $100/bbl. And that oil doesn't even come to the US.
I am amazed that the major pipeline company in North Dakota isn't even going to bother shipping anything other than Bakken sweet oil. As it is, the company is going to have to double pipeline capacity to keep up.
3. I find the Bakken a fascinating story. I am reading a biography of Mark Twain and his newly (2011) released autobiography. It is fascinating that a story about two boys on a raft written by a steamship pilot could change American literature. A story written by a steamboat pilot in the 1800s continues to be a bestseller, and today, in 2011, there are folks who cannot get excited about the Bakken. In fact, that book from the 1800s is still required reading in many schools, while "peak oil" and "global warming" are taught down the hall in a course called "science."
That is amazing. I don't care if the Bakken oil doesn't live up to some of the things written about it. To some extent, the Bakken has already surpassed much that has already been written. I love going back to some of the original scientific articles from the UND geology folks and find this conclusion regarding the Bakken, written as recently as 2007: "The Bakken has potential for producing a fair amount of oil." Yes, that is paraphrased. I don't want to embarrass anyone.
4. This site started out simply as an educational site. Actually, not quite true. It really started out as a way for me to keep track of what was going on in the Bakken. A word document would not suffice, but HTML was perfect. Going that route, I could have kept it private, but I then thought it could serve an educational purpose. My intent never was to bring in the investing side to this site. But over time I realized one could not talk about the Bakken without talking about the men and women and companies involved, and one cannot talk about companies without it naturally leading to investing.
Money is not important to some folks. Lots of money is not important to many folks. But for those few interested in money or investing, learning about the opportunities in the Bakken has been very, very rewarding.
My hunch is that more people are working in the Bakken than are currently involved in building wind turbines in the entire United States. My hunch is that more money has been made investing in Bakken companies than listening to pundits recommending investing in banks on Wall Street, or investing in coal-powered cars.
On a macro-level, the Bakken will not solve "world hunger." To that degree, the writer of that Oil Drum article is correct.
But on a micro-level, a lot of folks have done very well believing in the Bakken. And "believing" is the right word. After all, as JRR Tolkien would say, "we all have our myths."
Travelogue: Odessa and Midland, Texas, Permian Oil Basin
Friday night (March 4, 2011) I learned that a friend from Bowman, North Dakota, and his wife were staying overnight in Odessa, Texas, while touring the New Mexico/west Texas area the past few days.
I knew they were planning to visit this part of the country but due to my schedule, I did not think I would be able to catch up with them, despite being only three- to four-hundred miles away.
But after getting their e-mail update about 8:00 p.m. Friday night, I called Enterprise rental, and asked if they had a car available for 24 hours. They said they did, and I went over to Enterprise -- they are about five minutes away from where I live -- I can walk there -- and rented a great little 2011 (I assume) Volkswagen beetle.
By midnight I was on the road. I timed my departure so that I would be in Odessa at the break of dawn and could join Don and Kathy for breakfast. I drove all night -- yeah, an Orbison video could be placed here, but perhaps not -- and reached the Deluxe Inn about 7:30 a.m.
I can't say it was a beautiful drive, because I didn't see anything. It is really, really dark at night in west Texas. UFO sightings are not unusual in west Texas, but not even that broke up the drive this time.
The daytime 80-mph speed limit is reduced to 65 at night. Playing cat and mouse with a late vintage yellow Mustang kept me busy for about an hour. Have you ever had the experience of a car cutting in between you and a passing semi at 70 mph and then slamming on brakes about to box us both in? He moved on, alternating his lane position and speed position for quite some time. I had no desire to pass him but just stayed back a comfortable distance. Fortunately he (she?) generally sped along and we made good time and finally the Mustang exited somewhere west of Kerrville.
In Odessa, Don, Kathy, and I had breakfast, and talked about oil for two hours before moving down the road to their first destination of the day, the Petroleum Museum in Midland, Texas. I did not know what to expect, but I certainly had not imagined that the museum was going to be as good as it was. It was awesome. I cannot articulate how much I learned about the oil industry. I joke that I now know about one percent of what modern drilling is all about.
The museum walks you through the Permian basin in west Texas, and the drilling methods used from the beginning (oil was discovered in that area in 1926) to the modern era, but does not include horizontal drilling or fracture stimulation. One can see the evolution in the rigs, but the actual drilling process has not changed remarkably. Obviously, it has, but a roughneck working in 1926 would probably feel comfortable on a rig in 2011. And a whole lot safer.
However, I finally learned, or at least have a better idea, from Don, how "they" can drill horizontally, or more correctly, in any direction they want to go: up, down, left, horizontally, vertically. Interestingly enough, I cannot find a good link on the internet to explain it. And I'm certainly not going to try.
We spent the morning in Odessa and the museum, and then to lunch. I had promised Enterprise I would have their car back by 9:00 p.m. Saturday night so I had to leave about 1:00 p.m. I drove back through the Midland/Odessa area by a different route so I could see more of the operations in the area.
Don suggested that I view the area from the perspective of what North Dakota might look like fifty years from now. That's at least as long as the Permian Basin has been in development; by comparison, the Bakken is still a toddler.
The first thing I noticed was the landscape. The rigs, the pumpers, the trucks, the storage tanks, the natural gas gathering stations, did not catch my attention. I was used to seeing all that in oil country. What caught my attention was how unsuitable the land was from a ranching or farming point of view. It was nothing but cactus and scrub. I only saw one small "herd" of goats and one much larger herd of sheep. The sheep did not look happy among the cactus.
Due to climate (and I assume soil), the land really has nothing to offer farmers or ranchers. In addition, much of it -- where the oil activity is -- is absolutely flat. I did not see the "beauty" of the countryside that I see in North Dakota.
Perhaps because I am biased, having grown up in North Dakota, western North Dakota is absolutely beautiful -- stunningly beautiful -- in comparison with the Odessa/Midland area of west Texas. I'm sure I just stepped on a lot of toes of those from that area, and I apologize. But the vista of the rolling hills of North Dakota in the Killdeer Mountains, the immense wheat fields north of Williston, and the grandeur, as they say, of the area around and including the Teddy Roosevelt National Park, is (are?) so much more appealing than the flat, cactus/scrub brush-covered desert in the Permian Basin.
Having said that, I think the oil industry in North Dakota will blend into the natural landscape of the the Dakotas and Montana over time. The industrial parks and businesses around the periphery of Williston, Watford City, Dickinson will grow and change, but that will only encompass a few miles on the edges of those towns. Then one will be back in the countryside. The pumpers will eventually dot the landscape at 160-acre intervals, but there will still be immense stretches of green grass in the spring and early summer, and golden grain in the autumn. The number of pumps will be jarring to many, maybe most, at first, but over time, they will blend in. Or we will just get used to them. If there is an effort to maintain the pads, the pumpers, the roads, the fences and the gates, I think the landscape can actually be quite pleasant and interesting. In fact, as much as I'm against more regulation, I would have no problem with North Dakota enacting some sort of "eye pollution" regulation regarding the upkeep of steel on land. Nothing looks worse than abandoned, rusted out remnants of the oil industry -- or any industry -- along the countryside.
From a distance, wind turbines look fascinating and beautiful in their own way, and they certainly disrupt the land as much or more than pumpers. But somehow I am not affected negatively by seeing wind turbines either, and I saw hundreds south of Odessa and Midland off into the west. They break up the landscape and make the drive more interesting. I assume I was looking at the Indian Mesa Wind Farm, Pecos County, Texas, off in the distance. This is exactly what I saw: Indian Mesa, Texas, wind turbines (just a few of the total):
I got back to San Antonio at 8:00 p.m. The drive was wonderful. The speed limit during the day, as noted earlier, is 80 mph, so one can make good time. Even at that speed limit, there were a number of folks stopped for speeding along the way. I was impressed with the little Volkswagen beetle. The Enterprise folks asked me how the mileage was -- I kept track -- but was vague in answering. At 80 mph one is not going to maximize fuel efficiency. For the record, I don't think it quite hit 30 miles per gallon. I will recheck the overall figures and report back if wrong.
I believe the quoted price for a 24-hour rental for a compact (or however they classify the beetle) is $19/day. With insurance, fees, taxes, etc., the bill will be appreciably more but $19/day is not bad. The gas for that 800-mile round trip exceeded the cost of the rental. But what a grand tour.
By the way, the only car rental agency I rent from is Enterprise, unless they are not available. They have been wonderful over the years.
Supposedly, over the past year or so, I have lost a number of wagers with Don regarding the Bakken oil industry, costing me several hamburgers going forward. For the record, I have now paid for the first wager with that wonderful hamburger stop in Midland.
This is the Enterprise rental office in San Antonio, and the rental I took, $19/day:
Actually it's one of several Chaparral racing cars designed by Jim Hall starting in 1965. These cars are in the Chaparral Gallery in The Petroleum Museum, Midland, Texas.
By the way, Enterprise is one of the few places I never review the charge at the end of the rental because I don't want to spoil a wonderful road trip with a bill. When they get ready to show me the statement, I ask them not to tell me the final figure. I just fold it up, take it sight unseen, and mosey on down the road. I figure if there's a problem "we" will catch it later.
I knew they were planning to visit this part of the country but due to my schedule, I did not think I would be able to catch up with them, despite being only three- to four-hundred miles away.
But after getting their e-mail update about 8:00 p.m. Friday night, I called Enterprise rental, and asked if they had a car available for 24 hours. They said they did, and I went over to Enterprise -- they are about five minutes away from where I live -- I can walk there -- and rented a great little 2011 (I assume) Volkswagen beetle.
By midnight I was on the road. I timed my departure so that I would be in Odessa at the break of dawn and could join Don and Kathy for breakfast. I drove all night -- yeah, an Orbison video could be placed here, but perhaps not -- and reached the Deluxe Inn about 7:30 a.m.
I can't say it was a beautiful drive, because I didn't see anything. It is really, really dark at night in west Texas. UFO sightings are not unusual in west Texas, but not even that broke up the drive this time.
The daytime 80-mph speed limit is reduced to 65 at night. Playing cat and mouse with a late vintage yellow Mustang kept me busy for about an hour. Have you ever had the experience of a car cutting in between you and a passing semi at 70 mph and then slamming on brakes about to box us both in? He moved on, alternating his lane position and speed position for quite some time. I had no desire to pass him but just stayed back a comfortable distance. Fortunately he (she?) generally sped along and we made good time and finally the Mustang exited somewhere west of Kerrville.
In Odessa, Don, Kathy, and I had breakfast, and talked about oil for two hours before moving down the road to their first destination of the day, the Petroleum Museum in Midland, Texas. I did not know what to expect, but I certainly had not imagined that the museum was going to be as good as it was. It was awesome. I cannot articulate how much I learned about the oil industry. I joke that I now know about one percent of what modern drilling is all about.
The museum walks you through the Permian basin in west Texas, and the drilling methods used from the beginning (oil was discovered in that area in 1926) to the modern era, but does not include horizontal drilling or fracture stimulation. One can see the evolution in the rigs, but the actual drilling process has not changed remarkably. Obviously, it has, but a roughneck working in 1926 would probably feel comfortable on a rig in 2011. And a whole lot safer.
However, I finally learned, or at least have a better idea, from Don, how "they" can drill horizontally, or more correctly, in any direction they want to go: up, down, left, horizontally, vertically. Interestingly enough, I cannot find a good link on the internet to explain it. And I'm certainly not going to try.
We spent the morning in Odessa and the museum, and then to lunch. I had promised Enterprise I would have their car back by 9:00 p.m. Saturday night so I had to leave about 1:00 p.m. I drove back through the Midland/Odessa area by a different route so I could see more of the operations in the area.
Don suggested that I view the area from the perspective of what North Dakota might look like fifty years from now. That's at least as long as the Permian Basin has been in development; by comparison, the Bakken is still a toddler.
The first thing I noticed was the landscape. The rigs, the pumpers, the trucks, the storage tanks, the natural gas gathering stations, did not catch my attention. I was used to seeing all that in oil country. What caught my attention was how unsuitable the land was from a ranching or farming point of view. It was nothing but cactus and scrub. I only saw one small "herd" of goats and one much larger herd of sheep. The sheep did not look happy among the cactus.
Due to climate (and I assume soil), the land really has nothing to offer farmers or ranchers. In addition, much of it -- where the oil activity is -- is absolutely flat. I did not see the "beauty" of the countryside that I see in North Dakota.
Perhaps because I am biased, having grown up in North Dakota, western North Dakota is absolutely beautiful -- stunningly beautiful -- in comparison with the Odessa/Midland area of west Texas. I'm sure I just stepped on a lot of toes of those from that area, and I apologize. But the vista of the rolling hills of North Dakota in the Killdeer Mountains, the immense wheat fields north of Williston, and the grandeur, as they say, of the area around and including the Teddy Roosevelt National Park, is (are?) so much more appealing than the flat, cactus/scrub brush-covered desert in the Permian Basin.
Having said that, I think the oil industry in North Dakota will blend into the natural landscape of the the Dakotas and Montana over time. The industrial parks and businesses around the periphery of Williston, Watford City, Dickinson will grow and change, but that will only encompass a few miles on the edges of those towns. Then one will be back in the countryside. The pumpers will eventually dot the landscape at 160-acre intervals, but there will still be immense stretches of green grass in the spring and early summer, and golden grain in the autumn. The number of pumps will be jarring to many, maybe most, at first, but over time, they will blend in. Or we will just get used to them. If there is an effort to maintain the pads, the pumpers, the roads, the fences and the gates, I think the landscape can actually be quite pleasant and interesting. In fact, as much as I'm against more regulation, I would have no problem with North Dakota enacting some sort of "eye pollution" regulation regarding the upkeep of steel on land. Nothing looks worse than abandoned, rusted out remnants of the oil industry -- or any industry -- along the countryside.
From a distance, wind turbines look fascinating and beautiful in their own way, and they certainly disrupt the land as much or more than pumpers. But somehow I am not affected negatively by seeing wind turbines either, and I saw hundreds south of Odessa and Midland off into the west. They break up the landscape and make the drive more interesting. I assume I was looking at the Indian Mesa Wind Farm, Pecos County, Texas, off in the distance. This is exactly what I saw: Indian Mesa, Texas, wind turbines (just a few of the total):
I got back to San Antonio at 8:00 p.m. The drive was wonderful. The speed limit during the day, as noted earlier, is 80 mph, so one can make good time. Even at that speed limit, there were a number of folks stopped for speeding along the way. I was impressed with the little Volkswagen beetle. The Enterprise folks asked me how the mileage was -- I kept track -- but was vague in answering. At 80 mph one is not going to maximize fuel efficiency. For the record, I don't think it quite hit 30 miles per gallon. I will recheck the overall figures and report back if wrong.
I believe the quoted price for a 24-hour rental for a compact (or however they classify the beetle) is $19/day. With insurance, fees, taxes, etc., the bill will be appreciably more but $19/day is not bad. The gas for that 800-mile round trip exceeded the cost of the rental. But what a grand tour.
By the way, the only car rental agency I rent from is Enterprise, unless they are not available. They have been wonderful over the years.
Supposedly, over the past year or so, I have lost a number of wagers with Don regarding the Bakken oil industry, costing me several hamburgers going forward. For the record, I have now paid for the first wager with that wonderful hamburger stop in Midland.
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As long as I've rambled this long, one last Enterprise rental story. About five years ago or so, I got a letter from Enterprise along with a $15 dollar refund. Apparently about a year earlier I had rented from Enterprise, and in doing some kind of audit they realized they had overcharged me (it was probably a week-long rental for $200 or so). I was amazed that almost a year later I was getting a refund for an overcharge I was not even aware of. I mentioned this story to the folks at Enterprise last night and they said that "they can't close their books" if the books don't balance at the monthly and yearly audits.This is the Enterprise rental office in San Antonio, and the rental I took, $19/day:
Actually it's one of several Chaparral racing cars designed by Jim Hall starting in 1965. These cars are in the Chaparral Gallery in The Petroleum Museum, Midland, Texas.
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By the way, Enterprise is one of the few places I never review the charge at the end of the rental because I don't want to spoil a wonderful road trip with a bill. When they get ready to show me the statement, I ask them not to tell me the final figure. I just fold it up, take it sight unseen, and mosey on down the road. I figure if there's a problem "we" will catch it later.
UK: Wind Energy -- Electricity Won't Always Be Available
This may be the most honest reporting I have ever seen.
And the most incredible.
I have lived in Britain for for several years and the British people are very "compliant." This does not surprise me at all.
Due to the vagaries of wind energy -- like, no electricity when the wind ain't blowin' -- the British will have to live with the fact that there will be times when electricity is not available when their country's smart grid is tied into wind energy
Of course, now that the Brits are paying $9/gallon of gasoline, this story will not catch much attention in London. They've got a few more pressing problems.
And the most incredible.
I have lived in Britain for for several years and the British people are very "compliant." This does not surprise me at all.
Due to the vagaries of wind energy -- like, no electricity when the wind ain't blowin' -- the British will have to live with the fact that there will be times when electricity is not available when their country's smart grid is tied into wind energy
Electricity consumers in the UK will need to get used to flicking the switch and finding the power unavailable, according to Steve Holliday, CEO of National Grid, the country’s grid operator. Because of a six-fold increase in wind generation, which won’t be available when the wind doesn’t blow, “The grid is going to be a very different system in 2020, 2030. We keep thinking that we want it to be there and provide power when we need it. It’s going to be much smarter than that.By being "smarter," he means that the government, through the grid, will determine where brownouts and blackouts will occur when there is not enough electricity to meet demand -- because of the British decision to convert to so much wind energy.
Of course, now that the Brits are paying $9/gallon of gasoline, this story will not catch much attention in London. They've got a few more pressing problems.