Japanese Disaster May Be Death Knell For Nuclear Energy

Updates

March 27, 2011: Radioactivity in rain secondary to Japanese disaster has now been detected in Boston -- source: television news. Also here. You think folks are going to allow a new nuclear reactor in their neighborhood?

March 21, 2011: Warren Buttett on CNBC, Squawk Box, 6:50 a.m. EST -- there won't be any new nuclear reactors built in the US for a very long time.

March 19, 2011: I knew that Germany had shut down seven (7) reactors, but I did not know until today that China has suspended plans for nearly thirty new reactors.

Germany ordered all seven of its nuclear plants 31 years and older to be shut down for three months for safety inspections. The destroyed Fukushima plant in Japan is also 30 years old. China suspended plans for 27 new nuclear power plants and ordered safety inspections of its 13 existing plants. China had earlier told the World Nuclear Association that the emerging economic giant intended to build 110 reactors.

March 18, 2011: NBC's David Gregory -- "Nuclear energy has been set back a decade, maybe more."  Said on CNBC at 8:30 EST. Well, a decade is an eternity in the investing world.  [I personally think it can be done safely: the modern GE designs; fail-safe generators; don't build on seismic faults; need to work the terrorist question.]

Original Post

Those are not my words, but the words of a very well-respected editor.

Dangerous radiation leaks from four stricken reactors after a tsunami hit Japan’s Fukushima Daiichi nuclear plant last week may be “the death knell” for a pending “nuclear renaissance,” increasing demand for natural gas, residual oil, and coal to fuel electric power generation, said several industry analysts.

Germany has shut down several nuclear reactors and most folks don't associate Germany with either earthquakes or tsunamis.

Wyoming Coal-to-Liquid (CTL) Project One Step Closer

Before reading this update, you might want to review the various coal technologies in North Dakota at this posting. In addition to the Bakken, the coal potential in North Dakota is huge, perhaps made bigger by the Japanese nuclear disaster.

Now back to the news coming out of Wyoming. The Wyoming Supreme Court agrees with the proponents of coal technology and against the environmentalists regarding an air permit for a coal-to-gasoline.

A planned multibillion-dollar operation that would convert coal into gasoline and diesel fuel near Medicine Bow is getting a boost from a Wyoming Supreme Court ruling upholding a state air permit for the facility.

When completed, the plant would produce 21,000 barrels of gasoline a day from locally mined coal.

Houston-based DKRW Advanced Fuels is still waiting for a reply from the Department of Energy for a loan guarantee for which they applied in 2009.

Nine (9) New Permits -- North Dakota, USA

Producers: CLR (5), Enerplus (2), Whiting, and Petro-Hunt.

Fields: Moccasin Creek, Jim Creek, Hamlet, Sanish, and a wildcat.

Four of the CLR permits will be for an Eco-Pad in the Hamlet oil field, Divide County.

The two Enerplus permits appear to be for wells on the same pad straddling two sections in Moccasin Creek, Dunn County.

The Petro-Hunt wildcat is in Williams County.

The rest of the daily activity report was fairly uneventful, except for a Spearfish well:

• 19385, 5, Ritchie Exploration, Bernstein 4B-1, Bottineau County; a Spearfish well; t2/11; cum 1K 6/12;

There was a DRY hole reported for a well that targeted the Pierre formation (though NDIC says Bakken):

• 19608, DRY, Anschutz, Harlan Rebsom 1-2-11H 143-95, Dunn County. On the stratigraphic map linked on the sidebar at the right, in the Williston Basin, the Pierre formation is fairly shallow (TD = 2,170 feet), and just above the Niobrara. It's possible they were targeting the Niobrara.

Other:

• 19386, 0 bopd, Ritchie Exploration, Bernstein 1, Bottineau County; was also released from confidential status today but no data provided the date of the original post. However, on the daily activity report of April 28, 2011, "0 bopd" was reported.

VOG: Now Listed On AMEX; 2010 Operational Results; Less Than One Net Well in 2010; At Least 12 Net Wells in 2011

2010 operational results.

Data points (some numbers rounded):

• Working interest in 7 gross (0.74 net) wells (not even one well)
• Total production at end of year: 120 bopd
• 100 percent success rate drilling the Bakken/Three Forks
• One successful Niobrara discovery
• Purchased 15,000 net acres; average price: $650/acre
• Joint venture with Slawson: Denver-Julesberg Basin Niobrara Formation

Additional data points:

• Now listed on AMEX (VOG)
• Issued 12.5 million shares in February; netted $46.6 million; exercise price of $7.10
• Average oil price for 2010: $70
• Average production cost: $10/bbl

For 2011:

• Expect to drill six net Bakken/Three Forks wells
• Expect to drill a minimum of six net Niobrara wells

Pottawatomie Creek -- Nothing To Do With the Bakken

This has absolutely nothing to do with anything that would interest anyone reading this blog except me.

I ran across this little blurb:

Breitling O&G has spud the Breitling-Magnolia #1, the first of 2 wells in its Breitling-Magnolia prospect in Pottawatomie County, Oklahoma.

The Pottawatomie Massacre took place in Kansas, not Oklahoma, but it was interesting to see a similarly named site in Oklahoma.  Some say the Pottawatomie Massacre was the true beginning of the US Civil War.

Until yesterday I had never heard of Pottawatomie Creek. I had heard of John Brown but barely remembered the story or the significance. I was certainly not taught how heinous the murders were. But for the past two weeks I have been reading a wonderful biography of the Concord literary figures in the mid-1800's: R. W. Emerson, Louisa May Alcott, Nathaniel Hawthorne, Henry David Thoreau, and, bless her heart, Margaret Fuller; and, now I have a much better understanding of this event. American Bloomsbury is authored by Susan Cheever.

Interestingly enough, the biography has made me re-think the origins and reasons for the US Civil War. In addition, it turns out Louisa May Alcott had no desire to write children's books.

Spearfish Formation: Sweet or Sour

I posted this earlier today -- in fact, it was my first post of the day, but it may have been overlooked: there seems to be confusion over whether Spearfish oil is light oil or sour oil. Link here. Or maybe I'm misreading / confusing something.

Update: see comments below.

This is very basic stuff but I simply missed it. Sweet/sour has to do with sulfur content. Heavy/light has to do with viscosity.

News From All Over -- Including More "I Can't Make This Stuff Up"

This starts with the story that Fidelity Investments will move its Massachusetts employees to Rhode Island and New Hampshire to better serve clients across all time zones.

In the category of "I Can't Make This Stuff Up," from The Boston Globe today, in the front page story with equal billing to the Japanese nuclear reactor story (print edition), it is being reported that Fidelity Investments will close its office in Marlborough, Massachusetts, and move almost all of the 1,000 jobs there out of state.

The financial services giant, based in Boston since it was founded in 1946, has steadily slashed its Massachusetts workforce in the past five years. Fidelity will probably have about 7,300 workers left in Massachusetts, just over half of the 13,000 it had in 2006. 

Most of those Marlborough jobs will be relocated in Merrimack, New Hampshire, and Smithfield, Rhode Island.

[According to a Fidelity spokesman], by reducing its concentration here [in Massachusetts], Fidelity hopes to better serve customers across multiple time zones and attract enough talented employees.

Last time I checked, New Hampshire, Rhode Island, and Massachusetts were all in the same time zones. I knew the elementary, middle and high schools were in tough shape in Massachusetts but I would not think that would affect the "talented employees" workforce.

Independent analysts know what is really going on: Fidelity is moving employees and operations to states with better tax breaks, or where it believes it can cut operational costs.

In 1996, after Fidelity announced plans to build up operations in neighboring states, the state granted a permanent tax cut to mutual fund companies that added Massachusetts jobs in the following five years. With close to 10,000 employed in Massachusetts at the time, Fidelity reported that it added sufficient jobs to receive the tax break, and still does.

But Fidelity says they are moving their employees from Massachusetts to New Hampshire and Rhode Island to "better serve customers across multiple time zones."

As noted, I cannot make this stuff up.

[Update, March 19, 2011: the governor's back in town, and he is not happy.]

******

From the AP:

Almost everyone who voted, 88 percent, voted to recall the previously very-popular mayor of Miami-Dade, Florida, after property taxes were raised at the very same time county employees were given a raise.

The recall makes "Miami-Dade the most populous area ever to recall a local official.

The area has a 12 percent unemployment rate and one of the highest foreclosure rates in the nation.

*******

On MSNBC's "Morning Joe" this a.m., one of the regulars equated the BP oil spill in the Gulf of Mexico with the Japanese nuclear reactor story. The pundit is an apologist for the Obama administration, an administration that wants to destroy the domestic oil industry and favors nuclear energy. Right now the news coming out of Japan is "apocalyptic" according to some, but not to the pundit on "Morning Joe." The Japanese nuclear story was not apocalyptic to that pundit even as demand for private jets to fly bankers out of Tokyo outstripped supply. Commercial airlines have canceled flights into Tokyo despite the fact that there is minimal earthquake damage in Tokyo, and airports are open. Some folks must think it's apocalyptic. And to compare one oil spill in the Gulf with what is going on in Japan speaks volumes about "fair and balanced news" or rational thinking.

*******

In light of the high price of oil, and the likelihood that the price of oil will continue to rise, some folks suggesting as must as $150/barrel with $5 gasoline, the Obama administration is contemplating tapping the Strategic Petroleum Reserve (75 days worth of US consumption) and halting any further building of the Keystone XL pipeline that would bring oil from Canada to the US. I can't make this stuff up.

********

Did "we" just witness a "Cronkite moment"? As some folks may remember, the Cronkite moment refers to the evening that the most respected newsman in American finally spoke out against the Vietnam War being waged by President Lyndon Johnson. That newscast, some say, marked the end/sealed the fate of America's involvement in Vietnam, and President Johnson's decision not to run for re-election.

Perhaps not on the same scale, but when I heard an MSNBC anchor on "Morning Joe" question the energy policies of the Obama administration in light of $100 oil and the Japanese nuclear disaster, the "Cronkite moment" flashed across my mind.

*******

I wonder when they do the post-mortem on the Japanese reactors, if it will be determined that the disaster was compounded and events ended the way they did when the decision was made early on to try saving the reactor rather than the nation.

*******

ESPN: The president makes his "March Madness" picks and advises Americans to send aid to Japan via USAID.gov.

Keystone XL Decision Delayed For One More Year (At Least): Great News for ENB Investors and the Bakken

Update

March 22, 2011: No change in status. If approval is received by end of year, no increased cost to the project. If approval delayed past the end of the year, the cost of the project will have to be re-calculated.


March 18, 2011: TransCanada makes its case of Keystone XL. The project is "shovel-ready." [Comment: I still don't understand why TransCanada doesn't just scrap the whole plan, and lay the pipeline through Canada to the west coast, and then ship it to China, and now Japan. Japan is going to need all the fossil fuel they can get.]

March 17, 2011: Just one day after posting the story below and commenting on Obama's inability to decide, this op-Ed piece was published: Obama's Indecision Has Pushed Hillary Clinton Over The Edge.

Original Post

Someone, not me, has opined that President Obama is unable to make a decision. Two things come to mind immediately: the dithering over Libya, and now, the decision to delay the decision whether the Keystone XL pipeline should proceed. [Okay, he is good at deciding not to decide. Which reminds me: the president's record as voting "present" when a US Senator.] It should be noted that SecState Hillary Clinton has supported the pipeline on occasion.

The U.S. State Department announced Tuesday that it planned to conduct the additional review environmental groups had demanded. A presidential permit from the State Department is required because the pipeline would cross the U.S.-Canadian border.

This is TransCanada's "spin": the Keystone XL project enters final regulatory review.

Calgary-based TransCanada first submitted its Keystone XL project for State Department review in late 2008. The project is designed to carry crude oil from tar sands near Hardisty, Alberta, to the Gulf Coast via Montana, South Dakota, Nebraska, Kansas, Oklahoma and Texas. TransCanada has also proposed connecting the pipeline to the Bakken oil field in Montana and North Dakota.

TransCanada officials had previously predicted that a decision on the project would come by the end of 2010. The State Department's decision to issue a supplemental environmental report triggers a longer review process, so the Keystone XL project will be delayed further.

Meanwhile WTI oil is up another $2.00 today, back to just under $100/bbl.

American Petro-Hunter: Three Pay Zones in Oklahoma -- Implications for the Bakken

From Oklahoma, this report:

[American Petro-Hunt's] NOS227 cut all three objectives as planned, these being the Mississippi of 85 feet, Woodford Shale of 45 feet and the lower Simpson of 4 feet. All three zones contain oil shows and following a suite of electronic logs, have the requisite permeability and porosity to produce oil in commercial quantities such that an immediate casing election was made. 

As noted many, many times on the milliondollarway.blogspot, focus is on the Bakken formation and to some extent the Three Forks formation. Lost in the discussion are the other formations: Tyler, Spearfish, Lodgepole, and the legacy formations. 

There are "no" dry wells in the Bakken, and once production is secure, lease is held for eternity (at my advanced age, 30 years is an "investing eternity"). At worse, most Bakken wells appear to pay for themselves in five years; many in four years; some in three years; etc., etc., and the Bakken wells are expected to produced for 30 years. 

To get to 100,000 barrels of oil over five years, the well only has to average 55 bbls/day. 

Average oil production in North Dakota is 58 bbls/day. The average daily production of oil in North Dakota for 2010 was 309,679 bbls. With 5,332 wells at the end of the year, that works out to 58 bbls/well/day. There were 4,638 wells at the beginning of the 2010 calendar year with a daily production of 236,199 bbls: that works out to 51 bbls/well/day.  

There was a net gain of 694 wells in calendar year 2010. 

This suggests to me that Bakken production is more than making up for the decline in the pre-Bakken boom wells.  

Obama The Invisible -- New York Post; Weakest President in US History -- Express/UK; Spectator-in-Chief -- Gingrich

Link here.

Link here.

What is President Obama doing about anything? The most alarming answer – your guess is as good as mine – is also, frankly, the most accurate one. What the President is not doing is being clear, resolute and pro-active, which is surely a big part of his job description. This is what he has to say about the popular uprising in Libya: “Gaddafi must go.” At least, that was his position on March 3.

Link here.

Newt Gingrich has taken time away from mulling his presidential run to take shots at President Obama. Gingrich fired at Obama, calling him a "spectator in chief" while accusing him of being passive in the face of crises in Japan and Libya.

For Investors: Hindsight is 20/20 -- Oil Is "Up" Again Today

Before I get started on oil, just a note: the February housing data was the worst in 27 years, according to CNBC.

Oil futures are up today, after deep sell-off yesterday.

I opined on Monday (two days ago) that we might be seeing a fourth opportunity to invest in the Bakken. Yesterday was a great day to accumulate more shares in Bakken-focused companies.

Enerplus Roberts Trust 13C-2H TF -- Bakken, North Dakota, USA

A comment was sent to me regarding file number 19873, Roberts Trust 13C-2HTF.  This well is still on the confidential list.

Legacy Update on Spearfish Wells in Bottineau County -- North Dakota, USA

Legacy Oil and Gas website here.

Report (pdf) here.

When you get to that document, you will need to scroll down to page four:

The first two horizontal wells of a five well program targeting light oil in the Spearfish in Bottineau County, North Dakota were drilled in the fourth quarter of 2010, with the remaining wells drilled subsequent to year end. Based on drill cuttings, gas detector response and oil shows while drilling, all five wells have now been cased as potential Spearfish oil wells and await completion. Fracture stimulation treatment is dependent on weather and road bans but is anticipated to occur within the next six weeks. The Company has continued to build on its dominant land position in the area which is now in excess of 43,840 net undeveloped acres. No reserves have been assigned to Legacy’s interest in Bottineau County in the December 31, 2010 reserves report.

It seems I heard that Spearfish oil was not as sweet as Bakken oil and would not be put in the Enbridge pipeline system. This report says that the wells targeted "light oil." I thought I read that oil from Spearfish wells would be trucked to Canada. I have to go back and look at that. My memory does not always serve me well.

A big thank you to a reader for alerting me to the Legacy Oil and Gas Spearfish update.

Update: yes, I was correct. Lynn Helms says Spearfish oil is "sour oil" and will be trucked to Canada. This is the article (regional links break early and often).

The Spearfish play is part of the Waskada South Field, an extension of Manitoba's Waskada Field, which is 12 miles north of the Manitoba-North Dakota border.

The Spearfish Formation is at a shallower depth than the Bakken Formation and is just above the Madison Formation.

Helms said the oil in the Spearfish is sour, "but that was known all along."
Sweet crude is lower in sulfur content than sour crude.

"Enbridge has switched their pipeline east of Minot to 100 percent sweet crude, so sour crude producers in Bottineau and Renville counties now have to truck their oil to Canada," Helms said.

This was my original post of same.

News regarding the Spearfish formation is aggregated here, or you can click on the Spearfish formation at the sidebar on the right.