Sunday, August 28, 2011
Sunday Night -- Wal-Mart -- Williston, North Dakota -- Bakken, North Dakota, USA
Of course Wal-Mart would not provide the data if asked, but it sure would be fun to see the sales for the Wal-Mart in Williston compared to any Wal-Mart anywhere else.
Sunday evening we had to pick up a few things -- mostly the old light bulbs before only the funny ones are available at $10 apiece -- so we drove out to Williston Wal-Mart. Traffic was heavy, but nothing compared to what it will be tomorrow, Monday, morning. Dad showed me a "secret" way to get to Wal-Mart to avoid the traffic. Water trucks parked wherever there was an open space. The truck stops along the milliondollarway were full of trucks. It's gonna be a lot better when that 720-acre truck stop north of Williston is completed. Wow -- 720 acres -- a section is 640 acres; there's already a man-camp out there getting ready to start building that truck stop / industrial park.
But Wal-Mart parking lot was full, and the check-out lines were long. Dad normally takes his few grocery items to the jewelry counter, but even that counter was busy tonight, so we did the self-checkout thing -- a first for him. Worked great.
Anyway, in the parking lot as we walked in; the first ten cars we passed: Idaho, Colorado, Montana, South Dakota, North Dakota, Idaho, Mississippi, North Dakota, Montana, North Dakota. And one without a license plate, just one of those little "just bought" tags up on the rear window. One of the ten North Dakota plates belonged to us. Seven of the ten were pick-up trucks. The "story" in town is that no one lives in Idaho any more; they have all come to North Dakota. (No cars from Wyoming. Interesting.)
It looks like, for the first time in a long time, some of the eight hotels or so, might have some rooms available. Up until now, no rooms have been available in the eight hotels, but advertising on the electric signs suggest there may be some vacancies.
Sunday evening we had to pick up a few things -- mostly the old light bulbs before only the funny ones are available at $10 apiece -- so we drove out to Williston Wal-Mart. Traffic was heavy, but nothing compared to what it will be tomorrow, Monday, morning. Dad showed me a "secret" way to get to Wal-Mart to avoid the traffic. Water trucks parked wherever there was an open space. The truck stops along the milliondollarway were full of trucks. It's gonna be a lot better when that 720-acre truck stop north of Williston is completed. Wow -- 720 acres -- a section is 640 acres; there's already a man-camp out there getting ready to start building that truck stop / industrial park.
But Wal-Mart parking lot was full, and the check-out lines were long. Dad normally takes his few grocery items to the jewelry counter, but even that counter was busy tonight, so we did the self-checkout thing -- a first for him. Worked great.
Anyway, in the parking lot as we walked in; the first ten cars we passed: Idaho, Colorado, Montana, South Dakota, North Dakota, Idaho, Mississippi, North Dakota, Montana, North Dakota. And one without a license plate, just one of those little "just bought" tags up on the rear window. One of the ten North Dakota plates belonged to us. Seven of the ten were pick-up trucks. The "story" in town is that no one lives in Idaho any more; they have all come to North Dakota. (No cars from Wyoming. Interesting.)
It looks like, for the first time in a long time, some of the eight hotels or so, might have some rooms available. Up until now, no rooms have been available in the eight hotels, but advertising on the electric signs suggest there may be some vacancies.
Chesapeake Has Arrived -- Bakken, North Dakota, USA
Actually Chesapeake has been here for awhile. But I thought some folks would enjoy the ad.
North Dakota Hitting On All Cylinders -- Now, It's Corn -- Bakken, North Dakota
Another incredible story for North Dakota -- link here (regional links break early).
Remember all those dire warnings regarding farm crops in North Dakota this year due to flooding?
Data points;
Single farm: enough wheat to make 12 million loaves of bread (one farm)
With corn this high in price, ethanol will increase in price; watch of price of gasoline to go up.
Remember all those dire warnings regarding farm crops in North Dakota this year due to flooding?
Data points;
- North Dakota may have record corn production this year -- perhaps third best in history
“If I had to take an educated guess, I’d say this is the best corn crop we’ve ever had,” he said during a drive around tour. “There’s 150 bushels an acre out there.”
He and his dad, Laurance Heger, turned the corner last year, for the first time planting more corn than wheat acres.
Corn, for all its good looks, is much less high-maintenance than wheat. Genetics have made it more drought-resistant. It can stand up to hail and wind damage better and at harvest time, there’s none of that waiting around every morning for dew to dry, he said.
- Corn is selling for an all-time record of $7.11/bushel on the spot market: three times higher than its average historic price
- 40 percent of all corn: cattle feed
- 27 percent of all corn: ethanol
- At $7.00/bushel, ethanol barely profitable; much above $7.00 and ethanol producers will have trouble making money
Single farm: enough wheat to make 12 million loaves of bread (one farm)
With corn this high in price, ethanol will increase in price; watch of price of gasoline to go up.
Observations in the Bakken -- Widening the Highway South of Williston -- Sunday, August 28, 2011 -- Bakken, North Dakota, USA
Fourteen Observations -- Some Related To The Bakken
First and foremost: thank goodness for McDonald's. The company-owned franchise restaurants offer free wi-fi. I just walked from where I am staying to city library, about a 2-mile walk to use wi-fi there. When I got there, the library was closed. During the summer, the city library is closed on weekends except for Sunday evenings, 6 - 9 p.m.
But's it's an "evil" free market that has free wi-fi 24/7. Almost 24-7.
Second: shovel-ready jobs: I was last in the Bakken about six weeks ago. I don't recall any road construction on the two-lane road south of Williston to Alexander. Today, I drove that two-lane highway to Alexander and it appears that it will be a four-lane highway by winter. I asked a local about the highway: he said it was not going to be a four-lane highway, but rather stretches of four lanes for passing lanes. From a practical point of view, it certainly seemed to me that most of the Williston-Alexander stretch would be four lanes, and as noted, I don't recall any evidence of construction six weeks ago, and now it is close to being blacktopped. See Williston Herald for more on this project.
Third: this is a Sunday and everywhere building was going on. This is a right-to-work state; I have no idea if that has any impact. But on public projects (the aforementioned highway) and on private projects (the new Schlumberger complex going up) construction workers were out there working.
Fourth: speaking of working 24/7, the back-hoes were working digging ditches for the new water pipeline that is being paid for by the oil companies. See WAWS, a $150 million shovel-ready job. This new water system will include a significant upgrade and capacity expansion at the Williston city water plant and drinking water will be piped to surrounding communities fifty miles away, including Grenora, Watford City, Alexander, etc. I don't know the extent of this system but it will be huge. Geographically, it may be one of the largest water systems in the US. Six weeks ago I saw some pipeline being laid near the water plant; today I saw pipeline stretching north, south, east and west of Williston. Again, the back-hoes were digging on a Sunday; there is a sense of urgency here in the Bakken. No doubt there is a reason for this sense of urgency: it's but a few months to very cold winter weather. For newbies, the winter won't affect drilling operations until late January, February. The first freeze is around Halloween, but the severe winter doesn't kick in until after the new year.
Fifth: there's no pleasing everybody. I talked to a local resident about the new four-lane highway being put in between Alexander and Williston. At least when I asked him about it, I thought it was a four-lane highway being put it, expanding from the current two-lane highway. He corrected me, saying that the project was a "waste of money." He said that it wasn't going to be a four-lane highway, just stretches of passing lanes. He thought "they" should have put in a four-lane highway. I agree with some of what he said, but from my perspective, the passing lanes seemed to be most of the stretch between Alexander and Williston, essentially making it a four-lane highway. And, oh by the way, for all the complaints about the roads, the highway between Alexander and Williston was in perfect condition.
By the way, if anyone knows about the appropriation process, it is sometimes easier to get an "addition" approved rather than a completely new project. I don't know if this applies in this case -- passing lanes vs four-lane highway but I wouldn't be surprised.
Sixth: flooding. Much of the flooding is receding. It appears any wells affected by the flood are now high and dry (I'm sure folks will write me and tell my I am stupidly wrong on that; be that as it may), but the water has receded significantly. We drove out to a Madison / Bakken pair of wells that I was curious about, and the road was recently filled in for oil trucks and on the way out, we passed an oil truck heading out to the same well to load oil that was being stored in the on-site tanks. As expected, the Madison was was not pumping (according to the NDIC website, this well is not currently producing, but it is not abandoned). The BEXP Bakken well had a great first month and then the typical horrendous decline. I don't know for sure but this might be the well that BEXP (if it was BEXP, and not Whiting, I forget) that is holding $2 million in royalties until the owner of those mineral rights is sorted out; the horizontal runs under the river).
Seventh: the traffic is incredible. Busy, that is. But drivers seem courteous. Compared to Portland, Oregon, where I have just come from, the traffic in Williston moves smoothly. It seems traffic signals are set correctly and there is minimum congestion at lights (by big-city standards). Long-term residents will disagree and say the traffic congestion at lights is very, very bad.
Eighth: I can't remember if I posted this. Another rant about folks complaining about roads. The roads are bad. In the rural areas, they can be incredibly bad for the the farmers. The Williston Herald recently interviewed six men and posted their photos and their comments regarding the roads. Five said they weren't that bad; the six they said they were very bad. I believe most of the six (or was it five) were truck drivers; none were farmers. All were in their 20's and 30's. But considering there are 200 active drilling rigs in North Dakota, and most of them in four counties (there are 53 counties in North Dakota), the roads (from my viewpoint) are in great shape. Again, considering there are 200 active drilling rigs in these four counties. Seventy-five percent of wells are not connected to pipelines and require trucks to get oil from oil pad to nearest pipeline or rail facility.
Ninth: I asked a long-term resident how many oil service companies he thought were located in Williston. The long-term resident is a business man who deals with businessmen throughout Williston. He is very cognizant of the commercial build in Williston. So, how many oil service companies are located in Williston? He guestimated 25. --- Schlumberger, Halliburton, Sanjel, Baker Hughes, etc., ---
The Williston Herald says there are ... drum roll .. there are more than 135 (that is not a typo, more than 135) oil service companies located not "just" in North Dakota, but located in Williston. I imagine that if you asked the average person how many oil service companies in Williston, one would get the same answer, about 25.
And each of these oil service companies generate other businesses: restaurants, theaters, automobile dealers, construction companies, etc.
Tenth: supposedly there is a yellow Lamborghini in Williston. I have not seen it. It was spotted Friday night. I will keep an eye out for it. Hopefully get a photo in front of a Williston landmark to prove it's in Williston.
11th: I understand the Halliburton complex cost $60 million; and now, Schlumberger is building a complex probably about the same size west of Williston, perhaps about the same amount of money. I could be way off on the $60 million; it was idle chatter. I know I blogged about it months ago, but probably can't find it -- ah, yes, here it is, November 16, 2011. Only $20 million, but I think that refers to the expansion project. Now there is a brand new Halliburton complex just west of the original site (there is an old, unused (?) Farmers Union building sitting between these two Halliburton sites). So, who knows, $20 million, $60 million? Whatever.
12th: someone recently wrote to complain to me about the long coffee lines at CENEX. I assume that 99.9995 percent of folks standing in line at CENEX have a home and could brew their own coffee and place it in a thermos. There are homeless folks in Williston that would love to have as one of their many complaints that the line for coffee is too long. I spoke to a local pastor earlier today and he brought up the issue of homeless folks. Somehow I just can't get excited about long lines for coffee. I can't wait to hear from folks on this one.
13th: And just for the record: I am impressed in general with how the residents, the county commissioners, the city commissioners, the truckers, the rough necks, the workers from Florida, Louisiana, and Texas, et al, are doing their best to keep this boom under some semblance of normality, if not control. I understand the state of Idaho has moved all its residents to North Dakota to help out with all the work that needs to be done. Right now I'm sitting in McDonald's and it's filled with grandmothers and their grandchildren enjoying an afternoon out. They've learned not to come during the coffee-hour rush.
Fourteenth: I was reminded last night that sales tax receipts in Williams County exceed sales receipts in any other North Dakota county, including Cass County, home of North Dakota's largest city, Fargo, North Dakota, with a population of 106,600 with huge regional farming population, on both sides of the border, North Dakota and Minnesota. The population of Williston is 15,000. Fargo is more than 7 times larger than Williston, and yet the county where Williston is located had a higher sales tax receipt total than the county where Fargo is located. Cass County, home of Fargo, also includes West Fargo with a population of 26,000. Moorhead, Minnesota, across the river from Fargo, has a population of 38,000 and more Minnesota folks probably shop in Fargo than vice versa (sales tax difference; retail shopping opportunities, etc). When you include West Fargo (in Cass County) but not Moorhead, Minnesota, Fargo is almost 9 times larger than Williston. But Williams County has a larger total sales tax receipt.
Enough for now.
Natural Gas in Water Wells -- Bakken, North Dakota, USA
Link here (regional links break early).
Fortunately for the litigious-affected, hydrocarbons can be fingerprinted.
In the early 1900s, settlers in North Dakota tapped into shallow gases to light and heat their homes. Now geologists are conducting studies to see if these gases could be used as a resource.For more on this story, go to this post. I first posted this back in January, 2011.
“Historically, what has happened when people have developed in rural areas they found shallow gases in their water wells and used them as a resource to power lights,” North Dakota Geologist Fred Anderson said.
Anderson, who works for the Department of Mineral Resources in Bismarck, said this occurred in the 1800s in the southeastern part of the state, and there have been reports of shallow gases across the state since.
The North Dakota Geological Survey has screened 905 shallow gas occurrences in 52 out of 53 counties in North Dakota, according to a January newsletter put out by Anderson.
Fortunately for the litigious-affected, hydrocarbons can be fingerprinted.
Nice Human Interest Story in the Bakken -- Twelve-Year-Old Raises Rescued Canadian Geese
I doubt I would have posted this story, but unknowingly I saw these two geese out at Lewis and Clark State Park last night (Saturday, August 27, 2011).
And then this morning, in the Williston Herald I see that that these are two of three Canadian geese raised by a local 12-year-old boy who rescued the eggs when the rising flood waters earlier this spring would have covered the eggs:
A pair of geese named Nip and Moose quietly follow the 12-year-old Quentin Corcoran he walks across the lush greenery of this state park about 20 miles east of Williston.We had just entered the park, when I saw these two Canadian geese near the boat ramp. They looked very out of place, among all the campers, RVs, and people. In urban areas, I'm used to seeing Canadian geese on golf courses but not at boat ramps on rivers. There's no reason for them to be that close to folks when they have the whole river to themselves, so this time these two geese seemed out of place.
And then this morning, in the Williston Herald I see that that these are two of three Canadian geese raised by a local 12-year-old boy who rescued the eggs when the rising flood waters earlier this spring would have covered the eggs:
He found the nest with six eggs in it in the beginning of June while kayaking.“I kept watching (the geese’s mother)” he said. ‘She had a nest in the pipe and the water kept rising. I knew the water would come up and flood the nest.”.... after the mother had abandoned her eggs Quentin Corcoran brought the six eggs home; three hatched and are now big enough to be on their own. One has already flown off, and Quentin assumes it's only a matter of time before the siblings follow.
Crude By Rail -- Update and Idle Rambling -- Bakken, North Dakota, USA
Last night while driving home from the river, here in the Bakken, I thought about crude-by-rail again.
Then this morning, Don sends me the following Reuters story, about how that very subject:
Warren Buffett is either very, very smart, or very, very lucky (I assume a 30/70 split) -- I am thinking of of his purchase of Burlington Northern Santa Fe (BNI) in 2010. But one has to remember, the sage of Omaha was probably stopped at BNI rail crossings all his life growing up in Nebraska. He had lots of time to think about the potentials of rail.
Then this morning, Don sends me the following Reuters story, about how that very subject:
Rail shipments of crude from the landlocked and oversupplied Midwest to refiners in the Gulf Coast appear set to surge next year, to nearly double the volume now flowing in congested pipelines between the regions.This was also interesting:
The shipments, which were rare until this year, have already grown to around 100,000 barrels per day (bpd) in recent months, industry sources told Reuters. Two rail terminals in St. James, Louisiana are receiving much of the crude, while other sites like Houston are taking additional crude.
The daily cargoes between the Midwest (PADD 2) and the Gulf Coast (PADD 3) could triple to 300,000 bpd by late 2012, industry sources said. Logistics firms unveiled plans for several new crude-by-rail terminals over the last four months.
Since the Department of Energy does not track crude-by-rail, there's no official data on how much is moving.The government tracks everything else, I was surprised that it does not track oil shipments by rail. Be that as it may, I started posting about crude-by-rail about six months ago, I suppose. I don't have a good quantitative mind, but when one spends a lot of time in the Bakken, and even more time thinking about it, one starts to pick up on trends.
Warren Buffett is either very, very smart, or very, very lucky (I assume a 30/70 split) -- I am thinking of of his purchase of Burlington Northern Santa Fe (BNI) in 2010. But one has to remember, the sage of Omaha was probably stopped at BNI rail crossings all his life growing up in Nebraska. He had lots of time to think about the potentials of rail.