Saturday, January 7, 2012

Outstanding Article on China's Oil Consumption

Link here.
My reporting in the United States, and from three other continents in the last few years, clearly indicates that the Bakken development, as well as drilling in the Tyler and Three Forks shale formations, which lie above and below the Bakken, is very likely to persist for at least a generation.

Production in North Dakota has already reached 500,000 barrels per day and, according to industry executives and state oil and gas regulators, will reach 1 million barrels daily within a year. The Bakken contains some 22 billion recoverable barrels, say state officials. The two other shale reserves also contain billions of recoverable barrels, they say.
The linked article continues:
In 2000, China imported 1.4 million barrels per day, or 29 percent of the 4.8 million barrels it consumed each day that year. In 2011, China imported 5.4 million barrels a day, or 58 percent of the 9.2 million barrels it consumed daily. In the last decade, in other words, China’s oil imports more than tripled and its overall oil consumption nearly doubled.

The Energy Information Administration said that the growth in China’s consumption in 2010 and 2011 represented almost 40 percent of the increase in world oil demand during the two-year period.

Having spent weeks in China during four trips from November 2010 to September 2011, and having reported on energy, water, and China’s soaring economy, I saw no evidence that China has any plan other than accelerating its development. China, which last year overtook the U.S. as the largest energy consumer on the planet, is also now the largest market in the world for grain, cars, coal, steel, cement, glass, chemicals, trucks, trains, construction equipment, power plants, dams, etc. The risk to the United States and the global economy from China is that it’s growing so fast, any number of factors — commodity shortages, price increases, inflation, domestic unrest, droughts, floods — will cause Chinese markets to implode.
This is a must read article for all naysayers. The rest of us already know.

I had this album many, many years ago. I should have kept the jacket. Steve Jobs understood the value of album art. Hmmm. 

The City of New Orleans, Arlo Guthrie

Shell Oil to Announce $2 Billion Ethane Processing Plant in the East -- Implications for the Bakken -- EPP To Build ATEX Express Pipeline


March 14, 2013:  Oil and Gas Journal is reporting:
Enterprise Products Partners LP (EPP) said shipper commitments support development of a 270-mile pipeline header system for delivery of ethane to US Gulf Coast petrochemical plants from the company’s storage complex at Mont Belvieu, Tex.
August 30, 2012: Shell selects Pittsburgh for the new $2 billion ethane cracker unit (see original post). Ohio and West Virginia are miffed.

June 21, 2012: The ethane pipeline from the Hess facility in Tioga to Alberta, Canada, has been approved by North Dakota; it now awaits US State Dept approval.  

January 9, 2011: See comment below regarding another Bakken to Canada pipeline. Note the linked article: the writer calls this a "petrochemical revolution." I have started using the phrase "energy revolution" -- started using it about one month ago.

Same day: It is incredible all the stories out there regarding new pipelines for ethane, polyethylene plants, etc., and how eager communities are to get those industries. It speaks volumes that the present administration has not once said one positive thing about this industry.

I am absolutely convinced that the present administration prolonged the misery of the deepest recession in US history (regional depression in some cases) by bad decisions. To not even include the oil and gas industry in a turnaround plan for the country is beyond ... I can't even think of an adequate word.

I was completely unaware of all these multi-billion dollar projects; not only are they shovel-ready, they require no government money or subsidies, and they provide long-term very high paying jobs. They also require highly educated men and women (engineers, IT folks) which is what the administration is always talking about, while providing hundreds of thousands of blue-collar, and in many cases, union jobs. I am absolutely flabbergasted. And to think someone feels there are no more eye-popping stories to report.

The Keystone XL was just another pipeline in the big scheme of things. Wow. 

See the very long comment dated January 8, 2011, below.

To make it easier to get to the links, I have brought them up here:
Original Post

There's an incredibly good comment over at this post -- the link will take you to the South Heart housing story, but the comment is about the huge natural gas, polyethylene business, natural gas gathering and processing plants that are going up around the US, including in North Dakota.

Shell will announce a $2 billion ethane-to-ethylene plant in the east.
A giant chemical plant that processes natural gas is coming to the Midwest and Ohio leaders hope the state's newly tapped gas deposits, coupled with growing industries that use gas products, make Ohio the favored location.

Shell Chemical is finalizing plans for a $2 billion complex that is expected to create hundreds of jobs and pull other industries and manufacturers into its orbit. Shell has said only that it plans to build in either West Virginia, Pennsylvania or Ohio, three states that overlay ancient shale beds rich in natural gas.

With a site announcement imminent, interest in Shell's decision grows keener by the day. The placement of the mega-refinery, called a cracker, could define where other major oil companies establish operations in the nation's newest energy field. 
I think "Cramer" has talked about the revitalized polyethylene business in the US also (but I forget).

And in the Bakken?
In North Dakota, an ethane pipeline is being built from Hess's expanded Tioga plant into Canada, for processing to polyethylene in Canada. ONEOK is building a natural gas liquids pipeline from near Williston to Kansas. In Kansas, the ethane will be separated from the propane, butane, and pentane fractions, with the ethane than piped to Texas for conversion into polyethylene. Hess's expanded plant in Tioga will be a technically "complete" nat gas processing plant, while ONEOKs will not separate the higher hydrocarbons from each other. 
By the way, the comment also noted that in addition to the giant chemical plant that will be coming to the Midwest (Ohio?), EPP is going to build a 1,230-mile pipeline from Texas to the chemical plant.
The ATEX Express - a 1,230-mile pipeline - will send about 190,000 barrels of ethane daily from the local natural gas producing region to Texas.
As officials from West Virginia, Ohio and Pennsylvania wait to see which state will get Royal Dutch Shell's multibillion-dollar ethane cracker, a pipeline project will soon send ethane produced in those states to the Gulf Coast to be cracked.

Chesapeake, the Upper Ohio Valley's largest active gas driller, will be among the companies sending the ethane south via the Appalachia to Texas pipeline, also known as ATEX Express. The pipeline's owner is Enterprise Products Partners.
With all these pipelines being built across the country, it begs the question: what was it about the Keystone XL that first got folks' attention. Once it became politicized, I understand it; but how did it become politicized in the first place? No wonder TransCanada was taken by surprise. The pipeline was a no-brainer: jobs and money for the states, and pipelines are about as ubiquitous in the US as lawyers.

My hunch is that the Keystone XL was announced just about the time Enbridge had some mainstream press covering some (in retrospect) very minor spills.

On another note, there is clearly an energy revolution in this country occurring on a huge scale, a revolution that is not being reported by the mainstream media.

Delay in Posting / Responding To Comments

I apologize for the delay in posting comments.

I have gotten more comments than ever all of a sudden. They are excellent comments and deserve appropriate replies, etc. I may not get to them until tomorrow.

I apologize but I will eventually get to them.

Whiting's Kannianen Wells in the Sanish -- Exceed 3 Million Bbls -- Thirteen Wells -- Oldest Well, Six Years Old

Note: the original post had to do with the "first" 12 Kannianen wells; to minimize confusion, I will keep adding Kannianen wells as they are completed.

The subject line for the original post:  Whiting's Kannianen Wells in the Sanish -- Exceed 2 Million Bbls -- Twelve Wells -- Oldest Well, Five Years Old

The data is updated from the original post.
  • 17035, 2,016, Whiting, Kannianen 11-4H; 4-153-91; middle Bakken;  t8/08; cum 879K 1/20;
  • 18077, 1,773, Whiting, Kannianen 11-5H; 5-153-91; middle Bakken; t9/09; cum 485K 1/20;
  • 18298, IA/3,422, Whiting, Kannianen 44-33H; 33-154-91; middle Bakken;  t1/10; cum 702K 4/19; remains off line 1/20;
  • 18553, IA/1,776, Whiting, Kannianen 43-13H; 31-154-91; middle Bakken;  t7/10; cum 407K 6/19; remains off line 1/20;
  • 19174, IA/2,090, Whiting, Kannianen 43-33H; 33-154-91; middle Bakken; t10/10; cum 391K 4/19; off line 4/19; remains off line 1/20;
  • 21031, 1,969, Whiting, Carl Kannianen 21-4H; 4-153-91; s7/11; t12/11; cum 349K 1/20;
  • 22173, 1,180, Whiting, Carl Kannianen 22-32TFX; 32-154-91; t9/12; cum 216K 1/20;
  • 22174, 3,126, Whiting, Kannianen 22-32XH; 32-154-91; t9/13; cum 413K1/20;
  • 22175, 1,249, Whiting, Kannianen 22-32TFX; 32-154-91; t9/12; cum 238K 6/19; remains off line 1/20; 
  • 25350, 1,501, Whiting, Carl Kannianen 24-33H, t8/13; cum 218K 1/20;
  • 25636, 363, Whiting, Carl Kannianen 13-7XH, t9/13; cum 202K 1/20;
  • 26340, 934, Whiting, Kannianen 43-31TFH, t2/14; cum 219K 1/20;
  • 28481, 260, Whiting, Kannianen 21-4H, middle Bakken, low background gas, t11/14; cum 248K 1/20;
It is opined that the average EUR in the Bakken will be ~ 600,000 bbls (at time of original post)
Bakken wells are expected to produce upwards of 35 years.

Earlier this evening, I "hit the wall."

I was overwhelmed by all the data coming in from around the Bakken, all the comments I received after posting the above. The comments were to many other posts, but they all came after I posted the note above.

But something was bothering me.

Whenever I feel uneasy, "out of sorts," I try to figure out what it is. I've learned that by figuring out what is bothering me, I have a better chance of resolving the uneasy feeling. I think it has to do with a comment that came in much earlier today from the individual who was no longer excited by the Bakken. Have "we" become so jaded, so cynical, that "we" can't get excited by wells with IPs of 3,000; with individual spacing units having produced a million bbls of oil in less than three years? Have "we" become so used to staggering numbers that the Bakken no longer excites us? Wow. 

Maybe it was that comment, I don't know. Or maybe it was the fact that the FAA grounded a good Samaritan helping young whooping cranes migrate south. You have no idea how much I think about whooping cranes. They are beautiful birds and I have been fortunate enough to see them so many times up close and personal (Rockport, Texas, birding).

I can't say for sure what it was. But I do know I was overwhelmed; I couldn't keep up with posting and answering the comments. I hate not having time to respond to all those who send in comments. But I've gotten through most of them. And now I'm in a "Yellow River" frame of mind.

Yellow River, Christie
By the way, the "thing" that pulled me "back up," after "hitting the wall," was "anon 1"'s comment in response to my posting on the ATEX pipeline sent in by another reader.

South Heart -- Developer Looks At Site For Housing Development -- The Bakken, North Dakota, USA


February 29, 2012: another developer looks at South Heart as a potential site for another housing development.
City Councilman Chuck Andrus said James Perdaems of South Heart informed the council in early February that a developer offered to purchase a 78-acre tract of his land, east of St. Mary’s Catholic Church. Andrus believes the unknown developer might be interested in building housing, which he said is now a “big field.”

Andrus added that Perdaems wants to learn more about city infrastructure requirements before moving forward.

“(Perdaems) has, I believe, sold land to a developer, and they want it annexed into the city,” Andrus said Monday.

Original Post
Link here.

Data points:
  1. unspecified number of apartment complexes (complexes, not units)
  2. developer has purchased an 18-acre tract, east of Adamski Park
  3. developer has made verbal offer for an additional plot near the town's golf course
The Dickinson Press points out that the mayor feels "brick and mortar style housing" is better than the alternative. Whatever that may be.

I don't know the South Heart area very well, but this link will provide some additional insight with regard to the North Dakota coal industry and South Heart.

South Heart is a city in Stark County, North Dakota in the United States. The population was 301 at the 2010 census. It is part of the Dickinson Micropolitan Statistical Area. South Heart was founded in 1908 (wiki). 

South Heart is about 10 miles southwest of Dickinson as the crow flies.

Weather Channel

This is one of my favorite sites for tracking the weather.

Just type in the whatever city you are interested in and it should work.

The site, today, says there is 15% cloud cover in the Boston/Belmont area. In fact, there is not a cloud in the sky. The clouds must be off-shore, but Belmont is well in-land, so I can't explain it. But having said that, it's a fun site for those who track the weather.

First Wind Turbines -- And Now "Safe Passage" -- The Government Is Out to Kill The Few Remaining Whooping Cranes

I cannot make this stuff up.

There is a solution to protecting whooping cranes from wind turbines, but the government has put a stop to that. The solution to protect young whooping cranes is called "safe passage." It is very, very similar to the underground railroad of the 1860's. The government tried to stop that "safe passage" also.

This is incredible.

Link here.
Ten young whooping cranes and the bird-like plane they think is their mother had flown more than halfway to their winter home in Florida when federal regulators stepped in.

Now the birds and the plane are grounded in Alabama while the Federal Aviation Administration investigates whether the journey violates regulations because the pilot was being paid by a conservation group to lead the cranes on their first migration instead of working for free.

FAA regulations say only pilots with commercial pilot licenses can fly for hire. The pilots of Operation Migration's plane are instead licensed to fly sport aircraft because that's the category of aircraft that the group's small, open plane with its rear propeller and bird-like wings falls under. FAA regulations also prohibit sport aircraft — which are sometimes of exotic design — from being flown to benefit a business or charity.
Has this administration gone nuts?

Thank goodness for the Drudge Report.

A Must-Read Article For Those Enamored With Government Motors


August 25, 2012: GM to cut a third of all Opel employees in Germany; unions give in; agree to phased downsizing

Original Post
Link here. Some data points, something for everyone who is an apologist for Government Motors --

For investors: General Motors stock finished 2011 down 46.1% – the absolute worst car or car-related product stock on the board. Besting (so to speak) the second worst by 4.5%.

For investors who shorted the stock: congratulations!

For job growth: General Motors will send Volt jobs to China. Pretty much takes the wind out of the sails of those who said a bailout was necessary to save jobs.  I guess the administration was talking about saving Chinese jobs. Fool me once, shame on you; fool me twice, shame on me -- President Clinton.

For the tax payer who bailed out General Motors before it became Government Motors: all that taxpayer-subsidized R&D for electric vehicles/batteries is now going to China. For free.

For those who "believe" in the free market: the federal government now picks winners and losers (mostly losers: Solyndra, Government Motors, bio-fuel processing plants, Fisker cars).

For dealers/service centers: all 8,000 Volts on the road are being "called back" for major structural repairs to protect the batteries from exploding prior to, during, or after an accident.  The other 4,000 Volts are still in dealer show rooms and won't have to go far for the "call back," which if the company wasn't owned by the Government, would be called a "recall."

For used car dealers: would you really want to take a used Volt in trade-in?

For used car buyers: would you really want to buy a used Volt? Be sure to check the Carfax for mishap/accident history.

Rip Van Winkle Wakes Up -- Again -- The Bakken: An Economic Disaster Area? -- Wow! --The Bakken, North Dakota, USA

It appears the editor of The Dickinson Press has just crawled out from under the Geico rock or is using material from my blog or other Bakken blogs.

This story --- today's date -- has been reported for the past three years in the Bakken.
Think it’s difficult to get a room in Dickinson? Well, it is.

People looking for a place to stay overnight have had a hard time finding one because Dickinson has the highest reported occupancy rate in North Dakota, officials said Friday.

“I would suggest whoever is (making reservations), make them as soon as they know what’s going on,” said Nodak Motel manager and owner Scott Martin. [Well, duh -- we've been saying that for three years.]

City Administrator Shawn Kessel said a star report, which is a voluntary survey for hotels, revealed that Dickinson had a 90 percent occupancy rate as of November. Minot was second at 89 percent and Bismarck stood at nearly 78 percent. 
By the way, someone has noted that one cannot get a room in Bismarck when the legislature is in session, or when the Jehovah Witnesses host their annual convention there. Just saying.

And then, this article --  wow! Again, remember The Dickinson Press is now published by the folks from Minnesota -- which explains everything.
Reflecting a growing concern about the pace and scope of western North Dakota’s oil boom, a weekly newspaper editor in northwestern North Dakota recently appealed for the state to declare the region “an economic disaster area” because of the burgeoning oil industry.

Cecile Krimm, editor of the Crosby Journal, wrote that the economic crisis facing the area is “a societal disease characterized by skyrocketing rents, an inadequate labor pool and the complete overwhelming of existing public infrastructure.”

She suggested that the state cap the number of drilling rigs that can be operating at any one time and take other steps to slow the pace of development.

“This isn’t about wanting to go back to the way things used to be, but about the government taking steps to ensure basic public safety,” she wrote. 
All I can say is that smarter folks than I are solving these problems every day.

The writer should look at how the industry is building 2,000 homes in Williston and 500 homes in Watford City with almost no local construction workers, just as a start.

It might open her/his eyes.  The last line of the article: Haga is a reporter for the Grand Forks Herald, which is owned by Forum Communications Co.

It was also interesting to note that the writer quotes another source, but does not provide a link so readers can read the entire article, and not rely on someone else's reporting. 

It appears, without question, that in the past six months The Dickinson Press has moved even farther into the anti-growth arena. In my mind, at least, it has lost its journalistic balance, and has become a tabloid at best, and a blog at worst.

My hunch is that the Minnesota folks are planning to buy the Williston Herald.

Just a Reminder: FracFocus -- Not Just The Bakken

A reader reminded me of

I understand that it might be a bit delayed in posting updates; I don't know.

Regardless, it can answer your question if you are wondering if a particular well has been fracked. The site is very easy to use; you do not need to enter the API number of the well if you know the name of the well and the operator.

The Bakken Shale Discussion Group has a nice thread on it.