BLM: Barack's Latest Moratorium

Updates

April 3, 2012: Obama administration announces plans to expedite permitting process -- digital process, rather than pen and ink. Current process averages 298 days to approve a permit.  New digital process should drop average time to 60 days or less. Note: this is an administrative change; it will not affect policies such as fracking (see original post). At least now an operator will know in two months, rather than a year, if the permit is denied.

Original Post

Some months ago there were rumors that the native Americans in North Dakota wanted fracking stopped on their reservations. It turns out this rumor had some basis in fact: but it was not the native Americans in the Bakken, but rather those in the Turtle Mountains.

A tribal grassroots organization that urged their local government to ban hydraulic fracturing from happening on their reservation proved to be successful in their endeavors.

At an open public meeting Tuesday morning, the Turtle Mountain Tribal Council passed a resolution that would ban hydraulic fracturing, or "fracking" on the reservation.

This was a non-story. There is no oil under the Turtle Mountains in North Dakota. [See first comment. I stand corrected. I should have used this link: "The Bureau of Indian Affairs’ Dec. 14 lease sale for 45,000 acres in Rolette County is outside North Dakota’s existing oil patch. State records show no oil has ever been produced in the county, but some tribal members believe advanced horizontal drilling techniques and hydraulic fracturing could spur development on Indian land and threaten water sources."]

But this next story is real. It looks like Barack's latest moratorium (BLM) might soon occur in the Bakken.

The chairman of the Three Affiliated Tribes asked a congressional subcommittee Tuesday to help stop the Bureau of Land Management from implementing its proposed regulations on hydraulic fracturing.

Tex Hall told members of the House Appropriations Committee's Subcommittee on Interior, Environment and Related Agencies in Washington, D.C., that the BLM's proposed regulations on hydraulic fracturing, better known as fracking, will hurt energy development on Indian reservations.

"MHA (Mandan, Hidatsa and Arikara) and every other oil and gas tribe in the country was shocked to learn that the BLM is planning to implement new requirements for oil and gas-related fracturing activities on our reservations, especially in light of the fact that the BLM currently has no staffing for this new activity, no standardized process and no proposed system for processing and approving these plans.

This is exactly the type of federal mismanagement of oil and gas resources that tribes have been complaining about for at least the last four years," Hall told the subcommittee members.

The BLM draft proposed fracking rule has not been released to the public yet.

If the BLM goes ahead with "federal fracking rules" we will have another opportunity for the Bakken to provide a laboratory test. In this case, we will be able to see how BLM fracking rules affect about a fifth of the Bakken activity in North Dakota compared to state rules.

The two most prolific Bakken oil fields are the Sanish and the Parshall. About one-third of the Parshall, EOG-owned, is inside the reservation [changed from original post]. The Sanish, Whiting-owned, is mostly outside the reservation.

I believe nearly 100 percent of WPX's activity in North Dakota is inside the reservation, and that KOG has a significant amount of their activity inside the reservation. The reservation in general has some of the best prospects in the Bakken. [Comment: original posting incorrectly said XTO instead of WPX; that was my error. WPX -- formerly WMB -- bought 7 percent of the reservation, and I think that's where the bulk of WPX activity is in the Bakken -- inside the reservation. A reader caught that error. Thank you. XTO has some activity inside the reservation but most activity outside the reservation. A long, long time ago I blogged about a new pipeline that benefited XTO and KOG in Heart Butte and that's why my mind slipped on XTO vs WPX. Corrected Sunday, April 1, 2012, for those keeping score.]

And so it goes.

BLM: Barack's latest moratorium. Slow-rolling the oil and gas industry.

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These are the fields with some or most of the field inside the reservation:

Prairie Junction
Parshall (the south 1/3)
Van Hook
Big Bend
Reunion Bay
Four Bears
Antelope
Spotted HOrn
Squaw Creek
Mandaree
Heart Butte
Eagle Nest
Deep Water Creek Bay
McGregory Buttes
South Fork
Centennial
Twin Buttes
Moccassin Creek
Bailey
Wolf Bay

EPA To End Lawsuit Against Innocent Bystander

It's a long, long story. I can't remember if I've blogged about it before, but it's pretty much "guilt by association."

"Fracking" is in play and that's why the EPA went after the oil company.

Turns out out to be another bum rap by the EPA.

Here's the link for those interested. And here's a link to the story in the Wall Street Journal, sent to me by a reader.

And again, it's another story that most would have missed had it not been for the Drudge Report.

New England Utility Rate Payers Well Served By Their Elected Leaders

Coal: 6 cents/KWH

Boston's Cape Wind: 20 cents/KWH --> 30 cents/KWH in the outyears -- at cut rate prices (and probably a loss, at that)

Meanwhile (2nd story below): Minnesota Power looking to put 51 bird killers
 in center of North Dakota's migratory flyway

The lede: 

Boston utility NStar has agreed to pay a starting price for power from Cape Wind project that is substantially higher than the cost of conventional energy and would add about $1 to customers’ monthly bills in the first year the offshore wind farm generates electricity, according to a 15-year contract filed with state regulators Friday.

The article continues:

The price, 18.7 cents per kilowatt hour, is the same as what National Grid agreed to pay when it signed a contract in 2010 to purchase half the power generated by Cape Wind. NStar’s deal is to purchase 27.5 percent of the wind farm’s total output. Since the Cape Wind power represents only about 2 percent of the energy distributed by NStar, it is expected to have a moderate impact on the average customer’s bill, $1.08 a month. Customers in the Boston area pay about $86 a month.

The utilities currently pay about 8 cents per kilowatt hour for electricity, and NStar originally balked at becoming a Cape Wind customer, arguing the wind farm’s cost was too high. That position changed last month, when, after nearly a year of negotiations, state energy officials agreed to endorse a proposed merger between NStar and Connecticut-based Northeast Utilities if NStar made several concessions, including buying power from Cape Wind.

As with National Grid, the price that NStar pays for Cape Wind’s power will increase by 3.5 percent each year to adjust for inflation. By the end of the contract, NStar will pay just over 31 cents per kilowatt hour.

The $1.08 is inconsequential. This is not the story. The rest of the story:

The NStar contract is a milestone for Cape Wind, providing the project with enough assured sales to attract financing. The 130-turbine wind farm is expected to cost more than $2 billion to build in Nantucket Sound.

And the nut of the story:

“Cape Wind would have a substantial impact in reducing spot market prices,’’ said Mark Rodgers, a Cape Wind spokesman. “That ultimately filters back to all of us electricity consumers in New England.’’

Rio, meanwhile, said he thinks that any such savings would actually be “incredibly minuscule.’’

“I don’t know if you’ll ever be able to make money on this thing,’’ he said. “It’s real fuzzy math.’’

My hunch is that ten years from now: a) no Cape Wind; or, b) the "company" will be asking for subsidies from the state government to stay in business. The Netherlands has pulled the plug on wind energy; it makes no economic sense for the Netherlands, even where natural gas is upwards of $12 for mcf in Europe, compared to $2.40 and falling in the US. 

If natural gas is becoming cheaper than coal, this new deal paying 20 cents/kwh for wind is even more disturbing.

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Meanwhile, Minnesota Power would like to put 51 bird killers in the middle of the migratory flyway in central North Dakota.  Link at Bismarck Tribune for those interested. Interestingly enough, I hear nothing from the Audubon Society or Ducks Unlimited regarding these travesties.

Drilling a 2 x 2 2560-Acre Unit -- Continental Resources -- The Bakken, North Dakota, USA

Updates

Later: see comments. It's been pointed out that the horizontal "pattern" is not "efficient." It has been generally accepted that the direction of fracture varies from location and is similar within the same spacing unit. This proposed "new" configuration goes against that "rule." If CLR goes ahead with this proposal, we may see how valid this "generally accepted rule" or how important it is.

Original Post

How Continental Resources will drill a 2 x 2 2460-acre unit:

A huge "thank you" to RJ for sending me the graphic showing how CLR plans to drill out a 2 section by 2 section 2560-acre unit. This is very different from a 1 section x 4 section unit in which the pad will be placed midway between the four sections, with four horizontals going in one direction, and four horizontals going the very opposite way (or 6 to 8 going one direction, and 6 to 8 going the other way).

By the way, the technology is awesome. I'm sure you can do this on a PC, but on the Apple it was seamless. The graphic above was sent in a format not recognized by the system; simply adding ".jpg" to the graphic and the "blogger" application recognized it. (Unfortunately I can't get rid of that vertical line, but not a big deal.)

Look at the efficiencies a 14-well pad will provide, least of which is one road to one pad, as opposed to 14 roads to 14 individual pads. CLR introduced the Eco-Pad to the Williston Basin just a couple years ago. Things are moving quickly in the Bakken.

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