Wednesday, September 19, 2012

LiveScience Concurs: Antarctica Ice Growing

LiveScience leaves out a lot of history in that story. For the rest of the story, go to Antarctic ice sets another record.
NPR failed to mention anywhere in its article that Antarctic sea ice has been growing since satellites first began measuring the ice 33 years ago and the sea ice has been above the 33-year average throughout 2012.  
Indeed, none of the mainstream media are covering this important story.  
A Google News search of the terms Antarctic, sea ice and record turns up not a single article on the Antarctic sea ice record. Amusingly, page after page of Google News results for Antarctic sea ice record show links to news articles breathlessly spreading fear and warning of calamity because Arctic sea ice recently set a 33-year low.

Williston Wire Updates -- No Slowdown

From the Williston Wire. No links; folks can easily subscribe to the Williston Wire.

703 single family units five miles northwest of Williston ... for the "average person"
A group of Seattle, WA entrepreneurs is making its home and building hundreds for others in Williams County. 
A ground breaking ceremony was held recently at Fendee Estates located five miles northwest of Williston. The project is being billed as a well-planned Rural Residential Community. It will have 703 single family units. Many of the homes will cost less than $200,000.
Alaska developer to open office in Williston
The Petersen Group, Inc. an Anchorage, Alaska based developer and builder, is pleased to announce the opening of its North Dakota division and office in Williston, North Dakota. The Petersen Group's office is located at 3204 29th Street West. The Petersen Group is currently building homes in the Harvest Hills Subdivision. The Petersen Group is building single family and multi-family homes priced from the mid $300,000's and will have completed homes ready for owners to move in by October of this year.
Baker Hughes grand opening -- and building another complex across the road from the one just opened
Baker Hughes officially opened its multiple product-line operations base in Williston on Friday with a grand opening ribbon-cutting ceremony, speeches, tours of the facility and a buffet-style lunch. The 138,000-square-foot facility sits on 35 acres and costs over $30 million in infrastructure alone, not including inventory and equipment.
Peterbilt dealership to open in Williston (previously posted)
The Allstate Peterbilt Group recently broke ground on a new dealership in Williston. The 25,000 square foot facility will offer parts, service and sales. It is located eight miles north of Williston.
Buffalo Hills subdivision to open in Watford City
Buffalo Hills, a new subdivision located east of Watford City, celebrated its grand opening recently. The development already has closed on nine homes and it has contracts pending on 31 more. The subdivision is growing quickly due to the affordability of the homes.
Other articles at the Williston Wire, including stories about re-routing 2&85

Natural Gas to Liquids, Sundrop Fuels / EERC -- September 19, 2012


November 27, 2016: from the company's webpage --
When completed, a single Sundrop Fuels biorefinery will efficiently produce more than 200 million gallons of transportation fuel annually. We will replicate biorefinery units in targeted areas, creating a capability of producing more than a billion gallons annually by 2025 – more than five percent of the nation’s goal to produce 22 billion gallons of advanced renewable fuels by this point.
Sundrop Fuels has completed a successful progression of scale-up activities. These include laboratory-scale demonstrations, a pilot plant facility that was operational from 2009 to 2011, and a process demonstration facility now in operation at North Dakota’s Energy and Environmental Research CenterSee this page.
The company’s next commercial biorefinery fuels plant is current in engineering design stage and planned for completion by 2020.  The production facility will produce more than 200 million gallons of fuel per year.
September 20, 2012: OGJ alludes to other GTL projects under study. There are two mentioned at this link provided by "anon 1."
South African energy and chemicals group Sasol has pulled the trigger on another North American gas-to-liquids (GTL) feasibility study – this time for a two-million to four-million-ton-a-year (48 000 bl/d to 96 000 bl/d) facility in the US state of Louisiana. The JSE-listed group is already studying the development of a GTL facility for either Alberta or British Columbia, in Canada, where it and its partner Talisman Energy hope to convert shale gas produced at their Farrel Creek joint venture, in the Montney basin, of British Columbia. The Canada GTL feasibility study began six months ago. 
From another story, same project:
The South African company has selected Calcasieu Parish as the location for a potential gas-to-liquids (GTL) complex that would entail a capital investment of approximately $8-10 billion and produce direct employment of approximately 850 jobs with average salaries of about $89,000, not including benefits.
To put the $10 billion in perspective, ONEOK is investing about $4 billion in natural gas gathering and processing plants and pipeline in the Bakken. (The $4 billion is a "wag" but it's probably in the ballpark.)

Speaking of Louisiana, here's another project the state can brag about: a "green" gasoline "production facility, the first in the nation.
Sundrop Fuels, Inc., a drop-in advanced biofuels company, today announced a partnership with technology and engineering supplier ThyssenKrupp Uhde for what will be the nation’s first bona fide commercial “green gasoline” production facility. The company’s inaugural plant near Alexandria, Louisiana, will yield up to 50 million gallons of renewable gasoline annually while also serving as proving ground for Sundrop Fuels’ proprietary biomass conversion technologies that will be used for future large-scale facilities.
Original Post

Before delving into this article, if you are unfamiliar with "gas to liquid" technology, link to wiki. South Africa and the Dutch have the technology (SASOL and Shell).
Gas to liquids (GTL) is a refinery process to convert natural gas or other gaseous hydrocarbons into longer-chain hydrocarbons such as gasoline or diesel fuel. Methane-rich gases are converted into liquid synthetic fuels either via direct conversion or via syngas as an intermediate, for example using the Fischer Tropsch or Mobil processes. 
Two companies, SASOL and Royal Dutch Shell, have technology proven to work on a commercial scale. PetroSA completed semi-commercial demonstrations of gas-to-liquids used by the company in 2011. 
Using gas-to-liquids processes, refineries can convert some of their gaseous waste products (flare gas) into valuable fuel oils, which can be sold as is or blended only with diesel fuel. It may also be used for the economic extraction of gas deposits in locations where it is not economical to build a pipeline. This process will be increasingly significant as crude oil resources are depleted.  
Royal Dutch Shell produces a diesel from natural gas in a factory in Bintulu, Malaysia. Another Shell GTL facility is the Pearl GTL plant in Qatar, the world's largest GTL facility and there are reports that Shell is looking at the feasibility of a GTL facility in Louisiana, US. 
I'm not sure if the above link is directly related to the story below, but I'm sure I will find out.

Now, for this most interesting little story over at the Oil and Gas Journal.
Calumet Specialty Products Partners LP, Indianapolis, earlier this month said it is considering adding a 1,000-b/d gas-to-liquids (GTL) plant to its Karns City, PA, specialty products plant. 
This would be the first GTL installation in North America, so far as OGJ can determine; a few larger projects are under study and planning. [See updates above.]
Plant design is to be completed by late this year, followed by site engineering and a decision to begin building in first-half 2013. Production could begin in second-half 2014. Calumet has commissioned Pasadena, Tex.-based Ventech Engineers International LLC to design and deliver the GTL plant that will use an “autothermal reformer” from Haldor Topsoe Inc. and Fischer-Tropsch technology fromVelocys Inc.
Go to the link for additional background information. This could end up being a big story for any number of reasons. Time will tell.

When you go to the linked OGJ article, note some of the uses for this technology.

Cancellations With American Airlines Soar -- Note To the Granddaughters

Link to the story that cancellations with American Airlines are soaring.

Note to the granddaughters: the granddaughters never want to fly American Airlines again, July 23, 2012.
MDW related the story how two little girls, ages 5 and 8, were flying unaccompanied. They had each been given $5 in cash by their daddy to buy a meal for their cross-country flight -- Boston to Los Angeles. In-flight they learned that the flight attendants would accept only credit cards. Neither passengers nor flight attendants were willing to take the $10 in cash and pay for a snack for the girls with a credit card. The girls are pretty young, but the first thing they said when they got off the plane: "We're never going to fly American Airlines again." Non-customers for life.
The announcement that American Airlines declared bankruptcy back in late 2011 was so far below the radar that the initial link was found at the Drudge Report, November 29, 2011.

North Dakota State's Budget Surplus: $1.6 Billion -- Staggering

If I understand the article, the estimated budget surplus two months ago was about $850 million; that estimate, two months later, has grown to $1.6 billion. This does not include an additional $1.1 billion restricted reserve access funds.

Link here to the Bismarck Tribune.
The main driver for the increased revenue is sales and use taxes. “That’s (sales tax) estimated to get to $2.1 billion in the current biennium, which is $713 million more than originally forecast,” Morrissette said. 
In July [two months ago] the estimated budget surplus was approximately $850 million, not including an additional $1.1 billion in various state reserve funds in which access is restricted. Something tells me the state legislators can hardly wait for the new legislative session to figure out ways to spend that money.
Go to the linked article; it is simply filled with incredible data.

Rumors that Governor Jerry Brown of California has opened a checking account with the Bank of North Dakota are probably just that: rumors. [Speaking of which, the BOND is the only state-owned bank in the nation, established in 1919 in anticipation of the discovery oil in 1951. Part of that last sentence is inaccurate -- the part starting with "in anticipation"].

Saudi Burns Record Amount of Oil To Generate Electricity For Air Conditioners

Link here.
Saudi Arabia burned record monthly volumes of oil in June and July, official government figures show, contrary to the top crude producer's plan to temper its summer oil burning spree this year with more gas. 
The world's leading oil exporter burned an average of 743,500 barrels per day (bpd) of crude in June and July, up 82,000 bpd from the same months last year, mainly to make electricity to keep the population cool, data issued under the Joint Oil Data Initiative (JODI) showed on Wednesday. 
The kingdom had hoped that more supply from Saudi gas fields being made available for power generation would save millions of barrels of valuable crude for export this summer.
Meanwhile, on an unrelated note, the US EPA raised biofuels (converting food [corn] into fuel [ethanol]) targets for 2013.

And so it goes.

I Wonder If He's On The No-Fly List


September 22, 2012: the original post was SOOO yesterday, posted just three days ago. Now, we see that the President is set to release one-third of the GITMO detainees back to Yemen, now that it is much more stable. I can't make this stuff up. So, maybe the President will close GITMO after all.

Original Post
Link here.

The apparent mastermind behind the recent attack on the US Embassy in Libya in which the US Ambassador to Libya was killed was a GITMO detainee released in 2007, back to his native Libya, with the agreement that he would be kept in prison. Of course, he was not (kept in prison). Apparently he was also tied to the "9/11" financiers.

Why does none of this surprise me any more?

What We Will Be Talking About Thursday; WPX Has a Huge Well On The Reservation;

NOTE: several "articles" posted last evening have been put on "draft" status since they did not relate directly to the Bakken. They will be re-posted later this morning (Thursday, September 20, 2012).

RBN Energy: Refinery margins.


Two wells coming off confidential list Thursday:
21219, 401, WPX, Black Hawk 1-12H, Moccasin Creek, t6/12; cum 58K 7/12; 31K in first month (unknown number of days of production); 25K in second month)
21618, 504, CLR, Blaine 1-33H, Rainbow,  t6/12; cum 15K 7/12; 9K in first month (unknown number of days of production); 6K in second month)


And Some Things We Won't Be Talking About

Google wind-turbine job cuts tied to expiration of tax credit.
New layoffs at Siemens AG's DE +0.82% wind-power factories in the U.S. mark the latest retrenchment in the wind industry caused in part by the looming expiration of a federal tax credit. 
Siemens, a global leader in wind-turbine manufacturing, said Tuesday it would eliminate more than 600 positions, or about 37% of its U.S. wind-turbine-manufacturing jobs. The cuts include 407 jobs at its Fort Madison, Iowa, blade factory and 146 at a factory in Hutchinson, Kan., that makes nacelles, or housing, for the turbines' generators and gears. Additionally, Siemens said 330 temporary positions added to help with busy times earlier won't be renewed. 
Current U.S. law gives wind-power producers a tax credit of 2.2 cents per kilowatt-hour, a subsidy that keeps wind energy competitive with other methods of generating electricity. The tax credit is set to expire at the end of the year. A bipartisan group of lawmakers in Congress is pushing to extend the credit, while many Republicans say the cost—an estimated $12 billion through 2022—is too high. In the past, the credit has been renewed for one- or two-year periods.
The cost is peanuts in a country with a $16 trillion deficit. On "dollar-basis" alone, the tax credit is a non-issue. The problem: wind energy currently has no redeeming value. It is also impressive that "only" 2.2 cents/kwh is all that is needed to incentivize the industry.

Seven (7) New Permits; New Post-Boom Low in Number of Active Rigs

Active rigs: 187 (new post-boom low)

Seven (7) new permits:
  • Operators: Hess (3), OXY USA, CLR, Whiting, and one SWD permit
  • Fields: Sanish (Mountrail), Medicine Pole Hills (Bowman), Murphy Creek (Dunn), Hawkeye (McKenzie)
Released from confidential list:
  • 17784, 434, MRO, Bernhardt, Lake Ilo, , t8/12; cum 238 bbls 7/12
  • 20320, 375, WPX, Mandaree Warrior 14-11H, Squaw Creek, t5/12; cum 41K 7/12
  • 21480, 627, Whiting, Mary Elizabeth 13-13TFX, Sanish, t4/12; cum 37K 7/12
  • 21684, drl, Oasis, Mae 5603 43-19H, Bull Butte (Kalil Field); 
  • 22546, drl, CLR, Maruskie 2-22H, a Birdbear well; North Tioga
Producing wells completed:
  • 20946, 159, CLR, Vandeberg 1-26H, East Fork, t9/12; cum 18K 7/12; 
  • 22639, 180, Murex, Lucas 36-25H, Stanley, t9/12; cum --


The Director's cut is out: Director's Cut, PDF here.

Production hits all-time high in North Dakota (again):
July, 2012, oil: 674,066 bopd  (new all-time high)
June, 2012, oil: 660,332 bopd

July, 2012, producing wells: 7,467 (new all-time high)
June, 2012, producing wells: 7,352

Permitting (all time high: 245, 2 Nov 10) 
July, 2012: 266 drilling (new all-time high)
June, 2012: 204 drilling 

July, 2012: sweet crude, $71.13
June, 2012: sweet crude, $72.58
May, 2012: sweet crude, $79.44
April, 2012: sweet crude, $78.17
Mar, 2012: sweet crude, $76.29
Feb, 2012: sweet crude, $83.26
Jan, 2012: sweet crude, $88.09
Dec, 2011: sweet crude, $88.75
Nov, 2011: sweet crude, $88.54

Director's comments includes this most alarming phrase: "...and uncertainty surrounding future federal policies on hydraulic fracturing is impacting capital investment decisions." [Comment: with gasoline costing $4.00/gallon, can there be anything so crazy as holding the fracking sword of Damocles over the states which seem to be doing a fine job of regulating the industry? For North Dakota, at least, the proof is in the pudding: fracking since the 1980's and things seem to be working fairly well. Several migratory ducks died during some of the worst spring flooding in history -- back in 2010 -- but that was not related to fracking. Again, it will be a real debacle if the President is given a mandate to regulate fracking nationwide.]

Crude oil takeaway via pipeline is now less than 45% of daily production, but rail and truck transportation are adequate to keep up with near-term production projections.

The North Dakota Sweet posted price basis is now about 10% below NYMEX-WTI and NYMEX-WTI is still about 18% below Brent. This is resulting in more North Dakota crude oil transported on rail to destinations that pay Brent price.

Daily natural gas production is increasing at a slightly faster rate than oil production. This indicates that gas/oil ratios may be increasing and more gathering and processing capacity will be needed.

Note: I have not seen an explanation why natural gas production might be increasing in the Bakken. Just one of those things? The note said "production" so it's not a matter of less flaring/more in pipelines.

Don't Pass Over the RBN Energy Article Today

To get information out to readers as quickly as possible, I sometimes post links from trusted sites and trusted readers before I get a chance to read the entire article. Later, when I find time, I will go back and read the article.

Today's link to RBN Energy's primer on crude-by-rail is a great example. For all but the most knowledgeable about crude-by-rail, this is an excellent introduction. RBN Energy says they will continue with the series. I hope so.

I'm not going to post any data points: I am only posting this to remind folks that this is one article they should not miss.

Okay, I'll post just a bit - the first paragraph:
Unlike pipelines that take a long time to build and only deliver to a handful of destinations, rail freight cars offer the flexibility to deliver anywhere across North America. The rail freight industry can load, store and transport different NGLs (including those NGL products that must be transported under high pressure) as well as crude and petroleum products. Rail infrastructure is mostly already in place so new routes can easily be brought on line. That’s why rail freight has been used successfully by the energy industry for over 100 years as - a “pipeline on wheels."
Callie Mitchell does an outstanding job nuancing the different wet gases that are transported by rail and the challenges.

I can't resist; one more data point:
It takes a high pressure rail car to move propane, normal butane and isobutane. These NGL products, generally referred to as LPGs (liquefied petroleum gasses) have high vapor pressures and must be transported in vessels that can withstand that pressure. Y-grade (mixed NGLs containing ethane) can be carried in high pressure cars provided that the ethane content is minimal. The ethane in the mix must be low enough not to trigger inadvertent hydrocarbon releases and/or damage the tank car). Ethane has a vapor pressure well above the threshold for even high pressure tank cars.
As always, the graphics are awesome.

Biggest Coal Producer in Appalachia To Shut Mines, Cut Jobs

Google coal firm to shut mines, shed jobs
Alpha Natural Resources, Inc., the biggest coal producer in Appalachia, said it will cut nearly 10% of its workforce and shut mines across West Virginia, Virginia, and Pennsylvania, as it tries to weather the worst industrial downturn in decades. 
The latest cuts, which follow other closures and layoffs at the company's mines earlier this year, reflect the recent dramatic shift in coal markets as utilities have favored cheaper natural gas over coal and overseas demand for metallurgical coal used by steelmakers has fallen off sharply. 
Music to the President's ears, no doubt. His goal to kill the coal industry seems closer to reality.

Other data points in the WSJ article:
  • Alpha will idle eight (8) mines in West Virginia, Virginia, and Pennsylvania
  • Patriot Coal Corp, St Louis, filed for bankruptcy protection in July, 2012; announced nine (9) closures and layoffs in West Virginia and Kentucky
  • every major US coal producer has announced production cutbacks this past year

And The News For The Bakken Just Keeps Getting Better

Unless the federal government regulates fracking across the board, the Bakken continues to look very, very good.

How good? Read the article Don sent from Forbes magazine.

The Bakken is not mentioned but these plays are:
  • the Arctic: the Dutch can't help but notice that Shell has given up drilling this year; the company has spent $5 billion (with a "b") so far "scratching the surface of the Burger A well; permits not in place to develop Beaufort wells (the "permitorium" problem); paid $2 billion (with a "b") back in 2008 for the rights to this debacle;
  • the Gulf of Mexico: "BP's terminal experience" -- 'nuf said
  • Canadian oil sands: "very tetchy local legislators"
  • off-shore Brazil: MDW wrote this play off long ago; country won't risk white sandy beaches;
  • Russia: "where the biggest unconventional challenge rests"; operators simply don't trust Russia -- Forbes
  • China: the state oil companies will resist foreign intrusion (except for the technology)
There you have it. Not a pretty sight. Nor will it be a pretty sight if voters give the President a mandate to regulate fracking.

That $5 billion + $2 billion spent by the Dutch so far in the Arctic and nothing to show for it puts the QEP/Helis Bakken deal in perspective.

Conference: Bakken Product Markets & Takeaway Capacity 2013

Bakken Product Markets and Takeaway Capacity 2013 announces the January 30 - 21, 2013, Denver, CO, conference. This conference will cover both rail and pipeline takeaway.
Speakers include:
* Michael Lutz, VP Global Commercial, Hess Corporation
* Matthew Tobin, VP Crude & Shale, Kinder Morgan
* Rick Weyen, VP Logistics, Tesoro Corporation
* Jim Suttle, SVP Hiland Crude, Hiland Crude LLC
* Rodney Wren, President, New Frontier Midstream LLC
* Allan Roach, SVP Business Development, Watco Companies LLC
* Lin Gartner, Regional Manager Industrial Development, Canadian Pacific
* Ronald (Randy) Majors, Senior VP Business Development, TransMontaigne

And many more.

Topics include:
* Combining Pipe & Rail
* Loading & Offloading
* Rail Longevity
* Production Forecasts
* Gas Flaring Alternatives
* Gas Flaring Legislation
* Interstate & In-Field Pipelines
* Markets & Pricing


Comment: It looks like an incredible line-up of speakers and topics.

Energy Links -- Wednesday Morning

KOG: interim corporate update.
  • Kodiak intends to commence completion operations with a second crew in early October 2012, which is expected to be utilized through year end. 
  • The Company anticipates having the ability to complete five to six gross wells per-month, per-crew.
  • Nearly all of the wells to be completed are located on two, three and four well pads allowing for maximization of completion efficiencies. 
  • In mid-August, Kodiak brought on an additional drilling rig equipped with a skid package.
  • KOG intends to eventually replace its only non-skid-package rig with this skid-mounted rig. As nearly all of Kodiak's wells are drilled on multi-well pads, management believes that it is essential to be able to skid and drill multiple wells on pad locations.
  • By year end, it is anticipated that Kodiak will return to seven operated rigs under various staggered contract durations. 
  • Currently, two drilling rigs are operating in each of the Polar project area in southern Williams County, the Smokey project area in McKenzie County, with three rigs operating in Dunn County and one rig operating on the Koala project area in northern McKenzie County.
This doesn't sound like a slow-down to me.


RBN Energy: a tank car train for hire. Outstanding article. Again. Mirrors my worldview regarding crude-by-rail: flexibility; scalable. I still think of the comment some time ago: rail was oil shipping method of last resort.

WSJ Photo of Hampton I & S in Williston, page C12

Maybe it will be on-line. Google hotel construction picks up

Yup, it's there. Cool.

Well into the story:
A similar hotel boom is unfolding in a far different locale: rural communities atop oil-shale formations being drilled for oil and natural gas. Of the top 10 US markets for hotel construction in the past year, three are in oil-shale ares: North Dakota, with 2,088 rooms under construction; the greater Corpus Christi area in Texas, with 1,491 rooms; and rural Oklahoma, with 1,242 rooms. 
The article goes on:
Braxton Development, based in Bozeman, MT, built Microtel Inns in the small North Dakota towns of Williston and Dickinson last year and opened a Hampton Inn in Williston last August.
The article mentions that this could "be a bubble set to pop" especially if the federal government cools the drilling industry (through fracking regulations).