Sunday, October 21, 2012

In Language Anyone Should Be Able to Understand -- From the Congressional Budget Office

Link here to the Energy Tribune.
... CBO data, we find that the tax preferences for wind energy total $1,540 per barrel of oil equivalent per day.
At $1,540 per barrel of oil equivalent per day, the wind sector is getting subsidies that are about 12 times as great as the amount of tax preferences provided to the oil and gas sector.
Here are the numbers: In 2011, domestic oil and gas production totaled 19.736 million barrels of oil equivalent per day. Last year, according to the CBO, the tax preferences extended to the fossil-fuel sector totaled $2.5 billion.Therefore, a bit of simple math shows that the tax preferences for the oil and gas sector cost taxpayers about $127 per barrel of oil equivalent per day.
Readers on high blood pressure medication should probably not visit the linked article. 

Twelve Wells Come Off Confidential List; Seven Of Those on "DRL" Status or IP Not Reported; BR With A Nice Well

RBN Energy: with all the recent interest in Bakken posting recently, today's RBN energy link is very timely -- the clash of the Titans: WTI vs Eagle Ford crude oil marker price -- who will win out?

Note: some posts have been placed back on "draft" so that this post would be at the top of the blog overnight. The posts temporarily placed on "draft" will be back up later tomorrow. 

Active rigs, Sunday night: 186 (steady; near the post-boom low)

Wells coming off confidential list over the weekend, and Monday:
  • 20560, 2,124, BR, Everglades 11-3TFH, Keene oil field, t8/12; cum 3K 9/12;
  • 21516, drl, CLR, Lawrence 4-13H, North Tioga,
  • 21934, A, Whiting, Ogden 14-3TFX, Sanish, t--; cum 13K 9/12;
  • 22328, drl, Zavanna, James 41-3SH, Poe,
  • 22393, 753, Hess, EN-Dakota N-155-94-211609H-3, Manitou, t8/12; cum 13K 9/12;
  • 22394, 705, Hess, EN-Dakota N-155-94-211609H-2, Manitou, t8/12; cum 19K 9/12;
  • 22573, 175, Samson Resources, Felton 13-24-161-92H, Foothills, t9/12; cum --

  • 17768, 594, XTO, Chruszch 42X-29F, St Demetrius, t7/12; cum 3K 9/12;
  • 22434, drl, CLR, Gale 2-32H, Cedar Coulee,
  • 22460, drl, BEXP, Liffrig 29-20 3TFH, Alger,

  • 22700, drl, SM Energy, Norby 9X-20HA, Charlson, no IP; cum 21K 9/12;
  • 21519, drl, CLR, Omar 5-12H, North Tioga,
Keene oil field is in the heart of the Bakken; northeastern McKenzie County, just south of Charlson oil field. 

Canadian National Railroad announced 3Q12 earnings: modest increase in earnings.

Bakken Prices


October 22, 2012: RBN Energy -- with all the recent interest in Bakken posting recently, today's RBN energy link is very timely -- the clash of the Titans: WTI vs Eagle Ford crude oil marker price -- who will win out?
Original Post

Knowing that some folks may not read the comments, I will post this as a stand-alone post. A reader sent me this data point:

These are the prices I got per barrel on my checks for July 2012.
  • Hess....$75.63
  • EOG.....$100.61
  • Brigham..$70.43
Interesting to say the least.  A $30+ spread.

Human Interest Story on the "5th Wheel" In the Bakken

Link to the Billings Gazette.
Salesman Dustin Bretz knew standard RVs weren't going to cut it when Bakken oilfield workers came calling.
There’s camping rough, Bretz explained, and then there’s Bakken rough, living full time through the winter on the frozen prairie of Montana and North Dakota, where more than a few days of arctic weather are normal.
Oilfield camps are dotted with fifth-wheel recreational trailers shielded with foam-board insulation and whatever else workers can muster to keep water pipes and waste tanks from freezing. “Winter time can run as cold as 30 below zero, and a lot of RVs aren’t made for that,” Bretz said.
So, Tour America started looking for one that was and came up with a Camp Lodge, Work and Play fifth wheel custom built for the Bakken environment. “These go relatively quickly,” Bretz said, directing to conversation to a trailer resembling a super-sized version of what contractors commonly haul their gear in. “It has 2 to 3 inches of spray foam on the lower chasse, heated water lines and holding tanks. They have dual-pane windows, like your house. This is a niche product.”
Cool. Pun intended.

A niche product, yes, indeed. Another industry that benefits from the Bakken. Hoo-ah.

Go to the link for quite an incredible story. The little bit above does not to the whole story justice. 

Oil, Natural Gas, and Coal -- File Under: "What Goes Around, Comes Around"

There are three huge energy stories that could fuel the next decade.

Bakken oil:
  • the Bakken is probably bigger than you think
  • currently accounts for about 10% of US production
  • the unconventional oil research laboratory sine qua non
Natural gas:
Coal industry

With regard to the last link, the last story: enough is enough and the coal industry -- file under "What goes around, comes around.'

A long, long time ago I wrote about this very phenomenon: President Obama has a long history of talking about killing the coal industry. As an ideologue, he certainly believes this is the right outcome -- the demise of the coal industry. It happened more quickly than anyone could have predicted and, with a bit of irony, it happened on his watch. And thus, the "what goes around, comes around." If I run across my earlier posts on this subject, I will post the links.

However, I do believe the article underplays the importance of regulations and the administration's attitude toward coal. The article suggests it is more about market dynamics (excess natural gas undercutting use of coal); in fact, the Chinese are eager to buy American coal, but the administration turns a deaf ear. The administration is on record saying that the Chinese are in the forefront of "clean coal" technology. The administration is also on record with "all the above" as a stated policy for energy. Unless "all the above" includes oil, natural gas, or coal.

A huge "thank you" to Don for sending the two links.

A Note to the Granddaughters

My laptop is about to run out energy; the battery is down to 17 percent. An iPad with 17 percent battery life left would last almost two hours. The MacBook Pro might last another twenty minutes. And no outlet where I am to charge the battery.

But I couldn't leave without this short note. Yesterday I didn't get the chance to read the weekend edition of the Wall Street Journal (the older daughter had a swim meet a couple of hours distant in driving time -- only a few miles away for a Canadian goose, but the meet was in Salem, Massachusetts, on one of the last weekends before Halloween, perhaps the biggest tourist month of the year for Salem; think witches).

So, today, before the start of the second day of that same swim meet, I will read the WSJ -- all the more so because Starbucks accidentally gave me a "grande" instead of a "tall" which represents about twice as much coffee, three times more than I need. But that's another story for another day.

Back to the WSJ. I used to know some friends (okay, one) who subscribed to Playboy Magazine for the stories. That's the way it is with me. No, not Playboy Magazine, but the WSJ. I subscribe to the WSJ, not for the business news, but for the incredibly good writing, the weekend edition, and the fourth section each day (in that order).

This weekend's issue might be one of the best in a  long time. Or maybe like meat loaf it just seems better because it's a day older and I've been looking forward to it twenty-four hours.

The long, long lead story is fantastic -- read this story if you want to know my reading habits: My 6,128 favorite books, by Joe Queenan. Fortunately he only lists about 100 books. Most of those were books he did not like, so he must have read more than 6,128. You know that any article that mentions Middlemarch in the first few paragraphs is going to be a great piece of reading.

Paul Johnson's five favorite biographies: Macaulay, Sir Arthur Bryant; Ulysses S. Grant, Michael Korda; Lincoln at Gettysburg, Garry Wills; Rossetti: His Life and Works, Evelyn Waugh; and, A Portrait of Charles Lamb, David Cecil. The authors are relatively unfamiliar to me; the lives they have chosen to write about I know very, very well, except for Charles Lamb.

And finally, before I run out of battery (now 13%): How the French Invented Love, Marilyn Yalon. Four hundred pages of what appears to be an exceptionally interesting book. I don't know if this was planned by the WSJ editors or if it just happened, but earlier in the section there is an essay on "the new face of infidelity" by Peggy Drexler. Her findings: infidelity is no longer an exclusive domain for men (it never was, but the statistics are starting to even out): 23 percent and 19 percent. You can google the article to see what the numbers refer to. Something tells me the former number is way, way low [Update, November 9, 2012: how low? Well, when the paragon of virtue, US Army General Petraeus, admits to an extra-marital affair after 37 years of marriage, what can I say?]; the latter number is low, but hard to say by how much. It will be interesting to see what a similar essay reports 15 years from now. My hunch is that the definition of infidelity will have changed. See Marilyn Yalon's book review.

And with that, I leave, with only 11% of battery life left.