Friday, November 9, 2012

Halliburton Expands Its Perforating and Fracturing Laboratory

Link here to Rigzone.
Halliburton has expanded its Advanced Perforating Flow Laboratory at the company's Jet Research Center in Alvarado, Texas, in order to better meet the oil and gas industry's challenges of perforating and fracturing wells in increasingly challenging environments.
The expanded facility allows Halliburton to provide 'real world' answers for its customers and their oilfield perforation needs. Oilfield perforation is a technique used to create a flow path from the reservoir into the wellbore using a shaped charge perforator.
The charge, when detonated, penetrates the steel-cased wellbore and allows trapped hydrocarbons within the reservoir to then flow into the wellbore and up to the surface.
Construction on the Advanced Perforating Flow Laboratory began in 2010 and was completed in the first half of this year. The original flow lab has been operating for 12 years, and more than 650 tests have been conducted for our customers, said Dave Topping, vice president of Halliburton’s Wireline and Perforating business line.
The decision was made to expand following two years of discussions, during which time Halliburton officials realized the need for a step-change in technology because of the new, challenging environments in which industry was operating, such as high pressure/high temperature wells, Topping told Rigzone.
Read more at the link. 

Another One Bites the Dust -- Vestas Wind, Portland, OR


November 10, 2012: someone asked about the 2.2 cent tax credit. This was my non-expert answer:
I know nothing about the particulars but according to wiki, it looks like there are two incentives:

The Production Tax Credit (PTC) which will expire at the end of 2012. It is a 2.2 cent tax credit that is in effect as long as the law says. The first PCT was enacted in 1992 and expired in 1999; re-enacted in 2002, 2004, 2005, and 2009. [History suggests it will be re-enacted, doesn't it?]

The Renewable Energy Production Incentive (REPI), also enacted in 1992, is in effect until 2016. In 2016 it will expire. It is adjusted for inflation and currently pays to the producer a direct payment of 2.2 cents per KWH for the first ten years of operation.

Again, if the math worked out for wind -- that wind energy actually "worked" -- these would be worthwhile incentives. But since there is no redeeming purpose for wind turbines (in my mind), the incentives make no sense. Note: a small diesel generator on a trailer parked in the corner of a commercial garage will power a hospital under emergency conditions; to provide that same amount of electricity would require wind farms the size of 100 football fields would be required. One hundred football fields; and that's assuming the wind is blowing and the transmission lines are still up. One trailer-mounted diesel generator = 100 football fields of wind turbines. (Reputable source: posted earlier but not verified.) [No redeeming feature: a) not economical -- by a long shot; b) not dependable; c) actually decreases the efficiency of conventional-fired power plants because they need to power up/power down depending on wind; d) well known killer of migratory birds, including endangered species, and insect-eating bats; e) no dual use on wind farm acreage. And, of course, on top of all this, a "solution" for a problem that does not exist, or at least a problem that won't be solved with wind farms that will account for less than one percent of total global energy demand going forward. The math simply does not work.]
Original Post
Link to earthfix.opb.
A global wind company with offices in the Pacific Northwest has announced more layoffs.
Vestas says it will cut an additional 3,000 jobs by the end of 2013. That nearly doubles the number of jobs the wind turbine company had planned to eliminate. Most recently Vestas it would layoff 3,700 people by the end of 2012.
Vestas has not said where jobs will be cut from its global workforce, though some of the job eliminations happen as the company sells off some manufacturing facilities. That means workers will be employed through a different company. Vestas’ North American sales and service office is based in Portland.*
It's all part of the fiscal cliff.
One major reason for the slowdown is industry uncertainty over the production tax credit. Right now, wind producers receive a 2.2-cent tax credit for each kilowatt hour of energy the produce. That credit is set to expire Dec. 31.
The American Wind Energy Association, an industry trade group, predicts 37,000 jobs will be lost, if the credit is not extended another year.
*The faux environmentalists in Portland, OR, want to close their ports to exporting coal. More job losses. Economic suicide. 

What I find amazing is the tax credit is (what seems to be) a paltry 2.2-cent tax credit for each kilowatt hour of energy produced. Isn't coal, natural gas, nuclear between eight cents and fourteen cents/kilowatt hour retail?

More On That Global Warming Storm: Record Snowfall

The national weather service warning:
Winter Storm Warnings and Advisories are in effect for much of the area. Record snowfall is possible and gusty conditions will contribute to reduced visibility from blowing snow across the region. 
It's one thing for a snowstorm and/or a blizzard. "We" get them all the time, but record snowfall. Record.  Wow.

This is a dynamic link and it will change.

Remember: global warming predicted increased precipitation.

Only Three (3) New Permits Today

Bakken Operations

Active rigs: 191 (steady, but up again, interesting, for newbies, it looked like we were heading to 185 as the ceiling and a gradual meltdown to 175, but so far holding steady in the upper 180's)

New permits --
  • Operators: SM Energy (3)
  • Fields: Siverston (McKenzie)
Comments: lowest number of new permits in a long, long time; again, no Newfield or OXY USA; I guess everyone was starting their 3-day holiday early - smile. Well deserved holiday for the NDIC folks

Wells coming off confidential list were reported earlier; see sidebar at the right

Pretty quiet.

Update on Sandy Impact: Liquor Drought: Officials Want Military To Restore Power

This headline appeared earlier today at Drudge: liquor drought. It was initially posted at 12:59 a.m., November 9, 2012.

Now, at 3:59 p.m., November 9, 2012: Long Island officials want military to take over power restoration.

Nothing like the fear of a shortage of booze to get people moving. How long has it been since they've had no power, turning away non-union support, enforcing regulations about tree clearing by untrained individuals, gas lines stretching for miles, one photo op by the president, and electricity still not restored? How long? I believe it was on/about October 29 when the storm hit New Jersey. Ten, eleven days ago.

But, a liquor drought -- call in the US Marines.

I cannot make this stuff up.

Yes, I know the liquor drought was in New Jersey; and, I know that Long Island is in New York but New Yorkers read the headline and want action before the liquor drought spreads.


I'm trying to imagine what is worse: 300 Fiskers bursting into flame due to the flood or this graphic description of the liquor warehouse, from the linked story above:
Yesterday, a sad mix of liquor and slush puddled on the ground outside Fedway Associates Inc.’s warehouse in Kearny — where the smell of red wine hung in the air as workers piled boxes and broken glass into an 8-foot-tall mountain.
The devastating deluge smashed bottles of pricy libations such as Grey Goose vodka and Cristal Champagne, leaving a river of booze pouring onto a pile of soggy cardboard.

More Global Warming, Travel Advisories in the Heart of the Bakken

Link here. And here. Obviously these are dynamic links and will change over time.

November 9. This is quite early for snow/storm conditions in this part of North Dakota. Usually we see these storms in late January and February, in the dead of winter, not the autumn.

I remember dreaming of a white Christmas almost every year while growing up in Williston. I remember huge snow storms in the late 50's but not so much after that. Maybe snow drifts just looked higher when I was in elementary school. 

First, Ban Oil Shale Development On 1.6 Million Acres


November 9, 2012: I get an occasional comment suggesting that some of my notes are way off base, including my concern about a ban on exporting coal which I list below as on EPA's "to do" list. Some folks think that my concerns are beyond the pale ... and then this at the link: not at all; it is very, very possible the US could ban coal exports.  One reader who comments regularly calls the goals of these faux environmentalists "economic suicide."
The series of hearings all focus on whether governmental agencies should issue permits required for a coal export terminal at Cherry Point, near Bellingham, Wash. The agencies are required to hold meetings to gather comments from the public about possible environmental and health impacts.
If a small group of faux environmentalists could kill the Keystone, a small group of faux environmentalists could kill an entire domestic industry. It is not beyond the pale.

Original Post
Link here to The Hill.

Within three days of re-election, the announcement:
The Interior Department on Friday issued a final plan to close 1.6 million acres of federal land in the West originally slated for oil shale development.
Interior’s Bureau of Land Management cited environmental concerns for the proposed changes. Among other things, it excised lands with “wilderness characteristics” and areas that conflicted with sage grouse habitats.

Under the plan, 677,000 acres in Colorado, Utah and Wyoming would be open for oil shale exploration. Another 130,000 acres in Utah would be set aside for tar sands production.
The EPA's coal announcement is next.

Which reminds me, I still have to do that "to do" list for the EPA.

Rough draft:
Permitorium in the Gulf of Mexico
Delay drilling in the Arctic another year (repeat annually)
    Double CAFE standards five years earlier than current timetable
    Increase penalties for migratory bird kills
Unlimited waiver of liability for wind turbines (migratory bird kills)
Confirm tortoises have been relocated (solar farms)
    Increase emissions standards on coal plants
Close 90% of federal land to further oil shale exploration (think sage grouse)
    Federal regulation of hydraulic fracking on state land
    Ban all hyraulic fracking
Kill Keystone XL
    Re-define "clean coal": [kleen kohl], noun, mythic fossil fuel found only in Australia and China
    Ban export of coal
    Declare dust bunnies to be carcinogenic
Note: as items are taken off the list, new ones will be added. The "to do" list should have, at a minimum, ten open items. 

Bakken Could Surpass Ghawar

This was one of my favorite MDW commentaries: the case for a trillion-barrel OOIP in the Bakken.

The mainstream press is starting to pick up on this possibility, at Reuters: is the Bakken ready to rival Ghawar?
Could oil production from the Bakken formation in North Dakota and Montana rival output from Saudi Arabia's supergiant Ghawar oilfield, the greatest oil-bearing structure the world has ever known?
Until recently, comparisons between the shale fields of the Bakken and Ghawar, which produces 5 million barrels per day, would have been dismissed as fanciful.
But Bakken's exponential growth and enormous reserves put it on course to produce more than 1 million barrels per day by the middle of next year, which will earn it a place in the small pantheon of truly elite oil fields.
Ghawar accounts for nearly half of Saudi Arabia's total declared capacity of 12.5 million barrels per day and has produced more than 65 billion barrels of oil since 1951.
Ghawar is one of only six super-giant oil fields that have produced more than 1 million barrels per day at their peak. Others are Burgan (Kuwait), Cantarell (Mexico), Daqing (China) and in the 1970s and 1980s Samotlor (Russia) and Kirkuk (Iraq).
Three words. Federal. Fracking. Regulations.
But now Bakken has burst onto the scene. Output hit 631,000 barrels per day in August 2012, according to North Dakota's Department of Mineral Resources, up from 256,000 barrels per day in August 2010 and just 83,000 barrels per day in August 2008.
Growth has been exponential (in the true sense of the word). Output has been increasing at a steady rate of about 65 percent a year since late 2009 and shows no sign of slowing.
Three words. Federal. Fracking. Regulations.

If growth continues at this pace for the next 12 months, and there is no reason to think it won't, production will top 1 million barrels a day by August 2013. [Update: it appears that North Dakota hit the one-million-bopd milestone in April, 2014.]
Go to the link for significantly more information. It is staggering. 

Three words. Federal. Fracking. Regulations.

From a Reader -- 36 Bedroom Crew Camp For Sale

For those interested:
We are selling this 36 bedroom -72+ bed camp that we used in ND in 2011.  We have it advertised on with pictures, and description. re:
Again, there are no hidden agendas here; no quid pro quo. I simply got this note, and am very happy to post it.  

Japan Shops For LNG; Ex-Oil Man To Become Anglicans' Leader


Later, 10:56 am: wow, that story even made the WSJ. Color me impressed. Ex-oil man and scholar is seen as Anglicans' next leader

Later, 10:48 am: to my complete surprise, I received a comment about the first story below and a link to a great story about Dr Justin Welby. Wow.

Original Post
First story: 

This is personal and will be of no interest to readers. Please skip to stories below or scroll to other posts of which there are many.

Several years ago I was fortunate enough to attend services in the Church of England, in Yorkshire. Those were wonderful days. The English and the Scots are wonderful and interesting. This caught my eye. In Rigzone.  
UK press and media were widely reporting Thursday that former oil professional Justin Welby will become the next Archbishop of Canterbury when the incumbent, Dr. Rowan Williams, retires next month.
Welby, an old Etonian and Cambridge graduate who is currently Bishop of Durham, worked in the oil industry in the 1970s and 80s, first for Elf Aquitaine in Paris and then as treasurer for oil exploration firm Enterprise Oil in London.
Second story:

I alluded to this story in a post yesterday, finding a small note in a Devon press release, about the Japanese buying US energy assets.
Now this in Rigzone. A very, very good article on the subject.

It puts the Bakken in perspective.
Third story:

Also, from Rigzone today: pessimism will stifle "M&A" activity in the oil patch.
The barometer, which is released every April and October, is used to gauge corporate confidence in the economic outlook of senior executives. E&Y surveyed 1,500 senior executives in over 40 countries, including the 178 oil and gas executives.
Twenty-four percent attributed low confidence in the business environment as a reason for not pursuing acquisitions in the next year. The regulatory environment and valuation gaps between potential acquisition and the prices sought by sellers are also behind weak interest in M&A activity. Additionally, many executives perceive acquisition targets to be overpriced, E&Y noted.
Oil and gas companies that are pursuing M&A activity anticipated smaller deals, with 81 percent of those surveyed said they would execute deals valued at less than $500 million, while 38 percent will pursue transactions under $50 million. This suggests that deals being considered will extend existing businesses and fill strategic gaps, also known as bolt-on acquisitions.
That $500 million figure is interesting. In the news the other day, Warren Buffett bought a company valued at exactly $500 million which was well below what he normally does in acquisitions.

Fourth story:

Saudis not worried about increasing shale production.  There's no reason they should be. Total energy demand will increase by 54% (not 53 or 55 but 54%, it should be noted) by 2035.

Morning In America -- Nothing About the Bakken; If You Came Here for The Bakken, Scroll Down, Scroll Up, or Scroll Sideways; SandRidge; WJS Links


Later, 12:55 pm: in the long note below, I talk about McDonald's and mention the Millennial Generation. Now, this coincidence, the lead story at Yahoo!Finance/CNBC at the moment: economy bad for many, but it's crushing millennials. Wow.
While the continued economic slump hobbles many Americans, the downturn is crushing young people.
Almost half of millennials-those between 18 and 34-think they'll be worse off than their parents, according to research from Demos, a non-partisan policy and research center.
And voters under age 30 in Tuesday's presidential election identified unemployment (49 percent) and rising prices (37 percent) as the most pressing economic issues they face, according to the Pew Research Center. 
Wow. I wonder who they voted for? That mean old business man, or the incumbent.

Original Post
Wow, talk about a beautiful day in Boston. Bright sun, no clouds, no wind. An absolutely beautiful day.

The graph at the link says it all. If this doesn't foreshadow a recession -- and, a very, very deep recession -- in 2013, I don't know what would.

Morning in America.

Thank you, Don. In a comment I posted just a few minutes ago, I noted that CNBC had an "alert" that "SandRidge was under pressure." Don sent me this just moments ago:
SandRidge Energy on Thursday reported adjusted net income of $29.6 million, or 5 cents per diluted share, in the third quarter, compared with $5.1 million, or 1 cent per share, a year ago.
Analysts had predicted a break-even quarter for the Oklahoma City oil exploration and production company, according to Thomson Reuters research. Shares in SandRidge (SD) were up nearly 2 percent after hours.
The adjusted net income figure reflects the performance of the company’s normal operations and excludes unrealized losses on derivatives contracts and asset sales. In standard terms, the company reported a net loss of $184 million, or 39 cents per diluted share, an improvement over the loss of $561 million, or $1.16 per diluted share, a year ago.
I Can't Help It, If I'm Still In Love With You, Willie Nelson


Links from the WSJ.

This is an article for everyone: going for broke to stay out of debt
You may think it odd that a person could reach the age of 36 without having any understanding of how loan payments worked—that in those early and middle years a person is only paying off the interest—but these were the facts of life I had so assiduously shielded myself from. I called my stepsister, who is also my friend and my real-estate agent, and asked how this was possible. "All those people with houses are just paying off interest?" I asked her incredulously. She told me yes, for the most part. She told me that this was the way of the world.
I got in my car and drove to the bank. I closed out my mutual fund and my savings account, cashed in the stocks. ...... Interest. How does everybody fall for that one?
I remember my father reading "The Godfather" when I was child. When he got to the scene with the horse's head, he told me about it. Mafiosos, loan sharks, cement shoes all came to symbolize debt in my mind. Maybe that's why this happened to me. Then again, maybe there's nothing I can blame it on. All I know is that when I got into bed that night I was in my own house, the house I owned, and I was broke, and I was happy, and I didn't wake up once during the night.
And now, with [increasing] property taxes, she is renting her home from the state. She is a writer. She will recognize irony when she sees it. I hope she doesn't live in California. Speaking of which there is an almost full-page book review on Willie Nelson's new book in the Boston Globe. He has homes in two states: Hawaii and Texas. I will let the reader guess which state he declares residency.

Who was Hitch? A short piece on the movie director. I was in a Hitchcock phase some years ago. It's nice to see much of what I gathered about Hitch is confirmed in this article.

McDonald's is feeling fried. This is a tough one: the article says McDonald's problems are due to a) the economy (folks can't afford the $1 value meal? -- I can't make this up); and, b) competition. I don't know. The incessant noise from elites about the "badness" of McDonald's has to take a toll at some point. That $1 value meal? Starbucks is doing gangbuster business selling coffee at more than twice the price of McDonald's. However, I was surprised to see the price of the Whopper meal at Burger King last night, approaching $7.00 (I had the junior whopper at a significant savings). It's no longer "inexpensive" to take a family of four to McDonald's. But, of course, with regard to McDonald's we're talking "growth"; the company is still selling a lot of French fries. Tom Brokaw's "greatest generation" grew up with McDonalds, making it what it is, but has McDonald's adopted to the "millennial generation"? I don't know. Wi-fi helps. But you wonder if McDonald's PlayPlaces are sending the wrong message? Again, I don't know. By the way, for that $7.00 I can buy, at Starbucks, a healthy, faux-organic, chicken tarragon sandwich for $5.95. Of course, the coffee is extra, but I bought that earlier, so it doesn't count. Smile.

Wow, this is progress? Mississippi plant is set to become first to make gasoline out of wood, a race to meet us fuel targets.
KiOR's technology uses chemicals to "crack" away oxygen atoms in wood, leaving hydrogen and carbon. Those elements are the building blocks for oil, which the company then refines into gasoline or diesel fuel. Fred Cannon, the company's CEO, said it is like fossil fuel, "just made from today's carbon rather than carbon from a million years ago." KiOR says its gasoline can be sold to refiners or fuel distributors, which can combine it with conventional gasoline.
So, this is where the faux environmentalists have brought us? Slicers and dicers killing insect-eating bats and raptors? Burning food (corn) for SUV juice (ethanol)? And now clear-cutting forests for gasoline and diesel refineries? I can't make this stuff up. As the CEO said: "it is like fossil fuel, just made from today's carbon rather than carbon from a million years ago." Okay. The country of Turkey was once a forested paradise; there are no forests in Turkey any more; they disappeared a long time ago when the Turks used them for heating.

Page A3: aftermath of Sandy, three links -- rethinking waterfronts; nor-easter vexes region's recovery; storm expected to trim growth, not spending. If there were any references to global warming, I missed them, but they were there, no doubt. We've known since 1992 (thank you, Al Gore) the impending disasters coming due to global warming, and still, Sandy took us by surprise). Wow: in the most advanced nation in the world, the power is still out in many places where Sandy hit -- how long has that been? I've lost count; but the power is still out? Wow. And now they are rationing gasoline. In the United States.

Another great book review: an explorer beyond parallel. The Last Viking, by Stephen R. Bown (no typo), c. 2012 about Roald Amundsen.
Born into prosperous family in 1872, Amundsen grew up in Christiania (now Oslo) in a country not yet independent from Sweden [and thus the spelling of his name]. He made a halfhearted attempt to study medicine, but all he wanted to was explore ...
I probably won't buy or read the book but the review is, again, great writing. One example:
Amundsen exuded that mournful Scandinavian longing one associates with the music of Sibelius or an Ibsen play. He was permanently restless and prone to what Mr. Bown neatly refers to as "piratical gambling." Amundsen might not have been a true pirate, but he sailed close to the wind.
Ahh, the good ol' days.

Kimberley A. Strassel confirmed what I blogged about earlier: what where they thinking? Rick Berg defeated by Heidi Heitkamp.

And finally, we will end with a story, not for the story but for the accompanying photograph, perhaps the most sad photograph in the journal today at Syrian rebels press plan for governing body. These folks just want to get on with their lives.

[Blogging today was made easier by listening to Roy Orbison and Willie Nelson. Thank you.]