Saturday, February 16, 2013

Peak Oil? What Peak Oil? But At Least One Canadian Still Thinks US Could Make Shale Oil Uneconomic

Wow, isn't this an interesting article to be posted on The Oil Drum? From the Edmonton Journal:
Remember Peak Oil, the theory that global crude oil supplies have peaked and are in irreversible, long-term decline?
The concept got a lot of media play but never really passed the smell test, since it didn’t account for the impact of technological change or rising oil prices.
In any case, the notion of Peak Oil seems amusingly quaint now that it’s been relegated to the same ideological trash bin as Y2K.
Thanks to such innovations as horizontal drilling and fracking (hydraulic fracturing), the U.S. is currently producing more oil than it has in 20 years. U.S. output now exceeds seven million barrels a day, and that has enabled the world’s biggest oil consuming nation to cut its imports to the lowest level in 16 years.
Since Canada’s crude oil exports are a critical driver of well-paid jobs, royalties, taxes — and ultimately, federal equalization transfers — that’s something that should alarm all Canadians.
And then this:
The report doesn’t have much to say about the environmental consequences or restrictions on shale oil that may be imposed by governments.
And that may be a rather large factor in coming years, particularly if the Obama administration rolls out a carbon tax that could render such developments uneconomic. But even if it does, it’s unlikely that many other oil exporting nations would follow.
The problem: not many other nations with shale oil, as far as I know.

Random Update of BEXP East Fork Well Jennifer 26-35 1H

Elsewhere, an observer is questioning the accuracy of an NDIC report. Based on production runs of other East Fork wells, the oil production runs appear correct; the lack of water is interesting, appearing later on in Bakken wells but generally not this early. So, it will be interesting to see how this plays out.
  • 23033, 2,888, BEXP, Jennifer 26-35 1H, East Fork, t11/12; cum 78K 5/13; middle Bakken, 40 stages; 3.9 million lbs; at one point while drilling the lateral, a trip gas of 7,262 units was recorded; a 30-foot flare with free oil flowing over the shakers was also seen:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN12-2012312270522788022232824513987
BAKKEN11-201256336537415350632006320

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A Note for the Granddaughters

From the first time I saw it in a used book bookstore, I have been tempted to buy it. I finally bought it yesterday: Vincent Bugliosi's Reclaiming History: The Assassination of President John F. Kennedy, c. 2007. $20. Condition: new. 1,612 pages; about 3.5 inches thick; text: 1,510 pages. In addition, includes a CD of "endnotes and source notes."  1,510 pages: that's three 500-page volumes, or five 300-page books.

I started reading it last night. Wow, it is incredible. I may not finish it in my lifetime. Besides being so long, it reads so well, I will naturally read much more slowly just to enjoy it.

An excerpt:
LBJ was so opposed to the idea [of a federal investigation of the assassination] that he called FBI Director J. Edgar Hoover on the morning of November 25, asking Hoover to use "any influence you got with the [Washington] Post" to discourage it from pushing the appointment of a presidential commission in its editorials. Hoover responded, "I don't have much influence with the Post because I frankly don't read it it. I view it like the Daily Worker [a Communist publication]."
It's gonna be a fun read.

Random notes until I move this note over to my literature blog.

The introduction, 36 pages long, is worth the price of the book, alone.

In the introduction, p. xxvii: " ... if you push something at people long enough, eventually they're going to start buying it, particularly when they haven't been exposed to any contrary view."

In the introduction,  page xxxi: "Your conduct speaks so loudly I can't hear a word that you're saying."

On the length of the book, page xliv: "If this book (including endnotes) had been printed in an average-size font and with pages of normal length and width ... thirteen volumes." Yup, a lot of wonderful reading ahead for me.

Following the introduction, the "first chapter," but not so numbered: "Four days in November." 316 pages long. This "chapter" is a book in itself and reads like a novel. 

US To Be Net Exporter of Propane, Butane -- First Time In US History -- Yah, It's The Bakken

Bloomberg is reporting:
The U.S. is poised to become a net exporter of liquefied petroleum gases for the first year ever as shale-based energy production jumps, prompting new orders for specialized ships to haul propane and butane.
Daily LPG shipments equated to a record 194,000 barrels in last year’s first 11 months, outpacing imports at 169,700 barrels, U.S. Energy Information Administration figures show. That’s the first time the country was a net exporter in records going back to 1973, according to data compiled by Bloomberg
Total seaborne trade in LPG will come to 100.6 million metric tons this year, up about 16 percent from 2010, estimates by German transportation lender DVB Bank SE show. U.S. exports will exceed 5 million tons this year, against 3.7 million tons in 2012, before reaching 7 million tons next year, London-based shipbroker Braemar Seascope Ltd. predicts.
“After that, it’s anybody’s guess,” Nick Wright, a shipbroker at Braemar who specializes in organizing charters for gas carriers hauling LPG, said by phone Feb. 13. “Some have predicted they’ll be as much as 20 million tons by 2020.”
Associated article: Bloomberg is also reporting that Russia will raise the export duty on oil in March. Buried at the very bottom of the article, the last paragraph:
The government may lower the duty on liquefied petroleum gases such as butane and propane to $131.40 a ton from $200.30.  
I'm usually wrong on these things, but this certainly suggests the increasing LNG (propane and butane) being exported by the US is having an effect on world pricing. A drop from $200 to $130 seems like a significant drop.

Week 7: February 10, 2013 -- February 16, 2013

New metric
90 wells/month needed to maintain current production -- NDIC, Director's Cut

Economic development
BNSF studying feasibility of natural gas processing plant to provide fuel for its new-generation locomotives
Bakken impact on Fargo
New industrial park north of Dickinson; on new bypass route
Update on Bismarck's Tubular Transport & Logistics / Northern Plains Commerce Centre
Braun Intertec to open two more offices in North Dakota: Minot, Dickinson
Algeco Scotsman buying Target Logistics; $625 million price tag
EPA certifies ethanol plant in Jamestown, ND; will bring new coal plant on-line

Bakken operations
North Dakota oil production hits another record
Random update of seven (7) WPX wells on one pad
Bakken near parity with WTI at Clearbrook, MN
Three discussions of note over at the Bakken Shale Discussion Group, including a thread on 160-acre spacing: they are saying it; not me
Manufacturers can't get enough trucks to the Bakken

Crude-by-rail
Free map of CBR terminals in North Dakota
Burlington Northern CAPEX for 2013 -- staggering
Mike Filloon's comment on CBR

Spearfish operations
Update on Surge, Legacy, Spearfish wells in North Dakota

Agriculture
Corn boom in North Dakota
North Dakota #1 in food production for the nation, the world
Staggering corn production possible
North Dakota farm land surging in value
Farm income: highest in 40 years

Photos for sale
Vern Whitten

Fiction
The miraculous North Dakota boom is over -- The Atlantic
President acknowledges "oil fields" of North Dakota
The Bakken and fracking, at The Oil Drum

BNSF Studying Feasibility of Natural Gas Processing Plant in North Dakota To Fuel Its New Generation Locomotives

Updates

March 5, 2013: The Wall Street Journal is reporting --
BNSF Railway Co., one of the biggest U.S. consumers of diesel fuel, plans this year to test using natural gas to power its locomotives instead.
If successful, the experiment could weaken oil's dominance as a transportation fuel and provide a new outlet for the glut of cheap natural gas in North America.
The surplus, spurred by new technologies that unlock the fuel from underground rock formations, has sent natural-gas prices plummeting. That has prompted industries from electric utilities to tugboat operators to switch to gas. If freight rail joins the parade, it would usher in one of the most sweeping changes to the railroad industry in decades.
Original Post

Huge story: at least two story lines.

Minot Daily News is reporting.
In on-going discussions with Gov. Jack Dalrymple, officials with BNSF Railway have indicated they are in the early stages of studying the feasibility of building a liquid natural gas processing plant and refueling station to power the company's next-generation locomotives.
Dalrymple is encouraging BNSF officials to build in North Dakota if the proposed project moves forward.

Random Update of Marathon's Ione Barstad Well in Strandahl Oil Field

Elsewhere production figures for this well was requested:
  • 21613, 414, Marathon, Ione Barstad USA 31-30H, Strandahl, a middle Bakken well; 30 stages; 2.7 million lbs; t8/12; cum 7K 12/12; MRO's Diomedes prospect; Lodgepole may also be a viable payzone here; Bull Butte and Scallion intervals of the Lodgepole noted; middle Bakken is 36 feet thick here:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN12-201231389836544115351003324
BAKKEN11-20121160837612275660519
BAKKEN10-201293463477723470295
BAKKEN9-20121948646612305440439
BAKKEN8-20121419881830685184601767