Sunday, April 7, 2013

Winter Storm Walda To Hit The West, Great Plains


April 8, 2013: snow accumulation forecasts for this week.

I haven't seen reports of snow like this in a very long time. These are the snow potentials forecast by SkyView by 9:00 a.m. Wednesday. By the way, after Wednesday, North Korea says it can no longer guarantee the safety of any foreigner in its country. But I digress. Back to snow accumulation by 9:00 a.m. Wednesday:
  •  Buffalo, SD: 10 inches
  • Lemmon, SD: 3 inches
  • Faith, SD: 17 inches
  • Hot Springs, SD: 20 inches
  • Rapid City, SD: 26 inches
  • Newell, SD: 25 inches
  • Spearfish: 23 inches
  • Gillette, Wyoming: 19 inches

Original Post
Where's Walda. Walda, not Waldo.

Link here to The Weather Channel. More global warming -- this time a huge winter storm will move from Salt Lake City to the western Dakotas.
The forecast is a tough one for Salt Lake City [The Weather Channel's words, not MDW], where rain could mix with or change over to snow late Monday into Monday night. Depending on exactly how cold it gets and how quickly, a few inches of slushy snow could accumulate on the valley floor, with some limited impacts on travel.
This heavy snow will likely plunge into the northern Colorado Front Range urban corridor late Monday night. Expect a period of rain and possibly thunderstorms, changing to snow Monday night as temperatures plummet rapidly from the 40s to near 20, leading to a flash freeze. A sheen of ice may well form on roadways underneath the heavy falling snow, making travel extremely treacherous. 
This is a dynamic link from the National Weather Service, a blizzard watch for Colorado, including the Air Force Academy:
350 PM MDT SUN APR 7 2013

7500 FT-
350 PM MDT SUN APR 7 2013





A reader tells me southwestern North Dakota could see 3 - 8 inches of snow. A Wyoming winter advisory says 10 to 18 inches is possible.

Think how bad this would be without global warming. Count your lucky blessings, as we used to say.

Peak Oil? For Saudi?


March 21, 2015: Reuters/Rigzone is reporting:
As the global energy industry stares transfixed at a spectacular drop in U.S. rigs, Saudi Arabia is ramping up the number of machines drilling for oil and gas despite a sharp fall in the price of crude.
Industry sources and analysts say the OPEC kingpin is looking beyond the halving of global oil prices since June 2014 to a time when crude could again be in short supply.
Riyadh is therefore keen to preserve what is known as its spare capacity - the kingdom's unique ability to raise oil output quickly at any given moment.
But to achieve that, Saudi Arabia has to drill much more than in the past, after boosting output to record levels to compensate for global supply outages in the past four years.
"The Saudis are probably worried about everyone else reducing CAPEX as a result of low oil prices and about non-OPEC output falling off a cliff at some point. We all know that supply disruptions are unpredictable but they are certain," said [an analyst].
"The increase in Saudi rig numbers is like a signal to the industry - let's be rational. We will need supply growth in the future."
Comment: something doesn't ring true.

July 5, 2013: Reuters is reporting -- 
Saudi Aramco plans to develop two less productive areas of major oilfields, industry sources said, as Riyadh takes care to maintain excess capacity for the long term, even while non-OPEC oil supplies are on the rise.
The plan to increase capacity from Khurais and Shaybah by a total of 550,000 barrels per day (bpd) by 2017 will take the strain off Ghawar, the world's largest conventional oilfield.
Such projects are not intended to raise Saudi production capacity beyond the current stated 12.5 million bpd, Saudi oil officials have previously said.
After pumping its biggest fields at near record rates to make up for lost supplies from Libya and Iran over the last two years, the kingdom wants to focus on less productive fields to ease pressure on aging reservoirs to help keep their output robust.
July 2, 2013: Bloomberg is reporting -- 
Saudi Arabia started a program to assess its potential for generating renewable energy, part of an effort to lure $109 billion for building a solar industry that will free up more of its crude oil for export. [Comment: if Saudi's reserves were as robust as they say they are, one wonders whether there would be this need for renewables?]
June 6, 2013: Oil & Gas Journal is reporting --
Saudi Aramco has begun construction of a gas plant in an industrial region of northern Saudi Arabia to handle production from Midyan gas-condensate field under development in the Red Sea.
April 7, 2013: This Bloomberg article may explain a bit more for the reason behind Saudi's increase in number of active rigs. Note the date of the article (January 23, 2013):
Saudi Arabian Oil Co. is set to boost its use of drilling rigs to a record this year as it pushes exploration for oil and shale gas into the Red Sea, a local energy analyst said.
Saudi Aramco, as the world’s largest crude exporter is known, will probably use about 163 rigs this year, up from 133 at the end of 2012, said Sadad al-Husseini, who founded Husseini Energy, an independent energy consultant in Dhahran, Saudi Arabia, after retiring from the state producer in 2004.
Aramco was using 98 rigs to produce oil and gas from onshore fields and perform maintenance on existing wells at the end of last year, with a further 35 employed in exploration activity and offshore operations, al-Husseini said. This year, the company may use as many as 170 rigs in total should the country step up production of oil or gas, thus activating more rigs, he said.
Schlumberger Ltd., the world’s largest oilfield-services provider, also expects a gain in Saudi drilling activity. Saudi Aramco ended 2012 with 134 rigs and that number will grow to 160 rigs by the end of this year, Schlumberger Chief Executive Officer Paal Kibsgaard told analysts and investors on Jan. 18 in a conference call. 
Unfortunately there's no "SAUDI EIA" to track monthly metrics.

One reader suggests that Saudi could be deploying an increased number of rigs in anticipation of disruptions or "live fire" hostilities: Iran, Syria, Egypt, Libya, Korea. To name just the ones I can count on my left hand. This was noted a year ago, March 1, 2012:
Saudi Arabia is deploying the most oil rigs in four years as it prepares for possible shortages caused by tension with Iran, giving President Barack Obama one less reason to answer calls to curb prices by releasing supplies from America’s emergency reserves.
My hunch: it may be both -- tactically Saudi is increasing the number of rigs in anticipation of disruptions and/or a shooting war somewhere; strategically, Saudi is aware its legacy fields are on the right side (the down side) of the production curve.

By the way, another Oil Drum article on January 30, 2013, noted the same thing about Saudi production. Coincidentally, it also referred to "a Figure 7" and said:
Finally it is worth taking a look at Saudi Arabia (Figure 7). The number of rigs operating in The Kingdom reached a record high of 88 in October 2012 and there has to be a message in that statistic in itself.
The split was 58 oil and 30 gas. But Saudi Arabia continues to produce around 11.7 million bpd on a slowly rising bumpy plateau with a relatively tiny number of operational rigs.
The production world changed in Saudi Arabia in 2005 when the drilling rig count more than doubled, drilling new wells to combat declines from legacy assets like Ghawar. Like the USA, there has been a recent prioritization of oil drilling over gas. With Brent crude trading at over $113 / barrel it is quite clear that the world's major producers are working flat out to meet demand.
Others have said the same thing; from wiki:
After US President Bush asked the Saudis to raise production on a visit to Saudi Arabia in January 2008, and they declined, Bush questioned whether they had the ability to raise production any more.
In the summer of 2008, Saudi Arabia announced an increase in planned production of 500,000 barrels per day. However, there are experts who believe Saudi oil production has already peaked or will do so in the near future. 
Original Post

For what it's worth, there's another "peak oil" article and discussion over at The Oil Drum.

As a quick 30-second sound bite / reminder, from wiki:
Based on his theory, [Marion King Hubbert (1903 - 1989)] presented a paper to the 1956 meeting of the American Petroleum Institute in San Antonio, Texas, which predicted that overall petroleum production would peak in the United States between the late 1960s and the early 1970s. 
At first his prediction received much criticism, for the most part because many other predictions of oil capacity had been made over the preceding half century, but these had been based purely on reserve and production data rather than past discovery trends, and had proven false.
Hubbert became famous when this prediction proved correct in 1970.
There is only one interesting data point at the first linked article that I had not seen before. I've always maintained that things are not as rosy as Saudi Arabia would suggest regarding their oil reserves. This past week Saudi announced they were decreasing production in light of decreasing refinery demand (which, of course, are about the only folks who "use" crude oil, the refineries, but I digress).

Saudi does this periodically, capriciously, sometimes it makes sense, sometimes it seems not, but this most recent production decrease by Saudi, in my mind, is a non-event.

However, having said that, it is interesting what the author of the linked article has to say about Saudi's production capabilities and reserves.
Stuart Staniford speculates that the recent Saudi cutback may have been a deliberate response to U.S. production gains in an effort to prevent oil prices from declining. On the other hand, his graph shows that Saudi effort (as measured by active drilling rigs) has ramped up significantly in the last two years.
Perhaps it's the case that Saudi Arabia isn't willing to maintain its previous production levels, or perhaps it's the case that Saudi Arabia isn't able to maintain its previous production levels. But whatever the explanation, this much I'm sure about: those who assured us that Saudi production was going to continue to increase from its levels in 2005 are the ones who so far have proved to be dead wrong.
The graph he refers to is Figure 7: comparison between Saudi oil production and Saudi oil rig count. Wow, if that doesn't get your attention. For newbies: it's just the opposite in the Bakken: increasing production in light of decreasing rig count. I doubt the Saudis are using old, inefficient and ineffective rigs.

Check out that graph, figure 7, at the linked article. Like I said, it's an interesting, very interesting graph. And why I love blogging. Here is a screen shot of figure 7 and the caption:

However, the number of rigs above -- shown in the graph -- does not come close to agreeing to this 2015 article in Rigzone:
State oil giant Saudi Aramco used a record-high 210 oil and gas rigs in 2014, up from around 150 in 2013, 140 in 2012 and some 100 in 2011, according to previous industry estimates.

A Q&A On The Keystone In The LA Times

Before we get to the LA Times Q&A on the Keystone, a reminder of the Q&A with TED book author, same subject, just a couple of days ago.

Now, the LA Times Q&A on the Keystone. Assuming one a) understands this was printed in the LA Times, and assuming one  b) has half a brain working,  one can only see this Q&A as another trial balloon which provides more cover for President Obama if he should decide in favor of common sense.

These are the main points from the article:
a) the activist environmentalists originally objected to the pipeline because of the route through Nebraska. That route has been changed; the Nebraskans now support the pipeline. The activists are still concerned. The State Department: "any spill into the aquifer from the pipeline would not lead to extensive contamination."

b) once the route was changed to accommodate the activist environmentalists, and approved by the Nebraskan voters, the activist environmentalists moved the goal posts. They now contend the oil moved by the Keystone pipeline would contribute to global warming. In fact, "a recent study showed that development of all the Canadian oil sands would add an almost undetectable amount to global temperatures. That's because anything emitted by oil from the Keystone will be overshadowed by coal plants in China which is building, on average, one a day. Obviously, all of the Canadian oil sands will not be developed, and only a portion of what is developed will flow down the Keystone pipeline.

c) Will it provide any jobs? Yes.

d) Will it offer an alternative to heavy oil coming from a capricious and unreliable country unfriendly to the United States, i.e., Venezuela? Yes.

e) Will it be in the best interests of both the United States and its closest ally, Canada? Yes.

f) Will Canadian oil get here even if the Keystone XL is not built? Yes, it already is. By rail and existing pipeline. A competitor to the Keystone XL already has plans on the drawing board to increase imports through existing pipeline (new permits not needed).

g) Will the price of gasoline drop if the Keystone XL is built? Probably not.
Questions not asked:
a) Is heavy oil important to the economy of the US? Very.

b) Who are the primary financial backers  supporting the activist environmentalists on this issue? I don't know.

c) Who will benefit if the Keystone XL is killed by the president for the third time? Rail (primarily Warren Buffett, who owns the Bakken railroad, the BNSF) and Enbridge (a Canadian competitor).

d)  Will the price of refined petroleum products go up if the Keystone XL is not built? All things being equal, yes.
As for me, I am terribly conflicted. When I first mentioned the Keystone XL at the blog a couple years ago, I posted it because there wasn't much else in the news. I never expected the Keystone XL to become such a big story. I had no dog in the fight when the issue was first raised. I now have a big dog in this fight. For me, personally (or better said, for my estate) it will be advantageous to have the Keystone XL killed. I own shares in (at least) three companies that will benefit if the Keystone XL is killed.

However, out of common sense, and a sense of fairness; a believer in free enterprise; and, as a rational thinker, I hope the Keystone XL is approved.

So, I guess at the end of the day, I will root for the president to approve it, but realizing I will come out ahead either way.

Wells Coming Off The Confidential List Over The Weekend, Monday; MRO Has a Huge Well: Whiting Has A Huge Arnegard Well; OXY Has Another OXY Well; Whiting Has a Nice Madison Well

Wells coming off the confidential list for the weekend, Monday. See if you can spot the Bakken well with the lowest IP:
Monday, April 8, 2013
  • 22561, 991, Petro-Hunt, Fort Berthold 148-94-21A-20-2H, Eagle Nest, t2/13; cum 7K 2/13;
  • 22694, 330, Whiting, BSMU 3006, Big Stick, a Madison well; t12/12; cum 7K 2/13;
  • 22920, 633, Hess, BW-Thelma-150-99-3031H-1, South Tobacco Garden, t2/13; cum 22K 2/13;
  • 23134, 2,124, BR, CCU Powell 11-29TFH, Corral Creek, spacing, unitized; 
  • 23248, 227, OXY USA, State Buffalo Bill 1-20-17H-143-94, Murphy Creek, t10/12; cum 20K 2/13;
  • 23428, drl, CLR, Missoula 6-21H, Camp,
  • 23548, 838, XTO, Albert 24X-1E, Capa, t1/13; cum 20K 2/13;
  • 23613, 513, CLR, Hundseid 1-8H, Upland, t12/12; cum 21K 2/13;
Sunday, April 7, 2013
  • 23288, 2,234, Whiting, Timber Creek 21-27H, Arnegard, t10/12; cum 60K 2/13;
  • 23557, drl, BEXP, Jake 2-11 1H,
  • 23718, 641, Samson Resources, William Bailard 0112-1TFH, Ambrose, t3/13; cum 3K 2/13;
  • 23799, 1,132, MRO, Darrel Quale USA 14-16H, Four Bears, t12/12; cum 52K 2/13;
Saturday, April 6, 2013
  • 21372, 742, Zavanna, Bunning 35-26 1H, Foreman Butte, t1/13; cum 28K 2/13;
  • 23427, drl, CLR, Missoula 7-21H, Camp,
  • 23552, 428, Hess, EN-Hanson S-156-94-3130H-5, Manitou,  t2/13; cum 4K 2/13;
  • 23560, 482, Crescent Point Energy, CPEUSC Poley 12-1-158N-101W, Little Muddy, t1/13; cum 6K 2/13;
  • 23586, drl, Crescent Point Energy, CPEUSC Farthing 31-30-158N-100W, Church,
  • 23717, 474, Samson Resources, Karen Bailard 3625-1TFH, Ambrose, t3/13; cum --

22920, see above, Hess, BW-Thelma-150-99-3031H-1, South Tobacco Garden,

DateOil RunsMCF Sold

23288, see above, Whiting, Timber Creek 21-27H, Arnegard, on a natural gas pipeline:

DateOil RunsMCF Sold

 23799, see above, MRO, Darrel Quale USA 14-16H, Four Bears, on a natural gas pipeline:

DateOil RunsMCF Sold

 21372, see below, Zavanna, Bunning 35-26 1H, Foreman Butte, on a natural gas pipeline:

DateOil RunsMCF Sold


For my granddaughters who are studying French, and for those who are studying fashion:

Poupee De Cire, Poupee De Son, France Gall

For those who want to hear the lyrics again:

Poupee De Cire, Poupee De Son, France Gall

For those who missed the first stanza:

Poupee De Cire, Poupee De Son, France Gall

Germany Looking To Stop Wind Energy Initiatives Sooner Than Later -- Bloomberg; Wind Energy Has Killed Germany's Manufacturing Base

 “The entire [renewable] energy switch has derailed,” Marc Nettelbeck, an analyst at DZ Bank AG, 
said this week by phone from Frankfurt. 
“The difficulties connecting offshore wind farms to the power grid 
reduces their profitability
renders the original investment calculations of utilities invalid.” 

-- at Bloomberg, April 5, 2013

Chancellor Angela Merkel is losing support 
from her two biggest allies 
in the utilities industry as 
their mounting debt prompts a retreat 
from renewable-power expansion
undermining her 
$700 billion program to reshape Germany’s energy market. 

-- at Bloomberg, April 5, 2013

Something tells me the activist environmentalists will stage rallies to promote wind energy, but won't invest in German utilities. Call me cynical.

I think there are some irrefutable renewable energy facts. Germany is proving them.

Germany probably has the lead on wind energy. Let's see. Google "wind energy Germany wiki." I'm doing this in real-time. It will be a surprise to me also. So, here goes.

Wind power in Germany:
In 2011, the installed capacity of wind power in Germany was 29,075 megawatts (MW), with wind power producing about 8 percent of Germany’s total electrical power.
According to EWEA in a normal wind year, installed wind capacity in Germany will meet 10.6% at end 2011 and 9.3% at end 2010 of the German electricity needs. 
In 2012, the use of wind power is, according to the German newspaper Der Spiegel, causing increasing electricity prices and power outages, and due to these factors, renewable energy usage is forcing industries to close, move overseas, and the loss of German heavy industry jobs.
Okay, so that's Germany. But what is the country-by-country comparison? Here's 2011 data, the first site that popped up, per capita:
  • Denmarck
  • Portugal
  • Spain
  • Germany
  • Ireland
  • Sweden
  • Netherlands
  • USA
  • New Zealand
Interestingly, the PIIGS dominate the list, followed by the Scandinavian countries which some consider "special/unique cases." There are no BRICs on the list, the emerging economies.

So, Germany is near the top, and other than the fact that wind energy is destroying the manufacturing base in Germany, what else is new with regard to wind in Germany?

Don alerted me to this story: Germany is turning its back on wind. This Bloomberg story is incredible.

Some data points:
  • Germany plans to decommission all nuclear energy plants by 2022
  • Germany plans to triple renewable energy by 2050
  • renewable goals coming under pressure: wind has destroyed Germany's manufacturing base; increasing consumers' utility bills
  • cost of developing wind farms in the North Sea has surged; construction glitches and delays linking turbines to the grid
From the linked Bloomberg article:
The country’s biggest utility, said last month it will lower clean-energy investments to less than 1 billion euros in 2015 from 1.79 billion euros last year. RWE will cut annual renewables spending in half to about 500 million euros in the next two years. 
My hunch is they would cut faster if they were allowed to, or if public pressure wasn't in play.

After the Japanese nuclear debacle, Germany closed eight nuclear reactors: wiping 25 billion euros off the market value of two of the Germany's largest utilities in the nine months that followed that decision. 

From the linked Bloomberg article:
Utilities’ withdrawal from renewables targets may threaten Germany’s goal to have 10,000 megawatts of offshore wind capacity by 2020, two years before the last remaining nuclear plants shut permanently. The government sees offshore wind at 25,000 megawatts by 2030 -- up from about 280 megawatts now --as it implements its 550 billion-euro plan to replace reactors.
“The offshore expansion in Germany is much slower than anticipated by politicians,” said Marc Oliver Bettzuege, head of Cologne University’s Energy Economics Institute. Without a focus on wind from “financially strong investors” such as EON and RWE, Germany will need to import a “large amount” of clean power to reach its goals, he said. 
Years ago, I was impressed by the math ExxonMobil provided regarding wind energy. I'm not going to look for that link now, but suffice it to say, ExxonMobil said the math didn't work. Looks like they were correct, but the politicians had to see it for themselves. An expensive experiment. 

From wiki, linked above:
In 2012, the use of wind power is, according to the German newspaper Der Spiegel, causing increasing electricity prices and power outages, and due to these factors, renewable energy usage is forcing industries to close, move overseas, and the loss of German heavy industry jobs.
Off-shore wind energy, and perhaps renewable energy in general, had led to the destruction of the German manufacturing base. To read that is amazing. Now consider what is not said:
  • western governments tax the heck out of fossil fuel energy
  • western governments put up all kinds of obstacles to block fossil fuel energy development
  • western governments slow roll the oil and gas industry.
  • western governments give tax breaks, subsidies to renewable energy
  • western governments fast-track renewable energy projects
  • western governments mandate use of renewable energy even when less expensive alternative exist
  • there is no evidence that renewable energy is making a bit of difference
  • the world's largest consumer of energy in the not-too-distant future has no plans to be politically correct [China became the world's largest energy consumer (18% of the total) since its consumption surged by 8% during 2009 (up from 4% in 2008) , WSJ, 2010]
I can't make this stuff up.

Human Interest Story: Cincinnati Woman Named Executive Director, Williston Area Builders Association

The Dickinson Press is reporting:
On Thursday, the 28-year-old from Cincinnati was named executive director of the Williston Area Builders Association.
A day later she was already helping run the Williston Home Show.
Taylor, who moved to North Dakota in December with her fiancé, Jeremy Tankersley, said living in Williston is giving them a chance to be more prosperous.
“There’s so much opportunity for us here,” Taylor said.
Tankersley, a welder, owned a shop in Cincinnati but work there had slowed. After hearing from many people about opportunities for welders in North Dakota, the couple did some research and decided to make the move.
Tankersley, 25, works 60 or more hours a week as a welder for B&G Roustabout.
Go to the link; there is much more to the story, including the challenging living conditions, but something tells me, as executive director of the Bakken area builders association, she and her husband will find a new home. 

Later: I note I forgot to link the original article; the same article, I believe, can be accessed at oilpatchdispatch.

China To Build One of Country's Largest Coal-to-Natural Gas Projects

Earlier this year MDW noted, from Reuters:
The Alberta government said on Monday it canceled C$285 million ($278 million) in funding for a carbon-capture project tied to a proposed synthetic natural gas plant, the second withdrawal of such an environmental initiative in less than a year.
Alberta said the privately held company planning the project, Swan Hills Synfuels, has delayed it because lower-than-expected North American gas prices have made producing coal-to-gas fuel uneconomical.
In China, it is a different story. China announced that it will be building a huge, $11 billion, coal-to-gas facility. Reuters is reporting:
China's state energy giant Sinopec Group envisages investing 70 billion yuan ($11.3 billion) to build the country's largest coal-to-gas project in 8-10 years to meet a rising demand for natural gas, a newspaper said on Sunday. 
Coal-to-gas production facilities in Zhundong in China's northwestern region of Xinjiang will have annual production capacity of 8 billion cubic metres of gas (bcm) .... Coal extracted from two mines in Zhundong will be used to feed coal-to-gas production facilities nearby, the daily said. The coal mines have annual production capacity of 15 million tonnes each. 
Something tells me Sinopec will have no trouble with the permitting process. The CO2 emissions, I imaging, will flow eastward over Portland, OR.