Saturday, April 27, 2013

Energy Costs? Advantage: US

The New York Times is reporting:
A slowdown in Europe’s efforts to exploit its shale gas reserves, roughly 10 percent of the world’s deposits, could not come at a worse time for Europe’s companies, which are already suffering from a continental debt crisis and anemic growth and are becoming increasingly uncompetitive compared with rivals in the United States.
In America, energy-intensive industries like manufacturing and chemical production have benefited from a drastic fall in fuel costs because of a domestic energy boom in shale oil and gas. Natural gas prices, for example, have fallen by almost 67 percent over the five years, and the United States is on track to become the world’s largest oil producer by 2017, according to the International Energy Agency.
Fuel costs for European companies, by contrast, remain roughly double those of their American competitors, while many countries, particularly in Eastern Europe, are dependent on natural gas imports from Russia. Also, the Continent’s fossil fuel production has fallen steadily over the last 10 years, even as global demand rises.

Second Coldest Start to Spring In US History

Real Science is reporting.
The only year when the spring started colder was 1975.
Except for the graph, that was the full story.

I did not post this for the story; it is posted for the comments which are a must-read.

I assume this data will be plotted on the appropriate graph; the question is which graph will NASA use?

Two Corrections

Some of you may have seen this headline/article. CNBC is reporting.

Here's the headline: "Cheaper power bills? You may have natgas to thank."

A key paragraph:
"With natural gas prices coming down so much it's a viable solution," Henschel said in an interview. "For base generation [times of the day when power is at an ebb], coal was historically a more affordable solution. Now with natgas so affordable, you can run combined cycle base load generation plants burning natural gas."
Here are the two corrections. CNBC will thank me later, I'm sure. 

First correction:
"With natural gas prices coming down so much it's a viable solution," Henschel said in an interview. "For base generation [times of the day when power is at an ebb], coal was historically a more affordable solution. Now with natgas so affordable, you can run combined cycle base load generation plants burning natural gas Americans can now afford to install super-expensive, government-subsidized wind and solar alternatives, and folks won't even notice." 
Second correction: the headline:
"Cheaper power bills? You may have natgas fracking to thank."

Cold Scottish Weather Severely Affecting Lobster Catch: The Ocean Biome, Where The Shellfish and Octopi Roam, Has Become Very Cold Indeed


Later, 9:39 pm: this might help explain what is going on

Later, 6:30 pm: a huge "thank you" to Don for sending me an article addressing this issue
The Argo data shows that the oceans have been in a slight cooling trend since at least late-2004, and possibly as far back as mid-2003 when the Argo network.
Later, 5:02 pm: this article really bothers me -- that the ocean around Scotland has gotten so cold, it has affected the lobsters.

I think all would agree that one cold atmospheric/land-based winter could not have such an effect on the bottom of the ocean, even if relatively close to shore. [North Dakotans are well aware of the relative constant temperature in their basements independent of the hot summers and extremely cold winters.] So, either the lobstermen are wrong, or ocean cooling has gone on longer than most people are aware. Assuming that most folks would deny the ocean has been cooling, then the only option is to suggest the lobstermen are wrong.

Assuming the lobstermen are wrong, then there needs to be another reason for the decreasing lobster. The problem I have is that the lobstermen have been doing this for generations, and I am very, very hesitant to say the lobstermen are wrong. Like farmers in North Dakota, they have a very, very intimate relationship with the biome in which they work, live, and breathe 24/7, and if the lobstermen say the ocean is colder, I have to believe them. This will be an interesting story to follow. My hunch is that no dollars will be available for research because it would not be politically correct to research a cooling ocean. But my eyes and ears will be attuned to any trivia emanating from marine biologists about a possibly cooling ocean. 
Original Post

The ultra-conservative, right-wing, global-warming, British tabloid, the BBC, is reporting:
Prolonged cold weather has caused a shortage of Scottish lobster supplies, according to an industry body. 
The Scottish Creel Fishermen's Federation said landings had fallen by as much as 90% off the east coast of Scotland, forcing a sharp rise in wholesale prices. 
Langoustine catches were also reported to be as much as 70% down in the Clyde fisheries area. The federation said cold weather had forced lobsters further out to sea. 
It added that poor weather conditions off the east coast, from Peterhead to Eyemouth, had damaged creels, forcing fishermen to spend more time onshore repairing their equipment. 
Federation chairman Alistair Sinclair told the BBC Scotland news website: "Lobster is as rare as hens' teeth at the moment.
I assume we will soon be hearing stories about how global warming is causing all this cold weather we've been having. 

[For newbies: that was "tongue-in-cheek" above. The BBC is British but that's about the only accurate adjective from the opening sentence.]

Seriously, the bottom of the ocean where the lobsters live does not change temperature overnight. If the ocean biome where the lobsters roam has become this cold, this is very, very interesting. This is not a local nor a  recent event. It will be interesting to hear how the US east coast lobster industry is faring.

Where Have We Heard This Before? Rig Counts No Longer Matter

I can't remember when I first said rig counts no longer matter. And IPs don't matter. Of course, taken out of context, that is not correct. IPs and rig counts do matter, but they don't mean much as stand-alone data points.

I don't follow this company and I have a difficult time following / understanding non-crude-oil BOE production. From the Range Resources 1Q13 conference call:
I mean, we just need to quit talking about rig counts because the drillers are just getting too good too fast. And just like we saw in the Marcellus, we had to quit talking about rig count, and it's really the number of net wells we're going to put online each year. And our plan is still to ramp up activity, but you may not see it near as much in rig counts going forward as we thought earlier on because just in 9 months, they went from almost in half. And we've seen wells 16 days or less, and I predict they'll be a lot less than that a few months from now. So you're exactly right. I think rig count is going to be really difficult to model. We can't even do it internally any more. It's just too – they're changing too fast.
Even though some say "we just need to quit talking about rig counts because the drillers are just getting too good too fast" the metric, at least for me, still holds value, but not as a stand-alone data point.

Maybe more on that later. Kind of busy today.


One can compare the number of rig counts by operator from today to the number on August 22, 2011. Remember: these are simply snapshots in time, and could change by one or two rigs for any given operator on any given day. (For more historical rig data, see Active Rigs.

April 28, 2013 (big UP movers: BR, CLR, G3 Operating, QEP, Triangle) (big DOWN movers: Petro-Hunt; Statoil [BEXP])
  • Abraxas:1
  • American Eagle: 1
  • Armstrong: 1
  • Arsental Energy: 1
  • Baytex: 2
  • BEXP:  0 (transitioned from STO to BEXP)
  • BR:  12
  • CLR:  19
  • Cornerstone: 0
  • Crescent Point Energy: 0
  • Denbury Onshore: 0
  • Emerald (was VOG): 1
  • Enerplus (ERF): 3
  • Environmentally Clean: 0
  • EOG: 5
  • Fidelity:  3
  • G3 Operating (Halcon):  8
  • GMX Resources: 0
  • Helis (now QEP)
  • Hess:  14
  • Hunt: 2
  • KOG: 8
  • Legacy: 1
  • Liberty Resources: 1
  • Marathon (MRO):  5
  • Murex: 0
  • Newfield: 3
  • North Plains: 0
  • Oasis:  8
  • OXY USA:  7
  • Petro-Hunt: 6 (I believe Petro-Hunt sold a significant amount of acreage since last rig update)
  • QEP: 8 (bought Helis since last rig update)
  • Samson Oil and Gas: 1 (new to the list?)
  • Samson Resources: 3
  • Sequel: 1
  • Sinclair: 1
  • Slawson: 4
  • SM Energy:  4
  • Statoil: 12 (transitioned from BEXP to STO)
  • Triangle: 4
  • True: 1
  • Welter Consulting: 1
  • Whiting:  19
  • WPX: 4
  • XTO:  9
  • Zavanna: 1
  • Zenergy: 2
August 22, 2011
  • Abraxas: 1
  • Baytex: 2
  • BEXP:  16
  • BR:  9
  • CLR:  14
  • Cornerstone: 1
  • Crescent Point Energy: 2
  • Denbury Onshore: 4
  • Enerplus (ERF): 2
  • Environmentally Clean: 1
  • EOG: 7
  • Fidelity:  4
  • G3 Operating (Halcon): 2
  • GMX Resources: 1
  • Helis: 3
  • Hess:  17 
  • Hunt: 2
  • KOG: 8
  • Legacy: 1
  • Liberty Resources: 1
  • Marathon (MRO):  6
  • Murex: 2
  • Newfield: 2
  • North Plains: 2
  • Oasis:  8
  • OXY USA:  6
  • Petro-Hunt: 12
  • QEP: 4
  • Samson Resources: 4
  • Sequel: 1
  • Sinclair: 1
  • Slawson: 4
  • SM Energy:  4
  • Triangle: 2
  • True: 1
  • Whiting:  17
  • WPX: 6
  • XTO:  7
  • Zavanna: 1
  • Zenergy:  4

Saturday Morning Links


Later, 5:20 pm: I just had an opportunity to re-read and savor Peggy Noonan's op-ed. I have not liked her writing since the editorial before the election. Perhaps her "senior moment" lasted a bit longer than usual, is now over, and she has re-found her footing. This is a very, very good op-ed, linked at the bottom of the post. 


Active rigs: 187

WSJ Links

Section D (Off Duty): Later

Section C (Review):
What would it be like if other businesses operated on the same principles as airlines? Size 11 shoes would shrink to size 10, then to size 9, and ultimately all the way to size 4. Only first-class pedestrians would be sold shoes that fit them; everyone else would have to squeeze into fraying bootees. Intractable demands by the cobblers' union would be tabbed as the culprit.
Cardiologists would commandeer the public-address system to announce that they had overbooked open-heart procedures. They would offer a free quadruple bypass operation, valid for one year, to anyone willing to cede his place in line to the next customer. If they got no takers, they would offer two bypasses and a 50% discount on the patient's next four stents.
Dentists would announce that until further notice all wisdom-tooth extractions would be conducted without anesthesia, owing to furloughed dental assistants. Psychiatrists would begin offering frequent psychotic-episode plans that they would then refuse to honor due to mysterious restrictions concealed in the fine print of the agreement.
When the researchers extrapolate the chart backward, they find the origin of life must have happened almost 10 billion years ago, long before Earth existed. Therefore life may have spent its first five billion years on a different planet and got here as bacterial spores deep inside rocks that drifted through the vacuum after some cosmic explosion.
There are an awful lot of "ifs" in such a calculation. After all, the increase in complexity could have started fast and slowed down. Also, it isn't the first time somebody has suggested "panspermia," or microbial life hitching a ride here.
Section B (Business & Finance):

Section A:

Week 17: April 21, 2013 -- April 27, 2013

NDIC has signed orders for 18 wells on one pad
NDIC expects to see 24 wells on one pad in near future (same link as above)
Bakken well costs for Hess have come down significantly
Bakken well costs coming down faster than folks realize -- Mike Filloon
Update on Statoil in the Bakken

Overview of the Bakken
What we'll be talking about this summer in the Bakken
Random overview of the Bakken, economic impact for North Dakota
For newbies: another random overview of the Bakken, E&P Magazine
NDIC projects 6,000 more wells over next three years

Bakken oil to Port of Vancouver USA