Time For A New Poll

Updates

May 6, 2013: Wyoming wind energy tax pulls in a paltry $1 million.  The Trib.com is reporting:

Wyoming's one-of-a-kind wind power production tax generated only a drop in the bucket's worth of revenue for the state and counties in 2012.

The $1-per-megawatt-hour tax, signed into law in 2010, raised about $1.6 million for six counties in the central and southeast part of the state in its first year of implementation. Converse County received about $600,000 of that total.

An additional $1 million went into state coffers.

State officials admitted that the tax revenue collected last year was paltry when compared to revenue derived from minerals and other taxes. But they expect the wind revenue stream to grow with the industry.

Original Post

I'm not sure this is really ready for prime time but I'm tired of seeing the same poll up there day after day so I'll do this even though I don't have enough background on the subject to know if it's even feasible (due to interstate commerce regulations) but ...

... before a new poll, the results of the current poll.

The current poll asked readers to suggest which operator would the first to have permits for 18 wells on one pad? The results:

• XTO:  10%
• QEP:  4%
• Slawson:  4%
• Hess: 16%
• EOG: 11%
• CLR: 55%

Now, for the question I'm not sure is ready for prime time, but as noted, I was getting tired of the current poll.

A reader suggested: the state of North Dakota should charge a Wind Energy Extraction Tax of .005 cents per kwh. One-half of one cent/kwh should be levied on all wind energy produced in North Dakota to be used out-of-state. The rationale: if the producer can generate a 2.2 cent per kwh federal tax credit, giving up less then 25% of that credit would not be a burden. (For the full back story, see the comment at this post.) NIMBYs need to pay their fair share.

The poll:

Should North Dakota charge a wind energy production tax?

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Comments from readers:

In support of a wind tax per kwh on EXPORTED wind energy. There is a severance tax on North Dakota coal. If you burn less lignite to make elec going to MN or SD, the local county/school districts have less tax, and then you have less workers. Those mine jobs are goo paying job.

Now, "They" Are Demanding That Big Oil Build More Pipelines ... Or Something ... Maybe Greenpeace Can Help

I can't make this stuff up.

Reuters is reporting:

Farmers, truckers and politicians [in Arkansas] are up in arms over plans by Enterprise Product Partners to end deliveries on a key pipeline that ships diesel and jet fuel from Texas on July 1. Instead, Enterprise plans to reverse the line to ship ethane, chiefly used as a petrochemical feedstock, from the shale fields in Ohio and Pennsylvania to the Gulf Coast.

The Arkansas attorney general has appealed to federal regulators to intervene, local merchants warn of a "catastrophe," truckers fear a jump in prices and even a U.S. Air Force base is stocking up on extra fuel.

Enterprise, which announced its plans for the so-called TE Products line in March, says demand for interstate shipments on the 230,000 barrels per day line has fallen sharply in recent years, and that it is not "commercially feasible" to invest an estimated $50 million to upgrade a parallel line.

 

Local fuel groups argue it is an energy lifeline and that closing it will roil the local market, raising prices as fuel is fetched from further afield and sparking shortages when demand normally met by the pipeline shifts to other sources.

Maybe Greenpeace can provide some emergency fuel for Arkansas. The USAF can always fall back on its $59/gallon algae-based jet fuel. That was the whole purpose of the USAF-algae project, to provide a reliable source of fuel if traditional supplies were shut off.

The Air Force base in Little Rock will be topping up its fuel tanks to add an inventory buffer while it looks into alternative supply sources, says Mimi Schirmacher, a spokeswoman for Defense Logistics Agency-Energy, which sources energy for U.S. military forces.

I cannot make this stuff up -- although the $59 figure might be $26. I honestly can't remember.

For Archival Purposes -- North Dakota Energy Update: Coal, Gas, Wind, Not Much Solar

The Bismarck Tribune is reporting:

MDU, energy:

• Coal: 395 megawatts
• Gas turbines: 103 megawatts
• Renewable: 55 megawatts, including wind (49.5)

MDU, demand:

• Shortage: 125 megawatts short; mostly due to oil patch

MDU: projects

• Gas-turbine plant in Mandan; 86,000 customers; $85 million

Two new peaking stations (recently posted), both natural gas, both 45 megawatts

• Pioneer Station, near Williston
• Lonesome Creek, near Watford City

Wind

• North Dakota ranks 3rd in the nation in wind generation
• accounts for 15% of North Dakota's electricity
• 991 wind turbines in the state
• capacity: 1,672 megawatts; ND wind turbines run at 45% of their capacity
• creates havoc with the grid

The Keystone XL Tea Leaves

Bloomberg is reporting:

Most congressional Democrats, including leaders in the House and Senate, have joined environmentalists in fighting the project backed by the oil industry, labor unions, the Chamber of Commerce and Canadians. Some lawmakers who oppose the pipeline say it appears probable Obama will sign off, triggering their calls to mitigate environmental and political fallout.

The most important word in that paragraph: labor unions. Okay, two words.

Later: fact checker -- American Petroleum Institute policy statement on Keystone XL. 

This Pretty Much Spells The End

Reuters is reporting: each nation will set its own policies regarding global warming and greenhouse gas emissions.

A U.S.-led plan to let all countries set their own goals for fighting climate change is gaining grudging support at U.N. talks, even though the current level of pledges is far too low to limit rising temperatures substantially.

The approach, being discussed this week at 160-nation talks in Bonn, Germany, would mean abandoning the blueprint of the 1997 Kyoto Protocol, which set central goals for industrialized countries to cut emissions by 2012 and then let each work out national implementation.

Attempts to agree a successor to Kyoto have foundered above all on a failure to agree on the contribution that developing countries should make to curbing the industrial emissions responsible for global warming - greenhouse gases. The next ministerial conference to try to reach a deal is scheduled for Paris in 2015.

Look at the data points:

• European countries -- historically much more aggressive on global warming than the rest of the world -- once the global leaders on global warming, are now in the spectator seats, watching 
• Canada pulled out of the Kyoto Protocol; the US never signed
• the Kyoto Protocol died; no extension; no substitute; no nothing 
• 2013: a "nothing" plan; led by the US 
• 2015: next scheduled ministerial meeting on subject
• 2020: when the pact will "enter into force" (using the word "force" liberally)
• "commitments" changed to "contributions"
• carbon dioxide prices collapsed in Europe which weakened EU leadership; baton passed to a "lame duck" president and speech-giver
• US and China agreed, last month, to work more closely together. LOL
• 2012 was the ninth warmest year since records began in the 19th century (and we know how accurate those records were); ninth warmest year, which also means the warmest years are now behind us
• temperatures are already up by 0.8 degree C since pre-industrial times; neither statistically significant nor reproducible
• polar bears are thriving

The only question I have: who determines what the earth's thermostat should be set at?

As soon as China publishes its new "global warming" policy, I will post it.

Futures Don't Mean Squat ...

.... but, Dow futures up 20; oil up $1.02 at 6:08 pm, Sunday evening. Dynamic link; accurate when posted.

And Platts is also tweeting that Brent is up sharply, up a $1.16. War drums in the Mideast?

Minnesota StarTribune With Two-Page Article on USGS 2013 Survey

The StarTribune is reporting:

Two days after a rosy government report doubled the estimate of how much oil is tucked beneath North Dakota, four men hop out of their vehicles into the soft dusk light atop a rock-strewn hill north of town.

They point at the barren, rolling landscape dotted with cattle, an oil well and a pond as a half-mile-long train of oil tank cars silently snakes past in the distance.

One is a former hedge fund manager who flew in from Connecticut. Another is a real estate investor who drove his pickup from Spokane, Wash. There’s a local civil engineer and a homebuilder who moved out here when business dried up on Michigan’s Upper Peninsula.

They’re planning to buy the 70 acres of farmland for a 56-home subdivision on one-acre lots, envisioning a bedroom community as the area’s oil boom reality of man camps and crowded RV parks morphs into something more permanent. “This new estimate tells people looking to invest here that, hey, there is enough oil to drill here for 20 years instead of five,” Williston Mayor Ward Koeser said. “Now there’s scientific proof that we have twice as much oil as they said five years ago, and that gives us a little more stability, reliability and credibility.”

A reader provided me the link. Thank you. 

On Tap For Monday; Wells Coming Off Confidential List; BR With Another Huge Mesa Verde Well; Newfield With a Gusher; ERF, CLR, KOG, Hess With Good Wells; Saudi To Raise Prices

Wells coming off the confidential list over the weekend and Monday:
Monday, May 6, 2013

• 20250, drl, XTO, Wayne 34-34F, West Capa,
• 20666, 1,097, Zenergy, Snowshoe 30-31H, Glass Bluff, t4/13; cum --
• 23293, 3,878, BR, Mesa Verde 24-22TFH, Clear Creek, spacing, 2-section; t3/13; cum --
• 23542, 1,007, Enerplus, Grace 150-94-06B-07H, Spotted Horn, t2/13; cum 36K 3/13;
• 23701, dry, Zenergy, Flynn 34-34HTF, Harding, lost circulation in the Madison; never reached kick-off point
• 23706, drl, G3 Operating, Miller 1-35-26H, Climax,
• 23971, drl, Strike Oil, Waind 18-12, Kanu,
• 24057, 1,570, KOG, Moccasin Creek 14-11-2-3H3, Moccasin Creek, t2/13; cum 25K 3/13;
• 24207, drl, QEP, MHA 6-04-33H-150-92, Heart Butte,

Sunday, May 5, 2013

• 23926, 3,027, Newfield, Staal 150-99-23-14-2H, South Tobacco Garden, t3/13; cum --
• 23969, 1,188, Hess, BB-Rice 150-95-0718H-3, Blue Buttes, t4/13; cum 15K 3/13;
• 23686, 484, CLR, Lindsay 1-35H, New Home, t3/13; cum 10K 3/13;

Saturday, May 4, 2013

• 23079, 817, Petro-Hunt, USA 153-95-18B-1H, Charlson, t3/13; cum 10K 3/13;
• 23596, drl, B3 Operating, Pasternak Federal 1-2-11H, Strandahl,
• 23609, drl, CLR, Akron 3-27AH, Banks,
• 23729, drl, STO/BEXP, Delorme 12-1 3H, Painted Woods,

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Production for wells coming off confidential list, selected:

23542, see above , Enerplus, Grace 150-94-06B-07H, Spotted Horn,

Date	Oil Runs	MCF Sold
3-2013	22494	0
2-2013	12674	0

24057, see above, KOG, Moccasin Creek 14-11-2-3H3, Moccasin Creek,

Date	Oil Runs	MCF Sold
3-2013	9306	2891
2-2013	15343	5417

 23969, see above, Hess, BB-Rice 150-95-0718H-3, Blue Buttes,

Date	Oil Runs	MCF Sold
3-2013	13930	0

 23686, see above, CLR, Lindsay 1-35H, New Home,

Date	Oil Runs	MCF Sold
3-2013	10115	0

23079, see above, Petro-Hunt, USA 153-95-18B-1H, Charlson,

Date	Oil Runs	MCF Sold
3-2013	9173	0

For investors only: according to SeekingAlpha.com and Yahoo!Finance after market close tomorrow:

• EOG: robust report; $1.82 vs $1.20 one year ago
• FSLR ($0.75); misses by 6 cents, market happy with numbers; up by 3% after hours
• FTR ($0.06)
• LGCY ($0.30)
• MPO (-$0.01): income totaled $1.4 million;
• NOG ($0.28): beats estimates; comes in at 29 cents
• OTTR ($0.34)
• PAA ($0.98): posts strong earnings;
• ROSE ($0.93)

Bloomberg reporting: Saudi will raise price of Arab Light Crude to Asia in June

And Now Hummus

This, tweeted, from the WSJ: hummus is conquering America.

Prodded by the largest U.S. hummus maker, farmers in the heart of tobacco country are trying to grow chickpeas, an improbable move that reflects booming demand for hummus.

Sabra Dipping Co., a joint venture of PepsiCo Inc. and Israel's Strauss Group Ltd., wants to cultivate a commercial crop in Virginia to reduce its dependence on the legume's main U.S. growing region—the Pacific Northwest—and to identify new chickpea varieties for its dips and spreads.

For Sabra, which makes hummus at a plant near Richmond, Va., a secondary source of supplies could help protect the company if a chickpea shortage occurred because of crop failures in Washington or Idaho. Sourcing chickpeas locally also would lower its shipping costs. But the Virginia effort carries risk, because experts say the state's high summer humidity could prove a significant obstacle to its viability.

North Dakota is probably #4 in chickpeas. Washington State #1, Idaho #2; Montana #3.
Federal government price support is about 11 cents per pound, not enough to cover the cost of growing chickpeas.

It looks like the price of chickpeas is nearing 22 cents per pound vs the "typical price of about 15 cents."

Scholz said chickpea seeds are more expensive, harvested later and prone to disease. 

"It's a little more expensive and a little more risky crop, but it has returned an incredible amount of money over the last two or three years for our farmers in Washington and Idaho, so they're expanding their production," Scholz said.

I mentioned this a couple days ago but felt it deserved a stand-alone post. Especially if tweeted by the WSJ.

Hummus, done right, is incredible. And, some American company will eventually market flavored/textured hummus to appeal to Americans, sort of like "they" did with processed cheese. Done right, it really is delicious.  

Why I Love To Blog

From the Yahoo!DNR message board, sent to me by Don:

[In his annual meeting, Warren Buffett] also praised President George W. Bush for coming to the financial system's rescue at the height of the credit crisis in 2008 with what Buffett called the ten smartest words in economic history: "If money isn't loosened up, this sucker could go down."

I can almost imagine the speech President Obama would have given at that moment had he been president and not Bush. LOL.

And Now It's Propane: A 2 Billion Barrel/Year Nuisance

For newbies: the Bakken is an oil play, not a natural gas play.

Bakken-centric companies talk about 93% of their production from the Bakken being oil (see corporate presentations of KOG, others).

When ONEOK came into the Bakken to set up natural gas gathering and processing plants, the economic value of natural gas in the Bakken was said to have been 3%. I remember that figure because "everyone" else had blown off the Bakken as an opportunity to make money on natural gas. But, as I noted then, 3% is a small number, but 3% of a really, really huge fossil fuel play cudda/wudda/shudda be huge. And apparently it is. What is ONEOK up to now? Five (5) natural gas processing plants?

With that as background, enjoy The Calgary Herald article Don sent me earlier this morning, gas liquids boom helps company file higher first-quarter profits:

It reported that U.S. propane production recently surpassed domestic demand, leading to the U.S. becoming a net exporter.

Growth in propane supply is expected to mainly come from the Marcellus shale gas play in the Northeastern U.S., with as much as 1.8 billion gallons of propane production per year by 2020, and the Bakken shale play in North Dakota, which could pump two billion gallons per year by 2020.

The article continues:

Cheaper propane is making inroads in gasoline, diesel and heating oil markets in the U.S., according to a report ...

....the report notes that the discount paid for U.S. benchmark propane versus gasoline increased from 37 cents US per gallon in 2010 to $1.12 in 2012.

“Propane prices are expected to remain very competitive with gasoline, diesel fuel and distillate fuel oil as propane supply continues to increase,” it notes, adding fuel oil conversions in the U.S. Northeast “may offer the highest growth potential in residential and commercial sectors.”

The U.S. Energy Information Administration said on its website that residential propane prices averaged $2.84 US per gallon on March 18, its most recent number, versus $4 for heating oil.

And somehow, "they" are going to have to move all that propane from North Dakota to where folks want more of it. 

Wudda/cudda/shudda.

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And you all thought I was going to end there.  Did I miss something? Go back, re-read the post. You only have to read about a third of the way down.

The Marcellus: a natural gas play; 1.8 billion bbls of propane per year by 2020.

The Bakken: an oil play; 2.0 billion bbls of propane per year by 2020.

The Bakken is where the buffalo roam, where the deer and the antelope play, and propane is a by-product that most operators would just prefer to flare away for all the nuisance it presents. LOL.

The takeaway: if the Bakken is going to outproduce a natural gas play, the Marcellus, with a by-product, think how huge the Bakken is. 

And you all knew this was coming:

Propane, Hank Hill

Frac Daddies And A Special Note To The Granddaughters

Frac Daddy did not come in first in the Kentucky Derby yesterday, but he was still a winner.

And all the "frac daddies" in the Bakken are winners, too.  And active rigs: 192. Nice.

Not much yet to write about, so will drop back and punt, mixing metaphors early on a Sunday. A reader, yesterday, sent me a link to Grantland.com, a flashback to an article about the Kentucky Derby written by Hunter S. Thompson.

I had read that article before; it was part of an anthology of HST works, if I remember correctly. I have not been to the Kentucky Derby but HST's description makes me feel like I have, especially combining that with what I see on television.

I had not seen Grantland.com before, or if I had, I had forgotten how really good the writing is, and how crisp the photography is. I've added Grantland.com to the list of external links at the sidebar at the very, very bottom.

Alerting you to that detail also reminds you of the other excellent external links regarding the oil patch.

And you all knew, I'm sure, this was coming:

Who's Your Daddy? Toby Keith

Some of Toby's lines are from Willie Nelson's "if you got the money, honey, I got the time." Toby is America's answer to Australia's Slim Dusty.

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A Note To The Granddaughters

Two dots to connect. The first dot: in the early Steve Jobs/Apple years there were many, many stories about how Steve solved the problem of dissipating heat in his computers. The other dot: can computers be programmed to think for themselves and even taken the next step: replicate?

As we all know, computers work on a binary process. On/off. 0/1.

It turns out the the brain is also binary: neurons are either firing or they are not. They are either on/off. O/1. (By the way, if the nervous system is digital, the endocrine system (hormones) is analog. But I digress.)

Brains and electronic computers both use quantities of energy in performing their work of logic -- all of which is wasted and dissipated in heat, to be carried away by the blood or by ventilating and cooling apparatus. -- James Gleick, in The Information, p. 241

Now, connecting the dots.

In some planetary system light years away, an intelligent being has been able to do just that: the intelligent being "developed" a computer that could be programmed to think for itself, and even replicate.

TIB started with the central processing unit, the CPU. The CPU was easy. Cooling it and providing the energy were the challenges. TIB was only allowed to use the lighter elements, C, H, and O. (In the end, TIB did cheat, sneaking in some iron, sulfur, and phosphorus, for example.)

TIB solved the heat problem with a fluid pump/radiator system (heart and vascular system).

There were various solutions to the question of how to provide the energy to a) run the computer, and, b) run the pump to cool the computer.

The energy could have been centralized or decentralized. Had it been a 12-volt battery located outside the computer, it would have required another system of "electrical wires." Why not decentralize the energy source in small, nano-batteries? That TIB did and these nano-batteries were later identified and called mitochondria. There is one each in almost every living cell.

I suppose there would have been ways to convert all waste to gas but if there was going to be solid/liquid waste, one might as well develop apparatuses that could do double duty, doing something other than just eliminating solid/liquid waste. The real purpose of the solid waste apparatus was to recycle water. The liquid waste apparatus was engineered to provide answers to a number of other problems that the system kept coming up with.

TIB had done it: a computer that could think for itself; it was ready for prime time. One last addition: the replicator. And, of course, that was binary, also: DNA, a double strand of binary threads cross-linking binary digits (or bits, which all biology students now know as A, T, C, and G).

It is almost spooky. The entire body (except for the reproductive system) was developed to do two things to support a computer: a) dissipate the heat; and, b) provide the energy to run the CPU.

In my mind, the most fascinating solution TIB came up with: how to supply the energy. Little nano-batteries called mitochondria dispersed throughout the entire mainframe. Very, very clever.

My hunch: Steve Jobs is out there, somewhere, even now, working on nano-batteries for iPhone X.