Have A Safe Weekend Everyone!

Corral Creek oil field has been updated.

Brooklyn oil field has been updated.

New article on the Cline shale in the Permian has been posted. 

Only Three (3) New Permits

The NDIC must have begun a well-deserved 3-day Memorial Day weekend early. Only three (3) new permits:

• Operators: Flatirons Resources, Corinthian (2)
• Fields: Lake Darling (Renville), North Souris (Bottineau)
• Comments: 

No other data. 

WSJ Links, Friday

Section M (Mansion): I generally don't read

Section D (Arena):

• Kenny Chesney has sold more tickets than anyone else in the last 10 years. More than Springsteen, more than U2, more than the Stones.
• An oral history of the Creedence Clearwater Revival.
• "Arrested Development" returns; on Netflix.  See earlier post on Netflix. 
• A walk on the wild side with Liberace.

Section C (Money & Investing):

• Hulu dance partners should cut it: after years of being a dance-floor rival, Hulu may soon be the belle of the pay-TV ball.

Section B (Marketplace):

• Trains leave pipeline in lurch: growing use of railroads to ferry crude oil leads to cool reception for Kinder Morgan's $2 billion project. 

• A $2 billion pipeline project intended to ship oil from West Texas's booming oil fields to California has failed to pique the interest of several big refiners in the Golden State. The culprit: the growing popularity of railroads.

Kinder Morgan Energy Partners LP's 277,000 barrel-a-day Freedom pipeline, proposed in April, would be the first to bring light, sweet oil produced in Texas's Permian Basin to the fuel-hungry Los Angeles market.

That would give refiners in California, which now partly complement the state's declining oil production with expensive crude imports from Alaska, Ecuador and other far-flung nations, a direct shot at the relatively cheap crude squeezed out of shale formations through hydraulic fracturing. Access to that bountiful crude has already boosted the profits of Midwestern and even some Gulf Coast refiners.

• ATT to add a "below-the-line 61-cent fee. 

An AT&T spokeswoman stressed the similar practices of other carriers, noting that customers were given 30 days notice about the fee and its details are included on every bill. The fee covers "certain expenses, such as interconnection and cell-site rents and maintenance."

The new AT&T fee goes on top of a "regulatory cost recovery charge" that averages about 50 cents per line at the carrier, in order to cover the expense of complying with government regulations. AT&T began adding that to its bill "approximately 10 years ago," it said.

Section A:

• Minnesota raising taxes on the wealthy.

Minnesota's move to raise $2.1 billion in new taxes, largely from the wealthy, to fund government programs puts it among a handful of states controlled by Democrats that are adopting more liberal fiscal policies at a time when many Republican-dominated statehouses are pushing to cut taxes.
The Minnesota tax package, which Gov. Mark Dayton signed into law Thursday, aims to raise the revenue largely for expanding early-childhood education programs and freezing tuitions at state universities, as well as closing the state's budget deficit and funding some jobs initiatives and property-tax refunds. 

What little I saw of it, I thought was great: have the wealthy pay more for more state spending and cut property taxes. What's not to like. Meanwhile, North Dakota is open for business.

Hunter-Gatherers --> Farming-Animal Domestication --> Industrial Revolution --> Nuclear Age --> The Shale Economy

There are so many story lines in this one Platts story, but I will focus on only one. 

Platts is reporting:

In case you didn’t catch it, investment house Credit Suisse had a wonderfully informative conference call for their clients last week on how they see the future of the shale revolution that has engulfed the oil patch in the last decade and become hyper-active especially in the last several years.
Among the bank’s conclusions: 

• shale is a vital component of current US production which is growing at a huge clip — 
• CS sees as much as 10 million b/d of US oil production in the next several years, up from 6.5 million b/d last year
• consistently improving well results from big plays such as the Permian Basin in West Texas and Bakken Shale in North Dakota

Moreover, it’s not only the upstream that is exploding, but also companies that supply the technologies to eke out more oil in less time. Even ancillary services are exploding, such as technologies that can treat and dispose of water — a crucial component of well fracturing.  And all this will require many billions of investment dollars into a shale economy still years away from the mature development stage.

So, is this a stretch?

Hunter-Gatherers --> Farming-Animal Domestication --> Industrial Revolution --> Nuclear Age --> The Shale Economy

In the near term, the difference between the global "haves" (North America) and the global "have-nots" (Europe) is, to some extent, man-made.

In the near term, the difference between the North American "haves" (North Dakota, Texas, Oklahoma, Ohio, Pennsylvania) and the North American "have-nots" (New York state) is, to a great extent, man-made.

In the near-term to mid-term, the economic gap between the global "haves" (North America) and the global "have-nots (Europe) is going to wide significantly. See recent post on the grim prospect of Europe: it could be the only continent that imports 80% of its energy needs.

In the near term, the economic gap between the North America "haves" and the North American "have-nots" may widen, but it won't be due to the fracking, per se. Many of the states that do not have oil or do not allow fracking, can still participate in the shale economy: sand, steel manufacturing, ceramic manufacturing, refineries, processing plants. But it is simply a matter of time, perhaps measured in decades before even those shale oil-rich states that don't allow fracking will accept this technology.

The linked Platts article is very, very good, as usual.

For trivia buffs, I liked this bit of information:

Petrohawk was a humdrum company before being catapulted into the status of shale guru after its Eagle Ford find.  So much so, that barely three years after discovering the field, the company was sold to BHP Billiton in 2011 for $15 billion. 

Floyd Wilson, who ran Petrohawk, has essentially reincarnated his former independent in another company, Halcon Resources, which he formed last year.  (Even the names is similar to its predecessor:  Halcon means “hawk” in Spanish.)  Wilson recently trumpeted a new play, which he named ”El Halcon,” in East Texas, another widely-drilled area for many decades; already several companies are said to have congregated there hoping to pan out some shale oil volumes.

Friday News and Links --I'm Glad To See Enbridge So Concerned About Safety, But I Think There Is More Here Than Meets The Eye

Note: the AP, MSNBC, others will be releasing political news after the news cycle for the week ends today about 5:00 pm. 

The 5.7 earthquake this morning in northern California was probably not caused by a) George Bush, or, b) global warming. But the day is not yet over and we have not yet heard from Rhode Island's junior senator, the honorable and particularly crazy, Sheldon Whitehouse. Besides being crazy, he is a bit insensitive.

The only well coming off the confidential list today was: DRY. Well file report not helpful at this time.

Active rigs: 185 (steady, trending down)

RBN Energy:  Sour gas -- the Bakken H2S problem --

This particular tariff modification was a request to alter the quality specifications of crude that could be carried on the Enbridge pipeline – effective immediately (the next day). The new specification limited the hydrogen sulfide (H2S) content of pipeline crude to 5 parts per million (ppm) or less. H2S is a colorless, flammable, extremely hazardous gas with a rotten egg smell. It occurs naturally in crude petroleum, natural gas, and other naturally occurring sources like hot springs. Enbridge had found dangerously high levels of H2S vapor phase content (gas) at their Berthold Station Terminal in North Dakota. Enbridge’s rapid implementation of a new quality rule was motivated by a concern about the safety of its workers – particularly those loading rail tank cars with crude oil at the Berthold Station. Crude oil from the Enbridge pipeline is delivered into the Berthold terminal for rail loading.

The Enbridge action to limit the H2S content of crude on its pipeline caused immediate pushback from one of the company’s longest established shippers – Plains Marketing LP that together with its affiliates transports over 20 Mb/d of oil on the Enbridge North Dakota pipeline to Clearbrook MN. [At Clearbrook the North Dakota system joins the Enbridge Lakehead pipeline system transporting crude to Chicago and on to Cushing, OK]. Plains lodged a protest about Enbridge’s new tariff filing the day after it was posted. They objected to Enbridge having acted hastily to impose the H2S limit with one day’s notice under an emergency filing procedure and they objected to the tightness of the specification – arguing that it should be 10 ppm instead of 5 ppm. In their filing Plains argued that other North Dakota pipelines such as Bridger and Belle Fourche had instituted 10 ppm H2S limits in April 2013 with 30 days notice.

Original posting here.

Canadians increasingly against any more pipelines.  I assume they plan to start burning their forests for energy. And, of course, they probably like the railroad, maybe reverting to steam locomotives using coal, before it's all over. Good for them.

Colorado appears to be joining the crazies. Banning fracking. Good for them. They, too, can start burning their forests for energy.

Fundamentally, a ban on hydraulic fracturing is a ban on oil and gas development in Colorado,” said Doug Flanders, a spokesman for the Colorado Oil and Gas Association, another energy group based in Denver. “And it begs the question: if not here then where?” [The Bakken, North Dakota and Montana.]

Communities from New Jersey to California have also sought to impose restrictions on fracking, according to data kept by Food & Water Watch, a Washington-based environmental group.

In Colorado, communities have made the most direct challenges to fracking, which injects a mixture of water, sand and chemicals underground to break apart shale rock formations so oil and gas can flow to the surface.

Voters in Longmont overwhelmingly approved a ban on fracking in November. Fort Collins had a moratorium on the process. The city council voted May 21 to lift it after Prospect Energy LLC, the only oil and gas company operating within city limits, agreed to standards that are stricter than state rules.

Carpe Diem: shale oil boom spreads to other states, with great charts, as usual

...large increases in shale oil output over the last three years (February 2010 to February 2013) to the five states of: Oklahoma (51%), Utah (46%), Colorado (64%), Wyoming (22%) and New Mexico (46%).