Sunday, April 20, 2014

Potpourri Of Stories

The tide is starting to turn. The AP is reporting that unions like fracking and the oil and gas industry:
After early complaints that out-of-state firms got the most jobs, some local construction trade workers and union members in Pennsylvania, Ohio and West Virginia say they're now benefiting in a big way from the Marcellus and Utica Shale oil and gas boom.

That vocal support from blue-collar workers complicates efforts by environmentalists to limit the drilling process known as fracking.
"The shale became a lifesaver and a lifeline for a lot of working families," said Dennis Martire, the mid-Atlantic regional manager for the Laborers' International Union, or LIUNA, which represents workers in numerous construction trades.
The tide is starting to turn. The AP is reporting that biofuels from corn waste is no better than natural gas (of course, President Obama has already declared the study flawed) and won't meet standards to be declared a renewable fuel (wow)
Biofuels made from the leftovers of harvested corn plants are worse than gasoline for global warming in the short term, a study shows, challenging the Obama administration's conclusions that they are a much cleaner oil alternative and will help combat climate change.
A $500,000 study paid for by the federal government and released Sunday in the peer-reviewed journal Nature Climate Change concludes that biofuels made with corn residue release 7 percent more greenhouse gases in the early years compared with conventional gasoline.
While biofuels are better in the long run, the study says they won't meet a standard set in a 2007 energy law to qualify as renewable fuel.
The conclusions deal a blow to what are known as cellulosic biofuels, which have received more than a billion dollars in federal support but have struggled to meet volume targets mandated by law. About half of the initial market in cellulosics is expected to be derived from corn residue.
The Financial Times is reporting how President Obama lost his mojo among the BRICS:
When Barack Obama took office, he pledged a new overture to the world’s emerging powers. Today each of the BRICS – Brazil, Russia, India, China and South Africa – is at loggerheads with America, or worse. Last month four of the five abstained in a UN vote condemning the fifth’s annexation of Crimea. Next month India is likely to elect as its new leader Narendra Modi, who says he has “no interest in visiting America other than to attend the UN in New York.”
As the world’s largest democracy, and America’s most natural ally among the emerging powers, India’s is a troubling weathervane. How on earth did Mr Obama lose the BRICS?
Some of it was unavoidable. Early in his first term Mr Obama called for a “reset” of US relations with Russia. His overture was warmly received by Dmitry Medvedev, then Russia’s president, who was considerably less anti-western than his predecessor, Vladimir Putin. Unfortunately for Mr Obama, Ukraine, Pussy Riot and many others, Mr Putin repossessed the presidency. The US president can hardly be blamed for that. Things have gone downhill since then.
The trajectory of US relations with China has also been in the wrong direction.

Liberty Resources II, LLC, Is Back In The Bakken -- An Update

A great must-read article over at The Bakken Magazine: "Liberty Resources II, LLC, is back in the Bakken."

The article was posted March 19, 2014 -- it's hard to believe I missed it. [Nope, I didn't miss it: here's the original post: Liberty Resources Re-Enters The Bakken.]

This is an update, March 19, 2014:
Following Liberty Resources II LLC’s re-entry into the Williston Basin through a $455 million oil and gas asset acquisition earlier this year, the stage is again set for the Denver-based exploration and production company to shine. Before Liberty sold its assets to Kodiak Oil & Gas last year for $680 million, the team was recognized for its unique, industry-leading well recovery rates. After selling its Williston Basin assets, energy investment firm Riverstone Holdings LLC committed $350 million to Liberty to redeploy its talents in other shale plays. Based on the success of its work in the Williston Basin, Liberty chose to return to the Bakken.

In October 2013, Liberty released a Society of Petroleum Engineers paper explaining its completion strategies titled, “The Value Proposition for Applying Advanced Completion and Stimulation Designs to the Bakken Central Basin.” The paper described the variety of completion methods used in the Bakken. “As a consequence, it is not uncommon for different operators to have over a $2 million difference in their authorizations for expenditures, solely because of the differences in approach to the well’s completion and stimulation design.”

The Liberty SPE paper described the company’s method as one “designed to maximize reservoir contact area and optimize the conductivity.” The methodology can result in roughly $1 million to $2 million in additional costs, but the choice can result in greater production during the well’s first year on production, and, the additional costs are paid for through higher IP rates in just a few months.

During a two-year period, Liberty had drilled and completed 29 wells in the Bakken and Three Forks formations before selling its assets, some of which recorded the highest initial production rates of any wells in the play. With 53,000 net acres spread throughout the North Dakota counties of Williams, McKenzie, Divide and Burke, Liberty will once again have the chance to prove that a completion design focus on conductivity and contact area can result in great wells
One can do a search at the blog to see activity regarding Liberty Resources. Here are a couple of items from the NDIC Hearing Dockets, April 24, 2014:
  • 22173, Liberty Resources, Stoneview and/or North Tioga-Bakken, create an overlapping 2560-acre unit; twenty-six (26) wells on that unit, Divide
    22174, Liberty Resources, Temple and/or McGregor-Bakken, create three overlapping2560-acre units; twenty-six (26) wells on each of the three units; Williams

A New Mobile Railcar Repair Services Company Announced; To Service Rail Cars in North Dakota, Montana; HQ In Mustang, Oklahoma

A press release found at multiple internet sites:
Rail industry veterans Kevin Goins and Don Walsh announced today that they have formed Freedom Railcar Solutions, LLC, to provide mobile railcar repair and maintenance services for crude-by-rail shippers, operators and other railcar lessors in the Bakken Shale and Powder River Basin. Freedom Railcar will enter the market by providing on-site and mobile repair and maintenance services in North Dakota and Wyoming designed to minimize railcar downtime. 
When railcars are sent to full service repair shops, time out of service can average 90 days because most third-party repair shops are located out-of-state and provide limited mobile service. The total cost associated with a crude oil tank car that is out of service for 90 days is an estimated $100,000 per car, including lost revenue, cleaning, repair and freight charges. To address this problem, Freedom Railcar’s state-of-the-art mobile repair units will be strategically located to ensure rapid response times directly to the railcar’s location. Repair services will be conducted by carefully selected, highly skilled, certified technicians. Services will include the repair and replacement of vacuum relief valves, manway lids and eyebolts, load valves, bottom outlet valve handles, brake parts, stencils, AEI tags and safety appliances. Freedom Railcar expects to begin serving customers in North Dakota and Wyoming by July 1, 2014
Freedom Railcar is based in Mustang, Oklahoma, and maintains strategically located, state-of-the-art mobile repair units equipped to respond directly to locations in North Dakota and Wyoming. Mustang is a "suburb" southwest of downtown Oklahoma City.
One would assume there are multiple such mobile railcar repair and maintenance services. One would think BNSF (Bakken oil) and Union Pacific (Powder River coal) would have their own in-house services, but perhaps they do their repair back at regional centers. If so, possibly they will contract mobile repair to outfits like Freedom Railcar.

"Will It Be 'Fracked' Natural Gas?" -- I Can't Make This Stuff Up

The northeast is desperately short of natural gas.

Private enterprise is trying to rectify the situation.

Kinder Morgan has propose a natural gas pipeline from somewhere in the south to bring natural gas to the northeast.

Sounds like a pretty straightforward endeavor.

But some little ol' spinster is concerned: "Will this be 'fracked' natural gas?"

The Berkshire Eagle (Pittsfield, MA) is reporting:
As a proposed Tennessee Gas Co. natural gas pipeline project through the Northeast begins to take shape, local officials are closely watching the potential impact.
Lenox, Richmond, Washington and several other communities are on the path of the 250-mile Northeast Pipeline Expansion Project extending from upstate New York, across western and northern Massachusetts to Dracut, a town north of Lowell near the New Hampshire border. The 36-inch pipeline project is preliminary and would require federal and state permits.
Construction of the $2.75 billion to $3.75 billion project could begin in April 2017 with completion by November 2018, according to internal documents supplied by Kinder Morgan Inc., the Houston-based parent company of Tennessee Gas Pipeline.
"The project is of sufficient scale to address the long-term energy needs of New England and Atlantic Canada by providing access to abundant new supplies," the company's project overview states. "These significant volumes should lower the price of gas in New England energy markets and enhance reliability of gas and electricity grids."  
But then this:
When voters attend the May 1 annual town meeting at Lenox Memorial Middle and High School, they'll find a citizens' petition by environmental advocate Lee Scott Laugenour urging the Select Board to take a firm stand against the high-pressure pipeline designed to deliver hydraulic-fractured ("fracked") natural gas.
"Fracking" involves the injection of water and chemicals under high pressure into underground rock formations to release gas trapped there.
The citizens' petition urges the Lenox Selectmen to oppose any pipeline carrying hydrofracked natural gas through the community.  
I guess Lee Scott Laugenour, community organizer, prefers dirty coal to "fracked" natural gas. LOL. I assume he heats his home with wood, a renewable resource. This guy isn't even a "NIMBY." I guess he's looking out for the southerners. NITBY (not in their backyard) or NITBYE (not in their backyard, either). Probably a NITWIT.

I know what my answer to this question would be:
Asked by The Eagle whether any gas would be shipped overseas, Melissa Ruiz, manager of corporate communications for Kinder Morgan, stated: "The gas would be delivered to the Northeast region, but that really depends on where potential shippers wish to transport the gas. The Northeast Expansion Project is in response to the growing needs for natural gas in the New England region. Kinder Morgan is in the process of negotiating definitive agreements with customers that will ultimately determine where the gas will be delivered.
Posted for archival purposes only ("the road to New England") -- I don't give a hoot. 

Marcus Hook Refinery Could Be Natural Gas Export Hub

Marcus Hook refinery is located on the banks of the Delaware River, just south of Philadelphia. A new natural gas pipeline from western Pennsylvania (the Marcellus) to eastern Pennsylvania is being considered. is reporting:
It is out with the old and in with the new at the 500-acre waterfront facility formerly known as the Sunoco Marcus Hook Refinery, now the Marcus Hook Industrial Complex.
Workers last week ripped down aging petroleum-processing equipment, part of a labyrinth of machinery that has produced gasoline, diesel, and kerosene for more than a century. Other crews built cryogenic storage tanks more than 130 feet tall with three-foot-thick walls that will hold the future: new fuels from the prolific Marcellus Shale region.
Sunoco Logistics Partners L.P., a pipeline company that bought the property for $60 million last year from its sister company, Sunoco Inc., is converting the site into a major center for processing and shipping natural gas liquids.
Again, the usual opposition by community organizers. For archival purposes only: the road to New England.

Illegal Drugs In The Bakken; The "Meth" Problem In North Dakota Began In 1998 -- Almost A Decade Before The Bakken Boom In North Dakota Began; This All Began During The Height Of The Clinton Administration; Update On The Legacy Fund (February, 2014) -- National Journal

This story, by the AP, took up a full page in today's Sunday edition of The Dallas News. It turns out the story was first published a few days ago and is now making the rounds. The TimesLeader  (Wilkes-Barre, PA) is reporting, from Williston:
What they uncovered was a large-scale methamphetamine ring that had found a home in a state long known for its small-town solitude, its slow pace and peaceful pastures.
The members of this violent gang were all relative newcomers to Williston. They called themselves "The Family," the feds say, and were holed up in a few campers tucked behind an innocent-looking, white-frame house.
They had plenty of firepower, too: One of the men had an arsenal of 22 weapons.
Authorities say several "Family" members had abducted and planned to kill one of their own, seeking to enforce their code of silence out of fear he'd spill the group's secrets.
They assaulted him in a camper in Williston, stuffed him into a plastic-lined car trunk, then beat him again after he escaped. He was left for dead in a Montana field. He wound up, instead, in a North Dakota hospital, telling the FBI his story.
The result: Seven guilty pleas. Prison sentences of up to 20 years. And the dismantling of a drug trafficking ring that sold meth for more than a year in one of the fastest-growing corners of America.
I did not read the article, except for what I posted above. I was well aware of the story. It's been reported in various formats for the past year or so.

My wife read the entire story. I asked her if the story mentioned who the users were. She said the article does not say who the uses are. I understand who might be bringing the illegal drugs into North Dakota, but I doubted this article would say who the users were.

Oil workers, truckers, my hunch is anyone working for well-established oil companies in the Bakken are being tested. I'm not worried about the roughnecks or the truckers.

North Dakota had a "meth" problem long before the Bakken. That was true throughout the midwest. 

I'm glad to see the story get published, though. It will help the western counties get the law enforcement they need, and it might send a message to local judges to act quickly and decisively if they want this problem to be contained.

From The Bismarck Tribune
May 25, 2002 

The Bakken boom did not begin until 2007 in North Dakota. This article in The Bismarck Tribune linked below was written five years before the Bakken. The Bakken, folks, has nothing to do with meth. It has to do with population growth, money, and opportunity.
Is methamphetamine really that big of a problem in NorthDakota?
"This is the scariest drug I've seen in my 16 years at BCI," said Jerry Kemmet, director of the North Dakota Bureau of Criminal Investigation. "The way it's taken a hold of the population. It's hard to treat and so addictive."
State statistics have shown a steady increase in meth labs since the drug began gaining popularity in 1998. The 17 labs seized in 1998 were more than in the previous four years combined. That number nearly tripled in 2000 when 46 labs were seized. The trend has continued to escalate with 89 labs found in 2001 and 101 labs already discovered so far this year. At that rate, more than 260 could be found by the end of the year.
"The number of labs has doubled every year now and looks like it will double or triple next year," North Dakota Attorney General Wayne Stenehjem said. "There's no getting around the conclusion that it's a tremendous problem in North Dakota."
The rising number of meth labs has law enforcement worried. Due to the hazardous and flammable chemicals used in the process of making meth, there's risk of explosions and health problems for people who come into contact with the lab byproducts.
Even though the number of meth labs is on pace to nearly triple the number found last year, it's estimated that only 10 percent of the methampetamine used in North Dakota is made locally. Most is imported from Mexico and California, Kemmet said.
BCI Chief Agent Jeff White said the exact number of meth-related arrests in North Dakota is unknown because the state does not require reporting agencies to separate meth out from other drug-related arrests. But an increasing number of prison inmates say meth is their drug of choice.
State Corrections Director Elaine Little said based on admission interviews, 92 of the 201 inmates sent to the prison last quarter - January, February and March - were meth users. The previous quarter - October, November and December of 2001 - 94 of the 218 new inmates were meth users.
Those numbers indicate that about 45 percent of inmates entering the prison system are meth users. Those inmates aren't necessarily being sent to prison on meth-related charges, but they're admitting they're meth users.
"Meth is more addictive, toxic and obtainable," Stenehjem said. "It's far worse than anything we've seen before."
The main reason meth has quickly overtaken other drugs is its addictiveness and cheap price. Kemmet said users claim they get a cheaper, longer, more intense high with meth than any other drug. Also, the drug has a higher addiction rate, sometimes hooking recreational users the first time they use it, according to Sue Mock, a licensed addiction counselor at West Central Human Services in Bismarck.
The question is this: is there less meth used per capita now with the Bakken boom or less


I was going to add that the fact the meth problem began in North Dakota at the height of the Clinton administration is as relevant as the Bakken being related to the meth problem, but I do recall that "I did not inhale" was the mantra back in the '90's. So maybe the Clinton tie is relevant. LOL. Quiet chuckle. Hmmmm.....


A feature story on the Legacy Fund from The National Journal, published back in February, 2014:
The state has seen a tenfold increase in oil production in the past decade, bringing its daily yield to 1 million barrels. And with production up, joblessness has plunged: At less than 3 percent, unemployment is lower in North Dakota than anywhere else in the nation.
But the state has been on a miniature version of this ride before, and its officials know that the boom-and-bust nature of energy development makes it a fickle economic mainstay. Indeed, North Dakota's economy was hurt in the mid-1980s after oil production dipped. The state is currently producing far more oil than it was 30 years ago, and that growth would make a similar plunge all the more painful. 
This time, however, officials think they've found a way to make their oil wealth outlast their oil boom: The Legislature and voters in 2010 amended the state constitution to create the North Dakota Legacy Fund.
Since July 2011, 30 percent of state taxes on oil-and natural gas production and extraction have been siphoned into a low-risk investment fund. Not a dime of that can be spent until mid-2017 at the earliest. Even then, spending anything but the interest will require a two-thirds vote of each branch of the Legislature. And even if legislators authorize tapping into the fund, not more than 15 percent of the principal can be spent during any two-year period.
The fast-growing fund had almost $1.8 billion as of late January, and that's forecast to grow to roughly $3 billion by mid-June of 2015 and to keep climbing, according to the Office of the State Tax Commissioner.

Price Of Oil, Characteristics Of Crude Oil; How Fast Does Amazon Deliver? Incredibly Fast

This past week or so I've been flummoxed by the price of oil, why it continues to rise slowly despite a tsunami of shale oil hitting the US storage depots.

For background, I've added three new links to my "Data Links" page:
Crude oil characteristics (Bakken, others)
The EIA provides a wonderful graph of crude oil characteristics at the second of the three links. Take a look at it. Note what's missing. Actually, two "oils" are missing: a) heavy oil; and, b) US unconventional oil (Eagle Ford, Permian, Bakken, and many others.

Heavy oil information at wiki:
According to World Resources Institute, concentrations of remarkable quantities of heavy oil and oil sands are found in Canada and Venezuela.
The U.S. Energy Information Administration (EIA) reported in 2001 that the largest reserves of heavy crude oil in the world were located north of the Orinoco river 270-mile long by 40-mile wide Orinoco Belt in eastern Venezuela. At that time Venezuela began authorizing "joint ventures to upgrade the extra-heavy crude resources."
Petroleos de Venezuela, S.A. (PDVSA) at that time estimated that there were 270 billion barrels of recoverable reserves in the area, the same amount as the conventional oil reserves of Saudi Arabia.
The Orinoco Belt in Venezuela is sometimes described as oil sands, but these deposits are non-bituminous, falling instead into the category of heavy or extra-heavy oil due to their lower viscosity. Natural bitumen and extra-heavy oil differ in the degree by which they have been degraded from the original conventional oils by bacteria. According to the WEC, extra-heavy oil has "a gravity of less than 10° API and a reservoir viscosity of no more than 10,000 centipoise." Thirty or more countries are known to have reserves.
For newbies, place the Venezuela and Canadian oil at the far left of the EIA graph linked above, and place the unconventional US shale oil (Eagle Ford, Bakken) at the far right.

I haven't seen anything being written about Bakken light oil being stored at Cushing affecting the price of oil. WTI is not Bakken light oil -- they are two different oils. Historically WTI was stored at Cushing and Cushing was where WTI was priced. Because Bloomberg removed free access to the site I no longer know, but I believe Bakken crude oil is priced at Clearbrook, MN.

How Fast Is Amazon Delivery? Incredibly Fast

This morning we slept in late. We got up about 8:30, I suppose.

After breakfast and getting oriented to a new day, my wife mentioned she was going to do a bit of laundry. I re-arranged a few things in the laundry room so she would have more space. I noted that we probably had enough laundry detergent for three or four more loads of wash.

That would have been about 9:30 a.m. I suppose.

At 10:10 a.m. there was a loud knock on the door. A man wearing civilian clothes, no doubt a contractor for the US Postal Service dropped off a heavy package from

[US Postal Service has contracted with for Sunday deliveries; I've blogged about that before. This is the second time in about three weeks that we've had an Amazon delivery on Sunday; both times the delivery man was in civilian clothes.]

I opened the Amazon box; I had forgotten ordering anything. This was in the box:

My wife broke out laughing. Just ten minutes earlier she had added "Tide" to her shopping list which was posted on the refrigerator.

In her mind, she added "Tide" to her shopping list, and ten minutes later, the USPS delivered her request via Amazon.

If you don't tell her, she won't know. She does not read the blog.