What Some Of Us Will Be Talking About Friday -- September 25, 2014

Global Warming

Regular readers know the Germans have the highest electric rates in Europe except for Denmark. 

The Germans are going broke trying to save the world; they say their sacrifice is "their gift to the world."

But no good deed goes unpunished.

One volcano spewed more SO2 than all the SO2 spewed by all of Europe.

Not quite true.

The volcano spewed almost twice what the entire European continent spewed. IceAgeNow is reporting:

“The sulfur dioxide (SO2) emitted from the Holuhraun eruption has reached up to 60,000 tons per day and averaged close to 20,000 tons since it began,” writes Pall Stefansson on Iceland Review.

“For comparison, all the SO2 pollution in Europe, from industries, energy production, traffic and house heating, etc., amounts to 14,000 tons per day.

“It’s clear that no eruption [in Iceland] in the 20th century comes close to this one. We have to go far back to the 19th century, to find eruption as voluminous in gas emissions."

I hope the Germans aren't reading this. No good deed goes unpunished.

Adding insult to injury: snow in Romania -- and it's not even winter yet.

I can't make this stuff up.

The Wall Street Journal

Global anxiety roils markets. Really? What changed from a week ago?

Obama's attorney general resigns; to stay on until successor confirmed.

Coca-Cola soft drink sales have risen more than 2% after new "Share a Coke" campaign began this summer; bottles and cans are personalized with the names of individuals.

Now it's Chrysler: recalls 350,000 vehicles over a defective ignition switch. What's with all these defective ignition switches?

The Los Angeles Times

Drought has California communities on the brink of waterlessness; and yet I have read not one story on any water restrictions for golf courses (other than watering only at night).

Governor Brown signs bills benefiting prison inmates. Why not?

State Farm dumps pitchman Rob Schneider over anti-vaccine views.

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A Note To The Granddaughters

I remember seeing and enjoying the 2005 movie, The World's Fastest Indian, starring Anthony Hopkins, on the big screen. I don't recall under what circumstances I saw the movie, where I saw it, or with whom I saw it. My wife says she had never seen until watching it last night on DVD.

The other day I was ordering some "stuff" from Amazon and needed to "spend" another $1 or thereabouts to qualify for free shipping. Nothing really came to mind, but The World's Fastest Indian was in my cart "to be considered later." So, without a lot of thought, ordered it. It cost about $9.

It turned out to be a great choice. We watched it last night; my wife loved it. Tonight while May watches something else on television, I am watching the "special features" on the DVD. The "special features" included the 1971 documentary of Burt Munro and his motorcycle. That alone was worth the price of the DVD. Two other specials included "making of the movie," as well as the director's commentary.

It's a great movie. Highly recommend.

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YouTube Fugue

I have another website, "YouTube Fugue," whiere I seldom post any more. The site actually gets a fair number of hits. As I state at the blog:

After midnight I start with a random song on YouTube.com which leads me to another and then another. Later, sometimes hours later, I end up somewhere not knowing how I got there. Often I am in a fugue state. I am sure I am not alone.

I was reminded of that again tonight -- one can connect the dots from the note above -- The World's Fastest Indian to the video below with one intermediate dot/YouTube video -- hint: it's 28-minute video; if you find it, "fast forward" to 6:56.

Blue Velvet, Lana Del Rey

Miscellaneous Energy News -- September 25, 2014

This is not an investment site. Do not make any financial or investment decisions based on what you read here or think you may have read here.

Tallgrass Energy Partners announces potential expansion of crude oil pipeline system: Co announced that it is pursuing a potential expansion of its crude oil pipeline system to transport growing production in areas around its existing system receipt points. These areas include the Denver-Julesburg Basin in northeast Colorado and the Niobrara and Codell formations located in northeast Colorado and southeast Wyoming. Pony Express is also pursuing the expansion from Guernsey, Wyoming to receive additional Bakken Shale crude oil from its existing joint tariff partners and to accommodate growing Powder River Basin production. Discussions with prospective shippers are in progress concerning the terms of binding precedent agreements that, if executed, would result in such shippers becoming committed shippers on the expansion project.

• The proposed expansion, which would be expected to be operational in the second half of 2016, involves the construction of new pipeline facilities to increase the current capacity of the Pony Express crude oil pipeline system by up to 400,000 barrels per day.

I have several posts on Tallgrass and Pony Express, including:

• update, July 25, 2013
• Keystone is dead; Harold Hamm sees work-around
• RBN Energy, May 15, 2014

CBR And Other Rail-Related Stories -- September 25, 2014; Don't Whine For Me, Mr Bakken

Updates

September 27, 2014: another story to add to the list of those whining about CBR but not demanding more pipeline. The Dickinson Press is reporting:

Runaway oil production could slow road traffic as drivers face longer delays to cross train tracks in many congested regions, a U.S. study released on Friday predicted.

Oil, coal and grain shipments are taxing the national rail grid as the deliveries of those commodities are expected to climb along with commercial shipments in the coming years, according to the report from the Government Accountability Office, an investigative arm of Congress.

Freight movements on the tracks are due to rise 51 percent over 2007 levels by 2040, according to the Transportation Department, and so exceed 28 billion tons per year.
One factor is oil train deliveries out of North Dakota’s energy patch that neared 250,000 carloads in 2012 compared with roughly 10,000 in 2007, according to the study.

The increased oil shipments will translate into tie-ups at highway-rail crossings, though the study said it was hard to judge what areas of the country would be most affected.

As soon as I saw "runaway" -- which, by the way, was the first word in the story -- I knew it would be another "whining" story. Note also the dateline of the story (Washington, DC): this was no doubt sent out by some "advocacy group" disguising the "press release" as a story.

"... it was hard to judge what areas of the country would be most affected." Well, one could start with the northern tier, Minnesota to Washington State, and then go from there. I can't make this stuff up.

Original Post

Marketplace is reporting:

The electric utility that serves the Duluth region is mothballing four coal-powered generators, and not because the Environmental Protection Agency told it to.

No, Minnesota Power is idling these generators for three months because the railroad isn’t delivering enough coal. Railroads are crazy busy— carrying oil from North Dakota for one thing— and the delays are driving their customers nuts. 

Al Rudeck is the vice president of strategy and planning for Minnesota Power. The Burlington Northern Santa Fe railroad has delivered the utility’s coal for decades. I asked him: Has this kind of thing happened before?

"This is unprecedented," he said. "We’ve never had to shut our units off because we can’t get the coal we need. This year they’ve had a lot of challenges on the rail system, in terms of congestion, weather, and a lot of business."

Railroads have also had a lot of unhappy customers.

Farmers can’t get a bumper crop to market.

On some days, according to the Alliance of Automobile Manufacturers, car-makers have had as many as 200,000 vehicles sitting outside factories, waiting to be picked up by trains. 

That's interesting about the auto-makers. I posted that same prediction some time ago; this is the first time I've seen the "predication" "validated." Don't whine for me:

Don't Cry For Me, Argentina; Evita, Madonna
Don't cry for me, Minnesota. The Minnesota and Iowa farmers have pretty much decided they prefer CBR instead of crude oil pipelines. The Dickinson Press is reporting the Minnesota PUC took the unusual step to further complicate any movement on this issue:

An official of the union representing workers who hope to help build an oil pipeline through northern Minnesota is raising alarms over regulatory delays.

David Barnett, a special representative to the United Association of Journeymen and Apprentices of the Plumbing and Pipe-Fitting Industry, said Wednesday a recent decision by a Minnesota regulatory board to look into alternate routes could put Enbridge’s Sandpiper pipeline in jeopardy.

The Minnesota Public Utilities Commission voted earlier this month to study the environmental implications of six system alternatives for the pipeline, which would carry Bakken crude oil from western North Dakota to Clearbrook, MN, and then Superior, WI.

“We want it to be the best environmental route for the state of Minnesota,” Barnett said.

“But we don’t think that this course of action is geared at finding the best environmental route.”

The PUC also separated the Certificate of Need application from the route-permitting process, which are typically considered jointly.

Enbridge spokeswoman Lorraine Little stopped short of saying the $2.6 billion project was at risk, but said the company expects it to be delayed.

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A contributor to another board had some positive news with regard to BNSF efforts to relieve the logjam and shortage of coal reaching those Minnesota power plants:

Deliveries will be increasing shortly in my opinion.  I live along the Burlington Northern southern mainline in Montana and ride my bicycle along a couple hundred miles of their routes. 

BNSF started new sidings in 4 locations between Fallon, MT, and Forsyth, MT (80 highway miles), and have completed 3 for sure now.  

In addition, BNSF has installed new routing gear at Terry, MT, to remotely switch trains at 40 mph from the west to either: a) the old Milwaukee tracks heading east through southern North Dakota; or, b) northeast into northwest North Dakota and the Bakken-Three Forks shale developments.

There were large numbers of brand new Cat/Deere excavators, scrapers, etc at each of those sites.  

Then last week end I took the Amtrak train east from Wolf Point, MT, to Minot, ND.  In one spot I saw 2 brand new Cat backhoes -- I no longer know the numbers but they would have been about 225's when I used them a lot and 5 comparable Deere backhoes -- not a scratch on them.  

The Amtrak schedule has been lengthened to give more time to get through the construction areas plus Amtrak warns of up to 6 hour delays.  My train managed to make up enough time for the extended schedule coming in less than an hour late each way.  

From Williston east, there is now double track most of the way.   And Amtrak is rerouted away from Rugby and Grand Forks as those tracks are in the process of being upgraded -- I suspect those would go into Duluth.  

Last year the mines in Colstrip on the southern route were not even willing to price low enough to get any business.  The tracks which carried coal north from Colstrip mines to Forsyth and the main BNSF track sat idle with excess coal cars piled up on that single line.  Trainloads of coal did come through Forsyth, Miles City, Terry, but not as many as we are used to.   

I strongly suspect BNSF will be capable of carrying at least twice the freight on the two routes which was carried in past years in just a few more weeks.  

We don't see nearly as much oil going west as coal going east, but with longer sidings, they should be able to move trains much more effectively.   

Capitalism works wonders--it just takes a bit of time.

US Domestic Natural Gas Wells -- Initial Production In The Marcellus / Utica

This is for me and for newbies who do not understand natural gas. I have a feeling for 24-hour IPs, 30-day initial production, and EURs for on-shore domestic (US) crude oil wells.

However, until recently, I had no clue when it came to initial production for on-shore domestic (US) natural gas wells, but I am starting to get a feeling based on various reports in the past 24 hours.

If I remember, I will post the links later that bring me to these observations:

• the average initial production of natural gas wells in the US east (Marcellus, Utica): 8 million cubic feet per day
• a recent natural gas well in the Utica reported by Mark Perry in a footnote to a recent post: 30 million cubic feet per day
• a natural gas well in the Marcellus reported in the last 48 hours: 40 million cubic feet per day

So, just out of curiosity, what have been the IPs for natural gas for some Bakken wells (file number, IP natural gas mcf -- I assume the "m" is 1,000)?

• 25000, 669 m (669,000 cubic feet)
• 24999, 535
• 24998, 1,565
• 24997, 1,820
• 24996, 1,541
• 24995, 93
• 24994, 1,393
• 24993, 2,952
• 24992, 2,736
• 24991, 2,834
• 24990, 1,117
• 24989, unreported, 
• 24988, 3,306
• 24987, 2,912
• 24986, 3,087
• 24985, 1,831
• 24984, 2,154
• 24983, 2,238
• 24982, 2,992
• 24981, 2,559
• 24980, 2,894 

Magnum Hunter Resources is reporting:

Magnum Hunter Resources announced today that the Company's 100% owned Stewart Winland 1300U well located in Tyler County, West Virginia was placed on production last weekend. The Company's first Utica Shale well drilled and completed in the State of West Virginia and the most southeastern well in the entire play tested at a peak rate of 46.5 MMCF of natural gas per day (~7,750 BOE per day) on an adjustable rate choke with 7,810 psi FCP and has been flowing to sales through the Company's Eureka Hunter Pipeline system. The Stewart Winland 1300U well was drilled and cased to a true vertical depth of 10,825 feet with a 5,289 foot horizontal lateral, and successfully fraced with 22 stages.

46,500,000 feet / 7,750 boe = 6,000.

Data points:

• West Virginia
• Utica shale
• most southeastern well in the entire Utica shale play
• horizontal fracking; short horizontal; 22 stages

That has been the conversion factor I was using, also: 6,000 to convert "mm cf natural gas" to bbls of oil."

From Mark Perry:

As another example of surging production and ongoing productivity gains for new wells, I learned from an energy industry insider last night (on/about September 22, 2014) in Houston that a prolific, new shale gas well in the Utica Shale region has delivered an initial production volume of 30 million cubic feet of natural gas per day, almost four times the 8 million cubic feet per day new-well average in the Marcellus.

Dead Or Just Delayed? September 25, 2014

Later, I will post a couple of stories regarding CBR and the Enbridge Sandpiper Bakken crude oil pipeline, but for now, some "poll" action.

First, closing out this poll: does it surprise you that new CBR terminals are still being built in North Dakota?

• yes: 32%
• no: 68%

So, the new poll: is the Enbridge Sandpiper pipeline dead or just delayed?

Obviously we won't know for quite some time, but it's a snapshot in time. 

Thirteen (13) New Permits; 3 Of 5 Bakken Wells To Go To Drill Status Friday; September 25, 2014

Active rigs:

	9/25/2014	09/25/2013	09/25/2012	09/25/2011	09/25/2010
Active Rigs	192	186	187	195	141

Wells coming off the confidential list earlier today have been posted; see sidebar at the right.

Wells coming off the confidential list Friday:

• 27341, drl, CLR, Vachal 9-27H2, Alkali Creek, no production data,
• 27470, drl, Petro-Hunt, Moody 159-94-15B-22-3H, North Tioga, no production data,
• 27568, 1,797, MRO, Lewis 44-22H, Chimney Butte, t6/14; cum 25K 7/14;
• 27746, drl, XTO, Willey 31X-3D, West Capa, no production data,
• 27779, 53, Enduro, NSCU R-711-H2, Newburg, Spearfish/Charles, t8/14; cum --
• 27909, 618, Hess, LK-M Elisabeth-147-97-1522H-5, Little Knife, t8/14; cum --

Thirteen (13) new permits --

• Operators: Liberty Resources (6), QEP (3), Oasis (3), BR
• Fields: McGregor (Williams), Grail (McKenzie), Missouri Ridge (Williams), Blue Buttes (McKenzie),
• Comments:

Random Update Of Halcon's Fort Berthold 148-95-27B-34-5H In Eagle Nest -- September 25, 2014

Random update:

• 25209, 3,719, HRC, Fort Berthold 148-95-27B-34-5H, Eagle Nest, 32 stages, 4.8 million lbs sand/ceramic; spacing unit, 1240 acres; t4/14; cum 97K 7/14;

NDIC File No: 25209
Well Type: OG     Well Status: A     Status Date: 4/12/2014     Wellbore type: Horizontal
Location: SESW 22-148-95     

Footages: 6 FSL 2216 FWL     Latitude: 47.617057     Longitude: -102.770303
Current Operator: HRC OPERATING, LLC
Current Well Name: FORT BERTHOLD 148-95-27B-34-5H
Total Depth: 20618     Field: EAGLE NEST
Spud Date(s):  8/23/2013 
Completion Data
   Pool: BAKKEN     Perfs: 10927-20618     Comp: 4/12/2014     Status: F     Date: 4/12/2014     Spacing: 2SEC
Cumulative Production Data
   Pool: BAKKEN     Cum Oil: 96533     Cum MCF Gas: 90146     Cum Water: 48583
Production Test Data
   IP Test Date: 4/12/2014     Pool: BAKKEN     IP Oil: 3,719     IP MCF: 3034     IP Water: 1694

Monthly Production Data

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	7-2014	31	27178	27042	13651	30237	25238	4781
BAKKEN	6-2014	30	32446	32446	15491	31592	20869	10513
BAKKEN	5-2014	31	21439	22207	12039	14588	14338	33
BAKKEN	4-2014	13	15470	14449	7402	13729	9665	3973

Random Update Of BR's Washburn 41-36TFH And Washburn 41-36MBH In Charlson Oil Field -- September 25, 2014

Random update of;

• 25678, 2,976, BR, Washburn 41-36TFH,  Charlson, 30 stages; 3.3 million lbs sand/ceramic, t1/14; cum 105K 7/14;

NDIC File No: 25678    
Well Type: OG     Well Status: A     Status Date: 1/22/2014     Wellbore type: Horizontal
Location: NENE 36-153-95     

Footages: 1275 FNL 300 FEL     Latitude: 48.034711     Longitude: -102.828851
Current Operator: BURLINGTON RESOURCES OIL & GAS COMPANY LP
Current Well Name: WASHBURN 41-36TFH
Elevation(s): 2335 KB   2310 GR   2310 GL     Total Depth: 20148     Field: CHARLSON
Spud Date(s):  7/21/2013
Completion Data
   Pool: BAKKEN     Perfs: 10889-20148     Comp: 1/22/2014     Status: F     Date: 1/23/2014     Spacing: 2SEC
Cumulative Production Data
   Pool: BAKKEN     Cum Oil: 105023     Cum MCF Gas: 131931     Cum Water: 21921
Production Test Data
   IP Test Date: 1/23/2014     Pool: BAKKEN     IP Oil: 2,976     IP MCF: 4536     IP Water: 103

Monthly Production Data

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	7-2014	31	22073	22057	6811	29984	18573	11411
BAKKEN	6-2014	30	20321	20297	4435	28245	16098	12147
BAKKEN	5-2014	31	22191	22270	4142	25732	16174	9558
BAKKEN	4-2014	30	21324	21368	3119	23342	22288	1054
BAKKEN	3-2014	12	12377	12283	1276	13351	11775	1576
BAKKEN	2-2014	0	0	0	0	0	0	0
BAKKEN	1-2014	10	6737	6478	2138	11277	0	11277

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Random update:

• 25679, 2,800, BR, Washburn 41-36MBH, Charlson, 30 stages; 3.2 million lbs sand/ceramic, t1/14; cum 98K 7/14;

NDIC File No: 25679    
Well Type: OG     Well Status: A     Status Date: 1/16/2014     Wellbore type: Horizontal
Location: NENE 36-153-95     

Footages: 1320 FNL 300 FEL     Latitude: 48.034588     Longitude: -102.828852
Current Operator: BURLINGTON RESOURCES OIL & GAS COMPANY LP
Current Well Name: WASHBURN 41-36MBH
Total Depth: 20294     Field: CHARLSON
Spud Date(s):  7/22/2013
Completion Data
   Pool: BAKKEN     Perfs: 10731-20294     Comp: 1/16/2014     Status: F     Date: 1/17/2014     Spacing: 2SEC
Cumulative Production Data
   Pool: BAKKEN     Cum Oil: 97832     Cum MCF Gas: 135209     Cum Water: 20497
Production Test Data
   IP Test Date: 1/17/2014     Pool: BAKKEN     IP Oil: 2,800     IP MCF: 5640     IP Water: 287

Monthly Production Data

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	7-2014	31	23402	23412	3830	33737	22231	11505
BAKKEN	6-2014	30	23797	23730	4203	32120	19034	13086
BAKKEN	5-2014	30	22269	22178	4694	29962	17550	12412
BAKKEN	4-2014	11	9626	9840	1930	11707	10659	1048
BAKKEN	3-2014	12	12610	12257	1210	16682	14466	2216
BAKKEN	2-2014	0	0	0	0	0	0	0
BAKKEN	1-2014	16	6128	6128	4630	11001	0	11001

Random Update Of The XTO Marlene 42X-20H Well in Blue Buttes -- September 25, 2014

Random update:

• 25551, 4,434, XTO, Marlene 42X-20H, Blue Buttes; 30 stages; 3.5 million lbs sand; "difficult to drill"; t2/14; cum 154K 7/14; 

NDIC File No: 25551    
Well Type: OG     Well Status: A     Status Date: 1/11/2014     Wellbore type: Horizontal
Location: SENE 20-150-95     

Footages: 1625 FNL 327 FEL     Latitude: 47.799627     Longitude: -102.856531
Current Operator: XTO ENERGY INC.
Current Well Name: MARLENE 42X-20H
Total Depth: 20870     Field: BLUE BUTTES
Spud Date(s):  7/14/2013
Completion Data
   Pool: BAKKEN     Perfs: 11020-20870     Comp: 1/11/2014     Status: F     Date: 2/8/2014     Spacing: 2SEC
Cumulative Production Data
   Pool: BAKKEN     Cum Oil: 153907     Cum MCF Gas: 165681     Cum Water: 33586
Production Test Data
   IP Test Date: 2/8/2014     Pool: BAKKEN     IP Oil: 4434     IP MCF: 6276     IP Water: 1165

Monthly Production Data

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	7-2014	31	20149	20151	2882	22156	13397	8705
BAKKEN	6-2014	30	18858	18856	2767	17844	10681	7106
BAKKEN	5-2014	30	19227	19258	2982	19735	14897	4787
BAKKEN	4-2014	30	22729	22075	3774	24061	2613	21391
BAKKEN	3-2014	31	27638	27729	4840	34812	735	34016
BAKKEN	2-2014	24	39554	39896	16341	47032	0	46982
BAKKEN	1-2014	21	5752	5125	0	41	0	0

Thursday -- September 25, 2014; Unemployment Claims Surge; Natural Gas Fill Rate Very Good At "97"

Important: I missed this article, posted earlier over at SeekingAlpha. Richard Zeits talks about CLR's most recent corporate presentation. I will come back to this later. A big "thank you" to a reader for alerting the article to me; I had missed it. 

Active rigs:

	9/25/2014	09/25/2013	09/25/2012	09/25/2011	09/25/2010
Active Rigs	193	186	187	195	141

RBN Energy: a must-read for those interested in the Niobrara. Again, these articles will require a subscription or a password later on down the line.

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Jobs Report

Waiting for the spin. Yes, here it is:

The number of people seeking U.S. unemployment benefits increased last week after falling sharply two weeks ago. Despite the rise, the level of applications remains near pre-recession levels, a sign that hiring will likely remain healthy.

So, the number of claims surge, and it's seen as a sign that hiring "will likely remain healthy." Okay.

The four-week average:

Weekly unemployment benefit applications rose 12,000 to a seasonally adjusted 293,000, the Labor Department said Thursday. Yet the four-week average, a less volatile measure, fell for the second straight week to 298,500.

The four-week average fell because of the numbers last week, which were never explained.

Reuters, of course, always has the best spin, finding the silver lining in another dismal report:

The number of Americans filing new claims for unemployment benefits rose less than expected last week, suggesting an acceleration in job growth in September.

Ah, yes, the ever optimistic "less-than-expected" phrase.

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Waiting For Godot

Watch for the weekly natural gas fill rates. The number is 97. A great number. EIA link here.

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It Passed

Yes, the LA City Council did pass the bill requiring larger hotels to pay a minimum wage of $15.37/hour. Whether or not the affected hotels will cut employees, many of the current employees will lose their jobs.

Hotel managers will see a pool of better qualified applicants and will replace their marginal employees with better qualified employees. At $15.37 the hourly scale now becomes very, very competitive to staying home and living off welfare, or leaving other lower-paying jobs like McDonald's to see work at the hotels paying almost twice what others might be paying.

We won't see it in the news because "numbers" won't be affected.

For day labor and landscaping, it's very possible hotels will contract that work out. Contractors "hire" undocumented laborers on street corners across southern California.

At $15.37/hour the hotel managers will expect more productivity/employee.

Read more here: http://www.newsobserver.com/2014/09/25/4180327/applications-for-us-unemployment.htm#storylink=cp

Read more here: http://www.newsobserver.com/2014/09/25/4180327/applications-for-us-unemployment.html#storylink=cpy