Frack Sand Site In Wisconsin "Idled" -- September 15, 2015

Updates

September 22, 2015: BloombergBusiness with human interest story on spectacular fall of the fracking sand industry.  

In New Auburn, Wisconsin, a desolate, little outpost carved from the rolling pine-tree forests that run into Lake Superior, the collapse in oil is wreaking havoc on every aspect of the economy.

It’s not that there’s any oil here. None in fact for hundreds of miles around. What they’ve got is sand. Real good sand, piled high in giant mounds. And in what is a little-known offshoot of the shale oil revolution that swept across America over the past decade, the market for sand -- the grit that props open the rocks and makes fracking possible -- exploded too, transforming almost overnight what had been a sleepy industry that sold primarily to the likes of glass makers and golf courses. So when the shale boom went bust, it took down the sand industry with it. Prices have sunk almost a third to under $40 per ton.

Cheap sand makes for less expensive wells in the Bakken.

Remember when Mike Filloon said prices for fracking sand would go parabolic?

Original Post

 

Link here:

MARSHFIELD — The plunging price of oil is forcing a Texas-based company to idle its frack sand processing plant in the city. Completion Industrial Minerals CEO Tom Giordana contacted Mayor Chris Meyer earlier this week to inform him the company is laying off about 15 of its employees.

The company normally has a significant reduction in production during the winter months when it can't wash the sand because of winter weather. However, the company normally continues to dry and ship sand during the winter months.

This should please the environmentalists who will now contribute toward these employees' unemployment claims, food stamps, etc.

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Bakken Economy

Update: see first comment -- a reader noted that Amazon will open a fulfillment center in the Minneapolis area.

Original post: Meanwhile in Grand Forks, North Dakota, Amazon is hiring:

Internet retail giant Amazon is hoping to fill 30 new full-time positions to its customer service center in Grand Forks, the Seattle-based company said Monday.

Amazon said the hiring boost is meant to "support continued growth throughout the company's U.S. fulfillment network." The job entails communicating with customers via phone, email and online chats, according to a press release.

Amazon currently has 150 customer service associates in Grand Forks.

Remember, this is just across the river from the high-tax state of Minnesota. Also, Grand Forks is "ground zero" for the US drone research and testing program, and when it comes to drones, Jeff Bezos is all in.

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Vying For #2 Spot

Bloomberg/Rigzone is reporting:

In the race to supply crude to the world’s biggest energy user, it’s the tussle for second place that’s too close to call.

Russia, Angola and Iran are vying to be runner-up to Saudi Arabia as the top seller to China. The contest is set to intensify as Iran seeks to recover market share lost because of sanctions and the U.S. Congress debates a nuclear deal that’ll allow the Persian Gulf state to boost shipments.

China overtook the U.S. as the biggest importer of crude most recently in June, taking advantage of a 50 percent slump in benchmark prices over the past year to boost strategic reserves. With the Asian nation forecast to account for more than a quarter of global demand growth in 2016, the prize of becoming a top supplier will bolster the economic health of national producers that depend on energy exports for most of their budget revenue.

“Whether you’re number 2 or number 3, the numbers are very close,” Victor Shum, a vice president at IHS Inc., an Englewood, Colorado-based industry consultant, said by phone from Singapore. “In a globally oversupplied market, there is more competition for the growing Chinese pie.”

China is the biggest oil buyer in Asia, a region that the International Energy Agency estimates will use 23.4 million barrels a day in 2015, or about 25 percent of worldwide consumption. The Paris-based IEA predicts China will consume 10.9 million barrels a day this year.

Iran, the second-biggest producer in the Organization of Petroleum Exporting Countries before its nuclear program prompted the European Union to ban purchases of its crude in 2012, will boost production “at any cost” to reclaim market share, Oil Minister Bijan Namdar Zanganeh said Aug. 23. China is the Islamic Republic’s biggest customer, and Zanganeh has signaled it’ll target Asia for sales. Iran currently lags behind its rivals in shipments to China.

It should be remembered that President Barack Obama helped orchestrate Iran's oil exports to China at the same time the President a) killed the Keystone XL; and, b) continues to ban US crude oil exports. President Obama has also ceded the Arctic to Russia and others.