Thursday, September 24, 2015; Native Americans Wanted $10 Million/Mile For Pipeline Easement

Futures suggest Dow could drop below 16,000 today.

Active rigs:

	9/24/2015	09/24/2014	09/24/2013	09/24/2012	09/24/2011
Active Rigs	70	193	187	188	195

RBN Energy: Time is on Shell's side -- the latest offshore Gulf of Mexico "Stones" play to use FPSO.

Floating production, storage and offloading vessels—FPSOs, for short—allow for hydrocarbon production in waters too deep for conventional offshore platforms. While FPSOs have been in limited use around the world since the mid-1970s, they remain a relative rarity in the Gulf of Mexico (GOM), mostly because oil and natural gas has been available in shallower parts of the Gulf closer to shore. Now, Royal Dutch Shell will be taking a spanking-new FPSO into the deepest waters yet--9,500 feet, or almost two miles down--for its mammoth Stones development 200 miles off the Louisiana coast. Today, we look at the Stones project, the growing role of FPSOs, and the long-term perspective taken by exploration and production (E&P) companies in the GOM.

Crude oil production in the GOM has been rebounding gradually from two headline events of the past decade: Hurricane Katrina in August 2005 and the BP/Macondo disaster in April 2010. According to the U.S. Energy Information Administration (EIA), GOM production (mostly medium sour crude) averaged 1.5 million barrels/day (MMb/d) in the first six months of 2015, up from 1.4 MMb/d in 2014 but still off from the all-time peak of 1.56 MMb/d in 2009. In its Annual Energy Outlook report for 2015, EIA said it expects GOM production to continue rising through the end of the decade (even with lower oil prices) as deepwater and ultra-deepwater projects with long development cycles (including Shell’s Stones project) continue to come online.

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Back To The Bakken 

Bakken man camps dwindling to ghost camps.

West Coast to get Bakken oil via rail indefinitely.

Williston gets $27 million federal grant for airport relocation, expansion.

Fracking firms that drove oil boom struggle to survive.

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North Dakota set to extend deadline for flaring rules.

The state's oil companies flared 20 percent of the natural gas they produced in July, the latest month for which data are available. That went beyond current standards to flare no more than 23 percent.

The standards tighten to 15 percent in January, a goal the industry says is untenable.

Oneok's decision to cancel its Lost Creek pipeline and delays in federal approval for Hess Corp's Hawkeye pipeline dashed hopes the January standards could be met, Ness said.

Oil producers want two extra years to comply with the rules. Lynn Helms, who advises the NDIC as head of the state's Department of Mineral Resources, recommends a 10-month extension. Goehring, the NDIC commissioner, said he does not have a preferred timeline.

"That went beyond current standards ...." That's a funny way to write that.  

That Lone Creek Pipeline has an interesting story. It was all of 4.8 miles long but ONEOK couldn't get approval from Three Affiliate Tribes on the reservation. I can't recall if I previously reported that. The story is here:  

Oneok’s attempts to obtain right-of-way approval from the Three Affiliate Tribes to connect a 4.8-mile section of gas pipeline running from its Lost Bridge to Sand Stone Blue Buttes compressor stations were unsuccessful, which in turn prompted XTO Energy to request flaring exemptions from the North Dakota Industrial Commission for the gas from 143 wells that was slated to be sent to that pipe.

While a typical easement payment to a landowner runs between $50,000 to $75,000 per mile, according to the state’s Department of Mineral Resources Director Lynn Helms, the tribe rejected Oneok’s offer to pay nearly $10 million a mile.

“As opposed to a payment for use of the land,” Helms said, “they wanted a tariff on every mcf of gas that moved through that pipeline during the life of the pipeline and that was just a no-go with the operators.”

I think there's a word for that in the English language; not sure if there is a word for that in the Lakota language.

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China sitting on an "ocean" of diesel fuel.