Sunday, March 15, 2015

Most Important News Tonight -- The NCAA March Madness Brackets Are Out -- March 15, 2015

The brackets are available.

NDSU is seeded #15 in the SOUTH, and will play #2 Gonzaga in the first round. After that game, NDSU will play #7 Iowa in the second round, and then #3 Iowa State ("sweet 16") before they take on #1 Duke ("the quarterfinals"). And then it's on to #1 Villanova coming out of the EAST in the semi-finals. Of course, the dream will probably -- and it's just a "probably" -- end when NDSU meets Kentucky in the finals.

For those unfamiliar with "NDSU" -- North Dakota State University -- 2nd year in a row to make the NCAA tournament

Reason #12,546 Why I Love To Blog -- March 15, 2015

Based on the headlines this is how I understand the issue:
  • Minnesota mandates a heck of a lot of renewable energy by 2025
  • Minnesota plans to meet those mandates on the back of North Dakota wind
  • but when the wind ain't blowing, Minnesota needs something to back up that non-blowing wind power
  • enter stage right: hydroelectric power from Manitoba (Canada)
  • Minnesota and Manitoba have an agreement for Manitoba to supply hydroelectic power to back up North Dakota wind farms
  • the deal hinges on regulatory approval of a new 500-kV transmission line, but the speculative gamble is one parties in both countries are willing to make
I doubt there will be any problem getting the 500-kV transmission line approved but a lot of parties will be upset to see this line in their backyard. 

This is reason #12,546 why I love to blog. Prior to blogging I never would have followed the renewable energy story and the need for back-up power.

Only The Most Obtuse Would Disagree

Breitbart is reporting:
Missouri Lt Governor: US Attorney General Eric Holder Incited Ferguson Mob Many Times 
The story:
Sunday on Fox News, Lt. Governor Peter Kinder said Attorney General Eric Holder “on many occasions” seemed to “be inciting the mob.”
Kinder  said, “He is sounding the right notes today, this afternoon. I just wish he had been more judicious and measured in his comments since the August 9. Because Mr. Holder came in and seemed on many occasions to be inciting the mob. He seemed to be putting his weight on the one side of the scales of  justice and not backing up law enforcement. And if he is now, you know, backing up law enforcement mode, then I will be among those cheering him. And I hope that’s the way he is from now on.”
When asked if he had spoken to Mr. Holder directly, Kinder said, “No, no, no, he doesn’t bend to speak with people like me. He comes into town and meets with one side. He met with the family of Michael Brown, and that’s fine that he met with them. But, he did not meet with the family of officer Darren Wilson or with his brother and sister officers to say I’m backing you up."

Futures Down Another Dollar, Now Below $44 / Gallon WTI -- March 15, 2015; Boston Breaks All-Time Seasonal Snowfall Record; Kennedys Take The Kids Sledding -- Might Be Last Time They See Snow

Breaking news, being tweeted now:
Boston breaks its all-time seasonal snowfall record with 2.9 inches falling in the city Sunday, reaching a total of 108.6 inches - @7News
Hey, It's Just Cacti

Some idle chatter. Re-posting this from an earlier post:
Another great article -- Renewable Energy: The Vision and a Dose of Reality. This is another great article regarding renewable energy posted back in 2012, and nothing has changed. From the article, observations like this:
Solar power. While sunlight is renewable — for at least another four billion years — photovoltaic panels are not. Nor is desert groundwater, used in steam turbines at some solar-thermal installations. Even after being redesigned to use air-cooled condensers that will reduce its water consumption by 90 percent, California's Blythe Solar Power Project, which will be the world's largest when it opens in 2013, will require an estimated 600 acre-feet of groundwater annually for washing mirrors, replenishing feedwater, and cooling auxiliary equipment
To put 600 acre-feet in perspective, back in late 2011, it was estimated that approximately 6 acre-feet of water was used to frack a Bakken well.

So, every year from here on out, enough water to frack 100 Bakken wells will be used annually to wash those mirrors, and that's just one solar farm.

So, some more idle rambling, specifically, a deeper look at that Blythe Solar Power Project, from wiki:
  • was to be world's largest solar farm
  • originally planned to be 1,000 MW using parabolic troughs
  • reduced to 485 MW using photovoltaics
Putting the 485 MW into perspective:
  • California has mandated that 33% of the state's electricity must be from renewable resources
  • to meet that mandate, 20,000 MW of renewable energy will be needed
485 / 20,000 = 2.5%.

I knew it was bad; I did not know it was that bad.

History of Blythe:
  • the California Energy Commission unanimously approved the project on September 15, 2010.
  • the Bureau of Land Management cleared the project to go ahead on October 25, 2010.[14] 
  • in 2011, the U.S. Department of Energy offered a $2.1 billion conditional loan guarantee to Solar Trust, to reduce the interest on the $2.8 billion cost of building the first half of the project; the offer was rejected by Solar Trust. 
  • in 2011, Solar Trust of America announced that the first half of the project would use photovoltaic panels instead of solar thermal power
  • Solarhybrid is in talks with First Solar for supply of photovoltaic modules.
  • in 2012, Solar Millennium tried to sell its stake in Solar Trust to other German solar energy developer, Solarhybrid; however, this deal collapsed after all three companies filed for bankruptcy protection.
  • in June, 2012, NextEra Energy Inc. acquired the project as the top bidder
  • in 2013, NextEra Energy submitted a proposal to reduce the project size to three 125 MW sections, and one 110 MW section, for a total of 485 MW; approval was granted in January 2014
  • has not yet started construction but with Kaiser Permanente agreements in hand (February, 2015), construction should begin by 2016 -- construction needs to get started by the end of 2016 to qualify for a 30% tax credit
  • developers have been given permission to begin mowing vegetation on 4,000 acres and transplant cacti before the nesting season starts for the area's breeding bird population; full approval for NextEra's construction program has not yet gotten approval 
So, now we have some data points:
  • 4,000 acres
  • 485 MW
  • 2.5% California's mandate  
At the link:
The Blythe site holds "relatively intact native habitat" whose conversion to an industrial solar facility can potentially harm nesting birds, especially if that vegetation is cleared while birds are actively nesting in the shrubs and cacti. 
Just 12 Cents More
For Minnesota:
  • 2009 estimated qualified renewable generation: 13%
  • 2010 renewable mandate: 15%
  • 2025 renewable mandate: 25%; 30% (Xcel Energy)
  • Xcel Energy must meet 25% of its standard from wind or solar by 2020 with a maximum of 1% from solar (sic)
Some advocates are now shooting for 40% by 2030, and it would add only 12 cents a month on the bills of consumers by 2030.
The expected concerns over higher utility rates was addressed by the report, which placed the extra cost at 12 cents a month on the bills of consumers by 2030. 
Wow, just 12 cents a month.

Is It Time For EOR In The Bakken? -- March 15, 2015 -- Bakken Rodeo Cowboys; Whose Side Is Kerry On Anyway?

This is a keeper. From Oilfield Review, Winter 2010/2011, a Schlumberger article, "Has The Time Come for EOR?" Written by geologists from : Shell Technology (Oman); Petroleum Development Oman; Sand Springs, Oklahoma; Denver, Colorado; Rice University Houston, Texas; Abingdon, England; Anadarko Petroleum, The Woodlands, Texas; and Abu Dhabi, UAE.

The link: comes up as a PDF. (If the link fails, google EOR Schlumberger Oilfield Review 2010 2011 -- it will probably come up as the first "hit.")

In addition to a discussion about current EOR technology, the article reviews EOR for the newbie (like me). 
Bakken Rodeo Cowboys

First, this nice article on Nathan Schaper, professional bull rider and volunteer fire fighter from south of Williston .... Grassy Butte, North Dakota, to be exact. Years and years ago we stopped for a moment on US Highway 85 going north near Grassy Butte so my mom could get out and see the world's largest porcupine. Not sure if it was the world's largest but it was huge. And it was dead. Roadkill.

And, if you have the time, google another professional bull rider, Stetson Lawrence, from Williston. He rode recently in the Ft Worth rodeo a few weeks ago. If you find his facebook page, scroll down to see his beautiful wife on the cover of a western magazine.

And only one song could fit so well:

Ro Deo Deo Cowboy, Jerry Jeff Walker

Whose Side Is John Kerry On, Anyway

One of the problems with President Obama's bucket list is that the president does not care about the impact, implications, outcome, or details of his policies as long as the headline is his. ObamaCare was the most well-known example. The bill was written by the insurance industry, the "water carried" by Senator Reid and Speaker of the House "we won't know what's in it until it's passed" Nancy Pelosi, and the bill passed when key Senators were "bought."

President Obama got the headline: ObamaCare passed; the details were unimportant. The means justified the ends. He checked off the most important item on his bucket list.

In global affairs, over at The Mideast Bureau, his second most important bucket list item is deposing Syria's Assad. (His #1 bucket item list in The Mideast Bureau is to see Netanyahu out of office). But times have changed. I thought about that earlier this morning when Don sent me a copy of this tweet:
John Kerry: US will have to negotiate with Syria's Assad for a political transition, is exploring ways to pressure him into agreeing to talks - @CBSNews
My reply: "Saddam Hussein was the worst of the worst ... we all agree he had to go, but interestingly enough, many Kerry supporters argue that removing Saddam made things infinitely worse for the US ... I assume the same will happen if Assad is deposed."

And that's the rub: if Syria's Assad is deposed tonight, ISIS takes over tomorrow. Remember: Syria is fighting the war against ISIS on Iran's behalf. No Syrian Assad? ISIS fills the void. 

It gets worse. In this week's issue of BloombergBusinessweek, the lead editorial "The US Can't Lead Lead From Behind in Iraq. Iran's active role in the fight against Islamic State is worrisome."

The other day I was talking to a self-proclaimed expert on the Mideast. He thought this was the best thing since sliced bread to see Iran leading the fight in Iraq against ISIS. Wow. This is an expert? He's written at least five books on the Mideast; he is a regular on the cable news shows, and he is an Israeli apologist.

Apparently SecState Kerry and President Obama also think Iran leading the fight in Iraq is the best thing since vetoing the Keystone XL. (Stopping the Keystone XL is on the president's bucket list, also.)

So, if we can just overthrow Syria's Assad .... as long as we don't mind ISIS taking Syria -- not a problem for President Obama -- that will be the next president's problem. I wonder if Hiillary supports ISIS taking Syria?

Twenty-Nine (29) Bakken Wells To Come Off Confidential List Monday; All But Three Will Go To DRL Status -- New Record -- Sunday, March 15, 2015; Minnesota Looks To Raise Amtrak Fares

Active rigs:

Active Rigs112190185205173

Wells coming off the confidential list over the weekend, Monday:

Monday, March 16, 2015
  • 24062, 505, Crescent Point Energy, CPEUSC Narcisse 8-5-158N-99W, Ellisville, 35 stages; 3.5 million lbs; middle Bakken, t12/14; cum 27K 1/5;
  • 24091, drl, MRO, VMR Trust 11-16TFH, Bailey, no production data,
  • 28414, drl, BR, Shenandoah 44-36MBH ULW, Keene, no production data,
  • 28683, drl, CLR, Leonard 2-12H, Northwest McGregor, no production data,
  • 28779, drl, BR, Hammerhead 11-26TFH, Sand Creek, no production data,
  • 28780, drl, BR, Hammerhead 21-26MBH, Sand Creek, no production data,
  • 28851, drl, American Eagle, Byron 4-4-163-101, Colgan, no production data,
  • 28886, drl, Zavanna, Gust 2-11 2H, Long Creek, no production data,
  • 29005, drl, XTO, David Federal 21X-20A, Lost Bridge, no production data,
  • 29120, drl, XTO, Eide 31X-29C, McGregor, no production data,
  • 29187, IA/SI, Hess, EN-Nelson-155-94-2833H-7, Alkali Creek, no production data,
Sunday, March 15, 2015
  • 26220, drl, BR, Harley 41-2TFH, Blue Buttes, no production data,
  • 27937, drl, SM Energy, Elway 1-32H, Camp, no production data,
  • 28269, drl, MRO, Moritz 11-30H, Reunion Bay, no production data,
  • 28778, drl, BR, Hammerhead 11-26MBH, Sand Creek, no production data,
  • 28787, drl, CLR, Bratlien 3-26H, Sadler, no production data,
  • 29188, drl, Hess, EN-Nelson-155-94-2833H-6, Alkali Creek,
  • 29235, drl, Statoil, Heen 26-35 8TFH, Todd, no production data,
Saturday, March 14, 2015 (pi day)
  • 24072, drl, Crescent Point Energy, CPEUSC Holmes 8-5-158N-100W, Winner, no production data,
  • 25858, drl, Statoil, Skarston 1-12 5H, Banks, no production data,
  • 26221, drl, BR, Harley 41-2MBH, Blue Buttes, no production data,
  • 28413, drl, BR, Shenandoah 44-36TFH, Keene, no production data,
  • 28786, drl, CLR, Bratlien 4-26H1, Sadler, no production data,
  • 29006, drl, XTO, David Federal 21X-20E, Lost Bridge, no production data,
  • 29066, 816, Hess, BW-Heidi Ho-149-99-3526H-4, Juniper, t1/15; cum 19K 1/15;
  • 29119, drl, XTO, Eide 31X-29G, McGregor, no production data,
  • 29143, 227, Murex, Bradley Robert 1-12H, Daneville, t1/15; cum 5K 1/15;
  • 29234, drl, Statoil, Smith Farm 23-14 4TFH, Cow Creek, no production data,
  • 29246, drl, MRO, Piatt 11-17H, Murphy Creek, no production data,
Comment: I have been blogging about the Bakken since 2007; the current blog dates back to 2009. In all those years, I have never seen a report in which 26 of 29 wells coming off the confidential list will go to DRL status, waiting to be fracked. This is a huge number. Much of it is due to operational constraints as a result of pad drilling. North Dakota requires that wells must be completed within a year of being drilled. It would not surprise me, if push comes to shove, that operators would perform an open hole frack with minimal proppant, call it a day, and then come back later and do a "proper" frack -- assuming they can't get a waiver or as they call it, "relief," from the NDIC to delay fracking for operational reasons. It's possible they could argue that the "one year" be defined as starting after the last well on a pad is drilled. That could give the operators and extra four to six to eight months, depending on how many wells are on a pad. Just idle chatter. I have no background or formal training in any of this. This is simply idle chatter. 

Minnesota Looks To Raise Amtrak Fares

If the Minnesota governor gets his way, Amtrak will raise their prices. The governor wants to tax the railroads that operate in Minnesota by at least $100 million. The railroads own the tracks and they will pass those additional costs on to their customers, including Amtrak which rents the time they spend on the tracks going through Minnesota. The Dickinson Press has the story but missed the impact.

Hold Unto Your Hats -- The Numbers Are Staggering -- March 15, 2015

Petroleum News has a very, very long essay regarding an NDSU study that shows just how much .... $43 billion ... oil and gas contributes to North Dakota's economy.

The numbers are incredible, but there are some observations and comments that some might find even more interesting.
Petroleum News is reporting (some numbers rounded):
  • North Dakota’s oil and gas industry contributed a whopping $43 billion to the state’s economy in 2013. 
Some data points:
  • every two years, a one-year period of economic activity in North Dakota is reviewed 
  • since these studies began in 2005, there has been a 750 percent increase in economic activity 
Four areas of impact:
  • exploration and development 
  • extraction and production 
  • transportation and processing 
  • infrastructure 
  • direct impact: $17 billion 
  • secondary impact across the state: $26 billion 
  • every dollar spent by the industry generated another $1.43 in additional business activity 
Exploration and development:
  • 2013: $7 million/well; $15 billion in total financial outlay for well development; 2,200 wells 
  • 2011: $9 million/well; $12 billion in TFOFWD, 1,271 wells 
  • 2013: $15 billion generates another $13 billion as it circulates through the state 
  • 2005: only $1.4 billion generated in addition to direct outlays 
  • each drilling rig: an economic impact of more than $100 million over CY2013 
Drilling vs production:
  • almost equal impact to the state's economy 
  • impact on economy will be driven more by production than by exploration going forward 
  • 2013 production: $15 billion gross business volume 
  • 2005 production: $2.7 billion GBV 
Transportation and processing transportation:
  • $3 billion impact 
  • infrastructure: $5 billion impact 
  • operators spent $3 billion, but only $1.5 in-state (North Dakota does not have the specialized equipment required 
Other comments:
  • low prices will extend the timeline to develop the oil resource 
  • 2013: 56,000 jobs directly to the industry 
  • 2005: 5,000 jobs directly related to the industry 
  • for newbies: the Bakken boom began in 2000 in Montana and the Bakken boom began in 2007 in North Dakota

Putting The Most Recently North Dakota Crude Oil Production Decline Into Perspective -- March 15, 2015

Motley Fool headline yesterday:
And So it Begins: North Dakota Oil Output Slides 3.3% as Oil Plunge Takes a Toll.
I did not read the article. But the headline caught my attention. The 3.3% decline in oil production in North Dakota refers to the production in January, 2015, compared to the production the previous month, December, 2014.

As noted, I did not read the article. I assume Motley Fool provided a good historical perspective.

I am sure that the Fool noted that production is always tough in the month of January (and all winter months) in North Dakota.

I am sure that the Fool noted that as production increases, it becomes more and more logistically difficult to increase production on a percent basis -- due to any number of factors. In fact, folks have been surprised that the Bakken boom -- increase in production month-over-month -- has lasted as long as it has.

I am sure that the Fool noted that in addition to the slump in oil prices, Bakken producers were facing state-mandated obstacles: a) conditioning Bakken crude oil before shipping by rail; and, b) flaring restrictions. Both can significantly affect production.

I was most curious how the January, 2015, production delta (on a percentage basis) compared to previous Januaries.

Generally speaking, one could expect a 3 - 5% increase in North Dakota oil production month-over-month in the early boom. But winters are difficult for the operators in the Bakken. Last January (2014), the month-over-month production increase was just over 1% compared to almost 4% the following May (2014). Again, considering that we are well over a million bopd, a 4% increase in production is --- well, it catches my attention.

These were the numbers early last year:

But what was the production in January, 2013, and January, 2012, when it was much easier to hit new production records?

Folks may remember that I was trying to predict when North Dakota production would go over 1 million bopd (by the way, of all non-advertising-supported blogs and news outlets, I was the first to predict the correct month, when North Dakota would go over the 1 million bopd milestone). I would provide the data and then put in my own estimate ("E") for the next 12 months. Once the data came in, I changed the "E" to actual results ("A").

These were the actual production numbers and increases/decreases in production in the months of January, 2012, and January, 2013:

Look at January, 2013 -- a decrease of over 4%. No slump in the price of oil, no state-mandated obstacles, and production month-over-month decreased by an astounding 4% when in good months production could increase by 6%.

January, 2012, did show a 2% rise in production. However, that was a paltry increase compared to the 4.8% rise in production the previous month (December, 2011).


Bottom line: all indications are that we will see significant declines in production going forward. However, the 3% decline in the most recent reporting month (January, 2015) is in line with previous Januaries.

November, December, January, February are tough months in the Bakken.

What amazes me is that January, 2015, was not significantly worse. January, 2015,was in-line with previous Januaries in a "qualitative" sense despite all the headwinds -- rigs being stacked; operators choking back on production due to oil rices; state rules on conditioning oil to be shipped by rail; and, strict state flaring rules.

What also amazes me is I have been posting the Director's Cut for several years now. When I first started blogging I didn't even know what the "Director's Cut" was, and furthermore, I didn't even realize how important they would become for a historical record.