Wednesday, September 9, 2015

Third Impressions, The Bakken -- September 9, 2015

A big "thank you" to readers for hanging in there despite minimal blogging the past couple of days.

I took my semi-annual trip back to the Bakken. For those who don't know, I grew up in Williston, the heart of the Bakken, left home after high school, and seldom returned until I retired from the US Air Force a few years ago and now return twice a year. (It is interesting that the year I retired from the USAF is the first year of the North Dakota Bakken boom. Purely coincidental.)

I left Dallas-Ft Worth metroplex on Sunday afternoon, about 4:00 p.m. I drove straight through, stopping two times for short naps, arriving in Rapid City area early Monday afternoon. I did not want to stop in Rapid City, so I drove the 50 miles up to my grandfather/grandmother's homestead a mile south of Newell, South Dakota. There are not motels in Newell, so I drove over to Belle Fourche -- I did not want to drive all the way back to Sturgis -- and found the motel where Lucille Ball and Desi Arnaz ("I Love Lucy") probably spent their honeymoon back in the 1950s. The motel had no wi-fi, but every room apparently had a wonderful micro-television mounted on the wall above the refrigerator.

The next morning, I learned the "world's biggest biker bar," the Full Throttle in Sturgis burned to the ground overnight. I had driven by it the night before. It's hard to believe, one moment it's there, one moment it's gone. CNN says:
It held as many as 15,000 people on a rally night, owner Michael Ballard said on the bar's website. One employee said on a really busy night as many as 20,000 people would come in. 
Fortunately, the fire occurred after this year's Sturgis rally.

Tuesday, I drove to Bowman where I spent the night with Don and Kathy (I said I wouldn't name names). I had a most wonderful afternoon watching a "real" cowboy oil a museum saddle. The twenty-minute "job" took about two hours -- it appears that the reason it takes so long to oil a horse saddle is because the cowboy has a lot of stories to tell if there is an audience. This particular cowboy was not a particular fan of the EPA or the current administration so most of the stories he told I can't repeat.

He did tell us about a recent child neglect or abuse case in the county. Apparently, over at XXXXX XXXX (I can't name the town), a little baby was left in the back seat while the mom or the dad or whoever was babysitting the baby went into the store to buy a case of beer. When he/she came back out, he/she threw the case of beer in the back seat, forgetting there was a baby on the seat.

Some miles down the road, the car was stopped, and law enforcement took control of the situation.

When the story was first told, the first question was what happened to the beer, but the real issue was how badly the baby had been injured.

It turns out the baby was fine. The cowboy said the case of beer was Lite beer.

And folks wonder why I drive back to the Bakken every so often.

Speaking of cowboy jokes, this is a great article on intermittent energy for Californians


During the boom, lines stretched out the doors of the few restaurants in Williston. It sometimes took an hour or longer to get served. But now, that is not an issue. There are now many, many new restaurants -- including Famous Dave's, Buffalo Wings, and everything in between. The question, now, is whether they will all make it. The boom is over and the question is, are there to many restaurants to support the "new" Williston?

I don't know.

Tonight I'm at Fuddruckers. I came here because they have great food and, more importantly, they have wi-fi. When I came in at 6:00 p.m. it was empty. Now, by 7:45 p.m. it was fairly active. Easily enough to keep it open. It's Wednesday night, Bible night in the Deep South, but up here, I don't know. I was just impressed how busy Fuddruckers is in the middle of the week. 

It's also the end of tourist season, so these folks can't all be tourists. During the boom, those coming to restaurants were 90% male and all working in the oil and gas industry. Tonight, almost every other table is a family, with an average of 2.5 children.

Next year at this time we will know who the survivors are. This will go down as the year the Bakken caught its breath between the boom and the (coming) mini-boom.

One of the things I think folks forget is, "if they build it, they will come." Even before the boom, Williston had a pretty good draw from eastern Montana and Canada. But now, with the new Menards, and the new Sportsman's Warehouse (next to Menards), the draw will be even bigger. During the winter months, a lot of folks in the region take weekend vacations to local motels with swimming pools, and instead of folks driving all the way to Minot or Bismarck, they are only going to have to drive as far as Williston. It's going to be interesting to see how this plays out.

One can compare Williston, 2015, to Williston, 2012, or one can compare it to Williston, 1967. In all cases, there is "no comparison."

Something To Keep Your Eyes On -- Eagle Ford Condensate Being Exported -- September 9, 2015

This is probably "business as usual," but it's news to me.
Platts is reporting:
The vessel Minerva Zenia is set to load from the US Gulf Coast to the Mediterranean with options to the UK, carrying an export of Eagle Ford condensate from the US, a fixture report showed Wednesday.
The foreign-flagged Aframax-sized ship, set to load September 20 and chartered by Petro-Diamond, Mitsubishi's wholly owned California trading arm, is currently in the Cayo Arcas terminal off the coast of Mexico.
Several fixtures for condensate cargoes have been seen from the US Gulf Coast since April. According to shipbrokers' reports and Platts cFlow, two of the runs have been completed and two tankers are en route.

No Child Left Behind In The Bakken; Children Being Left Behind In California Schools -- September 9, 2015

The Dickinson Press is reporting:
Thousands of U.S. schools sit along rail corridors used to carry toxic substances such as crude oil and would be at risk in the event of a derailment, an environmental group said on Tuesday as it called for a temporary halt on oil trains.
ForestEthics said its analysis of U.S. Department of Education data show nearly 15,000 schools with 5.7 million students sit inside the so-called 'blast zone', the one-mile area along railroad tracks the U.S. Department of Transportation (DoT) recommends be evacuated in case of crashes.
Looks like "they" gotta move a lot of schools. Another good reason for new charter schools and home schooling. These public schools are dangerous. Columbine comes to mind. 

For The Archives

The Huffington Post is reporting:
California lawmakers negotiated frantically behind the scenes on Tuesday over the fate of several proposals to dramatically reduce the state's use of fossil fuels and slash the amount of greenhouse gases that legally could be emitted.
The measures, part of an environmental agenda championed by state Senate Democratic Leader Kevin De Leon, aim to require public utilities in California to use renewable resources for half the energy they provide by 2030, and mandate a 50 percent cut in the use of petroleum in cars and trucks by the same year.

Equally controversial is a proposal floated last week by Democratic Governor Jerry Brown that drivers pay $65 per year in additional fees to help pay for road repairs in the state.
Kevin's senatorial district is the city of Los Angeles.  I hope he succeeds in getting all the cars off the Los Angeles city streets and roads. But something tells me if the state can't even succeed in getting an additional $65 out of drivers, there's no way drivers are going to give up their cars.

[Update: the provision to cut petroleum use by 50% was removed from consideration by the California legislature. The press, Governor Brown, and Democratic supporters said "fierce opposition from the oil and gas industry" scuttled the bill. LOL.]

No Child Left Behind In The Bakken

From The Bismarck Tribune:
Oil prices may remain in the dumps, but it’s not having the impact on school enrollments many feared.
“It’s not bad considering everyone’s ‘the sky is falling’ mentality,” said Suzanne LaMontagne, secretary for the Divide County School District.
In fact, seven schools in the northwestern corner of the state are reporting new families to replace those who left.
This has probably been the most stable year we’ve had in the last five years,” said Superintendent Sherlock Hirning, of Divide County.
Based on oil activity, Hirning reported a decrease of three students.
“It’s interesting that we have 22 new students here that were not here over the summer, and 12 that left,” he said.
The story is much the same in Lignite, said Burke Central Superintendent Sherry Lalum.
“We lost a bunch, but we also gained some," she said.
With recent talk of declining oil revenue, layoffs and cutbacks in new drilling, many schools weren’t expecting new faces.
But Westby, Montana, enrolled 12 new students and was expecting four more.
Californian Children Being Left Behind

The Los Angeles Times is reporting:
Echoing a nationwide downward trend, most California students are falling short of state learning targets and are not on track to succeed in college, according to the results of new, more rigorous standardized tests released Wednesday.
And the picture is even worse for L.A. Unified, the nation's second-largest school system, than it is for the state. Across California, 44% of students achieved targets for their grade in English, while 34% did so in math. In L.A. Unified, the figures were 33% and 25%.
The results show our starting point,” state Supt. of Public Instruction Tom Torlakson said, “a window into where California students are in meeting tougher academic standards that emphasize critical thinking, problem solving and analytical writing.
I am encouraged that many students are at or near achievement standards. However, just as we expected, many students need to make more progress.”
 What they need to do is add a third test: Spanish. That would move the needle. 75% would pass, and would raise the average of the overall test score.

Second Impressions Of The Bakken -- September 9, 2015

Two of the busiest areas in the Bakken are the areas around Watford City, in northeast McKenzie County, and east of Williston, in the Stockyard Creek oil field and surrounding oil fields.

I have not checked out the area around Watford City and I may not get down there during this short trip to the Bakken, but I did take a drive out east of Williston this afternoon with my dad. With all the activity that has occurred in this area, I expected to find the prairie covered with wells and pads. Hardly.

I almost had to laugh.

I don't think folks have any idea how much work still needs to be done. Despite an incredible amount of drilling in this area since the boom began in 2007, the area along the highway, doesn't appear a whole lot different now than it did then. Yes, one can see a lot of wells from ND Highway 1804, and a few miles farther in (both north and south, but mostly north), there are even more wells. But in the big scheme of things, I still see huge areas of open prairie, with one or two wells on a pad per section. There will eventually be upwards of 24 wells in each of these 1280-acre drilling units targeting the middle Bakken and various benches of the Three Forks.

There is so much work to be done.

Traffic? There were very few big rigs on the road east of Williston going out to Stockyard Creek oil field, but it was a solid uninterrupted line of cars and trucks going west, back into Williston, about 5:00 p.m. and almost as many cars and trucks going east out to the fields. There is clearly as much traffic now as there was during the boom, but it's a different kind of traffic. That's probably a bit of hyperbole. There's no way the traffic can be as steady/busy now as it was during the boom, but the point is this: there is still a huge amount of activity.

I am quite blown away by how busy it is. I did not expect this.

They do need to widen ND Highway 1804 west of Williston, and based on what I saw in the Watford City area last year, I assume it's just a matter of time before "1804" is widened.

My dad was amazed at how much was accomplished in the last two or three years. Most impressive was the four-lane highway from south of Watford City all the way to Williston; and, the underpass under the bypass on what used to be the west side of Williston. That bypass is now the dividing line between "old" Williston -- the Williston I grew up in -- and the "new" Williston, where a new generation of Willistonites will grow up. Most impressive, they did this straight through the winter months. Nothing seemed to stop them.

I haven't talked to enough Willistonites who have lived their whole lives here to know, but I would assume that almost everyone -- except for the investors in man-camps, motels, and restaurants -- are taking a collective sigh of relief. Finally, things apparently are slowing down at the same time the infrastructure has been put in place to make it even better than it otherwise might be.

For example, the truck traffic would be much less by now because all the stuff that was done during the "boom" was completed, and now infrastructure hauls a lot more oil and water than during the height of the boom. With all the new four-lane highways and three new huge bypasses (Watford City, Alexander, and Williston) the truck traffic is almost non-existent.

The second-to-last choke-point on US 85 will soon be history. The construction continues on the new four-lane bridge crossing the Missouri River southwest of Williston.

The last choke-point on US 85 is the Long X Bridge south of Watford City, but it's become less of a problem as the boom has died down. I don't know what the plans are for the Long X Bridge but it's much less of a concern right now.

This is the view of coming into Williston earlier this afternoon, coming down Indian Hill, and then to the Missouri River where the new bridge is being built:

Coming Into Williston, September 10, 2015

By the way, did you notice all the rigs and pumpers ruining the beautiful landscape driving down into the river bottoms? There were none. There might have been a pad way off into the distance in the far upper left corner near the end of the video, but with almost 5 minutes of driving in the Bakken, not one rig or oil well. And yet, can you imagine how the landscape will be changed with they put in 1,000 wind turbines?

Note To The Granddaughters

Hunting season is underway in North Dakota: pheasants, ducks, deer, elk. Different seasons for different critters and different hunters: for example, gun vs spear vs bow and arrow.

Right now, for example, it's "deer, bow hunting" season. This means that hunters can only male deer (bucks) wearing bow ties. At least that's what they said on KFYR-radio out of Bismarck, ND.

Tumbling Tumbleweeds, Roy Rogers and Sons of the Pioneers

Thirteen (13) New Permits; QEP With Two High-IP Wells -- North Dakota, September 9, 2015

Active rigs:

Active Rigs73198185191199

Wells coming off confidential list Thursday:
  • 29417, 1,324, Whiting, State 31-3-5HU, Cartwright, t3/15; cum 43K 7/15;
  • 29419, 1,165, Whiting, State 31-3-3H, Nelson Bridge, t3/15; cum 43K 7/15;
  • 29420, 918, Whiting, State 31-3-1H, Nelson Bridge, t4/15; cum 32K 7/15;
  • 29421, 920, Whiting, State 31-3HU, Hay Creek, t4/15; cum 36K 7/15;
  • 30173, drl, XTO, Stenehjem 31X-28C, Siverston,
  • 30453, SI/NC, Hess, EN-D Cvancara S-154-93-0904H-9, Robinson Lake,
  • 30500, 929, Hess, LK-A Qtr Cir-147-96-1807H-10, Big Gulch, t8/15; cum 5K 7/15;
Thirteen (13) new permits:
  • Operators: WPX (5),  Hess (4), BR (4)
  • Fields: Squaw Creek (McKenzie), Hawkeye (McKenzie), Corral Creek (Dunn),  
  • Comments: 
Wells coming off confidential today:
  • 29450, 2,251, QEP, Moberg 20-17-19-18LL, Bear Den, t3/15; cum 79K 7/15;
  • 29451, 2,028, QEP, Moberg 20-21-29-28LL, Bear Den, t3/15; cum 72K 7/15;
  • 30625, SI/NC, Statoil, Banks State 16-21 7H, Banks, 
  • 30782, SI/NC, EOG, Shell 11-3225H, Parshall,
Three (3) producing wells completed:
  • 30941, 545, Whiting, Jones 11-8-2H, Sanish, t9/15; cum --
  • 30641, 1,679, Whiting, Two Shields Butte 31-22-16-1H3, Heart Butte, t8/15; cum--
  • 30643, 3,069, Whiting, Two Shields Butte 13-22-16-1H, Heart Butte, t8/15; cum --
Dry hole:
  • 27215, dry, Oasis, Chalmers 5301 44-24 2T, nothing in the well file to explain; my hunch, problem with the initial spud;

EIA's Short Term Energy Outlook, September, 2015

EIA's short-term energy outlook for September, 2015:
Crude Oil:
  • U.S. monthly crude oil production is expected to decline through the middle of next year in response to low oil prices. Output then begins rising in late 2016 as oil prices are forecast to move higher.
  • Despite the expected decline in monthly crude oil production, U.S. total oil output this year is forecast to be the highest since 1972. (Comment: so much for peak oil.)
  •  Current low oil prices are making some U.S. oil production less profitable, with total estimated oil output during August alone down 140,000 barrels per day from the month before.
Gasoline/Refined Products:
  • U.S. drivers will continue to see the effects of low crude oil prices as gasoline prices are expected to decline through the rest of this year, with the pump price falling to a national average of $2.03 a gallon by December. (Comment: if the national average did not include California, the average would be significantly lower.)
  • Reduced gasoline demand following the peak summer driving season along with the switchover to lower-cost winter-grade motor fuel will help push gasoline prices lower during the remainder of 2015.
  • U.S. drivers this past Labor Day weekend paid the lowest price for gasoline during the heavily traveled holiday in 11 years.
Natural Gas:
  • U.S. natural gas production will increase and natural gas prices will be relatively low at least through the end of 2016.
  • High natural gas production has been the main driver behind above-average increases in U.S. weekly natural gas inventories this year, building supplies for the upcoming winter heating season.
  • In response to sustained low natural gas prices and environmental regulations, coal-fired power plant operators are expected to retire about nine gigawatts of generating capacity by the end of next year.
Intermittent Energy:
  • Wind is expected to generate more U.S. electricity than hydropower during the fourth quarter of this year.
  • U.S. coal production will decline this year in response to less coal use by power plants and lower demand for U.S. coal abroad.

Quick Note From The Bakken -- September 9, 2015

I arrived safely in the Bakken about ninety minutes ago. First impression: many trucks headed south out of the Bakken, but Williston itself seems busier than ever. The big trucks are gone but it feels like there is more small truck, pick-up, SUV traffic than when I was last here in April (2015). Six months ago, it felt a bit too quiet; somewhat concerning. This time, the city "feels" really, really busy. I was surprised by how much construction is going on.

The highway construction is pretty much complete from south of Watford City to Williston, but the city street construction is incredible. Main Street and downtown has had a lot of street work completed, but immediately north of downtown (JC Penney area) it appears more Main Street construction. I was turning south toward Amtrak and was not paying a lot of attention to the construction to the north, due to changes at the intersections that I had to watch. The Main Street construction was pretty much just beginning when I was here last April.

Several residential streets on the east side of Williston, from near Main Street all the way over to University Avenue are completely torn up and being replaced.

The new high school (photos and video later) has come a long way. It will be interesting how much of the building they will get enclosed before the worst of winter comes along. I find JE Dunn Construction everywhere -- on the far northwest side of town putting up the new high school, and the southeast side of town, near the huge recreation center that must be about a year old now.

But traffic everywhere; busy everywhere. I've only been in Williston for about 30 minutes. Menards is open; I think I read that Menards in Williston and Jamestown were to open September 9 -- which would be today. There were no huge "grand opening" signs. Menards sits on the west side of the brand new road that connects the south end of the bypass to the huge housing development northwest of Williston, where the new high school is. That very, very long stretch of road has NO intersection signals; instead there are four roundabouts. Really, really cool. Very impressive. Slows traffic down at the same time it keeps traffic moving. At the last roundabout (north) is the "old" Statoil 4-well pad that was quite impressive when it was first going in; hardly inside city limits at the time. Now it almost seems quaint or "typical" -- just part of the landscape and now inside city limits.

The highway from south of Watford City to Williston is incredible. Four lanes all the way with additional lanes to exit as well as a center lane for turning. I was surprised how relatively slow vehicular traffic was moving; it seemed when the big trucks were here during the height of the boom and we only had the old two-lane highway, I had to move along at 75 mph if I didn't want to get pushed off.

Today I could easily travel at 55 - 60 mph and not feel pushed at all. The bridge southwest of Williston, the new Missouri River bridge, is coming along. I think there were three huge cranes working on it (video to follow).

I was also surprised to see at least one new residential development just starting construction. Many, many new streets in Williston, obviously most on the west side. I haven't driven across the new overpass which must be the "talk of the town." I'll do that later.

The weather is beautiful and apparently will remain so the next few days. I will be here for only a day or two.

But those were my initial impressions. Much, much busier than I expected. Much, much less chaos. Lots of city street construction -- much, much more than I have ever seen in the city.

Minimal Blogging; Still Traveling -- September 9, 2015

Tweeting nowSome Saudi oil projects may face extended delays, cancellation as Riyadh trims 'non-essential' spending. Comment: Setting up for $200 oil. Not just "delays," but "extended delays."

News: CLR to cut CAPEX for rest of year; reduce rigs from 10 to 8 in the Bakken; curtail fracking. Press release here.  
The company announced plans to spend approximately $300 to $350 million less than its previously approved capital budget for 2015 to better align spending with cash flow at current commodity prices. The Company plans to defer well completion activity, except for where it has contractual considerations or it accomplishes specific strategic objectives. Continental is also reducing its operated rig count in the Bakken from 10 to eight rigs by the end of the month.
Huge thank you to the reader who alerted me to CLR's decision to suspend fracking in the Bakken. I was alerted about ten days ago but felt best to wait until company announcement to post it.

MRO will cut capex. The Dickinson Press is reporting:
Marathon Oil Corp. said on Wednesday it will slash its capital budget next year by at least $600 million, becoming one of the first U.S. shale companies to announce 2016 cuts due to low crude prices.
The company, which operates in North Dakota, Texas and Oklahoma, plans to spend about $3.3 billion for 2015, and has begun identifying cuts for next year, with at least $600 million and likely more coming.
Poll results in which we asked whether operators should suspend fracking until next summer:
  • Yes: 7%
  • No: 27%
  • Yes, but no time frame; base in on price of oil: 19%
  • Depends on the operator: 47%
Active rigs:

Active Rigs73198185191199

RBN Energy, Tuesday: the future of Houston area crude oil infrastructure.

RBN Energy, Wednesday: more propane supply in the right places.

NDIC daily activity report, Tuesday:
  • Five (5) new permits --
  • Operators: Zavanna (4), Liberty Resources
  • Fields: Stony Creek (WIlliams), Capa (Williams)
  • Comments: the Zavanna permits are for a 4-well pad in section 16-155-100
One Slawson permit canceled: Armada Federal in Mountrail County.
Four (4) producing wells completed:
  • 21787, 988, Enerplus, Tandem 148-93-23B-24H, South Fork, t8/15; cum --
  • 29432, 1,560, BR, Kings Canyon 6-1-27MTFH, Camel Butte, 4 sections, t8/15; cum --
  • 29434, 1,080, BR, Kings Canyon 3-1-27MTFH, Camel Butte, 4 sections, t8/15; cum --
  • 29871, 1,529, XTO, Werre Trust Federal 44X-34D, Bear Creek, t7/15; cum 3K 2 days;