First-World Problems In The Bakken -- October 24, 2016

The price of oil is an existential problem for Saudi Arabia.

I've said repeatedly that Saudi Arabia cannot survive on $50 oil.

At $50 oil, it won't last two years.

This is from a Saudi official: the country faces bankruptcy in three years --

Two Saudi Arabia’s senior officials have warned that further cuts are needed to the kingdom’s swollen public sector otherwise the country faces bankruptcy in three years.

Khaled Al Araj, the civil service minister, told a TV debate on Saudi TV network MBC that civil servants in the kingdom barely put in one hour a day in the office and have little incentive to work.

The kingdom’s public sector, which employs more than 70 percent of the workforce, is extremely unproductive and its employees have a poor work ethic.

The system is so badly run, he added, that wages were paid to government employees even if they had left their jobs.

Third-world problems in the Mideast.

By the way, it's been reported everywhere that Saudi Arabia set a record with its "mammoth $17.5 billion bond issue." It is being reported that a) this bond issue will "plug a third of Saudi's 2017 deficit"; and, b) Saudi Arabia could issue record bond of up to $17.5 billion again.

If Saudi Arabia issues another "mammoth" bond issue, it only shows how desperate the Saudis are -- a culture in which usury is proscribed by their state religion; and, will put pressure on bond issues by companies around the world. 

For another sobering view on Saudi Arabia: http://www.cityam.com/252009/saudi-arabias-gormless-cheerleaders-have-failed-spot?utm_source=dlvr.it&utm_medium=twitter. 

 

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First World Problems In The Bakken

Years ago, when I growing up in North Dakota, the county and the state routinely sprayed oil -- crude oil -- on gravel and dirt roads to keep the dust down. I don't know if that is still done. I do know a lot of crude oil by-products end up on the shoulders of highways under new construction as new asphalt is laid. I saw that as recently as one year ago on my trip back to North Dakota on road maintenance in northwestern South Dakota.

So, I had to chuckle when I saw this is in the file report for #27417:

A hydraulic hose broke on a trucking vehicle (not owned by the drilling company) as it arrived on location. The break "impacted" the well site and approximately one-quarter of a mile of constructed lease road (dripping oil/mist was about three inches wide).

Containment was placed under the truck to contain the release on the well pad / facility. Affected soil / gravel on the lease road was cleaned up and sent to disposal. Lease road affected area was inspected by MHA inspector. He indicated that no further action was necessary. 

I assume about three cups of crude oil was lost on that stretch of road. 

And so it goes. My hunch is that the out-of-staters at Standing Rock are causing a much bigger mess from cattle slaughter to human waste disposal than the "oil spill" noted above. But that's just a hunch.

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Could Not Have Said It Better Myself

In response to this article about MIT building a 650-acre solar farm in North Carolina:

I'm sure the PhDs at MIT know that solar power has a capacity factor less than 30%.

So how does MIT power its computers, lights, and HVAC at night?

No doubt the energy will come from reliable, affordable, fossil fuels. So government subsidies will prop up the renewables and redundant fossil generation will be required to backup the intermittent "green" power and keep the electric grid stable. MIT can feel all warm and fuzzy , but the cost of electricity goes up for all ratepayers.