Sunday, August 13, 2017

Futures Mean Squat -- But All The Same ... Looking Good -- August 13, 2017

Futures mean squat -- but probably more accurate that what NOAA is reporting tonight -- but right now Dow 30 futures are up 62 points; Nasdaq, up 26 points; and, S&P 500, up 8.5 points. Pretty impressive.

Flashback: looking something up in my journal, I came across this note, written on December 27, 2009:
On another note: my dad says the word on the street is that 90 wells a year will be drilled for the next 20 years in Williams County. Is that possible? Rough calculations: there will soon be 100 rigs in North Dakota. A well can now be drilled in less than 30 days but let’s take time off for refurbishing wells, etc., and just say a rig drills 10 wells a year: that’s  1,000 wells/year in North Dakota.
Right now there about four counties where most of the work is being done: Mountrail, McKenzie, Williams and Dunn. But in addition, there’s Burke, Bottineau, McLean, Mercer, Golden Valley, etc. Let’s say 50% in Mountrail, 10% in each of the other “big four,” and 10% for all the rest. 10% of 1,000 wells is a conservative 100 wells next year in Williams County. Whether it can sustain for 20 years is another story, and, of course, for it to continue, they need to continue getting good wells. Time will tell. But 100 wells in Williams County is huge.
Pretty amazing, huh? That's what folks in Williston were thinking back in 2009. And I didn't know any difference.

Sports: wow! Due to family commitments, I missed two great sports events today. I saw most of the PGA championship but missed the last four holes. Turned out to be an incredible tournament. Justin Thomas comes from behind to win his first major. Second, I missed an incredibly good race: Kyle Larson wins in overtime, barely holding off Martin Truex. I saw the video replays: very, very impressive.

Heavy Snow In Jackson, Minnesota -- Just North Of Iowa -- NOAA (The Guys That Are Warning Us About Global Warming -- August 13, 207

The Farmer's Almanac forecasts a very severe winter this year, winter 2017  - 2018.

It looks like the editors are right on target! Weather reports from Jackson, MN, south of Minneapolis, report heavy snow in the area, despite balmy temperatures. Probably a cold front moving in quickly, and temperatures will fall below freezing by midnight.

Reports come from NOAA -- these are the same guys "forecasting" a 2-degree rise in global temperatures a century from now.


I guess this is what happens when you manipulate thermometers; temperature data; and, historical data.

Prince Salman's Plan Misses On Revenues -- August 13, 2017

August 13, 2017: the headline suggests things are going better for Saudi Arabia but data suggests Prince Salman's plan is still fantasy. From Bloomberg, data points:
  • with price of oil recovering (sort of), the kingdom's total revenue climbed 6%
  • income from crude oil jumped 28%
  • but, revenue from non-oil sources fell by 17%
  • spending dropped 1.3%
  • that non-oil revenue? taxes and fees!
  • despite the government’s efforts to decrease its reliance on oil income, its share of overall revenue rose to 62 percent in the second quarter, compared to 51 percent in the same period last year, reflecting the rise in oil prices. Non-oil income fell in the same period largely because of a decline in “other revenues,” which include returns on investments by the central bank and the Public Investment Fund. Revenue collected from customs taxes and and other taxes, including the zakat religious levy, also declined
Track the Prince Salman plan here.

Random Example Of The Peculiarities Of The Bakken -- Hess' BB-Budahn A-LS -- #282161 -- August 13, 2017

Assuming there was no typographical error, an example of the peculiarities in the Bakken.

The well:
  • 28161, 1,772, Hess, BB-Budahn A-LS-150-95-0403H-1, Blue Buttes, t12/14; cum 289K 6/17; 
Monthly production data:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Twentyfour (24) Wells Coming Off Confidential List This Week -- August 13, 2017

Friday, August 18, 2017
  • 19780, 2,252, Whiting, Skunk Creek 4-10-11-8H3, South Fork, Three Forks first bench, spud Feb 18, 2017; TVD, February 27, 2017; 100% in zone, 9 days from spud, t7/17; cum 5K over six days;
  • 24113, SI/NC, Enerplus, Zion 148-95-02B-11H, Eagle Nest, no production data,
  • 32955, 1,304, Hess, BB-Lars Rothie-LE-151-95-2932H-4, Blue Buttes, 4 sections, 53 stages, 7.4 million lbs, t7/17; cum --
Thursday, August 17, 2017
  • 26969, SI/NC, Petro-Hunt, Sabrosky 145-97-34D-27-2H, Little Knife, no production data,
  • 31096, 360, Crescent Point Energy, CPEC Elgaard 3 31-32-164N-100W, Colgan, t4/17; cum 19K 6/17;
  • 33245, SI/NC, Kraken Operating, Fairbanks 20-17 3H, Oliver, no production data,
Wednesday, August 16, 2017
  • 30549, SI/NC, MRO, Torrison 24-8TFH, Bailey, no production data,
  • 33344, 1,700, WPX, Etstatis 32-29HXR, Eagle Nest, Three Forks, 41 stages, 6.1 million lbs, t6/17; cum 36K 6/17;
Tuesday, August 15, 2017
  • 24111, SI/NC, Enerplus, Beaver Creek 149-94-31D-30H TF, Eagle Nest, no production data,
  • 30550, SI/NC, MRO, Brush 24-8H, Bailey, no production data,
  • 32498, SI/NC, Hess, EN-Rehak-LE-155-93-0718H-1, Alger, no production data,
  • 33246, SI/NC, Kraken Operating, Fairbanks 20-17 5H, Oliver, no production data,
Monday, August 14, 2017
  • 31526, SI/NC, Hess, EN-Skabo Trust-155-93-0631H-4, Alger, no production data,
  • 32240, 238, Oasis, Forland 5198 41-33 2TX, Siverston, 50 stages, 3.8 million lbs, t2/17; cum 96K 6/17;
Sunday, August 13, 2017 (the QEP Foreman wells are tracked here)
  • 31527, SI/NC, Hess, EN-Skabo Trust-155-93-0631H-5, Alger, no production data,
  • 31530, 1,822 QEP, Foreman 12-11-1-2T2H, Blue Buttes, 17 stages, 3.1 million lbs, t2/17; cum 71K 6/17;
  • 31532, 1,962, QEP, Foreman 5-2-1BH, Spotted Horn, 49 stages, 9.6 million lbs, t2/17; cum 87K 6/17;
  • 31533, 992, QEP, Foreman 1-2-1T3H, Spotted Horn, 49 stages, 3 million lbs, t2/17; cum 42K 6/17;
  • 31534, 1,757, QEP, Foreman 4-2-1BHR, Spotted Horn, 49 stages, 10 million lbs, t3/17; cum 85K 6/17;
  • 31535, 2,238, QEP, Foreman 2-2-1THR, Sptted Horn, 49 stages, 10 million lbs, t3/17; cum 104K 6/17;
  • 31689, 2,003, QEP, Foreman 12-11-1-2BH, Blue Buttes, 49 stages, 9.4 million lbs, t2/17; cum 82K 6/17;
  • 31690, 2,177, QEP, Foreman 6-2-1BH, Spotted Horn, 49 stages, 9.3 million lbs, t2/17; cum 110K 6/17;
  • 32239, 1,640, Oasis, Rolfson S 5198 41-33 14BX, Siverston, 50 stages, 4 million lbs, t2/17; cum 141K 6/17;
Saturday, August 12, 2017
  • 31528, SI/NC, Hess, EN-Skabo Trust-155-93-0631H-6, Alger, no production data.

South Australia: The World's Renewable Energy Crash Test Dummy -- August 13, 2017

I didn't want to clutter the blog with these short, little stories, but this item was too good to bury as an update to an older post.

Unless you've been under the Geico Rock for the past year, you are aware that energy-rich South Australia has an energy crisis due to non-sensical decisions to pivot away from coal and natural gas to wind and solar energy. See the tag for further stories on this debacle.

Elon Musk promised the Australian government he can solve "the problem" in 100 days. Australia, apparently came up with its own solution to solve this crisis.

From a reader: how is Australia meeting its crisis?
South Australia is now being referred to as the world's renewable crash test dummy for good reason. Set aside Saint Elon's battery backup plan for the moment. 
The SA government has now committed to leasing 9 GE TM2500 generators that burn almost 2,000 gallons of diesel fuel per hour.
Well, for GE investors, good news. The effort will probably be duplicated across the entire African continent over the next century. 

Notes to the Granddaughters

The Wall Street Journal led me here:

“The Farther Out You Get In Time, The More Uncertainty You Get In The Numbers" -- Water Level Expert -- August 13, 2017

Al Gore says he can predict the rise in sea level -- about 2 inches -- one hundred years from now.

Two articles regarding the level of Lake Mead:

First, from April 18, 2017, The Las Vegas Review-Journal: Lake Mead to get above-average flow of Colorado River water
The federal government plans to release an above-average amount of Colorado River water into Lake Mead this year, but it’s less than many hoped after a healthy snow season across much of the West.
The Bureau of Reclamation, which manages dams and reservoirs on the Colorado River, said Monday that it will release 9 million acre-feet (an acre-foot is enough water to cover 1 acre of land 1 foot deep) from Lake Powell, sending it down the Colorado to Lake Mead, where it will be tapped by Arizona, California and Nevada.
Last month, the agency projected it could release 11.1 million acre-feet from Lake Powell, but a dry early March reduced the amount of snow in the mountains that feed the river.
The planned release is above the annual average of 8.7 million acre-feet, and it should be enough to delay a widely expected shortage declaration in Lake Mead.
Now, just two months later, from June 16, 2017, The Las Vegas Review-Journal: Latest forecast shifts Lake Mead from big gain to small loss.
Several hundred billion gallons of water vanished from federal forecasts for Lake Mead over the past two months, but Bureau of Reclamation officials insist there’s no reason to panic.

In April, the bureau was predicting that the man-made lake east of Las Vegas would finish 2018 about 21 feet higher than it is today. Now the bureau is forecasting a 4-foot drop in the surface of the reservoir over the next 18 months — a difference of 25 feet.

But not to worry, said Rose Davis, spokeswoman for the Bureau of Reclamation in Boulder City. It’s too soon to say which scenario might turn out to be true.

“The farther out you get in time, the more uncertainty you get in the numbers,” Davis said. “They will get better, hopefully, if we get another good winter.”
Hmmm ... let's repeat that ...  “The farther out you get in time, the more uncertainty you get in the numbers.”

The experts greatly over-estimated Lake Mead water level in less than two months, but yet, these same experts know that the earth's sea level will rise two inches over the next 100 years. Okay. 

Lake Mead: sea level.

How The Faux Environmentalists Lie -- August 13, 2017


Later, 4:22 p.m. Central Time: this is pretty funny. Googling "Ra and Zephyr acolytes" brings you to this site: the absurdity of life in New York -- the upstate burden. Posted a year ago, May 9, 2016, I hope the link never breaks.
Cuomo’s arbitrary decision to ban fracking in New York left Upstate devastated and vulnerable to scams that won’t do much for the economy or the environment.
It is happening again in Upstate New York. This time it is the Wall Street hustlers from the solar energy industry who are going door to door and blanketing landowners with offers to lease their land for energy development using high pressure sales tactics.
Does this sound familiar: landmen telling landowners that if they don’t sign the company’s lease in a week the “parameters” are going to change and the company might have to lower its offer? Parcels of 30 acres or more are being tied up for 25 to 35 years with no rental payment for the first two years, leaving the landowners to pay the taxes with no ability to take better offers.
Yet, the company can bail out of the lease at any time during those two years.
One solar energy company may have already acquired over 900 leases amounting to over 27,000 acres of forest and farmland. To build its solar arrays the company will have to clear-cut the forest or bulldoze the farmland, thereby permanently stripping all vegetation from the land before building on the site.
Neither their lease nor any NYS regulations require the company to preserve the topsoil, restore its habitat and fertility, or restore its contour after the energy operations are exhausted on the site.  
Later, 4:14 p.m. Central Time: a reader provides an additional perspective and recommends that I not cherry-pick. I plead guilty to the latter: I cherry-pick on the blog all the time, but in general the blog seems fairly well-balanced, considering the webmaster is inappropriately exuberant about the Bakken. Having said all that, here's the reader's note which I really appreciate:
1. 500 gas wells over 40 years is not that big a deal. It's about one a month. To support a major power plant. Ask yourself how many boxcars of coal would be needed for the same 40 year power burn? (Too lazy to figure it out. It's a lot.)
2. 4 BCF is already MUCH better than conventional vertical wells delivering something like 0.2BCF EUR. The huge production from shale wells is what has enabled base-load natgas plants, versus cycling peaker plants.
3. I would avoid using cherry-picked statistics on subsamples (like select 40BCF EURs, Cabot only, 2016 when there was high grading, etc.). What matters is the average, if we want to look at numbers of wells needed. But even just looking at the average for 2014/2015 NE PA hz gas wells, they are already at 4BCF (now!) and project to something like 16BCF. [source, extending log cum versus rate, linearly, to 50mcf/day assumed shutoff.] You might end up a little better if everything breaks your way (continued efficiency gains, Terry Engelder "turn" in the decline curve, etc.) But 40 BCF seems very unlikely for the average well. Really I would just use 16 BCF as there are things that can break the opposite way also (exhaustion of sweet spot, e.g.).
Original Post 

In an earlier post, faux environmentalists greatly exaggerated the number of natural gas wells needed to supply a new natural gas plant in New York state. From that article (if the link breaks, go to this post):
CPV [a new plant in New York state] is projected to burn about 130,000 dekatherms per day, which is almost 130 million cubic feet of gas.
Since an average Marcellus well produces roughly four billion cubic feet of gas over its lifetime, this means that over forty years of operation CPV will require the fracking of nearly 500 gas wells. 
In fact, technology and completion strategies are moving so quickly, the "500-gas-wells" estimate is off by almost a factor of ten.

From a reader regarding that estimate:
In Pennsylvania alone, as of May, 2017, there were 1,754 wells out of 7,405 producers (24%) that have ALREADY produced over 4 Bcf. 
Recent advances now project EUR of future Marcellus wells to exceed 30 Billion cubic feet each
This eightfold increase over the author's number translates into only 70 wells needed to supply lifetime fuel to these plants
This nearly unlimited supply at extremely low cost ($8 million per well) is a big reason for such future optimism for the American economy. 
So, either the faux environmentalists are
  • generally ignorant;
  • not keeping up with technology;
  • are obfuscating; or,
  • outright lying.
It gets tedious.

Notes For The Granddaughters

How To Read Water: Clues and Patterns from Puddles to the Sea 
Tristan Gooley, 
c. 2016

I mentioned this book some time ago, but didn't quote from it. I'm re-reading the book. The first time through I found the book a bit tedious, but now, I am re-reading it, and finding it to be quite a gem.

From page 20, discussing capillary action:
It is time to look at this effect in a wider context.
The next time you pass a small river, stream, or ditch that has muddy banks, take a look at the mud on the bank. We would expect the mud to be dark and wet where the water is splashing it, but notice how it appears higher than the water splashed, higher than any water appears able to reach.
The mud above the water is a mixture of particles and air gaps, a little like a fine honeycomb of thin tubes. The water gets drawn up into these gaps by capillary action with the result that the mud becomes saturated above the level of the water in the ditch or stream. 
The distance that water can travel upward is influenced by a number of factors, including its purit -- clean water rises higher than polluted water -- but the main one is the size of the gaps between the particles
Water rise much higher in soils with fine rounded particles, like silts, than in course soils, like sandy ones. At the extremes, water can rise very high in clay but will hardly rise at all in gravel.
It gets tedious.

The faux environmentalists and CAVE dwellers have lots of advice but no viable solutions.

Sunday Morning -- August 13, 2017; Governor Cuoma Loves Fracking -- Just Not In His State

Active rigs:

Active Rigs573372193184

Governor Cuomo Loves Fracked Natural Gas -- Just Another NIMBY

Link here. This is precious -- a huge "thank you" to the reader who sent this to me. See comment at this post.

The article begins:
New York banned high-volume hydraulic fracturing (fracking) two years ago, in a victory for persistent anti-fracking activists and a potential precedent for other states.
Now, however, the state is poised to begin operating a power plant that will make fracking infrastructure fully operational throughout the state, completely undermining the ban. The $900 million power plant planned by Competitive Power Ventures (CPV) in Orange County, New York, requires permits for only two short pipelines before it may begin operating.
CPV will be among the largest of New York's nearly 500 gas- and oil-fired power plants.
Like more than half of currently proposed electricity generation in the state, this power plant will burn fracked gas from Pennsylvania's Marcellus Shale.
When operating, the CPV plant, together with another power plant being developed by Cricket Valley Energy in Dover, New York, will provide 1750 megawatts to offset closure of the Indian Point nuclear power plant.
Cornell University engineering professor Anthony Ingraffea lamented to Truthout, "New York had no plan 10 years ago for how to replace the nukes, and we still do not have a plan that replaces the nukes, shuts down all the gas fired plants, and keeps us from freezing in the dark. We need a comprehensive plan that decreases demand for, and supply of, fossil energy and increases the demand for, and supply of, renewable energy, for all sectors, so there are no surprises [like Cricket Valley and CPV] in the future." [And his plan would be .... I'm waiting ....]
CPV is projected to burn about 130,000 dekatherms per day, which is almost 130 million cubic feet of gas. Since an average Marcellus well produces roughly four billion cubic feet of gas over its lifetime, this means that over forty years of operation CPV will require the fracking of nearly 500 gas wells.
CPV will be the buyer, encouraging further toxic extraction, more leaking methane from gas wells to power plant, and tons more fracking waste requiring disposal -- despite the fracking ban.
And then this:
New York has increased its demand for shale gas every year since banning high volume hydro-fracking.