Monday, November 13, 2017

Another Nail In The Coffin Of "Peak Oil Theory" -- November 13, 2017

PowerLine is preaching to the choir; the alt-left won't read it. But that's fine.

For the rest of us, this post at PowerLine is a must-read, and will be archived in case the link is broken. A huge "thank you" to the reader who sent me the link.

Some data points from the post:
U.S. oil production has just reached an all-time high. Lesson: who turned out to be right about America’s energy potential—Sarah Palin and “drill, baby, drill,” or the “peak oil” liberals who said endlessly that “we can’t drill our way out” of oil dependency? That one’s so easy even a liberal will have trouble escaping it.

More from the PowerLine post:
The climatistas are meeting this week in Bonn, Germany, at the annual meeting of the UN climate change circus and freak show. They’re uttering the usual incantations about imminent doom and how the Future Belongs to RenewablesTM, and I hear that a rump group of African nations is demanding that the U.S., which pays 25 percent of the tab for the UN and 20 percent of the tab for the UN’s climate program, be kicked out of the whole thing because of Trump’s decision to leave the
Kellogg-Briand PactParis Climate Accord. Oh please don’t throw me into that briar patch!

The largest demand increase [for fossile fuels] will come from developing nations, not the advanced industrialized nations, which are steadily growing more energy efficient. Even oil demand is going to continue to increase, despite all the confident predictions that a Tesla in every garage is just around the corner.

The Market And Energy Page, T+296 -- November 13, 2017

Market close up slightly today. Futures are green tonight.

Total buys LNG assets from Engle. From Bloomberg via Rigzone, data points:
  • in today's energy market, size matters
  • billion-dollar deal
  • after Royal Dutch Shell bought BG Group last year, Wood Mackenzie said biggest energy companies with access to large volumes of diverse supplies will continue to dominate
  • superchilled gas market, currently at $90 billion in trade, will double by 2040
  • LNG market will be supported by surging demand from Pakistan to China
  • emerging markets will use LNG rather than burning dirtier coal
  • currently the biggest buyers: Japan, South Korea, and China
  • with Total's acquisition of Engle, Total will double output, quadruple trading volumes, and control as much as 10 percent of the market by 2020
Spot price for electricity in New England, today: $150/Mwh. A reader noted earlier today:
New England spot electricity price - wholesale - hit $150/Mwh this morning ... quadruple the price in the PJM region. Currently running $100 with the afternoon ramp up in demand just getting underway.
OIL (!) provided 6% of the juice.
I can only assume faux environmentalists have aggravated the problem by delaying natural gas pipelines; they must prefer burning oil. I wonder why solar / wind can't pick up the slack? For those interested, the link is here:

Flashback. GE's purchase of Alstom was hailed as the deal of the century back on December 4, 2015. Fast forward: one more GE debacle. Jim Cramer hailed it as a great deal, now he's 24/7 with his mea culpa. It's my understanding that the current CEO of GE, John Flannery was responsible for the deal. The Peter Principle in effect.

Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, or relationship decisions based on anything you read here or think you may have read here.

Notes To The Granddaughters

I don't see this often. At least, not often enough.

Of the five issues listed below, I have holdings in three of them. Whoo-hoo.

Ten New Permits; Eight Permits Renewed; Two DUCs Completed -- November 13, 2017

Active rigs:

Active Rigs543864188182

Ten new permits:
  • Operators: Whiting (5); Abraxas (3); Windridge (2)
  • Fields:  Truax (Williams); Pershing (McKenzie); Portal (Burke)
  • Comments: Whiting has permits for a 5-well Thomas pad in NWSW 3-153-98 (see graphic below); Abraxas has two Lillibridge permits in Pershing NWNE 29-150-96; one can the last time we talked about Windridge at this post
Eight permits renewed:
  • CLR (5): five Jack permits in Dunn County
  • QEP (2): two MHA permits in Dunn County
  • Petro-Hunt: one Van Hise Trust permit in McKenzie County
Two producing wells completed:
  • 32765, 111, SM Energy, Thompson Bros. Federal 2B-17HN, Burg, t11/17; cum --
  • 32766, 138, SM Energy, Thompson Bros. 2B-17HS, Burg, t11/17; cum -- 
The New Whiting Thomas Pad

Existing wells:
  • 24405, 2,367, Whiting, P. Thomas 153-98-5-3-2-1H, Truax, 28 stages; 3.9 million lbs, t4/13; cum 226K 9/17;
  • 24406, 2,076, Whiting, P. Thomas 153-98-5-3-2-8H, Truax, t4/13; cum 233K 9/17;
  • 22086, 2,052, Whiting, P. Thomas 153-98-5-3-2-1H3, Truax, Three Forks, 28 stages; 4 million lbs, t4/13; cum 276K 9/17;

EOG: King Of The Hogs -- Filloon -- November 13, 2017

Over at SeekingAlpha.

  • the Super Hog narrative is focused around EOG Resources' well design
  • it continues to outperform the competition, and complete huge horizontal unconventional well results
  • operators continue to follow EOG's lead with several operators increasing production per foot significantly
  • EOG's results are not just in the northern Delaware as the core Eagle Ford and Austin Chalk have been exceptional as well
From the article:
Enhanced completions continue to push the unconventional oil narrative and its effect on world oil prices. OPEC has underestimated how productive newer well designs can be, and more importantly how quickly improvements can be implemented. Lower oil prices have not been good for US E&Ps, but it could be argued that it has increased the speed at which engineering changes have been made. As marginal producers, US E&Ps will help set the price of oil. More importantly it will have longer term effect on WTI.
IHS Markit recently defined a "Super Hog" as wells completed since January of 2016 with a peak month oil production above 1,600 Bopd. This is impressive, as a 30-day month would equate to 48,000 bbls. Although there are a number of operators on the list, EOG Resources stands out. Concho, Devon, Marathon, Newfield, WPX Energy, Conoco, and Occidental top the list of other E&Ps with a number of Super Hogs.
QEP,  Parsle, and SM Energy have all had a number of good wells in the Midland Basin. Resolute is notable in the Delaware Wolfcamp. Chesapeake has done well in the Eagle Ford. EOG is the only operator with a large number of excellent results across several plays. With 37% of all Super Hog locations, it is far and away the best operator in the US.

Chinese Crude Oil Imports -- Big Story -- November 13, 2017

A couple of days ago I noted an article in which it was reported that the Chinese government had relaxed rules on crude oil imports by the small "teapot" refineries. It turns out that the smaller refiners may not have the resources necessary to be able to import their allowed allotments.

From Platts:
China has raised 2018 crude oil import quotas for independent oil companies by a sharp 63% from 2017 levels, a move that triggered a rally in the Middle East sour crude complex to a three-year high, but traders and analysts said the quotas would still fall short of Chinese independent refiners' requirements.

The country's Ministry of Commerce Wednesday said total crude oil import quotas for independent oil companies in 2018 would be 142.42 million mt (2.86 million b/d), compared with 87.6 million mt (1.76 million b/d) that the government had set for 2017, according to calculations by S&P Global Platts. But actual quotas awarded so far in 2017 stand at 103.52 million mt.

You Can Find Articles To Defend Any Side Of Any Argument -- CO2 Emissions -- November 13, 2017

I'm preaching to the choir, but even this article amazed me -- and it came from environmental progress.

From environmental progress, German emissions increases in 2016 due to nuclear plant closure. Data points:
  • German emissions increased in 2016 for a second year in a row
  • why? because Germany closed one of its nuclear plants; replaced energy from that one nuclear plan with coal and natural gas
  • German emissions would have declined had it not closed a nuclear plant and replaced that energy with coal and natural gas
  • not only did NEW solar and wind NOT make up for the lost nuclear energy, the percentage of time during 2016 that solar- and wind-produced electricity declined dramatically
  • Germany added a whopping 10 percent more wind turbine capacity and 2.5 percent more colar panel CAPACITY between 2015 and 2016, but generated LESS than 1 percent more electricity from wind and generated one percent LESS from solar
  • why? because Germany had significantly less sunshine and wind in 2016 than in 2015
Conclusions and another observation:
As such, 2016 is a dramatic illustration of the limits of energy sources that depend on the weather. Their output varies dramatically not just hour-to-hour but also year-to-year. 
Anti-nuclear advocates have long insisted that this radical intermittency can be solved through more transmission and storage. But there's a problem: neither more transmission lines nor more storage would have made Germany any sunnier, or windier, in 2016.

Random Update Of Two Nice HRC Wells Reported Today -- November 13, 207

HRC reported two nice wells today, but the second one below was spectacular:
  • 31464, 1,722, HRC, Fort Berthold 148-94-36C-25-8H, McGregory Buttes, middle Bakken, 33 stages; 5 million lbs; t7/17; cum 59K 9/17;
  • 29134, 1,976, HRC, Fort Berthold 148-94-36C-25-12H, McGregory Buttes, Three Forks, 33 stages; 5 million lbs, t5/17; cum 110K 9/17;
Monthly production for #29134:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Note that the completion strategy was not particularly robust, only 33 stages and only 5 million lbs. One might have expected 45 stages and 10 million lbs. 

Be careful not to compare total production to date: the middle Bakken well has been producing for 113 days; the Three Forks well has been producing for 141 days.

And as good as these wells are, folks are getting a lot better wells than these in the Bakken these days.

Random Update Of Part Of The Whiting Obrigewitch Area -- November 23, 2017

I track the Whiting Obrigewitch wells in Stark County here.

Current map of part of the Obrigewitch area:

Monday, November 13, 2017

Note: a Whiting Obrigewitch well was reported today (see IP below). I track the Whiting Obrigewitch wells here

Wells Reporting Today

Monday, November 13, 2017: 24 for the month; 61 for the quarter
  • None.
Sunday, November 12, 2017: 24 for the month; 61 for the quarter
  • 32999, SI/NC, Crescent Point Energy, CPEUSC Dressler 7-36-25-158N-100W TFH
  • 29070, SI/NC, BR, CCU Audubon 31-27TFH, Corral Creek,
Saturday, November 11, 2017: 22 for the month; 59 for the quarter
  • 33127, 1,945, Hess, SC-1WX-152-99-0809H-6, Banks, 44 stages; 8.4 million lbs, t10/17; cum --
  • 31464, 1,722, HRC, Fort Berthold 148-94-36C-25-8H, McGregory Buttes, 33 stages; 5 million lbs; t7/17; cum 59K 9/17;
  • 30640, 457, Whiting, Obrigewitch 44-8PHU, Bell, 4 sections, 45 stages, 5.1 million lbs, t6/17; cum 55K 9/17;
  • 29069, SI/NC, BR, CCU Audubon 21-27MBH, Corral Creek,
Friday, November 10, 2017: 18 for the month; 55 for the quarter (will be reported Monday; NDIC closed Friday for Veterans Day)
  • 33128, 1,995, Hess, SC-1WX-152-99-0809H-6, Banks, 45 stages; 8.4 million lbs, t10/17; cum --
  • 29134, 1,976, HRC, Fort Berthold 148-94-36C-25-12H, McGregory Buttes, 33 stages; 5 million lbs, t5/17; cum 110K 9/17;
  • 29068, SI/NC, BR, CCU Boxcar 34-22TFH, Corral Creek,
Active rigs:

Active Rigs523864188182

RBN Energy: crude export growth and gulf coast infrastructure needs.
Since the ban on exports of U.S. crude oil was lifted in December 2015, export volumes have soared, and for the week ending October 27, 2017, they surpassed 2 million barrels/day (MMb/d) for the first time ever, according to Energy Information Administration (EIA) statistics.
And while exports slowed last week, it is clear that there’s more to come. But the pace of export growth depends on many things, including the ability of Gulf Coast infrastructure to receive and store increasing volumes of West Texas Intermediate (WTI),
SCOOP/STACK, Bakken and other crudes and load it onto ships — the bigger the ship the better. Fortunately, coastal Texas and Louisiana already had extensive crude-related infrastructure in place when the export ban ended just under two years ago, and elements of that have been repurposed to handle exports. Will it be enough? Today, we begin a new blog series on existing and planned storage facilities and marine terminals targeted to support rising U.S. crude oil exports.
In response to the 1973-74 oil crisis, the U.S. government in 1975 implemented a ban on the export of most U.S.-sourced crude oil — the only exceptions being oil from Alaska, oil exported to Canada, heavy oil from California and very limited trades with Mexico.
Crude exports already had been minimal (only a few thousand barrels/day, on average) when the ban was put in place — in fact, exports actually rose in the late 1970s as Alaska North Slope (ANS) production kicked in (exports peaked, for the time, at 287 Mb/d in 1980). By the early 2000s, though, ANS was on the decline and crude exports amounted to a drop in the bucket, averaging less than 30 Mb/d. With the Shale Revolution, U.S. production of crude oil (including condensate — the ultra-light crude produced in a number of tight-oil plays) started rising, and by 2014, U.S. producers provided most of U.S. refiners’ need for lighter grades of oil, reducing the need for imported light crude in the process. (The increasing availability of heavy western Canadian crude to U.S. refiners also trimmed the need for overseas imports of heavier crude.) As U.S. production continued to rise, stockpiles of lighter crudes built up and the spread between West Texas Intermediate (WTI; the key benchmark for U.S. light crudes) and international benchmark Brent widened.
Some relief for U.S. producers came in June 2014, when the U.S. Commerce Department broadened its definition of refined products (whose export was never banned) to include condensate that was minimally processed (run through a stabilizer or other unit so it could be called “processed condensate”). Exports of processed condensate took off, peaking in December 2015 (the month the crude export ban was lifted) at more than 150 Mb/d. But processed condensate couldn’t be counted as crude exports — after all, it was processed.
Keeping the scam alive. This is the faux environmentalists plan -- "stay the course for three more years; then elect someone who will ban fracking." I am most curious, did The Washington Post article mention that Germany went back to burning brown coal?
The emissions from fossil fuel burning and industrial uses are projected to rise by up to 2 percent in 2017, as well as to rise again in 2018, the scientists told a group of international officials gathered for a United Nations climate conference in Bonn, Germany.
Despite global economic growth, total emissions held level from 2014 to 2016 at about 36 billion tons per year, stoking hope among many climate change advocates that emissions had reached an all-time high point and would subsequently begin to decline. But that was not to be, the new analysis suggests.
So, did they mention that Germany went back to burning brown coal? Nope.

China is the big problem but the "scientists" put the onus on the US. US emissions have declined since 2008; EU emissions started to flatten out a couple of years ago and there is a suggestion that EU emissions are rising slightly.

Did they mention that Germany has gone back to burning brown coal? Oh, I guess I already asked that.

Wow, isn't this coincidental: in The New Yorker this week, "Can carbon-dioxide removal save the planet? CO2 could soon reach levels that, it's widely agreed, will lead to catastrophe."

And it's not even Earth Day.

Fact check. From the article:
This past April, the concentration of carbon dioxide in the atmosphere reached a record four hundred and ten parts per million. 
In fact, it was only 409 ppm. It has since returned to 404 ppm. (Yes, I know, it's seasonal, but The New Yorker didn't mention that either.) 

Question: if CO2 reflects heat back towards the earth, why isn't that same CO2 blocking heat from the sun? By the way, I was not the first to ask that question. Scientists are now asking that question. Th "greenhouse" analogy does not work. I digress.

 It's all about the money, it's not about saving the planet. From the article:
“If we’re successful at building a business around carbon removal, these are trillion-dollar markets,” Corless told me.
Of everything I've read about the Manhattan Project (and I've read a lot about that project), I never got the feeling that it had anything to do with anyone making money. It was about a project that, at that time, was viewed as important as "saving the planet" is viewed today. 

For investors, it's an open-book test.

Update: a few hours after posting the above items regarding CO2 emissions, the EIA posted CO2 emissions from US coal. It will be interesting to see if anyone posts the CO2 emissions from Germany.

On Tap For Today

The college football rankings.

How Dallas did against one of the worst teams in the NFL.

I assume the New England Patriots won again, with or without deflated balls.