Bakken CBR Is Back! -- RBN Energy -- January 24, 2019

Spring is here? The robins have now returned to north Texas. I saw many of them early this morning in the DFW area. 

ISO Australia: heat wave continues. Electricity at $300/MWh now and will spike to $14,500/MWh at peak demand today.

Remember Falmouth, MA? That was the bellwether city in Massachusetts that led the state into wind energy. I blogged about it often in the early days of the blog. One can find posts about the two wind towers in Falmouth at this link. From The Boston Globe today: "Green energy blues" in Falmouth. The city will tear down the two wind towers that cost $10 million to install. Will cost $2 million to take down. City of 450 people see huge debt for many, many years. Developers said the wind turbines would eventually return $1 to $2 million to the city annually. If unable to get past the paywall, many other links to the story, including this one.

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Back to the Bakken

Wells coming off the confidential list today --

Thursday, January 24, 2019

• 35035, drl, XTO, FBIR Youngbear 31X-9D, Heart Butte, no production data, 
• 33972, 1,126, Enerplus, Lead 147-93-16B-21H-TF, 33 stages; 6 million lbs; 20/40 sand; Moccasin Creek, a very nice well, a "heavy metal" well,
• 30051, SI/NC, WPX, Good Voice 34-27HU, Spotted Horn, no production data, 

Active rigs:

$52.55	1/24/2019	01/24/2018	01/24/2017	01/24/2016	01/24/2015
Active Rigs	63	56	38	47	157

RBN Energy: Brent-WTI spread spurs gulf coast crude shipments to PADD 1 refineries.

Earlier this decade, East Coast refineries found it cost-effective to ramp down their crude imports and turn to the price-advantaged U.S. shale oil they could rail in from the pipeline-constrained Bakken or send up by tanker from the crude-saturated Gulf Coast.

Things changed, though.

New southbound crude pipelines out of the Bakken came online, the ban on most crude exports was lifted — providing a new outlet for Texas crude production — and the economic rationale for railing or shipping in domestic crude to PADD 1 refineries withered.

Now, things have changed again.

Most important perhaps, is that the price spread between WTI and Brent has widened, and once more it can make financial sense for these refineries to revert to crude-by-rail out of the Bakken and to shipping in crude on Jones Act tankers from Corpus Christi and other Gulf Coast ports. Today, we discuss these recent trends, what’s driving them, and how long they might last.

The nexus of East Coast refineries’ crude supply, including CBR from North Dakota (PADD 2) to PADD 1 refineries, and shipments of Eagle Ford, Permian and other light, sweet crude from the Gulf Coast to PADD 1, has been a frequent topic in the RBN blogosphere — especially in the early years of the Shale Era.

Bakken production growth in the early 2010s far outpaced the addition of new pipeline capacity, and building rail-loading terminals represented a logical, near-term fix. For one thing, these terminals could be constructed quickly and at relatively modest cost; for another, using the rails gave shippers destination flexibility (allowing oil to be moved to wherever the netbacks were highest). The East Coast turned out to be a logical market — refineries there were set up to process light, sweet crude, the vast majority of which they imported from West Africa and other foreign sources, generally at prices tied to the Brent benchmark. If the delivered cost of price-discounted Bakken crude (including the cost of transportation by rail) was lower than the cost of imported crude — and it was — why not rail in more Bakken crude and back off on the volumes being imported?

Archived. See also this note.