Thursday, June 24, 2021

Notes From All Over -- June 24, 2021

USPS, new standards, to save money:

  • current standard, Chicago to Williston: often two days; no longer than three days;
  • new standard, Chicago to Williston: 53%, three days; 46% (almost half), four days

Mentions DAPL:

  • link here;
  • FERC certificate revoked by court
  • pipeline had been operational since November, 2019;
  • DAPL:
    • the court cancelled the certificate even though the pipeline is operational, noting that “remanding without vacatur under these circumstances would give the Commission incentive to allow ‘build[ing] first and conduct[ing] comprehensive reviews later’ (Standing Rock Sioux Tribe v. Army Corps of Eng’rs, 985 F.3d 1032, 1052 (D.C. Cir. 2021). We certainly do not wish to encourage such an approach given the significant powers that accompany a certificate of public convenience and necessity.”


  • US Army Corps will require a new Enbridge Line 5 EIS
  • new EIS could delay line 5 tunnel startup to 2025
  • but says tougher review not needed for Line 3
  • link here.
  • Iran: US sanctions lifted
  • Russia: sanctions on Nord Stream 2 lifted
  • Canada: kill the Keystone; delay Line 5; Line 3 -- who knows?
  • ENB: up slightly today;

Fooling Around With Some Numbers -- Help Pay For The $1-Trillion Infrastructure Bill With Proceeds From The SPR -- June 24, 2021


June 26, 2021: update.  

Original Post

"Scare" headline of the day: US could sell oil from the SPR to pay for the infrastructure bill.

OMG. How many times have we heard this? 

So, what are we talking here?

In May/June, 2021, timeframe, US offered to sell nine million bbls of oil from the SPR. I don't know how much oil was actually sold. Successful bidders were to take delivery as early as May and deliveries were to be completed by June, 2021.

How much oil does the US consume on a daily basis:

  • 2020, Covid lockdown: 18 million bopd
  • 2019, pre-Covid lockdown: 20 million bopd

Nine million bbls/30 days? Let's double that and round to near "ten": Twenty million bbls/30 days.

Twenty million bbls / 30 days = 0.67 million bbls/day.

How much oil does the SPR hold? 700 million bbls.

20 million bbls / 700 million bbls = 3% each month if the sales were to continue indefinitely.

20 million bbls x $60 = $1200 million  = $1.2 billion / month.

$1 trillion / 1.2 billion = 833 months = 70 years.

0.67 million bbls/day / 20 million bbl/day = 0.67 / 20 = 3.35%. 

Bakken: one million bbls/day.

SPR sale of 20 million bbls/30 days = 0.67 million bbls/day, about two-thirds of what the Bakken produces. 

The big question is to what degree the sale of SPR crude oil would meet the expected demand/supply gap?  

All things being equal, selling oil from the SPR simply increases the storage deficit (link to S&P Global Platts). 

Draining the entire SPR -- the entire SPR -- would raise $45 billion at current prices ($64). Link here.

  • $45 billion / $1 trillion = 4.5% -- LOL.
  • $7.5 billion for EV charging stations

Bottom line:

  • this will generate a lot of political rhetoric: selling SPR oil to pay for the infrastructure bill
  • won't amount to a hill of beans
  • such talk often affects price of oil
  • by the time the SPR oil runs through the overall system, it will have almost no effect on the price of gasoline
  • whether it affects price of crude oil is yet to be seen
  • if selling oil from the SPR has ever affected the price of oil:
    • it has been minimal;
    • it has been self-limited:
    • unless I missed something of consequence which is always possible;

Note: I often make simple arithmetic errors. Matters not to me. I was just curious what the numbers even meant, in a ballpark way of thinking. Folks will run their own numbers and come up with their own conclusions. I look forward to the numbers Brian Williams and the NY Times staff come up with.

Still my favorite video, "really bad math." I think this is priceless. [This will be removed by YouTube.]

US Covid-19 Vaccinations Have Hit A Wall -- June 24, 2021

Link here.

Look at the sixth column: the is the number of doses given in the previous 24-hours. One million doses/24 hours should run at least 1.5 million doses/24 hours, and some would argue, 2.5 to 4.0 million. Look at the last five days: the average is a paltry 713,882 doses. 

Starting this fall:

  • by October, 2021, at least some of the Covid-19 vaccines should be "fully approved," none of this "emergency use authorized" stuff ;
  • here will be a push for everyone currently fully vaccinated to get a booster shot, for Covid-19, just like "season flu";
  • the big question is whether we "see" "seasonal flu" again: it all depends on the government's reimbursement rate for a "Covid-19" diagnosis vs a "seasonal flu" diagnosis;
  • right now, CDC statistics this past year suggest "season flu" has been eradicated.






Total Doses Administered

Number of People Receiving At Least One Dose

Fully Vaccinated

Delta: Difference in daily doses from previous day

Percent (B+C)/A

Percent Of Americans Considered Fully Vaccinated


June 24, 2021








June 23, 2021








June 22, 2021








June 21, 2021








June 22, 2021







Seven New "Creek" Permits -- June 24, 2021

Gasoline demand, link here:

Back to the Bakken

Active rigs:

Active Rigs2010626558

Seven permits canceled:

  • Crescent Point Energy (5): five CPEUSC Reed permits; all in Williams County; these wells were new names; my assumption: we will see these permits renewed
  • Oasis (2): one Grad permit and one Weisz permit, both in Mountrail County

Four permits renewed:

  • Enerplus (3): one Ridley, one Loggerhead permit, and one Aldabra permit, all in McKenzie County;
  • Petro-Hunt: one USA permit in McKenzie County

Nine new permits,, #38395 - #38403, inclusive:

  • Operators: Hess (5); CLR (2)
  • Fields: Robinson Creek (Dunn) , Jim Creek, Corral Creek
  • Comments:
    • 38395, CLR, Pletan 8-18HSL, Jim Creek, lot 1 section 18-146-95 200 FNL 850 FWL;
    • 38396, CLR, Dvirnak 10-7HSL1, Corral Creek, lot 1 section 18-146-95 200 FNL 895 FWL;
    • 38397, Hess, EN-J Horst-154-93-1112H-1, Robinson Lake, SWNW 11-154-93, 1628 FNL 680 FWL;
    • 38398, Hess, EN-J Horst-154-93-1112H-2, Robinson Lake, SWNW 11-154-93, 1595 FNL 680 FWL;
    • 38399, Hess, EN-J Horst-154-93-1112H-3, Robinson Lake, SWNW 11-154-93, 1562 FNL 680 FWL;
    • 38400, Hess, EN-J Horst-154-93-1112H-4, Robinson Lake, SWNW 11-154-93, 1529 FNL 680 FWL;
    • 38401, Hess, EN-J Horst-154-93-1112H-5, Robinson Lake, SWNW 11-154-93, 1496 FNL 680 FWL;
    • 38402, Hess, EN-J Horst-154-93-1112H-6, Robinson Lake, SWNW 11-154-93, 1463 FNL 680 FWL;
      38403, Hess, EN-J Horst-154-93-1112H-7, Robinson Lake, SWNW 11-154-93, 1430 FNL 680 FWL;

All Of A Sudden Folks Like The Crude Oil Story -- June 24, 2021

I've been traveling for the past few days and have not been able to keep up with the blogging, but I've tried to keep up with all the energy stories. 

It's amazing how fast things change.

When things looked bleak for oil and gas four months ago, it seemed incredible the number of anti-oil, ESG articles, and support for renewable energy.

All of a sudden, the same sources are reporting an incredible number of bullish articles on oil. It's amazing what $75-oil will do to change the narrative.

HOU: new oil futures contract will trade under "HOU." Harold Hamm says new marker will overcome limitations of Cushing WTI contract. Link here. Folks might not that Cushing storage is already opening up. Previously posted. Also here at Rigzone.

OPEC back in the driver's seat. Link here. Link at S&P Global Platts here.

Dallas Fed: "seventy-six percent of executives said they believe there will be a global crude supply gap in the next two to four years." Link here.

BP: says it will stick with oil and gas. Link here.

CVX: says it does not plan to shrink its conventional oil and gas business.

Norway: expands Arctic oil exploration now Biden has ceded the Arctic to Denmark, Norway, Russia, and China. Link here

Ka-ching: oil producers on track to set $348 cash flow record. Link here

The world’s publicly traded independent oil producers will make record profits this year, surpassing the levels reached when crude hit an all-time high near $150 a barrel more than a decade ago, according to Rystad Energy.

Combined free cash flow from the sector is expected to surge to $348 billion, beating the previous high of $311 billion in 2008, Rystad said. Key to the turnaround is U.S. shale, with the industry expected to reverse years of losses in 2021 and make “super profits” of nearly $60 billion of free cash flow before hedges.

Surging oil prices will add to producers’ revenue, but profits will be super-charged by executives determined to constrain capital spending on new output, the Oslo-based consultant said in a note authored by Espen Erlingsen, head of upstream research. This is the opposite of previous cycles, when crude rallies prompted companies to spend heavily on exploration and production in search of fresh supplies.

Ka-ching: oil, up; CAPEX, down = IOCs will make record profits this year, surpassing the levels reached when crude oil hit an all-time high near $150 / bbl more than a decade ago. Link here.

US gasoline: unexpected draw amid strong demand. Link here.

  • gasoline stocks fall 3 million bbls (means nothing to me without the denominator)
  • demand tests pre-pandemic highs (huge story)
  • crude oil stocks fall amid rising demand, sideways production (huge story)

No Wells Coming Off The Confidential List -- June 24, 2021

Active rigs

Active Rigs2010626558

No wells coming off the confidential list.

RBN Energy: Mont Belvieu propane prices top $1 a gallon; how high was they need to go

Propane prices at Mont Belvieu soared above $1/gallon on Wednesday — the first time that’s happened in the month of June since 2014. This buck-and-change price doesn’t come as much of a surprise for industry insiders, however. U.S. propane inventories have been very skinny lately, sitting at 56.2 MMbbl — or only 587 Mbbl above the five-year minimum based on yesterday’s EIA data. At the same time, propane exports have been riding high, averaging 1.3 MMb/d so far this year, up nearly 90 Mb/d from the same time frame in 2020, while production has remained virtually flat over the past 18 months. Surprise or not, the spike past $1/gal raises an important question: How high will U.S. propane prices have to go before exports are reined in so U.S. inventories can increase? Today, we discuss the key drivers behind the current price level and our propane market outlook for the second half of the year.