Monday, June 28, 2021

"We've Never Seen Anything Like It" -- June 28, 2021

Link here.

Californians are fueling Austin's housing frenzy: "we've never seen anything like this." 

Trending over at twitter today.

The metro area of Austin grows by about 180 people every day, a boom that's made it the country's fastest-growing major region for the past decade

Experts say Austin's boom, particularly during the pandemic, has been accelerated by Californians and Bay Area giants like Apple, Facebook, Google, and Tesla that are all hiring in Austin.

Those able to afford to move, i.e., those paying California state taxes are moving. Those who cannot afford to move are not moving to Texas.

Stanley Cup Finals -- Game 1 -- Lightning Over The Canadiens -- 5 - 1 -- June 28, 2021

I'm still traveling -- up in the Pacific Northwest -- from Portland, Oregon, to Flathead Lake, Montana. It's beautiful everywhere, but Flathead Lake is truly incredible. Below: one of 3,245 photos taken in the last four days on Flathead Lake with cousins, aunts, and great-aunts. The one-year twins are in the stroller at the end of the dock. Except for an occasional run to the local grocery store, I have been nowhere except on the lake.

I can't believe how beautiful this country is. And I've seen this country often, but not enough. It never ceases to amaze me.

Twilight zone: in Oregon, I can go to jail if I don't wear a mask; in Montana, mask? What mask?

Uber: I used Uber for the first time ever. An incredible experience. No one taught me how to use. Figured it out -- literally on the fly -- at PDX. Sophia in tow. Mark Perry has written about Uber, comparing it to legacy taxi systems. Best example ever of free market capitalism and entrepreneurial spirit in the US. It speaks volume the Europeans and/or Japan didn't come up with "Uber" first.

Hulu: awesome. Someone sent me a note telling me that the first game of the Stanley Finals had just started. Despite traveling, I was able to log into Hulu in less than twenty seconds, and the first thing that popped up -- out of 1,000's of possibilities, the hockey game was the first to show up. Hulu knew my profile and knew what I wanted.

 Feeding the birds out at Flathead Lake:


The "UPS Truck" that is mentioned in the background in the video above makes its regular run through this lakefront development every evening around 7:30 p.m. local time. In our small area of ten homes (out of perhaps 100 homes in the entire development) the UPS delivery truck generally drops off one to five packages each night.

Saudi Arabia In Transition -- June 28, 2021

Quick: which is bigger? Saudi Arabia's Ghawar or the Permian? Answer at this article

According to the Texas Railroad Commission (RCC), which gets its figures from the Federal Reserve Bank in Dallas, the greater Permian Basin now accounts for nearly 40 percent of all oil production in the United States and 15 percent of its natural gas. Last year, Forbes, based on numbers coming from Aramco, reported that the Permian had overtaken Ghawar in Saudi Arabia as the world’s top producing oil field in late 2018.

Peak oil for Saudi: April 7, 2013. Link here.  

Numbers don't add up. How much oil can Saudi Arabia really produce? June 27, 2021. Most interesting, we seldom see "how much oil can Saudi Arabia really export?" Much of their production is used domestically, especially in the summer to produce electricity for air conditioning. 

Saudi to issue dollar-dominated bonds to meet obligations, mostly that $75 billion annual dividend:

Motiva: Saudi Arabia looking to make "Motiva" a household word in North America. Link here

  • agreement solidifies Motiva as the face of Aramco base oils sales in the Americas, advancing a brand strategy that all Aramco-produced base oils are marketed exclusively by affiliates
  • S-Oil products from South Korea to be marketed under the "aramcoULTRA" brand name
  • both Motive and S-Oil are Saudi Aramco subsidiaries
  • Phillips 66 had been the exclusive distributor of Ultra-S in North America

Saudi's foreign reserve assets. Link here.


No New Permits; Three DUCs Reported As Completed; WTI Down; Active Rigs At Twenty-Two -- June 28, 2021

Active rigs:

$72.82
6/28/202106/28/202006/28/201906/28/201806/28/2017
Active Rigs229616658

No new permits.

Three producing wells (DUCs) reported as completed:

  • 36469, drl/A, Slawson, Periscope Federal 5-10-7TFH, Big Bend, no production data,
  • 36468, drl/A, Slawson, Periscope Federal 3-10-11-12H, Big Bend, no production data,
  • 36472, drl/A, Slawson, Periscope Federal 4-10-7TFH, Big Bend, no production data,

The Rimrock FBIR Johnson Wells

Perhaps a reader knows. I do not know which way these horizontals will go, but I'm betting they will go east to west, ending in section 11-149-92. 

The wells:

  • 38279, ros/conf, Rimrock, FBIR Johnson 13X-7H, Heart Butte, 
  • 38280, conf, Rimrock, FBIR Johnson 13X-7C, Heart Butte,
  • 38281, conf, Rimrock, FBIR Johnson 13X-7G, Heart Butte,
  • 38282, conf, Rimrock, FBIR Johnson 13X-7B, Heart Butte,
  • 38283, conf, Rimrock, FBIR Johnson 13X-7F, Heart Butte,


  • 38284, conf, Rimrock, FBIR Johnson 13X-7AXD, Heart Butte, 
  • 38285, conf, Rimrock, FBIR Johnson 13X-7A, Heart Butte,
  • 38286, conf, Rimrock, FBIR Johnson 13X-7E, Heart Butte,

The graphics:


Notes From All Over -- The Flathead Lake Edition -- June 28, 2021

Supply deficit: I think the most fascinating story to watch play out the next two years -- whether there will be a supply deficit, a supply deficit to push the price of WTI to $100.

  • already a natural gas shortage? Natural gas shortage pushes coal prices to 10-year high. Link to Irina Slav.

Saudi: along that same line, the second most fascinating story to follow the next two years -- whether Saudi Arabia (Saudi Aramco) controls the supply / demand narrative. The consensus is Saudi Arabia does control the narrative; some of us think not.

Supply deficit:

Covid-19:

  • another conspiracy theory called into question by a seemingly credible "western" observer with first-hand experience. Link here
  • during the pandemic, most Americans got richer -- especially the rich. Link here: https://www.foxbusiness.com/money/during-covid-19-most-americans-got-richer-especially-the-rich-u-s-households-gained-13-5-trillion.
  • vaccination rollout hits a wall; first noted by the blog some weeks ago; now a "mainstream media" story; Biden administration targeting the "movable middle." Good luck. Link here. It doesn't help that mainstream media posts every crackpot interview.

US shale: not primed for growth. A lot of headwinds.

Oil and gas executives remained upbeat this quarter as energy prices rebounded, according to the Federal Reserve Bank of Dallas, although concerns are growing over rising costs. 
The Dallas Fed's energy survey of 152 companies in Texas, southern New Mexico and northern Louisiana on 9-17 June showed that activity has continued to grow strongly in the past three months. 
Drillers also plan to step up spending. But respondents voiced scepticism about the energy transition and the possibility of a carbon tax, as well as concerns about a less favourable regulatory environment under President Joe Biden. 
Three-quarters of those polled see a global crude supply gap in the next two to four years.

DUCs: update from the EIA. A hefty decline? Link here. It's really all about the Permian. See also Tsvetana Paraskova.

Pivot to green energy:

Technology:

Investing:

  • calm before the storm? Watch out below. Link to The WSJ.
  • the S&P 500 has not had a 5% correction since October, 2020; turmoil in the depths. today? S&P 600 down 0.1% but the NASDAQ up 0.6% and AAPL doing very well, thank you very much.
  • the last Monday of the second quarter: NASDAQ "surges" to new record; S&P hits new record; Dow falls 0.44%.

Uber: likely winner this year in the "car business." Not enough "rentals" available. Folks will fly to destination; take Uber to their "vacation-spot." Trust me on this one.

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

USAF: When you positively, absolutely have to deliver overnight: F-15s and F-16s. Whoo-hoo. Links everywhere. US hits Iranian-backed-terrorist-launched drones. This guy is clueless. Link to source here.

Bad hair day: for Toyota. To story here.

Trending: this is pretty awesome. While out at Flathead Lake, the subject of The Big Lebowki came up. For those who had seen it, all agree: (one of) the best ever. So, then, less than twenty-four hours later, trending on social media: name the five movies you have seen at least ten times. I guess it's John Goodman's birthday.

TV personality, not! It's not often a politician does not want to be on television. South Dakota attorney general will not allow audio or video recordings of his trial. Link here

Clifton, Texas: Norwegian Capital of Texas. The nearby community of Norse is the final resting place of Cleng Peerson, commonly recognized as the "father of Norwegian immigration to america." The founder of Norse was Ole Canuteson (Ole Knudsen) from the Stavanger region of Norway. 

Montana: "My favorite state has not yet been invented. It will be called Montana, and it will be perfect." Abraham Lincoln, 1864.

PGA: what in the world happened to Bubba Watson yesterday? Asking for a friend.NBC Golf says he collapsed on the back nine. Covid? Link here

Labor market: normalizing in red states; remains broken in blue states

Business space: office vacancies in downtown Toronto hit their highest since 2008 with companies questioning their long-term needs for space. Link here.

Fifteen Operators With Active Rigs In The Bakken -- A New "Modern" Record -- JUne 28, 2021

Active rigs:

$73.02
6/28/202106/28/202006/28/201906/28/201806/28/2017
Active Rigs229616658

Operators with active rigs:

  • CLR (6): Gordon Federal, Bang, Jensen, Pasadena, Harrisburg, LCU Truman,
  • MRO (2): Osking, Sebastian,
  • Hess (2): EN-Johnson A, GO-Soine A
  • Slawson: Muskrat Federal (Slawson's Muskrat Federal wells are tracked here)
  • Rimrock: FBIR Johnson
  • Enerplus: Beaver
  • Kraken: Bigfoot
  • Ovintiv: Rolfsrud,
  • Rampart Energy: Coteau 1
  • Whiting: Lapica
  • Petro-Hunt: Jorgenson
  • KODA Resources: Porter
  • Oasis: Fraser Federal
  • Armstrong Operating: Fugere
  • Resonance Exploration: Resonance Ballantyne 16-19H Inj

Slawson Muskrat Federal wells:

The two parent wells in this section:

  • 19255, 718, Slawson, Muskrat Federal 1-28-33H, 33-061-01424,Van Hook, t1/11; cum 577K 10/20; stimulated 12/31/10 - 01/07/11; 40 stages; 3.7 million lbs proppant; see full production profile here; cum 614K 4/21; nice jump in production; still "flowing, no pump";
  • 20267, 737, Slawson, Muskrat Federal 2-28-33H, 33-061-01653, Van Hook, t9/11; cum 473K 10/20; stimulated 8/30/11; 40 stages; 3.98 million lbs proppant; cum 484K 4/21;

Rampart Energy Company:

  • has been operating in North Dakota since 1959
  • Rampart Energy has about 50 records on file
  • Coteau 1: wildcat, SWSW 1-145-88; a "long way" from the Bakken;
  • south of the lake; well east of the Bakken; southeast (outside) the Ft Berthold Reservation;
  • if this is a crude oil well (not a natural gas well), this will be interesting to follow
  • from "Bakken operators:

Rampart Energy Company 

  • June 16, 2021
    • Rampart's wildcat, Coteau 1, will be sited in SWSW 1-145-99, Mercer County, 555 FSL and 460 FWL; the oil field is also a wildcat; 
    • Rampart has about 50 permits in North Dakota; it has been active in North Dakota since 1959; 
    • Rampart's previous well in North Dakota, #27081, Craig Allen 10-3H, Stanley oil field; SESW 11-155-91; a Bakken well that was drilled in 2015 and has reported a respectable 228K bbls crude oil cumulative;

Number Of Active Rigs In The Bakken Jumps Ten Percent -- June 28, 2021

Talk about a huge coincident. Earlier (two days ago, yesterday, I forget) I posted a note about "blue hydrogen" and North Dakota

Now, this morning, this popped up on twitter: Saudi Aramco bets on blue hydrogen exports ramping up from 2030. Link here

Saudi Aramco outlined plans to invest in blue hydrogen as the world shifts away from dirtier forms of energy, but said it will take at least until the end of this decade before a global market for the fuel is developed.

“We’re going to have a large share” of the market for blue hydrogen, Aramco’s chief technology officer, Ahmad Al-Khowaiter, said in an interview on Sunday in Dhahran, eastern Saudi Arabia, where the company’s based. “The scale up isn’t going to happen before 2030. We’re not going to see large volumes of blue ammonia before then.”

Hydrogen is seen as crucial to slowing climate change since it emits no harmful greenhouse gases when burned. The blue form of the fuel is made from natural gas, with the carbon emissions generated in the conversion process being captured. The hydrogen is sometimes converted again into ammonia to allow it to be transported more easily between continents.

The state energy firm may end up spending roughly $1 billion on capturing carbon for every 1 million tons of blue ammonia produced, Khowaiter said. That would exclude the expense of producing the gas, he said.

********************************
Back to the Bakken

Active rigs:

$73.02
6/28/202106/28/202006/28/201906/28/201806/28/2017
Active Rigs229616658

No wells coming off the confidential list

RBN energy: why everyone is talking about renewable diesel, part 5

Renewable diesel is a popular topic in the transportation fuel space, and for good reason. For one, RD provides a lower-carbon, renewable-based alternative to petroleum-based diesel; for another, it’s a chemical twin of and therefore a “drop-in” replacement for ultra-low sulfur diesel. But, most of all, there are the large financial incentives provided by California’s Low Carbon Fuel Standard, the U.S. Renewable Fuel Standard, the U.S. Biodiesel Tax Credit, and other programs, which can make RD production highly profitable. Driven by these factors, there’s a lot of renewable diesel production capacity under construction or on the drawing board: everything from greenfield projects to expansions of existing RD refineries to conversions of old-school refineries so they can make RD. Today, we put the spotlight on RD and discuss how it differs from biodiesel, how it’s produced, and the new RD capacity coming online in North America.

Our blog series on low carbon fuel policies in the U.S. and Canada has garnered a lot of attention. There’s no doubt about it, energy folks want to learn all they can about alternative fuels, including the impact that low carbon fuel standard (LCFS) programs could have on refined products markets. To quickly recap what we’ve said so far, in Part 1 we provided an overview of various policies that have been adopted to reduced greenhouse gas (GHG) emissions from the transportation sector, such as fuel economy standards, renewable blending requirements, zero emission vehicle mandates, and LCFS programs in locations such as California, Oregon, British Columbia, and Canada generally via its Clean Fuel Standard.

In Part 2, we focused on California’s LCFS, which was implemented in January 2011 and which grew out of a number of earlier efforts there to improve air quality and, more recently, reduce GHG emissions. The LCFS assigns a carbon intensity (CI) target value for petroleum-based gasoline and diesel fuels, as well as their substitutes, such as ethanol, biodiesel, and renewable diesel. (CI is an assessment of the GHG emissions associated with producing, distributing, and consuming a fuel, and is measured in grams of carbon dioxide equivalent per megajoule, or gCO2e/MJ.) The LCFS then sets maximum CI limits on finished gasoline and diesel fuel consumed in California each year on a gradually declining scale to meet the 2030 goal of a 20% reduction in the carbon intensity of motor fuels consumed in the state.

​In Part 3, we turned our attention to ethanol, the use of which in gasoline has been prevalent for many years. Ethanol is a biofuel that is found in nearly 98% of the gasoline purchased at retail stations in the U.S., in most cases accounting for 10% of the gasoline at the pump. This high-octane biofuel has grown in popularity around the world, particularly over the last 20 years, due to regulations that require or incentivize its use. As governments continue to evaluate regulations to control GHG emissions, ethanol has been overshadowed by some other biofuels lately, but it is expected to continue to play an important role as a pathway for meeting low-carbon mandates. Last time, in Part 4, we looked at biodiesel. We noted that while the incentives for producing biodiesel are substantial, there are two big catches with the fuel: a limited supply of feedstocks and properties limiting how much can be blended with petroleum-based diesel.

And that’s a perfect segue to renewable diesel, which has no such “blend wall” — and which has been receiving a lot of press the past couple of years, including in the RBN blogosphere. In Playin’ by the Rules in December 2019, we covered some of the basics behind RD and noted that at the time about 2.9 billion gallons per year (gal/yr) of RD production capacity was either in operation or under development in the U.S. and Canada. Today, the amount of operating and planned RD capacity is 7.2 billion gal/yr, or 2.5 times where we stood a year and a half ago. Last July, in Green Grow the (Refineries), we zeroed in on HollyFrontier’s plan to shut down its petroleum-based Cheyenne, WY, refinery and convert it into an RD facility. Here we are in the summer of 2021 and the excitement around RD has not waned — if anything, the momentum toward low carbon transportation fuels in general, and RD in particular, has accelerated.

Renewable diesel, like biodiesel, is a biomass-based fuel that can be burned in diesel engines or used as home heating oil. However, there are unique aspects of RD that have given it an edge over biodiesel as a substitute for petroleum-based ultra-low sulfur diesel (ULSD. Renewable diesel meets or exceeds the fuel specifications of ULSD, thus is considered a “drop-in” replacement, whereas biodiesel (from FAME, or fatty acid methyl ester) is typically limited to blends of 5% (a diesel/biodiesel blend known as B5) to 20% (a.k.a. B20). In fact, unlike biodiesel, which has poor cold-flow properties and risk of contaminants, RD generally has a higher cetane value (an octane-like measurement of diesel and diesel alternatives) than ULSD, promotes more complete combustion and higher engine efficiency, and has comparable or better cold-flow properties than petroleum-based diesel. 

Much more at the link.