Wednesday, August 11, 2021

Back Home -- What A Great Country! -- August 11, 2021

Started out about two weeks ago; returned home today.

Alaska Airlines: DFW to PDX. Three-hour flight. Uneventful. $150 or something like that.

Uber: PDX to daughter's home in Portland, OR. $50 for twelve miles, thirty minutes. A full day in Portland.

POV: daughter's home to Amtrak.

Amtrak: Union Station, Portland, OR, to Whitefish, MT. $80 one way. Twelve hours overnight, through the Rocky Mountains. Train on schedule for entire journey.

POV: sister picked me up at Whitefish; ten days +/- on Flathead Lake, MT (Lakeside, MT) for family reunion. About a 30-mile ride from Whitefish to Flathead Lake home.

POV: return to Amtrak station. Whitefish, MT, return to Portland, OR. $80 one way. Twelve hours overnight, through the Rocky Mountains. Train on schedule for entire journey.

By foot: walked from train station, downtown Portland, to light rail station in the Rose Quarter. Probably about three/fourths mile. Across the Broadway Bridge. Beautiful walk.

MAX, blue line: light rail to Gresham, Oregon. About thirty minutes. $2.50 (vs $40  by Uber). But in fact it's free. No one checks and the only folks who pay are tourists. I gave my "ticket" to another person. I don't think she knew what it was. I didn't know her story and didn't ask; she was in a deep conversation with an imaginary friend.

By foot: sixteen minutes from Max blue line to granddaughter's home. A full day with daughter, husband, and twin grandsons.

POV: to Portland airport. Noted after going through TSA Security that I had booked wrong destination airport. LOL. We always fly in / out of DFW. How I booked this ticket to Love Field in Dallas I will never know. 

Alaska Airlines: PDX to LUV, Three hour flight. $150 or something like that.

POV: LUV to home in Euless, TX, about twenty minutes. 

Trip uneventful. People incredibly nice all along the way.

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Lana Del Rey -- Doin' Time

Link here.

Killing The Keystone XL -- For The Archives -- August 11, 2021

This is how much diesel fuel it takes to transport Canadian oil by train (CBR) now that the Keysteon XL has been killed:

For the archives and for the granddaughters:

  • 1 unit train has 100 cars, 2 engines and weighs 27,240,000 lbs
  • 1 unit train carries 3,000,000 gallons of oil  
  • 1 train uses 55.5 gallons of diesel per mile 
  • it takes 119,000 gallons of diesel to go 2,150 miles from Hardisty, AB (Canada) to Freeport, TX 
  • the Keystone XL pipeline was to deliver 34,860,000 gallons of oil per day
  • it would take 12 trains and 1,428,000 gallons of diesel to deliver that amount. PER DAY!
  • 521,220,000 gallons of diesel per year 
  • the oil will still go to market with or without the pipeline 
  • by stopping the pipeline billions of gallons of diesel will be wasted and cause needless pollution 

Alternative?

  • stop the Tar Sands all together? Then we must ship the oil from the overseas sandbox. 
  • 1 large oil tanker can haul 120,000,000 gallons of oil 
  • 1 boat takes 15 days to float across the Atlantic 
  • 1 boat uses 63,000 gallons of fuel PER DAY, that is about 1 million gallons of the most polluting type fuel in the world PER TRIP 
  • *(See below) Or take 3.5 days of Keystone Pipeline to move the same amount of oil with a fraction of the pollution 
  • *In international waters ship emissions remains one of the least regulated parts of our global transportation system. The fuel used in ships is waste oil, basically what is left over after the crude oil refining process. It is the same as asphalt and is so thick that when cold it can be walked upon. It's the cheapest and most polluting fuel available and the world's 90,000 ships chew through an astonishing 7.29 million barrels of it each day, or more than 84% of all exported oil production from Saudi Arabia 
  • shipping is by far the biggest transport polluter in the world. There are 760 million cars in the world today emitting approx. 78,599 tons of Sulphur Oxides (SOx) annually 
  • the world's 90,000 vessels burn approximately 370 million tons of fuel per year emitting 20 million tons of sulphur oxides. That equates to 260 times more sulphur oxides being emitted by ships than the world's entire car fleet 
  • one large ship alone can generate approx. 5,200 tons of Sulphur oxide pollution in a year, meaning that 15 of the largest ships now emit as much SOx as the worlds 760 million cars 
  • eliminate all gas consuming cars and diesel vehicles? 
  • worldwide car gas consumption is 403,583,712,000 gallons a year. That's billions 
  • worldwide oil consumption is 1,500,000,000,000 gallons a year. That's trillions
  • it takes 2.15 gallons of oil to make 1 gallon of car gas and .6 gal of diesel 
  • so it takes 867,704,980,800 gallons of oil to run the worlds cars, most diesel vehicles for a year and some ships 
  • that leaves 632,295,019,200 gallons of oil for other uses 
  • passenger vehicles are only a very small percentage of the problem. If emissions are the problem why not just capture them at the exhaust? 
    • create an industry to clean exhaust instead of crushing an entire industry and building a complete untested, replacement industry? 

Alternative, mining:

  • are we willing to dramatically increase mining to get all the minerals necessary to make all these batteries and electric motors? 
  • mining is way worse for the environment than oil extraction.

Let's See: Did Anyone See This Coming? -- August 11, 2021

First, the grid in California, did anyone see this coming? This caught me by surprise. LOL. Link here.

  • California faces potential energy shortfalls of up to 3,500 MW - ~2.6M households worth of electricity supply - in the coming weeks and as much as 5,000 MW next summer in extreme weather conditions like this summer's heat waves and drought, the state's Public Utilities Commission says.
  • Governor Gavin Newsom would need to fill the gap in part by using more fossil fuels, allowing industrial energy users to run on diesel generators and engines, according to an emergency proclamation. [It's very possible it won't be Newsom's problem after October 1, 2021.]
  • The extreme drought has cut 1,000 MW of hydroelectric power capacity, wildfires have threatened transmission lines that bring in power from other states, and a fire at a gas plant took a 300 MW chunk out of supply, all of which has made this year's supply shortfall worse than expected.
    • Did anyone mention the nuclear plants that have been decommissioned over the past ten years?
    • Did anyone mention the refinery-friendly business atmosphere in the Bay area?
    • Did anyone mention the ban on fracking?
  • Then utilities PG&E and San Diego Gas & Electric warned the PUC about delays in several battery projects planned for storing wind and solar energy for peak demand periods.
  • California's conundrum shows "the challenges electricity grids face by moving away from natural gas and coal power while incorporating large amounts of wind and solar energy that only run when the wind is blowing or the sun is shining."

Second, the Taliban resurgence, did anyone see this coming? This caught me by surprise. LOL. Link here.

  • the speed of Taliban advance surprises President Biden administration, dismays US allies.
  • the headline suggests that the Biden administration knew this would happen; they were only surprised how fast it happened; the article confirms it; thought it wouldn't happen until at least this fall;
  • the link is to The Wall Street Journal
  • the story will have legs until Kabul falls, then the story will disappear from our newspapers

Third, warehouse space near US ports, link here. Maybe an executive order stop all imports, or quadruple import tariffs or build more warehouses? Maybe that was in the $1 trillion infrastructure bill. I did not read the article, but I assume a lot of this has to do with a "trucker shortage." Not a "truck shortage, but a "trucker shortage."

Sturgis rally: active cases are starting to increase; deaths not yet seen. Same with North Dakota: cases increasing; deaths not yet seen. Of the three states, Montana is seeing the biggest jump in active cases.

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Most Beautiful Woman In The World

This was a candid photograph taken shortly before we got married a few years ago. Starting to fade (the photograph, not the beauty). If this is not my favorite photograph, then it is "tied" with whatever photograph is my favorite.

Is There Any Wonder There's A Southern Surge -- August 11, 2021

Southern surge: any wonder why folks are surging across the southern border, and up until a day or two ago, Canadians weren't allowed to cross the northern border. I'm sort of reminded of the answer Willie Sutton gave the FBI when he was asked why he robbed banks. On top of that, the vaccine is readily available. Why wouldn't folks want to come here? It's a good news story for someone.

China: crude oil inventories dropping. Short term, imports may have dropped due to slowing economic activity but long term, the tea leaves suggest there is going to be a significant supply/demand mismatch. If so, my hunch is that the mismatch won't last long. At $65-WTI, everyone wins.

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Something's Got A Hold On Me -- Etta James

Link here.

I had not noticed this before. There's an instrumental riff of four chords that are the same four chords seen in this video of James Brown.

US Crude Oil Imports -- Gasoline Demand -- August 11, 2021

Link here.

Crude oil imports: note this week and the previous week, last column --

Crude Oil Imports





Week (week-over-week)

Date of Report

Raw Data, millions of bbls

Change (millions of bbls)

Four-week period comparison

Week 41

December 23, 2020

5.6

0.140

-12.90%

Week 42

December 30, 2020

5.3

-0.238

-14.40%

Week 43

January 6, 2021

5.4

0.043

-18.10%

Week 44

January 13, 2021

6.2

0.900

14.90%

Week 45

January 22, 2021

6.0

-0.194

-11.80%

Week 46

January 27, 2021

5.1

-1.000

-13.90%

Week 47

February 3, 2021

6.5

1.400

-9.20%

Week 48

February 10, 2021

5.9

-0.700

-12.00%

Week 49

February 18, 2021

5.9

0.041


Week 50

February 24, 2021

4.6

-1.300

-13.30%

Week 51

March 3, 2021

6.3

1.700

-12.80%

Week 52

March 10, 2021

5.7

-0.600


Week 53

March 17, 2021

5.3

-0.332

13.90%

Week 54

March 24, 2021

5.6

0.300

-9.50%

Week 55

March 31, 2021

6.1

0.500

-9.40%

Week 56

April 7, 2021

6.3

0.119

-5.00%

Week 57

April 14, 2021

5.9

-0.411

7.00%

Week 58

April 21, 2021

5.4

-0.448

5.00%

Week 59

April 28, 2021

6.6

1.200

10.70%

Week 60

May 5, 2021

5.5

-1.200

7.80%

Week 61

May 12, 2021

5.5

0.037

7.60%

Week 62

May 19, 2021

6.4

0.900

10.90%

Week 63

May 26, 2021

6.3

-0.138

0.50%

Week 64

June 3, 2021

5.6

-0.600

-0.70%

Week 65

June 10, 2021

6.6

-1.000

-1.90%

Week 66

June 16, 2021

6.7

0.108

-5.90%

Week 67

June 23, 2021

6.9

0.197

-1.00%

Week 68

June 30, 2021

6.4

-0.500

2.80%

Week 69

July 8, 2021

5.9

-0.500

-2.20%

Week 70

July 14, 2021

6.2

0.347

-0.10%

Week 71

July 21, 2021

7.1

0.900

2.90%

Week 72

July 28, 2021

6.5

-0.600

6.90%

Week 73

August 4, 2021

6.4

-0.075

15.80%

Week 74

August 11, 2021

6.5

-0.036

16.30%

Gasoline demand, link here:

MRO With Six New Rigs In McGregory Buttes -- August 11, 2021

Active rigs

$69.25
8/11/202108/11/202008/11/201908/11/201808/11/2017
Active Rigs23*12616057

*From the daily activity report: 23.

Six new permits, #38471 - #38476, inclusive:

  • Operator: MRO
  • Field: McGregory Buttes (Dunn County)
  • Comments: MRO has six permits in McGregory Buttes, NWNW 14-147-94,
    • Treasure USA: 793 FNL and 1125 FWL
    • Shell USA: 801 FNL and 966 FWL
    • Judith USA: 797 FNL and 1046 FWL
    • Elva USA; 803 FNL and 926 FWL
    • Carolyn USA 799 FNL and 1006 FWL
    • Anita USA: 795 FNL and 1086 FWL

Two permits canceled:

  • Hess: two BL-S Ramberg permits in Williams County

Notes From All Over -- Masking And Covid-19 -- Fighters At Portland, Oregon -- August 11, 2021

Portland, Oregon, Air National Guard: F-15C's launching today, but also a couple of F-35's. Same organization scheduled to receive F-15EX's in 2023. 

The USAF intends to acquire 144 F-15EXs from Boeing. The 142ndWing at Portland will become the first operational unit to fly the aircraft, while the 173rd Fighter Wing is expected to serve as the F-15EX formal training unit in 2024. Link here.

Jobs: I remember how difficult it was to find a summer job before heading off to college in the late 60's / early 70's. Not true today. I'm sure any enterprising teenager could actually land two jobs. Link at The WSJ. And, here, "job openings continue to explode."

Tokyo Olympics: "everyone" is now reporting this but when it's a front page story in The WSJ, it's a thing. Breitbart probably summarizes it best: https://www.breitbart.com/politics/2021/08/10/nolte-woke-olympics-lowest-rated-ever-winter-summer/.  

Apple, Inc: moving to 3nm pretty quickly. Definition of "3nm" is changing. 

Elon Musk: launching UND EERC satellite oil field monitoring sensors. Link here. If link breaks, google North Dakota iPipe initiative to monitor pipeline link.

Pore space: Bakken "pore space" becoming an issue in the Bakken. Link here.

CO2 emissions: all-time record at Martha's Vineyard Airport over past weekend where elite celebrated President Obama's birthday bash. Link here

Crude oil in US: supply has jumped from 27.2 days to 27.5 days for the last week in July, 2021. Link here. 

India: gasoline demand has surpassed pre-Covid-19 levels, July, 2021. Link here.

South Korea: price differential favors US crude over Saudi Arabian crude in 2H21 amid rising Aramco prices. Link here.

China: crude oil inventories dropping. Short term, imports may have dropped due to slowing economic activity but long term, the tea leaves suggest there is going to be a significant supply/demand mismatch. If so, my hunch is that the mismatch won't last long. At $65-WTI, everyone wins.

Bakken:

  • cycle time for putting wells online has improved by 50 percent;
  • completed well costs have dropped by 30 percent;
  • key CLR metrics being reported by The Williston Herald over at twitter

US ten-year treasury yield at three-year high: 1.336% reported at 1:48 a.m. August 10, 2021.

Nissan: Tennessee plant to close for two weeks due to chip shortage. 

Steel: US hot-rolled coil spot prices hitting all-time highs. I suppose that could be an indication of the health of the US economy.

Covid-19:

  • CDC greatly exaggerates daily Covid-19 rate in Florida; most of us doubt it was an "innocent mistake"; when one sees an outlier number like that, most "scientists" take another look before reporting it. Florida CDC data here;
  • one wonders what other "innocent mistakes" have been made? 
  • best video today -- the insanity and hypocrisy -- link here.

Note From A Reader Regarding The Killdeer Area In North Dakota -- August 11, 2021

I received the following from a reader yesterday. I was not sure what I could add, so I will post the note as I received it, add comments later, if necessary. 

The reader noted the decline rate. There is no question the decline rate is a function of the Bakken (and perhaps other shale plays) but to some degree, the "decline" rate can be influenced by operators "managing their assets," for example, not bringing their product to market at ridiculously low prices.

Having said that, it seems I'm seeing more of the same: some incredibly high IPs (monthly) but then they decline to the "Bakken norm" fairly quickly. 

From the reader:

I was visiting family in Killdeer over July 4th weekend. Was curious about the Marshall wells since reviewing their history I noted the NDIC was reported flowing. I figured for the historical production of the area and current of the Marshall they surely were on pump. They were not pumping they were still flowing. Initial numbers were not eye popping but when you look at the decline curve that give me pause for curiosity. See below.

The CLR wells immediately to the east went on pump right away and after ten years have not produced as much as the above well in a little over a year.

We visited with a relative that owns land that the pipeline from the booster station to Bear Creek is being built on. He is a retired petroleum engineer so he knows a thing or two about what is going on there. He told me the new gas line under construction will pretty much wrap around the Killdeer Mountains when it is done.

Marathon well:

The Nadia well showing a little steeper decline than the Marshall well; this well is a TF1 whereas the  Marshall was MB. Appears to be flowing? [F] = flowing, no pump. The scanned information will lag what is going on in the field.

Gasoline Prices Soaring -- WTI Down Slightly -- One Well Coming Off Confidential List -- August 11, 2021

This is not the problem folks: the US calls on OPEC+ to boost production as gasoline prices soar --

  • oil majors tread cautiously in Permian shale, link to ArgusMedia;
  • generally, folks can expect to pay $4.00 / gasoline everywhere in the US; 
  • every proposed US pipeline is now deferred, delayed, or had its permit pulled:
  • existing pipelines under threat of closure (DAPL)
  • Interior: has slow-rolled all new permitting; originally stopped all new permitting until judicial branch got involved
  • trucker shortage: restrictions on truckers put in place years ago
  • Fed monetary / congressional fiscal policy out of control (perception by some)
  • new, fuel-efficient vehicles unable to meet demand due to chip shortage
  • link to Tsvetana Paraskova.
  • the bad news: the global economy is not yet fully open

WTI: not rising in price. 

Weekly EIA petroleum report:

  • US crude oil in storage dropped by 0.4 million bbls
  • US crude oil in storage now at 438.8 million bbls; 6% below the five-year avereage
  • refiners operating at 91.8% operable capacity
  • US crude oil imports averaged 6.4 million bbls per day last week; down by 36,000 bbls per day
  • distillate fuel inventories increased by 1.8 million bbls; now 6% below the five year average
  • total products supplies over last four-week period averaged 20.6 million bbls/day, up by a whopping 11.3% from same period last year (global lock down)
  • jet fuel supplied was 45.8% compared to one year ago

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Back to the Bakken

Active rigs

$67.74
8/11/202108/11/202008/11/201908/11/201808/11/2017
Active Rigs2312616057

One well reporting today:

Wednesday, August 11, 2021: 4 for the month, 15 for the quarter, 195 for the year:

  • 37406, conf, CLR, Gale 13-32H1, Cedar Coulee, no production data,

RBN Energy: why sustainable aviation fuel is taking flight, part 6.

Traveled by air in the U.S. lately? Airports and airplanes are packed to the gills. Unruly passengers are making the nightly news and becoming YouTube sensations. Jet fuel shortages are popping up. But there are other developments in air travel too, including a push by the global airline industry to rein in its greenhouse gas emissions. And the heart of that movement is sustainable aviation fuel, or SAF. While the blending of SAF with conventional jet fuel is not mandated in the U.S., the alternative fuel is gaining altitude, in part because it can generate layers of credits that can be utilized in various renewable fuel trading programs. In today’s blog, we look at the current status of renewable fuel in the U.S. aviation sector.