This is a most interesting economy.
Monday, June 20, 2022
Williston Herald's "Energy Chaser" -- North Dakota's Rig Counts Will Remain Low For Quite Some Time -- Helms -- June 20, 2022
Again, I can't say enough about Renée Jean's weekly column.
BAKKEN GETTING OVER A HANGOVER:
Those back to back blizzards in April gave the Bakken a hangover, North Dakota Director of Mineral Resources Lynn Helms said during his monthly oil production report.
The main part of the problem, of course, were the power outages, which put the lights out for two of the state's largest natural gas processors.
Production losses ranged from 45 to 100 percent for producers, dropping oil production 20 percent for April to 900,597 barrels per day and gas production 19 percent to 2.445 billion cubic feet per day.
County by county, McKenzie County lost the most per day, 67,000 barrels, followed by Dunn County which lost 57,000 barrels per day. Williams County lost 53,000 barrels per day and Mountrail lost 36,000 barrels per day. Divide County, meanwhile, lost the least, despite being hardest hit by the storm. They lost just 4,000 barrels per day.
There are around 16 hydraulic fracturing crews working in the Bakken presently.
Active drilling rigs are around 39, down from 44 week before last on Friday.
The region's two largest rig suppliers have 14 rigs located in North Dakota to deploy — but it's taking them two months to secure a crew to train to operate them.
At that rate, it will take a little more than two years to deploy all of those rigs. Helms does not expect the state to break 50 rigs this year as a result.
ERCOT -- Texas Grid -- 101°F In North Texas -- Grid Held By A Wide Margin -- June 20, 2022
The gap between supply and demand narrows a bit as we head toward 8:00 p.m. but the gap is wider (good) that forecast earlier today.
No daily activity report today.
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The Usual Disclaimer Applies
Since Everyone's Talking About It, A Couple Of Graphs -- June 20, 2022
GDPNow, link here: current reading, 0.0 %.
- 1Q22, second reading: - 1.5%
- 4Q21: +6.9%
GDPNow:
History:
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How Bad Could It Get?
To what extent will a) a cryptocurrency crash; and, b) a housing crash help? One has happened; the other appears about ready to happen.
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Keystoning America
"Biden and oil: destroy America in order to save it." -- Victor Davis Hanson
This president has delivered on what he promised.
During the Democratic primaries, Biden ran on the premise that he would end all fossil fuels during his tenure. In 2019-2020 that bluster seemed easy demagoguery at a time of near-record low gas and diesel prices. The American people shrugged at such utopianism since they often were filling up their cars for less than $50.
Biden’s video clips from the primary campaign now seem surreal, as he tried to out-green Bernie Sanders in boasting about what has now become his own self-created energy disaster.
Biden monotonously promised at rallies, such as they were, that he would cancel pipelines, stop new federal leasing to oil and gas companies, persuade lenders to restrict loans to them, put the Alaska National Wildlife Reserve off limits, and embrace the green new deal. Those were certainly campaign boasts that he has followed up on.
Biden apparently doubled down over the three-day weekend by seeming to suggest that high gas prices will be a "good" opportunity for the US to make a "fundamental turn" to clean energy.
Biden will meet with US oil executives soon.
His opening gambit: how can Big Oil justify $35 billion in profit in the 2Q22.
The US oil sector reply: by keeping prices high, we are doing our best to help Biden's goal to pivot to renewable energy sooner than later, an opportunity to make a "fundamental turn."
Meanwhile, back to a federal gasoline tax holiday, link here:
I'm not sure anyone in the White House can do simple arithmetic.
- 18.4 cents / 575 cents = 3.2%
- 20 gallons at $5.75 = $115.00 (no federal tax relief)
- 20 gallons at $5.56 = $111.32 (with federal tax relief)
Off The Net For Awhile -- June 20, 2022
The Movie Page
Pixar's Lightyear: the movie gross disappointed. Only $51 million at the box office over el fin de semana. Link here.
Lightyear came close but no cigar. Beaten by Jurassic World Dominion, the latter's second week at the #1 position. JWD grossed almost $60 million.
Lightyear: Pixar Animation Studios owned by Disney.
JWD: Universal owned by Comcast.
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Texas Grid
As the sun starts to set, the Texas grid becomes ever more precarious. Link here. And, that, folks is the problem with renewable, non-dispatchable, non-guaranteed solar energy.
Saudi Crude Oil Production - Domestic Consumption -- June 20, 2022
Saudi Arabia generally increases its crude oil production every year starting in April / May and maintains that higher production for four to five months. Saudi Arabia uses crude oil to generate electricity for air conditioning.
During peak periods, Saudi Arabia will generally increased domestic consumption to one million bopd, from a baseline of, maybe, 400,000 bopd
Europe Going Back To Coal -- Germany In Dire Situation; Austria Joins Them; Now Holland; UK Could Be Next -- June 20, 2022
Updates
Later, 10:47 a.m. CT: add the third -- the Dutch. Link here. So, we have Germany, Austria, and Holland, with UK likely to follow.
Original Post
One of the four big energy stories trending on my twitter energy feed right now:
- Germany, first to announce; 2nd, Austria; Britain likely to be in the mix eventually
- coal: European countries bringing back coal;
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Coal
Coal: 2022 theme added, June 20, 2022. If the world survives the growing energy crisis, it will be because of coal. Added June 20, 2022. Link here.
From Javier Blas: coal demand will hit a record high in 2022, and likely another new high in 2023.
Enbridge Line 5 -- Update -- June 20, 2022
Pipelines of interest are updated here, but seldom updated any more.
Long ago, when I first started the blog, I posted pipelines of interest here.
At that post, from 2015:
Line 5, expansion, Superior, MN, to Sarnia, Ontario: should be completed early this year (2015).
Well, here it is, 2022, and still not completed, in jeopardy, and could be shut down completely.
Enbridge Line 5 is trending on twitter.
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Sailing School -- Two Weeks -- Sophia's First Day
At the end of the two weeks, on the second Friday, Sophia, by herself, will take her family members out on her own little dinghy.
Manic Monday -- June 20, 2022
The four big energy stories trending on my twitter energy feed today:
- coal: European countries bringing back coal;
- Germany, first to announce; 2nd, Austria; Britain likely to be in the mix eventually
- geopolitics: Kaliningrad "blockade"
- Michigan: Line 5
- would severely disrupt operations at half a dozen refineries
- this could tell us we need too know how serious the administration is about using all "tools" available to bring down price of gasoline
- direct: disrupt crude oil flow to refiners
- indirect: CBR uses diesel to transport that crude when pipelines shut down
- GasBuddy: gasoline demand
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Back to the Bakken
Far Side: link here.
Markets closed today. It looks like oil is trading.
WTI: $110
Active rigs: 39 or thereabouts.
Monday, June 20, 2022: 30 for the month, 168 for the quarter, 328 for the year
- None.
Sunday, June 19, 2022: 30 for the month, 168 for the quarter, 328 for the year
- 38662, conf, CLR, LCU Reckitt 12-22H1X,
- 38658, conf, CLR, LCU Ralph 11-27HX,
- 38598, conf, Murex, Sheldon Mark 34-22H-A 3MB,
Saturday, June 18, 2022: 27 for the month, 165 for the quarter, 325 for the year
- 38436, conf, WPX, Wounded Face 14-15HEL,
- 37330, conf, Petro-Hunt, Lovdahl 158-94-32C-29-3H,
RBN Energy: the fundamentals driving the energy transition.
If you want to get the energy world’s full attention, give it a global pandemic, a rush to decarbonize, and a brutal land war in Europe — all in quick succession. Bam! Bam! Bam! The past two-plus years have shaken the global oil, natural gas and NGL markets to the core, and forced just about everyone involved to rethink the expectations and plans they had before everything seemed to unravel. So what happens next? How do we provide energy security, put a lid on inflation, and save the planet? To answer those questions, a good place to start is to gain a better understanding of the fundamentals — how energy markets develop, work and interact. In today’s RBN blog, we discuss highlights from RBN’s recent School of Energy, a like-you-were-there replay of which is now available.
With COVID on the ropes, if not yet down for the count, we were finally able to conduct an in-person School of Energy — face to face, just like the old days! — in Houston on May 17-18. It was great to see some old friends and meet some new ones, but all of us in attendance were well aware that the energy world has been turned on its head since the last School was held in the fall of 2019. Back then, WTI was selling for about $60/bbl, Henry Hub natural gas was steady at about $2.30/MMBtu, and regular gasoline — never mind, it’s too painful to be reminded how cheap it was. Europe was pulling out all the stops in its effort to decarbonize as quickly as possible and, to supplement its new wind farms and solar facilities, was making plans to pipe in a lot more natgas from Putin’s Russia.
That was then, and this is now. Today, everybody and his/her second cousin have thrown out their old expectations about “the future” and are in what you might call mid-scramble — that is, trying to figure out exactly how to navigate the very uncertain months and years ahead. Near-term, there are serious questions and concerns about energy supply, demand and prices — not just in Europe, but in the U.S. and just about every other energy-dependent nation. How high will gasoline and diesel prices go? Will there be a recession? And what about natgas supplies and prices this coming winter? There are other questions too, such as how fast is too fast for the transition to a lower-carbon world? How do we weigh the importance of reducing greenhouse gas emissions with the need to keep the economy humming and the lights on?