A regular reader sent me a link to an incredibly good link to help understand the Bakken. I'll post a bit here but it's worth going to the linked article to get the whole story; great graphics.
Responding to pressure to reduce the volatility of North Dakota crude
oil after the train disaster in Lac-Megantic, Quebec in 2013 which
killed 47 people and another derailment and fire in North Dakota that
same year, the North Dakota Industrial Commission (NDIC) passed
standards on December 9, 2014 to require oil-conditioning equipment at
the well head to separate production fluids into their gas and liquid
components, thereby reducing the volatility of the crude.
The standard requires producers to heat crude oil to at least 110
degrees F. at a pressure of 50 psi., effective April 1, 2015. The
standard device commonly used to accomplish this is known in the
industry as a “heater-treater.
The order requires a Reid Vapor Pressure (RVP) of 13.7 psi. “RVP” is a measure of gasoline volatility indicated in pounds per square inch, the higher the RVP the more quickly it evaporates, RVP at normal atmospheric pressure is 14.7 psi. Just how many heater-treaters may be required is a heated subject of debate between the State regulators and the industry.
Two recent State announcements attempt to provide some indication of where things might stand.
The North Dakota Department of Mineral Resources has indicated that 80% of Bakken crude has an average RVP of 11.8 psi, less than the requirement and therefore in compliance.
State inspectors recently reported that 55% (165) of the roughly 300 existing heater-treaters operated within the guidelines, 33% (99) were operating at lower temperatures and 12% (36) applied no heat to crude oil.
The 12% is believed to represent smaller operators who could be severely impacted by the new rules.
The 800 pound gorilla in the room with these statistics though is what percentage of the existing wells have no heater-treaters, potentially a lot more than 300 given the thousands of wells in North Dakota.
A search of the DI database for existing directional wells in North Dakota reveals 12,994 directional wells. Accepting the State’s 80% rule and taking only 20% of the 12,994 wells leaves 2599 wells without equipment. To be conservative we will assume as many as 6 wells could be treated with one heater-treater (the number will actually vary depending upon production and equipment capacity) the additional units would total 133 (2599/6 – 300 = 133).
If labor and equipment were to run $100,000 per installation costs would be in the neighborhood $13,300,000 to reach compliance.
North Dakota's oil producers are complying with new safety standards that went into effect on Wednesday to remove as many volatile gases from crude as possible, state officials told Reuters.
The new rules require the more than 1.2 million barrels of oil extracted each day from the state's Bakken shale formation be run through machines that remove ethane, propane and other volatile gases linked to recent crude-by-rail disasters in Quebec, Illinois and West Virginia.
Producers are now required to operate field equipment at oil wells at specific temperatures and pressures to remove those gases. Well sites are shut down if they are not compliant, according to the standards approved in December.
Late March field checks of equipment operated by all of the state's producers, ranging from the largest with Whiting Petroleum Corp to one of the smallest with Triangle Petroleum Corp, are compliant, the state's Department of Mineral Resources (DMR) said.
There had been concern that the costs of compliance would prove onerous for smaller producers, many of whom, for instance, did not previously turn heating elements on at well site equipment to remove gases.
Running the heaters, especially in the summer months when North Dakota temperatures routinely break 100 Fahrenheit was seen as a waste of money by some. The new standards, though, require all well site equipment to be run continuously at 110 Fahrenheit. Despite the higher cost, the new rules proved easier to comply with than strict new anti-flaring measures precisely because wellsite equipment is already common across the state's more-than 12,000 oil wells.
Flaring reduction, by contrast, requires an expansion of the state's natural gas pipeline system and construction of more processing plants, a timely and costly exercise.
Yes, there are some 100-degree days every summer, but to say that "temperatures routinely break 100 Fahrenheit" seems a bit hyperbole.
When you see the term "oil sands," there is a good chance that you will associate it with the Canadian province Alberta.
MCW Energy Group is trying to extend the geographical focus southward.
"Companies ... have ... failed over 5 decades attempting to develop this valuable resource," said MCW’s communications spokesman Paul Davey, referring to oil sand and oil shale resources in Utah, Colorado and Wyoming. "All have ended in failure in terms of attempting to prove up a commercially viable extraction technology."
Last October MCW – founded by its CEO R.G. "Jerry" Bailey, a 50-year oil and gas industry veteran and former president of Exxon's Arabian Gulf operations – deployed its first oil sands extraction plant in Vernal, Utah, located in the Uinta Basin nearly 200 miles southeast of Salt Lake City.
The plant applies the company's continuous-flow, closed-loop method of extracting oil from oil sands.
Billing the facility as "America's First Environmentally Friendly Oil Sands Extraction Project," MCW contends its process uses no water or heat and leaves behind only "99 percent clean" sand.
Moreover, the company asserts that its per-barrel processing costs are dramatically lower: $30 compared to an average of $75 in Alberta.
The efficiency of MCW’s extraction technology is extremely high with an energy returned on energy invested (EROEI) of 22:1 as compared to Alberta’s steam-assisted gravity drainage (SAGD) efficiency average of 4:1, according to MCW.
MCW is delivering its maiden plant's relatively small production volumes to refineries near Salt Lake City, but the company is working to scale up the process with a 5,000 barrels per day (bpd) extraction plant and – it hopes – many others at oil sands and oil shale sites in the region and beyond.
Headline story in today's WSJ: the train that derailed in West Virginia two weeks contained high amount of combustible gas. Look at the numbers (OMG):
The crude oil aboard the train that derailed and
exploded two weeks ago in West Virginia contained so much combustible
gas that it would have been barred from rail transport under safety
regulations set to go into effect next month.
Tests performed on the oil before the train left North Dakota showed it contained a high level of volatile gases,
according to a lab report reviewed by The Wall Street Journal. The
oil’s vapor pressure, a measure of volatility, was 13.9 pounds per
square inch.
That exceeds the limit of 13.7 psi that North Dakota
is set to impose in April on oil moving by truck or rail from the Bakken
Shale. Oil producers that don’t treat their crude to remove excess gas
face fines and possible civil or criminal penalties, said Alison Ritter,
a spokeswoman for the North Dakota Industrial Commission.
The article neglects to mention that the national standard is 14.7 psi. The first paragraph seems to imply that the cargo would have exceeded national standards. Not. Disingenuous.
The spin never quits.
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What Does It Matter?
Just for the record: the fact that the State Department now admits that Hillary broke the law by using private e-mail for official work means there was a conspiracy to cover up this fact. Obviously "everyone" in the State Department at the time knew she was using a private e-mail account. If not "everyone," certainly the IT folks.
But, then, what does it matter?
[Update, March 3, 2015, later: it turns out -- according to ABC News -- everybody does it or did it, including Colin Powell; this is a non-story; getting it out of the way before she announces her candidacy for Democratic nomination for US presidency.]
The Arctic seems to be warming up, states George Nicolas Ifft in 1922. He was at that time American consul at Bergen, Norway, and submitted from time to times reports to the the State Department, Washington, D.C.
The following text represents an extract from his report, which was published in the journal Monthly Weather Review October 10, 1922.
"The Arctic seems to be warming up. Reports from fishermen, seal hunters, and explores who sail the seas about Spitsbergen and the eastern Arctic, all point to a radical change in climatic conditions, and hitherto unheard-of high temperatures in that part of the earth's surface."
In August, 1922, the Norwegian Department of Commerce sent an expedition to Spitsbergen and Bear Island under the leadership of Dr. Adolf Hoel, lecturer on geology at the University of Christiania.
Its purpose was to survey and chart the lands adjacent to the Norwegian mines on those islands, take soundings of the adjacent waters, and make other oceanographic investigations.
Dr. Hoel, who has just returned, reports the location of hitherto unknown coal deposits on the eastern shores of Advent Bay - deposits of vast extent and superior quality......The oceanographic observations have, however, been even more interesting. Ice conditions were exceptional. In fact, so little ice has never before been noted. The expedition all but established a record, sailing as far north as 81 degrees 29 minutes in ice-free water. This is the farthest north ever reached with modern oceanographic apparatus.....
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Clueless
Oil companies will move more oil by pipeline than by rail if the price of oil goes up -- yup, that's what Bloomberg says. The writer is obviously clueless.
Texas, the only state that
produces more oil than North Dakota, had a century to build its oil
infrastructure before the shale boom hit. The Bakken, by
contrast, basically went from nothing to a gusher. That left a whole lot
of oil without pipes to move it. Since no one was quite sure how long
it would last, no one wanted to take the risk of building a big pipeline
system to service the area.
Cheap
oil weakens the incentives to build pipelines into North Dakota. At
current prices, a lot of wells in North Dakota are no longer profitable.
Drilling activity has already declined. Production is likely to follow
in the next 12 months. That's hardly a recipe for building a big,
expensive capital project. New rules governing the safety of oil trains,
proposed by federal transportation regulators, will probably make
crude-by-rail more expensive, once they take effect in the next couple
of years. Until then, however, the best way to keep trains from
exploding is to put that oil into pipelines. That isn't likely
to happen without higher oil prices.
Really? The writer's entire article suggests just the opposite.
The writer fails to mention the number of pipelines any number of companies are trying to build but are being stymied by environmental-nazis - but that's another story.
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Rock Beats Scissors
Apple Beats Samsung
For years, anti-Apple folks have said, "okay, Apple may sell more smart phones in the US, but worldwide, Apple is a distant second to Samsung." Not any more. Macrumors is reporting:
Apple surpassed Samsung in worldwide smartphone sales
during the fourth quarter of 2014 to become the world's largest
smartphone maker. Samsung lost the top spot to Apple for the first time
since 2011.
Apple narrowly edged Samsung as the two rivals had quarterly sales of
74.8 million and 73 million smartphones respectively. Apple's 20.4%
market share was also marginally higher than Samsung's 19.9% share
during the three-month period ending December.
Steve Ballmer on the iPhone
Last night, while watching our older granddaughter get ready to start water polo practice, I noted a couple of swimmers -- middle school swimmers -- checking their Apple iPhones. One had the "standard size" iPhone; the other had the larger iPhone -- I know I've seen the larger iPhones at the Apple store but I was surprised (again) how big they are; they are about the size of a small iPad And every time I see someone with an Apple product, I know they will never, ever switch. Not true of non-Apple users. The video above was posted on YouTube in 2007; at that time Mr Ballmer said Apple was selling no (zero, nada, zilch) phones at that time -- whereas Microsoft was already selling "millions and millions" of smart phones. It's amazing that in just seven years, Apple has gone to #1 and I'm not even sure what Microsoft calls their smart phone? It doesn't show up at the Gartner site.
In all the excitement leading up to the Super Bowl, I forgot to post this story (if I did, I forgot). Platts is reporting:
[North Dakota's] three-person Industrial Commission approved an order requiring Bakken crude to be conditioned before it is transported.
The order, to go into effect April 1, will limit Bakken to a vapor
pressure of no more than 13.7 per square inch, 1 psi below the national
standard of 14.7. It also requires that operators separate light
hydrocarbons from the crude and prohibits blending light hydrocarbons
back into the oil.
There are rumors that some small Bakken CBR terminal operators are considering hiring NFL inspectors to check the pressure inside BNSF tank cars carrying Bakken crude oil.
I assume Bill and Tom already know that most Bakken crude oil already has a vapor pressure less than 13.7 psi.
But, like Bill Clinton used to say, it's only illegal if you get caught.
I don't know if Bill Clinton really said that but if after
President Obama implied he was in the lead helicopter that took out
Osama bin Laden and lyin' Brian said he was in the lead helicopter that was shot down, I suppose one can say almost anything these days and get away with it.
What does it matter?
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Queen Of The Cake
Yesterday we stopped by our favorite grocery store, HEB's Central Market, here in the Southlake-Grapevine-DFW area, and happened to spy King Cake, also called Vitamin K in north Texas during Mardi Gras.
Our older daughter mentioned to the baker that she had never tasted King Cake before. The baker graciously gave each of us a sample. Delicious. Our 7-month-old granddaughter practically pulled my hand into her little mouth to get the entire sample in one bite.
Later that evening, completely coincidentally, our son-in-law brought home a King Cake.
It goes without saying that the 7-month-old knew what this was all about and was not going to settle for a sample this time.
