CEO Clarifies: Bakken Midstream Is Not Proposing A Plastics Plant -- June 26, 2019

From The Williston Herald, an interview with the CEO of Bakken Midstream.

If unable to access that link, here's another, with the same information, from The Grand Forks Herald.

Hopkins, an entrepreneur who spent part of his career in Alberta, Canada, said he sees a lot of similarities between North Dakota and the circumstances in Alberta in the mid-1970s.

“All the same conditions. A big oil boom. Gas being produced in large volumes. A lack of gas infrastructure. Large flaring,” he said.

The province developed an industry to produce value-added natural gas products, including petrochemicals, instead of exporting raw commodities, Hopkins said. That allowed Alberta to dramatically reduce flaring, create jobs and a new tax base, he said.

“Alberta provides a good roadmap of what you could do with your natural gas,” Hopkins said. “Instead of being a captive exporter and flaring it, you could actually create a whole value-add industry.”

Hopkins declined to discuss any specific projects because the plans are still in development. Examples of projects Hopkins said are needed include gathering infrastructure, processing plants, storage facilities and transmission pipelines.

Bakken Midstream is not a petrochemical company and is not proposing a plastics plant, Hopkins said.

See this post from June 6, 2019, and this post  from May 22, 2019.

Update On Shell's Plan For A Marcellus/Utica Ethylene Plant -- RBN Energy -- July 13, 2016

Active rigs:

	7/13/2016	07/13/2015	07/13/2014	07/13/2013	07/13/2012
Active Rigs	29	72	190	186	215

RBN Energy: update on Shell's plan for a Marcellus/Utica ethylene plant.

Whether or not Shell Chemicals follows through on its plan to build a $6 billion ethylene plant near Pittsburgh, PA –– and when that steam cracker comes online –– will have a significant impact on the U.S. ethane, ethylene and polyethylene markets. By consuming an estimated 90-100 Mb/d of ethane, the cracker’s operation would reduce the volume of ethane that needs to be moved out of the “wet” Marcellus/Utica production area, trim the amount of ethane available for export from marine terminals, and likely push ethane prices higher than they would otherwise be. Today, we examine what’s driving plans for the Northeast’s first cracker, and what effects the plant will have.

There’s an old story about two bear hunters, Roy and John, who hike deep into the forest to their hunting cabin. While Roy cleans up the cabin and puts away their gear, John goes outside to look for any signs of a bear. Not too much later, Roy hears John yelling “open the door, open the door!”  Roy looks out the window and sees that John is being chased by a huge bear, so he opens the door of the cabin. Just as John reaches the door, he jumps to the side and the bear charges into the cabin. John slams the door shut and yells at Roy, “I caught the bear, now you skin him.”

In many ways Shell Chemicals’ recent commitment to a new ethane-based ethylene facility near the heart of the natural gas liquids (NGLs) production area in western Pennsylvania is an enormous bear.  On June 7, 2016, Shell announced that it had made a Final Investment Decision (FID) to move forward with the $6 billion project to build a 1.5 million tonnes per annum (MTPA) ethylene plant and three polyethylene plants that will produce 1.6 MTPA of polyethylene. Polyethylene is used in many products, from food packaging and containers to automotive components.  This FID does not fully “guarantee” that Shell will proceed with the project, but it represents a major commitment, and given the plant’s ready access to locally sourced ethane and Shell’s “first-mover” status (several other crackers have been under consideration in the Marcellus/Utica area), it is reasonable to conclude that the plant is likely to become a reality by 2021 or 2022.  Construction of the cracker could begin as soon as late 2017 or early 2018.

I track the proposed $4 billion North Dakota plastics (ethane to ethylene, polyethylene) here.

Is Bismarck The Site? Two Headlines That Should Scare The Hell Out Of US -- October 15, 2014

I will close the most recent poll in which we asked where you thought the $4 billion plastics plant would be sited in North Dakota. I suggested Fargo would be #1 on the list and was wrong, wrong, wrong, and readers told me that immediately. [Remember: I specifically left Fargo off the list because I was so sure Fargo would be #1 -- shows you how little I know about manufacturing little plastic beads -- speaking of which -- if these little plastic beads could be made as hard as ceramic ....? Just joking.]

Here are the results of the poll (won't quite add up to 100 due to rounding):

• Carrington: 4%
• Jamestown: 18%
• Devils Lake: 4%
• Grand Forks: 9%
• Bismarck: 31%
• Minot: 33% 

Strong indications are it will be Bismarck. A huge thank you to a reader for providing the link. I assume that the company could still be looking but based on information provided by readers, Bismark-Mandan seems the best bet.

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Is The Bakken A Pipe Dream? -- SeekingAlpha

Link here. This story is likely to be available through subscription only at a later date.

There are several shale deposits in the United States, which are believed to contain very high amounts of oil. The most famous of these are the Bakken Shale formation in Montana and North Dakota and the Eagle Ford shale formation in South Texas. In 1999, Leigh Price, a geochemist with the United States Geological Survey, estimated that the Bakken Shale contained between 271 and 503 billion barrels of oil. In April 2008, the North Dakota Department of Mineral Resources estimated that the portion of the Bakken Shale that is in North Dakota alone contains approximately 167 billion barrels of oil.

Unfortunately, not all of this oil can be extracted using current technology. Estimates of how much can be extracted vary widely, but the United States Geological Survey estimates that a total of 7.4 billion barrels of oil can be extracted from the Bakken and Three Forks formations in aggregate. According to the U.S. Energy Information Administration, the Bakken and Three Forks formations have total combined reserves of 2 billion barrels of oil. The Eagle Ford Shale in South Texas is similarly massive.

According to the Energy Information Administration, the proved reserves of the Eagle Ford Shale are 1.25 billion barrels of oil and 8.4 trillion cubic feet of gas. 

The oil that is found in these formations is much more difficult to extract than the oil found in more conventional deposits such as those found in Saudi Arabia or the Permian Basin. This is due to the geological characteristics of the regions. In tight oil deposits such as the Bakken, oil is encased in low permeability rocks. In order to extract the oil, the rocks must be broken apart. This is a technique known as hydraulic fracturing. In addition, accessing this oil typically requires the use of directional drilling techniques, which is a blanket term used to describe drilling an oil well in any direction other than vertically.

As might be expected, the difficulty of accessing this oil results in these wells being significantly more expensive to drill than a more conventional oil well. According to Morgan Stanley Equity research and the International Energy Agency, it costs $65 on average to produce one barrel of oil from North America's shale plays like the Bakken.

This estimate is supported by other sources. This makes producing oil in these areas more expensive than producing anywhere else in the world except from tar sands and in the Arctic.

The article has several flaws and several bad assumptions, but there are some interesting data points.  Regular readers of the blog will pick up on them immediately.

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Two Headlines That Should Scare The Hell Out Of US

1. Second case of Ebola in Dallas from case #1 who came into the US from Ebolaland.

2. ISIS takes huge military base (unverified).

But the stories should scare US for two different reasons.

First: Ebola should be controllable / manageable in the US. The US is not west Africa. With Ebola, the only fear we have is fear itself. Unfortunately, we don't have an "FDR" in the White House. According to Gallup, 60% of Americans may agree with Jim Cramer who (on CNBC this morning) said the country is "leaderless."

Second: ISIS. I doubt many Americans are following this story. In fact, over at FoxNews (on-line) right now, not one story on ISIS -- except maybe deep down, one of the smaller headlines that few will even see. CNN is doing a better job reporting on ISIS/IRAQ. It's hard to believe that air strikes alone will turn this thing around. If ISIS streams into Baghdad -- like the Nazis streaming into Paris -- it will mark a huge turning point in the geo-political structure in the entire Mideast. The question at that point becomes whether ISIS will be happy with Iraq, or will be they be interested in more? History has shown how these questions are generally answered.

The younger generation won't remember how the Vietnam War ended for US: a) the president was picking bombing targets; and, b) US loyalists were air evacuated out of Saigon on helicopters.

Update, October 15, 2014, 1:28 p.m. CDT: it is being reported that US launched 23 air strikes October 14 - 15.  Again, the source is not reliable. But if accurate, that's amazing. That suggests that the coalition is running out of targets and/or 20 strikes in a 24-hour period is about the maximum that President Obama can manage by himself. I was on active duty in the Air Force during the US war on Afghanistan -- we ran out of targets very, very quickly. The same for ISIS: Toyota trucks with mounted armament, etc., do not represent a target.

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More To Follow

I  have no idea how reliable this web site is; I'm not even sure who "runs it." But if this is accurate, a) Drudge Report will pick it up; and, b) it should scare the hell out of US.  It should be noted that CNN has not verified this story. CNN is confirming that ISIS has pretty much taken the entire province of Anbar where this base is located, and that the Iraqi Army is generally unable to stop ISIS. Something called "IraqNews" is reporting that the third largest Iraqi military base was taken by ISIS:

On Monday Iraqi military sources confirmed the fall of the military base of Hit, which includes a training camp and the base of the seventh division of the Iraqi army, after a major attack of the organization ISIS, using suicide car bombs and rocket-propelled grenades.

The military sources said that “the organization ISIS attacked the army base in Hit, the third largest military bases in western Iraq, from several axes, and carried out a series of suicide attacks on the walls of the base by car bombs, as well as a missile attack lasted about an hour which led to the storming of the base after the withdrawal of the army from it. “

In a related context, lieutenant colonel, Rahim Aljughaifi said that “ISIS  have seized the contents of the base and the training camp, including tanks, heavy weapons, munitions and stores, as well as spare parts and different military supplies,” adding that “the army had requested help of the international coalition during the attack on the base, but the latter did not respond’, asserting the control of ISIS on the three towns surrounding the base.”

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Meanwhile, From Ebola Ground Zero (US)

A second individual in Dallas who cared for the first Ebola patient ever in the US has tested positive for Ebola.

For newbies, I live in the Dallas-Ft Worth metroplex. The big news coming out of Dallas is this: the local state health department in Texas can test for Ebola, but the CDC requires that samples be sent to Atlanta, GA, for testing. The locals say that sending samples to the CDC delay getting reports back to Texas.

Of course, conspiracy theories will start. Let's think about this. If you are the head of the CDC, and a sample in your laboratory comes back positive, who is the first person you are going to call? Yup, President Obama (obviously his staff will take the call, and who knows who will take the call if it comes in at 3:00 a.m. but that's another story). The first think the White House will say: "Hold that story -- hold the results -- until we can get a statement prepared. Give us 6 hours." The patient is already in isolation; holding the results for 6 hours won't make a difference medically, but the White House needs to get ahead of this to prevent panic in the street. Just saying.

Newbies to this site should be sure to read the welcome/disclaimer.

By the way, it now turns out that the second nurse who contracted Ebola called the CDC (the CDC confirms the calls) several times to ask if it was safe for her to fly despite the fact that she had a fever. Her temperature was 99.5 and because that did not hit the "risk factor" temperature of 100.4 she was "allowed" to fly by the CDC. Sources everywhere. 

$4 Billion Plastics Plant Announced For North Dakota -- October 13, 2014

Updates

July 13, 2016: update on plastics (ethane to ethylene/polyethylene) plant for Pittsburgh. 

June 16, 2015: personal note from reader provides update on plastics factory; site still not determined; still on track but could be delayed one year longer than planned. 

October 25, 2014: much more background on the $4 billion plastics factory at this post.

October 15, 2014: ethane cracker talk in Ohio, also. Bakken.com is reporting from Akron Beacon Journal:

Ohio’s Utica shale is generating enough liquid ethane to support several processing plants that can carry a price tag of several billion dollars. 

At least four of the so-called cracker plants that turn ethane into ethylene, a key ingredient in making plastic, have been proposed in Ohio, West Virginia and western Pennsylvania.

Natural gas wells in the Utica and Marcellus shale formations in those three states are producing enough ethane to support three large cracker plants, said [Cleveland State University economist Iryna] Lendel, whose comments were based on a preliminary economic assessment of the Utica Shale.

About 60 percent of the liquids derived from Utica wells are ethane, she said.
Cracker plants cost from $1 billion to $7 billion, depending on size. It probably will take five to seven years before the first plant opens in the Appalachian Basin, Lendel said.

October 14, 2014: Bismarck. There is talk -- from message boards, e-mail -- that more than one plant might be possible. 
 

Original Post

The Dickinson Press and KXNET are reporting a $4 billion petrochemical plastics plant coming to North Dakota:

From The Dickinson Press:

A company announced plans Monday to build a $4 billion manufacturing plant in North Dakota that will convert a byproduct of natural gas processing into an ingredient for making plastic products, representing what Gov. Jack Dalrymple called the largest private investment in state history.

Badlands NGL’s LLC and two partners are developing the facility, which will convert ethane into polyethylene, which is used to make a wide variety of plastics for consumers and industry.

The plant will produce 3.3 billion pounds of polyethylene annually and employ 500 people, company CEO Bill Gilliam said. He said the partners hope to be cranking out the finished product – little white plastic beads – by the end of 2017.

Gilliam said more than two sites are being considered in North Dakota but he wouldn’t say where, except that they aren’t in active oil drilling locations in western North Dakota. The plant is expected to cost $4 billion to $4.2 billion and will require a “substantial footprint” of more than 1,000 acres, he said.

One of the project partners, Madrid, Spain-based Tecnicas Reunidas, a major contractor for petrochemical plants, is doing a preliminary engineering analysis that is scheduled for completion this year and will include a final site selection for the facility.

With regard to ethane and ethane pipelines, a reader recently commented:

The Vantage pipeline to Alberta from the Hess plant is probably the longest ethane pipeline in North America. OneOK y-grade pipe line takes Bakken NGLs to Conway, Kansas, where the propane is fractionated and sent to north to Iowa and points north. The rest of the NGLs are sent to Mt Belvieu, TX, where the rest of the fractionations occur. 

The Vantage pipeline:

The Vantage Pipeline is a high vapour pressure (HVP) pipeline carrying ethane from a source near Tioga, North Dakota, extending northwest, through Saskatchewan, Canada, and terminating near Empress, Alberta, Canada. The pipeline links a growing supply of ethane from North Dakota to markets in Alberta. 

The Vantage Pipeline is 445 miles steel pipeline, with an outside diameter of 10 inches.

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This Is The Problem

The president: Ebola is difficult to transmit:

"I know that the American people are concerned about the possibility of an Ebola outbreak, and Ebola is a very serious disease. And the ability of people who are infected who could carry that across borders is something that we have to take extremely seriously," Obama said. "At the same time, it is important for Americans to know the facts, and that is that because of the measures that we’ve put in place, as well as our world-class health system and the nature of the Ebola virus itself — which is difficult to transmit — the chances of an Ebola outbreak in the United States is extremely low."

From the chief of the CDC: 

CDC spokesman Tom Skinner said the agency is still investigating the case of the Dallas nurse, but stressed that "meticulous adherence to protocols" is critical in handling Ebola. "One slight slip can result in someone becoming infected." 

[This was taken to be a "blame the victim" comment; nurses outraged; Skinner has now apologized.]

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The Gift That Keeps On Giving

The Los Angeles Times is reporting: Orange County, California, will refinance new toll road -- now drivers can expect to pay tolls through 2050:

An Orange County toll road that has struggled to build ridership will be refinanced for a second time -- a move that will add years to the period motorists will have to pay tolls to ride it.

On a 12-2 vote, the board of the San Joaquin Hills corridor approved restructuring at least half of the $2.2 billion in bonds that were sold to build the highway, which courses through the coastal hills from Newport Beach to San Juan Capistrano.

The plan by the Transportation Corridor Agencies in Irvine is expected to improve the road's bottom line, but motorists might have to pay tolls until 2050 to retire the debt.

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The Other Gift That Keeps On Giving

I talked about this from the beginning. To keep premiums "low" -- the deductibles and co-pays are very, very high. And more health care facilities (clinics and hospitals) want their money up front. The AP is reporting:

They have health insurance, but still no peace of mind. Overall, 1 in 4 privately insured adults say they doubt they could pay for a major unexpected illness or injury.

A new poll from The Associated Press-NORC Center for Public Affairs Research may help explain why President Barack Obama faces such strong headwinds in trying to persuade the public that his health care law is holding down costs.

The survey found the biggest financial worries among people with so-called high-deductible plans that require patients to pay a big chunk of their medical bills each year before insurance kicks in.

Such plans already represented a growing share of employer-sponsored coverage.

Now, they're also the mainstay of the new health insurance exchanges created by Obama's law.

Edward Frank of Reynoldsville, Pennsylvania, said he bought a plan with a $6,000 deductible last year through HealthCare.gov. That's in the high range, since deductibles for popular silver plans on the insurance exchanges average about $3,100 — still a lot.

"Unless you get desperately ill and in the hospital for weeks, it's going to cost you more to have this plan and pay the premiums than to pay the bill just outright," said Frank, who ended up paying $4,000 of his own money for treatment of shoulder pain.

"The deductibles are so high, you don't get much of anything out of it," said Frank, who is in 50s and looking for a new job.

The bigger problem: folks don't really understand the concept of "insurance." Frank bought catastrophic health insurance; he did not buy a policy to pay for his day-to-day expenses. Folks understand auto insurance (apparently) but can't make the leap to health insurance.

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It's Counterintuitive

Prediction: analysis of the results of the mid-term elections will show that President Obama was correct. If the Dems are to hold the Senate, Mr Obama needs to be on the ballot. The fact that Mr Obama is not on the ballot is the Dems biggest challenge this year.