It's All About The RINS, No Doubt -- July 1, 2017

From biomassmagazine:

Tesoro oil refinery in Dickinson, North Dakota, has plans to co-process renewable feedstock along with regionally sourced Bakken crude oil to produce a 5 percent renewable diesel blend. Construction is planned to begin in October with start-up expected in December. 

Some data points:

• Tesoro acquired the Dakota Prairie Refinery in Dickinson last year
• capacity: can refine 20,000 bbls per day
• renewable feedstock: regionally sources soybean oil and distillers corn oil from ethanol plants
• Tesoro has applied for a $500,00 grant through the NDIC
• capacity: up to 16,800 gallons per day of renewable feedstock
• the total cost of the project: $3.5 million

It's all about the RINS:

As an obligated party under the federal Renewable Fuel Standard, Tesoro indicated the project’s motivation is the increased environmental value of renewable diesel under the RFS.

“The co-processed renewable diesel will generate about 1.7 D5 RINs per gallon,” the refiner stated. “The current market value of a RIN is approximately $1 per RIN.”

The company said the results of this project will help determine the potential for a larger future renewable project at the Tesoro Dickinson Refinery.

Reminder: Tesoro will change its name to Andeavor on August 1, 2017.

MDU Sells Dakota Prairie Refining To Tesoro -- Press Release -- June 28, 2016; For One Day, MDU Owned The Whole Refinery

Updates

Later, 6:10 p.m. Central Time: by now, everyone who has wanted has done their own back-of-the-envelope calculations on this deal. Everyone who has written me seems to agree that Tesoro got this little refinery that cost $430 million (way over budget) for about $77 million. And considering that most of that may be debt, there may be some tax advantages. Regardless. I am thrilled that the Dickinson folks got a world-class refiner to take over this refinery. I sincerely hope it all works out for all involved. Now ... upward and onward to that $4 billion ethane processing plant. Or in the words of Buzz Lightyear, "to infinity and beyond!"

Later, 9:18 a.m. Central Time: from the AP:

Texas-based Tesoro Corp. has bought an oil refinery in southwestern North Dakota that has struggled to turn a profit.

North Dakota-based MDU Resources Group Inc. and Indianapolis-based Calumet Specialty Products Partners LP spent $430 million on the Dakota Prairie Refinery in Dickinson. It began selling fuel last year but hasn't been profitable due to the slumping oil industry and low diesel prices.

The plant lost $7.2 million in the first three months of the year, and officials in May announced plans to operate it at only 75 percent capacity. The developers also had considered a similar plant in Minot but late last year delayed those plans because of the red ink at the Dickinson plant, which currently totals about $66 million.

Tesoro will assume the $66 million in debt and contribute about $10 million toward working capital, the company said.

Later, 9:05 a.m. Central Time: from SeekingAlpha --

• Calumet Specialty Products Partners sells its 50% equity interest in the Dakota Prairie Refining joint venture to MDU Resources Group, which then sells the entire JV to Tesoro
• TSO winds up acquiring Dakota Prairie Refining in exchange for the continued servicing of DPR's $66M term loan debt and ~$10M towards working capital
• DPR's refinery has a crude oil capacity of 20K bbl/day and produces ultra-low sulfur diesel, naphtha and resid; TSO says it will continue to market the ultra-low sulfur diesel to local customers and utilize the naphtha and resid in its integrated value chain system 

Original Post

 

For one day, MDU owned the whole refinery.

From the press release:

MDU Resources Group, Inc. announced today that its subsidiary, WBI Energy, Inc., has sold Dakota Prairie Refining LLC to Tesoro Refining & Marketing Company LLC, an affiliate of Tesoro Corporation.

WBI Energy had been equal partners in building and operating the refinery with Calumet North Dakota LLC, a subsidiary of Calumet Specialty Products Partners LP.

To effect the sale of the refinery to Tesoro, WBI Energy on June 27 acquired Calumet North Dakota’s 50 percent membership interests.

Dakota Prairie Refining is capable of processing up to 20,000 barrels per day of Bakken crude oil and can produce approximately 8,000 barrels per day of diesel fuel, as well as the byproducts naphtha and atmospheric tower bottoms. Located just west of Dickinson, North Dakota, the refinery began operating in May 2015 and employs approximately 75 people.

That was easy.

Calumet Has Completed Its Expansion At The Great Falls, Montana, Refinery -- February 19, 2016

Oil & Gas Journal is reporting:

Calumet Specialty Products Partners LP, Indianapolis, has completed a long-planned project to more than double crude processing capacity at subsidiary Calumet Montana Refining LLC’s refinery in Great Falls, MT.

The refinery’s 25,000-b/d crude unit is now on stream and scheduled to reach full operating capacity by the end of March, 2016.

Initially intended to lift crude processing at the refinery to 20,000 b/d from its original 10,000-b/d capacity, the $400-million expansion also was to include installation of a 25,000-b/d mild hydrocracker (MHC) to convert gas oil to higher-value distillates, a hydrogen plant to support the MHC, and a treatment unit to handle increased fuel gas production from the MHC.

Alongside expanding overall capacity, the crude unit is designed to process heavy sour crudes to enable Calumet to benefit from nearby access to cost-advantaged heavy Canadian crudes.

Years ago when traveling cross-country, I passed through Great Falls. The amount of oil-truck traffic intrigued me; I did not know why; now I know. Great Falls is another city that would fascinate Ayn Rand.

From a recent presentation (2016) by Calumet:

Keep the graphic above in mind when you read the following excerpts from MDU and Calumet 4Q15 transcripts:

 From the 4Q15 transcript for MDU:

Our refining segment includes the company's 50% interest in the Dakota Prairie Refinery which began commercial operations just in May of last year. Our share of 2015 refining results is an adjusted loss of $20.5 million. Earnings were impacted by unplanned outages in October and November due to equipment problems that have since been repaired. Economics have also been affected by historically low Bakken differentials from the West Texas Intermediate pricing, which has reduced the discount for our oil feedstock.

In addition, reduced oilfield activity in the Bakken has decreased the demand for diesel fuel along with the slowdown in Canadian tar sands development has also reduced the demand for naphtha. Our share of projected 2016 EBITDA is at a minus $25 million to zero. As we talk about our overall guidance for 2016, you will see that refining has been moved from the pipeline business to a separate segment. This will provide investors with transparency both on the refinery and the value of our regulated pipeline business.

We're excluding it from adjusted guidance because the refining industry tends not to give earnings guidance due to the volatility and unpredictable nature of the key commodity assumptions supporting its financial results. We believe this approach to adjusted EPS allows for a narrower, more meaningful range for investors, while still providing sufficient guidance for investors to evaluate the refining segment. We are initiating 2016 adjusted guidance in the range of $1 to $1.15 per share. Adjusted earnings guidance includes results from the utility, pipeline, and midstream and construction businesses.

GAAP earnings per share guidance, which includes results from the refinery, is expected to be in the range of $0.85 to $1.10 per share.

Q & A on the refinery:

Q: On the refinery, I know market conditions have been tough there. There seemed to be lot of moving parts, though, this quarter, and in terms of the unplanned outages, is there a way we can think about the drag on earnings this quarter for that segment?

A: Yes. Brent, we were down almost approximately a month. It was all related to the hydrogen plant and we are past that. We're probably going to have some issues with our vendor on that plant, but ultimately we think we've got that handle. So, on a go-forward basis we're really happy with where operations are in terms of operating the plant day-to-day. I would characterize what we put out there as a 90% target in terms of about 21 days maybe for the year outage, and so that's the guidance. I hope that helps. 

And: 

Q: Okay, and then a follow up, and excuse me if this sounds like a stupid question, but you mentioned the guidance includes an expectation for 90% utilization in 2016. I guess that just seems high to me given kind of the demand outlook. I guess why would you expect it to run at these levels or why does it make sense to continue running at these levels if we're going to continue to see losses?

A: Well, there is still a margin on diesel. It's not as robust as it was. So ultimately that is – as long as there is a margin we will continue to operate at a percentage. If we don't see it, we would obviously take it down. Our marketing group has also been having some success taking some diesel out of the basin also. So we think that over the whole year period, we think we'll probably be able to attain those levels, but obviously one of the things you see in our guidance is we have given a range based on pricing because that's one thing we've learned over the years we can't control, and so you've got to operate as well as you can and react to when it's there. So, obviously, if we are having negative pricing, we would turn down the plant.

And finally:

Q: That's helpful and I guess it would also be helpful to get your current thoughts kind of longer term strategically thinking about how the refinery fits in with your longer term plans?

A: Yeah, obviously longer term – short-term, we are working on optimizing where the plant is at. Longer-term, you know this is a business you have to get in on scale, not just one refinery, you have to have several or else you would exit. Obviously, we may not be the right long-term owner but at this point that decision hasn't been made.

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 From the 4Q15 Calumet earnings transcript:

Regarding the Dickinson refinery: 

We do have local niche markets that we believe we are advantaged for in the long-term. I think what we saw in the fourth quarter was as the Bakken drilling was the slowing down, as diesel demand continued to drop in that North Dakota region, obviously that impacted our DPR Refinery significantly. We also saw some carry on effects in both our Montana, and specifically our Superior refiners.

So what’s happening is as diesel demand was extremely high one or two years ago, it was pulling diesel in from those out of state markets, and as the diesel demand started coming back in, what we saw was a backing up of the diesel back into those respective production areas. And so we saw a significant drop in the fourth quarter at both our Superior racks, as well as our Montana rack. As we continue to launch that, we've seen that the inventory is starting to clear, and the Superior racks in particular have rebounded significantly here in the last week or two. So we’re hopeful that as the inventory has been run off, that we’re going to return back to the more typical supply demand balances that we have seen in those local regions.

And more:

Let's start with the last one on Dakota Prairie. You know, clearly that has been weighing on our earnings in the fourth quarter as the Bakken field has slowed down significantly. We've made several -- we've taken several steps to improve the profitability of that operation. Remember in the first place that we just started that plant up in the middle of last year, and as we work through some of the startup kinks, I think we're in a position now where our reliability has been significantly improved, and we hope to be able to realize an improvement 2016 based on that improvement.

We have also taken some leadership changes, just to be frank at the plant, and we think that has made a significant change. We've already seen the difference here in the last couple of months. And one example of that is we were running a diesel yield at the plant somewhere in the 32%-33% range, and after we brought in some additional resources from some of our other assets that were more familiar and experienced with distillation columns, we were able to make some significant moves to increase our diesel yield to 44% or in that range.

So those are some of the significant opportunities that we believe we still have to take at our Dakota Prairie refinery. Our objective is to be cash flow neutral during this bottom of cycle condition. I would tell you we're not there yet, but we have many more steps that we're trying to execute on today to get us into that position. At that point, once we become cash flow neutral, then the role that an asset like Dakota Prairie refinery has in my portfolio is it's a call. It's a call on future increases in crude price, and that has some value in my portfolio.

Vision:

So when I say we have a vision of becoming a premier specialties petroleum products company in the world, what I mean is going forward that's what we're going to be focusing on in terms of our growth strategy. It doesn't mean we're going to try to fire sale any of our assets that are currently in our portfolio, because they do have value to me. However, in the event that someone else views any one of our assets in our portfolio with a higher valuation than what we view it at, of course we would consider selling that asset. That would include any of our field assets, any of our specialty asset, any of our oil sub services assets to the extent that it has higher value to someone else because their portfolio has different synergies or competitive advantages that could take advantage of that asset, we would certainly consider moving that asset out.

And what I would say Christina, is in the past I don’t think we really held that view. We pretty much held on the assets until like they were in our portfolio for good. And I think what I'm bringing to the discussion now is an openness to say hey, maybe other people view these assets at a higher valuation than we do. So that's our philosophy going forward.

Now, go back to the graphic above. Note that the MDU-Calumet refinery in Dickinson is not even listed. Not listed. Not loved. Just a matter of time for ...

It's Just a Matter of Time, Brook Benton
Perhaps it's just me, perhaps it's just this recording, but all of a sudden I long for the good ol' days when we had the 1950's wooden cabinet "hi-fi" and the vinyl records.  And the living rooms the children were not allowed to go into.

MDU Refinery Update -- January 27, 2016; Scroll Down For "The Apple Page"

John Kemp posted this graphic today:

Bloomberg posted this story a couple of days ago: How the Oil Bust Wiped Out One North Dakota Oil Refiner's Profit --

For the first new refinery in the U.S. in seven years, the idea was simple: Buy cheap oil from shale producers, then score a quick profit by selling it right back to them as more expensive diesel needed to power their trucks and drilling rigs.

Now the shale bust is threatening to ruin a renaissance in small refineries, known as teapots, before it even begins. When Dakota Prairie Refining LLC was building its plant in 2014, it could buy some of the cheapest oil in America and sell among the most expensive diesel in America. But the oil bust obliterated its local diesel market, along with the fat premium the fuel used to fetch, as its potential customers shut down operations.

In the fall of 2014, when tiny Dakota Prairie was getting ready to open its processing plant in Dickinson, North Dakota, diesel fuel near the state’s Bakken oil fields sold for $100 a barrel more than the oil produced there. Now it’s selling for just $16 a barrel more.

"The last thing you want to be doing right now is running a refinery that makes a lot of diesel and very little gasoline," said Robert Campbell, head of oil-products research at Energy Aspects Ltd.  It’s a "double whammy," he said, as the diesel market weakens worldwide and demand in their specific local market plunges. Dakota Prairie lacks the pipelines and storage units a larger refiner uses to sell to customers farther away, and it’s not equipped to make vehicle-ready gasoline instead of diesel.

A big "thank you" to Don for sending me the link a couple of days ago.

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The Apple Page

The general consensus, it seems, was that Apple's 4Q15 earnings report was not particularly good -- the company reported record profits for the quarter, but forward guidance was dismal, and sales of iPhones were slowing down, and there seems like nothing new on the horizon.

It took rebates or price slashing to move Apple watches and TV, but record quarterly sales were reported. From Macrumors:

Both the Apple Watch and the Apple TV set new quarterly sales records in 1Q 2016, according to information shared by Tim Cook during today's earnings call. The Apple Watch saw especially strong sales in December as people purchased the device during the holiday season, something that's perhaps not a surprise given the significant discounts offered by some third-party retailers.

While Apple did not offer discounts itself, Best Buy cut prices on the Apple Watch by $100, and Target offered a $100 gift card with the purchase of an Apple Watch. These price drops likely boosted Apple Watch sales by a good amount during the quarter. Apple also expanded Apple Watch availability to more than 48 countries ahead of the holiday season.  

MDU's Dickinson Refinery Down For Repairs -- November 19, 2015;

The Bismarck Tribune is reporting that the Dickinson refinery is "down" for repairs:

North Dakota’s newest refinery is down for repairs after trouble with the unit that produces hydrogen.

Dakota Prairie Refining, near Dickinson, which processes Bakken crude into diesel, has been down since Thursday and will be off line until sometime next week, says MDU Resources spokesman Rick Matteson.

The original project took longer than expected, came in over budget, and is now down for repairs, about six months after it came on line.

Thoughts?

"There are always issues with a new plant; it’s a normal part of the operation,” Matteson said.

Or as we all used to say in North Dakota: "Stuff happens."

Another update at The Dickinson Press.

Blue, LeAnn Rimes

Update On The MDU-Calument Diesel Topping Refinery West of Dickinson, ND -- November 12, 2015

Argus Media has an update on the MDU-Calumet refinery west of Dickinson:

Struggling Bakken crude producers have at least one refiner sharing their pain.

Dakota Prairie, a 20,000 b/d refining joint venture of MDU Resources and Calumet Specialty Products Partners that began operating in April, posted a $19.1mn loss in the third quarter.

At full rates, Dakota Prairie produces 7,000 b/d of diesel, 6,500 b/d of naphtha shipped to Canada for diluent and 6,000 b/d of atmospheric bottoms shipped to a Calumet refinery in Montana for processing through a hydrocracker. MDU Resources anticipated gross earnings of $60mn to $80mn at the facility, and considered a second refinery at similar scale as an April startup approached last year.

MDU Resources still expects the refinery to become profitable. Dakota Prairie has begun making a winter-grade diesel that MDU Resources expects could earn a 10¢/USG to 20¢/USG premium to other diesel. Contractor expenses will drop off next year as the facility gains more operating experience and needs fewer start up personnel.

Much, much more at the link.

Meanwhile, MDU appears to be having more success with its wind energy partner. RENews is reporting that its dicing and slicing project code-named Thunder Spirit is producing electricity:

Allete has announced that the first of 43 Nordex N100 turbines at the 107MW Thunder Spirit wind farm in North Dakota, USA has started to generate electricity.

The first turbine went online on October 21, rapidly followed by four more at the renewable energy farm which is being built about 100 miles southwest of Bismarck.
It is expected to be completed by December and the energy produced will be sold to Montana Dakota Utilities.

I don't know what happened to the rest of the turbines. Back in 2013, it was reported there would be 75 turbines (vs the 43 reported above) at a cost of $300 million. On August 11, 2015, it was reported that there would be only 43 turbines, 107.5 MW, but the cost not provided. $300 million / 107.5 MW  = $2.8 million / MW, but perhaps with 43 turbines, the price has come down.

From Outrun Change:

Some other info on the Thunder Spirit slice-and-dice farm near Hettinger, North Dakota:

• Allete Clean Energy – the shell company that owns the wind farm, in turn a subsidiary of Allete.
• 43 – number of turbines
• 10,000 acres – footprint of wind farm
• 2.7 – turbines per square mile
• 2.5 MW – rated capacity of each turbine
• 426,000 mWh – expected output per year for 43 turbines
• 9,907 mWh – Expected annual output per turbine (calculated as 426,000 mWh divided by 43)
• 10.86 hours – expected time each day that each turbine will be operating at capacity (calculated as 9907 mWh each turbine divided by 2.5 MW theoretical capacity divided by 365)
• 45% – percent of theoretical capacity that is expected to actually be delivered. From what I have read, this would be an extraordinarily efficient wind farm. I expect the actual capacity to be below 45%.

The expected utilization is that the wind farm will deliver 45% of the theoretical capacity.

A google search results in numerous articles with differing number of turbines, different costs, etc, etc. The Bismark Tribune reported it was a $350 million project for 150 MW back in 2013 when it was just getting approved, or about $2.3 million / MW. Whatever the actual number, it seems to be running about what onshore wind farms are going for in the US.

At the end of the day, about 100 MW, about $2.5 million / MW, and smack dab in the center of one of North America's busiest flyways.

This Side Of Paradise; Producers Paying To Have Their Propane Taken Away, Part I -- Tuesday, June 9, 2015

For those who may have missed it, the EPA says fracking has no widespread effect on drinking water. None. Nada. Nil. Zilch.  Varney and Company over at Fox Business News is apparently going to do a piece on this "ruling" in each of the three hours this morning. I don't know the specifics of Varney and Company, time slot, network, etc. I may be way off, but I know the "Varney" part is correct. Don told me. Fox News video here.

No matter how you spin it, the Obama administration supports fracking. If the administration did not support fracking, the administration could have easily delayed the EPA report, saying the study needed more time and more research or more study or whatever language they wanted to do. They only had to run out the clock, less than two years of delaying a report. Shoot, they've delayed action on the Keystone XL North for six years and counting. The fact that the EPA report was released  on President Obama's watch speaks volumes. Either he personally supports fracking, or he is disengaged going into his last two years and is focused on foreign relations issues. Like Iran.

Active rigs:

	6/9/2015	06/09/2014	06/09/2013	06/09/2012	06/09/2011
Active Rigs	82	192	189	213	169

EIA "energy cookie":

While total U.S. crude oil production increased by nearly 3.2 million barrels per day (b/d) from 2010 to 2014, production in the West Coast region (PADD 5) decreased by 0.1 million b/d, continuing a long-term decline.

With no major crude oil pipelines connecting the West Coast to other parts of the country, refineries on the West Coast adjusted to the declining in-region production by increasing imports of foreign crude oil, reaching an average of 1.1 million b/d over the past five years.

Shipments of domestic crude by rail (CBR) to the West Coast have also increased, from an average of 23,000 b/d in 2012 to 157,000 b/d in 2014. In the first quarter of 2015, West Coast CBR movements averaged 191,000 b/d. --- EIA

RBN Energy: producers paying to have their propane taken away. 

Prices for non-TET propane at Mont Belvieu yesterday fell to their lowest level in 13 years at 31.0 cnts/Gal (source: OPIS). A big part of the recent price decline is to do with surging propane storage inventory. Last Wednesday’s data from the Energy Information Administration (EIA) showed U.S. propane inventory levels increased by 3.8 MMBbl to 77MMBbl during the last week of May 2015. If storage injections increase at that rate for another couple of weeks then levels will surpass the record of 81.6 MMBbl set in October 2014. The trouble is – that record was set at the start of winter – traditionally the end of propane storage build season - but we are still only in June – with several months of storage build left. Today we discuss the growing propane surplus.

We began this series last week by looking at the Edmonton propane market where prices dropped into negative territory in the face of unprecedented oversupply.

The western Canadian surplus follows lower seasonal crop drying and home heating demand than usual for propane in their traditional markets in the U.S. Midwest and Northeast.

That lack of demand was compounded by the reversal of the Cochin pipeline in 2014 that previously shipped up to 50 Mb/d of Canadian propane to the Midwest. Until new rail terminals and storage capacity are built in the Edmonton region, natural gas liquid (NGL) producers are stuck scrambling to find local storage capacity or paying additional rail freight charges to ship their propane to U.S. storage hubs around the country at spots like Hattiesburg, Mississippi, Arizona, at Conway, KS in the Midwest,  Mont Belvieu on the Gulf Coast or just about any location that will take the stuff. The trouble is that supplies are just as abundant in the U.S. as they are in Edmonton this year and so there is no “room at the inn” for much of the surplus Canadian propane in the Lower 48. This time we turn our focus to the worsening U.S. propane supply glut.

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Grinding

US shale oil boom grinding to a halt, one percent / month. Bloomberg is reporting:

The shale oil boom that turned the U.S. into the world’s largest fuel exporter and brought $3 gasoline back to America’s pumps is grinding to a halt.

Crude output from the prolific tight-rock formations such as North Dakota’s Bakken and Texas’s Eagle Ford shale will shrink 1.3 percent to 5.58 million barrels a day this month, based on Energy Information Administration estimates. It’ll drop further in July to 5.49 million, the lowest level since January.

Since January. Six months ago. So yesterday.

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MUD

I cannot, for the life of me, see how MDU could screw up as badly as they did in the Bakken. Here's another story. Remember that MDU-Calumet Dickinson refinery: delayed and over -budget, coming in at over $400 million, if I recall correctly.

Devils Lake wants to build an almost identical refinery for .... drum roll ... $200 million. I believe $200 million was the original cost estimate for the Dickinson refinery; if not $200 million, at least in that ballpark. [I was off a bit, here's the estimate and "final" cost -- MDU says the cost of the plant, initially pegged at $300M, now has been revised to $425M-$435M.]

Of course, if the Devils Lake refinery is built, it, too, will come in over budget -- all big projects seem to come in over budget, but I doubt to the tune of $400 million.

The Dickinson Press is reporting:

The Devils Lake City Commission will review a development agreement next week with the company that plans to build a $200 million, 20,000-barrel-per-day oil refinery on the west edge of Devils Lake.

The refinery, similar to one that just opened in Dickinson, would process oil from the Bakken Formation of western North Dakota, converting it to low-sulfur diesel fuel, which would be marketed in the region for use in agriculture and construction equipment.

The things that stand out for me with regard to MDU:

• headquartered in the backyard of the Bakken
• a company from Oklahoma quietly buys up the mineral acreage in MDU's back yard
• MDU finds a good field; turns it into a mediocre field; sells it to Oasis who turns it into an outstanding field, and makes Oasis what it is today
• the $435 million MDU-Calumet Dickinson refinery, delayed and way over budget
• puts Fidelity on the market the very month the price of crude oil plummets (Saudi's revenge)
• takes Fidelity off the market; then puts it back on the market two months later 

Dickinson Refinery Begins Operations; Video Of The Bakken -- May 3, 2015; Chevy Cuts Prices On Volt

Refinery up. Press release:

MDU Resources Group, Inc. and Calumet Specialty Products Partners, L.P. today announced that the Dickinson, North Dakota-based Dakota Prairie refinery, the first greenfield fuels refinery built in the U.S. in nearly 40 years, has commenced operations. The facility has begun producing diesel fuel and is expected to begin sales of diesel as the plant ramps up during May.

The refinery is designed to process 20,000 barrels per day (bpd) of locally sourced Bakken crude oil, resulting in a production slate that includes up to 7,000 bpd of diesel fuel that will be sold from the plant to regional, North Dakota-based customers.

Wasn't it just last week when MDU announced that they were hoping to have the plant opened up in the next couple of months or so ... it's amazing how fast things happen when earnings will be announced. MDU announces earnings after market close tonight. It will be interesting to see how much diesel will be produced this week -- now that the refinery is up and running. 

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Volt Down

Chevrolet cuts price on new Volt. USA Today is reporting:

The Chevrolet Volt is getting more electric-only miles, sleeker styling and a whole suite of improvements -- yet Chevrolet is cutting the price of its extended-range electric car by $1,175.

The price cut speaks to the difficult time that automakers are having when it come to selling fuel-conserving cars in a low gas-price environment. And it's not the first time that Volt got a price cut. The original Volt, not this all-new model, had its price reduced by $5,000 in August, 2013.

The new Volt is capable of being driven 50 miles on electricity alone, some 31% better than the outgoing Volt. It also has a backup gas engine.  

I assume the tax credits are good only for the original buyer, but I don't know.

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 Silliness

The Tesla home battery. Seeking Alpha is reporting:

It's pretty clear that without "going crazy", your house can easily draw 3kw of electricity; and yet, Tesla's 10kWh back-up battery has continuous output of only 2kw, and thus is inadequate to run even a medium-sized house, and would be completely dead in five hours anyway, with no capacity to run central air conditioning or charge an electric car.

(For a medium-sized house, a central air conditioner alone draws nearly 5kw.)

 ... a comparably priced 16kw natural gas-fired generator can run your entire house (including the air-conditioning) for as many hours as needed, at a cost of less than $2/hour (assuming 195 cubic feet/hour consumption at full draw and a New York State gas price of less than $10 per 1000 cubic feet of gas)?

By the way, another dot is connected. Why did this battery pack show up now?

... to find some use for millions of Panasonic cells that it has committed to buy without being able to sell enough cars to utilize them ...

I don't know that much about Tesla batteries but this rings true. Regardless, the Tesla battery pack runs about $3,500 and SolarCity has an installation package that doubles the price.

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Book

Memo to self: Dana Perino has a new book out.

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Short Video Of Highway Construction

This short video probably should be deleted and not posted, but it may be one of the few recordings of my 93-year-old dad talking about how these construction workers worked right through the winter this past year, whereas when he was growing up, construction workers often quit for the winter. The video is a few miles south of Williston, if I remember correctly.

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Cross-Country Trip

I try to get in two cross-country trips each year, generally one to California and back, and one or two to North Dakota and back.

I enjoy them all. Sometimes I'm by myself, sometimes I'm with my wife, and rarely (once) we go with the granddaughters. The trip with the granddaughters is always the most fun.

For whatever reason, this most recent trip back to Williston was one of the best I've had, possibly because a) I drove through Nebraska during the night, both directions; and, b) the weather was incredible, and the scenery spectacular, especially in Kansas.

Thinking about this, I wrote the following down why this particular trip seemed particularly nice -- all because I was driving by myself:

• I could play the music I liked as loud as I liked
• I could listen to all three hours of Rush Limbaugh (when I remembered, and when I found "his" station)
• I could stop at McDonald's without anyone saying, "McDonald's? Not again!"
• I could stop when and where I wanted; even if the rest stop looked "creepy," I could stop there
• as soon as the car came to a stop, I was out the door, out of the car
• I could read a book while driving
• I could sleep at rest stops and not motels, and not feel guilty
• I could write this list while driving

Does Anyone Know If The Dickinson Refinery Is Producing Diesel Fuel Yet -- April 25, 2015

The website does not provide any real-time information as far as I can see.

I have conflicting reports. Back in November, 2014, it was reported that the refinery west of Dickinson would start producing diesel fuel "next month," which would have been December, 2104.

Yesterday a reader told me that the refinery has not yet begun production, and I see one of my most recent posts (March, 2015) said that "they" expected the refinery to start production within the next three months, which would be April, May, June, or July, 2015, for first production.

Also of interest, the final cost:

Initially estimated to cost $300 million, the refinery’s price tag has grown to $360 million, in part because of unusually wet conditions that have hampered construction, said John Stumpf, WBI Energy’s senior vice president of business development and midstream. 

The Dickinson refinery, at 20,000 bbls/day is significantly smaller than the proposed Valero topping refineries in Texas:

The company’s plans include adding a 70,000 b/d unit at the Corpus Christi refinery at an estimated cost of $340 million and a 90,000 b/d topping unit in Houston at a cost of $390 million.

Valero announced plans to add the 90,000 b/d unit at its Houston facility at an estimated cost between $220 – $280 million early in 2013. According to Valero Spokesman, Bill Day, those costs are now projected at $390 million for the 90,000 b/d unit.

Disclaimer: I often make factual and/or typograhical errors. Do not use this site for making any decisions about what to do with your life, financial, investing, job-hunting, or otherwise. If this information is important to you, go to the source. 

The Bakken Still Has Legs -- March 31, 2015

Updates

April 1, 2015: the more I thought about, the more I thought this might be the most important / most interesting story of the week, the story below about "the Dickinson refinery is not expected to stabilize diesel prices."

So many story lines. First, the "refinery" (more about that later) was completed at all -- the first new refinery in the US in decades. Second, the amount of diesel if produces is a "drop in the bucket" with regard to how much diesel North Dakota farmers use, especially at harvest. Third, it reminds us how vibrant / huge the North Dakota agricultural industry is. Fourth, the MDU-Calumet partnership and how that plays into the national refinery "grid" and CBR.

After the original post below, I received a nice note from Don. The note, heavily edited to fit the story lines follows:

The "Dickinson refinery" is technically a distillery and NOT a refinery. North Dakota state usage of diesel is 53,000 bpd and is expected to grow to 75,000 BPD in 2025. The plant will be referred to as a "topping” plant because it is an early stage refinery that refines only certain petroleum components found in the crude oil. As such, it does not meet the full definition of a refinery that processes all petroleum components found in the crude oil feedstock that comes into the plant.

"It’s called a ‘topping plant’ because, in essence, it strips out the easily refined components, processes them and ships the remaining components off to other refineries for complete processing,” he said. "Topping plant facilities are typically smaller than full-scale refineries and are usually located near the primary market for their key product.” 

What is not refined is put in tank cars and shipped to Superior Wisconsin, where Calumet has a refinery..   remember there is a CBR  unit right next to the MDU plant. 

Original Post

 

This is almost bizarre.

This AP story was picked up by the Washington Times: Dickinson refinery not expected to stabilize diesel prices.

Give me a break. This is a 20,000 bopd diesel refinery -- hardly a rounding error among US refineries. This was simply a local entrepreneurial story; someone saw a local need and took advantage of it. It took years to get it up and running -- although the fact that it was completed at all is probably the real story.

And this story gets picked up by The Washington Times -- must have been a slow day in DC on the day this was published.

The Washington Times/AP is reporting:

A new oil refinery near Dickinson is expected to begin operations within three months, but officials don’t expect it to stabilize the price of diesel fuel during harvest.

The Dakota Prairie Refinery is expected to produce nearly 300,000 gallons of diesel fuel each day. It will be sold locally, but MDU Resources Group spokesman Rick Matteson [says] that the amount is “a drop in the bucket” compared to the demand.

North Dakota State University Assistant Professor David Ripplinger also says the refinery will have little to no impact on what farmers pay for diesel, though he says it might help ease supply disruptions. 

Wow, even regionally it's a drop in the bucket. So, why didn't they build it 10x bigger? Let's hope this was a trial run -- time to think much bigger.

Again, I'm getting a feeling for just how big the energy picture is in North Dakota, not just the "Bakken," but the energy picture driven by agriculture. 

OOPS, We're Doing It Again: ANOTHER ND Refinery AND POTUS Pushes For Changes In ObamaCare AND Back To LBJ's "Vietnam-Style" Body Counts -- November 21, 2014

The Dickinson Press is reporting:

Developers of a nearly completed diesel refinery near Dickinson are eyeing the Minot area as the potential site for a similar plant.

the second refinery would process about 20,000 barrels of Bakken crude oil per day, the same capacity as the Dakota Prairie Refining LLC facility near Dickinson.

“Minot’s a little different situation, but the demand for diesel up there is even stronger than it is [in the Dickinson area].

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Another Inconvenient Truth Mr Obama Never Acknowledged

Link here. From 2008 - 2014, under Mr Obama's entire tenure (all numbers rounded) --

• Jobs created in the US, not counting Texas: a NEGATIVE 350,000 jobs
• Jobs created in Texas: a POSITIVE 1,400,000 jobs

California, Texas, Oklahoma, North Dakota, Louisiana, and North Carolina best positioned for influx of immigrants. The rest of the country? Er, not so promising.

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ObamaCare

POTUS Looking For Three Changes In The Law -- Who Benefits?

CNBC is reporting:

The Obama administration late Friday called for numerous significant changes to rules controlling the Obamacare health care program, including ones that would shorten open-enrollment seasons, increase transparency of insurance plans and prices, and push current customers toward lower-cost plans.

Let's look at each:

• shorten open-enrollment seasons: benefits insurance companies; the shorter the better (for any number of reasons)
• increase transparency of insurance plans and prices: benefits larger insurers at expense of smaller insurers (again, for at least two reasons); may benefit consumers, but unlikely since it's all gobbly-gook for most
• push current customers toward lower-cost plans: counter-intuitive, that's why it's so "nice"; benefits the insurance companies; lower-cost insurance plans will have higher deductibles

******************************

Body Counts

Updates

November 18, 2015: from The Fiscal Times --

Our military is being interfered with and directed by President Obama and a national security team that one retired general has described as “pathetically weak.” It includes Susan Rice, former human rights activist focused on Africa, and Valerie Jarrett, lawyer and former real estate developer. The Obama White House is remarkably devoid of ex-soldiers; that’s not an accident. The president’s contentious relationship with the military is well known.

The New York Times recently detailed efforts to disrupt Highway 47, ISIS’s critical supply route between Syria and Iraq’s Mosul. The U.S. has apparently been loath to bomb that essential artery for fear of civilian casualties. There have been 250,000 people killed in Syria. The U.S. is worried about truck drivers who may be willing to work for ISIS.

Yesterday the U.S. launched airstrikes on hundreds of trucks conveying oil to market, destroying 116. But we made certain no civilians were hurt by dropping leaflets an hour before the strikes, alerting ISIS to the imminent bombings. Was ever a campaign so absurdly restrained?

Earlier this year, that caution ignited controversy, when an Air Force official told legislators that in the bombing effort in Syria and Iraq, “There’s a target of zero civilian casualties….”

He explained further that even if there was only one civilian at risk, his pilots would withdraw, no matter how important the target. The upshot of that policy is that 75 percent of our combat missions return to base without dropping a single weapon. 

Original Post

 

Reuters is reporting:

Air strikes by U.S.-led forces in Syria have killed 910 people, including 52 civilians, since the start of the campaign against Islamic State and other fighters two months ago, a group monitoring the conflict said on Saturday.

The majority of the deaths, 785, were Islamic State fighters according to the Britain-based Syrian Observatory for Human Rights. Islamic State, a hard-line offshoot of al Qaeda, has seized land in Syria and neighboring Iraq, where it has also been targeted by U.S.-led strikes since July.

Three comments:

• back to LBJ's Vietnam body counts
• it's wonderful that George Bush is not doing this
• another Reuters story pushing the Nobel-Peace-Prize POTUS off center-stage to make room for Hillary

Similarly, the story that POTUS is expanding the war in Afghanistan will help move the Nobel-Peace-Prize POTUS off center-stage to make room for Hillary. This allows Pocahontas and Hillary to say they will bring the troops home. Interestingly, the story was reported by The New York Times. The New York Times calls it a "shift" (their word, not mine); John Kerry, had he done this, would have been accused of flip-flopping. LOL.

Update On Wind Ridge Pipeline, One Of The Largest Gas Pipelines To Be Built In North Dakota In Ten Years -- August 29, 2014

Updates

April 11, 2016: update on this pipeline -- the application for this project has been withdrawn. 

The application for regulatory approval by the Federal Energy Regulatory Commission for the planned Wind Ridge Pipeline to carry natural gas to near Spiritwood has been withdrawn, according to Tim Rasmussen, public relations manager for WBI Energy Transmission, owner of the project.

The planned 96-mile pipeline would have connected to the Northern Border Pipeline near Zeeland, N.D., and angled to the northeast to near Spiritwood where it was intended to provide natural gas to the planned CHS fertilizer plant. 

Original Post

 

The problem with blogging on the Bakken, or following the Bakken, or driving around the Bakken, everything becomes a blur. So much is happening, that unless "-est" is in the headline, the story may not catch one's attention.

Wind Ridge Pipeline is just one of a thousand examples. I assume I've come across Wind Ridge Pipeline before, but never paid any attention to it until Steven sent me the link to the story, and I happened to see a word in the lede with "-est" in it.

The Jamestown Sun is reporting:

One of the largest natural gas pipelines in North Dakota in the last decade is in the planning and permitting process, according to Tim Rasmussen, spokesman for WBI Energy, a division of MDU Resources Group.

Rasmussen said Wind Ridge Pipeline LLC will cost an estimated $120 million and will serve the proposed CHS nitrogen fertilizer plant at Spiritwood.

“Construction of the pipeline is contingent on CHS moving forward,” he said. “In order to meet their timelines we had to start the pre-filing process now.”

The pipeline will transfer natural gas from the Northern Border Pipeline near Zeeland, ND, to the CHS plant at Spiritwood for conversion into nitrogen fertilizer. The 95-mile pipeline project will cross Mcintosh, Logan, LaMoure and Stutsman counties with 16-inch pipe.

I have blogged at least twice on the Spiritwood fertilizer plant, but had missed or did not know about the "largest" pipeline that would be built to bring natural gas to the plant.

Other posts regarding the CHS plant:

• propane off-loading facility coming along
• Yahoo!In-Play
• RBN Energy
• EPA okays CHS
• largest-ever fertilizer plant has final approval

As Joe Biden would say, this is "a really big freakin' deal."

By the way, going back to all those links brings us back to all those propane-shortage stories. Somehow we weathered that, also.

********************************

Meanwhile, Back At Refinery....

The Dakota Prairie Refinery southwest of Dickinson is about 80 percent complete ...

The Dickinson Press is reporting:

With an estimated 20 percent of work still to finish — “the hardest,” said project manager Jeff Rust — the $350 million refinery is on schedule to begin processing roughly 20,000 barrels of crude oil per day later this year. It will produce about 300 barrels of natural gas and 7,000 to 8,000 barrels of diesel per day, much of which will be sent to local wholesalers and sold in the community.

**********************************

Twelve (12) new permits --

• Operators: Slawson (7), CLR (4). Hunt
• Fields: Big Bend (Mountrail), Dollar Joe  (Williams), Parshall (Mountrail)
  Comments:

Seven (7) producing wells completed:

• 23256, 642, SM Energy, Arnold 16X-12H, Siverston, t4/14; cum 28K 6/14;
• 23257, 776, SM Energy, Dorothy 16-12H, Siverston, t4/14; cum 55K 6/14;
• 24476, 1,890, Statoil, M. Olson 20-29 6H, Painted Woods, t7/14; cum --
• 26212, 1,967, EOG, Wayzetta 40-1424H, Parshall, 1920-acre although it's technically a long horizontal, in fact it really only drains one section (section 23), t3/14; cum 124K 6/14;
• 26346, 2,384, Statoil, Cvancara 20-17 7H, Alger, t7/14; cum --
• 26750, 615, SM Energy, Rick 16X-12H, Siverston, t4/14;
• 27080, 1,070, Arsenal, Allison Ann 10-3H,

Ten (10) New Permits On A Very Slow Friday -- July 25, 2014; NDIC Not Reporting Historical Rig Counts Consistently; The Big Story -- Why Is North Korea So Quiet?

NOTE: The NDIC is intermittently not including various years (most notably 2013 and 2009) when reporting the number of active rigs. I had not noticed that, but scrolling through the active rigs data, this started happening over the past week or so. Note, for example, today: 2013 and 2009 data is not included. An alert reader caught this. I don't know the reason.

Active rigs:

	7/25/2014	07/25/2012	07/25/2011	07/25/2010	07/25/2008
Active Rigs	193	208	179	138	76

Ten (10) new permits --

• Operators: Oasis (4), Petro-Hunt (2), Statoil, Whiting, Crescent Point, Samson Resources
• Fields: Foothills (Burke), Baker (McKenzie), North Tioga (Burke), Stony Creek (Williams) Sanish (mountrail), Ellisville (Williams), Blooming Prairie (Divide)
• Comments:

Wells coming off the confidential list today were posted earlier today; see sidebar at the right.

*****************************

New North Dakota Refinery Almost Complete

BillingsGazett is reporting:

Construction of an oil refinery near Dickinson is about three-fourths complete, and most of the jobs that will be created there have already been filled.

Bismarck-based MDU Resources Group Inc. and Indianapolis-based Calumet Specialty Products Partners are building the $350 million Dakota Prairie Refinery. Construction started in March 2013. The facility is slated to be operating late this year.

The refinery will employ about 90 workers. About 70 of the positions already have been filled by people with a lot of experience in the industry, according to MDU.

****************************************

ONEOK To Invest $450 Million In SCOOP

TulsaWorld is reporting:

ONEOK Partners LP announced Thursday that it plans to invest between $365 million to $470 million on natural gas projects in the emerging South Central Oklahoma Oil Province (SCOOP) over the next two years.

The Tulsa-based energy infrastructure firm will build a new natural gas processing plant in Grady and Stephens counties. The planned Knox plant will eventually process up to 200 million cubic feet in natural gas per day, according to the ONEOK release.

The "average" ONEOK natural gas processing plant in the North Dakota Bakken is rated at 100 million cubic feet of natural gas per day.

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When Is A Cease-Fire Not A Cease-Fire? When Israel Is Involved

Fox News is reporting:

Israel and Hamas announced a 12-hour humanitarian cease-fire in Gaza for Saturday, only hours after Israel's security cabinet unanimously rejected U.S. Secretary of State John Kerry's proposal for a temporary cease-fire to allow indirect talks.

In announcing late Friday that it would observe the "humanitarian window" from 8 a.m. to 8 p.m. Saturday, Israel said that during that time "we'll continue to locate and neutralize terror tunnels."

It also warned the military "shall respond if terrorists choose to exploit" the lull to attack Israeli troops "or fire at Israeli civilians."

A Hamas spokesman, Sami Abu Zuhri, said earlier Friday that the group had agreed to a 12-hour lull, starting at 8 a.m.

Any bets how long this 12-hour cease fire between modern-day Hatfields and McCoys will last? I give it six hours. [Apparently the cease fire did not last an hour: "Israeli-Hamas forces continue to fight despite cease fire."]

****************************************

The Obama Legacy: Household Net Worth Plummets

The New York Times is reporting:

The inflation-adjusted net worth for the typical household was $87,992 in 2003. Ten years later, it was only $56,335, or a 36 percent decline, according to a study financed by the Russell Sage Foundation. Those are the figures for a household at the median point in the wealth distribution — the level at which there are an equal number of households whose worth is higher and lower. But during the same period, the net worth of wealthy households increased substantially. 

No, the entire "loss" did not happen under the Obama administration, but the expectations that his administration would turn "this" around.

****************************************

The Obama Legacy: No More Oil From Libya

Fox News is reporting:

The United States shut down its embassy in Libya Saturday and evacuated its diplomats to neighboring Tunisia under U.S. military escort amid a significant deterioration in security in Tripoli as fighting intensified between rival militias, the State Department said. 

"Due to the ongoing violence resulting from clashes between Libyan militias in the immediate vicinity of the U.S. Embassy in Tripoli, we have temporarily relocated all of our personnel out of Libya," spokeswoman Marie Harf said.

The withdrawal underscored the Obama administration's concern about the heightened risk to American diplomats abroad, particularly in Libya where memories of the deadly 2012 attack on the U.S. mission in the eastern city of Benghazi are still vivid and the political uproar over it remain fresh ahead of a new congressional investigation into the incident. A senior military official told Fox News the Pentagon has been advising the State Department leave the post for weeks. 

Wow, talk about dithering. Never learns. It will be interesting to see the new definition of "temporarily."

President Obama will leave office with the world significantly worse off than the found it when he assumed the presidency.  

The big story: why is North Korea so quiet?
 

Happy Father's Day To All

Updates

June 16, 2014: two data points to connect. The first data point was supplied by the New York Times in the article linked down below which began:

It took only two days, though, for the fighters of the Islamic State in Iraq and Syria to issue edicts laying out the harsh terms of Islamic law under which they would govern, and singling out some police officers and government workers for summary execution.

With just a few thousand fighters, the group’s lightning sweep into Mosul and farther south appeared to catch many Iraqi and American officials by surprise. But the gains were actually the realization of a yearslong strategy of state-building that the group itself promoted publicly.

The second data point: Hillary got "out" just in time.

It doesn't take a political scientist to connect those two dots. If the planning for "taking down" the legitimate democratically-elected government of Baghdad was in the works for years, and the Obama administration was doing nothing about it, surely everyone in the Mideast knew it, and certainly Bremer knew it, and certainly Hillary knew it. She got out just in time.
 

Original Post

I guess we will have to wait for the June Director's Cut to come out tomorrow.

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Investment Potential In The Bakken

I did not know what to "headline" this link, but this is a very, very interesting story. As usual, because of the way such articles are written, it's a bit convoluted, but it's an important story for anyone interested in the Bakken. A big "thanks" to Steve for sending it my way. Regardless of what side of the issue you might be on with regard to CBR and its risks, this story has huge implications. MarketWired is reporting that:

Quantum intends to strip Bakken crude down to a Reid vapor pressure of 6 psi or lower and sell the separated gas liquids. The Tempe, AZ-based holding company also hopes to set up five micro-refineries modeled after a new joint project run by MDU Resources Group Inc. and Calumet Specialty Products Partners. Once completed, that diesel facility will mark the first new refinery built in the United States in nearly 40 years.

*******************************

LNG Fleets: The Tipping Point

Mark your calendar: June 13, 2014, may have just been the date that LNG reached the "tipping point" in the good ol' USA.

The Houston Business Journal is reporting that:

A more environmentally friendly "sea of brown" UPS vehicles are coming to Houston as the delivery giant introduces 1,000 liquefied natural gas trucks into its fleet — the largest fleet of LNG trucks in the world.

Nearly 60 LNG tractor-trailer trucks, or 18-wheelers, are coming Houston and 142 of them will be in Texas. About 100 other smaller LNG delivery vehicles also will be brought into Texas.

The new natural gas vehicles will replace diesel engine trucks and will displace more than 24 million gallons of diesel fuel annually. 

Great things may be happening in Russia, China, India, Japan, Germany with regard to renewable energy, but the US free-market capitalistic economy keeps moving along, making greater strides in energy, and in the process, widening the delta between the US and the rest of the world when it comes to energy. Memo to self: insert a copy of Mr Obama's speech, "You Didn't Build That" at some later date.

*******************************

A Note to the Granddaughters

I am home alone for a couple of weeks. My wife is out in California. I slept in late, but will join my daughter/son-in-law and granddaughters for a later lunch at a Mexican restaurant. Perhaps more on that later. It's my favorite Mexican restaurant at the moment.

I rode my bike to the nearest Starbucks this morning, where I am now. It is in a neighborhood grocery store (not Target) and generally not busy at all by this time in the morning. I was the only one there.

Nothing out of the ordinary, I simply walked up to the counter and told the barista, "a tall dark. And no room for cream."

His reply: "Was that 'leave room for cream'?" While he was punching in his code to open the electronic cash register.

I replied: "No, no room for cream. Thank you."

Then, the response that really put things into perspective: "Could I have your order again?"

"Yes, a tall dark."

It's gonna be a long day.

*************************************

I got home safely from Barnes and Noble last night with my new book purchases. I am thrilled with the purchases. (If anyone is really curious, and I doubt anyone is, I spoke of these books in an earlier post.)

When I got home I sat down to enjoy a late night watching some Blu-Ray DVDs. I started with Miami Vice, second season, last episode. Miami Vice was not particularly consistent; some good episodes; some not so good. Fortunately the visuals and the music provided some redeeming quality for even the worse episodes. This particular episode was quite good.

Then, unto Alfred Hitchcock's Notorious with Ingrid Bergman and Cary Grant. It's one of my favorites, and I try to watch it two or three times a year. Of course, my favorite remains Casablanca, and more often that not, I watch it while listening to the commentary by Roger Ebert. One can get a feeling for his commentary at his blog. Notorious also comes with two commentaries but last night I just watched the movie "in peace." Ms Bergman preferred to be photographed/filmed in left three-quarter profile. That preference was obvious in both Casablanca and Notorious. I never really "understood" the art of acting until I saw David Lynch's Mulholland Drive. Ever since that movie, my regard for successful actors has increased immensely. I just wish most of them would stay out of politics unless they actually ran for office. I wish more would run for office.

******************************

Summer Reading

Speaking of books, this probably won't make our older granddaughter any happier today: I just received a note from Amazon that they have shipped the book I ordered, Kumon: Pre-Algebra.

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Dereliction of Duty

I see the New York Times got the headline wrong. "Dereliction of duty" would have been more accurate, but then again, this is the New York Times. It's hard to believe that the New York Times could put this story together in less than 48 hours; this suggests to me a lot of folks knew the background and were just waiting for "it" to happen.  

It is a well-known fact that the large news organizations have obituaries written well in advance, so they can get them published within hours of a celebrity death, only having to fill in the last few details. If one looks at the New York Times story from that aspect, it is obvious this is the obituary of a democratically-elected government in a Muslim country. The obituary was written well before it was published today, just waiting for the final details to be filled in.

The Republic of Iraq

May 20, 2006 - June 12, 2014

But then again, this government lasted longer than most Italian governments.

An Aerial View Of The New Refinery Under Construction West Of Dickinson, ND -- Serving The Bakken, The Williston Basin, North Dakota, USA

A photograph taken quite some time ago is a Vern Whitten aerial view of the new refinery under construction west of Dickinson. At the link, scroll to the 33rd of 41 photographs.

Random Update on MDU Refinery; Press Release

MDU Resources announces through a press release:

Construction of the Dakota Prairie Refinery project is on track with initial site grading substantially complete: Co announced that construction of the Dakota Prairie Refinery project is on track with initial site grading substantially complete. Dakota Prairie Refinery, when complete, will be the first greenfield refinery built in the U.S. since 1976. It is a joint project with Calumet Specialty Products Partners, L.P. to develop, build and operate a 20,000-barrel-per-day diesel topping plant in southwestern North Dakota. The project will process Bakken crude and the diesel produced will be marketed within the Bakken region. Total project costs are estimated to be approximately $300 million.

It continues:

Knife River Corporation, MDU Resources' construction materials and contracting subsidiary, has moved approximately 1 million cubic yards of material since construction commenced March 26, despite rain-related weather challenges. In addition, they began preparing the foundation for 16 storage tanks planned for the facility and the construction of a bridge that provides operational access within the site.

Dave Podratz has been named the refinery manager at the facility where he will lead the organizational development, start-up and commissioning process of the refinery. Podratz brings refinery management expertise and more than 30 years of industry-related experience to the project.

"We are focused on constructing the facility on time and on budget and continue to target an in-service date in late 2014," said David L. Goodin, president and chief executive officer of MDU Resources. "This project is a strong organic growth opportunity for us and based on our assumptions we expect it will generate EBITDA of $70 million to $90 million in year one, to be shared equally with Calumet."

In addition to Knife River, other MDU Resources' companies involved in the project include Fidelity Exploration & Production Company, which will supply crude oil to the facility; WBI Energy Inc., which will supply natural gas service to operate the facility; and Montana-Dakota Utilities, which will supply the facility's electricity needs. MDU Construction Services Group Inc. also is a potential subcontractor for the facility.

34 Acres, $1.3 Million, Dickinson Interstate On-Off Ramp, Exit 59 -- Near The MDU-Calumet Refinery

The Dickinson Press is reporting: 

Five Diamond Fund Managers will pay just more than $1.3 million for 34 acres of real estate that will represent about one-third the land mass of a large-scale, mixed use development, [near Interstate 94’s Exit 59] said Five Diamond spokesman Brian Hymel.

“We believe this is the best piece of property in all of southwestern North Dakota,” Hymel said after the auction.

This ramp is relatively near the new MDU-Calumet refinery going up southwest of Dickinson. But I believe the MDU-Calumet refinery is west-north-west of Patterson Lake, west of exit 59. Northwest of Patterson Lake is a CBR terminal easily visible on Google maps.

A reliable source tells me the exit 59 parcel is 3 miles east and 1.5 miles north of the refinery. So, now you know as much as I do. My hunch: they are going to put in a 34-acre drive-through Starbucks. And casino.

MDU - Calumet Ready To Start Construction; Received Air Quality Permit To Construct

Updates

September 5, 2013: one step closer; a water source for the Dakota Prairie Refiner has been approved by officials. Water for refining, plus water storage on site to fight a fire for 8 hours was sourced.

Original Post

Press Release:

MDU Resources Group, Inc. and Calumet Specialty Products Partners, L.P. announced that the North Dakota Department of Health has issued an Air Quality Permit to Construct for Dakota Prairie Refining, a diesel refinery the two companies are developing in southwestern North Dakota.

"Approval of the air quality permit means that we can begin construction within the next month, and the facility can be operational and helping supply North Dakota's diesel fuel market by late 2014," said David L. Goodin, president and CEO of MDU Resources. "We are committed to operating this state-of-the-art facility responsibly and safely, and we appreciate the rigorous permitting process conducted by the health department."

"This facility will be an important contributor to the local and state economy," said Jennifer G. Straumins, president and chief operating officer of Calumet's general partner. "We appreciate the help of the state's agencies and officials to identify issues and help solve problems in a manner that has brought this project from concept to reality."

The facility will process 20,000 barrels per day of Bakken crude oil. The plant will be located on a 318-acre site located west of Dickinson in Stark County, N.D. It will employ approximately 100 people. Hiring and training of operating personnel is expected to begin in 2013. The plant will employ its own plant manager and management team, who will report to a governing board composed of representatives of WBI Energy and Calumet.

MDU and Calumet Announce Diesel Refinery Joint Venture

Company's update on the progress of this project, undated but must be near completion. 

Yahoo!Finance is reporting that:

MDU Resources Group, Inc.  and Calumet Specialty Products Partners, L.P. today announced that they have formed a joint venture to develop, build and operate a diesel refinery in southwestern North Dakota. The joint venture will be called Dakota Prairie Refining, LLC.

MDU Resources Group’s participation in the joint venture will be through its wholly owned subsidiary, WBI Energy, Inc.

The facility will process 20,000 barrels per day of Bakken crude oil. Construction could begin this spring, and is expected to take up to 20 months. The plant will be located on a 318-acre site located west of Dickinson in Stark County, N.D. It will employ approximately 100 people. Hiring and training of operating personnel is expected to begin in 2013. The plant will employ its own plant manager and management team, who will report to a governing board composed of representatives of WBI Energy and Calumet.

An earlier post will help you locate the new site on Google maps and its relationship to a crude-by-rail oil loading terminal.

Reuters reports the story, also. 

"Construction of the refinery could begin this spring and is expected to take up to 20 months," the two companies said in a statement, adding that the engineering and plant designs were in their final stages.

Oil production in North Dakota has jumped to 730,000 bpd from just over 100,000 bpd in 2006, primarily due to Bakken output, making it the second-largest oil-producing state after Texas.

The abundant supply has depressed crude prices, reinvigorating business for refiners that can access the crude, primarily in the Midwest.

Diesel demand in the state has soared along with shale development due to huge consumption by trucks coming to and from the Bakken fields, prompting a company called Dakota Oil Processing in 2011 to announce plans to build and operate an identically-sized refinery also producing just diesel in Williston, about 100 miles north of the Dakota Prairie plant. A 20,000 bpd refinery is modest, and only two refineries of such a size have been built and opened in the United States in the past 35 years - both in Alaska.

Update, added February 8, 2013, 10:03 a.m.:

For newbies: anything indented following a linked article is a "cut and paste" from the linked article. It is not my original writing. It is from the linked article.

I point this out because someone noted that the last paragraph above (in the indented portion) implies that Dakota Oil Processing was "late" to the scene, coming in after MDU-Calumet began the process of building a diesel refinery in North Dakota.

In fact, it was just the opposite to the best of my knowledge. I happened to meet, entirely by accident, one of the early program managers for the Dakota Oil Processing plan for their Trenton (near Williston) diesel refinery. DOP was one of the early ones to notice that diesel was in very, very short supply in the Bakken.

So, for the record, and for the archives, it is my understanding that DOP led the way for a diesel refinery in the Bakken.

By the way, I think the blog reflects that, also: stories about the Trenton refinery were posted a lot earlier than the MDU refinery story.

And, of course, somewhere in the mix is the Fort Berthold refinery which has been on the drawing board since General Custer first rode through the area.

Update On Two Proposed Refineries in the Bakken

Link from The Bismarck Tribune.

When Dakota Oil Processing applied for an air quality permit for a refinery to extract diesel from Bakken crude oil, not one person made a comment to air quality regulators.
So far, that exact same number of zero has commented on yet another diesel refinery in North Dakota, this one planned by a partnership of MDU Resources and Calumet Specialty Products.

Dakota Oil Processing now has a permit for a facility near Trenton, south of Williston, and the public comment period for a MDU-Calumet refinery permit near Dickinson ends at the close of day Monday.

Craig Thorstenson, environmental engineer for the state Health Department’s Division of Air Quality, said one person inquired, but no one had yet commented on the refinery’s air quality permit application late Thursday.

Two of the state’s high profile environmental groups say it’s not likely they will, either.