And This Is What The Least Sharp Knife -- Initials JG -- In The Drawer Wants To Stop -- January 31, 2024

Locator: 46699NG.

*****************************
Drawer? The Cabinet -- LOL

Link here.

This is simply incredible.

 And then this, link here.

Does anyone even remember Groningen any more? Wiki.

Rystad Energy Identifies Record Number Of High-Impact Wells For 2024 -- January 31, 2024

Locator: 46695DRILLING.

Link here.

In a release sent to Rigzone recently, Rystad Energy revealed that it has identified 36 potential “high impact” wells to be drilled or spud this year, which the company said is the highest annual total since it started tracking the market in 2015.

“This would be a sizeable jump from the 27 high impact wells drilled last year, and operators will hope for a better success rate,” Rystad noted in the release, which pointed out that eight of the 27 high impact wells drilled last year resulted in “commercially movable volumes”.

The high impact wells in 2023 discovered volumes of one billion barrels of oil equivalent, Rystad highlighted in the release, noting that this was a “sharp decline from the 3.5 billion barrels of oil equivalent found in 2022”.

“To make matters worse, 2023 was an expensive year, with drilling costs rising due to a significantly tighter rig market than in prior years, worsening the blow of a low success rate,” Rystad said in the release.

Of the 36 identified wells for 2024, 13 are in Africa, 10 are in Latin America, six are in Asia, and the Middle East, Europe, and North America each contain two, while Oceania contains one, Rystad outlined in the release. Fourteen of these wells will be drilled in frontier and emerging basins, with three opening up new plays entirely, Rystad noted.

Ya think SLB might be involved? SLB is the NVDA in the oil patch.

Reminder: Saudi Arabia to cut back on drilling. 

*****************************
People Who Know, Know

Link here.

This is simply incredible.

 And then this, link here.

Does anyone even remember Groningen any more? Wiki.

Groningen Back In The News -- January 8, 2024

Locator: 46491LNG.

How cold is it in Europe? Reports were that the continent was fully supplied with LNG / NG -- but now ....

Link here.

Groningen is tracked at the sidebar at the right.

The irony of the last update. LOL. 

 July 30, 2021: natural gas prices surging in Europe; severe shortage, and it could get worse. 

Electric Grid In The Netherlands Has Reached Its Limit -- Could New EV Sales Be Suspended? December 21, 2023

Locator: 46373EVS.

This story posted yesterday in the Netherlands Times:

Map of the area affected is pretty much all the Dutch provinces that border the North Sea, or perhaps as much as one-third of the Netherlands, stretching from The Hague to Groningen. Amsterdam is on the main road between these two cities / provinces.

From the article:

How bad is it? Link to Reuters story earlier this year:

The map:

ASML: is the only company in the world that currently produces extreme ultraviolet (EUV) orthography machines, which are used to produce cutting-edge semiconductor chips that companies like Apple rely upon.

The company is located in Veldhoven, Netherlands, a suburb on the southwest side of Eindhoven.

From wiki:

And more:

ASML, from Investopedia:

Headlines -- September 27, 2023

Locator: 45590B.

We can add this headline to the list posted two days ago.

Cushing lows. Links everywhere; stories everywhere. 

UK: approves a controversial $3.8-billion oil and gas project -- development plan for the Rosebank project, North Sea, Equinor. Link here.

Posted two days ago:

Fossil fuel: quick look at headlines overnight suggests fossil fuels are back; renewable energy, global warming issues facing headwinds. Apparently some folks don’t like the idea of $7-gasoline. Overnight headlines;

• OPEC+ cuts offset by booming US oil production
• oil demand destruction in India won't happen at $100-oil
• court upholds order to expand oil and gas lease sale in Gulf of Mexico, the expansion Biden tried to stop -- illegally -- he learned well from Obama, who actually went to law school
• Groningen finally closing for good -- well, except for emergencies for one more winter; link here.
  
• Goldman Sachs ignores activists' calls to "abandon" oil and gas investments
• Trans Mountain oil pipeline back on track; regulator, in what seems record time, approve the requested route change 
• short sells scramble as energy stocks surge (whoo-hoo)
• energy fund manager predicts major upside for oil equities
• OPEC+ cuts offset by booming US oil production: US production to hit 13 million bopd by the end of this month, matching the record output from November, 2019. Link here.

Fossil Fuels And Ford Battery Plant -- A Meandering Post -- September 26, 2023

Locator: 45584B.  

Fossil fuel: quick look at headlines overnight suggests fossil fuels are back; renewable energy, global warming issues facing headwinds. Apparently some folks don’t like the idea of $7-gasoline. Overnight headlines;

• OPEC+ cuts offset by booming US oil production
• oil demand destruction in India won't happen at $100-oil
• court upholds order to expand oil and gas lease sale in Gulf of Mexico, the expansion Biden trieed to stop -- illegally -- he learned well from Obama, who actually went to law school
• Groningen finally closing for good -- well, except for emergencies for one more winter; link here.
  
• Goldman Sachs ignores activists' calls to "abandon" oil and gas investments
• Trans Mountain oil pipeline back on track; regulator, in what seems record time, approve the requested route change 
• short sells scramble as energy stocks surge (whoo-hoo)
• energy fund manager predicts major upside for oil equities
• OPEC+ cuts offset by booming US oil production: US production to hit 13 million bopd by the end of this month, matching the record output from November, 2019. Link here.
  

Ford halts construction of $3.5 billion EV battery plant in Michigan:

• why Barron's says this is a big, big deal; link here; link here, also;
• "Michigan" can't be happy
• how many union jobs lost or "put on hold"?
• Ford re-thinking this EV thing?
• UAW - Ford, GM, Stellantis -- circular firing squad
• UAW planned / plans for months (plural)-long strike and will gradually expand

Look at that Barron's article: every big name in EV battery will be affected -- link here, again:

• Ford licensed the technology from Chinese battery maker Contemporary Amperex Technology Co. Ltd (CATL -- we've discussed CATL before);
• the plant is slated to use lithium-iron-phosphate battery technology (CATL -- world's largest battery maker)
• also called LFP batteries -- iron is "Fe"
• LFP batteries less expensive than other chemistries -- and, as they say, you get what you pay for
• now folks are suggesting that maybe Ford doesn't need as many batteries as it thought
• EV sales have hit a wall
• the US EV penetration is about 7% (which I think is baloney)
• EV sales are up almost 50% in one year BUT Ford sales are up only 6% through August -- and isn't Ford second only to Tesla in the US
• Barron's with the understatement of the day: "Ford ha run into 'some' battery and manufacturing problems -- previously reported
• maybe investors will like this pause: it will save or slow billions in capital spending
  
• Ford investors actually aren't too upset -- ticker F is up 2% over the past five days
• meanwhile Tesla keeps moving along
• having said all that -- one of the poorest Barron's articles I've read in a long time; meanders all over the territory; the writer certainly didn't seem like he / she knew where the story was leading
• I think this is the big question: delaying the battery factory -- a minor speed bump or a decades-long detour and eventual re-route? I don't think anyone knows and the Ford board is probably greatly divided on this
  

Meandering -- just like this blog. LOL.

Oh, one more thing:

Norway To Replace Netherlands Groningen -- July 12, 2023

Locator: 45098NG. 

This is how Norway pays for nice things.

Link here and here.

From the blog, June 19, 2023:

*********************
Minor Note 

Link here. 

EU Gas Markets Descend Into Chaos (Remember: The Netherlands Officially Closing Groningen -- Traders Having A Field Day) -- Meanwhile The Texas Grid Holds -- In The Bakken, Seven DUCs Completed; Three New Permits -- June 27, 2023

Locator: 45811B.

Texas to NE ISO: thank you for all your thoughts and prayers; your prayers got "us" through another typical Texas day. The global warming gods were appeased.

ERCOT:

• our apartment complex has two pools; I generally use the larger pool; today, the smaller pool; more shade;
• it's so hot, no one apparently even wants to swim; not me; I've been out here "all afternoon";
• 100°F right now, 6:07 p.m. CT; I don't know what the high was;
• unaware of any grid failures, but I don't listen to / watch local news
• wow, ERCOT supply / demand not even close to having problems; just checked;
• 8,000 MW reserves yet in play
• I won't look at the price; but "everybody" only cares whether the grid "holds."
  
• 86°F is the highest it gets in the apartment; I won't turn on the a/c if I can swim to keep me cool;

Headline: European gas markets descend into chaos. I didn't click on the clickbait. It's over at oilprice. Let me guess: Groningen and Norway. [Later: Norway back in the game despite promises last year to go green. My hunch: behind closed doors, the EU begged Norway to bail them out.]

**********************
Back to the Bakken

Active rigs: 36.

WTI: ouch -- $67.93.

Three new permits, #40003 - #40005, inclusive:

• Operator: Neptune Operating (I wonder who they are "working for"?)
• Field: Elk (McKenzie)
• Comments:
• Neptune has permits for three Wahlstrom wells, lot 1 section 3-151-102; 
• to be sited 303 FNL and between 634 FEL and 700 FEL

Seven producing wells (DUCs) reported as completed:

• 39143, 307, Enerplus, LK Bice 147-96-6-31-6H-LL, Dunn County;
• 39145, 113, Enerplus, LK Bice 147-96-6-31-2H, Dunn County;
• 39147, 278, Enerplus, LK Bice 147-96-6-41-6H, Dunn County,
• 38501, 2,885, MRO, Audreey 34-10H, Dunn County;
• 39129, 204, Crescent Point Energy, CPEUSC Claire Rose 5-31-30-159N-99W-MBH, Williams;
• 38168, 960, CLR, LCU Foster FIU 5-28H1, Williams,
• 38169, 1,134, CLR, LCU Foster FIU 6-28H1, Williams,

End-Of-Day Report -- June 23, 2023

Locator: 45030B. 

Groningen gas fields: officially closed, as of October 1, 2023. Link here. Will remain on operational status for one year to "manage" this winter, if necessary. After that, closed permanently and dismantled. 

Oil prices soar in MidEast: not yet reflected in WTI. Not sure what this means, original article at ZeroHedge (consider the source). Link here. 

**********************
Back to the Bakken

Active rigs: 38.

WTI: $69.16.

Eight new permits, #39900 - #39997, inclusive:

• Operators: CLR (6); Ragnar Exploration (2)
• Fields: Elidah (McKenzie); Fryburg (Billings)
• Comments:
• Ragnar has permits for two wells, a Reardon well and a Francisco well, both SESE 17-139-100, Fryburg, Billings, 
• both to be sited 1255 FEL with the Reardon well 300 FSL and the Francisco well, 345 FSL
• CLR has permits for six Omlid wells, NENW 30-151-97;
• to be sited 435 FNL and between 1500 FWL and 1660 FWL.

Four permits renewed:

• Enerplus: four Olson permits, SWSW 34-147-97; Little Knife, Dunn County.

Five producing wells (DUCs) reported as completed:

• 39127, 40, Crescent Point Energy, CPEUSC Szarka 2-36-35-159N-100W-MBH;
• 39130, 90, Crescent Point Energy, CPEUSC Claire Rose 4-31-30-158N-99W-MBH;
• 39131, 162, Crescent Point Energy, CPEUSC Amelia Grace 4-6-7-158N-99W-MBH;
• 39146, 298, Enerplus, LK Bice 147-96-6-31-3H;
• 39148, 307, Enerplus, LK Bice 147-96-6-31-5H;

For The Archives -- Shell, XOM, NAM -- Natural Gas -- Europe -- September 7, 2022

This interests me not, but it seems important for the archives.

Link here.

LONDON (Reuters) - Shell and Exxon Mobil have put up for sale one of Europe's largest and oldest natural gas production ventures, betting on soaring energy prices amid tensions with Russia to attract buyers. 

The top two Western energy giants could raise over $1 billion from the sale of the 50-50 NAM joint venture in the Netherlands, two industry sources said.

It would be part of both companies' efforts to shed ageing assets that are no longer central to their operations.

Shell and Exxon recently launched the sale process for NAM’s offshore gas operations, which include dozens of fields and around 20 offshore platforms, as well as a network of pipelines and three processing plants.

NAM started producing natural gas in 1963 following the discovery of the giant Groningen field and has been a major source of gas for the Netherlands and Europe for decades.

Its output has nevertheless been in a steady decline since 2014 and is set to fall further in the coming years after the Dutch government decided to shut Groningen in order to limit seismic risk in the region. The field is expected to shut down in 2023 or 2024 but its life could be extended.

**************************
The Book Page

Stephen King.

All 75 books. 

Ranked.

Link here.

********************
Never Too Old

Sterling Lord.

Literary agent.

Among other triumphs worked for years to find a publisher for Jack Kerouac’s On the Road, has died. He had just turned 102.

From the linked article at The Guardian:

Sterling Lord, who started his own agency in 1952 and later merged with a rival to form Sterling Lord Literistic, was a failed magazine publisher who became, almost surely, the longest-serving agent in the book business. He stayed with the company he founded until he was nearly 100 – then decided to launch a new one.

He was an early ambassador for a revolutionary cultural movement: the Beats. He endured the initial unwillingness of publishers to take on Kerouac’s unorthodox work and was later the agent for the poet and playwright Amiri Baraka, novelist Ken Kesey and poet and City Lights bookstore owner Lawrence Ferlinghetti.

Thanks to his friendship with Theodore Geisel, better known as Dr Seuss, Lord helped launch Stan and Jan Berenstain’s multimillion-selling Berenstain Bears books. He found a publisher for Nicholas Pileggi’s mob story Wiseguy and helped arrange the deal for its celebrated film adaptation, Goodfellas.

In the early 1960s, Viking asked Lord to get a blurb from Kerouac for One Flew Over the Cuckoo’s Nest, Kesey’s first and most famous novel. Kerouac declined but Lord ended up representing Kesey.

He represented the former US defense secretary Robert McNamara and John Sirica, the judge of Watergate fame, and worked with Jackie Kennedy during her time as an editor with Doubleday and Viking. Some of the great US sports books of the 20th century, from North Dallas Forty to Secretariat, were written by Lord clients.

Natural Gas Proved Reserves -- Global -- August 22, 2022

Off Cyprus:

• link here.
• this was considered "breaking news" and breathlessly reported -- oh, give me a break.
• but, yes, it's huge -- see Groningen below 
• but so is the Permian 140 trillion cubic feet
  
• TTE, Eni: Cronos-1 well
• preliminary estimates indicate there are about 2.5 trillion cubic feet (TCF) of gas in place, “with significant additional upside”
• that 2.5 trillion: put into perspective by numbers below
• Groningen, which the Dutch closed down? 2.8 trillion cubic feet
  

US proved reserves of natural gas by top eight states, 2016 - 2022:

Staggering global riches of natural gas (the numbers keep increasing). From an earlier post:

Top five countries:

• Russia: 6,000 trillion cubic feet
• Iran: 1,000 trillion cubic feet
• Qatar: 900 trillion cubic feet
• Turkmenistan: 600 trillion cubic feet
• US: 350 trillion cubic feet
• #11: Australia: 152 trillion cubic feet (as of January, 2014). (See this post.)
  

Now, let's go back and re-run the numbers that were posted earlier:

• that recent huge Mediterranean natural gas find: 30 trillion cubic feet; this was said to be biggest natural gas find ever in the Mediterranean
• Barnett, revised USGS figures: 53 trillion cubic feet
• Utica, newly revised figures: 782 trillion cubic feet
• Marcellus, EIA revised estimates: 65 trillion cubic feet, "proved" reserves
• Bakken/Three Forks, USGS estimate: 7 trillion cubic feet
• Qatar: 800 trillion cubic feet, wiki, conversion

Other recent stories on natural gas reserves

• Marcellus: 480 trillion cubic feet of technically recoverable gas, Penn State geoscientist 

Comments regarding natural gas reserves

• for me, it's hard enough getting my hands around billions of bbls of oil; it's almost impossible for me to get a feel for trillions of cubic feet of natural gas
• proved reserves are based on price of recovery, confusing matters from year to year
• estimates are just that, estimates (and often inflated for "certain" reasons)
• watch for this gotcha: sometimes reported in trillion cubic feet; sometimes in trillion cubic meters (35 cubic feet = 1 cubic meter; not trivial)
• for me it comes down to two things:
• any discovery over 30 trillion cubic feet natural gas is staggering, worth reporting
• "we" aren't going to run out of natural gas any time soon

Just Getting Started -- June 26, 2022

CATL: link here. 

• battery range: 621 miles
• fast charge: 80% (500 miles) in ten minutes
• mass production, 2023
• price: not provided

Energy: overnight twitter feed suggests Europe is in real deep doo-doo.

• Germany back to coal.
• Groningen is back in play.
• G-7 to walk back all climate initiatives
• Greta in shock

California: $1,050 stimulus check to offset rising gas prices and inflation; 

• LOL: demand construction and more inflation
• but it will buy votes in November

Cryptocurrency: 

• watch for more bankruptcy stories;
• next: the Celsius Network;

Best NYT story this week? Link here -- 

• unfortunately it's now behind a paywall, but it will probably be re-posted elsewhere overtime -- a must read, but the headline pretty much says it all --
• June 24, 2022: the day Chief Justice Roberts lost his court

Twitter:

• thirty-six hours ago, twitter was pushing SCOTUS stories that were not part of my twitter feed; very, very irritating; this morning, they are all gone -- all energy tweets -- back to my own feed, at least temporarily;

PBR: link here. 

Born to die:

This Is What Makes Us Girls, Lana Del Rey
Teach a heron to fish: has now become a think. Link here. But similar videos all over YouTube.

Back To Business -- June 21, 2022

Top energy story today: a report that anti-fossil fuel Biden-Granhalm administration is asking XOM to expedite its Golden Pass LNG export terminal in Sabine, TX. Absolutely huge; more below. 

Trending: on my Twitter energy feed --

• it's all about the European energy crisis
• Europeans in crisis mode
• will now do everything to conserve natural gas going into winter 
• why all the interest in coal? to conserve natural gas
• quick reading suggests Russian not letting up on squeezing Europe
• indications Russian ploys are working
  
• it's back to coal for Germany, Austria, the Dutch, and likely, the UK
• Germany committing to long-term LNG contracts with US
• Groningen to shake again; 
• if I read this correctly
• currently, 4.5 bcm produced in CY 2022
• was to completely end by end of year, CY 2022
• will now target 2.8 bcm for production year ending October, 2023 
• Dutch will also remove a cap on production at Dutch coal plants
  

Investors: usual disclaimers apply

• OPEC producer says there exists a $30-war premium on the price of oil
• tea leaves: if truce called, sanctions on Russia will fall faster than Biden's polling
  
• oil has fallen so far many companies now at accidental high yields
• DVN now pays nearly 9%
• AMZN: interesting analysis over at SeekingAlpha
• US oil demand: finally, we're going to see a jump
• anticipate: Biden to announce Federal gas tax holiday before July 4th
• the gas tax holiday will come too late to save the GDP number for 2Q22
• having said that, Obama has aid such a holiday -- the gas tax holiday, not the July 4th holiday -- is a "gimmick"
  

Oil demand: even if demand falls, is that bad for US oil stocks? Just asking.

Domestic LNG

• US asking XOM to expedite Golden Pass LNG
• RBN Energy, October 2, 2018; 
• note: Golden Pass scheduled for 2025
• September 2, 2021: 
• Reminder: how the shale revolution changed things. Link here.  Or go directly to this link at Gulf Times:
  
• the first liquefaction train of the Golden Pass LNG liquefication and export terminal in Sabine, Texas, a $10bn joint-venture formed by Qatar Petroleum and ExxonMobil, is scheduled to come online by 2024;

International LNG: huge story -- the huge new Qatar export terminal

• now, XOM joins the partnership.
• others: COP, Eni, and TotalEnergies
• this expansion, previously announced, will increase Qatar's LNG capacity to 110 million metric tons / year vs 77 million currently
• memo to self: find Texas/Louisiana LNG export capacity once Golden Pass on line
  

*****************************
First Day Of Sailing School

New Sources For Energy For EU -- April 26, 2022

I don't recall if I posted the link to the article that suggested the EU plans to be "free" of Russian energy (all forms) by 2027.

A reader sent me a note regarding feasibility of doing that, even forgetting about all the environmental issues. One needs to remember that not all energy that the EU relies on comes from Russia. Even by doing nothing in terms of new infrastructure, the EU could significantly reduce dependence on Russian energy. Having said that, not ready-for-prime-time:

Regarding the feasibility of the EU ending all Russian energy imports by 2027, there is another article that I was going to post but did not because the article was too mundane/esoteric, but Germany is accelerating plans for LNG import facilities. 

These new facilities take a few years to build after permit approval (which is pretty much being thrown out now) but floating LNG import terminals, modular, can be brought in in months, if not weeks.

So, there will be many options. [Think how quickly the US converted LNG import facilities to export facilities a few years ago, and how many new LNG export facilities the US has added to those over the past few years. The US has one huge "harbor" -- Texas/Louisiana for all of this; the EU has many ports/many options, going counterclockwise, from Poland to the Netherlands to Germany to France, to Spain, to Italy.]

In addition, many more articles on going back to more drilling in the North Sea, and even the Netherlands / Groningen for natural gas is getting a re-look.

Right now, the environmental concerns are on the back burner, very much like the John Kerry - Nancy Pelosi - Jen Psaki explanation for increased drilling (but very little); a few pipelines (but very few); and, a bit more rail to transport fossil fuel. 

The  bottom line for me is to what I alluded in this post: Russia has joined a very exclusive club composed of itself, North Korea, and Cuba. There may be a few others seeking membership (e.g., Iran, Venezuela). 

Based on what I'm reading in social media right now, the EU's goal to end all Russian energy imports could happen much more quickly than anticipated. It's much more "will" than "way," as in, "if there's a will, there's a way."

Germany and Austria are generally seen as the "hold-outs" (again, in general reading of social media) but Germany is being "shamed" into going along with the US. Austria may be a "lost cause." 

On a completely different note, there are three arenas on which to focus:

• economic
• diplomatic
• military.

Without question, the military is probably running the show with short-term goals, while diplomacy has long-term goals, all being bridged by the bankers and industrialists with long-term economic / short-term financial goals. 

But right now, without question, the US military-industrial complex is the huge winner in all this (see below). 

I think everyone saw the article regarding a new book coming out on the rocky relationship between Barack Obama and Joe Biden. Clearly, the pundits are correct: Joe Biden has a much bigger opportunity -- by doing almost nothing -- to be a more transformative president than Barack Obama. 

As good as the "Brian Williams" tape, link here:

****************************
The Military-Industrial Complex 

Link here.

Something Fishy In Mt Vernon, NY? -- January 7, 2022

Story: Deer Park, Texas

Something tells me there is more to this story at Hart Energy. 

Issue:

• Houston, Texas, oil refinery: the 300,000 b/d Deer Park refinery
• joint ownership: Royal Dutch Shell / Mexican state oil company: Pemex
• RDS looking to becoming more green, ESG-focused: wants out of refinery business
• agrees to sell its stake in this Texas refinery to Pemex
  
• who sues to stop this incredibly reasonable business and ESG decision? Two coin-operated laundromats in Mt Vernon, NY
• a US District Court denied the laundromats' request to stop process
  

By the way, on another note, Pemex has said that all refined products from this refinery will be exported to Mexico. This seems to be a "closed Pemex" loop: Pemex oil shipped to Deer Park which just happens to be in the US; but all refined products are returned to Mexico.

Story: White House monitoring oil prices very closely; nice video clip. 

Story: Keystone XL workaround -- Canada's oil sands exports to Asia reach record with new link. New link?  Reversal of the nation's biggest pipeline:

Canada’s oil sands producers were able to export a record amount of crude to overseas markets thanks to a new link to the U.S. Gulf Coast.

The recent reversal of Marathon Pipe Line Inc.’s Capline pipeline is sending oil sands crude produced in landlocked Alberta to export terminals on Gulf Coast where it can be shipped to other countries. Exports to Asia were at their highest ever, with India the leading destination by far, followed by China and then South Korea, according to oil analytics firm Kpler. The development marks a sea change for Canada’s oil industry.

The country holds the third highest crude reserves in the world, but exports to markets beyond the U.S. have been limited due to a lack of infrastructure.  

Canada has faced severe opposition from activists for building pipelines from the oil sands region to British Columbia’s Pacific Coast. Additionally, the Biden Administration last year blocked the Keystone XL pipeline, effectively shutting Canada’s crude out of the global market.

Shipments of heavy crude jumped to more than 266,000 barrels a day in December after averaging over 180,000 through the year, according to Kpler.  Canadian crude exports from the U.S. Gulf Coast averaged just 25,000 barrels a day in 2018, before rising to average around 70,000 in both 2019 and 2020.

In October, overall Canadian shipments of oil to the U.S. jumped to more than 4 million barrels a day, highest volume since the start of the year thanks in part to the startup of a long-delayed Canadian pipeline.

Much, much more at the link. But shutting down the Keystone XL -- what a doofus.

Story: European energy crisis. 

The Netherlands, this year, may have to double the amount of natural gas it pumps out of a basin subject to earthquakes. Residents angry. To Bloomberg paywall or direct to ABC News with no paywall. Yes, we're talking about the Groningen, a basin we've talked about many times before.

******************************
Time For A Nap

Clearing Out The In-Box -- December 24, 2021

Updates

Later, 1:24 p.m. CT: well, that didn't take long. China is now outbidding Europe for LNG. I guess the smog from coal just got excessive. 

Original Post

Merry Christmas! Texas is not locked down. Photo here.

Wolfcamp: maps. Cline --> Wolfcamp D.

EU energy crisis: natural gas prices collapse overnight as flotilla of US LNG tankers stream toward Europe. But still incredibly high. Tankers are diverting from China to Europe for better prices: Asia, particularly China, is switching back to coal, calling it quits on expensive natural gas.

How the EU collapses. Worse timing ever?

The Netherlands shut down Groningen, Europe's largest natural gas field. On top of everything else, Belgium is said to have blindsided France by closing their (Belgian) nuclear plants. "These idiots are going to protest themselves into the dark age."

EIA's energy posture: link here. 

Politics: the inevitability of Kamala Harris.

Greta, do you remember the straws? Now it's Brandon's 1.6 billion disposable face masks that take 450 years to biodegrade. 

Global auto sales: from statista, 3.8 trillion dollars from auto sales by 2030. Elon Musk: hold my beer!

Caspian update: Lukoil produces 700 million bbls crude oil cumulative at field in Caspian. Link here.

• note conversion factor: 30 million tons or 712.4 million barrels
• Vladimir Filanovsky: largest oil field in the Russian sector of the Caspian Sea
• initial recoverable reserves of 129 million tons of oil and 1.06 trillion cubic feet of gas;
• commissioned in 2016;
• reached target production level of six million tons of oil per year in 2018
• July, 2019: the field produced over 15 million tons
• Yury Korchagin field, the second field;
• Valery Grayfer field, the third field;

TSMC:

• to begin 3nm chip production in 2022; could "beat" Apple; link here.

Midland:

Enerplus "Stringed Instrument" Pad Will Be Huge -- Monday, September 27, 2021

WTI: will it hit $75 today; pre-market up 1.3%; up almost a dollar; trading just below $75 at $74.93.

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here. 

A quick look at the news this morning suggests:

• ten year treasury: moving higher and really, really helping the market (especially the banks)
• re-opening trade -- WTI flirting with $75; oil and oil services surging; Goldman Sachs has lifted substantially its Brent crude forecasts to $90/bbl by year-end; will continue into 2022, 2023 and what it calls the mid-cycle price; link here.
  
• some mainstream media starting to link renewable energy policies with current energy crisis
• op-ed in Financial Review does just that: Europe's renewables generated current energy crisis; 
  
• one respected pundit calls for a "natural gas reserve" for Europe, the UK
• hush: isn't this a bit late?
• hush: they had one until faux environmentalists shut it down; it was called Groningen
• the UK gasoline crisis is not getting better;
• China's sudden thirst for energy seems to have surprised analysts; link here or direct link to a Bloomberg paywall; 
• the Chinese winter has not started yet, but China's thirst for more energy right now is a big, big deal; all of this in context with the Winter Olympics in China in February 2022; link here;
  
• Equinor has quietly increased significant amounts of oil to Asia; link here;
• India: may need additional two-million bpd refining capacity by 2030; link here to Reuters;
  
• many years of underinvestment; discussed often on the blog; I never bought into them; looks like it may happen: Hess sees tight oil market in near term; underinvestment risk ahead; link to Reuters; reminder: Reuters is London-based; has great world view, but at same time, sees things through European socialist spectacles. [The Economist is so much worse; explains why it never shows up on my twitter feed];
  
• one begins to wonder what might happen if gasoline prices spike here in the US, from current average of around $3.10 / gallon to $5.00 / gallon
• indications some folks are again hoarding basic non-perishables
• Costco in some regions limiting volume purchases of some paper items
  
• in the US equity markets; there appears to be a sector rotation; folks are selling small amounts of AAPL to buy moderately into oil sector
• overnight futures starting to drop back; those who thought the market might close "green" today may be surprised; watch for day's lows to occur at 10:30 a.m. CT
  

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here. 

Asymptomatic Covid: is it just me or are we seeing an increasing number of television presenters with a hacking cough; JoBid had a hacking cough there for awhile; folks commented on it; seems to have resolved; hosts on The View were said to have been coughing at the time two tested positive for Covid-19;

CNBC: because I generally don't watch the network at dawn but wait until later, I had not noticed but isn't Becky Quick looking a bit older; Joe seems not to have aged; Andrew Ross Sorkin's hair looks incredibly black -- incredibly black, but most noticeable, not one grey hair along the temples where one would expect it; I watch the screen; no volume or captions; way too political and nonsensical; video now airing highlights of the Ryder Cup (numbers to recall, all in yards: 345 71 47). I did turn on the volume for that; well-worth hearing the conversation; these guys knew what they were talking about;

******************************
Back to the Bakken

Enerplus: the Enerplus "String Instrument" pad is going to be huge. See below. Tracked here. 

Active rigs: no one knows. My best guess*:

$74.93	9/27/2021	09/27/2020	09/27/2019	09/27/2018	09/27/2017
Active Rigs	24*	11	57	65	57

Wells coming off confidential list today; ditto, but NDIC says these will report today:

Monday, September 27, 2021: 31 for the month, 42 for the quarter, 222 for the year:

• 37029, conf, Enerplus, Fiddle 149-94-02C-01H-TF,
• 37028, conf, Enerplus, Mandolin 149-94-02-01H,

Sunday, September 26, 2021: 29 for the month, 40 for the quarter, 220 for the year:

• 38181, conf, Petro-Hutnt, Hurinenko 144-98-2B-11-1HS,
• 37245, conf, MRO, Armstrong 14-34H,

Saturday, September 25, 2021: 27 for the month, 38 for the quarter, 218 for the year:

• None.
  

RBN Energy: OPEC's giants claiming ground despite uncertain crude oil market.

Producers of crude oil face historic insecurity about their market. Not only is there still uncertainty stemming from COVID, oil demand is also under pressure as governments and international organizations push to replace fossil fuels with energy forms free of hydrocarbons. Members of the Organization of the Petroleum Exporting Countries (OPEC) face special challenges from measures taking shape to discourage oil use. Their economies, more than most others, depend on oil sales and many members of the exporters’ group have limited sources of replacement income. Yet OPEC producers do not lack leverage in a market expected to grow at diminishing rates and eventually shrink. Many of them can produce crude oil much less expensively than counterparts elsewhere and some of them plan to profit from that advantage by increasing output, even as the market flattens, and are investing to raise production capacity to ‘get while the getting is good.’ In today’s RBN blog, we look at capacity-boosting plans within OPEC, explain why most members cannot take part in the effort, and describe how this developing priority might intensify market competition.

A bit of "Oil-101":

In fact, analysis of undeveloped reserves suggests that six OPEC members face trouble clearing even the geologic hurdle, the one we’ll examine most closely. To assess this requirement for raising production capacity, we look at reserves-to-production (R/P) ratios. Because dividing reserves by annual production yields a quotient measured in years, R/P ratios are sometimes called reserves lives indexes and are taken to mean time remaining before resource exhaustion. But that can be misleading because oil fields don’t follow formulas. Reserves estimates change as knowledge grows about productive reservoirs and production doesn’t decline in a straight line as oil-bearing rock — the reservoir — depletes. Typically, a field peaks relatively soon after production starts then falls rapidly before flattening later in its life and beginning a slow decline that can last for a long time. Also, output can jump during a field’s life in response to techniques such as water or gas injection and enhanced recovery. For these and other reasons, a mature oil field — or a long-producing country with many such fields — can have an R/P ratio of 9-10 for much longer than 9-10 years. Regardless, an R/P ratio in that low range usually indicates that there has already been extensive field development and so there is limited potential to increase capacity by drilling more or installing surface equipment. Conversely, much higher R/P ratios imply room for further development of existing reserves and, therefore, potential for net capacity hikes to the extent that new production offsets declines from existing wells.

In Figure 1, we calculate R/P ratios for all 13 OPEC members with reserves and production data from the 2021 BP Statistical Review of Energy published in July. We use data for 2019 instead of 2020 because last year’s production suffered from oil-demand losses related to the coronavirus pandemic, making the prior year more reflective of long-term trends. The table shows reserves estimates (A) divided by the product of daily production (B) multiplied by 365 which yields annual production (C) to derive R/P ratios. The R/P ratio range among OPEC members is huge, from Angola’s and Equatorial Guinea’s 15 (blue ovals) to Venezuela’s whopping 925. We should point out that Venezuela’s R/P ratio is distorted by production suppressed by the economically beleaguered country’s inability to invest in its oil fields and by inclusion in its reserves number of heavy oil in the mostly undeveloped Orinoco Belt. Subtracting Orinoco reserves of 262,000 MMbbl leaves conventional reserves of 41,800 MMbbl and lowers Venezuela’s R/P ratio to a still high 127. That happens also to be the R/P ratio of Iran, another country with high reserves and suppressed production — in Iran’s case by international sanctions limiting exports and oilfield investment. Venezuela and Iran are the two countries mentioned earlier that, because of investment restrictions, are unlikely to raise production capacity soon despite their high R/P ratios. For countries with low R/P ratios, raising capacity is not impossible, but the resulting production increments probably would not be large. An alternative, not practicable on a large scale for many of the low-R/P countries, is to find new fields or extend existing fields through costly and risky exploration and development.

Figure 1. OPEC Reserves, Production, and R/P Ratios in 2019. Source: BP

 Much, much more at the link. 

UK, Europe -- Energy Crisis -- 2021 - 2022

Big things are happening in Europe, UK in response to the crisis. 

Two issues, and they appear completely separate.

Natural gas.

Gasoline.

They are related but we can dispense with the UK gasoline crisis for the moment. This was how it played out:

• natural gas prices were surging
• talk of natural gas prices pulling gasoline prices forward
• among the well-read, folks started keeping their automobiles full of gasoline; their trucks full of diesel
• that exacerbated the situation and rumors worsened
• even the less-well-read were now hearing rumors of fuel shortages
• shortage fed on itself
• then, accurate or not accurate, there were reports of a shortage of truck drivers ...
• but what's the possibility that as service stations (or garages as the Brits called them) anticipated growing demand, started ordering more and in some cases were simply being told, there's plenty of fuel, but there is now a "relative" shortage of drivers (same number of drivers, just more demand); the Brits famously do not like to work overtime;
  
• and, the rest is history as petrol stations started to run out of fuel
• mostly due to panic buying
• but this is what is not being said: the Brits, regardless of what the politicians have said, had moved on; they had enough with Covid; they were getting back to normal; demand for fuel exceeded prognostications when the Delta virus hit
• could this happen in the US? Nope.

Okay, now natural gas. This is a bigger problem for the Brits and even with a warm winter, the UK could be in big, big trouble. One would hope BoJo is coordinating with JoBid to get LNG shipments prioritized to the UK, not Asia. [There are reports saying that will not happen.]

This is not a story about Russia. Wow, that gets tiresome. 

This started with the "Angela Merkels" years ago when faux environmentalists started shutting down coal plants (2000) and nuclear reactors (Fukishima, 2011). It's ironic how it happened. Shutting down coal plants would not have been a disaster had there been no problem with nuclear plants, but that all changed, for Germany, with Fukishima. For Germany, coal was their Plan A. Nuclear plants, their Plan B.

The UK had no Plan B. One could say the same thing for the UK, except instead of shutting down nuclear reactors in response to Fukishima they simply increased reliance on wind.

And it was the "wind issue" that brought the UK to its knees most recently.

Well, to some extent. I don't believe it was simply the wind. 

A gedankenexperiment:

Imagine what would happen in the US if for whatever reason, Resident Biden shut down the Permian. Just shut it down. Things were reversed in the US. Plan A was oil from Canada via the Keystone XL. There was no Plan B because no Plan B was needed. Oil was more than plentiful in Canada and no one in their right mind ever thought any US president would shut down a simple pipeline.

Fortunately for America, Mark Papa (EOG) and Harold Hamm (CLR) came up with a Plan B before it was even needed; pure serendipity. In fact, Plan B, light oil was not what the refiners along the Gulf coast needed. They were optimized for heavy oil. 

So, with the loss of the Keystone X, Plan A: not a big deal but unpleasant for the oil industry, especially the refiners, and ultimately those who buy gasoline for their automobiles, like you and me.

So, now with the loss of the Keystone XL, imagine Resident Biden shutting down the Permian.

That's exactly what happened in Europe with regard to natural gas. And no one is talking about it. Until today, interestingly enough, and I will provide the link later. Actually there are two links but I can't find one of them now. Not to worry. By the end of the week, there will be many links, many stories.

The US did not shut down the Permian. But the Dutch shut down "the" Groningen, the largest natural gas field in Europe. Made the decision based on risk of earthquakes. Europe's Plan B: like Keystone XL from Canade, Europe's Plan B was Nord Stream 2 from Russia. 

The problem: Americans like Trump did not like Nord Stream 2. I have no idea what drove that: knee-jerk politics, or well-founded national security issues.  

So, whereas Americans did not have a Plan B if the Keystone XL did not materialize, Mark Papa and Harold Hamm pre-empted any serious problems for the US. 

But not the Europeans. It was just the reverse. They closed the Groningen (Plan A) knowing Nord Stream 2 (Plan B) was coming down the pike.

While editing this, a reader wrote to remind that there even more to the story. The reader reminded me that at the time the Groningen decision was being made there is/was another copious energy supply that was stillborn ... the project to frac the Bowland Basin shale.

A company named Cuadrilla not only drilled a horizontal well 3 years ago, they were able to frac about 5 stages.

 

The preposterous restrictions placed upon the company included not exceeding a .5 (point 5) reading on the Richter scale during the fracturing process. (For context, rambunctious football fans regulary produce Richter readings of 2 when stomping their feet. As the Richter scale is algorithmic, that 2 is something like 30/40 times more prominent than the acceptable .5).

Combining both the known Bowland and Weald Basin shale gas resources, the UK possesses about a 80 to 100 year supply of natgas beneath their feet. 

For Cuadrilla, this was just what the DAPL operators experienced: experiencing harassment at the very time recognizing how acute the need for natural gas.

So, in fact, there was a Plan C -- all that natural gas in Great Britain until faux environmentalists shut that project down, also.

But, as usual, there's even more. 

Folks are blaming the Russians. 

Nope, nothing could be farther from the truth.

First, the timing and the geopolitics. Why would Russia risk being exposed to "cheating" at the very time they are trying to get this thing approved by Europe and by the US?

Second, there are many, many indications that Russia itself is reaching the limits of its production. That has been addressed at the blog on number occasions over the past ten years. Russia is facing a very, very cold winter (again, nothing new). 

Link here, but this article appeared after I drafted the above. Cyril Widdershoven is one of my favorite contributors over at Oilprice.com.

Energy Notes From All Over -- September 24, 2021

WTI: some say WTI closed at $74. Let's check.

Bakken economy: North Dakota aircraft boarding numbers declined in August, m/m, but numbers in Williston continued to rise. Most important word: "continued."

UK: 50-fold jump in power rates. Link to Tsvetana Paraskova. Putin lovin' it. The good news? It's transitory. Likely to last only through 2027.

UK petrol: panic buying overwhelms UK filling stations. Again, simple procedures put in place would prevent it. Odd/even license plates; max: half tank. 

UK / EU: French and Germany electricity wholesale prices (one-year forward) have hit all-time highs, showing that the European energy crunch isn't going away anytime soon. 

Coal: highest levels in thirteen years. Reasons?

• high natural gas prices (why?);
• high power demand (why?);
• nuclear plant closures (why?);
• low wind generation

Arctic: oil is booming despite strong opposition. Link here. And look at this -- look which American company is among three international E&P companies? Gazprom, Total, and COP. For the record, I'm accumulating shares in two of the three. LOL. American banks providing huge amounts of financing, along with private equity giants like BlackRock. Report provided by a faux environmentalist.

US natural gas: it might not average $10 in 2022, but some pundits see $20+ in some regions.

Groningen: from Alexander Stahel @BurggrabenH -- Groningen was a key EU gas producer (yes, ageing but still solid) and is to be turned off next year due to seismic risk in the region. JSMH. Link here. 

• a reminder: commodities are priced at the margin, and it exactly those marginal bcfs/barrels/pounds that will be missed most in the coming years and that ARE setting prices. 
• with Nord Stream 2, the Russians conquer Europe without firing a shot.

***************************
Never Too Old

Go for it.

• Chuck Grassley: will run for sixth term. Next year he will be 89 years old. But he's still young. 
• Dianne Feinstein: has already filed papers to run in 2024 when she will be 91 years old.
  

And they survived Covid-19, the plague year.

No one should complain. US judgeships are generally lifelong appointments.

• RBG died "in office" at the age of 87.

****************************
Personal Matters

Your resume. What to include; what to leave out. Link here to The WSJ. There's some valuable tidbits for college students. 

Academic coursework: Listing courses taken while earning a degree or certification tells employers nothing about your abilities; it only speaks to your attendance. Neither does a GPA, which only demonstrates that you were a good student. Even if you are a recent college graduate, a better strategy is to write about a group project, a case study you wrote or a hypothetical model you built while in school. These types of details demonstrate to employers what you are capable of far better than a course list or GPA.

How Did This Happen So Quickly? The UK / European Edition -- September 21, 2021

I asked the same question yesterday, but with regard to China. How did this happen so quickly? Seemingly overnight.

When UK and European politicians started blaming Russia for their "sudden" natural gas shortage, it was time to start looking for the truth. LOL. 

Google: 2017 UK closes largest natural gas storage site.

Wow, wow, wow -- things become much clearer. Hundreds of hits when you google that.

This is my favorite: UK closes its largest natural gas storage site in 2017.

The article is re-printed in full here, in case the above link breaks: https://wellsofinterest.blogspot.com/2021/09/rough-end-for-uks-largest-gas-storage.html.

I can't post it here in full because it exceeds Sophia's guidelines.

Bottom line: in 2017 UK closed its largest natural gas storage site which accounted for 70% of its total storage, and then had the chutzpah to say this:

On an annual basis, the UK can comfortably meet demand as there is enough production and import capacity. 

LOL.  

Parse that statement: "On an annual basis..." That's the problem. I'm not even going mansplain it -- if you don't understand it, you're reading the wrong blog. Go read Rachel Maddow. 

That was the UK.

Of course, for the EU: it was Groningen. 

I may need a new tag: reality sucks. 

By the way, who found that little gem? Will Kennedy reading Bloomberg. 

By the way, as bad as it already it, British Steel says that energy costs are spiraling out of control and warns that there may be a 50-fold increase in power prices. That's not a 50% increase in power prices; British Steel said a 50-fold increase. Google it; I'm tired of linking paywalls.