Thursday, February 27, 2014

Shell Treads Carefully While Promoting LNG-Fueled Truck Fleets

For background, see also:
The Wall Street Journal is reporting that Shell is stepping back a bit from funding LNG corridors in Canada.
Shell is tapping the brakes on plans to push natural gas as a fuel for the trucking industry.
The company confirmed it will not build a previously announced plant 20 miles west of Calgary that would turn natural gas into liquid form, known as LNG, for use in heavy duty trucks.
Shell still plans to build out a network of LNG fueling stations along a 900-mile stretch between Alberta and Canada’s Pacific Coast. But those LNG service stations, which will be operated by Pilot Flying J, will sell natural gas fuel created by a company other than Shell.
“We are definitely still interested, but it’s an emerging market so Shell has to take a balanced approach to these developments,” Shell spokeswoman Destin Singleton said.
So far Shell has not changed plans for two other LNG fuel plants – one in Geismar, LA, and one in Sarnia, Ontario, Ms. Singleton said. Once constructed, they could produce up to 250,000 tons per year of natural gas fuel for use in trucks and even ships as some tanker and ferry owners install the equipment needed to burn LNG instead of oil-based fuel.
The company has been pulling back from some North American investments as it tries to fund costly oil and gas projects around the globe, including selling off shale fields in the U.S. In December the company abandoned plans to build a multibillion-dollar plant in Louisiana that would have converted natural gas into diesel, citing skyrocketing costs.

It Just Became A Bit Clearer Why Dow Chemical Was So Quick To Condemn Natural Gas Exports

Do you remember those stories reporting that Dow Chemical was strongly against natural gas exports?

This story shines some light on the issue. Deep in the article being reported by Houston Business Journal:
In Houston, many companies, such as The Dow Chemical Co., have publicly expressed their concerns about whether the price of natural gas, a raw material used to produce chemicals, will go up. If a significant price increase happens, Michigan-based Dow said that its massive, $4 billion Gulf Coast expansion will be in jeopardy.
I had no idea. 

Bakken Oil Rolling Through Fracking-Averse New York State -- Such Sweet Irony

Updates

March 2, 2014: it looks like four little counties in fly-over country have become a regular feature in The New York Times. Steven sent a follow-on to the article below. It is very interesting and very, very helpful. I envision a TSA-like CBR inspection team, and perhaps even a whole new division of Homeland Security: Bakken Security Agency, BSA. The New York Times is reporting:
New York State regulators conducted a series of inspections over the last week at the Port of Albany and on rail tracks in Albany and Buffalo to increase the safety of the surging oil-by-rail business, according to a statement by Gov. Andrew M. Cuomo.
Albany has emerged in the last two years as a key hub for shipping oil from North Dakota to refineries along the East Coast. And the rise in production from the Bakken shale region has prompted concerns about the hazards of moving potentially explosive oil by rail.
Federal and state officials have been under pressure to beef up their oversight of the industry and tighten regulations. The issue is particularly sensitive in Albany, where millions of gallons of oil arrive each day aboard two oil trains and are then transferred onto barges and tankers heading down the Hudson River.
Several facilities were inspected over the last week. At the Kenwood Rail Yard in Albany, inspectors examined 120 crude oil tank cars and found three defective wheels and three defective brake shoes. They also examined two miles of track and 31 switches and found 36 defects including loose rail joints and fasteners. Those were repaired immediately. Similar inspections took place at the Frontier Rail Yard in Buffalo and along four miles of track there. 
Let's see, 120 crude oil tank cars times 8 wheels = 960 wheels. 3 / 960 = 0.3%. But all it takes is one, I guess.  I suppose the definition of "defective" needs to be taken into account and how likely a defect would cause a derailment.

Original Post

Steve sent this most interesting article, filled with irony. The New York Times is reporting:
On a clear December morning two years ago, a 600-foot oceangoing oil tanker called the Stena Primorsk left the Port of Albany on its maiden voyage down the Hudson River laden with 279,000 barrels of crude oil. It quickly ran aground on a sandbar.
The incident attracted little attention at the time. The ship’s outer hull was breached, but a second hull prevented a spill. Still, the interrupted voyage just 12 miles south of the port signaled a remarkable turnaround for the state’s capital.
With little fanfare, this sleepy port has been quietly transformed into a major hub for oil shipments by trains from North Dakota and a key supplier to refiners on the East Coast.
Hidden in plain sight, Albany’s oil boom has taken local officials and residents by surprise. Many became aware of the dangers of oil trains after a recent series of derailments and explosions, including one that killed 47 people in Quebec last July, which have generated concerns about growing rail traffic into the city. Trains rumble through the heart of Albany every day and often idle along the busy Interstate 787 highway while waiting to get into the port’s rail yards.
“This has caught everyone off guard,” said Roger Downs, a conservation director at the Sierra Club in Albany.
About 75 percent of Bakken oil production travels by rail and as much as 400,000 barrels a day heads to the East Coast, said Trisha Curtis, an analyst at the Energy Policy Research Foundation. Albany gets 20 to 25 percent of the Bakken’s rail exports, according to various analyst estimates.
This is really a "fun"story to read; there are simply so many story lines.What caught my attention was the operator: Global Partners. Do a search on the blog to get background to this company. This is one post. I find it simply amazing how far -- literally and figuratively -- the Bakken has come in such little time.

Note this in the article:
Trains now come into Albany on average twice a day after completing a four-day journey from North Dakota, either through the Canadian Pacific network, via Montreal, or on the CSX rail lines that pass through Buffalo and Syracuse. These mile-long trains, each up to 120 tank cars long, can carry roughly 85,000 barrels of oil.
CBR trains now come into Albany on average twice a day according to the story. Let's put that into perspective: I understand that as many as thirty BNSF CBR trains roll through Minot daily. I can't link a source for that but that's what I've been told. I could be way wrong.

XOM, XTO, And Idle Chatter

Don sent me a most interesting article with several story lines. Bloomberg is reporting: 
Exxon finished 2013 with proved reserves equivalent to 25.2 billion barrels of oil, 47 percent of which were comprised of gas, according to today’s statement. The company discovered and acquired enough new crude and gas to replace 103 percent of what it pumped last year.
The company cited the Upper Zakum oilfield in Abu Dhabi as a major source of new liquid reserves, as well as North American shale formations such as the Permian and Bakken. Exxon has been deploying XTO’s fracturing experts to shale fields to speed the development of resources.
The story looks familiar and though it has the February 27, 2014, date, it seems I've seen the same story elsewhere a few days (or weeks) ago.  I wrote the following to Don, unedited:
You know, this is a huge story. I first heard "rumors" about this story some weeks ago -- let's see the date on this article -- Feb 27, so this is the first time I've seen this in print, but I heard someone talking about this/or read about this. I don't know who picked up on this a couple of weeks ago, but I certainly caught it -- my ears perk up when I hear XTO or some other Bakken operator mentioned on the radio.

They say XOM /CEO is brilliant -- the previous one and now this one -- whoever he is -- I've forgotten -- but they say XOM is brilliant and they don't make mistakes. They were too heavy into natural gas and analysts thought XOM had made a mistake. Maybe they did, but they turned on a dime when they bought XTO and the rest is history.

XOM could have bought other Bakken "experts" but maybe XOM liked XTO's ticker symbol. Smile.
If XOM is citing the Bakken, that, for me, is a huge story. Especially when the Bakken is mentioned in the same paragraph as Abu Dhabi.

Eighteen (18) New Permits -- The Williston Basin, North Dakota, USA; EOG Reports Another Huge Wayzetta Well (118,000 In Less Than Four Months); Hess With A Nice Well

Active rigs:


2/27/201402/27/201302/27/201202/27/201102/27/2010
Active Rigs19418120516996


Eighteen (18) new permits --
  • Operators: Hess (7), Oasis (5), SM Energy (3), EOG (2), QEP
  • Fields: Siverston (McKenzie), Parshall (Mountrail), Grail (McKenzie), Camp (McKenzie), Beaver Lodge (Williams), Cottonwood (Mountrail)
  • Comments:
The one well coming off the confidential list today was posted earlier; see sidebar at the right.

Finally, it's official: Four "Oil For America" wells were designated "DRY." Chesapeake's Olson well was also DRY; and Ballantyne's Diepolder well was DRY.

Help requested: over at The Bakken Discussion Group, an individual is asking -- Would anybody be able to tell me if $27,300 per acre bonus and 22% royalty for 160 acres in northeast McKenzie county on the reservation would be fair?

Wells coming off the confidential list Friday:
  • 22203, drl, CLR, Cuskelly 2-7H, Rattlesnake Point, no production data,
  • 25343, 730, EOG, Wayzetta 154-0605H,  Parshall, t9/13; cum 119K 12/13;
  • 25497, 233, Baytex, Haugenoe 21-16-162-99H 1PB, Ambrose, t9/13; cum 20K 12/13;
  • 25825, 1,751, Newfield, Holm 150-98-17-20-3H, Siverson, t1/14; cum --
  • 25948, 2,088, Petrogulf, Sanstrom 151-94-1H, Antelope, a Sanish well,  t12/13; cum 21K 12/13;
  • 26114, drl, Hess, EN-Chamley 156-93-0508H-4, Baskin,
  • 26123, conf, CLR, Morgan 1-29H1, Corinth, t11/13; cum 26K 12/13;

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

25343, see above, EOG, Wayzetta 154-0605H,  Parshall:

DateOil RunsMCF Sold
12-2013223120
11-2013386860
10-2013411710
9-2013154330

*****************************
A Note To The Granddaughters

I noted that it got up to 22 degrees the other day here in Williston, the heart of the Bakken, North Dakota. This morning when I drove to Cashwise for coffee, it was eleven degrees below zero; it is currently quite warm, 13 degrees (above zero, but still almost 20 degrees below freezing). To no one in particular in the Books on Broadway coffee shop this afternoon, I noted that it was warmer earlier in the week, but today was cooler. One of the long-term Willistonites who was there having coffee checked his iPhone and noted that it would be -21 overnight Friday; -22 overnight Saturday; -15 overnight Monday with snow.

He noted that we had our "spring" for the year.