Shifting to renewable energy sources has been widely touted as one of the best ways to fight climate change, but even renewable energy can have a downside, as in the case of wind turbines' effects on bird populations.
In a new paper in The Condor: Ornithological Applications, a group of researchers demonstrate the impact that one wind energy development in Kansas has had on Greater Prairie-Chickens (Tympanuchus cupido) breeding in the area.
Virginia Winder of Benedictine College, Andrew Gregory of Bowling Green State University, Lance McNew of Montana State University, and Brett Sandercock of Kansas State University monitored prairie-chicken leks, or mating sites, before and after turbine construction and found that leks within eight kilometers of turbines were more likely to be abandoned.
Leks are sites at which male prairie-chickens gather each spring to perform mating displays and attract females. The researchers visited 23 leks during the five-year study to observe how many male birds were present and to record the body mass of trapped males. After wind turbine construction, they found an increased rate of lek abandonment at sites within eight kilometers of the turbines as well as a slight decrease in male body mass. Lek abandonment was also more likely at sites where there were seven or fewer males and at sites located in agricultural fields instead of natural grasslands.
First page: a "debate of sorts" between two analysts on where the price of oil is headed; one says higher; one says lower. After reading the first couple of paragraphs, I quit reading it. Predicting the price of oil is a fool's errand. Two comments: we will never run out of oil. Saudi Arabia is setting us up for a huge spike in the price of oil. Or not.
Page R2: a quiz on the Keystone XL pipeline. So yesterday.
Page R3: full half page by Amy Myers Jaffe, the executive director of energy and sustainability of California, Davis, and chairwoman of the Future of Oil and Gas for the World Economic Forum. Title of her article: "Never Mind Peak Oil -- Here Comes Peak Demand." If I remember I will come back to this one. See below.
Page R6: What the future of oil drilling will look like. Date line: Tioga, ND: Liberty Resources' 'oil factory' focuses on lower costs, more flexibility, and better community relations. Great graphics. Need to come back to this later. See below.
Page R6: Oil nations see an opening to reduce subsidies.
Page R7: the tough path form coal to renewables. Can't wait to read this one. See below.
Page R8: water meters begin to get smarter.
Page R8: Green spinoffs open sector to investors.
Page R8: frackers look for ways to cut their prodigious thirst. Can't wait to read this one. See below.
Page R9: carbon capture - a status report.
Page R9: easier to pay, easier to spend. The surprising result of automatic bill paying. This should be interesting.
Page R10: In Kenya, the wind and a dream.
Page R10: A Wichita linedrone? Utilities use unmanned craft to inspect power lines.
So Bittersweet
***************************
The Stories
This story first: full half page by Amy Myers Jaffe, the executive director of energy and
sustainability of California, Davis, and chairwoman of the Future of Oil
and Gas for the World Economic Forum. Title of her article: "Never Mind
Peak Oil -- Here Comes Peak Demand."
In this 10-page insert in today's WSJ this article was the first to catch my attention. The first thing I did, once I got the gist of the story, was to see if renewables were mentioned. They were. I read the short section on "renewables" and immediately looked to see who the author was. Then it all made sense. A story from the state of fruits and nuts. Her thesis is that we have reached -- or will soon reach -- peak demand for oil.
The Saudis are very, very concerned about "peak demand for oil." And how does one counter "peak demand"? Give oil away for $50/barrel; maintain the addiction.
Near the end of the article, Ms Jaffe wrote:
Finally, renewable energy is turning out to be more promising than expected, eating away at oil's share of electricity production -- and, eventually, automotive energy. China's commitment to an industrialization program pushing itself to be the world's major exporter of solar panels and advanced vehicles including the production of five million electric vehicles a year is another source of caution to those who forecast oil demand will rise exponentially forever.
Let's parse what she just said.
after thirty of years of tax subsidies and grants, the amount of solar energy consumption in the US rounds to 0% -- zero percent
President Obama "tariffed" China's solar panel program into the dustbin of renewable energy
Chinese EVs, as well as America's EVs, will run off coal
no one ever said anything about oil demand rising exponentially forever
fifty percent of oil is used for non-transport industries (plastics)
But, again, Saudi Arabia reminds us that as the price of oil falls, Americans will buy ever more SUVs, and the Chinese aspire to the American middle class dream ... and inexpensive oil will take them there.
******************
Liberty Resources, Page R6
What the future of oil drilling will look like -- case study: Liberty Resources, the Bakken. Regular readers already know about this; we've been talking about the "manufacturing stage" in the Bakken for the past several years.
Here's the graphic:
Note the graphic above: 12 wells per pad. In the graphic above, there are six 1280-acre drilling units. That's 72 wells. In fact, that's just the start. Others may have seen this coming long ago, but it was Harold Hamm who espoused it publicly over and over. And over. There will be enough wells in this one "manufacturing unit" to support a salt water disposal well, eliminating the need for trucking water to an off-site SWD well.
PAGE, Ariz.—For the past decade, the Navajo reservation here has struggled to navigate the change from coal to green power.
It’s still struggling.
The effort began when environmental activists filed a federal lawsuit that helped result in the closure of a nearby coal plant, which ended up costing many Navajos their jobs.
Activists said they would try to help the tribe develop clean-energy jobs. But now, years later, few jobs have been created. And a second large coal plant in the area is facing a partial shutdown, putting many of the nearly 1,000 jobs at the facility and a related mine in jeopardy.
About 90% of those jobs are held by Navajos, and the fallout could be significant on a reservation where unemployment runs about 50%. “We Navajo are wondering what to do next, because coal is a major part of our resource,” says Travis Francisco, 35, who supports a family of six on his job as a plant supervisor.
People who enrolled in automatic bill-payment programs increased their
monthly electricity consumption by between 4% and 6% on average, and
some groups used as much as 9% more electricity, according to research
by Steven Sexton, assistant professor of public policy and economics at
Duke University. Dr. Sexton’s paper on the subject appeared in the May
issue of The Review of Economics and Statistics.
The effect is based on what behavioral economists and many marketers
noticed a long time ago—the less attention we pay to price, the more
likely we are to spend more.
It is why companies bombard
consumers with cheap introductory offers that, once they expire, turn
into higher rates.
Mobile apps from companies such as Uber Technologies
Inc. and tools such as Amazon Inc.’s new Dash button, which allows
people to order household items at the push of a button, hide the price
and payment transaction entirely.
At ConocoPhillips Co., so much water is coming up with the fuel it is
drilling in the Permian Basin of Texas that water management, logistics
and recycling have taken on a new importance. During a recent talk with
analysts and investors, the company said water-management improvements
have helped it cut the cost of supply by about $8 a barrel in some
areas. Last year, ConocoPhillips produced 58,000 barrels a day of oil
equivalent in the Permian Basin.
There is a reason the Bakken is not mentioned in the article (unless I missed it): there is more than enough water in the Bakken to frack every well that is drilled. Period. Dot.
One risk that remains: a further decline in oil prices. Key African
oil exporters such as Nigeria and Angola have been hurt by the global
plunge of oil prices. Kenya, however, a net importer of energy, is
benefiting, according to the World Bank.
Hence, the risk to the
Lake Turkana project is that if oil prices continue to fall, energy
produced by the wind farm could end up costing more than electricity
produced using oil.
“No one believes these [low oil] prices will
last forever” says Mr. Van Wageningen, when asked whether it makes sense
to build big renewable-energy projects at a time of historically low
energy prices. The director says he expects Lake Turkana’s pricing to be
competitive as long as crude doesn’t go below $40 a barrel.
Despite
all of the difficulties, he expects the wind farm to be profitable. “In
Africa you don’t get government subsidies to build renewable-energy
projects like you do in Europe,” he says. “Here you can only do it
because it makes financial sense.”
We'll see. But no, low oil prices won't last forever.
*******************************
Another Example Of Why The US Is The Best Country In The World
Embedding has been disabled. No one will open that link, but on the off-chance that you do, go to "56.00 minutes."
Crude oil aboard a BNSF train that derailed in North Dakota on
Wednesday caught fire even though it was less flammable than required by
a state law that took effect last month.
Test results sent to federal investigators and seen by Reuters show
the state’s new rule may not be stringent enough to significantly reduce
the risks of fireballs after derailments of trains carrying crude. In
this crash, the crude on board contained about 20 percent fewer volatile
gases than regulations mandate.
The oil, transported in tank cars owned by Hess Corp , had a vapor
pressure of 10.83 psi, according to test results. This pressure is less
than the new threshold of 13.7 psi.
A state Department of Health official says about 63,000 gallons of saltwater have leaked from a pipeline in northwest North Dakota and that some has reached a lake via a tributary.
Water Quality Director Karl Rockeman said Wednesday that it’s unclear how much of the saltwater has entered Smishek Lake near the town of Powers Lake, which is about 75 miles northeast of Williston. He says the lake does not supply area drinking water.
Saltwater, or brine, is an unwanted byproduct of oil production and is considered an environmental hazard by the state. It is many times saltier than sea water and can easily kill vegetation.
Rockeman says he considers the 1,500-barrel leak “significant.”
Oasis Petroleum owns and operates the pipeline. The state learned of the spill on Monday.
A North Dakota health official says a 70,000-barrel brine spill near Williston that has affected two creeks is the largest since the state’s oil boom began.
Operator Summit Midstream has begun the cleanup process and inspectors have been monitoring the affected area.
Brine is an unwanted byproduct of oil production and is considered an environmental hazard. It’s saltier than sea water.
The saltwater was released from a pipe Jan. 7 about 15 miles north of Williston and reached nearby waters in Blacktail Creek and Little Muddy Creek.
A contractor has pumped out from Blacktail Creek about 64,000 barrels of a mix of water and brine.
***********************
Oasis 1Q15 Earnings
Oasis Petroleum beats by $0.02, misses on revs: Reports Q1 (Mar) earnings of $0.28 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus Estimate of $0.26; revenues fell 44.0% year/year to $180.4 mln vs the $253.77 mln consensus.
Exceeded production guidance range and increased average daily
production to 50,446 barrels of oil equivalent per day ("Boepd"), an 18%
increase over the first quarter of 2014 and a 1% sequential quarter
increase.
Invested capital expenditures ("CapEx") of $271.1 million in the first quarter of 2015, compared to a CapEx budget of $271.1 million.
Completed and placed on production 23 gross (19.2 net) operated wells in the first quarter of 2015.
Decreased lease operating expenses ("LOE") per barrel of oil equivalent ("Boe") to $8.62, a 17% decrease from the first quarter of 2014 and an 11% sequential quarter decrease.
Reported Adjusted EBITDA of $208.9 million
in the first quarter of 2015. For a definition of Adjusted EBITDA and a
reconciliation of net income and net cash provided by operating
activities to Adjusted EBITDA, see "Non-GAAP Financial Measures" below.
Completed a public offering of 36.8 million shares, raising $463.1 million of net proceeds for the Company on March 9, 2015.
"Oasis exceeded production guidance of 47,000 to 49,000 Boepd in the
first quarter of 2015, as new wells brought on during the first quarter
exceeded production expectations with over 60% of the wells completed
with high intensity stimulation," said Thomas B. Nusz,
Oasis' Chairman and Chief Executive Officer.
"Based on our first
quarter performance, we expect to produce between 47,000 and 49,000
Boepd in the second quarter of 2015 and to produce between 46,000 and
49,000 Boepd for the full year 2015. Additionally, CapEx tracked in line
with our budget, with drilling and completion capital coming in at $216.6 million, or $8.3 million
below our budget. There were some timing differences on a few
non-drilling and completion items, and we remain on track to spend our $705 million
CapEx budget for 2015. Well costs are trending below our original 2015
estimates, as the team has driven down the cost for high intensity
completions to approximately $9.0 million per well."
Mr. Nusz added, "The White Unit in Wild Basin, our first
multi-slickwater test, continues to outperform the high-end of our type
curve. The test included seven wells in a portion of a single DSU, all
completed with slickwater completions. The Middle Bakken well has
produced approximately 256,000 Boe through 216 days and the wells in the
first bench of the Three Forks have produced on average 167,000 Boe
through 192 days. Additionally, we completed our first high volume
proppant test in Alger, which is the
17,000 net acre southern subsection of South Cottonwood where we have 18
DSUs included in our core inventory.
The Helling Trust has two new
Middle Bakken wells that have produced on average 139,000 Boe through 88
days and a well completed in the first bench of the Three Forks wells
that has produced 104,000 Boe through 87 days.
All of the Middle Bakken
and Three Forks wells in both the White Unit and the Helling Trust have
early time production that is trending over double our corresponding
production data for our 750,000 Boe Middle Bakken
type curve and our 600,000 Boe Three Forks type curve,
respectively. The continued outperformance of both of these high
intensity completion tests continues to provide us with confidence in
our plans to target our core area with high intensity completions."
Taylor Reid, Oasis' President and Chief Operating Officer added, "We have driven LOE down to $8.62
per Boe, the lowest level we have delivered since our acquisition
during 2013 and 15% below 2014 levels. We have been successful at
lowering operating costs as we focus completions in areas with existing
salt water pipeline and disposal infrastructure as well as improving run
time on our producing wells. We increased connectivity to our OMS
infrastructure in the first quarter of 2015 and now have 58% of our
wells connected. We are updating our LOE guidance for the year to $9.00 to $10.00, based on confidence around recent performance."
"We also continue to increase our financial flexibility completing a $463 million
equity offering in early March as well as amending our credit facility
to increase the term to five years and to increase the committed level
to $1.525 billion. We have over $1.3 billion of liquidity even as we drill within cash flow for the remainder of the year," said Mr. Reid.
