Bad, Bad News For The Bakken -- August 26, 2015

This makes it pretty clear exactly what Saudi Arabia's intentions were from the beginning.

The link is to the WSJ:

The operator of Canada’s largest crude oil refinery, Irving Oil Ltd., said it has stopped importing Bakken Shale oil from the U.S. in favor of cheaper crudes from such producers as Saudi Arabia, reflecting a shift in crude costs affecting East Coast refiners during a global slump in oil prices.

The closely held company’s 320,000-barrel-a-day refinery in Saint John, New Brunswick, one of the biggest by volume in North America, has reduced purchases of Bakken crude shipped by rail to zero from a high of nearly 100,000 barrels a day two years ago, Irving President Ian Whitcomb said in an interview on Thursday.

“We’re not importing any Bakken crude right now,” he said.

The move reflects shifting economics in the energy industry even as the price of oil—including Bakken crude—has slumped to six-year lows.

A once-yawning gap, between the cost of oil produced in North America and overseas crudes priced at the Brent global benchmark, has narrowed since 2013. Refiners on North America’s east coast can now import crude shipped by sea for less than the cost of shipping it by rail from shale oil producers in North Dakota and elsewhere in the U.S.

Even if Saudi Arabia (OPEC) were to raise their prices, or cut production, there's nothing to prevent Saudi from unilaterally keeping prices low enough to undercut Bakken oil that would have otherwise been shipped to these East Coast refineries.

Unless I'm missing something, this is a very significant development. 

Okay, that was my knee-jerk reaction.

After thinking about it while watching a) the middle granddaughter at soccer; and, then b) the oldest granddaughter at water polo, I realized this was probably just a minor speed bump in the big scheme of things. First of all, it's probably been going on for quite some time, and if Saudi wants to keep giving their oil away at $40 / bbl (that must have been the Bakken price) that's fine with me. For Saudi, they need $100 / bbl in current dollars and for them it's an existential issue. The Bakken isn't going to go away.

So, it's a headline story, but that's about it. This, too, shall pass. That which does not kill us, will make us stronger.

Seeing the new Zavanna permits put me in a great mood. 

Zavanna's Hunter Wells -- Foreman Butte

Updates

October 21, 2018: all Hunter wells on confidential list. I don't think they've been fracked yet.

The wells.

The 4-well Hunter pad to the north:

• 31863,
• 31862,
• 31861,
• 31860,

The 3-well Hunter pad to the south:

• 31864,
• 31865,
• 31866,  

Original Post

 
See this post for background to the new Zavanna permits for seven Hunter wells in Foreman Butte.

This is where they will be located (see graphic below). My hunch is that they will run to the south. Oasis as some old (very poorly performing horizontal Madison wells in the area). Oasis acquired much of the acreage in Foreman Butte from Zenergy back in 2013.

Zavanna has several very nice horizontal Bakken wells in this general area. Note how far west in McKenzie county these wells are located (the overview map of North Dakota with the very, very little red rectangle almost at the Montana state line.

Solyndra Was Just One Of (At Least) 36 -- August 26, 2015

Updates

February 6, 2020: Crescent Dunes, $737-million-backed by the federal government; solar company in Nevada declares bankruptcy. Link here. Solyndra: $535 million. Crescent Dunes lost its only customer; suffered a catastrophic technology failure -- can't even produce any electricity. Also here.

March 11, 2017: add Acquion. 

January 12, 2017: in the comments section at this post, a reader provided an updated list:

• Tonopah Solar Energy LLC / Solar Reserve ($737 million) -- added July 30, 2020; 
• Evergreen Solar ( Lost $25 million)
• SpectraWatt ( Lost $500,000)
• Solyndra ( Lost $535 million)
• Beacon Power ( Lost $43 million)
• Nevada Geothermal ( Lost $98.5 million)
• SunPower ( Lost $1.2 billion)
• First Solar ( Lost $1.46 billion)
• Babcock and Brown ( Lost $178 million)
• EnerDel’s subsidiary Ener1 ( Lost $118.5 million)
• Amonix ( Lost $5.9 million)
• Fisker Automotive ( Lost $529 million)
• Abound Solar ( Lost $400 million)
• A123 Systems ( Lost $279 million)
• Willard and Kelsey Solar Group ( Lost $700,981)
• Johnson Controls ( Lost $299 million)
• Brightsource ( Lost $1.6 billion)
• ECOtality ( Lost $126.2 million)
• Raser Technologies ( Lost $33 million)
• Energy Conversion Devices ( Lost $13.3 million)
• Mountain Plaza, Inc. ( Lost $2 million)
• Olsen’s Crop Service and Olsen’s Mills Acquisition Company ( Lost $10 million)
• Range Fuels ( Lost $80 million)
• Thompson River Power ( Lost $6.5 million)
• Stirling Energy Systems ( Lost $7 million)
• Azure Dynamics ( Lost $5.4 million)
• GreenVolts ( Lost $500,000)
• Vestas ( Lost $50 million)
• LG Chem’s subsidiary Compact Power ( Lost $151 million)
• Nordic Windpower ( Lost $16 million)
• Navistar ( Lost $39 million)
• Satcon ( Lost $3 million)
• Konarka Technologies Inc. ( Lost $20 million)
• Mascoma Corp. ( Lost $100 million) 

Original Post

 

It is amazing that out of the dozens of companies that were in the news from the very beginning, "we" picked up on Solyndra immediately. 

The blog is full of Solyndra stories right from the start (see tag). It turns out "we" were correct all along.

Taxpayer money to Solyndra; CEO and directors donate to DNC; Solyndra goes by the wayside after the election. At the same time Lois and the IRS targets Tea Party groups ensuring they are not given tax-free status and the rest is history as they say.

The Obama Administration admits Solyndra was a "scam." Not in so many words, but that's the nut. The actual words are here in the full report, a PDF file.

The interesting thing is that Solyndra was not the only scam. I doubt many folks remember this post and the list of 36 companies that received federal support from taxpayers have either gone bankrupt or are laying off workers and are heading for bankruptcy. This list includes only those companies that received federal money from the Obama Administration’s Department of Energy.

The amount of money indicated does not reflect how much was actually received or spent but how much was offered. The amount also does not include other state, local, and federal tax credits and subsidies, which push the amount of money these companies have received from taxpayers even higher.

The complete list of faltering or bankrupt green-energy companies:

1. Evergreen Solar ($24 million)*
2. SpectraWatt ($500,000)*
3. Solyndra ($535 million)*
4. Beacon Power ($69 million)* -- see "update/correction" below
5. AES’s subsidiary Eastern Energy ($17.1 million) -- see "update/correction" below
6. Nevada Geothermal ($98.5 million)
7. SunPower ($1.5 billion)
8. First Solar ($1.46 billion)
9. Babcock and Brown ($178 million)
10. EnerDel’s subsidiary Ener1 ($118.5 million)*
11. Amonix ($5.9 million)
12. National Renewable Energy Lab ($200 million)
13. Fisker Automotive ($528 million)
14. Abound Solar ($374 million)*
15. A123 Systems ($279 million)*
16. Willard and Kelsey Solar Group ($6 million) -- see "update/correction" below
17. Johnson Controls ($299 million)
18. Schneider Electric ($86 million) -- see "update/correction" below
19. Brightsource ($1.6 billion)
20. ECOtality ($126.2 million)
21. Raser Technologies ($33 million)*
22. Energy Conversion Devices ($13.3 million)*
23. Mountain Plaza, Inc. ($2 million)*
24. Olsen’s Crop Service and Olsen’s Mills Acquisition Company ($10 million)*
25. Range Fuels ($80 million)*
26. Thompson River Power ($6.4 million)*
27. Stirling Energy Systems ($7 million)*
28. LSP Energy ($2.1 billion)* -- see "update/correction" below
29. UniSolar ($100 million)* -- see "update/correction" below
30. Azure Dynamics ($120 million)* -- see "update/correction" below
31. GreenVolts ($500,000)
32. Vestas ($50 million)
33. LG Chem’s subsidiary Compact Power ($150 million) -- see "correction" below
34. Nordic Windpower ($16 million)*
35. Navistar ($10 million)
36. Satcon ($3 million)*
37. Nissan Leaf battery facility, Smyrna, TN (see November 15, 2012, update above) 
38. Twin Creeks Technologies, Senatobia, MS ($26  million)* (see November 30, 2012, update above) 
39. Abengoa, Madrid, Spain; added April 16, 2016; bankrupt; largest bankruptcy in Spain's history;  
40. Tonopah Solar Energy LLC / Solar Reserve ($737 million) -- added July 30, 2020; 

* Indicates filed for bankruptcy.

Note: the list came from another source; not all links were fact-checked. Much has been lost since the list was originally published. I can no longer vouch for the accuracy of the list, but it gets the point across to anyone paying attention. If this is important to you, go to the original source, at the post linked above.

Twelve (12) New Permits; BR Reports Four High-IP Wells; Whiting Will Report A Nice Well Tomorrow -- August 26, 2015

Wow, what a day:

• stock market up 600 points
• orders for consumer durables surge 2% month-over-month; surprised analysts who expected a drop
• Donald Trump hits 40% (remember: the consensus was his numbers would drop as other candidates dropped out and coalesced around non-Trump candidates); looks like Walker voters are going for "the Donald"
• black shooter kills two whites; no protests; no looting; "Black Lives Matter"; Bryce wanted a race war; he got it backwards -- black on white doesn't matter; white on black will start a riot
• Obama administration admits: Solyndra was a scam; lessons learned

***************************** 

Back to the Bakken

The big question, of course, tonight, is how many permit numbering errors there will be on the daily activity report when it is released later this evening?

Active rigs:

	8/26/2015	08/26/2014	08/26/2013	08/26/2012	08/26/2011
Active Rigs	75	195	185	189	200

Three (3) wells coming off the confidential list Thursday:

• 25361, 2,348, Whiting/KOG, Smokey 4-15-22-14H, Pembroke, 30 stages, 3.5 million lbs, t5/15; cum 21K 6/15 (29 days);
• 30387, drl/NC, SM Eenrgy, Shawn 1B-15HS, West Ambrose, no production data,
• 30697, drl/NC, MRO, Mikkelsen 11-14H, Reunion Bay, no production data,

Four (4) producing wells completed:
29050, 1,584, BR, Kings Canyon 2-8-34UTFH,
29423, 1,608, BR, Kings Canyon 4-8-34UTFH,
29426, 2,040, BR, Teton 5-1-3TFSH,
29465, 2,565, BR, Teton 7-1-3TFSH, 

Twelve (12) new permits:

• Operators: Zavanna (7), Newfield (3), CLR (2),
• Fields: Foreman Butte, Catwalk (Williams), Pembroke (McKenzie)
• Comments: generally speaking, once a permit is issued in North Dakota, the expectation is that the well will be drilled fairly quickly, probably within 3 to 9 months; the seven Zavanna permits appear to be for well on two pads (one 4-well pad, and one 3-well pad, I believe), NWNW 29-150-102. I think I'm correct on all this. The reason for my "hesitation" is because the entire area (around 29-150-102) is "owned" by Oasis -- at least one Oasis well in every section in that area. There is one Zavanna well nearby, but it is one mile to the east, sited in section 28-150-102, and running south (1280-acre spacing):

• 22314, 864, Zavanna, Browning 28-33 1H, Foreman Butte, 35 stages, 4.0 million lbs, t2/13; cum 129K 6/15; 

Further comment: I think the fact that this is Zavanna with all these permits, particularly in the current environment speaks volumes. There are not many operators that are very active right now in the Bakken. I would assume that for an operator to be active in the Bakken right now, the operator has to have "something going on" that is different from the other Bakken operators that are not so active. It could be as simple as Zavanna has no other plays in the US and has only the Bakken, but that's relatively true with a lot of Bakken operators. I would assume all Bakken operators are looking six to twelve months out, so these new permits were predicated on what the environment might look like a year from now. I may be going way out on a limb here, but when I saw the "jump" in monthly production when Zavanna reported "gas lift" recently, it makes me wonder if Zavanna doesn't think they might have something very, very interesting with regard to lift. The Foreman Butte oil field is not exactly where most of the action is right now: it's fairly far west in north McKenzie County, a bit far to the west of the sweetest spots in northeast McKenzie County. I have not updated Foreman Butte in a long time; guess it's something I need to do.

The Hunter wells will be tracked here. 

Okay, it make sense now. I forget / never knew if there was any formal relationship between Zavanna and Zenergy (other than the first letter of their corporate name), but they were often found "together" in the Bakken. In September, 2013, it was announced that Oasis acquired 160,000 net acres in the Bakken from Zenergy. That's why this field now looks like an Oasis field. It used to be a Zenergy / Zavanna field. Now it's an Oasis / Zavanna field. 

Just An Observation Regarding US Gasoline Demand And How The Obama Administration Sees It -- Basically Flat -- August 26, 2015

Updates

Later, 3:16 p.m. Central Time: this is why I love to blog. Not less than two minutes ago I was still correcting the typographical errors on the original post below. I leave this page to check my mail, and Don has already sent me a link validating my thoughts with regard to bigger SUVs, cross-overs, and pick-ups going forward. Business Insider is reporting that Ford may bring the Bronco back, bigger and better than ever. The article was just posted 52 minutes ago, about the time I started working on the graphic below.

A source familiar with Ford's product planning said that the company is considering the revival of the Bronco SUV. According to the source, the new Bronco will likely be a midsize affair comparable in size to Ford's popular Explorer.

However, unlike the Explorer — which is now a crossover — the Bronco will be based on a midsize pickup truck.

There's just one problem. Ford currently does not offer a midsize pickup in the US.

That's where the Ranger comes into play. Sources within Ford say that the Ranger pickup could return to the US market as early as 2018.

Although the Ranger name may be defunct in the US market, Ford has been selling a midsize truck overseas using the name for nearly 20 years.

Ford, like many others, abandoned the compact pickup truck market during the late 2000s when growth in the segment slowed and instead focused on the development of more profitable larger trucks, SUVs, and crossovers.

However, with the recent return of the GM duo and a revamped Toyota Tacoma, there is new life in the once dormant segment — albeit with slightly larger vehicles.

My hunch is automobile manufacturers are rushing to get out bigger vehicles a) before new CAFE standards are instituted; and, b) while consumers "believe" cheap oil is here to stay.

See also "Muscle Cars" are back. 

Original Post

 

It's a bit "busy," but interesting. Hope you can understand it.

Everything in blue (the x-axis and the line in atrial fibrillation) is from the EIA. Using an x-axis from 0 bopd to 12 million bopd (neither of which is close to reality between 1992 and today), it appears at first glance that US gasoline demand since 1992 has been relatively flat.

However, if one uses an x-axis from 5.5 million bopd to 10 million bopd (much closer to reality), the red line is actually quite remarkable.

It would be interesting to go back to 1992 and see what the projections for gasoline demand in the US were at that time.

The graph is even more striking when one remembers that the 1990's were known for stricter and stricter CAFE standards (mileage standards) and that over the years, the technology for more and more efficient engines has improved. In addition, Americans have demanded more fuel-efficient cars and there was an overall movement toward compact and sub-compact cars with the history of OPEC embargoes. And, of course, we can't forget all the EVs that Americans are now driving. And, of course, all the bicycle riding due to the fitness craze. And yet the gasoline demand from 1992 to today -- about 25 years -- is quite striking.

To add a bit of fuel to this fire, remember that auto manufacturers are setting new records with sales of gas guzzling SUVs, cross-overs, and pick-ups. EV sales are essentially flat. New, potentially stricter CAFE standards are not up for review until 2018, and won't take effect until 2020, IIRC.

It appears gasoline demand records were set:

• August, 2007, third week: 9.762 million bopd
• July, 2005, first week: 9.721 million bopd
• August, 2003, fourth week: 9.668 million bopd

We are currently about 9.6 million bopd per John Kemp's most recent tweet on the subject.

Source here.  Technically, I guess this is "gasoline supplied," not necessarily "consumed" or demanded." But I assume all three terms, when it comes to gasoline, are nearly synonymous.

Note: I often make simple errors. For example, I probably should have raised the left end of the red line slightly more. In addition, the red line would have some steeper slopes in places, and it might have even been a bit flatter in places. There could be other mistakes in the graph above. If this information is important to you, go to the source.