Reality Bites: Natural Gas, Renewable Energy, Coal And The Philippines -- November 24, 2015

I consider myself somewhat well-read, and somewhat cognizant of what's going on around the rest of the world, and then I come across an article and realize how little I really know. Take this Reuters article in Rigzone for example about the Philippines:

• 100 million people, one of the world's fastest growing economies
• aims to double its power generation capacity by 2030
• daily blackouts; in the 1990's these blackouts crippled its economy
• electricity is currently generated by local gas supplies

But:

• local natural gas supplies are fast running out 
• their gas field is expected to be depleted by 2024

The country is set to import LNG for the first time next year, but cheap coal is a strong competitor.

Reuters writes:

But despite government support for gas, a rash of approvals for coal-fired plants is already set to push coal's share of power generation up sharply to over 50 percent by that time, while gas' share may fade slightly to 15 percent.

A Philippines lawmaker conceded it is too early to say when legislators will call time on new coal plants.

"It presents a great challenge, especially for us in Congress," said Reynaldo Umali, who heads the committee on energy at the House of Representatives.

This type of dilemma is echoed throughout Asia, where more than 500 coal-fired plants are on the drawing board, spurred by coal's low cost and availability, while LNG needs billions of dollars for infrastructure to receive and store imported gas.

Despite increased emphasis on natural gas,

... the Philippines accepts that rejecting cheap coal is not an option as its economy develops, with more than 40 new power plants in the pipeline, including projects still seeking financing.

"The Philippine electricity market is very competitive, so to be able to make sure that we can sell the power capacity to be generated by our power plants, it has to be cheap," said Lito Lantin, senior vice president at Meralco Power Gen Corp, which plans to build three coal-fired plants over five years.

A related story on the Philippines was posted on November 7, 2015. 

Random Update Of Three Murex Wells, First Drilled 2006; Re-Drilled Back In 2010 With A New Lateral -- November 24, 2015

Note: in long notes like this, there will be factual and typographical errors. The very, very brief summaries are to give me an overview of these three wells to better understand the Bakken. This should be read only for interest and not as a source document. If this information or these wells are important to you, go to the source.

For the archives.

16186, 439, Murex, Angie Marie 13-24H, Beaver Lodge, t7/06; cum 383K 9/15;
16284, 412, Murex, Amy Lynette 13-23H, Beaver Lodge, t9/06; cum 264K 9/15;
16358, 439, Murex, Megan Brooke 15-22H, Beaver Lodge, t12/06; cum 192K 9/15;

All three wells drilled in 2006. Stimulated with HCL but no evidence of any further frack/stimulation.  In 2010, all three wells were re-drilled. In one file report, it was stated that the well was re-drilled due to pressure depletion in the original well. In each case, the well bore followed the original hole to about 8,000 feet at which point a new lateral was drilled. The new laterals were fracked.

Production profiles during the period of the re-drill / frack which occurred in2010:

16186, 439, Murex, Angie Marie 13-24H:

BAKKEN	12-2010	30	7253	6853	1871	9468	9468	0
BAKKEN	11-2010	30	8105	8205	1731	10158	10158	0
BAKKEN	10-2010	31	10634	10784	2299	11530	11530	0
BAKKEN	9-2010	18	3213	2650	532	3247	3247	0
BAKKEN	8-2010	26	5207	5881	1602	6304	6304	0
BAKKEN	7-2010	31	16127	15707	6809	18434	18434	0
BAKKEN	6-2010	30	4800	4734	773	4839	4839	0
BAKKEN	5-2010	31	0	0	0	0	0	0
BAKKEN	4-2010	30	965	1273	116	1123	1123	0
BAKKEN	3-2010	31	2342	2500	278	2609	2609	0
BAKKEN	2-2010	28	2175	1856	265	2314	2314	0

16284, 412, Murex, Amy Lynette 13-23H:

BAKKEN	10-2010	31	5511	5604	1758	7548	7548	0
BAKKEN	9-2010	30	6159	6258	1945	8253	8253	0
BAKKEN	8-2010	28	7568	7001	2520	8734	8734	0
BAKKEN	7-2010	27	6929	7260	3277	4585	4585	0
BAKKEN	6-2010	27	6256	5911	3422	4673	4673	0
BAKKEN	5-2010	31	0	0	0	0	0	0
BAKKEN	4-2010	0	0	0	0	0	0	0
BAKKEN	3-2010	31	1366	1584	448	2274	2274	0
BAKKEN	2-2010	25	1936	1582	519	3137	3137	0
BAKKEN	1-2010	31	1145	1837	156	1219	1219	0
BAKKEN	12-2009	31	1213	696	123	1244	1244	0

16358, 439, Murex, Megan Brooke 15-22H:

BAKKEN	10-2010	28	7694	7305	4468	4613	4613	0
BAKKEN	9-2010	22	2998	3267	2270	2237	2237	0
BAKKEN	8-2010	31	8745	8723	4219	3966	3966	0
BAKKEN	7-2010	3	1619	1349	0	3238	0	3238
BAKKEN	6-2010	0	0	0	0	8	8	0
BAKKEN	5-2010	31	315	454	127	655	655	0
BAKKEN	4-2010	30	914	807	301	1604	1604	0
BAKKEN	3-2010	31	932	1143	407	1691	1691	0
BAKKEN	2-2010	28	913	668	332	1721	1721	0
BAKKEN	1-2010	31	1118	1410	398	2137	2137	0
BAKKEN	12-2009	31	839	698	286	2098	2098	0

The screenshot showing the locations of these three wells.

Proposed Devils Lake Refinery On Hold -- November 24, 2015

The Grand Forks Herald is reporting:

Lagging oil prices have postponed plans for a proposed diesel oil refinery in Devils Lake.

About a year ago, Eagles Ledge Energy, based in Vancouver, B.C., had announced plans to build a $200 million, 20,000-barrel-per-day clean fuels oil refinery in Devils Lake.

The refinery, operating under the name of American Dakota Refinery, is proposed to convert crude oil from the Bakken Formation in western North Dakota into off-road diesel fuel for use in farm and construction equipment.

However, the project currently is on hold, as oil prices have plummeted from more than $100 per barrel in September 2013 to the low $40-$50 range in recent months.

Low Oil Prices And US Driving Data, And Again, Why Is The Price Of Gasoline So High In California? -- November 24, 2015

Earlier this morning, I posted these Jack Kemp tweets:

• US traffic volumes have grown 3.5% over last 12 months, compared to prior 12-month period, fastest gain since 1997
• US traffic surged 4.3% in September compared with prior-year, according to Federal Highway Administration

I didn't really pause to think about that ... I was moving along quickly to get things posted, but those data points are incredible. The 4.3% increase year-over-year is one thing, but the fact that traffic volume growth has shown the fastest gain since 1997.

Since 1997 ... that's almost twenty years ago.

The current oil price slump began one year, October, 2014. The growth would have been even greater had the state with the most miles driven, California, shared in the low oil prices.  

Energy Institute at Haas posted this note and graph on September 28, 2015:

While oil prices have been falling across the country, the gap between California gas prices and the rest of the U.S. has climbed to higher levels for a longer stretch than at any time in the last 20 years.

 

[I'm surprised EIA did not include a fourth trend line: "US average price for gasoline in 47 states -- excluding Hawaii, Alaska, and California."]

The Institute (at Berkeley, California, cannot provide the answer, but it runs through the history and it's very interesting.

It's a good piece of analysis and a good column until the last few paragraphs when the writer got off topic.

But back to the analysis. I think the writer comes very close to the answer when he writes:

With prices very sensitive to even a slight shortage, and with two companies producing about half the state’s CARB gasoline supply, it seems quite possible that firms might be able to make more money by making less CARB gasoline.  This could be particularly true when a supply shock like a large refinery fire has already tightened the market.  

The problem with that argument is that there are no signs that any individual gas station or any chain has ever shown any outward sign of coming close to running out of gasoline on any given day or any given week. It's hard for me to believe that each and every gas station in California is cutting it so close to "empty" at the end of the day or the end of the week and that hasn't been noticed by investigators or researchers.

But maybe we will know more when the Torrance refinery is brought back on line, sometime in late 2016, I suppose (the refinery has been by Exxon to PBF Energy, a New Jersey company.

Seven (7) New Permits -- November 24, 2015

Active rigs:

	11/24/2015	11/24/2014	11/24/2013	11/24/2012	11/24/2011
Active Rigs	65	191	185	183	202

Seven (7) new permits --

• Operators: XTO (6), BR
• Fields: Heart Butte (Dunn), Siverston (McKenzie)
• Comments: I haven't seen a permit for a new salt water disposal well in a very long time; today, there were three permits for new salt water disposal wells (Antelope oil field, Corral Creek, and Bear Den); Ragged Butte has been updated;

Whiting canceled one permit, a Kuykendall permit in McKenzie County.

Three (3) producing wells completed:

• 28064, 1,476, Oasis, Helling Trust Federal 5494 43-22 4B, Alkali Creek, t11/15; cum 12K 9/15; 9 days production,
• 28857, 1,035, Oasis, Helling Trust Federal 5494 41-22 2B, Alkali Creek, t10/15; cum --
• 28856, 2,574, Oasis, Helling Trust Federal 5494 41-22 11T2, Alkali Creek, t10/15; cum --

Wells coming off the confidential list Wednesday:

• 29994, 804, Triangle Petroleum, Lee 151-101-8-5-2H, 31 stages, 4 million lbs, Ragged Butte, t6/15; cum 71K 9/15;
• 30164, SI/NC, Hess, AN-Prosser-152-95-1102H-7, Antelope, no production data,
• 30399, 1,448, Newfield, Johnsrud 151-98-30-31-4H, Siverston, in the middle Bakken for 100% of the time; 59.6% drilled in 15-foot target zone; 38.1% in Middle Bakken "B" facies; and 2.3% in the Middle Bakken "A" facies; an alternate interpretation that had them in the 15-foot primary middle Bakken target for 88.15% of the time; t9/15; cum 12K over nine days;
• 30814, SI/NC, XTO, Klamm 34X-9D, Siverston, no production data,
• 31139, SI/NC, Statoil, Cheryl 17-20 6TFH, Banks, no production data,

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

30399, see above, Newfield, Johnsrud 151-98-30-31-4H, Siverston:

Date	Oil Runs	MCF Sold
9-2015	11813	2201

29994, see above, Triangle Petroleum, Lee 151-101-8-5-2H, Ragged Butte:

Date	Oil Runs	MCF Sold
9-2015	12581	0
8-2015	18552	0
7-2015	9965	0
6-2015	20831	0
5-2015	9142	0