How American Fracking Changes The World -- Op-Ed -- WSJ -- November 26, 2018

Great op-ed. Nothing new here for those following the Bakken revolution.

Link here.

Until recently, observers expected American energy production to reach a plateau. A lack of pipeline capacity was expected to constrain output in the Permian Basin through 2020. Instead, shippers found ways to use existing pipelines more efficiently, and new pipelines were constructed faster than expected. U.S. crude-oil production is expected to average 12.1 million barrels a day in 2019, 28% higher than in 2017. Surging production has roiled world energy markets. 

Ever since the shale boom began, diplomats and politicians have underestimated its importance. The U.S. has regained the position it lost in 1973 as the world’s largest oil producer, which it will likely hold through at least the 2040s. The consequences for energy markets and world politics will be far-reaching. Roughnecks in the American Southwest are doing more than most foreign ministries to change the world. 

Data points from the op-ed:

• Iran is the biggest loser
• Russia: second biggest loser
• but also bad news for the Gulf sheikhdoms
• additional pressure on Venezuela
• Mexico? A sixth of the Mexican government's revenue comes from energy; falling prices will force the incoming government to find ways to attract more foreign capital (Mexico will ban fracking)
• France/Macron will feel the relief

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New York Movers And Shakers Appear Envious

Updates

Later, 3:32 p.m. CT: see first two comments below regarding how much better the Bakken wells have become over the years. Now this very observant comment from another reader:

The subtle importance of Larne's comment ought not to be underestimated as it pertains to the Bakken, other shale plays, and future potential shale targets. 

To now drill WAY faster, with more precision, and MUCH higher recovery factor (20%+ according to some operators) will vastly expand the US productive acreage.

I strongly suspect that Helms et al want an updated USGS assessment for the Bakken as the current recovery rate of OOIP is now 3 to 5 times higher than earlier when the USGS projected 7+ billion barrels oil Technically Recoverable Resource (TRR).

 Original Post

Speculators buying up mineral rights in eastern Montana for pennies. The article is behind a New York Times paywall. It's been my experience that if these "efforts" pay off, it is the grandchildren that benefit. The vast majority of these mineral acres will never be developed. But they are great for "flipping" to unsophisticated investors who get caught up in the "Bakken revolution."

Good luck to all.

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

We saw a lot of this in North Dakota some decades ago. My hunch is that Harold Hamm picked up a lot of minerals in North Dakota many, many years ago, well before the boom.

From the linked op-ed:

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If Only Waffle House Had Free Wi-Fi

Maybe they do; I've never checked. Something tells me an Apple computer would feel unwelcome.

Add that to my "to-do" list. We have a Waffle House just down the street. People super friendly. Noted for being open regardless of the situation. "Active-shooters" at Waffle Houses don't stick around very long.

Loonie-Tunes -- November 28, 2018

One reader thinks heavy oil producers need to construct a six-foot-wide / thousand-mile long hockey rink from Alberta to Minot -- let the kids move western Canadian heavy oil to the US.
 
There's a reason the Canadian one-dollar coin is called a loonie. But that's not the end of the loonie-ness. From a reader who caught this on NPR: now that Canadians have banned "weapons" from schools, kids are being given 94-cent hockey pucks with which to defend themselves. I cannot make this up:

Hockey pucks: They're small, heavy and — one Michigan college thinks — might be the perfect weapon against an active shooter on campus.

Oakland University, a public school located in Rochester Hills, near Detroit, is distributing thousands of 94-cent hockey pucks for just that reason.

The distribution, which began earlier this month, stemmed from a March faculty active-shooter training session following February's shooting at a Parkland, Fla., high school that left 17 dead.

A participant at the training asked the Oakland University Police Chief Mark Gordon what items people could use to defend themselves on the campus, which has a no-weapons policy.

A hockey puck was a "spur-of-the-moment idea that seemed to have some merit to it and it kind of caught on," Gordon said.

The faculty union followed up on the idea, purchasing 2,500 hockey pucks: 800 for union members and 1,700 for students, the Free Press reports.

The school conducts active-shooter training sessions multiple times a year, teaching the "Run, Hide, Fight" method which emphasizes fleeing an active-shooter situation above all else, hiding if fleeing isn't an option — and fighting if hiding isn't, either.

Now, the training will be "run, hide, throw." Or for those with hockey sticks: "skate, swing, shoot."

A hat trick will require three active shooters.

From an earlier post:

One reader thinks heavy oil producers need to construct a six-foot-wide / thousand-mile long hockey rink -- let the kids move western Canadian heavy oil from Alberta to Minot.

Random Update On Canadian Oil / Natural Gas Resources -- Rigzone -- November 28, 2018

Link here.

At around 4.5 million barrels per day (MMbpd), Canada is the world’s 5th largest oil producer. Some 75 percent of Canada’s production occurs in the western province of Alberta, having a massive deposit of heavier, harder-to-produce “oil sands.”

Canada has a nearly unlimited hydrocarbon resource, so importing oil nations around the world are increasingly seeking the country to supply resources. Canada’s biggest advantage may be its widening capacity to export. A slow growing population and mature energy demand market make incremental domestic needs rather low.

Currently, most of Canada’s petroleum production is exported, and almost all of that gets shipped south to the U.S. This overreliance on the U.S. market has become a problem for Canada because a shale revolution has meant surging U.S. oil production amid its flat demand. As such, Canada needs to find new growing markets for its domestic oil industry to flourish.

Canada’s natural goal is to reach Asia, responsible for about 70 percent of new oil demand in the world. Exporters are banking on cheaper transport. It takes a little over a week for a ship to reach Tokyo Bay from Vancouver, for instance, compared to nearly three weeks from the U.S. Gulf Coast.

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Gelato --  Main Street -- Grapevine, TX

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The Book Page

I'm in my "historical" Bible phase.

The books that are top shelf on this subject:

• The Book of J, translation by David Rosenberg, commentary by Harold Bloom
• The Bible: A Biography, Karen Armstrong, one of many entries;
• The New Oxford Annotated Bible, New Revised Standard Version With The Apocrypha, Fourth Edition;
• Jesus and Yahweh: The Names Divine, Harold Bloom, c. 2005
• Where Shall Wisdom Be Found, Harold Bloom, c. 2005
• The Torah: The Five Books of Moses, the New Translation of the Holy Scriptures According to the Traditional Hebrew Text

Analysts Using These Figures For Oil Pricing Going Forward -- November 28, 2018

Link here.

The analysts now forecast that Brent will average:

• $73 per barrel in 2018
• $75 per barrel in 2019
• $82 per barrel in 2020
• $84 per barrel in 2021
• $85 per barrel in 2022

Last month, the analysts forecasted that Brent would average:

• $75 per barrel in 2018
• $82 per barrel in 2019
• $85 per barrel in 2020
• $89 per barrel in 2021
• $91 per barrel in 2022

According to the latest report, the analysts now forecast that WTI will average:

• $66 per barrel in 2018
• $69 per barrel in 2019
• $76 per barrel in 2020
• $78 per barrel in 2021
• $80 per barrel in 2022

Last month, the analysts forecasted that WTI would average:

• $68 per barrel in 2018
• $75 per barrel in 2019
• $81 per barrel in 2020
• $85 per barrel in 2021
• $87 per barrel in 2022

Active Rigs Jump In Number; Now Up To 66; Bakken Operators And Flaring -- RBN Energy -- November 28, 2018

"Switch and bait" -- the WSJ explains why oil prices tanked and what to expect next. Nothing new here. The interesting thing is why "we" didn't see it coming. As soon as one waiver was signed "we" should have known that the surge in anticipatory production was overdone.

Most ridiculous headline of the day: Mars InSight powered by solar panels. Well, duh. That's been going on for decades. What did CleanTechnica expect? Shell service stations? Natural gas plants?

By the way: down here in Texas, during the reporting of the successful landing, side-by-side animation was shown on television. Some viewers thought the animation was live and called into talk radio to suggest that it would have been more interesting to have watched the television crew landing on Mars to film the InSight landing. One reporter on Ft Worth talk radio said that after saying he was reporting "remotely" (he was in Houston) -- listeners called in saying, "... of course he was reporting remotely --- he was on Mars." And they were apparently serious. At least they were aware that Mars was "remote." I assume some folks think Mars is a suburb of Paris, Texas.

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Back to the Bakken

Wells coming off confidential list today -- Wednesday, November 28, 2018:

• 34738, 198, BR, Rink 6-1-5MBH-R, Pershing, t10/18; cum 9K over 28 days;
• 33111, 1,881, CLR, Wiley 9-25H2, Pershing, 4 sections, 50 stages; 8.1 million lbs, t7/18; cum 75K 9/18;
• 30545, 2,070, Bruin, Fort Berthold 151-94-26A-35-9H, Antelope-Sanish, 55 stages; 14.4 million lbs, t6/18; cum 126K 9/18; sundry form says middle Bakken;
• 30542, 2,010, Bruin, Fort Berthold 151-94-26A-35-5H, Antelope-Sanish, 55 stages; 14.2 million lbs; t6/18; cum 56K 9/18; sundry form says Three Forks B1;

NDIC is reporting 66 active rigs, a jump from the previous 62 a couple of days ago. A reader went through the data and suggests there may be an error -- some accidental "double-counting" of a couple of rigs.  -- posted November 28, 2018.

Active rigs:

$51.53	11/28/2018	11/28/2017	11/28/2016	11/28/2015	11/28/2014
Active Rigs	66	55	37	64	184

RBN Energy: Bakken producers get a welcomed reprieve on natural gas flaring. Archived.

Crude oil and natural gas production in the Bakken are at all-time highs, as are the volumes of gas being processed in and transported out of the play. The bad news is that for the past few months, the volumes of Bakken gas being flared are also at record levels, and producers as a whole have been exceeding the state of North Dakota’s goal on the percentage of gas that is flared at the lease rather than captured, processed and piped away. State regulators last week stood by their flaring goals, but in an effort to ease the squeeze they gave producers a lot more flexibility in what gas is counted — and not counted — when the flaring calculations are made. Today, we update gas production, processing and flaring in what’s been one of the nation’s hottest production regions.

North Dakota crude production grew by 39% between January 2017 and September 2018 to an even 1.3 MMb/d, according to the North Dakota Industrial Commission’s (NDIC) most recent numbers, and gas production was up an astonishing 62% over the same period, to about 2.53 Bcf/d. Those gains have put enormous pressure on the play’s infrastructure, and — of most interest to us in today’s blog — made it impossible for the state to meet its goals for reducing the percentage of produced gas that is flared.

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The Book Page

I'm in my "Bible" phase, reading the first five books of the Bible and Karen Armstrong's Biography of the Bible. Absolutely fascinating.

The December issue of the National Geographic has an incredibly good photo-essay on the development of the Bible. Every December, in general, National Geographic has a huge "Christianity-related" issue.