Coast Guard Out of Its Depth in Fighting Oil Rig Fires

Coast Guard admits it does not have expertise to fight oil rig fires and that its actions may have contributed to sinking of the rig in the gulf.

The Coast Guard also pressured BP into removing the "temporary seal" despite the fact that it worked and was working at the time Thad Allen wanted it removed. The Coast Guard lost that battle.

I can't make this stuff up.

The key paragraphs which will tie this thing up in court for years:

The question of what caused the platform to collapse into the Gulf two days later remains unanswered and could prove vital to ongoing legal proceedings and congressional investigations.

That is because the riser pipe from which the majority of BP’s oil spewed did not start leaking until after the rig sank. Experts and some lawsuits have openly tied the sinking of the drilling vessel to the severity of the leak. 

Yup.

ND Oil Patch Sets New Production Record

Bismarck Tribune:

North Dakota's oil patch is turning out about 300,000 barrels of crude per day, or double the state's production two years ago.

Lynn Helms, director of the state Department of Mineral Resources, said the state produced a record 9.2 million barrels in May, up from 8.5 million barrels in April, the latest figures available because oil production numbers typically lag at least two months.

Preliminary reports suggest production in July is about 310,000 barrels/day.

This link is likely to be broken in the near future, requiring a password, possibly paid, to access archives.

State On Pace for Active Rig Record

Williston Herald:

North Dakota Oil and Gas Division Director Lynn Helms said the level of oil activity is approaching full capacity for the infrastructure the state has to handle it. However, he expects the activity to continue to climb.

Helms states infrastructure can support about 150 active rigs. The highest number of rigs reported in the current boom has been 138, just a couple days ago. Today it is 136, but the number varies on a daily basis as rigs are moved or refurbished.

Helms states that it will take two to three years for infrastructure to catch up to be able to support 175 rigs.

The all-time record for active rigs in North Dakota was 146 in October, 1981. However, that is comparing apples to oranges. Those rigs were drilling vertical wells; it is said that some of the current horizontal wells are equal to eight of those 1980's vertical wells.

This link is likely to be broken in the near future, requiring a password, possibly paid, to access archives.

Hess To Buy American Oil and Gas

All stock transaction.

Premium for AEZ: 9%.

Comments should be entertaining.

More on ONEOK and Natural Gas Infrastructure in the Bakken

For some, this will be old news. I missed it earlier, mostly because I don't follow natural gas as closely as oil. For me, the Bakken means oil.

However, going forward, it appears natural gas is going to be every bit as big a story as Bakken oil before this saga plays itself out.

A couple days ago I posted an update about a natural gas pipeline that will connect the Bakken to the Overland Pass Pipeline. I would have missed the story but one of my readers sent it to me which I very much appreciated.

Well, it turns out, there is more to the story with regard to ONEOK. Again, to some extent, some folks will see this as a recommendation for investing. I am not posting it for that reason. I just find it extraordinarily interesting, how much money is being spent on projects in North Dakota.

So, with all that as background here are some data points from an April 21, 2010, press release from ONEOK:

ONEOK will construct a new 100 million cubic feet per day (MMcf/d) natural gas processing facility - the Garden Creek plant - in eastern McKenzie County, N.D. This plant and related expansions are estimated to cost between $150 million and $210 million and will double the partnership's natural gas processing capacity in the Williston Basin. Completion is expected in the fourth quarter of 2011.

In addition to the construction of a new natural gas processing plant, ONEOK Partners' natural gas gathering and processing segment will invest an additional $200 million to $205 million during 2010 and 2011 for new well connections, expansions and upgrades to its existing natural gas gathering system infrastructure in the Bakken Shale.

ONEOK Partners is the largest independent operator of natural gas gathering and processing facilities in the Bakken Shale region, with a gathering system of more than 3,500 miles. In March 2009, it completed a $46 million expansion of its Grasslands natural gas processing facility in North Dakota and since 2007 has invested more than $80 million in new well connections and related infrastructure upgrades to existing natural gas gathering systems in the region. 

This was the story that got me interested in ONEOK. (Same link as first link above, the one in the third paragraph.)

Again, this is not a recommendation one way or the other for investors. It is simply a story I find intriguing, and it helps me connect the dots with regard to the natural gas  and natural gas pipeline story in North Dakota.

I think folks who were less-than-impressed with the stories first coming out of the Bakken, missed the first, second, and third derivatives of those stories. Natural gas infrastructure is a second or third derivative to the whole Bakken story. Of course, the derivatives that follow include jobs and income for the state government.

*****

UPDATES

July 30, 2010: Bismarck Tribune reports on the story.