Alert in full:
1806 Road Alert
Jun 13, 2011
ND 1806 CLOSURE
ND 1806 has become inundated with breakups and pavement deterioration beyond
repair. The Department is working on a contract to grind up the existing pavement
and base, add some gravel, and maintain the gravel surface until we can find the
resources to widen the roadway, place new base gravel, and asphalt paving
sufficient enough to support the heavier loads generated by the industry.
Monday morning (6/13/2011), the Williston Sign crew will begin signing for the
closure of ND 1806, north of Watford City to Tobacco Garden. The entire highway
will be closed to thru traffic. Those living along ND 1806 will be allowed to
travel to the nearest detour location for access. Also, oil operators needing to
get to oil locations isolated from other roadways, can use minimum mileage for
that purpose. There are a couple pieces of ND 1806 that are necessary to tie
McKenzie County routes together: Cty 12 to 36 & Cty 10 to 35, these segments will
not be barricaded off.
ND 1806 will revert to an 80,000# roadway effective Monday morning. (the 5 ton
will not be removed until the closure is complete). Any permitting will be based
on the 80,000#.
A detour route has been established and will be signed. Eastbound: take ND 23
east and north to McKenzie County 10 (north of Keene), then west on McKenzie
County 10 (39th str.) to McKenzie County 43, then northbound on MC 43 to meet
with ND 1806 near Tobacco Garden Recreation Area. The return from Tobacco Garden
will the reverse of the eastbound route. Watch for signing.
Walter Peterson P.E.
Williston District Engineer
701-774-2710
Wednesday, June 15, 2011
A Little Sign That Things MIght Be Getting Back to "Normal" in the Bakken
I could be wrong, but I believe the number of active rigs in North Dakota was 169 yesterday, significantly below the all-time high of 179. This morning the count is up to 174 which is much more respectable.
On Friday night (June 10, 2011), the "only" highway through the North Unit of the Badlands (just south of Watford City) was abruptly closed due to "slides," ground shifting and tons of earth cascading over the highway. It probably closed about 4:00 p.m. -- I was driving through at 6:45, and was held up in a line of oil truck traffic for about 15 minutes. Highway patrolmen were helping truckers find alternate routes to their destinations. State highway 22 (Killdeer area) has been closed for quite some time due to slides and detours around this area were already constrained. Closing US Highway 85 south of Watford City obviously made things much worse.
I have no idea if US Highway 85 is open yet. There are ways around but I assume there are some wells that will not be reached if this portion of the highway is closed.
Slides in North Dakota are not uncommon (as noted in the link above). One can download maps showing where the slides have occurred at this site. When there, the best map to start with is the Watford City area, and then zoom in on the area in the Badlands, along the Little Missouri River.
On Friday night (June 10, 2011), the "only" highway through the North Unit of the Badlands (just south of Watford City) was abruptly closed due to "slides," ground shifting and tons of earth cascading over the highway. It probably closed about 4:00 p.m. -- I was driving through at 6:45, and was held up in a line of oil truck traffic for about 15 minutes. Highway patrolmen were helping truckers find alternate routes to their destinations. State highway 22 (Killdeer area) has been closed for quite some time due to slides and detours around this area were already constrained. Closing US Highway 85 south of Watford City obviously made things much worse.
I have no idea if US Highway 85 is open yet. There are ways around but I assume there are some wells that will not be reached if this portion of the highway is closed.
Slides in North Dakota are not uncommon (as noted in the link above). One can download maps showing where the slides have occurred at this site. When there, the best map to start with is the Watford City area, and then zoom in on the area in the Badlands, along the Little Missouri River.
PennEnergy Story on the Bakken
Link here.
Russ Atkins, an area supervisor for Continental Resources, said the emergency shutdown cost his company 8,000 barrels of daily production, though he said there was no blame for what nature caused.Bigger than Prudhoe Bay (Alaska). That's huge. And we've barely started.
Atkins said the Bakken is unique and he suspects even North Dakotans don't realize how to grasp its stature.
"This is world-class, bigger than Prudhoe Bay. We have to start thinking differently," he said.
Railroads Ramp Up To Support The Bakken -- North Dakota and Montana
Link here.
Both BNSF Railway and Yellowstone Valley Railroad (YSVR) are increasing railroad services in Montana to support growing oil production from the Williston Basin and the Bakken Shale.This is just a snapshot of a much bigger story. Throughout the Bakken, I saw more oil loading facilities being built along railroad tracks, sidetracks filled with brand new oil tank cars, etc.
BNSF and YSVR have amended their lease agreements on the railway route between Snowden and Glendive, Montana, to support increased oil transport traffic.
“The tremendous growth of oil production in the Williston Basin and the Bakken Shale formation over the last several years has resulted in significant increases in traffic volumes in and out of this area,” said Dean Wise, BNSF vice president, network strategy. “This amended agreement will allow BNSF and YSVR to respond to the changing demands of our customers, improve direct service and unit train handling efficiencies, and continue to invest to serve this rapidly growing part of the Montana and North Dakota economies.”
By the fall of 2011, BNSF will offer service for unit trains, and YSVR will offer service for any other traffic along the rail line between Snowden and Crane.
Saudi Unable to Make Up The Libyan Loss of Oil
Updates
July 5, 2011: Another one agrees -- Saudi may not be able to make up shortfall.
Some major investment banks are still betting that oil prices will grow next year despite an emergency injection of crude on world markets from the U.S. and other countries.July 3, 2011: Filloon -- Saudi can't make up the Libyan shortfall with either the right kind of oil or in a timely manner.
Independent oil analysts say prices still could head lower this year. But some think IEA's announcement speaks volumes about its expectations for world oil supplies.
"I think it's an admission from them that Saudi Arabia might not be able to produce enough oil on its own" to meet increased world demand, analyst Stephen Schork said.
The Bakken continues to be my favorite shale play in the United States. Its oil dominated resource is well placed in an environment of world demand slowly outstripping supply. The 60 million barrels of oil released to cover lost Libyan supply shows how close these two variables are. Saudi Arabia has the ability to meet this demand, but could take months to come on line. This increased Saudi supply is mostly sour crude, which also creates worry as to refining capacity. Now that OPEC is siding with Iran, the price of oil is headed upward. My estimates have it at $100/barrel, but $110 by year end may be closer to correct.
June 24, 2011: Well so much for that opinion by "anonymous" that Saudi was telling us the truth when "they" said "they" could make up the shortfall in loss of Libyan oil. This story pretty much puts the end to that argument.
The loss of Libyan oil output since February represented a greater disruption to global oil supply than the aftermath of Hurricane Katrina in 2005, said Richard Jones, the deputy head of the International Energy Agency.It appears if any oil is released from the US strategic petroleum reserve it will be sent to Europe. America's storage tanks are more than full.
Jones, speaking in Reuters' Paris bureau, said that the initial disruption to oil output in Libya happened at a "fortuitous" time for European oil refiners as many were closed for maintenance.
"Now we're going into the summer driving season, those refineries which have returned to operation are about to ramp up their production."
Jones said the market was facing a possible shortfall of 1.8 million barrels per day for the remainder of June and 1.7 million for the next quarter.
June 21, 2011: Deep in this story a reference to the fact that Saudi has not been able to replace the loss of Libyan oil. I remember back in March folks saying Saudi could make up the difference. It's almost July and it's being reported the Libyan loss is still palpable.
June 17, 2011: John Hofmeister is concerned about three regions in the western hemisphere: Venezuela, Mexico, and the Gulf of Mexico. He did not mention Alaska.
He says China's consumption will go from 9 million to 15 million barrels in four to five years. He said India's consumption will go from 4 million to 7 million barrels.
Interestingly, he seemed to confirm what I already thought: the Saudis have not yet made up the Libyan shortfall promised back in March, 2011, but I could have been mistaken. My impression is that the Libyan shortfall has not been replaced with light, sweet oil.
On CNBC, Friday, June 17, 2011.
June 16, 2011: IEA raises forecast on five-year global demand by 700,000 bbls of oil per day.
The IEA, during its medium-term report, urged OPEC to raise output levels. The IEA claimed global demand remains strong and increased its five-year global forecast by approximately 700,000 bpd.Let's do the math. Scroll down to the original post below where it says:
Saudi Arabia would boost output to 10 million barrels per day (bpd) in July, which Goldman Sachs' global head of commodities research Jeff Currie said would leave only 500,000 bpd spare.Re-stating the obvious: if Saudi raises production to 10 million bbls of oil per day, GS calculates that Saudi has only another 500,000 bpd to spare. Now the IEA raises its forecast for global demand by another 700,000 bpd.
I can't make this stuff up.
By the way, I thought Saudi had already raised its output to meet the deficit caused by the Libyan "thing" which the administration says is not covered by the US War Powers Act.
June 15, 2011: Saudi oil terminal vulnerable to terrorism.
When al-Qaida suicide bombers tried on Feb. 24, 2006, to blow up Saudi Arabia's Abqaiq oil processing facility, arguably the world's most important petroleum hub, it was taken as a sign of strength that internal security had foiled the attack. Secret U.S. State Department cables obtained by WikiLeaks and shared with news organizations show otherwise. Even though 70 percent of Saudi Arabia's oil exports flow through the Abqaiq facility, Saudi security forces were woefully ill-prepared to defend it, investigations into the attack found, according to the cables."Anonymous" has trouble envisioning Saudi execs sitting around a table making decisions to bluff investors.
Original Post
Link here.
Saudi newspaper al-Hayat reported Saudi Arabia would boost output to 10 million barrels per day (bpd) in July, which Goldman Sachs' global head of commodities research Jeff Currie said would leave only 500,000 bpd spare. Currie and his team have warned for months about overstated Saudi output capacity.
"If you get up to (10 mln bpd), you start to really create a very tight market relative to spare capacity," he told the Reuters Global Energy and Climate Summit in London.
"But the question that's more appropriate is when do you get to 9.5, when do you get to 10? Because when you start to look out over the horizon, their ability to create more flexibility in spare capacity increases tremendously."
Peter Oosterveer, group president for energy and chemicals with global engineering giant Fluor Corp (FLR.N), recently met with executives in the Middle East, and returned with a feeling that Saudi Arabia's capacity was not as large as some estimates.
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