Frack Sand Site In Wisconsin "Idled" -- September 15, 2015

Updates

September 22, 2015: BloombergBusiness with human interest story on spectacular fall of the fracking sand industry.  

In New Auburn, Wisconsin, a desolate, little outpost carved from the rolling pine-tree forests that run into Lake Superior, the collapse in oil is wreaking havoc on every aspect of the economy.

It’s not that there’s any oil here. None in fact for hundreds of miles around. What they’ve got is sand. Real good sand, piled high in giant mounds. And in what is a little-known offshoot of the shale oil revolution that swept across America over the past decade, the market for sand -- the grit that props open the rocks and makes fracking possible -- exploded too, transforming almost overnight what had been a sleepy industry that sold primarily to the likes of glass makers and golf courses. So when the shale boom went bust, it took down the sand industry with it. Prices have sunk almost a third to under $40 per ton.

Cheap sand makes for less expensive wells in the Bakken.

Remember when Mike Filloon said prices for fracking sand would go parabolic?

Original Post

 

Link here:

MARSHFIELD — The plunging price of oil is forcing a Texas-based company to idle its frack sand processing plant in the city. Completion Industrial Minerals CEO Tom Giordana contacted Mayor Chris Meyer earlier this week to inform him the company is laying off about 15 of its employees.

The company normally has a significant reduction in production during the winter months when it can't wash the sand because of winter weather. However, the company normally continues to dry and ship sand during the winter months.

This should please the environmentalists who will now contribute toward these employees' unemployment claims, food stamps, etc.

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Bakken Economy

Update: see first comment -- a reader noted that Amazon will open a fulfillment center in the Minneapolis area.

Original post: Meanwhile in Grand Forks, North Dakota, Amazon is hiring:

Internet retail giant Amazon is hoping to fill 30 new full-time positions to its customer service center in Grand Forks, the Seattle-based company said Monday.

Amazon said the hiring boost is meant to "support continued growth throughout the company's U.S. fulfillment network." The job entails communicating with customers via phone, email and online chats, according to a press release.

Amazon currently has 150 customer service associates in Grand Forks.

Remember, this is just across the river from the high-tax state of Minnesota. Also, Grand Forks is "ground zero" for the US drone research and testing program, and when it comes to drones, Jeff Bezos is all in.

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Vying For #2 Spot

Bloomberg/Rigzone is reporting:

In the race to supply crude to the world’s biggest energy user, it’s the tussle for second place that’s too close to call.

Russia, Angola and Iran are vying to be runner-up to Saudi Arabia as the top seller to China. The contest is set to intensify as Iran seeks to recover market share lost because of sanctions and the U.S. Congress debates a nuclear deal that’ll allow the Persian Gulf state to boost shipments.

China overtook the U.S. as the biggest importer of crude most recently in June, taking advantage of a 50 percent slump in benchmark prices over the past year to boost strategic reserves. With the Asian nation forecast to account for more than a quarter of global demand growth in 2016, the prize of becoming a top supplier will bolster the economic health of national producers that depend on energy exports for most of their budget revenue.

“Whether you’re number 2 or number 3, the numbers are very close,” Victor Shum, a vice president at IHS Inc., an Englewood, Colorado-based industry consultant, said by phone from Singapore. “In a globally oversupplied market, there is more competition for the growing Chinese pie.”

China is the biggest oil buyer in Asia, a region that the International Energy Agency estimates will use 23.4 million barrels a day in 2015, or about 25 percent of worldwide consumption. The Paris-based IEA predicts China will consume 10.9 million barrels a day this year.

Iran, the second-biggest producer in the Organization of Petroleum Exporting Countries before its nuclear program prompted the European Union to ban purchases of its crude in 2012, will boost production “at any cost” to reclaim market share, Oil Minister Bijan Namdar Zanganeh said Aug. 23. China is the Islamic Republic’s biggest customer, and Zanganeh has signaled it’ll target Asia for sales. Iran currently lags behind its rivals in shipments to China.

It should be remembered that President Barack Obama helped orchestrate Iran's oil exports to China at the same time the President a) killed the Keystone XL; and, b) continues to ban US crude oil exports. President Obama has also ceded the Arctic to Russia and others. 

Number Of Active Rigs Bounces Off Low -- September 15, 2015

Active rigs:

	9/15/2015	09/15/2014	09/15/2013	09/15/2012	09/15/2011
Active Rigs	70	199	178	193	200

RBN Energy: isn't this interesting?

Only a few months ago, it seemed likely that Hawaii’s electric and gas utilities would wean themselves off crude oil and naphtha-based gas in favor of liquefied natural gas (LNG). Now though, with oil prices low—and expected by many to stay low—the Aloha State’s governor says that he thinks the planned shift to LNG would be too costly and that he’ll fight it.

The utilities still see LNG as the way to go, pointing to falling LNG prices and natural gas’s environmental benefits over oil. Today, we consider how lower prices for crude oil and LNG are affecting the debate about Hawaii’s energy future.

As anyone who’s had the pleasure of visiting the Hawaiian islands knows, the last state to join the U.S. is unique, not only for its fantastic weather, lush landscape and friendly people, but for its location in the middle of the Pacific Ocean, almost as far from Los Angeles as Los Angeles is from New York City.

Because of that isolation—and Hawaii’s lack of any native oil, natural gas or coal reserves—all of the state’s fossil-fuel requirements need to be floated in by ship; most of its power plants run on oil, and its synthetic version of natural gas (SNG) is made from naphtha, a by-product of the state’s two oil refineries. As we said in the Episode 1 of our Blue Hawaii series last year, Hawaii’s heavy dependence on imported oil makes it an unusually expensive place to live—its electricity and gas rates are the highest in the country, and its gasoline and diesel are very costly too. In Episode 2 we discussed Hawaii Electric’s plan (unveiled in August 2014) to switch most of its oil-fired units to LNG-based gas by 2017-18 (using LNG shipped in ISO containers) and to switch the rest to LNG in the 2020s (when bulk shipment of LNG kicked in).

To underpin that plan, Hawaiian Electric reached a deal with FortisBC to lock in up to 0.8 million metric tons per year (0.8 MTPA) of LNG production capacity at a planned expansion of FortisBC’s Tilbury Island liquefaction facility near Vancouver, BC, for 15 years starting in 2017. (That much LNG would provide an average of 107 MMcf/d of natural gas). In Episode 3 we focused on Hawaii Gas: how it currently makes SNG from refinery-supplied naphtha on Oahu and distributes SNG to customers on the island by pipeline and distributes propane to customers--some on Oahu and some on other Hawaiian islands—that are not connected by pipe. We also discussed how since March 2014 Hawaii Gas has been receiving one ISO container of LNG a month from Clean Energy Fuels’ 160 Mgal/d liquefaction plant in Boron, CA; once on Oahu, the LNG is re-gasified and fed (along with SNG) into Hawaii Gas’s distribution system. Finally, in a follow-up blog, we discussed the gas utility’s October 2014 proposal to ramp up its use of LNG, initially by replacing 30% of its SNG with a steadier flow of LNG-filled ISOs, and then by working with Hawaiian Electric to develop bulk-delivery terminal for LNG to facilitate a 100% switch to LNG at both utilities.

If solar is so cheap, plentiful, and wonderful, why doesn't Hawaii just switch to solar for all energy needs?

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Well, This Is Profound

EIA "energy cookie":

U.S. motor gasoline product supplied, a proxy for gasoline use in the United States, has been rising after reaching an 11-year low in 2012. Although lower gasoline prices have been an important factor in the increase in gasoline use so far in 2015, changes in the labor market and in the vehicle sales mix over the past few years also have contributed to the rise in gasoline use. --- EIA

I have no idea what might be meant by "changes in labor market." The number of Americans not in the labor force has reached an all-time high, and unemployment/employment numbers haven't changed all that much once the data related to the record recession is taken out. 

Worth A Thousand Words -- September 15, 2015

Saving The Best For Last -- September 14, 2015

While returning from North Dakota, I ran into two couples -- one couple in Buffalo, South Dakota; and, one couple in Rapid City, South Dakota, a couple of days later -- who were on their way to North Dakota simply because they were completing their 50th state visit.

This evening, coincidentally, a reader sent me a link to this Wall Street Journal article:

FARGO, N.D.—During a stop at the visitors’ bureau here, Theresa Zelonis mentioned to an employee that she and her husband’s 6,400-mile road trip purposely included a few miles of North Dakota so she could tick off visiting her 50th state. The employee gasped.
“It was like bells and whistles went off!” she recalled.

The travel ambassador led Mrs. Zelonis, of Pennsylvania, to a desk, where she was presented with a T-shirt, magnet and certificate, all saying “Best for Last Club,” and emblazoned with a silhouette of North Dakota. She signed the guest book of other club members. The staff member took her photo for the bureau’s Facebook page.

One of America’s least-populated, most-rural states, North Dakota is also one of the least visited. A tourism brochure brags it has three times more cattle than residents; fittingly, the state’s official drink is milk. A prime attraction is the Theodore Roosevelt National Park, praised by one online travel site for being “sparse and empty.” Another is the wood chipper used to dispose of a body in “Fargo,” the 1996 movie about a kidnapping plot hatched by bumbling criminals.

According to an informal poll conducted by the All Fifty Club, an online list of Americans who have visited all 50 states, most members leave Alaska, Hawaii and North Dakota for last: Alaska and Hawaii, because they’re hard to reach; North Dakota, because, well, it’s North Dakota.

One of the two couples was only going as far as the south unit of Theodore Roosevelt National Park in the southwest corner of the state, and I'm not even sure the other couple was going that far. It sounded like if they got as far as the state line, or possibly Bowman, that might be as far as they will get, but they will be able to see they have visited all 50 states.

(President Obama has visited all 57 states, by the way.)

I've been to both Hawaii and Alaska, so it should be easy for me to complete all 50 states. It's possible I've been to all 50 states -- in my younger days I hitchhiked cross-country several times and ticked off a number of states that way. I'm trying to think; I do believe I have had to hit all 50 states. I've Amtrak'd from Boston to Texas; bused from Texas to Los Angeles; Amtrak'd up the coast and then across the northern tier all the way back to Boston. I've been to Dover (Delaware) and Maryland (courtesy of the Air Force) -- I think I've hit all the states. Never thought about it until now. While in Boston, all of New England. Hmmm...

Fourteen (14) New Permits; Number Of Active Rigs In North Dakota Ties Post-Boom Low; Whiting To Report A Big Well; BR With Another High-IP Well -- September 14, 2015

Active rigs (I track the number of active rigs here):

	9/14/2015	09/14/2014	09/14/2013	09/14/2012	09/14/2011
Active Rigs	68	199	178	193	201

Poll: will "we" drop into the "50's" with regard to number of active rigs in North Dakota?

Poll results: predicting July, 2015, ND crude oil production (I mistakenly forgot to add 1.2 million bopd and I assume many of those opting for 1.1 million bopd would have gone with 1.2 million, the best number):

• 1.1 million bopd: 65%
• 1.0 million bopd: 24%
• 0.9 million bopd: 12%
• 0.8 million bopd: 0%
• 0.75 million bopd: 0%

Wells coming off confidential list Tuesday:

• 29086, 1,607, Whiting, Cymbaluk Federal 41-15PH, Bell, 30 stages, 3.1 million lbs sand; on ESP almost immediately; t7/15; cum 73K 7/15;
• 29779, SI/NC, Abraxas, Sten-Rav 1H, North Fork, no production data,
• 30098, 1,362, Hess, BB-Ole Anderson-151-95-3130H-5, Blue Buttes, no production data,

Sure looks like the Bakken is shutting down. Not! Fourteen (14) new permits:

• Operators: XTO (6), MRO (3), Oasis (3), Petro-Hunt (2)
  Fields: Lost Bridge (Dunn), Murphy Creek (Dunn), Siverston (McKenzie), Charlson (McKenzie)
• Comments:

Triangle renewed two permits; Fidelity renewed one permit; and, American Eagle renewed one permit.

Two (2) producing wells completed:

• 29981, 2,352, BR, CCU Dakota 1-7-17MBH,  Corral Creek, t8/15; cum --
• 30502, 791, Hess, LK-A Qtr Cir-147-96-1807H-8, Big Gulch, t8/15; cum --

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9086, see above, Whiting, Cymbaluk Federal 41-15PH, Bell:

Date	Oil Runs	MCF Sold
7-2015	13542	18927
6-2015	17042	21869
5-2015	13198	15731
4-2015	18850	22811
3-2015	10282	10419