The Obama Legacy: A Shortage Of Oil; An Inconvenient Truth -- May 29, 2019

From Bloomberg vis Rigzone (let's see if the killing of the Keystone XL is mentioned in this article). Data points:

• a global shortage of heavy crude oil will create hurdles for America's key refining belts just as they ramp up gasoline production for summer driving
• Gulf Coast: dwindling heavy oil supplies have suppressed refining margins
• Midwest refiners: many not reach the high run rates seen last summer
• Gulf Coast: process requiring heavy oil already at lowest levels in a decade
• Ah, yes, here it is: blame it on Trump's sanctions on Iran and on Venezuela
• but nowhere is the Keystone XL mentioned 
• the oilmen knew what they were doing
• Canada has more than enough heavy oil to make up for any loss from Venezuela, Iran, and, Mexico

What a doofus:

Big Drop In WTI -- Now Below $58; RBN Energy Looks At The New Washington State Law Aimed At The Bakken -- May 29, 2019

Louisiana LNG: $1.3 billion project. Data link here:

• Calcasleu Pass LNG export facility
• Cameron Parish, LA
• 10-million tonne per annum 
• will use mid-scale, modularly, factory-fabricated liquefaction trains from Baker Huges, a GE company
• Stonepeak Infrastructure Partners will exclusively provide $1.3 billion equity investment in Venture Global LNG's venture
• total committed capital to fund construction now totals $2.2 billion
• more than $250 million has already been spent on preparation work

But there's more:

• Venture Global also anticipated FERC approval for its 20-mtpa Plaquemines LNG project along the Mississippi River near New Orleans

And, there's more:

• Venture Global has also proposed developing a second 20-mtpa facility, Delta LNG, nearby

The list: the list of potential US LNG export facilities is here.

Snarky: when I first posted that list, I vividly recall a reader writing me that just because something is proposed, doesn't mean it's going to happen. Whatever.  I'm now thinking that was an anonymous note from President Obama.

 

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Back to the Bakken

Wells coming off the confidential list after the long weekend and today -- Wednesday, May 29, 2019: 94 for the month; 188 for the quarter --

• 35378, SI/NC, Newfield, Skipjack 149-98-11-2-4H, Pembroke, no production data,
• 35096, 795, Liberty Resources Management Company, LLC, Stanley W 158-91-30-6-1MBHX, Kittleson Slough, t12/18; cum 67K 3/19;
• 34907, SI/NC, Hess, SC-JCB-LE-154-98-1720H-1, Truax, no production data,
• 34803, 1,299, Nine Point Energy, Erickson 155-102-26-25-6H, 60 stages, 10 million lbs, Squires, t12/18; cum 108K 3/19;
• 30485, 500, BR, Jerome 14-10MBH, North Fork, t4/19; no production data,

Tuesday, May 28, 2019: 89 for the month; 183 for the quarter --

• 35738, SI/NC, Newfield, Skipjack 149-98-11-2-12H, Pembroke, no production data,
• 35457, SI/NC, WPX, Minot Grady 26-35HWL, Squaw Creek, no production data,
• 34043, 484, Lime Rock Resources III-A, L.P., Harstad 44-9-2H, Stanley, t11/18; cum 38K 3/19;
• 30486, 178, BR, Merton 14-10MBH, North Fork, t4/19; no production data,

Monday, May 27, 2019:

• 35296, SI/NC, WPX, Minot Grady 2635HZ, Squaw Creek, no production data,
• 30487, 77, BR, Merton 14-10TFH ULW, North Fork, t3/19; no production data,

• the Merton wells are tracked here; 

Sunday, May 26, 2019:

• 35361, SI/NC, Hunt, Halliday 146-92-19-18H-6, Werner, no production data,

Saturday, May 25, 2019:

• 35298, SI/NC, WPX, Minot Grady 26-35HD, Squaw Creek, no production data,
• 35297, SI/NC, WPX, Minot Grady 26-35HZ, Squaw Creek, no production data,
• 34906, SI/NC, Hess, SC-JCB-154-98-1720H-9, Truax, no production data,

Active rigs:

$57.22	5/29/2019	05/29/2018	05/29/2017	05/29/2016	05/29/2015
Active Rigs	64	65	50	29	80

RBN Energy: will a new Washington State law hurt Bakken crude oil producers? Archived.

Refineries in Washington state have been reliable buyers of Bakken-sourced crude oil during the Shale Era, receiving an average of about 145 Mb/d — all of it by rail — over the past two-plus years. But a newly approved Washington law slashing the allowable vapor pressure limit for crude being unloaded from rail tank cars could hinder future growth in crude-by-rail shipments from North Dakota to the Evergreen State, or force Bakken producers to remove more butane and other “light ends” from the crude oil they rail west. It’s such a big deal that the state of North Dakota has indicated it will file suit to kill the new law. Today, we discuss Washington’s new law and its potential effects on Bakken crude oil producers.

Random Note On Peak Oil -- May 28, 2019

Not to beat a dead horse, but a bit more on the "peak oil" discussion. This goes back to an earlier post today.

A reader commented at that post:

Yes, Adelman is really good. Every now and then he went a little overboard. But I'm about 95% aligned with him. And way better than James "hundred dollars here to stay" Hamilton.

One good remark Adelman had was that oil depletion (drilling it out) tends to move the cost curve up. But technology (broadly defined to include discovery, drilling, completion, etc.) moves it down. So he actually acknowledged the peak oiler argument. Just said that you can't consider only one side of things. This is the main error of the peak oilers, including light peak oilers like Hamilton.

A couple more oil economists I really like: James Griffin (Texas A&M) and Fereidun Fesharaki. Both think in terms of supply and demand, rather than time series. 

I was going to write more but I got side-tracked. I doubt what I was going to say was anything new.

Maybe later.

Along with James "hundred dollars here to stay" Hamilton, one could have added Art Berman. LOL.

This post is unimportant in the big scheme of things, but it reminded me to add the "Commentary_2019" tag to this post and others. I think we might come back to 2018 - 2019 some years from now and opine this was the year there was a tectonic shift in thinking about:

• peak oil
• the "Red Queen"
• swing producer: baton passed from OPEC to US shale
• OPEC: policy-driven; US shale: market driven
• conventional vs unconventional

If so, one might reflect on the fact that when tensions seemed to be flaring in the Mideast, to include attacks on tankers in the strait and drones attacking Saudi's oil fields, the price of oil actually went down.

I would like to write more but family commitments intervene.

For The Archives: Polls Regarding Recession, 2019 -- May 28, 2019

Polls at the sidebar at the right were put there to assess readers' thoughts on likelihood of recession this year. The polls were posted a week or so ago.

Today, this from CNBC: Morgan Stanley says economy is on ‘recession watch’ as bond market flashes warning.

And, of course, we have the Fed chairman who feels no cut in interest rates is warranted.

And so it goes.

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A Lot Of Water Under The Bridge

Casablanca
At one time I watched this movie once a week or thereabouts, but I haven't watched it in quite some time. But tonight -- it's a long, long story -- I was trying to find that movie with the great line, " ... a lot of water under the bridge ... " Wow, YouTube, search, etc ... and there it was.

The "relationship" between Bogart's character and Bergman's character is such that this scene is so incredible. I have watched this movie a hundred times but yet tonight I see this scene entirely different than how I've seen it before.

As weird as it sounds, I think watching interviews with David Lynch helped me better appreciate this scene. I can't say why.

Eleven New Permits -- May 28, 2019

The gasoline / diesel poll at the sidebar at the right: in this neck of the woods, north Texas, diesel is about 30 cents more expensive than the least expensive grade of gasoline. That was certainly the case near San Antonio this pass weekend; the spread might be closer to 20 cents here in the Dallas-Ft Worth area.

Lewisville, TX, about nine miles north of DFW airport: regular gasoline, $2.349; diesel, $2.699 --

Headlines and comments:

• from oilprice.com: OXY to sell Anadarko assets, as deal greatly increased debt (not a bit unusual in such a big deal, but it will be interesting to see if OXY bit off more than it could chew; but again, see this post)
• from oilprice.com: oil markets are stuck once again (the headline seems to suggest someone did not get the memo)

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Back to the Bakken 

Active rigs:

$58.88	5/28/2019	05/28/2018	05/28/2017	05/28/2016	05/28/2015
Active Rigs	64	65	50	29	83

Eleven new permits:

• Operators: Crescent Point Energy (8); Hess (3)
• Fields: Ellisville (Williams County); Banks (McKenzie)
• Comments: 
• Crescent Point Energy has permits for an 8-well Narcisse/Austin pad in NENW 17-158-99, Ellisville oil field; they are all 275 feet from the north line, so the pad will run east-west (or west-east)
• Hess has permits for a 3-well SC-5WXpad in lot 2/section 3-152-99, Banks oil field

Note: this brings us to 606 new oil and gas permits for North Dakota so far this year. At this rate, the state is on track to issue almost 1,500 new permits. Less than a thousand wells will come off the confidential list this year.
One well released from confidential list:

• 35360, SI/NC, Hunt Oil, Halliday 146-92-19-18H-5, Werner, no production data,

The other ten wells that were scheduled to come off the confidential list today and over the long weekend were not posted and remain on the confidential list.

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After The Memorial Day Weekend