Will Saudi Kill US Shale -- Rigzone; Global Warming Hits West, Midwest Hard -- November 12, 2014

A nice essay over at Rigzone, asking whether Saudi / OPEC will kill US shale? The conclusion:

Past experience suggests the fortunes of the U.S. oil industry, Saudi Arabia and OPEC are bound tightly together.

Part of the adjustment process now underway in the oil market is likely to be a prolonged period of lower prices and a slowdown in the growth of the U.S. shale industry.

North Dakota's Bakken has become a relatively mature play, so this time around it might be spared the worst of the slowdown. Drilling has slowed in some outlying counties, but in counties at the core of play continue to report strong activity. North Dakota's Bakken is far more cost-competitive than it was in the 1990s thanks to technical advances and improvements in drilling efficiency.

The shale revolution will not be reversed, and the United States will continue to have a much bigger role in global supply. But some slowdown in shale growth is inevitable and will probably come on the fringes of the Bakken and in less developed shale oil plays, which have taken its place at the vulnerable high-cost frontier for U.S. onshore oil exploration.

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From BreakingNews:

Casper, Wyo., hits low of -26 degrees, breaking 2 different temperature records -

NDIC Expected To Rule Thursday On Stripping Volatile Gases From Crude Oil Before Shipping -- November 12, 2014

From the Wall Street Journal:

Regulators set to decide on crude-by-rail shipping rules are relying on testing methods that may understate the explosive risk of the crude, according to a growing chorus of industry and Canadian officials.

The tests’ accuracy is central to addressing the safety of growing crude-by-rail shipments across the continent: whether Bakken crude contains potentially dangerous levels of dissolved gases. Several trains carrying Bakken crude have exploded after derailing, including a fiery accident last year that killed 47 people in a small town in Quebec.

The North Dakota Industrial Commission is expected to rule Thursday on what steps, if any, producers must take to strip volatile gases out of crude oil before loading it into railroad tank cars.

The regulator’s decision will be based, at least in part, on the testimony of a half-dozen oil executives who urged the state to consider the conclusions of a study by the North Dakota Petroleum Council, a lobbying group for energy producers.

That study found Bakken crude was no more volatile than other so-called light crudes commonplace in Texas and elsewhere.

But that finding may reflect a problem with the methodology, which could have allowed flammable gases, or light ends, to escape in the process of collecting and handling the crude samples. This means that tests aimed at determining how explosive crude is within a tank car might be significantly underestimating the risk of combustion.

For googling, this is known as "crude oil stabilization."

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The Wall Street Journal

Russia entering the Ukraine ... again -- NATO.

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Is part-time work the new post-recession norm? This is the lede:

The unemployment rate has fallen sharply over the past year, but that improvement is masking a still-bleak picture for millions of workers who say they can’t find full-time jobs. Now economists are wondering whether the elevated level of part-timers is a post-recession norm.

The only question I have, is ObamaCare mentioned? Yes:

On one side are economists like Ms. Girard, who say greater economic uncertainty and rising labor costs—from increases in the minimum wage, regulations or health-care expenses stemming from the Affordable Care Act—explain higher levels of part-time work.

“There is a structural element to this at the very least,” she said. The health-care law requires employers with 50 or more full-time equivalent workers to offer affordable insurance to employees working 30 or more hours a week or face fines.

“Companies are just more inclined to hire part-time workers, not necessarily because of the health-care law, but for business reasons that make it a more attractive option,” Ms. Girard said.

Anecdotal reports have suggested employers have cut hours to prepare for the implementation of the health-care law, but that hasn’t been borne out by economic data.

An analysis by Bowen Garrett of the Urban Institute and Robert Kaestner at the University of Illinois at Chicago found a small increase in part-time work this year, but the increase occurred for part-time jobs with between 30 and 34 hours—above the 30-hour threshold that would be affected by the health-care law.

So, don't blame ObamaCare.

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Could we see another government shutdown? GOP may use must-pass spending legislation to thwart Obama's threatened immigration rules.

Supreme Court considers voting-rights case in Alabama. It appears the court might be upset that African-Americans are getting too good at gerrymandering. LOL.

"Everyone" now wants the Keystone, it seems -- Democrats in the Senate are looking for a unanimous vote to approve the Keystone. Previously reported.

A fourth African country -- Mali -- now has two cases of Ebola. Fortunately it's not that east to contract. In another note, POTUS seeks $6.2 billion in emergency funding to fight Ebola. And yet another Ebola story: trials of antivirals to treat Ebola start next month. 

Obama to nominate a lizard Lazard banker for a top Treasury post.

I assume there is a lot more but my time is up.

Oasis To Report Eight (8) Wells Thursday -- November 12, 2014

For newbies: "everybody" expects the rig count in North Dakota to start dropping, but the drop in the past couple of days could certainly be due to the predicted polar vortex as much as anything else. I think the rig count could be very, very volatile from this point on, until next summer, after the spring road conditions are lifted, and after the dust has settled with regard to the current slump in oil prices (which may continue for quite some time).

Active rigs:

	11/12/2014	11/12/2013	11/12/2012	11/12/2011	11/12/2010
Active Rigs	187	181	191	201	158

Wells coming off confidential list Thursday:

• 26505, 455, Oasis, Hendricks 5602 43-36 5B, Tyrone, t5/14; cum 29K 9/14;
• 26715, 1,725, Emerald, Pirate 2-2-11H, Foreman Butte, t5/14; cum 53K 9/14;
• 26950, drl, CLR, Oakdale 3-13H, Jim Creek, no production data,
• 27014, 294, Oasis, State 5792 31-15 3B, Cottonwood, t9/14; cum 11K 9/14;
• 27112, 506, Oasis, Hagen Banks 5298 42-31 4T2, Banks, t/714; cum 56K 9/14;
• 27157, drl, Oasis, Delta 6093 24-15 4T2, Gros Ventre, producing,
• 27222, 1,386, Oasis, Mallard 5692 31-22 7T, Alger, t8/14; cum 23K 9/14;
• 27466, 177, Oasis, Shaw 6092 11-23 3B, Cottonwood, t9/14; cum 2K 9/14;
• 27615, drl, Oasis, Andre Shepherd 55-1 31-8 8T, Missouri Ridge, no production data,
• 27642, drl, Oasis, Holmes 5501 11-5 2T, Tyrone, no production data,
• 27799, drl, Hess, HA-Mogen-152-95-0805H-7, Hawekey, no production data,
• 28210, 77, Legacy, Legacy Et Al Berge 12-6H, Red Rock, a Spearfish well, t6/14; cum 3K 9/14;

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27112, see above, Oasis, Hagen Banks 5298 42-31 4T2, Banks:

Date	Oil Runs	MCF Sold
9-2014	3541	0
8-2014	41388	45
7-2014	11385	0

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Five (5) new permits --

• Operators: American Eagle (2), Slawson (2), XTO
• Fields: Skjermo (Divide), Big Bend (Mountrail), Indian Hill (McKenzie)
• Comments:

There were ten (10) well name changes:

• Oasis will drill a Three Forks well instead of a middle Bakken well (#21371)
• OXY USA: cancels five (5) wells; I don't know if this had been previously reported (#23171, #23687, #23819, #24125, and #24151). One was in Stark County; the other four in Dunn County. It's possible these permits were canceled for any number of reasons; it is not necessarily uncommon to see canceled permits, but one does see canceled permits when an operator sells leaseholds.
• The others seemed to be minor changes. 

War On Coal -- November 12, 2014

The more one thinks about it, the more one has to ask: exactly with whom did President Obama negotiate the war-on-coal over in China? The Chinese were told that in exchange for them continuing to build as many coal-powered plants as they want, they were promised two things: a) no restrictions on CO2 emissions; and, b) the US would cut emissions by 26%, thereby improving Chinese ability to compete with US on energy. One almost wonders if Amy Carter was President Obama's chief negotiator. Putin was correct: Obama is a terrible negotiator.

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The Keystone XL

An informal note that I sent to Don. This and $1.89 will get you a cup of coffee at our local Starbucks:

The Keystone XL is completely in the political arena, from my point of view.

Canadian oil is getting to the coast; the Keystone is not absolutely required. I'm not even sure if TransCanada would be quick to build it -- I don't recall if you saw the recent new cost estimate -- but it's up to $7.5 billion, if I recall.

Be that as it may, politically it's a huge, huge deal. If Obama were to approve it before the December 6, 2014, Louisiana election, he would effectively be throwing Tom Steyer under the bus. Politics is very, very cold, and I can hear Obama telling Steyer, who spent billions (okay, maybe just hundreds of millions) in the election, that "Steyer, you did not deliver -- we lost 8 Senate seats -- you did not deliver, and I'm approving the Keystone." I can't believe Obama would do that, but he would be throwing Steyer and his basket of Hollywood fruits and nuts under the bus.

Second, if Obama approves the Keystone, it makes him look incredibly inconsistent -- he has a war on coal which his democratic senators don't want (West Virginia, for example) and then he turns around and gives Canada what they want -- and both Canadian oil and US coal are about equal in CO2 emissions.

Third, if Obama approves the Keystone, it pretty much ends the debate on pipelines. Sure, the folks in Minnesota, Iowa, and Nebraska will hold out for as much money as they can get for approving the pipelines, but the political debate regarding pipelines is over if the Keystone is approved. It completely takes the wind out of the environmentalists' sails with regard to pipelines. And with all the rail congestion and (history of) spills/derailments, the average American knows pipelines are safer.

So, for me, the Keystone XL is not an investment issue, a Bakken issue, or even a "real" issue -- it is simply political theater.

If both the House and the Senate unanimously approve the Keystone XL BEFORE the new Congress is sworn in, it will be very, very interesting to see what POTUS Obama does. And he really only has one "window of opportunity" in which to approve it. If he is going to approve it, he needs to approve it before the Landrieu election in Louisiana; after the new Congress is sworn in, if he were to approve it, he would gain nothing politically from so doing. Possibly a compromise to approve the Keystone XL in exchange for more war-on-coal, but that's about it, but even if he goes that route, maximum advantage would be before the Louisiana election.

By the way, it's my understanding that Mr Rick Santelli (CNBC) noted that for the past six years Harry Reid did not allow the Keystone XL to even be debated in the Senate chambers, much less bring a vote on the issue; and, now, barely a week after the midterm elections, Reid has brought the bill to the floor, and (apparently) is supporting a unanimous vote in favor.

I could really, really be wrong on all of this but that's what I'm hearing. If it's important to you, go to the source. I'm simply relaxing and opining. And drinking another cup of coffee. Now that out-of-town family members are back out-of-town.

Why Is There No Drilling Under The River In The Center Of The Reservation? -- November 12, 2014; TrainWreck (Their Word, Not Mine)

A reader has asked a very interesting question over at the discussion group.

The reader is wondering why there is no drilling under the river in the center of the reservation? It is not simply because it is under the river because there are plenty of areas in the North Dakota Bakken where drillers have long horizontals under the Missouri River.

There is probably a simple explanation. My hunch is it has to do with all the bureaucratic steps required to satisfy federal, state, tribal, BLM, US Army Corps of Engineers, requirements and regulations, but I could be wrong.

The area in question:

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TrainWreck

I can't remember if I posted a short blurb on this earlier. I was not aware of the full story. Bloomberg Politics has the full story. If Chief Justice Roberts doesn't get it right this time .... well, let's just say, a lot of folks will feel the Supreme Court is as political as the rest of Washington....

He's also behind a series of scoops that could convince the Supreme Court to dismantle part of the Affordable Care Act. Weinstein has absorbed hours upon hours of interviews with Jonathan Gruber, an MIT professor who advised the Massachusetts legislature when it created “Romneycare” and the Congress when it created “Obamacare.”

Conservatives had been looking for ways to demonstrate that the wording of the ACA denied insurance subsidies to consumers in states that did not create their own health exchanges. Weinstein found a clip of Gruber suggesting that states that did not create health insurance exchanges risked giving up the ACA's subsidies; it went straight into the King v. Burwell brief, and into a case that's currently headed to the Supreme Court.