Random Update On BNSF Expansion Plans -- January 15, 2015

From the press release:

In BNSF’s North Region, the company will invest approximately $1.5 billion across eight states for engineering maintenance and line expansion projects, of which approximately $700 million^* is planned for projects to expand the rail lines and Positive Train Control (PTC) in that region.

BNSF’s North Region has experienced the most rapid growth in recent years. It is the corridor used to move agriculture and coal to export facilities in the Pacific Northwest, petroleum products produced in the region that are destined for refinery facilities, and for consumer products shipped to and from marine ports in the Pacific Northwest.

The North Region is also a destination point for materials that support the production of crude oil in the Bakken shale formation. 

The North Region includes: Illinois, Minnesota, Montana, North Dakota, Oregon, South Dakota, Washington and Wisconsin.

Expansion projects include:

• Continue to install double track on the Glasgow subdivision between Minot, ND, and Snowden, MT, located in the far western part of the state.
• Extend the siding on the Dickinson subdivision located between Mandan, ND, and Glendive, MT, and expand the terminal at the Dickinson yard to accommodate expected growth in single car volumes.
• Convert the entire Devils Lake subdivision, located between Minot, ND, and Grand Forks, ND, to centralized train control, which will improve capacity for freight operation while improving on-time performance of passenger trains.
• Complete implementation of centralized train control on the Hillsboro subdivision, located in eastern North Dakota. Upgrade connection track between the Hillsboro subdivision and the Devils Lake subdivision to permit faster train speeds.

 * Illinois is included in the disclosure of the planned expenditure for the North Region despite the state being part of the company’s South Region. In this announcement Illinois was included in the North Region because the Chicago complex also serves as an origination and destination point for traffic along that corridor. Illinois was also included in the North Region reporting when BNSF’s 2014 capital expenditure was announced in the prior year.

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A Note For The Granddaughters

It's been a good night. I finally finished James Essinger's Ada's Algorithm: How Lord Byron's Daughter Ada Lovelace Launched The Digital Age, c. 2014. Ada Lovelace is receiving some new attention this year in light of the Alan Turing movie, The Imitation Game. She is also heavily featured in the new book by Walter Isaacson (Steve Jobs [2011],  The Innovators: How a Group of Inventors, Hackers, Geniuses, and Geeks Created the Digital Revolution (2014). I have the new Isaacson book around here somewhere -- I think the cover has the portraits/photos of Ada Lovelace, Alan Turing, and Steve Jobs. The Essinger book is "the story of the woman who wrote the first computer program -- in 1843."

The book is "endorsed" by Reshma Saujani, found of Girls Who Code and author of Women Who Don't Wait In Line. From the Girls Who Code website: In middle school, 74% of girls express interest in Science, Technology, Engineering and Math (STEM), but when choosing a college major, just 0.3% of high school girls select computer science.

Our older granddaughter, in middle school, is one of the 74%. It will be interesting where she ends up. 

The Essinger book is a quick read, but extremely well-researched it appears. One could probably read it over the course of several evenings, but I enjoy taking my time to finish a book. On completion, I felt a very intimate relationship with someone who had lived more than a 150 years ago. Really well done. It's the kind of book that Anglophiles will really enjoy; there's a little bit of British trivia on every page it seems. It's also fun to use Google maps and satellite views to check in on many of the sites mentioned in the book.

Before calling it an evening, my wife and I watched a new DVD I bought while we were out in southern California over the Christmas - New Year holidays. Due to family commitments we were able to visit only one museum this California trip, the Norton Simon museum which we had not seen in years. While there, among several books also bought, I bought the museum DVD, "The Art of Norton Simon." Surprisingly, it was narrated by Gregory Peck.

For the archives.

Some North Dakota Politicians Want A Do-Over With Regard To New Flaring And Conditioning Rules -- January 15, 2015

Bakken.com is reporting:

A bill sponsored by nine Republican lawmakers could potentially void North Dakota’s efforts to curb natural gas flaring and the conditioning of Bakken’s sweet crude, according to a report by The Dickinson Press.

Lead sponsor of the bill Rep. Keith Kempenich said that one of the bills is in response to the flaring goals and oil conditioning standards being approved by the Industrial Commission without going through the Legislature’s Administrative Rules Committee.

The Dickinson Press reports that Kempenich said, “We need to be involved when they get into that broad of public policy. The Legislature was pretty much left out of the loop as far as what those policies were.” He added that the rules committee would have likely rejected the order to reduce flaring because the goals are “arbitrary.”

That order, adopted July 1, requires oil and gas producers in the Bakken and Three Forks shale formations to capture 77 percent of the gas being released by January 1, 85 percent by January 2016 and 90 percent by October 2020. If operators are unable to meet these goals they would be forced to cut back on production.

I agree completely.  However, a slippery slope either way.

For newbies: the North Dakota legislature meets only every two years, and only for a few months when it does meet. 

Bakken.com is also reporting:

An incident at a North Dakota oil well has left one man dead and another one injured.

The Bismarck Tribune reports the men were repairing equipment at the oil well location near Mandaree when fluids somehow ignited, burning both men.

Reports from the Occupational Safety and Health Administration show that Denver-based QEP Resources operates the well. The incident’s fatal victim was the owner of Legendary Field Services of Watford City, and the man who was injured is employed by that oil-field service provider.

Very, very sad. 

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First Visit To The Library

 Which book tastes the best?

Fourteen (14) New Permits -- North Dakota -- January 15, 2015

Active rigs:

	1/15/2015	01/15/2014	01/15/2013	01/15/2012	01/15/2011
Active Rigs	156	187	185	200	163

Fourteen (14) new permits --

• Operators: Whiting (3), Emerald (3), BR (3), OXY USA (2), Oasis, Crescent Point, MRO
• Fields: Juniper (McKenzie), Boxcar Butte (McKenzie), North Fork (McKenzie), Murphy Creek (Dunn), Willow Creek (Williams0, West Ambrose (Divide), Antelope (McKenzie)
• Comments:

Wells coming off the confidential list earlier today have been posted; see sidebar at the right.

Wells coming off the confidential list Friday:

• 27468, 389, Crescent Point CPEUSC Matilda May 32-29-158-100, Church, a Bakken well, t11/14; cum 8K 11/14;
• 27914, drl, Slawson, Bootleg 6-14-15TFH, Stockyard Creek, no production data,
• 28158, 2,052, MRO, Longoria USA 21-17H, Van Hook, t11/14; cum 16K 11/14;
• 28624, A, CLR, Mildred 4-19H, Brooklyn, no IP, s7/14;
• 28625, drl, CLR, Mildred 5-19H1, Brooklyn, producing,
• 28864, 780, Hess, BW-Norgard-149-100-1102H-4, Ellsworth, t11/14; cum 17K 11/14;

Three (3) producing wells completed:

• 22363, 2,108, QEP, Kirkland 15E-23/14H, Grail, T10/14; cum 45K 11/14;
• 26210, 1,184, HRC, State 157-100-29A-32-3H,  Marmon, t2/14; cum 106K 11/14;
• 27614, 1,049, Oasis, Andre Shepherd 55-1 31-8 7T, Missouri Ridge, t12/14; cum --

Four (4) permits canceled, included one recent permit. Canceled were a Slawson well in Billings (#16077), two HRC wells in Williams County (Pasternak and Berg; #24824, #24825); and, an Oasis, permit in Williams County (#30170, Williams).

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How Can Analysts Get It So Wrong? SLB Earnings

How can analysts get it so wrong?

The Houston, Texas-based company reported a profit of $302 million, or 23 cents per share, down from $1.66 billion, or $1.26 per share, a year ago. Fourth quarter revenue rose 6% from a year ago to $12.64 billion.

Wall Street analysts expected earnings of $1.46 per share and revenue of $12.72 billion.

Based on how shares did, it suggests that analysts did not know how much SLB was writing down some assets. Along that line:

Schlumberger Ltd. said Thursday it has recorded a $296 million charge reflecting a headcount reduction of 9,000. The oil-services provider didn't specify whether the reductions had already taken place. "In response to lower commodity pricing and anticipated lower exploration and production spending in 2015, Schlumberger decided to reduce its overall headcount to better align with anticipated activity levels for 2015," the company said in a release. In December, the company said it would record a $800 million charge as it restructured its WesternGeco marine seismic fleet by reducing its fleet.

Now That Connecticut Has Banned Fracking, Will The State Ban Flaring? -- January 15, 2015

Updates

February 5, 2015: 136 active rigs:

 

Original Post

 

What the North Dakota Bakken looks like today, 156 rigs (January 15, 2015):

 We will compare this graphic with the 3Q15 graphic later in the year.

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Tweeting right now: President Obama directs federal agencies to advance 6 weeks of paid family leave for federal workers.

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Myfoxny is reporting: the quakes continue. Despite the ban on fracking, the earthquakes continue shaking Connecticut:

A 2.2-magnitude earthquake has rattled eastern Connecticut again.

In what's becoming a daily seismic event, the Weston Observatory of Boston College said the earthquake occurred at about 4:40 a.m. Thursday near Plainfield, where previous earthquakes were recorded.

It says two minor earthquakes were recorded on Wednesday and another on Tuesday.
Several were recorded on Monday and last week, too.

The observatory says that while the greatest earthquake activity in the United States is in the west, earthquakes are "quite common" in many areas of the eastern United States, including New England.

I guess that's why all the reporting of these earthquakes; they are actually quite common in New England. If so, why just Connecticut? Why not Massachusetts? Rhode Island? Vermont? And all this time I thought they were related to fracking.

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Wind Energy In NYC

$7,500 In Annual Costs And $750,00 Up Front Will Get You Enough Electricity For Two Houses For A Year

The New York Times reports --

In less than a month of operation, the first large-scale wind turbine to be installed in New York City, standing more than 160 feet tall, has produced enough energy to power two homes for over a year, or one 20-watt light bulb for over a century.

But this turbine, in Sunset Park, Brooklyn, was built to help power a recycling plant on a pier at the South Brooklyn Marine Terminal. It is expected to provide 4 percent of the energy used by the plant, which is owned and operated by Sims Metal Management, an Australian company.

A full-page story for a single wind turbine that will provide four (4) percent -- repeat, 4% -- of the energy used by a recycling plant. Cost: $750,000. 

Don has done the math:

Use 1% interest on the money for electricity, %750,000 x .01 = $ 7,500 for electricity for two (2) houses for 1 year.  Wow what a bargain, but I think this is still cheaper then Solyndra (bankruptcy declared and ceased all business activity on September 1, 2011).

And at that price -- it provides all of 4 percent the amount of energy the recycling plant needs. By the way, the utility needs to provide additional back-up power for those periods when the wind is blowing too fast or to slow.

Bottom line: the wind turbine was someone's hobby horse.

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Christmas Shopping For The Chronically Unemployed And Disenfranchised

The Ferguson problem:

From Carpe Diem. 

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Really?

Tweeting now: Southwest Airlines hit with record fine by Department of Transportation for Chicago Midway airport delays.

For The Archives: The 2015 Oscar Nominations -- January 15, 2015

For Kei who reads all my non-oil / non-Bakken posts:

The Oscar nominations for 2015 just came out. I am absolutely thrilled. Two of my favorite DVDs were on the list: The Grand Budapest Hotel for best movie (and eight other nominations); and Finding Vivian Maier for best documentary.

The Washington Post is reporting: 2015 Oscar nominations: Complete list; Selma snubbed; Birdman and The Grand Budapest Hotel lead with nine.

The Grand Budapest Hotel,which won a best picture award at the Golden Globes, is starting to look like an unstoppable force.  

Actress in a Leading Role included Julianne Moore in Still Alice.

Julianne Moore is the favorite here, playing a linguistics professor grappling with an early onset Alzheimer’s diagnosis.

Makeup and Hairstyling:

Will it be Steve Carell’s prosthetic nose in Foxcatcher or an unrecognizable Tilda Swinton under an aged face in The Grand Budapest Hotel? 

The Grand Budapest Hotel; nine (9) nominations: best film, director, cinematography, costume design, film editing, makeup and hairstyling, music, production design, original screenplay.

I was surprised to see that The Grand Budapest Hotel did not get a nomination for visual effects. The visual effects in GBH were sublime, subtle, sweet (to complete the alliteration). Maybe that was the problem.

I was thrilled to see Julianne Moore on the list. She is a supporting actress in one of my current favorite movies, The Big Lebowski. I watched it again last night. She is gorgeous.

I was also thrilled to see Tilda Swinton get a nomination -- actually, I suppose it was her makeup artist that got the nod, not Ms Swinton. She is in another of my current favorite DVDs, one I can watch two or three times back-to-back in one sitting, after the midnight hour: Only Lovers Left Alive, 2013.

And finally, wow, wow, and wow: the documentary Finding Vivian Maier -- I first saw that at one of the fine arts museums in Ft Worth, TX; I don't recall what specifically caught my interest, but it's a great, great documentary. I bet it was one of only two such documentaries I have paid much attention to in the last couple of years, and it is up for an Oscar (won't win). The other documentary that caught my attention recently: Tim's Vermeer, also 2013. I'm kinda surprised it did not get nominated.

I never guess on who will win the Oscar in any category. Too much politics in Hollywood of which I know nothing.  That's why there are two lists for Oscars: a) those who will win; b) those who should have won.

And that, by the way, is why the Golden Globes has better Hollywood attendance: the awards go to who should win.

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Oil Supply, Oil Demand, Automobiles, and China

At SeekingAlpha: The Crude Oil Slump Is Also Temporary From A Demand Standpoint. Even without reading the article, one can about predict what it is going to say if it's about oil, China, and automobiles.

Don sent me the link to the linked article. This was my response:

I think all these folks who think the price of oil will rebound sooner than later start off with that argument and then try to prove their thesis. 

Meanwhile, folks who think we won't see $100 oil again are doing the same thing: starting off with that premise and then finding data/articles to support their thesis. 

All I can say is I'm happy with my blog post of -- "The Future of Shale" :

• at $150 oil: the Bakken and all North American plays become very, very active 
• at $100 oil: most North American plays become active again 
• at $75 oil: only the sweet spots in the Bakken, Permian, and Eagle Ford remain active 
• at $50 oil: shale starts shutting down

Regardless, it is pretty much proven that beyond a shadow of a doubt that Peak Oil theorists lost their argument (as a viable investment argument for the next 20 years); at even reasonable prices ($150 oil) it appears "we" won't run out of oil any time soon.

There appear to be three centers of gravity:

• Saudi Arabia/OPEC 
• off-shore 
• North American (shale and Canadian sands) 

One can put them in a different order based on how fast they can react or affect prices:

• Saudi Arabia/OPEC: immediately 
• North American: 6 months 
• off-shore: 3 years 

In other words, a Saudi Arabia announcement on oil production today can affect prices the same day; an announcement regarding North American production will affect prices six months out; off-shore drillers need at least three years to put together a project and won't affect prices until that project comes on line. 

The linked article above focuses on China. I think most analysts forget about China. China will grow a lot faster than people think.

But my hunch is that oil supply can easily keep up for quite some time.