Delaware Basin Adds To Oil Glut -- Filloon -- November 27, 2016

Bakken update, part 4: Delaware Basin production adds to oil glut; basin production increases 52.5% per well in 2015, over at SeekingAlpha:

• the Bakken, Eagle Ford, Delaware and Midland have all shown a very large increase in production per well for 2015
• production per well improvements can be attributed to high-grading, but well design to a higher degree
• the increased production per well has helped to offset the decline in completions, and the reason US production remains higher than analyst expectations.

Active rigs:

	11/27/2016	11/27/2015	11/27/2014	11/27/2013	11/27/2012
Active Rigs	37	64	183	191	185

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Chess championship in dead heat. NY Times. Magnus Carlsen (Norway) and Sergey Karjakin (Russia) are tied after eleven games. The twelfth and deciding game is Monday. After that up to a dozen or more fast tie-breakers.

 Cellphones: Chinese tech giant Huawei's latest smartphone faces frosty US reception. WSJ.

Flashback: Back In 2011 -- US Running Out Of Oil That We Can Afford -- DOD -- November 27, 2016

This was posted October 27, 2011:

Link here.

DOE’s optimistic future supply forecasts are dangerously unrealistic, James S. Baldauf, president and cofounder of ASPO-USA, told reporters during an Oct. 26 press conference in front of DOE’s headquarters. “If these exuberant predictions are wrong, the consequences could be catastrophic. We need to be conservative in planning for the future,” he said. “We are not running out of oil. But we appear to be running out of oil that we can afford.”

The US Department of Defense’s Joint Operating Command said in its biennial report that a world oil supply shortfall would pose a serious challenge to military preparedness, he said in an e-mail to OGJ. “They have said that as soon as 2012, total world oil production will begin to decline, and that there could be a 10 million bbl/day shortage by 2015,” he indicated.

Memo to self: remind me to look at this report in December, 2015 

Frack Sand -- Bakken 101 -- November 26, 2016

This is a link is to an "advertisement" but it provides some items that newbies and even folks like me might find interesting.

From FairmountSantrol:

• mega-fracks: some operators have already pumped up to 30 million lbs per horizontal well (Chesapeake: 25,000 tons of sand, 50 million lbs)
• some are planning even higher sand volume per well in 2017
• some suggest that the "gold standard" for frack sand is "Northern White Sand"
• Northern White Sand: found in the upper midwest of the US
• known for its high conductivity and crush strength; also, high sphericity and purity
• Premium Tier 1; mono-crystalline; over 99.6% pure quartz, unlike Tier II frack sands
• high permeability (conductivity) is a major benefit for using Premium Tier I frack sand
• Fairmount Santrol operates several mines in the upper Midwest; also a sand mine in Brady, TX -- produces Texas Gold, a high quality brown type sand

So, that's the "30-second soundbite" or the "elevator speech" regarding northern white sand.

Now, for more about frack sand than you ever thought you would want to known, this is a very, very good paper on frack sand, over at Rock Products:

Highly prized frac sand mined principally in Wisconsin and Minnesota is referred to by the mining industry as “Northern White” sand or “Ottawa” sand. 

Slightly lower quality frac sand, referred to as “Brady” or “Brown” sand, is mined from central Texas.

The principal sources of “Northern White” or “Ottawa” sand in the upper Midwest are the Middle and Upper Ordovician St. Peter Sandstone and the Upper Cambrian and Lower Ordovician Jordan Formation, with the Upper Cambrian Wonewoc and Mount Simon Formations gaining in importance.

The main source for the “Brown” or “Brady” sand is the Upper Cambrian Hickory Member of the Riley Formation in central Texas.

Additional secondary frac sand sources include the Middle Ordovician Oil Creek Formation in Oklahoma. Sand deposits that are less suitable as frac sand, such as the Pliocene Bidahochi Formation in Arizona and the modern Loup River sands of Nebraska, are also being used in the proppant industry.

As the demand for frac sand increases, new sources are being sought that may become economic with changes in technology and physical standards, despite their currently lower quality.

Bakken Crude Oil Receiving Terminal Proposed For Washington State -- Expand An Existing Facilty -- November 26, 2016

From OregonLive: company wants to expand existing methanol facility in Washington State to receive up to almost 18 million bbls/year; data points:

• terminal in small city of Hoquiam, Washington
• existing methanol facility
• operated by Contanda (this is new name; originally: Westway Terminal)
• 17.8 million bbls oil/year
• storage: up to 1 million bbls of crude oil
• Bakken oil or diluted bitumen from Alberta
• from Hoquiam, would be transferred to ocean-going tankers/barges to refineries in the Puget Sound area or California
• local groups oppose
• permit originally issued in 2013
• appeal: permit rescinded
• process began again in 2014

Hope springs eternal.

A typical unit train carries around 85,000 bbls of crude oil. Eighteen million bbls / 85,000 bbls = 210 unit trains, or close to one unit train daily, Monday through Friday.

Huge thanks to a reader for sending me the link. I would have missed it. 

Flashback: Harold Hamm's "Advice" To President Obama In 2011 -- Five Years Later

This was posted September 30, 2011:

Link here.

This is the WSJ's weekend interview; a big thank you to Chris for alerting me to it.

Harold Hamm, the Oklahoma-based founder and CEO of Continental Resources, the 14th-largest oil company in America, is a man who thinks big. He came to Washington last month to spread a needed message of economic optimism: With the right set of national energy policies, the United States could be "completely energy independent by the end of the decade. We can be the Saudi Arabia of oil and natural gas in the 21st century."

"President Obama is riding the wrong horse on energy," he adds. We can't come anywhere near the scale of energy production to achieve energy independence by pouring tax dollars into "green energy" sources like wind and solar, he argues. It has to come from oil and gas. 

Not only riding the wrong horse, he's riding with the wrong posse. 

How much oil in the Bakken?

How much oil does Bakken have? The official estimate of the U.S. Geological Survey a few years ago was between four and five billion barrels. Mr. Hamm disagrees: "No way. We estimate that the entire field, fully developed, in Bakken is 24 billion barrels."

If he's right, that will double America's proven oil reserves.

"Bakken is almost twice as big as the oil reserve in Prudhoe Bay, Alaska," he continues. According to Department of Energy data, North Dakota is on pace to surpass California in oil production in the next few years. Mr. Hamm explains over lunch in Washington, D.C., that the more his company drills, the more oil it finds. Continental Resources has seen its "proved reserves" of oil and natural gas (mostly in North Dakota) skyrocket to 421 million barrels this summer from 118 million barrels in 2006.

The president's reaction:

When it was Mr. Hamm's turn to talk briefly with President Obama, "I told him of the revolution in the oil and gas industry and how we have the capacity to produce enough oil to enable America to replace OPEC. I wanted to make sure he knew about this."

The president's reaction?

"[President Obama] turned to me and said,

'Oil and gas will be important for the next few years. But we need to go on to green and alternative energy. [Energy] Secretary [Steven] Chu has assured me that within five years, we can have a battery developed that will make a car with the equivalent of 130 miles per gallon.'"

Mr. Hamm holds his head in his hands and says, "Even if you believed that, why would you want to stop oil and gas development? It was pretty disappointing."

I've tagged this update to look at it again five years from now.