Nothing About The Bakken -- December 6, 2018

Holy mackerel ... holy mackerel ... holy mackerel ... I'm lying here watching extended news coverage of Union Pacific 4141 carrying George H. W. Bush to his final resting place. It's incredible. I've never seen anything like it. Certainly JFK's was more moving -- how could it be otherwise -- but two entirely different circumstances. The pageantry -- if that's the right word for a solemn occasion ... was incredible. Twenty-four US fighter flyover. But the Union Pacific 4141 was even better. Hopefully there will be a YouTube video that captures this.

Here it is: 3.5 hours of Union Pacific 4141. 

 We live in Grapevine, the Christmas capital of Texas. Preceding the coverage of Union Pacific 4141 was a long piece on the "Parade Of Lights," the annual Christmas parade in Grapevine. Wow, that, too, was superb.

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Jamestown Ferry, Charley Crockett  

It's a cover; Tanya Tucker did it first. Studio version, hard to say which is "better." But his official video is so much better than her live version. He sings it with more feeling, more soul. On YouTube, Tanya's most watched version has about 260,000 hits and has been up since 2014. Charley's official video was posted January, 2018 -- about one year ago -- and has over 300,000 hits. 

Wow,Talk About A Retirement Party! -- December 6, 2018

Updates

Later, 10:10 p.m. CT: afraid that the link might be lost -- 

USGS Report Expands Permian’s Wolfcamp, Bone Spring Potential Bounty. 

The lede:

Anyone who follows the flow of U.S. oil and gas knows the Permian Basin’s Wolfcamp shale and Delaware Basin’s Bone Spring Formation are bountiful, but a new report from the U.S. Geological Survey (USGS) shows the enormity of their potential resources: an estimated 46.3 billion barrels of oil plus 281 trillion cubic feet of gas and 20 billion barrels of NGL.

That’s more than double the previous resource assessment for oil in the Wolfcamp.

I can never get my hands around "trillion cubic of natural gas." I need to compare 281 trillion cubic feet to other plays. See this link. Prior to the USGS report, natural gas reserves in the US were estimated to be 350 trillion cubic feet. Australia, 152 trillion cubic feet. Marcellus, 65 trillion cubic feet (probably will be revised upwards). 281 trillion cubic feet of natural gas -- and remember, reserves are based partly on price of production; if the price of natural gas were to go up, reserves would go up. Incredible, absolutely incredible.

I doubt this will be reported on network nightly news. But we'll certainly see a story about a cat caught in a tree and rescued by fire department on the way to a seven-alarm fire. Or another story on severe weather.

I'm inappropriately exuberant about the Bakken and I'm clearly overly optimistic with my own estimates of 50 billions bbls of recoverable oil in the Bakken, but here it is, the very, very conservative USGS coming up with almost 50 billion bbls of recoverable oil in just a couple of pay zones in the Permian.

From wiki: "To convert to one boe, the USGS gives a figure of 6,000 cubic feet of typical natural gas."

So, 281 trillion cubic / 6,000 cubic feet = 50,000,000,000 boe. Assuming I did the math correctly. Big assumption. 

Original Post

 

The USGS, which is part of the U.S. Department of Interior, deemed its review of resources in the Permian Basin province as the “largest continuous oil and gas resource ever assessed.” The assessment released Dec. 6 was more like Christmas for U.S. Interior Secretary Ryan Zinke, he said in a statement.

Wow, I need to get a life. I want to call it a night. I'm in a great mood, but exhausted. Loud 60's music recharging my battery (or is it batteries?).

I was ready to call it a day/night when a regular reader -- who seems to be as inappropriately exuberant about the US energy revolution as I am (😀) -- sent me a note.

I will post what he sent me and then get back to it tomorrow with links, etc. Also, tomorrow, a story about Trump and sage grouse.

But after this, I swear on the stack of bibles that I'm reading, I will not post any more notes until tomorrow. I will just read, watch the end of the NFL game on mute, and play 60's music as loud as I can without annoying the neighbors.

From the reader:

Greetings.

USGS report today puts Delaware portion of Wolfcamp along with Delaware Bone Spring at 46 billion barrels. 20 billion barrel NGLs.

This, combined with Midland Wolfcamp at 20 billion and Spraberry Midland at 4 billion gives 70 billion barrels technically recoverable resource from these formations alone!

There are several other formations/horizons within the Permian Basin. 

Paging Art Berman, indeed! 

Best Regards. 

Paging Art Berman! 😛

Sloop John B, Brian Wilson & Al Jardine

The Pace Of Change Is Staggering -- December 6, 2018

I've been so busy for the past two hours I have not had a chance to look at the actual data. I've only seen the headlines and I've only read a bit of the various articles regarding this historic milestone.

I assume it was not reported on any of the three major television networks this evening. I assume that 99% of Americans are unaware.

But wow, look at the raw data. At the same time, be aware of the caveats.

Having said that, in July, 2015, about 3.5 years ago, the US was importing around 5 million bbls of oil and petroleum products every day. Five million bbls.

As recently as August, 2018, just a few months ago, the US was still importing around 5 million bbls of same every day.

Literally overnight, it seems, imports dropped to 2 million bbls per day and then actually went negative in the last reporting period.

By the way, much of America's crude oil imports is necessary. We've discussed that before and won't say any more about that now.

I don't think it's a big deal that the US became a net exporter last month, or the month before, or six months, or a year from now. It's the trend that is so incredible. Volumes could be written about this. It will be interesting to see how this plays out in business sections of regional and national publications, especially in "opinion" and "essay" pieces.

My hunch is that if Occasional-Cortex has any synapsing neurons, she should request a tutorial on what this means for the US economy, perhaps from Art Berman or Larry Kudlow. I think she would be able to argue that with numbers like these, more importantly, the trend, the US could pay for a) Medicare for all; b) free college for all; c) and a basic universal income. Perhaps there might even be enough left over to pay Honduran migrants to stay in Mexico. 

Link here.

The graphic:

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Crazy

Wow, I'm in a great mood.

Open road "racing" this evening -- bringing the oldest granddaughter home from water polo practice. Incredible roads here in north Texas -- north side of DFW. When the traffic is light and wide open -- wow.

KXT played this song during the right home, after dropping Arianna off, played it really, really loud ... so many thoughts rushing through my mind .. Hunter S Thompson; former girlfriends; family; life; money --

Crazy, Gnarls Barkley   And then this in the YouTube lineup:

Suspicion, Terry Stafford  

1964: Central Junior High (middle school); pinball; football; bicycling; best friends, Catcher in the Rye. 

"The California Effect" -- December 6, 2018

Three areas in which California is having a huge effect on US data points and US economy:

• national politics
• fossil fuel energy data
• automobile / CAFE standards

CAFE standards: California's role in establishing automobile / CAFE standards was a huge topic a few years ago. It will become a huge issue again when a Democrat wins the US presidency which could be as soon as 2020. California's auto market is so big that whatever standards the state sets, it is difficult for automobile manufacturers to ignore. The easiest road to take: accept California standards as standards for the entire US.

Politics: I've talked about this before, but simply put, regardless of one's party designation walking into a California voting booth, one will be a Democrat walking out. California now requires that the two top vote-getters in the primary go head-to-head in the general election. So, from now on, for US Senator, it will be one Democrat running against another Democrat. For governor and all other statewide offices, the same. Any Republican voter walking into the booth has only two options: vote or not vote for state offices. If the voter votes, that vote will be recorded as a vote for a Democrat. That's obviously not the case when voting for US president, but the outcome will be the same. The popular vote in California from here on out will be "Democratic." Demographically, it is impossible for that to change in the next forty years.

Fossil fuel: like Hawaii, when it comes to energy, California is an island. Most of its energy comes from out-of-state sources, and much of that from foreign sources. I'm sure someone will fact check me on that. For sure, most of California's crude oil comes from foreign sources.

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Politics

 

With that in mind, when it comes to national data about the popular vote in California for statewide office, one needs to "back out" California numbers. As long as California numbers are included in national voting data, the popular vote will go to the Democrat candidate. In California, at the state level, a Democrat will always win a state-wide contest. For US president, the national results -- with California numbers included -- will, from now on, have a popular vote that goes Democratic and an electoral college vote that may or may not go Democratic, if the national election is a close race.

We've talked about that before and that's enough on politics for now.

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CAFE Standards

We've talked about this before and not much need to discuss it again. At the moment, it's not a topic of national interest except for, perhaps, the car manufacturers.

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Fossil Fuel

Today, the EIA announced that for the first time in 75 years, the US was a net exporter of crude oil and petroleum products.

In fact, if one were to "back out" California imports of crude oil, the US would have become a net exporter of crude oil and petroleum before now.

This graphic comes from the state of California:

If I am reading the graph correctly, California refineries receive about 650 million bbls of crude oil each year. That number has remained fairly constant since 1990, and was significantly higher for a short period in the 1980s.

California and Alaska sources provided about 290 million bbls of crude oil.

650 - 290 = 360 million bbls of foreign crude oil. The "gap" could widen (greater crude oil imports for California): the Alaskan pipeline has temporarily been shut down (back open?) but Alaskan crude oil production has been dropping significantly over the past thirty years. Under favorable administrations that might be reversed, but the tea leaves suggest that future US presidents will be less "open" to increasing Alaskan crude oil production. Be that as it may, the fact is, if one backs out California imports, the US would have been a net exporter of crude oil and petroleum products long before last month.

California, onshore and offshore, has huge crude oil reserves and the graphic could be significantly different under different scenarios. I think one could argue that California could become a net exporter of crude oil and petroleum products if allowed to do so.

US Becomes Net Oil Exporter -- Crude Oil And Petroleum Products -- For First Time Since George H. W. Bush Bailed Out Of His Plane 74 Years Ago -- December 6, 2018

Links to various articles reporting this story.

• The US just became a net oil exporter for the first time in 75 years: Bloomberg
• In major shift, US now exports more oil than it ships in: Reuters
• US becomes net oil exporter for first time in 75 years: oilprice
• shale is not a revolution, it's a retirement party: Art Berman

Now, this screenshot from Google search, note the date, February 7, 2018 -- less than a year ago:

The link:

• The United States is on pace to be a net energy exporter by 2022, the Energy Department forecasts. 
• Surging natural gas exports, higher crude shipments and robust fuel flows will help the United States achieve the status for the first time since 1953. 
• Tepid demand growth for energy in the United States will also help the nation become a net exporter.
• Comment: one can argue that the US would already be a net exporter of energy if it weren't for faux environmentalists killing and delaying crude oil and natural gas pipelines

The California effect: link here. 

Reader's response: caveats here.