To Readers: Keep Sending Me Your Links, Comments -- But I'm Exhausted -- Will Take The Evening Off -- December 9, 2019

I had an incredibly physically and mentally exhausting day. I need to take a break. I had so many great links and comments from readers, thank you.

Keep sending me stories, links, comments. I will get to them but I might not get to them tonight.

But, wow, there is so much going on. Hard to keep up.

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Numbers Don't Lie

Minnesota is #40.

Oregon is #44.

Montana is #38.

Iowa is #25.

I've been waiting for this list. 

It's the annual ALEC-Laffer State Economic Outlook Rankings, 2019.

Story at this link: https://www.foxbusiness.com/money/utah-idaho-north-dakota-nevada-indiana-best-economic-outlook.

#5: Indiana

#4: Nevada

#3: North Dakota

#2: Huge shout-out to Idaho -- they've had a decade of tough times

and, #1 ... Utah.

Texas doesn't make the top five. The Lone Star state is #15. Okay. But much worse than I would have guessed.

The five states (sic) with the worst economic outlook:

• Hawaii
• New Jersey
• California
• Illinois
• Vermont
• New York

"The report ranked Hawaii, New Jersey, California, Illinois, Vermont and New York as the five states with the worst economic outlook, respectively." -- That's a direct cut and paste from the article; screen shot pending. I count six states. Apparently, someone is either counting New York and New Jersey as one state, or they don't consider Hawaii a real state. Of course, President Obama thought there were 57 states.

I'm not surprised to see New York/New Jersey on the list, but I am very, very surprised to see California on the list. That's scary. California's economy is perhaps the fifth largest economy in the world.

One wonders what Vermont is doing [wrong] to make that list?

US Petroleum Exports Exceed Imports In September, 2019

Link here.

In September 2019, the United States exported 89,000 barrels per day (b/d) more petroleum (crude oil and petroleum products) than it imported, the first month this has happened since monthly records began in 1973.

A decade ago, the United States was importing 10 million b/d more petroleum than it was exporting.

Long-running changes in U.S. trade patterns for both crude oil and petroleum products have resulted in a steady decrease in overall U.S. net petroleum imports.

But note:

Despite increasing exports of crude oil, however, the United States remains a net importer of crude oil. The United States continues importing primarily heavy high-sulfur crude oils that most U.S. refineries are configured to process, and more than 60% of U.S. crude oil imports come from Canada and Mexico.

 There was a reason why "we" wanted the Keystone XL.

The Disconnect Between Natural Gas - Crude Oil Pricing -- Part 2 -- December 9, 2019

Updates

December 10, 2019: pay attention to this -- it's subtle but record-setting -- from a reader, see comments:

Natural gas prices for January hit an all time low a week ago Friday and beat that yesterday, a fact largely missed by the media...they don't understand prices for gas are seasonal, and while it's been lower in the summer, we've never had a January contract price fall this low...

I have the price graphs here: https://focusonfracking.blogspot.com/2019/12/natural-gas-prices-for-january-at-all.html.

Expecting a mild winter and lots of natural gas?

Most recent graph: https://www.barchart.com/futures/quotes/NGF20/interactive-chart.


December 10, 2019: a heck of a response from a reader regarding this story -- :

I do not think it is yet widely recognized just how profound - and widespread - are the effects of the divergence of Henry Hub pricing (aka US production) and benchmarks for crude (WTI, Brent, amongst many).

Focusing only upon the cost/price impacts on US LNG exports, get a load of these ...

• Algeria is cutting back on piped gas exports to Europe 
• Cyprus is mulling over an LNG terminal (FSRU to start) rather than commit to a short, 12 inch pipeline from the nearby Israeli gas field as the ~$5.50/mmbtu LNG price is cheaper than the ~$6/mmbtu price of the piped gas 
• Singapore is on track to completely end its imports of piped gas from nearby Malaysian and Indonesian fields when contracts expire in 5 years as imported LNG will be substantially cheaper 
• New, massive Siberian/China gas pipeline may not provide cheaper gas than LNG in southern regions of China due to cost of transportation 
• Turkey was importing LNG via the world's largest FSRU rather than increasing purchases of Gazprom's piped gas as the LNG was almost 2 bucks/mmbtu cheaper. 

One common thread to these developments is that historical pricing for piped gas is tied to indexed crude oil pricing. 

As the US-centric Henry Hub pricing continues to maintain a surreal level of rock bottom numbers, traditional LNG or piped gas suppliers are simply getting rocked out of their boots. These players include Australia, Qatar, Algeria, Russia ... virtually any existing or emerging country looking to export natural gas.

Note ... just as political and social factors come into play with oil revenues vis a vis domestic monetary distribution, the natural gas producers are in the same boat.

With LNG module fabrication yards in China and Italy affiliated with McDermott, Fluor, BHGE, et al, cranking out ready-to-assemble components ...

With small and mid scale operators plunging in with innovations at blinding speed ...

It is simply incontestable to state that the global order in the energy world will see upheavals in the coming years unlike anything witnessed in years gone by.

Original Post

Link here to part 1.

This was EIA's projection back in 2009, for the 2010 report:

So, if I understand the graph correctly, back in 2010, the EIA forecast a ratio of 3 to 1 for price of oil to price of natural gas in usual methods of pricing oil and natural gas. If crude oil was trading for $60, then natural gas should be about $20.

So, how did their projections work out? Also from the EIA:

Price of oil is on the x-axis at the left (currently about $50) while the price of natural gas is on the x-axes on the right (currently about $2). And between 2010 and 2014, the spread was much wider.

The tea leaves suggest the spread may widen slightly over the next eighteen months:

• natural gas prices should come down another 25 cents;
• crude oil should increase another $2 to $5

For The Record -- A McKenzie County Spill -- December 9, 2019

From The Williston Herald:

A vibration that sheared off a bolt resulted in the release of 480 barrels of crude oil on Saturday, Dec. 7 in McKenzie County at an Encana subsidiary’s well site.

The spill was reported by Newfield Production Company at the Sturgeon 150-99-18-193H well (sic), which is located about 6 miles west of Watford City.

All of the crude oil that was released was contained to the required dikes and berms around the facility.

More at the link. I'm impressed. It is customary to report spills in "gallons." In this case it was reported in "bbls."

In fact, the well is Sturgeon 150-99-18-19-3H:

• 35979,  2,461, Sturgeon 150-99-18-19-3H, Newfield (Encana), South Tobacco Garden, t7/19; cum 96K 10/39, 42K well;

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	10-2019	30	26238	25897	33037	37369	36852	517
BAKKEN	9-2019	17	16890	16561	20398	24429	24164	265
BAKKEN	8-2019	28	41982	41767	47146	61110	60324	786
BAKKEN	7-2019	5	10596	10199	3502	12409	11396	1013

WTI Down, But Appears To Hold At $59; Whiting With One New Permit But Cancels Another Seventeen Permits; Bruin With Eight Huge DUCs Completed -- December 9, 2019

Active rigs:

$59.00	12/9/2019	12/09/2018	12/09/2017	12/09/2016	12/09/2015
Active Rigs	56	64	53	40	65

One new permit today, #37275:

• Operator: Whiting
• Field: Sanish (Mountrail)
• Comments:
• Whiting has a permit for another Roggenbuck Federal well in section 24-153-93, Sanish oil field

Whiting canceled another seventeen permits:

• 31239, Carscallen, Williams County, Truax oil field,
• 31237, Carscallen, Williams County, Truax oil field;
• 34443, Rennerfeldt, Williams County, Stockyard Creek,
• 30851, Sue, Williams County, Stockyard Creek,
• 30840, P Earl Rennerfeldt, Williams County, Stockyard Creek, 
• 30716, Kaldah, Williams County, Ray,
• 27411, Helling, Williams County, Ray,
• 26165, Zalesky, Stark County, North Creek,
• 26166, Zalesky, Stark County, North Creek,
• 30010, Kostelecky, Stark County, South Heart,
• 28292, Kostelecky, Stark County, South Heart,
• 29179, Iver & Minnie, Stark County, Zenith, 
• 36387, Ogden, Mountrail County, Sanish,
• 36390, Ogden, Mountrail County, Sanish,
• 33053, Mallow, McKenzie County, Pembroke,
• 26896, Faiman, Dunn County, St Anthony,
• 26895, Faiman, Dunn County, St Anthony,

Eight producing wells (DUCs) reported as completed:

• 31458, 6,311, Bruin, FB James 150-94-3A-10-6B, Spotted Horn, t11/19; cum --;
• 35962, 4,471, Bruin, FB James 150-94-3A-10-7T, Spotted Horn, t11/19; cum --;
• 35963, 4,103, Bruin, FB James 150-94-3A-10-8T2, Spotted Horn, t11/19; cum --;
• 35964, 5,029, Bruin, FB James 150-94-3A-10-9B, Spotted Horn, t11/19; cum --;
• 31455, 5,346, Bruin, FB James 15--94-3A-10-11B, Spotted Horn, t11/19; cum --;
• 31456, 4,617, Bruin, FB James 150-94-3B-10-12T, Spotted Horn, t11/19; cum --;
• 31457, 4,406, Bruin, FB James 150-94-3B-10-13B, Spotted Horn, t11/19; cum --;
• 31454, 5,603, Bruin, FB James 15-94-3A-10-10T, Spotted Horn, t11/19; cum --;