Sunday, September 19, 2021

Notes From All Over -- Part 6 -- September 19, 2021

UK mess: UK energy firms seek bailout as government talks run on.  Sounds like the "Texas Freeze" but ... super-sized ... so much worse ...

Global mess: surging natural gas prices -- not just a UK story;

  • around the entire world;
  • link to The WSJ;
  • in the US, natural gas closed at $5.105; has doubled in the last six months; up 17% this month (so far);
  • last time prices this high: during the blizzards in the US northeast back in 2014;
  • analysts say that it might not have to get that cold this winter for prices to reach heights unknown during the shale era, which transformed the U.S. from a gas importer to supplier to the world.

Why Covid-19 remains the focus for Resident Biden:

  • my hunch is that the young Biden administration staffer thought the migrants crossing into Texas was funny until it wasn't;
  • link here;
  • only a matter of time before the Del Rio story becomes the "top story"; photo op if the 15,000 migrants start to "riot"

Notes From All Over -- Part 5 -- September 19, 2021

TCM: wow, wow, wow -- anything to avoid the NFL this afternoon, and TCM is airing Citizen Kane. Awesome. Enjoyed it again. Now, Doctor Zhivago. That's perhaps the only movie I can no longer watch. It is simply too painful for me to watch. There way too many "personal connections" with which I can connect, including the fact our older daughter spent a summer in Russia on her own during her college years. Watching the lead-in by TCM, I may have to re-read the novel. Oh, how cool is this? In between the movies, the five presenters answer the question, which one movie "lifts them up"? Ben Mankiewicz: Casablanca. I would have to agree.

Another week of swimming. Tuesday looks a bit cloudy ... but, other than that ..

Shortages? What shortages? Amazon is simply amazing. I arrived back home Friday night. My wife mentioned that some fluorescent lights in the kitchen had burned out and we needed to put in a work order to have the lights replaced. Instead, I ordered a six-pack of lights for $12 from Amazon. The lights arrived today, Sunday, less than 48 hours later. Lights replaced; wife happy. I hate "nickel and diming" our manager -- had we lived in our own house, it would have been the same -- it cost me $4. 

NFL: Dallas wins; Chiefs lose. “Every” analyst said the Baltimore Ravens would lose to the Kansas City Chiefs. On a separate note, NFL embraced gambling as soon as SCOTUS made it legal.

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New Earrings

The Magnitude Of Natural Gas Reserves In The US -- September 19, 2021

Disclaimer: I often make simple arithmetic errors and often misread things. If this is important to you, go to the source. 

Re-posting.

From a reader who follows the Appalachia, Marcellus, Utica, very, very closely -- 

The well: the Deremer 2HC, 3,617,694 boe  / 22 months on line -- the "Mighty Marcellus' best! 
Succinctly, I present you with data, with some context - current to July, 2021 - of the very best Marcellus well.
 
This in an effort to show the scale of what has been unfolding in the Appalachian Basin ...

Numbers:
  • 20,982,624,000 (just shy of 21 billion) cubic feet production (3,627,694 boe using 5.8 conversion factor)
  • 658 days online (~22 months)
  • July output 18,291 million cubic feet per day, oil energy equivalent of 3,153 barrels per day 
  • currently ranked #7 all time producer, on track to be #1 in a few months
Context:

     This one well can provide the annual residential gas needs for the cities of Cincinnati, Pittsburgh, and Buffalo COMBINED. (75,000 cubic feet per  household/year ... 3 persons/household)

The 5 wells on this Deremer pad all came online 22 months ago and have cumulatively produced 70 billion cubic feet ... enough to supply the annual residential gas needs of Philadelphia, Boston and Atlanta COMBINED

At a cost to drill and complete of approximately $50 million, this pad shows the incredible potential to any and all who continue to disparage embracing the  hydrocarbon bounty that lies beneath our feet.

Population / costs:

  • the cities:
    • Boston: 700,000
    • Philadelphia: 1.6 million
    • Atlanta: 500,000
  • population total: 2.8 million
  • one year to drill / complete the wells: $50 million
  • $50 million / 2.8 million = $18 / resident / year -- assuming these wells produce for only one year, which, of course, is not the case. 

By the way, this is why the EU has worked so hard to convince Americans of global warming. The gap between the energy available in the US and the EU is absolutely incredible. The EU desperately needs to keep the US from gapping ahead of the EU. The EU will do anything to make US energy costs equal to that of the EU. 

Notes From All Over -- Part 4 -- The Home Mortgage Edition -- September 19, 2021

Link here.

Small and midsize metros with the highest loan approval rates.

Small metros:

  1. Iowa City, IA
  2. La Crosse, WI
  3. Fargo, ND
  4. Bismarck, ND
  5. Sioux Falls, SD

Midsize metros:

  1. Madison, WI
  2. Des Moines, IA
  3. Provo, US
  4. Boise City, ID

Large metros with highest loan approval rates:

  1. Minneapolis, MN
  2. St Louis, MO
  3. Portland, OR
  4. Salt Lake City, UT
  5. Kansas City, MO
  6. Seattle, WA

In other words, fly-over country.

Notes From All Over -- Part 3 -- The Natural Gas Edition -- September 19, 2021

Updates

September 19, 2021:

From a reader who follows the Appalachia, Marcellus, Utica, very, very closely --  

    The well: the Deremer 2HC, 3,617,694 boe  / 22 months on line -- the "Mighty Marcellus' best! 

        Succinctly, I present you with data, with some context - current to July, 2021 - of the very best                Marcellus well.
 
        This in an effort to show the scale of what has been unfolding in the Appalachian Basin ...
       
        Numbers
:
  • 220,982,624,000 (just shy of 21 billion) cubic feet production (3,627,694 boe using 5.8 conversion factor)
  • 658 days online (~22 months)
  • July output 18,291 million cubic feet per day, oil energy equivalent of 3,153 barrels per day 
  • currently ranked #7 all time producer, on track to be #1 in a few months
Context:

     This one well can provide the annual residential gas needs for the cities of Cincinnati, Pittsburgh, and Buffalo COMBINED. (75,000 cubic feet per  household/year ... 3 persons/household)

The 5 wells on this Deremer pad all came online 22 months ago and have cumulatively produced 70 billion cubic feet ... enough to supply the annual residential gas needs of Philadelphia, Boston and Atlanta COMBINED

At a cost to drill and complete of approximately $50 million, this pad shows the incredible potential to any and all who continue to disparage embracing the  hydrocarbon bounty that lies beneath our feet.

Population / costs:

  • the cities:
    • Boston: 700,000
    • Philadelphia: 1.6 million
    • Atlanta: 500,000
  • population total: 2.8 million
  • one year to drill / complete the wells: $50 million
  • $50 million / 2.8 million = $18 / resident / year -- assuming these wells produce for only one year, which, of course, is not the case. 
By the way, this is why the EU has worked so hard to convince Americans of global warming. The gap between the energy available in the US and the EU is absolutely incredible. The EU desperately needs to keep the US from gapping ahead of the EU. The EU will do anything to make US energy costs equal to that of the EU. 

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Original Post 

Link here.

UK/ Europe: US manufacturer CF Industries and Norwegian chemical producer Yara International ASA announced closure of their facilities due to extraordinarily high European natural gas prices.

UK Steel: will close some steel plants across the UK due to high energy prices.

Freeport LNG, Texas: remained without power Friday; unclear when the plant might return to service.

Cheniere Energy, Inc: asked for FERC approval for a sixth train at Sabine Pass LNG in Louisiana. Approval was requested by Tuesday, September 21, 2021 (good luck with a Dem-dominated FERC). Train 6 is expected to be complete in 1Q22. 

Predictions: I don't know if folks recall but only a few years ago, "everyone" was predicting a natural gas shortage in the US and these export terminals were being proposed as import terminals. Then... the Bakken revolution. From twitter:

O&G on Twitter: "In the early 2000s the O&G industry warned everyone that the US would run out of natural gas in 10-15yrs. Those forecasts were spectacularly wrong. Green energy forecasts will also be spectacularly wrong Nobody has a monopoly on being wrong on long-term forecasts." / Twitter

By the way, that was about the time, the experts saw the need for the Keystone XL: ultimately killed by .. Resident Biden. Will we see $150-WTI due to this bone-headed decision?

Bloomberg: winter is coming and Europe is running scarily low on natural gas. Bloomberg used the word "scarily." I used the word "unnerving" earlier this week. I like "unnerving" better.  

NY Times: shutdown of fertilizer plants puts British meat supply at risk. Link here. I can't imagine this happening overnight but it may surprise me. This is the problem:

... carbon dioxide is used to stun animals like pigs and chickens before they are slaughtered, under regulations intended to protect animal welfare. The gas is also injected into meat packaging to extnd the shelf life in supermarkets.

Once current stocks of carbon dioxide run out -- less than fourteen days are left -- some companies would need to "stop taking animals and close production lines."

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How Bad Has It Been In The Bakken

From NaturalGasIntel:

The “number of well completions has been low and volatile since April 2020,” Helms said. The number of active completion crews declined “from 25 to one, then increased to six in July and to 12” as of Friday. 

With all due respect to Art Berman, the long pole in the tent in the Bakken is not the number of active rigs, but the number of frack spreads. One can drill wells -- at the rate of one well every six days for each rig -- until the cows come home, as they say, but without fracking them, they are simply DUCs. And, oh, by the way, all things being equal, fracking generally slows down in the cruel months of January and February in North Dakota.

The big question, unanswered, is whether operators are able / not able to get the frack spreads they want.