Check out that beautiful sky. Based on the number of storage tanks, there will eventually be far more than four wells on that site. Photo by James Ulvog.
A few articles of interest to me.
1/18 – Energy Media Group at Bakken.com – 5 oil full job still in demand in 2016 – Even with the drop off in drilling, there are five areas in which you can still find a job if you have the skill sets.
Article says those jobs are drivers with CDL, operators, production foremen, drillers, and field technicians.
Keep in mind the comment I’ve seen repeatedly that each producing well creates essentially one full-time job.
1/26 – Bismarck Tribune – Strip clubs receive second reading– The meaning of that headline is that rules to ban strip clubs from the downtown area were considered for the second time by the Williston city commissioners. City rules require considering a motion twice before it is considered approved. Second look at the rule resulted in unanimous approval.
Ten trillion Zimbabwe dollars. Not the largest currency in circulation, but close. Tragedy of hyperinflation is playing out again, this time in Venezuela.
The hyperinflation in Zimbabwe resulted in a ten trillion Zim note being worth four cents in American dollars. That would be:
Zim$10,000,000,000,000 = US$.04
When that level of financial devastation happens, it is the result of government policy. Usually socialists pull it off, but German also did so before WWII.
If you are so interested, you can now watch the sad story as it plays out in Venezuela.
2/3 – Wall Street Journal – Inflation-Wrought Venezuela Orders Bank Notes by the Planeload– Usually governments deal with out-of-control inflation by adding two or three zeros to the currency. Instead of the largest bill in circulation being a 100 unit note, the next run of currency is for a 10,000 unit note. In six months or a year there will be a 500,000 or 1,000,000 note in circulation.
Article says the Venezuelan government isn’t doing that because to do so would acknowledge the astronomical inflation. As the saying goes, denial isn’t just a river in Egypt.
Instead of acknowledging that inflation is running out of control, the government of Venezuela is flooding the economy with the same denomination note. In the last several months of 2014, the article says there were three dozen flights of 747s into the country hauling nothing but currency. Over 30 cargo holds filled with currency.
Out of focus photo of drilling rig and four not-yet-in-production wells by James Ulvog (yeah, yeah, I know – don’t give up my day job.)
Bruce Oksol wonders whether Bakken oil production is entering the manufacturing phase after a frantic construction phase.
2/3 – The Million Dollar Way – Idle Chatter on DUCs and Related Data Points – Before a big factory or electrical plant or other major project begins production there is a massive construction effort. The number of jobs to run the facility is a fraction of the number of workers needed to construct the thing. When completed, the number of jobs at the facility drops off.
Mr. Oksol uses the illustration of a natural gas plant being built. During construction there will be around 2,000 temporary jobs. When that gas is turned into electricity, the plant will employ 45. That’s 2,000 temporary and 45 permanent jobs.
He wonders if Bakken is like that, having finished the ‘construction’ and now moving into manufacturing.
Photo of multi fuel power plant courtesy of DollarPhotoClub.com
Bruce Oksol at The Million Dollar Way provides an updated scorecard on what he is seeing as the cost to construct a variety of electricity generating plants.
Previously mentioned a lot of players are involved with cutting edge efforts for space exploration. Russia is still a player. So is China. Here are a few articles on the Chinese efforts:
1/11 – Behind the Black – China has big plans in space in 2016– Summary of the following article. Recap says China has the goal of launching a new space station in 2016 and put staff on it along with initial launch of two new rockets.
While tech innovations have opened up new frontiers, innovation is disrupting some fields. Here are a few articles making this point that I’ve accumulated recently: newspaper circulation continues to collapse, higher ed is increasingly vulnerable to disruptions, and accreditation agencies (which illustrate regulatory capture) show why disruption is needed.
Reaper drone. Image courtesy of DollarPhotoClub.com
A few articles on military drone operations.
12/27 – Wall Street Journal – Air Force Looks Beyond Officers to Boost Drone-Pilot Ranks – USAF is moving towards having enlisted troops fly drones. To this point rated pilots had to be at the controls. The increased demands for joint operations combined with staffing limits along with the dreariness of the work has created a shortage of qualified pilots. To fill a gap, USAF may use enlisted pilots.
Unless you have lots of gunpowder or thousands of buddies , I suggest you not mess with this guy and his 6,000 buddies. Image courtesy of DollarPhotoClub.com
My friend John Bredehoft provides a different perspective on technology change. On 1/22 at his blog tymshft, he asked Do the essentials change?
He discusses a podcast comparing life today to about 35 years ago. For perspective, that puts us in 1981, or the range of the first year of the Reagan administration.
One of many points I draw from the discussion is related to Jon’s last comment:
But the speed of the processing chip in my smartphone is relatively meaningless.
Phrased differently, the smart phone in your hand may have an operating speed that is thousands or millions of times faster than 30 years ago but that increase doesn’t have an impact on your life in proportion to the increase in speed. Increased operating speed in the last decade probably hasn’t affected your life much at all.
A few articles of interest to me over the last two months: baby deliveries increase, airline boardings down, adjustments to low prices continue.
1/15 – Amy Dalrymple at Oil Patch Dispatch – While oil boom has slowed, births still booming– number of births in Williston and my not word a record number last year. The count at Williston’s Mercy Medical Center:
Long term housing for human traffickers. Duration of residence for Keith Graves has yet to be determined. Photo courtesy of DollarPhotoClub.com
Checked the docket in the federal PACER system again today for the now-convicted, felon, sex-trafficker Keith Graves.
No change since my last update on December 18. No new filings in district court. I can’t find any appeals in the 8th Circuit.
Sentencing is still set for February 17. That is just under four weeks away.
What’s noticeable by being absent is the sentencing recommendations from the federal Probation Office, opposition from Mr. Graves’ attorney, and rebuttal by US Attorney. At this point it sure seems to me there should be several filings regarding the recommended sentence. As of this morning, nothing has been filed regarding the sentence.
Thousands of wells can quickly be drilled and come on line when prices edge up. Three wells in 9/15 about to start production. Photo by James Ulvog.
Here are three very different articles on the future of crude oil prices.
One of the memorable things I learned in grad school was the idea that you can’t project the current trend of something into the future forever.
Keep in mind that West Texas Intermediate price was somewhere in the region of $100 a barrel in mid ’14. WTI is now about $26. Let me round off some calculations for simplicity. Let’s call that a current price of $30. Let’s call that a year and a half.
So we see a drop of about $70 in 1.5 years. A straight line projection would calculate out as another $45/bbl in another year. Thus, by 12/31/16 WTI price will be $30 minus $45, or a negative $15. Yes, you read that right. A straight line projection means that oil producers will be paying refineries $15 for every barrel the refiners agree to take off the producer’s hands. Gas prices will consist only of the refining costs, a humongous list of taxes, with an offset for the negative cost of raw material.
You can’t do straight line projections forever.
Here are three superb articles that help me understand what is going on in the world of crude oil…
After the Carnage, Shale Will Rise Again
Helms predicts oil prices to rise again in foreseeable future
Oil prices are quite cyclical. He points out there have been six extremes since the’73-’74 oil embargo. The extremes create turmoil. At the moment we are in the carnage stage of the cyclical extremes.
