Jim Ulvog – Page 45 – Outrun Change

More signs the North Dakota infrastructure is catching up

If you let an economy function, market forces will create pressures to smooth things out. The forces of supply and demand have an amazing ability to balance a temporarily unbalanced marketplace. Several recent articles illustrate this concept in North Dakota.

11/17 – Amy Dalrymple at Dickinson Press – Pipelines now outpacing trucks for gathering Bakken oil – After oil is pulled on the ground it needs to be moved from the well pad to either a rail-loading terminal where it leaves the state by rail or it gets moved to a major transmission pipeline where it leaves the state by pipe.

The oil is initially moved by either trucks or underground pipes.

The number of small gathering pipelines to carry oil away from the wells is finally large enough that more oil is moved by gathering pipelines than by trucks.

Continue reading “More signs the North Dakota infrastructure is catching up”

What might North Dakota oil production have looked like without the drop in crude oil prices?

How many rigs do you see? There are 2 clear rigs in addition to the obvious one. High magnification suggests there are at least another half dozen on the horizon. Photo by James Ulvog in October 2014. — How many drilling rigs do you see? There are 2 rigs for sure in addition to the obvious one. Looking under high zoom suggests there may be another half-dozen on the horizon. Rig towers are much wider than power poles and shorter than the radio tower. Photo by James Ulvog in October 2014.

Just as a matter of pure speculation, I wonder what production of crude oil might be if OPEC, I mean Saudi Arabia, had not opened the production spigots in late 2014?

What might the output be if growth continued at the rate of the last few years?

I tried graphing the production trend assuming the growth in output continued at the average rate of the last two years.

First the graph showing my guess, then my assumptions:

Now my assumptions.

Continue reading “What might North Dakota oil production have looked like without the drop in crude oil prices?”

Follow-up on athletic fiascos at Penn State and UNC Chapel Hill

Pennsylvania State University (Penn State). Fisher Fine Arts Library building. Photo courtesy of DollarPhotoClub.com

Historic Old Well at UNC Chapel Hill. Photo courtesy of DollarPhotoClub.com

I’ve not been watching closely for updates, but have seen a few articles on the massive scandals at Penn State and University of North Carolina Chapel Hill.

12/1/15 – Newsworks – Penn State, insurer scuffle over paying Sandusky victims – Penn State may have skated by with the serious consequences from NCAA getting reversed, but the legal liabilities are adding up. The University has already paid $92.8M to settle 32 cases, with many more still in the works with an unknown number of unresolved cases.

Their insurer is refusing to cover the full tab. As a result, the school and insurer will be going to court in 2016 to address their cross-claims.

Continue reading “Follow-up on athletic fiascos at Penn State and UNC Chapel Hill”

Near-term forecast for Bakken production

Amy Dalrymple reports comments by Mr. Lynn Helms on what might happen in the Bakken oil patch over the next six months. Her article is at Dickinson Press on 12/9: Low oil prices for some drillers to sell; but new operators the opportunity.

First point in the article, which drives the headline, is a number of operators have sold 710 wells to operators moving into the state. Obviously the prices are based on what crude is going for now, which means these are long-term bets that prices will be substantially higher in a few years. If those bets are correct, the new players will score big. In the meantime cash-pressed operators are selling off peripheral assets so they can stay alive to focus on core assets.

General directions for 2016

Continue reading “Near-term forecast for Bakken production”

North Dakota oil production increases half a percent in October ‘15

Average daily production in the state increased from 1,162,159 average bopd in September to 1,168,950 bopd in October. That is an increase of 6,791 bopd, or 0.58%, just over half a percent.

Fracklog dropped from previously reported 1,091 to 975. That is still a huge amount of oil sitting on the shelf, just waiting for a frackjob to start producing.

Not quite what OPEC, I mean the Saudis, had planned when they adopted their plan to take out US shale.

Average price of sweet crude in the state is $27.00 now, was $32.16 in November, and $34.37 in September. That info from the Director’s Cut. That is really low.

That is perhaps what OPEC, err, the Saudis, were thinking.

Here are my regular basic production graphs. Won’t have the others this month.

Still looks sort of like a plateau.

Here is the long-term view:

Continue reading “North Dakota oil production increases half a percent in October ‘15”

“Corruption Is Just a Symptom, Not the Disease”

Professors Daron Acemoglu and James Robinson explain Corruption Is Just a Symptom, Not the Disease / To end global poverty, stop tolerating national institutions that serve greedy elites and suck poor countries dry, on 12/5 in the Wall Street Journal.

Corruption is the highly visible symptom of much deeper issues.

The real problem?

The lack of an operating justice system. The lack of accountability. The lack of a free press that can actually get away with challenging those in power – that means reporters don’t get beat up, thrown in jail, or killed when they irritate political leaders.

Continue reading ““Corruption Is Just a Symptom, Not the Disease””

More impact from low oil prices

Pumps on new wells being installed in 9/15. Not exactly a sign of a collapsed industry. Photo by James Ulvog. Check out that beautiful sky.

Two previous posts discussed OPEC’s decision to maintain production and some of the implications. Here are a few more articles on the impact of low prices. Also, great illustrations of how the assets will be bought up by stronger players at bargain prices.

12/4 – Reuters media at Dickinson Press – Shares of Bakken Shale oil producers plummet after OPEC decision – Lack of a production cut and realization that OPEC production will actually exceed their announced limit combined with Iran ready to jump into the market pushed oil prices down. That in turn pushed down stock prices of North Dakota producers.

One industry representative is quoted as saying OPEC’s goal is to

“… outlast {U.S.} shale oil exploration and production…”

Yeah, I think that’s the worldwide consensus on the OPEC, I mean Saudi, goal.

12/1 – Dickinson Press – US oil companies’ restructuring plans founder as prices plunge – Continue reading “More impact from low oil prices”

Everyone everywhere has gotten far richer in the last 200 years. Hmm. I wonder how that happened?

After you celebrate that the average level of income has increased radically in the last 200 years, ponder how that happened.

10/18 – Max Roser – Economic World History in One Chart – Mr. Roser is superb with data visualization. Tweet from Max Roser ?@MaxCRoser :

Economic world history:
1800 Poor & equal
1970 Unequal
2000 Much richer & more equal again.

Click here to see the very cool graph. Keep in mind it is on a logarithm scale, roughly meaning that each marked increment on the horizontal axis is an increase of 50% or 100%.

Continue reading “Everyone everywhere has gotten far richer in the last 200 years. Hmm. I wonder how that happened?”

Oil prices will remain low after OPEC, uh, I mean after Saudi decision. 2 of 2

Previously discussed the decision by OPEC on 12/4/15 to maintain production. That will keep prices low and sustain the worldwide glut of oil. Also mentioned my opinion that OPEC is now the front for Saudi Arabia.

12/2 – Million Dollar Way – OPEC’s Pyrrhic victory – Post pointed me to the following two articles. The MDW post includes quotes of key paragraphs from both articles.

Pyrrhic victory?

11/30 – John Kemp at Reuters at Rigzone – OPEC Risks Pyrrhic Victory With Oil Policy – Article starts by explaining how King Pyrrhus won a big victory over the Romans but lost a huge number of men leaving him no reserves and also costing him most of his generals. The Romans merely advanced a few more legions and were ready to go again. King Pyrrhus? Not so. The two victories emptied his army.

Join with me as I learn more about that phrase. Wikipedia quotes Plutarch, who explains: Continue reading “Oil prices will remain low after OPEC, uh, I mean after Saudi decision. 2 of 2”

Coal powered electric vehicles

Energy source for electric vehicles in Netherlands, China, and many places in the U.S. Photo courtesy of DollarPhotoClub.com. Um, by the way, that’s a coal plant.

In addition to having distance capacity which may or may not be sufficient to get you where you want to go in a day, electric vehicles (EVs) are frequently powered by coal, can drain the grid during the day, and eventually they may force replacement of every neighborhood transformer in the grid.

11/23 – The Washington Post – Electric cars and the coal that runs them – Electric vehicles require huge amounts of electricity. Article says one charge takes as much electricity as a refrigerator uses in a month and a half. That electricity has to come from somewhere, even more so when a country has dramatically increased the amount of EVs on the road.

In Netherlands electricity to charge EVs comes from coal. Yes, coal.

To handle the huge increase in electricity demand because of EVs, the country has built three brand-new coal-fired power plants, of which two are at the Rotterdam Harbor.

Continue reading “Coal powered electric vehicles”

Oil prices will remain low after OPEC, uh, I mean after Saudi decision. 1 of 2

Oil prices will remain low after an OPEC decision on December 4 not to reduce production. Sure looks to me like OPEC is now essentially Saudi Arabia. What the Saudis decide is what OPEC will do. And what the Saudis have decided is to maintain production. Thus prices will continue at the current low level and the worldwide glut of oil will continue. In addition the OPEC producers will continue to burn up their foreign reserves.

12/4 – Wall Street Journal – OPEC Meeting Ends With No Production Cuts / Meeting marked by deep divisions; ‘shale is the new reality’ – Article points out a dramatic disagreement. Producers such as Iran and Venezuela want to maintain their production and have Saudi Arabia alone absorb enough of a production cut to balance the market.

Continue reading “Oil prices will remain low after OPEC, uh, I mean after Saudi decision. 1 of 2”

Diverging opinions on the U.S. bill to allow asteroid mining.

Image of asteroid courtesy of DollarPhotoClub.com

I previously mentioned the U.S. House and Senate had passed a bill which would allow private mining of asteroids. Ownership of the asteroids wouldn’t be allowed but a company extracting resources from asteroids would have lawful property rights to the material.

The law was signed – 11/26 – Space Daily – Pres. Obama signs bill recognizing asteroid resource property rights into law – The President signed the bill to allow companies to have ownership interest in resources mined from asteroids. Ownership of asteroids is not allowed, but what you mine you own.

Now for a completely different perspective:

11/27 – Gbenga Oduntan at Space Daily – Who owns space? US asteroid-mining act is dangerous and potentially illegal – Author asserts that activity in space “requires international regulation” which means the US Congress has no authority except to ratify international treaties.

Continue reading “Diverging opinions on the U.S. bill to allow asteroid mining.”

Update on the wide open frontier of technology – 12/3

A few recent articles that fascinate me. Amazing things engineers can do. Pondering the lack of discretion from red-light revenue generators. Air Force use of civilians to pilot drones flying in combat zones.

10/20 – Link from Behind The Black – What the engineering wizards can figure out amazes this office-living accountant. Check out the huge machine that puts an entire bridge section in place.

Well, since I saw the video, the account has been closed. What it showed was a huge machine that advanced it self to the next pylon and pulled over the gap an entire bridge section and put it in place.

11/20 – Tymshft – Can robots issue citations? More importantly, can people issue citations? –

Continue reading “Update on the wide open frontier of technology – 12/3”

Update on marijuana regulation – use of pesticides in Colorado – #22

My hypothesis is that state legalization of recreational marijuana sales is a giant natural experiment to test whether heavy-handed state regulation will constrict a newly legalized industry.

My interest in this topic is limited to watching how regulation slows economic development. Recreational marijuana is a new enough and small enough industry that we can actually watch the impact of regulation. Here are a few articles on recent news I have noticed:

10/4 – Denver Post at The Cannabist – Deep dive: Why Colorado has struggled to regulate pot pesticides – Article points out the EPA has provided no guidance on what pesticides are safe on marijuana.

According to the article, this left state regulators and the marijuana industry arguing about what pesticides are allowed and what is banned. Multiple comments indicated regulators wanted more restrictions and industry wanted very light restrictions.

The article follows the typical arguments you would expect for any industry that is regulated by the state or federal government. See if the following sounds like the same story as in dozens of other industries:

Continue reading “Update on marijuana regulation – use of pesticides in Colorado – #22”

Ban on crew camps in Williston moving forward with possible compromise. Maybe.

The Williston city commissioners have moved forward with their plan to shut down man camps and throw housing business to the hotels and apartments in town.

11/24 – Amy Dalrymple at Oil Patch Dispatch – Compromise possible for Williston crew camps – On 11/24 the commissioners held their ‘second reading’ and voted 3-2 to eliminate all crew camps within the city and their one-mile extraterritorial reach. That means all man camps they can touch will have to be closed by June 30, 2016.

Oil companies say they need temporary housing for workers that cycle in to the area for short or unknown lengths of time.

The mayor indicates there might be some room for some sort of compromise.

Continue reading “Ban on crew camps in Williston moving forward with possible compromise. Maybe.”