Outrun Change

We need to learn quickly to keep up with the massive change around us so we don't get run over. We need to outrun change.

Archive for the category “Energy”

More updates on the purge in Saudi Arabia

Kingdom Tower in Riyadh, Saudi Arabia. Image courtesy of Adobe Stock.

As pointed out in the last article mentioned below, few articles on Saudi Arabia are going for the idea that the current wave of high-profile arrests is really about fighting corruption. There is a far deeper effort. Here are my comments on a number of articles from the last few days. Sort it out for yourself.

11/6/17 – Karen House at Wall Street Journal – The Strategy Behind the Saudi Strife   – Article provides a more nuanced background on the arrests. One entertaining point, which I mentioned in earlier post, is that with the widespread malfeasance, misfeasance, and flat-out corruption, every Prince and every official is vulnerable to charges of corruption. I’ll guess every person with any government or business power has created massive amounts of electronic evidence.

Article speculates this is a part of the effort to modernize by MBS. Going after a huge number of corrupt senior royals, high-level businessmen, and a wide variety of government officials not only sends a very powerful message that the corrupt old days are gone but puts fear into everyone that hasn’t been arrested yet. It won’t take long for realize that they either play along and keep quite or go to jail. Article says this will have the benefit of increasing his popularity with younger people.

More importantly, consider this in relation to the dramatic efforts for social change over the last year. Granted there needs to be humongous social change to catch up with the 20th century, but there has been a dramatic amount of change in the last year. If those efforts create individual freedom, the current anti-corruption campaign makes corruption a bad thing, and the social guard rails of the religious police go away, then there might be a chance, slim though it may be, that the country could actually modernize and move beyond its deadly addiction to oil.

All these pieces fit together as a crash course in modernization, according to Ms. House’s theory in the article. The main idea is that personal freedom could lead to financial responsibility which could lead to entrepreneurialism and a vibrant, expanding economy.

11/7/17 – The Guardian – “This is a revolution”: Saudi’s absorb Crown Prince’s rush to reform – Article also makes the point that the massive arrests are part of a major effort to transform the country. The super elite, who are untouchable until last weekend, will now be removed or warned to get out-of-the-way.

Article points out the changes so far this year have been radical. The religious police have lost much of their power. More social changes on the way. Another article mentioned below says a lot of clerics and activists got arrested in September.

Read more…

Mid-day update on turmoil in Saudi Arabia

Flag of Saudi Arabia on flagpole. Image courtesy of Adobe Stock.

I had been thinking that there might be enough news out of Saudi Arabia for an update every few days.

Silly me.

This is my second post of the day, my third since news of the crackdown broke on Saturday.

Another Saudi prince died over the weekend. During a gun fight. With government forces. While the government was trying to arrest him.

11/6/17 – Zero Hedge – Second Saudi Prince Confirmed Killed During Crackdown – A prince was killed during a firefight between his security team and the government. The government team (military? Security agency? Police?) was trying to arrest him.

This prince was the youngest son of King Fahad.

King Fahad ruled from 1982 through 2005. He was one of Ibn Saud’s 45 sons and the fourth of the six sons who ruled. Read more…

Goal of weekend arrests in Saudi Arabia is getting clearer

Flag of Saudi Arabia. Image courtesy of Adobe Stock.

The purpose of dozens of arrests on Saturday in Saudi Arabia is becoming clearer. It was not a coup attempt and not a counter-coup. Picture now emerging is of a purge, removing opposition.

For more background, check out post from Saturday night.

11/5/17 – Associated Press – Billionaire prince among dozens arrested in Saudi sweep – Article categorizes the arrests as a power consolidation, removing dissenting voices.

Article says Saudi Arabia was, up until this point, ruled by consensus with the king having final authority on decisions.

Article also says unnamed analysts have explained that the senior level princes were untouchable up until now, meaning they didn’t worry about having to follow the law.

Read more…

Counter coup, or power consolidation, or something else going on in Saudi Arabia

Image courtesy of Adobe Stock.

Looks like a coup. Oh, wait. A coup is when the out-of-power people toss out the in-power people. This is a case of the in-power people deposing a bunch of other in-power people because, um, I don’t know.

Maybe it is power consolidation. Maybe it is a counter-coup. Maybe I don’t have any idea what it is and neither does anyone else with a byline. Another option is purge.

11/4/17 – Wall Street Journal – Saudi Princes, Former Ministers Arrested in Apparent Power Consolidation – At least ten senior princes and over 20 (per article) cabinet members were arrested on corruption charges Saturday night.

One was Prince al-Waleed bin Talal, a billionaire, prominent investor in U.S., and often an interviewee on US TV business shows.

Read more…

More economic problems for wind and solar

Photo of wind turbines north of Tioga, N.D. by James Ulvog.

Lots of money is pouring in to construction wind and solar plants, but that will continue only if the massive subsidies stay in place.

7/25/17 – AP at Billings Gazette – Montana ruling casts shadow over future of solar farm – Montana state regulators approved a 80 GW solar plant with reported cost of about $100M.

The approval allows the output to be sold at only $20 per megawatt and that contract only runs for 10 years. Presumably after that time the company would have to sell whatever output is actually generated at market prices.

Company wants a 25 year contract at $43.50. Anything less than that makes it uneconomical.

Let me translate that.

The project will only be profitable if all of the following conditions are met:

Read more…

More economic and environmental fails from wind energy

Still about 4 or 5 miles away from the turbines. Many of the towers are visible from highway 2. Photo of wind turbines north of Tioga, N.D. by James Ulvog

The bad news from slicer-and-dicers just keeps rolling in.

  • Article describes lack of CO2 benefit while running up cost of electricity in Minnesota
  • Description of environmental cost of building a wind tower

10/15/17 – Powerline – “Green” Energy Fails Every Test – Minnesota is touted as a model of green energy. With around $15 billion poured into wind power, the state is a good example of the damage from green.

More wind is produced in spring and fall, which does not correlate to when more electricity is needed, which is summer and winter.

So how has that $15,000,000,000 dumped into bird chopping turbines turned out?

CO2 emissions from the state, according to a new study, have only declined slightly. The drop during 2 years was due to an accident that took a coal plant off-line. Other than that, the drop is CO2 has been minor; nothing like what was supposed to happen with all that wind power.

Main reason is wind is very unreliable. When those slice-and-dicers aren’t producing, the energy comes from backup coal plants. So when there is little wind and high demand in the summer and winter, where does the extra electricity come from?

Read more…

Additional graphs of North Dakota oil production in August 2017

Notice the large size of the nearest pad in relation to the wells in place and the number of storage tanks. There will be many more wells on that pad when it is finished. Photo by James Ulvog.

Here are more views of crude oil production in August. Previous post mentions the output hit 1.087M bopd in the month.

The 10/10/17 Director’s Cut says the DMR thinks the daily count of drilling rigs will drop if WTI goes below $45 for over 30 days. If WTI is above $55 for over 90 days, the rig count will increase.

That suggests price stability in the range of $45 to $55 will keep the rig count around the current level of 57.

The rig count has been in the high 50s for the last few months. It seems to have stabilized since spring 2017 and is up substantially from the low. Remember that the rig count today does not compare to the rig count a few years ago because drilling rigs today are far more productive than just two years ago.

Here is the view of monthly rig count:

What is the value of the crude produced at the average sweet price in the state? Check it out:

Read more…

Crude production in North Dakota rises to 1.08 million barrels a day in August 2017

Based on the number of storage tanks on that pad, I’ll guess there will be a lot more than 2 wells operating on that site in a few years. Photo by James Ulvog.

Production of crude oil in the state rose to 1,085,690 bopd in August, an increase of 36,591 bopd from the updated production of 1,048,099 bopd in July. That is a 3.49% increase.

For context, that is the highest daily production since March 2016. On the front end of the boom, production did not rise to that level until June 2014.

The Williston Herald reports comments from Mr. Helms: Rigs moving away from Bakken’s core, but gas production still hits new high. Rigs are being deployed outside the core area of Bakken, away from the best sweet spots. I’m not sure what that means, but will guess it is an indication that drillers are more confident that prices will stay roughly where they are now or better.

Here is a graph of crude produced in the state and from the Bakken formation (along with Three Forks):

Read more…

Energy update

Five more reasons Saudi Arabia is in a jam and American pipelines are overfull. There will be many more reasons on that site before all the drilling is done. Oh, check out that gorgeous sky. Photo by James Ulvog.

A few articles that caught my interest over the last months on energy issues:

  • Another new field with one and half or two billion barrels of oil that not even the energy wizards were sure was there – Oh yeah, what Peak Oil?
  • Saudi Arabia cracks down
  • Two billion a year is consumed for lifestyle support stipends paid to every descendant of the house of Saud
  • Pipeline capacity is constraint for otherwise expanding shale production
  • US hit crude export level of 1 million barrels a day this past summer

What Peak Oil?

7/12/17 – Houston Chronicle – Houston’s Talos Energy makes ‘significant’ find in Mexico’s waters – Two years ago the Mexican government allowed private companies to start exploring for oil in the country. The improved freedom for private companies to do what private companies do is paying off.

On 7/12 Talos Energy announced the “Zama-1” exploratory well has confirmed a new find which is estimated to hold between 1.4 billion and 2.0 billion barrels of oil-in-place.

Oil that can now be pulled from under the ocean to provide energy to a fuel-hungry world.

Read more…

Updates from Bakken – 1M bopd is new normal; number and size of fracking crews

Natural gas processing plant at Tioga, ND. Photo by James Ulvog.

Interesting articles of late:

  • 1M bopd is ‘new normal’ for North Dakota.
  • Number of fracking crews in North Dakota and typical staffing size for a crew.
  • Cleanup of large leak near Tioga is nearing completion, with planting possible in the spring.
  • Wells fracked early in the boom might be re-fracked for large increase in total production.

9/18/17 – Williston Herald – Million barrels a day is the “new normal” for North Dakota – Graph of production of the last 12 months shows from 29 to 32 million barrels a month, which is around 1 million a day.

In a webinar, Lynn Helms, director of the Department of Mineral Resources said with oil prices, rig count, and number of fracked crews at the current stable level, the production will remain at 1 million a day. He calls it a “soft landing”.

He said production is somewhere in the range of 5% or 6% above the level built into the state revenue forecast. Prices are about 9% below what is built into the budget.

He indicated the consensus is that if the price of West Texas Intermediate goes above $50 there will be increased activity in drilling and completion.

Article provides insight on hydraulic fracturing. There are currently enough crews in place to keep up with the wells drilled by the current count of 56 rigs. Mr. Helms thinks if prices are in the $50-$60 range there will be six more fracking crews put in the field to supplement the 25 currently in place. That will reduce the fracklog.

A fracking crew has somewhere between 45 and 65 staff.

Read more…

Background on the power struggle inside Saudi Arabia and why things won’t be getting better for OPEC anytime soon.

Oil refinery in Utah. Off-angle photo by James Ulvog.

It took a short while, but more info emerged on the power transition inside Saudi Arabia. When there are no elections and dissent is not allowed in a country, armed and coercive backroom power plays determine who is in power.

Also, the distress on OPEC+Russia isn’t likely to end soon.

7/2/17 – Wall Street Journal – Saudi Arabia Moves to Silence Deposed Prince, Dissidents – Article says the newly appointed Crown Prince, Mohammed bin Salman, has placed travel restrictions on the former Crown Prince.

More serious is that the former Crown Prince’s personal guards have been replaced with other guards loyal to the royal court. From my reading of court intrigue from ancient history, which I think carries over to a modern autocratic country, a leader recruits guards whose primary loyalty is to that leader. Replacing a leader’s guards represents a significant degradation in the power and especially the ability to someone to intervene politically. It also is a serious drop in the level of personal security.

Read more…

Illustration of relation between proved reserves, economically & technically recoverable and original oil in place.

Here is a graphic that shows how the different categories of oil and gas relate to each other.

From most certain to least certain and then the total:

  • Cumulative production to date
  • Proved reserves
  • Economically recoverable resources
  • Technically recoverable resources
  • Remaining oil and natural gas in-place
  • Original oil and natural gas in-place

 

Courtesy of U.S. Energy Information Administration.

This illustration is from Technically Recoverable Shale Oil and Shale Gas Resources, from the U.S. Energy Information Administration.

Hat tip: The Million Dollar Way

Update: If you have any passing interest in what I say about the energy industry or oil or North Dakota, you really, really should be reading The Million Dollar Way regularly. If you landed here from the gracious shout-out over at MDW you already knew that. Mr. Oksol’s writing at that blog has provided a large portion of the learning I’ve gained on energy issues.

Increased interest in “The Overnighters” documentary – part 3 of 3

Flaring of natural gas. A common site in 2012 and 2013, but is rare today. Photo by James Ulvog.

There has been a lot more interest in my posts on “The Overnighters” documentary recently. This is the third and final part of this series of followup on the documentary. Previous discussions include my disclosures, and reporting with agendas.

This post will close with some lessons we can learn from this disaster.

Other articles

As I was looking for some source of the increased interest lately, I also came across some older articles I’ve not noticed before. Keeping in mind my extended discussion in part 2 about writing with agendas, these additional articles have a minimal agenda visible.

Read more…

Increased interest in “The Overnighters” documentary – part 2 of 3

Flaring of natural gas. A common site in 2012 and 2013, but is rare today. Photo by James Ulvog.

There has been a lot more interest in my posts on “The Overnighters” documentary recently. This is part 2 of my followup on the documentary. Previous discussion, including my disclosures, is here.

Might want to get a fresh cup of coffee. This will be a long read.

Reading a story when I know more than the reporter

It is fascinating to read coverage of a story when I have in-depth knowledge of the issue.

Read more…

Increased interest in “The Overnighters” documentary – part 1 of 3

Flaring of natural gas. A common site in 2012 and 2013, but is rare today. Photo by James Ulvog.

There has been a lot more interest in my posts on “The Overnighters” documentary recently. In particular, my 7/2/15 discussion of Where are they now? Follow up on people you saw in The Overnighters documentary has been getting a lot of page views. It has been running between 100 and 130 views a month for the last six months, with a peak of 217 views in January. Yesterday, 7/16/17, there were 62 views.

While those counts of page views are trivially small for the internet world, that’s a lot of attention to one of my posts, especially one that is two years old.

Did some searches online and cannot find what in particular is driving that growing interest. Did find a few things that I wanted to mention.

“Overnighters” streaming on Netflix in July and

running on lots of PBS stations

Read more…

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