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 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:

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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):

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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.

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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.

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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.

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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

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Average daily oil production in North Dakota down 0.98% in May 2017

Oil production in the state dropped about 1% in May, falling from average of 1,050,476 bopd in April (final) to 1,040,131 bopd in May (preliminary) That is a drop of 10,345 bopd for the month.

Million Dollar Way highlights the NDIC says a shortage of experience workers is slowing down completions.

Article also points out it will take another month to see what impact DAPL will having on the amount of oil shipped by rail. This is a big deal on the revenue realized by producers.

The spread between West Texas Intermediate and what Bakken producers get is about $11 a barrel. That is the cost of transport. The spread is expected to be $6 or $7 for oil shipped through DAPL.

Here are a few graphs to tell the production story:

Average production for state and Bakken only:

Value of monthly production, which seems to have stabilized in the last six months or so:

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More on the downside of unreliable wind power: paying for decommissioning costs

I count 64 turbine towers in that view. Photo by James Ulvog, somewhere southwest of Williston, en route to Denver.

There will be major costs involved in decommissioning wind turbines. Who will pay?

3/8/17 – Stop These Things – Farmers “Hosting” Wind Turbines Faces Massive Clean Up Bills & Other Legal Liability – Legislation is under consideration which would force wind power companies to set aside money to decommission the turbines. At the moment the corporate shells holding the producing assets have nothing set aside. Without some requirement for accumulating reserves, neither the holding company nor the entity’s parents will have any responsibility to clean up the site. There will be no recourse by landowners or regulators to force the then-empty shells to clean up the sites.  That will leave the landowner or the local government or the national government holding the bill for decommissioning.

Disposing of a wind turbine means finding some way to get rid of the toxic blades, the generator containing large amounts of rare earth metals, and 1000 metric tons of buried concrete.

Situation is similarly bad in Australia. Read more…

More on the downside of unreliable solar power: Paying to get rid of excess electricity.

Photo by James Ulvog.

There is so much excess electricity from solar power that sometimes California has to pay utilities in other states to take it. Also, what will we do with all those panels when they wear out?

6/22/17 – Los Angeles Times – California invested heavily in solar power. Now there is so much that other states are sometimes paid to take it – There are two non-negotiable physical laws that undercut the value of solar power.

First, electricity must be used the instant it is generated. Second, solar power is generated when the sun is bright not necessarily when the electricity is needed.

Some days, there is so much solar power in California that “we” have to pay utilities in Arizona to take the electricity in order to keep from overloading the grid in California.

Read more…

The massive economic and environmental impact of fracking.

Wells being drilled by that rig have long since gone into operation and contributed their share to increased US production.

The impact of fracking is massive. Large increases in production of natural gas and crude oil has created a long list of favorable economic and environment impacts.

7/6/17 – Victor Davis Hanson at National Review – The Fracking Industry Deserves Our Gratitude – Prof. Hanson provides a fast survey of how much fracking has improved the American economy. Fracking is the combination of horizontal drilling with hydraulic fracturing.

The impact of fracking is staggering.

Ten years ago eeeeeeverybody knew for an absolute certainty that Peak Oil was here and we were about to run out of oil. The Secretary of Energy was wishfully musing that gasoline would rise from $4 to $10 a gallon.

In the last five years, gasoline prices are down about $1.50 a gallon, surge in natural gas production displaced coal consumption which has reduced our CO2 output by 12% in the last decade (surpassing the EU in cuts), and reduced our oil imports by five million barrels a day.

Let me rephrase that part about CO2…

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