Category: Energy

Pricing mechanism did its job during California gas shortage – you could get gasoline if you wanted it

The recent gas shortage in California is a superb illustration of the idea that if you don’t meddle with prices and just leave them alone, they will communicate to everyone how scarce a resource is. The natural and expected result is that people who want the resource can get it.

Prices worked

The recent gas crunch shows what happens when you let the market work. Prices spiked because of a supply crunch. People who didn’t really, really need gasoline held off on topping their tank. People who really, really did need gas could get it.

Two things prove this to me.

Continue reading “Pricing mechanism did its job during California gas shortage – you could get gasoline if you wanted it”

Dramatic increase in oil production told in one graph

Mark Perry shows what’s happened in U.S. oil production one simple graph.

It shows production in Texas, Alaska, California, and North Dakota, the top 4 oil-producing states, from 2002 through 2012: .

Check out the graph at Energy chart of the day: Shale oil production in North Dakota and Texas has boosted US oil production to a 17-year high.

Amazing.

Continue reading “Dramatic increase in oil production told in one graph”

The frontier is open again – the oil field is “the gold rush of our generation”

“Witnessing my generation’s gold rush” is a superb story of what is happening in North Dakota, as observed by a photojournalist Mr. Jim Urquhart.

He provides a wonderful photo story of drilling in North Dakota. The scenery is beautiful and views of roughnecks are superb. Views of the drilling rigs from the air are outstanding.

His description of the economic vitality and what it’s like to live in Williston and work on an oil rig is delightful.

Here is a one sentence summary of the astounding things happening in Bakken. Continue reading “The frontier is open again – the oil field is “the gold rush of our generation””

Could the US surpass Saudi Arabia in oil production?

A few days ago a friend of mine said the US could soon surpass Saudi Arabia in oil production. I had a hard time believing it, so didn’t give it much thought.  My mistake.

Let’s look at his comment again.

An AP story today, US may soon be top oil producer in the world, says that US oil production is rising so fast that we could surpass Saudi Arabia soon.

The key sentence: Continue reading “Could the US surpass Saudi Arabia in oil production?”

“Free enterprise creates its own luck”

Here is a great comment from Mr. Greg Arnot on an article by Daniel Yergin:

Free enterprise seems to generate its own luck. Millions of free people stabbing out in seemingly random directions, each acting in his or her own self interest, seem to always find a way.

Free enterprise is able to focus chaos in order to meet our needs and exceed our expectations.

How’s that for a semester of economics compressed into 50 words?

Mr. Yergin’s article, The Real Stimulus: Low-Cost Natural Gas, discusses the boost to the economy of low-cost natural gas from shale.

Look at the dramatic change in just a few years:

Continue reading ““Free enterprise creates its own luck””

What’s the production level in Eagle Ford and how does it compare to some forecasts I’ve mentioned?

A reader asked me about the production levels in Eagle Ford. That got me looking at my past posts and wanting to get some more info. So here’s the result of my checking.

I don’t yet know how to read the production data at the Texas Railroad Commission’s website. For other newbies like me, they are the regulators for oil drilling in Texas.

That means I will rely on reporting from others, like this info from Bloomberg on 9-21-12, Eagle Ford Oil Production Above 310,000 Barrels a Day in July:

Continue reading “What’s the production level in Eagle Ford and how does it compare to some forecasts I’ve mentioned?”

Two more predictions on oil production in North Dakota – one an estimate of the date for 1M bopd and the other a never to exceed amount

I’ve been making note of predictions, forecasts, and wild guesses for when oil production in North Dakota will hit a million barrels a day.  I’ve seen another estimate for that. Also saw a prediction with an iron-clad upper limit that Bakken production will never cross.

Continue reading “Two more predictions on oil production in North Dakota – one an estimate of the date for 1M bopd and the other a never to exceed amount”

N.D. oil production passes the 700K bopd point in August ‘12

Average daily production in North Dakota is 701,134 barrels of oil per day (bopd) in August.

Here’s a couple of graphs.

Daily production by month. Blue is for entire state. Red is Bakken only.

 

A little longer time horizon:

Some analysis:

Continue reading “N.D. oil production passes the 700K bopd point in August ‘12”

Impressions of a new geologist after a year in Bakken

In an article titled The Bakken Boom and the New Wild West – A Young Geologist’s Perspective, a newly graduated geologist, Mr. R. Tyler Powers, describes his first year working in the Bakken oil field. It is hard work, typically running 90 hours a week. Looks like it is tremendously rewarding to a geologist.

As a desk-bound accountant by attitude and training, I’m astounded at the technology of drilling. I stand in awe of the team that can drill 8,000 or 12,000 feet down, turn the well 90 degrees over the distance of a few more hundred feet, and hit an oil layer that is a dozens of feet thick. Then drill another 10,000 feet through that 100 foot wide layer.

Here is a mild hint of the challenge: Continue reading “Impressions of a new geologist after a year in Bakken”

Great animation of a drilling rig setup and superb background on Bakken

Million Dollar Way points to an amazing article at drillingcontractor.org. It opens with a promo video for a National Oilwell Varco drilling rig. Check out the cool animation at the end on how their rig sets up.

The article has a lot of background on the Bakken field, different technologies involved, some discussion on the geology of the field, what some of the major players are doing, and lots of details on drilling. Much there is a stretch for me, but a very good stretch.

Continue reading “Great animation of a drilling rig setup and superb background on Bakken”

New description for the debate over oil – Cornucopians vs Peak Oil

There is an old saying to describe someone who is brand new on the job. They are wet behind the ears.  I’m so new to energy issues I need to towel off a while so I can move up to the level of merely wet-behind-the-ears. 

But I’m learning fast. I hope.

If you’ve read many posts here, you know I haven’t found anything from the Peak Oil school of thought that makes any sense at all. Quite the contrary, it is nonstop foolishness to me.

Continue reading “New description for the debate over oil – Cornucopians vs Peak Oil”

Shale boom changing geopolitics?

Incredible growth in shale production, both oil and gas, starting to have an impact on geopolitics.  In his Wall Street Journal column, John Bussey expands on the idea: Shale: A New Kingmaker in Energy Geopolitics.  He describes some of the ways that a dramatic increase in U.S. production is changing the world’s political dynamics.

One big change is the drop in oil imports:

Continue reading “Shale boom changing geopolitics?”

If the 10 commandments are just suggestions on moral issues, then it follows the Constitution is just a suggestion when it comes to energy policy

Check out the importance of the U.S. constitution in the efforts to ban hydraulic fracturing within the city limits of Las Vegas, NM. That’s a small town in New Mexico, not the gambling capital.

Here’s the money quote in an article in the Albuquerque Journal, Group Seeks To Prohibit Fracking from Ms. Hern, a board member of the group which helped write a law which would have banned fracking inside city limits:

Asked about the constitutionality of the ordinance, Hern said, “What people don’t understand is sometimes we have to step outside the boundaries of the Constitution to get things done. Laws are made to protect corporations and we need laws that protect Mother Earth – earth, air and water.”

Background

Continue reading “If the 10 commandments are just suggestions on moral issues, then it follows the Constitution is just a suggestion when it comes to energy policy”

Count of drilling rigs end of September 2012 – 190 and 274 for combined total of 464

190 – Bakken – from the current active drilling rig list at the N.D. Department of Mineral Resources website on 8-31-12.

274 – Eagle Ford – from EagleFordShale blog.

That is down 2 in Bakken and up 4 in Eagle Ford.

National rig count is 1,859 for 9-21-12.

Continue reading “Count of drilling rigs end of September 2012 – 190 and 274 for combined total of 464”

Another forecast for Bakken production – we have probably already hit the peak

Since I’ve started to pay attention to forecasts for the Bakken field, I’ll make note of one that is not so optimistic.

The Oil Drum has a post, Is Shale Oil Production from Bakken Headed for a Run with “The Red Queen?” that doesn’t see substantial increases in future output.

The forecast in that post is for production to stay at roughly the current level, which for July 2012 was 674K bopd state-wide and 609K bopd for Bakken only. Here are two key comments, the first from the findings and the second from immediately after the findings: Continue reading “Another forecast for Bakken production – we have probably already hit the peak”