Outrun Change – Page 57 – 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.

More good stuff on Bakken – 6/8

Great summary of news in the last week, “big trigger” oil tax reduction won’t get pulled, and lots of new housing in Williston available in ’15.

If you want a brief, superb summary of news last week on energy, Bakken, North Dakota, and cooking temperature numbers, you gotta’ check out:

6/6 – Million Dollar Way – Weekend update, Part I – June 6, 2015 – Mr. Oksol calls OPEC ‘dead.’ What we refer to as OPEC is now essentially a venue for Saudi Arabia. Continue reading “More good stuff on Bakken – 6/8”

OPEC continues price war against shale

A June 6th Reuters article in the Dickinson Press says North Dakota refuses to flinch as OPEC keeps output high. Unnamed company officials in North Dakota are calling OPEC’s decision to maintain a price war

… a questionable bet.

Article points yet again that drillers are dramatically reducing their costs. One executive said:

“High commodity prices hide a lot of inefficiencies in the system,”

Place your bets for or against ingenuity

The WSJ article below says OPEC members believe their strategy of high production (a.k.a. a price war) has been successful. Ooooookay.

As Prof. Mark Perry often says: Don’t bet against American ingenuity.

OPEC has doubled down on their bet.

Go for it.

Maintaining maximum production

Wall Street Journal reports OPEC Keeps Output Unchanged. At their meeting on June 5, OPEC kept their official production cap the same. Article points out this is now referred to by OPEC as “an indicator.”

Perhaps that is merely a recommendation, since producers are pumping as much oil as they possibly can with output understood to be about 1 million barrels a day above the suggested level.

Article says this confirms that OPEC, especially Saudi Arabia, is no longer the swing producer. That role, undesirable as it may be, has now shifted to American shale oil. It is slowly moving into common understanding that drilling in American shale is something that can be turned off and on rapidly.

The irony is the level of American shale production has not dropped off at the same time as OPEC has increased their production by roughly the amount that is produced in Bakken. That means the price war continues.

Continue reading “OPEC continues price war against shale”

NCAA actually accuses UNC-Chapel Hill of bad behavior the second time around

The NCAA has issued their Notice of Allegation regarding the UNC-Chapel Hill academic and athletic fraud. Recall the university was creating paper classes for athletes.

I’ve been following this mess and have discussed it several times. Get a fresh cup of coffee and walk with me as I learn more about this fiasco.

Allegations

Continue reading “NCAA actually accuses UNC-Chapel Hill of bad behavior the second time around”

Fracking doesn’t contaminate groundwater

That is now the conclusion of the EPA.

The Wall Street Journal reports Fracking Has Had No ‘Widespread’ Impact on Drinking Water, EPA Finds. A senior official from the office of research and development said:

“Hydraulic fracturing activities in the U.S. are carried out in a way that have not led to widespread, systematic impact on drinking water resources … In fact, the number of documented impacts to drinking water is relatively low when compared to the number of fractured wells.”

The risk is in proper construction of the wellbore as it passes through the water table. I’ve previously learned there is an outer casing liner which is sealed in concrete. Then the well bore is placed inside the casing. It is sealed with another round of concrete-like material, which prevents water from moving, should it get through the other concrete and steel in the bore.

Continue reading “Fracking doesn’t contaminate groundwater”

More on the morality of renewable energy

Fossil fuels create tremendous prosperity. Renewables can’t. Maybe somewhere someday something will be invented that can do so, but not today.

3/27 – Prof. Don Boudreaux (of Cafe Hayek) at Wall Street Journal – Fossil Fuel Free Is No Country for the Poor – Article points out a number of filthy rich people want a zero carbon emission world in 35 years. Currently all renewable energy provides around 10% of what we use in the US. Dropping the 90% of energy provided by fossil fuels would collapse the economy.

I have seen subsistence agriculture in operation during my very brief visits to Africa and Indonesia. I do not want to go there.

My father and his siblings grew up chopping wood to heat the house. Grandma used wood to cook food. My grandparents used a couple chunks of coal in the stove at night so a tiny fire would remain in the morning to get the wood started. I do not want to go there either.

Yet that is what the superrich want for the poor of the world.

Look at what these self-appointed experts wish for: Continue reading “More on the morality of renewable energy”

Oil exploration and production moves to manufacturing stage

The shale revolution is transitioning into a manufacturing stage where production can be turned on and off based on minor price fluctuations.

6/1 – Donald Luskin and Michael Warren at Wall Street Journal – The Shale Boom Shifts Into High Gear / Oil production is becoming a modern manufacturing process, with frackers using the ‘just-in-time’ approach

Think of it as Moore’s Law applied to oil production.

Combine two factors, increased efficiencies and rapid depletion. Continue reading “Oil exploration and production moves to manufacturing stage”

More good stuff from the open frontier of energy – 6/1

Articles on operation of salt water disposal sites, damage from ethanol, drones in the oil patch, and an interview with Chevron’s CEO (including comments on harsh over regulation in California).

5/26 – Journal Publishing – Putting the ‘safe’ in hazardous oil waste – Superb article on salt water disposal (SWD). Waste water from a well, perhaps two or 3 gallons for every gallon of oil, goes to special treatment sites.

The SWD sites have lots of tanks to let the saltwater settle. Oil floats to the top, is skimmed off, then sold.

Continue reading “More good stuff from the open frontier of energy – 6/1”

Background on comparing costs and prices across time

I often make comparisons of costs or prices across time on this blog. Doing so is difficult. I just found two resources to help understand how to do a better job.

The value of money in colonial America from the UNC School of Education explains the British currency system based on pounds. Because mercantilism was the predominant thought on how to gain wealth, manufacturing in the 1700s was done in the home country and raw materials were exported from colonies. (How much mercantilism held back the economy in the home country and every colony is a discussion for another day.)

This made manufactured goods extraordinarily expensive. Things we would think were high-priced were actually inexpensive.

For example most people could afford to buy land and build their own home but few people could afford imported sheets.

The article suggests looking at probate documents to see how things were valued. Continue reading “Background on comparing costs and prices across time”

North Dakota’s “big trigger” tax reduction not going to get pulled

(Poorly focused photo by James Ulvog. Workover rig, one pumpjack ready to go, and three not yet complete. Gonna’ be lots of wells on that pad.)

Big drop in tax on produced oil in North Dakota won’t happen. Also a recap of the tax rates on oil.

5/29 – Associated Press at Bakken.com – Oil price increase means North Dakota tax trigger won’t hit – If crude oil prices are below a certain threshold, currently $55.09 for five consecutive months there would be a dramatic reduction in the tax on oil produced in the state.

Prices have been running below that cut off for January through April. During May the key index has been above the cutoff.

Continue reading “North Dakota’s “big trigger” tax reduction not going to get pulled”

More good stuff on the open frontiers – 5/29

A few articles on the astoundingly open frontiers of technology and private space exploration.

Technology

5/21 – Popular Mechanics – Brain Implant Lets Teraplegic Man drink Beer with a Robot Arm – Although this is a little bity step, consider what a huge leap it is from what could be done before.

Sensors attached to a man’s head pick up electronic signals corresponding to him wanting to move his arm. Those signals control a robotic arm to move a cup of water up and toward him so that he can take a sip.

Continue reading “More good stuff on the open frontiers – 5/29”

The energy future is so bright we may have to trade in our sunglasses for welder’s goggles

Here are two resources I came across on the same day that point to why the future is so incredibly bright that regular sunglasses might not be enough:

Shale 2.0 – Technology and the Coming Big-Data Revolution in America’s Shale Oil Fields, by Mark Mills, of the Manhattan Institute

Economic Impact and Legal Analysis of the Shale Oil and Gas Activities in Mexico, preliminary report – by University of Texas San Antonio and others. Prof Thomas Tunstall is the principal investigator and Javier Oyakawa is the lead investigator at UTSA.

I have just started reading both of the reports. Plan to finish them in the next few days and will have more to say then.

A couple of initial thoughts:

The Manhattan Institute study suggests the shale revolution of the last five or seven years is barely getting started. The technological innovations in the last couple of years are going to accelerate.

Continue reading “The energy future is so bright we may have to trade in our sunglasses for welder’s goggles”

More on the revolution in energy, specifically shale oil

It is astounding to watch what is happening in the energy arena. U.S. petroprenuers have kicked off an energy revolution.

The staggering idea is this whole shale thing could just be getting started. Consider the following:

5/26 – Mark Perry at Investors Business Daily – Saudis’ Drive to Kill U.S. Shale Has Backfired – Prof. Perry points out the Saudis have now acknowledged their goal was to take out shale production. They think they have substantially succeeded based on the drop in recount.

I think the conceptual error is to assume there is a direct correlation between rig count and production. There are so many fallacies in that concept.

The ironic thing is there is a huge fracklog of wells drilled but are awaiting completion. As soon as prices come up a bit (exact point we may soon find out) there are a lot of wells for which it will be economic to finish. In North Dakota there are around 800 wells that just need to be fracked and they can come on the market. For context that’s just under half a years worth of new drilling.

One of the highly unintended consequences is to accelerate efficiencies and technological innovation. The article calls attention to those factors.

Continue reading “More on the revolution in energy, specifically shale oil”

More good stuff on the Bakken – 5/27

Here’s a few quick notes on interesting news from the North Dakota oil fields:

Rig counts actually going up –

5/20 – Million Dollar Way – Another Post-Boom Low — 80 Active Rigs; Eleven (11) New Permits; Slawson Proposing A 11-Well Pad In Big Bend Oil Field – 80 rigs

5/22 – Million Dollar Way – Eleven (11) New Permits – Count of rigs is up to 82.

5/26 – Million Dollar Way – Five (5) New Permits – Rig count up to 84.

I wonder if the drilling is now in a plateau. A few more articles on point:

Continue reading “More good stuff on the Bakken – 5/27”

More tidbits on the foolishness of rooftop solar

Here are two more articles pointing out the risks to the electric grid and economic destruction of rooftop solar. Didn’t realize how big a mess I would find when I started this series of posts!

4/18 – New York Times – Solar Power Battle Puts Hawaii at Forefront of Worldwide Changes – The huge increase in solar power generated from rooftops in Hawaii is creating instability in the grid across the islands. The capacity and output from homes is invisible to the electric companies, which makes it increasingly difficult to maintain stable power.

You can translate ‘risk’ as an increased chance of random spikes, brownouts, and blackouts.

Continue reading “More tidbits on the foolishness of rooftop solar”