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Title: How They're Handling Obama's Pipeline Fumble
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URL Source: http://by150w.bay150.mail.live.com/ ... 68-11e1-af6e-00215ad7e6d0&fv=1
Published: Nov 26, 2011
Author: Keith Kohl
Post Date: 2011-11-26 05:53:53 by Tatarewicz
Keywords: None
Views: 188
Comments: 4
“I'm not worried. If push comes to shove, they'll get the oil to market,” I told my colleague from my seat behind the wheel. “How do you think they'll manage that?” he asked. Looking back, I can understand his skepticism. Just a few weeks ago, Obama made the politically undecided move to delay TransCanada's Keystone XL Pipeline project. Although the main purpose of the 1,980-mile pipeline would have been to ship production from the oil sands, there were plans to add an extension, effectively linking up with Bakken. This would have shipped an extra 65,000 barrels of oil out of North Dakota on a daily basis. A thick odor drifted into the car, and I was struck with a sense of déjà vu from the all-too-familiar smell of oil. Not two weeks before, we had been driving past one of Syncrude's massive surface mining operations when the same smell penetrated our senses. It caught the attention of my passenger, and he immediately looked out my window. I followed his gaze and it became obvious where it was coming from...small oil tanker About fifty yards off the barren road we were driving on was a set of railroad tracks that stretched far into the horizon. We had come up on the tail end of the longest line of railroad tankers I'd ever seen. And the petroleum perfume it was giving off gave us no doubt what those tankers held. “That's how...” I replied to his earlier question. “Will it be enough?” “There's one thing we have on our side — money.” It's true. If you too had witnessed this line of oil tankers firsthand, all you would have seen were dollar signs. The problem isn't money. There is no lack of interest in energy plays like the Bakken. In fact, more than $480 billion has been spent so far through M&A deals in the energy sector. Here's a peek at just a few of them: M A deals That's already much higher than the $418 billion spent last year. The problem isn't on the production side, either. I confessed to my colleague that I had been slightly wrong when I said in September that North Dakota would catapult ahead of Alaska and California's oil production within five years. Truth is they're going to do it next year. I sensed his doubt at this proclamation, and it was all too easy to make a believer out of him. The EIA recently reported North Dakota's oil production in September topped 460,000 barrels per day. nd state oil output Think about that for a second... That means within a matter of six years, the state's production jumped 369%! Nowhere else will you find that kind of growth story — and it happened in spite of oil prices crashing to under $33 per barrel in December 2008. Advertisement Are Norwegians Smarter than Americans? On Monday, October 17, Norway's biggest oil company, Statoil, acquired a small Bakken oil producer for $4.4 billion. Some investors made as much as 743%. Still, most American investors have never heard of the Bakken... That means they will miss out on the next round of triple-digit Bakken profits. It's high time American investors profited from the biggest U.S. oil discovery in 50 years. Get the details here. During that same period, Alaska's output fell sharply by 40%. Without a miracle, it will be impossible for the state to reverse that two-decade downward trend. And California didn't fare much better. At this rate, North Dakota will be our second largest oil-producing state by early next year. By now, you've probably guessed that the problem lies with infrastructure... For starters, my friend was right to ask whether these tankers were enough. Fact is they're not. North Dakota hit their maximum pipeline capacity years ago. When my buddy informed me that about 28% of the Bakken oil (roughly 130,000 barrels per day) is shipped via rail, I couldn't help but offer him a slight correction. Just a few weeks ago, the Bakken Oil Express departed North Dakota bound for St. James, Louisiana, with about 70,000 barrels of oil in tow. Soon, they'll be shipping 100,000 barrels of oil per day. Before you know it, their capacity will reach more than 250,000 barrels per day. “Maybe you're right. So what do we do about it?” That, my friends, is by far the easiest question to answer. Pipelines will be built. More rail capacity will be added. They're even ready to put a brand-new refinery in place. And the whole time, we'll be in the right position to profit from it all... All the major players like ExxonMobil will be spending billions of dollars over the next few years for their piece of Bakken real estate. It's why I put together this new report. When the Bakken propels North Dakota to the second largest oil-producing state in the U.S., these are the stocks you want to own. As I explained to my colleague that day, it's simply a matter of time. Keith Kohl Editor, Energy and Capital
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#1. To: Tatarewicz (#0)
(Edited)
A record 204 rigs were drilling in western North Dakota in the past week, nearly all aiming for the rich Bakken and Three Forks formations. Helms expects about a dozen more rigs working by the end of the year. The state had a record 6,071 producing oil wells in September, up 120 from August, and nearly 1,000 more than a year ago. North Dakota surpasses oil production record November 23, 2011 nearly half a million barrels a day... then there's this... As director of the Department of Mineral Resources, he oversees regulations, permits, and surveys of oil and natural gas sites. And Helms predicts things are going to be “Rockin' in the Bakken” for quite a while. North Dakota: The Oil Boom November 18, 2011 ---------------------- “Rockin' in the Bakken” for quite a while.... yup... 33 years at 1000 wells per year...
we seem to be creeping up on the real problem, here... these 6,071 wells are producing half a million barrels a day, which means each well is producing, on average, 82 barrels a day... not so good compared to the old days. if the easter bunny or santa claus or somebody completed all 33,000 of those wells magically, overnight, and each well produced the average 82 barrels a day, the resulting production would be 2,717,838 barrels per day... which would just about cover the decline of texas production.
one more little thing... canada is exporting a little over a million barrels a day, most of it from the tar sands in alberta because their conventional production is fizzling out. the energy returned on energy invested in those tar sands is not so pretty good... for instance, if you got a trillion barrels of tar sands oil in the ground, but it takes half a trillion barrels' worth of energy to get the oil out of the sand, your real reserves are half a trillion barrels. canadians are idiots, anyhow... they abandoned their igloos and heat their condos with our oil, over two million barrrels a day that rightfully belongs in american hummers and escalades.
#2. To: All (#1)
North Dakota oil drillers have outdone last year's record crude production and are nearing a milestone of a half-million barrels of oil a day, according to an Associated Press analysis confirmed by state and industry officials.
Lynn Helms: Director of Dept. of Mineral Resources, North Dakota: “We think it is going to take about 33,000 wells to produce this oil field and so we're not even ten percent of where we need to be at the end of this drilling phase.”
#3. To: All (#2)
#4. To: All (#3)
(Edited)
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