Sunday, June 03, 2012

Sunday Energy Links and Charts

1. Over the last two years, crude oil production in North Dakota has more than doubled, from 277,640 barrels per day in March 2010 to 575,490 barrels per day in March of this year.  At the same time that oil production has been skyrocketing in North Dakota, oil imports from Nigeria have been declining, to the point that for the first time ever, North Dakota oil production has exceeded oil imports from Nigeria in each of the first three months of this year (see chart, data here). And for the last five months that data are available (November - March), North Dakota oil production has also exceeded imports from Colombia (see chart).

Update: By the end of the decade, it is estimated that surging oil production in North Dakota could double again to more than one million barrels per day, putting it on par with production in Texas and imports from Mexico.  

2. "Chesapeake Energy Corp. said it drilled the largest oil gusher in the company’s 23-year history at a “significant” discovery in the Anadarko Basin of Texas and Oklahoma. The Thurman Horn 406H well in the Hogshooter formation produced 5,400 barrels of crude a day during its first eight days of operation. The output was more than twice that of some of the best performing wells in the Eagle Ford shale of south Texas, which Chesapeake counts as its most valuable holding."  [MP: Peak what?]

3. Oil and gas cash boosts PA farming -- "The oil and gas boom in western Pennsylvania has provided a much-needed infusion of capital to farmers in that area. “It’s had mostly a good impact,” said Steve Quillin, local Farm Bureau president. “Just driving around, we saw farmers making improvements and updates to their properties.”

Money from oil and gas leases has allowed agriculture to expand. The influx of cash has prompted some older farmers to retire, but their farms have been absorbed by others or have been rented."
 
5. The Economist -- "America's “unconventional” gas boom continues to amaze. Between 2005 and 2010 the country’s shale-gas industry, which produces natural gas from shale rock by bombarding it with water and chemicals—a technique known as hydraulic fracturing, or “fracking”—grew by 45% a year. As a proportion of America’s overall gas production shale gas has increased from 4% in 2005 to 24% today. America produces more gas than it knows what to do with. Its storage facilities are rapidly filling, and its gas price has collapsed. Last month it dipped below $2 per million British thermal units: less than a sixth of the pre-boom price and too low for producers to break even.

Those are problems most European and Asian countries, which respectively pay roughly four and six times more for their gas, would relish. America’s gas boom confers a huge economic advantage. It has created hundreds of thousands of jobs, directly and indirectly. And it has rejuvenated several industries, including petrochemicals, where ethane produced from natural gas is a feedstock."

Update:

6.  The chart below shows monthly imports of crude oil from January 2000 to March 2012, on a three-month moving average basis (to smooth out monthly volatility).  U.S. imports of crude oil fell in March to an average of 10,672,670 barrels per day, the lowest level since February 2000, slightly more than 12 years ago.


7 Comments:

At 6/03/2012 8:18 PM, Blogger VangelV said...


1. Over the last two years, crude oil production in North Dakota has more than doubled, from 277,640 barrels per day in March 2010 to 575,490 barrels per day in March of this year. At the same time that oil production has been skyrocketing in North Dakota, oil imports from Nigeria have been declining, to the point that for the first time ever, North Dakota oil production has exceeded oil imports from Nigeria in each of the first three months of this year (see chart, data here). And for the last five months that data are available (November - March), North Dakota oil production has also exceeded imports from Colombia (see chart).


OK. I get around 83 barrels per day per well. Around 3,000 of the 7,000 wells have been drilled in the last three years at a cost of close to $8 million per well. These high IP wells have not been able to get the average production to over 100 bpd. That shows just how serious the depletion rate is and just how bad the current bubble happens to be.

 
At 6/04/2012 5:56 AM, OpenID moneyjihad said...

Re: Pennsylvania farmers benefit from leases.

But this doesn't fit the 'oil companies are evil' narrative!

 
At 6/04/2012 6:25 AM, Blogger Henry H said...

We should stop subsidies to farmers to not plant crops, especially if they are making money off oil leases. They no longer have any intention of farming.

 
At 6/04/2012 6:25 AM, Blogger Henry H said...

We should stop subsidies to farmers to not plant crops, especially if they are making money off oil leases. They no longer have any intention of farming.

 
At 6/04/2012 7:01 AM, Blogger joshua said...

What was the price of oil when the ND boom got going and if the price keeps dropping, at what point will it be threatened? It looks to me like the red line increases through the credit crunch bust (when oil went down to $30) and on through to the other side (up to $100+ and now down to $80)

 
At 6/04/2012 1:34 PM, Blogger Its GSATT said...

Joshua

There are many more variables than just pumping oil out of the ground. I remember an article somewhere within the past couple months about transporting the oil from Dakota to california. But have not there been some refineries shut down in that state? not sure if we could draw a good conclusion.

I definitely think that the oil sheeks will start to wake up regardless. Oh how some countries must be sweating as they try to predict how much oil we will be consuming from them.

 
At 6/04/2012 1:55 PM, Blogger VangelV said...

What was the price of oil when the ND boom got going and if the price keeps dropping, at what point will it be threatened? It looks to me like the red line increases through the credit crunch bust (when oil went down to $30) and on through to the other side (up to $100+ and now down to $80)

Shale oil is not viable at $80 for most formations. In fact, for more than half of them even $100 is not enough. The hype about shale oil is driven by the bust of shale gas. The producers have two choices. They can write down the assets and go to bankruptcy or they can try to sell themselves off as shale liquid plays in the hope that they can get enough cash to pay for the drilling activity. Their big problem is that when there is a contraction going on in the real economy there is no way to spin the story enough to assure longer term survival by adding debt.

 

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