Global Warming on Free Republic here, here and here
Posted on 11/09/2015 3:25:13 PM PST by jazusamo
I don't think Carbon Dioxide is the problem.
It is difficult to find a region of the United States that would cheer more loudly if Duh-1 were to fall into a pit and be eaten by rabid gerbils than the region which could really use the jobs (especially with the oil patch contracting by 2/3) the pipeline would generate.
I'm a geologist, and we didn't have enough takeaway capacity when the Bakken boom was just getting started back in 2000, and that still hasn't improved enough after a million barrel a day increase in oil production.
Dithering and diddling through all this has been the Federal Government which couldn't seem to make up its mind whether to allow the equivalent of running a hose from the spigot to the kiddie pool.
In the meantime, the Feds have upped their estimates of oil in place (significantly, a few times) after lowballing them for years (which is justifiable, considering).
Attacks on the industry have come from every media quarter, from newspapers circulating wild-eyed e-mails about people fighting over pallets of merchandise in Walmart to allegations of drug crazed violence in the streets and rampant sex trafficking to just plain traffic (that one justified).
Fracking has been presented as the evil of the millennium, used as a swearword in the media, who generally have no clue from the nonsense they write what hydraulic fracturing actually is conceptually, much less in practice.
The Feds (EPA) went so far as to drill test wells in the vicinity of Pavillion, Wyoming (which has always had bad water), construct them very badly, and attempt to 'prove' that hydraulic fracturing was contaminating groundwater (it hasn't--only a few limited surface spills have had any effect, and that effect is local to the event).
When that effort failed to produce the data desired to try and halt the boom, the EPA (yes, EPA!) gave a million acres of Wyoming to the Wind River Tribe for reservation land, including Riverton, WY and Pavilion, despite the fact that it is illegal for a Federal Agency to change the boundaries of a State without Congressional approval.
As far as I know the matter is still under litigation (Wyoming isn't happy about the land grab, either, nor the revenue shift from oil fields and gas processing facilities on the Riverton Dome), but the change in government for the area would preclude further and independent study of the historically bad water in Pavilion.
When enterprising people in ND and MT saw the need for increasing transport capacity due to the then fledgling Bakken boom and started building rail terminals to load crude oil onto unit trains, rail transport was attacked--but not poor procedures on the part of railroads, nor their inability to keep the trains on the tracks, rather the attacks focused on "highly explosive fracked* Bakken oil". (* just a note, but oil doesn't get fracced, the rock formation does)
No one blames a load of toilet paper or lumber for a train derailment, but here, the oil was presented as the problem, not bad track maintenance or operating procedures.
The State of ND imposed a maximum vapor pressure on rail shipped crude, to standardize maximum volatility levels--ahead of any Federal regulatory edicts.
Flaring wellhead gas, both while waiting for feeder pipeline tie-ins and for processing infrastructure to come on line has recently been under attack, and the worst locations for flaring, ironically enough, are those on land where the surface and mineral interests are controlled by the Federal Government. The permitting process for feeder pipelines is far more convoluted on Federal acreage than on private land, because so many federal agencies are involved. The net result is that a much higher percentage of the gas produced with the oil on Federal Leases (dissolved in it at depth, 'fizzes' out when it gets to the surface and the pressure comes off--much like opening a warm soda) ends up getting burned off at the surface because it can't be trucked out. The value of the oil is much greater than the gas, which has been considered just a by-product. As oil prices have come down, that ratio improved, and the effort was already underway to capture that resource as well.
Production locations on private land have made huge strides in reducing gas flaring, despite the tremendous increase in production, by contrast.
Because of the number of variables involved, from infrastructure capacity to changes in gas/oil ratio in the formation to other wells coming on line in the feeder system, there will always be some flaring.
But in the Federal Arsenal, all other attacks having failed thus far, there remains the ability to diddle around for a decade over letting a company build a pipe to transport oil, not only from Canada, but from this region as well.
The pipe would reduce some of the things the government and environmentalists have been raving about, would improve energy security, would provide jobs for a region, and enhance revenues for a sector that has kept the economy alive for much of America.
What's not for a Liberal (Communist, Foreign Muslim, America Hater) to hate?
The added bonus of stringing along the pipeline company at a cost of millions of dollars while waiting for a 'decision' is just a bonus for the anti-capitalists and envirowhackos in the Executive Branch.
As for the oil industry, it will find a way. Maybe not the least expensive of the acceptable options (and that will be reflected in product prices), but we've managed to continue a fine tradition of overcoming difficulty so far and still keep America moving.
Chances are history will support it.
Global Warming on Free Republic here, here and here
Don’t forget Frank Marshall.
Great, fact filled, post that further demonstrates how little reality matters to the anti-capitalist Left. It is the big lie message that Obama is so good at spreading that is smothering the US.
This pipeline leads directly to hell!
The ninth level of infernal conservatism!
Sea levels would rise and oceans would dry up at the same time!
Chickens would cough.
Dogs would start dancing the jig under the fool moon.
Doom, I say!
The sky would fall! Women and children hardest hit! Men would carry plaid purses! Cows would fart!
Oh the travesty!
Can US frakkers ride out this gas price war?
Great post. :)
Obama knows transporting oil by pipeline is safer than by rail or truck. He’s just lying. Like all democrats do... flat out tacky stupid liar..
Of fraccers, drillers, oil companies, which did you mean?
The oil companies will continue for the most part (they own the rights to and operate the wells). Some will have to divest themselves of some producing or leased assets to retain others.
Some will be better positioned and will buy those assets at favorable prices. It is the usual post boom shuffle.
Drilling companies (the folks who own drilling rigs and drill the holes) will either adapt or die.
There is tremendous emphasis on drilling faster, and the multi-well pad setups today in areas of intense horizontal drilling require different rigs, ones which can walk or otherwise relocate from wellhead to wellhead to cut costs, without being completely dismantled--which takes time and adds about a quarter million per rig move.
I have worked on a few variants on that theme, and those companies will do just fine. Others will drill in areas where a 'walking' rig isn't needed, or will end up selling off a lot of iron for scrap, reworking older rigs, or selling them to overseas companies. (Note: even scrap prices are down). Taking two weeks and $250,000.00 to dismantle, move, and reassemble a rig just won't cut it versus the 36 hour (or faster) 'walking' rig move on a well pad.
That whole paradigm has changed in some areas, and it's adapt or die.
Hydraulic fracturing is done by yet another group of companies. They specialize in that aspect of completions of oil wells, and most will likely survive, provided they aren't heavily leveraged--unless the government somehow finds that excuse they have been looking for to shut the process down.
Service company prices, wages, benefits, will all drop in order to stay in business, partly because demand for the completion services is down at boom prices. Over half of the present cost of a Bakken or Three Forks well is the frac (about $4 million).
Why enhance production from a wellbore to produce more oil at a net loss per barrel?
It is likely that their activity will slump, as the number of wells being drilled is dropping. Eliminate some of the backlog over the next year and the backlog will diminish (there is a light at the end of the tunnel but it is a train), and fewer new wells are being drilled.
If I ran a frac company, I'd go through maintenance logs, get the lemons out of the fleet, and pay off bills to cut leverage.
As an oil company (and this affects the frac companies), I'd configure my production string to be able to produce enough oil to hold the lease, and hold off on the frac until oil prices go back up or frack prices drop.
As for Natural Gas companies, natural gas wells tend to deplete at a fairly high rate. To straight line the curve, seven years and it's a small fraction of the IP (Initial Production).
With plenty of Natural Gas on the market, prices are low, and the only incentive to drill is to hold a lease already paid for which is going to expire without spudding and eventually producing a well. There are a couple of steps that can extend that time a little, but those leases are perishable if not produced, and will have to be leased all over again if the well is not drilled.
The expenses will be weighed, one against the other and decisions made to drill or not.
Thank you, Joe!
My main concern was mothballed ‘hydro-frac’ sites and how much attrophy they suffer from.
But it’s cool to think of a mobile oil station that can gear up quickly at lower cost. I bet regulations slow down new drills, but during a price spike that could be expedited legislatively, right?
I’m linking this discussion to ‘Digging Deep’ which normally ‘drills for truth’ more than for oil:
http://www.freerepublic.com/focus/chat/2636478/posts?page=381
The wells are not mobile. They are, after all, holes in the ground, and the pump jacks seen above the wellheads don't move, except to allow servicing of the well.
Commonly, I have seen the media (who know little about oil wells) label pictures of pump jacks as "oil rigs" or even "drilling rigs". I have also seen images where the media claimed drilling rigs were pumping oil. So let's clear that up.
The thing that does move is the drilling rig (images), which exists solely to drill the well. Once the hole is there, that same rig lowers casing (pipe) into the hole, which is cemented in place, and the well is capped for the next phase, after tools are lowered in the hole and recovered to record how well the cement bonds to the casing and the surrounding rock.
Sometimes, on multi-well pads, the rig is skidded or walked a short distance over to the next wellhead (generally 30 to 50 ft.) and the process repeated for another well. That hole will be drilled in either a different rock layer (formation) or in a different direction, or parallel to the well already in place but some distance away. The beauty of directional and horizontal drilling is that the actual openings at the surface (wellheads) can be 30 ft. apart on the same pad, the ends of the lateral wellbores can be as far apart as the lease will allow from 1250 ft. to about 9500 ft. depending on wellbore configuration on a 1280 acre (two section) lease spacing. Directional tools exist to put the wellbore where you want it, and barring some physical limitations, that can be done.
In the next phase, the drilling rig is moved off of the location and workover rig (images) brought in. Production equipment is moved on site, including the Christmas tree, treaters, separators, and tanks to hold produced fluid, various (short pipe) lines to move fluid around the location, and a flare stack to burn off excess gas (raw, wellhead gas, and sometimes H2S, not something you could use in your furnace). This is hooked up and pressure tested (as needed) in anticipation of producing oil, and the well is completed, using a workover rig. That may involve perforating the casing and fraccing the well, but now the well is producing oil and/or natural gas. If fracced, there is an initial 'flowback' period where the pressure induced by the frac (to crack the rock down hole) is bled off as the well is produced, along with some of the frac fluid.
That workover rig and frac equipment is moved off and the well allowed to flow until production rates decline to the point where it is economical to pump the oil out of the well, and then the workover rig is moved back in, and the pump, sucker rods, and pump jack (images) are installed, to pump oil out of the vertical part of the wellbore, where the formation pressure pushes the oil column up the pipe, just not to the surface.
While workover rigs and drilling rigs are mobile, they don't produce the oil, the well does, and it is literally carved in stone. It stays where it was drilled, unless additional drilling is done from that wellbore (another story).
The next boom
Complying with regulations can cost money. It can save it, too (by averting serious problems with fixed standards), but that depends on the purpose of the regulation.
When the profit is there, things move more quickly, because the money will be invested.
Permits, on the other hand, can take ridiculous amounts of time, and in order to get a permit for a road on Federal land, there must be conducted surveys by Archaeologists (cultural remains), Biologists (for rare/protected animals--especially for signs that raptors ever nested there), Botanists (for rare/protected plants), EIS filed, etc.
Each of those permits will require the report of a specialist in that field, someone paid for by, but not connected to the oil company. Those are pretty specialized fields, so that can be a bottleneck.
In the event a road route has been used in the past and reclaimed, all the surveys must be conducted again if that route is to be used again.
On Tribal Land, other permits and Tribal Government hoops may exist as well.
So that process can take months on Federal Land. It is generally quicker with the State on private or even State owned land. Generally, though, there is nothing fast about it.
The people who deal with permits at the Federal level get paid whether or not a permit is granted. They are seldom in any hurry.
At the State level, the state permit folks seem to take their jobs more seriously in that they are not there to obstruct the process. After all, a well drilled in this state will produce revenue for the State, too. That doesn't mean they will cut any corners, but they will get their job done. It is a subtly different mindset.
Other factors apply, though, in gearing up to drill a lot of wells. The perception is that the Bakken Boom only happened from about 2008 to this year (tailing off now).
Actually, the first attempts to drill horizontal wells in the Bakken date back to the mid 1980s; the present boom has its roots in wells drilled in 2000 in Montana, and spread and grew over 15 years, in a different part of the Bakken formation than the original wells of the 80s.
It takes longer to prove concept than most folks imagine. The leases (privately held mineral rights) and ownership must be sorted out and obtained, as well as the permits, and all that happens before a drilling location is prepared for a rig to be moved on. That's all prep work, tied in with geological evaluations, seismic studies, and the myriad preparatory steps which accompany the drilling of any well, right down to posting reclamation bonds for the wellsites. Millions of dollars may be spent before a drill bit is picked up.
Iron doesn't keep well outside, and drilling rigs are simply too big to put in a shed. If a rig has been stacked (out of operation) for as little as 6 months, it can cost between $50,000 to $100,000 to get it going again, and quite possibly more as rigs are increasingly dependent on computerized systems. That's just one drilling rig, and there were 218 here at the peak. Now, there are roughly 65.
Even so, that is a problem that can be cured with a little time and enough money, given the incentive (potential profit). Money might be harder to get the next time, though, because bankers who were eager to lend during the last boom might not have come out so well on the deal and be less eager to lend for business growth on the next.
Normalcy bias isn't just for day to day stuff. When a boom is on it is funny how many people start acting like it will never end.
Here's the killer, though. Whenever a 'boom' dies out, there will be a contingent of people who stay on, but the vast majority will disperse.
If they rented, the apartment will sit empty as they go back home and live in the house they came to work and save from the bank or go off in search of greener pastures.
The aforementioned normalcy bias blinds landlords to the decreasing income in an area, and the rents don't drop as fast as the paychecks go away, so the people leave.
People don't have much of a shelf life, especially when there are mouths to feed. They get jobs in other fields, maybe even decent ones, and often will not go back to the oil industry. They find jobs in other areas that will get them by, especially if they saved up a grubstake.
Older workers hit retirement age or die off.
Good people get swept out with the dead weight, so having been laid off is not an indicator that someone isn't top quality, just that they were in the wrong place at the wrong time or the people they worked with for decades retired and they lost their network.
There is also the assumption that those who successfully adapted to decades of change in an industry can't handle the "modern' technology. (Funny, really, because they were the ones who developed or proved it.)
So, ramping up to have another boom isn't as simple as throwing a switch. Even on the heels of another boom elsewhere it takes time to move equipment, hire and train people, obtain the fleets of trucks and drivers, and figure out the quirks of the particular formation (geological rock layer) being drilled and produced.
Since booms die as a result of economics, there tends to be a delay of a decade or two between periods of peak activity, unless geopolitical factors bring about another one.
Thank you for the detail! I’ll have to read most of this off-line.
“Permits, on the other hand, can take ridiculous amounts of time ...”
That’s what I thought.
As I understand it [and assuming the future President is anti-leftist], the President has tremendous leeway with many regulations and can sign emergency executive orders to bypass regulatory hurdles.
And if the President needs more anti-regulation power, emergency legislation can provide him/her with greater EO leeway. A sharp increase in gas prices is arguably an emergency, a threat to military budgeting at the very least.
Some of the process protects the landowner, some the environment (reasonably, no one wants a mess). Sometimes Government involvement is the worst thing that can happen. Usually, what needs to be done is weeding through the unnecessary regulation and getting out of the way.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.