A few words of wisdom from an airline pilot:

http://www.nbcbayarea.com/news/loca...engers-Over-In-Flight-Politics-400964896.html

 

I guess the problem is that all the wells drilled over the past 10-years as fracking technology was refined, many are pumping. It is not just the Middle East guys determining if more wells have to be drilled, it is the owners of already drilled/fracked wells and how much they want to pump. Some properties and mineral rights are leased, some are drilled and capped, some are drilled and fracked and sitting idle and many are drilled, fracked and pumping.

Many people like to blame the Middle East and Russia for the slow-down in the fracking industry but a lot has to do with domestic capacity. The US added about 5 or 10% to global capacity and, at the same time, increased fuel efficiency of our fleet through CAFE standards. There is a global glut and the cost of adding to that glut is minimal.

The oil sands on Canada is a real mess - not exactly sand either. They are trying to flow rocks and gravel with sand-sized shale through troughs and pipes to separators. Transport media is wearing out as rocks erode pipes and troughs made of rubber-lined steel pipes and various concrete composites.

The oil in the mix is a thick mess as well. If there is an option that costs $1 a barrel less to get to Houston, the oil industry will drift to that (check pipeline from North Dakota to Illinois already in progress.

I think I get it. The US oil companies ramped up on the bet that everybody else would cut production, but a lot of places can supply it cheaper than we can and didn't cut production (yet). Once the pumping wells run dry drilling will probably come back in roughly the reverse order of cost to produce.

Does that seem right?
If so, Keystone bad ND pipeline good.

 

I think I get it. The US oil companies ramped up on the bet that everybody else would cut production, but a lot of places can supply it cheaper than we can and didn't cut production (yet). Once the pumping wells run dry drilling will probably come back in roughly the reverse order of cost to produce.
Does that seem right?
If so, Keystone bad ND pipeline good.

Yes, but remember, $36 is an average for the US. operators look at specific wells - some Existing US wells are below $30 and some are well over $60

 

Yes, but remember, $36 is an average for the US. operators look at specific wells - some Existing US wells are below $30 and some are well over $60

Yeah, I get it. I was just trying to see if TCMTECH would be going back to work soon. It doesn't look like the Donald is going to help him much in the short term.
I don't understand though. One article I read said the ND pipeline took the same route as an existing gas pipeline. If so why aren't they shipping the gas out instead of burning it? Gas to cheap?

 

Yeah, I get it. I was just trying to see if TCMTECH would be going back to work soon. It doesn't look like the Donald is going to help him much in the short term.
I don't understand though. One article I read said the ND pipeline took the same route as an existing gas pipeline. If so why aren't they shipping the gas out instead of burning it? Gas to cheap?

Oil vs gas or not enough pipeline capacity? I don't know yet.

 

If so why aren't they shipping the gas out instead of burning it? Gas to cheap?

So many new wells went in so fast that there was no way to build the outgoing crude and gas pipeline systems to every well that went into operation fast enough to keep up with them. Even with the last near year and half of slowdown we still have not came close to getting all the needed lines in place yet.

The base problem is the natural gas is dissolved into the oil so as it reaches the surface it boils out due to the several thousand PSI pressure drop on the way up the well and being it can not be easily collected in tanks in a liquid form and later transported by common tank truck the only option is to vent it off and burn it wherever an active well without a pipeline system is operating.

We don't want to do it that way but the basic physics of operating a well leaves us stuck with no other choice at this time until a well is hooked into a pipeline system and even then only so many wells can go online due to the size and capacity limits of the main lines that can be built to carry it out of state.

At present the Dakota Access Pipeline is a 30" line and it will be carrying at best ~570,000 BBl's of crude out even though our pumping capabilities could easily run at 10X that per day. Same with outgoing gas line capacity. What we could produce is way beyond all present and immediate planned future pipeline capacities.