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California Takes Record Amount of Oil by Rail From Utah

California , home to two-thirds of refining capacity in the western U.S. , brought in a record volume of waxy oil by rail from Utah in June as crude imports from Canada and North Dakota slid. The state, the biggest gasoline market in the U.S., received 2,737 barrels a day of oil by rail from Utah in June, almost twice the volume of the previous month and up from nothing a year ago, data on the state Energy Commission’s website showed yesterday. Canadian oil-by-rail imports dropped 25 percent to 6,669 barrels a day. North Dakota shipments shrank by 34 percent to 4,035. California’s oil-by-rail deliveries are at a seasonal record as refiners in the western U.S., lacking direct pipeline access, use trains to reach surging crude production from shale formations in the center of the country and in Canada. Utah is shipping record volumes of oil by rail as […]

Posted On : Published By : Tom Whipple
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Colorado Deal Would Keep Fracking Off Ballot

Gov. John Hickenlooper, right, listens as Rep. Jared Polis (D., Colo.) speaks at a Monday news conference. Associated Press DENVER—A last-minute agreement on Monday between two of Colorado’s top Democrats would keep off the November ballot a pair of anti-fracking measures that some in the party feared would weaken its candidates on Election Day. Under the deal, Democratic Rep. Jared Polis will drop his support for two ballot initiatives that would limit fracking, even though the congressman has spent millions of dollars of his own money on the effort. The lawmaker instead will support a new plan from Gov. John Hickenlooper to have a commission advise the state legislature on the best ways to address residents’ concerns about oil and natural-gas drilling. Groups aligned with Mr. Polis and critical of fracking have been pushing for ballot questions to limit the drilling practice, which prompted pro-industry groups to push a […]

Posted On : Published By : Tom Whipple
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Study: Bakken no greater transport risk than other light crudes

The North Dakota Petroleum Council (NDPC) has released the final report on a study it commissioned to examine the characteristics of crude oil produced from the Bakken shale region. The third-party study, completed by Turner, Mason & Co., Dallas, and SGS Laboratories, indicates Bakken crude is similar to other North American light, sweet crudes and does not pose a greater risk to transport by rail than other crudes and transportation fuels, NDPC said. The final report follows preliminary results of the study presented in May ( OGJ Online, May 20, 2014 ). Designed to better understand the safety aspects of moving Bakken crude by rail, the study came as a response to concerns raised by government and industry groups as to the stability and safe transportability of the regional crude after its involvement in a series of high-profile railcar incidents in both the US and […]

Posted On : Published By : Tom Whipple
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Colorado Democrats Avoid Fracking Fight

Colorado Democrats avoided a politically costly fight over oil and gas drilling after a quid pro quo deal pitched by the state’s fracking-friendly governor prompted groups to drop their dueling ballot proposals. The cease-fire compromise from Gov. John Hickenlooper was announced with great fanfare at the state Capitol Monday morning with U.S. Rep. Jared Polis, a fellow Democrat who helped finance two initiatives that sought to limit hydraulic fracturing, or fracking. He agreed to back off his proposals, and groups pitching two pro-fracking proposals said later in the day they would end their campaigns as well. A ballot-battle over drilling had Democrats worried about the implications. Taking the issue to voters could have negatively impacted Democrats in November by increasing fundraising for Republicans who favor oil and gas development and possibly boosting GOP turnout. Hickenlooper […]

Posted On : Published By : Tom Whipple
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Bakken Shale Rig Count Increases by Two to 184

SM Energy Grabs 61,000 Bakken Net Acres – $330 Million SM Energy Bakken Map SM Energy Bakken Map | Click to Enlarge The  Bakken-Three Forks rig count  increased by two to 184 rigs running across our coverage area by the end of last week. The NDIC notes 193 rigs are active in North Dakota, but around 21 of those are in the process of moving in and rigging up. In recent Bakken news, SM Energy recently announced it will acquire approximately 61,000 net acres in Divide and Williams Counties for $330-million from Baytex Energy. The acreage is directly adjacent to the company’s Gooseneck focus area. Upon closing, the company will have ~97,000 acres in the area. Read more :  SM Energy Grabs 61,000 Bakken Net Acres – $330 Million The U.S. rig count increased by six to 1,889 rigs running by the end of last week. A total of 313 rigs were targeting natural gas […]

Posted On : Published By : Tom Whipple
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Colorado Fracking Opponents Losing Local Control Fight

Colorado ’s compromise with drilling opponents has dealt a blow to environmentalists’ expanding battle to give local communities more control to limit fracking. Governor John Hickenlooper and Representative Jared Polis agreed to a deal that weakened the prospects for two proposed ballot initiatives aimed at restricting oil and gas activity, the two men said at a news conference in Denver yesterday. Polis, who was expected to help finance the campaign for the measures, agreed to withdraw his support after Hickenlooper promised to create a task force to study the industry’s impact on local communities. “Responsible oil and gas development in Colorado is critical to our economy, our environment, our health and our future,” said Hickenlooper. The Democrat, who told a Senate committee last year that he drank fracking fluid to prove its safety, has been a strong proponent of drilling. Colorado crude output grew faster than in any other […]

Posted On : Published By : Tom Whipple
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Colorado Deal Would Keep Fracking Off Ballot

A last-minute agreement on Monday between two of Colorado’s top Democrats would keep off the November ballot a pair of anti-fracking measures that some in the party feared would weaken its candidates on Election Day. Under the deal, Democratic Rep. Jared Polis will drop his support for two ballot initiatives that would limit fracking, even though the congressman has spent millions of dollars of his own money on the effort. The lawmaker instead will support a new plan from Gov. John Hickenlooper to have a commission advise the state legislature on the best ways to address residents’ concerns about oil and natural-gas drilling. Groups aligned with Mr. Polis and critical of fracking have been pushing for ballot questions to limit the drilling practice, which prompted pro-industry groups to push a […]

Posted On : Published By : Tom Whipple
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Demand for Sand Takes Off Thanks to Fracking

Frackers are expected to use nearly 95 billion pounds of sand this year. A sand mine in Garnavillo, Iowa. Stephen Mally for The Wall Street Journal Sand prices are rising and companies are racing to build new mines in South Dakota and other locations as demand intensifies for the silica crystals that energy companies use to frack oil and gas wells. Sand is a key ingredient in items from solar panels to smartphones, but in recent years billions of pounds of it have been poured down wells to help coax more fuel out of the ground. In hydraulic fracturing, sand is mixed in a slurry of water and chemicals, then pumped down a hole to crack open dense rocks so oil and gas can escape to the surface. Frackers are expected to use nearly 95 billion pounds of sand this year, up nearly 30% from 2013 and up 50% […]

Posted On : Published By : Tom Whipple
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Low Rates Have Helped Fund Drilling; Tighter Policy May Not Choke Off Boom

The oil patch has run up the mother of all tabs. So will rising interest rates choke off the shale boom? Between 2006 and 2012, U.S. exploration and production companies clocked almost $1 trillion in capital expenditure, far above operating cash flow of $670 billion, according to Raymond James. Companies have proven adept at filling that funding gap, not least by raising debt. The E&P sector in 2007 was carrying $28.84 of net debt per barrel of oil equivalent produced, according to data from IHS , roughly equal to operating cash flow. By last year, net debt per barrel had jumped 36% to more than $39, while cash flow was essentially flat. That should provide fuel for those who doubt the shale boom’s longevity, as rising debt levels choke off returns and the capacity to invest in new wells to keep production growth going. Moreover, as the Federal Reserve […]

Posted On : Published By : Tom Whipple
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Bakken fuels North Dakota’s oil production growth

The Bakken counties total exceeds the North Dakota state total because the Bakken counties include crude oil production from some counties in eastern Montana. North Dakota production is for the entire state, not just counties in the Bakken Region. North Dakota crude oil production surpassed 1.0 million barrels per day (bbl/d) in April and May (the latest data available). This record is the result of increasing crude oil production from the Williston Basin’s Bakken and Three Forks formations in North Dakota and eastern Montana. Although Bakken oil production initially began in the 1950s at Antelope Field in North Dakota, large-scale production growth did not begin until after the discovery of the Parshall Field in 2007. Since then, advances in drilling methods and technology, a better understanding of the geology of the Bakken, higher crude oil prices, […]

Posted On : Published By : Tom Whipple