The U.S. Monthly Energy Review

The US Monthly Energy Review is now up with all the US Oil and Gas data for November. US (estimated) Crude + Condensate production was 8,002 kb/d for November. I think that will be revised later because the Bakken had a bad month in November.

Crude Oil Total

The average, so far this year, has been 7,438 kb/d and if December production is as much as November then the average for 2013 will be about 7,485 kb/d. AEO 2014 estimated 2013 production at 7,756 kb/d so it would appear that they are already a bit high with their prediction.

Natural gas liquids, along with natural gas is supposed to be a major player in our drive for “energy independence”, is up about 1 million barrels per day since 2006.

NGLs

 

In the chart below I have charted Net Imports along with Total Field Production, (NGLs + Crude) and Petroleum Products Supplied. The difference between Total Field Production and Petroleum Products Supplied is the distance we must go to reach energy independence.

Products Supplied

Although most of my charts are not zero based, because I like to amplify change, I have made this one zero based because I wanted to show how far we have come and how far we have to to attain energy independence.

Products Supplied increased by 614 kb/d in November and is up 1,864 kb/d since last December. And notice also that we are back to 20 million barrels per day of consumption.

Important Notice: The only reliable monthly world crude oil production numbers has come from the EIA. I find it extremely frustrating however that the EIA does not see world oil production as a priority. They seem to get later and later each month with their updates. When the old International Petroleum Monthly was published the data was only two months behind at most. Now we must rely on the International Energy Statistics page. Their last update was about 5 weeks ago with the July data. Now they are almost 5 months behind and I don’t expect anything before the first of the year. Friday I posted Patricia Smith, the EIA person who posts the data, though she does not compile it. Here is the exchange:

 To: Patricia Smith
 
Patricia, every day I check, several times, to see if the International Energy Statistics has been updated. And every time I am disappointed. Do you have any idea when it will be posted? And I am worried, is there a chance that this report will be cancelled?
 
Thanks and I am anxiously awaiting your reply,
 
Ron Patterson
Here is the reply I received Monday:
Hello Ron,

Due to a staff shortages, technical and database issues, and other priorities, some of the data are late getting posted to the web.  There have been so many changes, but hopefully the international program will not be cancelled.  Please be assured that we are working very hard to get the thousands of data records updated, I just can’t tell you an exact date.  What specifically are you looking for?

Pat

I replied and thanked her for her reply and told her I was looking for world crude oil production data from all oil producing nations. But from the tone of her post I am not hopeful.

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108 Responses to The U.S. Monthly Energy Review

  1. Inglorious says:

    http://www.bbc.co.uk/news/business-25546725

    A short interview with the Shell UK chairman. Towards the end he makes the statement ‘the easy oil in the world is gone’. Not really a shocker but the interview is running hourly on the BBC. Unfortunately I doubt many people are paying attention to it, Schumacher being in a coma is far more interesting.

  2. Tim E. says:

    I live in South East Wisconsin, specifically Racine, which has been hit hard financially and whose manufacturing base has been decimated. The jobs only leave and empty factories and homes are increasing. The former Chrysler Plant in Kenosha was recently torn down and the loss of those jobs and that factory has impacted the region hard. As I began seeing all the boarded up houses, stores and factories, I began using government databases and information to begin researching some of these closings. I use on-line Property Records, WI. Department of Revenue Databases such as Delinquent Taxpayers and IPAS (Integrated Property Assessment System, CCAP (Circuit Court Access), along with local government budgets and their audited financial reports, to get a clearer view of what Peak Oil has meant locally.

    What I find is shocking – and leads me to conclude that South East Wisconsin, Racine in particular, is heading for Bankruptcy/Default and it’s irreversible. Property assessments have decoupled from sale prices by tens of thousands – large numbers of properties are in arrears and underwater. Downtown businesses which have political connections have not paid their property taxes in 5+ years and are allowed to continue operation. Assessed values have to remain high because Wisconsin law limits municipal borrowings based upon a percent of total assessed value. Forgive my political messages, but I publish the data in a blog from time to time – and those interested can take a look here:

    http://racinesales.wordpress.com/

    AWS says: The way I see it tourism and civil aviation as we know it are the first industries to whither…

    Racine’s future, according to the politicians is based upon those 2 things. Racine has invested in DeltaHawk, which promises to revolutionize airplane small engines, but has so far failed to deliver, and Peak Oil almost guarantees it’s failure:

    RACINE — DeltaHawk officials have said it before and they’re saying it again: They will start making aviation engines — soon!

    http://journaltimes.com/business/local/deltahawk-struggling-before-takeoff/article_5e999cbe-702f-11e3-a7fa-001a4bcf887a.html

    The other business venture is Reef Point Marina, which Racine County took over in 2013 and says will revitalize the City. The Boaters will save Racine is the mantra! Looking at the County Budget I found that the occupancy rate was only 42% and the new Bar and Restaurant that replaced the former failing Bar and Restaurant is being given a pass on making rent payments – because it is unprofitable like the last venture. Further, there are problems with the infrastructure that will require tens of millions of $$$ in the future.

    The end of growth is here, and locally, this may be the beginning of a trend:

    SILVER LAKE — Dissolving or un-incorporating the village of Silver Lake is an idea that has gotten some lip service over the last couple of months.Officials there are struggling to balance the annual budget, maintain services, attract a commercial tax base and keep taxes in check.

    “I think it is something we may have to consider given that we have no growth and no potential for growth in the near future,” trustee Patrick Dunn said.

    http://www.kenoshanews.com/news/village_of_silver_lake_may_dissolve_474942789.html

    The ending of extended unemployment benefits and the rise in natural gas prices will only exacerbate the situation. That is my local view.

    • Jeffrey J. Brown says:

      Re: Tim. E.

      The GELM (Government Export Land Model)

      Let’s think of local and state (provincial), and for that matter, national governments as being similar to oil exporting countries, in that they consume a percentage of tax revenues and net debt infusions, in order to pay current benefits to employees and operating expenses and to pay current and future retirement/health benefits.

      And let’s just really focus on current and future retirement benefits.

      As Michael Lewis noted in his recent book, “Boomerang,” a lot of local governments, especially in California, are on track to consist of little more than a small staff that collects taxes and forwards virtually all tax revenue to retirees. And of course, most public pension systems are assuming a (highly unrealistic) estimate of 7% to 8% on future annual returns. Of course, the lower the actual investment return, the larger the unfunded pension obligation.

      In any case, if we assume flat to declining tax revenue, combined with rising retirement obligations (especially as investment returns continue to disappoint), it seems to me that the net result would be an accelerating rate of decline in services provided to the taxpayers, perhaps even as governments try (probably) unsuccessfully to materially raise tax revenue, by raising tax rates

      Excerpt from an Amazon review of “Boomerang”

      Quoting Lewis quote UCLA neuroscientist Peter Whybrow in the book’s last chapter (on California’s financial problems, not European countries), Lewis writes, “‘Human beings are wandering around with brains that are fabulously limited. We’ve got the core of the average lizard.’ Wrapped around this reptilian core is a mammalian layer (associated with maternal concern and social interaction), and around that is wrapped a third layer, which enables feats of memory and the capacity for abstract thought. ‘The only problem is our passions are still driven by the lizard core.’ Even a person on a diet who sensibly avoids coming face-to-face with a piece of chocolate cake will find it hard to control himself if the chocolate cake somehow finds him. Every pastry chef in America understands this, and now nueroscience does, too. ‘In that moment the value of eating the chocolate cake exceeds the value of the diet. We cannot think down the road when we are faced with the chocolate cake.’ … Everywhere you turn you see Americans sacrifice their long-term interests for a short-term reward.”

      • Mike says:

        Peak chocolate cake – 2007?

      • old farmer mac says:

        The go to book for anybody interested in learning something on the layman’s level about the three level brain is ” The Dragons of Eden” by Carl Sagan if memory serves.

        It’s fairly short, highly enjoyable and available from any large library.

        And small town librarians can borrow a copy for you from another library, although the one I use has found it necessary to charge a couple of bucks to cover the postage.

        • clifman says:

          The longer I live, the more I come to appreciate some of my professors, like the one who had us read The Dragons of Eden in a freshman seminar those many years ago…

      • Woody says:

        Bankruptcy is the only way to get back the increased pensions that were retroactively granted in the mid 2000s by a lot of agencies in California based on false information from PERS about future returns from the pension fund. The only thing that made 8% returns possible was continually reduced interest rates, which had pumped up bond yields since the 80s. It doesn’t require a financial hotshot to figure out that once interest rates go to 0 that the process of increased returns from falling bond yields will end. PERS knew this but presented the increased retirement benefits as a no cost perk to local agencies. Bottom line is they lied and are now trying to stick the public with the tab. Many local agencies owe PERS tens of millions to pay off the retroactive pension increases.

    • aws. says:

      Peak Oil will be local!

  3. TechGuy says:

    Bakken Production Profit

    I started work on trying to estimate how much money a typical Bakken well makes over its lifetime. Originally I used a simple decline curve of about 38% about a week ago. Ron posted a better production curve since my original estimate was not accurate. So I took the graph and created a table with about 50 data points so I could create a curve fit equation. From the data set I generated a ten order curve fit equation that I believe matches the decline curve fairly accurately. Below is a link to a graph using the curve fit equation:
    http://s1361.photobucket.com/user/TechGuyFive/media/BakkenWellProductionCurveFitPlot_12-24-2013_zpsfdcc6193.png.html
     photo BakkenWellProductionCurveFitPlot_12-24-2013_zpsfdcc6193.png

    Using the curve fit equation, the estimated total recovery of oil is about 200K (199,871) barrels over a six year period. If we assume that the total cost of drilling and operation of the well is $15 Million USD, and the average price per barrel of LTO is $65 bbl, the average bakken well loses about $2 Million USD. 200K*65 is about $13 Million. My guess is that the drilling and production costs are less than $15M and the average prices for LTO is probably higher than $65/bbl. Regardless, the profit margins on Bakken production are likely to be razer thin.

    If anyone has Mathematica or Matlab here is the plot equation you can use for your own purposes:
    Plot[2.718281828^(6.289439107718543` - 0.011543315289183781` x +
    0.00006035241819860633` x^2 - 1.9952239638304292`*^-7 x^3 +
    3.962939760372318`*^-10 x^4 - 4.923012495812217`*^-13 x^5 +
    3.860008680236791`*^-16 x^6 - 1.85110898087435`*^-19 x^7 +
    4.939129575330045`*^-23 x^8 - 5.5985240664919645`*^-27 x^9), {x,
    0, 365*6}, PlotStyle -> {Red, Thick}, PlotRange -> Full,
    GridLines -> {{30, 60, 90, 120, 150, 180, 365, 365*2, 669, 365*3,
    365*4, 1429, 365*5}, {500, 450, 400, 350, 300, 250, 200, 150, 100,
    50, 32}}]

    • Dennis Coyne says:

      Hi Tech Guy,

      Very nice. Let’s try the calculation as follows. We will assume the Bakken crude is shipped to the East Coast at a cost of $12/barrel and the refinery is willing to pay $100/barrel (essentially we will assume Brent prices remain at $100 or above and that this determines the refinery gate price on the East coast). So at the wellhead the price is 100-12=88 per barrel. Royalties and taxes are 24.5% of the well head price or $21.56/barrel and operating costs are $4/barrel so the net revenue is $62.44 per barrel. The capital cost of the well (for drilling and fracking) is $9 million. The net revenue is 12.49 million if we assume a zero discount rate. Profit is 3.49 million dollars with no discounting, when done properly, we determine the net present value (NPV) of future cash flows. If the NPV is greater than or equal to the capital cost of the well, then the well has a positive profit over its life. In this zero discount rate scenario, if the Brent oil price drops to $82.56 the well barely breaks even, this is equivalent to $45/barrel net revenue at the well head after operating costs, royalties and taxes are paid.

      DC

  4. Kam says:

    Interesting that Texas crude production rises exactly 50 kbpd since March: http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPTX2&f=M

    • I think you meant exactly 50 kb/d per month since March.

      Jan-13	Feb-13	Mar-13	Apr-13	May-13	Jun-13	Jul-13	Aug-13	Sep-13	Oct-13
      2,289	2,355	2,402	2,452	2,502	2,552	2,602	2,652	2,702	2,752
      Diff. from Previus Month   50	   50      50	   50	   50	   50      50
      

      Yes, that is very strange. One would would think they are just plugging in numbers. I know that is what I think. Thanks Kam for pointing this out. The odds that Texas crude oil would rise by exactly 50 thousand barrels per day ever month for seven straight months is astronomical. They are just making up stuff. How much oil has really been produced in Texas since March? I have no idea and I doubt that the EIA has either.

      • Watcher says:

        Bingo.

        In this past year we have caught several items like this.

        ZeroHedge seems to gravitate its reader base to a similar reality, which would go something like:

        Things are getting great according to the numbers — that no one should believe.

      • Jeffrey J. Brown says:

        The data that the EIA is showing for Texas + Louisiana (marketed) gas production are pretty interesting.

        January, 2012: 881 BCF (28.4 BCF/day)
        January, 2013: 850 BCF (27.4 BCF/day)

        Difference: -31 BCF (-1.0 BCF/day)

        September, 2012: 850 BCF (28.3 BCF/day)
        September, 2013: 792 BCF (26.4 BCF/day)

        Difference: -58 BCF (-1.9 BCF/day)

        Note that Texas hit 21.3 BCF/day in December, 2012, versus 20.4 BCF/day in September, 2013.

        LA Gas Production:

        http://www.eia.gov/dnav/ng/hist/n9050la2m.htm

      • Dennis Coyne says:

        It seems likely that budget cuts are making it impossible for the eia to do it’s job.
        DC

  5. old farmer mac says:

    There’s been another oil train wreck.

    Fortunately this one did’t hurt anybody, according to early reports.

    I saw an early report that seems to have vanished that said the oil train hit another train that had
    itself derailed, presumably blocking there oil train’s track.
    http://edition.cnn.com/2013/12/30/us/north-dakota-train-fire/index.html

    • Ert says:

      The big German newspaper Frankfurter Allgemeine (FAZ) stated the same as you. The following link contains a longer Video with voice comments in German that restate exactly what you have read elsewhere: http://www.faz.net/aktuell/gesellschaft/ungluecke/vereinigte-staaten-gueterzug-mit-oel-explodiert-12732767.html

      • Toolpush says:

        Looking at these explosions, I believe shows how light this oil is. These explosions look very much like a BLEVE rather than an oil fire. BLEVEs are normally associated with liquidized gasses, eg LPG and LNG.

        • aws. says:

          LTO is “barely crude”. : )

          • Toolpush says:

            Correct, that was my point.

            I can see some disruption in rail oil transport as regulations are tightened up, especially as there is a massive back log in rail tanker cars already in progress, and it will be very difficult to up grade the tanker already in service in a short time period.

            • aws. says:

              From G&M, some good background on the volatility of Bakken LTO…

              VIDEO: How oil from the U.S. Bakken formation decimated Lac-Mégantic

              … and the latest article on their investigative reporting on Bakken LTO rail transport.

              North Dakota’s explosive Bakken oil: The story behind a troubling crude

              Grant Robertson, The Globe and Mail

              Published Tuesday, Dec. 31 2013, 11:36 PM EST

            • old farmer mac says:

              IS this stuff so light it will always sell at a discount to the more easily processed somewhat heavier crudes?

              It’s been my impression so far that it has sold at a discount because of transportation bottlenecks.

              We’ve all heard about the guy with his foot freezing water hand his head in a fire being , according to a statistician, comfortable on the average.

              But it does occur to me that this super extra light crude might be used advantageously- without very much chemical restructuring- by blending it into a very heavy crude during the refining process .

              Any given “too light” molecular fraction of the light tight oil would have to be either “fattened up” chemically speaking or else used for some other purpose than gasoline, diesel, or lubricating oil. But the heavier fractions of lto might be easily blended into gasoline or diesel being made from an extra heavy crude.

              I’m in over my head but I’m sure somebody in the forum knows how the economics of processing a super light crude play out at the refinery and therefore the implications for the price of it once the transportation infrastructure catches up.

              • TechGuy says:

                “But it does occur to me that this super extra light crude might be used advantageously- without very much chemical restructuring- by blending it into a very heavy crude during the refining process .”

                While I am not a Petro-chemist, I don’t think it works that way. When Crude is refined its typically passed through a fractional distillation column to separate the various hydrocarbons by molecular weight. In order for LTO to be used to produce heavier hydrocarbon fuels they would need to use a chemical process similar to fischer-tropsch which is expensive and time consuming. I believe its much cheaper to use a hydrocarbon cracker to reduce heavy crudes into lighter hydrocarbons.

                Adding LTO to heavier crudes does not result it chemical reactions that alter the molecular weight of the heavy hydrocarbons. There needs to be a chemical process to alter them. Adding LTO to crude would be like adding water to alcohol and distilling it. You still have the same quantity of alcohol in the batch, and when the process is done you just separated the water from the alcohol.

                Perhaps LTO may be added to very heavy crudes as a solvent so that the heavy crudes don’t gum up the processing equipment. Another way may be to crack LTO into hydrogen gas use for cracking heavier crudes, but I believe hydrogen gas is usually produced using NatGas and there probably is a added cost to using LTO instead.

                Found this:
                http://www.econbrowser.com/archives/2012/07/shale_oil_and_t.html

                “We’re still learning about tight oil. Here is an interesting anecdote. At my refinery, we started getting some kind of North Dakota sweet crude that evidently had amines in it at maybe 250 ppm levels. They concentrated in the overheads from our atmospheric distillation tower, and completely fouled our overhead coolers, forcing us to cut rates and eventually replace exchanger bundles at great expense and lost production.

                While amines are common in refineries, they’re part of downstream processes that get sulfur out of fuels. They are generally not seen by themselves in crude oil.

                Our best guess is that the frackers use amines in their fracking fluids. They’re probably benign until they get concentrated at the top of a atmospheric distillation tower.”

                So it looks like LTO causes problems with fractional distillation.

                • DrTskoul says:

                  Ha.. Many additives in upstream operations can cause problems in distillation towers. I remember a particular corrosion inhibitor containing phosphorus used in crude pipelines that was causing a particular tray in an atmospheric distillation unit getting fouled up with phosphorus deposits.

                  Also to add to the above, in adding LTO to heavy fractions does nothing to those fractions other than reducing viscosity, altering pour points and other physical properties, but heat it up and those fractions will flash off.

                • old farmer mac says:

                  So- Light tight oil is not worth much if anything to use in the in the refining of heavy oil; this does not bode well for the price of it.

                  Might it be possible for a refinery to profitably refine lot by causing the small molecules to join together in pairs and make them of a size suitable for gasoline and diesel?

                  If the stuff can’t be used easily and economically to make a liquid fuel it will probably always sell at a substantial discount to other crudes such as Brent.

                  • DrTskoul says:

                    LTO has the right molecules for gasoline, and lighter fractions. Gasoline is comprised from 5 carbon molecules all the way to C10+ molecules. Deisel is much heavier. LTO molecules also find their way to chemicals through the fractionators.

                • toolpush says:

                  http://www.rbnenergy.com/It-Aint-Heavy-Its-the-Bakken-light-heavy-crude

                  “Exception #4. I want my diesel back. Since we are talking about Oops, there is one last point to consider that was also illuminated by Jim Jones. The new crudes are light in another way. They are light on diesel yield. Bonny Light, one of the Nigerian crudes getting backed out of the Gulf Coast has kerosene (360-500 °F cut) and diesel (500-650 °F) yields at 20.8% and 24.8% respectively. For Bakken, the numbers are much lower at 14.7% and 14.3%. Condensates, which make up more than half of Eagle Ford production have even lower kero/diesel yields– well south of 5%. These numbers mean that refiners will be getting significantly less diesel out of the new crudes. Today refiners are making most of their money on diesel – so much so that the U.S. has become a net exporter of diesel, to Latin America and Europe. Declining distillate yields can’t be good news for the refiners who see this material coming. For this reason and others, it is entirely possible that distillate yields could become a primary determinant of future price differentials for different grades of crude oil.”

                  Hope explains a little, to see the link you will have to open an account, it is free, and a very handy site. Basically if you want gasoline and the refineries are set up for light oil, Bakken would be selling at a premium. Unfortunately the refiners have just spent a heap of money preparing for the flood of Canadian heavy oil sand, production and have an indigestion problem with all the LTO coming to market.
                  The other issue that seems to be appearing, is the Bakken oil that is blowing up in the train derailment seems to be lighter then what has been advertised. Are the sweet spots for the most preferred oil being crowed out and some of the less preferred oils now being produced? I don’t know the answer to that question but it is shaping up as though there are some near condensate being produced in the Bakken, and being sold as crude oil.

  6. aws. says:

    Gonna burn through a lot of NG in the next couple of weeks…

    Bundle Up for New Year as Door to Arctic Is Wide Open

    By Andrew Freedman
    Published: December 31st, 2013 , Last Updated: December 31st, 2013

    Care to speculate what the price of NG will do in the next couple of weeks?

    • Jeffrey J. Brown says:

      And as noted up the thread, the year over year decline in Texas + Louisiana’s combined (marketed) natural gas production accelerated from down 1.0 BCF/day in January, 2013 to down 1.9 BCF/day in September, 2013 (relative to respective months in 2012, EIA).

  7. Canabuck says:

    Does anyone know what is behind the story about “maintenance water” for LTO oil wells?
    maintenance water
    The water is used to dissolve the salt. Is it done on a monthly basis?

    • toolpush says:

      Canabuck,

      I must admit to never hearing the term maintenance water, but salt build ups whether it is Na salts Barium salts or any other salts are a problem in producing wells. Flushing with fresh water seems a reasonable method of keeping of keeping it under control, certainly beats pulling the completion tubing and cleaning it or replacing it.
      To clean up the returning brine, then it could be put through a Reverse Osmosis unit. This would give a high concentration brine to be disposed of, along with clean water to be used for flushing the well. Now I have no idea of the cost of RO v buying fresh water, but this is the only method to recover any of this water. If they intend using too much water then they will need to get used to RO .

  8. Dennis Coyne says:

    If anyone has any charts to post, please try to choose a chart to upload in the box below the comment.
    Test with Temp images. Only one image per comment so if you need to do multiple images you would either need multiple comments or you could put several images in a word document then take a screen shot and edit.

    Unfortunately this is the best I can do so far.

    DC

    • Aws. says:

      Thanks DC.

    • Canabuck says:

      Wikipedia’s 65 year trend in Canada’s annual high temperatures.
      Notice the warming trend.

      • Dennis Coyne says:

        Not much of a trend. Note that climate change is about the trend in average temperatures on a global basis. So high temperatures in Canada don’t really tell us much. The RSS data is what Monckton writes about when he talks about no warming for 17 years, the UAH data is also satellite data, other longer term temperature data shows similar warming or greater over the last 20 years. All temperature data sets are imperfect, so the best estimate would be the average of several datasets, GISS, HadCrut, NOAA, UAH, and RSS. Also a minimum of 25 years of data is needed to establish a robust trend with a high signal to noise ratio.

        DC

      • Dennis Coyne says:

        Canabuck,

        Thanks for posting the chart. Sometimes the things I try to do only work for Ron and me, so a test by other people is helpful, I am not sure why there is so much whitespace below your chart, but maybe that is just the way your chart looks and it is not the plugin.

        Dennis Coyne

    • Dennis Coyne says:

      AWS,

      Your welcome.

      Canabuck,

      Thank you for posting the chart, now I know it doesn’t only work for me.

      Dennis Coyne

Comments are closed.