2014 July 18

The Master Resource Report 2014-07-18

Natural gas storage

The EIA reported that working gas in storage reached 2,129 Bcf for the week ending July 11th. This puts storage 22% below year ago levels and 25% below the five year average. The cool weather together with strong volumes of production from the Marcellus have worked together to provide ample gas for storage injection.

The injection of 107 Bcf into storage last week was 1 Bcf higher than the previous high for the same week in 2007. The average injection for that week since 2006 is 80 Bcf so injection was 33% above that level.

The graph below gives some additional perspective where the current storage level fits in historic terms since 2006. The peak storage volumes for each year are shown at the top of each year’s injection curve.

If the summer weather continues to be cool along with no production disruptions such as hurricanes natural gas in storage may breach the 3,500 Bcf level by the start of winter. In that case the price of natural gas could once again test the financial wisdom of the drilling programs of many producers.

Natural gas storage 2006-2014 comparison


2014 July 11

The Master Resource Report 2014-07-11

Oklahoma earthquakes

Last week the Wall Street Journal had an article that looked at the jump in magnitude 3 and above quakes that have been registered in Oklahoma.

Temblors in Oklahoma used to be rare. Before 2008, the state experienced just one earthquake of magnitude 3 or larger each year. So far this year the state has already witnessed 230 quakes of that size-more than the number recorded in California.

The article further reported that the USGS has been looking into the increased number of magnitude 3 and above earthquakes in the midcontinent of the United States.

In the central and eastern U.S., the number of quakes has jumped over the past few years, according the U.S. Geological Survey. The agency says that more than 300 earthquakes above a magnitude 3.0 occurred in the three years from 2010-2012, compared with an average annual rate of 21 from 1967-2000. These earthquakes were large enough to be felt, but they rarely caused any damage.


This graph from the USGS web page illustrates the dramatic shift in the occurrence of magnitude 3 and above quakes in the midcontinent of the US.

earthquake graph

Source: USGS


2014 June 27

The Master Resource Report 2014-06-27

Hydro in the Pacific Northwest

According to an article posted on the EIA’s Today in Energy web page (June 27th) hydroelectric generation in the Columbia River Basin accounted for 44% of all hydro power in the US in 2012. The generation from this river system was 29 gigawatts. The map below is from the article.

Hydro on Columbia River Basin

Click map for larger view.

It is worth noting this little bit of information on how the Grand Coulee Dam which is the largest hydro facility in the US compares to the largest nuclear facility in the US. Keep mind that in 2012 hydro provided about 7% of total US power generation while nuclear contributed about 19% according the EIA.

The Grand Coulee Dam in the state of Washington has the most capacity of any electric power plant in the United States, at 7,079 net megawatts. The Palo Verde nuclear plant in Arizona ranks second with a capacity of 3,937 net megawatts. But nuclear plants are able to use more of their capacity than hydropower facilities. In 2012, Grand Coulee generated over 26,461 gigawatthours of electricity, while Palo Verde generated more than 31,934 gigawatthours.

For now hydro remains the US largest provider of renewable carbon free power generation. But given the rapid growth in solar and wind along with the lack of new hydro locations means that position is destine to change. As an example this week’s report shows just how fast this is happening in California.


2014 June 20

The Master Resource Report 2014-06-20

EIA reports natural gas supply & demand

The EIA reported this week that natural gas consumption was down for the seventh week in a row as cooler temperatures prevailed. But in a good example of just how much weather impacts power burn consumption in that sector climbed from the low in the week of 20.2 Bcf/d to 28.2 Bcf/d when the weather warmed.

The graphs below from the EIA the weekly natural gas report give further information on supply and demand.

EIA weekly nat gas graphs 2014-06-20

Click image to open larger view.



2014 June 13

The Master Resource Report 2014-06-13

The Bakken’s radioactive problem

When you talk to folks who have visited or worked in the booming oil fields of North Dakota they report it being like the Wild, Wild West. And like any gold rush period government and environmental regulation enforcement runs way behind the curve.

Associated Press: People have been caught nearly 150 times in the past year attempting to illegally dump loads of oil field waste — much of it radioactive — at two of the biggest landfills in western North Dakota, records obtained Wednesday by The Associated Press show. None of the incidents resulted in fines or other sanctions from the state, and the most regulators required was that offenders promise to properly dispose of the waste, officials said.

The biggest problem is the growing volume of illegal disposal of filter socks. These are tubular mesh nets that filter the liquids produced from the oil wells.  In the process of straining out solid material the filter socks also become contaminated with radioactive waste that is extracted with the petroleum liquids.

Since there are no licensed disposal sites in North Dakota they need to hauled to the nearest approved disposal sites in other states such as Montana which allow radioactive waste in their landfills. But for some apparently the cost and the drive are just too far so they dump them illegally along the road or in dumps not designed to accept the waste.

For now North Dakota is remaining firm on its restrictions on radioactive waste disposal but this issue will not go away and must be resolved in the near future as the number of wells move beyond the current 10,000 plus.

While most operators are conforming to regulations concerning waste disposal there will always be those that will go out of their way to avoid compliance. If the industry doesn’t help bring these operators into compliance they will all suffer and the cost they face will be escalated further.