2014-07-25

2014 July 26

The Master Resource Report 2014-07-25

Brine disposal and lightning don’t mix

WILLISTON, N.D. — Three massive fires since the beginning of June have highlighted the threat lightning poses in the North Dakota oil patch, and in each case it was tanks that store the toxic saltwater associated with drilling — not the oil wells or drilling rigs — that were to blame.  More……

EIA reports on OPEC oil revenue

Yesterday the EIA posted a report on OPEC net oil export revenues. It is interesting that the EIA expects OPEC revenues to decline in 2014-15 from 2013 levels which fell short of 2012’s record revenues. It is interesting to note that the decline in revenue will be the result of less demand for the cartel’s production. Hmmmm, it will be interesting to see how that plays out over the next year and a half.

The U.S. Energy Information Administration (EIA) estimates that, excluding Iran, members of the Organization of the Petroleum Exporting Countries (OPEC) earned about $826 billion in net oil export revenues in 2013. This was a 7% decrease from 2012 earnings, but still the second-largest earnings totals during the 1975-2013 period for which EIA has tracked OPEC oil revenues. OPEC earnings declined largely for two reasons: a drop in OPEC oil production in 2013 (largely because of the supply disruption in Libya), and a 3% decline in average crude oil prices (as measured by the Brent crude oil price marker).  More…..

2014-07-18

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

2014-07-11

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

2014-06-27

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.

2014-06-20

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.