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(Daily Mail)   Oil prices rise to $96 per barrel following news that the oilfields in North Dakota burn off as waste enough to power Chicago and Washington   (dailymail.co.uk) divider line 61
    More: Stupid, North Dakota, Chicago, doves, short skirts, oil prices, British thermal units, Bakken, greenhouse gas emissions  
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2506 clicks; posted to Geek » on 28 Jan 2013 at 10:03 AM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-01-28 11:43:41 PM

SVenus: Feral_and_Preposterous: Yeah. We haven't figured out how to move electricity around, I forgot. Maybe you ought to get to work on that, you could make a dollar or three.

As the pipeline hooks up to the well you've been working that generator on, you move the generator on to the next well that came on stream. Where's the electricity infrastructure for that one? Now, multiply that times all those wells, because all 1,100 of those aren't the same ones. Now, feel free to sell that electricity to a grid with existing electricity contracts. It would be difficult, if not impossible to QUICKLY sell a consistent amount of electricity of that volume without significant substations and the rest.

Note the infrastructure being installed currently for the area. It's $4billionUS, and that's primarily for the gas. So ALL the infrastructure you're putting in place for electricity will be made obsolete in just a couple of years. You would have trouble justifying the expense of the electricity infrastructure you've just installed as the gas is sold and moved off more efficiently than your electric grid. People who know this would never want to buy electricity from you at the expense of terminating their existing long term contracts.


Ok, if they can't store it, pipe it somewhere or convert it to electricity on site then why should they be allowed to drill it? Why should the infrastructure be so far behind the drilling? How can that much waste and pollution be acceptable?
 
2013-01-28 11:47:32 PM

Feral_and_Preposterous: That would be farking idiotic


Then you didn't read my post upthread that has Statoil converting their field rigs to run off the natural gas. Conversions take time and cost an investment, but it is what's happening now. But nice to know you thought of it, too. Pat yourself on the back.
 
2013-01-28 11:58:24 PM
Using http://www.cntenergy.org/media/Chicago-Regional-Energy-Snapshot.pdf and http://www.eia.gov/beta/state/?sid=dc I get about 20MMMBTU/day to power D.C. the Chicago metroplexes. So the Daily Fail is right that ND is flaring enough natural gas to power the cities using SVenus' number of 713MMcfd (713MMMBTU/day). Of course, I suck at unit conversions in my head. For comparison, Svenus' number accounts for about 1.1% of the USA's total natural gas production in 2010 (less in 2011).

There are lots of chemical companies in the Gulf region planning major capital projects/expansions/grass roots projects in anticipation of the completion of the infrastructure to receive this natural gas. The oil industry doesn't want to waste the natural gas. The oil industry doesn't exist to be evil, it exists to make money. It's losing money by flaring the gas, simple as that.
 
2013-01-29 09:40:45 AM

Baryogenesis: Ok, if they can't store it, pipe it somewhere or convert it to electricity on site then why should they be allowed to drill it? Why should the infrastructure be so far behind the drilling? How can that much waste and pollution be acceptable?


I'm in the business, but I refuse to go into defense mode.

If it was converted into electricity, it would still be burned on site. Flares can be monitored for pollution, and I would imagine flaring gas isn't all that different from burning it in a generator. In truth, there could be some additional carbon soot that falls locally. For the most part, this area is pretty desolate. This isn't coal you're burning off.

Note I did mention the $4Billion dollars worth of gas infrastructure. This includes a 525 mile pipeline to Denver. Do I need to go into the issue with getting pipeline permits? Putting a pipeline down to collect gas locally is the same thing, only on a local basis. The local collection network buildout has to be a biatch. Imagine putting up a road system to handle traffic from a new city. Each road will be a toll road, and every person in every car paying their fair share, even down to how much they weigh. Only you're not zoning the city, and someone puts up an apartment building where you didn't expect. So a new toll road has to be put down on top of the other one, only the previous toll road owner isn't investing in this new toll road, but he now controls the right of way. So the people who control the right of way get a sweet deal. Rights of way in pipeline situations are sweet when you know the pipeline owner has no other choice. The state can't pull an eminent domain thing on the little collection network. Now, I don't build pipelines, but you see the types of problems that put delays that would prevent the timely development of an area.

Back in the early days of oil development, Rockefeller prevented development of oil drilling in large areas because he cut a sweet deal with the railroads. He actually got paid when others moved their oil. Could you imagine if an oil company accidentally (cough! cough!) prevented another oil company with leases expiring from drilling because the gas pipeline contracts were being held up for a contracted reason? The windfall profits from me drilling and completing because I have a gas contract and gas connections and you losing your leases is enough to buy the state legislature. With spare cash for a nice pinky ring.

Say you have a collection network of gas pipelines and nobody wants to buy the gas. THAT HAPPENS.

Plus the requirements to sell gas hits you. The gas that comes out of these wells has impurities, often carbon dioxide. That has to be removed at no small expense. Say, you get a nice rich fraction of gas (not just methane) but the gas pipeline doesn't want those fractions, or won't pay the value of that. So now, your gas treatment plant (Got one of those handy?) has to remove carbon dioxide and partially drop out the natural gas liquids, that you have to deal with. Eventually, it should pay for itself. But also eventually, the oil companies will get their final gas connections and want good prices.

The mineral owners deserve the royalty from the flared gas, and they could sue for it. I think in Texas the oil companies only get a month exemption for flaring.
 
2013-01-29 10:00:52 AM
One more thing

SVenus: Say, you get a nice rich fraction of gas (not just methane) but the gas pipeline doesn't want those fractions, or won't pay the value of that.


The gas glut in America is so bad, there's pretty active "ethane rejection" going on right now across many natural gas fields

Read this: What Is Ethane Rejecton?/
--
Gas processors look at the market value of ethane burned as an MMBtu in the pipeline gas stream versus its value as a gallon of liquid. The plastics industry turns liquid ethane into ethylene, then polyethylene, and then into things like trash bags. So is ethane worth more burned in your stove top or lining your garbage can?
If ethane is worth more at a plant as a liquid (and ultimately lining your garbage can), the processor "recovers" ethane. If it's worth more as a gas (ultimately burning on your stove top), he "rejects" ethane. This economic choice what we call a real option. The processor has the operational right but not the obligation to sell ethane as a gas, depending on what nets him the higher price at his gas processing plant. Of course, he can only reject as much ethane as permitted by the pipeline specs. We wouldn't want your stove top to blow out...or blow up!
--


If you heat your homes with natural gas, your water heaters are set for a certain gas heat value. It's not like you can add a free hotter gas in there and not have someone burn down their home. So, ethane is actively being rejected by gas pipelines. The folks that make stuff out of ethane in liquid form have all they can handle. They don't want your ethane in liquid form to make your garbage bags or in their gas pipeline.

So now, you have ethane that you can't sell at any price in any form. You could store it. You could build generators to burn it. But you have to build a transportation network to do that.
 
2013-01-29 07:29:59 PM

SVenus: Baryogenesis: Ok, if they can't store it, pipe it somewhere or convert it to electricity on site then why should they be allowed to drill it? Why should the infrastructure be so far behind the drilling? How can that much waste and pollution be acceptable?

I'm in the business, but I refuse to go into defense mode.

If it was converted into electricity, it would still be burned on site. Flares can be monitored for pollution, and I would imagine flaring gas isn't all that different from burning it in a generator. In truth, there could be some additional carbon soot that falls locally. For the most part, this area is pretty desolate. This isn't coal you're burning off.

Note I did mention the $4Billion dollars worth of gas infrastructure. This includes a 525 mile pipeline to Denver. Do I need to go into the issue with getting pipeline permits? Putting a pipeline down to collect gas locally is the same thing, only on a local basis. The local collection network buildout has to be a biatch. Imagine putting up a road system to handle traffic from a new city. Each road will be a toll road, and every person in every car paying their fair share, even down to how much they weigh. Only you're not zoning the city, and someone puts up an apartment building where you didn't expect. So a new toll road has to be put down on top of the other one, only the previous toll road owner isn't investing in this new toll road, but he now controls the right of way. So the people who control the right of way get a sweet deal. Rights of way in pipeline situations are sweet when you know the pipeline owner has no other choice. The state can't pull an eminent domain thing on the little collection network. Now, I don't build pipelines, but you see the types of problems that put delays that would prevent the timely development of an area.

Back in the early days of oil development, Rockefeller prevented development of oil drilling in large areas because he cut a sweet deal with the railroads. He actually got paid when others moved their oil. Could you imagine if an oil company accidentally (cough! cough!) prevented another oil company with leases expiring from drilling because the gas pipeline contracts were being held up for a contracted reason? The windfall profits from me drilling and completing because I have a gas contract and gas connections and you losing your leases is enough to buy the state legislature. With spare cash for a nice pinky ring.

Say you have a collection network of gas pipelines and nobody wants to buy the gas. THAT HAPPENS.

Plus the requirements to sell gas hits you. The gas that comes out of these wells has impurities, often carbon dioxide. That has to be removed at no small expense. Say, you get a nice rich fraction of gas (not just methane) but the gas pipeline doesn't want those fractions, or won't pay the value of that. So now, your gas treatment plant (Got one of those handy?) has to remove carbon dioxide and partially drop out the natural gas liquids, that you have to deal with. Eventually, it should pay for itself. But also eventually, the oil companies will get their final gas connections and want good prices.

The mineral owners deserve the royalty from the flared gas, and they could sue for it. I think in Texas the oil companies only get a month exemption for flaring.


I'm not arguing that it's easy to build that infrastructure. I'm arguing that if their infrastructure is too far behind the drilling. They've over drilled and now have no way to utilize that resource so it's just being wasted. Why is waste to that degree acceptable?
 
2013-01-30 09:07:08 AM

SVenus: So now, you have ethane that you can't sell at any price in any form. You could store it. You could build generators to burn it. But you have to build a transportation network to do that.


The ethane goes along with the methane in ethane rejection mode. The total BTU's per mcf then get balanced by adding inerts. What you have in your gas fireplace is some combination of methane, ethane, and a tiny tiny bit of propane, and the amounts vary, but the heating value stays the same, because they balanced it upstream to make it consistent.
 
2013-01-30 10:13:17 AM

plcow: The ethane goes along with the methane in ethane rejection mode. The total BTU's per mcf then get balanced by adding inerts. What you have in your gas fireplace is some combination of methane, ethane, and a tiny tiny bit of propane, and the amounts vary, but the heating value stays the same, because they balanced it upstream to make it consistent.


I figure that's probably what actually ends happening when there's just a partial fraction of ethane available. I'm told many streams are rich and getting richer with the stuff in some areas, so balancing of the ethane regionally becomes a cost. Add to that the ethane source isn't getting but methane prices, or if the balancing is a cost, below market prices for adding a richer stock.

The economics of natural gas liquids has changed in some areas, too. In the parts of Texas where I have some prospects, you would produce the oil, and the gas you would run through a small plant and "drop" the liquids out (condense the rich gas into transportable liquids) and those would then sell for the price near or even above the oil price. There's a glut of those liquids now; the refineries are close to max production of those feedstocks. So, instead of giving you a better price for NGLs than the oil, they offer you a much lower price for the liquids.

And to top that off, in many parts of Texas, there's up to a 20% price cut for oil. (It's about 14% today for a March 13 contract - see here) A barrel of oil produced south of Austin is worth $16.79 less than a barrel of exactly the same oil in Lake Charles, Louisiana. The pipelines are full. The price break does provide for oil to be profitably moved over the roadways and rail. It's safer if it moves in pipelines rather than rail or road, but pipelines are a political football these days.
 
2013-01-30 10:14:08 AM

Baryogenesis: I'm not arguing that it's easy to build that infrastructure. I'm arguing that if their infrastructure is too far behind the drilling. They've over drilled and now have no way to utilize that resource so it's just being wasted. Why is waste to that degree acceptable?


Money changes everything
 
2013-01-30 03:12:47 PM
Tag is for the subby trying to put together a sentence for the headline.
 
2013-01-31 12:04:25 AM

SVenus: Baryogenesis: I'm not arguing that it's easy to build that infrastructure. I'm arguing that if their infrastructure is too far behind the drilling. They've over drilled and now have no way to utilize that resource so it's just being wasted. Why is waste to that degree acceptable?

Money changes everything


I'll take that cryptic remark to mean "it's cheaper (for the oil/gas company) to pollute and be wasteful". Why not just say that to begin with? Now it's clear that these companies merely want to foist the true cost of their business onto the public.
 
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