[ROCKMAN]

pstarr - I probably push the limit. But I don't tend to aim vulgarities at individuals. Sometimes it's just to highlight my sarcasm or to be marginally funny.

[Cog]

Both of you make baby Jesus cry.

[AdamB]

Both of you make baby Jesus cry.

Jesus seemed to me as more pro-active, not really a crier type.

[Tanada]

This seems to contradict expectations, how reliable are everyone's predictions?

One of the arguments often made for building more oil pipelines is that they will lead to fewer trains hauling oil, with proponents further positing that pipelines are safer than oil trains.

With oil now flowing through the Dakota Access pipeline (DAPL), some analysts and industry lobbyists have predicted that there will be a significant reduction in oil-by-rail traffic from the Bakken region in Montana and North Dakota. That prediction has come despite the fact that Dakota Access owner Energy Transfer Partners actually owns an oil-by-rail facility connecting to the pipeline in Patoka, Illinois, with major Bakken producers such as Hess Corporation saying 30 percent of their oil will still move via rail.

“It is going to certainly shake up the existing transportation modes,” Ron Ness, president of the North Dakota Petroleum Council, recently told the Bismarck Tribune.

As DeSmog also noted, the Dakota Access project website itself touts that the pipeline will serve the purpose of “greatly reducing the risk of train accidents.”

“Numerous studies have shown that pipelines are safer than shipping oil by trucks or rail,” reads the website. “DAPL will replace 100- to 120-car trains that carry crude oil every day from North Dakota — greatly reducing the risk of train accidents and spills.”

Dakota Access will, without doubt, take much of the oil obtained via hydraulic fracturing (“fracking”) from North Dakota’s Bakken Shale off of the tracks. When the pipeline is fully operational, it is expected to move 470,000 barrels per day of Bakken crude to Gulf of Mexico refinery markets, or about half the oil produced in the Bakken.

So what about the other half of the mathematical equation? Look East — and West — for answers.

“When you add all that up, the only place you can pull that from is rail,” Trisha Curtis, co-founder of PetroNerds LLC, an energy analytics and advising firm based in Denver, Colorado, recently told the Bismarck Tribune.
Eastside, Westside

While Gulf Coast refineries stand to gain from the Dakota Access pipeline, the same cannot be said of those situated on the East and West Coasts.

“Although volumes of crude shipped by rail will decline as Dakota Access comes online and term rail shipping contracts expire, barrels will still move on trains to regions with low pipeline connectivity,” industry analysis group Genscape wrote in an October 2016 report. “Refiners on the U.S. East and West coasts have limited options for sourcing domestic crude, as most of the pipeline development spurred by the so-called U.S. shale revolution pointed to the refinery-rich Gulf Coast.”

Two major oil-by-rail offloading facilities proposed for the West Coast, both in California, have recently been shut down by local activists: the Phillips 66 project in San Luis Obispo and the Valero facility in Benecia. Despite these setbacks, the proposed facilities depict the industry's long-term plans for moving Bakken oil to the West via rail.

Another project, co-owned by the companies Tesoro and Savage, is hubbed in Vancouver, Washington. It would be the largest oil-by-rail facility in the country, with an offloading capacity of 360,000 barrels of oil per day. However, much like the two projects in California that were denied permits after years of strong public opposition, the Vancouver project also is meeting resistance with one public meeting drawing over 1,000 people attending to voice their opposition.

In 2015, a Tesoro executive explained to CNBC why projects like this are being pursued by the industry.

“It's incredibly important to the West Coast, because we don't have pipeline access. We have no other transportation means,” Keith Casey, executive vice president of operations for Tesoro, told the network. “So when you look at where the crude oil through the shale revolution is actually coming from, we don't have the capability to get it to our refineries.”

Another advantage of the West Coast: its proximity to Asian export markets. Since Congress lifted the U.S. crude oil export ban at the end of 2015, crude oil exports have exceeded expectations and confirmed the Asian market’s thirst for U.S.-produced crude, now being exported at record levels.
A False Dichotomy

While true that fewer oil trains translate to lower risks of derailment and accompanying oil train explosions, moving through pipelines also means higher risks of large oil spills. Contrary to industry talking points, the reality is that pipelines spill more oil than oil trains.

“Overall, oil spills [occur] more frequently with pipelines than rail cars, according to data from the Pipeline and Hazardous Materials [Safety] Administration (PHMSA),” Reuters has reported. “For example, in 2015, there were 252 pipeline spills reported to PHMSA involving crude oil, versus 44 for the rail industry. The year prior, the frequency of spills at pipes was about 62 percent greater than rail, the data shows.”

Another reality: the pipeline vs. rail dichotomy has morphed into an industry Trojan horse used to cloak the use of both modes of fossil fuel infrastructure. The industry, in short, will continue to use both modes of transportation moving forward. The drilling rig count and production numbers have already increased in the Bakken shale region since President Donald Trump signed off on Dakota Access, according to Reuters.

“One of Dakota Access’ repeated arguments is that the pipeline will reduce shipments of oil by rail, which it claims is a more dangerous and expensive way to transport oil,” the Iowa Sierra Club wrote in a 2014 regulatory filing as the pipeline was being proposed in Iowa. “However, Dakota Access presented no evidence to substantiate the argument that the pipeline will reduce shipments of oil by rail.”

https://www.desmogblog.com/2017/04/03/d ... il-by-rail

[ROCKMAN]

"However, Dakota Access presented no evidence to substantiate the argument that the pipeline will reduce shipments of oil by rail.” Obviously bullsh*t. Think about it: Some of the Bakken oil that was being shipped by rail to Illinois was being shipped from there by rail to other markets already. All Energy Transfer is saying is it will continue shipping some of that oil by rail AS IT HAS BEEN DOING before the DAPL was built. Or at least until someone who buys some of that oil at this MAJOR OIL HUB in Patoka and ships it via pipeline to its refinery:

"At the pipeline’s southern terminus, the oil storage hub of Patoka, Illinois, about 75 miles east of St. Louis, existing pipelines fan out in every direction, including to the Gulf Coast, home to half the nation’s refining capacity. Other pipelines radiating from Patoka supply big refining operations, including Phillips 66 in Illinois; BP in Indiana; and Marathon in Kentucky.

Though the companies don’t disclose details of their petroleum supplies for proprietary reasons, it’s likely that Dakota Access would feed these refineries with the light, sweet Bakken crude."

Just more propaganda from folks who don't like oil production/consumption anywhere in the US...despite being a part of the consumer class.

[ROCKMAN]

{"However, Dakota Access presented no evidence to substantiate the argument that the pipeline will reduce shipments of oil by rail.” Obviously bullsh*t.}

And to confirm it was bullsh*t:

East Coast Refiner Shuns Bakken Delivery As Dakota Access Pipeline Starts

Reuters - Philadelphia Energy Solutions Inc, the largest refiner on the U.S. East Coast, will not be taking any rail deliveries of North Dakota's Bakken crude oil in June, a source familiar with delivery schedules said on Tuesday - a sign that the impending start of the Dakota Access Pipeline is upending trade flows.

At its peak, PES would have routinely taken about 3 miles' worth of trains filled with Bakken oil each day. But after the $3.8 billion Dakota Access Pipeline begins interstate crude oil delivery on May 14, it will be more lucrative for producers to transport oil to refineries in the U.S. Gulf Coast. The long-delayed pipeline will provide a boost for Bakken prices and unofficially end the crude-by-rail boom that revived U.S. East Coast refining operations several years ago.

The 1,172-mile (1,885-km) Dakota Access line runs from western North Dakota to a transfer point in Patoka, Illinois. From there, the 450,000 barrel per day line will connect to large refineries in the Nederland and Port Arthur, Texas, area.

PES and other refiners built large rail terminals on the East Coast in recent years to accommodate cheap Bakken flowing from North Dakota. {Which would have not been built had Keystone XL been built} The PES refinery terminal, which opened in 2013, was able to handle roughly 280,000 barrels a day, making it the largest on the U.S. East Coast. Rail volumes of Bakken crude peaked at 420,000 bpd, resulting in bumper profits for those refiners. But Bakken crude's discount to U.S. crude slowly eroded as pipeline capacity out of North Dakota expanded, increasing competition for the heavy oil.

That forced the East Coast to rely more heavily on foreign, waterborne crude. Currently, Bakken barrels at the delivery point in Nederland, Texas, in June are trading around $1.25 to $1.50 a barrel over U.S. crude futures. Higher rail costs would boost those barrels to $7 to $8 more than U.S. crude.

[ROCKMAN]

pstarr - It will be interesting to see if the $5+/bbl transport cost reduction of pipeline vs rail ends up in the pockets of Bakken drillers. And if that increases activity. But there's the +/- dynamic: 450,000 bopd more oil to Texas putting downward price pressure but will have to be replaced by more foreign imports to NE refineries so perhaps upward price pressure.

[AdamB]

Summary October production data for the Bakken validates operators' claims of strong early-time well performance in the play's core. Current prices provide a powerful growth stimulus not yet reflected in the volumes. Continental Resources has advertised 15-month payouts for its wells in the Bakken Core in a $50 per barrel WTI environment, which implies exceptional returns. Predictable Surprise The report by the Industrial Commission of North Dakota last Friday likely left some shale growth skeptics puzzled. The preliminary data shows a ~76,000 barrel per day step up in October for production from the Bakken. This equates to ~7.2% growth - in one month. At 1.13 million barrels a day in October, the Bakken is just few short steps away from a new production record. For reference, the high watermark for monthly production was set in November 2014 at 1.16 MMb/d. The report gives fresh food for thought

The Bakken Strikes Back

[AdamB]

This one's for Plant!!

Weren't all the other resource plays except the Permian in the US played out? The Permian discovered by Pioneer a few years ago, not the one they were drilling with horizontal wells into the same formations more than half a century ago of course.

[dissident]

Wasn't the Bakken supposed to be producing several million barrels per day by now?

Sad quibbling over production noise. The lack of reserves remains a fact.

[AdamB]

Wasn't the Bakken supposed to be producing several million barrels per day by now?

According to Rune the Oil Drum, it was never supposed to produce more than about 600-700K. Admittedly, Rune wasn't much better than Ace when it came to predicting anything related to oil, but still, the cool thing about the Bakken is that it was the one of the first resource plays that piled in and made that blog implode.

Now and based upon present observed trends for principally well productivity and crude oil futures (WTI), it is challenging to find support for the idea that total production of shale oil from the Bakken formation will move much above present levels of 0.6 - 0.7 Mb/d on an annual basis.

http://www.theoildrum.com/node/9506

Never seen someone claim multiple millions per day for the Bakken though, but it might be possible, that the oil-ignorant on the opposite side of the malthusian oil-ignorant did it. It would have started with something like this perhaps?

https://www.newyorker.com/magazine/2011 ... he-prairie

Sad quibbling over production noise. The lack of reserves remains a fact.

You mean, all the NEW reserves that the Bakken brought with it? Because "lack" in that regard isn't the problem. Once there were almost none. Now there is a bunch more, and even more with every new well drilled. Such is the nature of reserves, and resource plays are great for this because they draw from a large resource base.

Reserves are easy, because they are price dependent. Just get costs down, or prices up, and presto. More reserves.

[rockdoc123]

Sad quibbling over production noise. The lack of reserves remains a fact.

A fact? What is your source for this opinion? The USGS estimated that there were 413 billion bbls of oil in place and the amount of technically recoverable oil was 7.4 billion bbls. That about 2% recovery. Increasing the recovery factor to 4% (not a huge stretch) adds another 7 billion bbls.

[AdamB]

Sad quibbling over production noise. The lack of reserves remains a fact.

A fact? What is your source for this opinion? The USGS estimated that there were 413 billion bbls of oil in place and the amount of technically recoverable oil was 7.4 billion bbls. That about 2% recovery. Increasing the recovery factor to 4% (not a huge stretch) adds another 7 billion bbls.

That's not how the USGS did it though, if you are referring to the 2013 estimate. They included the Three Forks in that assessment, and amusingly it was almost identical in size to their Bakken estimate at the same time. And then the 2 of them together was the 7+ billion number.

I wonder what the next number might be?

http://bismarcktribune.com/business/loc ... 4614e.html

[rockdoc123]

That would require more fracting liquids, more stages, closer spacing, more chemicals more expenses more energy burnt up on a fruitless endeavor . . . hence $70/barrel . . . which the American consumer can not afford.

The total cost of shale completions continues to decrease even though they have included larger fracs and more propant. The EIA noted that average completions in the Bakken in 2012 were about $550/foot whereas in 2017 they were $400/foot. This has to do with the way in which they plan and execute those fracs.

Given that the wellhead breakeven for Bakken is around $30/bbl according to Rystad you would have to be spending a heck of a lot more on a give well to contemplate $70/bbl breakeven. Why not just pull some other number out of your backside? It would be equally wrong.

[AdamB]

Hence the collapse of Bakken. Because it is becoming too cheap to measure, like nuclear power? Why bother, huh>

You must have missed the part in the OP about the non-collapsing Bakken. So is this lying just because you want to, or just more of the ignorance kind of lying?