Tag Archives: Bakken Shale

Hard times ahead for Bakken oil industry – maybe the end?

Why The Bakken May Not Come Back

OilPrice.com, by Nick Cunningham, Jul 07, 2020

The Bakken shale is already declining because of financial struggles and the oil market downturn, but the potential shuttering of the Dakota Access pipeline could close off the possibility of a rebound.

The 570,000-barrel-per-day oil pipeline carries Bakken oil to the Midwest. On Monday, a federal judge ordered the pipeline to shut down within 30 days after vacating authorization for the project. Energy Transfer immediately appealed for a “provisional stay,” but on Tuesday, U.S. District Court Judge James Boasberg shot down that request.

Energy Transfer will still file a conventional appeal to stay the judge’s order, and surely the company will follow through on that as quick as possible. But it’s not clear how quickly the judge will respond to that; meanwhile he ordered Dakota Access to be drained by August 5.

Even if a stay is granted, the pause could be “short-lived,” ClearView Energy Partners wrote in a note to clients. The firm cited a separate case involving an electric transmission line that resulted in the Army Corps of Engineers being forced to undertake an environmental impact statement after the project was completed.

“Put another way, even conservative jurists can back a court ruling that finds agency environmental reviews flawed and should be suspended while redone,” ClearView Energy Partners wrote. “[T]he horizon for Dakota Access may be darkening,” the firm added.

Assuming that Dakota Access goes offline and undergoes an environmental assessment, which could take the better part of a year, the process will drag on into a potential Joe Biden administration. At that point, the Army Corps, under a new direction, may change its stance, killing off the pipeline.

Time will tell, but in the interim, the temporary closure is an enormous victory for the Standing Rock Sioux Tribe. “This pipeline should have never been built here. We told them that from the beginning,” the Tribe’s Chairperson Mike Faith said.Related: China Inks Military Deal With Iran Under Secretive 25-Year Plan

If Dakota Access is forced to shut down for good, it could head off any hopes on the part of the oil industry to revive production in the Bakken. Without the pipeline, a large portion of Bakken production would need to return to the practice of moving large volumes by rail.

“I think everybody is forming their game plan now, and if they have tank cars, they’re probably thanking their lucky stars,” one source familiar with Bakken rail operations told Reuters.

However, a sudden rush of shipping oil-by-rail will increase the risk of derailments and explosions. Early on in the Bakken shale boom, it was all too common for oil trains to derail and explode, earning them the nickname of “bomb trains.” A return of oil train shipments would increase safety risks.

Meanwhile, because putting oil on rail is more costly, Bakken crude would need to be discounted for the process to make sense.

Already, the region is seeing a larger discount. Shortly after the court decision ordering Dakota Access to shut down, the price of Bakken oil at the hub of Clearbrook, Minnesota declined. Relative to WTI, the discount widened from $1.15 per barrel to $2.75 per barrel, according to Bloomberg, which was the largest markdown since May.Related: The Death Of The $2 Trillion Auto Industry Will Come Sooner Than Expected

The Bakken was already slowing down before the pandemic. Years of red ink from shale drillers soured investors on the whole fracking enterprise, but that is particularly true in the Bakken. For example, Continental Resources, which has a prominent presence in the Bakken, saw its stock price fall in half between late 2018 and late 2019.

Bakken production hit a peak in October and November of last year at just over 1.5 million barrels per day (mb/d), before declining to 1.43 mb/d in February, just before the global pandemic rocked the market.

Because the North Dakota region has much less storage capacity than Texas and Oklahoma, Bakken drillers were immediately squeezed when the market went into a tailspin, forcing them to shut in thousands of wells. The EIA expects production from the Bakken to dip below 1 mb/d in July.

A source at one unnamed Bakken oil producer said that the region’s total production will need to decline to 950,000 bpd in August if Dakota Access shuts down. At the start of this week, Continental’s share price is off by more than 15 percent, a reflection of the negative impact of the DAPL shutdown.

“Production of crude oil is going to be landlocked in North Dakota,” Sandy Fielden, director of oil and products research at Morningstar, told Reuters. “It’s going to be congested and that’s going to cause discounts in the price of Bakken crude to WTI.”


More Top Reads From Oilprice.com:

Yes, they are “Bomb Trains.” Even more importantly, they are “Global Destruction Trains”

Our Earth Day refocus on the larger issues

By Roger Straw, Editor, The Benicia Independent, April 22, 2015
tarsands_wis-sierra-club
This Sierra Club before-and-after photo of tar sands strip mining appeared with my 6/14/13 opinion in the Benicia Herald, “Do Benicians want tar-sands oil brought here?” – Roger Straw

My initial alarm over Valero’s proposal to build a crude-by-rail offloading facility here in my hometown came almost two years ago now, when I learned of the destruction in Alberta Canada caused by the mining and processing of tar sands.   It was plain to me that a decision to permit Valero Crude By Rail here, thousands of miles from those dirty bitumen mines, would position my hometown as a valued partner in the world’s most toxic oil extraction and transport operation.  I joined with others here in Benicia to organize so that we would have no part in that dirty game.

Lac-Mégantic, Quebec
Lac-Mégantic, Quebec

For me and for many along the rails in the U.S., our focus shifted gradually – or in some cases suddenly – to public safety issues surrounding Bakken shale oil train derailments and the resultant catastrophic explosions and fireballs.

Lately, I’m thinking that even though these safety concerns will not go away with the eventual passage of a few new laws and long-delayed safety regulations, we all might want to consider renewing and strengthening our original focus.

What we decide here along the tracks and in refinery towns has EVERYTHING to do with the situation in Alberta and the Upper Midwest where tar sands bitumen and shale oil is being produced.  People there, the land there, the wildlife, the air and water … these are the first and lasting victims of our thirst for cheap oil.

We hear so much about the oil boom’s contribution to “energy independence.”   Well, let’s focus on REAL energy independence: leave the oil in the ground, tax carbon, invest in clean energy.

The Benicia Independent has always been concerned with climate change, the air we breathe and the water and land that sustains life.  But our focus, like that of much of the media, has been primarily on the oil train derailments that have understandably shocked and frightened the public since July, 2013.  As editor and publisher, I’m serving notice this Earth Day, that the Benicia Independent is taking on a renewed commitment to cover the ongoing environmental damage and the increased risks of pollution if we permit oil trains.

You will begin to see more stories about proposed carbon taxes, polar ice, the destruction of land and lives in Alberta and the Upper Midwest and more.

Note that I fully expect my work to be dominated from time to time by the NEXT BIG EXPLOSION, and the NEXT ONE….  As long as oil trains rumble through our neighborhoods, city centers, mountains and wetlands and into our refinery industrial centers, we WILL see derailments.  And no matter the new federal safety rules and the efforts of the rail and oil industries, NOTHING can prevent the massive weight of a moving chain of these monstrous tank cars from coming off the tracks occasionally, accordion jackknifing, flipping and puncturing, setting off horrific explosions, and endangering human life and our natural world.  It will happen, and I will cover the news.

But for every day that you DON’T see a news report with fiery skies and black billowing smoke, please understand that the not-so-silent killer strip-mines and the fracking and horizontal drilling continue, too often unreported.  Far from most of us, but up close and real to the people who live there, our earth is groaning under the weight of our permitting decisions and our corporate desire for continued crude-oil profitability.

Here in Benicia, we will say NO to crude by rail.  It’s a tangible way to have a small say in the welfare of our town, our state, our nation and our beautiful planet earth.

Leave the oil in the ground.  Tax carbon.  Invest in clean energy.


MORE ON TAR SANDS …

Sightline Daily

Understanding the North American Tar Sands
Jan 14, 2015 Last year, Portland’s KBOO Community Radio profiled what is “the largest industrial project on Earth”: the North American tar sands. Typically, one hears of the “Canadian tar sands,” as if the issue is one that lives only north of the US national border and need not concern American citizens. But reporter Barbara Bernstein’s documentary, “Fighting Goliath,” revealed an alarming and very real threat…

Oil Change International

Tar Sands
Tar sands are found underneath Canada’s great boreal forest and consist of heavy crude oil trapped in a mixture of sand and clay. To extract oil from tar sands, companies must destroy fragile forest ecosystems and then use a very energy-intensive upgrading and refining process to turn that sludge into transportation fuel….

Natural Resources Defense Council

Stop Dirty Fuels : Tar Sands
In Canada, the oil industry is transforming one of the world’s last remaining intact ecosystems into America’s gas tank….

Forest Ethics

Canada’s tar sands is one of the largest industrial projects on the planet, and its environmental footprint is growing by the second. At a time when the world needs to transition to cleaner energy, the tar sands is the poster child of what we should not be doing. It’s time to put a healthy environment above corporate profit and the endless drive for more oil….

[More Google links on tar sands …]

Tar Sands Basics

ostseis.anl.gov/guide/tarsands/
Argonne National Laboratory
Tar sands (also referred to as oil sands) are a combination of clay,
sand, water, and bitumen, a heavy black viscous oil. Tar sands can
be mined and processed to extract the oil-rich bitumen, which is
then refined into oil.

Oil sands – Wikipedia, the free encyclopedia

en.wikipedia.org/wiki/Oil_sands
Oil sand is either loose sand or partially consolidated sandstone
containing a naturally occurring mixture of sand, clay, and water,
saturated with a dense and extremely viscous form of petroleum
technically referred to as bitumen  (or colloquially tar due to its
similar appearance, odour, and colour).

Stop Dirty Fuels: Tar Sands

www.nrdc.org/…/dirtyfuels_tar.asp

Extracting tar sands, and turning bitumen into crude oil, uses vast amounts of energy and water, and causes significant air and water pollution, and three times …

What are the Tar Sands? | Rainforest Action Network

www.ran.org/what-are-tarsands
Rainforest Action Network
The Keystone XL pipeline is a disastrous project of tar sands oil
companies that will do serious damage to our country and
climate.  If built, the spill prone …

Canada’s oil sands: The steam from below | The Economist

www.economist.com/…/21615488-new-technologies-are-…
The Economist
Sep 6, 2014 – ONE of the bleakest scenes of man-made
destruction is the strip mining of oil sands in the forests of
Alberta, Canada. The sand is permeated …

Tar sands – Friends of the Earth

www.foe.org/projects/climate-and-energy/tarsands

Tar sands are found underneath Canada’s great boreal forest and consist of heavy crude oil trapped in a mixture of sand and clay. To extract oil from tar sands, …

Canada’s tar sands: Muck and brass | The Economist

www.economist.com/node/17959688‎ – The Economist

But golf courses and suburban housing make the place liveable, and some locals have grown attached to Alberta’s tar sands and Fort McMurray, the town at the centre of them. “I’d like …

Unconventional Crude – The New Yorker

www.newyorker.com/magazine/…/unconventional-crud…‎ – The New Yorker

The tar sands begin near the border of Saskatchewan, around the latitude of Edmonton, and extend, in three major deposits, north and west almost to British Columbia. All in all, they …

How Much Will Tar Sands Oil Add to Global Warming?

www.scientificamerican.com/…/tarsands-and-keyston…‎  – Scientific American

The Opposite of Mining: Tar Sands Steam Extraction Lessens Footprint, but Environmental Costs Remain · Oil Sands Raise Levels of Cancer-Causing Compounds in Regional Waters.

What are Oil Sands? – Canadian Association of Petroleum …

www.capp.ca/…oil…/oilsa

Canadian Association of Petroleum Producers

Oil sands are a mixture of sand, water, clay and bitumen. They are found in several locations around the globe including Venezuela, USA, Russia and Canada.

No Tar Sands | UK Tar Sands Network | What are tar sands?

www.no-tarsands.org/what-are-the-tarsands/

Canada’s tar sands are the biggest energy project in the world,
currently producing 1.9 million barrels of oil a day. Largely located
in Alberta, the tar sands …

New York Times op ed video: A Danger on Rails

Repost from The New York Times
[Editor:  This is another good locally-based video, this time focusing on crude-by-rail in the Albany NY region.  We have seen similar professional quality videos featuring the Pacific Northwest (by Columbia Riverkeeper and VICE News) and an Inside Climate News / Weather Films documentary, “Boom” that is broad in scope, focusing in on a bridge in Alabama.  We need someone to create a prime time video documenting the looming threat of increasing oil trains here in our beautiful California, focusing not only on safety concerns, but also on the part our corporate decisions will play – or won’t play – in the desolation of land in Alberta Canada and the Upper Midwest and the massive release of toxic fossil fuel chemicals that contribute to climate change.  – RS]

‘A Danger on Rails’

This short documentary warns about the dangers posed by trains that transport explosive oil across North America.

Op-Docs, by Jon Bowermaster, April 21, 2015 

 

In recent years, small towns across the United States have begun hosting an increasingly common phenomenon: long trains, made up of 100-plus black cylindrical cars, rolling slowly past our hospitals, schools and homes.

Few who see them know what they carry: highly flammable crude oil from the shale fields around North Dakota.

I live in the Hudson Valley and see these trains daily; Albany is a major hub, and trains traveling south down the Hudson River toward mid-Atlantic refineries hug its shores. Every day on the East Coast, as many as 400,000 barrels of this explosive mixture travel through our backyards over shaky bridges, highways and overpasses.

As this Op-Doc video shows, there are reasons to be very concerned about this increased train traffic, which is directly related to the boom in oil and gas drilling in the Midwest. These trains can be very dangerous, prompting some to call them “bomb trains.” There have already been horrific railway accidents in North America caused when these trains go off the tracks, some of them fatal.

No one wants the responsibility, or expense, of improving the safety of the cars, fuel, tracks or related infrastructure that would reduce the threat. While new regulations are expected in May from the United States Department of Transportation, environmentalists are not hopeful for much change — given the powerful lobbying efforts of the oil and rail industries.

Already this year there have been four serious derailments, resulting in spills, explosions and fires. Safety and Homeland Security officials have mentioned these “rolling bombs” as potential terrorist weapons. And the Department of Transportation has estimated that at this rate there will be 15 major accidents in the United States this year alone. I hope we will do our best to prevent them.


Jon Bowermaster’s most recent documentaries include “Antarctica 3D, On the Edge” and “Dear Governor Cuomo: New Yorkers Against Fracking in One Voice.’’ He is a 30-year resident of the Hudson Valley.

UPDATE: Latest on West Virginia derailment, explosion

Two recent stories in the media:

1.  WEST VIRGINIA METRO NEWS: No change for CSX, Bakkan oil will continue to roll through area where derailment took place
By Chris Lawrence, February 27, 2015 at 2:47PM

MOUNT CARBON, W.Va. — There will be another CSX train carrying Bakkan oil going through eastern Kanawha and Fayette counties soon now that the track has been repaired following the Feb. 19 derailment of an oil train near Mount Carbon.

“It’s part of the freight that goes over that line,” CSX Spokesman Gary Sease told MetroNews Friday. “Those shipments, along with all the other freight we haul, have resumed.”

The rebuilt line, just a few miles from Montgomery, reopened Thursday afternoon following a week long cleanup.  [CONTINUED]


2.  PBS NEWSHOUR: Fiery train wrecks put pressure on safety standards for oil transport
February 27, 2015 – 8:43am
A combination photo shows a sequence of an explosion erupting from a CSX Corp train derailment in Mount Carbon, West Virginia pictured across the Kanawha River in Boomer, West Virginia February 16, 2015. Photo by Steve Keenan/Reuters

WASHINGTON — Fiery wrecks of trains hauling crude oil have intensified pressure on the Obama administration to approve tougher standards for railroads and tank cars despite industry complaints that it could cost billions and slow freight deliveries.

On Feb. 5, the Transportation Department sent the White House draft rules that would require oil trains to use stronger tank cars and make other safety improvements.

Nine days later a 100-car train hauling crude oil and petroleum distillates derailed and caught fire in a remote part of Ontario, Canada. Less than 48 hours later, a 109-car oil train derailed and caught fire in West Virginia, leaking oil into a Kanawha River tributary and burning a house to its foundation. As the fire spread across 19 of the cars, a nearby resident said the explosions sounded like an “atomic bomb.” Both fires burned for nearly a week.  [CONTINUED]