Author Archives: Bill Moist

About Bill Moist

Bill Moist, MS, CPA is Founder and President of Professional Equities, Inc., a funder of real estate; oil and gas; business projects; and trains others to take advantage of Crowdfunding. Mr. Moist is a lecturer at Graduate Business Schools and professional organizations. He is also a Texas Real Estate Broker, Certified Public Accountant (ret), Master of Science real estate tax expert, Co-founder of The Crowdfunding Training Institute, and Investor/Developer with 70+ successful projects. He can be reached on http://http://www.getcrowdfunding.ws and http://oilandgasinsider.com

What State Is The Top Energy Consumer? California, NY, Texas

Issue 105 – Texas Windfarm

Introduction…Texas has many firsts.  Texas is the first in oil and gas production as well number as wind farm producer in the United States.

According to U.S. Department of Energy…Texas produces a third of the nations oil and gas and more than a fourth of all wind power generated in the U.S.

Texas is also number one leading in curde oil refining.

The Texas first you may not have expected, Texas is the top energy consumer in the U.S.  The state’s demand for energy grows every year as its population grows.

The energy required to develop, produce, refine, and bring petroleum products to market is also a large part of that energy usage.  However, that statistic was not available.

One more first…Thirty states adopted energy efficient policies as reported by the U.S. Energy Information Administration.  Texas became the first state with an energy efficiency resource standard (ESSA) in 1999.

In conclusion…Texas is not only number 1 in oil, gas, wind energy production, It is also number one enegy consumer in the United States.  On the green side, it was also the first state to adopt the ESSA.

U.S. Becoming World’s Largest Natural Gas Exporter

 Issue 104- LNG Ship Loading Sabine Pass

Introduction..The United State is already the world’s largest producer of natural gas.  The International Energy Agency (IEA) expects by 2022 U.S. will be the world’s largest exporter of natural gas.  The U.S.  is expected to produce 890 billion cubic meters (bcm,) more than a fifth of the global gas output.

The demand…Global natural gas demand is expected to grow 1.6% a year for the next five years, with consumption on track to hit almost 4,000 billion cubic meters by 2022.

“Also, the rising number of liquefied natural gas (LNG) consuming countries, from 15 to 30 this year, shows that LNG attracts many new customers especially in the emerging world,” said IEA Executive Director Fatih Birol said in a statement Thursday.

The supply…”The U.S. shale revolution shows no sign of running out of steam and its effects are now amplified by a second revolution of rising LNG supplies,” Birol.  Three major LNG terminals are under construction on Texas coast will double the number of U.S. ports currently in use.

What this means to us…This continued demand for natural gas will keep the drillers active in the Utica/Marcellus shale play where our newest projct is located.  The project cleans drilling mud and produced water benefiting from the increased LNG shipping capacity.  Send me an email at bill@billmoist.net for insider information.

Source: David Reid, “U.S. on course to become world’s largest exporter of natural gas: IEA,” CNBC, 13 Jul 2017

Resistance To And Calls For New Oil & Gas Regulations Abound

 Issue 103- Front Range (CO) Drilling Controversy

Introduction…Two people were killed by a May 2017 home explosion in Firestone, Colorado.  Gas entered the basement through a cut flow line.  Colorado Gov. John Hickenlooper ordered a statewide review of oil and gas operations after the deadly fire.

The one inch flow line had been abandoned according to Anadarko Petroleum Corporation, the current owner.  However, the flow line was not disconnected from the wellhead or capped.

Controversy Ignited…People living near gas wells in Garfield, Colorado claim they have experienced an array of health effects from exposure to high concentration of volatile organic compounds such as bensene and toluene.  And the Firestone explosion and deaths has increased the fear of health effects.

The battle over oil and gas drilling in residential area was brought to the Colorado legislature this spring.  Democrats and environmental groups seeking to impose rules that would push fracking further away from schools and public facilities.  The Firestone exposition was identified as one more reason to pass such legislation.

The legislation did not pass.  However, a cut flow line that was abandoned has nothing to do with fracking.  They are two totally separate issues.

On the opposite side of the controversy... along Boulder, Colorado’s front range, support for oil and gas has grown, though it often goes unnoticed amidst the cries of what some call a vocal minority.  In particular, this desire for less regulation is predominant.

My experience in Boulder…About eight years ago I worked a 560-acre real estate development east of Boulder near Estes Park.  The anti-development fervor was so strong, that Boulder County had a special tax to be used to take large acreage out of private hands, never to be developed.  The only way I could develop this land was to subdivide into 35 acre tracts.  It is fascinating to see that same area supporting oil and gas development.

Conclusion...When tragedy strikes, hysteria is often whipped up.  It seems Gov. Hickenlooper’s ordered statewide review of oil and gas operations is appropriate.  If some health and safety issue is lacking, then it should be addressed.

In general, the leaders in the oil and gas industry do not support President Donald’s Trump’s call to reduce regulation. In annual reports to U.S. Security and Exchange Commission, 13 of the biggest 15 oil and gas producers said that compliance with current regulations is not impacting their financial operations or financial condition.

Sources: Amelia Arvesen, “Firestone explosion started by gas from cut flow line near house,” Time-Call Carbon Valley, 2 May 2017; Ben Adler, “Living next to natural gas wells is not fun,” grist, 18 July 2017; Josh Keefe, “in Colorado Fracking Fight, Emails Show Constituents Begging Lawmakers For Help,” IBT Times, 24 July 2017; Richard Valdmanis, “As Trump targets energy rules, oil companies downplay their impact, Reuters, 23 March 2017

 

Sustainable Energy – Why Oilfield Produced Water Must Be Cleaned

Issue 102 – Cleaning 500,000 gallons of oilfield produced water daily in Midland, TX

What is produced water?  

Produced water is water found in the same formations as oil and gas. When the oil and gas flow to the surface, the produced water is brought to the surface with the hydrocarbons. Produced water contains some of the chemical characteristics of the formation from which it was produced and from the associated hydrocarbons.

Produced water may originate as natural water in the formations holding oil and gas or can be water that was previously injected into those formations through activities designed to increase oil production from the formations such as water flooding or steam flooding operations.  In some situations additional water from other formations adjacent to the hydrocarbon-bearing layers may become part of the produced water that comes to the surface.

Why is produced water a problem for the oilfield industry?

  1. The United States has 1 million producing oil and gas wells and nearly everyone generates water.  The sheer volume of produced water is staggering.  During 2012 (the most recent year data is available) is 21.2 billion barrels or 890 billion gallons was produced; and was disposed of. per year. Niney-seven percent (97%( of the water was produced in 21 states with Texas generating one third of the total produced water . Just pumping that water back down is a waste of a tremendous resource.
  2. Water resources are declining especially in West Texas and Western United States. Cleaning and reusing produced water is a  very sound sustainable energy practice.
  3. Oklahoma Regulators issued new limits to produced water being pumped underground.  A recent study links produced water to the strongest earthquakes ever recorded in Oklahoma.
  4. Cushing, Oklahoma residents seek class-action lawsuit against oil companies over earthquakes.

What are the produced water solutions?  Two processes discussed.

#1. In Midland, Texas Gradient Technology is being used to clean 500,000 gallons of water per day.  The Midland plant is proving more economical than the old strategy of re-injecting produced water back into the wells, while purchasing clean water for the fracking operations.

The project is being joint ventured with Pioneer Natural Resources.  Pioneer claims it is able to re-use nearly 100% of its produced water and recycles 85% of the heat needed to keep the system running.

#2. Our American Mud Works, LLC project in Ohio will be using a ceramic membrane process that has low requirements of preliminary treatment with minimum need for support and maintenance.

Ceramic materials are very stable chemically, thermally, and mechanically.  The benefit to the operator is no additives are needed and the process is not temperature sensitive.  Filtration with ceramic is a mild process with running cost limited by a closed production cycles and continuous process.

American Mud Works expects to clean 82,000 gallons of water per day with this first installation.

in summary.

The oilfield industry is being pushed by regulators and possible lawsuits to adopt sustainable energy practices.  In locations of water shortages, such practice is imperative.  However, at least in the case of Pioneer Natural Resources in Midland, Texas, re-use of produced water is more economical then the old strategy.

Re-using waste water is and can be adapted by other industries such as chemical, metal, textile, food and beverage.  Maybe the oilfield industry will lead the way to sustainable water usage practices.

For more information, contact Bill Moist at bill@billmoist.net

Sources: “About Produced Water,” Produced Water Treatment and Benefical Use Information Center;  “Water Treatment Solutions,” Lenntech, BV; “Solving The Clean Water Crisis With Sustainable Energy,” Science Can Change The World, 29 February 2017

Remarkable History Making

Issue 101- Remarkable History Making
Introduction…It’s exciting when you realize you are part of history in the making.  Even if it is only a small part.  Here’s the story…
Thursday in his address in Warsaw, Poland, President Trump discussed shipping U.S. liquefied natural gas, LNG, to Poland.  The reason we are a part of  this is history making is

Click here to watch the video Remarkable History Making

What you don’t know about the 4th of July


Untold History of Fourth of July

THE BIRTH OF AMERICAN INDEPENDENCE
When the initial battles in the Revolutionary War broke out in April 1775, few colonists desired complete independence from Great Britain, and those who did were considered radical. By the middle of the following year, however, many more colonists had come to favor independence, thanks to growing hostility against Britain and the spread of revolutionary sentiments such as those expressed in Thomas Paine’s bestselling pamphlet “Common Sense,” published in early 1776.

On June 7, when the Continental Congress met at the Pennsylvania State House (later Independence Hall) in Philadelphia, the Virginia delegate Richard Henry Lee introduced a motion calling for the colonies’ independence. Amid heated debate, Congress postponed the vote on Lee’s resolution, but appointed a five-man committee–including Thomas Jefferson of Virginia, John Adams of Massachusetts, Roger Sherman of Connecticut, Benjamin Franklin of Pennsylvania and Robert R. Livingston of New York–to draft a formal statement justifying the break with Great Britain.

Did You Know?
John Adams believed that July 2nd was the correct date on which to celebrate the birth of American independence, and would reportedly turn down invitations to appear at July 4th events in protest. Adams and Thomas Jefferson both died on July 4, 1826–the 50th anniversary of the adoption of the Declaration of Independence.

On July 2nd, the Continental Congress voted in favor of Lee’s resolution for independence in a near-unanimous vote (the New York delegation abstained, but later voted affirmatively). On that day, John Adams wrote to his wife Abigail that July 2 “will be celebrated, by succeeding Generations, as the great anniversary Festival” and that the celebration should include “Pomp and Parade…Games, Sports, Guns, Bells, Bonfires and Illuminations from one End of this Continent to the other.”

On July 4th, the Congress formally adopted the Declaration of Independence, which had been written largely by Jefferson. Though the vote for actual independence took place on July 2nd, from then on the 4th became the day that was celebrated as the birth of American independence.

Happy 4th of July America!

Bill Moist

Source: History Channel

Petroleum Demand Highest In 109 Months

Issue 100- Texas Gulf Coast Drilling

Introduction…American Petroleum Institute reports U.S. petroleum demand for last month was the hightest in 109 months.  Total U.S. petroleum delivers in May moved ut 4.9% from May 2016 to an average of 20.1 million b/d.  These were the highest May deliveries in 10 years and the highest delivery for any month in more than 9 years.

What caused demand to increase? The overall US economy grew adding 138,000 jobs in May.  The unemployment rate changed little at 4.3%.

“Strong demand for petroleum is a good sign for the economy which grew for the 96th consecutive month,” said Chief Economist Erica Bowman. “American workers and consumers continue to benefit from these positive economic signs along with relatively low fuel prices.”

Crude oil production was up from the prior month, the prior year, and the prior year-to-date to the highest output level for any month since October 2015. Crude oil production increased 0.9% from April and was up 5.1% from May 2016 to average 9.3 million b/d in May.

In conclusion…A strong U.S. economy creates a strong demand for petroleum.  In this case, what’s good for the U.S. economy is good for the petroleum industry.

Growth In U.S. Natural Gas Production Creates Opportunity

Issue 99 Loading First LNG Shipment At Sabine Pass

Introduction….The first export shipment of liquefied natural gas (LNG) produced in Lower 48 states on February 24, 2016 is a milestone reflecting a decade of natural gas production growth puts the U.S. in a new position in worldwide energy trade. (EIA)

The rapid growth of shale gas has increased natural gas production each year since 2006.  The resulting decline in natural gas prices has led to rising natural gas exports to Mexico via pipeline, and now to overseas markets via LNG tankers.

Under construction or approved…

Cheniere Energy’s Sabine Pass Liquefaction Project in Sabine Pass, Louisiana, consists of six different liquefaction units, or trains, the first of which began service in February after many delays. The other trains are in various stages of development and permitting. Total permitted capacity by FERC is 4.16 Bcf/d.

Four LNG export terminals are currently under construction:

  • Dominion Energy’s Cove Point LNG facility in Cove Point, Maryland, is scheduled to bring one train totaling 0.82 Bcf/d online near the end of 2017.
  • Corpus Christi LNG, another Cheniere project, is under construction in Corpus Christi, Texas. The terminal is scheduled to begin service in 2018, with total permitted capacity at 2.14 Bcf/d.
  • Sempra Energy’s Cameron LNG terminal, located in Hackberry, Louisiana, is under construction and is scheduled to bring three trains online in 2018. A total of 1.7 Bcf/d has been permitted.
  • Freeport LNG‘s terminal planned for Freeport, Texas, has three trains under construction totaling 1.8 Bcf/d. The first two are scheduled to begin service in 2019, and the third in 2020.

Another terminal, Southern Union’s Lake Charles (Louisiana) LNG facility, has been approved by FERC but is not yet under construction. Lake Charles also has an LNG import terminal. Several more LNG export terminals, mostly on the Gulf Coast, have been proposed or have pending applications with FERC.

A lesson from history…You may remember the story off the San Francisco 49ers gold rush where a total of $2 billion worth of gold was extracted during the Gold Rush, which peaked in 1852.  The  non-native population swelled by 99,000 in the California territory

The company that provided the cloths needed by the 49ers is still in operations today.  Levi Strauss & Co. had 2016 sales totaling $4.6 billion.  Itls one year sales were more than twice the value of the gold rush that started the company.

Today’s opportunity created by growth in natural gas production?…Some might think today’s opportunity is in building the LNG export facilities.  However, that is a major capital expenditure with several years required to get any payback.  Many are developing and producing natural gas.  That’s not it either.

However, Just as in the 49ers story, the biggest opportunity is in providing the what is desperately needed by the producers.  This service is required by the environmental regulators.  It’s not salt water disposal either.  In fact it’s more profitable.  Message me  to learn more at bill@billmoist.net.

Sources:  “Growth in domestic natural gas production leads to development of LNG export terminals” U.S Energy Information Administration (EIA,) 4 March 2016; “Summary of LNG Export Applications of the Lower 48 States,” Energy.gov

OPEC Losing War With Fracking

OPEC Meeting Discussing Production Cuts- 98th Issue

Thanks to the shale revolution, U.S. production is up and costs have dropped significantly. Yet, OPEC is trying to increase prices by cutting its production.

First shale oil and now offshore deep-water oil are reducing their costs of production, making it more difficult for OPEC’s policies to have the intended effect. Shale oil production costs have come down significantly over the past several years, making its production profitable at below $40 a barrel.

Now, deep-water oil production is expected to bring down its costs to between $40 and $50 per barrel by early next year from an average break-even price of about $62 in the first quarter of this year and $75 in 2014. OPEC expects to keep oil prices between $50 and $60 a barrel by extending its production cuts for another nine months—keeping roughly 2 percent of global oil production off the market to increase prices.

Where is this going…As U.S. oil production increased in recent years, OPEC oil got edged out of the lucrative American oil market. America imported about 60 percent of its oil in 2007, but by 2014, the U.S. only imported 27 percent of its oil, according to government data. And now in 2016, net U.S. oil imported droped to 25% of its oil.  The rising U.S. oil production reduced demand for Saudi oil abroad, too, keeping prices low.

The Organization of the Petroleum Exporting Countries lost $76 billion in 2016 due to low oil prices caused by rising U.S. oil production, according to a report published May 15th by the U.S. Energy Information Administration.

In summary…Every U.S. President, since the 1973 Arab Oil Embargo has calling for U.S. energy independence.  Now the Frackers have accomplished just that by finding a way to be profitable in these low energy prices.  God bless the Frackers.

Source:  Tom Stepstone, “OPEC Cuts Production in Losing War with Fracking,” OIlPro, June 8, 2017;  Andrew Follett,  “OPEC Lost $76 Billion Last Year Due to US Fracking,” The Daily Signal, 16 May 2017

16-Story Super-Spec Rigs Bring Second Shale Boom

Drillers Mastered Feat Of Pumping For Less

Introduction...On a drilling rig towering above quiet cattle farms in Southeast Texas, Eric Williams perched inside the cabin of the 16-story machine, twisting a pair of joysticks to guide a gigantic wrench roaring into action, drowning out every sound as it reached for a 1,500-pound pipe emerging from the earth – pipe that soon will feed oil into a second shale boom.

Years ago, a worker doing Williams’ job would have stood outside on the rig floor, working a brake handle and knobs as men, drenched in sweat and syrupy fluid, worked the pipe by hand – a dangerous job. Now he sits behind six computer screens and a complex array of controls, piloting a 10-ton wrench on a so-called super-spec rig, one of a new breed of advanced drilling machines that are bigger and stronger than the ones that sparked the first U.S. shale oil bonanza a few years ago.

New technologies…They’re part of the fleet of new technologies paving the way for a historic surge of oil that could break the nation’s 1970 production record next year and further erode the decades-long grip the Saudi-led Organization of the Petroleum Exporting Countries has had on global oil markets. The cartel’s gathering in Vienna last week to extend oil production cuts put into place earlier this year showed how quickly the oil world’s center of gravity has shifted.

This particular $25 million machine, churning about 100 miles northwest of Houston, in the Bryan-College Station metropolitan area, has drilling systems more powerful than two semi-trucks screaming down the highway, and it can force fluid down a well with more than 100 times the pressure of a fire hose.

All told, it’s capable of supporting a fully-loaded Boeing 747, and it walks the dozen feet between well sites on four 10-ton feet. It can drill an oil well in less than 10 days, shaving more than a week from the average drilling time in 2010, and allowing oil companies to drill a greater number of wells each year.

Just a few years ago, even talking about production cuts would have sent crude prices skyrocketing. This time, when OPEC and other major producers agreed to reduce output by 1.8 million barrels a day into next year, prices fell nearly 5 percent as traders remained unconvinced the move would do much to shrink supplies in the face of rising U.S. production.

“OPEC’s market influence is highly questionable,” said Antoine Halff, director of global oil markets at Columbia University’s Center on Global Energy Policy. “We spent seven years revising shale forecasts upward because it went up much faster than anyone expected.”

In summary…The market’s cold response underscored just how much clout the cartel has ceded to U.S. oil companies, which found ways to wring a lot more oil from the earth at a profit – even at low prices.

Source: Collin Eaton, “Big rigs pave way for second shale oil boom,” Houston Chronicle, 27 May 2017