The Dark Side of the Shale Bust
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Posted by David Schott (+17407) 6 years ago
CommodityCharts.com: The Dark Side Of The Shale Bust

The Dark Side Of The Shale Bust
Oilprice.com - IF - Mon Jun 15, 3:33PM CDT

The fallout of the collapse in oil prices has a lot of side effects apart from the decline of rig counts and oil flows.

Oil production in North Dakota has exploded over the last five years, from negligible levels before 2010 to well over a million barrels per day, making North Dakota the second largest oil producing state in the country.

But the bust is leaving towns like Williston, North Dakota stretched extremely thin as it tries to deal with the aftermath. Williston is coping with $300 million in debt after having leveraged itself to buildup infrastructure to deal with the swelling of people and equipment heading for the oil patch. Roads, schools, housing, water-treatment plants and more all cost the city a lot of money, expected to be paid off with revenues from oil production that are suddenly not flowing into local and state coffers the way they once were.

...


Read more here.
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Posted by Amorette Allison (+11888) 6 years ago
The rig count in North Dakota last week was 75. There were 214 rigs drilling on the same day in 2012.
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Posted by atomicg (+1009) 6 years ago
Are the rigs in ND that are already in place and producing able to continue selling oil profitably at these prices? Not sure what it costs to get product to market once the rig is up n running compared to drilling a new well altogether?
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Posted by Richard Bonine, Jr. (+15076) 6 years ago
$75 per barrel used to be the break point. Not sure how much it's changed.
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Posted by AFAB (+97) 6 years ago
There are a lot of variables and each company is different but the break even point is much lower than $75 per barrel for the bigger companies who have refined their operations.
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Posted by Gunnar Emilsson (+17660) 6 years ago
I'm sure glad Art Wittich decided not to fund any of that infrastructure, now that we've gone from boom to bust. We tax payers would have been left holding the bag.
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Posted by AFAB (+97) 6 years ago
I figured all you democrats would be happy to see it go bust but I will warn you that your pretty little social security and other programs will suffer as well when the whole nation goes down because of the bust. Lol
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Posted by Amorette Allison (+11888) 6 years ago
The low oil price will not bring down the economy. Handing it over the oligarchs will.

I remember local econ dev type who was just sure MC would be full of money when the boom spread. This person also thinks the TRR will be arriving soon.

Say, anyone here read the TRR draft EIS. It says the coal will go east, not west. Huh?
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Posted by David Schott (+17407) 6 years ago
The Salt Lake Tribune: Montana coal mine deal aims to boost exports

By MATTHEW BROWN The Associated Press
First Published Sep 04 2014 04:56PM • Last Updated Oct 03 2014 02:17 pm

Billings, Mont. • Coal companies announced an agreement Thursday to consolidate ownership of a Montana mine in a deal aimed at boosting exports of the fuel to Asia through ports on the U.S. West Coast.

Under terms of the deal, Wyoming-based Cloud Peak Energy would give up its 50 percent stake in the Decker Mine to co-owner Ambre Energy of Australia.

Ambre would take over liability for $67 million in reclamation and lease bonds for the mine. Cloud Peak gains the option to move almost 8 million tons of coal annually through a port proposed by Ambre in Longview, Wash.

The deal is expected to close later this year.

Ambre, Cloud Peak and other companies want to increase coal shipments from the Mountain West to Asia as domestic demand falters. But that goal has so far eluded the industry, as proposals for new export terminals in Washington and Oregon run into strong resistance from regulators and environmentalists, prompting some projects to be dropped.

U.S. coal exports are forecast to drop below 100 million tons in 2014 after hitting a record 125 million tons in 2012, according to the U.S. Energy Information Administration.

. . .


Read more here.
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Posted by AFAB (+97) 6 years ago
Amorette
Could you please tell me what you credit the boost of Miles City's economy over the last three years to?
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Posted by Richard Bonine, Jr. (+15076) 6 years ago
This article indicates that the breakeven for wells on the edge of the bakken is $73 to $77. In the heart of the bakken the breakeven is about $30. Breakeven is defined as the point at which drilling new wells stops.


https://shar.es/12RtBU
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Posted by atomicg (+1009) 6 years ago
I think I read that the Saudi break even point was under $10
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Posted by Oddjob (+187) 6 years ago
Booms are under-appreciated. They get no respect. Being able to whine about the bust means, at least you had a boom. Whether or not you were in a position to take advantage of it, and what you did with it, is a personal problem. Besides, if there is a core in the Bakken with a $30 breakeven, the boom isn't over yet.

Miles City is what it is and it's never going to be a destination for Tesla, Microsoft or Intel. It can't even be Deadwood in spite of all the casinos. Cows, Ag, railroads and bust with the occasional rare boom is your lot in life, if you choose to be there.

I'm sure the Bakken is still putting some dollars in a lot of Miles City pockets, including some posting on this thread.
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Posted by Wendy Wilson (+6170) 6 years ago
AFB,

What boost to Miles City's economy? Please give examples.
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Posted by AFAB (+97) 6 years ago
Well let's see here. Have you driven down Haynes and noticed all of the out of state license plates stopping to eat or refuel on their way to and from the Bakken? And do you think the motels are busy just due to tourism? There are several businesses that have built new buildings and are employing local people as well as bringing new people to town. I have also seen a lot of vehicles that are owned by oil companies at the local car dealerships that are being serviced or repaired. The money brought into the local economy is in the millions per year. That is just a few things to prove it. If you owned a business in town then I'm sure you would agree.
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Posted by Richard Bonine, Jr. (+15076) 6 years ago
"The money brought into the local economy is in the millions per year. That is just a few things to prove it."

Please provide a source for your statement. The "evidence" you have provided is highly  antidotal. You have proven nothing.
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Posted by Oddjob (+187) 6 years ago
Here's an antidotal analysis.. Maybe this will cure what ails 'ya?

Dateline: milescity.com

"Authorities are confident that 99.9% of Bakken dollars were held captive in North Dakota with most of the remaining 0.1% incarcerated in Sydney or Glendive. The last remaining escapees were rounded up in Terry. Expat pseudo-economists are confident that no fugitive Bakken dollars are, or ever were, at large in Miles City........"

Just keep your antidotal evidence to yourself, AFAB...... Full motels in January in Miles City prove...nothing!
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Posted by AFAB (+97) 6 years ago
Mr. Bonine Jr
I wasn't trying to prove anything nor do I deem it necessary to prove a point to you. It is very clear that the boom has been very good for Miles City so if you choose to be blind to it then by all means enjoy.
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Posted by Richard Bonine, Jr. (+15076) 6 years ago
Well, hell if I can say what I want and not have to back it up... A long line at Town Pump for people picking up a suitcase of Busch lite does translate necessarily into a "boom". The increase in economic activity in the last 3 years has more to do with high cattle and grain prices than anything the brought by the increased oil activities to the east. I know the roughneck,bud-drinking, skirt-chasing, gun-toting, limbaugh-listening crowd likes to believe they are the cause of all economic growth, but in Miles City that has not been the case. In Miles City it's all about cows and plows.
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Posted by Richard Bonine, Jr. (+15076) 6 years ago
This post was removed 6 years ago.
It was removed because it was a duplicate.
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Posted by cubby (+2644) 6 years ago
So Richard, everyone that is bitching and complaining of high rent and nowhere to live should not be mad at the Bakken? It is on the other hand the ranchers and farmers fault for rent being so high? So everyone should be mad at them and not the oil field workers.




FWIW, I really did want to stay out of this peter measuring competition.
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Posted by Richard Bonine, Jr. (+15076) 6 years ago
High rent/ no place to live was that way LONG before there was a Bakken. People just like to bitch. This one of their favorite whipping posts.
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Posted by cubby (+2644) 6 years ago
As I'm not as old as you Richard, but I can tell you this. You can't get what you use to get for $100,000 now days. What I bought for $82000 9 years ago, you have to pay $120-140k for now days.
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Posted by AFAB (+97) 6 years ago
Cubby
You are wasting your time trying to explain anything to these know-it alls. Lmao
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Posted by Richard Bonine, Jr. (+15076) 6 years ago
As I'm not as old as you Richard, but I can tell you this. You can't get what you use to get for $100,000 now days. What I bought for $82000 9 years ago, you have to pay $120-140k for now days.


Yup, that is true. Prices and VALUE have gone up over time. My grandfather built the house that is at 614 S. Custer back in the early 50's. It cost him about $6000.00. That house today would be in the 100K+ range. My dad sold 9408 acres of what is now Sundial in the Pine Hills to a guy from Texas for $132,000 in 1972. Shortly after the price of land went from $32 /acre to $70. The economy has expanded. Oil wells in SE MT are a very small part of the reasons why things have changed. 

You are wasting your time trying to explain anything to these know-it alls


I really don't think of myself as a know-it-all. I am just a guy that is passionate about my thoughts and am tired of the BS most people throw up as "truth" that is false.
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Posted by AFAB (+97) 6 years ago
So everyone may now assume that everything that Richard posts is without the shadow of a doubt 100% factual? Bahahahahaha. I can't take it anymore.
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Posted by ike eichler (+1232) 6 years ago
No one has mentioned SanJel et al !!
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Posted by David Schott (+17407) 6 years ago
Is Sanjel still moving forward with its plan to build a new facility on Highway 12?

Miles City Star: Sanjel plans $15M expansion

* Published: Mon, 12/29/2014 - 3:55pm
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Posted by Oddjob (+187) 6 years ago
Reply to Richard Bonine, Jr. (#360256)
Richard Bonine, Jr. wrote:
The economy has expanded. Oil wells in SE MT are a very small part of the reasons why things have changed. 

I really don't think of myself as a know-it-all. I am just a guy that is passionate about my thoughts and am tired of the BS most people throw up as "truth" that is false.


You have to understand that Richard's hero is the alleged "economist" and documented liar, Paul Krugman. Richard and his pals believe that energy production is evil incarnate and is only done to benefit and enrich Republicans in general, and the Koch brothers in particular.

Therefore, you can never admit there may be any kind of value or economic benefit to any other inhabitants of the planet.

Those "No Vacancy" signs on Haynes Ave in the middle of January are just a cruel hoax.
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Posted by Richard Bonine, Jr. (+15076) 6 years ago
Oddjob saith:
You have to understand that Richard's hero is the alleged "economist" and documented liar, Paul Krugman. Richard and his pals believe that energy production is evil incarnate and is only done to benefit and enrich Republicans in general, and the Koch brothers in particular.

Therefore, you can never admit there may be any kind of value or economic benefit to any other inhabitants of the planet.

Those "No Vacancy" signs on Haynes Ave in the middle of January are just a cruel hoax.


What you've stated here is 99% UDSA grade Prime BS, but at least you're getting some exercise from long-jumping to conclusions.
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Posted by Brandy Allen (-2405) 6 years ago
"Authorities are confident that 99.9% of Bakken dollars were held captive in North Dakota with most of the remaining 0.1% incarcerated in Sydney or Glendive. The last remaining escapees were rounded up in Terry. Expat pseudo-economists are confident that no fugitive Bakken dollars are, or ever were, at large in Miles City........"

I think one needs not look any further than the "new crazy mans" manifesto in south Carolina. These out of state plates are probably the big city racist running types, you know, "the ones looking for good schools".
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