What’s going on with the oil industry? #FossilFuel companies offload wells and liabilities rather than drill new ones — @Land_Desk

Photo credit: Jonathan Thompson/The Land Desk

Click the link to read the article on The Land Desk website (Jonathan Thompson):

The oil and gas industry is behaving, well, abnormally these days.

As you probably are aware if you’ve filled up your car or paid a utility bill lately, oil and natural gas prices are sky high. And every time that oil or natural gas prices have shot up for a sustained period of time in the past, oil companies in the U.S. have responded by stepping up drilling so they can have more goods to sell at a higher profit. Rig counts—the most accurate, real-time measure of drilling activity—follow the price.

This time things appear to be different. Oil companies are raking in the cash, but instead of investing it in new drilling projects, they are buying back stocks and lining the investors’ and executives’ pockets with the profits. Not only that, but many of them are bailing on entire oilfields altogether.

Let’s look at the data, but first, my apologies on the graphs below. They cover the same time span, which means they should align with one another. They don’t, however, because in Oct. 2014 I began to track rig counts monthly. So that means the bottom graph is kind of funked up in that it starts out as average yearly counts then jumps into monthly (or so) counts. My retired-statistics professor father-in-law is probably gritting his teeth at that one. Sorry.

West Texas Intermediate oil prices—the benchmark for domestic crude—started rising in the early 2000s, peaked briefly in about 2008, crashed (as a result of the financial crisis), then rebounded quite healthily. The biggest crash came in 2014, when OPEC decided to flood the market with oil, bringing down the prices and driving many a smaller U.S. operator out of business. Prices kind of recovered, but not enough to make drilling profitable in some places. Then came the short-lived pandemic crash, followed by a steep climb to where we are now, in the $100/barrel range. Source: Energy Information Administration
At first glance, I mean, after you figure out how to align these two graphs, it appears as if the rigs are following the price. But look more closely and you’ll see that today’s rig count is still lower than in early 2019, when prices were consistently below $70/barrel, which is barely the break-even price for most drilling. Source: Baker Hughes.

We’re not seeing a total decoupling of prices and rig counts: It’s still true that as prices climb, so does the rig count. However, the count is climbing much slower in relation to prices than in the past. It would be easy to blame the drilling slowdown on Biden’s purportedly restrictive energy polices. But that doesn’t mean it would be accurate, mainly because Biden’s policies aren’t restrictive. Yes, he put a moratorium on leasing, for a while. But that doesn’t have any short-term impact on drilling. And besides, the moratorium was lifted, leasing has resumed, and Biden has even upheld contested Trump-era leases on 45,000 acres in the Greater Chaco Region, prompting a lawsuit from Diné and environmental groups.

A better gauge of Biden’s policies would be to look at the number of drilling permits issued. Here it is:

At first glance, I mean, after you figure out how to align these two graphs, it appears as if the rigs are following the price. But look more closely and you’ll see that today’s rig count is still lower than in early 2019, when prices were consistently below $70/barrel, which is barely the break-even price for most drilling. Source: Baker Hughes.

From these data we can deduce that oil companies are sitting on a bunch of un-drilled leases and a pile of unused drilling permits. And not only are the companies refraining from drilling, but they’re also ditching their wells left and right, even though they are cash cows right now.

Mark Olalde reports for the Los Angeles Times that Shell and ExxonMobil recently sold 23,000 California oil and gas wells to a German asset management company. This transaction mirrors similar ones in the San Juan Basin in southwest Colorado and northwest New Mexico in recent years, in which corporate publicly traded majors sell out to smaller, often private companies. BP sold all of its extensive assets and abandoned its sleek Rocky Mountain Region headquarters near the Durango airport; it remains empty to this day. ConocoPhillips sold out to Hilcorp. WPX sold its San Juan Basin natural gas assets to Logos. The list goes on.

Of course, they’re not just offloading wells and infrastructure, but also the responsibility to clean up all those wells, which in the California case could cost $1.1 billion, according to Olalde. And since they’re selling them to less financially flush companies, the potential that the wells end up as orphans, with cleanup costs hoisted on the taxpayers, is now exponentially higher.

Actually, this is a great time to sell, because with oil prices high, potential buyers have a great reason to acquire some new wells, bleed them dry, and so forth. Here’s a great explainer:

Or maybe we’re being too cynical. Maybe Shell and ExxonMobil are short on cash so they figured they’d sell a few assets to help them pay the bills. Yeah, right.

Shell just reported a $9.45 billion profit for the third quarter of 2022. It was the second-highest ever for the company. The highest? The second quarter of this year, when the company walked away with $11.5 billion. And ExxonMobil made a measly $19.7 billion. Yes, that’s profit. In one quarter. A big chunk of ExxonMobil’s revenues came from their Permian Basin operations, which produced 560,000 barrels of oil—per day.

So, if you’re wondering why it costs so much to fill up the tank these days, that partially explains it. Oil companies know that their industry’s days are limited and they’re plundering the place on their way out the door. I guess now we know what’s going on with the oil industry.

#RepublicanRiver #Water Conservation District (RRWCD) regular fourth quarterly board meeting Tuesday, November 15, 2022 — The #Burlington Record

South Lincoln St. in Burlington. By Jeffrey Beall – Own work, CC BY 4.0, https://commons.wikimedia.org/w/index.php?curid=82474364

Click the link to read the release from the Republican River Water Conservation District via The Burlington Record website:

The board of directors of Republican River Water Conservation District (RRWCD) will hold their regular fourth quarterly board meeting in the conference meeting room at the Cobblestone Inn and Suites, on Tuesday, Nov. 15, beginning at 10 a.m. The Cobblestone Inn is located at 35952 US Hwy 385, in Wray.

The meeting will begin with the affirmation of board members representing the Sandhills GWMD, Frenchman GWMD, Logan County, Yuma County and the Colorado Groundwater Commission. New members to the board representing these organizations will be sworn in. The board will review the minutes of the Aug. 16, quarterly board meeting, minutes from the executive session of the Aug. 16, 2022 quarterly board meeting, the minutes of the special virtual board meeting held on Aug. 25, and the minutes of the special virtual board meeting on Sept. 19.

Reports to be given include board president’s report, general manager’s report, the district financial report for the third quarter, an update on the number of acres retired in the South Fork Focus Zone, and a report from the Compact Compliance Pipeline operator, Tracy Travis.

Opinion: Why you should attend the West Slope Water Summit — The #Montrose Daily Press #GunnisonRiver #ColoradoRiver #COriver #aridification

Register here. Click the link to read the guest column on The Montrose Daily Press website (Sue Hansen). Here’s an excerpt:

What we need now is your help; I invite you to join us for the West Slope Water Summit on Nov. 10 at the Montrose County Event Center. Even though we are a small community on the western slope, arming our community members with knowledge, encouraging conservation, and researching potential solutions is a role that we all play in the Colorado River system. In its fourth year, the West Slope Water Summit’s theme is “troubled waters” featuring an impressive number of prominent water and conservation experts.

The program begins with Andy Mueller, Executive Director of the Colorado River District, who will address adapting the 1922 Compact to today’s reality. Next, Don Day, Meteorologist Day Weather Inc., is presenting on the State of the Weather: the good, the bad, and the ugly.

Before the free lunch, our local Uncompahgre Valley Water Users Association Manager Steve Pope will provide an update to the Colorado River Basin Drought Response as part of a panel of water user board members.

Spots are still available — we recently moved from the conference room to the arena to accommodate a larger crowd. Register at westslopewatersummit.com

River Bottom Park Uncompahgre River. Photo credit: PhilipScheetzPhoto via the City of Montrose

Snowstorms have been robust, but #Utah is still sitting at average — The Deseret News #snowpack

Westwide SNOTEL basin-filled map November 6, 2022.

Click the link to read the article on The Deseret News website (Amy Joi O’Donoghue). Here’s an excerpt:

“We’re close to normal for this time of year from a precipitation perspective. We are encouraged by the snow that we’re already getting. It looks like the pattern going into next week also looks wet,” said Jordan Clayton, supervisor of the Utah Snow Survey with the Natural Resources Conservation Service.

Utah Drought Monitor map November 1, 2022.

Snow totals may look extraordinarily optimistic in the various basins, but they are skewed because of how early in the season it is, Clayton said…In fact, the latest statewide assessment by the U.S. Drought Monitor shows that 51.2% of the state remains in extreme drought, while 100% is abnormally dry. With that said, Clayton again warned that an active stormy October does not mean a good water year.

Scientists awarded $3M to study #climate science, community resilience — Colorado State University #ActOnClimate #KeepItInTheGround

Photo credit: Colorado State University

Click the link to read the release on the Colorado State University website (Emily Wilmsen):

A federal agency awarded 12 Colorado State University researchers more than $3.1 million for such innovative science as improving how satellites show smoke plumes, using AI to predict precipitation, and, perhaps for the first time, evaluating how individual storms could change with climate intervention.

The three-year grants from the National Oceanic and Atmospheric Administration, or NOAA, are aimed at scientists studying climate science and community resilience.

Nearly all CSU recipients are based in the Department of Atmospheric Science, which is considered among the best graduate programs in the nation. All but one reside in the Walter Scott, Jr. College of Engineering; co-lead Thomas Borch, from the CSU College of Agricultural Sciences, has a dual appointment in the Department of Civil and Environmental Engineering.

Between 2016 and 2022, Colorado universities and organizations have attracted $29.1 million in NOAA funding. That is more than any other state, according to NOAA data.

Smoke billows from the Cameron Peak Fire north of Rocky Mountain National Park on Aug. 13, 2020. Courtesy of Emily Fischer and Peter Girard

Projects funded in 2022 that either have a CSU engineering faculty member as the lead investigator or a co-lead:

Structural fires at the wildland urban interface: Emission factors, inventories, and implications
Lead: Shantanu Jathar, Mechanical Engineering
Co-PIs: Christian L’Orange, Mechanical Engineering, Thomas Borch, Soil and Crop Sciences (Agricultural Sciences)
Goal: Study emissions from the combustion of common structural materials and their fuel complexes at different scales. Develop data and emissions inventory for structural fires specific to the wildland urban interface.
Award: $749,640

Improved retrievals of fresh and aged smoke properties from GOES satellite
Lead: Sonia Kreidenweis, Atmospheric Science
Co-PIs: Christine Chiu, Qijing (Emily) Bian, Atmospheric Science
Goal: Improve the characterization of smoke plumes from geostationary satellite observations, with a focus on providing insights into smoke spread, its temporal variability, and the impacts of transport and aging on smoke properties.
Award: $628,111

Explainable AI and process diagnostics to understand state-dependent precipitation forecast errors
Lead: Elizabeth Barnes, Atmospheric Science
Co-PI: Eric Maloney, Atmospheric Science
Goal: Use novel artificial intelligence to identify and improve forecasts from NOAA’s weather forecasting model of North American precipitation at subseasonal-to-seasonal lead times.
Award: $683,893

Assessing the impact of solar climate intervention on hazardous convective weather over the continental United States (CONUS)
Lead: Lantao Sun, Atmospheric Science
Co-PIs: Jim Hurrell and Kristen Rasmussen, Atmospheric Science
Goal: Use high resolution regional models to document how climate change is likely to affect severe storm systems, and the extent to which those changes might be mitigated by climate intervention.
Award: $719,000

Optimizing coupled boundary layer process studies in the tropical Pacific using high resolution models and in situ observations
Lead: Aneesh Subramanian, CU-Boulder
Co-PIs: Kris Karnauskas, CU-Boulder, Charlotte DeMott, CSU Atmospheric Science; Janet Sprintall, University of California San Diego
Goal: Identify and study key processes to determine the need for increased observations to help reduce systematic errors in modeling the coupled ocean-atmosphere boundary layer. DeMott’s role is to develop a climatology of western tropical Pacific Ocean conditions and low-level wind events associated with the onset of El Niño conditions.
Award: $889,912 ($111,734 to CSU)

Investigating the MJO-TC connection and its role in subseasonal US precipitation prediction
Lead: Daehyun Kim, University of Washington
Co-PIs: Eric Maloney, CSU Atmospheric Science, Suzana Camargo, Columbia University
Goal: Learn how problems in simulating east Pacific and Atlantic tropical cyclones, and their interactions with a weekly-varying tropical phenomenon called the Madden-Julian oscillation, lead to errors in simulating United States precipitation in NOAA’s weather forecasting model.
Award: $876,042 ($262,256 to CSU)

Dynamical downscaling to quantify extreme events under stratospheric Sulfate Aerosol Injection
Lead: Ben Kravitz, Indiana University
Co-PIs: Jim Hurrell, CSU Atmospheric Science
Goal: Use dynamical downscaling to simulate the impacts of climate intervention on extreme weather and climate events in the Midwest and the Western United States.
Award: $539,661 ($66,737 to CSU)

Poem and photo gallery: “In #PagosaSprings teaching at #Water 101 and 102, Southwestern Water Information Program” — Greg Hobbs

I think about Greg often. He was a friend of Coyote Gulch and I miss his friendship.

Autumn Anglers
I’m the freshet beneath your bridge
Source and mouth and passage
Fisher above, beyond, beside you
Your guide, your path, your canopy.
I’m the handholds on your cliff faces
The spring in your diversions
The catch, the feast, the planting
Transfusion for your sorrows.
I’m the wing-loft to your feathers
The talons of your grip
Reflection of your ripples
Quiver of your gifts.
I am the soar, the roar, the seep
The fiddle, the song, the strings
The lift of traveling companions
The land, the waters, the peoples.
—  Greg Hobbs