gold rushBy SD Contributor SRSrocco:

What is taking place in North Dakota is the same thing that took place during the 1848-50′s California Gold Rush.  And that is a Big Migration of people with very little in the form of housing and services.

ALL BOOMS behave the same way.  After the BOOM, comes the BUST.  The N.D. Bakken Boom won’t be any different.

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Just for your information… one of the biggest CASH COWS in the energy industry today are the PIPELINE COMPANIES.  They are making money hand over fist.  There have been plans for building a pipeline to North Dakota to move all that oil.

However, it looks like a pipeline is no longer in the cards.  The oil service companies have elected not to spend over $1 billion dollars in upgrading and adding RAIL LINES and added additional STATIONS.  Why?  Because they realize this oil will not last very long.  That is why they decided not to build a pipeline.

Of course, PORTER STANSBERRY and the clowns presently HYPING SHALE OIL & GAS, do not understand the decline rates of this industry.

Anyone who is honestly considering building and opening a business in North Dakota to take advantage of the OIL BOOM, had better do so fast… and sell the business within the next year or two.  Of course it would be in ones best interest to sell their business to some POOR WORTHLESS SLOB who has no idea of the sort of oil decline rates in shale oil.

  1. I am business manager for a pipeline companies and I can tell you 100% equivocally you’re wrong. We don’t benefit the most. By you saying that I can tell you haven’t had boots on the ground in the industry. I like your work but you’re becoming increasingly intellectually dishonest.
    How this differs from the gold rush is that prospectors before faced uncertainty on whether or not they could make money on a singular personal level. Now employees are guaranteed more than fair wages, subsistence, and other benefits, guaranteed paid every 2 weeks. On a personal level this boom will make many people alot of money. I see this personally every day.
    Suppliers are raking in money hand over fist, and they would in my view be the ones who stand to make the most money since their limited supplies, which are essential to the completion and tie in of these lines. They charge what they want. I see this personally every day. No better example is pipe companies. They are selling it as fast as they make it, with no regard for price. You think that pipeline compnaies can charge whatever they want? You’re sadly mistaken.
    Drilling companies have lucrative contracts and their money is guaranteed. They are making a killing. I see this personally every day.
     
    Fracking outfits have lucrative contracts and their money is guranteed and the process is simple and at this point not frought with much uncertainty. They are making a killing. I see this personally every day.
     
    Same goes for welding and fabrications outfits, X-Ray shops. Virtually no downside. They are making a killing. I see this personally every day.
     
    Finally the oil companies. They have tight oil figured out pretty good these days, and have the economics figured out in their singular cases far more than a generalized chart. The only way I can tell you I know this is because many people I know have made alot of money owning oil companies. A holding compnay I am part of had 20 thousand shares of Midway Energy we got for a song, and we cashed out big time when they got bought out by whitecap.
     
    Sum total, your assertion that pipeline companies are the ones cleaning up here is wrong. There is plenty of opportunity to make money, some with more risk than others, and the prospect of someone showing up and leaving penniless after hard work is exactly ZERO.

    • dear mr dirtlump,
      the amount of sense you are making here is exactly ZERO.
      setting aside the fact that you dont know what “equivocally” and “unequivocally” mean, your rant goes off on a tangent, and claims that srsrocco’s writing is not correct, but you absolutely fail to demonstrate how that is the case.
      he never said nobody will make money, he merely pointed out that the bakken oil rush will go through boom and bust just like the gold rush, and the rush will end relatively quickly.
      also, you state that he is being “intellectually dishonest”, but you 100% fail to make any case or present any evidence to support your dubious claim. if you’re going to make such a harsh accusation, you had better have some strong evidence to support what you say, but you got NOTHING!
      as they say, “put up or shut up”
       
       

    • From what I’ve heard Canadian Dirtlump’s direction is right in regards to where the money goes, but goes a bit further than necessary.
      Pipelines are steady as you go type investments, price of oil or gas goes up or down they’ll still make money.  But a lot of the money is locked in contracts for the fee per barrel or cubic feet/day that flows through.

      There is risk because of the regulations and enormous cap-ex they need to go through in order to build the pipeline… They need to stay operational for a long time in order to break even and start profiting. So if the Bakken does go bust, then with nothing flowing the pipelines will make nothing – hence SRS’s argument that they are sticking with railway transport.
      I think pipelines make additional revenue via ancillary services such as gas and/or oil storage facilities.  Some do natural gas liquid extractions as well and sell that off.
       
       
      Canadian pipeliner TransCanada:

      http://tmx.quotemedia.com/quote.php?qm_symbol=TRP

      Canadian pipe supplier Shawcor:

      http://tmx.quotemedia.com/quote.php?qm_symbol=SCL.A

    • Canadian Dirtlump…. I did say the Oil Pipelines were one of the biggest CASH COWS… not the biggest.  Regardless, here is the actual data for the doubters:
      ONEOK Partners scraps Bakken oil pipeline plans

      http://www.tulsaworld.com/articleimages/2012/20121128_bakken112812.jpg

      Tulsa-based ONEOK Partners LP announced Tuesday it has decided not to build the Bakken Crude Express Pipeline from North Dakota to Oklahoma due to a lack of long-term commitments by oil producers to use the 1,300-mile conduit.
      ——————
      According to Bloomberg:
      “A group of oil and gas pipeline operators led by Plains All American Pipeline LP (PAA) announced plans just in the past three months to spend about $1 billion on rail depot projects to help move more crude from inland fields to refineries on the coasts.”
      —————–
      To give an example, Oil and Gas Journal reported in September 2012:
      “Oil pipeline operators’ net income soared to an all-time high of $6.1 billion, a 33.3% increase from 2010 achieved on the back of a nearly 12% increase in operating revenues.”
      ——————
      Decline rates in the Bakken Oil Shale are 40% per year.  Shale Gas is even worse:
      Add to this mix extremely steep decline curves for both shale gas and tight oil. A paper presented to the Society of Petroleum Engineers which researched well data in the Eagle Ford shale of South Texas found that first year decline rates were about 80-93%! Shale gas overall yearly field declines are in excess of 40%. The Haynesville is in excess of 50%. In other words, wells are playing out much quicker than expected.
      …. Deborah Rodgers
      —————
      Folks, the future energy supply coming from the United States looks grim.  However, HYPE SELLS BETTER THAN FACTS.

  2. reflector tweak it down a notch. Not all who post are rhetorical and often misuse words incorrectly. To the previous poster, a equivocator or prevaricator is a liar. So you needed to use the word unequivocally to be correct. Now the boom bust of 49 was one hell of an event that infused the imagination of men and energized a nation. The effects of the gold rush were profound historically and enriched a nation. The technologies for mining, infrastructure development, cities, banking structure, and a crucible that forged men to go beyond themselves cannot be metered by the metric of boom/bust. So it will be with tight shale and a sorely needed beacon of hope for a nation that looks like it is shooting itself in the foot.
    The wells however do deplete much faster then conventional pool drilling but dammit there is one he’ll of a lot of this stuff.
    The good ole USA is loaded with tight shale deposits so “drill baby drill.” We need to count our luckystars that it is also on private land and private enterprise can make a buck here. It just may give this country a sorely need boost to get us up and running on all eight cylinders.
    There have been several other historical events in American history that I equate to the significance of a Bakken. They are the Comstock and the Klondike. We are now in the tight shale paradigm and the injection of new wealth will hopefully Invigorate a troubled nation with new hope and optimism.
    I am not here to refute the initial poster, engage in academic jousting with reflector but feel both posters don’t don’t grasp the larger picture. the boots on the ground guy just sees things in front of him and his read is different.
    Also reflector be kind your vitriol isn’t needed no one has and axe to grind here

  3. I was up on the Bakken this summer with a friend when I was on vacation. The boom is already busting with wells not delivering like promised and what is going to happen is the people of ND are going to be left with a huge cleanup mess once this plays out in 4-5 years. Add in the light pollution and pollution in general from the flares that make that part of ND as bright as the Twin Cities metro area.

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