The Uinta Basin in northeastern Utah, which may be the quirkiest production area in the Lower 48, is firing on all cylinders. Production of the basin’s unique waxy crude is at an all-time high, the natural gas takeaway constraints that had threatened to limit growth are being resolved, and demand for waxy crude is on the rise. In today’s RBN blog, we’ll provide an update on the Uinta, where the crude looks and feels like shoe polish and is trucked and railed — not piped — to market.
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We admit it, we’re energy geeks, with soft spots not only for giant production areas like the Permian, the Marcellus/Utica and the Bakken, but also for offbeat locations like the Uinta Basin, which is well-known in refining circles (especially Salt Lake City but also in parts of the Gulf Coast) for its trademark waxy crude. Waxy crude may be as hard to handle as porcupines and as tough to transport as giraffes — more on that in a moment — but its medium-to-light API gravity (32 to 36 degrees for the “black wax” variant and 38 to 44 degrees for the “yellow wax” type), super-low sulfur content (0.01%), low acid content (TAN, or total acid number, of less than 0.1%), and low metals and nitrogen content make it highly desirable to an increasing number of refiners.
As we said last year in You Waxy Thing, Uinta producers for many years relied on conventional vertical wells, often stimulated with massive acid jobs or water flooding. Over the past 10 years, however, producers have been turning to horizontal drilling and multi-stage hydraulic fracturing — and with more and more success. Like unconventional producers in other plays, Uinta E&Ps have been drilling longer and longer laterals (~10,000 feet is now standard and 3-mile laterals were recently tested), ramping up the intensity of their hydraulic fracturing, and multiplying the volumes of frac sand used. Most important, perhaps, they have identified — and zeroed in on — over-pressured areas in the basin’s Uteland Butte play (blue-shaded area in Figure 1) that offer very favorable initial production (IP) rates and slower decline curves.
Figure 1. Uinta Basin and Its Key Sub-Areas. Source: RBN
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About the song
“SexyBack” was written by Timbaland, Justin Timberlake and Tim Mosley. It appears as the second song on Justin Timberlake’s second studio album, FutureSex/LoveSounds. In the 4/4 tempo rhythmic dance song, Timberlake claims, “I’m bringing sexy back.” Recorded at Thomas Crown Studio in Virginia Beach, VA, in December 2005, with production handled by Timberlake, Timbaland and Nate “Danja” Hills, it was released as the lead single off the album in July 2006. It went to #1 on the Billboard Dance Club Songs, Dance/Mix, and Hot 100 Singles charts. It has been certified 3x Platinum by the Recording Industry Association of America (RIAA). Timberlake described the song as if David Byrne and David Bowie covered James Brown’s 1970 hit, “Sex Machine.” He didn’t mention the similarity the song has to nu-metal band, Korn’s 1998 hit song, “Got the Life,” which incorporates the phrase, “get your boogie back” in the same manner that “SexyBack” uses “get your sexy on.” The song helped introduce EDM (electronic dance music) to Top 40 radio and won a Grammy Award for Best Dance Recording at the 49th Annual Grammy Awards. Personnel on the record were: Justin Timberlake (lead, backing vocals), Timbaland (co-lead vocals, sampling), Nate “Danja” Hills (programming), Bill Pettaway (electric guitar), and Darryl Pearson (bass).
FutureSex/LoveSounds was recorded between November 2005 and June 2006 at Akademie Mathematique of Philosophical Sound Research, Arch Angel, Capitol, Conway, The Document Room, and Encore in Los Angeles; Chung King in New York City; and Thomas Crown in Virginia Beach. Produced by Timberlake, Timbaland, Nate “Danja” Hills, Jawbreakers and Rick Rubin, it was released in September 2006. It went to #1 on the Billboard 200 Albums and Top R&B/Hip Hop Albums charts and has been certified 4x Platinum by the RIAA. Six singles were released from the LP.
Justin Timberlake is an American singer, songwriter, record producer, and actor. He started his professional career as a main cast member of Disney’s Mickey Mouse Club. He joined the boy band NSYNC in 1997. They became one of the most popular boy bands. with record sales of over 70 million worldwide. Timberlake went solo in 2002 and has sold over 88 million records worldwide as a solo artist. He has released six studio albums, two soundtrack albums, two compilation albums, three EPs, and 51 singles and has starred in 23 feature films. Timberlake has won four Emmy Awards, 10 Grammy Awards, seven American Music Awards, three Brit Awards, nine Billboard Music Awards, and 11 MTV Video Music Awards. He is a member of the Songwriters Hall of Fame and has a star on the Hollywood Walk of Fame. He continues to record, act, and tour. He will begin The Forget Tomorrow World Tour in April.
Comments
1) if refining + rail terminal capacity is ~190/d during upside, where will incremental production go? are there expansions planned beyond the PRT project mentioned?
2) are EIA rail transfer from PADD4 to PADD3 right? If so, production less rail would imply ~100/d is refined in SLC, or up to 157/d in Sep23, which seems impossible
In reply to Oil Questions by Barrett Ellsworth
Thanks for your questions. Re Question #1, several non-Utah refineries are interested in waxy crude and at least a couple of possible rail-terminal projects are in early stages — one or more could happen if demand warrants. As for Question #2, the ability of SLC-area refineries to handle waxy crude is capped at about 90 Mb/d (maybe a little bit more). Individual monthly numbers for rail transfers aren't that meaningful once you count inventory changes and timing issues.