Joe Carroll, Energy Reporter for Bloomberg

He reported that Continental Resources boosted their Bakken estimates by 57% as well as pointed out that North Dakota had surpassed OPEC member Ecuador in oil production. He is an energy reporter for BLOOMBERG; our guest today on The Hegg Bakken Report is Joe Carroll, Chicago, IL.

Hegg Bakken Report: Today on the program we get in touch with a reporter from one of the most respect, one of the most credible news organizations in the United States. You find him on television, radio, print and of course on the web. Now we are talking of course about Bloomberg and Joe Carroll a reporter from Bloomberg joins us. Joe thanks for hoping on here with us.

Joe Carroll: Hey, happy to be here thanks for asking.

Hegg Bakken Report: You are located in the Mid West where did you grow up?

Joe Carroll: I grew up in the suburbs of Chicago and I work out of the city now and I’m mostly I have been in Midwest the upper Midwest the most of my life.

Hegg Bakken Report: How long have you been with Bloomberg?

Joe Carroll: I came to Bloomberg I want to say about 13 and half years ago and prior to that I was working in local newspapers.

Hegg Bakken Report: How did you energy as your focus on your coverage?

Joe Carroll: I actually didn’t, it chose me when I came to, you know Chicago is the commodity trading capital of the world really and when I came here my assignment was to cover the grain and livestock exchanges, you know the board of trade in the market and from that experience coverage commodity markets when we needed to move a little more into energy I went over on the energy side so I would cover propane and natural gas and a little bit of crude oil and from there you know I migrated into covering the companies and the industry itself.

Hegg Bakken Report: Were you pleasantly surprised at the things that you learned about the energy industry and having it as you say it found you?

Joe Carroll: Yeah it was definitely sort of the perfect time to be volunteered into the job if you see what I mean just because everything, I mean the industry is completely exploded and its gone through a couple of booming busts, many busts in that time and it’s just a perfect time to be covering it. Not just a growth you see out in the Bakken but other sort of shell prospects you have got not even Shell just the unconventional of South Texas, West Texas, Pennsylvania, Ohio even Canada.

Hegg Bakken Report: George Mitchell was a Texas business man who pioneered Shell drilling techniques and you recently wrote an article about him. Why did you find that important to what’s happening in the United States energy arena today?

Joe Carroll: You know the report on Mitchell was that he persisted in trying to find a way to crack open these geological formations that really for all intense, in fact most of the 20th century were just considered science experiments by petroleum engineers it was never really a source rock, it was never really seen as something that was going to be commercially producible but he kept at it, everybody talks about the hydraulic fracturing and he came up with some news fluids and ways to handle that. But coupling that with the horizontal drilling was really the key. He put those hydro fracturing have been around since the end of World War Two but he really he came up with the innovations where he crack up open the bonnet and all the super majors ignored him even the large GMP companies, they blew it off they just thought look these shell fields will never work and Lord behold all of those companies are now having to buy in they missed the boat.

Hegg Bakken Report: What was Mr. Mitchell like as a business man?

Joe Carroll: I think he is a modest man he understood his contribution, though I don’t think he would really talk about it in the terms I have. You know to the sort of energy renaissance. But I think he was most proud of his real estate development. He developed the woodlands which is his beautiful suburbs of Houston and I think he considered that really his main legacy. You know , he was, as I said he was persistent when everybody else was sort of looking at skill set, what is this guy doing drilling in dead in county Texas, he kept at it.

Hegg Bakken Report: Recently Joe you wrote an article that was highly circulated it was about continental resources boosting their Burning estimates by 57% after they got the results in from Challette 322H which is a well in the Bakken. What does this mean for us in Western North Dakota in the Bakken region?

Joe Carroll: Just to clarify when we are running for the international the sort of a much broader audience then say, trade publications were to maybe the local papers, when we talk about the Bakken we just mean it as that region in general. What continental do is they show that you could commercially produce under the three forks that they got down into those benches which just opens up as you know a vast of new layers? Everybody knew they were there but the question was can you, let me say like, you know what the question used to be with the Bakken itself can you came it work and so that’s the break through so now you have at least four benches and probably more to come.

Hegg Bakken Report: We are visiting with Joe Carroll the energy, an energy reporter for Bloomberg and Joe you wrote a story last year that pointed out that North Dakota had surpassed Old Park member Ecuador in oil production and what has the Bakken do to the economies of OPEC countries like Ecuador, Venezuela, Nigeria, and Saudi Arabia?

Joe Carroll: I don’t know if it has affected their economies yet but it certainly woken up their oil ministers. They got their first gear when Shell gas took off and all the took in this country was about replacing some oil demand with domestic natural gas, I’m not sure how scalable that really is or was but that was sort of the first rumbling on the horizon that those oil ministers heard about American Shell. The big change I think will hit them when, if and when there is more through going routes to the coast. As long as that oil is somewhat stranded in the upper great plains it’s not going to have a giant impact on the international brand it’s still going to govern the market brand being the one to trade in, you know, the bench mark features. But you know as folks like Herald, Hammer Continental they have been doing the more of their oil that they can get to the east coast and to the gulf coast and even to the Chicago area and into our refineries. Then it starts to push out some of the Saudi oil and Venezuelan oil to a certain extent and that’s when it will begin to have an effect.

Hegg Bakken Report: From your perspective Joe how is the Bakken impacting our standing in the world and impacting our global energy markets?

Joe Carroll: It’s interesting to try to consider as you mentioned how is it affecting Ecuador or the Saudi or the Venezuelan’s and also the one country a lot of folks don’t talk about is the Russians they are out there with the Saudi’s as far as production goes and they are just relying on oil for their, you know it’s the basis for their economy and that maybe the real, sort of the real game changer depending on how much of this oil can get pushed out of the country. One other thing and this is what folks were talking about in West Texas a couple of weeks ago because they have a similar situation there. Even though Texas is a big oil state and its on the golf, West Texas is really, really far away from it and at times in the last 12 months oil will get stranded because there weren’t trucks available, there weren’t drivers you know there just weren’t enough people around and so you had to shut in wells in West Texas and the producers didn’t have enough pipeline capacities it’s a very similar situation and I got to wonder if really there will be a push at some point to export all of these light oil that’s coming out of places like North Dakota because the refineries we have in this country are mostly designed to handle heavier grades crudes stuff like the Mexican’s and the Venezuelan’s pump not this real high quality oil that’s coming out of North Dakota. It really maybe a better sort of arbitron to sell this stuff but some of the overseas refine it, who need you know light oil in their refinery and then bring in the cheaper stuff for American refineries.

Hegg Bakken Report: So, what you said about Texas here a moment ago, you know they had to shut wells down because they were at full capacity, do they still have work to do on their infrastructure to get up to full capacity?

Joe Carroll: Yeah I mean there is new pipelines going in everywhere, same as in the Marseilles in terms of Utica, Ohio, there is new pipes going in but they just can’t go in fast enough. Right now the oil isn’t stranded is moving along, they have got plenty of trucking capacity but as you have seen in North Dakota you know it doesn’t take much to gum up the whole system it’s like take up in demands, two counties over and you don’t have any trucks or drivers available so they are a very similar situation down there. One thing I know it’s just that two weeks ago the McDonalds down there, they signed off on offering people $50 an hour to come work there in signing bonuses, such a similar situation.

Hegg Bakken Report: Yeah, what we also have is Harold Ham he recently said we don’t need the key stone project we will find other ways and some journalists feel that, that might be some sort of strategy on Mr. Ham’s part to, what he actually was meaning to say was, yeah we really do need the key store project, what’s your thoughts on key stone Joe?

Joe Carroll: I wondered and again I don’t have any, this is me wondering I don’t have any sort of inside analogy. Yes I wondered how much of that was about; he is competing with the oil sales producers with the Western Canadian. The company is producing up in that neck of the woods and so, and right now he is moving 75% of his oil out of both North Dakota and Oklahoma by rail and he is making plenty of money. He says it costs more to move a pair of rail everybody knows that, but the premium price he gets by moving it to, whether its New York harbour or here in Chicago it’s more than our ways the extra cost of moving it by rail. I’m not sure; I don’t really get the impression that he is arm strong at all. I would think smaller producers might be if there are any of them, there aren’t really that many mom and pops left anymore but I can see them having trouble getting on the real cost but that’s not continental problem.

Hegg Bakken Report: You know a lot of stuff going on in the world you know in energy, you know one thing that comes to mind is the BP trial going on in Louisiana, that’s been going on for some time and probably will in the weeks to come. Having said that with all the things going on in the world what do you have on your radar for the upcoming weeks for Bloomberg?

Joe Carroll: I think it’s probably a similar answer that you get from other folks in my line of work; we are kind of reluctant to talk about it until we publish it. But safe to say there is no shortage of new developments out here. Whether it’s the Bakken or this, you mentioned Harold and Haman and this South Central Oklahoma discovery they have which is another gigantic oil play that’s just getting started. The permeated taxes Utica, Ohio is very interesting, there is plenty going on.

Hegg Bakken Report: What do you read to stay on top of the things that are happening?

Joe Carroll: Oh Gosh let’s see, when it comes to your neck of the woods it would be the local papers and then there is the prier business magazine I like to keep an eye on it that’s a great read. Sort of broader industry I would say Rig Zone, Out Stream, Oil and Gas investor its one of the petroleum engineering newsletters, law street analysts at places like Douche Bank. I’m trying to think who are the best at Barleys, Global Hunter and then Wood McKenzie that’s a consulting firm they do a lot of excellent research and HIS is another one.

Hegg Bakken Report: At what point in your life Joe did you find out that journalism was going to be your career?

Joe Carroll: You know there were newspapers in the house, there used to be four or five, six daily papers in this town at least when I was a kid and so I couldn’t say what, if there was any sort of jumping point.

Hegg Bakken Report: No, defining moment it just kind of one thing led to another through your life?

Joe Carroll: Yeah.

Hegg Bakken Report: Have you read any books that were influential in your career and if so what are they?

Joe Carroll: I’m not sure about in the career if we are talking about the industry itself there is a recent one well in the last couple of years that was really impressive I recommend to everybody who has which is Vane Gustafson who wrote a book called Wheel of Fortune, the battle for oil and power in Russia and it has a really eye opening account of the sort of, the evolution of the industry over there and all the western companies that got involved at the end of the Soviet era and then after it fell apart and then there is Titan: The Life of John D. Rockefeller, by Ron Chernow, is another fascinating read.

Hegg Bakken Report: Our guest today reporter for Bloomberg Joe Carroll, Joe thanks so much for your time and I look forward to shaking your hand someday when you finally come up and visit us up here in the Bakken buddy.

Joe Carroll: Alright, thank you.