Thursday, July 24, 2014

North Dakota Expects "Big Surge" In Production This Summer

I think I posted this story earlier, when it was running in a regional newspaper, such as The Bismarck Tribune. It's been picked up by Bloomberg (note the date, July 15, 2014):
North Dakota, the second-largest oil-producing state in the U.S., expects output to surge through the summer as more benign weather gives roughnecks extra time to work in the field.
Output rose about 3.6 percent to 1.04 million barrels a day in May, the state’s Department of Mineral Resources reported yesterday. It was the largest increase since August.
The growth came even as rain and high winds kept well-completion crews out of the fields for several days during the month. Better summer weather will lead to production growth in the region of 5 to 6 percent a month in June, July and August, said Lynn Helms, director of the state’s Department of Mineral Resources.
“We still expect the big surge to come in June, July and August in terms of completions and some really rapid production increases,” Helms said on a conference call with reporters yesterday.
North Dakota is home to the majority of the Bakken shale formation, an underground layer of oil-and-gas-rich rock. High oil prices and improvements in horizontal drilling and hydraulic fracturing technologies have helped output from the state’s portion of the Bakken rise fivefold over the past five years.
Texas, which extracts more than 3 million barrels a day, is the only state producing more crude. North Dakota pumped more oil than three OPEC member nations in May.
Much more at the linked article; much the same as we've heard before.

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Exponential Growth In Production

I discussed this at an earlier post.

I know I'm going to get into a lot of trouble for posting this again, but it's interesting to say the least.

Starting with production of 547,326 bopd in January, 2012, and currently standing at 1,039,635 bopd as of May, 2014, the exponential formula comes very close to:

P = P(0)*1.023^t

where P = current daily production
P(0) = initial daily production (January, 2012)
t = time in months (exponent)

Plugging into the formula:
1,034,579  bopd (May, 2014)= 547,326 bopd (January, 2012) * 1.023^28

At the same rate, in January, 2015 (the Director's Cut will be out in March, 2015):
P = P(0)*1.023^36
P = 1,240,992 bopd in January, 2015

Once you have that formula you can do all kinds of things with it.

If one starts with the base month/year of January, 2011, when production was 342,088 bopd --
  • Using the same formula, one would be at only 849,500 bopd, so somewhere between 2011 and 2014, the pace of production has increased.
If one starts with the base month/year of January, 2010, when production was 235,925 bopd --
  • Using the same formula, one would be at only 769,674 bopd, so somewhere between 2010 and 2014, the pace of production increased even more than that between 2011 and 2014.  
With the anticipated surge this summer, the monthly increase should be greater than 2.3% month-over-month through maybe October or November, but then there could actually be some "negative" growth.

If the rate were to remain 2.3% increase month-over-month over the next several years, North Dakota would cross the 2 million bopd before January, 2017 (i.e., late 2016), using 2012 as the base year.

Disclaimer: I often make simple arithmetic mistakes. I used an on-line calculator for the calculations.

Anyway, to each his own. 


For Investors Only -- July 24, 2014; Three Airlines (Southwest, Alaska Air, United Continental) Beat Forecasts -- Despite Record High Sustained Energy Prices; Anyone Betting Against A Global Economic Recovery Needs To Look At Ford Results This Quarter; New Home Sales Plummet; Past Home Sales Figures Revised Significantly Downward

Note: wells coming off confidential list today have been posted. XTO reports a "high-IP" well; Oasis has two huge wells

The next big thing: mobile payments -- and it will be head-to-head, Apple vs Facebook. Apple has the eco-niche: hardware, integrated operating system, a cult-following, a handshake with IBM. But the killer technology Apple has: iBeacon. One won't even have to take one's credit card out or mobile device out to pay for one's purchase. iBeacon's range is measured in meters, and is scalable/flexible/personal. Apple doesn't talk much about iBeacon; it's just there. iBeacon even has its own wiki entry. I talk about "the next big thing" here. 

Fourteen (14) companies announce increased dividends, including:
  • Carbo Ceramics
  • Dupont
  • Norfolk Southern
Yahoo!Finance In-Play
  • Southwest Airlines beats by 9 cents; reports record quarterly operating income
  • Alaska Air beats by 2 cents
  • United Continental beats by 15 cents
  • Dr Pepper Snapple beats by 16 cents
  • Cabela's beats by 10 cents
  • Caterpillar beats by 16 cents
  • Noble energy beats by 8 cents
Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read here or anything you think you may have read here. 

Dunkin' Donut blames global warming global cooling extreme weather the rain for lackluster sales. Someone isn't buying that excuse:
The doughnut and coffee chain is getting dunked by investors after its earnings report. The company matched Wall Street EPS estimates at 47 cents a share, but revenue missed.
As you probably already guessed this is where we return to weather.
Here are some problems with that excuse: 1) It's Bull. Dunkin sells coffee and doughnuts, not bathing suits and sunscreen 2) Weather isn't in Dunkin's control. I'm not that fired up to own a doughnut company that effectively goes out of business when it rains and I don't have an investing edge on weather 3) It's lazy.
Whatever is wrong with Dunkin I know for sure it won't get fixed because management is apparently all standing in the parking lot shaking their fists at clouds.
Early morning trading:
  • CVX on a tear; up another dollar; hits a new 52-week high -- probably an all-time high
  • SRE up a bit; COP flat
  • WLL up a bit; KOG follows, but flat
  • TPLM, OAS both down
  • So, back to CVX: what's moving CVX? No news yet today, but quite a few stories yesterday, including this one at Seeking Alpha: the most under-valued DJIA component. As recently as 2012, this company paid an 81-cent-dividend; it was just increased from a buck to $1.07 this past May, 2014; and it's one company unlikely to be bought by Warren Buffett 
  • COP has gone from a 50-cent dividend to 69 cents in the same time period, but also a PSX spin-off that is paying 2.30%
The Ford story is compelling; Bloomberg is reporting:
Ford Motor Co., the second-largest U.S. automaker, posted profit that topped analysts’ estimates as sales in China increased and the company reported its first profit in Europe in three years.
Ford reported its 21st consecutive profitable period, with net income of $1.3 billion, or 32 cents a share, compared with $1.23 billion, or 30 cents, a year earlier, according to a statement today. Excluding one-time costs, second-quarter profit was 40 cents a share, beating the 36-cent average estimate of analysts surveyed by Bloomberg. North American operations also reported record pretax results.
Rising sales in China and Europe helped to offset the negative effects of a currency crisis in Venezuela, as well as higher taxes and increased costs to introduce 23 new models worldwide this year. Ford sales in China soared 35 percent in the year’s first half to a record 549,256 vehicles, while deliveries rose 6.6 percent in Europe, which is recovering from a deep recession. Ford has said profits will decline this year as it spends to roll out new models such as the aluminum-bodied F-150 pickup, its top seller.
Regardless where the market / WTI crude oil end up today, it's an incredible day. Think about this:
  • first-time unemployment claims hit 8-year low (long-term benefits expired in January, 2014)
  • Ford sales sore 35% in China (not trivial) in the year's first half, and only 1 million vehicles adjusted for full year; lots of growth left
  • three airlines report earnings that beat expectations
  • majority of companies reporting earnings are beating estimates
  • Facebook surprises
  • mobile payments the next big thing
  • and, the Bakken keeps chugging along 
The US sells first condensate to Asia in more than 40 years. Reuters is reporting:
South Korea and Japan have purchased the first condensate, or ultra-light oil, from the United States since the easing of a 40-year-old ban on U.S. crude oil exports, sources familiar with the matter told Reuters on Thursday.
The U.S. has recently softened a total ban on crude oil exports in place since the Arab oil embargo of the 1970s, allowing energy companies to export a variety of ultra-light oil if it has been minimally refined.
Refined products, such as gasoline and diesel, are not restricted.
The relaxation of the ban coincides with a resurgence in domestic shale oil and gas production as the U.S. seeks to assure energy importers in Europe and Asia of alternative sources of supply.
Energy hungry nations, grappling with disruption fears as geopolitical crises in Eastern Europe and the Middle East deepen, would welcome steady shipments of oil and gas from a stable exporter such as the U.S.
"It means very little in itself, but because of current events it takes on a more political or symbolic importance," said Alex Yap, a senior oil analyst at FGE.
This does not fit the narrative: new home sales plummet in June. Let's see how The AP spins this story:
New home sales fell 8.1 percent last month to a seasonally adjusted annual rate of 406,000, the Commerce Department said Thursday. The report also revised down the May sales rate to 442,000 from 504,000.
That revision is quite significant; that represents either a 12% or a 14% difference depending whether one uses 442,000 or 504,000 as the denominator. So, last month, those "stellar" first-time-home-sales numbers were bogus.

Nice comeback. Some time ago I posted a comment about the high price of gasoline and "anonymous" asked me what at what price gasoline "should" be priced. Today, Yahoo!Finance has a nice response in terms of an analogy. The analogy has to do with the Dow at 17,000:
The S&P 500 hit yet another record on Wednesday propelled by decent earnings from Apple and Pepsi.
For the year the total return of the S&P is approaching 10%.
Since the generational lows of March 2009 the benchmark measure of the stock market has gained more than 200%.
If your first reaction to that reminder is to pitch a fit over what stocks “should” be doing you’re missing the point, and probably the rally as well.
"Should" isn’t a concept that carries much weight around Wall Street.
The market is about absolutes not intent. The key to getting in front of the tape isn’t figuring out what should happen but determining why a rally is taking place. Only after you’ve done that can you decide whether or not you want to get involved.
Insert "gasoline at $5.00/gallon" wherever the article talks about the Dow at 17,000." Gasoline at $5.00/gallon is not good for the economy; what gasoline "should" cost is missing the point (their phrase, not mine).

Announcing Two Conferences: Multi-Well Pad Drilling And Annual Eagle Ford Product Markets / Takeaway Capacity

Two conferences coming up that folks might be interested in. The "Congress" on multi-well pad drilling, I am told, is the first such conference on multi-well pad drilling. I find it amazing how far we've come in the Bakken. I remember Harold Hamm introducing us to the Eco-Pad, a four-well pad. In hindsight it seems a no-brainer, but apparently it was quite an innovation. 

Multi-Well Pad Drilling Congress 2014 - September 30-October 1 | Houston | Texas: Hess, Halcon, COP, WPX will all be represented.

First-Time Unemployment Benefits Plummet; Lowest In Eight (8) Years -- July 24, 2014

Fox News is reporting:
The number of Americans filing for first-time unemployment benefits fell last week to 284,000 from an upwardly revised 303,000 the week prior. Wall Street expected claims to rise to 308,000 from an initially reported 302,000. The reading was the lowest since February 2006.
WTHR is reporting:
The number of people seeking U.S. unemployment benefits fell last week to its lowest level in more than eight years.
Weekly applications for unemployment aid dropped 19,000 to a seasonally adjusted 284,000, the Labor Department said Thursday. That's the lowest reading since February 2006, nearly two years before the Great Recession began.
The four-week average, a less volatile measure, declined 7,250 to 302,000. Claims for jobless aid have been falling for the past three months. Recent reports have coincided with the temporary summer shutdowns of auto plants, yet the impact of those closures is addressed through seasonal adjustments.
If these numbers hold, this is quite remarkable: the lowest reading since February, 2006, nearly two years before the Great Recession began. It will be very, very interesting to see how the market responds, especially during a very dynamic earnings reporting week.

The market hardly reacts: the DOW is flat, up about 26 points in early morning trading.

Wednesday, July 23, 2014

Chess - Putin Vs The Ukraine, EU -- Natural Gas -- July 23, 2014

I'm not sure I have this right, but in a nutshell this sounds like what is going on between Russia and the Ukraine with regard to natural gas.

Because the Ukraine is in arrears with regard to payments for natural gas to Gazprom (Russia), Russia instituted a "prepayment" plan in which the Ukraine needs to pay for their natural gas before they receive it.

Natural gas normally flows west from Russia through the Ukraine to Europe. Europe receives 30% of its natural gas from Russia. Obviously, as the natural gas passes through the Ukraine, that country receives its allotment. However, plans for Europe to help the Ukraine pay for their natural gas failed, and the Ukraine remains in arrears. If unable to pre-pay, the Ukraine will not get natural gas from Russia.

Apparently the EU "is reversing" the flow of natural gas from Europe back to the Ukraine.

Which brings us up to today.

The Ukraine is reporting that natural gas flows from Europe have decreased. Reuters is reporting:
Ukrainian Energy Minister Yuri Prodan said on Wednesday reverse gas flows from the European Union to Ukraine had fallen because of threats by Russian gas producer Gazprom.
Ukraine first saw the decrease two weeks ago.
He said reverse supplies stood at 7 million cubic metres daily on Wednesday versus a possible 18 million.
Related stories:
  • RT, July 1, 2014 -- Putin argues there is "no reverse natural gas flow"; rather, "Ukraine has concocted a plan with its western partners by paying for gas European customers do not receive."
  • Reuters, also today (July 23, 2014, with an added data point): On April 28 Bratislava and Ukraine signed a deal allowing the EU to send a limited amount of gas to Ukraine. Slovak Prime Minister Robert Fico said combined reverse flows from Slovakia, Hungary and Poland could reach up to around 16-17 bcm annually. 
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Apple

I did not know this, or if I did, I forgot: Tim Cook worked for IBM for 12 years before coming to Apple.  The Apple-IBM partnership may just be the "sleeper" story of the year.

Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read here or anything you think you may have read here. I have never owned shares in AAPL or traded in AAPL shares. However, I am Apple's #3 fanboy. Grew up with them; love them.

Reason #14,888 Why I Love To Blog: Trivia -- Oasis Wells Named After Major League Baseball Players

Perhaps I was the last to notice this but I haven't seen any articles on this. Oasis appears to be naming a series of wells after major league baseball players, many of which were left-handed players (or that may simply be coincidental). Here are some of the names of major league baseball players for whom Oasis appears to have named wells (some of the names are common and may simply be coincidental):
  • Mangum
  • Musial -- left-handed
  • Sheffield
  • Gonzalez
  • Bench
  • Ripken, Jr
  • Carter
  • Wolf
  • Evans
  • Snider
  • Palmeiro
  • Matthews
  • Sosa
  • Maris -- batted left, threw right
  • Mantle
  • Robinson
  • Banks
  • Williams
  • Kingman
  • Aaron
  • Ruth
  • Bonds
  • Schmidt
  • McGwire
  • Killebrew
  • Mays
  • Jackson
  • Thomas
  • Hodges
  • Ott
  • Winfield
  • Griffey, Jr
  • McGriff
  • Gehrig -- left-handed
  • Kuykendall
  • Karst
  • Buxbaum
  • Andrews
  • Link
  • White
  • Patsy (possibly)
  • Slagle
  • Snuffy
  • Kiner
  • Payette (a stretch; Harmon Killebrew was born in Payette, Idaho)
  • Kline
  • Flynn
  • A. Johnson
  • Shields
  • Johnny Schmitz -- left-handed
  • Lefty

XTO Reports A "High-IP" Well; Oasis Reports Two Gushers; Other Great Wells; Six (6) New Permits -- July 23, 2014; GM Profits Falls 85%, Huge Earnings Miss

Active Rigs, Thursday, July 24, 2014


7/24/201407/24/201207/24/201107/24/201007/24/2008
Active Rigs19220818113877

 RNB Energy

Our estimate based on the April 2014 run rate of 95 percent indicates that Houston area refineries will have roughly 21 crude storage days of capacity available to them in 2016. If those same refineries operate at 89 percent capacity – the monthly average level from January 2010 to April 2014, then refinery throughput in Houston would be 2.4 MMb/d and storage days would increase to 22.5 (assuming 54 MMBbl of storage). From our earlier analysis recall that days storage for the Gulf Coast region as a whole were 32 i.e. about 10 days higher on average than for the Houston area.
Flying Back Into Tel Aviv

Well, that didn't last long. FAA says it is now okay for American commercial aircraft to fly into Tel Aviv. I guess SecState John Kerry was being used to test the system when he flew in under the ban. And survived.

Doomsday Chronicles

The economic recovery has saved a lot of cities. It's been a long time since I've added a new city or updated an existing city over at Doomsday: US Cities. Atlantic City, NJ, makes the list.

The Market
 
I was absolutely amazed how the market reacted to one of the best quarters ever reported by AAPL -- meh! Frankly, I was astounded. I wrote:
Apple had one of its best quarters yet, and it hardly made news, with earnings soundly beating expectations.  
After being out and about this afternoon, I came home and checked the news. What a pleasant surprise:
Stocks ended mostly higher on Wednesday, with the S&P 500 closing at a record on Apple's bullish results.
AAPL closed at a new record high, closing in on $100/share. It may take some time, but eventually the market gets these things right.

So, what's on tap for tomorrow? Earnings for:
Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read here or think you may have read here.
 
The Daily Activity Report From North Dakota Oil Patch

Wells coming off confidential list Thursday:
  • 25688, 1,750, Oasis, Mangum 5493 44-7 T3, Robinson Lake, t1/14; cum 79K 5/14;
  • 26129, 2,525, Oasis, Lefty 5200 14-30 3B, Camp, t4/14; cum 27K 5/14;
  • 26275, 673, Fidelity, Carissa 27034H, Stanley, t2/14; cum 24K 5/14;
  • 26276, 799, Fidelity, CJ 27-34H, Stanley, t1/14; cum 39K 5/14;
  • 26277, 474, Oasis, Edwin 5601 44-24T, Tyrone, t3/14; cum 14K 5/14;
  • 26503, 635, Oasis, Hendricks 5602 43-36 3B, Tyrone, t5/14; cum --
  • 27203, 2,067, XTO, McCoy 44X-36D, Siverston, t6/14; cum --
  • 27298, 238, CLR, Brodal 1-36H, Noonan, t4/14; cum 8K 5/14;
  • 27493, 336, Slawson, Tempest 3-14H, Big Bend, t3/14; cum 12K 5/14;
************************************************

25688, see above, Oasis, Mangum 5493 44-7 T3, Robinson Lake:

DateOil RunsMCF Sold
5-2014178170
4-2014143510
3-2014208960
2-2014180960
1-201466330

26129, see above, Oasis, Lefty 5200 14-30 3B, Camp:

DateOil RunsMCF Sold
5-20141134110391
4-20141541311552

Active rigs:



7/23/201407/23/201207/23/201107/23/201007/23/2008
Active Rigs19420918213874

Six (6) new permits --
  • Operators: Newfield (2), Petro-Hunt (2), Whiting, Legacy
    Fields: Siverston (Dunn), Little Knife (Dunn), Sanish (Mountrail), North Souris (Bottineau)
  • Comments:
Wells coming off confidential list today were posted earlier; see sidebar at the right.

Bad news: Bakken production to be stifled if new railcar rules go into effect -- RBN Energy (in an earlier post). Today, the Obama administration announced the bad news. Bloomberg reports

Good news: in two years there will be a gazillion miles of new Bakken pipeline.

The Wall Street Journal 

Finally, international pressure on Hamas to stop firing rockets.

IRS: hey, maybe we found some Lois Lerner back-up tapes that weren't destroyed after all.

ObamaCare plaintiffs: one plaintiff has argued he was hurt by the Affordable Care Act even though he could have paid as little as $20 a year for coverage. I guess he had his own definition of "affordable."

Malaysian Airlines flew directly over some of the hottest fighting in eastern Ukraine. What were they thinking? 

US extends ban on carriers flying into Tel Aviv for another 24 hours.

President Obama has sent additional military advisers to Iraq.

GM plans six more recalls. I honestly can't recall if these are the recalls I just posted in an earlier posting; I am losing track of all the recalls by this one "company."

Los Angeles Times

Top story all about Gaza, Israel.  

Algerian airliner falls off radar scope; 116 on-board.

FAA lifts restrictions on flying into Tel Aviv.

Government Motors Has Broken The Code: Bring Customers Into The Dealer By Issuing Recalls -- July 23, 2014

In an earlier report which I did not link (because I was too busy at the time, no doubt) mentioned that GM dealers were seeing increased sales and increased interest in GM products when customers walked into their dealerships. Well, duh.

A quick way to get these folks into the dealership: issue recalls. The AP is reporting:
General Motors issued six more recalls on Wednesday, bringing its annual total to 60 recalls covering almost 30 million vehicles.

The latest recalls cover almost 718,000 cars and trucks. The largest is for faulty seats in just over 414,000 cars and small SUVs. Other problems include incomplete welds on seat brackets, turn signal failures, power steering failures, loose suspension bolts and faulty roof rack bolts.
GM is conducting a company-wide safety review as it tries to correct a dysfunctional corporate culture in which safety was a low priority. [And increase sales, one might add.]
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Speaking of Spin, Which We Weren't

Is this not incredible spin? The president's poll numbers are down to 42% approval -- pretty dismal for the first African-American president who had so much going for himself when he assumed office.

But CNN thinks those numbers are "okay" -- considering:
.... it looks like Obama has not experienced a similar drop in the summer of 2014, in part because his numbers already took that hit last year, and have stabilized since then.
The writer must be a Scandinavian. Our most commonly-used phrase is "it could be worse." LOL.

If the truth were told, I don't think many people even care any more what his poll numbers are any more. Hello! He's not running for a third term. Like all lame-duck presidents, his "value" is now in fund-raising and selecting the site for his presidential library.

I wonder if 85% of the US population can even name the current president? That's one "jay-walk" Mr Leno was afraid to take.

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No Spin

According to Breitbart:
According to the Detroit News, anti-capitalism "everyman" filmmaker Michael Moore owns 9 homes. On top of a $2 million, 10,000 square foot lakefront mansion in Torch Lake, Michigan, there is a Manhattan condo that was once 3 condos, and 7 other properties. 
I don't quite see it the same way Brietbart sees it; this does not seem particularly excessive for a multi-millionaire. If he were pro-capitalism he would be much richer and might be able to afford many more McMansions, some the size of the Algore mansion, which I'm told is 10,000 square feet, but energy efficient. The help staff is instructed to reduce-reuse-recycle.

War On Coal, US, Australia, And Common Sense -- July 23, 2014

Earlier I posted:
I doubt many folks will read the RBN Energy blog today: Burning natural gas this summer -- bluntly put: Texas will consume its own stored supplies to meet in-State needs first – depriving other States of a helping hand if need be. So low storage levels in Texas will likely have more impact out of State than in. Buried in that long post:
By October 2013, Texas’s stored gas had rebounded to 730 Bcf (only 2% less than its fall-of-2012 peak) but by March of this year in-state storage levels had plummeted to 418 Bcf, 26% lower than a year earlier and the lowest in the state since February 2004
Texas, with the most natural gas storage in the United States (in the world?), reported 26% lower storage of natural gas than a year early and the lowest in the state since February 2004. 
I don't think the word "coal" was mentioned it the RBN Energy post, but one can't explain away that dismal figure simply due to "the weather" (the polar vortex). Clearly there is something else going on. Yes, it's not that difficult to figure out: the war on coal is succeeding here in the US, and all that promised solar/wind energy simply cannot keep up.
Again, seldom reported: utilities need to add one-half MW of fossil fuel capacity for every one MW of solar/wind energy brought on-line for those periods (like all night) when the sun is not shining, and the wind is blowing too fast or too slow. 
The big story is not that natural gas stores are depleted; the big story is "why."
Don just sent me an interesting Motley Fool story that touches on this. Motley Fool is reporting:
The Australian Broadcast Corporation, Australia's public broadcaster, reports that electricity providers in that country are actually switching back to coal as the international price of natural gas is making coal a more cost-effective fuel to generate electricity
ABC also reports that Australian domestic gas prices may triple by 2021 as domestic producers elect to export gas to higher value international markets. 
Meanwhile, here in the states:
U.S. natural gas currently sits at about $4.10 per million British thermal units (MMBtu) as reported by the EIA, with futures even lower as reported by Bloomberg.
However, the international price of natural gas, as reported by the Federal Energy Regulatory Commission (FERC) is much higher than the U.S. price.
Natural gas in Asia and South America can be as much as three times the U.S. price, likely prompting U.S. domestic producers to develop export markets in pursuit of higher prices.
In addition, even in the U.S., the converted energy cost of coal is significantly lower than natural gas, as reported by FERC, potentially pushing the U.S. electricity generators back to coal. [Presidents come and go. Common sense tends to remain common.]
Motley Fool then goes into "clean coal" projects and carbon capture/CO2 EOR which have already been reported on the blog. Both projects are in ... drum roll ... drum roll ... Texas and one of the projects is being underwritten by the Obama administration. The other project is a joint project with Japan's JX Nippon.

******************************
North Dakota Crude Oil Production and Exponential Production

From Calculus: Single Variable, Deborah Huges-Hallett (Harvard University) and Andrew W. Gleason (Harvard University), c. 1998, p. 14:
Whenever we have a constant growth factor, we have exponential growth
Month-over-month, the oil production in North Dakota increases by about 2 percent. Rarely, the month-to-month growth declines (from early winter to late winter, for example), and often the rate is significantly more than 2 percent month-over-month. But I don't think it's a stretch to suggest that over time, the month-over-month increase in North Dakota oil production has been exponential.

So far this year:

Month bopd % change
Dec-13 923227
Jan-14 935126 1.29%
Feb-14 952055 1.81%
Mar-14 977178 2.64%
Apr-14 1001149 2.45%
May-14 1039635 3.84%



Production change by month for all of 2012 and 2013 can be found here. The numbers may be very, very slightly "off" due to fact that the monthly production numbers are revised following the initial report. I don't always have the most current data, but it's very, very close. Close enough for retired government employees.

******************************
A Note for the Granddaughters

One of my favorite pastimes with our granddaughters is to work with math with them, which we try to do every day. We probably succeed four days out of seven, which is not bad. We have not less than three different "series" of math texts and/or workbooks for the summer. She says she loves geometry so we have a separate book on geometry. We started going through the book, working the problems, but due to the short time left before they leave for a few weeks, I have been going through the book, not doing the problems, but just going over the concepts. Her memory is such that I am convinced that when she starts getting into geometry sometime in the next three years in middle school, she will say, "oh, yes, I remember that." Much of math is the fear of the unknown, I think.

On the other hand, her dad has the Singapore Math Series for her which she must do as prescribed, not skipping any problems or any pages: the textbook, the workbook, and the intensive practice book.

I was surprised how quickly the word problems became exceedingly more difficult after starting out with quite easy problems. She has not had algebra yet, but we have gradually been introducing the concept. When I saw the following problem, I could only solve it using algebra:
The total cost of 5 CDs and 3 video tapes was $169.20. The total cost of a CD and a video tape was $43.80. If I bought 3 CDs and 5 video tapes and paid with two $100 bills, how much change would I receive. 
Obviously, once one figures out the cost of a single CD or a single video tape, the rest is just "busy work."

Our older granddaughter, studied the problem for awhile, and then came up with a way to solve the problem without using algebra, and I am convinced that was exactly what Singapore Math expected. The series had not yet introduced algebra but yet there was a fairly simple, albeit somewhat tedious, way to solve the problem without using algebra.

I was pretty impressed with her reasoning. 

Weekly Petroleum Report -- EIA -- July 23, 2014

For week ending July 18, 2014.

Some data points:
  • crude oil inputs averaged 28,000 bopd less than previous week
  • refineries operating at 94% capacity -- high capacity
  • gasoline production increased by 9 million bbls per day (nice)
  • crude oil imports down 20,000 bopd
  • US crude oil inventories decreased by 4 million bbls last week
  • total motor gasoline inventories increased by 3.4 million bbls last week
Unremarkable.

Gasoline demand graphs here. A bit of "demand destruction"?

*************************************
Free-Market Capitalism: Fold, Fold, Fold

This little origami kiosk is generating $11 in sales/hour.