Updates
November 15, 2013: update -- Schlumberger announces it has resumed operations in Iraq.
Original Post
Active rigs: 182
RBN Energy: how refiners could improve margins. One word: diesel.
Recent third quarter earnings reports from US refiners have reflected lower refining margins squeezed by higher feedstock prices for inland crudes like West Texas Intermediate (WTI) rising to the same level as coastal crudes like Light Louisiana Sweet (LLS) while product prices stood still. In the past two weeks domestic crude prices have fallen below $100/Bbl in the face of a Gulf Coast supply glut. But despite lower crude costs, refinery margins have continued to weaken. The primary culprit has been sharply falling gasoline prices. Today we review what Gulf Coast refiners could do to improve margins.Yesterday it was reported that Baker Hughes suspended operations in Iraq. Reuters via Rigzone provides the background story and says Schlumberger has also suspended operations in Iraq.
Dozens of angry Shi'ite Muslim workers and tribesmen stormed a Schlumberger Ltd camp at one of Iraq's main oilfields and wrecked offices early on Monday after accusing a foreign security adviser of insulting their religion, police and employees at the field said.
Oil officials and workers at the Schlumberger drilling site in Rumaila North said the problem started when a security adviser they identified as British asked Iraqi workers to take down a flag and banners depicting a figure revered by Shi'ites.
Officials of the state-run Southern Oil Company said production from the field was not affected by the incident, but oil officials said Schlumberger had suspended its operations in response, not only in Rumaila but at the other oilfields in Basra province.And some call the Bakken the wild, wild west.
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The Wall Street Journal
One reason I enjoy the WSJ: the editorials. Again, the WSJ has it exactly right. I was really, really confused/flabbergasted/amazed about how the Iranian nuke story was playing out. All of a sudden the US was going to provide top cover for Iran to continue enriching uranium. It made no sense, and it seemed to have come out of nowhere overnight. The French saw through it, and despite being no friends to Israel, apparently stopped the deal. I remain completely amazed how this story is playing out. Here's the first paragraph or two in an op-ed:
When the history of the Obama administration's foreign policy is written 20 or so years from now, the career of Wendy Sherman, our chief nuclear negotiator with Iran, will be instructive.
In 1988, the former social worker ran the Washington office of the Dukakis campaign and worked at the Democratic National Committee.
That was the year the Massachusetts governor carried 111 electoral votes to George H.W. Bush's 426.
In the mid-1990s, Ms. Sherman was briefly the CEO of something called the Fannie Mae Foundation, supposedly a charity that was shut down a decade later for what the Washington Post called "using tax-exempt contributions to advance corporate interests."
From there it was on to the State Department, where she served as a point person in nuclear negotiations with North Korea and met with Kim Jong Il himself. The late dictator, she testified, was "witty and humorous," "a conceptual thinker," "a quick problem-solver," "smart, engaged, knowledgeable, self-confident." Also a movie buff who loved Michael Jordan highlight videos. A regular guy!Fascinating reading.
Our negotiations are being run by a smooth-talking social worker? The more I see of the Obama administration the more I agree with Mr Obama's self-characterization. He let others (Congress and the insurance companies) write the ObamaCare legislation, and now he's letting a social worker determine the US-Iran nuclear policy.
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Green energy is the real subsidy hog. Renewables receive three times as much money per energy unit as fossil fuels.
For 20 years the world has tried subsidizing green technology instead of focusing on making it more efficient. Today Spain spends about 1% of GDP throwing money at green energy such as solar and wind power. The $11 billion a year is more than Spain spends on higher education.
At the end of the century, with current commitments, these Spanish efforts will have delayed the impact of global warming by roughly 61 hours, according to the estimates of Yale University's well-regarded Dynamic Integrated Climate-Economy model. Hundreds of billions of dollars for 61 additional hours? That's a bad deal.But there's no sense in discussing global warming any more. It's a cult religion with Algore as high priest and it is what it is.
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Under the radar: the state exchanges. It was generally perceived by many that the state exchanges were doing better than the ObamaCare Express. Turns out that "as officials struggle to fix technical problems with the new federally run health-insurance exchange, some states that are operating their own programs are facing similar problems." I didn't read the story, but I know Oregon has been the poster child for state exchanges gone bad. North Dakota seems to have enrolled the most per capita among the 50 states and DC, having enrolled 35 folks in early reports. 35.
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This was blogged about months ago: the widening of the job gap.
Despite three years of steady job gains, and four years of economic growth, many Americans have yet to experience much that could be described as a recovery. That sort of pattern isn't unusual in the aftermath of a recession, but it usually eases as growth picks up steam.
Youth unemployment, for example, nearly always improves after recessions more slowly than that of prime-age workers, those between 25 and 54. Following the 2001 recession, it took six months for the gap between the youth and prime-age unemployment rates to return to its long-run average. After the early 1990s recession, it took 30 months. This time, it has been 52 months, and the gap has hardly narrowed.Much more at the link.
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And, of course, this is was what renewable energy is all about: supporting various interest groups. I've been blogging about this lately and now it's a WSJ front section article: "A fight is under way over the Renewable Fuel Standard, which requires that ever-increasing volumes of biofuels be blended into fuel supplies. Refiners and others want to curb the mandate; farmers defend it." The amount of renewable fuel we are talking about is a drop in the bucket compared to all the gasoline consumed in the US every year, but it represents a windfall for Iowa farmers where presidential politics start.
My solution: change the mandate to help the farmers by simply requiring maximum production of biofuels but dump the renewable fuel into the the Strategic Petroleum Reserve. Let the farmers set the price of the biofuels they produce.
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It seems strange that a virus causing a respiratory illness in the Middle is a huge story: it's in the front section of the WSJ and I've seen it widely reported elsewhere. The breaking news: it appears a camel passed the virus on to a Saudi Arabian male. The other interesting thing: unless I missed it, the WSJ did not say what the MERS acronym stands for: Middle East respiratory syndrome. The MERS virus is a coronavirus, an RNA virus and first described in the 1960's as being associated with the "common cold." So, this winter, I'm sure, Ms Sebelius will remind folks to get their flu shots and warn folks to stay away from camels. I know when I was growing up, I avoided camels.
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