Monday: Rigs Steady At 192; ObamaCare Site Up And Running -- Insurers Trying To Go Around It; Is The Government Underspending On Rail? New York Magazine Retreats

Active rigs: 192

RBN Energy: Part II -- looking at supply and demand of natural gas in the US

The golden years of natural gas abundance in which we find ourselves are sparking tremendous enthusiasm among potential users of the fuel, from power generators to major industrial companies, to exporters both current and potential.  After all, a trifecta of cheap, abundant, and clean is hard to resist.  But the big question is  how supply and demand really shake out after everyone’s enthusiasm results in new and growing use of the resource.  Is the natural gas industry going to be able to supply all the new demand without prices going up the way they have in the past, most recently hitting double-digits at Henry Hub just five years ago?  The first step in order to weigh supply against demand is to have a plausible scenario of what that demand might be. What does it all add up to?  So in today’s blog we will see how much demand we should be trying to meet, to be followed later by a next installment to see how producers might meet it.

Wells coming off the confidential list over the weekend, today, have been posted; scroll down, or see sidebar at the right.

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Several have written sending me the link on federal government spending $600 million on rail that benefits private companies. McClatchyDC is reporting:

Last week in Missouri, Federal Railroad Administrator Joseph Szabo cut the ribbon on a new bridge that added a second track over the Osage River, eliminating a bottleneck between St. Louis and Kansas City. Though the Obama administration paid for $22 million of the $28 million project through its High Speed Intercity Passenger Rail Program, the bridge will benefit the nation’s largest freight railroad, Union Pacific, which operates as many as 60 trains a day on the line.

In November, the Port of Miami restored its rail connection, which Hurricane Wilma had severed in 2005. A DOT grant paid for $22 million of the $49 million project. Port Director Bill Johnson said the grant was essential and that the project wouldn’t have happened without it. The Miami port is undertaking a massive expansion to accommodate bigger ships. It’s scheduled to be ready when a widened Panama Canal opens in 2015.

Read more here: http://www.mcclatchydc.com/2013/12/02/210101/obama-spends-600-million-on-rail.html#storylink=cpy

If the graphic is current, accurate, two data points are noted:

• almost all the $500 million spent by the federal government on rail was all east of the Mississippi River with two exceptions (San Bernadino -- benefits Amtrak, Union Pacific, BNSF, local commuter)
• the $500 million was distributed/spent since 2009 (the past four years)

To help put this in perspective, ONEOK recently announced it will spend as much as $780 million in North Dakota on a new natural gas gathering and processing plant. That project should be completed sometime in the next three years.

The big question: is the US government underspending on rail?

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The Wall Street Journal

Insurers seek to bypass the ObamaCare health site. Why does this matter? There's only one reason. [On a side note, I have checked plans for many states over the past few weeks, and it seems the cost is about $900/month for two 55-year-old adults with $12,000 out-of-pocket expenses yearly. The mainstream media reports that hospitals are looking for payment up front suggesting the $12,000 out-of-pocket expenses is a reality. Once the deductible is met, there is still a $50 co-pay and a 25% co-insurance. Wow. So, this adult couple pays $12,000/year in premium, plus $12,000 up-front; and then 25% of on-going costs, plus the $50/visit nuisance fee. One can look at a typical example here and scroll through all the plans. I assume no North Dakota Bakken millionaire will be eligible for a subsidy to help cover the cost of the premium. Smile.]

The Detroit debacle: A crucial court ruling is expected this week on Detroit's eligibility for bankruptcy, but the legal battle over the city's future is likely far from over.

Again, the US will go it alone. Allies would not sign on, so the US will destroy Syria's most lethal chemical weapons on a ship in international waters, an unprecedented operation, after Washington was unable to enlist other countries to undertake the task on their own soil.

Break, break.....I was just listening to an NPR story on Jeff Bezos/Amazon talk about delivering packages by drone. The reporter and an analyst suggested this was a non-starter. They completely missed a niche for drone delivery. I guess that's why they are reporters/analysts and not entrepreneurs. They almost stumbled on the reason where drones make sense when they talked about increasing postage rates, but then missed that opportunity.

Now, back to The Wall Street Journal.

How "ironic?" Is that the right use of this word. The very next story that caught my eye in The Journal: Amazon developing drones for deliveries.

He said it was possible Amazon could introduce the drones within four to five years, depending in part on Federal Aviation Administration approvals.

Amazon has been working to cut delivery time through warehouse-equipment efficiencies and by building more of them near urban centers. The Seattle retailer has drawn millions of customers to its $79-a-year shipping Prime program, which promises unlimited two-day shipping.

Mr. Bezos said the drones could carry packages weighing up to 5 pounds, which make up 86% of the company's deliveries, according to the transcript.

That's about it.

Oh, from a DrudgeReport link: the New York Magazine retreats. 

Using the tenets of so-called New Journalism, the magazine helped popularize the knowing, skeptical voices of writers including Tom Wolfe, Jimmy Breslin, Gloria Steinem and Nora Ephron. It was the birthplace of both Ms. Magazine and the concept of “radical chic.”

Now, this magazine that has been at the vanguard of Manhattan publishing for almost five decades is acknowledging that the cutting edge is not necessarily a lucrative, or sustainable proposition, at least on the same schedule.

Beginning in March, New York will retreat from its long-standing status as a weekly and come out every other week instead.

Along with the closing of the printed Newsweek and the planned spin-off of Time Inc., which includes the weeklies Time and People, the move to bi-weekly publishing represents the end of an era and underscores the dreary economics of print and its diminishing role in a future that’s already here.

The change will beget misty eyes from magazine geeks — myself among them — while other consumers will shrug and dive into the ever-changing web version of New York magazine that shows up in their browser.

I track the demise of mainstream media here.