Monday, July 29, 2013

Well, That Was Easy -- Only One Well Coming Off The Confidential List Tuesday -- And It Goes To DRL

23077, DRL, CLR, Oscar 2-24H, Stoneview, no data

Tea Leaves: President Obama Getting Ready To Kill Keystone XL 3.0 (Or Whatever Iteration We Are On)


August 5, 2013: Michael Fitzsimmons at SeekingAlpha is asking: Keystone-XL Pipeline: delayed so long it no longer matters? Tactically, the pipeline does not; strategically, it matters. It matters a whole lot.

July 30, 2013: In light of my comments below, a reader was nice enough to send a great article on the same subject from the Financial Post. Interestingly, some of the same observations were made.
President Obama’s latest smug comments on the Keystone XL oil sands pipeline suggest the Canadian project’s odds of being approved under his watch are waning.
Thankfully, Canada hasn’t stood still while the U.S. President dithered.
So many new pipeline options have emerged that Keystone XL’s relevance is diminishing as each one gains momentum.
I replied to the reader, in light of that article, his comments, and my comments made last night (part of the original post):
My most recent comments regarding the Keystone XL reflect my frustration, sarcasm, -- short term, we can do without the Keystone but long term there are so many reasons for the Keystone -- exactly as you pointed out. The good news: we will see the Keystone (or a newer version)  some day, but it may happen after President Obama leaves office.

I think his decision (actually he will probably listen to John Kerry) will reflect how much he values the US-Canadian relationship.
Sometimes statesmen do things for bigger reasons than the stated reason.

Original Post

On a day that the market was down, and almost all energy stocks were "red" (with some notable exceptions like KOG and OAS), TransCanada was up over 1% even with this New York Times story. It certainly seems TransCanada investors don't want the company to build this pipeline.

Disclaimer: this is not an investment site. Don't make any investment decisions based on anything you read here or think you may have read here.

Rigzone is reporting.
U.S. President Barack Obama has called into question the number of jobs that would be provided from the construction of the Keystone XL pipeline in a New York Times interview over the weekend.
Republicans have frequently stated that there would be a large number of jobs created if the pipeline is approved for construction, Obama said, adding that he disputes their premise.
“Republicans have said that this would be a big jobs generator,” Obama said in the interview. “There is no evidence that that’s true. The most realistic estimates are this might maybe 2,000 jobs during the construction of the pipeline, which might take a year or two, and then after that we’re talking about somewhere between 50 and 100 jobs in an economy of 150 million working people.”
The president noted that even the temporary increase of 2,000 jobs that might be created during the construction of the pipeline, which would cost about $5.3 billion to build, was “a blip relative to the need.”
It's obvious the US no longer needs this pipeline.

I don't think anyone cares any more.

I don't think anyone is even following this story any more except a few bloggers.

TransCanada will be better off without this albatross for the next ten years of legal fights, bad PR, sabotage.

Canada can move on with a new plan. More freight trains.

Shenanigans In Washington With The National Debt -- No Change In 70 Days -- Fascinating, Isn't It?

CNS News is reporting:
According to the Daily Treasury Statement for July 26, which the Treasury released this afternoon, the federal debt has been stuck at exactly $16,699,396,000,000.00 for 70 straight days.
That is approximately $25 million below the legal limit of $16,699,421,095,673.60 that Congress has imposed on the debt.
The portion of the federal debt subject to the legal limit set by Congress first hit $16,699,396,000,000.00 at the close of business on May 17. At the close of every business day since then, it has also been $16,699,396,000,000.00, according to the official accounting published by the Treasury Department.
Something is rotten in the state of Denmark. 

A Small Rewrite, Shakespeare

A Bad Mood Rising...

... sometimes I am in a bad mood when I start blogging. If so, it usually has to do with some incredibly dumb news story but as soon as I start blogging about the Bakken, my mood changes, especially when I see something like this:
22158, 996, CLR, Kuhn 2-12H, t5/12; cum 204K 5/13; still producing at 10,000 bbls/month; 29 days to total depth; gas as high as 6,000 units; the seam was 12 feet thick; 60 - 90 foot flares; 40 stages; 3.8 million lbs sand frack; ceramics were not mentioned.
CLR just received several permits for more wells next to this one.

This well is a non-descript well on the prairie -- no one would think twice driving by it -- and it's IP was not all that impressive (compared to Statoil IPs) ... and yet ... 200,000 bbls of oil in one year, and it is still producing 9,000 bbls of oil/month. (Except that while drilling it had flares as high as 90 feet which would have been pretty impressive --)

It is not on a pump.

Remember when we used to look for 100,000 bbls in one year? Now, the "new norm" is 200,000 bbls in one year.

And this well would have been less expensive than several years ago:
  • pad drilling
  • 29 days to total depth vs 60 days in the early days of the boom
  • infrastructure in place
  • drilling and completion costs have come down in the oil patch; more supply; less demand
40 stages is not unusual any more; technically they've proved they can do 60 stages. The sundry suggests it was all sand. Regardless, it was less than 4 million lbs of proppant.

And there is a reason I posted the entire stub below. See if you can guess why I posted it.

NDIC File No: 22158     API No: 33-053-03921-00-00     CTB No: 122158
Well Type: OG     Well Status: A     Status Date: 4/24/2012     Wellbore type: Horizontal
Location: SESE 12-152-100     Footages: 570 FSL 430 FEL     Latitude: 47.994516     Longitude: -103.413536
Current Well Name: KUHN 2-12H
Elevation(s): 2055 KB   2034 GR   2047 GL     Total Depth: 21450     Field: CAMP
Spud Date(s):  2/20/2012
Casing String(s): 9.625" 1970'   7" 11210'  
Completion Data
   Pool: BAKKEN     Perfs: 11210-21450     Comp: 4/24/2012     Status: F     Date: 5/6/2012     Spacing: 2SEC
Cumulative Production Data
   Pool: BAKKEN     Cum Oil: 203731     Cum MCF Gas: 280227     Cum Water: 58277
Production Test Data
   IP Test Date: 5/6/2012     Pool: BAKKEN     IP Oil: 996     IP MCF: 1256     IP Water: 333
Monthly Production Data
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

A Bad Moon Rising, CCR

The Compact Digital Camera Is Fading Fast -- WSJ

The Wall Street Journal is reporting:
As global shipments plummet—down 42% in the first five months of 2013, according to the Camera and Imaging Products Association, a Tokyo-based industry group—manufacturers are scrambling to adapt to a world where customers value the convenience of smartphones for quick shots they can share on social networks like Facebook and Instagram.
The changes are forcing some of the biggest camera makers, including Fujifilm Holdings Corp. and Panasonic Corp., to pare product lines and adapt offerings. Some are choosing to focus on more high-end cameras as interest in the classic compact, or "point-and-shoot," fades.
Canon Inc. last week lowered its full-year profit outlook by 10%, citing slumping camera sales. In a sign of the dramatic downturn in the market, Canon also cut its compact digital camera outlook for the second time in three months. 
I love the photo at the linked story.  I see this everywhere. The iPad as movie camera. David Lynch must be going nuts.

 I assume SanDisk memory cards and sticks could be history, also. Wow, how things change so quickly. What Steve Jobs wrought.

Wind Farm Shenanigans In Oregon; Oregonians Look Forward To Increased Monthly Utility Bills But At Least The

The best part of the very complicated story below is learning how to "flip" wind farm tax credits:
In the end, Caithness sold its three tax credits at a discount to WalMart and Comcast.
A reader sent me links to these two stories from The Oregonian. 

The first story:
The Oregon Department of Energy ignored its own rules, legislators' intent and taxpayers' interests in reaffirming its decision to define Shepherds Flat wind farm as three separate facilities and provide its owners three separate $10 million tax credits. The mammoth installation of turbines in eastern Oregon, developed by a New York company to slake California's thirst for renewable energy, started spinning last year.
The agency undertook a review in March of its earlier tax credit approvals for the wind farm after an investigation by The Oregonian raised questions about its eligibility for more than one tax credit. Lisa Schwartz, appointed in January as ODOE's fourth director in five years, signed off on the final two credits last month after what she described as a rigorous review in cooperation with the Department of Justice.
Yet limited and often non-responsive information about the review provided to The Oregonian suggests it was neither rigorous nor consistent with state rules governing tax credits. In its review, ODOE ignored clear evidence in its own files and additional records identified by The Oregonian that should have disqualified $20 million of the $30 million in tax credits. It failed to ask for contracts or other documentation to answer fundamental questions that state rules pose about ownership, financing, construction, operation and maintenance.
The second story:
For Shepherds Flat wind farm, the $30 million in tax credits that received final approval from Oregon Department of Energy last month were frosting on a multi-layered cake of federal, state and local subsidies. Its developers gorged themselves on hundreds of millions of dollars from taxpayers, and government officials were well aware it was over-subsidized.
At the White House, top advisors balked at the largesse for Shepherds Flat, warning President Obama of potential backlash as opportunistic developers "double dipped" on public money. In Oregon, the dicing of Shepherds Flat into three came in spite of state prohibitions against developers subdividing projects to garner multiple taxpayer subsidies. In Gilliam and Morrow counties, elected officials rolled with it too, slashing property taxes on the project and urging the state to sweeten the pot.
In the end, the lesson of Shepherds Flat may be that it was too big to fail. Its timing was ideal. Developers were offering the biggest wind farm in the world, a 338-turbine behemoth with a price tag of $2 billion, in eastern Oregon, in the midst of recession, using American-made turbines (never mind the Chinese towers).
And once the project gathered momentum, no bureaucrat was willing to stand in the way. 
Oregonians will get to see how much this will cost them when they see their utility bills. Compare price of wind vs hydroelectric power which is superabundant in the northwest.

Fourteen (14) New Permits -- The Williston Basin, North Dakota, USA; Statoil With Another Huge Beaux Well; Non-Descript CLR Well Produces 200K In One Year -- Becoming The "New Normal"

Active rigs: 179

Fourteen (14) new permits --
  • Operators: CLR (7), BR (4), Enduro, Samson Resources, Whiting
  • Fields: Camp (McKenzie), Westberg (McKenzie), Little Deep Creek (Renville), Ambrose (Divide), Sanish (Mountrail), Long Creek (Williams)
  • Comments: Five of the CLR wells are going into the same section where this well is sited:
  • 22158, 996, CLR, Kuhn 2-12H, t5/12; cum 204K 5/13; still producing at 10,000 bbls/month; 29 days to total depth; gas as high as 6,000 units; the seam was 12 feet thick; 60 - 90 foot flares; 40 stages; 3.8 million lbs sand frack; ceramics were not mentioned.
Wells coming off the confidential list were posted earlier; see sidebar at the right.

Five (5) producing wells completed:
  • 24304, 1,253, MRO, Gustafson 31-30H, 
  • 23980, 576, MRO, Klay Carlson 41-29TFH,
  • 23388, 3,375, Statoil, Beau 18-19 3TFH,
  • 24033, 508, CLR, Dover 2-30H, 
  • 24034, 598, CLR, Dover 3-30H,  

Detroit: What Goes Around, Comes Around; Lessons Learned From NYC

Buried deeply in this article reported by Reuters:
Under a change to Chapter 9 bankruptcy law that was made while New York was in difficulties in the 1970s, municipalities can instead argue that good-faith negotiations are impractical.
Detroit has made this argument.
"Despite the ultimate impracticability of such negotiations, the City nevertheless attempted, where possible, to negotiate with its various creditor constituencies in good faith," Detroit said in court papers.
Because municipal bankruptcies are rarer than corporate ones, there are fewer precedents. But Detroit can point to a ruling from June involving the California city of Stockton to make its case.
U.S. Bankruptcy Judge Christopher Klein in Sacramento ruled that even if Stockton had not negotiated in good faith, it was still eligible for bankruptcy because such negotiations would have been impractical given it had 2,400 retirees.
It's an interesting article. 

This Is Cool: Limbaugh, Hannity To Clear Channel

I used to walk past or drive past Clear Channel Headquarters almost every day when I was living in San Antonio.

I moved from San Antonio to the Dallas area this summer now that the granddaughters have moved to the Dallas area.

I do not care for Sean Hannity at all.

But love him or hate him, Rush Limbaugh is very, very good at what he does. I listen to him rarely any more and usually only when driving cross-country, but I always enjoy listening to him. The trick to listening to Rush: when he takes a commercial break, switch to a music station for ten minutes; he takes very, very long breaks; it will drive you nuts. The other trick to Rush: you have to listen to him for about six months before you "get him." Those who don't understand him did not successfully complete the six-month introductory course on "Listening To Rush Limbaugh 101." I didn't say "like Rush"; I said "understand" him. Even his political opponents "understand" him, even if they don't "like" him.

Update On Flaring In North Dakota -- Economic Value of Natural Gas In The Bakken: 12%?


Later, 5:00 pm CDT: as noted, my original post was in error (see update below and the first comment). Assuming the correction is accurate, that's another remarkable story line for the Bakken. As noted in the original post, the economic value of the natural gas in the Bakken, which is considered an oil play, was originally estimated to be around 3%. I believe that figure came from the NDIC monthly Director Cuts early on. If, in fact, the real economic value is closer to 12% that has to be incredibly good news to a company like Hess and/or ONEOK. It would be interesting to sort out how the original estimate was low. It cannot be due to a lowering of the estimate of the OOIP or a lowering of the price of crude oil. Both have gone up, and both have gone up significantly since the Bakken boom began in 2007 (North Dakota).

Later, 10:45 am CDT: I don't know if I will correct the post -- for various reason -- but a reader caught a huge mistake that I made -- see first comment. The value of flared natural gas represents about 4.5% of the $2.21 billion figure for crude oil. About of a third of produced natural gas is being flared, so the economic value of all produced natural gas should be about $300 million.  $300 million/$2.51 billion =  12% of economic value of boe (oil + natural gas). I added the $300 million to the denominator.
Original Post

The most interesting bit of trivia is at the very end of the posting.

Despite the headline, this is a good article. Nothing new for regular readers. I have absolutely no idea why folks have such continuing interest in this story. It is what it is. It's a red herring. ONEOK figured this out four years ago. Investors take note. (Disclaimer: this is not an investment site. Do not make any investment decisions based on what you read here or what you think you might have read here.)

Reuters is reporting:
Flaring has tripled in the past three years, according to the report from Ceres, a nonprofit group that tracks environmental records of public companies.
"There's a lot of shareholder value going up in flames due to flaring," said Ryan Salmon, who wrote the report for Ceres. "Investors want companies to have a more aggressive reaction to flaring and disclose clear steps to fix the problem."
The amount lost to flaring pales in comparison to the $2.21 billion in crude oil production for May in North Dakota.
Still, energy companies are working to build more pipelines and processing facilities to connect many of the state's 9,000 wells - a number expected to hit 50,000 by 2030. But it is a process that takes time and is not always feasible.
"Nobody hates flaring more than the oil operator and the royalty owners," said Ron Ness of the North Dakota Petroleum Council, an industry trade group. "We all understand that the flaring is an economic waste."
The article states it but it's buried: the big story line -- the big story is this -- if $100 million/month is being flared -- $100 million/month -- $100 million/month -- and "the amount of flaring pales in comparison to the $2.21 billion in crude oil production...." wow -- that should tell one how huge the Bakken is.

Again, remember, the Bakken is not a very large geographical area. "They" keep equating "the Bakken" with "North Dakota." In fact, the Bakken is limited to about four counties: MMDW, and a few cities: Watford, Dickinson, Williston. $2.21 billion/month. $100 million/month. Hard to get my arms around those numbers. Each month.

But flaring? It's all a red herring. A McGuffin.

Oh, the most interesting bit of trivia. When I first started blogging about the Bakken in 2007, or thereabouts, I remember folks saying that the economic value of the natural gas in the Bakken was 3 percent. I remember that vividly because a) I knew nothing about the oil and gas industry, and was trying to put things into perspective; b) the Bakken is an oil play, not a natural gas play; c) I never understood why ONEOK invested a gazillion dollars on natural gas gathering and processing plants; d) I was absolutely 100% impressed with the foresight that ONEOK had -- 3% of $2 billion is not trivial (the Steve Jobs business theory); and, e) how MDU missed this in their own back yard.

So, back in 2007, the natural gas in the Bakken was said to account for 3% of the total economic value.

In the linked article, what percent does $100 million of $2.21 billion represent? 4.5%. The experts had it right. For all intents and purposes, 4.5% is not all that far from 3%. And that tells me the experts who suggest the Bakken is a trillion-barrel reservoir have that right, also. By the way, the percent of flared gas has decreased since the boom began and will continue to decrease.

4.5% being flared, but that will get better. I wish the federal government was that efficient with the revenue they collect.

Active Rigs At Post-Boom Low; Monday Links, News, And Views -- The New "Meth" -- More Physicians Are Just Saying "No"

Even Howard Dean --- remember him -- Presidential candidate, physician, screamer -- comments on the impending train wreck. It appears the politicians are jumping ship, and the pundits are getting their headlines in now so they can say "I told you so."
One major problem is the so-called Independent Payment Advisory Board. The IPAB is essentially a health-care rationing body. By setting doctor reimbursement rates for Medicare and determining which procedures and drugs will be covered and at what price, the IPAB will be able to stop certain treatments its members do not favor by simply setting rates to levels where no doctor or hospital will perform them.
Death by a thousand cuts. But other than that, it's a great plan. Say what?

General (now, President) Sisi. New Egyptian leader? The new King Tut?

Mayor Coleman Young's legacy: The AP is reporting:
Detroit's historic bankruptcy filing is a major setback for public employee unions that have spent years trying to ward off cuts to the pensions of millions of government workers around the country.
If the city's gambit succeeds, it could jeopardize an important bargaining tool for unions, which often have deferred higher wages in favor of more generous pensions and health benefits.
It also could embolden other financially troubled cities dealing with pension shortfalls to consider bankruptcy, or at least take a harder line with their unions in negotiating cuts.
"This is essentially the union's worst nightmare, said Gary Chaison, professor of industrial relations at Clark University in Worcester, Mass. "It means that the most sacred of sacred things they've negotiated for, the pensions of their retired members, are going to be severely cut."
Amazon is blowing away brick and mortar: Reuters is reporting: Inc unveiled a new hiring spree on Monday ahead of a visit by President Barack Obama to one of the Internet retailer's giant distribution warehouses this week.
Amazon said it is looking to fill more than 5,000 new full-time jobs at 17 of its fulfillment centers across the United States. That's roughly a 25 percent increase in full-time fulfillment center staff, which currently number more than 20,000 in the country.
Barnes & Noble needs to re-invent itself. And fast.

Pending home sales down. Reuters is reporting:
Contracts to purchase previously owned U.S. homes fell in June, retreating from a more than six-year high touched the prior month, suggesting rising mortgage rates were starting to dampen home sales.
That was a short-lived home-building recovery. Yes, I know this is not new home-building but it's all part of the same pie.

Active rigs: 179 -- ties post-boom low

Wells coming off confidential list have been posted; scroll down.

RBN Energy: the Eaglebine -- a must read
One of today’s hottest boutique oil shale plays in Texas is located northeast of the Eagle Ford shale and south of the Woodbine Sand basin. This play has been dubbed the “Eaglebine” by one of its principal acreage holders – ZaZa Energy Corporation. Another part of the play – operated by Halcón Resources - is known as “El Halcón” (the Hawk). Both companies are confident that positive early drilling results will translate into high rates of return. Today we examine the Eaglebine play.
The Eaglebine and Halcón “Hawk” plays have been developed by small independent oil companies and are now attracting significant interest from larger players. The Eaglebine’s big brother - the Eagle Ford - came from nowhere 4 years ago to surpass production in the North Dakota Bakken. That dramatic increase in production was encouraged by high producer rates of return, the proximity to Gulf Coast refineries and easy build out of takeaway capacity leveraging existing infrastructure. Producers are hoping for a similar success story to play out in the Eaglebine.
The Prince says Saudi's production capacity is waning.

Reuters is reporting that the price of Russian crude oil is surging:
Domestic crude oil prices in Russia, the world's top producer, surged by over 14 percent to an all-time high last week due to cuts in volumes usually supplied to the spot market by TNK-BP, acquired by Rosneft, and higher international oil prices, traders said.
The spot market, with capacity of around 3.5 million tonnes (25.7 million barrels) of crude per month - almost a fifth of all oil consumed in Russia - first felt the shock of the $55 billion TNK-BP buyout in June, when prices surged almost 25 percent.
Crude in the domestic spot market is bought mostly by refineries which do not have any, or enough, production of their own. Traders said the quotes for spot delivery in August on the Russian market reached an all-time high after some previous non-binding supply agreements with TNK-BP were scrapped and Rosneft's offers, which traditionally make up a third of the total volume on the market, dried up.
WSJ Links

Investors applaud as Big Oil gets smaller.
Happy anniversary, Big Oil.
The world's energy supermajors wouldn't mind seeing crude hit $147 a barrel, as it did exactly five years ago, but their shareholders aren't exactly pining for the days of yore. That is despite the fact that the companies earn a lot less profit and even pump fewer hydrocarbons today.
With BP PLC, Exxon Mobil Corp., Chevron Corp., and Royal Dutch Shell  PLC announcing quarterly results this week, it is clear that size and even growth are overrated.
Those four companies made a combined $28 billion in profit during the previous quarter. Although oil prices today aren't far off their level during the spring of 2008, those earnings are $10 billion less than what the companies made five years ago.
Part of the reason is that they haven't invested as aggressively and, in the case of BP following its legal woes related to the Gulf of Mexico oil spill, have even sold assets.
For investors:
Though net income is lower, share buybacks and dividend increases have enriched shareholders. An investor owning one share or depositary receipt of each company could expect to reap $10.44 in dividends over the next 12 months, compared with the $8.88 paid five years ago.
More impressive still is that, even compared with the time of the peak oil price five years ago, the companies are worth more. A portfolio containing a share of each is now 11% more valuable.
 Remember: this is not an investment site; do not make any investment decisions based on anything you read here or anything you think you might have read here.

This should be fun: fracking in/under the Arctic floor to target methane hydrate. My hunch is that 23 activist environmentalists just experienced apoplexy. They will probably be able to stop the US from tapping this new energy source, but the Japanese and Russians will move ... "damn the torpedoes, full speed ahead":
Scientists in Japan and the U.S. say they are moving closer to tapping a new source of energy: methane hydrate, a crystalline form of natural gas found in Arctic permafrost and at the bottom of oceans.
At room temperature the crystal gives off intense heat, earning it the nickname of "fire in ice," and making the estimated 700,000 trillion cubic feet of the substance scattered around the world a potentially major fuel source, containing more energy than all previously discovered oil and gas combined, according to researchers at the U.S. Geological Survey.
Commercial production of methane hydrate is expected to take at least a decade—if it comes at all. Different technologies to harvest the gas are being tested, but so far no single approach has been perfected, and it remains prohibitively expensive. But booming energy demand in Asia, which is spurring gigantic projects to liquefy natural gas in Australia, Canada and Africa, is also giving momentum to efforts to mine the frozen clumps of methane hydrate mixed deep in seafloor sediment.
And here it is: activist environmentalists worried "crystal meth" could be hazardous to Mother Earth:
Tapping methane hydrate for natural gas might have a positive impact on global energy production, but critics say the potential fuel source could have a negative impact on global warming.
The trillions of cubic feet of methane hydrates contained in the ocean's floor are in geologically unstable areas. The fear: One wrong move and an undersea landslide in the muddy sediment containing the methane hydrates could send massive amounts of a particularly potent greenhouse gas to the ocean's surface and into the atmosphere.
"Adding more methane to the atmosphere is a really bad idea," said Kert Davies, research director at Greenpeace, which is known for its use of direct action as well as lobbying and research to sway public opinion on issues including global warming and commercial whaling.
What a  great way to start a new week. Here we go again. Be sure to read the comments at the linked article. My favorite and most pithy:
Funny, I don't seem to recall the pictures of those Greenpeace boats using sails or oars.
Predictable, but NOT good news: more physicians are just saying NO -- no to new Medicare patients:
Fewer American doctors are treating patients enrolled in the Medicare health program for seniors, reflecting frustration with its payment rates and pushback against mounting rules, according to health experts.
The number of doctors who opted out of Medicare last year, while a small proportion of the nation's health professionals, nearly tripled from three years earlier, according to the Centers for Medicare and Medicaid Services, the government agency that administers the program. Other doctors are limiting the number of Medicare patients they treat even if they don't formally opt out of the system.
Even fewer doctors say they will accept new Medicaid patients, and the number who don't participate in private insurance contracts, while smaller, is growing—just as millions of Americans are poised to gain access to such coverage under the new health law next year. All told, health experts say the number of doctors going "off-grid" isn't enough to undermine the Affordable Care Act, but they say some Americans may have difficulty finding doctors who will take their new benefits or face long waits for appointments with those who do.
Cue up Connie Francis. Medicare used to be the "bread and butter" for family practice physicians and internists, but these physicians are now doing financially well enough to say sayonara, adios, so long, to seniors. ObamaCare will give them top cover in their communities so they (the physicians) won't be seen as "the bad guys." By the way, the photo at the link is of a clinic in Marble Falls, TX -- I just drove through Marble Falls earlier this summer; a beautiful, beautiful city.

Front section story on voting on Mali, but not one story on Syria. Whatever happened to Syria, the civil war that was supposed to take down western civilization as we know it?

Strippers. Favorite place to work right now: Williston, North Dakota


Bloomberg is reporting:
Saudi Prince Alwaleed bin Talal told Oil Minister Ali Al-Naimi in an open letter that the kingdom won’t be able to raise production capacity to 15 million barrels of crude a day as planned, and that he disagrees with him over the impact of U.S. shale gas output.
The prince published the letter today on Twitter, saying there’s a “clear and increasing decline” in demand for crude from members of the Organization of Petroleum Exporting Countries, particularly Saudi Arabia. The kingdom is now pumping at less than its production capacity as consumers limit oil imports, Alwaleed said.
“We disagree with your excellency on what you said and we see that raising North American shale gas production is an inevitable threat,” the billionaire prince, founder of Kingdom Holding Co., said in the letter.
Al-Naimi said in Vienna on May 31 that he isn’t concerned about the increasing production of oil from shale formations in the U.S., nor does it represent the first time the OPEC has faced a surge in output from outside the group.
Alwaleed also said that Saudi Arabia’s reliance on oil to fund 92 percent of this year’s fiscal budget “is contradicting many of the state’s plans to diversify its income sources.” 
Two story lines in case you missed it. The prince says:
  • Saudi's ability to raise production capacity is limited; and,
  • yes, US shale oil production is a "threat" to Saudi

I opined that Saudi's ability to raise production capacity was limited quite awhile ago. I think the Prince speaks from a non-political view, whereas the Saudi oil minister is a politician. I would place my bets with the Prince.

Bakken Fracking Is Safe -- UND Geology Professor

A big "thank you" to a reader for sending this my way. 

The Grand Forks Herald is reporting:
On June 30, Dexter Perkins wrote about the “serious health and environmental risks” caused by hydraulic fracturing or fracking (column, Page C4).
Perkins and I are faculty members in geology and geological engineering at UND; however, my comments in this column do not reflect the official position of UND.
My educational and research backgrounds are in hydrogeology, groundwater monitoring and water quality analysis. With that in mind, I’d like to clarify several points Perkins made about fracking in North Dakota and its risk to groundwater quality.
Perkins gave four sites as examples of what could happen with fracking in North Dakota: 1) Pavillion, Wyo.; 2) Geauga County, Ohio; 3) Dimcock, Pa.; and 4) Parker County, Texas.
Whether fracking caused problems at these sites is hotly debated; I encourage Herald readers to go online and read the arguments. But what’s not obvious in the online rhetoric is how some of the geological characteristics of these four sites highlight why North Dakota’s oil patch is a more favorable setting for fracking.
Go to the link for the full argument, but the author sums up:
To sum up, North Dakota has an excellent geological setting for fracking. The fracking zone is deeper than for the sites mentioned by Perkins, and our potable groundwater supplies are isolated from fracking zones by greater thicknesses of low-permeable shale.
With our unique geology and a proactive regulatory framework, properly enforced, fracking in the Bakken/Three Forks Formations does not put our groundwater at serious risk.

It Never Quits -- At Least Not In California

I was just out in California for a couple weeks to visit family and friends, and to grill Omaha Steaks for same.

I spent a fair amount of time in coffee shops, early in the mornings, before folks got up, and heard a common complaint: how challenging it was to do business in California. (And a lot of stories about $4.50 gasoline.) The challenges with business in California: the bureaucracy. Permits for everything. And $$$ for permits.

And now Jerry Brown is proposing another increase in payroll taxes on businesses. The LA Times is reporting:
With one of the nation's highest unemployment rates for several years, the state has had to borrow money from the feds to keep the program going. Now that the jobless rate has fallen to 8.5%, Brown would like to start paying down a $10-billion debt.
His administration is circulating a draft bill that would put the system on an even keel by raising payroll taxes paid by employers. The goal is to win approval before the Legislature finishes work for the year Sept. 13.

People close to the process say that Morgenstern is proposing an increase in the amount of wages subject to unemployment insurance taxes from the first $7,000 of annual pay to $9,500 and eventually $12,000. The goal is to retire the federal debt by 2016 and create an $11-billion surplus by 2021.
Businesses might be willing to pay off the $10-billion debt, but increasing the payroll tax to the point it results in a surplus of $11 billion in just a few years after that? Hmmm? And just think: these same businesses are starting to gear up for ObamaCare. A year from now we are going to read horror stories about California restaurants closing.