Wednesday, August 19, 2015

Japan's Gasoline Shipments Rise To A Multi-Year High; B is For Biden -- August 19, 2015

Tweeting now and the story over at Platts:
Japan's gasoline shipments rose to a multi-year high of over 1 million b/d in mid-August as demand rose due to a heat wave and low pump prices. 
Gasoline shipments were at a two-year high of 1.1 million b/d in the week to August 15, according to industry estimates based on oil product stocks, production and export data released by the Petroleum Association of Japan Wednesday. 
 Shipments for the week ended August 15 were was up 27.5% year on year. 
Really? Gasoline for air conditioning? Low pump prices? See "crack cocaine and heroin" solution.

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B Is For Biden

To save his legacy (whatever legacy that might be), President Obama needs an Obama-lite to follow him in the presidency. That "should have been" Hillary Clinton, had that worked out. Bill Clinton and Barack Obama went golfing this past weekend. I'm sure they both had the same subject in mind. It's looking more and more like Hillary won't be the one to insure Obama's legacy.

Today at my daughter's home I saw one of those little signs one buys at novelty shops: "Life is all about Plan B."

Joe Biden is Plan B.

Hyperbole? NPR is now picking up on the story, even if The New York Times is not.

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Denver Sets Record Low

Link here:
The mercury dipped to 47 degrees this morning at Denver International Airport, sett a record low for Aug. 19. The previous record of 48 was set three times, in 2002, 1967 and 1960.

Major Permit Numbering Problem Over At NDIC -- August 19, 2015

Updates

August 27, 2015: the error has been corrected

August 24, 2015: It appears the NDIC permit numbering error as noted below has been cleared up. As expected, the duplicate permit numbers remain EOG Austin wells in Parshall oil field, and the CLR Corsican permits in the same field (duplicate permit numbers) on the GIS map server have simply disappeared.

Original Post 

In today's daily activity report, eight EOG permits have the same numbers (#31821 - #31828) as CLR Corsican Federal permits that were issued Monday (August 17, 2015) -- based on scout tickets; they were never in a daily activity report. It will be remembered that NDIC said there were no permits issued on Friday, August 14, 2015, despite the fact that the scout ticket sequence suggested thirteen (13) permits had been issued. Five of those permits showed up on Monday, but the eight CLR Corsican Federal permits have not shown up on a daily activity report yet.

However, on the GIS map server, the CLR Corsican Federal permits show up (#31821 - #31828, inclusive) but on the scout tickets, they are now EOG Austin permits.

My hunch is that the CLR Corsican Federal permits, #31821 - #31828, will disappear and will re-appear with new numbers.

This will not affect readers in general, but it will cause confusion among those of us who track permit numbers.

Bottom line: right now, there are duplicates of these permit numbers, #31821 - #31828 (8 permits). On the daily activity report for August 19, 2015, they show up as EOG Austin permits; on the GIS map server, they show up as Corsican Federal permits. The EOG Austin permits are in the Parshall oil field; the Corsican Federal permits are also in the Sanish oil field.

In addition, not seen before, the daily activity report for today for new permits has a break in permit numbers. There are eight permits, #31821 - #31828, inclusive; then a break in sequence, and then three more permits, #31834 - #31836, inclusive.

The individual normally responsible for inputting new permits must be on vacation.

Note: I often make mistakes and I may be misreading something here. Time will tell. If this information is important to you, go to the source. Do not trust my data.

Mercedes Dumps Tesla; Will Beat Tesla At Its Own Automotive Game; Audi To Challenge Tesla -- August 19, 2015

Updates

August 26, 2015: the trouble with Elon Musk, over at The Coyote Blog

August 21, 2015: it's very possible TeslaBattery's biggest competitor will be Apple when it's all said and done. I doubt the average person knows how deeply involved Apple is with battery technology. Inadequate batteries drove Steve Jobs nuts; seldom reported. This should really scare Tesla: Apple and Mercedes may partner. This comes out just days after it was announced that Mercedes dumps Tesla. My hunch is that Mercedes saw something with regard to Elon Musk or Tesla that truly bothered them, and they thought it was time to get out. Macrumors is reporting:
Amid rumors that Apple is working on a top-secret automotive project ranging from its own electric car to a CarPlay-related technology platform for vehicles, Mercedes-Benz parent company Daimler AG remains open to "different types" of cooperation with Apple, reports Reuters.
Later, 6:41 p.m. Central Time: wow, that didn't take long. Literally, just minutes after posting the link/note below, I run across this note/link from The Drudge Report: Audi to unveil 310-mile electric SUV to rival Tesla Model X.

The problem with Tesla, among a number of other things, it did not have a very big moat. With regard to building cars, it had no moat: there are a dozen automobile manufacturers selling a lot more cars than Tesla. With regard to batteries, it had no moat: Panasonic, among others, have been working on batteries for a long, long time. This house of cards is about to fall.

Note: this is not an investment site. Do not make any investment or financial decision based on what you read here. The problem I have with Tesla is this: scam.
 
Original Post
 
Regular readers know my feelings about Tesla. Here's a new report that raises the question -- what does Mercedes know that the rest of us don't know. From Seeking Alpha, first the summary:
  • Auto Motor Und Sport, the leading German auto magazine, reports that Mercedes will stop buying Tesla powertrain components - batteries, motors, etc;
  • Tesla's recent 10-Q and 10-K filings provide numbers that help an investor quantify the financial impact to Tesla of lost sales to Mercedes;
  • adding insult to injury, the article also says that this new all-electric Mercedes will get approximately 310 miles of range;
  • the timing of this new all-electric Mercedes is uncertain, but is unlikely to arrive in US dealerships in the next 12 months; and,
  • for Tesla to lose its Mercedes revenue, and to gain a new long-range electric car competitor, is not a positive incremental investment development. 
It will be interesting to watch TSLA over the next few days.

Note: this is not an investment site. Do not make any investment or financial decisions based on what you read here or what you think you may have read here. 

Archived.  

NIne (9) Producing Wells Completed; Eleven (11) New Permits, North Dakota -- August 19, 2015

Active rigs:


8/19/201508/19/201408/19/201308/19/201208/19/2011
Active Rigs74192183199193

Wells coming off the confidential list Thursday:
  • 29159, SI/NC, Hess, BB-Chapin A-151-95-0403H-7, Blue Buttes, no production data,
  • 29170, A, CLR, Nordeng 2-5H1, Elidah, producing, no test date;
Eleven (11) new permits --
  • Operators: EOG (8), Whiting (3)
  • Fields: Parshall (Mountrail), Truax (Williams)
  • Comments: the EOG permits appear to be for three multi-well pads in Parshall oil field; the CLR wells will be Evitt wells in section 12-154-98
Whiting renewed five permits, including an Iver & Minnie permit in Stark County, and four Moccasin Creek permits in Dunn County.

Statoil canceled five permits: three Albert B wells in McKenzie County, and two M. Macklin permits in Williams County; BR canceled on McRansom well in McKenzie County.

Nine (9) producing wells completed:
  • 29802, 365, Petro-Hunt, Lovdahl 158-94-32D-29-1H, Tioga, t7/15; cum --
  • 29654, 1,682, Newfield, Olson 152-96-30-31-13HLW, 4 sections, Westberg, t5/15; cum 29K 6/15;
  • 29665, 716, Newfield, Olson 152-96-30-31-11H, Westberg, t5/15; cum 18K 6/15;
  • 29664, 1,070, Newfield, Olson 152-96-30-31-1H, Westberg, t6/15; cum 27K 6/15;
  • 29663, 719, Newfield, Olson 152-96-30-31-10H, Westberg, t6/15; cum 18K 6/15;
  • 29662, 1,084, Newfield, Olson 152-96-30-31-4HLW, 4 sections, Westberg, t6/15; cum 25K 6/15;
  • 29655, 804, Newfield, Olson 152-96-30-31-3H, Westberg, t5/15; cum 29K 6/15;
  • 29657, 807, Newfield, Olson 152-96-30-31-2H, Westberg, t5/15; cum 25K 6/15;
  • 29656, 789, Newfield, Olson 152-96-30-31-12H, Westberg, t5/15; cum 22K 6/15; 

The "Crack Cocaine and Heroin" Solution -- Biofuels -- August 19, 2015

Ask 1,000 analysts why Saudi is doing what they are doing, and you will get 1,500 answers. The best answer, of course, is the "crack cocaine and heroin" answer I provided some time ago. If you don't believe me, see the McGraw Hill financial report: a convergence of factors could have US biofuel producers scrambling.
Not long ago, biofuels were viewed as an important tool for mitigating oil price spikes and for limiting carbon emissions from the transportation sector. But recent events, policies, and trends have conspired to make the near future somewhat murkier for U.S. ethanol producers, and the market has taken notice.
More recently, several Presidential hopefuls have begun positioning themselves for a run at the White House by disparaging the current Administration's energy policies with claims of onerous government intrusion, job losses, and stunted economic growth. Despite these tactics, there is continued support for the ethanol industry from both parties, which resonates with residents of Iowa, an early bellwether Presidential caucus state. For many years, the federal government and numerous state governments have supported the biofuels industry with policies that have spurred domestic production and consumption of ethanol and limited imports. But in recent months, this has swelled into a full-blown controversy, especially amid crude oil prices that make the economic case for renewable fuels less compelling.
Of course, there is still a long track record of such incentives being renewed and even strengthened, and discussions about their discontinuation are only preliminary at this point. They are still subject to rigorous review, and to political gamesmanship in Washington. But if these discussions materialize, the harvest could happen soon because public sentiment may be turning and several issuers could see their credit quality change--however, the direction of that change can differ based on the nature of the issuer.
In coming months, Standard & Poor's Ratings Services expects certain factors to potentially weaken credit quality for ethanol producers. The industry has relied on a unique blend of economics and politics to sustain itself for many years, and recent developments may call both into question. Furthermore, our criteria continue to focus on technological capacity, and it's not clear yet that second-generation biofuels can meet expected standards, despite considerable fervor for their expansion.
Much, much more at the link. (Archived.)

Musings On That Mexico Heavy Oil Swap -- August 19, 2015

From wiki:
Venezuela is the world's fifth largest oil exporting country and has the world's largest proven oil reserves at an estimated 296.5 billion barrels (20% of global reserves) as of 2012. In 2008, crude oil production in Venezuela was the tenth-highest in the world at 2,394,020 barrels per day (380,619 m3/d) and the country was also the eighth-largest net oil exporter in the world. Venezuela is a founder member of the Organization of the Petroleum Exporting Countries (OPEC).
Today, Venezuela is the fifth largest oil exporting country in the world with the second-largest reserves of heavy crude oil (after Canada). Canada and Venezuela have significant potential for capacity expansion; Venezuela could potentially increase production capacity by 2.4 Mbbl/d (380,000 m3/d) from 2001 level (3.2 MMbpd) to 5.6 MMbpd by 2025 - although this would require significant amounts of capital investment by national oil company PDVSA.
By 2010, Venezuelan production had in fact declined to ~2.25 Mbbl/d (358,000 m3/d). PDVSA have not demonstrated any capability to bring new oil fields onstream since nationalizing heavy oil projects in the Orinoco Petroleum Belt formerly operated by international oil companies ExxonMobil, ConocoPhillips, Chevron and Total. 
Current Venezuela oil imports into the US can be found at this link. Currently, imports into the US from Venezuela run about 25 million bbls monthly (let's say about a million bopd).

US imports from Mexico are in the very same ball park, 20 to 27 million bbls/month.

I assume (it can easily be verified but I'm not going to look it up now) that both Venezuelan and Mexican oil is a heavier oil preferred by the US refineries along the Gulf Coast.

One can argue that the Obama administration okayed the US light oil for Mexican heavy oil swap because Mr Obama really, really likes Mexico and really, really likes the US oil and gas industry and did what the oil and gas industry has been advocating for a very, very long time.

Hold that thought.

Take a look at this white paper: Venezuela, Unnatural Disaster. If Venezuela is in as bad a shape as I think it is, it's very possible there could be an interruption in Venezuela's crude oil production and exports. When a country falls into anarchy, its workers tend to stay home to protect the family rather than venture into work.

I can imagine a PowerPoint presentation that steps the US through a scenario in which Venezuelan oil supply becomes unreliable.

Perhaps, just perhaps, the Obama administration did not okay the Mexican heavy oil swap because it liked the oil and gas industry. Perhaps, just perhaps, the administration was shown what the price of gasoline could go to if refiners can't get the heavy oil they need to balance out the light oil.

When Will The Rigs Come Back? Seeking Alpha Article On Shale Oil Collapse; A Silver Lining In This Dark Cloud -- August 19, 2015

When will the rigs come back? This is a great article sent to me by a reader. I had not seen it; it's very, very good, reinforcing what most readers already know. The Bismarck Tribune is reporting:
There are two interviews over the past four years that stand out when thinking about the big picture in oil and gas trends. Signs and indicators, if you will, to determine whether Big Oil will stick around or whether they are going to pack up and move to another shale play.
The first memorable interview is from North Dakota native Ed Schafer. The former governor and current board member of Continental Resources says understanding oil activity is just like hunting ducks.
"Oil companies work three to five years out, they're securing mineral rights, moving rigs, getting capital. They're planning where they are going to be punching holes, not today, not tomorrow, but three years from now, five years from now," Schafer said. "Let's be aware of the competitive situation out there and understand that, you know, it's kind of like shooting ducks. You shoot ahead of them, you don't shoot at them. You shoot ahead."
The one thing about hunting is how variables often come into play: Weather, unexpected noises and a sprained ankle, are just a few variables that could change a hunter's strategy on a moment's notice. These unforeseen variables create shifts and create the need for audibles and changes to logistical plans. Much like the weather and oil prices, speaking about energy futures can be dicey.
Schafer's use of colorful and colloquial language to illustrate oil companies planning years out quickly transitioned into discussing a multitude of variables that can just appear.
"The reality is the oil companies are going to extract our minerals resources where they can the most efficiently for the least amount of cost." Schafer said. "And we need to be aware of that in North Dakota."
Much, much more at the link.  (Archived.)

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Break-Even Prices --  Again

Don alerted me to this article, a Seeking Alpha submission. It's important enough to archive. Regardless of which side of the fence one is on with regard to this issue but there are a lot of data points which will be interesting to follow over time.

First the summary:
  • most of the oil production growth worldwide over the past few years has been due to tight oil in North America and elsewhere;
  • tight oil cannot be profitably extracted at today's oil prices;
  • those companies operating in the area have been able to survive due to hedges that allow them to essentially sell their oil at above market prices;
  • these hedges will expire shortly and cause these companies to have financial problems which may be insurmountable; and,
  • ultimately, production from shale will decline and oil prices will begin to increase. 
I don't think there is anything new in this article that regular readers are not already aware of.

With regard to the summary:
  • "... due to tight oil in North American and elsewhere." Note to newbies: there is no "elsewhere."
  • "... tight oil cannot be profitably extracted at today's prices." What are today's prices? "Tight oil" is not equal across North America 
The linked article has two graphs. 

The first graph is the average cost to extract a barrel of oil from these regions around the world:
  • onshore Middle East: $27
  • offshore shelf: $41
  • heavy oil: $47 (the article does not say where "heavy oil" is found)
  • onshore Russia: $50
  • onshore rest of world: $51
  • deepwater: $52
  • ultra-deepwater: $56
  • North American shale: $65
  • oil sands: $70
  • Arctic: $75
Although folks may disagree on the lifting cost, the relative order is probably correct.

A couple of comments:
  • the "actual" cost to lift oil in the Mideast is irrelevant; even if countries in the Mideast could lift
  • oil for pennies/bbl, it would not matter. What matters is what the country needs to balance their national budget. It's a lot higher than $27/bbl across the Mideast;
  • the Arctic may have a price associated with it, but is it relevant; unless we are talking currently produced Arctic oil from Siberia and Alaska, the Arctic is fairly irrelevant
In the first graph, all North American shale is lumped together in one small block.

In the second graph, the cost to lift crude oil in tight North American plays is broken down by region / play. The Bakken is further broken down by sub-regions:
A: Parshall Sanish
B: Fort Berthold
C: West Nesson
D: Northern Mountrail, Williams Core
E: Williams Perimeter, North Williston
A and B are hard to see on the graph but are at the far left, within the lifting cost of Eagle Ford Karnes Trough Condensate and the Utica Condensate Core.

The Bakken heat map is at this link.

The "x" axis is labeled cumulative reserves, but does not say whether it's million or billion of bbls. I assume it is millions of bbls.

The graph is undated, as far as I can tell.

The Bakken sub-regions, A, B, C, and D are all to the left. The Permian is all to the right (most costly) and Eagle Ford Black Oil is also to the right.

The graph does not include the SM Energy sweet spot in Divide County, North Dakota, which is probably similar to Bakken sub-regions A and B.

When one looks at this graph, remember:
  • the US produces a fair amount of oil
  • one-half of all US production now comes from unconventional sources
  • unconventional sources accounted for 95% of all growth in oil production in the US between 2011 - 2013, reported earlier today
  • of the unconventional sources, the Bakken appears to remain the gold standard when looking at all metrics

Another Graphic For Jane Nielsen -- August 19, 2015; Finally Bird Lovers Understand Wind Energy -- It Took Them Long Enough

The three major oily plays in the US: the Bakken, the Eagle Ford, and the Permian. In the long-term, it will be a race between the Bakken and the Permian for bragging rights. Conventional wisdom is that the Permian will get bragging rights.

In the near term, as prices for crude oil (WTI) start drifting into the $30-range, it will be the productivity/rig that will start to gain more attention. And, yes, the EIA, tracks that.

Here is the most recent data, released August 10, 2015. The next release is scheduled for September 14, 2015.

The EIA tracks the seven most important shale regions (only four of which are oily, and of those four, only three matter at the moment). The EIA notes: these seven regions accounted for 95% of domestic oil production growth and all domestic natural gas production growth during 2011-13.

In the graphic below, note the ovals in "green." Looking at the "green" ovals and comparing the oil production/well in the Permian against the Bakken speaks volumes. It explains why the recent New York Times article talked about the "demise" of the fracking industry in Texas rather than the Bakken (in the headline).


I would assume the day-rates for rigs would be similar in all regions, but that may not be true. The Bakken is heavily weighted with the brand new flex rigs that can "walk" to the next site while pad drilling. I do not know the extent to which operators are using these huge rigs and/or pad drilling in the Permian.

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Obama's Wind Farms, 504; Bald Eagles, 1

But it's an important first point.

In a WSJ op-ed, it was noted that "a California judge has ruled in favor of bald eagles and against 30-year permits to shred them."
Chalk one up for the bald eagle. The avian symbol of American freedom has beaten the Obama administration and the wind industry in court, though the majestic birds still don’t stand a chance when flying near the subsidy-fueled blades of green-energy production.
On Aug. 11, a federal judge in the Northern District of California shot down a rule proposed by the U.S. Fish and Wildlife Service (FWS) that would have allowed the wind industry to legally kill bald eagles and golden eagles for up to three decades.
The ruling is a setback for the wind industry and President Obama’s Clean Power Plan, which depends on tripling domestic wind-energy capacity to meet the plan’s projected cuts in carbon-dioxide emissions by 2030. The ruling also exposes the Obama administration’s cozy relationship with the wind industry and the danger to wildlife posed by a major expansion of wind-energy capacity.
U.S. District Judge Lucy H. Koh, an Obama appointee, ruled in favor of the plaintiff, the American Bird Conservancy, and against the FWS’s “eagle take” rule. Judge Koh found that the FWS violated the National Environmental Policy Act in 2013 when the agency’s director, Dan Ashe, decided that the agency could issue permits to wind-energy companies that would have allowed them to lawfully kill eagles for up to 30 years without first doing an environmental-impact assessment. Permits were previously limited to five years.
The tide is beginning to turn. I hope North Dakota legislators are paying attention. We know Iowa (and Texas) no longer care.

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A Note For The Granddaughters

I "came to" the Grand Canyon late in life. However, after driving cross-country multiple times from Texas to southern California over the past fifteen years, I have finally gotten the "bug" for the southwest, New Mexico, Arizona, Route 66, the Grand Canyon and associated parks in the region.

I would argue that one of the best books describing the development the southwest after the Civil War is Stephen Fried's Appetite for America.

Railroad buffs might enjoy the book, especially those folks with a "broad" interest in railroads.

I am so excited about what I've read in the book, I am planning on an extensive cross-country trip next summer to the Santa Fe / Taos (New Mexico) area with a side-trip to Pueblo, Colorado.

Wednesday, August 19, 2015 -- Part II; The Cartoon Page; Solar Energy -- A New Revenue Stream For Electric Utilities

The Cartoon Page

Link here

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Solar Energy: The New Revenue Stream for Utilities
 
SolarIndustryMag is reporting a new revenue stream for utilities:
A new report from the North Carolina Clean Energy Technology Center (NCCETC) says customer charge increases and changes to net-energy metering rules were the most common distributed solar policy changes proposed or enacted in the second quarter (Q2'15).
The report, which provides an nationwide overview of the state policy landscape for distributed solar, provides details on 87 instances in 40 states and the District of Columbia of proposed or enacted regulatory and legislative state-level distribute solar policy changes during Q2'15.
The report found that from 18 states there were 32 examples of utilities requesting residential customer monthly fixed charge increases of 10% or more. These monthly charges for all customers - not just those with solar - but might have a large impact on the residential solar value proposition.
Of the 32 proposed changes in Q2'15, the average existing monthly residential fixed charge is $9.70. The average proposed fixed charge is $15.45, an average proposed increase of 59.3%. According to the report, 15 of these proposals were decided in Q2'15, with regulators allowing fixed charges to increase by an average of $2.50 per month compared to an average increase request of $4.71 per month.
Proposals for fixed charge increases on all customers were much more common than proposals to add charges only to solar customers (six examples in five states) or for minimum bill increases (two examples in two states).
There were 18 examples in 16 states of proposed or enacted legislative and regulatory changes to net-energy metering policies during Q2'15, the report says. Fifteen states had legislative or regulatory-led efforts studying the value of solar, net-metering rules or distributed generation policy.

Wednesday, August 19, 2015 -- CBR Volumes Falling In The Bakken; Diesel Should Be Adequate For North Dakota Harvest; Soros Buying Coal Really, Really Cheap -- Staunch Environmentalist/Global Warmist Turns To Coal

EIA "energy cookie":
Amid high uncertainty in the global oil market, EIA has lowered crude oil price forecasts in the Short-Term Energy Outlook (STEO), expecting West Texas Intermediate (WTI) crude oil prices to average $49 per barrel (b) in 2015 and $54/b in 2016, $6/b and $8/b lower than forecast in last month's STEO, respectively. Concerns over the pace of economic growth in emerging markets, continuing (albeit slowing) supply growth, increases in global liquids inventories, and the possibility of increasing volumes of Iranian crude oil entering the market contributed to the changed forecast. --- EIA
Active rigs:


8/19/201508/19/201408/19/201308/19/201208/19/2011
Active Rigs75192183199193

RBN Energy: a new era in Mexico's LPG (propane) market. (Archived)
Big changes are coming to the LPG market in Mexico.  LPG, or liquefied petroleum gas, is mostly propane but can include butane.  Mexico is one of the largest consumers of LPG in the world and imports significant volumes from the U.S.  Historically PetrĂ³leos Mexicanos (Pemex) has been the only legal LPG importer of record, standing between suppliers and Mexico’s buyers.  But in January 2016, Pemex will lose that status, and a year later the regulations that have capped Mexican LPG retail prices will be eliminated.  Today, we consider how opening up of the LPG south of the border may affect Mexican LPG importers and consumers, and U.S. producers and exporters.
Our blog post yesterday (August 18, 2015) detailed evolving Mexican plans to import light crude from the U.S. under a licensed swap arrangement. This time we turn our attention to deregulation of our southern neighbor’s LPG market and the prospect for increased imports from the U.S. For decades (and with strong encouragement from its federal government), Mexico has been consuming more LPG (mostly propane but including some butane, two members of the natural gas liquids – NGL – family) than all but a half-dozen other nations: the U.S., China, Saudi Arabia, Japan, India and Russia.
In the first six months of 2015, LPG sales within Mexico averaged about 280 Mb/d, which is pretty much what sales have averaged the past several years. Of the total volume of LPG sold and consumed in Mexico, about two-thirds is currently produced domestically (that is, within Mexico; the rest (about 93 Mb/d) is imported, with about 70% of imports (66 Mb/d) coming from the U.S. and the balance coming from other countries. As we have discussed previously the U.S. has become a significant exporter of LPG (propane in particular) over the past two years as U.S. production has ramped up and midstream companies have built out marine terminals along the Gulf Coast. 
The U.S. exported over 400 Mb/d in early 2014 and over 700 Mb/d in July 2015.  A substantial majority of LPG import volumes into Mexico are delivered by ship; pipelines play a role too, as do trucks and railroads.
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CBR

CBR in the Bakken. UPI is reporting:
New pipelines operating in North Dakota have pushed the volume of crude oil by rail lower during the first half of the year.
Rail broke away from pipelines as the main source of crude oil delivery in 2012. The boom in shale oil production from the so-called Williston basin, hosting the Bakken and Three Forks shale formations, had outpaced pipeline capacity, leaving companies with rail as the primary alternative transit option.
After peaking in December 2014, when the state set its crude oil production record at 1.22 million barrels per day, transport by rail has been in a general decline and is now at parity with pipeline transport.
Justin Kringstad, director of the North Dakota Pipeline Authority, said in response to email questions the decline in rail volumes was in part because of the February start of the Double H pipeline, a project led by pipeline company Kinder Morgan. That project has the capacity to deliver as much as 84,000 barrels of oil per day.
Bakken crude oil to the west coast will still go by rail.

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Diesel and The North Dakota Harvest
Updates

Friday, August 21, 2015: The Dickinson Press reports that diesel is less expensive than gasoline. 
Stamart Travel Center manager Becca Neustel of Bismarck said she’d have to look back in the books to see the last time diesel fuel was lower than gasoline.
“It’s been a very, very long time,” she said.
The price for diesel at the station was $2.55 a gallon Thursday, 24 cents cheaper than regular unleaded gasoline.
In Dickinson, diesel could be purchased for $2.59 a gallon at multiple stations throughout the city. That was about 10 cents cheaper than super unleaded gasoline, the cheapest at the pumps.
In fact, according to the U.S. Department of Energy, the last time diesel was the cheapest fuel at the pump was 11 years ago in 2004. The department said the marker was reached in July when the average price of diesel nationwide dipped 2 cents a gallon below regular gasoline.
Wrong. See this post
Original Post

The Houston Chronicle is reporting but it requires a subscription/password. However, Fox Business also has the AP story:
The slowdown in North Dakota's oil patch should help keep fuel supplies adequate for the state's fall crop harvest due to the dramatic drop in the number diesel-thirsty drill rigs.
The harvest, which already has begun for some crops, often spurs diesel shortages for farm machinery in the Upper Midwest.
The problem was particularly acute in North Dakota in recent years because of the oil drilling activity in the western part of the state.
Mike Rud, president of the North Dakota Petroleum Marketers Association, and Mark Watne, president of the North Dakota Farmers Union, said there is no indication that diesel supplies will be tight when the harvest ramps up to full speed next month.
The MDU diesel topping refinery is, supposedly, also on-line.

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Maybe Coal Isn't So Bad After All

Updates

September 1, 2015: following in his tracks, another multimillionaire buying up cheap coal.
A millionaire environmentalist is buying into coal with a twist he believes can turn the beleaguered black fossil fuel at least partially green.
Tom Clarke, who made a fortune in health care, recently announced a plan to buy bankrupt St. Louis-based Patriot Coal for $400 million, following a major investment in coal by the billionaire liberal activist George Soros. But Clarke said he is not simply bargain-shopping in an industry wounded by federal policies and the emergence of American oil and gas. He said he is looking to transform the industry, and intends to sell his coal at a 10 percent premium -- which he will then spend on planting trees.

Original Post

The Guardian is reporting:
Billionaire climate philanthropist George Soros invested more than $2m (£1.3m) in struggling coal giants Peabody Energy and Arch Coal in recent months, despite having once called the fuel “lethal” to the climate.
Filings with the Securities and Exchange commission show that between April and June this year Soros Fund Management (SFM) bought more than 1m shares in Peabody ($2.25m), the world’s largest private coal company, and 500,000 shares in Arch ($188,000). The firm, which Soros chairs, bought the large stakes for bargain prices. Peabody and Arch are giants of the US coal sector but have suffered massive declines in recent years, losing more than 98% of their value.
SFM made a similar move in 2014 by investing $234.4m in coal and gas company Consol. Those shares were sold off after a few months as gas prices continued to fall.