Friday, September 4, 2015

Cedar Coulee Oil Field: A Sweet Spot In Two Sections -- September 4, 2015

Cedar Coulee oil field, located in the far northwest corner of Dunn County, is a small rectangular oil field, two sections by eight sections = 16 total sections. The entire field is spaced at 1280 acres. Except. Except for two 640-acre drilling units.

Here is a screenshot from the NDIC GIS map server showing four sections of Cedar Coulee oil field. The two sections in brown (in Cedar Coulee) are the only two sections in Cedar Coulee spaced for 640 acres. All of the rest of the sections, shown in white, are spaced at 1280 acres. Most of Cedar Coulee is pretty quiet; all sections are held by production but generally with just one or two wells. (Again, note that only a small portion of Cedar Creek is included in the screen shot below.)

Look at the two sections in brown in Cedar Coulee, sections 9 and 16:


The wells in these two sections:



Note the production numbers; these are all short laterals. Some folks argue that long laterals, all things being equal, would have twice the production of a short lateral. I'm not sure I agree with that, but be that as it may, here are the numbers of some very, very good wells, being reported by two different companies:

  • 28544, 1,159, XTO, Schettler 14X-9A, 1 section, t6/15; cum 7K 7/15 (18 days);
  • 28545, 2,654, XTO, Schettler 14X-9E, 1 section, t6/15; cum 16K 7/15 (20 days);
  • 28546, 2,318, XTO, Schettler 14X-9B, 1 section, t6/15; cum 11K 7/15 (15 days);
  • 28547, 2,312, XTO, Schettler 14X-9F, 1 section, t6/15; cum 11K 7/15 (18 days);
  • 28548, 1,112, XTO, Schettler 14X-9C, 1 section, t6/15; cum 6K 7/15 (19 days);
  • 28549, 1,841, XTO, Schettler 14X-9F, 1 section, t6/15; cum 8K 7/15 (18 days);
  • 28550, 1,991, XTO, Schettler 14X-9F, 1 section, t6/15; cum 9K 7/15 (16 days);
  • 19470, 1,274, Hess, Victor Pohribnak 16-1H, t1/11; cum 306K 7/15;
  • 22944, 609, Hess, LK-Pohribnak-147-96-16H-4, 1 section, t8/12; cum 145K 7/15;
  • 21350, 858, Hess, LK-Pohribnak-147-96-16H-3, 1 section, t1/12; cum 140K 7/15;
  • 21380, 1,424, Hess, LK-Pohribnak-147-96-16H-2, 1 section, t1/12; cum 286K 7/15;
  • 24733, 150, Hess, LK-Pohribnak-147-96-16H-7, 1 section, t10/13; cum 50K 7/15;
  • 24734, 1,208, Hess, LK-Pohribnak-147-96-16H-6, 1 section, t10/13; cum 156K 7/15;
  • 24735, 981, Hess, LK-Pohribnak-147-96-16H-5, 1 section, t10/13; cum 153K 7/15;

Random Update Of An Enerplus Mandan/Hidatsa Pad -- September 4, 2015

There really are some incredible wells being reported.

One example: this Enerplus two-well Mandan / Hidatsa pad, section 32-150-94; as of July, 2015, both were still flowing unassisted (no pump), according to the scout ticket.  [Enerplus has another two-well pad just to the east of this pad, a TAT well and an Arikara well, #21538 and #21539.]

The Mandan well: note the number of stages and the amount of proppant. Also note that this is a Three Forks well. Remember what Lynn Helms said about the Three Forks many, many years ago. Also note that the well was off-line for much of the past six months, so this well produced almost 130,000 bbls in less five months:
  • 21536, 1,348, Enerplus, Mandan 150-94-32C-29H TF, Spotted Horn, 40 stages, 10 million lbs, t2/15; cum 129K 7/15;
Production profile:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN7-2015211647016439869923058193951609
BAKKEN6-20151093838953650713742126150
BAKKEN5-20152927076274541285339204358660
BAKKEN4-201529288032914522043483400400
BAKKEN3-201520258252515422040454374670
BAKKEN2-201516215082094622034412236857753


The Hidasa well:
  • 21537, 1,522, Enerplus, Hidatsa 150-94-32C-29H, Spotted Horn, 40 stages, 10 million lbs, t1/15; cum 149K 7/15;
Production profile:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN7-2015201425713878606819959166531521
BAKKEN6-201517128401359749021797616254139
BAKKEN5-2015313067330660114274294238499839
BAKKEN4-20152928329283081176245014416200
BAKKEN3-20153139821397331807764043593660
BAKKEN2-20151622649218271536336239263886990

Week 35: August 30, 2015 -- September 5, 2015

Operations
US rig counts down sharply; Bakken holds steady
Zavanna gas lift
Top ten oil producing counties in the US; and here
BR's 22-well proposal for a 2560-acre standup unit in Pershing oil field 

Refining
New refinery in North Dakota?

Fracking
Federal fracking rules implementation delayed

Bakken economy
The Williston Wire: Menards in Williston, Jamestown to open September 9

Investing
WPX monetizing some of its midstream assets in the Bakken 

Miscellaneous
Peak oi? What peak oil?
New soybean processing plant to open in Grafton, ND 

First US Tar Sands About To Open -- September 4, 2015

This is interesting. The AP is reporting:
On a remote Utah ridge covered in sagebrush, pines and wild grasses, a Canadian company is about to embark on something never before done commercially in the United States: digging sticky, black, tar-soaked sand from the ground and extracting the petroleum: Book Cliffs of eastern Utah, about 165 miles from Salt Lake City.
The impending opening of the nation's first tar sands mine has become another front in the battle across the West between preservationists and the energy industry.
U.S. Oil Sands has invested nearly $100 million over the last decade to acquire rights to about 50 square miles, obtain permits and develop what it says is a brand-new, non-toxic method of separating out the oil with the use of an orange-peel extract similar to what's in citrus-scented household soaps and detergents.
Protesters have tried to thwart the mine's construction for two summers in a row and have gotten arrested for chaining themselves to equipment. They argue that the project is an eyesore and that it could contaminate nearby springs and ruin habitat for deer, beaver and bears.
The mine sits on a cleared swath of land enclosed by barbed wire, with modular buildings, bulldozers, large metal posts and rails and a massive metal cylinder with a cone-shaped bottom where the tar sand mixing will be done.
Opponents also worry the mine will spur more projects in this pristine area that attracts hikers, campers and hunters. A 45-mile, $86 million highway as smooth as an autobahn has been built out to the mine. And the state has given approval for three other tar sands operations in the same corner of Utah.  (About $2 million/mile.)
Instead of relying on the usual industrial-strength hydrocarbon solvent, U.S. Oil Sands says it will employ the biodegradable citrus extract that is in grease-cutting household products.
Much more at the link.

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World-Class Cities

The other day I got off on a tangent, world-class cities.  I've been in Tokyo so I can talk first-hand of that experience, and Tokyo is a world-class city. Tonight I happened to watch James Bond Skyfall again and saw Shanghai. Both in the movie and in the "extras" one can see exactly what I mean by a "world-class" city."

From The Williston Wire -- September 4, 2015

Keeping a stiff upper lip:
Drilling is down and hotel vacancies are up, but participants at a conference Wednesday said there are still reasons to be optimistic about Williston's economy. Peter Elzi, a consultant whose firm has done more than 70 market studies on Williston, said low oil prices will make 2015 and 2016 challenging years for the city. But the area has a lot of other economic activity, he said, such as a new airport in the works and construction of new schools and government buildings, along with pipeline and gas plant expansions. "There's still people coming here and there's still activity," said Elzi, a principal with THK Associates in Denver. "People forget the most valuable oil that an oil company owns is still in the ground. It's a bank for them. It's there when prices recover."
Planning economic development:
The city of Williston is ramping up efforts to bring more retail to town. Williston Economic Development and the Williston Convention and Visitor Bureau are partnering with a retail recruitment firm to identify shops and restaurants that best match local customers' needs. Buxton, a Texas-based firm, has helped more than 700 communities open over 35 million square feet of new retail space since 2002. The key to Buxton's success is its information gathering system. 
Finally:
The new Menards Mega Store will open for business on Wednesday in Williston. Trevor Fisk, Williston Menards General Manager says, "The big day is finally here! We appreciate all the support and patience from everyone in town and can't wait to open the doors on Wednesday.  Menards in Jamestown is also opening at the same time.
Moose Sightings:
Moose sightings in Watford City are soon to spike with plans to open a Smiling Moose Rocky Mountain Deli in October 2015 located at 1005 Main St. South. This will be the second Smiling Moose Deli in western North Dakota and the fourth for the state. A group of close, mountain loving friends opened the first Smiling Moose in Edwards, Colorado in 2003, and over the years the fast casual restaurant concept has steadily grown to 18 locations in seven states. 
Up-Scale Luxury Apartment Complex Has Broken Ground:
Williston Apartments, LLC has broken ground on a new upscale apartment community, The Retreat, which will offer residents upscale amenities and a convenient location.  They are pre-leasing now with move in dates set for early winter! This is in a convenient location across from the new Menards.

Friday Night Notes -- September 4, 2015

I admit to being inappropriately exuberant, but I just can't help but get excited when I see these stories. Oil & Gas Journal is reporting:
Formosa Petrochemical Corp., a member of Taiwan’s Formosa Group, is evaluating the possibility of building a $9.4-billion ethane cracking and petrochemical complex along on the west bank of the Mississippi River in St. James Parish, LA.

In addition to ethylene, the complex, which FPC would develop in two phases, would include downstream plants for production of polyethylene as well as customized outputs of low and high-density polyethylene, ethylene glycol, polypropylene, and other derivatives.
A $10 billion project seems to be something other than trivial.

Also in the news, the AP is reporting: Canadian energy and services company Emera says it will buy Teco Energy, an electric and gas utility that does business in Florida and New Mexico, for about $6.48 billion. They said Emera will continue Teco's efforts to sell its coal business and plans to complete that sale by the time its acquisition of Teco closes.

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Rig Count

Also note that on a day that Platts tweeeted that after 6 weeks of climbing, Baker Hughes' US rig counts down sharply even as oil prices recovered from 6-year lows, but that the number of rigs in North Dakota held steady.

Another tweet along that same line: Texas led states in rig count losses (-11) due to Eagle Ford (-4), Permian (-2) and  Granite Wash (-2). You will note that the Bakken was not mention. Hoo-ah! For EagleFord, its rig count of 93 is its lowest since BHI began tracking activity in major US basins in Feb 2011.
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Other News

Meanwhile, Platts is also tweeting that US July ethanol exports were up 19% on the month, and 30% on the year.

Meanwhile, in the Bakken, several years ago these wells would have made the headlines in North Dakota; today, these IPs are expected. All four producing wells that were reported as completed today, had huge IPS; one Enerplus well and three QEP wells.

From yesterday's WSJ: private equity firms are jumping back into oil and gas. 
Private-equity firms are doubling down on energy, despite heavy damage from their last adventure in the oil patch.
These firms’ stakes in a dozen publicly traded energy exploration-and-production companies have lost more than $18 billion in value since last summer, when oil prices began their slide from more than $100 a barrel.
Yet with U.S. crude prices down to about $46.75 a barrel at Thursday’s close, private-equity firms are looking for opportunities to spend the hundreds of billions of dollars they have amassed to make new energy investments. They are hoping the commodity-price crash will open up opportunities to pick up assets and entire companies on the cheap.
“This is a temporary situation, and investments that are made in this low-price environment are going to look pretty good two or three years out,” said Mark Papa, who joined energy-focused firm Riverstone Holdings LLC earlier this year after retiring as chief executive at EOG Resources Inc., one of the largest U.S. energy producers.
This is not rocket science. We are being set up for $200 oil.

*****************************************
Simply For The Archives
Survival Mode

I'm posting this link simply for the archives.
Texas-based oil giant Carson Energy may have figured out a means to completely scoff at even the lowest of oil prices.
The industry can’t remove its gaze away from Carson. This week, the company released new analysis that shows rich Texas oil fields can be profitable at just $15 a barrel.
“Many investors feel you have to be getting over $60 per barrel for oil to be profitable, but that’s only on expensive shale plays,” Michael Johnson of Carson Energy stated in a press release. “Carson operates in rich Texas blanket sands where it’s possible to make money when prices are as low as just $15 a barrel.”
Investors are nervous at best with all the variables intruding on crude oil prices.
However, many oil industry experts say this is often the best time to invest in new exploration and development. Wells and production are then in place when prices go back up, that is if a company can hold out that long. Experienced energy investors refer to this situation as one ripe for “double dipping.” An investor can benefit from very cheap drilling costs, and then have oil in production just as energy prices spike again.
Such a payoff is inevitable. Demand, although sluggish, is increasing worldwide.
I've heard from one long-time oil worker: he hopes the slide in prices lasts long enough to weed out the weak players.

QEP Reports Three High-IP Wells; Enerplus Reports One High-IP Well; September 4, 2015

Active rigs:


9/4/201509/04/201409/04/201309/04/201209/04/2011
Active Rigs75196188192198


Whiting canceled four permits: three Oakland permits in McKenzie County, one Skunk Creek permit in Dunn County.


Producing wells completed:
  • 21789, 1,908, Enerplus, Earth Lodge 148-93-22-21H TF, South Fork, t8/15 cum --
  • 29519, 2,396, QEP, P. Levang 4-14-23BH, Grail, t8/15; cum --
  • 29520, 2,406, QEP, P. Levang 3-14-23BH, Grail, t8/15; cum --
  • 29786, 3,392, QEP, P. Levang 2-14-23TH, Grail, t8/15; cum --
Six (6) new permits --
Operators: Petrogulf (4), Oasis, EOG
Fields: Antelope (McKenzie), North Tobacco Garden (McKenzie), Parshall (Mountrail
Comments: Petrogulf has been in the news recently:
June 17, 2015: a drilling unit in Antelope oil field that could get 16 wells;
May 29, 2015: NDIC June, 2015, hearing dockets --
  • Case 24068, Petrogulf, Antelope-Sanish, establish 640-ace spacing, two units, multiple horizontal wells, McKenzie, Mountrail
  • 24069, Petrogulf, Antelope-Sanish, establish an overlapping 1280-acre unit; 3 wells, McKenzie, Mountrail
February 1, 2015:
  • 28523, 1,572, Petrogulf, Three Tribes 151-94-4THF, Antelope, t12/14;cum 18K 12/14;
 January 22, 2015: Petrogulf with two permits in all of 2014.

December 19, 2014: January, 2015, NDIC hearing dockets --
  • Case 23580, Petrogulf, Antelope-Sanish, 16 wells on an existing 1280-acre unit, 25/36-151-94; McKenzie, a look at this drilling unit, June 17, 2015;
  • Case 23581, Petrogulf, Antelope-Sanish, establish an overlapping 2560-acre unit, 3 wells, McKenzie, Mountrail
Petrogulf has twelve permits/wells in North Dakota; four are active wells; four are on the confidential list; four more today. Website for Petrogulf here. Geologist Dan Plazak.

Random Notes -- September 4, 2015

From Portland, Oregon:
Our younger daughter / son-in-law live in Portland, Oregon. Economy in Oregon, so-so.
They moved into new home a few weeks ago and bought new appliances a few weeks and finally got them delivered. Here is her note:
They got here late last night.... but the applicances arrived!
They were to come 3:30-5:30... then 4-6... and at 5:30, the delivery guy called and said they were in Welches (by Mt. Hood) and had to go to Corbett (45 minutes drive) to do a delivery and then they would be here (we are about 15-20 minutes from Corbett -- it's where our church is).
They got here at 8.
Poor (delivery) guys (getting here at 8 after a long day), but good for the store, they were flown in from Mississippi to do deliveries (mind you, this is Portland, OR, on the west coast). They were to help a week, have been here two weeks, and were asked to stay another (third week) and they said, "No, our wives and kids miss us."
In fact the store is so busy / backed up they have flown in several people from around the country to help with delivery and installation. Crazy.
So, here we have a so-so economy in Portland, OR, high taxes, etc., and the local appliance store is so busy they had to fly in extra help to make all the summer deliveries.
And then these guys wouldn't even stay around to make extra money because their wives/children miss them. In the military, one could be deployed up to 180 days without question, and then forced over 180 days with permission from headquarters. Whatever.
This tells me that, without question, at 5.1% unemployment nationwide, this country -- the United States -- is at full employment.

************************************
Moving

I got a haircut this morning. The barber was Sandy, a full-blooded Hispanic. Her dad was born in Mexico (south of border) and her mother was born on the border, in Mercedes, TX. Sandy, herself, has lived in Irving, TX, all her life. Irving is where all the earthquakes have been. Irving has one of the largest Islamic populations in the US, and one of the largest mosques. I mentioned that Irving has probably changed over the years, but she said, "not really." Just growing by leaps and bounds. Irving sits sort of between Dallas and Ft Worth, on the south side of the airport, I guess.

She mentioned that she will probably stay in Irving until her parents move ... back to Mexico. I did not ask why they were considering moving "back" to Mexico but I assume it was to be family after all these years now that their children are grown.

I suppose it's possible they are fed up with US economy and "open-borders" policy. LOL.

*****************************************
Feminization Of Men In The US

I'm not going to go into now, but I had an "a-ha" moment last night driving home from our granddaughter's soccer practice. Some years ago there was a lot of talk of feminization of the American male in the US on talk radio and there's even a short wiki stub on the subject.

Hold that thought.

In literature (and music and the fine arts), Romanticism was a response to the Industrial Society.

Now back to feminization of the American male. There may be a dot that connects urban hip-hop / urban rap. I won't get into it now, but if there is a relationship, it could explain a lot. It would be interesting if Camille Paglia or Peggy Noonan would ever write about the phenomenon / phenomena.

**************************
Better Than Free Trash Pick-Up In Chicago

A new, huge, state-of-the-art public recreation center has just opened in Grapevine, TX, near where we live. It's quite amazing: indoor pool, water park, exercise rooms, basketball courts, handball courts, library, video monitors to watch DVDs on the big screen, and so on. It is co-located with one of the best libraries in the country, the Grapevine Public Library -- separate buildings but common parking lots. For a membership, the best rate is $170/year or about $15 month.

My wife and I planned to join a the $170 level.

But then we learned there is a better rate: free for seniors. The entire facility is free for seniors from 8:00 a.m. to 11:00 a.m. That's all I would use it anyway, three hours a day. And I'm always up at 8:00 anyway. I used to go to Starbucks until they increased their prices. Now I go to Central Market in Southlake from 7:00 a.m. to 10:00 a.m. and then the Southlake Library until 1:00 p.m.

Now, a simply change: Grapevine Recreation Center until 10:00 a.m. and then the Grapevine Library.

The $170 I'm not paying Grapevine will be offset by the increase Time Warner is charging me for faster internet. LOL.

Random Update On WMB, ETP, And Spectra -- September 4, 2015

Gasoline prices across the nation going into Labor Day weekend. California is definitely the outlier. After the 3-day weekend, I expect to see gasoline going under $2.00 in much of the south and southeast.

**********************************
Update On WMB, Spectra, ETE-ETP

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

BloombergBusiness brings us up to date on the WMB story, being "pursued" by ETE-ETP and Spectra:
Energy Transfer Equity LP sees Williams’ natural-gas conduits in the U.S. East, especially one to New York City, expanding its operations into demand-hungry areas. For Spectra Energy Corp., also said to be in talks to buy Williams, the attraction may be the possibility of a tax write-off and the chance to bring more Canadian gas into the western U.S.
The two companies’ starkly different interests in Williams illustrate how complex the financial structure of U.S. pipelines have become. Energy Transfer retains its complicated corporate setup, with controlling interests in multiple separately traded partnerships, while Williams has sought to simplify along with other pipeline owners. The changes come as investors demand ever-increasing cash payouts. Reducing tax rates has become as powerful a driver as strategy.
Nice graphics at the link.

A big "thank you" to the reader sending me the link.

Friday, September 4, 2015

EIA "energy cookie":
The U.S. average retail price for regular gasoline was $2.51/gallon (g) on August 31, the lowest price for the Monday before Labor Day since 2004, and 95¢/g lower than the same time last year. Declines in crude oil prices are the main driver behind falling U.S. gasoline prices. Lower crude oil prices reflect concerns about economic growth in emerging markets, expectations of higher oil exports from Iran, and continuing actual and expected growth in global crude oil inventories. --- EIA 
That's good news because a lot of folks don't have jobs based on today's job report.

*************************************

Active rigs:


9/4/201509/04/201409/04/201309/04/201209/04/2011
Active Rigs75196188192198

RBN Energy: crude prices and China's (lack of) growth threaten the boom. (Archived.)
Projected growth in U.S. methanol production was based in large part on the expectation that domestic natural gas prices would remain significantly lower (on a per-MMBtu basis) than the price of crude oil, and that Asian demand for U.S.-sourced methanol would continue rising at a fast clip. 
Today both of those assumptions look dicey. Natural gas prices remain low, but crude prices have languished below $50/Bbl for most of the past two months, and there are worries that China (by far the world’s largest methanol consumer) may be an economic bubble about to burst. Today, we consider recent developments that could slow the long-anticipated growth in natural gas use by U.S. methanol producers.

Just over a decade ago, U.S. oil and natural gas production were on the decline and scores of petrochemical plants—including 90% of the nation’s methanol capacity--were being shut down. Now, the only constraints on domestic oil and gas output are prices (they need to be high enough to encourage drilling) and infrastructure (it needs to be sufficient to move product to market). Abundant, inexpensive natural gas has spurred interest in a variety of gas-based chemical production projects, including projects to make ammonia, propylene, and—as we will revisit today—methanol. 
A three-step process is used to produce methanol from natural gas. (No angst please; we’ve really simplified things for our organic chemistry-phobic readers). First, a steam-methane reformer (SMR) converts natural gas into a synthesis gas (syngas) consisting of carbon monoxide, carbon dioxide, water and hydrogen. Next, hydrogen is stripped from the syngas, and third, methanol is produced through a catalytic synthesis of the syngas. 
As we said a while back, about two-thirds of worldwide methanol demand (recently estimated by Methanex, the leading methanol producer, at 61 million metric tons per annum, or MTPA) is tied to its traditional use a basic chemical feedstock for making formaldehyde, acetic acid and petrochemical intermediates that, in turn, are used to make plastics, synthetic fibers, paints, resins, solvents and the like. The balance of methanol produced annually is used in “methanol-to-olefins” (MTO) plants (most of them in China) that directly convert methanol into ethylene or polyethylene; as a fuel (again, mostly in China); or as a fuel additive (it can be used to produce dimethyl ether (DME), an alternative motor fuel and sometimes replacement for propane, and to make methyl-tertiary-butyl ether (MTBE), an octane booster the U.S. has banned for domestic use but still produces for export). 
Methanol’s fastest-growing use has been in MTO plants (China now has 10 such plants, which at full capacity can consume a total of 10 metric tons per annum, or MTPA) and as a fuel; it’s been estimated that by the 2020s worldwide methanol demand may top 100 MTPA or 40 MTPA above the current level – representing about 7% per year growth.

Shocked! -- Friday, September 4, 2015; The US Is At Full Employment -- Janet Yellen And The Federal Reserve

Note: after yesterday's "first time unemployment claims" report came out, I had decided to start posting that weekly number by exception. The weekly "ups and downs" of 5,000 or less is simply background noise, and not significant. With today's shocking "new jobs number" -- a monthly report --  I'm not sure if I will stick with that decision. So, we'll see. No one saw today's number coming and my hunch is that it will be revised upward; but to get it from 177,000 to 200,000 is going to require quite a revision.

************************************* 
Wow!

Regular readers know how cynical I am when it comes to the unemployment numbers and jobs reports, but the jobs report coming out this morning exceeded anything I had imagined. What was it? 177,000? Anything below 200,000 is consistent with economic stagnation. Despite energy at all-time lows and gasoline demand at all-time highs, we have 177,000 new jobs added in August. Pundits had suggested the number would be 225,000, not great, but at least with that number Bloomberg and Reuters could tell us again how good the Obama economy is doing.
But 177,000? Wow. Even I was shocked, and I'm pretty cynical. [Wow, I was wrong. I thought I had read 177,000 but, in fact, it was 173,000. An incredibly bad report.]

But the dots are easy to connect:
  • hourly wages are up slightly
  • minimum wage mandates and pressure for minimum wage increases grow
  • stores like Wal-Mart cut employee hours
  • new jobs added: way, way below 200,000
  • folks dropping out of work force; new records for low participation set again
  • unemployment rate drops to 5.1%
Bullets #4, 5, and 6 are the reasons the market tanked this morning. Movers and shakers and anyone paying attention know that the unemployment rate ticked down because folks are dropping out of the labor force.

President Obama has a busy day today. He will see that unemployment has dropped to 5.1% and he will move on.

By the way, the August jobs number was hardly posted when already one of the major news services was already suggesting it was due to a statistical glitch. Next month the August jobs report will magically be revised to show that the August numbers was really 350,000.

I track the numbers here. Seldom in the past six years has there been a really good jobs report despite a gazillion dollars in stimulus. Even when the numbers are somewhat good, the numbers are almost always less than expected. Back in March, for example, the report was 235,000 new jobs added -- at least it was above 200,000. But it was less than what analysts had expected.

Probably just another statistical glitch.

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Bloomberg Spin

Bloomberg saw the numbers as a great report. Wow:
Employers added 173,000 workers in August and the U.S. jobless rate dropped to 5.1 percent, the lowest since April 2008 and a level that the Federal Reserve considers to be full employment.
The gain in payrolls, while less than forecast, followed advances in July and June that were stronger than previously reported, the Labor Department said Friday. Average hourly earnings climbed more than forecast and workers put in a longer workweek, the report also showed.
Persistent hiring indicates employers were upbeat about America’s demand prospects leading up to mounting concerns of further deterioration in emerging economies. Fed policy makers meeting in less than two weeks will weigh resilient U.S. employment conditions against the recent turmoil in world financial markets as they debate the timing of any interest-rate increase.
Earlier, Bloomberg asked if this might not be the most important jobs report ever? Wow, such hyperbole. And then the jobs number did not meet Bloomberg's expectations: any number of 200,000 -- even 205,000 -- would have been a reason to uncork the champagne, but alas, only 173,000.

Even the New York Times was more honest than Bloomberg:
Despite disappointing job growth last month, the unemployment rate fell to its lowest level since early 2008, sharpening the debate within the Federal Reserve over whether to raise interest rates when policy makers meet in two weeks.
Friday’s report from the Labor Department — which estimated that employers added a less-than-expected 173,000 jobs in August even as the official jobless rate dipped to 5.1 percent — provided evidence for both camps to make their cases.