Wednesday, November 4, 2015

Wow! First-Time Unemployment Claims Surge; Jump Far More Than Expected; GDPNow Forecasts 2.3 GDP -- November 4, 2015

Multiple sources had inaccurate information, but this appears to be the correct numbers:
  • for week ending October 31, 2015
  • last week's numbers were unrevised; stand at 260,000 first time claims
  • analysts generally expected an increase of 2,000 (although the range was quite wide)
  • in fact, the number rose by 16,000
  • the four-week average also rose to 262,750
From the various sources:

Initial jobless claims rise more than expected, from Business Insider:
Initial jobless claims climbed to 276,000 last week. Economists had forecast, according to Bloomberg, that the Department of Labor's data showed first-time claims for unemployment insurance totaled 262,000 last week, up 2,000 from the prior period.
The total number of claims has not topped 300,000 since March. The four-week moving average, which evens out some of the weekly volatility, rose to 262,750.
Last week's number of 260,000 was revised to 262,000. Today, the number surges 14,000 to 276,000. The rise was so much it affected the four-week average which also rose.

This increase of 16,000 was the largest since late February -- The Wall Street Journal. Note the Journal  uses the unrevised previous week figure. The WSJ says "claims were unrevised at 260,000 for the week ending October 24," at odds with Business Insider (one of them got it wrong).

The Journal also noted:
Fewer layoffs typically means hiring is picking up. But job gains have slowed in recent months, reaching 142,000 in September and 136,000 in August. That is well off the pace of around 230,000 new jobs a month on average over the past 12 months.
Can't wait to see the spin from Bloomberg and Reuters. They will highlight the fact that the total number of claims has not topped 300,000 since March. It is accurate that less than 300,000 is very, very good when one considers the magic number: a number greater than 400,000 suggests economic stagflation. But what surprises me is the magnitude by which analysts missed this one. Again.

And just yesterday, it was pretty much a foregone conclusion that Janet Yellen would "raise rates."

Yes, BloombergBusiness focused on the "lowest level since 1973" but noted that the most recent data showed unemployment benefits "climbed to the highest level in five weeks." BloombergBusiness also said that the previous week's numbers were not revised.

And here's where Business Insider misread/misheard/mis-reported: the previous week was not revised upward by 2,000. Rather, the expectation was that new claims would rise by 2,000. In fact, the number, as noted above, surged by 16,000.
Applications increased by 16,000 to 276,000 in the week ended Oct. 31, a Labor Department report showed Thursday. It marked the biggest advance since the end of February, while the level exceeded the Bloomberg survey median estimate of 262,000. The four-week average of claims climbed from the lowest in four decades.
Also note the discrepancy between which week they say they are reporting. Whatever.

********************************* 
GDP Forecast

From GDPNow:
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2015 is 2.3 percent on November 4, up from 1.9 percent on November 2. Following this morning's Non-Manufacturing ISM Report On Business, the forecast for fourth-quarter real consumer spending growth increased from 2.4 percent to 2.7 percent while the forecast for real fixed investment growth increased from 3.0 percent to 4.3 percent.

Reporting Thursday -- November 4, 2015; Will Bass Pro Shops Buy Cabela's?

Bass Cabela Pro Shops

Will privately-hell Bass Pro Shops buy Cabela's? This apparently started when Cabela began looking at its options.

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Apache

Apache Corp reported a much smaller-than-expected quarterly loss and joined a growing list of US oil producers in raising full-year production forecast even as many of them cut spending. 

Increased efficiencies, a drop in service costs and low break-even levels in core US shale fields are all helping US oil companies increase production on reduced budgets. 

US producers ranging from Oasis Petroleum to Devon Energy have forecast higher production in their latest quarterly reports.
*************************
Reporting Thursday

Apache Corp (APA), forecast a loss of 36 cents; Reuters;
a much bigger quarterly loss as it took a $3.7 billion writedown due to a slump in oil prices
Net loss attributable to Apache's common shareholders widened to $5.56 billion, or $14.95 per share, in the third quarter, from $1.33 billion, or $3.50 per share, a year earlier.
CenterPoint Energy (CNP), forecast 30 cents; Zacks; beat by 4 cents at 34 cents;

Crescent Point Energy (CPG.TO), forecast 3 cents; AP; earnings came to 2 cents;

Denbury Resources (DNR), forecast 13 cents; AP; beats by 5 cents at 18 cents per share;

Enbridge (ENB.TO), forecast 49 cents; WSJ;
Canadian / US dollars makes forecast / actual difficult to compare; WSJ says 47 Canadian cents were up from 41 Canadian cents a year earlier but fell just short of hte 49 Canadian cents analysts were expecting; from Reuters: Enbridge Inc, Canada's largest pipeline company, reported a 15.7 percent rise in quarterly adjusted profit, helped by increased throughput as producers moved more oil by pipelines than on rail. The Calgary-based company's adjusted earnings rose to C$399 million ($303.4 million), or 47 Canadian cents per share, in the third quarter ended Sept. 30, from C$345 million, or 41 Canadian cents per share, a year earlier. ($1 = 1.32 Canadian dollars)
Linn Energy (LINE), forecast 13 cents; press release;

Windstream Holdings (WIN), forecast a loss of 34 cents; AP;
wow, huge beat; forecast to lose 41 cents by Zacks, WIN reports a loss of only 13 cents;
WPX, forecast a loss of 14 cents; AP;
slightly wider than foecast; Zacks predicted a loss of 12 cents; actual loss was 17 cents/share;
Clean Energy Fuels (CLNE), forecast a loss of 28 cents; press release here;
if I read this correctly, the loss was 23 cents; much better than forecast;
EOG, forecast a loss of 29 cents; press release; transcript;

Halcon (HK), forecast one cent; press release; at Seeking Alpha;
if I read this correctly, net income was 4 cents; if accurate, a huge beat;
Walt Disney (DIS), forecast $1.14; AP; beat nicely at $1.20/share;

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Tyranny Of A Big Idea -- Op-Ed in The Wall Street Journal

Link here. Well worth reading. 

Remember Paul Ehrlich?
Paul Ehrlich helped get the ball rolling with his 1968 blockbuster “The Population Bomb,” which begins with the words: “The battle to feed all of humanity is over. In the 1970s and 1980s hundreds of millions of people will starve to death in spite of any crash programs embarked upon now.” Mr. Ehrlich, a biologist at Stanford, had no scholarly credentials as a demographer or an economist. But that didn’t keep him from putting a scientific gloss on a personal prejudice.
From “The Population Bomb” there came Zero Population Growth, an NGO co-founded by Mr. Ehrlich. Next there was the United Nations Population Fund, founded in 1969, followed by the neo-Malthusian Club of Rome, whose 1972 report, “The Limits to Growth,” sold 30 million copies. In India in the mid-1970s, the Indira Gandhi regime forcibly sterilized 11 million people. Then-World Bank President Robert McNamara praised her for “intensifying the family planning drive with rare courage and conviction.” An estimated 1,750 people were killed in botched procedures.
And now it's global warming.
What matters, rather, is the strength of the longing. Modern liberalism is best understood as a movement of would-be believers in search of true faith. For much of the 20th century it was faith in History, especially in its Marxist interpretation. Now it’s faith in the environment. Each is a comprehensive belief system, an instruction sheet on how to live, eat and reproduce, a story of how man fell and how he might be redeemed, a tale of impending crisis that’s also a moral crucible.
In short, a religion without God. I sometimes wonder whether the journalists now writing about the failure of [China's] one-child policy ever note the similarities with today’s climate “crisis.” That the fears are largely the same. And the political prescriptions are almost identical. And the leaders of the movement are cut from the same cloth. And the confidence with which the alarmists prescribe radical cures, their intolerance for dissenting views, their insistence on “global solutions,” their disdain for democratic input or technological adaptations—that everything is just as it was when bell-bottoms were in vogue.
Meanwhile, for the archives, Representative Lama Smith (R-Texas)  has subpoenaed NOAA internal documents now that there is evidence that NOAA may be misleading (is "lying" too strong a word?) the American public.

Simple Housekeeping -- Reposting Previously Posted Material -- November 4, 2015

This is simply some housekeeping. Nothing new here. This has all been posted before. The page where this came from was getting too long. These are wells that I was watching for some reason or other; once I saw what I wanted to see, I "closed" them out.

I no longer follow these wells.

CLOSED


Page 5

January 27, 2016Fidelity has been sold by MDU in five separate deals; they have not been formally announced. We need to watch operator changes for Fidelity wells. For example, these two Fidelity wells were chronologically next to each other (Limestone Resources bought the Fidelity assets in this area some time ago -- not part of the recent entire Fidelity sale. Turns out that Kaiser-Francis was the operator who got the lion's share of the Fidelity wells:
  • 24052, 738, Kraken/Kaiser-Francis/Fidelity, Wayne 3-4-33H, Sanish, 4 sections, 4/13; cum 227K 10/18;
  • 24511, 52, Lime Rock Resources/Fidelity, Irene 12-13H-24, Alger, t4/13; cum 123K 10/18;

December 5, 2015: was waiting to post fracking data -- posted -- can be moved to "Closed" status
  • 25467, 1,821, Whiting, Privratsky 11-27PH, Zenith, Three Forks (Pronghorn), 40 stages, 3.04 million lbs, t3/14; cum 184K 10/18;
  • 25468, 1,920, Whiting, Privratsky 21-27PH, Three Forks (Pronghorn), 40 stages, 3 million lbs, t3/14;cum 215K 10/18;
  • 25469, 2,272, Whiting, Privratsky 41-27PH, Zenith, Three Forks (Pronghorn), 40 stages; 3 million lbs sand; t3/14; cum 222K 10/18;
November 16, 2015: 25924, 55, Hess, EN-Jeffrey A 155-94-2734H-5, Alkali Creek, 4 sections, t6/14; cum 163K 10/18; 34 stages; 3.5 million lbs sand. [Update, November 18, 2014: this well was fracked 2/14; still having problems. Zero bbls June/July, 2014; 25K in 27 days in August, 2014 -- was that a commingling error; but then only 9K bbls in 21 days in September; paperwork for commingling submitted. Update, June 13, 2015: looks like well is back on track]

November 3, 2015follow up on this re-frack? #20755. Not a re-frack; simply some work on the pad mostly likely. Nothing to see here. This item closed November 3, 2015.


June 17, 2015: I need to complete the January, 2015, dockets.

September 19, 2015:
  • Permitted for re-entry: 16439, 373, MRO, Hecker 21-5H, Murphy Creek, t9/07; cum 280K 10/18; last on-line 11/14; still off-line as of 6/15; back on ACTIVE status on/about 6/15; tracked here
September 27, 2014:
  • 19294, PNC, Whiting, BSMU 3605, a Madison well;
Note these very low IPs for EOG in the Parshall; these wells were noted in the July 28, 2014, daily activity report, but on November 18, 2014, when re-checked, they were both back on confidential, and no IP was provided at the NDIC site. I now track both these wells here:
  • #27441 - EOG RESOURCES, INC., PARSHALL 65-14H, NWNW 14-152N-90W, MOUNTRAIL CO., 446 BOPD, 2354 BWPD - BAKKEN
    #27442 - EOG RESOURCES, INC., PARSHALL 66-14H, NWNW 14-152N-90W, MOUNTRAIL CO., 394 BOPD, 2376 BWPD - BAKKEN
  • 27441, 446, EOG, Parshall 65-14H, Parshall, short lateral, t7/14; from the file report, after reaching TD, gas reached a max of 10,000 units as the well began to flow; 25 stages, 7.6 million lbs; cum 122K 10/18;
  • 27442, 394, EOG, Parshall 66-14H, Parshall, short lateral, t7/14; 19 stages, 5.8million lbs; cum 115K 10/18;
26335, PA/18, MRO, Powell 31-27TH, Wildcat, Tyler, t4/15; cum 638 bbls 4/15;  the second Tyler well "everyone" is waiting for, 24 stages; 800K lbs (minimal frack); t8/14; cum 434 bbls; apparently this well will be PNA in May, 2015; PNA as of 6/20/15;

A comment from a reader, received June 27, 2014:
I'm a non-op partner in 143-97 Leroy Petry Oxy well (#26370).  One of my buddies got his first check today and along with it was a letter saying OXY is selling part of its assets to Merit Energy.  Thought I would pass along.  When I get my paperwork I'll let you know; update July 3, 2015 -- still an OXY USA well; Lime Rock;
December 1, 2014, 4:44 p.m. CT: for some inexplicable reason, the number of active rigs in North Dakota jumped from 183 on Black Friday, November 28, 2014, to 189 on Monday, December 1, 2014 during some of the most miserable weather ever in the history of the Bakken boom during the late days of November. If the active rig rate holds or actually increases despite the slump in oil prices, one needs to ask the question, why? This could be an unintended consequence of the slump in oil prices, as operators start to circle the wagons and start to drill the better spots to "stay alive." If the marginal shale plays in the US see a decrease in rig counts, some operators to maintain their production or meet their contracts, may start to move their rigs to the better spots. The Bakken is known for a) consistency; b) reliability; c) adequate takeaway; d) improving infrastructure. So we'll see. I will not put this in a stand-alone post for several reasons. [Update, March 20, 2015 -- my irrational exuberance got ahead of me -- rigs plunged; now stand at 107. Update, June 13, 2015 -- my irrational exuberance got way ahead of me -- active rigs have plunged to lowest post-boom record, at 76]]


April 9, 2015: need to get frack data on these two wells
  • 28075, 3,255, MRO, Anthony USA 23-14H, Moccasin Creek, 2.5 section-long horizontal; 100% within the middle Bakken; 93% within MOC geology defined target interval; gas max at 1,300 units; 3,840 acres drilling unit; 23,148 feet TD; 43 stages; 4.5 million lbs; t2/15; cum 451K 10/18;
  • 28076, 3,255, MRO, Hale USA 23-14TFH, Moccasin Creek, 2.5 section-long horizontal; Three Forks, 100% within the Three Forks Formation; 69% within the MOC geology defined target interval;  gas units very, very low; a 1 - 5' intermittent flare near the end of the lateral; 23,148 feet TD; 43 stages; 4.5 million lbs; t2/15; cum 252K 10/18;
October 16, 2014: nomenclature of this well? #29727 -- Eide 41-13HU. This well is on 4-acre spacing;
  • 29727, 2,319, Whiting, Eide 41-13HU, 4 sections, middle Bakken; 30 stages; 3.4 million lbs; seam 22 feet thick?; max gas at 4,697 units, a consistent 2 - 5 foot flare; t2/15; cum 178K 10/18;
October 12, 2014: 20342, 1,430, Petro-Hunt, USA 153-95-4B-9-1H, t11/11; cum 900K 10/18; went IA 1/14; still inactive as of 6/14; back on line and tracked here;

September 11, 2014: several Oasis wells with very short horizontals; in the process of being completed? I had not seen this before (or don't recall); I was incorrect: these are not very short laterals (see explanation at the link); standard long lateral (about 9,300 feet horizontally)

August 2, 2014: a three-section horizontal lateral
  • 25959, 732, CLR, Haffner 1-31H, Noonan, middle Bakken; 1920-acre; 50 stages; 7 million lbs, a true 3-section lateral (full sections 19/30/31 - 162-95); background gases "poor"; t3/14; cum 178K 10/18;
November 29, 2014: new designation for a Whiting well?  Yes, TFHU -- the "U" means "unit" -- 2560-acre unit.

November 29, 2014, a huge well;
  • 17314, 431, MRO, Brown 24-9H, Killdeer, a 10 - 30' flare for fifty minutes; this is a bit confusing for me, but I believe this well was spud/completed in 2008, but it was re-fracked in August, 2014, and that's why it shows up in today's report; the re-frack data was not yet scanned in; last full month production was in July, 2014; it will be interesting to see what new production numbers are and what the re-frack data is; t8/08; cum 403K 3/19; update here.
November 18, 2014: a huge CLR North Red River B well back on active status; looks like some type of workover in May/June, 2014, when there was no production; off-line from mid-April to mid-July, 2014; a huge producer back on line.
  • 16529, 100, CLR, Spry 11-13NH, Cedar Hills, a North Red River B well, t8/07; cum 620K 10/18;
The Lawrence well in North Tioga,  #17745, posted May 10, 2014. They are back on line as of August, 2014. 

Also, later: #18341.

Was this well that produced 30,000 bbls in the first month really canceled by EOG? This will end up being a non-story. See this post. My hunch is that the "30,000" was an error.

Why did they take this great well off-line in July, 2013? A great well to follow periodically.
  • 17310, Rosemary Eckelberg 41-26H, 459, 49,138 bbls in 15 months; t8/08; cum 167K 3/19; went back on line 1/14; significant increase in oil production; no explanation in well file;
Hit the one-million-bbl milestone:
  • 7571, 482/AB, Hess, Reitsch NCT-2 4, Blue Buttes, a Silurian well, t4/81; cum 1.0062 million bbls 7/17;
#20879 has two laterals, drilled at separate times. They have different names: -1H and -2H but yet carry the same permit number, #20879.
  • 20879, 2,709, Bruin/HRC, Fort Berthold 147-94-1A-12-2H, McGregory Buttes, t1/14; cum 491K 3/19; off-line as of 9/18; see this note, 10/18;
The Carlson 1-11H well was taken off line 2/14; no explanation. Need to recheck in a few months. Posted 6/14. [Apparently back on-line, 5/14.]
  • 19169, 685, HRC, Carlson 1-11H, Strandahl, northwest of Williston, t2/10; cum 82K 3/19; this was GEOI's first completed Bakken well at a cost of $5.6 million; remains a lousy well (3/19);
One to follow: 18362 -- the answer here: http://themilliondollarway.blogspot.com/2014/09/random-update-on-mros-uran-31-2h-well.html
  • 18362, 641, MRO, Uran 31-2H, Reunion Bay, t6/10; cum 343K 3/19; 15 stages, 2.6 million lbs; no explanation why it was taken off-line for four months in mid/late-2013, and then came back with much better production;
Flaring. I doubt I will ever do a story on this, but if push comes to shove, I might. This well, along with 1,000's of others, would never have been drilled, and would now be shut down, if all flaring was banned in North Dakota: 
  • 10217, 80, Legacy Reserves, Spring Creek Federal 6, Mondak, a Madison well, t10/83; cum 157K 4/14; at $50/bbl, this represents $7.7 million in crude oil; at $5/MCF natural gas, that represents $500,000 in natural gas. It would have cost several million dollars to put in a natural gas pipeline, assuming that regulators would even have allowed a pipeline for one well this remote. Spud in 1983, this well is flaring almost no natural gas but a very, very tiny bit is being flared. I cannot explain why it can go years producing oil but flaring no natural gas, and then back to flaring small amounts. Whatever meager amounts are being produced, none is being sold. [Update: I believe the rules state that the wells have to be producing at least 200 bbls of crude oil to be affected by new flaring rules, or about 6,000 bbls per month. This well is producing only 350 bbls of crude oil per month so it is not affected by new flaring rules.]

Six Wells Forbes And Reuters Analysts Won't Believe; And To Think The Wells Are All Choked Back -- November 4, 2015

A huge thank you to a reader again: just yesterday a reader reminded me of FracFocus to see if a given well has been fracked. Already, I've used FracFocus to see if a certain well was fracked; see below. 

Wells coming off confidential list Thursday:
This is very interesting. Six months ago we were well into a price "situation" due to the glut of oil, and yet here we are today (actually tomorrow) when nine wells will come off the confidential list. I haven't look at them yet; perhaps the permits were all PNC'd but let's take a look:
  • 27419, SI/NC, CLR, Garfield Federal 6-5H, Banks, no production data,
  • 29330, 180, Triangle, Wisness 150-100-23-14-11TFH, Timber Creek, 31 stages, 4 million lbs, t5/15; cum 35K 9/15;
  • 29331, 655, Triangle, Wisness 150-100-23-14-7H, Timber Creek, 31 stages, 4 million lbs, t5/15; cum 57K 9/15;
  • 29373, 2,235, QEP, P. Levang 2-14-23BH, Grail, 49 stages, 10 million lbs, t5/15; cum 97K 9/15;
  • 29374, 2,342, QEP, P. Levang 1-14-23BH, Grail, 49 stages, 10 million lbs, t5/15; cum 72K 9/15;
  • 29375, 2,298, QEP, P. Levang 14-13-23-24-LL, Grail, 48 stages, 9.9 million lbs, t5/15; cum 103K 9/15;
  • 29749, 2,159, QEP, P. Levng 1-14TH, Grail, 49 stages, 6.7 million lbs, t5/15; cum 89K 9/15;
  • 29861, SI/NC, XTO, Johnsrud Federal 34X-14A, Bear Den, no production data,
  • 31013, SI/NC, Newfield, Wahus Federal 152-97-13-24-4H, Westberg, no test date; cum 9K 9/15 over 12 days; API: 33-053-06848-00-00; according to FracFocus this well was fracked 9/3 - 8/15; appears to have used around 5 million lbs sand;
Yes, there might be six wells here that analysts over at Forbes and Reuters might not believe, and to think these wells are probably choked back by now.

Three (3) new permits --
Permit renewals continue:
  • Hess renewed five permits, the AN-Gudbranson permits in McKenzie County
  • American Divide renewed two permits, the Curly and the Kenyon in Divide County
One (1) producing well completed:
  • 29443, 1,442, WPX, Olive Mae 7-8-9HW, t10/15; cum -- ;said to be on Active Status but has reported no production; application for Three Forks B1, but changed to middle Bakken; 1920-acre spacing; API: 33-061-03307-00-00. FracFocus says this well was fracked 9/13 - 28/15, but there has been zero bbls of production; it was on line for two days back in February, 2015; looks like maybe as much as 14 million lbs of sand (no ceramic); huge, huge amount of fluid: 13,445,058 gallons of water (320,000 bbls @ 42 gal/bbl); almost 12% of total HF was sand. (Disclaimer: I often make simple arithmetic errors. If this information is important to you, go to the source.)
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29330, see above, Triangle, Wisness 150-100-23-14-11TFH, Timber Creek:

DateOil RunsMCF Sold
9-201558180
8-2015867311149
7-20151246915239
6-201548874806
5-20153425992

29331, see above, Triangle, Wisness 150-100-23-14-7H, Timber Creek:

DateOil RunsMCF Sold
9-201550260
8-2015906712436
7-20151475017729
6-20151270114701
5-20151551912473

29373, see above, QEP, P. Levang 2-14-23BH, Grail:

DateOil RunsMCF Sold
9-20152086413684
8-20151186931
7-20152557323461
6-20153054126333
5-20151845215688

29374, see above, QEP, P. Levang 1-14-23BH, Grail:

DateOil RunsMCF Sold
9-2015759350
8-201544994781
7-201583567145
6-20152840723865
5-20153016927802

29375, see above, QEP, P. Levang 14-13-23-24-LL, Grail:

DateOil RunsMCF Sold
9-20151371913172
8-20151808218166
7-201588899196
6-20152925134989
5-20153211236042

29749, see above, QEP, P. Levng 1-14TH, Grail:

DateOil RunsMCF Sold
9-2015123677751
8-2015910211325
7-20151682015459
6-20152920925456
5-20152132818564

31013, see above, Newfield, Wahus Federal 152-97-13-24-4H, Westberg:
DateOil RunsMCF Sold
9-2015897211183

Now We See Why Agency Reluctant To Release Cost Data On California Bullet Train -- November 4, 2015

Updates

November 26, 2015: hearings will be held in state legislature over this project cost overrun. In the original post:
Buried deep in the article we get the current "final" estimate: $71 billion from an original $27 billion -- the amount California voters were told at the time they voted to support Jerry's pet train project.
Now, in this new LA Times article, they manage to crawl back the $71 billion back to the $68 billion. 

Original Post
 
We have $30 billion, now we have $40 billion, do I hear $60 billion, can I get $80 billion?

The Auctioneer Song, Leroy Vandyke

The Los Angeles Times is reporting:
The California high-speed rail authority bowed to pressure from California legislators and members of Congress late Tuesday and released a copy of a 2013 report showing a large estimated increase in the cost of building the initial segment of the bullet train project.

The report, disclosed by the Times in a story Oct. 25, said Parsons Brinckerhoff had briefed state officials in October 2013 that the projected cost of the first phase of the bullet train system had risen 31%. The state did not use the increase, however, in its 2014 business plan four months later.

A dozen members of Congress and four members of the California assembly had written to the state and to Parsons Brinckerhoff asking for disclosure of the report.

Rail authority chairman Dan Richard and CEO Jeff Morales released the document and said the cost estimates it contained are part of an iterative process and that the numbers were "preliminary, still in development and subject to review clarification and refinement." They say initial contracts have come in below budget.

"The authority under the present leadership has always been forthcoming about the costs and risks of the program," Richard said.
Buried deep in the article we get the current "final" estimate: $71 billion from an original $27 billion -- the amount California voters were told at the time they voted to support Jerry's pet train project.
The report shows that the cost of building the first segment from Burbank to Merced had grown from $27.3 billion to $35.7 billion, not including future inflation.
The state publishes most of its public cost figures with future inflation included, which would translate the cost of the initial segment from the current $31 billion to about $40 billion, based on the Parsons Brinckerhoff estimates.

The document also shows the cost of the entire project would increase by about 5%, going from $54.4 billion to $56.9 billion without inflation. If future inflation is included, based on the Parsons Brinckerhoff inflation estimates, the total project cost would go from $68 billion to more than $71 billion.

Americans Think The JV Team Planted Bomb On Russian Plane; Brits Think That Russian Jet Over Egypt Downed By "Bomb" -- November 4, 2015

Updates

November 6, 2015: Reuters is reporting:
The sound of an explosion could be heard on the black boxes recovered from a Russian plane that crashed over Egypt's Sinai Peninsula on Saturday, according to an investigator who had access to them, French TV station France 2 said on its website on Friday.
According to the investigator, the explosion was not consistent with an engine failure, the report said. 
Original Post
 
Link here for the CNN story/update on the Russian commercial airline that went down over Egyptian Sinai a couple of days ago.
The latest U.S. intelligence suggests that the crash of a Russian passenger jet in the Sinai over the weekend was most likely caused by a bomb on the plane planted by ISIS or an ISIS affiliate, according to a U.S. official familiar with the matter.
But the official stressed a formal conclusion has not been reached by the U.S. intelligence community.
"There is a definite feeling it was an explosive device planted in luggage or somewhere on the plane," the official, who is familiar with the latest U.S. intelligence analysis of the crash, told CNN.
Link here for the British story/update on the Russian commercial airline that went down over Egyptian Sinai a couple of days ago.
Britain said Wednesday it has information suggesting the Russian jet that crashed in the Egyptian desert may have been brought down by a bomb and it was suspending flights to and from the Sinai Peninsula as a precaution.
My original post when the story broke:
First hunch may have been correct.

Immediately after news of the downed Russian a/c killing 224 on board, I wrote Don:
  • most dangerous aspects of commercial flying, non-terrorist-related mishaps: take-offs and landing 
  • once at cruising altitude, most likely reason for unexplained crash: terrorists 
The plane was 25 minutes into flight; well past take-off and leveling off.
Both CNN and Fox News  has the story on-line. The Los Angeles Times is not yet reporting it.

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The Keystone XL Debate Becomes Tiresome

I was going to do a series of polls on the Keystone in light of a recent post by RBN Energy, but after seeing the story in today's WSJ, it's not worth the effort.

The "Keystone" is about two political parties raking in cash on this argument. The story itself no longer has any relevance.

I was concerned a bit after RBN Energy suggested that petcoke would be in short supply if the US did not have access to heavy oil, but that's a bit of hyperbole, also.

In today's WSJ, front page of section B: Pipeline delay unlikely to hurt refiners in US. The lede:
Oil imports from Canada set a record in August, averaging 3.4 million barrels a day, according to data released Monday by the U.S. Energy Department.

In fact, the U.S. has bought 64% more Canadian crude so far this year than it did in the same stretch of 2008, the year TransCanada first asked the U.S. government for permission to build the pipeline that would run from Alberta to Texas. That is an extra 1.2 million barrels of oil flowing into the U.S. from Canada every day, or 45% more crude than Keystone XL would have carried had it been constructed.
Unless someone knows something I don't know about the US manufacturing base bursting forth at 10% GDP next year, it sounds like the US is getting all the heavy oil it needs.

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The Story No One Is Talking About

Yesterday the numbers suggested that the US will sell 18 million vehicles this year, a record of some sort, and something no one would have foreseen a year or so ago. But with gasoline well below $2.00 / gallon and likely to stay inexpensive for the next 20 to 30 years (or so the car dealers would have you believe), the American car manufacturers are going gang-busters with the internal combustion engine, which by the way is the real issue here. If the anarchists can bring down the ICE, they can bring down GM, Ford, and Fiat Chrysler. At least that's their thinking. Whatever. But I digress.

The US is likely to set some kind of record this year, selling upwards of 18 million vehicles. Tesla, if you believe Elon Musk and his pitch, should be contributing to that record. But here's the reality:
Tesla's deliveries rose 49% to 11,603 in the third quarter, putting its deliveries this year through September at 33,140.
At that rate, at the end of the year ([1.49 x 11,603] +33,140) Tesla will have delivered 50,428 vehicles this calendar year.  
Tesla has already lowered its sales forecast to 50,000 to 55,000 from 55,000. Tesla's forecast for deliveries puts it at 50,000 to 52,000 in deliveries for the year. 
Back-of-the-envelope calculations:
  • 52,000 - 33,140 = 18,860 vehicles in the fourth quarter
  • 18,860 - 11,603 = 7,257
  • 7,257 / 11,603 = 64% increase over the quarter ending this past September.
So, we'll see.

I suppose if Elon can get to 52,000 that will put us over the 18 million mark.

52,000 / 18,000,000 = 0.003 or 0.3%.

By the way, the WSJ story that posted some of those numbers also mentioned the following:
  • Tesla is a maker of luxury electric cars
  • Tesla posted a wider $229.9 million net loss due to hefty costs to launch the Model X SUV
  • Tesla forecast that it would deliver between 17,000 and 19,000 vehicles in this current quarter
  • initial versions of the SUV are priced at about $132,000
  • one year ago, Tesla posted a $3 million profit (2 cents/share)
  • this year, same quarter, Tesla's posted a loss of $75 million or a loss of 58 cent/share

Two Words One Doesn't Want To See In Same Sentence -- But Absolutely Predictable -- November 4, 2014

The two words: ObamaCare, soaring.

Again, thank goodness Mr Boehner did not defund this debacle. This debacle belongs completely to its namesake. A more accurate name for the program would be PORCare -- Pelosi, Obama, Reid-care. Or even OPRAHCare -- Obama, Pelosi, Reid, Anti-Health Care. Yeah, that's a stretch.

Reuters headline: Cost of Cheapest Obamacare Plans Is Soaring.

Even Congressmen -- who run for election every two years -- can read that short headline.

Some excerpts from the article:
Subsidies are probably the biggest thing keeping the markets from sliding into the dreaded adverse-selection “death spiral,” in which sick people are more likely to buy insurance, so the pool is sicker and more costly, so prices go up, so the healthiest folks decide the insurance isn’t worth it, so the pool gets sicker and more costly….

Contrary to expectations, the mandate really doesn’t seem to be doing much to get people to buy insurance, at least yet (the penalty is set to go up again this year, and that may get people to pay attention). The subsidies, on the other hand, clearly have a large effect, which is why the customer base for the exchanges is so disproportionately composed of folks who are getting large amounts of taxpayer assistance to buy insurance. Anything that increases the gap between the cost of the insurance and the subsidy they are getting is therefore worrisome, if you want the exchanges to get and stay healthy.
More:
The whole bottom of the market is undergoing a fairly massive repricing. In most states, the cost of the cheapest Silver plan, relative to the cheapest one last year, rose even more than the benchmark rate. And in most states, the cost of the cheapest Bronze plan went up by more than the cost of the cheapest Silver plan.
(The average increase was 13 percent, but it looks as if it's unweighted, while the government used a weighted average. As I noted last week, the weighted average is usually the most meaningful national metric, but the unweighted can be revealing as well.)

That still doesn’t tell us what happened at the top of the market, with the carriage trade splurging on policies that cover nearly everything. But I think there’s one thing we can say for certain: Insurers significantly underestimated how much people would spend on health care, even if they chose stripped-down plans that have narrow provider networks and require consumers to cover a significant portion of their own costs.
Yada, yada, yada, soaring premiums, yada, yada, yada.

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The Train Wreck In Slow Motion

Speaking of the TrainWreck, Business Insider also has a story with this headline: One of Obamacare's biggest success stories is suddenly under serious threat.
One of the Affordable Care Act's biggest success stories since its implementation came in an unexpected place.

That would be in Kentucky, the deep-red Southern state that has drifted further and further away from the policies of national Democrats and President Barack Obama.

The Bluegrass State's Democratic governor, Steve Beshear, embraced the law colloquially known as Obamacare — though he wouldn't dare call it that. The state set up an exchange, called Kynect, that thrived in 2013, as the federal government's website was mired in disaster.

And Kentucky expanded the federal Medicaid program, signing up more than 375,000 people over the first year of the expansion. One study found that the expansion could inject as much as $30 billion into the state's economy through 2021, in the form of tens of thousands of new jobs.

But most of Obamacare's success in the state is under significant threat after Republican Matt Bevin won Tuesday night's election for the governorship.

Bevin's surprisingly dominant win served as at least an implicit rebuke of the law in the state, and it cemented the trend of Southern states' continued shift to align more with the policies of the national Republican Party. Just on Tuesday, Beshear was touting Obamacare as a political winner in the state.
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Reading

A few weeks ago there was a lot of chatter on a new book, fiction, City On Fire. It was about NYC during the 70's, during the great blackout. I was intrigued. And then I read at Amazon that it was a 994-page book and everyone said that by page 250 it was already too long; one reader had gotten to 750 pages, and realized there were still 200 pages to go. It sounded like no one read the entire book. Everyone said the author -- who did not live in NYC in the 70s -- captured NYC perfectly. He had done his homework; lots of research. I couldn't wait to see the book. I spent some time with a copy at Barnes and Noble the day it was released. I skimmed through a fair amount of it, but in the end, it held no interest for me. I recognized some passages that had been used by critics or book reviewers. Interestingly, these passages were at the very beginning of the book, suggesting the critics and the book reviewers had not read very much of the book either, though they all raved about the writing.

The New Yorker published a collection of stories published during the decade of the 1940's. It was extremely good. It was my impression The New Yorker planned to follow up with a similar book from other decades. Collections of New Yorker short stories should capture the city of New York also.

I say that because as good as The Great Gatsby was, chapter 4, "The Princess with the Golden Hair" in Edmund Wilson's Memoirs of Hecate County is absolutely superb at describing the city in the 20's, the crash, and immediately following the crash. The book was copyright as early as 1942 and again in 1943, and 1946, by Edmund Wilson. It was banned in the US at the time, and it took a number of years before it was finally allowed to be published/sold in the US. Certainly chapter 4 was the reason the book was banned, although I've yet to complete chapter 4 or any of the following chapters.

The first three chapters were excellent but would not have bothered the censors.

Chapter 4 starts on page 82. I am on page 146 and can only read a few pages at a time. It is very, very dense. I see chapter 5, "The Milhollands and Their Damned Soul" doesn't start until page 240. It's going to take a long time to finish "The Princess with the Golden Hair." I'm not even sure there is a plot, but it sure is interesting reading, on so many levels.

See this 2011 review of Memoirs of Hecate County.

Jack Kemp's Weekly Energy Tweets -- November 4, 2015

US refinery throughput essentially unchanged from prior week as refineries pass midpoint of maintenance season; throughput remains above 10-year high, but just barely.

US propane stocks hit new record of 102 million bbls; up 22.2 million bbls above prior-year level. This year's propane stocks are so much higher than the 10-year range, the graph is simply staggering. The 10-year graph no longer has any relevance. The entire US crude oil and natural gas metrics will have to be re-set, perhaps starting with 2013 or 2014.

US distillate stocks fell 1.3 million bbls; the 7th consecutive week of decline. Total draw of 13.2 million but still up 9.2 million above average. Sits about in the middle of the 10-year range -- actually looks a bit lower than the mid-point of that range.

US gasoline stocks fell 3.3 million bbls, the 4th consecutive week of declines, though still 12.1 million bbls above the 10-year seasonal average. The graph is staggering.

US commercial crude stocks rise 2.8 million bbls and are now 103 million bbls above 2014. The graph at the tweet is amazing, to say the least. The ten-year high was around 350 million blls; the ten-year low was about 250 million bbls. Most recently, about 475 million bbls. US commercial crude stocks are in the stratosphere and will make new 10-year graphs completely meaningless.

US total refined product stocks fells 5.2 million bbls last week, the 7th consecutive decline.  Again, the same comments regarding the 10-year history as noted above.

US total commercial oil stocks fell 2.3 million bbls last week, second consecutive decline. The graph is staggering. This year's number is so far above the 10-year range, the 10-year graph has become meaningless.

US diesel very cheap compared with gasoline as market enters winter with unusually large stocks. The interesting thing is that distillate fuel oil stocks are right in the middle of the 10-year history grapha nd trening down, for several weeks now.

Over the past four weeks, US gasoline demand is trending up; diesel is trending down, but choppy.

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Other Energy Tweets

Tweeting at Platts: Restarting crude oil output from Kuwait-Saudi partitioned neutral zone has both technical and political issues accoring to Kuwaiti oil minister.

Tweeting at Platts: Kuwaiti oil minister says oil prices may have bottomed, high-cost output falling; caustious about outlook for global economy.

EIA is tweeting: Texas expects to keep breaking wind generation records as capacity grows. Boone Pickens was right; he was just too early.

Tweeting at Platts: Canada's oil and gas drilling activity expected to fall further in 2016, to 5,150 oil wells, down from 5,340 in 2015. This would be one of the high cost producers the Kuwaiti oil minster would be referring to.

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EIA "Energy Cookie:

EIA:
As U.S. propane production has increased and domestic demand has remained relatively flat, the United States has transitioned from being a net propane importer to a net exporter.
Facilitated by rapid expansion in the capacity to export domestic supply, propane exports from the United States are changing traditional propane trade patterns across the globe. --- EIA

Closing The Loop On That Well That Was "Certainly Fracked" -- November 4, 2015

Remember that well that I said must "certainly be fracked" and yet there was no frack data at the NDIC site?

A reader was kind enough to do the work I should have done. My bad. I'm sorry.

It is so incredibly easy.

Click on FracFocus. It is also linked at "Data Links."

Click on "find a well."

Enter the API number.

When I did this, I get to this link, which I've embedded.

Then click on the PDF and that's all there is to it. The results:
  • it was fracked
  • start date: 6/2/15
  • end date: 6/6/15
  • all sand, no ceramics
The reader says about 3.5 million lbs of sand was used. The site does not say how many frack stages were used, but assuming about 100,000 lbs/stage, one gets 35 stages which is in line with which one would expect.

Wednesday, November 4, 2015 -- China Admits To Burning Way More Coal Than Originally Reported -- I'm Shocked, Shocked, I Say

Active rigs:


11/4/201511/04/201411/04/201311/04/201211/04/2011
Active Rigs69190180188196

RBN Energy: The EPA reports on hydraulic fracking.
EPA concluded:
“We did not find evidence that these mechanisms have led to widespread, systemic impacts on drinking water resources in the United States.  Of the potential mechanisms identified in this report we found specific instances where one or more mechanisms led to impacts on drinking water resources, including contamination of drinking water wells.  The number of identified cases, however, was small compared to the number of hydraulically fractured wells.”
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GOP takes Kentucky governorship. NYT, NPR in shock.

Most populous Connecticut city votes felon ex-mayor back into office. Had been in federal prison for seven years. Not reported by NYT, NPR. 

At least he didn't use a gun. Killing three people with a claw hammer; sentenced to death. Supreme Court agrees with killer; he could suffer a seizure during final punishment. No background check when claw hammer was purchased. NPR reported.

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Global Warming
China

The New York Times is reporting that China is burning a lot more coal than originally reported:
China, the world’s leading emitter of greenhouse gases from coal, has been burning up to 17 percent more coal a year than the government previously disclosed, according to newly released data. The finding could complicate the already difficult efforts to limit global warming.

Even for a country of China’s size, the scale of the correction is immense. The sharp upward revision in official figures means that China has released much more carbon dioxide — almost a billion more tons a year according to initial calculations — than previously estimated.

The increase alone is greater than the whole German economy emits annually from fossil fuels.

Officials from around the world will have to come to grips with the new figures when they gather in Paris this month to negotiate an international framework for curtailing greenhouse-gas pollution. The data also pose a challenge for scientists who are trying to reduce China’s smog, which often bathes whole regions in acrid, unhealthy haze.
Wow, this opens up so many more questions and observations.

1.  Despite this huge increase in CO2 emissions which have been under-reported for decades, there has been no evidence of global warming for 19 years.

2.  Despite this huge increase in CO2 emissions which have been under-reported for decades, there has been relatively little increase in atmospheric CO2 concentration. In fact, the most recent number (September, 2015) showed atmospheric CO2 concentration once again below 400, the level at which the world is about ready to come to an end as we know it.

3. How did the UN miss this huge discrepancy?

4. Why did the UN use China's data and not independently researched data which was out there?

5. Why is China releasing this information now? Yes, I know it came out in an updated Chinese economic report, but they could have massaged the data. It would not be the first time a country massages data. The US admitted to massaging labor data a couple of years ago (I forget exactly when that story came out).  ZeroHedge reports the same thing, and very, very recently.

And now the spin from The New York Times:
When President Xi Jinping proposed that China’s emissions stop growing by 2030, he did not say what level they would reach by then. The new numbers may mean that the peak will be higher, but they also raise hopes that emissions will crest many years sooner, Mr. Yang, the climate adviser, said.
“I think this implies that we’re closer to a peak, because there’s also been a falloff in coal consumption in the past couple of years,” he said.
I think it's quite obvious why China admitted to burning more coal than originally reported. In fact, one could argue that it would be in China's best interest to "high-ball" the number -- report as big a number as possible -- make it even bigger than it really is. By doing absolutely nothing, then in 10 years, they can report the "real" number and show they've made process. 

Unless I missed it, The New York Times does not explore the reasons why China is coming up with "more realistic" numbers now.