Thursday, December 14, 2017

The Market And Energy Page, T+326; Saudi Shenanigans -- Reason #45 Why I Love To Blog; BLM Estimates Wyoming Wind Farm Will Kill Upwards Of 64 Eagles Per Year -- December 14, 2017 -- This Page Is Complete But Details May Yet Be Added

Disclaimer: in a long note like this, there will be factual and typographical errors. It is often difficult to separate fact from opinion in a post like this. Read it at your own risk.

Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, or relationship decisions based on anything you read here or think you may have read here.

Some days there is just too much to post. Amazing how fast things seem to be moving.

Economy: the economic news this morning was simply stunning. I will fill this in later when I get caught up, but the retail sales simply blew the socks off anyone really paying attention. Steven Liesman was one of those paying attention and he said he was unable to find such a huge month-over-month increase in retail sales as far back as he could look. I think he said he went as far back as 2004. CNBC has this story on retail sales: the increase in US retail sales for the month of October was almost triple what experts expected. The jobs data was reported elsewhere; it, too, was stunning and nothing was mentioned about Trump's campaign promises.

Trump gets no credit: after those numbers were released and comments about the great economy made, President Trump was not mentioned. Instead, CNBC immediately switch to Europe and went on to suggest that all of this was a global phenomenon, having nothing to do with the US president. It never quits. One can be sure had this happened under the Obama administration we would hear no end of his great policies.

Yellen: by the way, Steve Liesman, again CNBC, noted that with regard to the stock market, she said it was neither "red nor orange." As Liesman noted, there's only one color left and that's green. The stock market at this level does not scare "the Fed" (red), nor the stock market at this level lead "the Fed" to be cautious (orange), but rather, Liesman suggests that "the Fed" is suggesting US equities are enticing (green). [This, by the way, is/was in great contrast to what a former Fed chairperson said about the frothiness of the stock market.]

Gasoline demand. I posted the weekly petroleum report and the "gasoline demand" graph yesterday. Gasoline demand actually exceeded that for the same time period a year ago. But this was the headline story over at Reuters: oil slips as US gasoline stock build overshadows crude draw

Saudi Shenanigans

I talked about "Saudi shenanigans" and/or "Saudi smoke and mirrors" all through 2015 and 2016 when Saudi was talking about their surge, and then their "cuts" in production. In the big picture, the surge was a $1 trillion mistake and the cuts in production simply brought them back to where they were before the surge. I probably won't provide all the links but  google search of the site will lead one to those posts.

Now, today, a reader sent me an article that said the very same thing about "Saudi cuts." That article was full of interesting data, which I will come back to later, but for now this paragraph from the article:
More important than demand, however, was the November supply of OPEC oil, which declined by 133.5K to below 32.5 million bbl, a fresh six month low if only 195K bbl lower than last year's output, confirming that ahead of last year's production cut agreement, OPEC furiously ramped up production effectively offsetting the subsequent output limit.
Saudi Shenanigans link. The graph at this post is one of my favorite graphs; as is this one; and this one. I hope the latter is updated a year from now.

Huge WTI-Brent Spread Boosts US Crude Oil Exports

Also at, an update on US crude oil exports. One word: wow! But it's been previously posted on the blog: U.S. crude grades into China climbed to a record in November.

The White Butte Jore Federal Permits

This is just a reminder to myself to post my thoughts regarding the White Butte Jore Federal permits. This is a huge story, especially in light of the announcement this week that Oasis is selling its "non-core assets" in the Bakken to buy acreage in the Permian. The most recent post on these permits is at this post

GE Hitachi Nuclear Confirms North Carolina Layoffs

Incredible. I just pointed this out a couple of days ago. The Washington Post link is here. I talked about this at this post, "Reality of Renewables," December 12, 2017.

The reader who sent me that story asked if I thought there might be a capacity surplus of electricity in the US right now and that we might see a cutback in some of that capacity next year (2018). This was my reply:
The decommissioning of a nuclear plant, if this is what this is, is a huge bullish story for natural gas.

In my "Reality of Renewables" post, December 12, 2017, linked above , I mentioned that there is no way solar/wind will be able to replace all the electricity provided by nuclear plants being decommissioned.

On top of that, I get the feeling that tax credits for wind/solar are going to be eliminated/significantly reduced under the new tax bill. Of course that could change. But every time I see a nuclear plant being decommissioned, I know that natural gas will benefit; even if they add a bit of wind/solar it won't be enough and natural gas peaking units will be needed.

With regard to your question: I don't think there is a surplus of electricity as much as there is a mismatch between when/where electricity is needed and how it is supplied.
I could have added that renewables will simply increase the cost of electricity to all consumers, all else being equal.

By the way, for those faux environmentalists who love wind farms, note that the largest wind farm in the US (yet to get started), the Chokecherry and Sierra Madre Wind Energy Project in Wyoming has been give carte blanche with regard to killing eagles and other migratory birds. Perhaps not carte blanche but awful darn close:
A team researches golden eagles, as an "eagle take" permit is necessary. The research is to be continued during construction and operation of the wind farm so as to be compared with the condition prior to construction. The $3 million research project is paid by PCW. The Bureau of Land Management estimated 40-64 eagles per year for 1.000 turbines, whereas the Fish and Wildlife Service estimates 10-16 for 500 turbines
It's amazing how they can get such a great estimate: an upper limit of 64. Why now 66 or 61 or 73for 1,000 turbines; and, for 500 turbines, why not 14 or 21 or 17 for the upper limit. Of course anything over the limit will result in an inconsequential fine, which will be passed on to consumers, regardless.

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