Wednesday, January 3, 2018

The Winner Of The 2017 Geico Rock Award

An earlier post reminded me I had not announced the winner of the Geico Rock Award for 2017.

The list of nominees for 2017 is at this post. I cannot guarantee that all nominees were actually posted at that site, but ...

Without further ado ... drum roll ... nominated on January 3, 2017, no one surpassed Prince Harry.
January 3, 2017: That didn't take long, our first nominee for the 2017 Geico Rock Award. Prince Harry: "Saving endangered animals is God's test for humanity." I guess he missed the Aleppo [Syria/ISIS] story, the 2016 equivalent of the 1940s Holocaust.
Winner of the 2017 Geico Rock Award: Great Britain's Prince Harry. 

With Regard To Bragging Rights Among Oil Producers, Has CNN Been Under The Geico Rock For The Past Four Years? Nope -- January 3, 2018

From CNN: American could be crowned the oil world's new king in 2018.
The United States is poised to ramp up crude oil production by 10% in 2018 to about 11 million barrels per day, according to research firm Rystad Energy.
Surging shale oil output should allow the United States to dethrone Russia and Saudi Arabia as the planet's leading crude oil producer, Rystad predicted in a recent report.
The U.S. hasn't been the global leader, nor ahead of both Russia and Saudi Arabia, since 1975.
"The market has completely changed due to the U.S. shale machine," said Nadia Martin Wiggen, Rystad's vice president of markets.
Has CNN been under the Geico Rock for the past four years? I don't think so. CNN is correct on a technicality. But it's close. The headline in the next story is slightly "off."

Flashback, July 10, 2014, from IER: US overtakes Saudi Arabia and Russia as largest oil producer.
According to the International Energy Agency (IEA) and the Bank of America, the United States is now the world’s largest oil and natural gas liquids producer and will remain so for awhile, overtaking both Saudi Arabia and Russia.
U.S. production of crude oil, along with liquids separated from natural gas, surpassed all other countries with daily output exceeding 11 million barrels during the first 5 months of this year.
Oil production is soaring from shale formations in Texas and North Dakota using hydraulic fracturing and directional drilling technology.
According to the Energy Information Administration (EIA), those two states produced almost 50 percent of the nation’s oil in April 2014.
The United States became the world’s largest natural gas producer in 2010, ousting Russia for the top spot. The United States also ranks as the world’s largest producer of oil and natural gas combined.
Now, it is also the largest producer of oil and natural gas liquids.
The technicality:  
  • CNN -- oil only
  • IER -- oil + natural gas liquids

I Can't Even Do The Math On The Year-Over-Year Increase -- Atmospheric CO2 -- January 3, 2018

Link here:

One year ago:

Arctic Blast? What Arctic Blast? Active Rigs Increase By One -- January 3, 2018; Seven New Permits

Active rigs:

Active Rigs533960171185

Seven new permits:
  • Operators: Whiting (6): EOG
  • Fields: Lonesome  (McKenzie); Stockyard Creek (Williams); Epping (Williams); Clarks Creek (McKenzie)
  • Comments: Whiting has permits for a 5-well pad on Lot 1, section 3-154-99; will be on/near the P Earl Rennerfeldt pad (#26029; #26031; et al); the P Earl Rennerfeldt wells are followed here; EOG has a permit on/near 3-well pad with #20890, #20891, and #20892 (nice wells, but not great wells).
Two permits renewed:
  • Resource Energy Can-Am (2): a Kimberly permit and a Rebecca permit, both in Divide County
Two permits cancelled:
  • XTO (2): two Cole permits in McKenzie County
Most interesting from today's daily activity report: a name change --
  • 32496, loc , QEP, Tipi V V 4-13-12TH is the new name; old name: Tipi V 1-13-12T2H; apparently has decided to drill a middle Bakken well at this location and not a Three Forks second bench well; Spotted Horn
North Dakota Trivia

I'm not going to explain how I got to this one, but a reader sent me this little bit of trivia:
Chief Justice Gerald W. VandeWalle is the longest-serving chief justice in state history and the oldest state chief justice in the nation.
"They refer to me as the 'dean' (of chief justices). That's a euphemism for 'old,'" he said.
"Jerry," as he prefers to be called outside the courtroom, is a native of Noonan and a University of North Dakota graduate. He was appointed to the Supreme Court on Aug. 15, 1978, by former Gov. Arthur Link. He's been elected three times and selected chief justice by his colleagues four times since 1993.
From his bio:
On August 15, 1978, he was appointed to the Supreme Court. In November 1978 he was elected to serve an unexpired term, and was reelected to ten-year terms in 1984, 1994, 2004 and 2014. From July 1985 to July 1987, he served as the first chair of the North Dakota Judicial Conference.
Justice VandeWalle was elected Chief Justice effective January l, 1993; and reelected to successive five-year terms as Chief Justice effective 1995, 2000, 2005, 2010, and 2015.
He remains on the Court as Chief Justice, having served 39 years, 4 months, and 20 days as of January 3, 2018.
Thirty-nine years is not excessive. Most 30-year-career military men who are forced to retire after 30 years of service are but 54 years of age and at the peak of their professional productivity. Can one imagine if Warren Buffett had been forced into retirement at age 54? Or Donald Trump? Or Ronald Reagan?

In this case, I assume, VandeWalle succeeded Ralph J. Erickstad. I served alongside his son, John Erickstad, in the USAF back in 1980 or thereabouts, assigned to Grand Forks AFB. 

December, 2017, EV Sales Starting To Be Reported -- January 3, 2017

  • overall, this will be best month for EV sales 
  • Tesla
    • huge jump in Model S  (which is interesting on several levels)
    • Model X jumps month-over-month but about the same as in September, 2017
    • Model 3 yet to be reported
  • Chevy Bolt: nice bump but not as exciting as the headlines have made it out to be
  • Nissan Leaf falling away; new model yet to start selling? I don't know
  • Honda Clarity takes big jump from less than 500 last month; now 1,425 in December, 2017
  • of everything else reporting, nothing exciting
API crude oil inventories (link here): a 4.992 million drawdown. I use EIA data to re-balance. That data will come out tomorrow.

Nuclear. Link here
Scana, the South Carolina utility that last year abandoned its plan to build two of the first new commercial nuclear reactors in the US for 40 years, has accepted an all-share takeover offer from Dominion Energy valued at $14.6bn including debt.
The deal, which is dependent on regulators approving Dominion’s plan to manage the remaining costs from the failed reactor project, comes after Scana was laid low by its ambitious attempt to expand its nuclear generation capacity.
Thomas Farrell, Dominion’s chief executive, said he expected South Carolina’s future increases in power demand to be met by gas-fired plants and renewable energy. [Comment: "renewable energy" is always thrown in to get support of the mainstream media, and to get support of the regulators. In reality, it will amount to very little in the big scheme of things. Natural gas is the big winner here.]
WTI: closed up 2.6%. Wow. Iran-related?

Natural gas: from Twitter --
Natural gas deliveries jumped to a record on New Year’s Day in the lower 48 states, topping volumes reached four years ago during the “polar vortex,” which unleashed bone-chilling conditions across the Midwest and Northeast. 

Looking For Information On Well In Northwest North Dakota -- January 3, 2018


Later, 9:29 p.m. CT: most likely explanation for increased production? A new, more efficient pump optimized for very deep wells.

Original Post 

A reader wondered why this well continues to flare all natural gas. It was first drilled/stimulated/producing in late 2011. There was a small jump in production (3x production) this past summer but there is nothing in the file report to explain why. FracFocus shows no re-frac but does note the 2011 frack (which is pretty good -- I don't usually find frack reports prior to 2012 in FracFocus. I don't think work-over rigs are generally noted in the file report.

There is a form in the file report that this well meets stripper well status, dated December 27, 2016.

Some readers would be interested if anyone has more information on this well:
  • why the jump in production
  • why the well has never captured any natural gas (I assume it is because of the remoteness of the well, and laying a pipeline at this point would not be economical)
The well:
  • 20251, 313, CLR, Blue Jay 32-29-163-95H, Kimberly, 26 stages, 2.1 million lbs sand, t12/11; cum 100K 11/17;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

The Political Page, T+346 -- January 3, 2018

Scott Adams: great, great column, putting things into perspective. The list:
  • candidate Trump told us he would be the first non-politician to win the presidency; done
  • common wisdom that US recognizing Jerusalem as capital of Israel would be a huge problem; minor problem at most
  • experts said Trump should not mess with Iran; looks like the protestors weren't listening to the experts
  • experts said China would never help squeeze North Korea; North Korea now sounding "flexible"
  • common wisdom that US would not put Pakistan on notice; Trump just did -- instead of sending Pakistan pallets of unmarked billions in dollars, will withhold funding
  • experts said withdrawing from Paris Climate Accord would be a catastrophe; epic cold snap closed out 2017
  • couldn't get tax bill passed; did that, too
The possible he gets done quickly; the impossible takes a little longer.

First Gene Therapy Introduced

From CNBC:
The first gene therapy in the U.S. now has a price tag: $850,000 for the one-time treatment, or, more specifically, $425,000 per eye for a retinal disorder.
This is huge. On so many levels.

The Market And Energy Page, T+346 -- January 3, 2018; Lost Decades Coming To An End? US Manufacturing Best Year Since 2004 -- 13 Years Of Wandering In The Desert


Later, 9:19 p.m. CT: Weatherford sells US fracking business to Schlumberger instead of forming joint venture as originally announced.

Later, 1:11 p.m CT: GDP Now estimate jumps to 3.2 percent for 4Q17
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2017 is 3.2 percent on January 3, up from 2.8 percent on December 22
The forecast of real consumer spending growth increased from 2.9 percent to 3.3 percent after this morning's Manufacturing ISM Report On Business from the Institute for Supply Management, while the forecast of real private fixed-investment growth increased from 7.9 percent to 8.9 percent after the ISM report and this morning's construction spending release from the U.S. Census Bureau. 
The model's estimate of the dynamic factor for December—normalized to have mean 0 and standard deviation 1 and used to forecast the yet-to-be released monthly GDP source data—increased from 0.44 to 1.50 after the ISM report. The forecast of the contribution of net exports to fourth-quarter real GDP growth fell from -0.46 percentage points to -0.60 percentage points after the Census Bureau's Advance Economic Indicators release on December 28.
Later, 1:00 p.m. CT: S&P hit 2,700 for the first time ever. 

Later,  12:42 p.m. CT: wow, a talking head on CNBC suggests Tesla Model 3 units delivered will be closer to 2,250 than 3,000.

Later, 12:42 p.m. CT: WTI now up over 2%. WTI at $61.59.

Later, 10:48 a.m. CT: for more background on what's going on in New England -- see comments --
The fact that New England power generators are now importing fuel oil from Europe should come as no surprise as the LNG facility in Everitt, MA, gets its gas from Trinidad.
(Owner of Everitt facility - Engie - was staunch pipeline foe. In addition, Engie was technical advisor to MA Attorney General Healy who backed a soon-to-be-infamous report claiming new gas pipelines were unnecessary. Hmmm ...)

Wanna hear the craziest news of the day?
Source of the coal used in Bridgeport comes from Indonesia/Philippines from mining company Adaro who touts product as "EnviroCoal".

So, we have the Marcellus nearby, huge coal sources in Pennsylvania, US exporting LNG worldwide, and the New England policy makers have brought about a situation where their residents need to bring in fuel from Asia, the Caribbean, and now Europe to stay warm and keep the lights on for their families.

If this does not spur the wider population up there to become enraged and forcefully engage in this process which is - quite literally - destroying lives, then shame on them.
Original Post 

Top story going into the weekend: energy issues on the US east coast due to huge winter storm. See this post and see update below on this page. The US east coast, with temperatures hitting zero degrees, may have power/electric grid issues. North Dakota, with lowest global temperatures this week (- 45 degrees), apparently has no energy issues.

This story is shaping up to be the big story for the week. From twitter this morning, rare tankers of heating oil from Europe headed to the land of banned fracking and no pipelines:

Epic storm: Boston's epic cold snap ties a century-old record. It hasn't been this cold since 1918.

Ice: the Great Lakes have 9x the ice coverage of last year at this time

Strain: America's power grid is showing signs of strain during brutal cold -- Bloomberg. Gee, I wonder how that happened? Area of greatest concern is also where majority of CAVE dwellers seem to live.

Markets: all three major indices hit new highs.

WTI: solidly over $61 and up over 1% today.

Forties: that didn't take long. Forties Pipeline system now fully operational.

Presidential tweets; love 'em.

Lost decades coming to an end. US economy, another record, making American great again: manufacturing in US accelerates to cap best year since 2004 -- Bloomberg. President Trump is not mentioned in the article. That's why he needs to tweet. The mainstream media certainly isn't going to mention his economic policies actually might be working. Tags: lost decade; and, second lost decade.

Auto sales surprise, remain strong: auto sales, believe to have dropped in 2017, remain strong.
The U.S. auto industry's historic growth streak may be ending, but demand for new cars and trucks remains healthy as the new year begins.
U.S. sales of new vehicles are expected to fall 2 percent to 17.1 million in 2017, according to Kelley Blue Book. That would be the first year-over-year decline since 2009, ending an unprecedented seven-year expansion.
General Motors and Ford both reported a 1 percent decline in sales last year compared with 2016. Automakers are releasing monthly and annual sales numbers Wednesday.
While sales are likely to fall short of 2016's record of 17.55 million, 2017 is still expected to be the fourth-best sales year in U.S. history. Low unemployment and rising consumer confidence are expected to boost demand this year.
Auto sales -- it's all about the mix, not the absolute numbers. Financial Times reports that "vehicle sales in 2017 shaped up to be the worst year for the US auto industry since the financial crisis. But, as noted above, 2017 might be the fourth-best sales year in US history. But total sales mean less than what is selling.

Ford, from their press release:
  • Ford brand sales: 8th consecutive year as America's best-selling vehicle brand
  • full-year F-series sales increased 9.3%; best performance since 2005; marks 41 consecutive years for F-Series as America's best-selling pickup
  • Ford-brand SUV sales set an all-time record
  • trucks up 4.3%; SUVs up 4.3%; cars were down over 15%
Global warming: apparently the current winter storm will be at its worse starting at midnight tonight on the east coast. Thursday (tomorrow) will be bad, but Friday and Saturday will be horrendous -- and it's possible that there may be power outages -- reporting by CNBC. It will be interesting to follow ISO New England. Wind farms will shut down during the high winds. 

All eyes on North Korea. But it looks like Iran is imploding.

WTI Creeping Up -- January 3, 2018; The S&P Has Risen For 14 Months Straight, A New Record

Active rigs:

Active Rigs523960171185

RBN EnergyHaynesville natural gas production is surging -- again -- but will it last?

Other News

Venezuela: misses another debt payment. The country has $9 billion payments due in 2018.
Venezuela: has run out of gasoline.

US banks: business-loan growth fell off a cliff in 2017 and no one can figure out why. This has been noted before. Now The WSJ has the story.

Coincidence? I think not: the S&P 500 has risen for 14 months straight, a new record. Let's see, how many months ago was Donald Trump elected president? November, December, January, February ... hmmmm. 14 months. And "they" call it "synchronized global growth." LOL.

Road To New England -- Fascinating -- January 3, 2018


January 3, 2018: see first comment --
Only 3 plants remain in New England that burn coal, a 440 Mw, a 400 Mw, and a 150 Mw.
Looking closely at the charts, it would appear only the 150 Mw is producing (Schiller plant, NH), or one of the others at reduced capacity (unlikely).
Speculation, but the Bridgeport plant in Connecticut (400 Mw), almost 50 years old and slated to retire, ran out of coal or broke down.
Merrimack plant in NH (440 Mw) is third coal burner.
Wouldn't surprise me at all if they either ran out of coal or had operational issues, aka breakdowns.
When these older plants are seldom used and due to be retired (the 2 NH plants were recently sold) maintaining tip top condition is difficult.
More oil burning seems in store with cold temperatures.
Original Post

This is something I had not seen before -- it's likely it's happened before but I simply missed it. Note in the graphic below that coal dropped abruptly and precipitously just as demand and price of electricity was at early morning highs.

When something drops that precipitously and abruptly, there must be an explanation.

Also, which we've seen every morning, even as electricity demand is going up, renewable energy is actually dropping.

Oil is the go-to source for generating electricity in New England when it absolutely, positively needs it.

Update: At 8:07 a.m. electricity demand started going back up. Renewable continued to trend down; coal did not move at all, nor did natural gas. The only energy source that increased was oil.