Saturday, January 18, 2020

Connecting A Couple Of Dots After The Trade Deal -- January 18, 2020

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


Zacks here, January 17, 2020:
While the Asian giant has agreed to purchase more goods and services from America, Washington has pledged to cut some tariff on Chinese imports. Notably, the U.S. energy sector is poised to gain heavily from this agreement as an export revival is expected. Of the additional $200-billion purchase of U.S. goods over the next two years (keeping 2017 imports as the base level), $52.4 billion will likely come from the energy sector. Per the deal, China will purchase $18.5 billion worth of energy products this year, followed by $33.9 billion imports in 2021. The energy sector stands second only to the manufacturing sector, which will likely witness $77.7 billion of exports.
Among the energy products such as liquefied natural gas (LNG), crude oil, natural gas, petroleum products, LNG is expected to gain the most from the deal. Following the U.S. shale revolution, abundance of natural gas in the domestic market and growing demand for cleaner energy sources globally have led to the development of several LNG terminal projects in the past few years. As such, the Washington-Beijing deal can open up a huge market for the U.S. LNG industry.
While China is set to become the biggest LNG importer by the end of the decade, the United States is likely to be the largest exporter by 2025, ahead of Qatar and Australia. This makes the two countries a perfect fit even though the whole vision is largely dependent on the fate of the existing 25% Chinese LNG tariff. This was levied during the trade war and its future is still uncertain.
The existing LNG export facilities like Cheniere Energy, Inc.’s LNG Corpus Christi, TX terminal are poised to gain from the renewed opening to the China market. Jack Fusco, chief executive officer of Cheniere was present at the trade deal signing ceremony. He said, “The phase one agreement between the United States and China is a step in the right direction that will hopefully restore the burgeoning U.S. LNG trade with China,”. Other companies like ConocoPhillips COP with Freeport LNG, Sempra Energy SRE with Cameron LNG will likely grab a share of this market. Tellurian Inc. TELL, a newcomer in the LNG game, is also expected to thrive from the recent developments.
Cheniere Energy this week reaped the benefits of the Phase 1 trade deal between the United States and China, with its shares rising considerably on news that China may buy more than $50 billion worth of additional U.S. energy products, including LNG.
A day earlier, S&P Global Platts reported that natural gas flows into liquefaction trains across the six operating LNG facilities in the United States had shot up to 8.5 billion cu ft in December. This was a record-high amount and represented almost a tenth of the total natural gas production in the country.
New LNG capacity additions were strong last year, providing a much-needed export venue from growing U.S. gas production that pushed prices to historic lows, including several occasions on which they traded below zero. This year, S&P Global Platts analysts expect the addition of new capacity to continue but at a slower pace as competition intensified internationally.
Cheniere Energy is by far the largest U.S. producer and exporter of liquefied natural gas and its Sabine Pass plant is the oldest and largest one, with five liquefaction trains in operation and a sixth one under construction. Cheniere also operates a smaller plant in Corpus Christi in Texas. This one has two liquefaction trains in operation and a third one under construction.

FWIW: US Energy-Related CO2 Emissions To Fall; Fossil Fuel Production To Increase -- EIA -- January 18, 2020

Link here.
In its latest Short-Term Energy Outlook (STEO), released on January 14, the U.S. Energy Information Administration (EIA) forecasts year-over-year decreases in energy-related carbon dioxide emissions through 2021. After decreasing by 2.1% in 2019, energy-related CO2 emissions will decrease by 2.0% in 2020 and again by 1.5% in 2021 for a third consecutive year of declines.
These declines come after an increase in 2018 when weather-related factors caused energy-related CO2 emissions to rise 2.9%. If this forecast holds, energy-related CO2 emissions will have declined in 7 of the 10 years from 2012 to 2021.
With the forecast declines, the 2021 level of fewer than 5 billion metric tons would be the first time emissions have been at that level since 1991.
After a slight decline in 2019, EIA expects petroleum-related CO2 emissions to be flat in 2020 and decline slightly in 2021. The transportation sector uses more than two-thirds of total U.S. petroleum consumption. Vehicle miles traveled (VMT) grows nearly 1% annually during the forecast period. In the short term, increases in VMT are largely offset by increases in vehicle efficiency.
Winter temperatures in New England, which were colder than normal in 2019, led to increased petroleum consumption for heating. New England uses more petroleum as a heating fuel than other parts of the United States. EIA expects winter temperatures will revert to normal, contributing to a flattening in overall petroleum demand.
Natural gas-related CO2 increased by 4.2% in 2019, and EIA expects that it will rise 1.4% in 2020. However, EIA expects a 1.7% decline in natural gas-related CO2 in 2021 because of warmer winter weather and less demand for natural gas for heating.

Notes From All Over, Politics ,Part 1 -- January 18, 2020

On the way to something else, I stumbled across this:


It explains why Senator Collins was forced to clarify her views on the impending impeachment trial in the US Senate and it's pretty clear to me how she will end up voting in that trial.

There is a new national poll out today, SUSA, 1/14 - 1/16, link here:
  • Biden polls above 30% in any poll for first time in a long time, at 32%
  • Sanders: 21%; right where he's been all along
  • Pocahontas: at 14%, at the low end of her polling
  • Buttigieg: 9%
  • Bloomberg: 9%
  • Klobuchar, a legend in her own mind: 2%; I just don't get it; later today there will be any number of articles suggesting how Klobuchar continues to surge; once she goes behind the cloistered impeachment US Senate walls, her 15 minutes of fame will be over;
Also , it appears, link here, there is a new New Hampshire poll, Emerson, 1/13 - 1/16:
  • Sanders: a commanding lead at 23%; about where he has been all along
  • Buttigieg: 18% -- which is probably pretty accurate, and if so, quite a surge
  • Biden: 14%
  • Pocahontas: 14%
  • Klobuchar: 10% -- wow, maybe I am wrong -- maybe Klobuchar will peak at just the right moment;
SUSA also has a new California poll, link here, 1/14 - 1/16 (remember, the last Democrat debate was 1/14):
  • Klouchar, a legend in her own mind: 2%
  • Steyer: 4%
  • Bloomberg: 6%
  • Buttigieg: 8%
  • Pocahontas: 20%
  • Sanders: 20%
  • Biden: 30%
***************************************
Weights and Measurements

The other day I posted a note defining an acre as a "chain times a furlong."  A reader replied with this:
  • ratio of an igloo's circumference to its diameter: Eskimo Pi
  • 2000 pounds of Chinese soup: Won ton
  • 1 millionth of a mouthwash: 1 microscope
  • time it takes to sail 220 yards at 1 nautical mile per hour: 1 Knot-furlong
  • 365.25 days of drinking low-calorie beer because it's less filling: 1 lite year
  • 16.5 feet in the Twilight Zone: 1 Rod Serling
  • half of a large intestine: 1 semicolon
  • 1000 aches: 1 megahurtz
  • basic unit of laryngitis: 1 hoarsepower
  • 2000 mockingbirds: two kilomockingbirds
  • 10 cards: 1 decacards
  • 1 kilogram of falling figs: 1 Fig Newton
  • 1000 grams of wet socks: 1 literhosen
  • 1 trillion pins: 1 terrapin
  • 10 rations: 1 decoration
  • 8 nickels: 2 paradigms
  • 2.4 statute miles of intravenous surgical tubing at Yale University Hospital: 1 I.V. League

Week 3: January 12, 2020 -- January 18, 2020

Top story of the week: US economy -- housing starts and two huge trade bills. 

Top international non-energy story:
  • President Trump signs two landmark trade deals that could mean $1.2 trillion in more trade; China; USMCA;
Top international energy story:
Top national non-energy story:
Top national energy story:
Top North Dakota non-energy story:
  • North Dakota airport traffic continues to increase
Top North Dakota energy story:

Geoff Simon's top North Dakota stories: pending

Director's Cut, November, 2019, data: link here;
  • Barely missed another all-time high for crude oil production
  • New all-time high based on "boepd" production
  • North Dakota bucks the national trend: DUCs increase
Operations:
Three Forks, second bench experience:
Bakken 101:
Flaring:

Honey Update; Notes From All Over, Part 1 -- January 18, 2020

From Billings Gazette, May 17, 2019: North Dakota leads nation in honey production for 15th year.
The Agriculture Department says producers with five or more colonies totaled 38.2 million pounds of honey in 2018, up 13% from the previous year. That led the nation for the 15th consecutive year.
The number of honey-producing colonies in North Dakota was up 16% to 530,000. Average yield was down 2 pounds, to 72 pounds per colony. [Nationally: 55.3 pounds/colony.]
Nationally, honey production was up 2%, to 152 million pounds. Montana produced the second-most honey, followed by California, South Dakota and Florida.
From KFRYTV, July 15, 2019: North Dakota avoiding national (and global) trend of record bee colongy losses.
They're aiming for 100 pounds per hive.
From KFYRTV, August 8, 2019: North Dakota honey harvest underway; expected to lead the nation in production.

From agweb, April 18, 2017: the top ten honey-producing states in America.

Friday, January 17, 2020

Notes From All Over, Part 1 -- January 17, 2020

Got oil?



Got beef?


US crude oil exports:


Natural gas:

No New Permits Issued Today -- January 17, 2020

Downspacing / infill / development in the Bakken:


Active rigs:

$58.811/17/202001/17/201901/17/201801/17/201701/17/2016
Active Rigs5668583849

No new permits today (as of 3:59 p.m. CT).

One permit renewed:
  • BR: a Veederstad permit in McKenzie County; 
Two producing wells (DUCs) reported as completed
  • 34634, SI/NC, Slawson, Wolverine Federal 13-31-30TF2H, Elm Tree, minimal production;
  • 35638, SI/NC, WPX, At Anthony 9-16HC, Mandaree, no production data,
**************************************
Slawson's Wolverine Federal Wells

Tracked here.
Three second bench Three Forks wells here.
Permits back in 2018.

Director's Cut, November, 2019, Data

Updates

Later, 5:35 p.m. CT: for the past month, the shale nay-sayers, led by the folks over at oilprice have been suggesting that shale operators are working through their DUC inventory to save costs. That has been a common theme over at twitter also: evidence that shale is in deep trouble is the fact that operators are working their way through their DUC inventory. They rarely post numbers. Apparently nationwide the number of DUCs decreased 10% month-over-month. What these nay-sayers don't tell us is whether it's oil or natural gas DUCs. I don't know either; I haven't seen the data but my hunch is that it is natural gas. 

So, I was eagerly waiting to see the Bakken inactive well / DUC data for November, 2019. 

Here are those numbers:
Wells off line, to end of November, 2019: 2,645 -- about "average" for the Bakken -- 2,568 in October; an increase of 77 or a 3% increase month-over-month.
  • DUCs: 919 (up 34 from the 885 in October)
  • inactive well count: 1,726 (up 43 from 1,683 in October)
So, all that "talk" about operators working through their DUC inventory did not include the Bakken. In fact, both the number of DUCs and the number of inactive wells both rose, albeit not by much. That, to me, was an incredibly important data point. Despite the number of wells off line/DUCs actually increased, North Dakota production came very, very close to another all-time crude oil production record.

*******************************************************************
The Director's Cut
Data For November, 2019 
North Dakota Oil and Natural Gas Production

Disclaimer: usual disclaimer applies. As usual, this is done very, very quickly. It is not proofread. There will be factual and typographical errors on this page. If this is important to you, go to the source.

A huge, huge "thank you" to Lynn Helms and his staff at the NDIC getting this information out in a timely and transparent manner. I am not aware of any other state that does such a good job providing such data. 

Crude oil production:
  • November, 2019, preliminary:1,515,404 bopd
    • revenue forecast: 1.4 million bopd
  • October, 2019, final: 1,517,936 bopd -- all-time high
  • September, 2019, final, 1,443,980 bopd -- very, very wet September that impacted oil fields
  • August, 2019, final, 1,480,475 bopd (previous all-time high)
  • July, 2019, final: 1,445,934 bopd (previous all-time high)
  • June, 2019, final: 1,425,230 bopd (previous all-time high)
  • month-over-month, bbls: -2,532 bopd  (November-October)
  • month-over-month, percent: - 0.17%  (November-October)
Gas production:
  • November, 2019, preliminary: 3,133,939 MCF/day; new all-time high on a per-day basis; all time on a monthly basis, October, 2019)
    • 83% capture
  • October, 2019, final: 3,070,616 MCF/day
    • 81% capture
  • September, 2019, final: 2,946,391 MCF/day (note -- fell below the 3-billion threshold previously reported)
  • August , 2019, final: 3,014,419 MCF/day -- an all-time high
  • July, 2019, final: 2,944,816 MCF/day
  • June, 2019, final: 2,885,293 MCF/day
BOE, September, preliminary:
  • natural gas:  3,133,9393 MCF/day =  522,236 boe
  • crude oil:1,515,404 bopd
  • total boe, preliminary for November, 2019: 2,037,640 boepd
  • total boe for October, 2019: 2,029,620 boepd
  • month-over-month increase/decrease: 8,019 boepd
  • month-over-month: an increase of  0.04%
Producing wells:
  • November, 2019, preliminary:16,090
  • October, 2019, final: 16,169
  • September, 2019, final: 16,115
  • August, 2019, final: (all-time high was 15,954, July 2019)
  • July, 2019, preliminary: 15,954 (another new all-time high)
  • June, 2019, 15,752
Permitting:
  • December, 2019: 67
  • November, 2019: 79
  • October, 2019: 126
  • September, 2019: 92
  • August, 2019: 127
  • July, 2019: 141
  • June, 2019: 127
Rig count:
  • Today: 55 (all-time high was 218 on 5/29/12)
  • November: 55
  • October: 56
  • September: 61
  • August: 62
  • July: 57
  • June: 63
Fort Berthold Reservation data partitioned out.

Completions:
  • November, 2019, preliminary: 92 (preliminary) 
  • October, 2019, final: 102 (revised)
  • September, 2019, final: 117 (revised up from 94) (revised a second time, up from 112)
  • August, 2019, final: 102
  • July, 2019, final: 137
  • June, 2019, 102 (revised, last month's report); revised again, now, 123
  • May, 2019, 113 (final)
Gas capture:
  • statewide, captured: 83% (81% reported last month)
  • statewide, captured: 
    • November, 2019: 2,591,250 MCF/day (preliminary)
    • October, 2019:  2,524,405 MCF/day
    • September, 2019: 2,429,487 MCF/day
    • previous all time high was May, 2019: 2,287,761 MCF/day
    • FBIR Bakken:
      • November, 2019: 81%
        October, 2019, captured: 70% (was 79% in September)(75% reported two months ago, August, 2019)
Off line, to end of November, 2019: 2,645 -- about "average" for the Bakken -- 2,568 in October; an increase of 77 or a 3% increase

Director's Cut, November, 2019, Data -- Posted

Link here (a pdf will download).

It will take me a few minutes to do the usual summary but there was a huge surprise. Summary has been posted.

US Housing Starts Soar Almost 17% In December; 13-Year High -- January 17, 2020


Housing data: link here. I was driving Sophia to school when the report was released so I did not see the announcement on television. 
According to one reader, Steve Liesman, CNBC) spent more time talking about the warm weather in December that accounted for the surge -- apparently didn't talk much about interest rates; optimism under Trump's policies; wealth effect of the market; near-record positive consumer sentiment; the fact that this is a 13-year high; soared almost 17%, etc., etc.

One would think that in thirteen years there would have been other "warm" Decembers especially with all the global warming we've had for the past three decades, but apparently it was the warm weather this year that was different somehow that drove the housing starts.

If in fact, it's all about warm weather, what's not to love about global warming with economic data like this? Highest level of housing starts since December, 2006. The percentage gain was the largest since October, 2016. November, 2019, data was revised upward.
Housing starts soared 40.8% on a year-on-year basis in December. Starts for the volatile multi-family housing segment vaulted 29.8% last month.
From the linked CNBC article:
The housing market is regaining momentum after the Federal Reserve cut interest rates three times last year, pushing down mortgage rates from last year’s multi-year highs. The 30-year fixed mortgage rate has dropped to an average of 3.65% from its peak of 4.94% in November 2018, according to data from mortgage finance agency Freddie Mac.
And folks forget it was President Trump's constant and consistent calling on the Federal Reserve to lower interest rates. My hunch is that the Fed would not have cut rates to the extent it did had it not been for President Trump.
Consumer sentiment: 99.1
Consumer sentiment unexpectedly edged down to a reading of 99.1 in January, according to the University of Michigan’s preliminary monthly print for its survey of consumers.
Consensus economists had expected the headline print to hold at 99.3 for the month, matching December’s reading, according to Bloomberg data. The reading, however, still held relatively close to 2019’s recent high of 100.0 from May.

Seven Wells Coming Off Confidential List Today -- January 17, 2020

Schlumberger: stock surges after profit, revenue beat expectations. Adjusted EPS came in at 39 cents vs 37 cents forecast. Net income fell to $333 million of 24 cents/share, from $538 million, or 39 cents/share in the same period a year ago. Revenue rose to $8.32 billion from $8.18 billion, beating a forecast of $8.16 billion. Free cash flow was $1.5 billion for the quarter and $2.7 billion for the year.

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

**************************************  
Back to the Bakken

Director's Cut: scheduled to be released this afternoon. 

Active rigs:

$58.821/17/202001/17/201901/17/201801/17/201701/17/2016
Active Rigs5568583849

Seven wells coming off confidential list today -- Friday, January 17, 2020: 59 for the month; 59 for the quarter; 59 for the year;
  • 36397, conf, Rimrock, Two Shields Butte 4-24-11-1HU,
  • 36200, conf, WPX, Pheasant 33-28HZ,
  • 35687, conf, BR, Tailgunner 1B TFH
  • 35686, conf, BR, Tailgunner 1A MBH, 
  • 35505, conf, CLR, Weisz 7-11H1
  • 34826, conf, Hess, HA-Nelson A-152-95-3427-9, 
  • 32779, conf, BR, Veederstad 8-8-35UTFH-ULW,
RBN Energy: the thinking behind a planned gulf coast ethylene-to-alkylate project. This is a great reference article. Very, very educational.
For a few years now, the Shale Revolution has been opening up development opportunities hardly anyone would have thought possible in the Pre-Shale Era. For example, new crude oil, natural gas and NGL pipelines from the Permian to the Gulf Coast, lots of new fractionators and steam crackers, as well as export terminals for crude, LNG, LPG, ethane and, most recently, ethylene. And here’s another. Thanks to the combination of NGL production growth and new ethylene supply — plus increasing demand for alkylate, an octane-boosting gasoline blendstock — the developer of a novel ethylene-to-alkylate project along the Houston Ship Channel has reached a Final Investment Decision (FID). Today, we discuss how the FID is driven by both supply-side and demand-side trends in the NGL and fuels markets. .
...Examples of the knock-on effects of the flourish caused by plentiful drill-bit hydrocarbons abound, but one that caught our eye in recent weeks is Next Wave Energy Partners’ (NWEP) FID on its planned 28-Mb/d ethylene-to-alkylate plant in Pasadena, TX, the company’s project, known as Project Traveler. ....
What Next Wave saw — in addition to the trends of growing butane and ethylene supply, coupled with increasing demand for alkylate — is that the technology exists to convert low-cost, NGL-based products into an important gasoline blendstock. Project Traveler, a planned 28-Mb/d ethylene-to-alkylate plant scheduled to begin operation in mid-2022, will have two main elements: a dimerization unit that reacts ethylene with itself to form butylene, and an alkylation unit that reacts butylene and isobutane to form a pure alkylate. We hear that Next Wave’s alkylate will be 96 octane — 4 higher than the average 92-octane alkylate produced at refineries — with an RVP of only 3.5 psia and next to no sulfur content.
Ethylene will be delivered to the Pasadena (TX) plant site via the half-dozen or so ethylene pipelines that already run along the site’s boundary; isobutane also will be delivered by pipe. As for the alkylate produced, Next Wave plans to pipe it to two large, close-by gasoline-blending and marine-terminal facilities in Pasadena, one owned by Kinder Morgan and the other by International Terminals Co. (ITC). Kinder Morgan’s facility is the largest gasoline blender by volume in the U.S.
Altogether, Project Traveler has a lot going for it. To put it simply, it’s planning to use ethylene produced from an increasingly available NGL purity product — ethane — to make an increasingly important blendstock — alkylate. In doing so, the facility will provide its ethylene suppliers with a new, albeit small market, for their product; and give the project’s alkylate buyers a new source for the blendstock, all the while mitigating their commodity risk.
Much, much more at the link.

Thursday, January 16, 2020

Candadian Supreme Court Slaps Down BC -- Re: TransMountain Pipeline -- January 16, 2020

Video here.

One New Permit; WPX Reports Five Completed DUCs -- January 16, 2020

Active rigs:

$58.511/16/202001/16/201901/16/201801/16/201701/16/2016
Active Rigs5568573649

One new permit, #37353:
  • Operator: Slawson
    Field: Big Bend (Mountrail)
  • Comments: 
    • Slawson as a permit for a Moray Federal well in section 10-151-92, Big Bend oil field;
Five producing wells (DUCs) reported as completed:
  • 35640, 2,341, WPX, St Anthony 9-16HD, Mandaree, t12/19; cum --;
  • 36095, 2,618, WPX, St Anthony 9-16HUL, Mandaree, t12/19; cum --;
  • 35639, 2,937, WPX, St Anthony 9-16HX, Mandaree, t12/19; cum --;
  • 35637, 3,513, WPX, St Anthony 9-16HY, Mandaree, t12/19; cum --;
  • 35635, 1,682, WPX, St Anthony 9-16HDZ, Mandaree, t12/19; cum --;
Neighboring wells of interest:
  • 18560, off line, 11/19; an Enerplus Levings Estate well;
  • 17024, off line, 11/19; a WPX Tekakwitha well;
  • 17943, off line, 11/19; a WPX Alisia Fox well;
  • 18520, off line, 11/19; a WPX Birdsbill well;
  • 20243, off line, 4/18; intermittent production since; a Petroshale Horse Camp well;
  • 23678, off line, 11/19; a WPX Martin Fox well;
  • 23679, off line, 11/19; a WPX Martin Fox well;

Notes From All Over, Part 3, Huge Day On The Market -- All Major Indices At New All-Time Records -- January 16, 2020

The Dow: up all day about 150 points and then in the last hour, a surge, the Dow jumped 267 points for the day. The surge?
  • short squeeze?
  • FOMO?
  • earnings?
UNP: all-time high?

Notes From All Over, Part 2, Sense Of Urgency In China -- January 16, 2020

DUCs: lots of articles this week about DUCs dropping in number. The NDIC's Director's Cut will be out tomorrow. I track Bakken DUCs here

IMO 2020:



China. China's economy in deep trouble? From Fox Business News today --
  • China to report GDP tonight: expected to be lowest in 30 years
  • China's largest utility writes: economic growth could fall to 4$ over the next five year
China: later, WSJ -- China's slowing growth underlines stress facing its economy in 2020.

Natural gas fill:



Bank of New York (BNY Mellon) - BK:
  • shares plunge 8%
  • down $4.05; trading at $46.64
  • from Zacks:
  • adjusted earnings: $1.01; surpassed forecast of 99 cents
  • earnings reflect a rise of nearly 2% from the prior-year quarter
  • net income applicable to common shareholders was $1.39 billion or $1.52/share, up from $832 million or 84 cents per share recorded in the prior-year quarter
  • for full year, 2019, earnings per share of $4.02 surpassed forecast, $3.99
  • for full year net income applicable to common shareholders was $4.27 billion or $4.51/share, up from $4.10 billion or $4.04 per share recorded in 2018 
  • despite that beat, shares plunged 8%
  • the "whisper" numbers must have been a lot greater than the two-cent beat 
Disclaimer: this is not an investment site.  Do not make any investment, financial, career, travel, job, or relationship decisions based on what you read here or think you may have read here. 
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The Book Page

From The Viking Wars: War and Peace in Kin Alfred's Britain, 789 - 955, Max Adams, c. 2018.

I had not heard of quarter days before. From wiki:
In British and Irish tradition, the quarter days were the four dates in each year on which servants were hired, school terms started, and rents were due. They fell on four religious festivals roughly three months apart and close to the two solstices and two equinoxes.

The English quarter days are
  • Lady Day (25 March) 
  • Midsummer Day (24 June) 
  • Michaelmas (29 September) 
  • Christmas (25 December)
But this is what fascinates me:
There is a mnemonic for remembering on which day of the month the first three quarter-days fall (Christmas being easy to recall): Every quarter day is twenty-something, and the second digit of the day of the month is the number of letters in the month's name. So March has five letters and Lady Day is 25 March; similarly June has four letters and September nine, with Midsummer Day and Michaelmas falling on the 24th and 29th respectively.
I've finished this book but will keep it on "top shelf" as a reference book. It's an incredible book for those interested in the trivia of this period in English (British?) and Scandinavian history. I doubt many folks will read it straight through; it's a real slog, but as a reference book, it's outstanding.

One of the things I appreciated most was the author's use of words and terms, no matter how obscure or archaic, without digressing with definitions. He simply assumed, I guess, we either knew what these words meant, or we could look them up for ourselves.

An example, and another pearl, from page 437:
A meeting is to be held in each wapentake, and the twelve leading thegns, and with them the reeve, are to come forward and swear on the relics that are put into their hands that they will accuse no innocent man nor conceal any guilty one.
This is generally held to enshrine the concept of a jury system, unknown in English law before this date but secure in its Scandinavian origins. 
From the Wantage Code, 997, King Æöelred II.
"Wapentake" -- link here.  Pronounce this as "weapon-take" and the etymology seems clear.

Notes From All Over, Part 1 -- January 16, 2020

$13 trillion: that's the amount equities have appreciated since President Trump took office.

$7 trillion: that's the amount of assets that BlackRock has under management. According to The WSJ, "BlackRock's assets blew past $7 trillion in milestone for investment giant." It was $5.98 trillion at the close of 2018; at the end of 2019, $7.43 trillion. Earnings scheduled to be reported January 29, 2020.

Alcoa: misses by a mile.
  • forecast: an adjusted loss of 21 cents/share; sales of $2.5 billion
  • actual: an adjust loss of 31 cents/share; sales of $2.4 billion
Keystone XL: inches forward.
Heavy construction equipment will be moved to worker campsites and pipeline storage sites in Montana, South Dakota and Nebraska in February, the Calgary-based company said in a filing with the U.S. District Court in Montana on Tuesday. TC then plans to start building the part of the conduit that crosses the U.S.-Canada border in April.
Deere: buy a bigger tractor. Deere aims to reap billions with "corn warrior" technologies.
The average acre of corn planted in the U.S. yields more than 170 bushels. A bushel—an old measure of weight—is 56 pounds of corn kernels. That means corn planted on an acre—the standard U.S. measure of farming area that is a chain times a furlong, two other old measures—generates almost 5 tons of food.

That is impressive, but there are more-impressive feats of corn.

The top of the range—the best farmers can do—is more than 600 bushels an acre. One farmer grew 616 bushels of corn on an irrigated acre with Corteva (CTVA) seed in the national corn-growing contest.

Yes, there is such a contest.

The farmers competing—some of whom call themselves corn warriors—are spending a lot of time and money ensuring the health of each corn plant. Nothing is too small to measure. It might not be practical or cost-effective to adopt all the techniques used to generate incredible crop yields en masse. But the yields they achieve demonstrate the upper fertility limit of American cropland. 
Chain times a furlong?
  • chain: 66 feet or 22 yards; 100 links; 4 rods
  • chain: 100 links (Gunter's chain)
  • furlong: 1,000 links
  • from wiki:
The rod or perch or pole (sometimes also lug) is a surveyor’s tool and unit of length exactly equal to ​5 1⁄2 yards, 16​1⁄2 feet, ​1⁄320 of a statute mile, or one-fourth of a surveyor's chain (approximately 5.0292 meters). 
The rod is useful as a unit of length because whole number multiples of it can form one acre of square measure. The 'perfect acre'[2] is a rectangular area of 43,560 square feet, bounded by sides 660 feet (a furlong) long and 66 feet wide (220 yards and 22 yards) or, equivalently, 40 rods and 4 rods. An acre is therefore 160 square rods.
Acre: amazing how it has survived. I suppose after President Jefferson's survey, the "acre" as a unit was too big to fail. No way was there going to be any interest in changing everything to metric. 

WTI Opens Well Below $58; Eleven Wells Come Off The Confidential List Today -- January 16, 2020

New record: Texas oil and gas industry paid $16.3 billion in taxes and state royalties in 2019, most in Texas history.

Canada: severe winter cold snap shutting down oil operations ("heavy oil" becomes too viscous to move) and refiners have been disrupted due to the cold. Western Canadian Select (WCS) has fallen to $35.33 earlier this week from $40.77 less than two weeks earlier. Bloomberg, behind a paywall, reposted by oilprice

Active rigs:

$57.821/16/202001/16/201901/16/201801/16/201701/16/2016
Active Rigs5268573649

Wells coming off the confidential list today -- Thursday, January 16, 2020: 52 for the month; 52 for the quarter; 52 for the year:
  • 36398, SI/NC, Rimrock, Two Shields Butte 4-24-12-4H3U, Mandaree, no production data,
  • 35905, 2,818, CLR, Honolulu 5-15H, Indian Hill, t7/19; cum 117K 11/19; 34K month;
  • 35825, 602, CRL, Gjorven 7-21H1, Brooklyn, t9/19; cum 58K 11/19; 25K month;
  • 35688, SI/NC, BR, Tailgunner 1C MBH, North Fork, no production data,
  • 35504, 1,996, CLR, Weisz 6-11H, Pleasant Valley, t11/19; cum 36K 11/19; 35K month;
  • 34827, drl, Hess, HA-Nelson A-152-95-3427H-8, Hawkeye
Wednesday, January 15, 2020: 46 for the month; 46 for the quarter; 46 for the year:
  • 36399, SI/NC, Rimrock, Two Shields Butte 4-24-12-4H3, Mandaree, no production data,
  • 35995, 1,659, Whiting, Martell 34-36-2H, Glass Bluff, t7/19; cum 59K 11/19; 19K month;
  • 35779, 1,549, Hess, EN-Farhart-156-93-0409H-7, Baskin, t7/19; cum 98K 11/19; 23K month;
  • 35689, SI/NC, BR, Tailgunner 1D TFH, North Fork, no production data,
  • 34828, drl, Hess, HA-Nelson A-152-95-3427H-7,Hawkeye,
RBN Energy: Tallgrass/Rockies Express recontracting efforts for Rockies gas flows.
Tallgrass Energy’s Rockies Express Pipeline (REX) has been through a lot in its 10-plus years of operation. Since its first eastbound-only segments started moving natural gas out of the Rockies in 2008, flows on the pipeline have evolved due to market events, primarily the onset of the Shale Revolution, which has resulted in a surge of gas supplies in the Eastern U.S. and increasing gas-on-gas competition across North America. Rising to the challenge, REX has undergone a number of transformations to adapt to the shifting gas flow patterns and price relationships, including reversing flows on the eastern zone of the pipe to move gas west from Ohio. In 2019, REX was again put to the test, this time on the western end of the pipe, where the bulk of its legacy long-term contracts for eastbound flows out of the Rockies expired, with the last of them rolling off on November 11, 2019. Some of that has since been recontracted, and the in-service of the REX Cheyenne Hub Enhancement and Cheyenne Connector projects could further shore up REX mainline flows. Today, we begin a short series providing an update on REX’s eastbound gas flows and contract changes.
You could say REX is the Madonna of gas pipelines. The Queen of Pop’s four-decades-long (and still going) career has been attributed to her habit of constantly reinventing herself. Similarly, REX’s long-term success has depended on its ability to morph, particularly given the rapid-fire changes that have buffeted the gas market over the past decade, all driven by the dramatic effect the Shale Revolution has had on the geographic distribution — and sheer volume — of gas supply across the Lower 48. The large-diameter, long-haul pipeline is now a robust bidirectional cross-country system that behaves like a massive header system for interregional flows. But it didn’t start out that way.
REX began as a much-needed outlet for surplus Rockies gas supply, initially only extending east to delivery points in the Midcontinent and terminating at the Panhandle Eastern Pipe Line (PEPL) interconnect in northeastern Missouri.
But by November 2009, the easternmost section was completed, allowing REX to flow as much as 1.8 Bcf/d all the way east to Clarington, OH, for further delivery into the Northeast’s premium consuming markets along the Atlantic seaboard. This eastern section of REX — or Zone 3 — added more than 15 interconnects with other interstate pipelines running generally perpendicular to REX and feeding Midwestern and Eastern markets plus a number of local utilities in Illinois, Indiana and Ohio.
This all made sense at a time when Rockies natural gas producers were looking to sell into the Eastern U.S., and when the Northeast region — the biggest heating demand region in the U.S., then and now — had little local supply of its own to help balance its consumption. As a result, Rockies producers quickly filled REX to near its eastbound capacity of about 1.8 Bcf/d by April 2010, and sustained that level for over a year. But that plateau didn’t hold up for long.
Not even a year-and-a-half later, by late 2011, west-to-east gas flows were facing pushback at REX’s eastern terminus from the emerging Marcellus Shale. REX still flowed net eastbound from the Rockies, but the deliveries shifted back to interconnects in the Midcontinent and Midwest, as Appalachian gas increasingly took over serving Northeast demand. Eastbound flows out of the Rockies also became more seasonal and declined as Rockies production growth slowed, taking a back seat to shale drilling elsewhere, and the region no longer had the kind of surplus gas and severe pipeline takeaway constraints it had faced just a few years earlier. Flows ramped up during the summer when Rockies demand was lower, and slowed during the winter, when most gas was needed to heat homes and businesses locally or in the Pacific Northwest.
Much, much more at the link.

Wednesday, January 15, 2020

Saudi On The Ropes -- OPEC Sees Less Demand For Their Oil -- January 15, 2020

Why Is OPEC demand dropping?

US supply expectations soar. And the US has the "right" kind of oil.

Forecast:
  • US to break another production record this year
  • US liquids supply in 2020 is forecast at 18.81 million b/d -- a 7.77% increase over last year -- source: OPEC
  • by 4Q20, US liquids could reach 20.21 million b/d -- cracking the 20 million mark for the first time 
A reader commented elsewhere shortly after posting the above:
Paging James Hamilton! Self styled super academic oil economist. How's that "Peak oil in America" article looking?
https://econbrowser.com/archives/2007/05/peak_oil_in_ame

Probably no better than your JUL2014 "hundred dollar oil here to stay" article. Just a few months before the price crashed.
It's always entertaining to read those old "peak oil" articles. If you do click on the linked article, be sure to scan through some of the comments to James Hamilton regarding his "peak oil"theory.
******************************
First Things First

I'm impressed. It was expected that the US Senate voting on the USMCA was going to have to wait until after the Articles of Impeachment, the latter having precedence over everything else.

But now I understand that Mitch McConnell will hold the vote Thursday morning, before taking up the impeachment trial.

I'm impressed.

Three Second-Bench Three Forks Wells -- January 15, 2020

Re-posting:
Three producing wells (DUCs) reported as completed:
  • 34639, 601, Slawson, Wolverine Federal 12-31-30TF2H, Elm Tree, t12/19; cum --; 2nd bench, Three Forks; spudded December 16, 2018, TD on February 22, 2019; vertical drilled, January 26, 2019 - January 30, 2019; curve started immediately after completing the vertical segment; segment took 10.3 hours; landed 66 feet into the Three Forks formation; the lateral was drilled in 48.3 drilling hours; drill rates ranged from 26 to 362 feet / hour; gas ranged between 57 and 2,270 units;
  • 34603, 1,034, Slawson, Wolverine Federal 11-31-30TF2H, Elm Tree, t12/19; cum --; 2nd bench, Three Forks; spudded December 14, 2018; vertical began on February 3, 2019; completed in 65.6 hours; curve built in 9.7 hours; lateral was drilled in 48.3 drilling hours; gas units ranged between 13 and 3,260 units;
  • 34604, 458, Slawson, Wolverine Federal 10-31-30TF2H, Elm Tree, t12/19; cum --; 2nd bench, Three Forks, spudded December 16, 2018; vertical drilled in 64.4 hours, January 26 - 28, 2019; curved built in 10.3 hours; lateral drilled 48.3 hours; gas ranged from 57 to 2,270 units; compare that with gas units from 26 to 380 in the first bench, Three Forks.
I find that absolutely incredible.

Drilling the vertical in 48 hours. Completing the curves in less than 12 hours which, up until now, seemed to be the norm. Finally, the lateral drilled in 48 hours.

Frack data not yet posted at the NDIC site. FracFocus:
  • 34604, 14.3 million gallons of water; 92.7% water by mass; a huge frack; fracked 8/23 - 8/28/2019;

Seven New Pemits; WPX And Oasis -- January 15, 2020

Active rigs:

$58.061/15/202001/15/201901/15/201801/15/201701/15/2016
Active Rigs5268553649

Seven new permits, #37346 - #37352, inclusive
  • Operators: WPX (6); Oasis
  • Fields: Eagle Nest (Dunn County); Sand Creek (McKenzie County)
  • Comments:
    • WPX has permits for a 6-well Fast Dog pad in Eagle Nest, section 18-148-94;
    • Wold has a single permit for a Wold well in Sand Creek, section 34-153-97; 
Three disposal wells permitted.
 
Three producing wells (DUCs) reported as completed:
  • 34639, 601, Slawson, Wolverine Federal 12-31-30TF2H, Elm Tree, t12/19; cum --; 2nd bench, Three Forks; spudded December 16, 2018, TD on February 22, 2019; vertical drilled, January 26, 2019 - January 30, 2019; curve started immediately after completing the vertical segment; segment took 10.3 hours; landed 66 feet into the Three Forks formation; the lateral was drilled in 48.3 drilling hours; drill rates ranged from 26 to 362 feet / hour; gas ranged between 57 and 2,270 units;
  • 34603, 1,034, Slawson, Wolverine Federal 11-31-30TF2H, Elm Tree, t12/19; cum --; 2nd bench, Three Forks; spudded December 14, 2018; vertical began on February 3, 2019; completed in 65.6 hours; curve built in 9.7 hours; lateral was drilled in 48.3 drilling hours; gas units ranged between 13 and 3,260 units;
  • 34604, 458, Slawson, Wolverine Federal 10-31-30TF2H, Elm Tree, t12/19; cum --; 2nd bench, Three Forks, spudded December 16, 2018; vertical drilled in 64.4 hours, January 26 - 28, 2019; curved built in 10.3 hours; lateral drilled 48.3 hours; gas ranged from 57 to 2,270 units; compare that with gas units from 26 to 380 in the first bench, Three Forks.
*********************************************
Gasoline Demand

The dog days of gasoline demand:

Notes From All Over, Part 3 -- January 15, 2020

Income: For the first time in 26 years, all US metropolitan areas enjoyed income gains -- Bloomberg.
Americans in every U.S. metropolitan area experienced economic prosperity in 2018.
For the first time in 26 years, no metro area saw per-capita incomes fall that year -- the latest available data -- and it was only the fourth time since 1970 that every U.S. urban region experienced prosperity.
Americans in fewer than 6% of metropolitan areas have experienced uninterpreted gains in personal income since 1970. In contrast, as the country began to recover from the Great Recession in 2009, residents of 84% of metro areas saw incomes decline. A large number of areas saw significant decreases in 2013 and to a lesser extent in 2016.
Metros that haven’t experienced per-capita income drops in recent years include Washington D.C. and Pittsburgh. The nation’s capital is buffered from sector-based recessions by a federal government that pulls tax revenue from a variety of sources and geographies. The Pennsylvania city, meanwhile, has emerged as a health care, education, and technology hub even as its population declines.
The most notable thing that came out of the Democrat presidential debate last night: Joe Biden wants to raise payroll taxes. Payroll taxes are the most regressive taxes. Will affect blue collar workers disproportionally. 

Nothing like the threat of a war to learn geography:



Notes From All Over, Part 2 -- January 15, 2020

Liz Peek: hands down, my favorite Fox Business News contributor.

Biden: proposes to increase the most regressive tax there is -- payroll taxes. Is that all he has to "counter" Trump's economy -- raising taxes? This is not going to fly.

The market close: first time ever, Dow closes above 29,000. S&P 500 also hits all-time high. NASDAQ also rose for the day but did not hit a new high.

Oil closes at a 6-week low. Closes under $58. Diesel supplies "went through roof," gasoline supplies increase.

Peak oil? Bloomberg reports "experts" insist that Permian output is approaching a peak. The "experts"? Amad Waterous at Waterous Energy Fund. Article suggests otherwise or least raises doubts.

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

Making Texas great: EPD reports that its isobutane dehydrogenation (iBDH) plant near Mont Belvieu, Texas, is completed and producing. Earlier note back in 2017.
Enterprise stated that market demand is growing for isobutylene – a byproduct of ethylene production plants – amid increased use of low-cost, light-end feedstocks such as ethane rather than more expensive crude oil derivatives.
The firm pointed out the iBDH facility will turn plentiful, cost-advantaged natural gas liquids into a higher-value product using the company’s integrated midstream network.
Ovintiv update: Encana Corp. won investors’ approval to relocate to the U.S. and change its name to Ovintiv, a plan that has dented morale in Canada’s beleaguered energy industry.

****************************************
Diridon

I think this is a most fascinating story.

The headline: old complexities of how trains should reach new Diridon station stymie San Jose city council.

Behind a paywall at Silicon Valley Business Journal, but a google search will provide background and story. This is pretty much the story:
The major passenger railroads that serve San Jose’s Diridon Station — or plan to — have talked individually about the complexity of getting to and through the Diridon of the future, envisioned as the West Coast’s greatest transportation hub surrounded by a downtown reimagined by Google.

Now they have the concurrence of a European design partnership with considerable experience in planning this kind of station, which is routine on that continent. And rather than accept all its preliminary recommendations so far, the City Council decided Tuesday to further study how tracks from the north and south get to Diridon at a public study session in January before deciding.

As described to the council by Jessica Zenk, the city transportation department’s deputy director, the options identified by the Dutch architectural team of Arcadis-Benthem Crouwel — especially routing tracks southward from Diridon — are “very challenging” and accommodating the freight requirements of the Union Pacific Railroad render some of them “fatally flawed.”

The council voted unanimously to ratify ABC’s concepts for an elevated station with concourse entrances on the east and west along Santa Clara and San Fernando streets, which were released last month.

The key problem area is where it has always been since high-speed rail became a factor to consider two decades ago — getting through or around the Gardner neighborhood that now is split by Caltrain’s corridor and is adjacent to the I-280 / Guadalupe Freeway interchange. Earlier high-speed rail studies, confirmed by city-hired consultants a year ago, ruled out a tunnel to an underground station.
How big is this going to be?
When the new station opens sometime in the 2030s, ABC expects between 212 and 262 passenger trains a day to run through it, a figure that will increase over the next 20 years to 480 daily trains.

Mayor Sam Liccardo put the price tag for the complex, which will include BART, Caltrain, high-speed rail, VTA light rail, Altamont Corridor Express (ACE), Capitol Corridor and Amtrak trains, at about $15 billion. Funding sources for most of that are still unidentified.
And then you have the freight trains in the area.
Options for getting Union Pacific freight trains from the East Bay through Diridon toward Gilroy or along the Vasona branch line toward the Lehigh Permanente Quarry in Cupertino are a major complication as well, she said. The railroad does not permit its trains to climb steep grades nor share tracks with electric trains, which means tracks used for Caltrain and high-speed rail must cross Union Pacific on tall viaducts.

At the Tamien Station now used by Caltrain, for example, one concept would require elevating the station 70 feet above the ground if Caltrain and high-speed rail share tracks there.
It completed, it sounds like it will become the ninth engineering wonder of the world. 

China-US Trade Deal -- January 15, 2020

The numbers are huge. China has pledged to boost its purchases of US goods and services over the next two years by $200 billion over 2017 levels:
  • that $200 billion is an increase of more than 50%
  • agricultural purchases: $32 billion
  • manufactured goods: $78 billion
  • energy products: $52 billion
  • additional US services: $38 billion
This is what I find most remarkable in that list: energy.

Up until recently the US was a net oil importer. The US is now producing record amounts of oil and has the capacity to meet the Chinese demand for oil. This would not have been true some years ago when we were told we cannot simply drill our way to lower oil prices. On the blog, search doofus-in-chief.

On another note, from NPR (consider the source):
But steep 25% tariffs remain in place on much of what the U.S. buys from China, including components that American factories use to assemble finished products. While Trump insists that China is paying those tariffs, numerous studies have found the costs are largely borne by American importers.
And numerous analysts have not seen that Americans are affected all that much -- if at all -- by American importers. If there has been an increase in retail products due to tariffs, I haven't seen it. It appears that the real costs affecting Americans are healthcare costs; housing costs; college tuition; new automobiles. None of these are due to tariffs on Chinese imports.

Most amazing: Trump took a huge political risk pursuing this fight. The agricultural sector was hit very, very hard by the tariffs, but if deal holds as signed this is huge for the agricultural sector.

US Weekly Production Hits All-Time Record -- 13 Million BOPD; WTI Drops Below $58 -- January 15, 2020

EIA: after weeks flirting with a new record, US oil output hit a record 13 million bopd last week.

EIA weekly petroleum report, link here:
  • US crude oil in storage decreased by 2.5 million bbls from the previous week
  • US crude oil in storage: at 428.5 million bbls, US inventories are at the 5-year average
  • refineries operated at 92.2% capacity; trending down the past couple of weeks
  • gasoline production increased, average 9.3 million bbls per day
  • over the past four weeks, crude oil imports averaged 13.1% less than the same four-week period last year
  • jet fuel product supplied continues to trend up; jet fuel product supplied was up 2.0% compared with same four-week period last year
WTI: after the report and on the same day the China-US trade deal signed -- down 24 cents; drops below $58. 

Re-balancing:
Week
Week Ending
Change
Million Bbls Storage
Week 0
November 21, 2018
4.9
446.9
Week 1
November 28, 2018
3.6
450.5
Week 2
December 6, 2018
-7.3
443.2
Week 3
December 12, 2018
-1.2
442.0
Week 4
December 19, 2018
-0.5
441.5
Week 5
December 28, 2018
0.0
441.4
Week 49
October 30, 2019
5.7
438.9
Week 50
November 6, 2019
7.9
446.8
Week 51
November 14, 2019
2.2
449.0
Week 52
November 20, 2019
1.4
450.4
Week 53
November 27, 2019
1.6
452.0
Week 54
December 4, 2019
-4.9
447.1
Week 55
December 11, 2019
0.8
447.9
Week 56
December 18, 2019
-1.1
446.8
Week 57
December 27, 2019
-5.5
441.4
Week 58
January 3, 2020
-11.5
429.9
Week 59
January 8, 2020
1.2
431.1
Week 60
January 15, 2020
-2.5
428.5