Friday, August 14, 2020

Top Story Of The Week -- Tell Me Again How Solar Energy Will Save The Planet? -- August 14, 2020

Updates

August 15, 2020: The WSJ noted the power outages.  

On Friday, the California Independent System Operator, which manages the state’s power grid, called for rotating outages throughout the state for the first time since 2001.

The system operator lifted the Stage 3 electrical emergency a few hours later, but only after PG&E Corp, one of the state’s largest utilities, had begun to cut power to about 220,000 customers. Service had been restored by late Friday night.

Original Post

If you put this in context of California wanting to put a gazillion EVs on the road, all requiring a gazillion gigawatts of electricity, this is truly the biggest story of the week.

From a reader:

Rotating power outages in southern California today.  Notice how close we came to maxing out today.  Also NO WIND to speak of and SOLAR disappears as sunset arrives.  Look at the curves at the bottom of this Supply page.

The screenshot was taken from ISO California at the time the state was going through rotating power outages in southern California.  

Wind is practically non--existent, and solar -- remember all those roof-top solar panels at great expense -- and this is in the sunniest state in the union.


To the degree that Californians have been sold a scam, this is almost criminal. On so many levels. And there is no indication things will improve. Again, imagine this same scenario with "all" EVs on the road. This is crazy.

Notes From All Over -- The Late Friday Night Edition -- August 14, 2020

Update on the DAPL: see this link at Schwa Nation.
 
Moving quickly:

Color me impressed, link here:

Warren Buffett is more surprising than some of us thought. It is being reported that Berkshire Hathaway:

    • "slashed" positions in Wells Fargo and JPMorgan; dumps Goldman stake;
    • buys gold (gold miner Barrick).

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.

**************************
Farming

If this is accurate .....see item in bold red, link here:

...fresh off its June initial public offering, Albertsons Companies Inc announced an agreement to offer fresh produce made by Plenty Unlimited, a vertical farming company. Plenty operates a sustainable indoor vertical farm that can grow produce all year long. The company heavily relies on technology to grow produce, including data analytics, machine learning and customized lighting. 

In its present form, the Plenty farm can grow 1 million plants at a time and process 200 plants per minute. The farm is also designed to use less than 1% of land and 5% of water versus traditional farming. I will be watching for independent verification on this one. Link here.

*****************************************
Fool Me Once, Shame On You; Fool Me Twice, Shame On Me
Trump Administration Didn't Get Fooled The Second Time

From Reuters:

Venezuela had few options for obtaining gasoline on Friday after the United States seized four Iranian fuel shipments en route to the fuel-starved South American country, where protests intensified over widespread gasoline shortages. 
The U.S. Department of Justice said it had confiscated approximately 1.1 million barrels of fuel aboard four vessels, which were destined for Iran's ally, Venezuela. 
Tehran had successfully sent five fuel tankers to Venezuela earlier this year
The U.S. maintains sanctions on the oil industries of both countries. Oil refineries in once-prosperous OPEC member Venezuela have capacity to process some 1.3 million barrels per day (bpd) of crude, but they are producing little fuel due to years of under-investment and mismanagement at state-owned oil company Petroleos de Venezuela.

Equinor Update -- Seeking Alpha --August 14, 2020

 From Michael Fitzsimmons over at SeekingAlpha:

Summary
  • Norway's Equinor (previously known as Statoil) was one of the first O&G companies to embrace renewables.
  • while BP recently grabbed headlines for its high-profile strategy shift toward renewables, Equinor has a head start.
  • with its expertise in off-shore drilling, combined with a very long coastline, Equinor is primed to profit from wind energy.
  • the newly announced CEO is a long-time company engineer who has a favorable view of renewables - and that bodes well for the future.
  • meantime, the company's world-class and massive Johan Sverdrup field will be the main contributor to upstream profits.

The reason I include the quotations is that it is clear: Equinor's Board of Directors and new CEO Opedal are putting a priority on transitioning the company to a low-carbon future. While the announcement may seem to come on the heels of BP's recent strategy shift, the fact is that Equinor has been quietly building up a renewables business for quite some time and has a head-start over all other international integrated O&G companies.

Going forward, for energy investors, one might want to archive this article.  

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

Active rigs:

$42.01
8/14/202008/14/201908/14/201808/14/201708/14/2016
Active Rigs1262585733

No new oil and gas permits:

Nine permits renewed:

  • BR (4): four Lincoln Hill permits in Dunn County
  • Slawson (4): four Mole permits in Mountrail County
  • Bruin: one Christine Joe permit in Williams County

Bakken Oil Prices -- August 14, 2020

For mineral owners wondering why their recent royalty checks were so low, this was the note I sent to some interested readers:

If you want to see why our recent checks were so low, here are the oil prices for Bakken oil as reported by the State of North Dakota -- these numbers came out today:

  • today: $33
  • July: $31.75
  • June: $32.35
  • May: $7.92 -- no typographical error.

Director's Cut Posted -- North Dakota -- June, 2020, Data

The Director's Cut
Data For June, 2020

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.

Link here.

Link here to past reports.

DUCs and wells off-line for operational reasons are tracked here

Selected data points:

  • crude oil production: 890,109 bopd
  • price, crude oil:
    • today: $33
    • July: $31.75
    • June: $32.35
    • May: $7.92
  • natural gas production: 1,973,289 MCF/day
  • wells, permitted --
    • May: 59
    • June: 72
    • July: 92
  • wells, completed --
    • April: 58 (final)
    • May: 12 (revised)
    • June: (37 (preliminary)
  • wells, inactive --
    • May: 6,109
    • June, 4,214
  • wells, waiting on completion (DUCs) --
    • May: 952
    • June, 899 
  • wells, total off line for operational reasons: 5,113 (see this  link)
  • narrative, drilling and completions activity:
    • The drilling rig count was stable in the mid 50’s second half of 2019 through March 2020. trilling rig count is down 82% January to June of 2020.
    • the number of well completions has been very volatile since March as the number of active completion crews decreased from 25 to 1-3.
    • drilling permit activity is slower, but has held up through the oil price collapse. Operators are still attempting to maintain a permit inventory of approximately 12 months and some experienced drilling rig and completion crews.
  • Gas capture:
    • statewide: 89%
    • statewide, Bakken: 90%
    • FBIR Bakken: 85%
  • Comments:
    • if there were comments on DAPL and the MPC pipeline supplying the Mandan refinery, I missed them

Hell Just Froze Over -- Clearing Out The In-Box -- August 14, 2020

Hell just froze over! Ninth Circuit Court panel strikes down California's "high capacity" magazine ban. No, the "high capacity magazine ban" has nothing to do with the number glossy photographs of nude women in men's magazine; it has to do with firearms, things that have bullets in them. Link here

Noted for its freshness: now noted for its coronavirus -- Covid-19-In-N-Out -- in Oregon --

Oregon health officials identified an In-N-Out Burger location as one of the dozens of workplaces to experience COVID-19 outbreaks over the past month after five cases were linked to the restaurant
Health officials began investigating cases linked to the Keizer, OR, restaurant on July 18 with the most recent case connected to the restaurant identified on July 29, according to the Oregon Health Authority. But that’s just one of many workplaces to experience outbreaks of at least five cases. Altogether, the authority found 80 workplaces in the state with active outbreaks, and dozens more with resolved outbreaks. The various businesses include several other fast-food eateries, retail stores, manufacturers, a U.S. Postal Service facility and a Portland strip club.

OMY: five cases!

One wonders why Oregon? Hmmm? A tolerance for mass gatherings, demonstrations, congregations of homeless?

By the way, where is Keizer, OR? Forty-three miles south of Portland, OR, on/near I-5.

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. 

Market: holy mackerel -- lightning striking often -- I said quite some time ago that lightning will strike often among pharmaceutical companies during this Covid-19 thing. The opportunities will be there, I think, for about one year: a) treatment modalities; and, b) vaccines. "No one" has a clue who the winners will be.

The government will, to some extent, pick winners and losers, granting huge contracts. I think it will be an even "better" environment for these pharmaceutical companies under a President Harris administration.  
Today, breaking news on CNBC, McKesson spikes higher due to Covid-19 issues, up 4%; and then, this, not mentioned by CNBC:

  • IMUX is up almost 6% whose one-year target has jumped from $48/share to $60/share in the past week; it was trading for $6/share (?) when the one-year target was $48 -- and IMUX is not even a "Covid company.

Covid cough. I get a dry cough seasonally and generally annually, due to allergies. This year, I have it again. When people ask, I call it my "Covid cough." 

Politics: I don't watch television enough to see the political ads that are probably starting to appear but I've always said the president needs to go on the offensive, put Biden/Harris in "reactive/defensive" mode. He needs to take some pages from "Tricky Dick." Apparently Trump did just that this past week, raising questions about Kamala Harris' qualifications to be president. Remember the Dems raising that question regarding John McCain. John who? On another note, my wife is non-white. I once told her that Kamala Harris is "black." My wife told me I was wrong. Okay. Speaking of which, "Pocahontas" chose the wrong ethnicity when she applied to Harvard.   

Mass Transit Is Dead; Electric Golf Carts Are In -- August 14, 2020

Why I love to blog: about fifteen minutes after writing the note below, I stumble across this story from Barron's: buy utility stocks now; Goldman Sachs says they could be a great source of dividends. Well, duh!

The spread between the sector’s yield and that of the 10-Year U.S. Treasury note is near a 25-year high, according to Goldman Sachs—3.2% versus 0.6% recently.

************************************
Original Post

Breaking: from SeekingAlpha --

  • California utilities Edison International, PG&E, and Sempra Energy  all trade sharply lower amid warnings that a dangerous heat wave may cause power outages.
  • The California Independent System Operator, which controls electricity flows on most of the state's grid, says there could be a shortfall in power supplies this afternoon and calls for more resources to help meet electricity demand.
  • According to the National Weather Service, temperatures are forecast to hit 112 degrees Friday in the San Joaquin Valley, Los Angeles temps could hit 96, and Sacramento could reach 108.
  • imagine if there were a gazillion EVs on the California highways today; yeah, this EV thing is going to work out just fine;
    • and a reminder, that the governor wants the state to assume responsibility for day-to-day operations for the electric grid going forward
    • first thing they would do in this "emergency" scenario: schedule a sub-committee to meet next week;
    • wow, talk about crazy "investors"; SRE trading sharply lower on a one-day non-issue;

Market: earlier I mentioned that it looked like a "blah" day for the market. Wow, was I wrong. The major indices are essentially flat but on days like this one can take a breath and spend some time digesting (sorry about the mixed metaphor) what is happening on Wall Street.

  • first, both the S&P and the Dow have turned green; the Dow was down over one hundred points before the open and it looked like there could have been a pretty significant sell-off;
  • second, although the NASDAQ is red, it's barely red, and the NASDAQ has had such a huge run-up, it should not be surprising there will be some profit-taking;
  • the bellwether stock for the NASDAQ, AAPL, has come off its lows for the day, and instead of being down $5/share is now down about $1; amazing;
  • third, oil is down, but book at this: natural gas is up 8%
    • ISO New England: electricity costs are moderate today, but renewable energy is simply not there, accounting for only 5% of total energy supplied; the combination of natural gas (71%) and nuclear (21%) is, I think, at a record high, on a percentage basis, accounting for 92% of energy supplied; when that percentage goes above 90%, it catches my eye:
    • ISO New York, price-wise, is unremarkable; but again, renewable energy is simply not there, solar is not broken out, and wind accounts for 0.51% of total energy supplied; dueal fuel (53%), natural gas (25%), nuclear (19%), and hydro (17%) account for a combined total of 97.4% of total energy provided; wow;
    • ONEOK is up over 3%;
    • WMB is up almost 3%;
    • SRE: down about 2.5%:
  • going forward, the transition to electricity at the expense of natural gas (and gasoline) will continue regardless of who wins in November, but if Biden wins, the transition will accelerate; the winners -- 
    • those who provide electricity from sun and wind;
    • those who provide the infrastructure needed for the transition; and,
    • utilities, in general
    • companies who generate revenue from regulatory credits (cap and trade, Tesla) -- Tesla is up $17 today in a flat market;
    • movers and shakers, and investors, perhaps are already taking notice:

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. 

To repeat: I think this is on the radar scope of very few investors, particularly the second and fourth sub-bullet below in bold red:

  • going forward, the transition to electricity at the expense of natural gas (and gasoline) will continue regardless of who wins in November, but if Biden wins, the transition will accelerate; the winners -- 
    • those who provide electricity from sun and wind;
    • those who provide the infrastructure needed for the transition; and,
    • utilities, in general
    • companies who generate revenue from regulatory credits (cap and trade, Tesla)
    • movers and shakers, and investors, perhaps are already taking notice:

Infrastructure to support the electrical grid: number one on my list -- power transformers. And number one in that sector in terms of size (not in terms of investment recommendations): GE --

It is interesting to note that power transformer manufacturers and power transformer supplies are two separate categories. See the link above.  

Mass transit is dead: electric golf carts are in.

  • Tesla is up $17 today in a flat market;

Notes From All Over -- Part 3 -- Early Morning Edition -- August 14, 2020

After this note, I will be off the net for awhile, going swimming.

DAPL: when I get back, an update on the DAPL, from a reader, if I remember. Tea leaves suggest "we are okay." Great sleuthing on part of the reader. It's a long, long note with lots of background. I may post all of it over at Schwa Nation. Haven't decided; nothing posted yet. A story that must be followed for investors holding positions in ET.

Kash-&-Kari: will be interviewed on CNBC after the break. Time to turn the television off; we've entered fantasyland / the silly part of the day.

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.

The market:

  • UNP: up 2%
  • ONEOK: up 3%

****************************************
For The Archives

Flathead Lake, August, 2020. 



Notes From All Over --- Early Morning Edition -- Part 2 -- August 14, 2020

First things first: a shout out to apartment complex management. 

I can't believe how incredibly responsive and efficient our maintenance folks are when it comes to taking care of their property. 
I had a plumbing problem -- not an emergency, but fairly urgent -- which I noted upon return from my two-week cross-country trip.
I submitted the work order on-line and then sort of forgot about it. I have been in/near the apartment since submitting the work order. This morning I received an e-mail telling me that the problem had been resolved. I was never even aware that maintenance was even in the apartment. I immediately jumped out of bed, walked briskly to the area under question, and wow, incredibly, a note from the maintenance folks that the plumbing problem was resolved.
I had no idea they were even in the apartment. They must have come in during the middle of the night when I was sleeping. LOL

John Kemp: a reader alerted me to this link here. US petroleum inventories show gradual rebalancing. A big "thank you" to the reader. 

U.S. petroleum inventories show clear signs of trending lower as consumption slowly recovers from the epidemic and lockdowns, while Saudi Arabia restricts production and directs volumes away from North America. 

Business sentiment: 72.8 vs 71 forecast. Highest since June, 2020 (?) when it was 78.1 (?).

Ruth Bader Ginsburg: a reader noted we have had no recent photo updates of the jurist. RBG will be a headline story on November 4, 2020, regardless of whether anyone covers it or when they cover it.  

ICYMI: NBA has re-branded itself as a BLM platform. 

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. 

Market opening: a blah day.

That's what she said: bigger is better. LOL I never thought I would say this. 

Some years ago I finally broke down and replaced my beloved Sprint clam-shell dumb-phone with an Apple iPhone SE. It was the smallest iPhone available but I still thought it was too big compared to the clam-shell phone. 
Today, while doing some "work"on the iPhone, I realized how small it really is. I need a bigger iPhone. The height of decadence? Two smart phones, both personal, neither business? One to carry around with me when I'm biking, on the move, etc. But a second larger one when I'm flat in bed dong some work? For me, the Apple iPad and the iPhone are merging in functionality. I never thought I would think about getting a larger iPhone. 

Schwab: I assume everyone has their favorite broker. Mine is Schwab. I can't say enough about this company.

Notes From All Over -- Bakken Golf Course Ranked #35 In US -- Golfweek -- August 14, 2020

First things first: Bakken golf course ranked first in North Daktoa; 35th int he nation, right between Wine Valley, Walla Walla, WA, and Forest Dunes, Roscommon, MI). From Golfweek:
Each year we publish three lists that are the foundation of our course-ratings program: Golfweek’s Best Modern Courses, Golfweek’s Best Classic Courses and Golfweek’s Best Courses You Can Play, state-by-state. If you’re looking for only the best in public-access golf, we’ve got you covered with this list of the top 100 Golfweek’s Best Courses You Can Play in the United States, as judged by our nationwide network of raters. (Pictured atop this story: Bandon Dunes Golf Resort’s Bandon Dunes) The members of our course-ratings panel continually evaluate courses and rate them based on our 10 criteria. They also file a single, overall rating on each course. Those overall ratings on each course are averaged together to produce a final rating for each course.

For investors: most important story this week. Link here to The Denver Post -- Xcel Energy unveils $100 million plan to drive more electric transportation. Colorado's largest electric utility wants to help put 1.5 million more electric vehicles on the road.

Minneapolis-based Xcel Energy, Colorado’s largest electric utility, said Wednesday that if it met its goal across the eight states it serves, 20% of the vehicles would be electric in those areas. 
Carbon emissions would be cut by nearly 5 million tons annually, utility officials said. The plan would support Gov. Jared Polis’ goal of having about 940,000 electric cars in Colorado by 2030, Xcel Energy Chairman and CEO Ben Fowke said..

Methane limits limited: link here. Will most likely be immediately reversed by President Harris administration.

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.

Market:

  • mixed; flat
    • but AAPL could open green -- but it will be close
    • UNP: down 1% yesterday, might open slightly higher today 

California bullet train update:

A series of errors by contractors and consultants on the California bullet train venture caused support cables to fail on a massive bridge, triggering an order to stop work that further delayed a project already years behind schedule, the Los Angeles Times has learned.

The bridge is longer than two football fields and is needed to shuttle vehicles over the future bullet train right of way and existing BNSF freight tracks in Madera County.

Authorities have yet to finalize a plan to repair the bridge. Late last year, crews installed temporary steel supports to prevent it from collapsing.

Hundreds of pages of documents obtained by The Times under a public records request show the steel supports snapped as a result of neglect, work damage, miscommunications and possible design problems.

 

Two Wells Coming Off The Confidential List -- August 14, 2020

North Dakota, Apple, and Covid-19: North Dakota, Wyoming, and Alabama launching exposure notification apps. Reuters.  North Dakota, Wyoming and Alabama are the latest U.S. states launching apps to warn users about potential exposure to the novel coronavirus by tracking their encounters.

Virginia last week became the first U.S. state to urge residents to download such an app using technology developed by smartphone software giants Apple Inc and Alphabet Inc’s Google.

About 316,000 people have downloaded Virginia’s app, COVIDWISE, Jeff Stover, a state health department official, told Reuters during an online event about pandemic technology hosted by the Massachusetts Institute of Technology-affiliated Responsible Data Foundation.

North Dakota launched its app, Care19 Alert, on Thursday (August 13, 2020) and Wyoming will release an app on Friday, , whose company ProudCrowd developed the apps, also said during the event.

Sturgis rally: no positive tests (yet). Link here.

Consumers need to know that commercial COVID 19 testing locations in Sturgis this week for the Sturgis Motorcycle Rally are not testing for an active COVID infection, but are testing for coronavirus antibodies.

Unlike direct COVID-19 detection tests, like the nasopharyngeal swab, that can detect acutely infected persons, an antibody test determines whether the individual being tested was previously infected and their body has built antibodies, or an immune response to the virus.

McVay said business had been slow and all who had been tested so far tested negative for antibodies. Testing costs $45.

ICYMI: Tellurian update.

Tellurian is deferring all but one pipelines associated with the first phase of its proposed Driftwood liquefied natural gas export project, the LNG producer said in an investor presentation.

Tellurian has been trying to cut costs for its Driftwood LNG production and export terminal on the west bank of the Calcasieu River, south of Lake Charles, Louisiana, in view of the depressed market conditions for natural gas amid the pandemic.

Tellurian has achieved cost reductions of 30 percent in its phase 1 planning for the project, including deferring the proposed Permian Global Access Pipeline, the Haynesville Global Access Pipeline, and the Delhi Connector Pipeline, which leaves just one pipeline to feed natural gas to the facility during phase 1.

The company will also focus on sourcing cheap natural gas for the project, which has secured all permits and is shovel ready, if Tellurian decides to move ahead with the final investment decision (FID).

OPEC basket, link here: $45.34

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

Active rigs:

$42.21
8/14/202008/14/201908/14/201808/14/201708/14/2016
Active Rigs1162585733

Two wells coming off the confidential list -- Friday, August 14, 2020: 46 for the month; 117 for the quarter, 563 for the year:

  • 36980, drl/TAI, CLR, LCU Truman 8-23H1, Long Creek, no production data,
  • 36111, drl/NC, BR, Outlaw Gap 44-23TFH, Sand Creek, no production data,

RBN Eenrgy: a propane molecule's journey to Mont Belvieu and markets beyond.

When firing up the backyard propane grill and watching that first propane molecule flash to life, most people don’t think much about what it took to get that fuel to the cylinder they picked up at the store. But that long and winding road from the production well to the tank beneath your grill is actually a fascinating tale of supply-chain logistics involving producers, midstreamers, and propane retailers. In today’s blog, we will take that interesting and sometimes mysterious trip with a molecule of propane. We will travel over 1,000 miles, moving in and out of various facilities, purifying our product and incurring various costs each step of the way. So strap on your seat belt for a selection from our greatest blog hits, in which we track a typical propane molecule’s journey from beginning to end.