Alice in Wonderland

This will be the last word on the subject except for updates.

Some folks are still under the illusion that the EPA and fracking can co-exist. The most recent comment I received took this paragraph from the EPA Website:

Based on the information collected and reviewed, EPA has concluded that the injection of hydraulic fracturing fluids into coalbed methane wells poses little or no threat to USDWs and does not justify additional study at this time. This decision is consistent with the process outlined in the April, 2001 Final Study Design, in which EPA indicated that it would determine whether further investigation was needed after analyzing the Phase I information. Specifically, EPA determined that it would not continue into Phase II of the study if the investigation found that no hazardous constituents were used in fracturing fluids, hydraulic fracturing did not increase the hydraulic connection between previously isolated formations, and reported incidents of water quality degradation were attributed to other, more plausible causes. 

I guess that's why the EPA is now studying the issue, has four meetings planned, and has "a plan" written and ready to go:

WASHINGTON, DC, June 21, 2010 (as in last week) -- The US Environmental Protection Agency has scheduled four public meetings on its proposed study of the relationship between hydraulic fracturing and its potential impacts on drinking water supplies.

The meetings will be held July 8 in Fort Worth; July 13 in Denver; July 22 in Canonsburg, Pennsylvania; and Aug. 12 in Binghampton, New York. EPA said it will accept comments on the proposed study at the meetings. Stakeholders planning to attend a meeting are asked to register at least 72 hr in advance.

The meetings will provide information about the proposed study’s scope and design, EPA said in a June 18 announcement. It said it sought guidance from its independent science advisory board to support initial planning and guide the plan’s development. 

All I can say is this: a) either the EPA is inconsistent; or, b) it is wasting taxpayer money studying a issue it says is a non-issue. I've long forgotten the difference between Phase I and Phase II, and exactly what phase the EPA is in. I know I'm out of phase with regard to the EPA. 

UPDATE: July 14, 2010: tangentially related to the EPA, is the Delaware River Basin Commission which is also trying to decide whether to maintain its moratorium on drilling/fracking. My hunch: if the state commission is seen as being lax by the EPA, the EPA will step in and take over. EPA rules and regulations likely to be national, not local. 

The Problem for Alternative Energy

No one wants transmission lines in their backyards.

Links to these stories are often broken and require passwords to access archives.

More Housing In Williston - Heart of the Bakken (USA)

New housing developer in Williston.

These links are often broken after a few days and require a password to access archives.

OT: Venezuela Likely to Nationalize H-P Rigs

Venezuela is likely to seize eleven (11) oil rigs owned by Tulsa-based Helmerich and Payne.

It's almost as tough being in the oil business in Venezuela as Louisiana now that the administration has nationalized the oil industry in the state of the Big Easy. Actually, it may be easier in Venezuela -- at least Venezuela is predictable.

Update, July 4, 2010: Yes, indeedy, Venezuela did nationalize these oil rigs. I just love the words governments and the media use to describe their actions. In this case, "nationalize" for "steal."

And it appears that the moratorium on drilling in the gulf will go on and on and on. The Obama administration canceled the next scheduled meeting to take another look at the moratorium. Venezuela steals rigs, calls it nationalization, and the US steals livelihoods, calling it a moratorium.  

The Rule of Nines

On a day like this,  I am reminded of something I suggested could come to pass in the not-too-distant future: a Dow of 9,000; oil at $90/barrel; and unemployment at 9%.  Or if one is not quite so negative: a down of 10,000; oil at $100/barrel; and unemployment at 10%. Of course, we are practically there for all practical reasons, so this is no great shake, but it has to be a nightmare for the administration if things continue to go in the direction they seem to be going.

Again, if one is an agile trader (I am not) one should be able to do very well in this very volatile market. On the other hand, long term investors holding shares in companies paying nice dividends should be happy with some of their returns, and another opportunity to accumulate shares that are on sale.

Watching this economy and the politicians flounder (or is it "founder"?) reminds me of many classic country/western songs and their great hooks. Maybe some more of that later.

There is an interesting op-ed piece at MarketWatch today. I am particularly buoyed by the third myth, that the US is sliding into socialism.

For a system allegedly being strangled in its bed, U.S. capitalism seems to be in astonishingly robust shape.

Numbers published by the Federal Reserve a few weeks ago show that corporate profit margins have just hit record levels. Indeed. Andrew Smithers, the well-regarded financial consultant and author of "Wall Street Revalued," calculates from the Fed's latest Flow of Funds report that corporate profit margins rocketed to 36% in the first quarter. Since records began in 1947 they have never been this high. The highest they got under Ronald Reagan was 30%.

And that's why I like to a) accumulate shares in good companies when I can; and, b) accumulate shares in companies that pay robust dividends. On a day that the market plummets, those companies are still going to be paying their dividends, and if one is able, can use the dividends to buy shares on sale.

There is more and more talk of deflation. I see suggestions of deflation in the fast food restaurants and not-so-fast restaurants as I travel around the country this summer. I honestly don't know how some of these restaurants continue to survive; the competition is severe.

MDU Touted as Great Diversification Play

Investopedia has a nice article: looking at MDU as a diversification play.

CenterPoint Explores Expanding Pipeline

A while back I opined that the "big boys" see opportunities in natural gas. Here's another story suggesting this could be true: CenterPoint exploring possibility of expanding Haynesville natural gas pipeline.