Obama Health Care Plan: Tax or Non-Tax Law?

Drudge Report has linked a story citing President Obama defending the Obama Health Care Mandate as a tax. Why is that headline news on the Drudge Report? Most of us saw it as a new tax, even though it wasn't defined as such.

All during the process, supporters adamantly refused to call the health care mandate a tax, although the financial auditing and penalties would be administered by the IRS. Folks not supporting the administration's health care mandate claimed it was a tax. Obama, to get the bill passed politically, was very clear that this was not a tax. He stated that the mandate would be paid for through other means. (Laughable.)

Now that the bill has passed, several states have indicated they will sue in Federal court to opt out of the mandate.

If the courts agree that this mandate is in fact a (new) tax as now being suggested by the president, then the cases will be thrown out. Actually they won't be thrown out; they won't even be heard; they will have no legal standing.

The Tax Anti-Injunction Act of 1867 says that a federal tax cannot be challenged in any court (not just state court).

The health care act of 2010 was passed politically as a non-tax mandate. Now that it has passed and some states look to opt out through lawsuits, the administration is going to define the bill as a tax. And federal tax laws cannot be challenged in court.

So, there you have it.

73 Wells Coming Off the Confidential List in August

Only 53 wells came off the confidential list in July, 2010.

73 wells come off the confidential list in August, 2010. 

So far, for September, 2010, 68 wells are on the confidential list.

Jumping ahead, for December, 2010, 103 wells are on the confidential list. The jump in the number of wells is probably due to two reasons:

• Increased activity from record number of active rigs
• Companies like EOG don't frack during the winter

If EOG fracks a well in March, it can then be placed on the confidential list for six months, meaning it won't come off the confidential list until September. We should start seeing number of wells on confidential list increase in the fourth quarter of this calendar year and going forward.

Parshall Well Runs, Courtesy of Others

Some folks really go beyond the expected to share information. I am very impressed and very appreciative of those folks. "David" over on the Google/Bakken discussion boards is one of those such folks. He always posts good information. Most recently he has posted the May, 2010, production runs of all the wells in the Parshall oil field.

His Excel sheet is downloadable. Downloading such files is not without risk with regard to viruses, so some folks may not want to download it. However, as far as I am concerned, "David" is a trusted contributor.

If you want to try the download, click here or click on the following:
http://bakken-water-cooler.googlegroups.com/web/Mayranked.xls?gda=GSGLlD8AAAB9H_dlSG_7EOJtbTB5M48LV0m7MedO9qZVqMmTBo8duhQJ4GyiWtikLrhJFvGyTOGccyFKn-rNKC-d1pM_IdV0&gsc=sCnAERYAAACl04VNBLI6YNewM-MI0nw6Y-xFN0UfF27fBnvAImAK-w

The spreadsheet provides data on 169 wells in the Parshall oil field. The best well was Lucille 22-06H with 31,868 bbls of oil produced in May, 2010. Within this selected group of wells, one is comparing apples to oranges since we don't know the dates the wells were completed, and we all know the horrific decline rates of Bakken wells.

But it's an interesting spreadsheet to look at, especially for mineral rights owners.

The following wells are listed:

• Lucille 22-06H
• Austin 19-30H
• Austin 17-20H
• Austin 23-32H
• Austin 21-28H
• Austin 20-29H
• Austin 16-19H
• Austin 22-31H
• Wayzetta 15-05H
• Van Hook 2-24H
• Fertile 14-17H
• Austin 18-21H
• Austin 10-34H
• Wayzetta 9-03H
• Wayzetta 16-09H
• Van Hook 5-11H
• Wazetta 20-17H
• Lee 8-5H
• Austin 24-33H
• Hauge 1-01H
• Pederson 1-33H
• Burke 22-31H
• Karbowski 1-22H
• Wayzetta 14-02H
• Skaar 7-10H
• Fertile 7-06H
• Wayzetta 19-31H
• Parshall 3-19H
• Austin 11-01H
• Austin 15-17H
• Austin 3-04H
• Burke 23-32H
• Parshall 18-34H
• Parshall 16-32H
• Whitmore 1-7H
• Austin 14-18H
• Austin 26-36H
• Shell 3-05H
• Paul 1-19H
• Barbara 1-12H
• Wayzetta 10-32H
• Wayzetta 11-08H
• Wayzetta 6-12H
• Austin 13-08H
• Whitmore 1-6H
• Shell 1-08H
• Van Hook 6-14H
• Parshall 10-29H
• Wayzetta 17-29H
• Wayzetta 13-01H
• Horst 1-19H
• Austin 27-10H
• Parshall 4-20H
• Weflen 1-27H
• Parshall 15-31H
• Burke 19-28H
• Parshall 11-28H
• Austin 8-26H
• Austin 12-05H
• Austin 25-35H
• Fertile 13-18H
• Sauber 1-18H
• Fertile 23-19H
• Austin 5-14H
• Austin 6-15H
• Ausitn 7-23H
• Austin 2-03H
• Horst 1-32H
• Austin 9-11H
• Wayzetta 21-19H
• Burke 1-34H
• Parshall 12-27H
• Wayzetta 18-30H
• Wayzetta 5-21H
• Austin 4-09H
• Burke 2-35H
• Austin 1-02H
• Fertile 30-28H
• Liberty 2-11H
• Wayzetta 4-16H
• Wayzetta 1-13H
• Woessner 1-29H
• Hovda 1-08H
• Alan 1-06H
• RS-State 36H-1
• Herbert 1-26H
• Parshall 9-30H
• Bert 1-28H
• Shirley 1-17H
• Wayzetta 3-15H
• Wayzetta 102-02H
• Fertile 35-32H
• Parshall 17-33H
• Parshall 5-21H
• Parshall 13-26H
• Wayzetta 8-11H
• Horst 1-24H
• Fertile 9-08H
• Parshall 6-22H
• Wenco 1-30H
• Wentz 1-29H
• Risan 1-34H
• Fertile 4-03H
• Cormylo 1-23H
• Fertile 5-04H
• Evenson 1-18H
• Horst 1-25H
• Ehlert 1-35H
• N&D 1-05H
• Burke 18-27H
• Henry 1-28H
• Christie 1-22H
• Kulland 1-30H
• Ralph 1-32H
• Zacher 1-24H
• Bruhn 1-12H
• Charlie 1-06H
• Wayzetta 2-14H
• Detienne 1-07H
• Oakland 1-20H
• Fertile 10-09H
• Bartelson 1-33H
• Long 1-01H
• Erickson 1-7H
• Loren 1-27H
• Parshall 19-35H
• Hahn 1-06H
• Roger 1-15H
• Florence 1-04H
• Model 10-07H
• C&B 1-31H
• Fertile 6-05H
• John 1-20H
• Parshall 100-22H
• Geving 1-09H
• Sauber 1-17H
• Warberg 1-25H
• Bartelson 1-3H
• Moen 1-31H
• Jensen 1-7H
• Parshall 20-03H
• School 1-16H
• Frink  1-17H
• Patten 1-02H
• Austin 101-5H
• Parshall 8-24H
• HG 1-14H
• Hoff 1-10H
• Parshall 7-23H
• Gudbranson 1-06H
• Roberta 1-16H
• Bowman 1-18H
• Nelson 1-26H
• Wayzetta 101-21H
• Nelson 1-25H
• Sampson 1-12H
• Wombat 1-25H
• Parshall 2-36H
• Evans 1-13H
• Jordet 1-11H
• Fertile 2-01H
• Bergstrom 1-21H
• Model 100-19H
• Wzyetta 12-20H
• Fertile 101-04H
• Patten 1-27H
• Parshall 1-36H
• GDR 1-07H
• Prospector 1-36H

The Bill That Targets North Dakota Energy Industry

This is a "cut and paste" of my original post of some days ago in addition to an update.

This bill and the EPA fracking regulation are the two biggest threats to the North Dakota energy industry.

New "cap and trade" bill targets North Dakota; this is an op-ed piece.

If you don't like op-ed pieces, you can read the "facts" in the Wall Street Journal.

It ain't a pretty picture.

Update -- July 16, 2010: Read the article yourself in IBD. The "new" bill

• Won't decrease emissions
• Will target only utilities (think MDU, OTTR)
• Will transfer oil wealth to government

Finally we see what the real point was for "cap and trade." (Most of us knew it all along, but it's main purpose was to transfer wealth from deep pockets of the oil industry. The Spanish search for gold and silver in the new world was under the guise of spreading religion. Nothing has changed.)

Patriotism vs Nationalism

Again, Peggy Noonan hits the target.

...speak of your love for this great nation [USA]. We don't, not in a deep way and not enough. Even our President doesn't. He tries, but he can't get it right because it's all so abstract to him. He associates patriotism with nationalism. But patriotism springs from legitimate love and gratitude, nationalism from shallow aggression and conceit. Obama confuses the two, can't get them straight in his head, and winds up saying little, badly.

Whatever your feelings about Ronald Reagan, he understood the difference between patriotism and nationalism. 

TransCanada Keystone Pipeline Makes First Delivery of Oil

Click here:

The first phase of the $12 billion Keystone Pipeline that runs from Hardisty, Alberta (Canada), south through North and South Dakota (USA) started up with commercial deliveries at the end of June to markets in Illinois.

This comes as controversy over the Keystone XL Pipeline, that runs through Montana and South Dakota, continues with Democratic congressmen pushing for delays while more environmental evaluation is completed. 

By the way, it is not only Henry Waxman trying to stop the project; Montana governor Schweitzer is also on record as wanting to delay the project, albeit perhaps for different reasons.

You can see maps of the pipeline and the proposed expansion, as well as other information at this site. 

UPDATES

New York Times, July 6, 2010.

Bakken Activity Overwhelms Title Attorneys; Royalties Delayed

Click here; then click on "NEWS" at top of that web page; and then scroll down for article. It cannot be directly linked without subscription.

Royalty payments are being delayed due to number of mineral owners with increasing size of units to 1280 and 2560 acres. In addition, there has been another generation of heirs (two generations in some cases) since the boom began.

Folks will eventually get their money, but it might take some time. The good news: delays past 150 days results in 18 percent interest.

EOG seems to have best process; they have partnered with law firm to manage the program and have everything in place before they even begin to drill. That could explain why I have seen relative delay in new permits for EOG.

Kinder Morgan to Go Public

This is a huge story: Kinder Morgan proceeds with plans to go public.

This article has a number of interesting pearls in it, particularly the comments about the relative monopoly these pipeline companies have due to their regional dominance and little overlap. There is a huge moat into entry into the industry in general, and into a new region specifically. With the current administration, I assume it's almost impossible to put in new pipelines. All they can do is improve / enlarge the pipelines that already exist.

Example: Representative Henry Waxman is leading efforts to stop the TransCanada Keystone XL pipeline. The project won't be stopped, but it will certainly be delayed, and the cost will go up.

This should give us a good idea what pipelines like Enbridge are really worth. This announcement that Kinder Morgan plans to go public might explain why EEP has continued to appreciate in share price over the past few days. EEP had a surprisingly good day yesterday despite a market downturn of over 2 percent.

UPDATES

Update, July 19, 2010: ENB continues to rise; EEP hits a new 52-week high, busting through trading range; actually quite spectacular. 

EPA Continues Its Efforts to Regulate Fracking

The study continues. It is due to be completed in 2012.