Tuesday, July 24, 2012

Reminder: Magic Maps Is Currently Off-Line; An Alternative -- North Dakota Rigs Map

Link to North Dakota Rigs Map is also at the sidebar and the "Data Links" page.

Why I Love To Blog -- Great Opinion Piece in the Grand Forks Herald


November 18, 2012: buffalo auction in western South Dakota today.

July 25, 2012: flashback! A reader sent me this great link to National Geographic (see comments). I probably have the issue stored away somewhere. A must-site to visit -- even for a minute to see the photos -- I wonder if NatGeo will do a follow-up -- with a "positive slant"?  (If they have, I missed it, which wouldn't be unusual.)

Later, 3:30 p.m.: a reader pointed out a spelling error. It should be "Poppers." I appreciate that. Thank you. I've corrected it. [Later,  9:00 p.m.: a bit of background -- that really bothered me, getting the name wrong; no excuse. I was in the middle of moving from one location to another with our granddaughters and wasn't as careful with fact checking as I should have been. It was easy, also: the first link takes you directly to the correct spelling. I remember checking the spelling carefully and then still made a mistake. So I appreciate someone catching it and taking time to tell me.]

Original Post

A long, long time ago I reminded folks of the Poppers and their quite incredible suggestion to bring back the Buffalo Commons to the Dakotas.

Then, earlier this year, I pointed out the burgeoning energy zone / corridor running from North Dakota to Texas, referring to it as America's energy renaissance zone.  I couldn't decide on "corridor" or "zone." I felt "corridor" was being over-used by the media and that corridor was a bit restrictive; it's larger then just a corridor.

But it looks like the mainstream media will go with "corridor," and I probably will use that term more often than not, but whatever, I digress.

The reason for the post is this: a reader sent me the link to an-op in the Grand Forks Herald bringing back the memories of the Poppers, and introducing "energy corridor" to its readers. This editorial pretty much says everything I've saying for quite some time now.
“Get ready for an American century,” writes Walter Russell Mead, humanities professor at Bard College and editor-at-large of The American Interest magazine.

“That appears to be the main consequence of the energy revolution that is now causing economic and political experts to tear up their old forecasts all over the world.”

And here’s the thing: If this “American century” unfolds as Mead and others predict, it’s likely to be centered on the place where it began: North Dakota.
Wow, what a great country. I wonder what the Poppers are doing today. [That's rhetorical; lease don't tell me.]

By the way, the various links will eventually lead to The American Interest Magazine online, if interested, which has some interesting reading for July/August, 2012. 

El Monte, California #5 -- Not Yet

Stockton, Mammoth Lakes, San Bernardino, Compton, now El Monte? Not yet. See LA Times:
Faced with a crippling combination of low revenues, high labor costs and decreasing funding from the state, El Monte is moving to declare a fiscal emergency and seek a tax on sugary beverages sold within the city.

The moves come as the city attempts to stave off the financial problems facing a number of cities across California. So far this summer, three cities — Stockton, San Bernardino and Mammoth Lakes — have moved to seek bankruptcy protection, and Compton officials announced the city could run out of cash in a matter of months.
Several story lines:

First, of course, another California city has it figured out: declare a fiscal emergency and then file for bankruptcy. 

Second, using taxes on "sugary beverages" as a way to raise revenue. I never thought taxing sodas had anything to do with obesity -- the sugar in sodas is not the problem, and the "lap band" folks figured that out a long time ago. Taxes on "sugary beverages" is all about raising revenue.

And, third, buried near the end of the article, the reason the city needs to raise taxes: to pay the $200,000 pensions for former city employees:
El Monte has also awarded generous benefits to some of its top employees. Former Police Chief Thomas Armstrong, who retired in May 2011, collected nearly $430,000 in his final year with the city through a combination of salary and payouts for unused time off. Armstrong and two other former police chiefs now receive yearly CalPERS pensions of more than $200,000.
That would have been my lede: declaring a fiscal emergency to deal with $200,000 pensions.

Oh, a fourth story line: a tax on food and/or drinks in a city like El Monte won't work. Folks will just cross the city line to surrounding towns/cities where there is no tax. This is not rocket science.

The US Energy Economic Stimulus

With all the energy links thrown at me every day, it's hard to know what to read, and what is most important. I really was not ready to read a long "research" article, but I have to admit, the CarpeDiem link to the Merrill Lynch article is quite interesting.
To calculate the economic benefits that are being generated from America’s vast energy resources, Merrill-Lynch introduces the concept of “energy carry” in its report, defined as an estimate of the daily dollar value of the improvement in our energy balances, including “the natural gas advantage of the U.S. economy relative to Europe or East Asia, the growing revenues from increased exports of fuels, and the reduced crude oil import bill.”

By that measure, America’s “energy carry” was $900 million per day in April, and the energy benefits to the economy will reach $1 billion per day by the end of the year. Merrill Lynch estimates that the daily “energy carry” in January 2010 was only $70 million per day, so the daily economic benefits of energy to the U.S. economy increased dramatically by a factor of more than 12 times in just a little over two years.

The biggest economic benefit from domestic energy production is coming from the growing abundance of America’s cheap shale gas ($3.10 per million BTUs), which is now saving U.S. companies and consumers $566 million per day compared to the $11.64 global average price.  The economic benefits from our growing domestic energy supplies are becoming so significant that they now represent about 2.2% of America’s $15.5 trillion of GDP, according to Merrill-Lynch, and that huge boost to the nation’ economy might be enough to keep the U.S. from falling into another recession.
Interestingly, for those who have been reading the RBN Energy articles on natural gas this past year, this is not news; it is just confirmation that RBN Energy had it right and was posting their observations earlier than others, and in a language that even I could understand. (Seriously: two years ago I did not understand natural gas, and in fact, and in early posts at my blog, I stated I would not be following natural gas because a) it did not interest me; b) it was a bit player on the Bakken scene: and, c) I did not understand the industry. That has all changed -- a big "thank you" to RBN Energy.

But I digress. Two things that strike me about the Merrill Lynch study on natural gas.

First, all this good news regarding natural gas in the United States, and we haven't even begun to see its full potential. We might be starting to see natural gas corridors in the western United States for long-haul truckers.

Second: the US has its economic problems. (Seniors will be in for a shock when they see their Medicare premiums more than double in 2014, but that's another story for another time.) But, compared to the EU, the US looks pretty darn good. On top of everything else, the EU is paying a lot of money a) for high-priced OPEC oil and gas (France bans fracking); and, b) for really bad investment decisions in wind and solar. Just ask Spain how much they like wind and solar now. The US is paying dirt-cheap prices for oil and gas and fortunately companies like Solyndra cut their losses relatively early by filing for bankruptcy.

Tuesday Morning Links -- ATT Activates Almost 4 Million iPhones; 20% New to ATT


Later, 9:55 a.m.: Practically on cue. Down below I wrote: "All eyes, it seems, are on what Apple will do next. It's an incredible story." And now I see this headline story: "Apple Earnings Will Be Phenomenal, But What's Next?" You won't see that headline with Dell, Microsoft, IBM, H-P, Samsung, Google, and the list goes on. I don't know what's next but for now I am satisfied hearing that Apple accounts for 80% of the smart phones being sold, and ATT activated almost 4 million iPhones in the last quarter, almost 20% of "them," new to ATT,

Original Post

Great energy links at ISA: oil pricing, shale boom.

RBN Energy: Eagle Ford, Part I. Break-even point for oil -- $50/bbl.

From Merrill Lynch, via CarpeDiem: energy sector providing a $1 billion stimulus every day. As usual, the comments are more interesting than the article, especially those who are already aware of the energy boom. Of course, some are not.


Baker Hughes at PennEnergy: falling prices threaten Bakken production.
In response to dropping prices, Craighead predicts many companies in the Bakken oil field will need to scale back production.
"The largest drillers in the Bakken are all reducing their rig counts this month, although none acknowledge a change in drilling plans," said Amrita Sen, an analyst at Barclays. 

Do you think natural gas prices are on their way up? Hot weather --> more air conditioning, and then this: natural gas rigs at 13-year low, at Penn Energy


For investors only (see disclaimer for this blog: this is not an investment site; don't make any investment decision based on anything you read at this blog), also at PennEnergy: Williams to buy natural gas cracker unit in Louisiana:
Located south of Baton Rouge, LA, the Geismar facility is a light-end natural gas liquid (NGL) cracker with current volumes of 37,000 barrels per day (bpd) of ethane and 3,000 bpd of propane and annual production of 1.35 billion pounds of ethylene. With the benefit of a $350-$400 million expansion under way and scheduled for completion by late 2013, the facility's annual ethylene production capacity will grow by 600 million pounds to 1.95 billion pounds.
Anyone following the RBN series on liquid natural gas understands the Williams investment. It's a natural fit. 

For investors only, from Yahoo In-Play: AT&T beats by $0.03, reports revs in-line: Reports Q2 (Jun) earnings of $0.66 per share, $0.03 better than the Capital IQ Consensus Estimate of $0.63; revenues rose 0.3% year/year to $31.57 bln vs the $31.71 bln consensus. AT&T sold 5.1 million smartphones in the second quarter. Smartphones represented 77% of postpaid device sales. At the end of the quarter, 61.9%, or 43.1 million, of AT&T's postpaid subscribers had smartphones, up from 49.9%, or 34.1 million, a year earlier. In the quarter, the company activated 3.7 million AAPL iPhones, with 22% new to AT&T (this is being reported to be in-line estimates). Co reported highest-ever wireless margins, operating income margin of 30.3 percent, with EBITDA service margin of 45.0 percent.

The new activations may be "in line" with estimates, but activated 3.7 million iPhones and noting that more than 20 percent of them are new to ATT -- this seems to be a big story by any measure.

At MacRumors, it is a big story: almost 80% of new smart phones sold by ATT are iPhones. 80%. More than 50% of all postpaid phone sales were at ATT this past quarter.  If history is any guide, this will be ignored by CNBC; I haven't watched television in over two weeks now (no cable access) so I haven't seen CNBC in a long, long time. Surprisingly, I don't miss it. Too much noise. I assume Starbucks is talked about a lot, and Green Mountain. I was going to do a stand-alone piece on Apple yesterday but simply lost energy. There are a number of very interesting story lines regarding Apple right now. The biggest for me, and always has been: does anyone care what any other "computer" company is bringing out in the next quarter? All eyes, it seems, are on what Apple will do next. It's an incredible story.

At the WSJ, I see that about 16 companies announced an increase in their dividends; usually it's about three to four companies per day in the past few months.