Wow, How Do You Spell Gouging? -- And, Original Post Re-Visited

Updates

September 21, 2012: Speaking of gouging -- this has nothing to do with the Delta story, except for gouging. New York City is considering a $15 toll for the Verranzano Bridge (connects Staten Island and Brooklyn Island). This puts the story below in perspective.

September 19, 2012: As I comment below --

Now that I've had a night to sleep on it (the story), and given it a bit more thought, maybe it's not so bad. I realized when I first read the story these prices were targeted for businessmen on an expense account.  It's a lot cheaper than owning one's own jet.

I can't get too excited. I over-reacted when I posted the story. As others have noted, this price will bring in competitors, and over time the prices should drop.  

With regard to hotel/man-camp prices: if the $70 figure is accurate, I encourage folks to check the rates of hotels/motels in cities  where the unemployment rate is less than 5%.

I will leave the original post up, for archival purposes. [I took my older granddaughter horseback riding last weekend; it was an awesome experience. I thought the price for riding was very, very fair, but yet, it was expensive. But, like flying to Williston, it was much less expensive to rent a horse for one day of riding, than to own the horse which would probably be ridden once a week at most.]

Bottom line: I have no problem with airlines charging what they do. Life goes on.

Original Post

Delta has announced prices for the Minneapolis to Williston flights: $550 to $700. The article does not say if that is round trip.  It sounds like a  one-way ticket the way the article is written but I could be wrong.

A one-way Boston-to-Los Angeles flight can be bought for $199. That's coast-to-coast. A $700 flight from Minneapolis to Williston is unconscionable. Even Delta had this to say:

Representatives with Delta say the nonstops aren’t just a way to get people to Williston, but to get those doing business there, to key markets around the world.

Sure. And the government looks into gouging when service stations raise the price of gasoline along a hurricane evacuation route. Gimme a break. This makes Amtrak look like a bargain.

Remember, that's just the flight from Minneapolis. If you live in Texas or Louisiana, you still have to pay for a flight to get to Minneapolis. I hope the $700 ticket includes an in-flight meal.

A huge "thank you" for a reader sending me this link.

Public Television Documentary on the Bakken

I have not watched the documentary (I don't watch television any more, unless I am somewhere where I can catch NASCAR, or maybe some football). My television watching is pretty much limited to the original Perry Mason series on Hulu.com. But I digress.

What makes me think this documentary would be about par for public television? Here's the synopsis, verbatim, from the website: The 60-minute documentary shows us:

• the towns that don’t have the infrastructure to support the uncontrolled and dramatic growth;
• the ranchers who now view bumper-to-bumper traffic all day rather than the rare vehicle traveling along the two-lane horizon to horizon; and, 
• the oil workers who earn huge salaries but live in makeshift housing without hope of finding homes suitable for their families. 

Sounds pretty grim up there in the Bakken. I guess the roughnecks and truck drivers earning $100,000 salaries could be flocking to Afghanistan, Iraq, Iran, Yemen, Libya, Saudi Arabia, or other such oil countries to drill wells and experience the above, along with:

• roadside bombs;
• miserably hot weather most of the year;
• sand;
• more sand;
• no alcohol (which might be good);
• sand;
• burning US embassies;
• makeshift housing without hope of finding homes suitable for their families; and,
• did I mention, sand?

Anyway, it's there if you want to watch it, at the link.

Investment Teaser

Disclaimer: this is not an investment site.

This story was sent to me by a reader. All I initially saw was the OPEC forecast for increased oil demand for 2012 and 2013. To keep it simple: demand will increase about 1 million bopd this year and next year (one million bopd each year).

But then I noticed that the article was really a teaser to order "stock research" on two Bakken-centric companies: Abraxas and Triangle.

Migratory Birds Are Clapping Their Wings

Absolutely nothing about the Bakken. 

If you came here for the Bakken, scroll down. 

Link here to the Des Moines Register.

Siemens has notified Fort Madison that it will lay off 407 of the 660 workers at the blade manufacturing plant that is one of the five largest employers in the city.

Siemens said the layoff is in response to uncertainties surrounding the wind industry with the pending expiration of the 2.2 cents per kilowatt hour production tax credit Dec. 31. 

No action is expected by congress until after the November election. Siemens spokesperson Melanie Forbrick says 407 employees will be laid off at the Fort Madison plant. A total of 220 will remain at the plant, which has 600,000 square feet. 

The layoff will be the second in Iowa this year. Clipper Windpower in Cedar Rapids reduced its workforce there by 76 workers of its 300 employees beginning on Aug. 27.

A big "thank you" to a reader for sending me this link. I don't generally read the Des Moines Register.

This story took me by complete surprise. I just posted a feel-good story not too long ago that renewables (solar and wind) were beating the heck out of coal, the renewables being such a great deal, saving everyone money, etc., etc. Here it is:

September 1, 2012: Germany sets new solar record. It's the details that are scary. 

It was a solar story, but close enough. Wind is even cheaper than solar, I'm told. So, there you have it. Just when solar and wind seemed to be on a roll, Congress goes and messes it up, letting subsidies and grants and whatever expire. We'll have to see if these new numbers are reflected in next week's job watch. Where's the chair on this one? This isn't rocket science.

"They" say the Keystone XL pipeline would have hired upwards of 20,000. Just saying.

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Speaking of "solar," have you seen the migratory birds' new banners on renewables? "Kick the 'el" out of solar."  And, "Wind beneath our wings, not turbines in our flight paths."

ONEOK Announces "Open Season" Bakken Crude Express Pipeline

Link here.

Data points:

• open season will close November 20, 2012
• previously announced 1,300-mile-crude-oil pipeline
• 200,000 bopd with multiple access points in the Williston Basin
• terminus: Cushing, OK
• construction to begin in early 2014; completed by mid-2015

No State Department approval required.

Isn't is amazing, really, when you think about it, that the entire Keystone XL project was killed because of a few miles of pipeline route in Nebraska. Really? Someday, someone is going to ask: "what were they thinking?" Not that it would have made any difference at this time, but with the price of gasoline at < $2.00 / gallon a few years ago, and now it's $4.00 / gallon. Americans appear to be content to let the decision to kill the Keystone XL "ride."

Americans are content. [as in "satisfied."] We have a pretty good life, all things considered.

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Note for the Granddaughters

Not To Be Read By Anyone Else

There Is Nothing In Here About the Bakken

Read At Your Own Risk

Speaking of being content: McDonald's again. I blogged about it the other day. I know Michelle is concerned about obesity in this country. At the other end of the scale, I see AARP is worried about starvation among our younger seniors, especially those between the ages of 50 - 59. I guess they call it "risk of hunger." The younger seniors are out of work and too young to qualify for programs that are provided for senior seniors, according to the AARP website.

With seniors and "risk of hunger," I suppose there are two issues: a) access to food; and, b) cost of food.

With obesity, I suppose there are two issues: a) access to food; and, b) cost of food. Food is so plentiful in this country and so cheap, it's easy for children to become obese with the wrong choices.

McDonald's can hardly be beat for both demographics.

For the obese, a hamburger is all of 250 calories; apple slices are 15 calories; and water or diet drinks have zero calories. We're talking 265 calories for dinner with the correct choice. [For fruits and vegetables, Michelle would have you garden.]

For seniors at "risk of hunger," it's hard not to find a McDonald's in any community. I don't know how AARP proposes to get food to their seniors but whether it's McDonald's or someone else, the challenge is the same. But on cost, the hamburger is a buck, french fries are a buck (the seniors at "risk of hunger" can afford the caloric-laden french fries) and any drink is a buck. We're talking $3.00 for dinner. If you can do it for less, go for it. Throw in a banana, and many seniors at "risk of hunger" will be slightly less hunger-challenged.

I spent a fair amount of time at the AARP site to learn more about their programs. I was disappointed; it was pretty sparse with specifics. The site was best on helping folks learn how to send in money. Eighty-seven cents of every dollar will go directly to help those who need it. They didn't say where the other thirteen cents would go.

*************************

While riding my bike in the drizzling rain this evening after dark to the aforementioned McDonald's, I saw a sign in someone's yard: "Say No To Wal-Mart. No More Big Box Stores." I had to chuckle. They may get their wish sooner than later now that Amazon's strategic plan to compete head-on with brick-and-mortar stores everywhere will spell the demise of big box stores more quickly than signs in people's front yards. 

Yes, I would say Americans have it pretty good, and where there are problems, they are not insurmountable. McDonald's could be part of the solution for many of the food-related problems in this country. 

Seven (7) New Permits

Wells coming off the confidential list were reported earlier; see sidebar at the right.

New permits:

• Operators: Triangle (3), Corinthian (2), Whiting, American Eagle
• Fields: North Souris (Bottineau), Dollar Joe (Williams), Antelope Creek (McKenzie), Colgan (Divide)

******************

There were four (4) permits canceled:

• 21100, PNC, CLR, Carbon 1-30H,

• 21563, PNC, CLR, Tompkins 1-35H,

• 22244, PNC, CLR, Wahpeton 3-21H,

• 22245, PNC, CLR, Wahpeton 2-21H,

One mile to the east of the Carbon well:

• 17433,658, CLR (original)/BR (current), Ole 1-29H, t5/10; cum 114K 7/12; 

One mile to the west of the Tompkins well:

• 19908,1,308, XTO, Teddy Federal 12X-5, t8/11; cum 88K 7/12; 

The toe of the following well ends right where the two Wahpeton wells were sited:

• 19450,322, CLR, Wahpeton 1-16H, t7/11; cum 91K 7/12; 

There was nothing in the well file to suggest why these were PNC.  These permits are for wells in very good locations. Banks is an outstanding field; Haystack Butte is a great field. Some operator is going to drill wells in these sections or CLR is re-siting or re-defining the wells.

********************************

One producing well was completed:

• 22325, 856, XTO, Wallace 21X-2B, 

********************************

For newbies:

• if you see Corinthian, Legacy, North Souris, or Bottineau: think Spearfish formation; Legacy and Corinthian are both Canadian companies; most of their activity is north of the Canadian border but their Spearfish prospects just happen to extend into North Dakota by a few miles
• McKenzie County is where the best action is right now among the five or six major oil-producing counties in North Dakota
• wells in Williams County are about average
• Divide County is the surprising county; it is north of Williams County and has done surprisingly well
• Stark County is in the southwest part of the state; I associate Stark County with Whiting, particularly its Pronghorn Sand prospect which might be better than its cash cow, the Sanish, in its northern ops
• there has been (almost) no activity in the "much-mentioned, seldom-targeted" Tyler formation in this boom; the Tyler is also in the southwest (Stark County and surrounding counties)

Mainstream Media CBS: Median Income Worse Now Than At End of the Great Recession -- CBS/Pew Research

Published by mainstream media, CBSDC:

A new report put out by the Pew Research Center finds that the median income is worse now than it was during the Great Recession. According to Pew, the Census Bureau showed that the median income for American households in 2009 – the official end of the Great Recession – was $52,195 (in 2011 dollars), while the median income dipped to $50,054 last year, falling 4.1 percent over two years.

I guess it takes awhile for redistribution to kick in.

Labor Force Statistics in North Dakota

Labor force data:

• Williston, North Dakota
• Minot, North Dakota
• Dickinson, North Dakota

A big "thank you" to a reader for sending me this data. It was sent quite some time ago, but I never got around to posting it. Sorry. But at least it is posted now. 

Pricing

Updates

May 8, 2013: After Bloomberg removed Bakken pricing, I was unable to find any source for Bakken pricing without a very expensive subscription. One can occasionally find updates at Clearbrook News. 

Original Post

At my data links:

• Bloomberg Clearbrook, MN -- no longer provided by Bloomberg (? when this was d/c'd)
• Bloomberg Clearbrook, MN, chart for Bakken differential
• Bloomberg WTI, Cushing (if you combine the previous link with this link, you should be able to get Bakken price at Clearbrook, MN)

Feds Use Chinese Solar Panels -- I Can't Make This Stuff Up

Link here to the Washington Times.

Government officials blame unfair competition from China for the collapse of solar panel manufacturer Solyndra, but such concerns didn’t stop the federal government from breaking stimulus program rules to use Chinese solar panels atop a federal building housing the offices of a senator, congressman and several agencies.  

Even the contractor questioned whether Chinese-made panels could be used under the American Recovery and Reinvestment Act, the stimulus program that mandated use of U.S.-made products. His query in early 2010 was dismissed and the General Services Administration moved forward with using the Chinese panels on the Sen. Paul Simon Federal Building in Carbondale, Ill., records show. 

Questions about the panels, which were assembled overseas, were raised in a four-page advisory memo sent by the inspector general to the GSA in the summer of 2011, but the findings take on added significance as government officials increasingly place blame on Chinese subsidies for troubles in the U.S. solar market. 

I can't make this stuff up.

Photo-Journalism of the Bakken

A reader just forwarded me this link of photos, story of the Bakken boom. As you scroll down, it may take a moment for some photos to load; there are a lot of photos here. But even with all these photos, it shows only a percent of all that is going on. It is an incredible story.

But these are incredible photos. A huge "thank you" to the correspondent.

For newbies, remember: 200 wells/month are being drilled and tracked; each at a cost of $10 million --> $2 billion just in drilling wells in five or six counties in the western part of one state. Then, throw in

• the natural gas gathering and processing industry
• the hotel/restaurant industry
• retail clothing: specialty; winter; 
• the transportation industry: new highways and highway maintenance
• the trucking industry: selling, buying, licensing, insuring, maintaining, refueling
• the railroad industry: new tanks, maintenance, loading, unloading
• the pipeline industry: water, natural gas, oil
• the public utilities: water, sewer, electricity
• the construction business (new motels, hotels, homes, hospital additions, clinics, offices, retail)

It's an incredible story.

Yup, Here It Is: Tapping the SPR -- Chatter -- Volatility in Crude

Updates

September 19, 2012: Oil down to $91. Huge drop in less than a week. Not good for renewables if price of oil drops too far. Saudi saying they wanted oil below $100; rising too fast. Oil inventories much higher than expected. Lots of chatter. Apparently peace broke out in the Mideast.

Original Post

Link here.

Though crude had been picking up steam for weeks, the former Notre Dame football standout says it was Ben Bernanke who "pushed it over the goal line" last week when traders took WTI over $100 a barrel. As is always the case in trading, particularly in commodity pits, big moves are subject to fast, vicious reversals on the road higher. 

What had the bulls edgy yesterday was growing chatter that President Obama may tap the Strategic Petroleum Reserve, a time honored method for flooding the market with supply to drive down prices. While the Obama administration resorted to these means in June of 2011, they say there's no planned announcement coming, but all options are "on the table." 

Kilburg thinks memories of capricious SPR releases from the past coupled with distortions from high frequency trading activities were behind the nearly $5 drop in WTI in the closing minutes of Monday's trading session. He speculates that one headline-trolling HFT program found an SPR headline and flooded the market with bearish contracts.

Possibly. High frequency trading relies on algorithms. It would be easy to do, and very helpful, to load hypothetically-varying ("what-if") volumes of crude oil released from the SPR into the algorithms to see what the market would do. Hypothetically. Unless, accidentally, one of those trials accidentally went live. Just saying.

The good news. If any of these scenarios are accurate, "we" now have an idea of the floor if the SPR is tapped. In my book, a floor of $96 is not all that earth-shattering. There's not a lot of difference between $100 oil and $96 oil.

And Kilburg (go to the link) sees oil going a lot higher -- after the SPR story plays itself out.

On a related, but different note, I think this makes it very problematic for the administration to announce an SPR release this week: a) first, it would questions about yesterday's volatility ("who knew what when?"); and, b) a drop in oil to $96 is not going to change the high price of gasoline at the pump.

South Dakota School of Mines Grads Earning More Than Harvard Graduates

Link here.

It's not often I can "beat" CarpeDiem.com to a link to a story, but maybe this time I have. We'll see.

Harvard University's graduates are earning less than those from the South Dakota School of Mines & Technology after a decade-long commodity bull market created shortages of workers as well as minerals. 

Those leaving the [South Dakota] college of 2,300 students this year got paid a median salary of $56,700, according to PayScale Inc., which tracks employee compensation data from surveys. At Harvard, where tuition fees are almost four times higher, they got $54,100. 

Those scheduled to leave the campus in Rapid City, South Dakota, in May are already getting offers, at a time when about one in 10 recent U.S. college graduates is out of work.

An incredible story. Something tells me most of those graduates don't  have far to travel to take their first job: north to the Bakken, south to the Eagle Ford, with the Permian and the Mississippi Lime in between.

If CarpeDiem.com links this story, also, I will post the link.

Fire: Environmentalists Way To Thin Forests -- Carpe Diem

Link to Carpe Diem. I thought the same thing. I would have said "faux environmentalists," but one gets the point. I am pro-environment, an environmentalist. And I favor thinning forests other ways than burning them down.

Nationwide Construction Projects Database

Some days ago (weeks ago?) a reader sent me links to data bases in which it is easy to find projects that are under construction / being bid on across the US. This is the comment I received, with minimum editing:

Some of my favorite links are the "construction bid" sites of upcoming projects. You can find all kinds of upcoming construction projects for different parts of the country. 

In the Dodge Lead Center site http://dodgeprojects.construction.com/Food-Beverage-Service_stcVVproductId145939554VVviewprod.htm select ND and enter project name (use WILLIAMS) for Williams county...and it will list project bids for upcoming projects. Before it was even announced, Buffalo Wild Wings, Love's, the 12-plex movie theater complex, etc., were listed.  

I see now there are four (4) new apartments buildings coming on line (two appear to be five-story buildings with parking garages underneath). Also found a 240-room hotel. Check it out, pretty interesting. Another good one is BidClerk: https://www.bidclerk.com/advanced-search-project.html.

I've added these links to the top of my "Data Links" page.

Update on the Spearfish

Someone sent me a note yesterday inquiring about the status of the Spearfish northeast of Minot, northwest of Bottineau.

So, yesterday, I updated the two more active fields where the Spearfish is being targeted: the Red Rock and the North Souris.

Today, that same reader sent me a media link with the same focus: the Spearfish north of Minot and the Tyler. (It's my experience that these regional media links break early, break often.)

There's only one rig up there, but they can drill to total depth in about four days. I believe one, if not both, fields have gotten bigger since 2008. [See "anon 1"'s comment: the Red Rock is a 'new' field.]