Monday Morning Links; Wells Coming Off Confidential List Have Been Posted

Initial production numbers have been posted for the wells that came off the confidential list since last Thursday. About a third of wells coming off the confidential list went to DRL status.

RBN Energy: overview of the Bakken NGL situation. Huge story. A must-read.

Natural gas liquids (NGL) production from the Bakken has increased from only 20 Mb/d two years ago to almost 50 Mb/d today.  And that is with nearly one-third of the natural gas in the region being flared and no outlet for ethane.  For years gathering, processing and pipeline constraints have held back production growth.  But that’s all changing.  ONEOK has completed their NGL pipeline and plant expansion project and more outlets are on the way.  Production could rise to more than 300 Mb/d by 2018.  In today’s blog, we examine the Bakken NGL situation.

Does anyone care any more? Another article on the safety of pipelines, and the Keystone XL in particular from The Brainerd Dispatch. Regional media links break often and break early, so a quick excerpt:

The still heavy dilbit requires extra pressure to move through the pipeline, and it is also more acidic and corrosive than conventional oil. This creates a greater danger of pipeline leaks with risks to ground water aquifers such as the Ogallala, over which the pipeline will pass.

In response, pipeline builder TransCanada notes that existing dilbit pipelines are operating safely. This includes the Alberta Clipper pipeline which brings dilbit from Alberta to Northern Minnesota.  The Alberta Clipper is a 1,607-km (1,000-mile) crude oil pipeline that provides service between Hardisty, Alberta, and Superior, Wis.,  A spur pipeline at Clearbrook, Minn., brings 300,000 dilbit barrels/day to our Pine Bend refinery, the source of most of Minnesota’s gasoline, diesel, and aviation fuel. Nebraska governor, DaveHeineman, has approved a revised route for the Keystone Pipeline. 

WSJ Links

Section R (Journal Report):

• Will longer hours boost (restaurant) sales?

The basic problem: Restaurants need to shoulder more expenses to keep the lights on longer—but the crowds usually aren't that big at odd hours, and customers don't end up spending very much. In fact, franchisees and industry experts say, some markets may not have enough all-night types to make the concept work at all.

Longer hours appeal mostly to "younger folks out and about, and they have cut back so much on restaurants," says Bonnie Riggs, restaurant-industry analyst at research firm NPD Group. "Maybe if you're in some big metropolitan or tourist areas it's worthwhile."

• Microsoft is leaving money on the table by not providing Office for Androids, iPads.

The idea is to convince buyers that Windows-based tablets can do more than rival devices and, consequently, that they can save money buying one product instead of a laptop and tablet. That sales pitch revolves around a key feature of Windows tablets: They are the only ones that run a full version of Office.

Particularly popular among business users, the Office suite includes Word, Excel, Power Point and other productivity apps. And it is a far bigger business for Microsoft than even Windows. Microsoft's Business Division, of which Office is the primary component, generates around 30% of sales and nearly half of operating income. Office is so popular, Morgan Stanley has estimated that even 30% to 40% of Mac users pay for it.

So the fact that Office isn't available for iPads and Android tablets, the most popular devices in the fastest-growing segment of the computer market, means Microsoft is leaving money on the table.

Section C (Money and Investing):

• In stocks, payouts trump potential.

Investors searching for higher yields are driving up the shares of dividend-paying companies, fueling a debate over whether these traditional haven stocks are getting dangerously expensive. Some buyers argue that dividend stocks have entered a period where demand for income will keep valuations high, perhaps for years, thanks to Federal Reserve easy-money policies that are expected to remain in place at least into 2015. Skeptics say the "this time is different" thesis will prove wrong, and that investors will discover they have overpaid.

Section B (Marketplace):

• Boeing's Dreamliner returns to service: my favorite airline -- Ethiopian Airlines.  

Section A:

• Real culprit behind smaller workforce: age.

Americans are leaving the labor force in unprecedented numbers. But the trend has more to do with retiring baby boomers than frustrated job seekers abandoning their searches.

The share of the population either working or looking for work in March hit its lowest level since 1979. The measure, known as the participation rate, now stands at 63.6%, down from 66% when the recession began. That represents close to seven million workers who are now "missing" from the labor force.

The April jobs report, coming Friday, probably won't repeat March's historic decline, when the labor force shrank by nearly half a million workers. But it likely won't show much improvement, either. The participation rate has trended downward through both the recession and the recovery, continuing to fall even as other measures of economic well-being have improved.

• Wow, that didn't last long. Air travel delays are easing. 

• Impact fees fracture Pennsylvania.

Unlike many communities focused on cutting budgets, this small township of hilly farmland an hour south of Pittsburgh recently splurged on a new firetruck, a police cruiser and a new pavilion, bathrooms and riding mower at its Wana B Park.

The shopping spree was financed by a $1 million check—nearly half as much as the township's $2.3 million operating budget—thanks to a state law passed last year to assess fees on natural-gas wells drilled into the Marcellus Shale formation. The township, which has 130 such wells on its 39 square miles, is among the state's most densely drilled areas.

Unlike most other states that require drillers to pay severance taxes based on the volume of gas produced, Pennsylvania's impact fee is based on natural gas prices and the year of production for each well. When the price of natural gas is between $2.99 and $5.00, the fee is $50,000 a well during the first year of production. Critics of the law faulted Pennsylvania for not raising even more revenue from fracking.

While severance taxes typically flow into a state's general fund, the impact fee is designed to send money back to areas most affected by drilling to pay for wear and tear on roads and new equipment.

• Tough slog for Obama's gun orders.

His nominee to lead the Bureau of Alcohol, Tobacco, Firearms and Explosives, which has long lacked a permanent director, awaits a Senate hearing. A $10 million budget allocation to research the causes and prevention of gun violence needs congressional approval. This comes on top of the biggest setback for the administration, the Senate's rejection this month of a proposed expansion of background checks for gun buyers.
The administration says many of Mr. Obama's 23 executive actions will have an effect, even as officials acknowledge that they can't accomplish all that legislation could.

Few of the measures were intended to bring wholesale changes, both gun-rights and gun-control advocates say, with many seeking to improve the effectiveness of existing laws and regulations.

The ACLU will love this, rifling (no pun intended) through medical records as part of a background check:

And the Department of Health and Human Services said it would write new rules to ensure that federal health-privacy law doesn't prevent states from providing records to the background-check system.

Cue up Connie Francis.

• Op-ed: on taxes.

It's not just rates that vary but rules that determine what's taxable and what isn't. Wisconsin has a 1,400-word regulation on when the sale of an ice-cream cake is taxable. If the ratio of ice-cream layers to cake layers is too high, sales tax has to be collected. Candy bars are taxable in New York, but not in New Jersey. In Texas, large pretzels are tax-exempt baked goods, but small pretzels are taxable snacks. Iowa charges a sales tax on decorative pumpkins but not edible ones.

Rhode Island taxes soft drinks but not bottled water. It taxes clothing accessories but not fur clothing. It taxes kidney-dialysis machines with or without a prescription, unless used at home, whereas prosthetic devices, eyeglasses and contact lenses are taxable without a prescription but tax-free with one.

• Op-ed: profiling.

But it is not good enough for the CFPB. In a quest to make sure that all individuals falling within the "protected classes" under the Equal Credit Opportunity Act get the same interest rate as those who are not covered by it, the agency wants financial institutions to guess your race, ethnicity and gender based on your name and the address on your application. Put bluntly, they want lenders to profile you.

It sounds bizarre. But during a conference call on March 21 to congressional offices explaining how auto lenders were supposed to comply with the Equal Credit Opportunity Act (as outlined in CFPB's Bulletin 2013-02), agency staff advised us that they would recommend that financial institutions use "proxies to give probabilities of the race, ethnicity and gender of borrowers" to guess if an applicant falls into a protected class, or not, for the purpose of setting interest rates. In other words, they would like lenders to use stereotypes associated with your name and location in order to monitor compliance with equal-opportunity requirements.

Does that mean a person named Jefferson who lives in the Bronx is to be presumed an African-American, but not a Jefferson in Wichita? Is Taylor Rosenstein living in Miami a woman or a man? He or she must certainly be Jewish, right?