Monday Morning: The Sun Came Up; Despite Greenhouse Gases At 400 Parts/Million It Appears We Are All Still Here

Monday, Monday....

Monday, Monday, The Mamas and The Papas

Active rigs: 185 (steady)

RBN Energy: Crude by rail -- 154 operating terminals; Burlington Northern is dominant player.
I opined sometime in the last 48 hours that in the "political arena," not approving the Keystone XL is ludicrous (for lack of a better word until I wake up) but in the "investment arena," I hope the Keystone XL is never approved. One of my biggest holdings was BNI (Burlington Northern Santa Fe) until it was bought by Warren Buffett; now BRK-B is one of my largest holdings. If I recall, his BNSF profits increased 15% this past year. A huge "thank you" to the activist environmentalists; keep up the good work.

RBN on the CBR facilities in the Bakken:

It will not be a surprise to anyone following our narrative that the Bakken has the most load terminals of any crude producing region. Since we last surveyed the terminals in North Dakota a new manifest terminal has been added at Boyle in Stark County, operated by Cenex Energy also known as CHS transport. This is a manifest terminal on the BNSF railroad. According to the BNSF interactive map we mentioned a minute ago, there are also 3 CHS manifest terminals across the State border in Montana. In all there are 22 terminals serving the Bakken on the US side with 13 able to load unit trains (100 rail tank cars or more). Many of the 11 terminals included in the “Canada Light/Medium Sour Crude” row of the table are loading crude from Bakken production on the Canadian side of the border.

The rapid build out of over 150 crude by rail terminals in the space of little more than two years has demonstrted the flexibility and ingenuity of US oil producers, refiners and midstream companies as well as the railroads. Many of the terminals started out small and many are still only moving a few rail tank cars at a time in manifest loads. However, forty percent of the load terminals are unit train operations that have required significant investment. The dominant railroad company is BNSF. They were in the right place at the right time but rapidly took advantage of the opportunity. Despite the recent narrowing of crude oil differentials that helped justify crude by rail transport costs over pipelines, we believe that crude by rail is here to stay. It offers great destination flexibility and requires less commitment than pipelines. Over the next two years the railroads and the pipelines will compete more directly for the crude shipping business leading to lower rail freight costs. Producers and refiners alike will benefit from lower transport costs and greater optionality.

That's nice. RBN Energy shows 19 CBR terminals in North Dakota. I have the exact same number.

Disclaimer: this is not an investment site; do not make any investment decisions based on what you read here or what you think you read here. 

The Arctic: has been in the news the past couple of days for any number of reasons. This article is quite interesting from an energy perspective. Note: one has to read well into the article to find out why the US is at a disadvantage vis a vis the other players. The US has no Arctic policy. The last policy "expired" in George Bush's last year of presidency, and despite five years to work on something, the Obama administration has nothing to show for it -- no Arctic policy. And all this time the Arctic was melting faster than Al Gore's ice cream cone. Bloomberg is reporting:

The U.S. is alone in not having ratified the UN Convention on the Law of the Sea, which gives states 10 years from the date of ratification to extend their claims on the continental shelf. Gaining sovereignty to more land that’s underwater will give them a jump-start when it comes to exploiting mineral-rich resources below the seabed. 

Like the Keystone XL, I suppose Mr Obama needs more time to study the issue. Cue up Connie Francis.

WSJ Links

Section R (Journal Report): 

Section C (Money & Investing):

• The cloudy logic of Europe's solar tariffs: 

But the EU may have acted too late for firms like SolarWorld. Last year, its losses increased 58% to €476 million ($618 million), and the firm blamed a 40% fall in panel prices due to Chinese competition. Chinese companies now account for 80% of European solar-panel sales.

And Europe's solar industry also relies on state help, such as guaranteed prices for solar power. These give an adequate return on what is still an expensive form of energy.

But with politicians now more sensitive to high energy bills, subsidies are slipping. Given that, the likes of SolarWorld might have to cut costs further to make their products competitive. Putting up barriers to Chinese rivals alone won't bring Europe's panel makers back into the sunlight.

If the Chinese move their manufacturing sites to Taiwan, they avoid the European tariffs.

Section B (Marketplace):

Section A:

• In Detroit, hints of big cuts, asset sales. I follow these stories here.

The emergency manager appointed to oversee this ailing city might make cuts to employee health care and pensions plans as well as sell municipal assets in a move to stave off financial collapse, according to a detailed report released Sunday.

The emergency manager, Kevyn Orr, hopes that cutting costs and restructuring debt will help the city avoid bankruptcy, though it remains an option, a spokesman for Mr. Orr said in an interview Sunday.

"No one should underestimate the severity of the financial crisis," Mr. Orr said in a written statement, adding that the path Detroit has followed for more than 40 years is "unsustainable" and "only a complete restructuring" of its finances and operations will allow it to return to a path of prosperity.

The report paints a picture of an aging industrial Midwestern city locked in a dire financial state by its junk-level credit rating and a chronic level of deficit spending that has forced it to borrow millions every year to fund basic services. The report, which was distributed to news organizations Sunday, is expected to be released by Mr. Orr Monday.