Monday, January 28, 2013

Monday Evening -- Potpourri and Daily Activity Report To Follow - Eight (8) New Permits -- Williston Basin, North Dakota, USA

I missed this earlier today: Toyota took back the top spot in car sales worldwide, moving GM to #2.

Nice headline story at Yahoo!Finance: ride the rails.
(Interestingly, Warren Buffett's Berkshire Hathaway Inc.  these days trades more like a train stock than anything else, owing to its Burlington Northern railroad division acting as the its biggest source of profits and most of Berkshire's cyclical exposure. Any serious selling in Berkshire based on a cooling railroad sector would be a gift to investors looking to grab this unrivaled collection of assets at an even slimmer premium to book value than it currently commands.)
Yes, Berkshire is a railroad stock right now -- and the article failed to mention the Bakken.

Hess announcement to get out of the refining business? Investors loved it. Share price popped from $59-range to $63 at the opening. EPD at an all-time high today; a solid jump.

Active rigs in North Dakota: 190.

I've added another Bakken link to the sidebar at the right:

Eight (8) new permits --
  • Operators: Whiting (4), Hess (3), True Oil
  • Fields: Red Wing Creek (McKenzie), Park (Billings), Timber Creek (McKenzie), Robinson Lake (Mountrail), Zenith (Stark)
  • Comments:
Wells coming off the confidential list over the weekend were reported earlier; see sidebar at the right.

Producing wells completed:
  • 21698, 181, XTO, Flatland 11X-2F, Sand Creek, t10/12; cum 488 bbls 11/12;
  • 22788, 366, Crescent Point Energy, CPEUSC Szarka 25-36-159N-100W,  wildcat, t9/12; cum 12K 11/12;
Dry Hole:
  • 22413, DRY, Hess, AV-Claire 163-94-211H-1;  Forthun; 

Filloon On Triangle Petroleum -- SeekingAlpha

Link to

Disclaimer: this is not an investment site. I post links to Mike Filloon's articles on a regular basis for his information on the Bakken.

Road Trip: March 7 - 8, 2013 -- Houston, TX -- 2nd Annual Bakken Crude Oil Logistics Conference

From the webpage / ad:
This conference is in response to the sudden challenge being faced by U.S. petroleum companies who are pumping crude out of the Bakken shale in North Dakota and Montana. The sudden increase in volume has resulted in the problem that the companies are having problems shipping the crude to the refineries. Truck and rail are being used and the volume has put an enormous strain on the supply of tank cars and available tank trucks. This conference is a follow up to our highly successful 2012 Bakken Crude Oil Logistics Conference, where we had over 135 attendees, numerous sponsors, and a great lineup of speakers. This event is organized to help bring together the crude producers, the rail companies, truckers, barges, and those who provide technology solutions to help develop a more efficient supply chain.

EPD Hits An All-Time High; Goes Ex-Dividend Tomorrow

Link here to The Street.

Disclaimer: this is not an investment site. This is not a recommendation to buy, sell, hold or otherwise trade. It is simply an observation. Idle chatter, so to speak. Paying 4.8%.

Five Percent of Three Percent of Three Percent of Two Degrees Works Out To Not A Whole Lot -- Nothing About the Bakken -- Okay -- I'll Put the Word Flaring In At the End

Assuming the premise is correct, and, of course, I don't, the story is still irrelevant.

CO2 makes up 3% of green house gases (the number one greenhouse gas is water vapor, about 95 to 97%). An inconvenient truth.

It is claimed that man-made activity contributes about 3% of that 3% of that "greenhouse gas" CO2. I don't know if that includes "breathing." The rest of the 97% of the 3% "greenhouse gas" CO2 is from non-man made sources. So, now we're down to 3% of 3%. [Don't confuse the percent of greenhouse gas with the actual amount of CO2 in the atmosphere: CO2 exists in Earth's atmosphere as a trace gas at a concentration of 0.039 per cent by volume -- wiki, or any good science textbook.] [By the way: 0.039 percent --> 0.00039 ml/ml of air.]

Then, this, at the linked NY Times article,
Though air travel emissions now account for only about 5 percent of warming, that fraction is projected to rise significantly, since the volume of air travel is increasing much faster than gains in flight fuel efficiency. (Also, emissions from most other sectors are falling.) 
I assume when the NY Times says "5 percent of warming" they are converting CO2 emissions to warming. If they are not, it's even more ridiculous. It is estimated that global warming will result in a one to two-degree increase in global temperature over the next century. Let's say five degrees, just to get way outside the range of argument. Five percent of five degrees is ... 0.25 degree; a fourth of a degree.

A fourth of a degree over the next 100 years.

And that's the filler we get in the NY Times: New Yorkers who don't own a car, live in a small apartment, and listen to Al Gore, are now distraught that they fly five times a year.
So if you take five long flights a year, they may well account for three-quarters of the emissions you create. “For many people in New York City, who don’t drive much and live in apartments, this is probably going to be by far the largest part of their carbon footprint,” says Anja Kollmuss, a Zurich-based environmental consultant. 
Meanwhile, I assume Anja is on the ski slopes today laughing at the crazy Americans who actually worry about these things. Five percent of three percent of three percent of two degrees over the next century. New Yorkers -- some of the highest taxed folks in the world -- who worry about this, or take Anja seriously -- need to move to an income-tax-free state ASAP.

Now, add this to your data base: the number of people taking five long flights/year is minuscule compared to the number of folks on the planet, so any one individual contributing to that 5% of 3% of 3% of 2 degrees over 100 years is ... well, that's why we have calculus. Knowing that most readers are not interested in the math behind the linked article, I have completed the calculus in the margins of another one of my blog sites.

The NY Times writes this and is taken seriously; bloggers .... well, that's another story.

Disclaimer: The NY Times story was accessed through The Drudge Report or something like that; I've now forgotten how I dragged myself over to the NYT.

Note: the article did not state a) the optimal global temperature; and, b) who/what sets the global thermostat each day. I assume the optimal global temperature varies from organism to organism. And I assume the Hubble telescope was really sent up to look for the thermostat.


By the way, it was the NY Times that said the cellulose-to-diesel fuel may be gaining momentum: it cited a cellulose-to-diesel fuel company that in December sold 1,000 gallons of diesel fuel made from cellulose. Yes, a 1,000 gallons of diesel sold in one month and the NY Times suggests this could mean that the industry is taking off. I can't make this stuff up.

A Note to the Granddaughters

I continue to enjoy David Graeber's Debt: The First 5,000 Years. In chapter seven he talks about honor and degradation, and discusses the legal system in Ireland during the Middle (Medieval) Ages at length. It turns out that ...
... the Irish material is all spelled out so clearly. This is partly because Irish law codes were the work of a class of legal specialists who seem to have turned the whole thing almost into a form of entertainment, devoting endless hours to coming up with every possible abstract possibility. Some of the provisos are so whimsical ("if stung by another man's bee, one must calculate the extend of the injury, but also, if one swatted the bee in the process, subtract the replacement value of the bee") that one has to assume they were simply jokes.
Something tells me that Anja's five percent of three percent of three percent of two degrees over one hundred years is not a joke. But maybe, then again, it is.

I'm beginning to think we've come full circle back to the Irish Medieval jurists: the New York Times is turning articles on global warming into a form of entertainment.


Monday Morning Links -- First Class Stamps Now Cost $0.46 But They Are Good "Forever"

Active rigs in North Dakota: 191.

WSJ Links

Section D: not in the paper today?

Section C (Money & Investing):
Key to oil: location, location, location: a must-read for those interested in investing in well-known publicly traded companies. Even Baytex is mentioned.

Section B (Marketplace):
Wow! Barnes and Noble expects to close as many as a third of its retail stores during the next decade. Great news for independents, mom-and-pop's, used book stores, Amazon. With the closure of the huge bookstore down the street from my home in San Antonio, it's pretty much now the wonderful Half-Price Books, perhaps the best used book chain in the US?

Fisker speeds up its search for suitors. One battery story after another.

And who saw this coming: Huawei ('wah-way') is now the third-biggest smartphone seller. Too much trouble to find the WSJ link; multiple other sources.  Jumped ahead of RIMM and Nokia.

Section A:
Immigration debate gears up. The GOP will screw this up also. Folks on both sides are asking the wrong questions.

Page 3: postal rates, volume, nice graphics.

Op-ed: if Chavez believes that the nation's oil billions belong to the people, why not give it to them directly? Another piece on windmill tilting.

Op-ed: if Lefty moves to Florida, he will find plenty of elite athlete company. [If he doesn't move to Florida, he's a fool.]
Last week, Lefty's rival, Tiger Woods, acknowledged that he left California for Florida in 1996 when he turned pro because of the difference in state tax. California's top marginal rate then was 9.3% for individuals earning more than $32,000. The move was particularly farsighted given that rates on high earners in California have since soared.
n November, voters in California approved a ballot measure raising the top rate on income over $1 million to 13.3% (the increase applies retroactively to last year). According to, Mr. Woods grossed $56.4 million in 2012. As a Floridian, he will keep about $7.5 million that he otherwise would have owed to the state of California. His net tax savings over his 16-year career come to about $100 million. Mr. Mickelson last year earned $60.7 million. Paying the 13.3% California rate, he will owe the state $8 million.
"The day California passed the tax increase, I received three calls from concerned athletes," accountant Steve Piascik, president of Piascik & Associates, told me. His firm is one of the largest representatives of professional athletes in the country.
Some examples:
  • Torii Hunter, LA Angels of Anaheim, CA, who recently signed with the Detroit Tigers, calls home: Prosper, TX.
  • Serena and Venus Williams grew up in Compton, CA, but moved with their father to Florida in the early 1990s. They currently reside in Palm Beach Gardens, FL, close to where Michelle Wie lives. She grew up in Palo Alto, CA.
  • Sloane Stevens also now lives in Florida, near the same area. A lot of tennis pros have set up shop in Florida.
  • Sam Querrey, 2nd-ranked American in tennis, moved to Las Vegas (no income tax state) from Thousand Oaks, CA.
The writer fails to mention all the NBA stars who have publicly talked about taxes, contracts, and no-income tax states. Let's see: LeBron James, Kobe Bryant, the entire Spurs team.  
I've always wondered why Warren Buffett, a stickler for details and smart decisions, hasn't helped his secretary by moving the entire company to a non-tax state. Mr Buffett has often talked about how much tax his secretary pays. Of course, Nebraska is now likely to become the 10th state to have no income tax

Keystone XL 2.0 Timeline

February 28, 2014 (E) White House approves with conditions. Any decision later than this will impact the mid-term elections.

January 30, 2014 (E): On President Obama's desk. 

January 15, 2014 (E): State Dept makes recommendation. Other departments can object. In early 2013, State Department said they would not make decision before end of 1H13, and then revised it by saying "not before March, 2013," so the January 15, 2014, date may be six months too long.

November 15, 2013 (E): Mandatory 30-day wait.

October 15, 2013 (E): State Dept publishes final SEIS in the Federal Register.

September 30, 2013 (E): State Dept compiles comments and answers any "substantitve" concerns.

June 30, 2013 (E): EPA places summary in Federal Register.

June 15, 2013 (E): 45-day comment period ends.

May 1, 2013 (E): EPA's mandatory 45-day comment period. Impacted by new EPA chief.

March 4, 2013: EPA has to review the draft Supplemental Environmental Impact Statement (SEIS). No deadline to complete.

March 1, 2013: State Department's Keystone Pipeline report Friday. This was a draft statement.

Archived Presentations

Bloomberg West Coast statistics and the Bakken, June 21, 2013

Bakken Activity Update, June, 2013, a PDF file

The Bakken revolution, what every investor needs to know, May, 2013

Geologic Factors Affecting Production Across the Bakken, Colorado School of Mines, May 2, 2013

The Rolfstad Presentation, April, 2013

NDSU Housing Study, 2013

IPAA archived presentations.
  • "Anon 1" suggests starting with the January 21, 2013, Private Capital Conference, Houston, TX. At that list of conferences, start with Karen Harbert's presentation and then David Miller's presentation.
How is the Bakken affecting the nation's GDP? Professional Logistics Group presentation, January, 2013.  Best presentation of the year?

Bentek: Bakken to 2.2 million bopd, September 22, 2012.

Mike Filloon's better articles:
 CO2 EOR: 1% increase in production -->$150 billion in more oil, UND/EERC - 2012

Monday Morning

Wells coming off confidential list have been posted.

RBN Energy: Canadian west coast pipelines -- another great update and Pipelines 101.

Hess to sell refinery on east coast; get out of the refining business altogether, it sounds like. More to follow, perhaps.
Hess Corporation announced today that it will pursue the sale of its terminal network in the United States. Hess also announced that it will complete its exit from the refining business by closing its Port Reading, New Jersey refinery.
The terminal network is located along the U.S. East Coast and has a total of 28 million barrels of storage capacity in 19 terminals, 12 of which have deep water access. The terminals previously served as the primary outlet for Hess’ share of production from its HOVENSA joint venture refinery, most of which was used to supply Hess’ Retail and Energy Marketing businesses.
With the closure of the HOVENSA refinery in 2012 as well as Hess’ ability to access refined products from third parties to supply these marketing businesses, the terminal system is no longer core to the company’s operations. The company’s St. Lucia oil storage terminal in the Caribbean with 10 million barrels of capacity will also be included in the package for divestiture. In addition to the proceeds from the sale of the terminal network, the transaction should also release approximately $1 billion of working capital for redeployment to fund Hess’ future growth opportunities. 
Three refineries closed/re-opened/whatever in the Philadelphia area this past year. Tea leaves are telling us something. Remember: Hess committed $2.2 billion to the Bakken this year -- 185 wells is what I guess.

CAT earnings: $1.91 (vs $1.60). The company reported earnings of $1.91 a share, excluding a write-down of 87 cents a share relating to a China holding. That compared to earnings of $2.32 a share in the year-earlier period. The market liked the news: CAT is surging in pre-market trading.