Wednesday, July 17, 2013

Six (6) New Permits -- The Williston Basin, North Dakota, USA; Whiting Will Convert A Nice Red River Well Into A Salt Water Disposal Well; Seven WPX Well Sites In Mountrail To Be Re-Surveyed

Active rigs: 189 (steady for several days now)

Six (6) new permits --
  • Operators: Hess (3), HRC (2), Whiting
  • Fields: Bonnie View (Golden Valley), Robinson Lake (Mountrail), Eagle Nest (Dunn)
  • Comments: HRC is a subsidiary of Halcon, I believe
Results of wells coming off the confidential list have been posted; see sidebar at the right.

Temporarily abandoned:
  • 16581, TA/108, Whiting, Curl 23-14NESW 14-149N-100W, Red River, 10/08 cum 41K 12/12;; I don't understand this one. This seemed to be a good Red River well producing about 1,800 to 2,500 bbls of oil/month during its short lifetime, 10/08/ to 7/10. In 29 days in July, 2010, it produced 1,785 bbls of oil; in August it was on-line for one day and then taken off-line through 5/13, except for short periods of time. One almost gets the feeling during some subsequent work on the well, they ran into a problem that could not be fixed, and they decided it was just better to abandon the well. The file report says the well will be turned over to a third party and converted to a salt water disposal well. This Red River well is right in the heart of the Bakken, but seems to be a pretty good Red River well. I've seen a lot of Red River wells that produced significantly less but remained on-line, so I don't understand this one. There was a spill at the site in 2009, but the well was back on line in 2009 and producing nicely.
Five (5) producing wells were completed:
  • 25337, 1,053, Whiting, Sterling TTT 21-6H, Sanish, t7/13; cum --
  • 25105, 843, Whiting, Rohde 13-6TFX, t6/13; Sanish, cum --
  • 25181, no IP , Whiting, Doug Kinnoin 11-14H, Sanish, no production data
  • 24390, 819, Hess, EN-Uran A 154-93-1522H-4, Robinson Lake, t6/13; cum --
  • 23820, 50, Hess, HA-State 152-95-1621H-4, Hawkeye, t7/12; cum -- ; if frack data was reported, I missed it; I did not see that data at the well file
We'll see if the NDIC corrects #25101 in the next day or two. No frack data was available.

Federal Fracking Regulations

I've been out all day -- out and about in southern California, so  it will take a bit of time to get caught up.

While waiting to read whatever pithy comments I might (or might not write), you may enjoy parsing this statement from the new SecInterior as reported in the Oil & Gas Journal:
Federal regulations on hydraulic fracturing would provide a necessary baseline for states where onshore unconventional oil and gas development has not taken place yet but will soon, US Sec. of the Interior Sally Jewell said. Interior also would possibly accept more-stringent requirements than some states have enacted already, she told the US House Natural Resources Committee.
  • federal regulations (BLM land only; all land, state, private?)
  • provide a necessary baseline (baseline only? not on-going?)
  • for states (some states, not all states; which states?)
  • where onshore (onshore only, not offshore?)
  • unconventional oil and gas development
  • has not yet taken place
  • but will soon (would that include a state like New York which has banned fracking?)
  • stricter requirements than some states have enacted already (some exemptions; examples?)

Oil Deliveries By Rail, Truck, Barge Up 57% in 2012 -- EIA

The Oil & Gas Journal is reporting:
Increased US crude oil production has spurred the use of rail, truck, and barge to deliver oil to refineries, the US Energy Information Administration reported in its recently released Refinery Capacity Report.
More than 1 million b/d of oil was received by refineries across the nation by rail, truck, and barge in 2012, up 57% from 2011, according to EIA.
These increased receipts vary by region, EIA said, with the Gulf Coast (PADD 3) region accounting for most of the growth.
“PADD 3, where rail, truck, and barge receipts nearly doubled in 2012, is increasingly dependent on rail and truck to move crude production out of the Eagle Ford and Permian basins to refineries in the area until pipelines are built,” EIA said.
Following a decrease in 2011 in part due to refinery closures, East Coast (PADD 1) receipts by rail, truck, and barge increased by 18% in 2012 as a number of refiners put in rail facilities to receive discounted crude from the Bakken and other tight oil formations.
In the Rocky Mountain region (PADD 4), US truck and pipeline imports of Canadian oil continue to increase as US pipeline receipts have stayed flat.
Again, these numbers are staggering. Is there any other industry growing by 60% year-over-year (other than Wall Street hedge funds and banks)?

Natural Gas Is Losing Market Share to Coal -- Market Realist


July 17, 2013: a reader noted, and I agree -- great comment:
Peaking plants will be fired up to meet AC loads. Plus natural gas has to "idle" when wind and solar are available. It's too expensive to build coal plants but when they are up and running they can compete with $4 gas.... 
Original Post
Is that a typo in the headline? Nope.

Natural gas is losing market share to coal.

I don't get it:

At the linked article:
For most of 2012, natural gas gained significant market share (mostly against coal) for use in power generation. However, in 2013, natural gas prices have risen relative to coal, causing natural gas to lose some market share in the power generation sector.
But, it may be only temporary:
Despite the recent decline in market share on a year-over-year basis, many expect that coal-to-gas switching will continue to be a long-term trend. For example, the government agency known as the Energy Information Administration (EIA) noted in a report from December 2012 that in its forecast, coal remains the largest energy source for energy generation, but “its share of total generation declines from 42 percent in 2011 to 35 percent in 2040.” The EIA also stated that market concerns about greenhouse gas emissions continue to dampen the expansion of coal-fired capacity in its forecasts.
Again, look at that graph above. Last year, natural gas accounted for 32% of US power generation; this year, only 26%. Who wudda thought?

I'm not sure why the MarketRealist put the money of May twice into the graph above.  And no February. If that's a DOE graph, it makes sense, but I wouldn't expect MarketRealist to make such a glaring mistake.

KOG Just Went Over $9.00; Everything Seems To Be Going Right For Oasis -- SeekingAlpha

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

KOG up almost 6% right now.


Suntrust: upgrades KOG from neutral to buy.
Time to take profits in the Bakken? -- SeekingAlpha
Everything seems to be going right for Oasis -- SeekingAlpha
In OAS' case pipeline transportation is now available for almost all of its production. In fact 85% of its oil production was flowing through gathering pipelines at the end of Q1 2013. OAS expects its cheaper delivery costs due to pipelines to increase its realized oil prices by $3-$5/barrel in 2013 and there may be still more future upside.
Keep in mind that OAS may also benefit from the confluence of WTI and Brent pricing by approximately +$10/barrel. This should mean quite an increase to both OAS' top and bottom lines over the long term.
On top of this OAS drove down its capital cost per well by 5% to $8.4 million. Its Oil Well Services subsidiary is a key factor in this. OAS' 2013 year end target is an $8.0 million capital cost per well.
This will amount to a -23% decrease in capital cost per well from 1H 2012. PAD drilling has been a key factor in this improvement. OAS' Salt Water Disposal subsidiary (Oasis Midstream Services) further adds to savings on lease operating expenses.
And that's just the start of a very interesting article. 

The Gulf Is The Fastest Growing Off-Shore Market In The World -- Bloomberg

Bloomberg is reporting:
The deep-water Gulf of Mexico, shut down after BP Plc’s record oil spill in 2010, has rebounded to become the fastest growing offshore market in the world. 
The number of rigs operating in waters deeper than 1,000 feet (300 meters) in the U.S. Gulf will grow to 60 by the end of 2015, ... As of last week, there were 36 rigs working in those waters ...
Companies such as Chevron Corp and Anadarko Petroleum Corp must do more drilling to turn large discoveries into producing wells -- as many as 20 wells for each find. [Compare that to the Bakken.]
“Right now, the Gulf is the fastest growing deep-water region in the world.”
Contrary to all I said one or two years ago. Good for the oil and gas industry. 

$5 Gasoline

CNNMoney is reporting:
Drivers in California became the first in the mainland U.S. to pay an average of $4 a gallon for gas in the current price spike.
They probably will get lots of company soon. California prices reached $4.01 for a gallon of self-serve regular gas on Monday and continued higher to $4.02 on Tuesday, the first time since March that the price has been that high.
Only Hawaii and Alaska, with their limited access to refineries, had been above $4 a gallon before the recent price spike.
Other states are likely to cross the $4 mark in coming days. The average price in Connecticut and Illinois is now pennies away from $4, while Michigan, Washington, Oregon and the District of Columbia are close behind with prices above $3.80 a gallon.
The national average stands at $3.64 a gallon, up 16 cents in just the last week.
Last week, forecast that the national average will rise by 30 cents a gallon by August. While that would leave the national average under the $4 mark, it won't matter to more than a third of drivers nationwide who could soon see their local prices above that level.
There are at least two story lines here.

First, CNNMoney is late in reporting this story. I came out to Southern California for a couple of weeks, arriving here about ten days ago. Gasoline was already over $4.00. California's increased state tax on gasoline went into effect on July 1, 2013. California makes about 71 cents on each gallon of gasoline sold; Exxon makes about 3 cents per gallon.

Second: CNNMoney finally said exactly what I said last year -- average prices mean squat -- it's the local price folks watch and their perception of what they pay. The average person sees $4.49 gas as "$5 gasoline."
While that would leave the national average under the $4 mark, it won't matter to more than a third of drivers nationwide who could soon see their local prices above that level.

So, How's That Wind And Solar Energy Working Out For Those In NYC?

Reuters is reporting:
New York State's power grid operator said it might ask some of its customers in its power reduction programs to limit electricity use for a third day as people crank up air conditioners to escape the brutal heat wave. 
So far, the state's utilities and the New York Independent System Operator (NYISO), which operates the grid, have not had to take any major steps to keep the lights on and air conditioners humming.

They have asked consumers to conserve power, deferred non-essential equipment maintenance and activated demand response programs to reduce energy usage in some areas, but there have been no widespread blackouts - just some scattered outages.

Is This The Longest Stretch ...

... that we've seen oil over $100/bbl in quite some months?

For newbies: WTI should stay over $100/bbl for quite some time.

For decades, WTI and Brent were near parity, but for newbies it seems that WTI has always been $20 - $40 less than Brent. That disparity was due to a glut of North American oil at Cushing.

Now that pipelines have been reversed, pipelines added, and, rail capacity has surged, the gluts/choke points are now relieved, and WTI oil is reaching parity with Brent. And Bakken oil is nearing parity with WTI oil. Scroll down the linked article and note the WTI-Brent spread over the past year.

We can start watching OPEC production more closely, giving us a better indication of future Bakken oil prices.

Old Story; Can't Remember If Previously Posted

Out of Billings, Montana, the UPI is reporting, back in June, 2013:
The U.S. government said it was taking a broad-based look at how best to make it easier to develop oil and natural gas resources in northern Plains states.
The Interior Department said an interagency group met this week in Montana to explore ways to facilitate the development of the Bakken oil and natural gas formation, which underlies territory in Montana, North Dakota and parts of Canada.
The group examined a range of options to help encourage Bakken development, including adding more employment options and addressing permit complexity.
Bottom line:
"The BLM wants to get this right," he said in a statement Thursday.

The Markets

Now that I'm caught up, what are the markets doing? Another nice day for investors. The DOW flat; oil up slightly.

  • BK and BAC: profits surge! Wow! President O'Bama's gifts keep on giving. Remember all that talk about "Wall Street" vs "Main Street." Yup, all talk. "Wall Street" doing just fine; "Main Street" not so much. BK at 52-week high.
  • PSX: continues to fall
  • KOG: up, almost $9.00
  • OAS: up nicely
  • TPLM: up nicely
  • SD: up very nicely
  • CHK: up a bit
  • CVX: up
  • COP: up
  • XOM: flirting near a 52-week high
  • ENB: up
  • EEP: down; probably some profit taking;
    EPD: up
  • SRE: up; near a 52-week high
  • CNP: down a bit
  • XLNX: up, near a 52-week high
Disclaimer: this is not an investment site. Do not make any investment decisions based o anything you read here or what you think you may have read here. 

US Oil: 7-Million-Bbl Draw Last Week

Platts is tweeting:
NYMEX briefly rebounded after US stats showed a 7 million-barrel draw in crude stocks last week, hitting a session high of $106.35/bbl.

Bakken Artificial Lift And Production Conference, September 24 - 25, 2013; Denver

See the announcement here.
With the sole aim of enhancing production efficiency and reducing costs, the Bakken Artificial Lift & Production Congress 2013 will over 2 packed days, deliver an unparalleled results-driven evaluation of optimum techniques at every stage of the production process, to reduce failures, ensure wells stay online and maximize production in the Bakken.
Full program and registration here. Sign up before July 26th, and save $400.

Housing Starts At Lowest Level Since August Last Year; President Planning Golf Outing; Michelle Planning Next Vacation

The headline has been removed from the Yahoo!Finance site but earlier this a.m. the headline suggested that the housing numbers were nothing to get excited about. Apparently, Reuters or Yahoo!Finance re-thought that and re-wrote the headline, the lede.

It's pretty grim:
U.S. housing starts and permits for future home construction unexpectedly fell in June, offering further evidence of a sharp slowdown in economic activity in the second quarter.
The Commerce Department said on Wednesday housing starts dropped 9.9 percent to a seasonally adjusted annual rate of 836,000 units. That was the lowest level since August last year.
Economists polled by Reuters had expected groundbreaking to rise to a 959,000-unit rate last month. June's drop unwound the prior month's gains, suggesting a smaller boost from residential construction to second-quarter gross domestic product growth.
Look at the phrases used:
  • unexpectely fell
  • further evidence
  • sharp slowdown in economic activiity
  • dropped 9.9 percent (couldn't bear to say "almost 10%" or even simply "10%)
  • lowest level since August last year
Analysts expected a rise of almost a million units; instead a drop of almost a million units -- in other words, a two-million-unit swing.

And then Ben suggested tapering might begin later this year. Really? Hello!

Less Agricultural Acreage Planted This Year In North Dakota

The Bismarck Tribune is reporting:
An estimated 4.4 million acres of North Dakota cropland will go unplanted this year, based on an early estimate by U.S. Department of Agriculture Farm Service Agency’s state office. 
Heavy snow, flooding and excessive rain have kept producers from planting. Most of the acreage is north of state Highway 200.
Thank goodness for federal subsidies.

Oh, yes, and thank CLR for oil royalties. 

And thank goodness for global warming to minimize "heavy snow, flooding, and excessive rain." Without GW it might have been worse.

Widening US Highway 85 -- But What Will Happen To The Wildlife?

This has been a topic ever since I was growing up in North Dakota. I remember my dad talking about the possibility. The Dickinson Press is reporting:
The Theodore Roosevelt Expressway Association is continuing its goal of turning Highway 85 from a two-lane road into a four-lane all the way through North Dakota.
Cal Klewin, Theodore Roosevelt Expressway Association executive director, said there are plans for the representatives to speak to the North Dakota Department of Transportation next week about further expansion of Highway 85, focusing on the area near Theodore Roosevelt National Park. Klewin spoke during Tuesday’s Stark Development Corporation’s board of directors meeting at the Dickinson Chamber of Commerce.
“We will need to address issues with the park,” he said. “They do not want any improvements to go through that park with a four-lane structure. We’re going to try and figure out how to work through that.”
He said the DOT has received two letters of concern about the expansion of Highway 85 — including one from the park — about moving wildlife when the highway is widened.
Are you kidding? Moving wildlife when the highway is widened? I've driven that stretch a hundred times, if not a thousand times.  The wildlife won't even notice. Won't even be affected. I assume a few field mice will have to re-locate, but if they work on the highway after the mice have had their babies for the season, the entire family of mice can move without incurring much hardship. In fact, maybe we can have the ranchers put out some mouse feed to attract the field mice from where the construction will be occurring. The few coyotes and fewer wolves will appreciate the field mice moving away from the highways.

Koch Wants To Put In A New Bakken Pipeline -- RBN Energy; ENB Promoting Its Flanagan South Pipeline

RBN Energy is reporting:
At the end of June Koch announced plans for an open season that started July 1, 2013 to solicit interest in a pipeline project to deliver 250 Mb/d of crude from the Bakken to Hartford and Patoka, IL. Koch’s plans suggest the new pipe could connect to St James, LA on the Gulf Coast via the proposed Energy Transfer/Enbridge Energy joint venture Gulf Coast Crude Access pipeline. If the pipeline proceeds, it would come into service in 2016. Earlier Bakken pipeline projects have failed because of flexible rail options. But rail rates from the Bakken to the coasts are currently underwater due to narrowing crude spreads. 
RBN Energy suggests this pipeline is not likely to be laid; I agree.

Meanwhile the AP is reporting on ENB's efforts with its Flanagan pipeline.
A Canadian company's plan to build an oil pipeline that will stretch for hundreds of miles through the Midwest, including through many sensitive waterways, is quietly on the fast-track to approval — just not the one you're thinking of. 
As the Keystone XL pipeline remains mired in the national debate over environmental safety and climate change, another company, Enbridge Inc. of Calgary, Alberta, is hoping to begin construction early next month on a 600-mile-long pipeline that would carry tar sands from Flanagan, Ill., about 100 miles southwest of Chicago, to the company's terminal in Cushing, Okla. From there the company could move it through existing pipeline to Gulf Coast refineries. 
The company is seeking an expedited permit review by the U.S. Army Corps of Engineers for its Flanagan South pipeline, which would run parallel to another Enbridge route already in place. Unlike the Keystone project, which crosses an international border and requires State Department approval, the proposed pipeline has attracted little public attention — including among property owners living near the planned route.
I don't think it's going to be easy.

And Congress wonders why the price of gasoline keeps going up. Bloomberg reports:
Lawmakers grilled representatives of oil producers and refiners seeking an explanation for a rise in gasoline prices at the pump amid a boom in U.S. oil production.
Senators at an Energy and Natural Resources Committee hearing today complained that fuel exports and refinery shutdowns for maintenance cause regional price surges, while the head of refiner Valero Energy Corp. said local prices reflect global shifts in crude markets and blamed higher costs on the Renewable Fuel Standard, which mandates ethanol use.
“Our people want to know why the flood of new domestic crude oil isn’t lowering prices at the pump,” said Ron Wyden, an Oregon Democrat and chairman of the Senate Energy and Natural Resources Committee. “There is no question that the lower oil costs are not getting through to Americans’ wallets.”
Advances in drilling technology, including hydraulic fracturing, has revived U.S. oil production in states such as North Dakota and Texas, which reached 7.4 million barrels a day in April, a two-decade high, according to the U.S. Energy Information Administration.
Maybe Mr Wyden should talk to Mr O'Bama about the Keystone XL.

CBR Is Here To Stay -- The Journal


July 19, 2013: rail is here to stay. AP is reporting:

But experts say the oil industry's growing reliance on trains won't be derailed anytime soon. Unless new pipelines are built, there's just no other way to get vast amounts of oil from North Dakota and Rocky Mountain states to refineries along the coasts, which are eager for cheaper, homegrown alternatives to imports brought in by boat. 
"Stopping crude by rail would be tantamount to stopping oil production in a lot of the places it is now being produced," says Michael Levi, who heads the Council on Foreign Relations' program on energy security and climate change.
Even safety experts worried about the dangers of shipping oil by rail acknowledge that the safety record of railroads is good — and improving. The scope of the Lac-Megantic disaster, which is still under investigation, appears to have been the result of uniquely bad circumstances, these experts say.
"Rail is going to remain a significant part of the way we move crude around the country for a long time," says Jason Bordoff, head of Columbia University's center on global energy policy. "I don't think this rail accident will significantly change that."
Original Post

From the Wall Street Journal:
Fracking has been a boon to railroads not just because of a huge jump in crude-by-rail shipments—from nearly nothing to 300,000 annual carloads in half a decade.
Railroads have also booked rapidly growing revenues delivering "frac sand"—used in hydraulic fracturing of wells. Last year trains moved at least 200,000 carloads of frac sand. In Wisconsin alone, more than 100 frac-sand mines now are operating.
Then there's the downstream traffic boom: chemicals, plastics, natural gas liquids.
In fact, the evidence is mixed on whether pipelines or railroads are safer for transporting oil, and may not be relevant, industrially or politically. Rail shipping is likely to keep growing no matter what happens with the Keystone pipeline, over which President Obama has been perfecting his Hamlet impersonation.
Rail offers flexibility, allowing shippers quickly to redirect supplies to wherever they are most valued. What's more, East and West Coast refineries, like the one in Saint John, New Brunswick, toward which the MM&A train was headed (displacing North Sea oil), are not convenient to the pipeline network and likely never will be. And when it comes to Alberta tar sands, rail has another advantage: Before Canada's sludgy bitumen can even be handled by a pipeline, it must be diluted with natural gas condensate, often shipped all the way from the Gulf Coast.
But that was not what the article was all about. That was just the lead in to the issue -- the recent runaway freight train, explosion, destruction of a small town.

The bottom line:
Let's be serious about environmental opposition. Environmentalists are not opposed to pipelines, aka Keystone; they are opposed to fossil fuels. They will oppose both Keystone and oil shipping by rail with perfect consistency. Their goal is to raise the cost of using fossil fuels and to punish politicians who don't move their way on regulating carbon.
There will be a lot of things said and written about the disaster in Quebec, but there are a lot more hazardous things that crude oil being hauled. Rail is here to stay.

Wednesday Morning Links, News, And Views

The sequester? Thank goodness for Matt, otherwise we would not have learned that the US government spent $81,000 on new televisions for GITMO just two days after furloughing civilian workers due to the sequester. Quick: how much of the money "withheld" by the sequester has been "reinstated"? About 77% and rising.

I apologize.

I got off to a late start this morning, and there's a ton of news -- nothing earth-shattering, but it all adds up.

Some of the things we will be discussing:
  • RBN Energy has a great article today on pipeline infrastructure and the Bakken; a must-read
  • a long article on ENB's Flanagan; my hunch is this won't be easy for ENB, and it's probably a 60-40 chance it won't be approved
  • more spin from the AP on the economy; it's really quite remarkable how far apart folks are on some basic data
  • Saudi increased production despite all the talk to the contrary; talk and acts diverge
  • the IPs of the wells coming off the confidential list have been posted; OXY USA reports another mediocre well, at best
Let's get started.

Active rigs: 189 (steady)

RNB Energy: Koch proposes a new pipeline from the Bakken to Hartford and Patoka, IL; I don't think it will fly

Saudi increases production (May over April):
Oil production in Saudi Arabia, the world's largest exporter of crude, rose to 9.657 million barrels a day in May, compared with 9.31 million barrels a day a month earlier, while exports edged 4.6% higher during the same period, official data showed Wednesday.
The kingdom exported 7.789 million barrels a day of crude oil and condensate in May, up from 7.444 million barrels a day in April, according to figures posted on the Joint Organization Data Initiative, or JODI, website.
Internal consumption is increasing: Saudi Arabia used 547,000 barrels a day in power stations and water-desalination plants in May, down from the 559,000 barrels a day during the corresponding period in 2012 but up from the 378,000 barrels a day consumed a month earlier.
In May OPEC kept its oil production ceiling at 30 million barrels a day in a widely expected move that members described as an easy decision. But concerns about the growing threat from shale oil overshadowed the group's otherwise smooth meeting.
Oil by rail is here to stay -- WJS. A stand-alone post later.
In fact, the evidence is mixed on whether pipelines or railroads are safer for transporting oil, and may not be relevant, industrially or politically. Rail shipping is likely to keep growing no matter what happens with the Keystone pipeline, over which President Obama has been perfecting his Hamlet impersonation.
In case you missed it late last night, if you are not familiar with PJM, you should be.

Quick WSJ Links

Something tells me Jonathan Welsh's article on how to avoid "windshield dings" will not help drivers in the Bakken. The solution: clear plastic NASCAR windshield racing sheets.

Remember: the British Open this weekend.

Goldman Sachs' profit doubles. President O'Bama has been good to almost all investors. Coal producers are about the only exception. Maybe investors will push for a third O'Bama term.

Rents are soaring in the Bay Area. Say what? I thought we had rent control.

Here we go again; I thought "they" learned their lesson after Enron. Barclay's and four of its traders fined almost half a billion dollars for manipulating electricity prices in California, other western markets. 

Corn prices are rising.

This story seemed to come to an end fairly quickly: Flying J settles with truckers.

Freight trains and brake failures are quite common, apparently. There seems to be a simple fix.

Nissan delays introduction of its first luxury electric car; betting on more advanced, cheaper technology around the corner.

Top story, Front Section: the GOP caves. And they got nothing out of it.

As I noted the other day: it looks like it is starting. Inflation up 0.5%. But for investors, a little inflation is good.

It's interesting -- just a quick random note -- I get a bit of grief for my positive comments about the Drudge Report. I find it interesting that many stories I read on The Drudge Report show up two or three days later in the mainstream media.  I will say it again: without The Drudge Report there would be a lot of stories we would never hear about.

There are several high-profile folks slamming "hold-your-ground" laws, including some guy named Eric Holder. In fact, that defense was never used in the recent high-profile trial. It was a simple "self-defense" argument that even Jeantel could understand.

Wow, there is so much news in today's Journal; I just don't have time to post/link it all.

On to the stand-alone posts.

Coal, Wind, Natural Gas Energy In The Midcontinent Independent System Operator (MISO) Territory

A reader sent me this article from Platts regarding future energy picture in the Midwest: broad strokes -- natural gas with/without wind replace coal; transmission lines will be the long pole in the tent.

There is a lot of information in the linked article. This is what I took away from the article in my reply to the reader who sent me the article. The reply may not be ready for prime time (much of what I post on the blog probably isn't) but these were my first thoughts (and I may have missed the point of the article).

So, with that "disclaimer," my thoughts on the linked article:
Hi, ----

Wow, there's a lot of information in that article.

1. You mentioned Alliance. That was a very small piece of the entire article, but very, very timely: which you probably saw (posted yesterday).

2. The gist of the linked article you sent me, of course, was coal in MISO will be replaced by natural gas with/without wind.

3. Natural gas, for sure.

4. Wind requires huge tax breaks, govt subsidies; but it's the politically correct thing to do, so very likely we will see more wind, even though it doesn't make economic sense, and will actually result in more stress on the grid, and probably increased demand for natural gas.

5. There are two obstacles to wind. The article mentions both of them. First, the article questions whether there are enough "good" locations for wind. (Wind is where there is little demand for more energy which leads us to paragraph 6.)

6. Interestingly enough, it's the very last paragraph that is the most important in this very long article with regard to wind:

Minnesota Power's Rudeck agreed. "Investment in the transmission system is key to ensuring the reliability of the grid going forward. It is the companies' and grid owner's responsibility to work together and find a solution for the new capacity."

7. There have been recent articles (which I did not post) that suggest that new transmission lines necessitated by wind farms will be the biggest hurdle. If you recall, Pickens lost a lot of money on his wind bet in western Texas because he could not get the transmission lines in -- that was two to three years ago. Forbes had a great article on the problems with wind back in December, 2012.

8. It is minor challenge to convert from coal to natural gas; the plants are there, and the transmission lines are there.

9.  Also, did you note PJM in the article? I assume they are talking about the energy broker, PJM -- something new for investors, newbies.

10. So, bottom line:
a) great article; thank you for sending; I will post with the above comments
b) the govt is likely to support wind power because it's the "PC" thing to do
c) wind still has hurdles -- 
  • i) where to place wind farms; and, 
  • ii) transmission lines
d) the govt will probably force exiting utilities to put in new transmission lines; no matter how costly wind is, it's the "PC" thing to do -- it will happen
e) natural gas story for North Dakota is only going to get better and better; at the sidebar near the top, I have two "featured presentations": the Bentek presentation talks to both oil AND natural gas in the Bakken
f) the linked Platts article introduces PJM for some of us
g) the Alliance pipeline story was minor part of this article, but huge story on its own
11. Bottom, bottom line with regard to wind: I think we will know by the end of 2014, if not by the end of 2013, whether the wind industry will keep growing. Renewables practically "broke" Spain (maybe others in the EU) but the US is much bigger; "we" can go on making dumb policy decisions for a long, long time and not notice the damage. Sort of like the laboratory frog that died when the researchers gradually turned the water temperature up to boiling, so slowly the frog did not notice.