Monday, August 5, 2013

Finally, Mainstream Media "Gets It"

Reuters is reporting:
So many workers have left the job market in recent years that the decline in the official unemployment rate to 7.4 percent last month may understate the extent of weakness in employment prospects.
This gives Federal Reserve officials considerable room to keep interest rates near zero, potentially well beyond current expectations of rate increases beginning in 2015.
Combined with low inflation, a more aggressive Fed might actually see depressed rates of participation in the job market as an impetus for further monetary easing, particularly if they think more working-age Americans have simply given up looking for work after repeated rejections.
For now, officials seem gun-shy about further purchases of U.S. Treasuries and other assets, a practice designed to stimulate the economy by driving down long-term interest rates, and appear inclined to decrease them later this year.
"The official unemployment rate to 7.4 percent last month may understate the extent of weakness in employment prospects." Ya think?

All in one short sentence, these four words: employment ... weakness ... extent ... understate....

Those are not words one likes to see in one sentence if one is running for re-election.

Sort of like four words in one sentence an airline CEO does not like to see in a news story: runway ... short ... crash ... error....

Especially if it's his airline.

So, Does Anyone Have Any Thoughts On Why Amazon's Bezos Would Buy The Washington Post?


Later, 8:45 CDT: I had not read the story, just the headline when I posted my thoughts below. I see a lot of folks are asking the same question, suggesting that there will be no print media in 20 years (or sooner). That's why the important question is: what business is Amazon in? Or what business is Mr Bezos most familiar with? Certainly not print media. No, he didn't buy this for the ad revenue.
Original Post

John Henry buys The Boston Globe for $70 million.

Mr Bezos, for $250 million buys: the Washington Post, The Express newspaper, The Gazette newspapers, Southern Maryland newspapers, Fairfax County Times, El Tiemp Latino, and Greatre Washington Publication.

This was a personal acquisition and not bought by

So what gives?

All the reasons that you can think of, be sure to include this one: although now sells almost everything through its website, it started out as a bookseller, and I assume book sales make up much of the company's revenue.

I assume the books are, for the most part, being bought by people who read books.

Likewise, I assume that most folks who subscribe to newspapers also read them. And my hunch is that the demographics tend to favor middle income and high middle income subscribers. 

Mr Bezos, gives a lot of books away for free every month through his Amazon Vine program -- he wants folks to read the books, and then post a review at Amazon to create a buzz about the books.  I assume that's a relatively small number of amateur reviewers who belong to the Vine program.

With his $250 million he just got a pretty good mailing list.

Amazon's market cap is $137.52 billion. Again, this was a personal acquisition and not an Amazon deal, but Bezos is probably worth a significant percentage of Amazon's market cap. So let's just say that $0.52 billion was gone tomorrow -- would anyone even notice? Probably not. And for half that amount Bezos just got the mailing addresses of all those subscribers to:
  • the Washington Post,  
  • The Express newspaper,  
  • The Gazette newspapers,  
  • Southern Maryland newspapers, 
  • Fairfax County Times,  
  • El Tiemp Latino, and  
  • Greatre Washington Publication.
Notice how many of those publications have an "s" in their name (as in plural). Also note one newspaper that probably caters to Spanish readers.

I have trouble believing Mr Bezos is in the newspaper business for the ad revenue. I think he just got a list of folks who like to read. Even if everyone of those subscribers canceled their subscriptions, he still has their mailing addresses and knows they like to read. And they like to have things delivered to their homes. And they are literate. And probably discerning. And probably with some money to spend.

Oh, one more thing. He just got a list of folks who like to have things (not just books) delivered to their doors, something Amazon does very, very well.

Also, all those newspapers have a distribution system, including warehouses, trucks, and drivers; one wonders if there are opportunities for cost savings combining what Amazon already does and what these newspapers do in distribution.

Is Bezos in the newspaper business, or a logistics business? This might be a good case study for Harvard Business School this autumn.

Even though it's a personal acquisition, and not part of Amazon, Mr Bezos can certainly "lease" his new business to Amazon.

It Can Be Done

Say what you want, but if the infrastructure is there, and if the operator "knows" natural gas, it can be done (assuming I'm reading things correctly; I do make errors quite often so check for yourself to see if I got this right).
Look at the Hess well below: 
  • produced almost 13,000 bbls of oil in the first seven days of production
  • captured every bit of natural gas from day one; no flaring; sold it all
This really is pretty spectacular. 
A lot of roughnecks should be very, very proud. A Nabors rig. The big rig spud January 3, 2013; ceased drilling on January 19, 2013 -- 16 days. Neset Consulting -- Geologist; middle Bakken; the lateral was started on January 14; the frack data appears not to be posted yet.

This well is on a 4-well pad; there are six horizontals in this spacing unit. The spacing unit is just a few miles west of Whiting's Sanish field.

NDIC File No: 24368     API No: 33-061-02318-00-00     CTB No: 124368
Well Type: OG     Well Status: A     Status Date: 6/25/2013     Wellbore type: Horizontal
Location: NENE 17-154-93     Footages: 300 FNL 860 FEL     Latitude: 48.167217     Longitude: -102.658720
Current Operator: HESS CORPORATION
Current Well Name: EN-WEYRAUCH A-154-93- 1720H-3
Elevation(s): 2391 KB   2365 GR   2372 GL     Total Depth: 20284     Field: ROBINSON LAKE
Spud Date(s):  12/15/2012
Casing String(s): 9.625" 2516'   7" 11035'  
Completion Data
   Pool: BAKKEN     Perfs: 11035-20284     Comp: 6/25/2013     Status: F     Date: 7/4/2013     Spacing: 2SEC
Cumulative Production Data
   Pool: BAKKEN     Cum Oil: 12536     Cum MCF Gas: 12629     Cum Water: 3205
Production Test Data
   IP Test Date: 7/4/2013     Pool: BAKKEN     IP Oil: 1259     IP MCF: 1688     IP Water: 134
Monthly Production Data
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Nine (9) New Permits; Six Producing Wells Completed: Statoil With Two Big Wells; KOG And Corinthian Report Nice Wells; Back Up To 183 Active Rigs

Active rigs: 183

Nine (9) new rigs:
  • Operators: BR (3), Baytex (2), OXY USA, XTO, American Eagle, North Plains
  • Fields: Plumer (Divide), Camel Butte (McKenzie), Little Knife (Billings), Tobacco Garden (McKenzie), Sioux Trail (Divide), Colgan (Divide)
  • Comments:
Wells coming off confidential list over the weekend and today were posted earlier; see sidebar at the right.

This is something (the magnitude of the list) I don't see often: about 20 permits were renewed, many of them were Statoil permits, but some from Whiting, CLR, XTO, and Triangle. Normally I might see two or three permits renewed.

Eight (8) producing wells were completed:
  • 24388, 944, Hess, EN-Uran A 154-93-1522H-2, Robinson Lake, t7/13; cum -- ;
  • 22885, 349, Hess, LK-Wing 146-97-2215H-3, Little Knife, t7/13; cum 4K 6/13;
  • 24368, 1,259, Hess, EN-Weyrauch A-154-93-1720H-3, Robinson Lake, t7/13; cum 13K 6/13 (that's in 7 days)
  • 24134, 653, Hess, LK-Little Chase Creek 147-97-2116H-3, Little Knife, t7/13; cum 8K 6/13;
  • 21974, 379, CLR, Carus 2-28H, Cedar Coulee, t7/13; cum --
  • 24009, 2,089, Statoil, Paulson 36-1 1H, Briar Creek, no production data,
  • 23557, 3,606, Statoil, Jake 2-11 1H, Last Chance, no production data,  
Wells coming off the confidential list Tuesday:
  • 23704, 141, Corinthian, Corinthian Bowers 5-2 1H, Spearfish well, North Souris, t2/13; cum 19K 6/13;
  • 23709, 2,157, KOG, P Thomas 153-98-5-10-11-1H, Truax, t6/13; cum 19K 6/13;


 23704, see below, Corinthian, Corinthian Bowers 5-2 1H, North Souris:

DateOil RunsMCF Sold

23709, see below, KOG, P Thomas 153-98-5-10-11-1H, Truax:

DateOil RunsMCF Sold

Keystone XL Delayed So Long; Does It Even Matter Any More -- Seeking Alpha

Later: now that I'm caught up with blogging, I will add this: Michael Fitzsimmons at SeekingAlpha is asking: Keystone-XL Pipeline: delayed so long it no longer matters? Tactically, the pipeline does not; strategically, it matters. It matters a whole lot.

Market Action, Earnings; Etc -- EOG Hits A 52-Week High

Wow: EOG hits a 52-week high. What's that all about? This article in Forbes?
Analysts expect higher profit for EOG Resources when the company reports its second quarter results on Tuesday, August 6, 2013. The consensus estimate is calling for profit of $1.76 a share, reflecting a rise from $1.16 per share a year ago.
The consensus estimate has risen from $1.33 over the past three months. Analysts are expecting earnings of $7.04 per share for the fiscal year. Revenue is projected to be $3.54 billion for the quarter, 22% above the year-earlier total of $2.91 billion. For the year, revenue is projected to come in at $14.07 billion.
Watch out below if EOG misses.

Yahoo!Finance is reporting: positive US economy data propping up WTI. After all that trading today, and all that talk by talking heads (I assume), WTI was flat. 

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.


Other earnings today and the market in general:
OTTR: press release here; 21 cents 2Q13 vs 19 cents 2Q12; Wall Street Cheat Sheet:
Results: Adjusted earnings per share decreased 25% to $0.21 in the quarter versus EPS of $0.28 in the year-earlier quarter.
Revenue: Decreased 25.14% to $212.39 million from the year-earlier quarter.
Actual vs. Wall St. Expectations: Otter Tail Corporation reported adjusted EPS income of $0.21 per share. By that measure, the company missed the mean analyst estimate of $0.26. It missed the average revenue estimate of $220.4 million.
CVX, XOM, COP: all down a bit today
KOG traded at a new high of $10.22. Closed at $10.06.
OAS down slightly.
CHK hits a new high.
SandRidge up almost 4% today.
Everything else down slightly, in line with the market overall.

Earnings this week, a reminder:
A reminder: Oasis will report earnings Tuesday (that's tomorrow) after market close.

EOG, DNR, MRO: to report Tuesday, also. 

CLR: will report on August 7, I believe. CLR down slightly today; near its 52-week high.

NOG will report this week also, August 8, after market close; remember the operations update (below) from July, 2013.

CLNE -- ditto (after market close, August 8).
NOG 2Q13 Operations Update, from July 18, 2013:
Northern's second quarter 2013 production is expected to average approximately 10,900 barrels of oil equivalent per day, down approximately 2% when compared with the first quarter of 2013. 

Cooler Summer Than Normal Could Hurt Retail Sales -- So Could The Economy (Unemployment)

Yahoo!Finance is reporting:
Cooler-than-normal weather could be good for consumers but bad for retailers, according to one expert.
"From a consumer's point of view, there's going to be some great deals to be had for summer items,” said Paul Walsh, vice president of weather analytics at The Weather Channel. That’s because retailers will have to offer discounts to persuade shoppers to buy summer items when it feels like fall outside.
"People don't buy based on the calendar, they buy based on how it feels, and it just doesn't feel like summer anymore," Walsh explained.

But because they will be spending about 20 percent less to cool their homes, shoppers will have more disposable income for clothes, back-to-school necessities and other items, Walsh said.
"I think that the companies that are going to see the biggest negative impact, at least in the near term, are specialty-apparel retailers, department stores—even mass merchants that have a lot of summer items left over," Walsh said.
There are so many story lines here, I wish I had time to write about them all. But I have to move on. For the archives: a cooler summer than normal. The earth quit warming 15 years ago.

Back in April (2013) it was too much snow with resultant flooding. I normally don't associate too much snow with global warming, though activist "global warmers" will.

The nice thing about the Tea Party: it is flexible -- iced tea if the weather is too hot; hot tea if the weather is too cold. Unsweetened tea if Mayor Bloomberg is coming to the party; sweetened tea if you're a Texan. I guess. I really don't know. I don't drink tea.

How Much Is One Willing To Pay To Go Green? Natural Gas Utility ($1.5 Million/MW) Vs Solar ($6 Million/MW)

Back on June 1, 2013, I posted the following regarding the cost of putting up a new wind farm:
Off-shore, wind is, they say, more expensive. How much more expensive?

Cape Wind, off Massachusetts: $2.6 billion / 454 MW = $6 million/MW.

The London Array, phase I: 2.2 billion euros/630 MW (1 euro = $1.30); therefore, $2.86 billion/630 MW = $4.5 million/MW 

So, this is is what we have:
  • North Dakota: $3 million/MW.
  • On-shore average, wiki: $1 million/MW
  • Off-shore, London (England): $4.5 million/MW
  • Off-shore, Massachusetts: $6 million/MW
I don't know, but I assume solar is in the same ball park.

It is my understanding that a new power plant using coal/natural gas is in the ball park of $1.5 million/MW.

So, let's summarize:

Electric utility power plants:
  • Coal/natural gas power plants: $1.5 million/MW
  • Wind, on-shore, North Dakota, $3 million/MW 
  • Wind, off-shore, $5 million/MW
  • Solar, $3 million/MW (estimate)
Hold that thought (or hold those numbers).

Yahoo!Finance is reporting:
Canadian Solar Inc. (one of the world's largest solar power companies, today announced that its subsidiary, Canadian Solar Solutions Inc., has entered into a sales agreement with Concord Pacific's green energy affiliate, Concord Green Energy, whereby Concord will acquire from Canadian Solar five utility-scale solar power plants totaling 49MW valued at over $277 million.
So, now we know the price companies are willing to pay for solar energy: $277 million/49MW = $5.65 million/MW. And this is a very small transaction -- five plants totaling just less than 50 MW.

So, in the future, if I'm asked, my answer, in a 30-second sound bite will be:
  • Coal/natural gas power plants: $1.5 million/MW
  • Wind, on-shore, North Dakota, $3 million/MW (large projects, price comes down)
  • Wind, off-shore, $5 million/MW
  • Solar, $6 million

But the Canadians are not alone in their willingness to go green whatever the cost.

The Scots are legendary about watching their money; and it's well deserved. I saw it first hand while stationed in northern England some years ago. So it was with interest that I read this article from CarpeDiem sent to me by Don:
The unreliability of wind power could mean an independent Scotland would have to import energy from England – leaving it with the highest household bills in the world, it was claimed yesterday. 
In an interview with Scotland on Sunday, Sir Donald Miller, former chairman of both the South of Scotland Electricity Board and of ScottishPower, has described the SNP’s current energy policy on producing 100 per cent of Scotland’s needs from renewables as “disastrous."

Sir Donald said an independent Scotland could find itself in the same position as Denmark, which produces much of its energy from wind and has the highest household bills in the world – about 
70 per cent more than the UK – because it has to import at premium prices from Norway when the wind is not blowing.

Denmark currently produces about 30 per cent of its needs from renewables and plans 
to increase this by 50 per cent by 2020, just half the Scottish target of 100 per cent. Sir Donald said: “Independence with present energy policies would be disastrous for Scotland. It would be even worse than the Denmark situation.”
I've lost the bubbly on whether the average Brit pays 2x, 3x, or 4x what the average Texan pays, but whatever it is, it's exorbitant, comparatively speaking. Denmark pays almost twice what the Brits pay, and the Scots are so infatuated with renewables they may outspend Denmark.

Note: Denmark currently produces about 30 percent of its needs from renewables; Scotland wants to go the full Monty -- 100%. Meanwhile, Minnesota will only settle for 25% by 2025.

All I can say: I hope North Dakota legislators watch this all play out before committing to something crazy.

Bakken Operators Set To Outperform Big Oil This Year -- Bloomberg

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

This story has been posted several times in different variations. But here is the Bloomberg story:
Oil explorers focused on high-margin shale drilling from Texas to North Dakota are set to outperform Big Oil this year.
EOG Resources Inc, Pioneer Natural Resources Co and Continental Resources Inc. are poised to reap bigger returns for investors than energy titans 15 times their market values as they devote almost all their drilling capital to higher-margin, domestic crude wells. Houston-based EOG is estimated to more than triple profit in 2013 to $1.92 billion.
Halcon Resources Corp., the oil and gas producer run by former Petrohawk Energy Chairman Floyd C. Wilson, posted record quarterly profit on Aug. 1 after a five-fold increase in output from wells, according to data compiled by Bloomberg.
EOG and Unit are scheduled to announce second-quarter results on Aug. 6.
Continental follows the next day.
The world’s biggest energy producers, including Exxon and Shell, have had mixed results while playing catch-up to smaller U.S. explorers that helped pioneer shale exploration. Shell, Europe’s largest energy producer by market value, wrote down the value of its U.S. shale assets last week for the second time in less than a year, while saying its liquids-rich properties in Texas’ Permian Basin are “developing very well.” Natural Gas, the worst-performing commodity of the past half-decade in U.S. markets, accounts for more than 80 percent of the output from The Hague-based company’s shale wells.
Exxon spent $52 billion in the past three years to create a shale portfolio, though most of it has involved gas that tumbled to a 10-year low in 2012 and commands less than one-fifth the price of oil, on an energy-equivalent basis. During a conference call with analysts last week, Exxon touted its progress in ramping up output 74 percent from a year earlier to 60,000 barrels a day in the Bakken formation that sprawls beneath North Dakota and Montana.

Folks With Nice Health Care Plans Will Be Taxed At A Higher Rate -- Unions Calling Foul

The New York Times is reporting:
The so-called Cadillac tax was inserted into the Affordable Care Act at the advice of economists who argued that expensive health insurance with the employee bearing little cost made people insensitive to the cost of care. In public employment, though, where benefits are arrived at through bargaining with powerful unions, switching to cheaper plans will not be easy. 
Under the tax, plans that cost above a certain threshold in 2018 — $10,200 annually for individual plans and $27,500 for family plans, with slightly higher cutoffs for retirees and those in high-risk professions like law enforcement — will be taxed at 40 percent of their costs in excess of the limit. (The thresholds will rise with inflation after 2018.) 

Reminder: State Land Auction Tomorrow

Home page link here.

At the link, scroll down to the bottom of the page for the "results."

The Dickinson Press is reporting in anticipation of the auction.

WTI-Brent Near Parity -- EIA

The EIA is reporting:
Spot prices for benchmarks West Texas Intermediate (WTI) and North Sea Brent crude oil neared parity of around $109 per barrel July 19, and the Brent-WTI spread was still as close as $4 on July 30. By contrast, the average Brent-WTI price spread in 2012 was about $19 per barrel, and the spread was $23 per barrel as recently as February 2013. Since spring 2013, prices for these benchmarks have moved much closer together, as WTI increased in relation to Brent. This increase in the WTI price was the result of new U.S. transport infrastructure and U.S. refineries running at near-record level.
The linked article provides several reasons for the return to parity, which by the way, is the historical norm.

GM Automobile Sales In China Up More Than Eleven (11) Percent Year-Over-Year -- And Not Many Of Them Powered By Fuel Cells

Earlier I posted a link to a story from The Economist suggesting demand for oil would decrease due to global changes in the automobile market. (At the link, you have to scroll down a bit to get to the story.)

I thought The Economist position on this was, for lack of a better word, "nuts," as in "insane."

The global demand for oil isn't going to go away any time soon was my contention. Now, I see this story: GM says July China auto sales up 11.1 percent year on year. Auto sales up 11% year-over-year is not trivial. And that was just GM sales.

I doubt any of them were powered by fuel cells.

Microsoft Lowers The Price Of The Surface Pro

The Wall Street Journal is reporting:
Microsoft keeps chopping the price on the Surface.
Microsoft over the weekend began offering a $100 discount on its Surface Pro, one of the two versions of the company’s tablet-style computer. Previously, Microsoft announced price cuts of up to 30% on the less-powerful version, called Surface RT.
The company’s websites began showing a price of $799 or $899 for the Surface Pro, not including a device cover that doubles as a keyboard and costs at least $120. Surface Pro launched earlier this year at a price of $899 or $999 for a model with twice as much memory.
“We’ve been seeing great world-wide success with Surface RT pricing and keyboard-cover promotions over the past several months and are proud to offer Surface Pro at more affordable prices,” a Microsoft spokesman said in a prepared statement Sunday.
It’s not immediately clear why Microsoft is lowering the price. Company executives previously have said they’re pushing hard to generate interest in Microsoft-powered PCs during the back-to-school shopping season.
From the article: "it's not immediately clear why Microsoft is lowering the price." Say what? Where has this writer been.

By the way, I visited the South Lake (Texas) Town Center (shopping mall) over the weekend. It is incredible. I have seen some incredible shopping around the world during my 30 years with the Air Force, but South Lake Town Center is second to none. It is quite the deal. It was busy for a very, very hot day in Texas. But most stories had just a small number of shoppers ... until you got to the Apple store, and then it was shoulder-to-shoulder. It truly was incredible. I didn't get anything this trip -- I got my wife a MacBook Air just a few weeks ago which she loves. I can't remember if I blogged about that purchase. If not, maybe another day.

I have my heart set on the 27-inch iMac. It will double as a "television" monitor. Perhaps by the end of the year, once we get settled in the new apartment.

I don't think Microsoft had a store in South Lake Town Center; at least I didn't see it if there is one there, but again, I didn't look too hard.

I am reading a small book, I, Book, a collection of Steve Jobs comments, writings, letters, etc., and will start reading the biography as soon as I unpack the box in which it is in, following our move from San Antonio to the Dallas area. 

Something Tells Me There Is More To The Story: French Total Is Moving Corporate Treasury To London

CityAM is reporting:
French oil and gas giant Total has said it is planning to move its corporate treasury department to London to boost its image and get closer to analysts. 
A spokesman told Reuters the move would help it “get closer to… the oil trading and financial centre of Europe to allow the group to improve its international visibility.” 

The company is currently in discussions with trade unions and social partners. The news confirms a report by investigative website Mediapart. The executive committee and chief financial officer Patrick de La Chevardiere would remain in Paris and the company has said it will continue to pay its taxes in France. Total paid €1.2bn in taxes to the French treasury in 2012.
But the workers who live permanently in London won't be paying French taxes, I don't suppose.

Monday Morning Links, News, And Views -- Part II

Disclaimer: this is not an investment site. Do not make any investment decisions based on what you read here or think you may have read here.
Market action:
  • The Dow is down about 50 points; oil is off slightly more a dollar
  • KOG hits a new 52-week high, $10.10
  • Oasis is down a bit after hitting new highs last week
  • I assume the majors are all down; I only looked at CVX
  • CHK is up again, but not yet at a new 52-week high
  • it looks like most of the energy companies I follow are down slightly (along with the market in general)
  • Berkshire is up, but not quite a new 52-week high

Gasoline prices nearing "danger zone" -- 
It happened in 2008, then again in 2011. Finally in April 2012, average gasoline prices once again topped $3.85 a gallon. While still well shy of the record high $4.11 set in July of 2008, Jeff Kleintop, chief market strategist at LPL Financial says, every time pump prices top what he calls the "danger zone," stocks have taken a hit.
"For the last five years, whenever we got into (the danger zone), stocks pulled back back five to ten percent," Kleintop says in the attached video, in reference to the 2008, 2011 and 2012 price peaks.
Fortunately, after a sharp run-up in July, the past two weeks have seen a modest dip in gas prices, at a time when crude oil has held steady above $100 a barrel.
From Kleintop's point of view, it's only a matter of time before pump prices follow the run-up in oil. If he's right and high fuel costs do indeed begin to take a larger bite out of family budgets, then the danger zone curse could happen again.

Highway To The Danger Zone, Kenny Loggins, Top Gun Video Segment

By the way, think of the fuel savings the US Air Force will see as the service transitions from F-15s to drones. This is not trivial; I am surprised we haven't heard more about that cost savings. And, then, of course, the US Navy going to algae to power their ships --.

Wells coming off the confidential list over the weekend and Monday have been posted.

Active rigs: 181

Nice article in SeekingAlpha this morning on MDU.

WSJ Links

Meatpackers await signs that beef is back.   I am really, really impressed with Omaha Steaks. I routinely mail order Omaha Steaks and have never been disappointed; and, I visited an Omaha Steaks store in Huntington Beach when we were out visiting family earlier this summer. The deals in the store are even better than through mail order (no shipping costs, for one thing; though my orders often ship free through promotions).

No sign of progress in CBS dispute.

Awesome: Missy Franklin won her record sixth gold medal of the world championships Sunday, swimming the leadoff leg for the U.S. in the 400-meter medley relay. Franklin, 18 joined Michael Phelps, Mark Spitz, Ian Thorpe and Kristin Otto as the only swimmers to capture as many as six golds at worlds or an Olympics.

The lead story, page 1, section 1 has to do with Apple and big patent battles. I did not read; no interest in the subject. 

US and Canada vie for big-natural-gas projects.
PORT EDWARD, British Columbia—Some of the world's largest energy companies are racing to transform backwaters like this hamlet of 544 people into boomtowns.
The energy giants are proposing half a trillion dollars in projects to export vast new finds of North American natural gas. Western Canada and the U.S. Gulf Coast are competing to see which region receives the lion's share of the investment.
Port Edward has been shrinking since the canneries and pulp mills began shutting decades ago. But it has a deep-water port that could someday handle the huge ships that carry liquefied natural gas. And Malaysia's state-owned energy giant, Petroliam Nasional Bhd., or Petronas, says it is prepared to spend $20 billion on a terminal, pipeline and other infrastructure here.
A drilling revolution in the U.S. and Canada has unlocked a glut of natural-gas reserves across the continent. That has sent prices tumbling—a boon for consumers and industrial users. But it has also sent energy companies scrambling for a way to profit by sending the cheap gas to Asia, where demand and prices are high.

Random Comment On Cable Television: Time Warner Drops CBS


Later, 10:45 am CDT: Yahoo!Finance is reporting -- 

While studies have shown that nearly one third of households will consider cutting the cord this year, only one percent will actually do it. Even the CEO of Cablevision James Dolan says he rarely watches TV, but when he does, it's via Netflix  and over a broadband internet connection. In fact, Dolan goes as far as saying that the cable industry is living in a "bubble," and that he can envision a time when his company doesn't even offer TV service.
In some ways, that's the catch or the back-up plan for Time Warner Cable in this spat, in as much as cord-cutting typically involves ditching TV but leaves internet intact. So even if you leave Time Warner Cable - or whichever provider - there's a good chance you will still remain a customer.

On the content side of things, where costs perpetually rise but blockbusters are hit-or-miss, the worry is more about making good shows and covering big events than it is where to show them. Still, CBS points out that this is the first time in its history that it has been booted from a platform, whereas Time Warner Cable has had 50 such blackout disputes in the past five years alone.
Pretty much goes along with what I posted earlier.  In the past, networks like CBS "won" but this time it might be different.
Original Post

I'm sure you are all aware that Time Warner Cable has dropped CBS. Now this story from The Wall Street Journal:
Predicting that transmission of TV will move to the Internet eventually, Cablevision Systems Corp.  Chief Executive James Dolan says "there could come a day" when his company stops offering television service, making broadband its primary offering.
His comments may be the first public acknowledgment by a cable CEO of the possibility of such a shift, long speculated about by analysts. It comes amid growing tensions between cable operators and channel owners over rising programming costs, highlighted Friday night when Time Warner Cable Inc.  dropped CBS from its channel lineup in major markets such as New York and Los Angeles.
If cable operators drop TV service, charging only for broadband, channel owners would have to sell directly to the public or through Web outlets.
In a 90-minute interview on Friday, the usually media-shy 58-year-old executive also talked about his marriage, his relationship with his father Chuck and his after-hours role as a singer and songwriter. He said his rock band, JD & the Straight Shot, toured with the Eagles last month.
Mr. Dolan said that on the rare occasions he watches TV, it is often with his young children, who prefer to watch online video service Netflix, using Cablevision broadband.
This goes along with my view which I have discussed earlier.

I haven't had cable television for months and I don't miss it at all. I saw both the NASCAR race and Tiger Woods handily win at Firestone yesterday at the neighborhood sports bar; I used to walk there but now that I have my bikes, I bicycle there. For about $15 (drinks and a salad) it's a great bargain. Of course, the Texas Rangers - Oakland game was being televised, and the Rangers were ahead when I left. But I digress.

I don't miss CBS at all. Or NBC. Or ABC. There are a few other advantages to not having cable television, but perhaps that story another time. 

It will be interesting to watch the Time Warner - CBS feud play out. I think TWC has the upper hand:
  • TWC customers may complain to TWC but they won't disconnect their service
  • TWC customers may complain to TWC but they don't want CBS if it means their cable bill will go up
  • Many TWC customers are probably paying at the upper end of what they feel they can afford
  • Up to 47% of TWC customers may not be of the same political "bent" as CBS News, and have decided to boycott CBS (even before this latest spat); they won't miss CBS at all 
  • TWC customers are probably spending more time "internet channels" (including social media like Facebook) than on the four major networks
  • TWC customers have more than enough content without worrying about CBS
  • CBS hit shows will go into syndication as soon as six months after first airing 
  • Netflix movies, Blu-Ray movies, etc., air/play without commercial interruption
That last point is a huge deal. Customers pay twice: first to TWC for the cable package, and then again to have to sit through the commercials.

Steve Jobs once said that television and computers won't converge. Depending on the definition of "converge" he may be right; he may be wrong. His premise was that people turn on the computer to do exercise their brains; they turn on the television to rest their brains. The latter is still true. It is less true for the former, though when using a computer even for streaming television, there is a bit of interactive involvement (though minimal, in many cases).

I am watching the 22 episodes of "Twin Peaks" and, without commercial interruption, it is quite incredible. "Twin Peaks" by the way does not age. Nor does "Miami Vice." 

Senior Discounts: 50 Is The "New 65" -- An Ad For AARP Disguised As A News Story In The Wall Street Journal

The Wall Street Journal is reporting a number of senior discounts for people as young as 50.

Unfortunately, it appears to be an ad for AARP or an AARP press release. As others noted, most of the discounts can be had without an AARP membership. I personally find AARP annoying and would never join. Their relationship with health insurance companies turned me off many, many years ago, and their support of ObamaCare was not helpful. 

Another Reason Oceans Are Warming; Also, More Islands Rather Than Disappearing Islands: There's A Lot We Don't Know And Lot That Isn't Being Reported In The Mainstream Media

IceAgeNow is reporting:
Researchers at the University of Bergen (UiB) have found a 932-mile (1,500-km) volcanic mountain chain hidden off the coast of Svalbard, which could soon break the surface to form a new island chain. 
The range extends from Jan Mayen island in the Greenland Sea to the Fram Strait between Svalbard and Greenland.
“We have discovered five new vent fields in Norwegian national waters between Jan Mayen island and Loki’s Castle,” Rolf Birger Pedersen, the professor leading the research, told The Local
“The vent fields were discovered during a cruise with RV GO Sars in July this summer. The last volcano was found a few weeks ago and is just 20 meters below sea level, said Pedersen, professor at the Centre for Geobiology (UiB). 
“We have found volcanoes at such a shallow level and they could break the surface at any time and form a new island group,” said Pedersen.
Just for the record, I’ve been talking about underwater volcanoes for years. In fact, there’s an entire chapter in “Not by Fire but by Ice” (entitled “Fish Stew”) that discusses the importance of underwater volcanoes, and how they’re heating the seas.
“Imagine how much heat is being put into the Arctic ice from prevailing currents,” says Peter. “How much might this be causing ocean warming in the area?”

TransCanada's Proposed Energy East Line

Reuters is reporting:
TransCanada Corp's plan to build one of the world's longest oil pipelines has reverberations far beyond Canadian shores.
The planned 2,700 mile pipeline, which will bring crude from Canada's energy capital of Alberta to refineries and ports on the East Coast, has the potential to upturn the dynamics of the North Atlantic oil trade squeezing out some imported crude to North America and revitalizing once-ailing refineries.
The Energy East line could also reinforce North Sea Brent crude as the world's oil benchmark against which giants such as Saudi Arabia price their western-bound exports, analysts say, while opening up the option of more Canadian heavy crude flowing to the U.S. Gulf Coast.
The scale of the $12 billion, 1.1-million barrel per day (bpd) pipeline, which will extend part of an old natural gas line, is hard to understate. Were it to start in London, it would stretch all the way to Tehran. In the United States, it could pump crude oil from Beverly Hills to New York City.
And its capacity is greater than the entire oil production of Azerbaijan, could provide 6 percent of daily U.S. oil consumption or, put another way, has the ability to carry 30 percent of Canada's total daily oil production.
"In the short and medium term, this isn't a project focused on exporting heavier Canadian oil to the U.S. Gulf Coast," said Mark Routt, a senior energy consultant at KBC in Houston, who has a number of clients interested in the project.
"The initial stage of this project will be primarily about sending light sweet crude to Canadian refineries."
That could effectively wipe out Canada's need to import crude for its eastern refineries. They now import around 700,000 bpd from North and West Africa and Latin America because Canada's own supplies lie across a vast wilderness in the far West.

Monday Morning Links, News, And Views -- Part I

Active rigs: 179

RBN Energy: a review of Canada's western CBR infrastructure --
The battle between pipeline and rail transport alternatives to get growing crude supplies out of Western Canada is heating up. On Thursday (August 1, 2013) TransCanada confirmed plans to proceed with repurposing their Mainline gas pipeline into the Energy East crude pipeline that will now carry up to 1.1 MMb/d from Alberta to Eastern Canadian refiners and the export market. A day earlier Kinder Morgan and Keyera announced plans to build a unit train loading terminal in Alberta to increase crude by rail capacity to the US. Today we review Canadian rail infrastructure investment plans.
Reuters provides more background to TransCanada's proposed eastern pipeline. This is a huge story. Will get a stand-alone post.Previously reported from a different source.

How many decades have folks been predicting the demise of the oil industry? The Economist does it again.
Oil is close to a peak. This is not the “peak oil” widely discussed several years ago, when several theorists, who have since gone strangely quiet, reckoned that supply would flatten and then fall. We believe that demand, not supply, could decline. In the rich world oil demand has already peaked: it has fallen since 2005. Even allowing for all those new drivers in Beijing and Delhi, two revolutions in technology will dampen the world’s thirst for the black stuff.
The first revolution was led by a Texan who has just died. George Mitchell championed “fracking” as a way to release huge supplies of “unconventional” gas from shale beds. This, along with vast new discoveries of conventional gas, has recently helped increase the world’s reserves from 50 to 200 years. In America, where thanks to Mr Mitchell shale gas already billows from the ground, liquefied or compressed gas is finding its way into the tanks of lorries, buses and local-delivery vehicles. Gas could also replace oil in ships, power stations, petrochemical plants and domestic and industrial heating systems, and thus displace a few million barrels of oil a day by 2020.
The other great change is in automotive technology. Rapid advances in engine and vehicle design also threaten oil’s dominance. Foremost is the efficiency of the internal-combustion engine itself. Petrol and diesel engines are becoming ever more frugal. The materials used to make cars are getting lighter and stronger. The growing popularity of electric and hybrid cars, as well as vehicles powered by natural gas or hydrogen fuel cells, will also have an effect on demand for oil. Analysts at Citi, a bank, calculate that if the fuel-efficiency of cars and trucks improves by an average of 2.5% a year it will be enough to constrain oil demand; they predict that a peak of less than 92m b/d will come in the next few years. Ricardo, a big automotive engineer, has come to a similar conclusion.
The author lives on a different planet than where I live.

However, it is getting more and more expensive to produce that oil. TulsaWorld is reporting:
That makes this new oil far more expensive to get out of the ground than what's known as conventional oil - large pools of oil and gas in relatively easy-to-drill locations. Those reserves have always been hard to find, but now they are all but gone outside of the Middle East.

David Vaucher, who tracks oil production operating costs at IHS CERA, says oilfield operation costs are now at a record high. "The fields are more remote and the resource conditions are more extreme," he says.

New oil projects in the U.S. and Canada, where production is growing faster than anywhere in the world, require high oil prices to be profitable, Vaucher says.

To make an industry average return, a new production project in the Canadian oil sands requires a price of $81 per barrel. For an onshore U.S. field, it's $70 per barrel, but it ranges from $45 to $95 per barrel, depending on the rate of oil flow. In the Gulf of Mexico, it's $63. In the Middle East, just $23 per barrel.
But major oil companies such as Exxon Mobil, Chevron, Royal Dutch Shell and BP were late to get into the U.S. shale oil game, and therefore had to pay high prices to acquire promising land. And the drilling is hugely expensive, too. Because the oil is thinly dispersed and hard to squeeze out, dozens of wells must be systematically drilled over an area to get to the oil.

Drillers are making technological leaps that are reducing some costs, but those are being countered by higher costs to lease equipment, buy supplies and pay workers.

Smaller oil companies like EOG Resources and Continental Resources that found these troves early were able to acquire the best acreage for relatively low prices. Because oil production is rising for these smaller companies, profits can rise even if costs increase. For a major oil company like Exxon or Shell, even big increases from dozens of wells in Texas or North Dakota aren't enough to make up for declining production in giant fields around the globe.